May 10, 2022
To Whom It May Concern:
Company Name:
Representative:

NAGASE & CO., LTD.
Kenji Asakura,
Representative Director, President
Stock Exchange Listings:
Tokyo (Prime Market) Code 8012
Contact:
Noriyoshi Yamaoka,
Executive Officer,
General Manager,
Human Resources &General Affairs DivisionTel:+81-3-3665-3081

Notice Regarding Introduction of Performance-Linked Stock-Based Compensation Plan for Directors
At the Board of Directors meeting held on May 10, 2022, NAGASE & CO., LTD. (hereinafter referred to as"NAGASE") resolved to introduce a performance-linked stock-based compensation plan ("the Plan") for theCompany's using a trust for NAGASE's directors (excluding outside directors, as described below). NAGASE also
resolved to submit a proposal for the introduction of the Plan to the 107th Annual Shareholders' Meeting scheduled tobe held on June 20, 2022 ("the Meeting").
1.

Introduction of the Plan
Remuneration for NAGASE's directors has consisted of fixed (basic) remuneration and performance-linkedremuneration. Now, NAGASE has decided to introduce a new stock-based compensation plan for its directors.
The purpose of the Plan is to establish a clear link between remuneration for directors and NAGASE'sperformance and share value and for directors to share the benefits and risks associated with fluctuations in
NAGASE's share price with shareholders, thus raising awareness about contributing to improved businessperformance and increased corporate value over the medium to long-term.
With the introduction of the Plan, remuneration for NAGASE's directors will consist of fixed (basic)
remuneration, performance-linked remuneration, and stock-based compensation.
The introduction of the Plan is subject to approval at the Meeting.
In addition, if the introduction of the Plan is approved at the Meeting, NAGASE plans to introduce the Plan for
executive officers who have entered into a delegation agreement with NAGASE ("Executive Officers") as
introduced for NAGASE's directors. In this case, Executive Officers will be beneficiaries of the trust under thePlan like NAGASE's directors. In addition, NAGASE will establish a fund for the acquisition of shares to bedelivered to Executive Officers.

2.

Overview of the Plan

(1) Structure of the Plan
The Plan is a stock-based compensation plan under which a trust ("the Trust") established by monetarycontribution from NAGASE acquires NAGASE's shares, and the Trust delivers to each director a number of
NAGASE's shares equivalent to the number of points granted to each director.

Under the Plan, shares of NAGASE's stock will be delivered to NAGASE's directors who are in office during
the four fiscal years from the fiscal year ending March 31, 2023 to the fiscal year ending March 31, 2026 ("theEligible Period"). The timing that NAGASE's shares are delivered to directors shall be in principle upon theirretirement from office as director.
Illustration: Plan Structure Overview(Consignor)

NAGASE(2) Establishment of trust (other benefit trust)(contribution of money in trust)(3) Purchase price(3) Payment(3) Disposal oftreasury stock(3) Purchase of shares(Trustee)

Sumitomo Mitsui Trust Bank, Limited(Re-trust trustee: Custody Bank of Japan, Ltd.)

Share delivery trust(5) Grantingof points(1) Establishment ofrules on share delivery

Common sharesof NAGASE

ExchangemarketMoney(4) Direction for non-exercise
of voting rights

Trust administrator(6) Sale of shares(6) Proceeds from sale(6) Shares and money(Beneficiaries)

Directors(1) NAGASE will establish rules on share delivery for directors.
(2) NAGASE will establish a share delivery trust (other benefit trust) with directors as beneficiaries (theTrust). At that time, NAGASE will place an amount of money in trust with the trustee, equivalent to
the funds required for acquisition of shares (provided, however, that the funds for acquisition ofshares to be delivered to NAGASE's directors shall be within the amount approved by a general
meeting of shareholders).
(3) The trustee will acquire, in a single transaction, an equivalent number of NAGASE's shares that areexpected to be delivered in the future (acquisition shall be through the disposal of treasury shares orvia an exchange market (including off-floor trading)).
(4) A trust administrator (who shall be independent of NAGASE and its officers) shall be appointed tosafeguard the interests of the beneficiaries subject to the rules on share delivery throughout the trust
period and to supervise the trustee. With respect to NAGASE's shares held in the Trust, the trust
administrator shall direct the trustee not to exercise voting rights, and the trustee shall not exercise
voting rights throughout the trust period in accordance with this direction.

(5) NAGASE will grant points to directors in accordance with the rules on share delivery.
(6) Directors who satisfy the requirements stipulated in the rules on share delivery and the trust
agreement pertaining to the Trust shall, as beneficiaries of the Trust, receive from the trustee deliveryof NAGASE's shares in proportion to the points they have been granted. In the case that certain
instances specified in advance in the rules on share delivery and trust agreement are met, a portion ofNAGASE's shares to be delivered will be sold on an exchange market and cash will be delivered.
All NAGASE shares constituting residual assets in the Trust at the time of the Trust's termination are
to be acquired gratis by NAGASE and then canceled by resolution of the Board of Directors.
In addition, a certain amount of money constituting residual assets in the Trust at the time of theTrust's termination is to be donated to a special public interest promotion corporation with which
NAGASE's directors have no conflict of interest, as provided for in the rules on share delivery andthe trust agreement in advance.
Sumitomo Mitsui Trust Bank, Limited, which will be the trustee under the Plan, will entrust (reentrust) the administration of the trust assets to Custody Bank of Japan, Ltd.

(2) Establishment of Trust
On the condition that the introduction of the Plan is approved at the Meeting, NAGASE will establish the Trustby contributing the funds necessary for the Trust to acquire a number of NAGASE's shares reasonably
expected to be required for delivery in accordance with (6) below in advance for a certain period. The Trust
will acquire NAGASE's shares with funds contributed by NAGASE as described in (5) below.
Sumitomo Mitsui Trust Bank, Limited, which will be the trustee under the Plan, will entrust (re-entrust) theadministration of the trust assets to Custody Bank of Japan, Ltd.
(3) Trust Period
The trust period will be approximately four years, from February 2023 (planned) to August 2026 (planned).
However, the trust period may be extended as described in (4) below.
(4) Maximum Amount of Money to be Contributed to the Trust as Funds for Acquisition of Shares
NAGASE will contribute a total of up to 280 million yen as compensation to directors in office during theEligible Period to fund the acquisition of NAGASE's shares necessary for delivery of said shares to directors
under the Plan, establishing the Trust with directors who meet certain requirements as beneficiaries. The Trustshall be funded by money placed in trust by NAGASE, and shall acquire NAGASE's shares via disposal ofNAGASE's treasury stocks or from an exchange market (including off-hours trading ).
Note: In addition to the funds for acquisition of NAGASE's shares mentioned above, necessary expenses
such as trust fees and trust administrator fees will also be entrusted.
In addition, by decision of NAGASE's Board of Directors, the Eligible Period of the Plan may be extended fora period not exceeding five fiscal years on a case-by-case basis, and the trust period of the Trust may beextended accordingly (including the transfer of the trust assets of the Trust to a trust established by NAGASE
for the same purpose as the Trust, thereby effectively extending the trust period; the same shall applyhereafter). In this case, during the extended portion of the Eligible Period in question, NAGASE will
additionally contribute money in trust necessary for delivery of shares to Directors under the Plan equivalent to70 million yen multiplied by the number of fiscal years during the extended portion of the eligible period inquestion. With this, NAGASE will continue to grant points and deliver NAGASE shares as described in (6)below.
In addition, even if the Eligible Period, and therefore the Plan, is not extended as described above, if there are
directors who have already been granted points but have not yet retired at the expiration of the trust period, thetrust period of the Trust may be extended until such directors retire and the delivery of NAGASE's shares iscompleted.
(5) Method of Acquisition of NAGASE's Shares by the Trust, Etc.
The initial acquisition of NAGASE's shares by the Trust is planned to be made through disposal of treasury
shares from NAGASE or via an exchange market within the limit of the funds for share acquisition mentionedin (4) above. However, the details of the method of acquisition shall be determined and disclosed after theresolution of the Meeting.
During the trust period, in the event that the number of NAGASE's shares in the Trust may fall short of thenumber of shares corresponding to the number of points to be granted to directors during the trust period due toan increase in the number of directors or other reason, additional shares may be acquired by placing additional
money in the Trust within the limit of contributions to the trust mentioned in (4) above.
(6) Calculation Method and Maximum Number of NAGASE's Shares to be Delivered to Directors(i) Method of Granting Points to Directors, Etc.
In accordance with the rules on share delivery established by NAGASE's Board of Directors, NAGASE
shall, during the trust period, grant points to each director on the point granting date stipulated in theaforementioned rules in proportion to their position, achievement of performance targets, and other factors.
However, the total number of points to be granted to directors by NAGASE shall be 67,000 points per fiscal
year.
(ii) Delivery of NAGASE's Shares in Proportion to the Number of Points Granted
Directors will receive NAGASE's shares in proportion to the number of points granted in (i) above.
One point shall be equivalent to one share of NAGASE's stock. However, in the event of a stock split,
reverse stock split, or other event in which it is deemed reasonable to adjust the number of NAGASE's shares
to be delivered, the number of NAGASE's shares per point shall be adjusted in accordance with the ratio of
this stock split, reverse stock split, or other event.
(iii) Delivery of Nagase Shares to Directors
Each director shall, in principle, acquire beneficiary rights in the Trust by following the prescribed
procedures upon their retirement, and as a beneficiary of the Trust, shall receive from the Trust NAGASE'sshares mentioned in (ii) above.
However, a certain percentage of NAGASE's shares may be sold and converted into cash by the Trust for thepurpose of NAGASE withholding funds for the payment of withholding income tax, etc., and then deliveredin cash in place of NAGASE's shares. In addition, in the event that NAGASE's shares in the Trust areconverted into cash for reasons such as settlement after submission to a tender offer for NAGASE's shares inthe Trust, NAGASE's shares may be instead delivered in cash.
(7) Exercise of Voting Rights
No voting rights pertaining to NAGASE's shares held in the Trust shall be exercised based on directions fromthe trust administrator, who is independent of NAGASE and its officers. By using this method, NAGASE
intends to ensure neutrality toward its management with respect to the exercise of voting rights pertaining toNAGASE's shares held in the Trust.
(8) Handling of Dividends
Dividends pertaining to NAGASE's shares held in the Trust will be received by the Trust and will be used topay for the acquisition of NAGASE's shares, trust fees paid to the trustee and other costs related to the Trust.
(9) Handling of NAGASE's Shares and Cash on Termination of the Trust
All NAGASE shares constituting residual assets in the Trust at the time of the Trust's termination are to beacquired gratis by NAGASE and then canceled by resolution of the Board of Directors.

In addition, a certain amount of money constituting residual assets in the Trust at the time of the Trust'stermination is to be donated to a special public interest promotion corporation with which NAGASE's directors
have no conflict of interest, as provided for in the rules on share delivery and the trust agreement in advance.
(Reference) Overview of the Trust Agreement for the TrustConsignor
NAGASE & CO., LTD.
Trustee
Sumitomo Mitsui Trust Bank, Limited(Re-trust trustee: Custody Bank of Japan, Ltd.)
Beneficiaries
Directors and executive officers of NAGASE who meet beneficiary
requirements
Trust administrator
A third party to be selected, independent of NAGASE and its officers
Exercise of voting rights
Voting rights pertaining to shares in the Trust will not be exercised during thetrust period
Type of trust
Money deposited other than money in trust (other benefit trust)
Trust agreement dateFebruary 2023 (planned)
Trust period
February 2023 - August 2026 (planned)
Purpose of trust
Delivery of NAGASE's shares to beneficiaries in accordance with rules onshare deliveryEnd