Notice Regarding Disposal of Treasury Stock as Restricted Stock Compensation

Overview of Treasury Stock Disposal

Tokai Carbon Co., Ltd. resolved to dispose of 40,400 shares of treasury stock at 949.5 yen per share, totaling 38,397,779 yen, to five directors on April 17, 2026, based on the restricted stock compensation plan. This disposal aims to provide medium-to-long-term incentives to eligible directors and to share shareholder value. The transfer restriction period is set at 30 years and is managed according to the restricted stock allocation agreement.

Details of the Restricted Stock Compensation Plan and Impact on Shareholders

The plan was introduced in 2020 and allocates common shares as in-kind contributions against monetary claims up to 100 million yen annually to eligible directors. The transfer restriction period is 30 years, during which transfer and pledge of shares are prohibited. Conditions for lifting transfer restrictions upon resignation, retirement, or corporate restructuring are also stipulated. The disposal price is reasonably set based on market price and is not particularly favorable. The dilution impact on shareholder value is unknown, but the plan aims to enhance management motivation through long-term incentives.