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 shall prevail.

Securities Code: 7976
March 8, 2021
To our shareholders:Eiichiro Suhara
Representative Director, Chairman
Mitsubishi Pencil Co., Ltd.
5-23-37, Higashi-ohi, Shinagawa-ku, Tokyo

Notice of the 146th Annual General Meeting of Shareholders
You are hereby notified that the 146th Annual General Meeting of Shareholders of Mitsubishi Pencil Co., Ltd. (the“Company”) will be held as indicated below.
From the viewpoint of preventing the spread of the novel coronavirus disease (COVID-19), we strongly recommendthat you, regardless of your health condition, refrain from attending the General Meeting of Shareholders in person
if possible and exercise your voting rights in advance in writing or via the Internet.
Please review the attached Reference Documents for the General Meeting of Shareholders and exercise your voting
rights by 5:10 p.m. on Monday, March 29, 2021 (JST).
1. Date and Time: Tuesday, March 30, 2021 at 10:00 a.m. (JST) (The venue opens at 9:30 a.m. (JST))
Event Hall, 7F, Shinagawa General Culture Community Center (Curian)
2. Venue:
5-18-1, Higashi-ohi, Shinagawa-ku, Tokyo, Japan
3. Purpose of the Meeting
Matters to be reported:
1. Business Report and Consolidated Financial Statements for the 146th fiscal year (from January 1, 2020 to
December 31, 2020), and the results of audits of the Consolidated Financial Statements by the Financial
Auditor and the Audit & Supervisory Board
2. Non-consolidated Financial Statements for the 146th fiscal year (from January 1, 2020 to December 31,
2020)
Matters to be resolved:
Proposal No. 1
Appropriation of Surplus
Proposal No. 2
Partial Amendments to the Articles of Incorporation
Proposal No. 3
Election of Eight (8) Directors
Proposal No. 4
Election of One (1) Audit & Supervisory Board Member
Proposal No. 5
Election of One (1) Substitute Audit & Supervisory Board Member-

Of the documents to be provided at the time of this notice, the Consolidated Statement of Changes in Equity and the Notes toConsolidated Financial Statements, and the Non-consolidated Statement of Changes in Equity and the Notes to the Non-consolidated
Financial Statements are posted on our website below in accordance with relevant laws and regulations and the Company’s Articles
of Incorporation, and are not stated in this notice. Note that the Consolidated Financial Statements and the Non-consolidated Financial
Statements audited by Audit & Supervisory Board Members and the Financial Auditor include the above Consolidated Statement of
Changes in Equity, the Notes to the Consolidated Financial Statements, the Non-consolidated Statement of Changes in Equity, andthe Notes to the Non-consolidated Financial Statements.
Company’s website: https://www.mpuni.co.jp/ir/index.html- If there are any amendments made to the Business Report, Consolidated Financial Statements, Non-consolidated Financial
Statements and Reference Documents for the General Meeting of Shareholders or if there are significant changes in the way theGeneral Meeting of Shareholders will be run, we will post them on our website as noted above.

-1-

Reference Documents for the General Meeting of Shareholders
Proposal No. 1

Appropriation of Surplus

The Company has given consideration to the business performance of the fiscal year and future business development,
and it proposes to pay year-end dividends for the 146th fiscal year as follows:
Year-end dividends(1) Type of dividend property
Cash(2) Allotment of dividend property and the total amount
15.5 JPY per common share of the Company
In this event, the total dividends will be 904,927,650 JPY.
(3) Effective date of dividends of surplus
March 31, 2021

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Proposal No. 2

Partial Amendments to the Articles of Incorporation

1. Reasons for the proposal
Article 40 (Organizational Body to Determine Dividends of Surplus, Etc.) of the proposed amendment shall be
newly established to enable dividends of surplus, etc. to be made by resolution of the Board of Directors without
requiring a resolution at the General Meeting of Shareholders in cases where it is deemed difficult to hold theGeneral Meeting of Shareholders in a timely manner due to unforeseen circumstances such as the spread of an
infectious disease or a disaster. In addition, Article 41 (Record Date for Dividends of Surplus) shall be changed,
and Article 6 (Acquisition of Own Shares) and Article 42 (Interim Dividends) of the current Articles ofIncorporation, which overlap with part of Article 40 of the proposed amendment, will be deleted. Articles shallalso be renumbered as required by the new establishment and deletions of articles.
Even after these amendments to the Articles of Incorporation take effect, there will be no change to the Company
being able to make resolutions regarding dividends of surplus, etc. at the General Meeting of Shareholders.
2. Details of the amendments
Details of the amendments to the Articles of Incorporation are as follows:(Underlined parts represent amendments)
Current Articles of Incorporation
Proposed Amendment
Chapter 2
Chapter 2
SharesShares(Acquisition of Own Shares)
Article 6(Deleted)
Pursuant to the provisions of Article 165, paragraph (2) of theCompanies Act, the Company may, by resolution of the Boardof Directors, acquire its own shares through market transactions
as well as other means.
Articles 7 to 39 (Omitted)
Articles 6 to 38(As written in Articles 7 to 39 of the current Articles ofIncorporation)
Chapter 6
Chapter 6
Accounts
Accounts
Article 40 (Omitted)
Article 39 (As written in Article 40 of the current Articles ofIncorporation)(Organizational Body to Determine Dividends of Surplus, Etc.)(Newly established)
Article 40
Unless otherwise provided for by laws and regulations, theCompany may, by resolution of the Board of Directors,
determine dividends of surplus and other matters set forth in
the items of Article 459, paragraph (1) of the Companies Act.
(Record Date for Dividends of Surplus)(Record Date for Dividends of Surplus)
Article 41
Article 41
1. The record date for year-end dividends of the Company
1. The record date for year-end dividends of the Company
shall be December 31 of each year.
shall be December 31 of each year.
(Newly established)
2. The record date for interim dividends of the Company shallbe June 30 of each year.
3. In addition to the provisions of the preceding two
2. In addition to the provisions of the preceding paragraph,
the Company may pay dividends of surplus by setting aparagraphs, the Company may pay dividends of surplus byrecord date.
setting a record date.
(Interim Dividend)
Article 42(Deleted)
The Company may, by resolution of the Board of Directors,
distribute interim dividends for which the record date is June
30 of each year.
Article 43 (Omitted)
Article 42 (As written in Article 43 of the current Articles ofIncorporation)-3-

Proposal No. 3

Election of Eight (8) Directors

The terms of office of all eight (8) Directors will expire at the conclusion of this meeting. Therefore, the Company
proposes the election of eight (8) Directors. The candidates for Directors are as follows:
Candidate
Name
No.
1
Eiichiro Suhara
2
Shigehiko Suhara
3

Hiroshi Yokoishi

4Nobuyuki Nagasawa

5

Kazuhisa Kirita

Current position and responsibility in the Company

Attribute

Representative Director, Chairman
Representative Director, President
Director, Managing Executive Officer in charge of International
Affairs, Global Marketing and Cosmetics
Director, Managing Executive Officer in charge of Human
Resources, General Affairs, Legal Affairs, and ComplianceDirector, Managing Executive Officer, Engineering, in charge of
Quality Assurance

Reelection
Reelection

6

Kenichiro Senoh

Outside Director

7

Tojiro Aoyama

Outside Director

8

Asako Yano

Outside Director

Reelection: Candidate for Director to be reelected
New election: Candidate for Director to be newly elected
Outside: Candidate for Outside Director
Independent Director: Independent Director as defined by the securities exchange-4-

Reelection
Reelection
Reelection
Reelection
OutsideIndependent
DirectorReelection
OutsideIndependent
DirectorReelection
OutsideIndependent
DirectorFemaleCandidate
No.

1

2

Number of the
Career summary, and position and responsibility in the
Company’s sharesCompany
owned(Important concurrent positions)Aug. 1974
Joined the Company
Mar. 1980
Director
Mar. 1982
Managing Director
Mar. 1985
Director, Vice President
Mar. 1987
Representative Director, President
June 2015
Outside Director of Eisai Co., Ltd.
Eiichiro SuharaMar. 2019
Representative Director, Chairman and(July 19, 1948)
687,807 shares
President
Reelection
Mar. 2020
Representative Director, Chairman (current
position)
June 2020
Outside Audit & Supervisory Board Member of
FUJI KYUKO CO., LTD (current position)[Important concurrent positions]
Outside Audit & Supervisory Board Member of FUJI KYUKO
CO., LTD[Reasons for nomination as a candidate for Director]
Ever since his appointment as Representative Director, President in 1987, Eiichiro Suhara has exhibited superiorleadership and has been leading the Company’s business for many years. He has played an important role in achieving
sustainable growth and increasing the corporate value of the Group. His abundant experience and wide breadth ofknowledge, as well as his perspective that takes a big-picture view of the Group, are essential for us in our aim tofurther strengthen the supervisory function hereafter. Therefore, the Company proposes his reelection as Director.
Apr. 2005
Joined the Company
Apr. 2010
General Factory Manager of Gunma Factory
Apr. 2012
General Manager of Sales Planning Department
Mar. 2013
Director in charge of Corporate Planning
Nov. 2015
Director in charge of Corporate Planning andGeneral Manager of International Operations
Planning Department
Mar. 2016
Director in charge of Product Development andNew Business Development
Shigehiko SuharaMar. 2017Managing Director in charge of Writing(February 11, 1979)
58,840 sharesBusiness, New Business Development, ProductReelection
Development and Quality Assurance
Mar. 2018
Director, Vice President
Mar. 2019
Representative Director, Vice President
Mar. 2020
Representative Director, President (current
position)[Important concurrent positions]Representative Director, President of Yamagata Mitsubishi
Pencil Precision Co., Ltd.
Chairman of Mitsubishi Pencil Vietnam Co., Ltd.
[Reasons for nomination as a candidate for Director]
Shigehiko Suhara has served as General Factory Manager of Gunma Factory and General Manager of Domestic andInternational Sales Planning, and has been in charge of Corporate Planning, Product Development, and New Business
Development. He has exhibited superior management execution capabilities and leadership since assuming office as
Representative Director, President in 2020. Based on this, he has played an important role in efforts aimed at further
enhancing the flexible management decisions and swift business execution, as well as at achieving business growth andincreasing the corporate value of the Company. Therefore, the Company proposes his reelection as Director.
Name(Date of birth)-5-

Candidate
No.

3

4

Number of the
Career summary, and position and responsibility in the
Company’s sharesCompany
owned(Important concurrent positions)Oct. 1985
Joined the Company
Apr. 1998
General Manager of International Business
Department
Mar. 2001
Director and General Manager of International
Business Department
Apr. 2005
Director and General Manager of International
Operations Department
Hiroshi Yokoishi
Mar. 2017Managing Director and General Manager of(April 17, 1959)
13,800 sharesInternational Operations Department
Reelection
Mar. 2018
Managing Director in charge of International
AffairsMar. 2019
Director, Managing Executive Officer in chargeof International Affairs
Mar. 2020
Director, Managing Executive Officer in chargeof International Affairs, Global Marketing andCosmetics (current position)[Reasons for nomination as a candidate for Director]
Hiroshi Yokoishi has been devoting efforts to cultivate new sales channels by leading international operations divisions
for a long time with his extensive management experience in those divisions. We consider that his wide-ranging insightwill be essential for us in further expanding our business in the global market. In addition, he has played an importantrole in management decision-making. Therefore, the Company proposes his reelection as Director.
Apr. 1980
Joined the Company
Apr. 2001
General Manager, assistant to International
Business Department
Apr. 2003
General Manager of Financial Resources andAccounting Department
Mar. 2006
Director and General Manager of Financial
Resources and Accounting Department
Jan. 2008
Director in charge of Financial Affairs, Legal
Affairs and Information System
Apr. 2010
Director in charge of Financial Affairs, Legal
Nobuyuki Nagasawa
Affairs, Information System and Internal
23,400 shares(April 3, 1957)
Control
Reelection
Mar. 2016
Director in charge of Corporate Planning andInformation System
Mar. 2017Managing Director in charge of Human
Resources, Corporate Planning and Information
SystemMar. 2018
Managing Director in charge of Human
Resources, General Affairs, Legal Affairs andComplianceMar. 2019
Director, Managing Executive Officer in chargeof Human Resources, General Affairs, Legal
Affairs and Compliance (current position)[Reasons for nomination as a candidate for Director]
Nobuyuki Nagasawa has extensive knowledge and experience in managerial divisions, including accounting, finance,
legal affairs, and information system, and his achievements include establishing a group-wide compliance system andrisk management system. He can grasp the Company’s situation from a diversified perspective by leveraging his
insights, and has played an important role in the strengthening of business execution supervising functions and inmanagement decision-making. Therefore, the Company proposes his reelection as Director.
Name(Date of birth)-6-

Candidate
No.

5

6

Number of the
Career summary, and position and responsibility in the
Company’s sharesCompany
owned(Important concurrent positions)Apr. 1981
Joined the Company
Apr. 2003
General Manager of Product Development
Department
Apr. 2007
General Manager of Gunma Research andDevelopment Center
Apr. 2011
General Manager of Product Development
Department
Mar. 2012
Director and General Manager of ProductDevelopment Department
Kazuhisa Kirita
Mar. 2016
Director in charge of Engineering, Patent(November 13, 1958)
7,100 shares
Administrations and Cosmetics
Reelection
Mar. 2018
Managing Director in charge of Engineering,Intellectual Property Rights, Cosmetics and
New Business Development
Mar. 2019
Director, Managing Executive Officer in chargeof Engineering, Intellectual Property Rights,
Cosmetics and Industrial Materials
Mar. 2020
Director, Managing Executive Officer,
Engineering, in charge of Quality Assurance(current position)[Reasons for nomination as a candidate for Director]
Leveraging his experience in research and development, Kazuhisa Kirita has been involved in Product Development,
Cosmetics, New Business Development, and other areas. Furthermore, he has made many achievements andaccumulated wide experience of commercialization based on the combination of technology and business. We judgedthat his insight grounded on such extensive experience will contribute to the search and development of new business
opportunities, and he plays an important role in management decision-making. Therefore, the Company proposes his
reelection as Director.
Apr. 1976
Joined Fuji Photo Film Co., Ltd. (currently
FUJIFILM Corporation)
Dec. 1999
Representative Director, Vice President of Keio
Academic Enterprise Co., Ltd.
Apr. 2001
Professor at the Graduate School of Media andGovernance, Keio University
Apr. 2004
President of the Industry-Academia
Collaboration Initiative Nonprofit Organization(current position)
Kenichiro Senoh
June 2012
Independent Outside Director of Teijin Limited(January 1, 1954)
Reelection
Member of the Advisory Board of Teijin
OutsideLimitedIndependent Director
Mar. 2017
Outside Director of the Company (current
position)
Feb. 2019
External Director of giftee, Inc. (current
position)[Important concurrent positions]
President of the Industry-Academia Collaboration Initiative
Nonprofit Organization
Director of the Intellectual Property Association of Japan
External Director of giftee, Inc.
[Reasons for nomination as a candidate for Outside Director]
Based on his diverse experience and knowledge of practical research that connects the both fields of technology andbusiness, Kenichiro Senoh has actively made comments that have contributed to enhancing governance system from an
objective, multi-pronged perspective at venues such as meetings of the Company’s Board of Directors, a voluntarycommittee, etc. Therefore, the Company proposes his reelection as Outside Director as it expects him to continue toprimarily fulfill these roles. His term of office as Outside Director of the Company will be four (4) years at theconclusion of this General Meeting of Shareholders.
Name(Date of birth)-7-

Candidate
No.

7

Number of the
Career summary, and position and responsibility in the
Company’s sharesCompany
owned(Important concurrent positions)Mar. 1979
Ph.D. in Engineering at Keio University
Apr. 1988
Assistant Professor, Department of MechanicalEngineering, Faculty of Science andTechnology, Keio University
Apr. 1995
Professor, Department of MechanicalEngineering, Faculty of Science andTechnology, Keio University
Apr. 1996
Professor, Department of System Design
Engineering, Faculty of Science andTechnology, Keio University
July 2009
Dean of Faculty of Science and Technology and
Dean of Graduate School of Science andTojiro Aoyama
Technology, Keio University(August 29, 1951)
June 2015
Outside Director of DMG MORI CO., LTD.
Reelection(current position)
OutsideIndependent Director
Mar. 2016
President of the Japan Society for Precision
Engineering
Mar. 2017
Outside Audit & Supervisory Board Member of
the Company
Apr. 2017
Professor Emeritus, Keio University
May 2017
Vice-President of Keio University (current
position)Mar. 2019
Outside Director of the Company (current
position)[Important concurrent positions]Vice-President of Keio University
Outside Director of DMG MORI CO., LTD.
[Reasons for nomination as a candidate for Outside Director]
In addition to having extensive knowledge and experience in mechanical engineering, production engineering, andother fields, Tojiro Aoyama has served as Vice-President of Keio University, and possesses a wide breadth ofknowledge. Based on this experience, he has been able to give beneficial opinions and advice at venues such as
meetings of the Company’s Board of Directors, a voluntary committee, etc. from a viewpoint that is not confined to theindustry to which the Company belongs, which will lead to improved soundness and transparency of decision making.
Therefore, the Company proposes his reelection as Outside Director as it expects him to continue to primarily fulfill
these roles. His term of office as Outside Director of the Company will be two (2) years at the conclusion of this
General Meeting of Shareholders. His total term of office, including his time as an Outside Audit & Supervisory Board
Member, will be four (4) years.
Name(Date of birth)-8-

CandidateNo.

8Notes:

1.
2.
3.
4.
5.

6.

Number of the
Career summary, and position and responsibility in the
Company’s sharesCompany
owned(Important concurrent positions)Apr. 1990
Joined Mercedes-Benz Japan Co., Ltd.
Sept. 1997
Joined Boston Consulting Group Japan Co.,
Ltd.
Mar. 2000
Joined Louis Vuitton Japan K.K.
June 2002
COO of Celux Co., Ltd.
Oct. 2008
Established Dramatic Co., Ltd.; Representative
Director of Dramatic Co., Ltd.
May 2014
Established ten to four inc.; Representative
Director of ten to four inc. (current position)
June 2015
Outside Director of YAOKO Co., Ltd. (current
position)Aug.
2015
Directorof Cogito Education and Management
Asako Yano
Inc.
(January 21, 1968)
FemaleJune 2018
Outside Director of Watabe Wedding
Reelection
Corporation
OutsideMar. 2019
Outside Director of the Company (current
Independent Director
position)
May 2020
Outside Director of SANYO SHOKAI LTD.
(current position)
Nov. 2020
Outside Director of CIRCULATION INC.
(current position)
Nov. 2020
Established BLOOM Co., Ltd.; Representative
Director of BLOOM Co., Ltd. (current
position)[Important concurrent positions]Representative Director of BLOOM Co., Ltd.
Outside Director of YAOKO Co., Ltd.
Outside Director of SANYO SHOKAI LTD.
[Reasons for nomination as a candidate for Outside Director]
In addition to extensive knowledge relating to business management and diversity management, Asako Yano possesses
a wide breadth of knowledge and achievement in marketing and branding. She has made diversified comments onenhancing corporate governance, promoting diversity, and other matters at venues such as meetings of the Company’s
Board of Directors, a voluntary committee, etc. from a standpoint which is independent of the Company’s management
team, and has played a key role in the further revitalization of the Company’s Board of Directors. Therefore, theCompany proposes her reelection as Outside Director as it expects her to continue to primarily fulfill these roles. Her
term of office as Outside Director of the Company will be two (2) years at the conclusion of this General Meeting of
Shareholders.
Shigehiko Suhara concurrently serves as Representative Director, President of Yamagata Mitsubishi Pencil Precision Co.,
Ltd. The Company purchases its specified products from this company and is also leasing real estate to this company.
Shigehiko Suhara concurrently serves as Chairman of Mitsubishi Pencil Vietnam Co., Ltd. The Company purchases its
specified products from this company.
There is no special interest between each candidate for Director other than those stated in 1. and 2. and the Company.
Kenichiro Senoh, Tojiro Aoyama, and Asako Yano are candidates for Outside Directors.
Pursuant to the provisions of Article 427, paragraph (1) of the Companies Act, the Company has entered into limited
liability agreements with Kenichiro Senoh, Tojiro Aoyama, and Asako Yano to limit their liability for damages under
Article 423, paragraph (1) of the Companies Act, on the condition that the requirements stipulated by laws and regulations
are met. If their reelection is approved, the Company will continue the above-mentioned limited liability agreements withthem. The maximum amount of liability for damages under this agreement is 5 million JPY or the minimum liability
amount provided for under laws and regulations, whichever is the higher amount.
The Company has concluded a Directors and Officers liability insurance policy with an insurance company, as provided
for in Article 430-3, paragraph (1) of the Companies Act. This insurance policy covers damages arising from liability
borne by the insured persons in the course of execution of their duties as a Director, etc. or claims pertaining to the pursuitof such liability. Each candidate for Director is included as an insured person under the said insurance policy as a Directorof the Company, and will continue to be included as an insured person if reelected as a Director of the Company pursuant
to this proposal. The Company intends to renew the said insurance policy during the terms of office of the Directors
pertaining to this proposal.
Name(Date of birth)-9-

7. The Company has designated Kenichiro Senoh, Tojiro Aoyama, and Asako Yano as Independent Directors under theprovisions of the Tokyo Stock Exchange and has notified the Exchange thereof, and plans to continue to designate themas Independent Directors.
8. Kenichiro Senoh, Tojiro Aoyama, and Asako Yano, who are candidates for Outside Directors, satisfy the “Independence
Criteria for Outside Directors and Outside Audit & Supervisory Board Members” stipulated by the Company on page 14.
9. Asako Yano’s registered name is Asako Saito.

- 10 -

Proposal No. 4

Election of One (1) Audit & Supervisory Board Member

The term of office of Audit & Supervisory Board Member Toru Kajikawa will expire at the conclusion of this meeting.
Therefore, the Company proposes the election of one (1) Audit & Supervisory Board Member. The consent of the
Audit & Supervisory Board has been obtained for this proposal. The candidate for Audit & Supervisory Board
Member is as follows.
Name(Date of birth)

Career summary and position in the Company(Important concurrent positions)Oct. 1976
Sept. 1979
May 1990

Number of theCompany’s shares
ownedJoined Chuo Audit Corporation
Registered as a certified public accountant
Audit & Supervisory Board Member of Kakiyasu Honten
Co., Ltd.
Sept. 1990
Representative Partner of Taiyo Audit Corporation(currently Grant Thornton Taiyo LLC)
June 1997
Outside Audit & Supervisory Board Member of Kakiyasu
Honten Co., Ltd. (current position)
July 2000
Managing Partner of Taiyo Audit Corporation (currently
Grant Thornton Taiyo LLC)
Toru Kajikawa(September 24, 1951)
Apr. 2005
Professor of Graduate School of Aoyama Gakuin University
Reelection
Apr. 2010
Visiting Professor of Graduate School of Aoyama Gakuin
OutsideUniversity (current position)
Independent Audit &June 2014
Outside Audit & Supervisory Board Member of Kikkoman
Supervisory Board Member
Corporation (current position)
July 2014
Chairman and Representative Partner of Grant Thornton
Taiyo ASG LLC (currently Grant Thornton Taiyo LLC)
(current position)
Mar. 2017
Outside Audit & Supervisory Board Member of theCompany (current position)[Important concurrent positions]
Chairman and Representative Partner of Grant Thornton Taiyo LLC
Outside Audit & Supervisory Board Member of Kikkoman Corporation
Outside Audit & Supervisory Board Member of Kakiyasu Honten Co., Ltd.
[Reasons for nomination as candidate for Outside Audit & Supervisory Board Member]
Toru Kajikawa has extensive professional knowledge in the finance and accounting fields as a certified public accountant in addition
to having a wide breadth of knowledge cultivated through serving in diverse positions. This experience and insight is reflected in
audits of the Company, and he provides proactive advice and suggestions for securing legal compliance from a standpoint which is
independent of the Company’s management team. Therefore, as we have judged that he is qualified to serve as an Outside Audit &Supervisory Board Member of the Company, the Company proposes his reelection as Outside Audit & Supervisory Board Member.
His term of office as Outside Audit & Supervisory Board Member of the Company will be four (4) years at the conclusion of this
General Meeting of Shareholders.
Notes: 1. There is no special interest between the candidate for Audit & Supervisory Board Member and the Company.
2. Toru Kajikawa is a candidate for Outside Audit & Supervisory Board Member.
3. Pursuant to the provisions of Article 427, paragraph (1) of the Companies Act, the Company has entered into a limited
liability agreement with Toru Kajikawa to limit his liability for damages under Article 423, paragraph (1) of the Companies
Act, on the condition that the requirements stipulated by laws and regulations are met. If his reelection is approved, theCompany will continue the above-mentioned limited liability agreement with him. The maximum amount of liability fordamages under this agreement is 1 million JPY or the minimum liability amount provided for under laws and regulations,whichever is the higher amount.
4. The Company has concluded a Directors and Officers liability insurance policy with an insurance company, as provided
for in Article 430-3, paragraph (1) of the Companies Act. This insurance policy covers damages arising from liability
borne by the insured persons in the course of execution of their duties as a Director, etc. or claims pertaining to the pursuitof such liability. Toru Kajikawa is included as an insured person under the said insurance policy as an Audit & Supervisory
Board Member of the Company, and will continue to be included as an insured person if reelected as an Audit &Supervisory Board Member of the Company pursuant to this proposal. The Company intends to renew the said insurance
policy during the term of office of the Audit & Supervisory Board Member pertaining to this proposal.
5. The Company has designated Toru Kajikawa as an Independent Audit & Supervisory Board Member under the provisionsof Tokyo Stock Exchange and has notified the Exchange thereof, and plans to continue to designate him as an Independent
Audit & Supervisory Board Member.

- 11 -

6. Outside Audit & Supervisory Board Member candidate Toru Kajikawa satisfies the “Independence Criteria for Outside
Directors and Outside Audit & Supervisory Board Members” stipulated by the Company on page 14.

- 12 -

Proposal No. 5

Election of One (1) Substitute Audit & Supervisory Board Member

The validity of election of Satoshi Sugano, who was elected as a Substitute Audit & Supervisory Board Member atthe 145th Annual General Meeting of Shareholders held on March 26, 2020, will expire as of commencement of thismeeting. Therefore, the Company requests approval for the election of one (1) Substitute Audit & Supervisory Board
Member to be ready to fill a vacant position should the number of Audit & Supervisory Board Members fall below
the number required by laws and regulations. The consent of the Audit & Supervisory Board has been obtained forthis proposal. The candidate for Substitute Audit & Supervisory Board Member is as follows:
Name(Date of birth)

Career summary(Important concurrent positions)Registered as an attorney at law; joined Naritomi & Partners(currently Marunouchi Minami Law Office)Oct. 2003
Partner of Naritomi & Partners
June 2015
Established Nakadori Law Office; Representative Attorneyat Law (current position)[Important concurrent positions]Representative Attorney at Law of Nakadori Law Office[Reasons for nomination as a candidate for Substitute Outside Audit & Supervisory Board Member]
Satoshi Sugano has no prior experience in the management of a company, but has advanced professional legal knowledge as an
attorney at law. As we judged that his extensive knowledge could be reflected in the Company’s auditing system and that he could
provide us with appropriate advice and suggestions for securing legal compliance from a standpoint which is independent from theCompany’s management team, the Company proposes his reelection as Substitute Outside Audit & Supervisory Board Member.
Notes: 1. There is no special interest between the candidate for Substitute Audit & Supervisory Board Member and the Company.
2. Satoshi Sugano is a candidate for Substitute Outside Audit & Supervisory Board Member.
3. If Satoshi Sugano has taken office of Audit & Supervisory Board Member, pursuant to the provisions of Article 427,
paragraph (1) of the Companies Act, the Company plans to enter into a limited liability agreement with him to limit his
liability for damages under Article 423, paragraph (1) of the Companies Act, on the condition that the requirements
stipulated by laws and regulations are met. The maximum amount of liability for damages under this agreement will be 1
million JPY or the minimum liability amount provided for under laws and regulations, whichever is the higher amount.
4. The Company has concluded a Directors and Officers liability insurance policy with an insurance company, as provided
for in Article 430-3, paragraph (1) of the Companies Act. This insurance policy covers damages arising from liability
borne by the insured persons in the course of execution of their duties as a Director, etc. or claims pertaining to the pursuitof such liability. If Satoshi Sugano takes office as Audit & Supervisory Board Member, he will be included as an insured
person in the said insurance policy. The Company intends to renew the said insurance policy while the election of the
Substitute Audit & Supervisory Board Members pertaining to this proposal is valid.
5. If Satoshi Sugano has taken office of Audit & Supervisory Board Member, the Company plans to designate him as an
Independent Audit & Supervisory Board Member under the provisions of the Tokyo Stock Exchange and notify the
Exchange thereof.
6. Substitute Outside Audit & Supervisory Board Member candidate Satoshi Sugano satisfies the “Independence Criteria for
Outside Directors and Outside Audit & Supervisory Board Members” stipulated by the Company on page 14.
Satoshi Sugano(December 17, 1965)
Reelection
OutsideIndependent Audit &Supervisory Board Member

Apr. 1994

Number of theCompany’s shares
owned- 13 -

[Reference] Independence Criteria for Outside Directors and Outside Audit & Supervisory Board Members
The Company deems that Outside Directors and Outside Audit & Supervisory Board Members (including candidates)
who do not fall under any of the criteria of the following items possess independence with regard to the Company
and do not pose a risk of conflict of interest with general shareholders.
1. Major shareholder
Major shareholder of the Company or its executing person. “Major shareholder” means any of those who directly
or indirectly hold 10% or more of voting rights at the end of the Company’s most recent fiscal year.
2. Major business partner(1) Our principal business partner or its executing person. “Our principal business partner” means any one of
the following:- The amount of payment from the said business partner to the Company in the most recent business year
exceeds 2% of the Company’s annual consolidated net sales.
- A business partner who is indispensable in fund procurement of the Company and whom the Company
relies on to the extent that there is no substitution.
(2) A party who considers the Company as a major business partner or its executing person. “A party who
considers the Company as a major business partner” means the following party:- The amount of payment from the Company to the said party in the most recent business year exceeds 2%of the said party’s annual consolidated net sales.
3. Professional service provider
A legal expert such as an attorney at law, accounting or tax specialist such as a certified public accountant or tax
accountant, consultant, corporate manager, university professor, etc. who obtains monetary or other property
profit exceeding 10 million JPY per year other than executive remuneration from the Company. When suchproperty is obtained by an organization such as a corporation or a partnership, this criterion applies to a person
belonging to such organization.
4. Donation/Grant
A person who receives donation or grant exceeding 10 million JPY per year from the Company. When such
donation or grant is obtained by an organization such as a corporation or a partnership, this criterion applies toan executing person of such organization.
5. A person who has fallen under any of the above 1. to 4. in the past three (3) years.
6. A spouse or a relative within second degree of kinship of a Director or an employee of the Company or theCompany’s subsidiary.
* In these criteria, the term “executing person” means a person who executes business in an organization such asa corporation or a partnership regardless of his/her title or position name such as director, executive officer,
employee, etc.

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