May 17, 2019
Company Name:
Representative:

Contact:

NIKON CORPORATION
Kazuo Ushida,
Representative Director and Chairman of the
Board(Code Number: 7731; Stock Listings: Tokyo
Stock Exchange)
Tetsuya Okumura,
General Manager of Finance & Accounting
Division(Tel: +81-3-6433-3626)

Notice Concerning Resumption and Partial Revision of Performance-based Stock Remuneration
System for the Executive Directors, etc. of the Company
NIKON CORPORATION (”Company”) hereby announces, as described below, that it resolved at its Boardof Directors meeting held on May 17, 2019 to resume, with partial revisions, the performance-based stock
remuneration system (”System”) as an incentive plan for directors and officers of the Company (excluding
Audit and Supervisory Committee Members, external directors, non-executive directors, andnon-residents in Japan; collectively ”Executive Directors, etc.”) and details of the incentive plan (”Plan”)
that starts on this fiscal year, based on the System.
The resolution of the Board of Directors regarding the above is based on the deliberation results of theCompensation Committee and the revision of the System shall be subject to the approval of the 155th
Annual General Shareholders’ Meeting to be held on June 27, 2019 (“General Shareholders’ Meeting”).
1.

Resumption of the System
In May 2015, the Company announced the Medium-Term Management Plan covering the period
from the fiscal year ended March 31, 2016 to the fiscal year ended March 31, 2018, andintroduced the System as a remuneration system linked to this Medium-Term Management Plan.
However, the Company, as described in “Notice of Restructuring,” released on November 8, 2016,
decided to discontinue this Medium-Term Management Plan and subsequently engaged in
restructuring efforts through the fiscal year ended March 31, 2019. As a result, the Company
forfeited the remuneration based on the System.
In conjunction with the recent formulation of the new Medium-Term Management Plan, whichaims to “establish a foundation for growing enterprise value sustainably,” the Company will
resume the System to further enhance the incentive of the Executive Directors, etc. towardachieving the plan. Also, as the Company transitioned from business management aiming atrevenue growth to business management aiming at profit enhancement and maximization of
corporate value as a result of the restructuring, the Company will partially revise the System toreinforce linkage with performance targets indicated in the Medium-Term Management Plan. In
conjunction with this transition, the Company will extend the trust term of the BIP trust (asdescribed in 2. (2) below).

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2.

Overview of the System and the Plan
(1) Summary of the System and the Plan
The System is an incentive plan in which the delivery and payment (“Delivery, etc.”) of theCompany shares and the cash equivalent of the conversion value of said shares (“Company
Shares, etc.”) to the Executive Directors, etc. as director remuneration will be conducted per
every three years based on the degree of accomplishment of performance targets, etc. of theMedium-Term Management Plan.
Each incentive plan based on the System applies for three consecutive fiscal years (“Target
Period”) from the fiscal year to which the date of the establishment of the trust or the date of theextension of the trust term belongs. The Target Period of the Plan will be for three fiscal years
starting from the fiscal year that ends on March 31, 2020 up to the fiscal year that ends on March
31, 2022.
(2) The System Structure
The System adopts a structure called the Board Incentive Plan Trust (“BIP Trust”). The BIP Trustis a stock incentive plan similar to the Performance Share system and Restricted Stock system in
the U.S., wherein the Company shares that are acquired by the BIP Trust will be delivered to the
Executive Directors, etc. based on the degree of accomplishment of performance targets, etc.

(i) Resolution by the Shareholders’ Meeting(vii) Gratis[Entruster]transfer/extinguishment ofCompany(ii) Revision of
Share Delivery

residual shares(iii) Extending the Trust(iv) Dividends

Rules(viii) Payment of residual
assets(vi)[Trustee]
Mitsubishi UFJ Trust and Banking Corp.

Company share delivery
and cash payout(Co-trustee: The Master Trust Bank of Japan, Ltd.)*1 Company
Stock Market

BIP TrustCompany shares, cash

[Beneficiaries]
Executive Directors,
etc.

Shares(v) Instruction not to exercise*1 Payment of the pricevoting rights
Trust Caretaker(i)

The Company shall obtain approval for director remuneration in relation to the revision of the System at
the General Shareholders’ Meeting.
(ii) The Company shall revise the Share Delivery Rules concerning the System at the Board of Directors
meeting.
(iii) The Company, based on the agreement to change the trust agreement, shall extend the trust term of the2BIP Trust (“Trust”), which was set at the time of introduction of the System.
(iv) Dividends of the Company shares in the Trust will be distributed as well as other Company shares.
(v) The voting rights of the Company shares in the Trust will not be exercised during the trust term.
(vi) During the trust term, the Executive Directors, etc. who meet the beneficiary requirements will receive theCompany shares according to the Share Delivery Rules. (In addition, the Executive Directors, etc. will
receive money equivalent to a certain percentage of the Company shares under the Trust by converting
those shares into money according to the provisions of the trust agreement.)(vii) If there are remaining shares at the expiry of the trust term due to non-achievement of performancetargets or other reasons during the trust term, the trust may continue to be used as a type of incentive
plan similar to the System by changing the trust agreement and entrusting additional money to the Trust,or the Trust may voluntarily convey said remaining shares to the Company and the Company may
acquire them without payment and cancel the remaining shares by a resolution at the Board of Directors
meeting.
(viii) Residual properties after distribution to beneficiaries at the end of the Trust will belong to the Company tothe extent of allowances for trust expenses, which are calculated by deducting the funds to acquireCompany shares from the trust money. The portion exceeding the allowances for trust expenses will be
donated to groups that have no vested interest with the Company and the Executive Directors, etc.
(Note) If there are no remaining Company shares under the Trust due to the delivery of the Company
shares to the Executive Directors, etc., who meet the beneficiary requirements, the Trust will be
discontinued before the expiry of the trust term.
If the possibility of a shortage of shares under the Trust occurs, due to an increase in the number of
Executive Directors, etc. and other factors, the Company may entrust additional money to the Trust
as funds to acquire the Company shares and the Trust may acquire additional Company shares.
However, the total number of the Remaining Company Shares, etc. (as described in (5) below) at
the time of extension of the trust term and the additional trust money to be entrusted shall be within
the extent of the upper limit of trust money approved by the General Shareholders’ Meeting.
(3) Resolution of the Shareholders’ Meeting Related to the partial revision of the System
The General Shareholders’ Meeting shall resolve the necessary matters relating to the partial
revision of the System. In addition, if the trust term is extended (see (5) below), the Board of
Directors will resolve to change the trust agreement and entrust additional money to the Trust at
the expiry of the trust term to the extent approved by the General Shareholders’ Meeting.
(4) Eligibility under the Plan (Beneficiary Requirements)
The Delivery, etc. of the Company Shares, etc. to the Executive Directors, etc. from the Trust will
be conducted corresponding to the Share Granting Points (provided in (6) below) if the Executive
Directors, etc. have fulfilled the beneficiary requirements.
Beneficiary requirements of the System will be as follows:(i) a person who is in office as Executive Director, etc.;(ii) a person who resides in Japan;(iii) a person who does not fall within those who left office due to dismissal, etc., or who
conducted certain illegal activities during their time in office;(iv) a person whose Share Granting Points provided in (6) below have been determined;(v) a person who satisfies other requirements deemed necessary to attain the aim of the System
as a share remuneration system.

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(5) Trust Term after Extension
The trust term pertaining to the Plan after the extension of the Trust will be three years, from
September 1, 2019 until the end of August 2022.
The Trust may be continued by changing the trust agreement. In such cases, the Company may
further extend the trust term of the Trust, entrust, if necessary, additional money to the Trust pereach extended trust term to the extent of the upper limit of trust money approved by the
resolutions at the General Shareholders’ Meeting, and continue, in accordance with the (6) below,
the grant of Standard Points to the Executive Directors, etc., continuously during the extended
trust term.
However, in cases where such additional entrustment is made and there are remaining Company
shares and money (excluding Company shares to be delivered to the Executive Directors, etc.,
corresponding to the Share Grating Points (as described in (6) below) granted to the Executive
Directors, etc. which have not been delivered to the Executive Directors, etc.; “Remaining
Company Shares, etc.”) in the trust assets as of the last day of the previous trust term, theRemaining Company Shares, etc. may, under the Plan, be granted to the Executive Directors, etc.
as the remuneration under the System and for the extended trust term, provided that the total
amount of the Remaining Company Shares, etc., and the additional contribution of trust money
shall be within the upper limit of trust money approved by the resolutions at the General
Shareholders’ Meeting.
(6) Calculation Method of Number of the Company Shares to Be Delivered to the Executive Directors,
etc.
Points calculated in accordance with the standard points calculation formula defined below(“Standard Points”) will be granted to the Executive Directors, etc., as of June every year during
the trust term. The Company Shares, etc. will be Delivery, etc. to the Executive Directors, etc., in
accordance with the number of points (“Share Granting Points”) which is calculated as of June
after the end of the final fiscal year of the Medium-Term Management Plan to be resolved pereach three fiscal years (June 2022 in relation to the Plan) by multiplying the performance-based
coefficient (*1) to the three-year cumulative Standard Points. One Share Granting Point equals
one share (*2).
(Standard Points Calculation Formula)
Base compensation by title (*3) x ratio by title (*4) / average price per share acquired by the Trust(fractions after the decimal point to be rounded down)(Share Granting Points Formula)
Cumulative Standard Points granted during the Target Period x performance-based coefficient(*1) The performance-based coefficient shall be determined within the range of 0% to 150% in
accordance with the degree of accomplishment of the target for total consolidated operating
income for the Target Period and the degree of accomplishment of the ROE target in the final
fiscal year that are set in the Medium-Term Management Plan covering the Target Period.

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[Reference] Calculation Method of Share Granting Points under the Plan
Under the Plan, weighting of each evaluation benchmarks (ROE for the final fiscal year and total
consolidated operating income) to the Share Granting Points will be 50% each. Targets, degreeof linkage with performance and applicable coefficient by performance for each evaluation
benchmarks will be as follows;

Evaluation
benchmarks

Degree of
WeightTargets

linkage with

Applicable coefficient by performance

performance
Variable in the range below;- Upper limit (12.0%) : Coefficient 150%

ROE for the
fiscal year
ending March- Target (8.0%) : Coefficient 100%

50%

8.0%

0% - 150%- Lower limit (6.0%) : Coefficient 50%*If it falls below 6.0%, the coefficient will be 0%,31, 2022

and if it exceeds 12.0%, the coefficient will be
150%.

Total
consolidated

Variable in the range below;

operating- Upper limit (240 billion yen) : 150%

income for the
fiscal year
ending March

50%

200
billion yen- Target (200 billion yen) : 100%0% - 150%- Lower limit (180 billion yen) : 50%*If it falls below 180 billion yen, the coefficient will

31, 2020 to thebe 0%, and if it exceeds 240 billion yen, thefiscal year

coefficient will be 150%.

ending March
31, 2022(*2) In the events such as a share split, allotment of shares without contribution or consolidation ofshares occurs during the Trust Period regarding the Company shares, the Company will adjust
the number of Share Granting Points with reasonable calculation.
(*3/4) The “base compensation by title” and “ratio by title” will be determined in consideration offactors such as responsibilities and duties, and the percentage of monetary compensation andstock compensation in overall executive compensation.
(7) Method and Timing of the Delivery, etc. of the Company Shares, etc. to the Executive Directors,
etc.
The Delivery, etc. of the Company Shares, etc., corresponding to the Share Granting Points will
be conducted in June after the end of the final fiscal year of the Medium-Term Management Plan
(June 2022 in relation to the Plan) to eligible Executive Directors, etc., who satisfy the beneficiary
requirements.
Executive Directors, etc. will receive 50% of the Share Granting Points by Company shares (lessthan one unit will be rounded down), and remaining 50% of the Share Granting Points by money
after the conversion of Company shares into money by the Trust.
(8) Upper Limit of the Amount of Trust Money Entrusted to the Trust and Number of the Company
Shares to Be Delivered by the Trust

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The upper limit of the amount of trust money entrusted to the Trust by the Company (total amountof the Remaining Company Shares, etc. and additional entrustment of trust money during theTarget Period) shall be 1.2 billion yen (*5).
(*5) These are the total funds for the Trust acquired shares, as well as trust fees and trust
expenses.
The total number of the Company Shares, etc. to be Deliverey, etc. (including in case of
conversion into money) under the Trust pursuant to (6) and (7) above shall be up to 730 thousand
shares. The maximum number of the Company shares to be delivered has been determinedbased on the maximum amount of trust money mentioned above and in reference to the latest
stock prices, etc.
(9) Method of Acquiring the Company Shares by the Trust
The Trust will acquire the Company shares from the stock market to the extent of trust money andthe maximum number of the Company shares to be delivered, as specified in (8) above.
(10) Exercising Voting Rights Related to Company Shares in the Trust
Voting rights related to the Company shares in the Trust (namely Company shares, with respect towhich Delivery, etc. to the Executive Directors, etc. has not been conducted yet pursuant to (7)above) will not be exercised during the trust term, to ensure the neutrality of the Company
management.
(11) Treatment of Dividends Related to the Company Shares in the Trust
Dividends related to the Company shares in the Trust will be received by the Trust and used fortrust fees and trust expenses.
(12) Treatment at the End of the Trust Term
If there are residual shares at the end of the trust term due to the non-achievement of
performance targets during the Target Period, the Trust may continue to be used as the same
type of incentive plan as the performance-based stock remuneration system by changing the trust
agreement and entrusting additional money to the Trust. If the Trust is terminated by the expiry of
the trust term, the Trust will transfer said remaining shares to the Company without compensationand the Company will cancel said shares by a resolution at the Board of Directors meeting.
If there is a remainder of dividends at the end of the trust term, even after dividends are used fortrust fees and trust expenses under the Trust, the remainder will be donated to groups that haveno vested interest with the Company or the Executive Directors, etc.
(Reference)[Details of Trust Agreement](i) Type of trust:(ii) Purpose of trust:(iii) Entruster:(iv) Trustee:(v) Beneficiaries:(vi) Trust caretaker:

Money trust other than a specific individually operated money trust(third-party benefit trust)
To grant incentives to the Executive Directors, etc.
The Company
Mitsubishi UFJ Trust and Banking Corporation (planned)(Co-trustee: The Master Trust Bank of Japan, Ltd. (planned))
Executive Directors, etc. who meet beneficiary requirements
A third party who has no vested interest in the Company

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(certified public accountant)(vii) Date of trust agreement:
August 11, 2015 (To be revised, effective August 7, 2019)(viii) Trust period:
From August 11, 2015 to the end of August 2019 (To be extended tothe end of August 2022, by changing the trust agreement, effective
August 7, 2019)(ix) Exercise of voting rights:
No voting rights shall be exercised.
(x) Upper limit of trust money:
1.2 billion yen (total amount of the Remaining Company Shares, etc.
and the additionally entrusted trust money entrusted during the Target
Period)(xi) Time to acquire shares:
If the possibility of a shortage of shares under the Trust occurs,
additional shares may be acquired.
(xii) Type of acquired shares:
The Company’s common stock(xiii) Method of share acquisition: To be acquired from the stock market(xiv) Vested rights holder:
The Company(xv) Residual properties:
Residual properties that the Company, which is the holder of vested
rights, can receive shall be within the extent of allowances for trust
expenses, which are calculated by deducting funds to acquireCompany shares from trust money.
[Note] The scheduled time mentioned above may be changed to an appropriate time in accordance withapplicable laws and regulations, etc.

[Affairs Concerning Trust and Shares](1) Trust-related affairs:
Mitsubishi UFJ Trust and Banking Corporation will be the trustee of
the Trust and engage in affairs related to the Trust.
(2) Share-related affairs:
Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. will engage inaffairs related to delivering Company shares to beneficiaries basedon the agreement of entrustment of affairs.

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