[Translation]

This document has been translated from the Japanese original for the convenience of non-Japanese shareholders.
In the event of any discrepancy between this document and the Japanese original, the original shall prevail.

Securities code: 9069
June 9, 2017
To our shareholders:
Yasuhisa Fukuda
Representative Director, President
SENKO Group Holdings Co., Ltd.
8-10, Shiomi 2-chome, Koto-ku, TokyoNOTICE OF CONVOCATION OF
THE 100th ANNUAL MEETING OF SHAREHOLDERS
You are cordially invited to attend the 100th Annual Meeting of Shareholders of SENKO Group
Holdings Co., Ltd. (the “Company”) on June 28, 2017, which will be held as describedhereunder.
If you are unable to attend the Meeting in person, we ask you to review the attached
Reference Documents for the Annual Meeting of Shareholders and exercise your voting
rights by either of the following methods by 6:15 p.m., Tuesday, June 27, 2017 (Japan
Standard Time).
[Voting by postal mail]Please indicate your approval or disapproval of the proposals on the enclosed voting form, andreturn it by postal mail to reach us by the above deadline.
[Voting via the Internet]
Please access the website for exercising voting rights designated by the Company(http://www.evote.jp/), which is in Japanese only, and indicate your approval or disapproval of
the proposals by the above deadline.
Meeting Details
1. Date and Time:

Wednesday, June 28, 2017 at 10:00 a.m. (Japan Standard Time)

2. Venue:

1-30, Oyodonaka 1-chome, Kita-ku, Osaka
Umeda Sky Bldg., Tower West, F3 Stella Hall

3. Purposes:
Items to be reported:
1. Reports on the Business Report, Consolidated Financial Statements for the 100th
fiscal year from April 1, 2016 to March 31, 2017, and Reports of Audit on theConsolidated Financial Statements by Financial Auditor and the Board of
Corporate Auditors
2. Reports on the Non-Consolidated Financial Statements for the 100th fiscal year
(from April 1, 2016 to March 31, 2017)-1-

[Translation]

Items to be resolved:
Appropriation of Surplus
Proposal 1:
Election of Ten (10) Directors
Proposal 2:
Election of Three (3) Corporate Auditors
Proposal 3:
Determination of Amount and Content of Performance-linked Stock
Proposal 4:Compensation Plan for Directors
Giving the Board of Directors the Authority to Determine the
Proposal 5:
Guidelines for Subscription to Stock Acquisition Rights as Stock
Compensation-Type Stock Options to Be Issued to the Officers andthe Employees of the Company and Its Subsidiaries
4. Other matters concerning the Meeting:
Included in the documents to our shareholders that should be provided by the Company
when providing this Notice of Convocation are the notes to consolidated financial statements(Japanese only) and the notes to non-consolidated financial statements (Japanese only). As
provided for by laws and regulations and Article 16 of the Company’s Articles ofIncorporation, these documents are posted on the Company’s website(http://www.senkogrouphd.co.jp/ir/stock_info/general_meeting/) and are not included asaccompanying material to this document.
As a result, the accompanying material to this document includes one part of the materials
that are the target of the audit by the Financial Auditor and the Corporate Auditors.

<About electronic voting platforms>
Trust banks and other nominee shareholders (including standing proxies) who have applied in advance to
use the electronic voting platform operated by ICJ, Inc. (a joint-venture company established by Tokyo
Stock Exchange, Inc. and others) may use this platform to electronically exercise voting rights for theCompany’s Annual Meeting of Shareholders.

-2-[Translation]

Reference Documents for the Annual Meeting of Shareholders
Proposal 1:

Appropriation of Surplus

The Company aims to enhance the return of profit to its shareholders and maintains a basic
policy regarding the distribution of profit to pay dividends, taking into account, in addition tostable dividends, performance-linked dividends. In addition, it is necessary to secure sufficientinternal reserves for future business development and putting the Company on a firmer footing.
In accordance with those views, the Company proposes to appropriate surplus for this fiscal
year as follows:1.

Matters concerning year-end dividend
In view of the Company’s performance in this fiscal year, the Company proposes to pay 11
yen per share as the year-end dividend. Combined with interim dividend of 11 yen per
share, this brings the annual dividend to 22 yen per share.

2.

(1)

Type of dividend assets
Cash

(2)

Allocation and total amount of the dividend assets
11 yen per share of the Company’s common stock
Total amount of dividends: 1,677,007,024 yen(3)Effective date of dividend payment
June 29, 2017

Other matters relating to the appropriation of surplus(1)(2)

Item and amount of reduction in surplus:
Retained earnings carried forward

900,000,000 yen

Item and amount of increase in surplus:
General reserve

900,000,000 yen-3-[Translation]

Proposal 2:
Election of Ten (10) Directors
The terms of office of all the eleven (11) Directors will expire at the conclusion of this Annual
Meeting of Shareholders. Accordingly, the Company proposes the election of ten (10) Directors,
lowering the number of Directors by one to enhance the efficiency of the management system.
The candidates for the Directors are as follows:
No.

Name
(Date of birth)

Career summary, positions and areas of responsibility in the Company,
and important concurrent positions
April 1969

Yasuhisa Fukuda(August 23, 1946)

Joined SENKO Co., Ltd.

June 1993

Director, SENKO Co., Ltd.

June 1997

Managing Director, SENKO Co., Ltd.

June 2003

Director, Vice President, SENKO Co., Ltd.

June 2004

Representative Director, President, SENKO Co., Ltd.
(present)

April 2009

Head of Production Management Division SENKO Co.,Ltd.

April 2017

Responsible for Logistics Business (present),
Head of Business Support Promotion Division (present),
SENKO Group Holdings Co., Ltd.

1

Number of theCompany’s
shares held

192,100(Important concurrent positions held in other organizations)Representative Director, President, SENKO Co., Ltd.
Representative Director, Chairman, Zenkoku Tsuun Co., Ltd.
[Reasons for nomination as the candidate for Director]
Mr. Fukuda has served as the Company’s Representative Director for many years, directing the management of theentire Group and contributing to the expansion of business fields. We can expect him to use his accumulated
experience and performance as a manager and his wealth of insight into the industry in general, and provide strong
leadership to establish the direction for the newly launched holding company structure and contribute to increasing
corporate value going forward. We have therefore nominated him as a candidate to continue serving as a Director.

Yoshihiro Kawase(January 3, 1953)
2

April 1975

Joined SENKO Co., Ltd.

April 1998

General Manager, Human Resources Department,
SENKO Co., Ltd.

April 2001

Director, General Manager of System Solution
Department, SENKO INFORMATION SYSTEM CO.,LTD.

July 2004

General Manager of Human Resources Department,
SENKO Co., Ltd.

April 2007

Executive Officer, SENKO Co., Ltd.

April 2009

Responsible for Human Resources, SENKO Co., Ltd.

June 2009

Director, SENKO Co., Ltd. (present)

April 2013

Managing Executive Officer (present), General Manager
of Human Resources Department, SENKO Co., Ltd.

April 2017

Responsible for IT and Human Resources Training,
SENKO Group Holdings Co., Ltd. (present)

57,800(Important concurrent positions held in other organizations)Representative Director, President, SENKO INFORMATION SYSTEM
CO., LTD.
[Reasons for nomination as the candidate for Director]
Mr. Kawase has been working mainly in the human resources division since he joined the Company. He has a wealthof experience and specialist knowledge in IT and human resource training. As such, we determine that he isappropriate for enhancing the Company’s corporate value and have therefore nominated him as a candidate tocontinue serving as a Director.

-4-[Translation]

No.

Name
(Date of birth)

Noburoh Sasaki(March 12, 1957)
3

Career summary, positions and areas of responsibility in the Company,
and important concurrent positions
April 1979

Joined SENKO Co., Ltd.

April 2005

General Manager of Public Relations Department,
SENKO Co., Ltd.

April 2007

General Manager of President Office, SENKO Co., Ltd.

April 2009

Executive Officer, Responsible for Public Relations,
SENKO Co., Ltd.

April 2015

Managing Executive Officer, SENKO Co., Ltd. (present)

June 2015

Director, SENKO Co., Ltd. (present)

April 2017

Responsible for Public Relations and IR, SENKO Group
Holdings Co., Ltd. (present)

Number of theCompany’s
shares held

24,200(Important concurrent positions held in other organizations)Representative Director, President, Senko Facilities Co., Ltd.
[Reasons for nomination as the candidate for Director]
Mr. Sasaki has been working mainly in the public relations division since he joined the Company. He has a wealth ofexperience and specialist knowledge in external public relations and IR. As such, we determine that he is appropriate
for enhancing the Company’s corporate value and have therefore nominated him as a candidate to continue serving asa Director.

Kenichi Shiraki(November 8, 1952)*
4

April 1975

Joined SENKO Co., Ltd.

April 1998

General Manager responsible for Sales Development,
Osaka Sales Supervision Department, SENKO Co., Ltd.

April 2004

General Manager of Production Management
Department, SENKO Co., Ltd.

April 2006

General Manager of Chemical Distribution Sales No. 1
Department, Sales No. 1 Division, SENKO Co., Ltd.

April 2007

Manager of Nagoya Main Branch, General Manager of
Chubu Sales Department, Logistics Sales Division,
SENKO Co., Ltd.

April 2009

Executive Officer, SENKO Co., Ltd.

April 2011

Head of Housing Distribution Sales Division, SENKO
Co., Ltd.

April 2014

Managing Executive Officer, SENKO Co., Ltd. (present)

April 2016

Head of Health and Welfare Business Promotion
Division, SENKO Co., Ltd. (present)

28,200[Reasons for nomination as the candidate for Director]
Mr. Shiraki has been working mainly in sales of the core logistics business since he joined the Company. He has awealth of experience and specialist knowledge in sales activities. As such, we determine that he is appropriate forenhancing the Company’s corporate value by using his experience and so forth to open up new business fields. We
have therefore nominated him as a candidate for a new Director.

-5-[Translation]

No.

Name
(Date of birth)

Masanobu Uenaka(November 23, 1959)*
5

Career summary, positions and areas of responsibility in the Company,
and important concurrent positions
April 1982

Joined SENKO Co., Ltd.

April 2006

General Manager of Administration Accounting
Department, SENKO Co., Ltd.

April 2014

Deputy Head of International Multimodal Transport
Business Department, International Distribution Business
Division, SENKO Co., Ltd.

April 2015

Executive Officer, SENKO Co., Ltd.

April 2017Managing Executive Officer (present), Responsible forManagement Strategy (present), General Manager ofManagement Strategy Office (present), SENKO Group
Holdings Co., Ltd.

Number of theCompany’s
shares held

15,700[Reasons for nomination as the candidate for Director]
Mr. Uenaka has been working mainly in the accounting division since he joined the Company. He has a wealth ofexperience and specialist knowledge in the management and administration and financial fields. As such, we
determine that he is appropriate for enhancing the Company’s corporate value by using his experience and so forth tohelp maintain and enhance corporate governance. We have therefore nominated him as a candidate for a new
Director.
April 1973

Joined SENKO Co., Ltd.

June 2003

Director, SENKO Co., Ltd. (present)

April 2004

Responsible for Administration, SENKO Co., Ltd.

June 2004

Executive Officer, SENKO Co., Ltd.

April 2005

Managing Executive Officer, Head of Business
Development Division, Responsible for Public Relations,
SENKO Co., Ltd.

Takeyo Tezuka(November 21, 1950) April 2008
April 2011
6

April 2013

Senior Managing Executive Officer, SENKO Co., Ltd.

119,700

Responsible for Trading Business, SENKO Co., Ltd.
(present)
Executive Vice President, SENKO Co., Ltd.

(Important concurrent positions held in other organizations)
Director, Chairman, SENKO SHOJI CO., LTD.
Representative Director, President, Marufuji Co., Ltd.
Representative Director, President, Obata Co., Ltd.
[Reasons for nomination as the candidate for Director]
Mr. Tezuka worked in the corporate planning and new business development division after joining the Company,
before working for many years in the trading business field. He has a wealth of experience and specialist knowledge
in the trading business field. As such, we determine that he is appropriate for enhancing the Company’s corporate
value and have therefore nominated him as a candidate to continue serving as a Director.

-6-

[Translation]

No.

Name
(Date of birth)

Career summary, positions and areas of responsibility in the Company,
and important concurrent positions
April 1974

Kengo Tanaka(October 25, 1950)
7

Number of theCompany’s
shares held

Joined Sekisui Chemical Co., Ltd.

June 2003

Director, Sekisui Chemical Co., Ltd.

June 2005

Director (present), Managing Executive Officer,
Responsible for Sales, SENKO Co., Ltd.

October 2005

Head of Sales No. 2 Division, SENKO Co., Ltd.

April 2007

Head of Housing Distribution Sales Division, SENKO
Co., Ltd.

April 2009

Responsible for Kita Kanto area, Manager of Saitama
Main Branch, SENKO Co., Ltd.

April 2011

Deputy Head of Production Management Division,
SENKO Co., Ltd.

April 2012

Responsible for Business Administration, SENKO Co.,Ltd.

April 2013

Senior Managing Executive Officer, Responsible for
AEO, Head of International Distribution Business
Division, SENKO Co., Ltd.

April 2017

Responsible for International Business, SENKO Group
Holdings Co., Ltd. (present)

49,900[Reasons for nomination as the candidate for Director]
Mr. Tanaka worked in the Housing Distribution Sales Division after he joined the Company, before working in theinternational distribution business field. He has a wealth of experience and specialist knowledge in the international
distribution business field. As such, we determine that he is appropriate for enhancing the Company’s corporate valueand have therefore nominated him as a candidate to continue serving as a Director.
April 1972

Joined SENKO Co., Ltd.

April 1994

Manager of Tokyo Minami Branch, SENKO Co., Ltd.

November 1998 Manager of Kashiwa Branch, SENKO Co., Ltd.

Kazuhiro Yamanaka(November 1, 1949)*
8

April 2005

Executive Officer, Responsible for Hokkaido and Tohoku
area, SENKO Co., Ltd.

April 2009Managing Executive Officer, Deputy Head of Production
Management Division, SENKO Co., Ltd.

April 2011

Manager of Kanto Main Branch, SENKO Co., Ltd.

June 2011

Director, SENKO Co., Ltd.

April 2014

Senior Managing Executive Officer, Responsible for
Chugoku, Shikoku and Kyushu area, Responsible forconstruction of Distribution Network for West Japan,
SENKO Co., Ltd.

April 2016

Representative Director, President, Runtec Corporation(present)
Representative Director, President, Kouki Co., Ltd.
(present)

48,207[Reasons for nomination as the candidate for Director]
Mr. Yamanaka has worked for many years in the logistics business division since joining the Company, and has awealth of experience and specialist knowledge in the logistics business field. He has been demonstrating his abilities
in the field of refrigerated and frozen distribution as the Representative Director of Runtec Corporation since April
2016. We determine that he is appropriate for enhancing the corporate value of the Company by utilizing his
experience and so forth. We have therefore nominated him as a candidate for a new Director.

-7-

[Translation]

No.

Name
(Date of birth)

Hiroko Ameno(August 10, 1971)
9

Career summary, positions and areas of responsibility in the Company,
and important concurrent positions
April 2005

Associate Professor, Department of Commerce at Seinan
Gakuin University

April 2007

Associate Professor, Faculty of Commerce at Kansai
University

June 2011

Director, SENKO Co., Ltd. (present)

April 2012

Professor, Faculty of Commerce at Kansai University(present)

Number of theCompany’s
shares held

0

[Reasons for nomination as the candidate for Director]
Ms. Ameno has specialist knowledge and experience as a university professor. We have nominated her as a candidate
to continue serving as an Outside Director because she is expected to provide her opinion from a neutral position on
the Company’s management.

April 1978

Joined Mitsubishi Corporation

April 2009

Senior Vice President, Mitsubishi Corporation

Yasuyuki Sugiura(September 25, 1953) April 2013*10

Notes:

April 2016

Executive Vice President, Mitsubishi Corporation
Director, President, Mitsubishi Corporation (Americas)

0Advisor, Mitsubishi Corporation (present)[Reasons for nomination as the candidate for Director]
Mr. Sugiura has a wealth of experience and achievements in the trading and international fields, as well as wideranging knowledge and insight. We have nominated him as a new candidate for an Outside Director because he isexpected to provide his opinion from a neutral position on the Company’s management.

1. New candidates are marked with an asterisk (*).
2. There are no special interests between the candidates and the Company.
3. Ms. Hiroko Ameno and Mr. Yasuyuki Sugiura are candidates for Outside Directors.
4. Ms. Hiroko Ameno is a current Outside Director of the Company, and her term of office as an Outside
Director will be six (6) years at the conclusion of this Annual Meeting of Shareholders.
5. The Company has entered into a limited liability agreement with Ms. Hiroko Ameno. The purpose of thisagreement is to limit liability as provided for in Article 423, paragraph 1 of the Companies Act. The
maximum liability amount shall be the amount stipulated in applicable laws and regulations. If thereelection of her is approved, the Company will continue the said agreements. If the election of Mr.
Yasuyuki Sugiura is approved, the Company plans to enter into the limited liability agreement with him.
6. The Company has submitted an Independent Officer Notification Form to register Ms. Hiroko Ameno as
Independent Officer at Tokyo Stock Exchange, Inc. If the proposal of reelection is approved, the Company
will notify her as Independent Officer, continuously. Furthermore, if the election of Mr. Yasuyuki Sugiura
is approved, the Company will submit an Independent Officer Notification Form to register him as
Independent Officer at Tokyo Stock Exchange, Inc.

-8-

[Translation]

Proposal 3:
Election of Three (3) Corporate Auditors
Corporate Auditor Mr. Takashi Sawada, Mr. Takanobu Ishioka and Mr. Keiichiro Yoshimoto
will expire at the conclusion of this Annual Meeting of Shareholders. Accordingly, theCompany proposes the election of three (3) Corporate Auditors.
With respect to this proposal, the Company has obtained the consent of the Board of Corporate
Auditors.
The candidates for the Corporate Auditor are as follows:
No.

1

2

3

Name
(Date of birth)

Career summary, positions in the Company,
and important concurrent positions
April 1980

Joined SENKO Co., Ltd.

April 2008

General Manager of General Affairs Department,
SENKO Co., Ltd.

Masami Washida(November 27, 1956) April 2012

Keiichiro Yoshimoto(February 27, 1953)

Kanji Yasumitsu(June 30, 1957)
Notes:

General Manager of Safety and Environmental Control,
SENKO Co., Ltd.

April 2017

Responsible for Special Appointee, SENKO Group
Holdings Co., Ltd. (present)

April 1975

Joined Chisso Corporation

June 2005

General Manager of General Affairs Department,
Minamata Headquarters, Chisso Corporation

April 2013

Assistant to General Manager of Minamata Headquarters,
Chisso Corporation

June 2013

Full-time Corporate Auditor, SENKO Co., Ltd. (present)

April 1980

Joined Sekisui House, Ltd.

August 2010

General Manager of Hyogo Factory, Sekisui House, Ltd.

Number of theCompany’s
shares held

11,0008,900

1. Mr. Masami Washida and Mr. Kanji Yasumitsu are new candidates for Corporate Auditor.
2. There are no special interests between the candidates and the Company.
3. Mr. Keiichiro Yoshimoto and Mr. Kanji Yasumitsu are candidates for outside Corporate Auditor.
4. The Company requests the election of Mr. Keiichiro Yoshimoto and Mr. Kanji Yasumitsu as
Outside Corporate Auditor since the Company judges that he would contribute to provide asuitable opinion regarding to corporate auditing with their abundant experience andachievements in corporate management and other areas, as well as their vast knowledge andinsights as Outside Corporate Auditor.
5. The Company has submitted an Independent Officer Notification Form to register Mr. Keiichiro
Yoshimoto as Independent Officer at Tokyo Stock Exchange, Inc. If the proposal of his
reelection is approved, the Company will notify him as Independent Officer, continuously.

-9-0[Translation]

Proposal 4:

Determination of Amount and Content of Performance-linked Stock
Compensation Plan for Directors

Whereas compensation for Directors of the Company consists of base compensation, bonus andstock options, the Company proposes adoption of a new performance-linked stockcompensation plan (the “Plan”), intended for the Company’s Directors (excluding Outside
Directors and Directors that are non-residents of Japan (“Non-resident Directors”); the same
applies hereinafter). Under the Plan, the Company’s stock and an amount of money equivalent
to the converted value of such stock (the “Company’s Stock, etc.”) shall be granted and paid(“grant, etc.”) to the eligible Directors based on factors such as their positions and achievementof performance targets.
Through the Plan, the Company shall integrate both management of the executive compensationof the Company’s Directors and management of the executive compensation of Directors of theCompany’s major group subsidiaries (“Eligible Subsidiaries,” or “Eligible Companies” inreferring to the Company and the Eligible Subsidiaries; Directors of the Company’s major groupsubsidiaries excludes Outside Directors and Non-resident Directors; “Eligible Directors” inreferring to such directors together with Directors of the Company).
The Plan shall be adopted with the aim of heightening awareness among Directors with respect
to their contributing to improving the Senko Group’s business performance and increasing its
corporate value over the medium to long term. Accordingly, the Company believes it reasonable
to adopt the Plan.
In this proposal, the Company proposes that Directors be paid stock compensation, separatelyfrom the maximum amount (¥400 million per year) of monetary compensation, etc. for
Directors as previously approved at the 90th Annual Meeting of Shareholders held on June 28,
2007, by the former SENKO Co., Ltd. prior to its change of business name.
If Proposal 2, “Election of Ten (10) Directors” is approved as proposed, the number of Directors
eligible for the Plan will be eight (8).
Amount and content of compensation in the Plan
(1) Outline of the Plan
The Plan is a performance-linked stock compensation plan under which the Company’s Stockshall be acquired through a trust using moneys contributed by each Eligible Company, and theCompany’s Stock, etc. shall be granted, etc. to the Eligible Directors based on factors such as
their positions and achievement of performance targets. (Details as provided in (2) below andthereafter.)i. Individuals eligible for being granted, • Directors of the Company (excluding Outside
etc. shares of the Company’s Stock, etc.
Directors and Non-resident Directors)
subject to this proposal• Directors of Eligible Subsidiaries (excluding Outside
Directors and Non-resident Directors)
ii. Maximum monetary amount to be contributed by the Company and maximum number of shares of
the Company’s stock to be acquired by the eligible Directors, and effect thereof on the total number ofissued shares of the Company’s stock subject to this proposal
Maximum amount of money contributed • A total of ¥180 million in the applicable period ofby the Eligible Companies
three (3) fiscal years (of which, the Company’s portion(details as provided in (2) below)
amounts to ¥70 million)- 10 -

[Translation]

Methods for acquiring the Company’s • No dilution occurs as the purchase shall be made on
stock and the maximum number of shares
the stock market for the initial applicable period.
of the Company’s Stock, etc. to be • The maximum number of award points that have beenacquired by the Eligible Directors (details
assigned to the Eligible Directors in each fiscal year
as provided in (3) below)
shall amount to a total of 138,000 points (of which, theCompany’s portion amounts to 54,000 points), which
accounts for approximately 0.1% of the total number
of issued shares of the Company’s stock corresponding
to such points (as of March 31, 2017; after deducting
treasury shares).
iii. Content of criteria for achievement of • Varies from 0% to 100% based on degree of
performance targets (details as provided inachievement of performance targets with respect to the(3) below)
Company’s consolidated ordinary profit and ROE
iv. Timing of granting, etc. the Company’s • Every three (3) fiscal years
Stock, etc. to the Eligible Directors(details as provided in (4) below)(2) Maximum amount of moneys contributed by each Eligible Company
The Plan applies to three (3) consecutive fiscal years (the “Applicable Period”). The initial
Applicable Period shall encompass the three (3) fiscal years running from the fiscal year ending
March 31, 2018, to the fiscal year ending March 31, 2020, and shall apply to the respective
three (3) fiscal years thereafter upon extension of the trust period described in paragraph 3 ofsection (2).
The Company shall contribute a maximum total amount of ¥180 million (of which, theCompany’s portion amounts to ¥70 million) during the Applicable Period, consisting of moneys
contributed as compensation to Directors of the Company together with moneys contributed ascompensation by the Eligible Subsidiaries to Directors of the Eligible Subsidiaries, and theCompany shall establish a trust (the “Trust”) such that has a trust period of three (3) years, with
Eligible Directors who fulfill the beneficiary requirements acting as beneficiaries thereto (thetrust period may be extended as follows; the same applies hereinafter). The purchase shall bemade on the stock market for the initial Applicable Period. The Trust shall purchase shares of
the Company’s stock on the stock market or from the Company (treasury shares) using thetrusted moneys in accordance with instructions of the trust administrator. The respective
Eligible Companies shall assign points to the Eligible Directors during the trust period (details
as provided in (3) below), and the Trust shall grant, etc. shares of the Company’s Stock, etc.
At the expiration of the trust period, the Trust may be continued by modifying the trust
agreement and entrusting additional money in lieu of establishing a new trust. In such cases, thetrust period of the Trust shall be extended to a period equal to the initial trust period, andaccordingly the Applicable Period shall become the respective three (3) fiscal years prevailingafter extension of the trust period. For each trust period extended, new contributions shall bemade to the Company consisting of moneys within the range approved by resolution of arespective annual meeting of shareholders. Furthermore, the Company shall entrust no morethan ¥180 million in money to the Trust, which consists of the money additionally contributedby the Company and the money contributed by the Eligible Subsidiaries, and the respective
Eligible Companies shall continue assigning points and granting, etc. the Company’s Stock, etc.
to the Eligible Directors during the ongoing and extended trust period. However, in cases wheresuch additional contributions are to be made, when there are any shares of the Company’s stock- 11 -

[Translation](excluding shares of the Company’s stock equivalent to points that have been assigned to the
Eligible Directors yet to be granted, etc.; “Residual Shares”) and money remaining in the trust
property (“Residual Shares, etc.” together with Residual Shares) as of the last day of the trust
period prior to the extension, the sum total of the Residual Shares, etc. and trust funds
additionally contributed shall amount to no more than ¥180 million, and the sum total number
of Residual Shares and shares additionally acquired by the Trust shall amount to no more than
414,000 shares.
(3) Method of calculating and maximum number of shares of the Company’s Stock, etc. granted,
etc. to the Eligible Directors
On August 1 of each year during a trust period, the Eligible Directors shall be assigned aprescribed number of points (the “Award Points”) based on factors such as their positions andachievement of performance targets. In addition, as a general rule one (1) share of theCompany’s Stock, etc. shall be granted, etc. for each one (1) point assigned, based on theaccumulated number of points that have been assigned as of the August 1, immediately
subsequent to the Applicable Period (the “Accumulated Points”). However, if a share split,
reverse share split or any other such event occurs during the trust period with respect to theCompany’s stock, then the Company shall adjust the number of shares of the Company’s stock
to be granted per one (1) point, based on the ratio of such share split or reverse share split, orotherwise, involving the Company’s stock.
* The performance-linked benchmarks shall be set within the range of 0% to 100% basedlargely on the degree to which the quantitative performance targets have been achieved, in
terms of the Company’s consolidated ordinary profit and ROE.
The maximum total number of points that can be assigned to the Eligible Directors per year
shall be 138,000 points (of which, a total of 54,000 total points per year may be assigned to
Directors of the Company). In addition, the number of shares of the Company’s stock granted
to the Eligible Directors for an Applicable Period (including the number of shares of theCompany’s stock paid for with money equivalent to the converted value) shall amount to a
maximum number of shares (414,000 shares) equivalent to the product of three (3) years of atrust period multiplied by the maximum total number of points per one (1) year assigned to the
Eligible Directors.
(4) Timing of granting, etc. the Company’s Stock, etc. to the Eligible Directors
The Eligible Directors who have fulfilled the beneficiary requirements shall be granted, etc.
shares of the Company’s Stock, etc. from the Trust, the number of which is to be calculated on
the basis of subsection (3), above, sometime around the September immediately subsequent to
the Applicable Period (initially September 2020).
At that time, such Eligible Directors shall be granted the Company’s stock of a number
equivalent to 50% of the Accumulated Points from a trust (fractional shares of less than one
share unit shall be rounded up), and such Eligible Directors shall receive payment of moneyfrom the Trust equivalent to the converted value upon being converted into cash within the
Trust, with respect to the remaining Company stock.
Also, in the event that an Eligible Director resigns during the trust period (excluding voluntary
resignation and dismissal on the basis of legitimate grounds for dismissal), such Eligible
Director shall be granted shares of the Company’s stock (fractional shares of less than a shareunit shall be rounded up) of a number equivalent to 50% of the Accumulated Points
accumulated up to the date of such Eligible Director’s resignation, and such Eligible Director
shall receive payment of money equivalent to the converted value upon being converted into
cash within the Trust, with respect to the remaining Company stock.
In the event that any such Eligible Director becomes a Non-resident Director during the- 12 -

[Translation]

Applicable Period, such Eligible Director shall receive payment of money equivalent to theconverted value, upon being converted into cash within the Trust, with respect to shares of theCompany’s stock of a number equivalent to the Accumulated Points calculated at the time of
his or her resignation.
In addition, in the event of death of an Eligible Director during the trust period, shares of theCompany’s stock of a number equivalent to the Accumulated Points calculated at the time ofdeath shall be converted into cash within the Trust, and the heir of such Eligible Director shallreceive payment of such amount of money equivalent to the converted value of such stock.
(5) Exercising voting rights related to the Company’s stock under the Trust
Voting rights related to the Company’s stock under the Trust may not be exercised during thetrust period to ensure neutrality of the Company’s management.
(6) Other details of the Plan
Other details of the Plan shall be determined by the Board of Directors each time the Trust isestablished, the trust agreement is modified, or additional contributions are made to the Trust.

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[Translation]

Proposal 5:

Giving the Board of Directors the Authority to Determine the
Guidelines for Subscription to Stock Acquisition Rights as Stock
Compensation-Type Stock Options to Be Issued to the Officers and the
Employees of the Company and Its Subsidiaries

In accordance with the provisions of Articles 236, 238 and 239 of the Companies Act, theCompany requests approval for giving the Board of Directors the authority to determine theguidelines for the subscription of stock acquisition rights to be issued to Directors andCorporate Auditors of the Company’s group subsidiaries and Executive Officers and Senior
General Managers of the Company and the Company’s group subsidiaries (“the Company’s
Officers and Employees”) as stock compensation-type stock options as outlined below.
1.

Reasons for issuing stock acquisition rights with particularly favorable conditions
Stock acquisition rights are issued without the requirement for cash payment, for the
purpose of enhancing the willingness and the morale of the Company’s Officers andEmployees to continuously improve the Company’s business performance and increase
corporate value on an intermediate basis by further strengthening the link between the
Company’s business performance and value of its shares, and making them share not only
the benefits of higher share prices but also the risks of lower share prices with shareholders.

2.

Amount of payments for the stock acquisition rights
No cash payment is required for the stock acquisition rights.

3.

Details of the stock acquisition rights(1)

Type and number of shares subject to the stock acquisition rights
The number of shares subject to the stock acquisition rights shall not exceed 77,000
shares of the Company’s common stocks.
If the Company conducts a share split or share consolidation, the number of sharessubject to the stock acquisition rights shall be adjusted using the following formula.
However, such adjustment shall be made for the number of the shares subject to thestock acquisition rights that have not been exercised at the time of such share split orshare consolidation, and that any fraction less than one (1) share which may arise as aresult of such adjustment shall be rounded down:
Number ofshares after
adjustment=

Number of sharesprior toadjustment

X

Ratio of share split orconsolidation

In addition, in the event that it is necessary for the Company to make an adjustment to
the number of shares, such as in cases where the Company carries out a merger,
company split, share exchange or share transfer (collectively “a merger (etc.)”), or a
gratis allotment of shares, the Company may adjust the number of shares to an extent
considered reasonable after taking into account the conditions of the merger (etc.) or
gratis allotment of shares.
(2)

Total number of the stock acquisition rights
The number of the stock acquisition rights shall not exceed 77 units. (The number ofshares to be issued upon exercise of one (1) stock acquisition right will be 1,000 shares,
provided however, that when the number of shares prescribed in the above (1) has been

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[Translation]

adjusted, the same adjustment shall be made.)(3)

Amount of assets to be contributed upon exercise of the stock acquisition rights
The amount to be contributed upon exercise of each stock acquisition right, which shallbe in cash, shall be the amount obtained by multiplying 1 yen, which is the exercise
price per one (1) share to be issued upon exercise of stock acquisition rights, by the
number of shares subject to stock acquisition rights.

(4)

Exercise period for stock acquisition rights
The exercise period shall be from July 4, 2017 to June 30, 2047. If the last day of theexercise period falls on a Company holiday, the last day shall be the preceding business
day.

(5)

Matters concerning the amount of increase in capital and capital reserve resulting fromissuance of shares upon exercise of stock acquisition rights
1) The amount of increase in capital resulting from the issuance of shares upon exerciseof the stock acquisition rights shall be one-half of the maximum amount of increase incapital, etc. as calculated pursuant to Article 17, paragraph 1 of the Ordinance on
Accounting of Companies. Any fraction of less than 1 yen shall be rounded up to thenearest yen.
2) The amount of increase in capital reserve resulting from the issuance of shares upon
exercise of stock acquisition rights shall be the maximum amount of increase incapital, etc. as provided in the above 1) less the amount of increase in capital asdetermined in the above 1).

(6) Conditions for exercising the stock acquisition rights
1) At the time the stock acquisition rights holder resign from any position with theCompany or a subsidiary of the Company such as Director, Corporate Auditor,
Executive Officer, Senior General Manager and Advisor and Executive Advisor, thestock acquisition rights can be exercised during a period beginning on the day
following the day of said resignation of position to the last day of the period
prescribed in the above (4) when the remaining stock acquisition rights can be
exercised.
2) In the event that the stock acquisition rights holder dies, the holder’s successor (onlythe spouse, child or any family within the first degree of consanguinity of the holder)
may exercise the stock acquisition rights only during a period from the day that
follows the stock acquisition rights holder’s death until the date when three months
lapse.
3) By the resolution of the Board of Directors, other conditions for exercising the stockacquisition rights shall be as stipulated in the stock acquisition right allotment
agreement between the Company and the stock acquisition rights holder.
(7)

Conditions for acquiring the stock acquisition rights
If a proposal about a merger contract in which the Company shall be an expiring party,
or a share exchange contract or share transfer in which the Company shall be a whollyowned subsidiary of another company, is approved at the Company’s Annual Meetingof Shareholders, the Company shall be entitled to acquire the stock acquisition rights
free of charge.

(8)

Restrictions on acquiring the stock acquisition rights through transfer
The acquisition of the stock acquisition rights through transfer shall require approval byresolution of the Company’s Board of Directors.

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[Translation](9)

Handling of the stock acquisition rights in the event that the Company conducts
organizational restructuring
In the event that a contract or plan document prepared at the time of organizational
restructuring stipulates that stock acquisition rights of the reorganized public company
as specified below are delivered, the stock acquisition rights of the reorganized publiccompany as specified below are issued in accordance with the ratio of the saidorganizational restructuring.
1) Merger (limited to cases in which the Company is to become extinct)
Public company which survives the merger or the public company incorporated as aresult of the merger
2) Absorption-type company split
Public company which succeeds all or part of the rights and obligations related to theabsorbed business of a company which conducts absorption-type company split
3) Incorporation-type company split
Newly established public company through the incorporation-type company split4) Share exchange
Public company which acquires all of the issued shares of a company with which the
public company exchanges shares5) Share transfer
Public company which is established through the share transfer(10) Rounding down of fractions through the exercise of the stock acquisition rights
Any fractions less than one (1) share included in the number of shares to be delivered tothe stock acquisition rights holder shall be rounded down.
(11) Other details of the stock acquisition rights
Other details of the stock acquisition rights shall be determined, along with other items
relating to the subscription, at the meeting of Board of Directors that shall be held in the
future where the details of issuance of the stock acquisition rights shall be resolved.

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