Supplemental Explanatory Material on the Opinion of the Company’s Board of Directors Regarding Proposals to be Submitted to the Annual General Meeting of Shareholders

March 6, 2026

The Board of Directors has submitted Proposals No. 1 through No. 4 to the 119th Annual General Meeting of Shareholders scheduled to be held on March 24, 2026. The Board opposes Shareholder Proposal No. 5 (Acquisition of Treasury Shares).

Company Proposals

For

For For For

Against

*The shareholder proposal requests that, within one year from the conclusion of this Annual General Meeting of Shareholders, the Company acquire 15 million shares of its own stock, with an aggregate acquisition amount of JPY 200 billion.

※ISS also recommends voting against.

（ as of March 6, 2026 ）

1

Dividend per share: JPY Total Payout Ratio : %

• The Company considers the return of earnings to shareholders to be one of the most important issues for

  management. The Company's basic policy is to continue providing stable returns reflecting overall business

  400

  320

  240

  160

  80

  0

  Trends in Dividends and Total Payout Ratio

  234% 363

  309

  339

  285

  260

  20

  194%

  235

  15

  10

  40%

  58%

  59%

  50

  28%

  2021 2022 2023 2024 2025 2026

  通期配 当金

  総還元 性向

  Annual Dividend

  Total Payout Ratio
  
  

  （Forecast）

  250%

  0%

  0%

  0%

  %

  0%

  performance and strategy.

  • In accordance with the above policy, the Company has submitted Proposal No.1, a company proposal, to pay out year-end cash dividends for fiscal year 2025 of 169.50 yen per share, an increase of 15 yen per share from the year-end cash dividends paid in the previous year. If this proposal is approved, the cash dividends for the full fiscal year 2025, combined with the interim dividends of 169.50 yen, will amount to 339 yen per share (a dividend payout ratio of 87%), an increase of 30 yen per share from the cash dividends paid in the previous year. This will also mark the fifth consecutive year of dividend increases since fiscal year 2021. The cash dividends for the full fiscal year 2026 are scheduled to increase further to 363 yen per share.

  • In February 2025, the Company set a policy to implement acquisitions of treasury stock in the approximate amount of 100.0 billion yen over the next two years. In accordance with this policy, we recently acquired about 50.0 billion yen worth of treasury stock within one year. All these efforts resulted in the Company's total return ratio for the fiscal year ended December 2025 being expected to reach 234%. In addition, equity decreased by about 2% within one year, and of this, shareholders' equity decreased by about 6% within the same period.

  • At the same time, the Company believes that efficient cash allocation must be achieved upon determining an optimal balance between growth investment and shareholder returns. Based on the above stance, at a meeting of the Board of Directors held on February 10, 2026, the Company formulated initiatives entitled and announced "Cash allocation and improvement of capital efficiency (FY2025 Result and FY2026 Schedule_Announced in February 2026)" (Please refer to p. 6 and p. 7 for details).

  • Under its basic policy of not reducing dividends, the Company will strive to implement shareholder returns with a target total return ratio of at least 50%, by continuing to enhance progressive dividends and engaging in the acquisition and cancellation of treasury stock on a flexible, ongoing basis. In line with its Shareholder Returns Policy, the Company has also established a new limit for the acquisition of treasury stock of 50.0 billion yen as announced in "Notice Concerning Establishment of Limit for Purchase of Treasury Stock" dated February 10,

    2026, with the acquisition period set from February 12, 2026 to January 31, 2027 (hereinafter, "Limit for Treasury Stock Acquisition Dated February 10, 2026"). By acquiring approximately 50.0 billion yen worth of treasury stock, we seek to achieve further reduction in equity and shareholders' equity.

    
    
    ‌Opinion of the Board of Directors Regarding the Shareholder Proposal (2/2)

    The possibility that this shareholder proposal could hinder growth investment for the purpose of enhancing the Company's corporate value.

    
    
    

    The possibility that this shareholder proposal could destabilize the Company's position within the industry.

    
    
    

    • Under this shareholder proposal, a large-scale acquisition of treasury stock is proposed, with a total acquisition price of 200.0 billion yen to be implemented within a short period of only one year. Implementing such a massive acquisition of treasury stock-which is nearly six times the Company's consolidated net income of 34.0 billion yen for fiscal year 2025-within a short time frame of only one year may lessen the scope for growth investment necessary to enhance corporate governance and corporate value, and could undermine the Company's ability to adapt to the significantly transforming bicycle and fishing tackle businesses.

    • Implementing this shareholder proposal could unnecessarily decrease the Company's resilience against the emergence of contingencies and risks, and there are concerns that it could hamper and destabilize the entire supply chain for bicycles and fishing tackle, in which the Company holds a high market share. Especially in the bicycle industry, the Company must act as a buffer in order to minimize the negative impact on the entire industry in the event of a supply-demand imbalance; therefore, we maintain our financial soundness by holding a certain amount of cash and time deposits.

    • In fact, during the phase of declining demand and market inventory adjustment that occurred as a reaction to the surge in demand for completed bicycles amid the COVID-19 pandemic from around 2021 to 2022, the

      Company underpinned the entire industry by taking flexible actions, such as accepting order cancellations from our customers, to mitigate the negative impact on the entire industry.

    • We believe that the Company's fulfillment of such a role leads to securing trust within the industry and stabilizing the market, which in turn builds a foundation for our new growth and contributes to the Company's high market share in the industry. If the Company were to lose the management resilience necessary to act as a buffer as described above, it could threaten the Company's credibility, its foundation for growth, and its high market share within the industry.

      The current cash holdings are deemed appropriate.

      
      
      

    • The proposing shareholder also mentions the amount of cash and time deposits held by the Company as grounds for the proposal, but due to our growth investment and proactive shareholder returns, the amount of cash and time deposits held by the Company has decreased by 56.7 billion yen, or about 11%, compared with the figure as of the end of fiscal year 2024.

    • Although the amount of cash and time deposits on the Company's consolidated balance sheet as of the end of fiscal year 2025 increased by approximately 170.0 billion yen compared with the pre-pandemic level recorded at the end of fiscal year 2020, about 120.0 billion yen of this increase is attributable to foreign exchange effects arising from conversion of foreign currency-denominated cash and time deposits into yen amid the ongoing yen depreciation, and it must be noted that this increase in the amount of cash and time deposits is limited on a local currency basis, such as dollars and euros. Therefore, we deem it not appropriate to judge immediately that there is excess accumulation of cash and time deposits merely because of the increase in the amount of cash and time deposits

that is converted into yen on the balance sheet (refer to p. 8 for details of the cash management policy). 5

• Of our ten directors, five (50.0%) are outside directors, and of our four Audit & Supervisory Board members, two are Outside Audit & Supervisory Board Members. This structure enables us to incorporate and utilize diverse perspectives and viewpoints that differ from those within the company in our management. We hold Board of Directors meetings monthly in principle, where we deliberate and make decisions on important management matters, while also supervising the execution of duties by each director. Our goal is to ensure that management decisions are both rational and efficient.

  Board of Directors

  (Assuming all candidates are elected at the AGM)

• Since 2005, we have appointed one non-Japanese director, reinforcing our governance framework so that it is capable of supporting business activities on a global scale.

  Yozo Shimano

  Taizo

  Takashi

  Masahiro

  Chia Chin Seng Kazuo Ichijo

  Mitsuhiro

  Sadayuki

  Hiromi Wada

  Atsumi

  Chairman and CEO

  Shimano

  Governance & Independence

  Executive Directors

  Independent Outside Directors

  Independent Directors

  (on the Nomination and Compens

  ation

  Advisory Committee)

  Independent Outside Audit & Supervisory Board Members

  5 10

  5 10

  3 5

  ２ 4

  President

  Toyoshima

  Deputy President

  Tsuzaki

  Deputy President

  Executive Vice President

  Outside Director

  Katsumaru

  Diversity & Business Expertise

  Female

  Directors

  Average Age of Directors and

  Outside Directors with

  ２ 10

  80's

  70's

  Officers

  50's

  Management Experience at Operating Companies

  69.6

  3 5

  60's

  Outside Director

  Sakakibara

  Outside Director

  Outside Director

  Eguchi

  Outside Director

  
  
  

  Current Position / Role

  Name

  Years in Office*

  Nomination & Compensation Committee

  Skill Matrix

  Corporate Management / Management Strategy

  Manufacturing / Technology / R&D

  Marketing / Sales

  Risk Management / Legal Affairs

  Human Resource Management

  Sustainability

  Finance / Accounting

  IT/ Digital

  Global

  Chairman and CEO

  Yozo Shimano

  40

  Chair

  ●

  ●

  ●

  ●

  ●

  President

  Taizo Shimano

  16

  〇

  ●

  ●

  ●

  ●

  ●

  ●

  Deputy President

  Takashi Toyoshima

  16

  ●

  ●

  ●

  ●

  Deputy President

  Masahiro Tsuzaki

  16

  ●

  ●

  ●

  ●

  ●

  Senior Executive Vice President Executive Chairman, Shimano (Singapore) Pte. Ltd.

  Chia Chin Seng

  14

  ●

  ●

  ●

  Outside Director

  Kazuo Ichijo

  21

  〇

  ●

  ●

  ●

  ●

  ●

  Outside Director

  Mitsuhiro Katsumaru

  9

  〇

  ●

  ●

  ●

  Outside Director

  Sadayuki Sakakibara

  7

  ●

  ●

  ●

  ●

  ●

  Outside Director

  Hiromi Wada

  3

  〇

  ●

  ●

  ●

  Outside Director

  Atsumi Eguchi

  1

  ●

  ●

  ●

  ‌Skill Matrix

• The Audit & Supervisory Board consists of two full-time Audit & Supervisory Board Members and two Outside Audit & Supervisory Board Members. The Chair of the Board is a full-time Audit & Supervisory Board Member.

,

Dividends for Fiscal Year 2025

Basic Policy

The Company considers the return of earnings to shareholders to be one of the most important issues for management. Our basic policy is to continue providing stable returns reflecting overall business performance and strategy. Under this policy, we will strive to enhance progressive dividends and engage in the acquisition and cancellation of treasury stock on a flexible, ongoing basis, with a target total return ratio of at least 50% as a lower limit, thereby working to improve shareholder returns.

In accordance with this basic policy, the Company proposes a year-end cash dividend for the current fiscal year of 169.50 yen per share. Combined with the interim dividend, the annual dividend for the full fiscal year will amount to 339 yen per share.

• Kiyoshi Tarutani (Audit & Supervisory Board Member) and Toshihiko Hashimoto (Outside Audit & Supervisory Board Member) are scheduled to resign their posts on March 24, 2026.

Reasons for nomination as a candidate for Audit & Supervisory Board Member

Mr. Masahiro Ohtake has professional experience as a certified public accountant and has served in the Human Resources and Internal Audit departments of the Company. He possesses extensive knowledge and experience in finance, accounting, and the Company's internal audit system.

Based on this knowledge and experience, the Company has nominated him as a candidate for Audit & Supervisory Board Member, believing that he will effectively fulfill a supervisory function over the Company's management.

• Kiyoshi Tarutani (Audit & Supervisory Board Member) and Toshihiko Hashimoto (Outside Audit & Supervisory Board Member) are scheduled to resign their posts on March 24, 2026.

• From the standpoint of ensuring continuity of the Audit & Supervisory Committee and maintaining the effectiveness of its oversight functions, we believe that Ms. Nozue's

  reappointment is essential.

  
  
  

  Reasons for Reappointing Ms. Nozue

  Outside Audit Supervisory Boar	& Date of Birth d	August 17, 1969
  Member Candidat Kanako	e Shareholding in Shimano	200 shares
  Nozue	Years in Office※	12 years
  	Auditors Meeting Attendance	100％(14/14)
  Career History
  October 2001	Admitted to the Bar; joined Kitagawa Law Firm
  May 2004	Joined Nozue Law Firm
  August 2007	Joined Tsujinaka Law Firm (to present)
  March 2014	Appointed Outside Audit & Supervisory Board Member (to present)

  Ms. Nozue has leveraged her expertise as a lawyer to make meaningful contributions to the Company, particularly in enhancing the internal reporting system, information management framework, and compliance-related matters through the Audit & Supervisory Committee.

  In addition, as one of the Company's female employees and from a gender-diversity standpoint, she has continued to provide valuable recommendations on matters such as improving the ratio of female employees and promoting workplace inclusion. Through these efforts, she has contributed to advancing diversity across the Company.

  Moreover, the Company intends to nominate one additional candidate-Mr. Hashimoto, another Outside Audit & Supervisory Committee Member-to succeed an outgoing member.

  Under this situation, replacing two committee members simultaneously would risk

  undermining the continuity and effectiveness of the Committee's oversight.

  Therefore, we believe it is essential to reappoint Ms. Nozue, who possesses extensive experience and expertise, so that she can continue supporting new members and contribute to maintaining and enhancing our governance standards.

  Furthermore, prior to this Annual General Meeting of Shareholders, the Company had engaged in various considerations, including the search for suitable candidates, to secure an appropriate successor to Ms. Nozue. Following this Annual General Meeting of Shareholders, the Company will continue to examine potential candidates for the position of Outside Audit & Supervisory Board Member to succeed Ms. Nozue. If a successor candidate capable of fulfilling a role equivalent to or greater than that of Ms. Nozue is secured, the Company may appoint such candidate as an Outside Audit & Supervisory Board

  
  
  ‌Proposal No. 3：Election of 3 Audit & Supervisory Board Members(3/3)

  • Kiyoshi Tarutani (Audit & Supervisory Board Member) and Toshihiko Hashimoto (Outside Audit & Supervisory Board Member) are scheduled to resign their posts on March 24, 2026.

    
    
    

    Outside Audit ＆ Date of Birth October 1, 1961 Supervisory Board Member Shareholding in 0 shares Candidate Shimano Fuminori Years in Office※ New Candidate Mitera Career History
    August 1987	Osaka Regional Taxation Bureau
    July 2020	Deputy Assistant Regional Commissioner, Criminal Investigation Department Osaka Regional Taxation Bureau
    July 2021	District Director, Kita Tax Office, Osaka Regional Taxation Bureau
    August 2022	Opened Mitera Fuminori Certified Accountant Office (to present)

    Reasons for nomination as a candidate for Outside Audit & Supervisory Board Member

    Mr. Fuminori Mitera has professional experience as the Director of the Kita Tax Office and as a certified tax accountant, and he possesses extensive knowledge and experience in tax and accounting.

    Based on this knowledge and experience, the Company has nominated him as a candidate for Outside Audit & Supervisory Board Member, believing that he will effectively fulfill a supervisory function over the Company's management from an independent standpoint.

    
    
    ‌Proposal No. 4：Election of 1 Substitute Audit & Supervisory Board Member

  • Mr. Yukihiro Kondo, the incumbent Substitute Audit & Supervisory Board Member, will resign from the position of Substitute Audit & Supervisory Board Member as of the commencement of this AGM.

    Substitute Audit & Supervisory Board Member

    Toshihiko Hashimoto
    
    

    Date of Birth	January 29, 1954
    Shareholding in Shimano	300 shares
    Years in Office※	8 years

    (Significant concurrent positions)

    Certified Tax Accountant, Hashimoto Certified Tax Accountant Office Outside Auditor, JA Hyogominami

    Auditor, Kakogawa Sangyokaikan Co., Ltd.

    Career History

    April 1977 Administrative Official, Ministry of Finance

    July 2012 Deputy Director, Osaka Regional Taxation Bureau July 2013 Director, Kobe Tax Office

    August 2014 Opened Hashimoto Certified Tax Accountant Office (to present) March 2018 Audit & Supervisory Board Member, Shimano Inc. (to present) June 2018 Outside Auditor, JA Hyogominami (to present)

    June 2018 Auditor, Kakogawa Sangyokaikan Co., Ltd. (to present)

    Reasons for nomination as a candidate for Substitute Audit & Supervisory Board Member:

    Mr. Toshihiko Hashimoto has professional experience as Director of Kobe Tax Office and a certified tax accountant, and a wealth of knowledge and experience in tax and accounting. Considering that based on his knowledge and experience, he is able to supervise the Company's management as an Audit & Supervisory Board Member, the Company has nominated him as a candidate for Substitute Outside Audit & Supervisory Board Member.

    
    
    ‌Outline of the Corporate Governance System

    Appointment／ Dismissal

    Appointment／ Appointment／

    Dismissal Dismissal

    Consultation

    Report

    Board of Directors

    Advice

    pervision & struction

    (Director)

    Appointment／ Dismissal

    Report

    Accounting Audit

    Appointment／ Dismissal

    Audit

    Guidance & Supervision

    Report

    Appointment／ Instruction

    Dismissal

    Collaboration

    Collaboration

    Internal Audit

    Audit

    Report

    Governance Committee

In

2022) Su

ESG Committee

(introduced in

• We have the Board of Directors as an organization responsible for supervision and decision-making of important matters. As an audit organization, we have the Audit & Supervisory Board. We appoint executive officers as those responsible for the execution of operations.

  Audit & Supervisory Board (Audit & Supervisory Board Member)

• We hold monthly meetings of the Board of Directors, in principle, where its members discuss and make decisions concerning important management matters, and supervise the execution of operations. By holding the meetings, we seek rational and efficient decision-making of its management. Since 2005, we have had one non-Japanese Director with the aim of building a system that makes it possible to respond well to continual changes in its global business.

  Accounting Auditor

• We have five outside directors. The outside directors supervise the decision-making and the execution of operations, from a professional, objective and independent standpoint to enhance the management and supervisory functions of the Board of Directors.

• Concerning the internal audit, the internal audit organization is engaged in periodic and occasional auditing activities, including but not limited to auditing activities regarding the effectiveness and efficiency of our business, reliability of its financial statements, compliance with relevant laws and regulations, and conservation of corporate assets.

• Accounting auditors conduct accounting audits and provide suggestions so as to improve our business operations.

• We ensure fairness and objectivity in nomination and remuneration for the Directors, in the following ways:

  The Nomination and Remuneration Advisory Committee, which includes outside directors among its members, discusses nomination and remuneration of Directors, and advises the Board of Directors on the result of the discussion. The Board of Directors resolves the determination of the nomination and remuneration based on advice from the Committee.

• We have established an ESG Committee, comprising all Executive Officers, as a forum to deliberate sustainability issues related to the environment and society that may affect corporate value and business activities.

We discuss key themes such as climate change and respect for human rights, and report the outcomes of these deliberations to the Board of Directors.

1. A major shareholder of the Company (holding 10% or more of the voting rights of the Company at the end of the most recent fiscal year) or an executive officer thereof

2. A person whose major business partner is the Company or an executive officer thereof

3. A person who is a major business partner of the Company or an executive officer thereof

4. A person engaged in auditing of the Company or any of its consolidated subsidiaries as the Accounting Auditor of the Company or a consolidated subsidiary or as an employee thereof

5. An attorney-at-law, judicial scrivener, patent attorney, certified public accountant, certified tax accountant, consultant, etc. who has received cash or other property exceeding 10 million yen from the Company in the most recent fiscal year other than officer remuneration (or if such person is an organization, such as a corporation or an association, a person who is affiliated with an organization whose revenue from the Company exceeds 2% of its annual revenue)

6. A principal lender to the Company (a lender whose name is indicated as a principal lender in the business report for the most recent fiscal year) or an executive officer thereof

7. A person who has received a donation exceeding 10 million yen from the Company in the most recent fiscal year (or if such person is an organization, such as a corporation or an association, an executive officer of an organization whose revenue from the Company exceeds 2% of its annual revenue) A person who has fallen under any of the items 1 through 7 in the past three fiscal years.

8. A person to whom any of 1 to 7 above applied in the most recent three fiscal years

9. A spouse or relative within the second degree of kinship of a person to whom any of 1 to 8 above applies (only a significant person)

10. A spouse or relative within the second degree of kinship of an executive officer of the Company or a subsidiary (if a person is an employee, only a significant person)

11. A spouse or relative within the second degree of kinship of an executive officer of the Company or a subsidiary (if a person is an employee, only a significant person) in the most recent three fiscal years

12. In addition to the preceding items, a person who has a special reason that prevents him/her fulfilling his/her duty as an independent Outside Officer,

    such as a risk of causing permanent conflict of interest with the Company

13. Even in the case of a person to whom any of the preceding items applies, if the Company considers the person is appropriate as an independent Outside Officer in light of his/her personality and insight, etc., the Company may appoint such person as an Outside Officer, provided that the Company explains the reasons why the Company considers him/her appropriate as an Outside Officer to external parties.

Independent Outside Director

Detailed Rationale for Appointment

In selecting candidates for Outside Directors, we assess whether they meet the requirements set forth in the Independence Standards for Outside Officers established in May 2016, and determine-regardless of length of tenure-whether they possess the experience and expertise necessary for the Company's

management.。

Mr. Ichijo has actively expressed his views at Board meetings on matters related to

Global (Experience)

digital transformation (DX), human rights, and corporate governance. Drawing on his expertise as a university professor, he continues to act from an independent standpoint regardless of the length of his tenure.

Specifically, at meetings of the Board of Directors, he has emphasized the importance of clearly communicating the Company's shareholder return policy to investors, improving capital efficiency, and enhancing ROE. He has also stated that while giving due consideration to investor returns, it is essential to pursue growth investments aimed at the future.

With respect to sustainability issues such as human rights, he has provided practical advice at Board meetings by leveraging his own expertise and referencing initiatives and best practices at other companies.

In recent discussions, he has also raised issues regarding production cutbacks at manufacturing sites and confirmed response measures, as well as strongly calling for the strengthening of effective governance frameworks for overseas subsidiaries. Through such candid and rigorous remarks, he continues to maintain an appropriate level of constructive tension at the Board, even with a long tenure.

As described above, Mr. Ichijo possesses a high level of expertise, a deep

understanding of the capital markets as well as the Company's business and industry, and substantive independence demonstrated through concrete and rigorous contributions at Board meetings. We therefore believe that he is an indispensable Outside Director for the Company.

Independent Outside Director

Mitsuhiro Katsumaru

Independent

Outside Director

Sadayuki Sakakibara

Chairman of the Board and Outside Director, The Kansai Electric Power Co., Inc.

Independent Outside Director

Independent Outside Director

Major Concurrent Positions

Advisor, Panasonic Automotive Systems Co., Ltd.

Outside Director, TS TECH Co., Ltd. Outside Director, NTN Corporation President & CEO, i-Golf Studio Inc.

Reasons for Appointment as Outside Director and Expected Role

Ms. Wada held important posts in the non-profit organization related to IT technology and in companies related to technology development. She now serves as an Outside Director of other companies and has a wealth of experience and profound insight in IT and digital fields.

She has many achievements in making proactive and necessary comments, advice and proposals from an independent and objective standpoint as an Outside Director of the Company for its management decision-making.

Considering that she is able to fully demonstrate her ability to supervise the execution of business and provide professional advice and proposals, which the Company expects from an Outside Director, we determined that she is well suited to serve as an Outside Director.

The performance forecasts and future outlook described in this presentation are based on assumptions regarding information available as of the present time and various factors that may affect future performance.

Accordingly, actual results may differ materially from these forecasts due to changes in domestic and international conditions.

CONFIDENTIAL