May 18, 2026
Notice Regarding Disposal of Treasury Stock as Performance-based Stock RemunerationNIKON CORPORATION ("Company") hereby announces, as described below, that it has resolved at its Board of Directors meeting held on May 18, 2026 to dispose of treasury stock as performance-based stock remuneration ("Disposal of Treasury Stock").
Overview of Disposal
Details of disposal of treasury stock as performance-based stock remuneration(1) Disposal date
June 17, 2026
(2) Type and number of shares to be disposed of
7,686 shares of common stock of the Company
(3) Disposal price
¥2,265.5 per share
(4) Total amount of shares to be disposed of
¥17,412,636
(5) Planned allottees
1 Director other than those who are Audit and Supervisory Committee Members (excluding Directors who do not concurrently serve as officers (including Executive Fellows and other positions equivalent to officers; "Officers"), non-Japanese citizens, and non-residents of Japan), 881 shares
15 Officers (excluding non-Japanese citizens and non-residents of Japan), 6,805 shares
(6) Other
An extraordinary report has been filed for the Disposal of Treasury Stock in accordance with the Financial Instruments and Exchange Act.
Purpose of and reason for Disposal
In conjunction with the announcement of the new Medium-term Management Plan on April 7, 2022, the Company resolved at its Board of Directors meeting held on May 20, 2022 to introduce a restricted stock remuneration system ("System I") and a new performance-based stock remuneration system ("System II"; hereinafter, together with System I, referred to as "Systems") for Directors other than those who are Audit and Supervisory Committee Members (excluding External Directors, other Non-executive Directors, and non-residents of Japan; the same shall apply hereinafter) to replace the previous stock compensation system (performance-based stock remuneration using the BIP Trust and subscription rights to shares granted as stock-related compensation) in order to provide them an incentive to achieve the target 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.
Furthermore, it was approved, at the 158th Annual General Shareholders' Meeting held on June 29, 2022, that, separately from monetary compensation to be paid to Directors other than those who are Audit and Supervisory Committee Members, monetary compensation claims shall be granted to Directors other than those who are Audit and Supervisory Committee Members under the Systems as remuneration to be used for in-kind contributions to deliver 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"). The upper limit of the amount of monetary compensation claims to be granted under the System I shall be ¥100 million or less per fiscal year. Meanwhile, the upper limit of the total amount of monetary compensation claims and cash to be delivered under the System II shall be the upper limit of the number of Restricted Shares to be delivered per evaluation fiscal year of 110,000 shares, multiplied by the closing price of the Company's common stock on the Tokyo Stock Exchange on the business day prior to the date of the resolution by the Board of Directors on the issuance of Restricted Shares to be delivered under the System 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 ("Paid-in Amount per Share")). It was also approved that Directors other than those who are Audit and Supervisory Committee Members shall receive Restricted Shares by making an in-kind contribution of the said monetary compensation claims at the time of issuance of shares of the Company's common stock or disposal of treasury stock by the Company, and that a period between the date on which a Director other than those who are Audit and Supervisory Committee Members receives Restricted Shares and the date on which he/she retires from any and all of the positions as Director (including executive officer at a company with three committees) and Officers shall be set as the transfer restriction period. At the same time, the Company also announced that it would pay the same restricted stock remuneration and performance-based stock remuneration as those to be paid under the Systems to Officers.
The purpose of the Disposal of Treasury Stock (II) is to, upon the resolution at the Board of Directors meeting held today, deliver the number of Restricted Shares, which is calculated as (h) in Outline of System II below, to Directors other than those who are Audit and Supervisory Committee Members (excluding Directors who do not concurrently serve as Officers, non-Japanese citizens, and non-residents of Japan; the same shall apply hereinafter) and Officers (excluding non-Japanese citizens and non-residents of Japan; hereinafter, together with Directors other than those who are Audit and Supervisory Committee Members, referred to as "Eligible Directors and Officers."), with the fiscal year started on April 1, 2025 and ended on March 31, 2026 being set as the evaluation fiscal year (specified in (b) in Outline of System II below) and as the Service Offering Period (II) (specified in (e) in Outline of System II below) under the System II. Restricted Shares subject to the Disposal of Treasury Stock (II) shall be delivered through the disposal of treasury stock by having Eligible Directors and Officers make an in-kind contribution of monetary compensation claims granted to them as the property to be contributed. This time, the Company has decided to grant monetary compensation claims totaling ¥ 17,412,636 and Restricted Shares totaling 7,686 shares to Eligible Directors and Officers, who are the planned allottees, under the System II. The amount of monetary compensation claims and the number of Restricted Shares to be granted to each of the Eligible Directors and Officers under the System II have been determined by the Board of Directors based on the results of deliberations by the Compensation Committee, in accordance with the calculation method specified in (h) in Outline of System II below.
For the issuance of shares of the Company's common stock or disposal of treasury stock under the System II, Eligible
Directors and Officers shall enter into an agreement on allotment of Restricted Shares ("Allotment Agreement") with the Company. The Allotment Agreement shall specify the following:
Eligible Directors and Officers shall not transfer, create a security interest on, or otherwise dispose of shares of the Company's common stock received under the Allotment Agreement during the predetermined period; and
the Company shall acquire the said shares of common stock without contribution if certain circumstances arise.
The Company shall pay monetary compensation claims to be paid under the System II on conditions such as that each of the Eligible Directors and Officers shall enter into the Allotment Agreement.
The outlines of the System II is as follows:
Outline of System II
Outline
The System II is a compensation system under which a number of 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)") or a monetary amount equivalent to the market value of Restricted Shares (II) shall be delivered to Eligible Directors and Officers. The number of Restricted Shares (II) granted is calculated based on the degree of accomplishment of performance targets, etc. for each evaluation fiscal year.
Evaluation fiscal year
An evaluation fiscal year under the System II shall be each fiscal year of the period covered by a medium-term management plan subject to the stock-based compensation payment ("Target Period"; initially, four consecutive fiscal years from fiscal 2022 to fiscal 2025, and thereafter, multiple consecutive fiscal years, starting from the fiscal 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).
Upper limit of the amount of remuneration, etc.
The Company shall grant monetary compensation claims to Eligible Directors and Officers based on the degree of accomplishment of performance targets, etc. for each evaluation fiscal year. Meanwhile, Eligible Directors and Officers, shall receive Restricted Shares (II) by making an in-kind contribution of 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 and Officers, multiplied by the Paid-in Amount per Share.
The upper limit of the total amount of monetary compensation claims and cash to be delivered by the Company to Directors other than those who are Audit and Supervisory Committee Members under the System (II) as remuneration to be used for in-kind contributions to deliver Restricted Shares (II) shall be upper limit of the number of Restricted Shares (II) to be delivered to them per evaluation fiscal year of 110,000 shares as defined in (h) below, multiplied by the Paid-in Amount per Share.
Details of transfer restrictions
Each of the Eligible Directors and Officers shall be, in principle, prohibited from transferring, creating a security interest on, or otherwise disposing of Restricted Shares (II) during the period between the date on which he/she receives Restricted Shares (II) and the date on which he/she retires from any and all of the position as Director (including executive officer at a company with three committees) and Officers ("Restriction Period (II)") under the agreement with the Company. The retirement date is determined as follows: (i) if the Restricted Shares (II) are granted within the first six months of the fiscal year and the Director retires by the filing date of the semiannual securities report for that fiscal year (excluding retirement due to death, the expiration of a term of office, reaching mandatory retirement age, or other reasons deemed justifiable by the Board of Directors), the retirement date will be the filing date; or (ii) if the Restricted Shares (II) are granted after the first six months of the fiscal year and the Director retires by the filing date of the annual securities report for that fiscal year (excluding retirement due to death, the expiration of a term of office, reaching mandatory retirement age, or other reasons deemed justifiable by the Board of Directors), the retirement date will be the filing date.
Lifting of transfer restrictions
The Company shall lift the transfer restrictions on all of the Restricted Shares (II) upon the expiry of Restriction Period (II), on condition that each of the Eligible Directors and Officers to whom Restricted Shares (II) are delivered remains in any of the positions as Director (excluding Directors who do not concurrently serve as executive officers and non-Japanese citizens) and Officers throughout a period determined by the Board of Directors ("Service Offering Period (II)").
The Service Offering Period (II) is expected to be from the first day to the last day of each evaluation fiscal year. However, if the tenure during Service Offering Period (II) is shorter than the entire Service Offering Period (II) due to reasons such as being appointed as Eligible Directors and Officers during Service Offering Period (II), the number of Restricted Shares (II) to be delivered will be reasonably adjusted.
Acquisition without contribution
The Company shall acquire without contribution the remaining share of Restricted Shares (II) on which the transfer restrictions have not been lifted in accordance with (e) above.
If any of the Eligible Directors and Officers retires from any and all of the positions as Director (including executive officers at a company with three committees) and Officers without a justifiable reason or if certain other circumstances arise before the lifting of the transfer restrictions, the Company shall acquire all of the Restricted Shares (II) without contribution immediately after the circumstance arises.
Treatment during Reorganization, etc.
If, during the Restriction Period (II), 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 the reorganization, etc.) ("Approval for Reorganization"), the Company shall lift the transfer restrictions on all of the Restricted Shares (II).
Calculation method of the number of Restricted Shares (II) to be received by Eligible Directors and Officers The Company shall deliver the number of Restricted Shares (II) calculated based on the degree of accomplishment of performance targets and title of each of the Eligible Directors and Officers for each evaluation fiscal year during the Target Period to each of the Eligible Directors and Officers The number of Restricted Shares
(II) to be delivered to each of the Eligible Directors and Officers 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 the Compensation Committee, taking into account factors such as the title of, content of duties performed by, and responsibilities of each of the Eligible Directors and Officers
*2 The degree of accomplishment of each of the evaluation benchmark, namely, financial targets set forth in the Medium-term Management Plan (the degrees of accomplishment of revenues, operating margin, and ROE) as well as strategic targets (amounts of operating profit derived from growth drivers, and services and components, respectively, and initiatives to strengthen 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 performance-based 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 the Board of Directors in consideration of, among other factors, economic conditions, etc. during each evaluation fiscal year, and subsequent events and other special circumstances of the Company. Even in such case, however, the performance-based coefficients shall be determined within a range of 0 to 150%.
Weightings of respective evaluation benchmark and the targets set for FY2025 are as follows.
Evaluation benchmark
Weighting
FY2025 target
Financial Targets
Revenue
25 - 30%
¥700.0 billion
Operating profit
25 - 30%
10%
ROE (FY2025 only)
20%
8%
Strategic Targets
Amount of operating profit derived from growth drivers
10 - 20%
¥31.0 billion
Amount of operating profit derived from services and components
10 - 20%
¥46.0 billion
Initiatives to strengthen the management base
10%
Evaluate the degrees of accomplishment of initiatives, such as sustainability strategy
and human capital management, 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 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 deliberations on their appropriate level to achieving the fiscal 2025 targets by the Compensation Committee, by the Board of Directors in accordance with the results of the deliberation, 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 or decreases as a result of Share Split, etc., the said upper limit shall be reasonably adjusted accordance to the ratio of Share Split, etc.
Delivery of Restricted Shares (II) or a monetary amount equivalent to their market value to Eligible Directors and Officers
The Company shall deliver the number of Restricted Shares (II), which is calculated as (h) above, to Eligible Directors and Officers who remain in service during each evaluation fiscal year in accordance with prescribed procedures after the end of each evaluation fiscal year in a way described in (c) above.
Provided, however, that if any of the Eligible Directors and Officers retire (including the case where he/she has died) 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 (h) above, based on tenure during each evaluation fiscal year between the start 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 of shares, etc.).
If any of the Eligible Directors and Officers are non-residents of Japan who do not have Japanese nationality at the time of delivery, cash equivalent to the market value of the number of shares of the Company's common stock to be delivered, which is calculated as (h) above, shall be delivered to him/her.