Securities Code: 6312
May 15, 2023

(Start of electronic distribution: May 9, 2023)
To Our Shareholders:
Iwao Fusejima, President & CEO

Freund Corporation
6-25-13 Nishi-shinjuku, Shinjuku-ku, Tokyo

Notice of Convocation of the 59th Annual General Meeting of Shareholders

We are pleased to announce the 59th Annual General Meeting of Shareholders of Freund Corporation (the“Company”), which will be held as indicated below.
Documents concerning this shareholders meeting are distributed electronically. Information distributed
electronically is posted on the following website as documents titled “Notice of Convocation of the 59th Annual
General Meeting of Shareholders” and “Other Items Provided Electronically (Items Omitted from Paper
Documents).”
Company website
https://www.freund.co.jp/english/ir/library/shareholders/
In addition to the Company’s website, information is posted on the following website.
Website of the Tokyo Stock Exchange
https://www2.jpx.co.jp/tseHpFront/JJK020010Action.do?Show=Show
After accessing the Tokyo Stock Exchange website, enter “Freund” or “6312” (the Freund securities code) andclick search. Then select “Basic information” and “Documents for public inspection/PR information.”
You may submit your votes by postal mail (in writing) or by using the Internet instead of attending this meeting.
Please review the Reference Documents for General Meeting of Shareholders, which is included in the information
distributed electronically, and submit your votes no later than 5:30 p.m., Monday, May 29, 2023 (JST).

- 1 -Meeting Details
1. Date and Time:
2. Venue:

Tuesday, May 30, 2023, at 10:00 a.m. (Reception starts at 9:00 a.m.)
BELLESALLE Shinjuku Grand Conference Center
Sumitomo Fudosan Shinjuku Grand Tower 5F, 8-17-1, Nishi-shinjuku, Shinjuku-ku,
Tokyo

3. Purpose of the Meeting
Matters to be reported
1. The Business Report and the Consolidated Financial Statements for the 59th fiscal
year (from March 1, 2022 to February 28, 2023), and the results of audits of theConsolidated Financial Statements by the Accounting Auditor and the Audit &Supervisory Board
2. The Non-consolidated Financial Statements for the 59th fiscal year (from March
1, 2022 to February 28, 2023)
Matters to be resolved
Proposal No. 1: Appropriation of Surplus
Proposal No. 2: Election of Six (6) Directors
Proposal No. 3: Election of One (1) Audit & Supervisory Board Member
Proposal No. 4: Election of Accounting Auditor
Proposal No. 5: Revision of Restricted Stock Compensation for Directors
4. Matters Prescribed for Convocation
If you do not indicate your approval or disapproval for the proposals on the voting form, the Company willassume that you have voted in favor of the proposal.
* If you are attending the meeting, please submit the enclosed voting form to the reception desk upon arrival.

If information distributed electronically is revised, the revised information will be posted on the Company’s
website and the Tokyo Stock Exchange website.

- 2 -Reference Documents for General Meeting of Shareholders
Proposal No. 1:

Appropriation of Surplus

The Company proposes the appropriation of surplus as follows.
Maximizing shareholder value is the highest priority of the Company. Our policy is to use the benefits of higher
shareholder value for earnings distributions to shareholders while retaining earnings for making the company
stronger in order to adapt swiftly and accurately to changes in the operating environment.
The basic policy for the distribution of earnings is to make distributions based on results of operations. The target
for the annual consolidated dividend payout ratio is 30%. We will maintain stable distributions while taking into
account the need for retained earnings in order to build a stronger base of operations and take actions aimed at growth.
Although earnings in the fiscal year that ended in February 2023 were lower than in the previous fiscal year, we areproposing the payment of an ordinary dividend of 20 yen per share, the same as in the previous fiscal year, based on
our policy of consistently paying a stable dividend.
Year-end dividend
1. Type of dividend property
Cash
2. Allotment of dividend property and aggregate amount¥20 per common stock of the Company
Total dividends will be ¥334,890,400.
3. Effective date of dividend of surplus
May 31, 2023

- 3 -

Proposal No. 2:

Election of Six (6) Directors

The terms of office of all five (5) Directors will expire at the conclusion of this shareholders meeting. To further
strengthen management, shareholders are asked to approve the election of six (6) Directors (including two (2)Outside Directors), which is one (1) more than in the previous fiscal year.
The candidates for Director are as follows:
No.

Name
(Date of birth)

Brief career history, positions, responsibilities andsignificant concurrent positions
Nov. 1997
May 2008
Mar. 2010
Mar. 2012
Sep. 2012
Mar. 2013

1

Apr. 2014
Iwao Fusejima(Dec. 13, 1969)

Nov. 2020
Apr. 2023

Joined the Company
Director of the Company
Managing Director of the Company
President & CEO of the Company (to present)
President & CEO of Freund Chemicals, Ltd.
Chairman & CEO of Freund-Vector
Corporation
Chairman & CEO of Freund-Turbo Corporation(to present)
Director of Cos.Mec S.r.l. (to present)
Chairman of Freund-Vector Corporation (topresent)- 4 -Number of theCompany shares held

288,800 shares

No.

Name
(Date of birth)

Brief career history, positions, responsibilities andsignificant concurrent positions
Apr. 1977
Jan. 1996
May 2003
Apr. 2006
May 2007

May 2013

Jan. 2016
Mar. 20172
Masao Wakai(Jul. 29, 1954)

Sep. 2019
Sep. 2019
Apr. 2020
May 2020
Nov. 2020
May 2021
Mar. 2023

Apr. 1997
Mar. 2014
Mar. 2017
Sep. 20193
Apr. 2021
Toshiaki Honda(Aug. 19, 1974)

May 2021
Mar. 2023

Joined Fuji Bank Limited (currently Mizuho
Bank, Ltd.)
Vice President of Fuji Securities Inc.
Financial General Manager of Accounting
Department of Lion Corporation
General Manager of IR Office of Lion
Corporation
Director, Corporate Officer, General Manager
of Corporate Management Department of
CMIC Co., Ltd. (currently CMIC Holdings Co.,Ltd.)
Corporate Officer in charge of humanresources, general affairs, public relations andintellectual property of Dexerials Corporation
Joined the Company as a General Manager of
the Office of Business Development
Deputy Division Director of Overseas Sales
Division of the Company
Corporate Officer, General Manager ofCorporate Planning Division of the Company
Director of Freund-Turbo Corporation (topresent)
Director of Freund-Vector Corporation (topresent)
Director, Division Director of Corporate
Planning Division of the Company
Director of Cos.Mec S.r.l. (to present)
Managing Director, Division Director of
Corporate Planning Division of the Company
Director, CFO, Division Director of
Administration Division, in change of Quality
Assurance Division of the Company (topresent)
Joined the Company
General Manager of Sales Department,
Equipment Division of the Company
Division Director of Domestic Sales Divisionof the Company
Corporate Officer, Division Director of
Customer Business Division of the Company
Director of Freund-Turbo Corporation (topresent)
Director of the Company
Director in charge of Machinery Business
Division, Chemicals Business Division andHamamatsu Technical Center (to present)- 5 -Number of theCompany shares held

12,500 shares

15,100 shares

No.

Name
(Date of birth)

Brief career history, positions, responsibilities andsignificant concurrent positions
Apr. 1985
Oct. 2007

Jun. 2011
Jun. 2013
Sep. 2017*4

Jun. 2019
Toshifumi
Moriguchi(Jan. 4, 1958)

Sep. 2019
Mar. 2023

Apr. 1984

Joined Eisai Co., Ltd.

Jun. 2008

Senior Vice President, Head of ClinicalResearch Center of Eisai Co., Ltd.

Aug. 2009

Joined EPS Corporation (currently EPS
Holdings, Inc.)

Oct. 2018

President and Representative Director,
President and Representative Corporate Officer
of EPS Holdings, Inc.

Oct. 2019

President and Representative Director,
President and Corporate Officer of EPS
Holdings, Inc.

5
Hisashi Tanaka(Jan. 13, 1955)

Joined Yoshitomiyakuhin Corporation.
General Manager of Facility Engineering
Department, Pharmaceutical Division of
Mitsubishi Tanabe Pharma Corporation
Director, Yoshitomi Plant Manager of
Mitsubishi Tanabe Pharma Factory Ltd.
Director, Vice President of Mitsubishi Tanabe
Pharma Factory Ltd.
Director, General Manager of Business
Management Department of BIKEN Co., Ltd.
Joined the Company, Assistant to Division
Director of Chemicals Division, in charge of
Production Planning
Executive Officer, Division Director of
Production Business Division of the Company
Executive Officer, Division Director ofChemicals Business Division of the Company(to present)

Oct. 2020

Vice Chairman and Corporate Officer of EPS
Holdings, Inc.
Chairman and Director of EPS Corporation
Chairman and Director, Chairman andCorporate Officer of EPS International Co.,Ltd.

May 2021

Director of the Company (to present)

Oct. 2021

Special Advisor of EPS Holdings, Inc. (topresent)- 6 -Number of theCompany shares held

10,000 shares

-

No.

Name
(Date of birth)*6

Brief career history, positions, responsibilities andsignificant concurrent positions
Apr. 1981
Apr. 2006

Joined Shionogi & Co., Ltd.
Managing Executive Officer, Division Directorof Manufacturing Division and General
Manager of Production Technology Laboratoryof Shionogi & Co., Ltd.

Apr. 2017

Senior Executive Officer, Division Director of
Pharmaceuticals Business Division of Shionogi& Co., Ltd.
Senior Executive Officer, Division Director of
CMC Research Center of Shionogi & Co., Ltd.
Representative Director of Shionogi PharmaCo., Ltd.
Outside Director of KOKANDO Co., Ltd. (topresent)

Apr. 2018

Ryuichi Kume
(Nov. 8, 1956)

Apr. 2019
Jun. 2022
Jul. 2022

Number of theCompany shares held-

Director and Chairman of Shionogi PharmaCo., Ltd. (to present)

Notes
1. Director candidate Mr. Iwao Fusejima is concurrently the Chairman of Freund-Vector Corporation, which has a business
relationship with the Company. Mr. Fusejima is also the Chairman & CEO of Freund-Turbo Corporation, which has a business
relationship with the Company. There are no significant financial relationships with the Company at other companies where
Mr. Fusejima concurrently has executive positions.
2. None of the other candidates for Director has any special conflicts of interest with the Company.
3. An asterisk (*) indicates a candidate to be newly elected as Director.
4. Mr. Hisashi Tanaka and Mr. Ryuichi Kume are the candidates for election as Outside Directors. The Company has designatedMr. Tanaka as an Independent Director according to the rules of the Tokyo Stock Exchange.
5. The candidates for Outside Directors are as follows:
Mr. Tanaka has many years of experience involving R&D and global development activities in the pharmaceutical industry
and a broad range of knowledge as a manager. Shareholders are asked to reelect Mr. Tanaka as an Outside Director because
he is expected to contribute to strengthening corporate governance by performing the oversight of management and providing
advice regarding all aspects of management.
Mr. Tanaka will have served as Outside Directors for two years at the conclusion of this General Meeting of Shareholders.
Mr. Kume has many years of experience involving R&D, manufacturing technologies and sales in the pharmaceutical industry
and a broad range of knowledge as a manager. Shareholders are asked to elect Mr. Kume as an Outside Director because heis expected to contribute to strengthening corporate governance by performing the oversight of management and providing
advice regarding all aspects of management.
6. Limited liability contracts between the Company and Outside Directors
To enable the Outside Directors to fully perform their duties, pursuant to the provisions of Article 427, Paragraph 1 of theCompanies Act and the Company’s Articles of Incorporation, the Company has entered into a liability limitation agreementwith the Outside Directors to limit their liabilities for damages set forth in Article 423, Paragraph 1 of the Companies Act.
Pursuant to this agreement, the cap on the liability for damages is the minimum liability amount in Article 425, Paragraph 1of the Companies Act. If Mr. Tanaka is reelected, the Company plans to renew this agreement with him. The Company will
also enter into the same liability limitation agreement with Mr. Kume if he is elected.
7. The Company has purchased a liability insurance policy from an insurance company for Directors and Audit & Supervisory
Board Members as stipulated in Article 430, Paragraph 3-1 of the Companies Act. The insurance policy pays for damages
that may be the responsibility of individuals covered by this policy. However, damages caused by intentional acts or serious
negligence are not covered by this policy. If elected, all six (6) Director candidates will be covered by this policy. The
insurance policy is scheduled to be renewed with the same terms and conditions at the next renewal. The Company pays theentire cost of these policies.

- 7 -Proposal No. 3:

Election of One (1) Audit & Supervisory Board Member

The term of office of Audit & Supervisory Board Member Mr. Sakae Hirano will expire at the conclusion of thisshareholders. Accordingly, shareholders are asked to approve the reelection of one (1) Audit & Supervisory Board
Member.
This proposal has received the consent of the Audit & Supervisory Board.
The candidate for Audit & Supervisory Board Member is as follows:
Name(Date of birth)

Sakae Hirano(May 28, 1957)

Brief career history, positions, responsibilities andsignificant concurrent positions
Apr. 1980

Joined Idemitsu Kosan Co., Ltd.

Apr. 2007

Deputy General Manager of Accounting Divisionof Idemitsu Kosan Co., Ltd.

Jul. 2008

President of Idemitsu Lubricants America
Corporation

Jun. 2011

General Manager of Investor Relations and Public
Relations Office of Idemitsu Kosan Co., Ltd.

Apr. 2012

General Manager of Public Relations and CSR
Office of Idemitsu Kosan Co., Ltd.

Jun. 2015

Full-time Audit & Supervisory Board Member ofIdemitsu Kosan Co., Ltd.

May 2019

Full-time Audit & Supervisory Board Member of
the Company (to present)
Audit & Supervisory Board Member of FreundTurbo Corporation (to present)

Number of theCompany shares held

-

Notes
1. The candidate for Audit & Supervisory Board Member has no special conflicts of interest with the Company.
2. Mr. Sakae Hirano is the candidate for reelection as an Audit & Supervisory Board Member. The Company has designated Mr.
Hirano as an Independent Audit & Supervisory Board Member according to the rules of the Tokyo Stock Exchange.
3. The candidate for an Audit & Supervisory Board Member is as follows:
Mr. Hirano has extensive knowledge concerning finance and accounting as well as all aspects of management. Shareholders
are asked to reelect Mr. Hirano as an Audit & Supervisory Board Member because he is expected to perform his management
oversight capabilities from an objective and fair standpoint.
Mr. Hirano will have served as an Outside Audit & Supervisory Board Member for four years at the conclusion of this General
Meeting of Shareholders.
4. Limited liability contracts between the Company and Outside Audit & Supervisory Board Members
To enable the Outside Audit & Supervisory Board Members to fully perform their duties, pursuant to the provisions of Article
427, Paragraph 1 of the Companies Act and the Company’s Articles of Incorporation, the Company has entered into a liability
limitation agreement with the Outside Audit & Supervisory Board Members to limit their liabilities for damages set forth in
Article 423, Paragraph 1 of the Companies Act. Pursuant to this agreement, the cap on the liability for damages is the minimum
liability amount in Article 425, Paragraph 1 of the Companies Act. If Mr. Hirano is reelected, the Company plans to renew
this agreement with him.
5. The Company has purchased a liability insurance policy from an insurance company for Directors and Audit & Supervisory
Board Members as stipulated in Article 430, Paragraph 3-1 of the Companies Act. The insurance policy pays for damages
that may be the responsibility of individuals covered by this policy. However, damages caused by intentional acts or serious
negligence are not covered by this policy. If Mr. Hirano is reelected, he will be covered by this policy.

- 8 -Reference: Directors and Audit & Supervisory Board Members(following the 59th Annual General Meeting of Shareholders if approved byshareholders)
Candidate
No.

Attendance at
the Board ofTerm of Directors/Audit &office Supervisory
Board
meetings

Directors
Audit & Supervisory
Board Members

Name

Age

Position

1

Iwao Fusejima

53

President & CEO

15 years

11/11 times

2

Masao Wakai

68

Director

3 years

11/11 times

3

Toshiaki Honda

48

Director

2 years

11/11 times

4

Toshifumi Moriguchi

65

Director-

5

Hisashi Tanaka

68

Outside Director

2 years

6

Ryuichi Kume

66

Outside Director--

Sakae Hirano

66

Audit &
Supervisory Board 4 years
Member (full time)

11/11 times-

Sayoko Izumoto

69

Outside Audit &Supervisory Board 6 years
Member

11/11 times-

Kazunari Hamada

49

Outside Audit &Supervisory Board 2 years
Member

11/11 times

Advisory Committee
Nomination &Remuneration Committee
Member of Nomination &Remuneration Committee

10/11 times

Chairperson ofNomination &Remuneration Committee
Member of Nomination &Remuneration Committee-

13/13 times
13/13 times

Observer of Nomination &Remuneration Committee

13/13 times

Reference: Skill Matrix
Expected areas of expertise
Name

1

Iwao
Fusejima

●

2

Masao
Wakai

●

3

Toshiaki
Honda

●

4

Toshifumi
Moriguchi●

5

HisashiTanaka●6

Ryuichi
Kume

●

-

Sakae
Hirano●-SayokoIzumoto-Kazunari
HamadaDirectors

Candidate
No.

Corporate
Sales /
management Marketing

Finance /Accounting

IT /Security

Labor /
Human
resources

ESG /Legal / Risk
Global Manufacture
Sustainamanagement experience / R&D
bility

●

●
●

●

●

●
●

●
●

●

●

●

●

●
●

●

●

●

●
●

Audit & Supervisory
Board Members

●
●

●
●

●
●

- 9 -

●

●

●

Proposal No. 4:

Election of Accounting Auditors

The term of office as accounting auditor of Ernst & Young ShinNihon LLC will end at the conclusion of thisshareholders meeting. Consequently, shareholders are asked to approve the election of a new accounting auditor.
This proposal has received the consent of the Audit & Supervisory Board.
ARK LLC has been selected as the candidate to become the new accounting auditor because the Company believes
this firm is suitable to perform the duties of accounting auditor based on a comprehensive assessment of its
capabilities. This includes the firm’s professional skills, independence, quality management system, amount ofcompensation for audits, and expectation to perform audits from a new perspective.
The name, primary place of business, history and other information concerning ARK LLC is as follows.
(As of April 1, 2023)
Name

ARK LLC

Head office

1-23-3, Nishi-Shinjuku, Shinjuku-ku, Tokyo

History

April 1, 1975

Established Kinki Daiichi Audit Corporation and Hijiribashi Audit Corporation

August 17, 1982

Established Meiji Audit & Co.

March 3, 2004

Established ARK Audit & Co.

January 4, 2016

Meiji Audit & Co. and ARK Audit & Co. merged to become ARK Meiji Audit & Co.

July 1, 2016

Hijiribashi Audit Corporation and ARK Meiji Audit & Co. merged

July 1, 2019

Changed its name to ARK LLC

July 1, 2020

Kinki Daiichi Audit Corporation and ARK LLC were merged

OutlineCapitalStaff

50 million yen
Representative Partners

8

Employees

37

Certified Public Accountants

58

Individuals who passed the CPA examination

42

U.S. Certified Public Accountants

1

Individuals who passed the U.S. CPA examination

1

IT and other specialists

4

Auditing assistants

19

Others

13

Total

183

Number ofcompanies audited108- 10 -

Proposal No. 5: Revision of Restricted Stock Compensation for Directors
At the 48th Annual General Meeting of Shareholders held on May 29, 2012, shareholders approved a resolution that
hat limits the annual compensation to a maximum of 300 million yen. At this shareholders meeting, shareholders are
asked to approve the payment of compensation in order to grant restricted stock or the granting of restricted stock ascompensation. Directors other than Outside Directors (the “Directors Covered by the Plan”) (the “Eligible
Directors”) are to receive restricted stock and restricted stock compensation will be within the maximum amount ofcompensation approved by shareholders in 2012. The purposes are to give Eligible Directors an incentive tocontribute to the sustained growth of corporate value and to align the interests of these Directors with the interestsof shareholders.
At the 57th Annual General Meeting of Shareholders held on May 28, 2021, shareholders approved a resolution to
pay compensation (bonuses) linked to results of operations to Eligible Directors and to establish the following
composition of basic (fixed) compensation and performance-linked compensation (bonuses). This compensation iswithin the maximum amount of compensation approved by shareholders in 2012.
Basic (fixed) compensation

Performance-linked compensation (bonuses)

60%

40%

Executive Director

Basic (fixed) compensation

Performance-linked compensation (bonuses)(excluding President, Vice President)

70%

30%

President, Vice President

These percentages assume that performance targets will be reached at a level of 100%. Actual performance-linked
compensation (bonuses) will differ depending on the degree to which performance targets are accomplished. As aresult, performance-linked compensation can vary by multiplying the corresponding percentages in this table byanywhere between 0% and 200%.
In conjunction with the establishment of restricted stock compensation, shareholders are also asked to approve thefollowing revisions to the composition of compensation for eligible Directors.
Representative Director:

Basic (fixed) compensation

Performance-linked bonuses

Stock compensation

CEO, Vice President

60%

30%

10%

Basic (fixed) compensation

Performance-linked bonuses

Stock compensation

70%

20%

10%

Executive Director

These percentages assume that performance targets will be reached at a level of 100%. Actual performance-linked
compensation (bonuses) will differ depending on the degree to which performance targets are accomplished. As aresult, performance-linked compensation can vary by multiplying the corresponding percentages in this table byanywhere between 0% and 200%.
Restricted stock will be distributed in accordance with this proposal, if approved by shareholders, by using either ofthe following methods based on a resolution of the Board of Directors.
(a) The sale or disposal of common stock of the Company with no need for cash payments of compensation
to eligible Directors or payment in kind(b) The payment of monetary claims as compensation to eligible Directors with all monetary claims received
as a payment in kind with no need for the sale or disposal of common stock of the Company (payment inkind distribution)
The maximum number of shares of common stock of the Company that can be sold or disposed of in accordancewith this proposal is 70,000 per year. The maximum total monetary value is 50 million yen per year, which is anamount believed to be suitable based on the purposes or this compensation as explained earlier. However, if thenumber of shares of the Company’s stock issued increases or decreases because of a stock merger or split (including
a gratis stock allocation), the maximum number of shares will be adjusted based on the ratio of the increase or
decrease.
The amount per share paid for a payment in kind distribution is determined by the Board of Directors at a level thatis not particularly advantageous to the Eligible Directors. Furthermore, the amount paid is based on the closing price- 11 -

of common stock of the Company on the Tokyo Stock Exchange on the trading day prior to the day of the resolutionof the Board of Directors concerning the distribution (or the closing price on the most recent previous day if theCompany’s stock was not traded on that day).
The times and allocations for distributions to individual directors are determined by the Board of Directors.
There are currently three (3) Directors who are eligible to receive restricted stock compensation. If shareholders
approve Proposal 2 with no revisions, the number of eligible Directors will increase to four (4).
When distributing restricted stock in accordance with this proposal, the Company and the Eligible Directors shallenter into a restricted stock allotment agreement (the “Allotment Agreement”) that includes the following contents.
(1) The Eligible Directors shall not transfer, grant a security interest in, or otherwise dispose of shares of theCompany’s stock allotted under the Allotment Agreement (the “Allotted Shares”) during the period from the
grant date of the Allotted Shares to the date of resignation or retirement from the position of director of theCompany or any other position determined by the Board of Directors of the Company (“the Restriction Period”)(if the Director resigns or retires before the expiration of three months after the end of the business year of theCompany to which the date of delivery of the Allotted Shares belongs, and there is a date separately determinedby the Board of Directors of the Company within six months after the elapse of the relevant fiscal year, suchdate) (the “Restriction on Transfer”).
(2) If an Eligible Director resigns or retires from the position set forth in (1) above before the expiration of theperiod separately determined by the Board of Directors of the Company (the “Service Period”), the Company
shall, unless there is a reason that the Board of Directors of the Company deems justifiable, will naturally
acquire the Allotted Shares without consideration.
(3) The Company shall lift the Restriction on Transfer of all of the Allotted Shares upon expiration of the
Restriction Period, provided that the Eligible Director has continuously held the position set forth in (1) above
during the Service Period. However, if the Eligible Director resigns or retires from the position set forth in (1)above before the expiration of the Service Period for reasons that the Company’s Board of Directors deems
justifiable as set forth in (2) above, the number of the Allotted Shares for which the Restriction on Transfer islifted shall be reasonably adjusted as necessary.
(4) The Company shall naturally acquire, without consideration, the Allotted Shares for which the Restriction on
Transfer has not been lifted in accordance with the provisions of (3) above at the time the Restriction Period
expires.
(5) The Company shall naturally acquire the Allotted Shares without consideration in the event of a violation oflaws and regulations, internal rules, or the Allotment Agreement, or any other event specified by the Board of
Directors of the Company as an event for which it is reasonable to acquire the Allotted Shares without
consideration.
(6) Regardless of (1) above, in cases where the Company’s General Meeting of Shareholders (or the Company’s
Board of Directors in cases where the Company does not require the approval of the General Meeting of
Shareholders with respect to such organizational restructuring, etc.) approves a merger agreement, a shareexchange agreement, a share transfer plan where the Company becomes a wholly owned subsidiary, or othermatters related to organizational restructuring, etc., and the Company’s Board of Directors passes a resolution,
the Restriction on Transfer of the number of the Allotted Shares that is reasonably determined based on the
period from the commencement date of the Service Period to the date of approval of such organizational
restructuring, etc., shall be lifted prior to the effective date of such organizational restructuring, etc.
(7) In the case stipulated in (6) above, the Company shall naturally acquire, without consideration, the Allotted
Shares for which the Restriction on Transfer has not yet been lifted at the time immediately after the Restriction
on Transfer is lifted in accordance with the provisions of (6) above.

- 12 -

Reasons that granting of restricted stock is appropriate
The distribution of restricted stock to Eligible Directors as compensation or the payment of monetary claims for thereceipt of restricted stock as compensation is proposed for the purposes of giving Eligible Directors an incentive tocontribute to the sustained growth of corporate value and aligning the interests of these Directors with the interestsof shareholders.
The Board of Directors has revised the policy for the determination of compensation, etc. for individual Directors.
On May 8, 2023, the Board of Directors approved a resolution making the approval of this restricted stock proposal
a prerequisite for the approval of the policy revisions that reflect this proposal. The granting of restricted stock inaccordance with this proposal has terms that are required and reasonable with respect to the revised policy for thedetermination of compensation, etc. In addition, this proposal will result in only negligible dilution of the Company’s
stock because the annual limit on the number of shares that can be issued or disposed of based on this proposal is
only 0.3% of all shares issued (as of February 28, 2023).
For these reasons, the Company believes that the terms of this proposal are appropriate.
(Reference)
If this proposal is approved, the Company plans to distribute restricted stock to executive officers and employees
too.

- 13 -