SUZUKEN : Notice Concerning Introduction of a Restricted Share Compensation Plan

Press Release Suzuken Co., Ltd.

Hiromi Miyata, President and CEO (Stock Code: 9987)

May 11, 2017

Securities Traded: First Sections of the Tokyo and Nagoya Stock Exchanges and the Sapporo Securities Exchange

Contact: Shigeru Asano, Director and Senior Executive Officer; Senior General Manager, Corporate Management Headquarters

Tel.: [phone]

Notice Concerning Introduction of a Restricted Share Compensation Plan

Suzuken Co., Ltd. (hereinafter "the Company") announced that at a Board of Directors Meeting held today, it conducted a review of its executive compensation system and resolved to introduce a restricted share compensation plan (hereinafter "the Plan"). Moreover, the board has decided to tender a proposal regarding the Plan at the 71st Ordinary General Meeting of Shareholders, (hereinafter "the General Meeting of Shareholders"), scheduled to be held on June 28, 2017.

1. Purpose of Introducing the Plan, Etc.

2. Purpose of introducing the Plan

   The Plan introduces a system that can allocate part of the compensation for the Company's directors (excluding outside directors) to restricted shares. The aim is to make the Company's directors share the merits and risks of stock-price fluctuations with shareholders and create an even greater incentive for them to contribute to increasing the Company's share price and corporate value.

3. Conditions for introduction of the Plan

The Plan involves payment of monetary compensation receivables for allocating restricted shares to the Company's directors (excluding outside directors). Its introduction is therefore conditional upon receiving approval from shareholders at the General Meeting of Shareholders for payment of the compensation involved. At the 60th Ordinary General Meeting of Shareholders held on June 29, 2006, the Company received approval from shareholders for directors' compensation, etc., up to an amount of ¥600 million per year. At the upcoming General Meeting of Shareholders, the Company plans to ask shareholders to approve an amount for restricted shares for directors (excluding outside directors) of up to ¥60 million per year, giving overall consideration to general matters such as the directors' degree of contribution within the Company. Moreover, the amount of compensation to be paid in the form of restricted shares shall be set within the amount of compensation up to ¥600 million per year approved at the 60th Ordinary General Meeting of Shareholders held on June 29, 2006.

4. Overview of the Plan

1. Allocation of restricted shares and pay-in

   The Company will pay its directors (excluding outside directors) monetary compensation receivables within the abovementioned annual amount as compensation related to restricted shares based on a resolution of the Board of Directors, and the directors will receive an allotment of restricted shares by paying all of the monetary compensation receivables as a contribution in kind.

   The pay-in amount for the restricted shares shall be decided by the Board of Directors within a range that will not produce a particularly advantageous amount for the directors receiving the restricted shares. The amount will be based on the closing price of the Company's common shares on the Tokyo Stock Exchange on the business day before the Board of Directors' decision (or if the Company's stock was not traded on that day, the closing price on the most recent day when it was traded).

   Moreover, payment of the abovementioned monetary compensation receivables is to be conditional upon the Company's directors having agreed with the abovementioned contribution in kind and signed a restricted share allotment agreement including the content stipulated in (3) below.

2. Total number of restricted shares

   A total number of restricted shares to be allotted to directors (excluding outside directors) of 40,000 shares shall be the upper limit of the number of restricted shares to be allotted within each business year.

   However, in the case where it becomes necessary to adjust the total number of restricted shares for allotment due to a stock split or stock consolidation of the Company's ordinary shares (including a gratis allotment of the Company's common shares), or some other case necessitating an adjustment, the number of restricted shares may be adjusted rationally.

3. Content of restricted share allotment agreement

When allotting restricted shares, the restricted share allotment agreement to be concluded between the Company and the directors receiving the allotment of restricted shares based on a resolution of the Board of Directors shall include the following details.

1. Details of transfer restrictions

   The director receiving the allotment of restricted shares may not transfer them to a third party, nor pledge, attach, advance, bequest, or dispose of them in any other way for a period of 20 to 30 years determined by the Board of Directors (hereinafter "the Restriction Period").

2. Gratis acquisition of restricted shares

   The Company will automatically acquire gratis the restricted shares allotted to a director who has received an allotment of restricted shares (hereinafter "the Allotted Shares") if the director retires from the position of director, executive officer, or councilor before the day before the first Ordinary General Meeting of Shareholders to be held after the starting day of the Restriction Period, except in the case where the Board of Directors recognizes the reason to be justified.

   Moreover, the Company shall automatically acquire gratis any of the Allotted Shares at the end of the Restriction Period noted in a. above that have not had their restriction released in accordance with the reasons for release of the transfer restriction provided in c. below.

3. Release of transfer restriction

   The Company will release the transfer restriction on all of the Allotted Shares at the end of the Restriction Period, provided that the director that has received the allotment of restricted shares has continuously held the position of a director, executive officer, or councilor of the Company until the day before the first

   Ordinary General Meeting of Shareholders to be held after the starting day of the Restriction Period. However, in the case where the director has retired from the position of director, executive officer, or councilor before the end of the Restriction Period due to a reason that is recognized as being justifiable by the Board of Directors, the number of the Allotted Shares to have their transfer restriction released and the timing for the release of the transfer restriction may be rationally adjusted as necessary.

4. Treatment in cases of organizational restructuring, etc.

During the Restriction Period, if a proposal regarding organizational restructuring, etc., such as a share exchange agreement or share transfer plan in which the Company becomes a wholly owned subsidiary, is approved by the Company's General Meeting of Shareholders (or the Company's Board of Directors if the proposed organizational restructuring, etc., does not require approval by the Company's General Meeting of Shareholders), the Company may release the transfer restriction on a number of the Allotted Shares ahead of the effective date of the organizational restructuring, etc., by a resolution of the Board of Directors, with the number to be determined rationally based on the period from the starting day of the Restriction Period until the day of approval for the organizational restructuring, etc.

In this case, the Company will automatically acquire gratis the Allotted Shares that have not had their transfer restriction released immediately after the release of the transfer restriction in accordance with the above provision.

(Reference)

The Company plans to allot restricted shares of the same kind as the abovementioned restricted shares to the Company's executive officers after the conclusion of the General Meeting of Shareholders.