May 24, 2024
Company name:
Representative:

Nippon Shinyaku Co., Ltd.
Toru Nakai,
Representative Director and President(Securities code: 4516 [Tokyo Stock Exchange Prime Market])Masahiko Okano, Department Manager,
Inquiries:
Corporate Communications Department

Tel.: +81-75-321-1111 (main line)

Notice Regarding Introduction of a Restricted Stock Compensation Plan

Nippon Shinyaku Co., Ltd. (the “Company”) announced that, at the meeting held on May 24, 2024,
its Board of Directors reviewed the executive compensation system of the Company and resolved topropose that the Company introduce a restricted stock compensation plan (the “Plan”) for its Directors(excluding outside Directors, “Eligible Directors”), and that the Board also decided to submit theproposal regarding the Plan to the 161st Annual General Meeting of Shareholders scheduled for June27, 2024 (the “General Meeting of Shareholders”).
１. The purposes and conditions of the Plan
（１）

Purposes of introducing the Plan
The Plan is designed to grant shares of the Company's common stock to eligible directors ascompensation, subject to terms and conditions that define the period of restriction on transfer,requirements for purchase by the Company without consideration, etc. ("Restricted Stock”). With
the introduction of this at the time our 7th Five-Year Medium-term Management Plan starts, theCompany aim to provide the Eligible Directors with incentives to work to continually enhance
the Company’s corporate value and to further promote the alignment of interests between theEligible Directors and shareholders.
（２） Conditions for the introduction of the Plan
Since this plan involves the payment of monetary compensation claims as remuneration to theEligible Directors for the grant of Restricted Stock, the introduction of this plan is subject to theapproval of shareholders at the upcoming General Meeting of Shareholders.
At the 154th General Meeting of Shareholders held on June 29, 2017, it was approved that thetotal amount of compensation for the Company’s Directors shall be no more than 600 million
yen per year. At the upcoming General Meeting of Shareholders, the Company plans to propose
the introduction of the Plan and the payment of monetary claims for the award of shares ofRestricted Stock to Eligible Directors within the compensation limits described above.

1２. Overview of the Plan
Under the Plan, Eligible Directors shall make in-kind contribution of all monetarycompensation claims paid by the Company and shall in turn receive shares of the Company’scommon stock to be issued or disposed of.
The total amount of monetary compensation claims to be paid to Eligible Directors under thePlan shall be within the abovementioned compensation limit, and the total number of shares of
the Company’s common stock to be newly issued or disposed of (“Allotted Shares”) shall not
exceed 100,000 per year. In the event of a split, a gratis allotment of shares, or a reverse split of
the Company’s common stock, or any other circumstance that requires adjustment of the numberof shares, the number of Allotted Shares may be reasonably adjusted. To ensure the alignment ofinterests between the Eligible Directors and shareholders over the medium to long term, which
is one of the purposes of the introduction of the Plan, the transfer restriction period for an Eligible
Director shall start on the date of issuance of shares of Restricted Stock and end on the date of
his/her retirement or resignation from the position of Director.
The amount of monetary compensation claims to be paid to each Eligible Director for theaward of shares of Restricted Stock shall be deliberated and determined by the Remuneration
Committee based on entrustment from the Board of Directors. Other details, including thespecific timing of claim payment to each Eligible Director, shall be determined by the Company’s
Board of Directors.
The amount of payment per share of the Company’s common stock to be issued or disposedof under the Plan shall be equal to the closing price per share of the Company’s common stockat the Tokyo Stock Exchange on the date before the Company’s Board of Directors passes aresolution on allotment of Allotted Shares (or, if no stock price quotation is available on that date,the closing price per share on the nearest trading day).
When the Company issues or disposes of Allotted Shares under the Plan, the Company and therelevant Eligible Director shall conclude an agreement to allot Restricted Stock (the “AllotmentAgreement”), which includes the following provisions:① Each Eligible Director shall not, for the prescribed period, transfer, create a security interestin, or otherwise dispose of the shares of the Company’s common stock allotted to him/herpursuant to the Allotment Agreement, and② If certain specified events occur, the Company shall acquire the Allotted Shares without
consideration.
Please note that a similar restricted stock compensation plan for the Company’s corporate
officers will be considered, subject to approval for the introduction of the Plan at the upcoming
General Meeting of Shareholders.

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