Long-term enhancement of corporate value and alignment of interests with shareholders

「The Company has introduced the share grant ESOP trust incentive plan for employees of its U.S. subsidiary Deciphera Pharmaceuticals, Inc., under which the Company's shares are delivered to employees to enhance corporate value over the medium to long term. As of 31 March 2026, the share grant ESOP trust, Japan Master Trust Bank, Ltd., held 8,398,300 shares of the Company.」

「For restricted stock compensation as a medium- to long-term incentive, where deemed necessary to ensure the proper operation of the system, the company may, following fair and careful procedures, require directors who received inappropriate stock compensation as a result of serious misconduct or other wrongdoing to forfeit all or part of that compensation (malus) or return it after the restrictions on transfer have been lifted (clawback).」

「Restricted stock compensation comprises service-based restricted stock compensation, under which the number of shares delivered is calculated according to the degree of responsibility for decision-making, and performance-linked restricted stock compensation, under which the number of shares delivered is calculated based on achievement of annual performance targets, including ESG targets, set in line with medium- to long-term management strategies and issues, and achievement of target values for performance indicators for each fiscal year.」

「The scheme comprises service-based restricted stock compensation, under which the number of shares delivered is calculated according to the degree of responsibility for decision-making, and performance-linked restricted stock compensation, under which the number of shares delivered is calculated based on achievement of annual performance targets, including ESG targets, set in line with medium-term management strategies and issues, and achievement of target values for performance indicators for each fiscal year.」

「At the 74th Annual General Meeting of Shareholders held on 23 June 2022, the Company abolished its stock option scheme and introduced a restricted stock compensation scheme. The eligible directors surrendered all unexercised rights, and were allocated the same number of restricted shares as the number of shares underlying the stock acquisition rights issued as stock options, namely 75,000 shares.」

「The Company introduced service-based restricted stock compensation and performance-linked restricted stock compensation as incentive schemes for its directors, excluding outside directors, and its executive officers. Following the introduction of these schemes, the Company delivered the shares covered by the schemes as compensation and other payments to the eligible directors, in the same number as the common shares underlying the unexercised stock acquisition rights previously allotted to the Company's directors as stock options, upon the eligible directors' surrender of all such rights.」

「Compensation and other payments to directors, excluding outside directors, comprise fixed basic compensation, performance-linked compensation and other payments, including bonuses, as short-term incentives, and non-monetary compensation and other payments, including share-based compensation, as medium- to long-term incentives. In consideration of their responsibilities, outside directors and Audit & Supervisory Board Members receive only fixed basic compensation.」

「Number of stock acquisition rights　47 (Note) 1 / Number of shares underlying the stock acquisition rights　23,500 shares (Note) 1 / Exercise period　From 3 July 2021 to 2 July 2061」

「Compensation and other payments to directors, excluding outside directors, comprise fixed basic compensation, performance-linked compensation and other payments as short-term incentives, and share-based compensation as medium- to long-term incentives. In consideration of their responsibilities, outside directors and Audit & Supervisory Board Members receive only fixed basic compensation.」

「Number of stock acquisition rights　39 (Note) 1 / Number of shares underlying the stock acquisition rights　19,500 shares (Note) 1 / Exercise period　From 4 July 2020 to 3 July 2060」

「Resolution date　20 June 2019 / Number of stock acquisition rights　40 / Number of shares underlying the stock acquisition rights　20,000 shares / Exercise period　From 6 July 2019 to 5 July 2059」

「Issued in fiscal 2018　Directors of the Company (excluding outside directors)　14,500 shares　10 July 2018 to 9 July 2058」

「Issued in fiscal 2017　Directors of the Company (excluding outside directors)　14,500 shares　15 July 2017 to 14 July 2057」

「The stock acquisition rights issued during the second quarter accounting period under review were as follows: / Number of stock acquisition rights: 29 / Number of shares underlying the stock acquisition rights: 14,500 / Exercise period for the stock acquisition rights: from 15 July 2017 to 14 July 2057」

「The stock acquisition rights issued during the second quarter accounting period under review were as follows: / Number of stock acquisition rights: 26 / Number of shares underlying the stock acquisition rights: 13,000 / Exercise period for the stock acquisition rights: from 15 July 2016 to 14 July 2056」

「We have adopted a stock option plan to provide clearer incentives for enhancing long-term corporate value and to share a focus on profits with shareholders. In November 2015, we established the Meeting to Review Officer Compensation Proposals, comprising the president and outside directors.」