Notice Regarding Introduction of Performance-linked Stock Compensation PlanMarch 26, 2019
Name of listed company: Nissan Chemical Corporation
Stock Exchange: Tokyo
Code Number: 4021
URL: https://www.nissanchem.co.jp/eng/
Representative: Kojiro Kinoshita, President & CEOInquiry to: Takeshi Matsuoka, General Manager of CSR & Public Relations Office, Corporate Planning Dept.

This is to notify that the Company resolved at its Board of Directors’ meeting held today to introduce a
performance-linked stock compensation plan called a Board Benefit Trust (BBT) (hereinafter referred to as the“Plan”) contingent on approval at the 149th Ordinary General Meeting of Shareholders (hereinafter referred toas the “General Meeting of Shareholders”) to be held in late June 2019. Details are as follows:
1. Background and purpose of the Plan
The Company’s Board of Directors passed a resolution to introduce the Plan on the condition of gaining
approval from shareholders at the General Meeting of Shareholders with regard to director compensation. The
Plan aims to further clarify the linkage between compensation for directors (excluding outside directors; thesame applies hereinafter unless otherwise specified), executive officers and associate executive officers(hereinafter collectively referred to as the “Directors, etc.”) and the Company’s business performance andstock value and to encourage Directors, etc. to contribute to mid- to long-term improvement in the corporate
performance and expansion of corporate value because they will share the benefits and risks of stock pricefluctuations with the shareholders.
2. Outline of the Plan
(1) Outline of the Plan
The Plan is a performance-linked stock compensation plan under which money contributed by the Company
is used as funds to acquire the Company’s shares through a trust (hereinafter the trust set up under the Planis referred to as the “Trust”) and the Company’s shares and the cash equivalent to the market price of theCompany’ Shares (hereinafter the “Company’s Shares, etc.”) are provided through the Trust to Directors, etc.
in accordance with director stock benefit rules established by the Company. The Directors, etc. will receive
benefit of the Company’s Shares etc. as of the date of their retirement from office, as a rule.

<Framework of the Plan>(i) Establishment of director stock benefit rules[Trustor]
The CompanyDirectors, etc.

Trust administrator
Instructions on nonexercise of voting
rights[Trustee][Beneficiaries]

Mizuho Trust & Banking

Retired Directors, etc. who(Re-trusted: Trust & Custody Services Bank)The Company’s shares(vi) Distribution of theCompany’s Shares,etc.

Acquisition of right toreceive benefits(iii) Stockacquisition(v) Non-exercise ofvoting rights(ii) Entrustmentof money(iv) Granting of points

meet the beneficiary
requirements(i) The Company passes a resolution on compensation of directors in relation to the Plan at theGeneral Meeting of Shareholders and establishes director stock benefit rules within theframework of approval received at the General Meeting of Shareholders.
(ii) The Company entrusts the money within the amount approved at the General Meeting ofShareholders as set forth in (i).
(iii) The Trust acquires the Company’s shares through the stock market or by underwriting thedisposition of the Company’s treasury stock using the money entrusted in (ii) as funds.
(iv) The Company grants points to the Directors, etc. based on the director stock benefit rules.
(v) In accordance with instructions from the trust administrator, who is independent from theCompany, the Trust shall not exercise voting rights concerning the Company’s shares in theTrust account.
(vi) The Trust distributes to those among the retired Directors, etc. who meet the beneficiary
requirements stipulated in the director stock benefit rules (hereinafter referred to as the“Beneficiaries”) the Company’s shares based on the number of points granted to theBeneficiaries. However, in the case where Directors, etc. meet the requirements stipulated in
the director stock benefit rules, they shall receive in respect of a certain percentage of thepoints granted to them an amount of cash equivalent to the market price of the Company’sshares.

(2) Individuals subject to the PlanDirectors (outside directors are not subject to the Plan), executive officers and associate executive officers(3) Period of the Trust
From August 2019 (tentative) until the Trust ends. (With respect to the period of the Trust, the Trust shallcontinue without a specific ending date, continuing for as long as the Plan continues. The Plan shall end if theCompany’s shares are delisted, the director stock benefit rules are discontinued, or similar grounds arise.)(4) Money left in the TrustOn the condition that the introduction of the Plan is approved at the General Meeting of Shareholders, theCompany shall introduce the Plan targeting the three business years from the business year ending March31, 2020 to the business year ending March 31, 2022 (hereinafter the period of the three business years
concerned is referred to as the “Initial Covered Period” and the Initial Covered Period and each
three-business year period that begins after the Initial Covered Period has elapsed are referred to as the“Covered Period” respectively) and, in order to distribute the Company’s Shares, etc. to Directors, etc., theCompany will provide the money described below to the Trust as funds to acquire the Company’s shares viathe Trust.
Firstly, at the start of the Trust period set out in (3) above, the Company will contribute to the Trust funds up toa limit of 800 million yen (of which 300 million yen is for Directors) as the necessary funds corresponding tothe Initial Covered Period.
Furthermore, even after the Initial Covered Period has elapsed, until such time as the Plan ends, theCompany shall for each Covered Period additionally contribute to the Trust funds up to a limit of 800 million
yen (of which 300 million yen is for Directors), as a rule. However, in the case where such an additional
contribution is made, if the Company’s shares (excluding the Company’s shares equivalent to the number ofpoints that have been granted to Directors, etc. in relation to any preceding Covered Period and that have yet
to be distributed to the Directors, etc.) and money (hereinafter referred to collectively as the “RemainingShares, etc.”) remain in the Trust assets, the sum total of the value of the Remaining Shares, etc. (the bookvalue of the Company’s shares on the last day of the previous Covered Period) and the additionallycontributed money shall be not exceed 800 million yen (of which 300 million yen is for Directors).
Throughout the Covered Period, including the Initial Covered Period, the Company may make multiple
contributions of funds to the Trust until such time as the aggregate amount of contributions during theCovered Period concerned reaches the upper limits set out above. The Company will disclose its decision tomake additional contributions in a timely and appropriate manner.
(5) Acquisition method of the Company’s shares and number of shares to be acquired
The Trust shall acquire the Company’s shares through the stock market or by underwriting the disposition of
the Company’s treasury stock, using the funds contributed in accordance with (4) above to finance theacquisitions and no new shares shall be issued.
As a reference, based on the assumption of the acquisition of shares at the closing price on March 25, 2019,the maximum number of shares that will be acquired using up to a limit of 800 million yen in funds contributedby the Company to finance the acquisition of shares to be distributed to Directors, etc. in relation to the Initial
Covered Period will be 160,000 shares. The Company will disclose details of acquisitions of the Company’s
shares via the Trust in a timely and appropriate manner.
(6) Calculation method for the number of the Company’s shares to be distributed to Directors, etc.
For each business year, the Company shall provide Directors, etc. with points, the number of which isdetermined in light of factors such as their rank and level of performance in accordance with the director
stock benefit rules.
Points granted to Directors, etc. shall be converted at a ratio of one share of common stock per point whenproviding the Company’s shares, etc. as described in (7) below. (However, in the event of a stock split, anallotment of shares without contribution, a stock consolidation or similar following shareholders’ approval of
the resolution of this proposal at the General Meeting of Shareholders, the number of points already grantedor the conversion ratio will undergo a rational adjustment according to the ratio of the stock split, allotment ofshares without contribution, stock consolidation or similar.)
The number of points of Directors, etc. that will serve as the basis for the distribution of the Company’sshares, etc. described in (7) below shall be the number of points granted to the Directors, etc. concerned until
such time as they retire from office, as a rule (hereinafter, the points calculated in this way are referred to as
the “Final Number of Points”).
(7) Distribution of the Company’s shares, etc.
In the case where Directors, etc. have retired from office and satisfy the beneficiary requirements set out inthe director stock benefit rules, the Directors, etc. concerned will, after retiring from office, receive distributionof the Company’s shares in a number according to the Final Number of Points as determined in accordancewith the description in (6) above, as a rule, after taking prescribed procedure for determining beneficiaries.
However, in the case where Directors, etc. meet the requirements stipulated in the director stock benefit rules,

they shall receive in respect of a certain percentage of the points granted to them an amount of cash
equivalent to the market price of the Company’s shares in place of distribution of the Company’s shares. The
Trust may sell the Company’s shares in order to provide the cash.
(8) Exercise of voting rights
In accordance with instructions from the trust administrator, the voting rights represented by the Company’sshares held in the Trust’s account shall not be exercised without any exception. Adoption of this approach isintended to ensure neutrality in the management of the Company with respect to the exercise of voting rights
represented by the Company’s shares held in the Trust’s account.
(9) Treatment of dividends
The Trust shall receive dividends from the Company’s shares held in the Trust’s account and shall use themfor payment to acquire the Company’s shares and for trust fees, etc. for the trustee of the Trust. In addition, inthe case where the Trust is terminated, dividends remaining in the Trust shall be distributed to Directors, etc.
in office at that time, in proportion to the number of points held by each, in accordance with the provisions ofthe director stock benefit rules.
(10) Treatment upon termination of the Trust
The Trust shall terminate in the case where grounds such as a delisting of the Company’s shares or thetermination of the director stock benefit rules have arisen. The Company plans to acquire without
consideration all the Company’s shares included in the remaining assets of the Trust upon termination of theTrust and to then cancel them by a resolution of the Board of Directors. As for the cash included in theremaining assets of the Trust upon termination of the Trust, the balance after deduction of the cash
distributed to Directors, etc. in accordance with (9) above shall be distributed to the Company.

[Outline of the Trust](1) Name of trust:(2) Trustor:(3) Trustee:

Board Benefit Trust (BBT)The Company
Mizuho Trust & Banking Co., Ltd. (Re-trustee: Trust & Custody Services
Bank, Ltd.)(4) Beneficiaries:
Retired Directors, etc. who meet the requirements as beneficiaries as
stipulated in the director stock benefit rules(5) Trust administrator:
A third party having no conflicts of interest with the Company will beappointed.
(6) Type of trust:Money trust other than cash trust (third-party beneficiary trust)(7) Date of trust agreement:
August 2019 (tentative)(8) Date when money is entrusted: August 2019 (tentative)(9) Period of trust:From August 2019 (tentative) to until the Trust ends. (The Trust shallcontinue without a specific ending period, continuing as long as the Plancontinues.)