Note: This document has been translated from a part of the Japanese original for reference purposes only. In
the event of any discrepancy between this translated document and the Japanese original, the original shallprevail. The Company assumes no responsibility for this translation or for direct, indirect or any other formsof damages arising from the translation.
(Stock Exchange Code 6505)
August 5, 2020
To Shareholders with Voting Rights:
Kenzo Terashima
President, Representative Director
Toyo Denki Seizo K.K.
1-4-16 Yaesu, Chuou-ku, TokyoNOTICE OF
THE 159th ANNUAL GENERAL MEETING OF SHAREHOLDERS
Dear Shareholders:
We would like to express our appreciation for your continued support and patronage.
We hereby announce that the 159th Annual General Meeting of Shareholders of Toyo Denki Seizo K.K.
(the “Company”) will be held as described below.
Instead of attending the meeting, you can exercise your voting rights in writing or via the Internet,
etc. Please review the attached Reference Documents for the General Meeting of Shareholders, andexercise your voting rights no later than 5:00 p.m. on Tuesday, August 25, 2020, Japan time.
1. Date and Time:

Wednesday, August 26, 2020 at 10:00 a.m. Japan time

2. Place:“Station Conference Tokyo” Meeting Room 501 (5F, Sapia Tower)
1-7-12 Marunouchi, Chiyoda-ku, Tokyo

3. Meeting Agenda:
Matters to be reported: 1. The Business Report, Consolidated Financial Statements for the Company’s
159th Fiscal Year (June 1, 2019 - May 31, 2020) and results of audits by the
Accounting Auditor and the Board of Corporate Auditors of the Consolidated
Financial Statements
2. Non-consolidated Financial Statements for the Company’s 159th Fiscal Year
(June 1, 2019 - May 31, 2020)
Proposals to be resolved:
Appropriation of Surplus
Proposal 1:
Election of Seven (7) Directors
Proposal 2:
Continuation of Countermeasures against a Large-scale Purchase of the
Proposal 3:Company’s Shares, etc. (Takeover Defense Measures)◎ Of the documents to be provided with this Notice, “Information Concerning Accounting Auditor,” “Overview of
Systems to Ensure Appropriate Business Operations (Basic Policy for Internal Control Systems) andOperational Status Thereof” and “Basic Policy on Control of the Company” of the Business Report, and the“Consolidated Statements of Changes in Net Assets,” “Notes to Consolidated Financial Statements,”“Non-consolidated Statements of Changes in Net Assets,” and “Notes to Non-consolidated Financial
Statements” are posted on the Company’s website (https://www.toyodenki.co.jp) in accordance with provisionsof laws and regulations as well as Article 15 of the Company’s Articles of Incorporation and therefore are notprovided in this Notice. Furthermore, the aforementioned items posted on the Company’s website are part of the
documents audited by the Accounting Auditor and the Board of Corporate Auditors when preparing theiraccounting audit report and audit report, respectively.
◎ Should the Business Report, Consolidated Financial Statements, Non-consolidated Financial
Statements, or the Reference documents for the General Meeting of Shareholders require revisions, therevised versions will be posted on the Company’s website.

-1-

Reference Documents for the General Meeting of Shareholders
Proposals and References
Proposal 1:

Appropriation of Surplus

With regard to the appropriation of surplus, the Company proposes the following.
[Items related to the year-end dividend]With regard to the year-end dividend for the fiscal year ended May 31, 2020, upon
comprehensively taking into consideration the return of profits to shareholders in a stable andcontinuous manner, the strengthening of the business structure and other factors the Company
proposes the ordinary dividend of 30 yen per share.
(1) Type of dividend property
Cash(2) Items related to the allocation of dividend property to shareholders and its total amount
30 yen per share of common stock
Total of 268,247,910 yen(3) Effective date of distribution of surplus
August 27, 2020-2-

Proposal 2:

Election of Seven (7) Directors

As the terms of office of all six Directors will expire at the conclusion of this General Meeting of
Shareholders, the election of seven Directors (including three Outside Directors), increasing the number of
Directors by one in order to strengthen the management structure and the corporate governance structure, is
proposed.
The candidates for Director are as follows.
No.

Past experience, positions, responsibilities
and significant concurrent positions

Number ofshares of theCompany held

Joined the Company
General Manager, International Sales Division, Transportation
System Business Unit
Executive Officer; Deputy General Manager, Sales Division
August 2002
Appointed as Director; General Manager; Sales Division
August 2004
Director; Division Director, Transportation Business Unit
August 2006
Executive Director
August 2008
Representative Senior Executive Director
August 2009
Vice President, Representative Director
August 2012
President, Representative Director (current position)
August 2013
[Reason for nomination as a candidate for Director]
Mr. Kenzo Terashima has been driving the growth of the Group since 2013 bystrengthening the management structure and promoting globalization as President,
Representative Director. He is demonstrating leadership and strongly promoting“Revitalize 2020,” the new medium-term management plan currently in progress,
while also working to strengthen the supervisory functions of the Board of Directors
from a governance perspective.
He is nominated as a candidate for Director based on the judgment that, by utilizing
his experience and knowledge, he would be able to continue to appropriately
supervise the management of the Group as a whole and play a significant role insustainable growth and the improvement of corporate value.

15,760Name(Date of birth)
April 1972
July 2001

1

Kenzo Terashima
August 18, 1948
Reappointment

-3-

No.

Name
(Date of birth)

Past experience, positions, responsibilities
and significant concurrent positions

Number ofshares of theCompany held

Akira Watanabe
November 22, 1959
Reappointment

Joined the Company
Chief, Development Division, Transportation Systems Works,
Transportation Business Unit
Group Manager, Business Creation Group, Development Division
June 2002
Deputy Group Manager, Transportation Design Group, Yokohama
June 2003
Plant, Production Division
June 2005
Group Manager, Traction Control Design Group, Transportation
Systems Works, Yokohama Plant, Production Division
August 2008
Deputy Center Manager, Research CenterMay 2011
Group Manager, EV Systems Group, Business Development
Division
August 2013
General Manager, Business Development Division
August 2015
Executive Officer; General Manager, Management Planning
Division
August 2016
Appointed as Director; Division Director, Transportation Business
Unit
June 2018
Executive Director and Executive Officer; Division Director,
Transportation Business Unit; General Manager, International
Sales Division, Transportation Business Unit
August 2018
Executive Director and Executive Officer; Division Director,
Transportation Business Unit
August 2019
Senior Executive Director and Executive Officer; Division
Director, Transportation Business Unit; Plant Manager, Yokohama
Plant (current position)[Reason for nomination as a candidate for Director]
Mr. Akira Watanabe, since joining the Company in 1982, has been mainly engaged
in transportation business, and has knowledge and experience regardingtransportation business as a whole and the management of the entire Group, as
evidenced by his experience in the fields of research and development andmanagement planning. He has been appropriately supervising the management of theGroup as a whole as Director since 2016.
He is nominated as a candidate for Director based on the judgment that, by utilizing
his experience and knowledge, he would be able to continue to appropriately
supervise the management of the Group as a whole and play a significant role insustainable growth and the improvement of corporate value.

2,826

April 1982
June 2000

2

-4-

No.

Past experience, positions, responsibilities
and significant concurrent positions

Number ofshares of theCompany held

Joined the Company
Chief, General Affairs Division
Deputy Group Manager, Industry Business Planning Group,
Industry Business Unit
Group Manager, Administration Group, Yokohama Plant
June 2009
General Manager, Human Resources Division
August 2011
Executive Officer; General Manager, Human Resources Division
August 2013
Appointed as Director; General Manager, Human Resources
August 2015
Division
Director
August 2017
Executive Director and Executive Officer
June 2018
Senior Executive Director and Executive Officer (current position)
August 2019
[Reason for nomination as a candidate for Director]
Mr. Akihiko Ishii, since joining the Company in 1981, has been mainly engaged ingeneral affairs and human resources affairs. In addition, he has served as Director
since 2015 in charge of general affairs, human resources and financial affairs. He hasabundant job experience at the Company and knowledge regarding management as awhole and business administration and operation.
He is nominated as a candidate for Director based on the judgment that, by utilizing
his experience and knowledge, he would be able to continue to appropriately
supervise the management of the Group as a whole and play a significant role insustainable growth and the improvement of corporate value.

6,967

Name
(Date of birth)
April 1981
November 1999
June 2008

3

Akihiko Ishii
June 22, 1956
Reappointment

-5-

No.

Name
(Date of birth)

Past experience, positions, responsibilities
and significant concurrent positions

Joined The Sanwa Bank, Ltd. (currently MUFG Bank, Ltd.)
General Manager, Strategy Development Department; General
Manager, Strategy Support Department
General Manager, Hiroshima Corporate Sales Department
July 2005
General Manager, Hiroshima Branch
January 2006
General Manager, Corporate Research Department
July 2007
Joined the Company; Group Manager, Management Planning
June 2010
Group, Planning Division
General Manager, Management Planning Division
August 2011
Executive Officer; General Manager, Management Planning
August 2012
Division
Senior Executive Officer; Branch Manager of Osaka Branch
August 2015
Senior Executive Officer; General Manager, Ryuo Factory
August 2016
Integration Division; Deputy Division Director, Industry BusinessUnit
Yoshifumi Otsubo
Senior Executive Officer; Division Director, Industry Business
December
2017
January 9, 1958
Unit; General Manager, Ryuo Factory Integration Division
Reappointment
Executive Officer; Division Director, Industry Business Unit
June 2018
Executive Officer; Division Director, Industry Business Unit;
June 2019
Branch Manager of Hokkaido BranchAppointed as Director; Executive Officer; Division Director,
August 2019
Industry Business Unit; Branch Manager of Hokkaido Branch(current position)[Reason for nomination as a candidate for Director]
Mr. Yoshifumi Otsubo, since joining the Company in 2010, has been engaged inmanagement planning, utilizing his abundant experience at a financial institution,
following which he has knowledge and experience in the management of the Group
as a whole, including overseeing business divisions. He has been appropriately
supervising the management of the Group as a whole as Director since 2019.
He is nominated as a candidate for Director based on the judgment that, by utilizing
his experience and knowledge, he would be able to continue to appropriately
supervise the management of the Group as a whole and play a significant role insustainable growth and the improvement of corporate value.
Registered as a lawyer (Daini Tokyo Bar Association)
April 1969
Established Chinone & Haruhara Law Office
May 1982
Representative Director, Management and Law Committee
July 2011
Trust Administrator, Charitable Trust (Assistance Fund Regarding
March 2013
Disaster Risk Management Measures for Highways of NEXCO
and Associated Companies) (current position)
April 2014
Director, Public Interest Incorporated Foundations of TETSUDOU
KOUSAIKAI (current position)
April 2015
Outside Director, Maruzen CHI Holdings Co., Ltd.
Hirokazu Chinone
August 2015
Appointed as Outside Director of the Company (current position)
March 1, 1944
April 2016
Outside Director and Member of the Audit and Supervisory
Committee, Maruzen CHI Holdings Co., Ltd. (current position)
Reappointment
July 2017
Advisor, Management and Law Committee (current position)
Outside Director[Reason for nomination as a candidate for Outside Director]
Independent Director Mr. Hirokazu Chinone is a qualified lawyer and is nominated as a candidate for
Outside Director based on the judgement that he would be able to give advice andmake proposals in order to ensure legality and appropriateness of decision making of
the Board of Directors of the Company, utilizing his high level of insight andabundant experience in the field of corporate legal practice.
[Term of Office as Outside Director]
Mr. Hirokazu Chinone currently serves as the Company’s Outside Director and his
term of office will be five years at the conclusion of this General Meeting of
Shareholders.

Number ofshares of theCompany held

April 1980
June 2004

4

5

-6-

4,007

0

No.

Name
(Date of birth)

Past experience, positions, responsibilities
and significant concurrent positions

Joined TEIJIN LIMITED
President and Director, Teijin DuPont Films S.A.
Corporate Officer, TEIJIN Group
Group Manager, Film Business Group, TEIJIN LIMITED;
Vice Chairman and COO, Global Joint Venture, Teijin DuPont
Films
Chief Technology Officer, TEIJIN LIMITED
April 2005
Managing Director
June 2005
Senior Managing Director
June 2006
Executive Vice President
June
2008
Takashi Yamagishi
Vice President, Representative Director of the Board
June 2009
August 3, 1944
Counselor and Chief Engineer
June 2010
Reappointment
Counselor
June 2012
Outside Director
Appointed as Outside Director of the Company (current position)
August 2016
Independent Director [Reason for nomination as a candidate for Outside Director]
Mr. Takashi Yamagishi has abundant experience in corporate management both inJapan and overseas and highly specialized expertise and is nominated as a candidate
for Outside Director based on the judgement that he would be able to give advice andmake proposals in order to ensure legality and appropriateness of decision making of
the Board of Directors of the Company, utilizing his extensive insight and global
view.
[Term of Office as Outside Director]
Mr. Takashi Yamagishi currently serves as the Company’s Outside Director and his
term of office will be four years at the conclusion of this General Meeting of
Shareholders.

Number ofshares of theCompany held

April 1970
March 1996
June 1999
April 2004

6

-7-

0

No.

Name
(Date of birth)

Past experience, positions, responsibilities
and significant concurrent positions

Number ofshares of theCompany held

Joined NIPPON STEEL NISSHIN Co., Ltd. (currently NIPPONSTEEL CORPORATION)
General Manager, Corporate Planning Division
June 2001
Executive Officer; General Manager, Sales Administration
April 2005
Division
Executive Officer; General Manager, Human Resources Division
April 2007
Managing Executive Officer; General Manager, Human Resources
April 2009
Division
Director; Managing Executive Officer; General Manager, Human
June 2009
Resources Division
Director; Managing Executive Officer; General Manager, Risk
April 2010
Management Promotion Office
Koji Mizumoto
Director; Managing Executive Officer; Chairman, NIPPON
April 2012
November 3, 1954
STEEL NISSHIN (Shanghai) Steel Trading Co., Ltd.
Managing Executive Officer; Chairman, NIPPON STEEL
June 2012
New appointment
NISSHIN(Shanghai) Steel Trading Co., Ltd.
Outside Director
Vice-President, Executive Officer & CFO
April 2014
Independent Director
Representative Director, Vice President, Executive Officer & CFO
June 2014
Director
April 2017
Senior Advisor
June 2017
AdvisorJune 2018
Director (Outside), HISAKA WORKS, LTD. (current position)
June 2019[Reason for nomination as a candidate for Outside Director]
Mr. Koji Mizumoto has abundant experience in corporate management andknowledge in financial accounting as CFO, and is nominated as a candidate for
Outside Director based on the judgement that he would be able to give advice andmake proposals in order to ensure legality and appropriateness of decision making of
the Board of Directors of the Company, utilizing his extensive insight andprofessional perspective.
April 1978

7(Notes) 1.

2.

3.

There are no special interests between each candidate for Director and the Company.
Mr. Hirokazu Chinone, Mr. Takashi Yamagishi and Mr. Koji Mizumoto are candidates for Outside
Director as stipulated in Article 2, Paragraph 3, Item 7 of the Ordinance for Enforcement of the Companies
Act.
The Company has registered them as independent officers with the Tokyo Stock Exchange.
As to liability of Outside Officers set forth in Article 423, Paragraph 1 of the Companies Act, theCompany may enter into an agreement to limit their liability to the minimum liability amount stipulated in
Article 425, Paragraph 1 of the Companies Act, when they performed their duties in good faith andwithout gross negligence, as stipulated in the Articles of Incorporation of the Company. If the proposal isapproved and Mr. Hirokazu Chinone and Mr. Takashi Yamagishi are elected, the above-mentioned
liability limitation agreement shall retain their effect. In addition, if Mr. Koji Mizumoto is elected, theCompany intends to enter into the above agreement to limit his liability.

-8-0<Reference>■
Standards for Independence of Outside Officers
In addition to fulfilling the criteria in the amended Companies Act, Outside Officers shall also not fallunder any of the following items, in accordance with the Tokyo Stock Exchange “Guidelines Relating to
Listing Management, etc.”(1) In the event that a company where the Outside Officer serves as an executive* receives payment
from the Company or a subsidiary of the Company as consideration for products, components, orservices, or makes payment to the Company or a subsidiary of the Company, cases when theamount of such payments exceeds 2% of the consolidated net sales of either company in any fiscal
year during the past three fiscal years.
(2) Cases when the Outside Officer has received compensation exceeding 10 million yen directlyfrom the Company or a subsidiary of the Company as a legal, accounting, or tax specialist or
consultant (or in the event of a corporation, a person belonging to that corporation) in any fiscal
year during the past three fiscal years.
(3) Cases when contributions from the Company to a non-profit organization where the Outside
Officer serves as an officer executing business operations have exceeded 10 million yen in any
fiscal year during the past three fiscal years.
(4) Cases when the Outside Officer is or has been a major shareholder of the Company or an
executive thereof, directly or indirectly holding more than 10% of the Company’s voting rights
during the past three years.
(5) Cases when a relative within the second degree of the Outside Officer falls under the following
categories:
・An executive of the Company or a subsidiary of the Company during the past three years(excluding insignificant persons);
・A person falling under any of the above items (1) to (4) (excluding insignificant persons).
*Executive: An executive director, executive officer, operating officer, manager, or other
employee-9-Proposal 3:

Continuation of Countermeasures against a Large-scale Purchase of the Company’s Shares,
etc. (Takeover Defense Measures)

At the 147th Annual General Meeting of Shareholders held on August 26, 2008, the Company introduced
countermeasures against a large-scale purchase of the Company’s shares (takeover defense measures) uponreceiving shareholders’ approval, and subsequently, most recently, renewed this policy after receiving
shareholders’ approval at the 156th Annual General Meeting of Shareholders held on August 29, 2017
(hereinafter, the existing takeover defense measures shall be referred to as “the Current Plan”).
As the effective period of the Current Plan is until the conclusion of this Annual General Meeting of
Shareholders, the Company has considered its status, including the appropriateness of its continuation, fromthe perspective of securing and enhancing corporate value and shareholders’ common interests. As a result,at a meeting of the Board of Directors held on July 13, 2020, the Company has decided to continue theCurrent Plan upon making partial changes to its contents, subject to receiving the approval of shareholders(hereinafter, the policy after continuation shall be referred to as “this Plan”).
Accordingly, the continuation of this Plan is proposed. If shareholders’ approval is received at this Annual
General Meeting of Shareholders, the effective period of this Plan shall be from that point until theconclusion of the Annual General Meeting of Shareholders of the Company to be held in August 2023.
When continuing this Plan, the Company has made required changes, including amending “2. Initiatives
to Contribute to the Realization of the Basic Policy,” “Attachment 2 Past Experience of the Independent
Committee Members,” “Attachment 3 Status of Shareholdings by Major Shareholders of the Company,” etc.
to the latest information, and other amendments to dates and wording, etc., but there are no changes to thefundamental plan.
Furthermore, this Plan was determined by the unanimous approval of all Directors at a meeting of theBoard of Directors when all six Directors attended, including two Outside Directors. In addition, at themeeting of the Board of Directors, all four Corporate Auditors of the Company attended, including three
Outside Corporate Auditors, and expressed the opinion that this Plan is appropriate as countermeasuresagainst a large-scale purchase of the Company’s shares, etc.
1. Basic Policy Regarding the Status of Persons Controlling Decisions about the Company’s Financial andBusiness Policies
As an entity whose shares are listed on a financial instruments exchange, the Company respects the freetransaction of its shares on the exchange, and even in the case of a large-scale purchase of the Company’s
shares by a specific person, the Company shall not categorically deny it, provided it contributes to securing
and enhancing the corporate value of the Group and shareholders’ common interests. In addition, theCompany believes that ultimately, whether or not to accept a large-scale purchase of shares should be
entrusted to the determination of shareholders.
However, among proposals for large-scale purchases of shares, there are some for which the necessary
information for shareholders to make a final decision has not been provided, some that cannot be said to
sufficiently reflect the value of the Group, and some that may harm the corporate value of the Group andshareholders’ common interests, such as those for which there is a possibility that favorable relationships
with stakeholders may not be maintained.
For such proposals, the Board of Directors of the Company believes that, as the responsibility of persons
entrusted by shareholders, they must act on shareholders’ behalf to perform actions such as securing thenecessary time and information and negotiating with the person making the large-scale purchase proposal for
the Company’s shares.
2. Initiatives to Contribute to the Realization of the Basic Policy(1) Initiatives to Enhance Corporate Value
The Company was founded in June 1918 in order to produce electrical equipment for rail vehicles inJapan, and over a period of more than 100 years since then, has developed and manufactured various
products in the transport and general industrial fields as a specialist manufacturer of electrical systems with
its core technology in the field of motors, motor drives, and related technology, and contributed to society.
In the same way that the Company was the first to manufacture some of these products in Japan, theCompany has built trust and a track record of performance in fields that are of a highly social, public natureand contribute to the foundations of society, with its superior technical skill and steady responsiveness.
As it looks toward the realization of its long-term vision, “integrating the exceptional motor drive
technologies developed since our establishment with our breakthrough advanced technologies to help build
social infrastructure systems that are sustainable for the global environment through global business- 10 -

development,” the Group formulated and is promoting “Revitalize 2020,” a four-year medium-term
management plan starting from July 2018 with 2020 as the first target year and the fiscal year ending May 31,
2022 as the final year.
Under the basic policy set forth in this plan, we are working together as a Group to increase our “earning
power” and establish a “leaner” business operation structure that generates a stable profit.
Furthermore, the principal measures in the plan that the Company is currently promoting are as follows.
1) Expand overseas business• Review our business strategy according to the economic and technological development of the othercountry• Expand new business in the Industrial Systems segment in Southeast Asia
• Strategically participate in new urban transportation projects2) Expand business areas utilizing core technologies• Promote commercialization with a view to future business potential and market trends• Develop new business based on the latest technological innovations• Expand business areas utilizing alliances and M&A
3) Promote technological developments that anticipate market needs• Engage in timely product development by strengthening market analysis• Establish new production technology for mainstay parts (products)
4) Build a stable business earnings structure• Reduce costs to improve business profitability• Strengthen collaboration between sales and factory systems through companywide activities• Promote Group management with a focus on “earning power”a) Promote “selection and concentration” throughout the Groupb) Build a sales and production system as a Group5) Develop an infrastructure to expand production capacity• Strengthen process management by making maximum use of backbone system functions, and build
optimal production lines• Expand production capacity by rebuilding production lines (Yokohama Plant)• Improve the operating rate of the new production line (Shiga Ryuo Plant)• Restructure the supply chain• Upgrade the BCP (Business Continuity Plan)
6) Train human resources to lead the future• Establish and implement a human resources rotation system for organizational revitalization• Strengthen the training of next-generation executives and overseas employees• Undertake the early training of young managers who will become key members of the organization
7) Promote ESG activities• Promote initiatives to reduce the environmental impact of business activities• Promote work style reforms• Enhance corporate governance(2) Corporate Governance
The Company embraces the business principle of prioritizing ethics and contributing to the prosperity ofcustomers and society as the starting point for its corporate activities. Recognizing the importance ofpracticing compliance based on corporate ethics, the Group continually reviews its control and monitoring toadapt to changes in the social, regulatory, and business climate. This is part of a commitment to enhance andexpand corporate governance to ensure the healthy management of the Group.
In April 2018, we established the Nomination and Compensation Advisory Committee set up under the
Board of Directors with the participation of Outside Directors in order to further strengthen corporate
governance, thereby creating a mechanism to ensure objectivity and transparency when selecting candidates
for Directors and Executive Officers and determining their remuneration.
In addition, in June 2018, we separated the supervision and execution functions of the Board of Directors
so that by delegating business execution to Executive Officers, the Board of Directors is mainly responsible
for supervisory functions.
As a company with a Board of Corporate Auditors, the supervisory function of the Board of Directors andthe audit function of Corporate Auditors in regard to the business execution of Directors both function
effectively.
As corporate governing bodies based on laws and regulations and the Articles of Incorporation, theCompany has a Board of Directors, Corporate Auditors, a Board of Corporate Auditors, and Independent
Accounting Auditors, in addition to the General Meeting of shareholders and Directors.

- 11 -

The Board of Directors comprises six Directors, including two Outside Directors, and, in addition to
making decisions on matters to be decided solely at the discretion of the Board of Directors and importantmanagement matters, also supervises Directors’ and Executive Officers’ business execution. Furthermore, aManagement Strategy Meeting and Executive Officer Report Meeting are held, with Directors, Operating
Officers, and Corporate Auditors in attendance, and all officers at these meetings share information reported
from each operational division, in addition to confirming the status of progress on management issues, andconducting the necessary deliberation of important management issues.
There are four Corporate Auditors, including three Outside Corporate Auditors, and in addition toauditing the business execution of Directors through attendance at important meetings such as the Board of
Directors and the Management Strategy Meeting and confirming the status of operations and assets, theBoard of Corporate Auditors also works closely with internal auditors and Accounting Auditors,
strengthening their mutual coordination by, for example, exchanging information, and thus enhancing theeffectiveness and efficiency of audits.
In addition, the Company has an Internal Control Committee under the Board of Directors, which
deliberates the awareness of risks in the Company and countermeasures, etc.
Going forward, the Company will continue to work to enhance the corporate governance system.
3. Objective of this Plan
The Board of Directors of the Company has decided to continue this Plan in order to make clear the rulesthat persons attempting to conduct a large-scale purchase of the Company’s shares, etc. should follow, and tosecure the necessary and sufficient information and time for shareholders and investors to make anappropriate assessment, together with opportunities to negotiate with the person attempting to conduct thelarge-scale purchase.
As follows, this Plan sets forth the rules that persons attempting to conduct a large-scale purchase of theCompany’s shares, etc. should follow, and makes it clear that any persons attempting to conduct a large-scalepurchase might incur damages as a result of the Company taking countermeasures in certain cases, and by
making appropriate disclosure thereof, a warning is hereby given to any persons attempting to conduct alarge-scale purchase that will not contribute to the Company’s corporate value and shareholders’ common
interests.
Furthermore, under this Plan, in order to eliminate arbitrary judgments by the Board of Directors of theCompany when activating countermeasures, etc., the Company shall respect to the maximum extent possible
the recommendation of an independent committee (hereinafter, the “Independent Committee”) made up
solely of persons independent from the management team conducting the business operations of theCompany who are Outside Directors of the Company, Outside Corporate Auditors of the Company, or
outside experts (corporate managers with a track record of performance, former government employees,
attorneys, certified public accountants, academic experts, or other equivalent persons), in accordance with
the Independent Committee Regulations (please refer to Attachment 1 for an overview thereof), in addition
to ensuring transparency by making timely disclosure of related information to shareholders and investors.
For the members of the Independent Committee at the time of the continuation of this Plan, the Company
intends to appoint the three persons listed in Attachment 2.
In addition, the status of major shareholders of the Company as of May 31, 2020 is as shown in
Attachment 3, “Status of Shareholdings by Major Shareholders of the Company.” The Company has notreceived any inquiries or requests, etc. regarding a large-scale purchase of the Company’s shares, etc. at thepresent time.
4. Details of this Plan (Initiatives to Prevent Decisions about the Company’s Financial and Business Policies
Being Controlled by Inappropriate Persons in light of the Basic Policy)(1) Procedures Relating to this Plan
1) Applicable Large-scale Purchases, etc.
This Plan shall apply in cases when a purchase or other similar action pertaining to the Company’s shares,
etc. that falls under category (i) or (ii) below is conducted (however, this excludes those that have been
approved by the Board of Directors of the Company; hereinafter, the relevant actions are referred to as“large-scale purchase(s), etc.”). Persons conducting or attempting to conduct a large-scale purchase, etc.
(hereinafter, “purchaser(s), etc.”) must comply with the procedures set forth in advance in this Plan.
(i)
1
2

Purchases whereby the ownership ratio of shares, etc.1 of a holder2 in relation to shares, etc.3

As defined in Article 27-23, Paragraph 4 of the Financial Instruments and Exchange Act. The same shall apply hereinafter.
Refers to a holder as defined in Article 27-23, Paragraph 1 of the Financial Instruments and Exchange Act, and includes- 12 -

issued by the Company will be 20% or more(ii) A tender offer4 for shares, etc.5 issued by the Company, whereby the total of the ownership ratio ofshares, etc.6 pertaining to the shares, etc. that the tender offer concerns and the ownership ratio ofshares, etc. of any specially related parties7 thereof will be 20% or more.
2) Prior Submission of Letter of Intent to the Company
The purchaser, etc. shall submit to the Board of Directors of the Company a written statement that
includes a pledge to comply with the procedures set forth in this Plan when conducting a large-scalepurchase, etc. (hereinafter, the “Letter of Intent”) in Japanese, in the form specified by the Company, aheadof the implementation of any large-scale purchase, etc.
Specifically, the following items shall be provided in the Letter of Intent.
(i) Overview of the purchaser, etc.
(a) Name or corporate name and address or location(b) Position and name of representative(c) Object and business details of the company, etc.
(d) Overview of major shareholders or major investors (top ten by shares held or investment ratio)(e) Contact details in Japan(f) Governing law of incorporation(ii) Number of the Company’s shares, etc. actually held by the purchaser, etc., and status of transactionsof the Company’s shares, etc. by the purchaser, etc. over the 60 days prior to the submission of theLetter of Intent(iii) Overview of the large-scale purchase, etc. proposed by the purchaser, etc. (including the type andnumber of the Company’s shares, etc. that the purchaser, etc. intends to acquire through thelarge-scale purchase, etc., and the objective of the large-scale purchase, etc. (the acquisition ofcontrol or participation in management, portfolio investment or strategic investment, the transfer,etc. of the Company’s shares, etc. to a third party after the large-scale purchase, etc., or if there is
any other objective, such as making a Material Proposal8, notice to that effect and the details
thereof; furthermore, in the event that there are multiple objectives, all shall be given.))3) Provision of the Required Information
If the Letter of Intent described in the above item 2) is submitted, then the purchaser, etc. shall thenprovide to the Company information that is necessary and sufficient for shareholders and investors to makean assessment regarding the large-scale purchase, etc. (hereinafter, the “Required Information”), in
accordance with the procedure below.
First, within ten (10) business days9 (not including the first day) of the submission of the Letter of Intent,
the Company shall dispatch to the purchaser, etc. at his or her contact address in Japan in the above item 2)(i) (e) a list of the information that should initially be provided, and the purchaser, etc. shall thus provide
sufficient information to the Company, in Japanese, in accordance with the list of information.
In addition, in the event that the Board of Directors of the Company reasonably judges that thepersons included as holders pursuant to Paragraph 3 of the same.
As defined in Article 27-23, Paragraph 1 of the Financial Instruments and Exchange Act. The same applies hereinafter unlessotherwise provided for. Furthermore, in the event of amendments to laws and regulations, etc. cited in this Plan (includingchanges to the names of laws and regulations and the establishment of new laws, etc. that succeed the former laws andregulations, etc.), each provision or term of the law or regulation, etc. cited in this Plan shall be deemed to be replaced with theprovision or term in the law or regulation, etc. that substantially succeeds these provisions or terms of laws or regulations, etc.
after the amendment, unless otherwise determined by the Board of Directors of the Company.
4
As defined in Article 27-2, Paragraph 6 of the Financial Instruments and Exchange Act. The same shall apply hereinafter.
5
As defined in Article 27-2, Paragraph 1 of the Financial Instruments and Exchange Act. The same shall apply in Item 2
hereinafter.
6
As defined in Article 27-2, Paragraph 8 of the Financial Instruments and Exchange Act. The same shall apply hereinafter.
7
Refers to a specially related party as defined in Article 27-2, Paragraph 7 of the Financial Instruments and Exchange Act.
However, with regard to persons listed in Item 1 of the same, this excludes persons set forth in Article 3, Paragraph 2 of the
Cabinet Office Ordinance on Disclosure Required for Tender Offer for Share Certificates, etc. by Person Other than Issuer. The
same shall apply hereinafter.
8 Refers to a Material Proposal as defined in Article 27-26, Paragraph 1 of the Financial Instruments and Exchange Act, Article
14-8-2, Paragraph 1 of the Order for Enforcement of the Financial Instruments and Exchange Act, and Article 16 of the
Cabinet Office Ordinance on Disclosure of the Status of Large-Volume Holdings in Share Certificates, etc. The same applies
hereinafter unless otherwise provided for.
9 A business day refers to days other than those listed in each item of Article 1, Paragraph 1 of the Act on Holidays of
Administrative Organs.
3- 13 -

information provided by the purchaser, etc. in accordance with the list of information is insufficient for theassessment of shareholders or the evaluation and consideration of the Board of Directors of the Company,
etc., in light of the details and format, etc. of the large-scale purchase, etc., then the purchaser, etc. shallprovide additional information as separately requested by the Board of Directors of the Company.
Furthermore, regardless of the details and format, etc. of the large-scale purchase, etc., information
pertaining to each of the items below shall, in principle, be included in part of the list of information.
(i) Details of the purchaser, etc. and its group (including any joint holders10, specially related parties,
and, in the case of funds, each member and other constituents) (including history, specific name,
capital structure, business details, financial details, and the names and past experience of officers)(ii) Purpose of the large-scale purchase, etc. (details of the purpose disclosed in the Letter of Intent),
method and details (including whether or not the purchaser, etc. intends to participate inmanagement, the type and amount of consideration for the large-scale purchase, etc., timing of thelarge-scale purchase, etc., the structure of any related transactions, the number of shares, etc. thepurchaser, etc. intends to purchase and the ownership ratio of shares, etc. after the purchase, etc.,
and the legality of the method of large-scale purchase, etc.)(iii) Calculation basis for the large-scale purchase, etc. consideration (including assumptions and facts
used in the calculation, the calculation method, numerical data used in the calculation and the detailsof any synergies expected to arise as a result of transactions related to the large-scale purchase, etc.,
and, in the event that any third parties have been consulted when performing the calculation, thenames of those third parties, a summary of their opinions, and the process that led to them
determining the amount in light of these opinions)(iv) Backing for the funds for the large-scale purchase, etc. (including the specific name of the providerof funds (including any de facto providers), the method of raising funds, and the details of any
related transactions)(v) Whether or not there has been any communication of intent with any third parties in connection
with the large-scale purchase, etc. and, in the event that there has been a communication of intent,
the details thereof and an overview of those third parties(vi) In the event that the purchaser, etc. has already entered into a lending agreement, pledge agreement,
resale agreement, engagement agreement for purchase and sale or other important agreement or
arrangement (hereinafter referred to as “pledge agreement, etc.”) pertaining to the Company’s
shares, etc., the specific details of the pledge agreement, etc., including the type of agreement,
agreement counterparty, and number of shares, etc. to which the agreement applies(vii) In the event that the purchaser, etc. intends to enter a pledge agreement, etc. or other form ofagreement with a third party in relation to the Company’s shares, etc. that it plans to acquire in thelarge-scale purchase, etc., the specific details of the agreement, including the type of agreement
planned, agreement counterparty, and the number of shares, etc. to which the agreement applies(viii) Management policies, business plans, capital strategy, and dividend strategy for the Company and
the Group after the large-scale purchase, etc.
(ix) Policies regarding the treatment, etc. of the Company’s employees, labor unions, business partners,
customers, local communities, and other stakeholders of the Company after the large-scale purchase,etc.
(x) Specific measures to avoid a conflict of interest with other shareholders of the Company.
Furthermore, the Board of Directors of the Company shall appropriately make clear the fact that there
was a proposal for a large-scale purchase, etc. from a purchaser, etc., and shall make timely, appropriate
disclosure of an overview thereof, an overview of the Required Information, and any other information
recognized as necessary for the judgment of shareholders and investors, if there is such information.
In addition, if the Board of Directors of the Company recognizes that the Required Information has been
sufficiently provided by the purchaser, etc., it shall notify the purchaser, etc. to that effect (hereinafter, the“Completion Notice of Information Provision”), and shall make prompt disclosure to that effect.
4) Establishment of the Board of Directors’ Evaluation Period, etc.
After the Completion Notice of Information Provision, the Board of Directors of the Company will
establish a period in accordance with (i) or (ii) below depending on the difficulty of evaluating thelarge-scale purchase, etc., as a period for the Board of Directors of the Company to evaluate, consider,negotiate, form an opinion, and formulate an alternative proposal (hereinafter, the “Board of Directors’
10

Refers to a joint holder as defined in Article 27-23, Paragraph 5 of the Financial Instruments and Exchange Act, and includes
persons recognized by the Board of Directors of the Company to be deemed as joint holders pursuant to Paragraph 6 of thesame.

- 14 -

Evaluation Period”).
(i) A period of up to 60 days in the event of a tender offer for all of the Company’s shares, etc. where
the consideration is cash only (Japanese yen)(ii) A period of up to 90 days for any other large-scale purchase, etc.
However, in either case (i) or (ii) above, the Board of Directors’ Evaluation Period may be extended if theBoard of Directors and the Independent Committee reasonably recognize that it is insufficient for theevaluation and consideration of the Board of Directors, and in that case, the purchaser, etc. shall be notifiedof the specific extension period and reasons why the extension period is necessary, and disclosure shall bemade to shareholders and investors. In addition, the extension period shall be up to a maximum of 30 days.
During the Board of Directors’ Evaluation Period, the Board of Directors of the Company shall perform
such actions as sufficiently evaluating and considering the Required Information provided by the purchaser,
etc. while appropriately obtaining advice from outside experts, etc. as necessary, and consider the content of
the large-scale purchase, etc. by the purchaser, etc. from the perspective of securing and enhancing thecorporate value of the Company and shareholders’ common interests. Through these considerations, etc., theBoard of Directors of the Company will carefully summarize the opinion of the Board of Directors in regard
to the large-scale purchase, etc. and notify the purchaser, etc. thereof, in addition to making timely,
appropriate disclosure to shareholders and investors. In addition, if necessary, the Board of Directors of theCompany may negotiate the terms and method of the large-scale purchase, etc. with the purchaser, etc., and,furthermore, present an alternative proposal to shareholders and investors as the Board of Directors of theCompany.
5) Recommendation of the Independent Committee regarding the Activation of Countermeasures
After the commencement of the Board of Directors’ Evaluation Period, the Independent Committee shallbegin performing such actions as considering the content of the large-scale purchase by the purchaser, etc.
and the opinion of the Board of Directors of the Company and any alternative proposal, etc., at the same timeas the evaluation, consideration, negotiation, opinion forming, and formulation of an alternative proposal by
the Board of Directors described in the above item 4), and during the Board of Directors’ Evaluation Period,
shall provide a recommendation to the Board of Directors of the Company regarding the appropriateness of
the activation of countermeasures or to confirm the will of shareholders, in accordance with the procedures
below. When doing so, in order to ensure that the judgment of the Independent Committee is made in amanner that contributes to the securing and enhancing of the corporate value of the Company andshareholders’ common interests, the Independent Committee may, at the Company’s expense, obtain theadvice of outside experts who are independent of the management team engaged in the business execution of
the Company (including investment banks, securities firms, financial advisers, certified public accountants,
attorneys, consultants, and other experts). Furthermore, in the event that the Independent Committee
provides a recommendation to the Board of Directors of the Company as defined in any of the items (i)through (iii) below, the Board of Directors of the Company shall promptly disclose information relating to
the fact that the recommendation was made, an overview thereof, and any other matters judged appropriateby the Board of Directors of the Company.
(i) Cases when the purchaser, etc. has not complied with the procedures set forth in this Plan, or when
it is clearly recognized that the large-scale purchase, etc. by the purchaser, etc. will significantly
harm the corporate value of the Company or shareholders’ common interests
In cases when the purchaser, etc. has not complied with the procedures stipulated in this Plan, or when it
is recognized that the large-scale purchase, etc. by the purchaser, etc. will significantly harm the corporate
value of the Company and shareholders’ common interests, and the Independent Committee judges that theactivation of countermeasures is appropriate, then the Independent Committee shall recommend that theBoard of Directors of the Company activates countermeasures. Specifically, if the large-scale purchase, etc.
falls under any of the types listed in Attachment 4-1, and as a result it is reasonably judged from an objective
standpoint that it will cause harm to the Company that will be difficult to recover from, and may effectively
force shareholders to sell the Company’s shares, etc., then it shall be deemed to be a case when it is clearlyrecognized that the large-scale purchase, etc. shall cause significant harm to the corporate value of theCompany and shareholders’ common interests.
Furthermore, the activation of countermeasures shall not be recommended in cases when the large-scalepurchase, etc. falls under any of the types listed in Attachment 4-1 for formal reasons only. The above
recommendation to activate countermeasures shall only be made in cases when it is clearly recognized thatthe large-scale purchase, etc. will significantly harm the corporate value of the Company and shareholders’common interests.

- 15 -

(ii) Cases when there is a risk that the large-scale purchase, etc. by the purchaser, etc. may harm thecorporate value of the Company and shareholders’ common interests
Even if the large-scale purchase, etc. does not fall under item (i) above, if it is recognized that there is arisk that the large-scale purchase, etc. by the purchaser, etc. may harm the corporate value of the Company
and shareholders’ common interests, and it is judged that the activation of countermeasures is appropriate,
then the Independent Committee shall, in principle, make a recommendation to the Board of Directors of theCompany to the effect that the will of shareholders should be confirmed regarding the content ofcountermeasures and approval for their activation.
Furthermore, if it is judged that the large-scale purchase, etc. falls under any of the types listed in
Attachment 4-2, then, in principle, it shall be recognized that the large-scale purchase, etc. may harm thecorporate value of the Company or the common interests of shareholders.
(iii) Cases when it is recognized that the large-scale purchase, etc. by the purchaser, etc. will not harmthe corporate of the Company or shareholders’ common interests
In cases other than those defined as either items (i) or (ii) above, the Independent Committee shallrecommend that the Board of Directors of the Company does not activate countermeasures.
6) Confirmation of Shareholders’ WillIf, in accordance with the above item 5) (ii), the Independent Committee recommends that the Board of
Directors of the Company should confirm the will of shareholders regarding the content of countermeasuresand approval for their activation, then the Board of Directors of the Company shall convene a General
Meeting of Shareholders to confirm the will of shareholders (hereinafter, a “Shareholder Will Confirmation
General Meeting”) within as short a time as practically possible, excluding cases when holding the meeting
would be very difficult for practical reasons, and submit a proposal regarding the activation ofcountermeasures. The Shareholder Will Confirmation General Meeting may be held together with theAnnual General Meeting of Shareholders or an Extraordinary General Meeting of Shareholders. If the Boardof Directors of the Company decides to hold a Shareholder Will Confirmation General Meeting, then the
Board of Directors’ Evaluation Period shall end at that point. If a proposal regarding the activation ofcountermeasures is approved at the Shareholder Will Confirmation General Meeting, then, in accordancewith the decision made at the Shareholder Will Confirmation General Meeting, the Board of Directors of theCompany shall make a resolution regarding the activation of countermeasures and take the necessary
procedures. Meanwhile, if a proposal regarding the activation of countermeasures is rejected at the
Shareholder Will Confirmation General Meeting, the Board of Directors of the Company shall make aresolution regarding the non-implementation of countermeasures.
In addition, if a Shareholder Will Confirmation General Meeting is conducted, the Board of Directors of
the Company shall promptly disclose information relating to the results of the vote and any other mattersjudged to be appropriate by the Board of Directors of the Company.
7) Resolution of the Board of Directors
While respecting the recommendation of the Independent Committee set forth in the above item 5) to the
maximum extent possible, and in accordance with the decision of the Shareholder Will Confirmation General
Meeting set forth in the above item 6), the Board of Directors of the Company shall promptly make aresolution regarding the activation or non-activation of countermeasures, from the perspective of securing
and enhancing the corporate value of the Company and shareholders’ common interests.
If it makes a resolution as set forth above, then regardless of whether the content of that resolution is toactivate or not activate countermeasures, the Board of Directors of the Company shall promptly disclose
information relating to an overview of the resolution and any other matters judged to be appropriate by the
Board of Directors of the Company.
8) Suspension of the Activation of Countermeasures
After the Board of Directors of the Company has resolved to activate countermeasures in accordance withthe procedures set forth in the above item 7), or even after it has activated them, it may resolve to suspend
the activation of countermeasures if: (i) the purchaser, etc. cancels the large-scale purchase, etc.; or (ii)changes arise to the facts, etc. that formed the basis of the decision on whether or not to activate
countermeasures, leading to circumstances where it is believed the activation of countermeasures would not
be appropriate from the perspective of securing and enhancing the corporate value of the Company andshareholders’ common interests.
If the Board of Directors of the Company makes the above resolution, it shall promptly disclose
information relating to an overview of that resolution and any other matters judged to be appropriate by the
Board of Directors of the Company.

- 16 -

9) Commencement of the Large-scale Purchase, etc.
The purchaser, etc. shall comply with the procedures stipulated in this Plan, and may not commence thelarge-scale purchase, etc. until a resolution is made by the Board of Directors regarding whether to activate
or not activate countermeasures.
(2) Details of Specific Countermeasures under this Plan
The specific countermeasure to be activated by the Board of Directors of the Company based on a
resolution as described in the above item (1) 7) shall be a gratis allotment of stock acquisition rights(hereinafter, the “Stock Acquisition Rights”).
An overview of the gratis allotment of the Stock Acquisition Rights is as described in Attachment 5,“Overview of the Gratis Allotment of Stock Acquisition Rights.”
After the Board of Directors of the Company has resolved to activate countermeasures, and even after
activation, it may decide to cancel the countermeasures or suspend activation, as described in the above item
(1) 8). For example, in cases when the Board of Directors of the Company resolves to conduct a gratis
allotment of the Stock Acquisition Rights as a countermeasure, if the purchaser, etc. cancels the large-scalepurchase, etc. and the Board of Directors of the Company makes a resolution as described in the above item
(1) 8), it may suspend the activation of countermeasures by measures including canceling the gratis
allotment of the Stock Acquisition Rights prior to the ex-rights date pertaining to the record date established
for the gratis allotment of the Stock Acquisition Rights, and, on or after the effective date of the gratis
allotment of the Stock Acquisition Rights, acquisition of the Stock Acquisition Rights by the Company
without consideration prior to the day before the commencement date of the Stock Acquisition Rights’
exercise period.
(3) Effective Period, Discontinuation, and Amendment of this Plan
If approved at this Annual General Meeting of Shareholders, the effective period of this Plan shall be
until the conclusion of the Annual General Meeting of Shareholders to be held in August 2023.
However, even before the end of the effective period, if a resolution is made to amend or discontinue thisPlan at a General Meeting of Shareholders of the Company, this Plan shall be amended or discontinued atthat time, in accordance with the resolution. In addition, if a resolution to discontinue this Plan is made by
the Board of Directors, which comprises Directors elected at the General Meeting of Shareholders of theCompany, then this Plan shall be discontinued at that time.
Furthermore, if the Board of Directors of the Company judges that formal amendments are necessary inaccordance with amendments to the Companies Act, the Financial Instruments and Exchange Act, other laws
and regulations or financial instruments exchange rules, or their interpretation or implementation, or changes
to the tax system or judicial precedents, etc., then it may make corrections or amendments to this Plan asneeded, after obtaining the approval of the Independent Committee. On the other hand, if making
amendments to the content of this Plan that will have a material effect on the Company’s shareholders, theBoard of Directors of the Company shall newly submit a proposal to the soonest General Meeting of
Shareholders and obtain shareholders’ approval.
If this Plan is discontinued or amendments are made to the content of this Plan that will have a material
effect on the Company’s shareholders, then the Company shall promptly disclose information relating to thefact of the discontinuation or the amendments, and (in the case of amendments) details of the amendments,
and any other matters judged to be appropriate by the Board of Directors of the Company.
5. Reasonableness of this Plan
(1) Fulfills the Requirements of the Guidelines Regarding Takeover Defense
This Plan fulfills the three principles set forth in the “Guidelines Regarding Takeover Defense for the
Purpose of Protection and Enhancement of Corporate Value and Shareholders’ Common Interests”
announced by the Ministry of Economy, Trade and Industry and the Ministry of Justice on May 27, 2005 (theprinciple of protecting and enhancing corporate value and the interests of shareholders as a whole, theprinciple of prior disclosure and shareholders’ will, and the principle of necessity and reasonableness), andalso takes into consideration the content of the “Takeover Defense Measures in Light of Recent
Environmental Changes” announced by the Corporate Value Study Group on June 30, 2008. In addition, thisPlan is consistent with the intent of the various rules, etc. relating to the introduction of takeover defense
measures set forth by the Tokyo Stock Exchange.
Furthermore, the Company intends to implement all the principles of Japan’s Corporate Governance
Code relating to takeover defense measures (Principle 1.5 and Supplementary Principle 1.5.1).

- 17 -

(2) Continued for the Purpose of Securing and Enhancing the Corporate Value of the Company andShareholders’ Common Interests
As described in the above item 3., this Plan has been continued with the objective of securing andenhancing the corporate value of the Company and shareholders’ common interests, by making it possible tosecure the necessary information and time for shareholders to judge whether or not to accept a large-scalepurchase, etc. in the event that such a large-scale purchase, etc. is conducted for the Company’s shares, etc.,
and for the Board of Directors of the Company to present an alternative proposal, in addition to making it
possible to conduct negotiations with the purchaser, etc. on shareholders’ behalf, etc.
(3) Prioritizes Shareholders’ Will
Under this Plan, the will of shareholders in regard to the appropriateness of activating countermeasuresagainst a large-scale purchase, etc. by a purchaser, etc. shall be directly confirmed, excluding cases when thepurchaser, etc. conducts a large-scale purchase, etc. without complying with the procedures set forth in thisPlan, the Independent Committee recommends the activation of countermeasures, and cases when the
Independent Committee recommends that countermeasures are not activated.
(4) Prioritization of the Judgment of Highly Independent External Persons, and Information Disclosure
When continuing this Plan, the Company has established an Independent Committee in order to eliminate
arbitrary judgments by the Board of Directors regarding such matters as the activation of countermeasuresagainst a large-scale purchase, etc., and ensure the objectivity and reasonableness of the judgment andresponse of the Board of Directors.
The Independent Committee comprises three or more members elected from among persons independentof the management team engaged in the business execution of the Company, namely Outside Directors of theCompany, Outside Corporate Auditors of the Company, and other outside experts (corporate managers with atrack record of performance, former government employees, attorneys, certified public accountants,
academic experts, or other equivalent persons).
In addition, a mechanism is ensured whereby this Plan will be implemented in a transparent manner that
contributes to the corporate value of the Company and shareholders’ common interests, as the Company
shall disclose information to shareholders and investors as necessary in relation to an overview of thejudgment of the Independent Committee.
(5) Establishment of Reasonable and Objective Activation Requirements
A mechanism is ensured to prevent arbitrary activation by the Board of Directors of the Company, as thisPlan is established such that activation will not occur unless reasonable and objective activation
requirements are fulfilled, as described in the above item 4. (1).
(6) Not Dead-hand or Slow-hand Takeover Defense Measures
As described in the above item 4. (3), this Plan may be discontinued at any time by the Board of
Directors, which comprises Directors elected at the General Meeting of Shareholders of the Company.
Accordingly, this Plan is not a dead-hand takeover defense measure (a takeover defense measure whose
activation cannot be prevented even if a majority of the members of the Board of Directors are replaced).
In addition, as the Company does not use a staggered term system, this Plan is not a slow-hand takeover
defense measure (a takeover defense measure that requires time to prevent its activation, as the members of
the Board of Directors cannot all be replaced at one time).
6. Effect on Shareholders and Investors(1) Effect on Shareholders and Investors at the Time of Continuation of this PlanAt the time of the continuation of this Plan, the Stock Acquisition Rights will not actually be issued.
Accordingly, at the time of the continuation of this Plan, there will be no direct, specific effect on the legal
rights and economic interests pertaining to the Company’s shares held by shareholders.
Furthermore, as described in the above item 4. (1), the Company’s policy for responding to a purchasewill differ according to whether or not the purchaser, etc. complies with this Plan, etc., so shareholders andinvestors are advised to keep the actions of the purchaser, etc. in mind.
(2) Effect on Shareholders and Investors at the Time of a Gratis Allotment of the Stock Acquisition
RightsIf the Board of Directors of the Company decides to activate countermeasures and conducts a gratis
allotment of the Stock Acquisition Rights, the Stock Acquisition Rights shall be allotted gratis toshareholders recorded in the shareholder register on the Allotment Date, which will be separately determined,- 18 -

at a ratio of up to three Stock Acquisition Rights per share held. With this type of system, although dilution
to the economic value per share held by shareholders will occur when a gratis allotment of the Stock
Acquisition Rights is conducted, there will be no dilution of the value of the Company’s shares held as awhole, and therefore no direct, specific effect is expected on the legal rights or economic interests pertaining
to the Company’s shares held by shareholders.
However, the legal rights and economic interests of the purchaser, etc. may be affected as a result of theactivation of these countermeasures.
Furthermore, even if the Board of Directors of the Company resolves to conduct a gratis allotment of theStock Acquisition Rights, if it resolves to cancel activated countermeasures or suspect activation inaccordance with the procedures, etc. set forth in the above item 4. (1) 8), there may be a corresponding
fluctuation in the share price of the Company’s shares. For example, please note that in the event that after
the shareholders to receive the gratis allotment of the Stock Acquisition Rights have been determined, theCompany suspends the activation of countermeasures, acquires the Stock Acquisition Rights without
consideration, and does not deliver new shares, then shareholders and investors who have conductedtransactions based on the assumption that a dilution in the economic value per share of the Company will
occur may suffer a loss owing to fluctuation in the share price, as the dilution in the economic value pershare in the Company held by shareholders will not occur.
In addition, if discriminatory terms are attached relating to the exercise or acquisition of the Stock
Acquisition Rights, it is expected that the legal rights and economic interests of the purchaser, etc. will beaffected, but even in this case, no direct, specific impact is expected on the legal rights or economic interests
pertaining to the Company’s shares held by shareholders other than the purchaser, etc.
(3) Required Procedures for Shareholders Accompanying the Gratis Allotment of the Stock Acquisition
RightsOn the effective date of the gratis allotment of the Stock Acquisition Rights, shareholders recorded in the
final shareholder register on the date of the gratis allotment of the Stock Acquisition Rights willautomatically become stock acquisition rights holders, and therefore no application procedures are necessary.
In addition, if the Company takes procedures to acquire stock acquisition rights with an attachedacquisition provision, then shareholders other than the purchaser, etc. will receive shares in the Company asconsideration for the acquisition of stock acquisition rights by the Company, without making monetary
payment of an amount equivalent to the exercise price of the stock acquisition rights, and therefore noprocedures are required for application or payment, etc. in relation to the stock acquisition rights.
Besides the above, after the Board of Directors of the Company makes a resolution regarding the gratis
allotment of the Stock Acquisition Rights, the Company will provide timely and appropriate disclosure or
notice of the details of procedures relating to the allotment method, exercise method, method of acquisitionby the Company, method of delivery of shares, etc., pursuant to the applicable laws and regulations andfinancial instruments exchange rules, and therefore shareholders are advised to confirm the content of thedisclosure or notices.

- 19 -

Attachment 1
Overview of the Independent Committee Regulations
1.

2.

3.

4.
5.
6.

7.

8.
9.

The Independent Committee shall be established by resolution of the Board of Directors of theCompany in order to eliminate arbitrary judgments by the Board of Directors in relation to theactivation of countermeasures against a large-scale purchase, etc., and ensure the objectivity andreasonableness of any judgment or response of the Board of Directors.
The Independent Committee shall comprise three or more members (hereinafter, the “Independent
Committee Members”), who shall be persons independent from the management team conducting thebusiness operations of the Company who are (1) Outside Directors of the Company, (2) Outside
Corporate Auditors of the Company, or (3) outside experts (corporate managers with a track record of
performance, former government employees, attorneys, certified public accountants, academic experts,
or other equivalent persons), and shall be elected based on a resolution of the Board of Directors of theCompany. Furthermore, the Company shall enter into an agreement with the members of the
Independent Committee that includes provisions relating to the duty of due care of a prudent manager
and the duty of confidentiality.
The term of office of Independent Committee Members shall be until the date of the conclusion of theAnnual General Meeting of Shareholders held with respect to the final fiscal year ending within three
years of the time of election, or until a date separately determined by the Independent Committee
Member and the Company. However, this shall not apply in cases separately provided for by resolutionof the Board of Directors of the Company.
The Independent Committee shall be convened by a Representative Director of the Company or byeach Independent Committee Member.
The Chairman of the Independent Committee shall be selected by mutual selection from the membersof the Independent Committee.
In principle, resolutions of the Independent Committee shall be made by a majority of votes at meetingsof the Independent Committee when all members are present. However, at times when any members of
the Independent Committee are unable to act, or when there are other special reasons, resolutions shallbe made, in principle, by a majority of votes at meetings of the Independent Committee when all
members are present, excluding these members.
The Independent Committee shall conduct deliberations and make resolutions relating to the matterslisted in each of the below items, and shall make recommendations to the Board of Directors of theCompany based on the content of those resolutions, together with the reasons thereof.
(1) The appropriateness of activating countermeasures under this Plan, or that the will of
shareholders should be confirmed;(2) The cancellation of countermeasures or suspension of activation under this Plan;(3) The discontinuation or amendment of this Plan;(4) Any other matters that the Board of Directors of the Company consults the Independent
Committee about in relation to this Plan.
When conducting deliberations and making resolutions in the Independent Committee, each
Independent Committee Member must do so solely from the perspective of whether or not it
contributes to the corporate value of the Company and shareholders’ common interests, and must not do
so in order to further their own personal interests, or those of the management team of the Company.
The Independent Committee may request that Directors of the Company, Corporate Auditors,
employees, or other persons deemed necessary attend meetings as necessary, and may request opinions
or explanations regarding matters specified by the Independent Committee.
When executing these duties, the Independent Committee may obtain, at the Company’s expense, theadvice of outside experts who are independent of the management team engaged in the businessexecution of the Company (including investment banks, securities firms, financial advisers, certified
public accountants, attorneys, consultants, and other experts).

- 20 -

Attachment 2
Past Experience of the Independent Committee Members
Masayuki Miyamoto
April 1993
April 1995
April 1999
Takashi Yamagishi
April 1970
March 1996
June 1999
April 2004
April 2005
June 2005
June 2006
June 2008
June 2009
June 2010
June 2012
August 2016

58 years oldEntered the Legal Training and Research Institute of Japan
Graduated from the Legal Training and Research Institute of Japan
Registered as Attorney at Law
Established Miyamoto Law Office (to present)
75 years old
Joined TEIJIN LIMITED
President, Teijin DuPont Films S.A.
Corporate Officer, The Teijin Group
Group General Manager, Films Business, TEIJIN LIMITED
Vice Chairman and COO, Global Joint Venture, Teijin DuPont Films
Chief Technology Officer, TEIJIN LIMITEDManaging Director
Senior Managing Director
Director and Vice President
Representative Director and Vice President
Counselor and Technical Expert
Counselor
Outside Director, the Company (to present)

Yuji Yui 71 years oldJune 1980
Visiting Researcher, Economic Research Institute, Economic Planning Agency
July 1985
Special Researcher, Institute of Fiscal and Monetary Policy, Ministry of Finance
April 1987
Visiting Researcher, University of Michigan
April 1989
Professor, Faculty of Economics, Seijo University
April 2010
President
April 2011
President, Seijo Gakuen (to present)* There are no special interests between the three persons above and the Company.
* The Company has registered Mr. Takashi Yamagishi as an independent director as prescribed by the Tokyo
Stock Exchange.

- 21 -

Attachment 3
Status of Shareholdings by Major Shareholders of the Company
The status of major shareholders of the Company as of May 31, 2020 is as follows.

Shareholder

Number of shares
held (thousands)

Ratio of number ofshares held to total
number of shares
outstanding (%)
5.00

The Master Trust Bank of Japan, Ltd. (Trust487
account)
East Japan Railway Company
480
Employees Stock Ownership Plan
416
NIPPON LIFE INSURANCE COMPANY
337
MUFG Bank, Ltd.
270
Sanshin Co., Ltd.
270
Toyo Denki Subcontractor Factories
257
Shareholding Association
Japan Trustee Services Bank, Ltd. (Trust
235
account)
BNP PARIBAS SECURITIES SERVICES216
LUXEMBOURG/JASDEC/JANUS
HENDERSON HORIZON FUND
Masayoshi Yamauchi
213(Note) In addition to the above, the Company holds 793 thousand treasury shares.

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4.93
4.27
3.46
2.77
2.77
2.64
2.42
2.22
2.18

Attachment 4
1. Types of Purchase, etc. Deemed to Significantly Harm
the Corporate Value of the Company and Shareholders’ Common Interests
1)

Cases when it is judged that despite having no intention of truly participating in corporate management,
the purchaser, etc. is acquiring, or attempting to acquire, the Company’s shares, etc. in order simply toincrease the share price and make the Company or its related parties buy back the Company’s shares,
etc. at a high price (a so-called green mailer);2)

Cases when it is judged that the Company’s shares, etc. are being acquired in order to take temporary
control of the corporate management of the Company and transfer to the purchaser, etc. or its groupcompanies, etc., assets of the Company or companies in the Group that are necessary for the
management of the businesses of the Company or companies in the Group, such as intellectual property
rights, expertise, confidential corporate information, main business partners or clients;

3)

Cases when it is judged that the Company’s shares, etc. are being acquired in order to take control of
the corporate management of the Company and subsequently use the assets of the Company orcompanies in the Group as collateral or repayment funds for the liabilities of the purchaser, etc. or its
group companies, etc.;

4)

Cases when it is judged that the Company’s shares, etc. are being acquired in order to take temporary
control of the corporate management of the Company, cause the Company to sell or otherwise disposeof highly valued assets, etc. that are not immediately related to the businesses of the Company orcompanies in the Group, such as real estate or marketable securities, and use the profits from thedisposal to cause the Company to pay a one-time high dividend, or alternatively to take advantage ofthe sudden increase in the share price caused by the one-time high dividend to sell the Company’s
shares, etc. at a high price;5)

Cases when it is judged that the method of purchase of the Company’s shares, etc. proposed by thepurchaser, etc. will restrict shareholders’ opportunity to make an assessment or freedom, and may
effectively force shareholders to sell the Company’s shares, etc., such as a so-called two-tier coercive
purchase (refers to the conducting of a purchase, etc. of shares, etc. by a tender offer or other methods,
whereby the purchaser, etc. does not solicit all of the Company’s shares, etc. for purchase in the initialpurchase, and sets unfavorable purchase terms for the second stage, or does not make the terms clear).
2. Types of Purchase, etc. Deemed to Have a Risk of Harming
the Corporate Value of the Company and Shareholders’ Common Interests

1)

Cases when it is judged that the purchase terms for the Company’s shares, etc. proposed by thepurchaser, etc. (including but not limited to the type or amount of consideration for the purchase, thecalculation basis for the amount, any other specific details of the terms (including the timing andmethod of the acquisition), and the legality and feasibility of the purchase, etc.) are considerably
insufficient or inappropriate in view of the corporate value of the Company;

2)

Cases when it is judged there is a risk that the purchase, etc. will hinder the securing and enhancementof the corporate value of the Company and shareholders’ common interests, such as when theacquisition of control by the purchaser, etc. will destroy relationships with the Company’s shareholders
and customers, business partners, employees, local communities, and other stakeholders that are thesources of corporate value, and damage to the corporate value of the Company and shareholders’common interests is expected;

3)

Cases when it is judged that the corporate value of the Company in the event that the purchaser, etc.
acquires control would be inferior to the corporate value of the Company in the event that the purchaser,
etc. does not acquire control, in a comparison of future corporate value over the medium- to long-term.

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Attachment 5
Overview of the Gratis Allotment of Stock Acquisition Rights
1. Total Number of the Stock Acquisition Rights to be Allotted
The total number of Stock Acquisition Rights to be allotted shall be a number separately determined in the
resolution of the Board of Directors relating to the gratis allotment of the Stock Acquisition Rights (hereinafter,
the “Stock Acquisition Rights Gratis Allotment Resolution”), of a maximum of three times the final total
number of shares of the Company outstanding (however, this shall exclude the number of the Company’s
shares held by the Company at that point) on a certain day separately determined by the Board of Directors of
the Company in the Stock Acquisition Rights Gratis Allotment Resolution (hereinafter, the “Allotment Date”).
2. Shareholders Eligible for Allotment
The Company shall make a gratis allotment of the Stock Acquisition Rights at a ratio separately determinedby the Board of Directors of the Company in the Stock Acquisition Rights Gratis Allotment Resolution of up
to three stock acquisition rights per share of common stock of the Company held (however, this shall exclude
shares in the Company held by the Company at that time) to shareholders recorded in the final shareholder
register on the Allotment Date.
3. Effective Date of the Gratis Allotment of the Stock Acquisition Rights
The effective date shall be a date separately determined by the Board of Directors of the Company in the
Stock Acquisition Rights Gratis Allotment Resolution.
4. Type and Number of Shares Underlying the Stock Acquisition Rights
The type of shares underlying the Stock Acquisition Rights shall be the common stock of the Company, andthe number of shares underlying each of the Stock Acquisition Rights shall be a number separately determinedby the Board of Directors of the Company in the Stock Acquisition Rights Gratis Allotment Resolution of up
to one share per stock acquisition right (hereinafter, the “applicable number of shares”). However, theCompany shall make the necessary adjustments if it conducts a share split or consolidation of shares, etc.
5. Details and Amount of Assets to be Contributed Upon Exercise of the Stock Acquisition Rights
Contributions upon the exercise of the Stock Acquisition Rights shall be in cash, and the amount of assets tobe contributed per share of common stock in the Company upon the exercise of the Stock Acquisition Rights
shall be an amount separately determined by the Board of Directors of the Company in the Stock Acquisition
Rights Gratis Allotment Resolution, of one yen or more.
6. Restrictions on the Transfer of the Stock Acquisition Rights
Any transfer of the Stock Acquisition Rights shall require the approval of the Board of Directors of theCompany.
7. Conditions for Exercising the Stock Acquisition Rights
The following persons shall not be able to exercise the Stock Acquisition Rights: (1) specified large-scale
holders11; (2) joint holders of specified large-scale holders; (3) specified large-scale purchasers12; (4) specially11

Refers to a holder of shares, etc. issued by the Company, with an ownership ratio of shares, etc. in relation to these shares, etc.
is 20% or more, or a person to whom this is deemed to apply by the Board of Directors of the Company. However, this shallnot apply to persons whom the Board of Directors of the Company recognizes will not harm the corporate value of theCompany and shareholders’ common interests by acquiring and holding the Company’s shares, etc., and any other persons
separately defined by the Board of Directors of the Company in the Stock Acquisition Rights Gratis Allotment Resolution.
12 Refers to a person who has made a public announcement to the effect that he or she will conduct a purchase, etc. (refers to apurchase, etc. as defined in Article 27-2, Paragraph 1 of the Financial Instruments and Exchange Act; hereinafter the same
applies in this note) of shares, etc. (refers to shares, etc. as defined in Article 27-2, Paragraph 1 of the Financial Instruments
and Exchange Act; hereinafter the same applies in this note) issued by the Company by tender offer, and whose total
ownership ratio of shares, etc. in relation to shares, etc. held (equivalent actions shall include those defined in Article 7,
Paragraph 1 of the Order for Enforcement of the Financial Instruments and Exchange Act) by that person after the purchase,
etc. together with the ownership ratio of shares, etc. of any specially related parties of that person shall be 20% or more, or aperson to whom this is deemed to apply by the Board of Directors of the Company. However, this shall not apply to persons
whom the Board of Directors of the Company recognizes will not harm the corporate value of the Company and shareholders’common interests by acquiring and holding the Company’s shares, etc., and any other persons separately defined by the Boardof Directors of the Company in the Stock Acquisition Rights Gratis Allotment Resolution.

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related parties of specified large-scale purchasers; and (5) any transferee or successor to the Stock Acquisition
Rights from a person falling under any of the categories (1) through (4) without the permission of the Board of
Directors of the Company; and (6) any related person13 to persons falling under any of the categories (1)through (5) (hereinafter, collectively referred to as “Non-qualified Parties”). Furthermore, details of theconditions for exercising the Stock Acquisition Rights shall be separately determined in the Stock Acquisition
Rights Gratis Allotment Resolution.
8. Acquisition of the Stock Acquisition Rights by the Company
The Company may acquire the Stock Acquisition Rights held by persons other than Non-qualified Parties
on a day separately determined by the Board of Directors of the Company, and in exchange deliver theapplicable number of shares of common stock of the Company for each of the Stock Acquisition Rights.
Furthermore, details of the acquisition terms of the Stock Acquisition Rights shall be separately determined in
the Stock Acquisition Rights Gratis Allotment Resolution.
9. Acquisition without Consideration in Case of Suspension of the Activation of Countermeasures, etc.
The Company may acquire all of the Stock Acquisition Rights without consideration if the Board of
Directors of the Company suspends the activation of countermeasures, or in other cases separately defined by
the Board of Directors of the Company in the Stock Acquisition Rights Gratis Allotment Resolution.
10. Exercise Period of the Stock Acquisition Rights, etc.
The exercise period of the Stock Acquisition Rights and other necessary matters shall be separately
determined by the Board of Directors of the Company in the Stock Acquisition Rights Gratis Allotment
Resolution.

13

A person’s “related persons” are those who effectively control that person, who are controlled by that person, or who areunder the same control as that person (included persons to whom this is deemed to apply by the Board of Directors of theCompany), or alternatively, persons whom the Board of Directors of the Company have recognized as acting in concert withthat person. Furthermore, “control” refers to “controls decisions on the financial and business policies” of another company,
etc. (referring to cases defined in Article 3, Paragraph 3 of the Ordinance for Enforcement of the Companies Act).

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(Reference)
Flowchart Regarding Procedures of this Plan

Emergence of Purchaser, etc.
Submission of Letter of Intent and the Required Information
No

Yes

Purchase does not comply
with procedures

Board of Directors’ Evaluation Period (Up to 60 or 90 days)

Evaluation, opinion forming, formulation of alternative
proposal, etc. by the Board of Directors

Does not comply
with the time limit

Consideration by Independent Committee
Will not harm corporate value orWill significantly harm corporate value
and shareholders’ common interests

shareholders’ common interests

May harm corporate value andshareholders’ common interests

Independent Committee

Independent Committee

Independent Committee

recommendation to activate

recommendation to confirm
shareholder will

recommendation not toactivate

Respect recommendation

Respect recommendation

to maximum extent
possible

to maximum extent

Hold Shareholder Will

possible

Confirmation General Meeting

Activation
approved

Activation not
approved

Activation of countermeasures

Non-activation of countermeasures(Resolution to activate by the Board of Directors)(Resolution not to activate by the Board of Directors)*This chart is presented to aid readers’ understanding of an overview of this Plan. Please refer to the text for specific details of
the plan.

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