May 20, 2022

Notice Concerning Revision of Compensation System for Directors Other Than Those
Who Are Audit and Supervisory Committee Members
NIKON CORPORATION (the “Company”) hereby announces, as described below, that it has resolved at its Board of Directors’ meeting heldon May 20, 2022 to revise the stock compensation system for Directors other than those who are Audit and Supervisory Committee Members
and divide the compensation into monetary compensation and stock compensation (“Revision”) and submit a proposal on this Revision to the158th Annual General Shareholders’ Meeting to be held on June 29, 2022 (“General Shareholders’ Meeting”).
1. Purpose of this Revision
Under the current compensation system of the Company, compensation for Directors other than those who are Audit and Supervisory
Committee Members comprises fixed monthly compensation, monetary compensation paid as bonuses, performance-based stock
remuneration using the BIP Trust, and subscription rights to shares granted as stock-related compensation.
For these compensation components, it was approved, at the 157th Annual General Shareholders’ Meeting held on June 29, 2021, that theaggregate maximum amount of monetary compensation and subscription rights to shares granted as stock-related compensation for
Directors other than those who are Audit and Supervisory Committee Members shall be 650 million yen or less per year (of which 50
million yen or less is for External Directors per year and 170 million yen or less per year is for subscription rights to shares granted as
stock-related compensation) (this amount does not include the portion of employees’ salaries for Directors who also serve as employees).
Separately, it was approved, at the 155th Annual General Shareholders’ Meeting held on June 27, 2019, that performance-based stock
remuneration using the BIP Trust with the upper limit of 1,200 million in total shall be paid to Directors (excluding Audit and Supervisory
Committee Members, External Directors, other Non-executive Directors, and non-residents of Japan) and Officers (excluding nonresidents of Japan) for every three fiscal years.
In conjunction with the recent formulation of the new Medium-term Management Plan, the Company reviewed the current stockcompensation system to provide them an incentive to achieve the targets set forth in the Medium-term Management Plan and to enhance
corporate value over the medium to long term, as well as to further promote greater value sharing with shareholders, and decided to divide
the compensation into monetary compensation and stock compensation and newly set the amount of monetary compensation after
consideration of various circumstances such as the compensation paid to Directors in the past. Meanwhile, as for stock compensation, theCompany decided to newly establish a restricted stock compensation system and a new performance-based stock remuneration system toreplace the current performance-based stock remuneration using the BIP Trust and subscription rights to shares granted as stock-relatedcompensation.
2. Overview of this Revision(1) Content of monetary compensation
With regard to the amount of monetary compensation for Directors other than those who are Audit and Supervisory Committee
Members of the Company, it will be proposed at the General Shareholders’ Meeting to pay fixed monthly compensation and othermonetary compensation within the same amount as previous 650 million yen or less per year (of which 50 million yen or less per year
is for External Directors) (this amount does not include the portion of employees’ salaries for Directors who also serve as employees)
after consideration of various circumstances such as the compensation paid to Directors in the past and the authorized number of
Directors other than those who are Audit and Supervisory Committee members, which is not more than 15.
(2) Revision of stock compensation system
Stock compensation for the Company’s Directors other than those who are Audit and Supervisory Committee Members comprises
performance-based stock remuneration using the BIP Trust and subscription rights to shares granted as stock-related compensation.
As previously mentioned, in conjunction with the recent formulation of the new Medium-term Management Plan, the Company
decided to review the current stock compensation system to provide them an incentive to achieve the targets set forth in the Medium-term Management Plan and to enhance corporate value over the medium to long term, as well as to further promote greater value
sharing with shareholders.
Specifically, it will be proposed at the General Shareholders’ Meeting to newly establish a restricted stock compensation system anda new performance-based stock remuneration system to replace the current performance-based stock remuneration using the BIP Trustand subscription rights to shares granted as stock-related compensation and deliver shares to Directors other than those who are Audit
and Supervisory Committee Members (excluding External Directors, other Non-executive Directors, and non-residents of Japan)
separately from their monetary compensation (Directors eligible for the restricted stock compensation and the new performance-based
stock remuneration are hereinafter referred to as “Eligible Directors”). After this Revision, respective systems for the both
performance-based stock remuneration using the BIP Trust and subscription rights to shares granted as stock-related compensation
will be abolished (excluding shares and subscription rights to shares that have already granted).
(i) Structure of restricted stock compensation system(a) Overview
Restricted stock compensation system is a compensation system under which shares of the Company’s common stock that are
subject to provisions of a certain transfer restriction period and grounds for acquisition by the Company without contribution(“Restricted Shares (I)”) are delivered to Eligible Directors.
(b) Upper limits of the amount of compensation and the number of shares to be delivered
Upon resolution by the Board of Directors, the Company shall, in principle, grant monetary compensation claims to Eligible
Directors every year. Meanwhile, Eligible Directors shall receive Restricted Shares (I) by making an in-kind contribution of
the said monetary compensation claims at the time of issuance of Restricted Shares (I) or disposal of treasury stock by theCompany. The amount of monetary compensation claims to be granted by the Company to Eligible Directors shall be
determined by the Board of Directors within a range that is not particularly advantageous to Eligible Directors who receive
Restricted Shares (I), and its total amount shall be 100 million yen or less per fiscal year, which is deemed reasonable in lightof the aforementioned purpose. The number of Restricted Shares (I) to be delivered to Eligible Directors shall be 150,000
shares or less per fiscal year; provided, however, that if the total number of shares issued by the Company increases or decreases
as a result of such events as a share consolidation, share split, or allotment of shares without contribution (“Share Split, etc.”),the said upper limit shall be reasonably adjusted according to the ratio of Share Split, etc.
(c) Calculation method of shares of the Company’s common stock to be received by Eligible Directors
The Company shall determine the number of Restricted Shares (I) to be delivered to each Eligible Director for each fiscal yearin accordance with the calculation formula defined below:[Calculation formula for the number of Restricted Shares (I) to be delivered for each fiscal year]
Number of shares to be delivered = Base reference amount by title (*1) ÷ Reference price (*2)
*1 Base reference amount by title shall be determined according to factors such as the title of, content of duties performed by,
and responsibilities of each Eligible Director.
*2 Reference price shall be determined at the Board of Directors’ meeting on the issuance of Restricted Shares (I) or the
disposal of treasury stock within a range that is not particularly advantageous to Eligible Directors.
(d) Details of transfer restrictions
An Eligible Director shall be, in principle, prohibited from transferring, creating a security interest on, or otherwise disposingof Restricted Shares (I) during the period between the date on which he/she receives Restricted Shares (I) and the date on
which he/she retires from any of the positions as Director (including executive officer at a company with three committees)
and Officer (including Executive Fellow and other positions equivalent to Officer) (“Restriction Period (I)”) under anagreement entered into among the Company, the Eligible Director, and Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.
that manages accounts opened for Restricted Shares (I).

(e) Lifting of transfer restrictions
The Company shall lift the transfer restrictions on all of the Restricted Shares (I) upon the expiry of the Restricted Period (I),on condition that an Eligible Director to whom Restricted Shares (I) were delivered has remained in any of the positions as
Director (including executive officer at a company with three committees) and Officer (including Executive Fellow and otherpositions equivalent to Officer) throughout a period determined by the Board of Directors (“Service Offering Period (I)”).
If the Eligible Director retires from any of the positions as Director (including executive officer at a company with threecommittees) and Officer (including Executive Fellow and other positions equivalent to Officer) due to a justifiable reason(including the case where he/she has died) during the Service Offering Period (I), the number of shares on which the transfer
restrictions are to be lifted shall be reasonably adjusted based on the period between the start date of the Service Offering
Period (I) and the date of retirement.
(f) Acquisition without contribution
The Company shall acquire without contribution the remaining shares of Restricted Shares (I) on which the transfer restrictions
have not been lifted in accordance with (e) above.
If an Eligible Director retires from any of the positions as Director (including executive officer at a company with threecommittees) and Officer (including Executive Fellow and other positions equivalent to Officer) without a justifiable reason orif certain other circumstances arise before the lifting of the transfer restrictions, the Company shall acquire all of the Restricted
Shares (I) without contribution immediately after the circumstance arises.
(g) Treatment during reorganization, etc.
If, during the Restriction Period (I), matters relating to a merger agreement under which the Company will become a dissolving
company, a share exchange agreement or a share transfer plan under which the Company will become a wholly-owned
subsidiary of another company, or other certain reorganization, etc. are approved at a general shareholders’ meeting (or at a
Board of Directors’ meeting in case where approval at a general shareholders’ meeting is not required in relation to thereorganization, etc.) (“Approval for Reorganization”), the Company shall lift the transfer restrictions on all of the Restricted
Shares (I). Provided, however, that if the Approval for Reorganization is given during the Service Offering Period (I), even if
it is during the Restriction Period (I), the Company shall lift the transfer restrictions on Restricted Shares (I) in the number
determined based on the period between the start date of the Service Offering Period (I) and the date of approval and shallacquire without contribution the shares on which the transfer restrictions have not been lifted.
(ii) Structure of performance-based stock remuneration system(a) Overview
Performance-based stock remuneration system is a compensation system under which the number of shares of the Company’scommon stock calculated based on the degree of accomplishment of performance targets, etc. for each evaluation fiscal yearor the amount of cash equivalent to the market value of shares of the Company’s common stock (“Company’s Shares, etc.”)
shall be delivered to Eligible Directors.
(b) Evaluation fiscal year
An evaluation fiscal year under the performance-based stock remuneration system shall be each fiscal year of the period
covered by a medium-term management plan subject to the delivery of Company’s Shares, etc. (“Target Period”; initially, four
consecutive fiscal years from fiscal 2022 to fiscal 2025; and thereafter, multiple consecutive fiscal years, starting from thefiscal year following the final fiscal year of the previous Target Period, determined separately by the Board of Directors every
time a new medium-term management plan is formulated).
(c) Upper limit of the amount of remuneration
The Company shall grant monetary compensation claims to Eligible Directors based on the degree of accomplishment of
performance targets, etc. for each evaluation fiscal year. Meanwhile, Eligible Directors shall receive shares of the Company’scommon stock that are subject to provisions of a certain transfer restriction period and grounds for acquisition by the Company
without contribution (“Restricted Shares (II)”) by making an in-kind contribution of the said monetary compensation claims
at the time of issuance of Restricted Shares (II) or disposal of treasury stock. The amount of the said monetary compensation
claims shall be the number of Restricted Shares (II) to be delivered to Eligible Directors, multiplied by the closing price of theCompany’s common stock on the Tokyo Stock Exchange on the business day prior to the date of resolution by the Board of
Directors on the issuance of Restricted Shares (II) or the disposal of treasury stock (if there is no closing price on such date,the closing price on the closest preceding trading day).
The upper limit of the total amount of monetary compensation claims and cash to be delivered by the Company to Eligible
Directors under the performance-based stock remuneration system shall be the upper limit of the number of Restricted Shares(II) to be delivered to Eligible Directors per evaluation fiscal year of 110,000 shares as defined in (e) below, multiped by theclosing price of the Company’s common stock on the Tokyo Stock Exchange on the business day prior to the date of resolution
by the Board of Directors on the issuance of Restricted Shares (II) or the disposal of treasury stock (if there is no closing priceon such date, the closing price on the closest preceding trading day).
(d) Details of transfer restrictions and lifting thereof
Details of transfer restrictions on Restricted Shares (II) and the lifting thereof, conditions for acquisition by the Company
without contribution, and treatment of reorganization, etc. shall be the same as those for Restricted Shares (I) (excluding,however, the provisos to 2. (2) (i) (e) and (g)). In these provisions, the terms “Restriction Period (I),” “Restricted Shares (I),”and “Service Offering Period (I)” shall be deemed to be replaced with “Restriction Period (II),” “Restricted Shares (II),” and“Service Offering Period (II),” respectively. The Service Offering Period (II) is planned to be from the start date to the end dateof each evaluation fiscal year; provided, however, that if the tenure of an Eligible Director during the Service Offering Period(II) is shorter than the entire period of the Service Offering Period (II) due to the assumption of position as Eligible Director
during the period or other such reasons, the number of Restricted Shares (II) to be delivered shall be reasonably adjusted.
Meanwhile, as described in (f) below, in certain cases, such as where an Eligible Director retires before the delivery date ofRestricted Shares (II), the amount of cash equivalent to the market value of Restricted Shares (II) shall be delivered instead of
Restricted Shares (II).
(e) Calculation method of Company’s Shares, etc. to be received by Eligible Directors and upper limit thereof
The Company shall deliver the number of Restricted Shares (II) calculated based on the degree of accomplishment of
performance targets and the title of each Eligible Director, etc. for each evaluation fiscal year during the Target Period to eachindividual Eligible Director. The number of Restricted Shares (II) to be delivered to each Eligible Director per evaluation fiscal
year shall be determined in accordance with the calculation formula defined below:[Calculation formula for the number of Restricted Shares (II) to be delivered per evaluation fiscal year]
Number of shares to be delivered = Base number of shares to be delivered by title (*1) × Performance-based coefficient (*2)
*1 The base number of shares to be delivered by title shall be determined by the Board of Directors, after deliberation by theCompensation Committee, taking into account factors such as the title of, content of duties performed by, andresponsibilities of each Eligible Director.
*2 The degree of accomplishment of each of the evaluation benchmarks, namely, financial targets set forth in the Mediumterm Management Plan (the degrees of accomplishment of revenue, operating margin, and ROE) as well as strategic targets(amounts of operating profit derived from growth drivers, and services and components, respectively, and initiatives tostrengthen the management base) shall be deliberated by the Compensation Committee, which is chaired by an External
Director, and more than half of which consists of External Directors, within a range of 0% to 150%. Then, the performancebased coefficients shall be calculated by totaling the values multiplied by the weightings of respective evaluation
benchmarks within a range of 0% to 150%. Points may be added to or subtracted from the performance-based coefficients,
which are calculated as above, within 25 points, respectively, upon decisions of the Compensation Committee and theBoard of Directors in consideration of, among other factors, economic conditions during each evaluation fiscal year, andsubsequent events and other special circumstances of the Company. Even in such cases, however, the performance-basedcoefficients shall be determined within a range of 0% to 150%.
Weightings of respective evaluation benchmarks and targets set for fiscal 2025 are as follows:

Financial
targets
Strategic
targets

Evaluation benchmark

Weighting

Revenue
Operating margin
ROE (FY 2025 only)
Amount of operating profit derived from growth
drivers
Amount of operating profit derived from services
and components

25–30%
25–30%
20%

700.0 billion yen
10%8%

10–20%

31.0 billion yen

10–20%

46.0 billion yen

Initiatives to strengthen the management base
(Sustainability
strategy,
humancapitalmanagement, etc.)10%

FY 2025 target

Evaluate the degrees ofaccomplishment of initiatives onsustainability strategy human capitalmanagement, etc. in a comprehensive
manner.

Among these evaluation benchmarks, ROE shall only be used for the evaluation for the final fiscal year of a Target Period.
Also, the weightings and the targets of respective evaluation benchmarks for the period between fiscal 2022 and fiscal
2024 shall be determined at the beginning of each fiscal year, after deliberation on their appropriate levels to achieve thefiscal 2025 targets by the Compensation Committee, by the Board of Directors in accordance with the results of thedeliberation, taking into account such factors as the state of the Company at the time.
The upper limit of the number of Restricted Shares (II) to be delivered by the Company to Eligible Directors shall be 110,000
shares per evaluation fiscal year; provided, however, that if the total number of shares issued by the Company increases ordecreases as a result of Share Split, etc., the said upper limit shall be reasonably adjusted according to the ratio of Share Split,etc.
(f) Delivery of Company’s Shares, etc. to Eligible Directors
The Company shall deliver the number of Restricted Shares (II), which is calculated as (e) above, to Eligible Directors who
remain in service during each evaluation fiscal year in accordance with prescribed procedures after the end of the fiscal year
in a way described in (c) above. Provided, however, that if an Eligible Director retires (including the case where he/she hasdied) before the delivery date of Restricted Shares (II), the Company shall deliver the amount of cash equivalent to the market
value of the number of shares of the Company’s common stock, obtained by prorating the number of shares to be delivered,
which is calculated as (e) above, based on tenure during each evaluation fiscal year between the start date of each evaluation
fiscal year and the date of retirement (in case of death, such cash shall be delivered to a successor to the rights to delivery, etc.
of shares of the Eligible Director).
If an Eligible Directors is a non-resident of Japan who does not have Japanese nationality at the time of delivery, the amountof cash equivalent to the market value of the number of shares of the Company’s common stock to be delivered, which is
calculated as (e) above, shall be delivered to the Eligible Director.
(Reference)
If a proposal on this Revision is approved at the General Shareholders’ Meeting as originally proposed, the Company plans to pay the same
restricted stock compensation and performance-based stock remuneration as proposed in the proposal on this Revision to the Company’s
Officers (including Executive Fellows and other positions equivalent to Officer).
End of document