Central Glass : Notice of the Disposal of Treasury Stock through Third-Party Allotment in Accordance with the Introduction of Stock Compensation Plan（121KB）

August 4, 2023

Central Glass Co., Ltd.

Note: This document is a translation of the Japanese original for reference purposes only. In case of any discrepancy between this translated document and the Japanese original, the original shall prevail. The Company assumes no responsibility for this translation or for direct, indirect or any other forms of damages arising from or in connection with the translation.

Notice of the Disposal of Treasury Stock through Third-Party Allotment

in Accordance with the Introduction of Stock Compensation Plan

At the meeting of Board of Directors held today, Central Glass Co., Ltd. (the "Company") resolved to dispose of treasury stock as stock-based compensation as follows.

1. Outline of Disposal

2. Purpose and reason of the disposition

On May 11, 2023, the Board of Directors resolved to introduce a performance-based stock compensation plan. The plan was approved at the 109th Ordinary General Meeting of Shareholders held on June 29 2023 to clarify the linkage between the remuneration of our directors, excluding outside directors, and executive officers who have entered into an entrustment agreement with us, and our stock value, and to raise the awareness that directors, etc. can contribute to improving medium-tolong-term performance and increasing corporate value by sharing profits and risks arising from stock price fluctuations with shareholders.

For the summary of the performance-based stock compensation plan, please refer to the "Notice of Introduction of Performance-Based Stock Compensation Plan for Directors " as of May 11, 2023.

In addition, on May 11, 2023, the Board of Directors resolved to introduce the Employee Equity Compensation Plan to enhance our employee benefit program and raise awareness of our performance and stock price, and foster a sense of participation in management and enhancing our corporate value over the medium to long term.

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For the summary of our employee equity compensation plans, please refer to the " Notice of Determination of Matters Relating to Acquisition of Shares for Equity Compensation Plan for Employees " as of May 11, 2023. The Company resolved to introduce an equity compensation plan for employees of Central Glass Products Co., Ltd., a subsidiary of the Company (collectively referred to as the Company's employees, hereinafter referred to as the "Employees"), similar to that for employees of the Company, and plans to manage it in the employee stock trust.

In terms of the number of shares to be delivered to directors and employees, based on the Share Delivery Regulations established by the Company at the time of the introduction of the plan, the number of shares to be delivered to directors and employees in consideration of the position and composition of directors and employees during the trust period. The ratios of dilution are 1.11% of 42,975,995 shares outstanding as of March 31, 2023 (1.83% of 26,000,000 shares outstanding as of June 30, 2023), and 1.93% of 246,658 voting rights as of March 31, 2023, all of which are rounded to the third decimal place. The plan clarifies the linkage between the remuneration of our directors and employees and our stock value, and leads to an increase in our corporate value over the medium to long term. Accordingly, the volume of disposal of treasury stock and the scale of dilution are reasonable and the impact on the secondary market should be minimal.

(Reference) Outline of Trust Contract for Stock Trust for Directors

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(Reference) Outline of Trust Contract for Stock Trust for Employees

3. Basis and details of the calculation of the disposal value

Considering the recent stock price trends, the disposal price was set at 2,973 yen, the closing price on the Tokyo Stock Exchange on August 3, 2023 (the business day immediately prior to the resolution date of the Board of Directors), which is not arbitrary price. The closing price on the business day immediately before the resolution date of the Board of Directors was determined to be the market value immediately before the resolution date of the Board of Directors, which is highly objective and reasonable as the basis for calculation. With regard to the value, the deviation rate from the average closing price of 3,018 yen (amounts less than 1 yen rounded down) during the most recent business month (from July 4, 2023 to August 3, 2023) immediately preceding the date of the resolution of the Board of Directors is (1.49%) and the deviation rate from the average closing price of 3,036 yen (amounts less than 1 yen rounded down) during the most recent three-month period (from May 8, 2023 to August 3, 2023) is (2.08%) and from the average closing price of 3,006 yen (amounts less than 1 yen rounded down) during the most recent six-month period (from February 6, 2023 to August 3, 2023) is (1.10%).

(All deviation rates are rounded to the nearest third decimal place.)

As a result, the disposal value related to the disposal of treasury stock is not particularly favorable to the planned disposal destination, so it is considered as reasonable.

With regard to the disposal value mentioned above, all Corporate Auditors who attended the meetings of the Board of Directors (five Corporate Auditors, of which three are outside Corporate Auditors) expressed their opinion that the basis for calculating the disposal value is reasonable, and that the disposal value does not fall under the category of particularly favorable disposal value for the institutions to be disposed of, and it is legal.

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4. Items related to procedures for the corporate code of conduct

The disposal of treasury stock does not require the following procedures: ① the stock dilution ratio is less than 25%; and ② the disposal does not change any controlling shareholder. Therefore, the Company does not need to obtain opinions from independent third parties as stipulated in Article 432 of the Securities Listing Rules stipulated by the Tokyo Stock Exchange, or procedures for confirming the intention of shareholders.

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