The System is a stock-based incentive system, in which a trust established and funded by the Company (“the Trust”) acquires shares of the Company, and the Company grants the shares to eligible Directors in accordance with Share Grant Regulations adopted by the Board of Directors. Such shares are in principle granted to each Director at the time of his/her retirement from office of Director and, if applicable, any other position as officer of the Asahi Kasei Group.

The Company establishes the Trust by providing the funds necessary for the Trust to acquire, in a certain period of time in advance, the number of shares of the Company reasonably estimated to be needed for the grants in accordance with (7) below, subject to approval of the introduction of the System at the Shareholders Meeting. The Trust shall, as described in (5) below, acquire shares of the Company by using the funds contributed by the Company.

The trust period is approximately three years beginning in August 2017 (planned) and ending in September 2020 (planned); provided, however that the trust period may be extended as described in (4) below.

The Company contributes an amount not exceeding ¥300 million during the 3-year trust period as funds necessary for the Trust to acquire shares of the Company to be granted to eligible Directors under the System. The Trust acquires shares of the Company from the stock market (including in after-hours trading) using funds entrusted by the Company.

The trust period may be extended by a resolution of the Company’s Board of Directors (including by effective extension of the trust period by transferring the trust assets of the Trust to another trust established by the Company for an identical purpose, the same applying hereinafter). If the trust period is thus extended, the Company contributes an additional amount not exceeding ¥100 million into the Trust as funds for acquiring shares of the Company necessary for granting to Directors under the System for each year of the extended trust period. At the same time, the Applicable Period is extended in accordance with the extended trust period, and the conferring of points as described in (6) below, as well as the grant of shares of the Company as described in (7) below, shall continue.

However, if the conferring of points is not continued as described above but there are Directors who have not retired from office and who have accumulated points at the end of the trust period, the Company may extend the trust period until such Directors retire from office and the corresponding grant of shares of the Company from the Trust is completed.

Initial acquisition of shares of the Company by the Trust is by purchase from the stock market, in an amount not exceeding the maximum as funds to acquire shares as described in (4) above.

During the trust period, if the number of shares of the Company held in the Trust falls short of the number of shares that corresponds to the number of points to be conferred to Directors during the trust period, due to an increase in the number of Directors, etc., the Company may, without exceeding the maximum amount entrusted as approved at the Shareholders Meeting as described in (4) above, entrust additional money to the Trust in order to enable the trust to acquire additional shares of the Company as required.

The Company confers to each Director a certain number of points as specified in accordance with their individual rank, etc., on a given date during the trust period, in accordance with the Share Grant Regulations.

However, the total number of points to be conferred to all Directors by the Company during a single fiscal year shall not exceed 100,000.

Directors receive grants of shares of the Company in accordance with their accumulated number of points conferred as described in (6) above.

The number of shares of the Company granted to each Director is equal to the number of points accumulated by each Director (provided that reasonable adjustment may be made if there has been a share split, share consolidation, or other change of circumstances between the time the points are conferred and the time the shares are granted). Nevertheless, a certain proportion of shares of the Company may be sold by the Trust and granted to Directors in the form of cash.

In accordance with instructions from the trust administrator which is independent of the Company or any officer of the Company, voting rights associated with the shares of the Company held in the Trust shall not be exercised at all, in order to ensure neutrality towards the management of the Company with respect to the shares of the Company held in the Trust.

Dividends of the shares of the Company held in the Trust shall be received by the Trust to be used to acquire shares of the Company and for trust fees to be paid to the trustee with respect to the Trust.

Of the assets remaining in the Trust at the end of the trust period, all shares of the Company are to be acquired by the Company without consideration and then cancelled by resolution of the Board of Directors, while a certain amount of cash is to be donated to public service entities having no conflict of interest with Directors of the Company, as arranged in advance in accordance with the Share Grant Regulations and the trust agreement.

1. i.Name: Trust for Granting Shares to Directors
2. ii.Assignor: Asahi Kasei Corp.
3. iii.Trustee: Sumitomo Mitsui Trust Bank, Ltd.
   (Re-trustee: Japan Trustee Services Bank, Ltd.)
4. iv.Beneficiaries: Directors who satisfy beneficiary requirements
5. v.Trust administrator: Third party having no conflict of interest with the Company
6. vi.Type of trust: Trust of money other than money trust (third-party-benefit trust)
7. vii.Date of trust agreement: August 2017
8. viii.Date on which money will be entrusted: August 2017
9. ix.Trust period: August 2017 to September 2020