Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy
between this translated document and the Japanese original, the original shall prevail.

June 29, 2022

NEWS RELEASE
Company name:
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TSUMURA & CO.
TSE Prime Market
4540
https://www.tsumura.co.jp
Terukazu Kato, President, Representative Director and CEO
Ritsuko Inukai, Head of Corporate Communications Dept.
+81-3-6361-7100

Tsumura Announces Disposition of Treasury Sharesfor Performance-Based Stock Compensation
TSUMURA & CO. today announces that at a meeting of the Board of Directors held on June 29, 2022, the Company
resolved to dispose of treasury shares for performance-based stock compensation (hereinafter “the Disposition ofTreasury Shares” or “Disposition”). Details are as follows.
1. Outline of the disposition(1) Date of disposition
Class and number of(2)
shares to be disposed(3) Disposal value(4) Total disposal value(5) Persons to receive shares(6) OtherJuly 22, 2022
Common stock of the Company: 22,400 shares
3,020 yen per share
67,648,000 yen
Three Directors (who are not Audit and Supervisory Committee Members or
Non-executive Directors): 7,900 shares
Eight Executive Officers who have entered into an engagement agreement with
the Company: 11,200 shares
Four Executive Officers who have entered into an engagement agreement with
the Company (who have resigned as Executive Officers; two are employees of
the Company and the two have left the Company): 3,300 shares
For the Disposition of Treasury Shares, the Company submits the securities
registration statement under the Financial Instruments and Exchange Act.

2. Purpose and reason of the disposition
The Company has resolved to introduce a performance-based stock compensation system (hereinafter the “System”),
to clarify the linkage between the Company’s operating results, the value of its stock and the remuneration of theDirectors of the Company (excluding Directors who are also Audit and Supervisory Committee Members and Nonexecutive Directors) and Executive Officers who have entered into an engagement agreement with the Company(hereinafter “Directors, Etc.”), to increase their awareness of their contribution to the Company’s sustainable growth
and the increase of its corporate value over the medium and long term. Approval was obtained for the partialamendment of the compensation plan at the 80th and 83rd ordinary general meetings of shareholders held on June29, 2016 and June 27, 2019, respectively.
The Disposal of Treasury Stock shall be implemented through the payment in kind of monetary compensation
receivable granted to Directors, Etc. as performance-based compensation.
Regarding the Disposal of Treasury Stock, the Company determined at a meeting of the Board of Director to grant
Directors Etc. monetary compensation receivable totaling 67,648,000 yen according to the degree of achievement of1

evaluation indicators during an evaluation period, and Directors, Etc. will acquire 22,400 common shares in theCompany by tendering monetary compensation receivable contributed in kind.
In addition, the Company also resolved at the meeting that a total of 67,648,000 yen in cash will be provided to 15
Directors, Etc. based on the System.
3. Description of the System(1) Outline of the System
The System is an incentive plan for Directors, Etc. that uses treasury shares. It is a performance-based stockcompensation system where common shares in the Company and cash will be provided to the Directors Etc.
according to their roles, duties and positions and the level of achievement of the Company’s performance indicators.
Common shares in the Company will be provided to the Directors Etc. in the applicable period specified in (3)below. Common shares or cash will also be provided to the Directors Etc. that have resigned as Directors Etc. or
have left the Company on or after March 31, 2022, according to the Company’s performance during their service.
(2) Mechanism of the System
The applicable period of the System is the three fiscal years described in (3) below. The Company will provide
common shares or cash according to the roles, duties and positions of the Directors Etc. and the level of achievementof the Company’s numerical targets in the final year of the three fiscal years. When the Company provides commonshares or cash, it will do so through issuing shares or disposing of treasury shares. The Directors Etc. to whom
common shares of the Company will be provided and the number of shares to be provided will be determined at a
meeting of the Board of Directors to be held after the end of the applicable period. The Company will grantmonetary compensation receivable to the Directors Etc., who will acquire common shares in the Company bytendering monetary compensation receivable contributed in kind when the shares are issued or when the treasury
shares are disposed of. The total amount of monetary compensation receivable will be a 450 million yen maximum(under a resolution adopted at the 83rd ordinary general meeting of shareholders held on June 27, 2019) and will
be determined by the Board of Directors within a range where the amount will not be particularly favorable to theDirectors Etc. who will accept the common shares in the Company. The upper limits of monetary compensation
receivable and cash to be delivered to the Directors, Etc. according to their roles, duties and positions are as follows.
Classification
Representative Director
Executive Directors
Executive Officers with special title
Executive Officers

Upper limits of monetary compensation
receivables and cash to be delivered
72 million yen
60 million yen
48 million yen
24 million yen(3) Applicable period of the System
The applicable period of the System is the three fiscal years covered by the Third Medium-Term Management Plan,from the fiscal year ended March 31, 2020 to the fiscal year ended March 31, 2022.
(4) Method for calculating and upper limits for the number of shares and amounts of cash to be delivered to theDirectors, Etc. based on the System.
The Company will calculate the number of shares to be provided by multiplying the base number of shares to beprovided (determined in accordance with a compensation standard based on the role, duties and position of each ofthe Directors Etc.) by the sum of achievement ratios, which will be multiplied by assigned weights, for thenumerical targets for consolidated net sales, consolidated operating profit, and consolidated ROE publiclyannounced in the Third Medium-Term Management Plan. The amounts of cash shall be calculated by multiplying
the number of shares obtained as a result of the above calculation by the share price at the time of delivery. The
number of shares equivalent to less than one unit and fractions of less than one thousand yen in amounts of cash to
be delivered shall be discarded.

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Calculation formula for number of shares to be provided and amount of cash to be paid
➢ Standard number of shares to be provided= Amount of money determined according to a compensation standard based on the role, duties and position ofeach of the Directors Etc. / Standard stock price* × 3 (number of fiscal years)(*) Standard stock price = Closing price in regular transactions of the stock of the Company on March 29, 2019
➢ Method of calculating the number of shares to be provided and the amount of cash to be paid to each of theDirectors, Etc.
Following calculation using the method below, the number of shares to be provided and amount of cash to be paid
shall be determined.
(i) Standard number of shares to be provided × Sum of the achievement ratios for the numerical targets for thefinal year of the applicable period stated Medium-Term Management Plan, each achievement ratio multiplied
by a weight assigned to each numerical target × 50%* The numerical target achievement ratio is 100% if it is equal to the numerical target. The achievement ratio
will be determined in a range between 0% and 120%. If figures in results of final year of applicable period arezero or less, the numerical target achievement ratio shall be 0%.
The achievement ratios for the numerical targets = Figures in results of final year of the applicable period (ona pre-revenue recognition basis) / Numerical target for the final year of the applicable period stated in theMedium-Term Management Plan
* Each numerical target (Numerical target for the final year of the applicable period stated in the Medium-TermManagement Plan) and allocation ratio is as follows.
Category
Target
Allocation ratio
Consolidated net sales
135.0 billion yen
40%
Consolidated operating profit
19.0 billion yen
30%Consolidated ROE
6%30%(Note) The above indicates planned values prior to revenue recognition, approved at the 83rd ordinary
general meeting of shareholders held on June 27, 2019.
(ii) Amount of cash to be paid = Number of shares to be provided based on calculation under (i) × Share price atthe time of provision** The share price shall be the closing price of the Company’s stock on Tokyo Stock Exchange on the business
day immediately preceding the day of the resolution of the Board of Directors at a meeting to be held within
2 months of the conclusion of the first ordinary general meeting of shareholders following the expiry of theapplicable period (if there is no closing price on this date, the closing price of the closest preceding day).
The maximum total number of shares of the Company’s common stock to be provided to the Directors, Etc.
shall be 60,000 shares. In addition, the maximum number of shares to be provided to each of the Directors,Etc. according to their role, duties and position shall be as follows.
Classification
Representative Director
Executive Directors
Executive Officers with special title
Executive Officers

Maximum number of shares
6,000
5,000
4,000
2,000

If the Company’s number of shares issued changes due to the consolidation of shares, the splitting of shares,
the free allotment of shares, etc., the number of common shares to be provided to the Directors Etc. and themaximum number of common shares to be provided to the Directors Etc. will be changed in a rational manneraccording to ratios for the consolidation, splitting and free allotment. Moreover, if the maximum limit ofmonetary compensation receivable or total number of shares to be provided stipulated in (2) above are likely
to be exceeded due to the provision of the Company’s common stock and cash in the number and amountstipulated in (4) above, the number of shares to be delivered and the amount of cash to be paid to each of the3Directors, Etc. shall be decreased by reasonable methods such as proportional distribution, within the scope
not exceeding the upper limits.
(5) Requirements for the provision of shares in the System
In the System, common shares in the Company will be provided to the Directors Etc. after the end of the applicable
period and if the following requirements for the provision of shares are met:
- The Directors Etc. were Directors Etc. during the applicable period.
- The Directors Etc. did not violate any laws.
- Other requirements that are considered necessary to achieve the goal of a stock compensation system.
(Note 1) If any of the Directors Etc. resigns during the applicable period, common shares in the Company will beprovided to them, pro rata, according to their years of service in their position prior to the resignation.
(Note 2) If any of the Directors Etc. takes office during the applicable period, common shares in the Company will
be provided to them, pro rata, according to their years of service in their position.
(Note 3) If any of the Directors Etc. passes away during the applicable period, the amount of money calculated bymultiplying the base number of shares to be provided, which is calculated pro rata according to their yearsof service in their position, by the market value of the stock of the Company when they pass away will be
provided to their successor regardless of numerical target achievement ratios.
4. Basis of calculation of the amount to be paid
The Company calculates the number of shares to be provided as described in “3. Description of the System.” It has
decided to make the closing price of the Company’s common stock on the Prime Market of the Tokyo Stock Exchange
on June 28, 2022 (the business day immediately preceding the day of the resolution of the Board of Directors), 3,020
yen, the stock price to be used in the calculation of the number of shares to avoid arbitrariness. The price is the market
price immediately prior to the day of the resolution of the Board of Directors, and we have determined that thedecision is reasonable.
The rate of deviation of the price from the simple average of the closing prices of the Company common stock on
the Prime Market of the Tokyo Stock Exchange for a month (from May 30, 2022 to June 28, 2022), 2,920 yen(rounded down to the nearest yen; the same applies hereinafter for the simple average of closing prices), is 3.42%(rounded off to the second decimal place; the same applies hereinafter for the calculation of deviation rates). The rateof deviation from the simple average of the closing prices for three months (from March 29, 2022 to June 28, 2022),
3,062 yen, is (1.37)%. The rate of deviation from the simple average of the closing prices for six months (fromDecember 29, 2021 to June 28, 2022), 3,173 yen, is (4.82)%. We do not think that the price is particularly favorable
to the Directors Etc. The disposal value above is compliant with the Guidelines on the Handling of Capital Increases
through Private Placements of the Japan Securities Dealers Association. The Audit and Supervisory Committee (3Directors who are Audit and Supervisory Committee Members (including 2 Outside Directors)) has expressed theopinion stating that the disposal value above is not a disposal value that is particularly favorable to the Directors Etc.
and is legitimate.

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