July 24, 2019
MITSUBISHI GAS CHEMICAL COMPANY, INC.

Notice regarding Disposal of Treasury Sharesas Restricted Stock Compensation
The Board of Directors of Mitsubishi Gas Chemical Co., Inc. (MGC) met today and reached a resolution todispose of treasury shares (referred to as the “treasury share disposal” or simply “disposal” below) to provide
restricted stock compensation as described below.
1. Outline of the Disposal(1)Disposal dateAugust 23, 2019(2)Class and number of shares to be disposed

35,200 shares of common stock of the Company(3)Disposal price

1,460 yen per share(4)Total value of shares to be disposed

51,392,000 yen(5)Method of offer or disposal

Grant of restricted stocks(6)Method of contribution

In-kind contribution of monetary compensation
claim(7)Allottees and number thereof, number ofshares to be disposed

Directors （ excluding Outside Directors ） 9persons,
20,000 shares
Executive Officers(8)Others

12persons, 15,200 shares

The treasury share disposal is conditional on theacceptance of the filing under the Financial
Instruments and Exchange Act.

2. Purposes and Reasons of Disposal
MGC has resolved on the treasury share disposal to award MGC Directors (not including Outside Directors and referred
to as “Eligible Directors” below), Executive Officers (referred to collectively as “Eligible Officers” below) incentives formaking lasting improvements in the company’s corporate value and to further promote sharing value between the
Eligible Officers and shareholders. At the 91th General Meeting of Shareholders, held June 26, 2018, the shareholders
agreed on compensation for Eligible Directors in order to award them restricted shares under the restricted stockcompensation system (referred to as the “system” below).

1

Overview of this system
MGC will grant the Eligible Officers monetary compensation receivables under this system and have the Eligible Officers
pay in all these receivables as contributed assets in order to issue or dispose of MGC common shares. Under this system,
MGC grants the Eligible Directors with annual monetary compensation receivables of up to 100 million yen in total. The
specific timing of the provision and the allocation to each Eligible Officer will be determined by the Board of Directors.
The total number of common shares issued or disposed of by MGC for the Eligible Directors will be up to 120,000annually. The amount paid per share to an Eligible Director will be the closing price of the company’s common shareson the Tokyo Stock Exchange on the business day before the day of the relevant resolution of the Board of Directors. If
no trading is reported on the day, it will be the closing price on the immediately preceding day.
In issuing and disposing of MGC common shares under this system, MGC will conclude a restricted stock allocationagreement with Eligible Officers (referred to as the “allocation agreement” below). The allocation agreement covers
two main points: a. During a certain period, Eligible Officers shall not transfer, arrange security interests or otherwise
dispose of any of the MGC common shares allocated to them. b. If and when certain events occur, MGC shall acquire
such allocated common MGC shares free of charge.
Considering the purpose of this system, the company’s financial performance, the scope of individual Eligible Officers’
duties and other circumstances, MGC has recently decided to award the Eligible Officers monetary compensation
receivables worth 51,392,000 yen and 35,200 MGC common shares in total.
With the treasury share disposal, the 21 Eligible Officers to whom MGC shares are to be allocated (referred to as the“recipients” below) will follow this system to pay in all monetary compensation receivables from the company ascontributed assets, in order to subscribe to the common shares disposed of by the company (referred to as “allocatedshares” below).
3. Overview of the allocation agreement
The following paragraphs describe the allocation agreement that will be concluded by MGC and each of the EligibleOfficers.
(1) Transfer restriction period: August 23, 2019- August 22, 2049
The transfer of allocated shares shall be restricted for 30 years to attain the purpose of this system: awarding
incentives for making lasting improvements in the company’s corporate value and sharing value with shareholders.
(2)Conditions for Cancellation of Transfer Restriction
The Transfer Restriction shall be removed when the Transfer Restriction Period expires on the condition that theApplicable Director has continuously been in the position of Director, Executive Officer, or Trustee of MGC. However,if the Applicable Director retires, passes away, or is removed from the position of Director, Executive Officer, orTrustee of MGC for any reason deemed legitimate by the Board of Directors, the number of Shares subject to and2

timing of removal of the Transfer Restriction shall be reasonably adjusted as necessary.
(3) Reasons for Gratis Acquisition
1) If an Applicable Director is removed from the position of Director, Executive Officer, or Trustee of MGC prior to theexpiration of the Transfer Restriction Period for any reason other than retirement, passing away, or other reason
deemed legitimate by the Board of Directors, MGC will acquire all the Shares without consideration.
2) Based on a resolution by the Board of Directors of MGC, other reasons for acquisition of the Shares without
consideration shall be stipulated by the Allotment Agreement.
(4) Control of shares
To prevent Eligible Officers from transferring, arranging security interests or otherwise disposing of any of theallocated shares, the allocated shares will be controlled using dedicated accounts to be opened by Eligible Officers atNomura Securities Co., Ltd. To guarantee the effectiveness of the transfer restriction and other conditions set on theallocated shares, MGC and each of the Eligible Officers have concluded an agreement with Nomura Securities Co., Ltd.
regarding the control of the accounts created for the allocated shares owned by the Eligible Officers.
(5) Treatment of allocated shares upon reorganization of and other changes in MGC
Notwithstanding item (1) above, if, during the transfer restriction period, a merger agreement in which MGC
becomes a non-surviving company, a share exchange agreement or a share transfer plan under which the company
becomes a wholly-owned subsidiary of another company, or any other matters related to reorganization and/or
other changes are resolved at a General Meeting of Shareholders (or by the Board of Directors, if the approval of theGeneral Meeting of Shareholders is not required for said reorganization and/or changes in question), then thetransfer restrictions on the number of allocated shares that are reasonably determined considering the period fromthe beginning of the transfer restriction period to the day of said approval shall be lifted before the effective date ofsaid reorganization and/or changes. Immediately after the lifting of the transfer restrictions in any of the cases statedabove, the company shall, as a matter of course, acquire all of the allocated shares for which the restrictions have notbeen lifted, at no extra cost.
4. Grounds of calculation of paid-in amounts
The monetary compensation receivables provided in the form of the fiscal 2019 restricted stock compensation will beused as contributed assets during the treasury share disposal to be performed for the recipients. To ensure fairness, thedisposal value is determined as 1,460 yen or the closing price of the company’s common shares on the First Section ofthe Tokyo Stock Exchange on July 23, 2019. MGC considers the rule reasonable and fair because it corresponds to themarket value on the business day immediately before the day of the relevant resolution of the Board of Directors.
End

Corporate Communications Division, MITSUBISHI GAS CHEMICAL COMPANY, INC.
TEL: +81-3-3283-5041 https://www.mgc.co.jp/eng/3