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.

August 10, 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 Executive Officers Who Have Employment Contracts withthe Company
TODA CORPORATION (the “Company”) announces that it resolved at its Board of Directors meeting
held today to continue and partially revise the performance-linked share-based compensation
system that was introduced in FY2016 (hereinafter “the System”) targeted at the executive officers
who have employment contracts with the Company, as described below.
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 increasingmotivation 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) The System, which uses the Employee Stock Ownership Plan (ESOP) trust (hereinafter “theESOP trust”), is a share-based compensation system linked to the Company’s medium- tolong-term business performance. The ESOP trust is an incentive plan for employees basedon the ESOP system in the United States.

2.

Partial Revision of the SystemRegarding 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. The following changes will be made 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 Company1(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 points issued to the target
beneficiaries of the System shallbe calculated based on twofactors: performance-linked
factors aimed at raising
motivation to increase themedium-term businessperformance, and nonperformance-linked factors aimed
at raising awareness to increase
the corporate value over the long

Method ofcalculating theshares of theCompany, etc., tobe acquired by thetarget
beneficiaries of theSystem

At certain timing each year,term.

points calculated based on theThe points based on theposition and the degree of

performance-linked factors areattainment of the Company’s

issued according to the position ofbusiness performance targets foreach beneficiary at certain timing

the year are issued, and theeach year, and shares of theissued points are accumulated

Company, etc., are delivered/paid

each year until the target

according to the number of points

beneficiaries of the System retirecalculated based on the degree offrom office, when shares of theattainment of the Company’s

Company, etc., according to thebusiness performance targets

accumulated number of points

three (3) years after the issuance.

are delivered/paid to them.

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 target beneficiaries of theSystem retire from office, whenshares of the Company, etc.,
according to the accumulated
number of points aredelivered/paid to them.

2ItemBefore 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

Shares of the Company

Percentage of theequivalent to 80% of the points

equivalent to 50% of the points

amount equivalentissued (shares less than one unit

issued (shares less than one unit

to the cash

are disregarded) are delivered,

are disregarded) are delivered,converted fromwhile the remaining shares arewhile the remaining shares areshares of theconverted to cash by the trust

converted to cash by the trust

Companyand the amount equivalent to theand the amount equivalent to thecash is paid to the beneficiary.

cash is paid to the beneficiary.

Criteria for theachievement ofbusiness targets

Note: Total frequency rate = total occupational accidents (4 or more days lost from work) ÷ total
working hours (1,000,000 hours)

Reference: Content of the Trust Contract
Type of the trust:

Nonmonetary trust using a designated and single

Purpose of the trust:

method of investment (third-party-benefit trust)
Provision of incentives to the executive officers who③

Settlor:have employment contracts with the Company
The Company④Trustee:

Mitsubishi UFJ Trust and Banking Corporation

Beneficiary:(Co-trustee: The Master Trust Bank of Japan, Ltd.)
Those who are subject to the ESOP trust and satisfy

Trust administrator:

the requirement as a beneficiary
A third party who has no conflicts of interest with the⑦Trust contract date:Company (Certified Public Accountant)August 29, 2016⑧

Trust period:

From August 29, 2016, to September 30, 2022①②⑤⑥(The trust period will be extended to September 30,⑨2025, by revising the trust contract in August 2022)
Date of commencement of the System: September 1, 2016⑩

Exercise of voting rights:

Not exercised⑪

Type of shares acquired:

The Company’s common shares⑫

Total amount of shares acquired:

21,928,200 yen
3⑬Holder of vested rights:

The Company⑭

Residual assets:

The amount of residual assets that the Company as aholder of the vested rights may receive shall be within
the range of the reserve for the cost of the trust, or anamount deducting the fund for acquisition of sharesfrom the trust money.
End4