Transitioning to a performance-linked stock compensation plan

「The company's shares remaining in this trust are recognized as treasury shares in net assets at the carrying amount recorded in the trust, excluding incidental expenses. The carrying amount and number of these treasury shares were ¥1,432 million and 1,247,500 shares at the end of the previous consolidated fiscal year, and ¥3,417 million and 2,337,500 shares during the current interim consolidated accounting period, respectively.」

「The total number of points to be granted during the initial covered period is capped at the number of points calculated by multiplying 1 million points per fiscal year, including 625,000 points for the Company's directors, by the number of fiscal years included in the covered period. For the initial covered period of 3 fiscal years, this is 3 million points, including 1.875 million points for the Company's directors.」

「Based on a resolution at the 58th Annual General Meeting of Shareholders held on 29 June 2023, the Company had introduced a performance-linked share-based compensation plan for the Company's directors, excluding outside directors and non-residents of Japan, executive officers, excluding non-residents of Japan, and directors of the Company's subsidiaries, excluding outside directors and non-residents of Japan. However, in connection with the transition to a company with an Audit and Supervisory Committee following approval of amendments to the Articles of Incorporation at the 59th Annual General Meeting of Shareholders held on 27 June 2024, the eligible participants changed to the Company's directors, excluding directors who are Audit and Supervisory Committee members, outside directors and non-residents of Japan, executive officers, excluding non-residents of Japan, and directors of subsidiaries, excluding outside directors and non-residents of Japan, collectively referred to as the Company's directors and other officers. The amount and terms of compensation and other matters under the plan have also been re-established.」

「The covered period of this plan comprises the 3 fiscal years beginning with the fiscal year ending 31 March 2024 and ending with the fiscal year ending 31 March 2026, referred to as the initial covered period.　Total number of shares scheduled to be acquired by the Company's directors and other officers　Maximum of 3,000,000 shares (3 fiscal years)」

「Based on a resolution at the 58th Annual General Meeting of Shareholders held on 29 June 2023, the Company has introduced a performance-linked share-based compensation plan for the Company's directors, excluding outside directors and non-residents of Japan, executive officers, excluding non-residents of Japan, and directors of the Company's subsidiaries, excluding outside directors and non-residents of Japan, collectively referred to as the Company's directors and other officers. The carrying amount of these treasury shares at the end of the second quarter of the current interim consolidated accounting period was ¥1,550 million, and the number of shares was 270,000.」

「Disposal date　23 August 2023　Type and number of shares to be disposed of　270,000 shares of the Company's common stock. The number of shares to be disposed of corresponds to the total number of shares expected to be granted during the 3 fiscal years under the share benefit rules established by the Company and its subsidiaries upon introduction of this plan, representing 0.41% of the 66,339,100 issued shares as of 31 March 2023.」

「The Company is introducing this system to clarify the linkage between the compensation of directors and other officers of the Company and its affiliates and the Company's performance and share value, and to increase their incentive to contribute to improved medium- to long-term performance and increased corporate value by ensuring that they share with shareholders not only the benefits of a rising share price but also the risk of a decline in the share price.」