Notice Regarding the Introduction of Performance-Linked Restricted Stock Compensation Plan

Purpose of the Plan Introduction

Nitto Denko Corporation has resolved to introduce a performance-linked restricted stock compensation plan in response to increasing responsibilities and roles of directors under the new mid-term management plan amid a rapidly changing business environment. The aim is to secure and retain excellent talent by expanding incentives linked to medium- to long-term performance and strengthening the alignment of interests between directors and shareholders, thereby increasing the ratio of stock compensation in director remuneration.

Plan Overview and Future Schedule

Under this plan, performance-linked restricted stock compensation will be granted to eligible directors based on achievement levels of performance targets defined for the evaluation period set by the board of directors. Monetary compensation claims will be provided and fully contributed in kind to allocate shares. The total number of restricted shares allocated annually will be capped at 1,000,000 shares, with the total monetary compensation claims also capped at the amount calculated by multiplying this share cap by the stock price at the time of payment. The current stock compensation plan will be abolished after the July 2025 payment. Outside directors are excluded from eligibility, and salary for directors concurrently serving as employees is not included. The proposal will be submitted for approval at the 161st Annual General Meeting of Shareholders scheduled for June 19, 2026.