February 13, 2026
Sony Financial Group Inc. President and CEO: Toshihide Endo Security Code: 8729, TSE Prime Market
Notice Regarding Introduction of "Performance-linked Stock Compensation Plan" and "Stock Compensation Plan" for Executives
Sony Financial Group Inc. ("SFGI") hereby announces that, at the Board of Directors meeting and Compensation Committee meeting held on February 13, 2026, SFGI resolved to introduce a performance-linked stock compensation plan, whereby shares of its common stock are delivered after the vesting of performance share units (PSUs) (the "PSU Plan"), and a stock compensation plan, whereby shares of its common stock are delivered after the vesting of restricted stock units (RSUs) (the "RSU Plan"; collectively with the PSU Plan, the "Plans") for certain executives (the "Eligible Persons") of SFGI and its subsidiaries (collectively with SFGI, the "Eligible Companies"), as follows:
Reason for Introduction of the Plans
SFGI has decided to introduce the Plans for the purpose of incentivizing the Eligible Persons to strive for the sustained enhancement of Sony Financial Group's corporate value, as well as promoting greater value sharing with shareholders, through the grant of shares of SFGI.
Overview of the Plans
Eligible Persons for the Plans
The Eligible Persons are directors and corporate executive officers of SFGI, and directors of its subsidiaries that are designated by SFGI as persons who receive the shares of SFGI.
Outline of the Plans
PSU Plan
Under the PSU Plan, SFGI will grant the Eligible Persons in advance the number of PSUs prescribed by SFGI, and will deliver shares of common stock of SFGI, in a number that is the same as the number of vested PSUs (the "Number of PSU Shares") if, during the period prescribed in advance by SFGI, the Eligible Persons hold the position of director, corporate executive officer or other executive, or of employees, of the Eligible Companies, upon the vesting of the number of PSUs determined by SFGI's Compensation Committee based on the calculation method separately decided by SFGI's Compensation Committee. SFGI will calculate the number of PSUs based on the percentage achieved against numerical targets set by SFGI (Note), within a range of 0% to 150%, and the number of PSUs held by the Eligible Persons. In addition, if the total number of issued shares of SFGI increases or decreases due to stock consolidation or stock split (including gratis allotment of shares), SFGI will adjust the Number of PSU Shares by multiplying it by the ratio of the consolidation or split.
Note: With respect to half of the PSUs to be granted, the number of PSUs to be vested shall be calculated by comparing (a) SFGI's total shareholder return and (b) the total shareholder returns of three competitors as well as the return in respect of the Tokyo Stock Price Index (dividend-inclusive TOPIX), pertaining to the monthly average for March in the fiscal year preceding the fiscal year
in which the grant date of PSUs falls (with respect to the initial grant, the monthly average for February 2026), with the monthly average for March in the fiscal year preceding the fiscal year in which the vesting date falls. With respect to the remaining half of the PSUs, the number of PSUs to be vested will be calculated based on SFGI's return on equity, adjusted to exclude one-time factors, as of the end of the fiscal year preceding the vesting date, according to the degree of achievement of the 10% target return on equity.
RSU Plan
Under the RSU Plan, SFGI will grant the Eligible Persons in advance the number of RSUs prescribed by SFGI, and will deliver shares of common stock of SFGI, in a number that is the same as the number of such RSUs (the "Number of RSU Shares") if the RSUs vest due to loss by Eligible Persons of the position, at the Eligible Company, of director, corporate executive officer or other executive, or of employee. In addition, if the total number of issued shares of SFGI increases or decreases due to stock consolidation or stock split (including gratis allotment of shares), SFGI will adjust the Number of RSU Shares by multiplying it by the ratio of the consolidation or split.
Method and Timing of Delivery of Shares of SFGI
SFGI will, after the vesting of the PSUs and RSUs, and in the timeframe stipulated by SFGI, deliver shares of common stock of SFGI in the Number of PSU Shares and the Number of RSU Shares, pursuant to the decision of the Representative Corporate Executive Officer of SFGI, by issuing new shares or disposing treasury stock, in exchange for in-kind contribution of the monetary compensation receivables against SFGI that are provided by the Eligible Companies to the Eligible Persons (SFGI will cumulatively assume the debt obligation owed to the Eligible Persons of its subsidiaries in relation to the monetary compensation receivables that are granted to such Eligible Persons of its subsidiaries).
In addition, the amount to be paid per share of common stock of SFGI that will be issued or disposed under the Plans shall be determined by SFGI (i) based on the closing price of the common stock of SFGI in the regular trading thereof on Tokyo Stock Exchange, Inc. on the trading day immediately preceding the date when the Representative Corporate Executive Officer of SFGI makes a decision with respect to such issuance or disposal (or, if no transaction has been executed on such trading day, the closing price on the immediately preceding trading day) and (ii) at a price that is not especially favorable to the Eligible Persons and within such a range as is compliant with applicable laws and regulations.
Events that would extinguish units, etc.
In the event that an Eligible Person commits particular misconduct as specified by SFGI or otherwise falls under any other grounds specified by SFGI, such Eligible Person shall forfeit all or part of unvested units. Furthermore, if, after the units have vested, SFGI's Compensation Committee reasonably determines that certain conditions are met, such as a material deficiency is discovered in the financial reporting, and such deficiency affects the calculation of previously paid compensation and that such previously paid compensation was excessive, SFGI may request the Eligible Person to return, without compensation, all or part of the common stock of SFGI received in connection with such units, or the equivalent cash amount.
Handling in the Event of Reorganization or Other Events
In the event of approval, at a shareholders' meeting of SFGI (or by the Board of Directors of SFGI if such approval at a shareholders' meeting of SFGI is not required with respect to such reorganization), of matters regarding a proposal with respect to a merger agreement under which SFGI is dissolved, a share exchange agreement or a share transfer plan under which SFGI becomes a wholly-owned subsidiary, or any other reorganization, or if any other events stipulated by SFGI occur, SFGI may deliver shares of common stock of SFGI, money or shares of the counterparty involved in such reorganization in the number or amount reasonably stipulated in accordance with a resolution of the Compensation Committee of SFGI or a decision of the Representative Corporate Executive Officer of SFGI.
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