May 20, 2015
Company Name:
Representative:

Contact:

NIKON CORPORATION
Kazuo Ushida,
President and Representative Director(Code Number: 7731; Stock listings: Tokyo
Stock Exchange)
Yosuke Toyoda, Department Manager,
Corporate Communications & Investor
Relations Department(Tel: +81-3-6433-3741)

Introduction of Performance-based Stock Remuneration System for the Directors, etc., of the Company
NIKON CORPORATION (“Company”) hereby announces, as described below, that it resolved at theBoard of Directors meeting held on May 20, 2015 to introduce a performance-based stock remuneration
system (“System”) as a new incentive plan for directors and officers of the Company (excluding external
directors and non-full-time directors; collectively “Directors, etc.”) and the incentive plan to be
implemented in this fiscal year ended March 31, 2018, based on the System (“Plan”).
The aforementioned resolution by the Board of Directors was made based on the result of discussions at
the Compensation Committee consisting of the representative directors, external directors and external
experts, and the introduction of the System is subject to approval at the 151th Annual General Meeting of
Shareholders to be held on June 26, 2015 (“Shareholders Meeting“).
1.

Purpose of Introducing the System
The Company resolved to change its traditional rolling system to fixed system by every three
years in “Medium Term Management Plan of 2015” announced on May 14, 2015, and to set a goal
it becomes a company growing with a portfolio of 6 businesses under “Next 100 - Transform toGrow”, the Medium Term Management Vision. The Company will introduce the System, which is
closely linked to the company’s performance defined in the Medium Term Management Plan inorder to reinforce the incentives to attain the goal for the Directors, etc. In addition, the Company
also has the purpose of having more qualified people who play an important role in theinternational business arena of growing business field like medical field.

2.

Overview of the System and the Plan
(1) The System and the Plan Summary
The System is a stock incentive plan for the Directors, etc. Delivery and payment (“Delivery, etc.”)of the Company shares and the cash equivalent of the conversion value of said shares (“Company
Shares, etc.”) to the Directors, etc. will be conducted per every three years based on the degree ofaccomplishment of business performance in the final fiscal year of the Medium Term Management
Plan. The Plan will be for the three fiscal years starting from the fiscal year that ends on March 31,
2016 up to the fiscal year that ends on March 31, 2018 (“Target Period”).
(2) The System Structure
The Board Incentive Plan Trust (“BIP Trust”) (*) will be adopted upon introduction of the System.
The BIP Trust is a stock incentive plan reference to the Performance Share system and Restricted1

Stock system in the U.S., wherein the Company shares that are acquired by the BIP Trust will bedelivered to Company Directors, etc., based on the degree of the attainment of businessperformance goals, etc.
(*)BIP Trust® is a registered trademark of Mitsubishi UFJ Trust and Banking Corporation.

(1) Resolution By the Shareholders Meeting(8) Gratis[Entruster]

Transfer/extinguishment ofCompany(2)Enactment of
Share Delivery

residual shares(3) Establishing the Trust(5) Dividends

Rules(9) Payment of residual
assets(7)[Trustee] (Planned)
Mitsubishi UFJ Trust and Banking Corp.

Company share delivery
and cash payout[Beneficiaries](Co-trustee: The Master Trust Bank of Japan, Ltd.)(4) Company
Stock Market

BIP TrustCompany shares, cash

Company Directors,
etc.

Shares(6) Instruction not to exercise(4) Payment of the pricevoting rights exercising
Trust Caretaker(1) The Company will obtain approval for director remuneration in relation to the introduction of the Systemat the Shareholders Meeting.
(2) The Company will, at the Board of Directors meeting, enact the Shares Delivery Rules concerning
director remuneration in relation to the introduction of the System.
(3) The Company will entrust money to the extent approved by the resolution at the Shareholders Meeting in(1) above and at the appropriate timing under relevant laws, and establish a trust (“Trust”) wherein the
Company Directors, etc., who meet the beneficiary requirements, are beneficiaries.
(4) The Trustee (of the Trust) acquires the Company shares from the stock market using money contributedin (3) above in accordance with the instructions of the trust caretaker.
(5) Dividends of the Company shares in the Trust will be distributed as well as other Company shares.
(6) The voting rights of Company shares in the Trust will not be exercised during the trust term.
(7) During the trust term, the Directors, etc. who meet the beneficiary requirements will receive the Company
shares according to the Shares Delivery Rules (in addition, the 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.).
(8) 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

2acquire them without payment and cancel the remaining shares by a resolution at the Board of Directors
meeting.
(9) 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 Company Directors, etc.
(Note) If there are no remaining Company shares under the Trust due to the delivering of the Company
shares to the Directors, etc., who meet the beneficiary requirements, the Trust will be discontinued before
the expiry of the trust term. The Company may entrust additional money to the Trust as funds to acquire
the additional Company shares and the Trust may acquire the additional Company shares to the extent offunds necessary to acquire the Company shares that were approved by a resolution of the Shareholders
Meeting and to the extent of the maximum amount of the Company shares to be delivered (provided in (8),below).

(3) Resolution of the Shareholders Meeting related to the Introduction of the System
The upper limit of the amount to be paid to the Trust, the maximum amount of Company shares to beacquired and other necessary matters will be resolved by the Shareholders Meeting. In addition, if
the trust period 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 a resolution of the Shareholders Meeting.
(4) Eligibility under the Plan (Beneficiary Requirements)
The Delivery, etc. of the Company Shares, etc. to the Directors, etc. from the Trust will be conducted
corresponding to the Share Granting Points (provided in (6) below) if the Directors, etc. have fulfilled
the beneficiary requirements.
Beneficiary requirements of the Plan will be as follows:(i) a person who is in office as the Director, etc., as of the end of the end of the Board of Directors
meeting held after the Shareholders Meeting (*1) (*2) (*3) (*4)(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 conductedcertain 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 asa share remuneration system.
(*1) If an eligible Director, etc., resigns (excluding cases of resignation for personal reasons), theDelivery, etc., of the Company Shares, etc. to the Directors, etc. from the Trust corresponding to
the cumulative Share Granting Points as of the person’s resignation will be promptly conducted.
(*2) If an eligible Director, etc., passes away during his/her time in office as a Company Director, etc.,
a successor of the Directors, etc. shall receive payouts from the Trust promptly with regard tomoney equivalent to Company shares converted into cash corresponding to the cumulative
Share Granting Points as of death of the Directors, etc.
(*3) If an eligible Director, etc., becomes a non-resident in Japan during the Target Period, the Director,
etc. shall be treated in the same manner as those who dies, and receive payouts from the Trustwith regard to money equivalent to the Company shares converted into cash corresponding to
the cumulative Share Granting Points as of the time the Director, etc. becomes a non-resident.

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(*4) While a person who is newly appointed as a Director, etc., during the Target Period, and is not a
Director, etc. at the end of the Board of Directors meeting held after the Shareholders Meetingshall not be eligible for the System, the Director, etc. will be granted Share Granting Points inaccordance with his/her service period in the same manner as an eligible Director, etc. Yet, if theTrust is continued as provided in (5) below, the Delivery, etc., of the Company Shares, etc., fromthe continued trust, corresponding to the Share Granting Points granted during the Target Period
in addition to the Company Shares, etc., corresponding to Share Granting Points granted during
the period of the continued trust.
(5) Trust Term
The trust term will be about three years, from August 11, 2015 (planned) until the end of August 2018
(planned).
The Trust may be continued by changing the trust agreement and entrusting additional money at the
expiration of the trust term. In such cases, the Company may further extend the trust term of the Trust,
entrust additional money to the Trust per each extended trust term to the extent of the upper limit oftrust money approved by the resolution at the Shareholders Meeting, and continue the grant of Share
Granting Points to Directors, etc., continuously during the extended trust term.
However, in cases where such additional entrustment is made and there are remaining Company
shares (excluding Company shares to be delivered to Directors, etc., corresponding to the Share
Grating Points granted to the Directors, etc., which have not been delivered to the Directors, etc.) andmoney (collectively the “Remaining Company Shares, etc.”) in the trust assets as of the last day of theprevious trust term, 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 resolution at
the Shareholders Meeting.
(6) Amount of the Company Shares to be delivered to the Directors, etc.
Points calculated in accordance with the points calculation formula defined below will be granted to
the Directors, etc., as of June 1 (or the next business day in case June 1 is not a business day) every
year during the trust term. The Company shares delivered to the Directors, etc., will be determinedbased on the number of points (“Share Granting Points”) which is calculated as of June after the endof the final fiscal year of the Medium Term Management Plan to be resolved per each three fiscal
years (June 2018 in relation to the Plan) by multiplying the performance-based coefficient (*5) to thethree-year cumulative points after consideration of discussions and advice from the Compensation
Committee consisting of the representative directors, external directors and external experts. One
Share Granting Point equals to one share (*6).
(Points Calculation Formula)
Base compensation by title (*7) x ratio by title (*8) / average price per share acquired by the Trust(fractions after the decimal point to be rounded down)(Share Granting Points)
Three-year cumulative points x performance-based coefficient(*5) The performance-based coefficient shall be determined within the range of 0% to 150% in
accordance with achievement during in the final fiscal year (the fiscal year of 2017 in relation to
the Plan) of the Medium Term Management Plan to be resolved per each three fiscal years.

4(*6) If events such as a share split or reverse share split occurs and the adjustment of the number ofpoints during the trust term in accordance with such events is regarded as appropriate, suchadjustment will be made in accordance with the relevant share split ratio or reverse share split
ratio, etc.
(*7/8) 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 Directors, etc.
The Delivery, etc. of 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 to beresolved per each three fiscal years (June 2018 in relation to the Plan)to eligible Directors, etc., who
satisfy the beneficiary requirements.
(8)

Scheduled Amount of Trust Money to be paid to the Trust and Scheduled Amount of theCompany Shares to be delivered by the Trust
The upper limit of the amount of trust money entrusted to the Trust by the Company shall be 1.2 billion
yen (*9).
(*9) These are the total funds for the Trust to acquire shares, as well as trust fees and trust expenses.
The Company is planning to submit a proposal for an upper limit of 1.2 billion yen for the amountto be paid for the System, and to obtain a resolution at the Shareholders Meeting. If it is so
resolved, the Company may pay money to the Trust under the System up to said limit.
The total amount of the Company Shares, etc., to be delivered under the Trust pursuant to (6) above
shall be up to 730 thousand shares. The maximum amount of the Company shares to be delivered
has been determined based on the upper limit of trust money mentioned above and in reference to thecurrent stock price, etc.
(9) Method of acquiring the Company Shares by the Trust
The Trust plans the acquisition of the Company shares from the stock market to the extent of the funds
to acquire shares and the maximum amount 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. has not been conducted yet pursuant to (7) above) will not be exercised during thetrust 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 for trust
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-attainment of businessperformance goals 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 paying additional money to the Trust. If the Trust is terminated by the expiry of the trust term, the5Trust will transfer said remaining shares to the Company without compensation and the Company willcancel said shares by a resolution at the Board of Directors meeting.
If there is a remainder of dividends at the end of the Trust Period, even after dividends are used fortrust fees and trust expenses under the Trust, the remainder will be donated to groups that have novested interest with the Company or the Directors, etc.

(Reference)[Trust Agreement Contents](1)

Type of Trust:An individually operated designated trust of cash other than cash trust(third party benefit trust)(2)

Purpose of Trust:

To grant incentives to the Directors, etc.

(3)

Entruster:

The Company(4)

Trustee:

Mitsubishi UFJ Trust and Banking Corporation (planned)(Co-trustee: The Master Trust Bank of Japan, Ltd. (planned))(5)

Beneficiaries:

The Directors, etc. who is incumbent upon the establishment of theTrust, and who meet beneficiary requirements(6)

Trust Caretaker:

A third person who has no vested interest with the Company(Certified public accountant)(7)

Date of trust agreement:

August 11, 2015 (planned)(8)

Trust Period:

From August 11, 2015 (planned) to the end of August 2018 (planned)(9)Start of the Plan:

August 11, 2015 (planned)
Granting points from June 1, 2016 (planned)(10) Exercise of voting rights:

No voting rights will be exercised(11) Type of acquired shares:

Common Company shares(12)

1.2 billion yen (scheduled)Totalamountoftrustmoney:(13) Time to acquire shares:

From August 17, 2015 (planned) to the end of August 2015 (planned)(14) Manner of share

To be acquired from the stock market

6acquisition:(15) Vested rights holder:

The Company(16) Residual properties:

Residual properties that the Company, which is the holder of vested
rights, can receive are 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 related to Trust and Shares](1)

Affairs related to trust:

Mitsubishi UFJ Trust and Banking Corporation will be the trustee of
the BIP Trust and engage in affairs related to the Trust.

(2)

Affairs related to shares:

Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. will engage inaffairs related to delivering Company shares to beneficiaries based on
the agreement of entrustment of affairs.

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