Employee Incentives to Enhance Corporate Value through an Employee Share Ownership Plan ESOP

「At a meeting of the Board of Directors held on 20 February 2026, the company resolved to dispose of treasury shares in the form of common shares as restricted stock, with the Employee Stock Ownership Plan designated as the intended recipient, in order to grant restricted stock to eligible employees through the plan. The objectives are to further align value between eligible employees and shareholders by providing incentives for the sustainable enhancement of corporate value, and to help eligible employees build personal assets through the grant of restricted stock.」

「The company is raising the incentive contribution rate for the employee stock ownership plan and introducing and expanding share-based incentive programs for employees, thereby working to strengthen the link between corporate value enhancement and employee benefits.」

「The Company's sales declined in the domestic market, but sales related to EMS (electronics manufacturing services), particularly in China and India, increased in overseas markets, resulting in sales of ¥9,870 million, up 9.3% year on year.」

「The company established a trust for the benefit of employees who join the Kitagawa Iron Works Employee Stock Investment Association, provided they meet certain requirements. The trust terminated on 21 December 2016.」

「The 188,000 shares held by the Stock Benefit Trust Scheme (Employee Share Ownership Plan, ESOP) are not included in treasury shares.」

「The company established a trust for the benefit of employees who join the Kitagawa Iron Works Employee Stock Investment Association (the “Employee Stock Ownership Plan”), provided they meet certain requirements. During a predetermined acquisition period, the trust will acquire the number of the company’s shares that the Employee Stock Investment Association is expected to purchase over the coming several years.」