January 22, 2020
Kuraray Co., Ltd.

Notice Concerning the Board of Directors’ Resolution for the Issuanceof Share Purchase Warrants
Kuraray Co., Ltd. today announced that it passed a resolution at a Board ofDirectors’ meeting held on January 22, 2020 to determine the procedure forthe offering and issuance of share purchase warrants to its directors andexecutive officers. Details are provided as follows in accordance with the rules
stipulated in Article 238-1, 238-2 and 240-1 of the Corporation Law.
I.

Reason for Offering Share Purchase Warrants as Stock Options

In line with the abolition of the retirement benefit system for Company
executives, Kuraray is introducing an alternative system for issuing sharepurchase warrants in the form of stock options as remuneration to directors
and executive officers. The purpose of this system is to improve theCompany’s performance by raising motivation and morale among directors
and executive officers. As a consequence of this new system, Kuraray will
issue stock options (share purchase warrants).

II.

Items Pertaining to the Offering of Share Purchase Warrants

1. Name of share purchase warrants to be offered
Kuraray Co. Ltd. Share Purchase Warrants issued in February 2020

2. Parties eligible for allotment (hereinafter “Rights Holders”) andnumber of allotted share purchase warrants
Rights Holder
Directors of Kuraray Co.,
Ltd.
Executive Officers ofKuraray Co., Ltd.*2

Number ofRights Holders

Number of allotted sharepurchase warrants

12124*11249

(*1 including the number of units allotted to directors who concurrently serveas executive officers as the executive officers’ portion)(*2excluding those who concurrently serve as directors or work overseas)

3. Total number of allotted share purchase warrants
173 units (the number of shares to be granted per share purchase warrant is500)
The aforementioned number is a forecast as of the date of the Board of
Directors’ meeting wherein the resolution was passed. The total number ofshare purchase warrants to be allotted to directors is to be impartiallycalculated based upon share prices on the allotment date and may be adjusted
or decreased to agree with the Company’s annual cap for such allotments of¥90 million as approved by the resolution of the ordinary general meeting ofshareholders held on June 28, 2006.
4. Calculation method of the amount to be paid for share purchasewarrants
The amount to be paid for share purchase warrants shall be fairly calculated inaccordance with the Black-Scholes Model on the allotment date for relevant
share purchase warrants with the proviso that the amount payable by eachRights Holder shall be offset by the Rights Holder’s compensation receivablefrom the Company (an amount equivalent to the aforementioned amountpayable), which will be granted on the condition of the Right Holder’ssubscription to the purchase of share purchase warrants on the allotment dateof share purchase warrants.
5. Allotment date of share purchase warrants to be offeredFebruary 14, 2020
6. Details of share purchase warrants(1) Type and number of shares to be issued upon the exercise of sharepurchase warrants
The type of shares to be issued upon exercise of share purchase warrants shallbe shares of common stock of the Company, and the number of shares to beissued upon the exercise of share purchase warrants shall be 86,500. In theevent of the Company’s division or consolidation of shares, the number ofallotted shares shall be adjusted in accordance with the formula below

provided that such adjustment shall also be made to share purchase warrants
remaining unexercised as of the allotment date and that any fractional sharesless than one (1) share arising out of such adjustment shall be omitted.
Number of corresponding shares after adjustment = Number ofcorresponding shares before adjustment x Stock split or reverse stock split
ratio
In the event the Company is involved in a merger, corporate spin-off, shareexchange or share transfer (hereinafter collectively “Merger and OtherEvents”); implements the gratis allotment of share purchase warrants; orengages in any other activity that entails an adjustment in the number ofshares offered, the Company shall adjust the relevant number of shares in arational manner, giving due consideration to conditions pertaining to gratis
allotment, such as Merger and Other Events.
(2) Amount to be contributed upon the exercise of share purchasewarrants to be offered (“Exercising Amount”)
The investment for the exercise of share purchase warrants shall be made in
the form of cash and the amount calculated by setting the amount to be paidfor one (1) share upon the exercise of each share purchase warrant at one (1)yen. This amount shall be multiplied by the number of shares to be issued.
(3) Exercise period of share purchase warrants to be offered
From February 14, 2020 to February 13, 2035. Because the final day of theexercise period falls on a holiday, it shall be shifted to the working day
immediately preceding that day.
(4) Matters concerning capital or capital reserves to be increased whenshares are issued upon the exercise of share purchase warrants to beoffered(a) The amount of capital to be increased when shares are issued upon theexercise of share purchase warrants shall be half the limit of capitalincrease as calculated in accordance with Article 17, Paragraph 1, of
the Corporate Accounting Rules, and any fraction of less than one (1)yen resulting from that calculation shall be rounded up to the nearest
whole yen.

(b) The amount of capital reserve to be increased when shares are issued
upon the exercise of share purchase warrants shall be the amount of
the limit of capital increase described in (a) above, less the amount ofcapital to be increased as set out in (a) above.
(5) Conditions for exercise of share purchase warrants(a) The Rights Holder may exercise the right only on or within the 10 days
immediately following the date when he or she loses his or her
position as both director and executive officer of the Company(hereinafter the “Commencement Date of the exercise period”).
(b) Notwithstanding (a) above, if the Commencement Date of the exercise
period of the Rights Holder does not fall on or before January 14,
2035, the Rights Holder may exercise his or her rights from theworking day immediately following the last day of work through theexpiration date of the period as stipulated in (3) above.
(c) In the event of the gratis awarding of share purchase warrants due to aresolution by the general meeting of shareholders or a Board ofDirectors’ meeting in accordance with the conditions described in (6)below, the Rights Holder shall exercise the rights granted thereby
within a period prescribed by the Board of Directors, which will notcorrespond with the date of the gratis awarding of share purchasewarrants.
(d) In the case of the Rights Holder’s demise, the legal heir shall exercise
said Right Holder’s rights in accordance with the terms and conditionsof the Allotment of Share Purchase Warrants Agreement stipulated asfollows in (e).
(e) Other terms and conditions for exercising share purchase warrants
shall be prescribed in the Allotment of Share Purchase Warrants
Agreement made and entered into by Kuraray and the Rights Holder.
(6) Conditions for acquiring share purchase warrants
Should it be resolved that the Company will engage in a merger, absorb
another company’s division, establish a new division or company in a way thatwould entail the dissolution or division of its own operations, enter into ashare exchange or implement a share transfer wherein it becomes a wholly
owned subsidiary through the Company’s general meeting of shareholders (orupon approval from the Company’s Board of Directors’ meeting when ageneral meeting of shareholders’ resolution is not necessary), the Company
may itself acquire all share purchase warrants outstanding as of the dateprescribed by the Company’s Board of Directors’ meeting.
(7) Restriction on the transfer of share purchase warrants
The acquisition of share purchase warrants by transfer shall require approvalof the Company’s Board of Directors.
(8) Policy concerning the details of invalidating of share purchasewarrants and the delivery of share purchase warrants of a Restructured
Company undergoing Organizational Restructuring
Upon merger (limited to cases wherein the Company becomes a dissolvingcompany), the absorption of another company’s division, the establishment of
a new company or division, entry into a share exchange or the implementationof a transfer of shares of the Company to another entity (hereinaftercollectively referred to as “Organizational Restructuring”), the Company shalldeliver share purchase warrants as per a corporation described in Article 236,
Paragraph 1, Items 8.1 through 8.5 of the Corporation Law of Japan(hereinafter “Restructured Company”) and in accordance with the following
terms and conditions pertaining to the Rights Holders of share purchasewarrants remaining unexercised immediately before the Organizational
Restructuring takes effect (hereinafter “Remaining Share Purchase Warrants”).
In such a case, the Remaining Share Purchase Warrants shall cease to beeffective and the Restructured Company shall newly issue share purchasewarrants. However, the foregoing shall apply only to cases in which thedelivery of share purchase warrants of the Restructured Company is inaccordance with the following terms and conditions as provided for in therelevant agreements or plans pertaining to the merger, new company
establishment, the absorption of another company’s division, theestablishment of a new company or division, entry into a share exchange orthe implementation of a transfer of shares.
(a) Number of share purchase warrants of the Restructured Company tobe delivered
The Company shall deliver share purchase warrants, the number ofwhich shall equal the number of share purchase warrants held by theRights Holder of the Remaining Share Purchase Warrants.

(b) Type of shares of the Restructured Company to be issued upon theexercise of share purchase warrants
Shares of common stock of the Restructured Company(c) Number of shares of the Restructured Company to be issued upon
the exercise of share purchase warrants
To be decided upon application, mutatis mutandis, of item (1) above,taking into consideration the terms and conditions of theOrganizational Restructuring, and so on.
(d) Amount to be contributed upon the exercise of share purchasewarrants
The amount to be contributed upon the exercise of each sharepurchase warrant shall be one (1) yen per share of the Restructured
Company to be delivered upon the exercise of each share purchasewarrant, multiplied by the number of shares of the Restructured
Company issued upon the exercise of the relevant share purchasewarrants as determined in accordance with (c) above.
(e) Exercise period of share purchase warrants
From the later of the commencement dates of the exercise period ofshare purchase warrants as set out in item (3) above, or the day on
which the Organizational Restructuring becomes effective throughthe expiration date of the exercise period of share purchase warrants
as set out in item (3) above.
(f) Matters concerning capital or capital reserve to be increased whenshares are issued upon the exercise of share purchase warrants
To be decided by a resolution upon application, mutatis mutandis, ofitem (4) above.
(g) Restriction on transfer of share purchase warrants
To acquire share purchase warrants by transfer shall require theapproval of the Board of Directors of the Restructured Company.
(h) Conditions for acquiring share purchase warrants
To be decided by a resolution upon application, mutatis mutandis, ofitem (6) above.

(i) Other conditions for exercise of share purchase warrants
To be decided by a resolution upon application, mutatis mutandis, ofitem (5) above.
(9) Arrangement of handling of fractional shares resulting from exerciseof share purchase warrants
In the event the shares to be delivered to the Rights Holder include fractional
shares, such number of fractional shares shall be disregarded.