NEXON : Notice of Grant of Stock Options (Agenda of Annual General Meeting of Shareholders)

	February 20, 2020
Name of Company:	NEXON Co., Ltd.
Representative:	Owen Mahoney, Representative Director,
	Chief Executive Officer and President
	(Stock Code: 3659, TSE First Section)
Contact:	Koji Abe, Administration Division
Telephone:	Manager
03-6629-5318

Notice of Grant of Stock Options (Agenda of Annual General Meeting of Shareholders)

NEXON Co., Ltd. announced that, through the resolution of the Board of Directors today, it was decided that a proposal for the issuance of subscription rights to shares under preferential terms to persons other than the shareholders, along with a proposal to delegate the determination of the terms and conditions of the offer thereof to the Board of Directors of the Company, would be put to the 18th Annual General Meeting of Shareholders scheduled to be convened on March 25, 2020 for approval as follows:

1. The reason why the Company needs to offer the subscription rights to shares under preferential terms
   Since the value of these subscription rights to shares are linked to the stock price of the Company, by granting these subscription rights to shares, the mid- to long-term performances of the Company can be aligned with the interests of Nexon Group directors and employees. Due to this, the Company's employees, as well as the directors and employees of the Company's subsidiaries, will share not only the benefits from a rise in the stock price, but also the risks of a fall in the stock price, thereby the purpose is to give incentive to motivate contribution to the improvement of performance and corporate value and to further promote management awareness with an emphasis on shareholders, in addition to securing talented personnel from a global perspective.
   Moreover, these subscription rights to shares function as incentive to the med- to long- term achievements and a rise in the stock price by prescribing a condition of exercise of subscription rights to shares in accordance with his/her post in the subscription agreement.
   Therefore, subscription rights to shares will be issued according to the following guidelines, pursuant to Articles 236, 238 and 239 of the Companies Act.
2. Guidelines for issuance of subscription rights to shares
3. 1. Persons to whom subscription rights to shares will be granted
      Employees of the Company as well as directors and employees of the subsidiaries of the Company ("grantees")
   2. Class of shares to be issued upon exercise of subscription rights to shares
      The class of shares to be issued upon exercise of subscription rights to shares shall be

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the common stock of the Company

1. Number of shares to be issued upon exercise of subscription rights to shares
   The total number of shares to be issued upon exercise of subscription rights to shares shall not exceed 14,000,000 shares of common stock of the Company.
   In the event that the Company splits its common stock (including allotment of its common stock without compensation) or consolidates its common stock, the number of shares to be issued upon exercise of each unit of subscription rights to shares shall be adjusted according to the formula outlined below. Provided, however, that such adjustment shall be made only to those remain unexercised at the time of such adjustment, and any fraction less than one share resulting from such adjustment shall be rounded down.
   Number of shares after adjustment＝number of shares before adjustment ×ratio of split or consolidation
   In the event there is an unavoidable reason necessitating an adjustment in the number of shares, such as when the Company carries out a merger, demerger, share exchange or equity transfer, the number of shares shall be adjusted within a reasonable scope upon consideration of the conditions for the merger, share split, share exchange or equity transfer.
2. Total number of subscription rights to shares to be issued Not exceeding 7,000 units.
   The number of shares to be issued upon exercise of each subscription rights to shares ("Number of Granted Shares") shall be 2,000 shares of common stock of the Company. In the case the number of shares is adjusted as provided in (3) above, the Number of Granted Shares shall also be adjusted.
3. Cash payment for subscription rights to shares
   No cash payment is required for subscription rights to shares.
4. Amount to be contributed upon exercise of subscription rights to shares
   The amount to be contributed upon exercise of subscription rights to shares shall be the amount obtained by multiplying the amount to be paid in for each share to be issued upon exercise of such subscription rights to shares ("Exercise Price") by the number of shares to be issued upon exercise of such subscription rights to shares.
   The Exercise Price shall be the closing price of the common stock of the Company in the regular trading thereof on the Tokyo Stock Exchange on the date of allotment of subscription rights to shares ("Allotment Date").
   In the event that the Company carries out a stock split (including allotment of its common stock without compensation) or a consolidation of its common stock and so on after the Allotment Date, the Exercise Price shall be adjusted according to the following formula. Any fraction of less than one yen shall be rounded up.

Exercise Price	Exercise Price		1
after adjustment	＝ before adjustment	×
ratio of split or
			consolidation
	2

In the event of issuance of new shares at a value less than the market price or disposal of treasury shares by the Company (excluding exercise of these subscription rights to shares), the Exercise Price shall be adjusted according to the following formula, and any resulting fraction of less than one yen shall be rounded up.

Exercise		Exercise		Number of	Number of newly issued shares
		× Amount paid in per share
		shares
Price		Price
＝	×	outstanding	Market price per share
a	before
fter
adjustment		adjustment		Number of shares outstanding ＋ Newly issued shares

The "Number of shares outstanding" used in the above formula shall be equal to the total number of common shares outstanding less the common shares outstanding that the Company holds as treasury shares, and the "Number of newly issued shares" in the above formula shall be deemed to read "Number of treasury shares to be disposed of" when disposing of the common shares that the Company holds as treasury shares.

In addition to the above, when the Company merges with another company, carries out a demerger, or reduces its capital, or any other event similar thereto, and an adjustment of the Exercise Price is required after the Allotment Date, the Exercise Price shall be adjusted to an extent reasonable with a resolution of the Board of Directors.

1. Exercise period of subscription rights to shares
   The exercise period shall be a period falling within ten years from the Allotment Date. In the event that the last date of the exercise period is a non-business day of the Company, it shall be the business day immediately preceding such date.
2. Conditions for exercise of subscription rights to shares
   The person must be a director or an employee of the Company or its subsidiaries at the time of the exercise to be eligible, except when a director or an employee of the Company or its subsidiaries loses its position as a director or an employee due to resignation or retirement, dismissal or discharge (excluding punitive dismissal or any other event similar thereto), or death or disability, or when there is any other due reason specifically provided by the Board of Directors.
3. Amount of capital and capital reserve increased by the issuance of shares upon exercise of subscription rights to shares
4. 1. The amount of capital increased by the issuance of shares upon exercise of subscription rights to shares shall be one-half of the amount of the maximum limit on the increase in capital as calculated pursuant to Article 17, Paragraph 1, of the Company Accounting Ordinance. Any fraction of less than one yen shall be rounded up.
   2. The amount of capital reserve increased by the issuance of shares upon exercise of subscription rights to shares shall be the amount of the maximum limit on the increase in capital provided in i) above, reduced by the amount of increased capital stipulated in i) above.
5. Restriction on the acquisition of subscription rights to shares by transfer

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Any acquisition of subscription rights to shares by transfer shall require an approval of the Board of Directors of the Company by its resolution.

1. Treatment of subscription rights to shares at the Company's restructuring and other activities
   When approval is granted for proposals i), ii), iii), iv), or v) below by a resolution of the General Meeting of Shareholders (or if a resolution of the General Meeting of Shareholders is not required, then when approval is granted by a resolution of the Board of Directors of the Company), the Company may acquire subscription rights to shares without charge on the date specifically stipulated by the Board of Directors:

1. Proposal for the approval of a merger agreement in which the Company will become the extinct company;
2. Proposal for the approval of a split agreement or a split plan in which the Company will become a split company;
3. Proposal for the approval of a share exchange agreement or a share transfer plan in which the Company will become a wholly owned subsidiary;
4. Proposal for the approval of an amendment to the Articles of Incorporation to make provisions concerning all shares issued by the Company requiring the Company's approval for the acquisition of such shares through transfer; or
5. Proposal for the approval of an amendment to the Articles of Incorporation to make provisions concerning underlying shares of subscription rights to shares (i) requiring the Company's approval for the acquisition of such shares through transfer, or (ii) allowing the Company to acquire all shares of the relevant class upon resolution of the General Meeting of Shareholders

1. Allotment date of subscription rights to shares

The allotment date of subscription rights to shares shall be the day on which Agreement of Allotment of Subscription Rights to Shares has been entered into with each grantee after the terms and conditions of the grant of subscription rights to shares have been determined by the Company's Board of Directors.

(Note) The specific details of the issuance and the conditions of allotment of subscription rights to shares will be determined within the scope of the content above, through a resolution of the Company's Board of Directors to be held at a later date.

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