Notice Regarding the Disposal of Treasury Shares for Performance-Linked Stock Remuneration

Decision Regarding Stock Acquisition Under Performance-Linked Stock Remuneration Plan

KADOKAWA Corporation has formalized a decision to allocate additional funds to its performance-linked stock remuneration plan, facilitating the acquisition of company shares through an established trust mechanism. This strategic move aims to incentivize executive officers of the parent company and directors of its various subsidiaries, excluding outside directors. By aligning executive compensation with corporate performance and shareholder value, the initiative seeks to foster long-term growth and strengthen the commitment of leadership across the group’s diverse business segments. The transaction involves the acquisition of 903,100 shares of common stock, valued at approximately 2.935 billion yen. These shares will be obtained through the disposal of treasury stock, with the transaction scheduled for completion on February 18, 2026. The trust, originally established in 2017 through the consolidation of previous incentive plans from Dwango and KADOKAWA Future Publishing, serves as the vehicle for this distribution. Under the terms of the trust agreement, voting rights associated with the shares held within the trust will not be exercised, ensuring a neutral impact on corporate governance proceedings during the holding period. This financial arrangement extends the operational timeline of the existing remuneration framework, with the trust period now projected to conclude at the end of August 2027. The management of the trust remains under the oversight of Sumitomo Mitsui Trust Bank and an independent third-party administrator to ensure transparency and adherence to beneficiary requirements. This capital allocation underscores a continued reliance on equity-based incentives to drive executive performance within the Japanese media and entertainment conglomerate.