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

Purpose and Overview of the System Introduction

Aozora Bank has resolved to revise the director remuneration system and introduce a performance-linked restricted stock compensation plan. This system aims to strengthen the linkage between in-house directors’ remuneration and performance, enhancing medium- to long-term incentives. Restricted shares will be granted as compensation to eligible directors, with the number of shares determined based on performance evaluation indicators set by the Board of Directors. The evaluation indicators combine quantitative measures such as profitability, capital efficiency, and capital soundness, with qualitative measures assessing the implementation status of growth strategies.

Submission to Shareholders’ Meeting and Details of Transfer Restrictions

The introduction of this system is subject to approval at the 93rd Ordinary General Meeting of Shareholders scheduled for June 23, 2026. Upon approval, the existing stock compensation-type stock option framework will be abolished, although unexercised options will remain valid. Restricted shares will be subject to transfer restrictions during the restriction period, prohibiting transfer or setting as collateral, with the Bank holding the right to acquire these shares without consideration if violated. Additionally, repayment claims are possible if significant fraudulent accounting or similar misconduct is discovered. The total remuneration is set at up to JPY 250 million annually, with up to 150,000 shares issued per year, and allocation will be decided following deliberations by the Nomination and Remuneration Committee.