July 22, 2024
Company name:
Representative:

Nippon Shinyaku Co., Ltd.
Toru Nakai,Representative Director and President(Securities code: 4516 [Tokyo Stock Exchange Prime Market])
Inquiries:
Masahiko Okano, Department Manager,
Corporate Communications Department
Tel.: +81-75-321-1111 (main line)
Notice Regarding Disposal of Treasury Stock as Restricted Stock Compensation
Nippon Shinyaku Co., Ltd. (the “Company”) hereby announces that at the meeting of the Board of Directors
held today, a resolution was passed to dispose of its treasury stock as restricted stock compensation (the“Disposal”) as follows:
１. Overview of the Disposal（１） Disposal date
（２）

Type and total number of shares
to be disposed of（３） Disposal price（４）

Total value of shares to bedisposed of（５） Planned allottees

August 20, 2024
26,267 shares of common stock of the Company
3,460 yen per share
90,883,820 yen
Eight Directors of the Company, excluding Outside
Directors, will receive 26,267 shares in total.

２. Purpose of and reason for the Disposal
As announced in the “Notice Regarding Introduction of a Restricted Stock Compensation Plan” dated May
24, 2024, at the meeting of the Board of Directors held on the same day, a resolution was passed to introduce
a restricted compensation plan (the “Plan”) whereby shares of the Company’s common stock would begranted to its Directors (excluding Outside Directors, the “Eligible Directors”), subject to terms andconditions that define the period of restriction on transfer, requirements for purchase by the Company without
consideration, etc. The Plan is intended as a new compensation plan that enables the Company to provide theEligible Directors with incentives to work to continually enhance the Company’s corporate value and tofurther promote the alignment of interests between the Eligible Directors and shareholders.
In addition, on June 27, 2024, the 161st Annual General Meeting of Shareholders (the “161st AGM”)
approved that under the Plan, the Company shall pay monetary compensation claims up to 600 million yen
per year, which is the upper limit of compensation for the Company’s Directors, as monetary compensation
to be used as contributions to acquire restricted stock and shall issue or dispose of up to 100,000 shares of its
common stock per year and that the period of restriction on transfer of restricted stock shall start on the dateof allotment and end on the retirement of the relevant Eligible Director from his/her position of theCompany’s Director.

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[Overview of the Plan]
Under the Plan, Eligible Directors shall make an in-kind contribution of all monetary compensation claims
paid by the Company and shall in turn receive shares of the Company’s common stock to be issued ordisposed of.
The total amount of monetary compensation claims to be paid to Eligible Directors under the Plan shall bewithin the current compensation limit (the upper limit of compensation for the Company’s Directors), andthe total number of shares of the Company’s common stock to be newly issued or disposed of under the Plan(“Restricted Stock”) shall not exceed 100,000 per year. (However, in the event of a split, a gratis allotment ofshares, a reverse split of the Company’s common stock, or any other circumstance that requires adjustmentof the number of shares, the number of shares of Restricted Stock may be reasonably adjusted.)
The amount of payment per share of the Company’s common stock to be issued or disposed of under thePlan shall be determined by the Company’s Board of Directors, within the scope of an amount that is notparticularly advantageous to the Eligible Director who subscribes to the allotted shares of common stock,based on the closing price per share of the Company’s common stock on the Tokyo Stock Exchange one day
before the Company’s Board of Directors passes a resolution on allotment of shares of Restricted Stock (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 shares of its common stock under the Plan, the Company and therelevant Eligible Director shall conclude a restricted stock allotment agreement (the “Allotment Agreement”),
which includes the following provisions:①

Each Eligible Director shall not transfer, create a security interest on, or otherwise dispose of the sharesof the Company’s common stock allotted to him/her under the Allotment Agreement for the prescribedperiod, and②

If certain specified events occur, the Company shall acquire the allotted shares of its common stock
without consideration.
At the Board of Directors meeting held today, it was resolved that total monetary compensation claims of90,883,820 yen (the “Monetary Compensation Claims”) be paid to the eight Eligible Directors who areplanned allottees as restricted stock compensation for the period from the 161st AGM to next year’s Annual
General Meeting of Shareholders and that the Eligible Directors make an in-kind contribution of all theMonetary Compensation Claims paid so that 26,267 shares of the Company’s common stock will be allotted
as shares of Restricted Stock. The amount of monetary compensation claims to be paid to each Eligible
Director is determined through deliberations by the Compensation Committee pursuant to delegation fromthe Board of Directors in comprehensive consideration of various factors, such as the Company’sperformance and the responsibilities of each Eligible Director. The Monetary Compensation Claims are paidon the condition that an Eligible Director and the Company conclude the Allotment Agreement, which
includes the following provisions:
３. Overview of the Allotment Agreement（１） Period of restriction on transfer
From August 20, 2024 to his/her retirement from his/her position of the Company’s Director
During the period stipulated above (the “Transfer Restriction Period”), the Eligible Director shall nottransfer to a third party, establish the right of pledge to, create a mortgage interest in, offer as a living
gift, make a bequest of, or otherwise dispose of any shares of Restricted Stock allotted to him/her (the“Allotted Shares”). (Hereinafter, this restriction is referred to as the “Transfer Restriction.”)2

（２） Removal of the Transfer Restriction
The Company shall remove the Transfer Restriction on all Allotted Shares upon the expiration of theTransfer Restriction Period, provided that an Eligible Director who has received the Allotted Shares has
continuously served as the Company’s Director during the period from the date of the 161st AGM to thedate of the following year’s Annual General Meeting of Shareholders (the “Term of Service”).
（３） Handling in the event of the resigning of an Eligible Director due to expiration of his/her term ofoffice or other legitimate reasons during the Term of Service
If an Eligible Director resigns from the above-mentioned position for a reason that the Company’s
Board of Directors recognizes as legitimate during the Term of Service, the number of Allotted Sharesfrom which the Transfer Restriction will be removed and the time of removal of the Transfer Restriction
shall be reasonably adjusted as necessary.
（４） Acquisition of Restricted Stock without consideration
If an Eligible Director who has received the Allotted Shares resigns from his/her position of theCompany’s Director before the expiration of the Transfer Restriction Period, the Company shall
automatically acquire the Allotted Shares without consideration, unless there is a reason that its Boardof Directors recognizes as legitimate. In addition, if the Transfer Restriction on any of the Allotted Shares
has not been removed pursuant to the grounds for removal of the Transfer Restriction stipulated in thesecond section of this chapter at the time of the expiration of the Transfer Restriction Period stipulated
in the first section of this chapter, the Company shall automatically acquire those shares without
consideration.
（５） Handling in the event of organizational restructuring
If any proposal for organizational restructuring, such as a merger agreement in which the Company
will be a merged company or a stock exchange agreement or share transfer plan in which the Company
will become a wholly owned subsidiary, is approved by a General Meeting of Shareholders of theCompany (or by the Company’s Board of Directors if that organizational restructuring does not requireapproval from a General Meeting of Shareholders) during the Transfer Restriction Period, the Company
shall remove the Transfer Restriction from a certain number of Allotted Shares prior to the effective dateof the organizational restructuring. The number of Allotted Shares from which the Transfer Restriction
will be removed shall be reasonably determined in consideration of the period from the start date of theTerm of Service to the date of approval of the organizational restructuring. In this case, the Company
shall automatically acquire Allotted Shares without consideration from which the Transfer Restriction is
not yet removed even immediately after the removal of the Transfer Restrictions.
（６） Management of the Allotted Shares
To ensure that the Allotted Shares cannot be disposed of in any way, such as transfer or theestablishment of mortgage interests, during the Transfer Restriction Period, the Eligible Directors shallopen a dedicated account with a financial instruments business operator designated in advance by theCompany and manage the shares in that account until the Transfer Restriction is removed. In addition,
the Company has obtained consent from the Eligible Directors for the handling of the shares in theabovementioned way of management in the account.
４. Basis and details of the calculation of the disposal priceTo eliminate arbitrariness, 3,460 yen is used as the disposal price, which is the closing price for thecommon stock of the Company on the Tokyo Stock Exchange on July 19, 2024. As it is the market price of
one day prior to the day of the resolution of its Board of Directors, the Company believes that the price isreasonable and not particularly favorable.
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