May 27, 2020
To All Concerned Parties
Company name
Representative

Contact for inquiries

Mitsubishi Materials Corporation
Naoki Ono, Chief Executive Officer(Securities code: 5711, First Section, TokyoStock Exchange)
Yuji Omura, General Manager, Corporate
Communications Dept.
(Tel: +81-3-5252-5206)

Notice of Introduction of a Stock Compensation Plan
Mitsubishi Materials Corporation (hereinafter “MMC”) hereby announces that the Remuneration Committee andthe Executive Officers’ Meeting as of May 27, 2020 resolved to introduce a stock compensation plan (hereinafter“the Plan”) applicable to MMC’s executive officers, corporate officers and fellows (excluding non-domestic
residents, hereinafter collectively referred to as the “Officers”). Details are described below.
1. Introduction of the Plan
(1) MMC has introduced an executive remuneration system for the Officers om April 1, 2020 and its remuneration
system consists of a base salary as a fixed compensation, an annual bonus as a performance-basedcompensation, and a stock-based compensation. Of these compensations above, MMC will introduce the Planwith respect to the stock-based compensation as a compensation for the purpose of enhancing the corporate
value in the medium to long-term and align the interests of the Officers with those of the shareholders of MMC.
(2) The Plan adopts a structure called Board Incentive Plan Trust (hereinafter the “BIP Trust”). The Plan is a plan
which offers Officers grant or payment (hereinafter "grant, etc.") of the MMC's shares and money equivalent tothe converted value of such shares (hereinafter the "MMC's shares, etc.") according to their individual rank.
(3) If the trust period of the BIP Trust established for implementation of the Plan (hereinafter “the Trust”) has
expired, MMC may continue the Plan by making amendments to the existing Trust for which the trust period
has expired and additionally contributing to the Trust.
2. Framework of BIP Trust
1) Resolution of the Remuneration Committee
and the Executive Officers’ Meeting【Entruster】
8) Gratis transfer
and cancellationof residual shares9) Grant of residual
assets

MMC2) Share issuance rules5) Dividends

3) Establishment of a trust【Trustee】 (planned)
Mitsubishi UFJ Trust and BankingCorporation

7) Delivery of MMC’s
shares and monetarypayment(Join Trustee: The Master Trust Bank of Japan, Ltd.)BIP Trust

Stock market

4) Acquisition ofMMC’s shares

MMC’s shares and money

6) Instruction not to exercise voting rights
4) Payment
Trust administrator【Beneficiary】
The Officers

1) MMC obtains approval for the introduction of the Trust to introduce the Plan at the Remuneration Committee
and the Executive Officers’ Meeting.
2) MMC establishes the share issuance rules with respect to the introduction of the Plan at the Remuneration
Committee and the Executive Officers’ Meeting.
3) MMC entrusts money based on the resolution for approval of the Remuneration Committee and the Executive
Officers’ Meeting in 1) above and establishes a trust (the Trust) the beneficiary of which is the Officers whomeet the beneficiary requirements.
4) The Trust follows the instruction of the trust administrator and acquires MMC's shares from the stock market
using the money contributed in 3).
5) MMC's shares held in the Trust are entitled to receive dividends in the same manner as other MMC's shares.
6) No voting rights shall be exercised on MMC's shares held in the Trust during the trust period.
7) Following the share issuance rules During the trust period, a certain number of points are granted to theOfficers according to their individual rank and such points are accumulated.
The grant, etc. of MMC's shares, etc. corresponding to the number of points are offered to the Officers who meetcertain beneficiary requirements after their retirement.
8) If there are residual shares at the expiry of the trust period due to a decrease in the number of the Officers
during the trust period and MMC will either continuously use the Trust or another stock compensation plan
similar thereto as the Trust, such residual shares may be delivered to the Officers.
If the Trust is terminated at the expiry of the trust period, the Trust will transfer such residual shares to MMC
without compensation and MMC will cancel them as return to shareholders.
9) If there remains dividends after the distribution with respect to MMC’s shares within the Trust at the expiry of
the trust period and the Trust is continuously used, such residual assets will be utilized as the share acquisition
fund. If the Trust is terminated at the expiry of the trust period, any portion in excess of reserve for trustexpenses will be donated to organizations with no interest in MMC and the Officers.
(Note) If MMC's shares are exhausted within the Trust due to the grant, etc. of MMC's shares, etc. to the Officers
who meet the beneficiary requirements, the Trust shall be terminated prior to the expiry of the trust period.
If the number of shares corresponding to accumulated number of points granted to the Officers during thetrust period (as defined in 3. (4) below) is likely to be insufficient or if the money in the trust assets is likely
to be insufficient for payment of trust fees or trust expenses, MMC may additionally entrust money to theTrust or additionally acquire MMC’s shares from the stock market based on the resolution for approval ofthe Remuneration Committee and the Executive Officers’ Meeting
3. Details of the Plan
(1) Outline of the Plan
The Plan is a plan that offers the grant, etc. of MMC's shares, etc. as officer compensation to the Officers after
retirement with respect to three consecutive fiscal years from the FY2021 (hereinafter “the Period”).
If the Trust is extended (as defined in (3) ii. below), the Period shall be the three consecutive fiscal yearthereafter.
(2) Persons subject to the Plan (beneficiary requirements)
The Officers are eligible to receive the grant, etc. after retirement from the Trust for the number of MMC'sshares, etc. corresponding to the accumulated number of points based on the term of office until retirement
through the prescribed procedures for determining the beneficiary on the condition that they meet thebeneficiary requirements.
The beneficiary requirements are as follows:21) To hold office as the Officers during the Period;2) To be a domestic resident;
3) To have retired from office as the executive officer, corporate officer or fellow (*);
4) Neither resigned due to personal reasons (excluding resignation due to any unavoidable reason such as
sickness or injury), nor committed certain illegal conducts during his/her term of office;5) Other requirements deemed necessary for achieving the purpose of the stock compensation plan which areprovided in the trust agreement or share issuance rules.
(*) However, in the event of an extension of the trust period as described in (3)(iii) below, and if the person
covered under the Plan remains to hold office as the Officers at the expiry of the extension period, the Trustshall terminate at that point, and the person shall receive the grant, etc. of MMC's shares, etc. during his/herterm of office.
(3) Trust periodi.

Initial trust period
Approximately three years from June 2020 (planned) to May 2023 (planned)ii.

Extension of the TrustAt the expiry of the trust period, MMC may continuously operate the Trust as an incentive plan
similar to the Plan by making amendments to the trust agreement and making additional contribution
to the Trust. In such case, the trust period of the Trust is extended for a further three years and MMC
makes additional contribution of trust money approved by the Remuneration Committee and the
Executive Officers’ Meeting through a resolution for each extended trust period and continues togrant points to the Officers during the extended trust period. The extension of the trust period is not
limited only once and the trust period may be re-extended thereafter.

iii.

Treatment of termination of the Trust (extension of trust period without additional contribution)
Despite the termination of the Trust, if the Officers who may meet the beneficiary requirements
remain in office at the expiry of the trust period (or extended period if the Trust in ii. above isextended), although no points shall be granted to them after the expiry, the trust period of the Trust
may be extended for a certain period until the retirement of such Officers and the completion ofgrant, etc. of MMC's shares, etc. to such Officers.

(4) MMC’s shares to be delivered as the grant,etc. to the Officers
Number of MMC's shares, etc. to be delivered as the grant, etc. to the Officers shall be determined by thenumber of points granted to the Officers each year during the trust period. The points are granted to the Officers
at a certain time of each year and in the number predetermined based on the ranks. MMC’s shares, etc. aredelivered as grant, etc. to the Officers in the number according to the accumulated points for terms of office
until retirement (hereinafter the “Accumulated Points”).

Annually granted points (truncated after decimal point)= Amount of stock compensation by rank / Average unit price of MMC’s shares acquired in Trust(truncated after decimal point)
One point shall equal to one common share of MMC’s and in the event of a share split or share consolidation of
MMC’s shares held in the Trust, MMC shall make an adjustment to the number of MMC’s shares per point inaccordance with the ratio of split or ratio of consolidation.
(5) Method and timing of the grant, etc. of MMC's shares, etc. to the Officers

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If the Officers meeting the beneficiary requirements retire from office (excluding the case of their death), theOfficers shall be granted MMC’s shares corresponding to 70% of the Accumulated Points (any fraction lessthan one unit is rounded down) and MMC's shares corresponding to the remaining Accumulated Points shall beconverted into cash within the Trust and the money equivalent to the converted value shall be paid to theOfficers.
In the event of death of the Officer meeting the beneficiary requirements during his/her term of office, MMC'sshares corresponding to the number of the Accumulated Points shall be converted to money within the Trustand paid to his/her heirs from the Trust.
(6) Trust money scheduled to be contributed to the Trust and the maximum number of MMC's shares, etc.
scheduled to be delivered as the grant, etc. from the Trust
MMC is scheduled to contribute the following money to the Trust as compensation to the Officers during theinitial Period.
The scheduled amount of trust money to be contributed to the Trust during the initial Period: 688 million yen in
total (*)
The maximum number of points granted to the Office during the initial Period: 350 thousand points(*) The scheduled amount of trust money shall be calculated by adding the trust fees and the trust expenses tothe share acquisition fund taking into account the current compensation standard of the Officers.
(7) Method for the acquisition of MMC's shares by the Trust
Initial acquisition of MMC’s shares by the Trust shall be planned to be from the stock market within the ceilingfor the share acquisition fund in (6) above and the number of shares corresponding to the points to be granted.
(8) Exercise of voting rights for MMC's shares held in the Trust
For the purpose of ensuring neutrality in management, no voting rights shall be exercised for MMC's shares
held in the Trust (MMC’s shares before grant, etc. to the Officers based on (5) above) during the trust period.
(9) Treatment of dividends associated with MMC’s shares held within the Trust
Dividends associated with MMC’s shares held within the Trust shall be received by the Trust and appropriatedto the trust fees and trust expenses for the Trust.
(10) Treatment at the expiry of the trust period
If there are residual shares at the expiry of the Period due to a decrease in the number of the Officers during thetrust period and MMC will either continuously use the Trust or another stock compensation plan similar thereto
as the Trust, such residual shares will be subject to grant to the Officers. If the Trust is terminated at the expiryof the trust period, the Trust will transfer such residual shares to MMC without compensation and MMC willcancel them through the prescribed procedures as return to shareholders.
If there remains any dividends after the distribution with respect to MMC’s shares within the Trust at the expiryof the trust period and the Trust is continuously used, such residual assets will be utilized as the shareacquisition fund. If the Trust is terminated at the expiry of the trust period, any portion in excess of reserve fortrust expenses will be donated to organizations with no interest in MMC and the Officers.
(Reference)4

[Outline of the trust agreement of the Plan](1) Type of trust

Monetary trust other than a specified solely-administered monetary trust(third-party benefit trust)(2) Purpose of trust

Providing incentives to the Officers(3) Entruster

MMC(4) Trustee

Mitsubishi UFJ Trust and Banking Corporation (planned)(Joint Trustee: The Master Trust Bank of Japan, Ltd.)(5) Beneficiary

Retired Officers who meet the beneficiary requirements(6) Trust administrator

A third party with no interest in MMC (certified public accountant)(7) Date of trust agreement

June 1, 2020 (planned)(8) Trust term

From June 1, 2020 (planned) to May 31, 2023 (planned)(9) Commencement date of the plan

June 1, 2020 (planned)(10) Exercise of voting rights

Voting rights will not be exercised(11) Class of shares to be acquired

Common stock of MMC(12) Amount of trust688 million yen (planned) (including the trust fees and the trust expenses)(13) Timing for acquiring shares

June 2, 2020 (planned) to June 19, 2020 (planned)(14) Method of share acquisition

Acquisition from the stock market(15) Rights holder

MMC(16) Residual assets

MMC, as the rights holder, may receive residual assets within the scope ofreserve for trust expenses after deducting share acquisition fund from trustmoney.

[Details of administration relating to the trust and shares](1) Trust-related administration

Mitsubishi UFJ Trust and Banking Corporation and The Master Trust Bankof Japan, Ltd. are to be the trustees of the BIP Trust and will conduct trustrelated administration.

(2) Share-related administration

Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. will conduct
administration related to the delivery of MMC's shares to beneficiaries
based on the administration service agreement.

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