Notice Regarding Introduction of Performance-Linked Stock Compensation Plan for Directors and Others

Overview of the Performance-Linked Stock Compensation Plan Introduction

Hokko Chemical Industry Co., Ltd. has resolved to establish a new performance-linked stock compensation plan targeting directors and executive officers (excluding non-resident domestic officers), with implementation contingent upon approval at the 76th Annual General Meeting of Shareholders on February 26, 2026. The plan comprises fixed monetary remuneration and performance-linked stock compensation (fixed and performance-linked components), aiming to enhance corporate value over the medium to long term. A trust will be established, acquiring company shares using trust funds, and shares or cash will be granted upon resignation based on point allocations.

Details of the Plan and Future Outlook

The plan’s target period is principally aligned with the three-year management plan, with the initial phase covering one fiscal year until the end of November 2026 plus the subsequent three-year plan, totaling four fiscal years (end of November 2026 to end of November 2029). The trust fund cap for the initial target period is 400 million yen (200 million yen for directors), with a maximum stock acquisition of 160,000 shares (80,000 shares for directors). Voting rights will not be exercised during the trust period, and dividends will be allocated to the trust. Upon trust termination, remaining shares will be acquired without compensation and cancelled. Further details will be finalized and disclosed following shareholder approval.