Yakult Honsha: Notice of Receipt of Shareholder Proposal Document and Yakult Board of Directors’Opinion

May 12, 2026

To whom it may concern:

Company Name: Yakult Honsha Co., Ltd. Representative: Hiroshi Narita

President and Representative Director (Securities code: 2267, TSE Prime Market)

Yakult Honsha Co., Ltd. (the "Company" or "Yakult") received a document (the "Shareholder Proposal Document") from our shareholder Dalton Kizuna (Master) Fund LP (the "Proposing Shareholder") indicating its intent to make shareholder proposals (the "Shareholder Proposal") at the 74th Ordinary General Meeting of Shareholders ("Shareholders' Meeting") to be held on June 24, 2026. We hereby notify that the Board of Directors unanimously resolved to oppose all Proposals in the Shareholder Proposal at its meeting held today.

1. Proposing Shareholder

   Dalton Kizuna (Master) Fund LP

2. Contents of the Shareholder Proposal

   1. Items

      1. Appointment of two directors

      2. Approval of the compensation amount regarding the restricted stock unit plan

      3. Amendment of the Articles of Incorporation regarding the record date for the Shareholders' Meeting

   2. Summary and reasons for the Proposal

   As stated in the attached "Contents of the Shareholder Proposal."

   Please note that the attached "Contents of the Shareholder Proposal" represents the original text of the relevant sections of the Shareholder Proposal Document submitted by the Proposing Shareholder.

3. Opinion of the Yakult Board of Directors Regarding the Shareholder Proposal

1. Opinion of the Yakult Board of Directors

   The Yakult Board of Directors opposes all items in the Shareholder Proposal.

2. Reasons for opposition

   1. Appointment of two directors
      1. Process of determination of candidates for the Company's directors

         The Company has established the Nomination & Remuneration Committee, an advisory body to the Board of Directors, headed by an independent outside director and with the majority consisting of independent outside directors, in order to strengthen the independence and objectivity of the Board's function regarding director nomination and compensation. The nomination of candidates for directors is determined by the Board of Directors in consultation with the Nomination & Remuneration Committee.

         From the perspective of sustainable growth and enhancement of the medium- to long-term corporate value of the Company, our baseline requirements for a potential director include position-appropriate abilities, personality, and insight, along with extensive knowledge and experience, as well as a thorough understanding of group management. We also seek diversity of the Board members, which should foster open-minded discussion. To this end, the Board structure is determined from a perspective of placing the right people in the right positions; director candidates are selected not only from among the Company employees via promotions, but also from among top-level managers of Yakult Group marketing companies and experts in various fields. In the process, consideration is given to a good balance of skills and diversity among these potential directors.

         The same process is also employed when considering shareholders' proposals on the appointment of directors. Regardless of whether the director candidate in question is based on a shareholder proposal, deliberations are made based on whether the appointment of the candidate as a director contributes to the Company's sustainable growth and medium- to long-term corporate value enhancement.

      2. Reasons that the Company-proposed Board structure to be implemented following approval at the 74th Shareholders' Meeting is optimal

         With the goal of realizing the corporate philosophy, "We contribute to the health and happiness of people around the world through pursuit of excellence in life science in general and our research and experience in microorganisms in particular," the Yakult Board of Directors has maintained a medium-to long-term outlook for sustained business continuity and growth into the future. Based on this outlook, we have worked to maintain stable financial foundations, while continuing proactive growth-oriented investments aimed at expanding the Company's business. At the same time, the Board has pursued constructive discussions toward implementing policies that take into consideration society's expectations in regard to cost of capital, share prices, and other such concerns.

         Based on the Company's Medium-term Management Plan, the Company has, as part of the abovementioned endeavors, implemented capital policies which includes share repurchases in the amount of 100 billion yen or more during the Plan period, embarked on revisions to the director compensation framework, and pursued various other measures. In regard to issues pointed out by the Proposing Shareholder, current members of the Board are moving forward with necessary actions and measures.

         If the proposal on the appointment of directors to be submitted by the Company at the 74th Shareholders' Meeting is approved, the number of Board members will be reduced from 14 to 13, which includes six independent outside directors. This structure will ensure the effectiveness of the Board's supervisory function while also enabling flexible and swift decision-making. Furthermore, the Board includes two women and one foreign national, as well as experts in their respective fields, such as a lawyer, a corporate management professional, an academic expert, and an experienced analyst. In that regard, we believe that full consideration is given to the Board structure in terms of diversity.

         The Board structure also enables the director candidates to provide proactive and constructive opinions and proposals, as well as effective supervision, leveraging their wide-ranging specializations and experience in order to bolster corporate value over the medium and long terms, based on a good understanding of the Company's business operations and management environment. Therefore, we believe that the effectiveness of governance will be sufficiently secured by the Company-proposed Board of Directors following approval at the 74th Shareholders' Meeting.

      3. Reasons that the Company considers the appointment of outside-director candidates proposed by the Proposing Shareholder to be unnecessary

         Following careful examination of the skills, including knowledge and experience, of the outside-director candidates proposed by the Proposing Shareholder, the Company concluded that our proposed outside-director candidates can already sufficiently provide the same capabilities as a Board. More specifically, as for skills in investment and finance, the Company-proposed Board members include a specialist with experience in corporate finance within a global financial institution and in corporate research as an investment advisor. As for skills in global business operations, the Board has a manager at a global business firm, an academic expert who is active on the international stage, and a lawyer specializing in international transactions with many years of experience working overseas. Therefore, in terms of skills encompassing but not limited to the investment market and corporate governance fields, we believe that our proposed Board structure can ensure expertise and experience required for the Company's medium- to long-term growth strategies and specific corporate characteristics.

         Furthermore, the Proposing Shareholder's proposed candidates are both executive staff members from the Proposing Shareholder's organization, which may lead them to make decisions and take actions that prioritize the interests of the Proposing Shareholder. This creates significant risk of failure

         to sufficiently ensure independence required of Board directors. Additionally, the Proposing Shareholder has been requiring of the Company measures and policies which emphasize short-term shareholder returns. Based on these circumstances, the Yakult Board of Directors believes that the Proposing Shareholder's proposed candidates do not necessarily share the same time frames and interests as the medium- to long-term shareholders that account for a certain proportion of the Company's shareholder composition, which may disrupt the joint interests of shareholders due to factors such as conflicts of interest.

         Due to the reasons stated above, the Yakult Board of Directors opposes this Shareholder Proposal.

         The Board of Directors resolved on this opinion based on the deliberations and report by the Nomination & Remuneration Committee.

         To further strengthen the governance system and supervisory function of the Board, the Company will continue to work on improvements in the number and ratio of independent outside directors and pursue an ideal structure and capability of the Board including suitable skills. This will be carried out through deliberations at the Nomination & Remuneration Committee and the Board of Directors meetings.

   2. Approval of the compensation amount regarding the restricted stock unit plan
      1. Process of determination of remuneration for the Company's directors

         At the Company, the Board of Directors resolves on matters pertaining to the remuneration for directors based on deliberations and report by the Nomination & Remuneration Committee. However, the Board of Directors delegates the determination of individual remuneration amounts, such as fixed monetary remunerations and performance-based compensations, to the Nomination & Remuneration Committee.

      2. Revision of officer remuneration system

         At the February 10, 2026 Board meeting, the Company decided to revise the stock remuneration system for directors excluding outside directors and part-time directors ("relevant directors") (hereafter, the revised officer remuneration system is referred to as the "Stock Remuneration System"). The aim is to provide incentives for continual enhancement of corporate value and to promote shareholder value between the relevant directors and shareholders, by further clarifying the linkage between the remuneration for relevant directors and the Company's medium- to long-term corporate value and share prices.

         While the current system consists only of non-performance-based stock remuneration, the Stock Remuneration System consists of both non-performance-based and performance-based stock remuneration (board benefit trust system). In terms of capital efficiency, value sharing with shareholders, and human capital management (HCM), the performance-based stock compensation

         calculation metrics include return on equity (ROE), relative total shareholder return (TSR), and employee engagement scores. The Stock Remuneration System is scheduled for implementation following approval of its proposal at the 74th Shareholders' Meeting.

         The Company places importance on raising awareness about not only improving short-term performance, but also enhancing medium- to long-term corporate value and shareholder value. Consequently, regarding the remuneration component ratio for relevant directors following implementation of the Stock Remuneration System, the Company intends to change the proportions of fixed remuneration, short-term incentive remuneration (monetary), and long-term incentive remuneration (stocks) from its current ratio of 70:15:15 to 60:15:25, thus realizing an increase in stock remuneration. The Board decided on this ratio based on deliberations by the Nomination & Remuneration Committee, referring to director remuneration components and standards at other publicly traded companies in the same industry in Japan.

         The Stock Remuneration System is a well-balanced officer remuneration system with a focus on the linkage between the remuneration and the improvement of short-term performance and medium- to long-term corporate value of the Company, which can facilitate value-sharing with shareholders. We believe that the system will contribute to continual enhancement in the Company's corporate value.

         For further information on the Stock Remuneration System, please refer to the Company notification released on February 10, 2026, "Announcement of the Remuneration of the Stock Remuneration System" (Note 1) as well as the Company notification released today, "Notice Regarding Introduction of New Stock Remuneration System Following Revision of Existing System" (Note 2).

         (Note 1): https://www.yakult.co.jp/english/news/article.php?num=235

         (Note 2): https://www.yakult.co.jp/english/news/article.php?num=240

      3. Reasons that the introduction of the stock remuneration in the Shareholder Proposal is unnecessary

Concerning the stock remuneration for relevant directors, the Proposal requests the introduction of a performance-based remuneration that includes return on equity (ROE) and total shareholder return (TSR). It seeks the introduction of a restricted stock unit plan designed to grant an aggregated total of restricted stocks equivalent to three times the fixed remuneration over a three-year period if the relevant performance criteria are met (up to 800 million yen per annum, with the number of common stocks to be issued or disposed of capped at 300,000 shares per annum).

If the restricted stock unit plan under this Proposal is implemented, it will result in the granting of restricted stock units equivalent to three times the fixed remuneration for directors within a short period of three years. This could motivate directors to pursue short-term profits disregarding stable medium- and long-term growth, or run an excessive risk, which may interfere with growth in corporate value over the medium and long terms.