This document has been translated from a part of the Japanese original for reference purposes only, without any warranty as to its
accuracy or as to the completeness of the information. In the event of any discrepancy between this translated document and theJapanese original, the Japanese version will prevail. The Company assumes no responsibility for this translation or for direct,
indirect or any other forms of damages arising from the translation.

Securities Code: 4548
May 28, 2019
To Our Shareholders
Ken Mizutani
President & Representative Director
SEIKAGAKU CORPORATION
6-1, Marunouchi 1-chome, Chiyoda-ku, Tokyo, Japan

Convocation Notice of the 73rd Ordinary General Meeting of Shareholders
You are cordially invited to attend the 73rd Ordinary General Meeting of Shareholders of SEIKAGAKUCORPORATION (the “Company”), which will be held as indicated below.
If you are unable to attend the meeting in person, you may exercise your voting rights by sending the enclosed
voting form by postal mail or via the Internet. Please review the attached Reference Documents for General
Meeting of Shareholders, and indicate your approval or disapproval of the proposals so that your vote is received
by 5 p.m. on Tuesday, June 18, 2019 (JST).
1. Date and Time: Wednesday, June 19, 2019 at 10 a.m. (JST)(Reception starts at 9:15 a.m.)
2. Venue:
Fourth floor hall, Otemachi Sankei Plaza
7-2, Otemachi 1-chome, Chiyoda-ku, Tokyo, Japan
3. Purpose of the Meeting
Matters to be reported:
1. The Business Report and the Consolidated Financial Statements for the 73rd fiscal year (from April 1,2018 to March 31, 2019), and the results of audits of the Consolidated Financial Statements by the
Financial Auditor and the Audit & Supervisory Board
2. The Non-consolidated Financial Statements for the 73rd fiscal year (from April 1, 2018 to March 31,
2019)
Matters to be resolved:
Proposal No. 1
Appropriation of Surplus
Proposal No. 2
Election of Six Directors
Proposal No. 3
Election of Three Audit & Supervisory Board Members
Proposal No. 4
Determination of Remuneration for Granting Restricted Stock to the Company’s Directors

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For those attending the meeting, please bring this notice to the meeting and present the enclosed voting form at the reception desk
on arrival at the meeting.
If you exercise your voting rights by proxy, you may appoint as a proxy one of the shareholders holding voting rights at themeeting. However, please note that a document verifying the proxy right of the person representing you must be submitted.
Any corrections in the Reference Documents for General Meeting of Shareholders, the Business Report, the Consolidated Financial
Statements and the Non-consolidated Financial Statements will be posted on the Company’s website on the Internet (in Japaneseonly).
Pursuant to the relevant laws and regulations and the provision of Article 16 of the Company’s Articles of Incorporation, thefollowing items among documents to be attached are posted on the Company’s website and are not attached to this notice. The
Business Report, Consolidated Financial Statements and the Non-consolidated Financial Statements audited by Audit &Supervisory Board Members and the Financial Auditor consist of documents included in this notice and the following documents
posted on the Company’s website (in Japanese only).
i“System to Ensure the Appropriateness of Business Operations and Status of Operations of the System” of the Business Reportii “Consolidated Statements of Changes in Shareholders’ Equity” of the Consolidated Financial Statements
iii “Notes to the Consolidated Financial Statements”
iv “Non-consolidated Statements of Changes in Shareholders’ Equity” of the Non-consolidated Financial Statementsv“Notes to the Non-consolidated Financial Statements”
Please note that the results of the resolutions adopted at this General Meeting of Shareholders will be posted on the Company’s
website (in Japanese only) after the conclusion of the General Meeting, in lieu of delivery of the notice of the resolutions in writing
to the shareholders.
The Company’s website https://www.seikagaku.co.jp/en/ir/stock/meeting.html-1-Reference Documents for General Meeting of Shareholders
Proposals and Reference Information
Proposal No. 1

Appropriation of Surplus

The Company positions the improvement of shareholder value as one of important management tasks, andregarding the return of profits to shareholders, we are aiming for a stable and continuous dividend from a mediumto long-term perspective, and will continue with our policy of annual dividends of ¥26 per share.
The Company has given consideration to the business performance of the fiscal year under review, payout ratio andmedium- to long-term business growth, etc., and it proposes to pay year-end dividends for the fiscal year as
follows:
(1)
(2)

(3)

Type of dividend property: Cash
Allotment of dividend property to shareholders and their aggregate amount-Per share of common stock of the Company ¥13-Total dividends¥733,250,921
Accordingly, including the interim dividend of ¥13 per share, the annual dividend will be ¥26 per share,
resulting in the (consolidated) payout ratio of 65.4%.
Effective date of dividends of surplus: Thursday, June 20, 2019-2-

Proposal No. 2

Election of Six Directors

At the conclusion of this ordinary general meeting of shareholders, the terms of office of all six Directors will
expire. Therefore, the Company proposes the election of six Directors.
The candidates for Director are as follows:[Reference] List of candidates
Candidate
No.

Name

1

Reelection

Ken Mizutani

2

Reelection

Toshiyuki Okada

3

Reelection

Yosuke Funakoshi

4

Reelection

Takayuki Akita

5

Reelection

Eiji Katayama
Candidate for outside Director
Independent Officer

6

Mio Minaki
New election Candidate for outside Director
Independent Officer

Attendance at
Current position and responsibility
meetings of the Boardin the Company
of Directors
Representative Director and100%
Member of the Board, President &(13 of 13)
CEO and Head of Manufacturing
Member of the Board, Executive
Vice President responsible for
Business Development & Marketing
Member of the Board, Executive
Vice President responsible for
Research & Development and Headof Clinical Development
Member of the Board, Executive
Vice President responsible for
Corporate Strategy, HR, F&A and
Corporate Staff and Head ofCorporate Strategy

100%(10 of 10)100%(10 of 10)100%(13 of 13)

Outside Director

―

-3-

92%
(12 of 13)―

Candidate
No.

Name
(Date of birth)

Career summary, position and responsibility in the Company
Apr. 1970
Sept. 1983
Aug. 1988
June 1990
June 1993

June 1996

July 1997

Nov. 1997
Ken Mizutani(March 10, 1948)
Reelection

1

June 1998

Term of office as Director:
29 yearsJune 2000

Attendance at meetings of theBoard of Directors during the
fiscal year under review:
100% (13 of 13)

June 2002

June 2003

June 2004

June 2005

June 2014

Jan. 2015

June 2018

Joined Mitsubishi Chemical Industries Limited(current Mitsubishi Chemical Corporation)
Deputy Head of Electronics Materials
Joined the Company
Member of the Board, Head of Research
Biologicals and Diagnostics Marketing
Member of the Board, Senior Executive Vice
President responsible for Planning andManufacturing
Member of the Board, Senior Executive Vice
President responsible for Pharmaceuticals
and Fine Chemicals
Member of the Board, Senior Executive Vice
President responsible for Pharmaceuticals,
Fine Chemicals and New Business
Development
Member of the Board, Senior Executive Vice
President responsible for Pharmaceuticals,
Fine Chemicals, New Business Development
and ACC
Member of the Board, Senior Executive Vice
President responsible for Marketing
Member of the Board, Senior Executive Vice
President and Head of Central ResearchLaboratory
Representative Director and Member of theBoard, Senior Executive Vice President
responsible for Pharmaceuticals, Fine
Chemicals, Oral Care, Glycoforum, and Headof Central Research Laboratory
Representative Director and Member of theBoard, Senior Executive Vice President
responsible for Pharmaceuticals, Fine
Chemicals, LAL Strategic Planning and Headof Central Research Laboratory
Representative Director and Member of theBoard, Senior Executive Vice President
responsible for Research & Development andFine Chemical Marketing
Representative Director and Member of theBoard, President & Chief Executive Officer(CEO)
Representative Director and Member of theBoard, President & CEO and head of
Manufacturing
Representative Director andMember of the Board, President &CEO
Representative Director and Member of theBoard, President & CEO and Head of
Manufacturing(current position)-4-

Number of theCompany’s shares
owned

437,316 shares

[Significant concurrent positions outside the Company]
Chairman of Mizutani Foundation for Glycoscience*The Company is making donations to Mizutani Foundation for Glycoscience at which Ken Mizutani serves as
Chairman. Because the Foundation aims to contribute to the welfare of mankind through the development of
Glycoscience, the donation to the Foundation is a suitable donation that coincides with our business objective ofworking on drug development, mainly Glycoscience. As a transaction, it is approved by the Company’s Board of
Directors. In addition, he has not received any remuneration from the Foundation, and none of his relatives are an
officer or employee of the Foundation.
[Reasons for nomination]
With experiences in a wide range of fields centered on planning, marketing, and research and development, Ken
Mizutani is familiar with all aspects of the Company and has high insight regarding business management and plays acentral role of decisions on important matters and supervising business execution. We have once again nominated him
as a candidate as we judged that he is qualified to direct the business management as Director and contribute to theimprovement of corporate value.

-5-

Candidate
No.

Name
(Date of birth)

Career summary, position and responsibility in the Company
Apr. 1989
Sept. 1996
Feb. 2015

Sept. 2015

Oct. 2015
Toshiyuki Okada(August 27, 1960)
Reelection
Term of office as Director:
2 years2

Attendance at meetings of theBoard of Directors during the
fiscal year under review:
92% (12 of 13)

June 2016

Jan. 2017
June 2017
Aug. 2017

Jan. 2018

Apr. 2018

June 2018

Joined Dow Corning Japan Co., Ltd.
Joined Johnson & Johnson Medical K. K.
(current Johnson & Johnson K. K.)
Vice President and Chief Technology Officer(Regulatory Affairs, Quality Assurance,
Pharmacovigilance, R&D, GCP Auditing,
Medical Affairs, Clinical Development & Postmarketing Research, Quality Regulatory
Compliance and Professional Education)
Joined the Company
Executive Vice President, Deputy responsible for
Quality Assurance, Pharmacovigilance andRegulatory Affairs Auditing
Executive Vice President responsible for
Quality Assurance, Pharmacovigilance andRegulatory Affairs Auditing
Executive Vice President responsible for
Quality Assurance, Pharmacovigilance andRegulatory Affairs Auditing
Executive Vice President responsible forMarketingMember of the Board, Executive Vice President
responsible for Marketing
Member of the Board, Executive Vice
President responsible for Marketing and Headof North American Business
Member of the Board, Executive Vice President
responsible for Marketing, head of
Pharmaceuticals Marketing and North
American Business
Member of the Board, Executive Vice President
responsible for Marketing and Head ofMarketing Planning, Pharmaceuticals Marketing,International Marketing and North American
Business
Member of the Board, Executive Vice President
responsible for Business Development &Marketing (current position)

Number of theCompany’s shares
owned

4,600 shares[Reasons for nomination]
Toshiyuki Okada has global insight and abundant know-how on pharmaceutical industry in general throughexperiencing a wide range of operations at foreign-affiliated pharmaceutical companies, and substantially fulfills therole of decisions on important matters and supervision of business execution. We have once again nominated him as a
candidate as we judged that he is qualified to carry out his duties appropriately as Director and contribute to theimprovement of corporate value.

-6-

Candidate
No.

Name
(Date of birth)

Career summary, position and responsibility in the Company
Apr. 1990
June 2008
July 2009
Aug. 2012

Yosuke Funakoshi(November 28, 1965)
Reelection

Aug. 2014

Term of office as Director:
1 year3

Attendance at meetings of theBoard of Directors during the
fiscal year under review:
100% (10 of 10)(After taking officein June 2018)

Oct. 2014
June 2016

June 2017

June 2018

Number of theCompany’s shares
ownedJoined ONO PHARMACEUTICAL CO., LTD.
Joined Takeda Pharmaceutical Company Limited
Takeda Pharmaceuticals International, Inc.
Senior Director of Strategic Development
Takeda Global Research & Development Center
Inc. (current Takeda Development Center
Americas, Inc.)
Vice President of Strategic Project Management
Joined the Company
Senior Vice President and assistant to Senior
Executive Vice President responsible for
Research & Development
Senior Vice President and Head of ClinicalDevelopment
Executive Vice President, Deputy responsible
for Research & Development and Head ofClinical Development
Executive Vice President responsible for
Research & Development and Head of ClinicalDevelopment
Member of the Board, Executive Vice President
responsible for Research & Development andHead of Clinical Development(current position)

5,100 shares[Reasons for nomination]
Yosuke Funakoshi has a high-level insight through years of research and development in the pharmaceutical industry,and substantially fulfills the role of decisions on important matters and supervision of business execution from a
global perspective that makes full use of his overseas work experience. We have once again nominated him as a
candidate as we judged that he is qualified to carry out his duties appropriately as Director and contribute to theimprovement of corporate value.

-7-

Candidate
No.

Name
(Date of birth)

Career summary, position and responsibility in the Company
Apr. 1986
May 2013

Takayuki Akita(December 9, 1963)
Reelection
Term of office as Director:
1 year4

Attendance at meetings of theBoard of Directors during the
fiscal year under review:
100% (10 of 10)(After taking officein June 2018)

July 2014

May 2016
June 2017
June 2017
Oct. 2017
June 2018

Joined The Mitsubishi Bank, Limited (current
MUFG Bank, Ltd.)
Executive Vice President, Head ofInternational Operations
Executive Vice President (dispatched to MUFG
Union Bank N.A.), Head of Japanese/Asian
Corporate Banking, Regional Head of theAmericas (Mission Specialist) and Deputy Headof New York Branch (Mission Specialist)
Executive Vice President, Head ofTransaction Banking
Joined the Company as Advisor
Executive Vice President responsible for
Corporate Planning
Executive Vice President and Head ofCorporate Strategy
Member of the Board, Executive Vice
President responsible for Corporate
Strategy, HR, F&A and Corporate Staffand Head of Corporate Strategy

Number of theCompany’s shares
owned

1,800 shares[Reasons for nomination]
Through his experiences at domestic and international financial institutions, Takayuki Akita has a wide range of insights
into global business practices and corporate management, and substantially fulfills the role of decisions on importantmatters and supervision of business execution. We have once again nominated him as a candidate as we judged that heis qualified to carry out his duties appropriately as Director and contribute to the improvement of corporate value.

-8-

Candidate
No.

Name
(Date of birth)

Career summary, position and responsibility in the Company
Apr. 1973

Eiji Katayama(November 8, 1950)
Candidate for outside Director
Reelection
Independent Officer
Term of office as Director:
15 years

Apr. 1984
Apr. 1984
Aug. 1989
June 1997
June 2004

5

Joined Fujisawa Pharmaceutical Co., Ltd.
(current Astellas Pharma Inc.)
Admitted to the bar in Japan
Joined Ginza Law Office (current Abe, Ikubo &Katayama) (current position)
Admitted to the bar in New York State, US
Outside Audit & Supervisory Board Member of
the Company
Outside Director (current position)

Number of theCompany’s shares
owned

36,100 shares

Attendance at meetings of theBoard of Directors during the
fiscal year under review:
100% (13 of 13)[Significant concurrent positions outside the Company]
Partner of Abe, Ikubo & Katayama
Director and Audit and Supervisory Committee Member of Mitsubishi UFJ Trust and Banking Corporation
Outside Audit & Supervisory Board Member of Akatsuki Inc.
Outside Audit & Supervisory Board Member of REALGATE INC.
*The transaction amount between the Company and Abe, Ikubo & Katayama, of which Eiji Katayama is a Partner, is¥170,000 for the fiscal year ended March 31, 2017, which is minimal and within the scope of the “Independence
Criteria for Outside Officers” as stated below that we have defined. There were no transactions during the fiscal
year ended March 31, 2018 and the fiscal year ended March 31, 2019.
[Reasons for nomination]
Eiji Katayama, being familiar with pharmaceutical business from his experience in working at a pharmaceuticalcompany, has been acting as an attorney in the areas of international and corporate legal affairs as a whole, inparticular with respect to intellectual property and business revitalization, and has significant insight in the field ofcorporate management. His tenure as outside Director is 15 years at the conclusion of this ordinary general meeting ofshareholders. While consistently maintaining a third party viewpoint, he actively advises and makes recommendations
from a neutral and objective standpoint and substantially fulfills the role of decisions on important matters andsupervision of business execution. We have once again nominated him as a candidate as we judged that he is qualified
to carry out his duties appropriately as outside Director and contribute to the improvement of corporate value.

-9-Candidate
No.

Name
(Date of birth)

Career summary, position and responsibility in the Company
Apr. 1999
Oct. 2003

6

Mio Minaki(April 6, 1973)
Candidate for outside Director
New election
Independent Officer

Apr. 2004

Term of office as Director:―

Apr. 2016

Attendance at meetings of theBoard of Directors during the
fiscal year under review:―Apr. 2005
Apr. 2014

Apr. 2017

Apr. 2019
Apr. 2019

Number of theCompany’s shares
ownedJoined MIT Corporation
Public prosecutor, Tokyo District Public
Prosecutors OfficePublic prosecutor, Osaka District Public
Prosecutors OfficePublic prosecutor, Fukuoka District Public
Prosecutors Office
Litigation Department Attorney, Ministry ofJustice Fukuoka Legal Affairs Bureau
Public prosecutor, Tokyo District Public
Prosecutors Office
Assigned as Head of Legal Affairs
Department to Agriculture, forestry andfisheries Fund corporation for
Innovation, Value-chain and Expansion
Japan
Admitted to the bar in Japan
Joined Minaki & Kitazawa Law Office(current position)―[Significant concurrent positions outside the Company]
Partner of Minaki & Kitazawa Law Office*There had been no transaction between the Company and Minaki & Kitazawa Law Office, a law firm in which
Mio Minaki serves as a Partner, for the past three years.
[Reasons for nomination]
In addition to her years of abundant experience in the judicial field, Mio Minaki has deep insight in the field ofcorporate legal affairs. We have nominated her as a candidate as we judged that she is qualified to appropriately fulfill
the role of decisions on important matters and supervision of business execution from a neutral and objective standpoint
as an outside Director of the Company and contribute to the improvement of corporate value.
Notes

1. There is no special interest between any of the candidates and the Company.
2. Eiji Katayama and Mio Minaki are candidates for outside Director.
3. At the conclusion of this ordinary general meeting of shareholders, the tenure of Eiji Katayama as an outside Director
will have been 15 years.
4. As Eiji Katayama and Mio Minaki satisfy the requirements for independent officer established by Tokyo Stock
Exchange Inc. and the “Independence Criteria for Outside Officers” of the Company as stated below, the Company has
submitted notification to Tokyo Stock Exchange, Inc. that they have been appointed as independent officers.
5. The Company has appointed Eiji Katayama as an Independent Committee member prescribed in the countermeasuresagainst large-scale purchases of the Company’s shares (takeover defense measures). The Company will also appoint Mio
Minaki as an Independent Committee member if her appointment as a Director is approved.
6. The Company prescribes in the Articles of Incorporation that it may enter into an agreement with a Director (excluding a
director who is an executive director, etc.) to limit the scope of his or her liability for damages to the Company, in orderto enable the outside Director to fully exercise his or her duties as expected.
Accordingly, the Company has entered into an agreement with Eiji Katayama to limit his liability, if a case falls underrequirements specified by laws and regulations regarding the liability under Article 423, paragraph 1 of the Companies
Act. Pursuant to this agreement, the defined maximum amount of liability is the amount provided for under Article 425,
paragraph 1 of the Companies Act. If the reelection of Eiji Katayama is approved, the Company plans to renew the
aforementioned agreements with him. The Company will also enter into an agreement with Mio Minaki to limit her
liability, if her election is approved.

- 10 -

Proposal No. 3

Election of Three Audit & Supervisory Board Members

At the conclusion of this ordinary general meeting of shareholders, the terms of office of Audit & Supervisory
Board Members Nobuhiro Takeuchi, Yoshihito Shibata and Mie Fujimoto will expire. Therefore, the Company
proposes the election of three Audit & Supervisory Board Members.
The consent of the Audit & Supervisory Board has been obtained for this proposal.
The candidates for Audit & Supervisory Board Members are as follows:[Reference] List of candidates
Candidate
No.

Name

Current position in the Company

1

Reelection

Yoshihito Shibata
Candidate for outside Audit & Supervisory Board Member
Independent Officer

Outside Audit & Supervisory Board
Member2

Reelection

Mie Fujimoto
Candidate for outside Audit & Supervisory Board Member
Independent Officer

Outside Audit & Supervisory Board
Member3

Shinkichi Matsuo
New election Candidate for outside Audit & Supervisory Board Member
Independent Officer- 11 -―

Candidate
No.

Name
(Date of birth)
Yoshihito Shibata(July 31, 1965)
Candidate for outside
Audit & Supervisory
Board Member
Reelection
Independent Officer
Term of office as
Audit & Supervisory
Board Member:
4 years

1

2

Career summary and position in the Company
Apr. 1988
Apr. 1998
Dec. 1999

July 2006
Apr. 2015
June 2015

Joined FUJITSU LIMITED
Admitted to the bar in Japan
Joined Law Offices of Hideyuki Sakai (Later,
Bingham Sakai Mimura Aizawa (foreign law
joint enterprise))
Admitted to the bar in New York State, US
Joined Anderson Mori & Tomotsune(current position)
Outside Audit & Supervisory Board Member of
the Company (current position)

Number of theCompany’s shares
owned

1,300 shares[Significant concurrent positions outside the Company]
Partner of Anderson Mori & Tomotsune
Outside Statutory Auditor of C'est la vie Resort Izumigo Co., Ltd.
Outside Audit & Supervisory Board Member of FWD Fuji Life Insurance Company, Limited*There had been no transaction between the Company and Anderson Mori & Tomotsune, a law firm in which Yoshihito
Shibata serves as a Partner, for the past three years.
[Reasons for nomination]
Yoshihito Shibata, being familiar with corporate legal affairs as an attorney, in particular with respect to risk
management, business revitalization, healthcare and pharmaceutical regulations, has an abundant insight on corporate
finance and accounting and corporate management, and substantially fulfills the role of supervision of managementfrom a specialist viewpoint based on his knowledge and experience. We have once again nominated him as a
candidate as we judged that he is qualified to carry out his duties appropriately as an outside Audit & Supervisory
Board Member.
Mie Fujimoto
Apr. 1993
Admitted to the bar in Japan(August 17, 1967)
Apr. 1993
Joined New Tokyo International (Later,
Candidate for outside
Bingham Sakai Mimura Aizawa (foreign
Audit & Supervisory
law joint enterprise))
Board Member
Apr. 2015
Joined TMI Associates (current position)
Reelection
June 2015
Outside Audit & Supervisory Board
Independent
Member of the Company
1,300 shares
Officer(current position)
Term of office as
Audit &
Supervisory Board
Member:4 years[Significant concurrent positions outside the Company]
Partner of TMI Associates
Outside Director of Kuraray Co., Ltd.
Outside Corporate Auditor of TOKYO BROADCASTING SYSTEM HOLDINGS, INC.
Corporate Auditor of TOKYO BROADCASTING SYSTEM TELEVISION, INC.
*There had been no transaction between the Company and TMI Associates, a law firm in which Mie Fujimoto serves asa Partner, for the past three years.
[Reasons for nomination]
Mie Fujimoto, being familiar with corporate legal affairs as an attorney, in particular with respect to labor related laws
and regulations, has abundant insight in the field of corporate management, and substantially fulfills the role ofsupervision of management from a specialist viewpoint based on her knowledge and experience. We have once again
nominated her as a candidate as we judged that she is qualified to carry out her duties appropriately as an outside Audit& Supervisory Board Member.

- 12 -

Candidate
No.

Name (Date of birth)
Shinkichi Matsuo(January 9, 1969)
Candidate for outside
Audit & Supervisory
Board Member
New election
Independent Officer

3

Notes:

Career summary and position in the Company
Apr. 1991
Apr. 1993
Oct. 1995
Apr. 1999
June 2018

Joined Mitsubishi Electric Corporation
Joined Yokohama City Government
Joined Ota Showa Audit Corporation(current Ernst & Young ShinNihon LLC)
Registered as a certified public accountant
Representative Director, NextLeap Co., Ltd.
(current position)

Number of theCompany’s shares
owned

―

Term of office as Audit &Supervisory Board Member:―[Significant concurrent positions outside the Company]
Representative Director of NextLeap Co., Ltd.
Outside Audit & Supervisory Board Member of Amvis Holdings, Inc.
There had been no transaction between the Company and NextLeap Co., Ltd., a company in which Shinkichi Matsuo
serves as a Representative Director, for the past three years.
[Reasons for nomination]
Shinkichi Matsuo, being familiar with finance and accounting as a certified public accountant, has abundant insight in
the field of corporate management. We have nominated him as a candidate as we judged that he is qualified to
substantially fulfill the role of supervision of management from a specialist viewpoint based on his knowledge andexperience, as an outside Audit & Supervisory Board Member of the Company.
1. There is no special interest between any of the candidates and the Company.
2. Yoshihito Shibata, Mie Fujimoto, and Shinkichi Matsuo are candidates for outside Audit & Supervisory Board Members.
3. At the conclusion of this ordinary general meeting of shareholders, the tenures of Yoshihito Shibata and Mie Fujimotoas outside Audit & Supervisory Board Member will have been 4 years.
4. As Yoshihito Shibata, Mie Fujimoto and Shinkichi Matsuo satisfy the requirements for independent officer establishedby Tokyo Stock Exchange Inc. and the “Independence Criteria for Outside Officers” of the Company as stated below,
the Company has submitted notification to Tokyo Stock Exchange, Inc. that they have been appointed as independent
officers.
5. The Company has appointed Yoshihito Shibata and Mie Fujimoto as Independent Committee members prescribed in the
countermeasures against large-scale purchases of the Company’s shares (takeover defense measures). The Company will
also appoint Shinkichi Matsuo as an Independent Committee member if his appointment as an Audit & Supervisory
Board Member is approved.
6. The Company prescribes in the Articles of Incorporation that it may enter into an agreement with an Audit &Supervisory Board Member to limit the scope of his or her liability for damages to the Company, in order to enable the
Audit & Supervisory Board Member to fully exercise his or her duties as expected. Accordingly, the Company hasentered into agreement with each of Yoshihito Shibata and Mie Fujimoto to limit his or her liability, if a case falls underrequirements specified by laws and regulations regarding the liability under Article 423, paragraph 1 of the Companies
Act. Pursuant to this agreement, the defined maximum amount of liability is the amount provided for under Article 425,
paragraph 1 of the Companies Act. If the reelection of Yoshihito Shibata and Mie Fujimoto is approved, the Company
plans to renew the aforementioned agreement with each of them. The Company will also enter into an agreement with
Shinkichi Matsuo to limit his liability, if his appointment as an outside Audit & Supervisory Board Member is approved.
7. In March 2017, Kuraray Co., Ltd., a company in which Mie Fujimoto serves an outside Director, received a cease anddesist order from the Japan Fair Trade Commission as a punitive disposition against a violation of the Act on Prohibitionof Private Monopolization and Maintenance of Fair Trade with respect to a tender for the procurement of certain vinylon
products by the Acquisition, Technology & Logistics Agency. Although Mie Fujimoto, who had held the office ofoutside Auditor of the company at that point, was not aware of the abovementioned fact in advance, she had been
regularly calling the company’s attention to the importance of compliance with laws and regulations. After the facts
came out, she confirmed the content of the countermeasures for recurrence prevention, appropriately provided
recommendations at the meetings of the Board of Directors of the company, and thereby fulfilled her duties.

- 13 -

Proposal No. 4

Determination of Remuneration for Granting Restricted Stock to the Company’s Directors

At the 61st Ordinary General Meeting of Shareholders held on June 22, 2007, approval was granted for the total
amount of remuneration for the Company’s Directors (excluding the employee portion of remuneration for
Directors who serve concurrently as employees) to be set at a maximum of ¥400 million per annum (including amaximum of ¥50 million for outside Directors).
The Company has adopted a Directors’ remuneration system deploying a stock-price-linked remuneration system,
under which the Company’s shares are purchased every month through the Director Shareholding Association
using a certain portion of funds from the Directors’ remuneration in addition to a base remuneration and aperformance-linked remuneration for inside Directors, up to the limit mentioned above.
As a revision to the Directors’ remuneration system based on the recent approach to corporate governance, theCompany proposes the introduction of a new remuneration scheme (the “Scheme”) under which restricted stock isgranted to the Company’s Directors (the “Eligible Directors,” excluding outside Directors) separately from the
remuneration limit mentioned above, in order to provide the Eligible Directors with incentives to sustainably
increase the Company’s corporate value and further accelerate the sharing of the value with shareholders bypromoting long-term, stable shareholding. If the introduction of the Scheme is approved, the Company plans toabolish the stock-price-linked remuneration system mentioned above.
Remuneration to be paid to the Eligible Directors for granting restricted stock pursuant to this Proposal shall be amonetary claim (the “Monetary Remuneration Claim”), and its total amount shall be a maximum of ¥50 million perannum (excluding the employee portion of remuneration for Directors who serve concurrently as employees), an
amount deemed reasonable in consideration of the purposes mentioned above. The specific timing and distributionof the payment to the Eligible Directors shall be deliberated at a Nomination and Remuneration Committee
consisting of the President & Representative Director and all of the outside Directors, to be resolved by the Boardof Directors.
The current number of Directors is six (including two outside Directors). If Proposal No. 2 “Election of Six
Directors” of this meeting is approved as proposed, the number of Directors will remain six (including two outside
Directors), and the number of the Eligible Directors will be four through the exclusion of two outside Directors.
[Details of the Scheme]
1. Summary
Based on the resolution of the Company’s Board of Directors, the Eligible Directors shall pay all of the Monetary
Remuneration Claim granted pursuant to this Proposal as property contributed in kind and shall receive theissuance or disposal of the shares of common stock of the Company.
When issuing or disposing of shares of common stock of the Company, the Company shall conclude an agreementon the allotment of restricted stock (the “Allotment Agreement”) with the Eligible Directors. The Eligible Directors
shall not transfer, pledge, or otherwise dispose (the “Restriction”) of shares of common stock of the Company
allotted in accordance with the Allotment Agreement (the “Allotted Shares”) during the period from the date on
which the Eligible Directors receive an allotment in accordance with the Allotment Agreement up until the time
immediately after the Eligible Directors retire or resign from their positions as both Directors and Managing
Officers of the Company. The details of the Allotment Agreement are summarized in 4 below.
2. Upper limit of the amount of the Monetary Remuneration Claim and number of shares under the Scheme
The total amount of the Monetary Remuneration Claim to be granted to the Eligible Directors shall be a maximumof ¥50 million per annum (excluding the employee portion of remuneration for Directors who serve concurrently as
employees), and the total number of the Allotted Shares to be issued or disposed of for the Eligible Directors shallbe a maximum of 40,000 per annum; provided that, in the case of a stock split (including gratis allotment) or areverse stock split of shares of common stock of the Company, or any other case requiring the adjustment of thetotal number of the Allotted Shares arises on or after the day of approval of this Proposal, the total number shall be
adjusted within a reasonable range.
3. Amount to be paid per Allotted Share
The amount to be paid per Allotted Share shall be based on the closing price of the Company’s common stock on
the Tokyo Stock Exchange, Inc. on the business day immediately preceding the resolution date of the Board of
Directors regarding share allotment (if the Company’s common stock is not traded on the said day, the closing- 14 -

price on the latest preceding trading day) and shall be resolved by the Board of Directors within a price range thatis not particularly advantageous to the Eligible Directors who receive the shares of common stock.
4. Summary of the Allotment Agreement(1) Restriction-on-transfer period (“Restriction Period”)
The Restriction period shall be the period from the date on which an Eligible Director receives an allotment inaccordance with the Allotment Agreement up until the time immediately after the Eligible Director retires orresigns from his or her positions as both a Director and Managing Officer of the Company. During the Restriction
period, the Eligible Directors shall not transfer, pledge, or otherwise dispose of the Allotted Shares.
(2) Treatment at the time of retirement
If an Eligible Director retires or resigns from his or her positions as both a Director and a Managing Officer before
the expiration of the period from the commencement of the Restriction period up until the time immediately
preceding the conclusion of the first ordinary general meeting of shareholders to be held after the commencement
date (the “Service Period”), the Company shall acquire the related Allotted Shares without consideration as amatter of course, unless there are reasonable grounds for the retirement or resignation such as the expiration of theterm of office or the death of the Eligible Director.
(3) Release of the Restriction
The Company shall release the Restriction of all Allotted Shares when the Restriction period expires, on thecondition that an Eligible Director has filled the position of either a Director or Managing Officer of the Company
during the Service Period; provided that the number of Allotted Shares subject to the release and the timing of therelease shall be reasonably adjusted as necessary if (i) the Eligible Director retires or resigns from both positions
stated in (2) above before the Service Period expires because of death or other reasonable grounds, or (ii) the
Eligible Director retires or resigns from both positions stated in (2) above before the Restriction period expires forreasons other than the expiration of the term of office, death, or other reasonable grounds stated in (2) above evenafter the Service Period expires. The Company shall, as a matter of course, acquire without consideration the
Allotted Shares that are not subject to the release immediately after the Restriction is released in accordance withthe above provisions.
(4) Treatment upon reorganization, etc.
Notwithstanding the provisions in (1) and (3) above, if a merger agreement in which the Company is to be themerged company, a stock exchange agreement in which the Company is to be a wholly owned subsidiary, or an
agenda item related to reorganization, etc. such as a stock transfer plan is approved at the Company’s general
meeting of shareholders (or by the Company’s Board of Directors, if the reorganization, etc. does not require theapproval of a general meeting of shareholders) during the Restriction period, the Company shall, by a resolution ofits Board of Directors, release the Restriction before the effective date of the reorganization, etc. for the number ofAllotted Shares to be decided reasonably based on the period from the date of commencement of the Restriction
period up until the date of the approval of the reorganization, etc. In addition, in the case provided for above, theCompany shall, as a matter of course, acquire without consideration the Allotted Shares that are not subject to therelease immediately after the Restriction is released.
(5) Other matters
Any other matters related to the Allotment Agreement shall be determined by the Company’s Board of Directors.

<Reference>
Subject to the approval of this Proposal as proposed, the Company plans to introduce a scheme similar to the
Scheme above for Managing Officers not serving concurrently as Directors of the Company.

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