Note:This document is a translation of a part of the original Japanese version and provided for reference purposes only. In the event of any discrepancy between
the Japanese original and this English translation, the Japanese original shall prevail.

May 13, 2022
Company: TODA CORPORATION
Representative: Seisuke Otani, President and Representative Director(Securities Code: 1860 TSE Prime Market)
Contact: Kaname Miwa, Corporate Officer, General Manager,Financial&IR Div.
(Phone: 03-3535-1357)

Notice of Continuation and Partial Revision of the Performance-linked Share-based
Compensation System for the Company’s Directors and Executive Officers

TODA CORPORATION (the “Company”) announces that it resolved at its Board of Directors meeting
held today to submit the proposal (hereinafter “the Proposal”) of continuation and partial revision of
the performance-linked share-based compensation system that was introduced in FY2016(hereinafter “the System”) targeted at the Company’s directors and the executive officers who
conclude an entrustment contract with the Company (excluding outside directors and non-residentsof Japan) to the 99th Annual General Meeting of Shareholders of the Company to be held on June29, 2022 (hereinafter “the General Meeting”).

1.

Continuation of the System(1) The Company decided at its Board of Directors meeting held today to continue the Systemafter partially revising it as detailed in Paragraph 2. below, aimed at further increasing
motivation to attain medium- to long-term business performance enhancement and corporate
value growth, and modifying its evaluation and compensation system to increase
management’s awareness of putting shareholders first.
(2) Continuation of the System is subject to approval of the Proposal at the General Meeting.
(3) The System, which uses the directors’ compensation Board Incentive Plan (BIP) trust(hereinafter “the BIP trust”), is a share-based compensation system linked to the Company’s
medium- to long-term business performance. The BIP trust is an incentive plan for directors
based on the Performance Share and the Restricted Stock compensation systems in the UnitedStates and European countries.

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2.

Partial Revision of the System
Regarding the System for which the trust period is set to expire on September 30, 2022, theCompany will continue the System by revising the trust contract and making additional
contributions to the trust to extend the trust period by three (3) years. As such, the System’s target
period will be three (3) fiscal years from the fiscal year ending March 31, 2023, to the fiscal year
ending March 31, 2025. Subject to approval of the General Meeting, the following changes will bemade to the conventional System for its continuation.
The System is a share-based compensation system where the money contributed by theCompany is used to acquire shares of the Company via the trust company, and shares of theCompany and the amount equivalent to the cash converted from shares of the Company(hereinafter “the shares of the Company, etc.”) are delivered/paid to the target beneficiaries. Except
for the matters detailed below, the content of the System that was set in FY2016 remains effective.
For details, please refer to the Notice of Introduction of the Performance-linked Share Allocation
System for the Company’s Directors and Executive Officers, dated May 13, 2016.
Revisions to the System
Item

Before Revision

After Revision
The Company’s directors and theexecutive officers who conclude
an entrustment contract with theCompany (excluding nonresidents of Japan; hereinafter“the directors, etc.”)

The Company’s directors and theTarget
beneficiaries of theSystem

executive officers (excludingoutside directors and nonresidents of Japan) who conclude
an entrustment contract with theCompany

Considering the function ofoutside directors to not only
supervise but also provide advice
to the management from theperspective of increasing theCompany’s medium- to long-term
corporate value, outside directors
are subject to the System.
However, they will be paid only
the part not linked to businessperformance because they do not
engage in the execution ofbusiness.

Upper limit ofmoney contributedby the Company¥1,400 million in total for three¥245 million in total for three (3)(3) fiscal yearsfiscal years(including ¥15 million for outsidedirectors)

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Item

Before Revision

Upper limit of theAfter Revision
Upper limit of the total number

number of shares

Upper limit of the total numberof points per year: 800,000 pointsof the Company toof points per year: 140,000 points(800,000 shares)

be acquired by the(140,000 shares)(including 8,600 points (8,600directors, etc.

shares) for outside directors)
The points issued to thedirectors, etc., shall be calculated
based on two factors:
performance-linked factors aimed
at raising motivation to increasethe medium-term businessperformance, and nonperformance-linked factors aimed
at raising awareness to increase
the corporate value over the long
At certain timing each year,points calculated based on theposition and the degree of

Method ofattainment of the Company’s

calculating thebusiness performance targets forshares of thethe year are issued, and theCompany, etc., toissued points are accumulated

be acquired by theeach year until the directors, etc.,

directors, etc.

retire from office, when shares of
the Company, etc., according to
the accumulated number ofpoints are delivered/paid to them.

term.
The points based on theperformance-linked factors areissued according to the position ofeach beneficiary at certain timing
each year, and shares of theCompany, etc., are delivered/paid
according to the number of points
calculated based on the degree ofattainment of the Company’sbusiness performance targets
three (3) years after the issuance.
The points based on the nonperformance-linked factors areissued according to the position ofeach beneficiary at certain timing
each year, and the issued points
are accumulated each year until
the directors, etc., retire fromoffice, when shares of theCompany, etc., according to theaccumulated number of points
are delivered/paid to them.

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Item

Criteria for theachievement ofbusiness targets

Before Revision

After Revision

There is a range of variation from

There is a range of variation from0 to 157.5% according to the

0 to 165.0% according to thedegree of attainment of thedegree of attainment of theCompany’s business performancetargets of the companywide

targets for each fiscal year (ofperformance evaluation

consolidated net sales,(consolidated net sales,

consolidated operating income,consolidated operating income

consolidated profit for the yearand ROE) and the ESG

attributable to owners of theevaluation (CO2 emissions, Total

parent and CO2 emissions).

frequency rate).

Shares of the Company
Percentage of theamountequivalent to thecash converted
from shares of theCompany

equivalent to 80% of the points
issued (shares less than one unit
are disregarded) are delivered,
while the remaining shares areconverted to cash by the trust
and the amount equivalent tothe cash is paid to thebeneficiary.

Shares of the Company
equivalent to 50% of the points
issued (shares less than one unit
are disregarded) are delivered,
while the remaining shares areconverted to cash by the trust
and the amount equivalent to thecash is paid to the beneficiary.

Note1: Total frequency rate = total occupational accidents ÷ total working hours (1,000,000 hours)
Note2: A review of the ESOP trust system already introduced for executive officers who have
employment contracts with the Company is currently under consideration. Details will be announced
as soon as they are determined.
Reference: Content of the Trust Contract① Type of the trust:

Nonmonetary trust using a designated and single

method of investment (third-party-benefit trust)② Purpose of the trust:

Provision of incentives to the directors, etc.

③ Settlor:

The Company④ Trustee:

Mitsubishi UFJ Trust and Banking Corporation(Co-trustee: The Master Trust Bank of Japan, Ltd.)⑤ Beneficiary:Those who are subject to the BIP trust and satisfy therequirement as a beneficiary⑥ Trust administrator:

A third party who has no conflicts of interest with
the Company (Certified Public Accountant)⑦ Trust contract date:August 29, 2016⑧ Trust period:

From August 29, 2016, to September 30, 2022
The trust period will be extended to September 30,2025, by revising the trust contract in August 2022)⑨ Date of commencement of the System:

September 1, 2016

⑩ Exercise of voting rights:

Not exercised⑪ Type of shares acquired:

The Company’s common shares
4⑫ Upper limit of the trust money:¥ 1,400 million (including trust fees and cost)⑬ Holder of vested rights:

The Company⑭ Residual assets: The amount of residual assets that the Company as a holder of the vested rights

may receive shall be within the range of the reserve for the cost of the trust, or an amountdeducting the fund for acquisition of shares from the trust money.
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