January 30, 2020
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Representative:

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ES-CON JAPAN Ltd.
Takatoshi Ito, President &Representative Director(TSE 1st Section, code: 8892)
Minoru Nakanishi, Senior
Managing Director+81-3-6230-9308

Notice on Continuation and Partial Revision of Performance-Based Stock Reward System
ES-CON JAPAN Ltd. (ES-CON JAPAN) announces that a decision was made to submit a proposal (the“Proposal”) on the continuation and partial revision of the performance-based stock reward system (the“System”) for ES-CON JAPAN’s directors (excluding outside directors and auditors) (the “Directors.”Hereinafter referred to as the same unless otherwise specified) introduced from fiscal 2015 to the 25th
Regular General Meeting of Shareholders (the “General Meeting of Shareholders”) scheduled to be heldon March 26, 2020, as follows.
1. Continuation of the System
ES-CON JAPAN has made a decision to partially revise and continue the System, which was introducedwith an aim to further clarify remuneration for company directors and the relationship between ES-CON
JAPAN’s performance and stock price, with directors not only benefiting from a rise in stock price but also
sharing the same risks as shareholders in relation to a fall in stock price, thereby increasing awareness ofcontribution to the medium- to long-term improvement of performance and enhancement of corporate
value, on the condition that approval from all its shareholders is obtained. ES-CON JAPAN will submit theProposal to the General Meeting of Shareholders.
The System is an incentive system by which ES-CON JAPAN contributes money to a trust (the “Trust”)(the upper limit of which is as per section 2. (2) below) with the Trust acquiring shares of ES-CON JAPANwith the applicable money as capital, and shares of ES-CON JAPAN and the fair market value of sharesof ES-CON JAPAN (“shares, etc. of ES-CON JAPAN”) are granted to ES-CON JAPAN’s directors throughthe Trust in accordance with the performance achievement rate, etc. For details of the previous system,
please refer to “Notice on Introduction of Performance-Based Stock Reward System” announced onFebruary 13, 2015.
2. Partial Revision to the System
Upon continuing the System, the content of the System will be partially revised as follows on the condition
that approval is obtained at the General Meeting of Shareholders.
(1) Target period after the continuation of the SystemES-CON JAPAN obtained approval for the introduction of the System with a target period of five fiscalyears from the fiscal year closing at the end of December 2015 until the fiscal year closing at the end ofDecember 2019 at the 20th Regular General Meeting of Shareholders held on March 20, 2015, and again
obtained approval for the System at the 21st Regular General Meeting of Shareholders held on March 25,
2016, coinciding with ES-CON JAPAN’s transition to a company with an audit committee.
ES-CON JAPAN will implement the System in a continuous manner by contributing additional money on
the condition that approval is obtained at the General Meeting of Shareholders. In the System, the target
period of ES-CON JAPAN’s third medium-term management plan “IDEAL to REAL 2022” (the “thirdmedium-term management plan”) comprised of the period lasting three fiscal years from the fiscal year
closing at the end of December 2020 until the fiscal year closing at the end of December 2022, as well as
each subsequent period of three fiscal years (hereinafter respectively referred to as “target periods”), hasbeen set as the target period.

-1-(2) Amount of money contributed to the TrustES-CON JAPAN will contribute money with an upper limit of 330 million yen (Note), calculated bymultiplying 110 million yen per fiscal year by the target period, to the Trust as funds for acquisition ofshares of ES-CON JAPAN to grant shares, etc. of ES-CON JAPAN to ES-CON JAPAN’s directors, on thecondition that approval is obtained at the General Meeting of Shareholders.
Moreover, after the expiration of the first target period and until the end of the System, ES-CON JAPANshall make additional contributions not exceeding the amount calculated by multiplying 110 million yenper fiscal year by the target period in each target period.
However, when making contributions or additional contributions, when there are residual company shares(excluding items for which granting to ES-CON JAPAN’s directors has not been completed with shares of
ES-CON JAPAN in proportion to the number of points assigned to ES-CON JAPAN’s directors in eachtarget period) and money (hereinafter collectively referred to as “residual shares, etc. immediately before
the start of the target period”), the total amount of the residual shares, etc. immediately before the start of
the target period and the amount of the trust money which will be additionally contributed shall be within
the range of the upper limit of the trust money approved at the General Meeting of Shareholders.
(Note) The money to be allocated to trust expenses for the Trust and expenses for system operationsuch as trust fee will not be included in 330 million yen, which is the upper limit of the funds foracquisition of shares of ES-CON JAPAN mentioned above, and additional contribution ofnecessary money can be made.
(3) Calculation method and upper limit of number of shares to be granted to ES-CON JAPAN’s directors
After the continuation of the System, consolidated operating income and total shareholder return (TSR)
shall be adopted as the method for calculating the number of shares of ES-CON JAPAN to be granted to
ES-CON JAPAN’s directors, with an aim to provide incentive for business execution conscious ofsustainable growth and setting as clear indicators from the viewpoint of shareholders the return of profits
to shareholders and enhancement of corporate value. Specifically, ES-CON JAPAN will assign points (the“annually assigned points”) in accordance with the status of achievement of the goal on consolidated
operating income (the “performance-based coefficient (1) (*1)”) based on the number of standard sharesfor each position stipulated at the beginning of the fiscal year in the third medium-term management plan,and the annually assigned points assigned to the subject parties will be accumulated (the “cumulativeassigned points during the target period”) in the performance for the fiscal year ending December 2022,
the final fiscal year in the third medium-term management plan. The obtained points (the “assigned pointsultimately decided”) will be calculated by multiplying the cumulative assigned points during the target
period by the rate of deviation between ES-CON JAPAN’s TSR and the growth rate of the TSE FirstSection Real Estate TOPIX (the “performance-based coefficient (2) (*2)”) during the period of the third
medium-term management plan. The points are converted at a rate of one company share for every 10
points when granting shares. However, when a stock split, free stock allocation or reverse stock split, etc.
has been carried out with regards to the shares of ES-CON JAPAN after the approval of this proposal, theconversion rate shall be adjusted appropriately in accordance with the relevant rate, etc. The upper limit
per fiscal year of the number of cumulative points assigned to ES-CON JAPAN’s directors shall be
1,100,000 points (110,000 shares). The upper limit of the number of shares of ES-CON JAPAN acquiredby the Trust in each target period is 3,300,000 points (330,000 shares), which is equivalent to the number
calculated by multiplying the upper limit of the number of annually assigned points by three, the numberof fiscal years during the target period.
(*1) Performance-based coefficient (1) will be determined within the range between 0.0 and 1.5 inaccordance with the achievement rate of the forecast operating income on a consolidated basis.
(*2) Performance-based coefficient (2) will be determined within the range between 0.5 and 1.0 bycomparing ES-CON JAPAN’s TSR with the TSE First Section Real Estate TOPIX during the target
period and based on the rate of deviation between them.

-2-(4) Method of share acquisition by means of the Trust
The acquisition of shares of ES-CON JAPAN by the Trust is scheduled to be made through the disposalof treasury shares or from the stock market within the range of the upper limit of the amount of trust
money and the number of acquired shares in 2. (2) and (3) above.
(5) Granting of shares of ES-CON JAPAN to ES-CON JAPAN’s directors
When the directors of ES-CON JAPAN fulfill beneficiary requirements, payment of money will also bemade as follows in addition to the granting of shares made previously.
Accordingly, shares of ES-CON JAPAN equivalent to 70% of the total number of points assigned basedon the System before the revision and the number of assigned points ultimately decided assigned basedon the System after the revision will be granted to ES-CON JAPAN’s directors. As for shares of ES-CONJAPAN equivalent to 30% of the total points, the money equivalent to the fair market value of shares ofES-CON JAPAN will be granted instead of shares of ES-CON JAPAN from the perspective of securing
funds for tax payment. In addition, as for the total amount of shares of ES-CON JAPAN equivalent to thetotal number of points assigned based on the System before the revision and the number of assigned
points ultimately decided assigned based on the System after the revision, money equivalent to the fairmarket value of shares of ES-CON JAPAN will be granted instead of shares of ES-CON JAPAN to theheir in the case the director of ES-CON JAPAN passes away during the trust term. Furthermore, the total
amount of shares of ES-CON JAPAN equivalent to the total number of points assigned based on theSystem before the revision and the number of assigned points ultimately decided assigned based on theSystem after the revision will be granted to directors who will retire at their own convenience.
3. Overview of the System after Revision(1) Overview of the System
The System is an incentive system in which ES-CON JAPAN contributes money to the Trust (the upper
limit of which is as per section 2. (2) below), with the Trust acquiring shares of ES-CON JAPAN with theapplicable money as capital, and shares, etc. of ES-CON JAPAN being granted to ES-CON JAPAN’s
directors through the Trust in accordance with the performance achievement rate, etc.
Moreover, the shares, etc. will be granted to the director of ES-CON JAPAN when the said director retires
from the position of director.
(2) System beneficiaries
Directors of ES-CON JAPAN (excluding outside directors and auditors)(3) Target period
Three fiscal years from the fiscal year closing at the end of December 2020 until the fiscal year closing at
the end of December 2022 and each subsequent period of three fiscal years.
(4) Establishment of the trust associated with operation of the System
ES-CON JAPAN shall establish and operate the following trust for operating the System based on mutual
agreement with the trustee.

-3-(1) Resolutions of general meeting of shareholders[Trust settlor]
ES-CON JAPAN(3) Change inthe trustagreement
and entrustmentof additionalmoney(4) Shares ofES-CON JAPAN(4) Shares ofES-CON JAPAN(4) Payment of theprice

Stock Market(2) Change in officer stockownership regulations[Beneficiaries]
ES-CON JAPAN’s Directors(6) Granting of shares, etc.
of ES-CON JAPAN[Trustee]
Resona Bank
(4) Payment of the price[Trust administrator](5) No exercise of voting rights(1) ES-CON JAPAN shall obtain a resolution for approval at the General Meeting ofShareholders concerning continuation and partial revision of the System.
(2) ES-CON JAPAN shall change officer stock ownership regulations within the scope
approved by the General Meeting of Shareholders.
(3) ES-CON JAPAN shall change the existing trust agreement and entrust additional
money within the scope approved by the General Meeting of Shareholders.
(4) The Trust shall acquire shares of ES-CON JAPAN through the stock market, etc. or by
the method of underwriting ES-CON JAPAN’s disposal of treasury shares by using
money entrusted in (3) above.
(5) Voting rights shall not be exercised during the trust term with regard to shares of ESCON JAPAN under the Trust.
(6) During the trust term, the beneficiaries will be assigned points in accordance with theposition and the performance achievement rate of the beneficiaries based on thestipulations of the officer stock ownership regulations in (2) above. Shares, etc. of ESCON JAPAN will be granted to directors who have fulfilled the beneficiary
requirements stipulated in the officer stock ownership regulations to a certain degree,
including when a director resigns, at the number in accordance with the number ofpoints assigned.
(5) Trust term
From April 1, 2015, to the closing of the Trust (No specific closing date is determined for the trust
term of the Trust and the Trust shall continue as long as the System continues. The System shallend due to delisting of shares of ES-CON JAPAN or abolishment, etc. of the officer stock ownershipregulations.)(6) Upper limit of money and the number of shares to be contributed by ES-CON JAPANAs described in 2. (2) and (3) above.

-4-

(7) Method of acquisition of shares of ES-CON JAPAN by the Trust
The Trust shall acquire shares of ES-CON JAPAN through financial instrument exchange markets,etc. or by the method of underwriting ES-CON JAPAN’s disposal of treasury shares within the upper
limit of the amount of money to be contributed in to the Trust in (6) above.
(8) Calculation method and upper limit of number of shares of ES-CON JAPAN to be granted tobeneficiaries
As described in 2. (3) above.
(9) Timing of granting of shares of ES-CON JAPAN to beneficiaries
When a director of ES-CON JAPAN resigns and has fulfilled the beneficiary requirements, there
shall be granting of the number of shares, etc. of ES-CON JAPAN in accordance with the total
number of the points assigned based on the System before the revision and the number of assigned
points ultimately decided assigned based on the System after the revision, at the time of retirement
by means of the prescribed beneficiary definition procedure.
(10) Exercise of voting right of shares of ES-CON JAPAN within the Trust
Voting rights pertaining to shares of ES-CON JAPAN within the Trust shall not be exercised without
any exception in order to secure independence of ES-CON JAPAN’s management from the Trust.
(11) Handling of dividends of shares of ES-CON JAPAN within the Trust
Dividends pertaining to shares of ES-CON JAPAN within the Trust shall be received by the Trust,and used for trust-related expenses such as acquisition of shares of ES-CON JAPAN and trust fees,etc. Moreover, when the Trust closes, it is planned that the dividends remaining in the Trust are to
be granted to beneficiaries of the System who are in office at that point in time by proportionallydividing the dividends in accordance with the accumulated points of each individual or donated to
public interest corporations.
(12) Handling at the closing of the Trust
The Trust shall be closed in the event the shares of ES-CON JAPAN are delisted or the officer stock
ownership regulations are abolished, etc.
Of the residual assets of the Trust when it is closed (excluding shares planned to be granted todirectors in office at the time of the closing of the Trust with the possibility of fulfilling the beneficiary
requirements), shares of ES-CON JAPAN shall be cancelled or donated to public interest
corporations based on a resolution of the board of directors, after all of the shares of ES-CON
JAPAN having been acquired by ES-CON JAPAN at no cost. Of the residual assets of the Trustwhen it is closed, money shall be paid to the beneficiaries of the System who are in office at thatpoint in time by proportionally dividing the money in accordance with the accumulated points of eachindividual or donated to public interest corporations.
[Reference]<Content of trust agreement>
1. Name: Board benefit trust for executives
2. Entrusting party: ES-CON JAPAN3. Trustee: Resona Bank, Limited
4. Beneficiaries: Directors (excluding outside directors and auditors) who fulfill the prescribed
requirements
5. Trust administrator: Third party having no interest in ES-CON JAPAN6. Date of conclusion of trust agreement: April 1, 2015 (an amendment agreement is scheduled to beconcluded in May 2020)
7. Trust term: From April 1, 2015, to the closing of the Trust-5-