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(1) Number of Shares to be Granted

As described above, the number of shares granted to the Eligible Directors based on the PLAN may vary depending on the achievement of performance criteria during the Subject Period specified by the medium-term management plan, while the upper limit of the total number of shares shall be as described in the one above. During the initial Subject Period, the Company is planning to determine the total number of shares granted to each Eligible Director using the calculation method shown below. (However, the number of shares to be granted may be rationally adjusted depending on the period in office of each Eligible Director during the Subject Period.)

Calculation Method for the Number of Shares to be Granted

Number of Shares to be Granted = (Ⅰ) Number of shares linked with the net profit + (Ⅱ) Number of shares linked with the ROE, on a consolidated basis respectively

The ratio of the number of shares linked with the net profit and the number of shares linked with the ROE shall be 8:2 as described below.

(Ⅰ) Number of Shares Linked with the Net Profit

Basic compensation^*1 × 0.8 × Performance-based compensation rate (Ⅰ)^*2 ÷ Price of allotted shares^*3

• *1The amount of the basic compensation shall be determined at the board of directors’ meeting.

• *2Performance-based compensation rate (Ⅰ) may vary between 0 and 200% depending on the achievement of performance criteria for the net profit, which is the net profit after deducting minority interest belonging to the owner of the parent company, specified by the medium-term management plan.

• *3The price of share allotted to the Eligible Directors shall be determined at the board of directors’ meeting to be fair and rational based on the closing share price of the Company at the TSE on the previous day of each resolution for the issuance of new shares or the disposition of treasury shares (or the closing share price at the TSE on the nearest prior trading day if the Company’s common shares were not traded on said previous day).

(Ⅱ) Number of Shares Linked with the ROE

Basic compensation^*1 × 0.2 × Performance-based compensation rate (Ⅱ)^*4 ÷ Price of allotted shares^*3

• *4Performance-based compensation rate (Ⅱ) shall be set at 100% when the ROE criteria specified by the medium-term management plan has been achieved, and at 0% when they have not been achieved.

(2) The Amount of Monetary Compensation Claims

Total amount of the monetary compensation claims granted to the Eligible Directors shall be as described above. However, during the initial Subject Period (for five fiscal years between the fiscal year starting July 1, 2021 and the fiscal year starting July 1, 2025), the Company is planning to determine the amount of the monetary compensation claims granted to each Eligible Director by multiplying the number of shares to be granted described in (1) above with the price of allotted shares^*3 described in (1) above.

(3) Transfer Restriction

When issuing of the Company’s common shares or disposing of its treasury shares, the Company shall conclude a PLAN Allotment Agreement (hereinafter the “Allotment Agreement”) to set share transfer restriction with the Eligible Directors. In addition, to ensure the effectiveness of such transfer restriction, the shares granted to the Eligible Directors in accordance with the PLAN shall be managed with the exclusive accounts opened by the Eligible Directors at a securities firm designated by the Company during the restriction period to prevent the share transfer, the set-up of the security rights, and all other actions during the period of transfer restriction.

• A)Until retirement, the Eligible Directors shall not transfer, set up security rights for, and take any other actions regarding the Company’s common shares allotted in accordance with the Allotment Agreement.

• B)In the case of certain events such as the board of directors determines that there has been a material breach of the delegation agreement between the Company and the Eligible Directors during the term of office of the Eligible Directors, the Company may acquire the common shares in question without providing compensation

• C)Other matters including cancellation conditions regarding the transfer restriction set in advance by the Company’s board of directors’ meeting

However, in the case that any Eligible Director retires before the date of the first General Meeting of Shareholders held after the expiration of the Subject Period due to the expiration of his/her term of office or other justifiable grounds, the number of common shares without the transfer restriction determined as described in (1) above is granted.

(4) Other

In the case that any merger agreement in which the Company is the absorbed company, any share exchange agreement in which the Company is the wholly owned subsidiary, and any other similar matters regarding reorganization, etc. are approved at the Company’s General Meeting of Shareholders during the Subject Period (or the Company’s board of directors’ meeting if the above-mentioned matters do not require approval from its Shareholders), the Company shall not grant the monetary compensation claims and common shares; provided, however, that the effective date for the relevant reorganization, etc. is scheduled before the date the stock is granted in accordance with the PLAN.

In addition, in the case that any Eligible Director retires or is involved in a certain illegal activity during the Subject Period, the PLAN allows the Company, as a so-called malus provisions, to choose not to grant the monetary compensation claims and common shares in response to a decision made at the board of directors’ meeting with the utmost deliberation on a report from the Nomination and Compensation Committee.