Note: This is an unofficial translation of the Japanese original version and is provided foryour reference and convenience only. Where there are any discrepancies between
the Japanese original and the translated document, the original Japanese
document shall prevail.
To Our Shareholders:
Stock Code: 6741
June 1, 2017
Nippon Signal Co., Ltd.
5-1, Marunouchi, 1-Chome,Chiyoda-ku, Tokyo
President & CEO
Hidehiko Tsukamoto
Notice of Convocation of the Ordinary General Meeting ofShareholders for the 134th Business Term
Notice is hereby given that the Ordinary General Meeting of Shareholders for the 134thBusiness Term of Nippon Signal Co., Ltd. (hereinafter referred to as ‘Company’) will beheld as described below.
Your attendance at the meeting is cordially requested.

1. Date and Time: Friday, June 23, 2017 at 10:00 a.m. (Japan time)(Reception will start at 9:00 a.m.)
2. Venue:Hall of Otemachi Sankei Plaza 4th Floor, Tokyo Sankei Building
7-2, Otemachi 1-chome, Chiyoda-ku, Tokyo

3. Agenda for the Meeting：：[Matters for Reporting]
1 - Reports on the contents of the Business Report and Consolidated Financial
Statements for the 134th Business Term (from April 1, 2016 to March 31, 2017),
and reports on the Auditing Results of Accounting Auditor and Audit &Supervisory Board regarding the Consolidated Financial Statements.
2 - Reports on the content of the Financial Statements for the 134th Business Term(from April 1, 2016 to March 31, 2017).
[Matters for Resolution]
1 - Appropriation of Surplus
2 - Partial Amendment to the Articles of Incorporation
3 - Election of one Alternate Audit & Supervisory Board Member
4 - Revision to Amount of Remuneration for Directors
Upon attending the Meeting, please present the enclosed Voting Form to thereceptionist of the Meeting.

1Guide to the Exercise of Voting Rights
If you attend the Meeting
Please present the Voting Form to the receptionist of the Meeting.
Date and time: Friday, June 23, 2017 at 10:00 a.m. (Japan time)(Reception will start at 9:00 a.m.)
If you are unable to attend the Meeting
Voting by postal mail:Please indicate your approval or disapproval concerning the proposals shown on theVoting Form and send it back to us.
Deadline for exercising voting rights:
Voting Form must be received by 5:05 p.m. on Thursday, June 22, 2017 (Japan time)
InternetPlease input your approval or disapproval concerning each proposal via the voting
website designated by the Company (http://www.it-soukai.com).
Deadline for exercising voting rights:
No later than 5:05 p.m. on Thursday, June 22, 2017 (Japan time)● When you exercise the voting rights through a proxy, such proxy must be only one
shareholder who is entitled to attend the general meeting of shareholders. In thiscase, please submit a written power of attorney and the enclosed Cards for Exerciseof Voting Rights to the receptionist of the Meeting.
● Any changes in the matters described in Reference Documents for General Meetingof Shareholders, Business Report, Consolidated Financial Statements and Financial
Statements will be posted on our website (http://www.signal.co.jp/ir/).
● In accordance with the provisions of laws and regulations and Article 17 of theArticles of Incorporation, the following items are posted on our website(http://www.signal.co.jp/ir/library/meeting.html) and thus they are not included in thisNotice of Convocation.
• “(4) Basic Policy on Parties Who Control Decisions on the Company’s Financialand Business Policies” in the Business Report.
• “Consolidated Statements of Changes in Net Assets” and “Note to Consolidated
Financial Statements” in Consolidated Financial Statements• “Statements of Changes in Net Assets” and “Notes to Financial Statements” inFinancial Statements
Consolidated Financial Statements and Financial Statements audited by Audit &Supervisory Board Members and the Accounting Auditor consist of thedocuments included in this Notice of Convocation, and the “Consolidated
Statements of Changes in Net Assets,” “Notes to Consolidated Financial
Statements,” “Statements of Changes in Net Assets” and “Notes to Financial
Statements” posted on our website.

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No.1 - Appropriation of Surplus
The Nippon Signal Group’s basic policy regarding earnings distribution is to seek toestablish a stable earnings structure and management foundation, and strengthen
its financial condition from a long-term perspective. In addition, the Company aims tosustain research and development, manufacturing infrastructure, and humanresources development, and provide investors with stable dividends and returns
commensurate with performance. We have set a target payout ratio of around 30%
on a consolidated basis.
Under this policy, we would like to increase this term’s year-end dividend by 1 yenfrom the previous fiscal year, taking it to 16 yen per share, considering theCompany’s performance and payout ratio in a comprehensive manner based on thepolicy to provide investors with stable dividends.
Based on this policy, the Company proposes the following.

Matters concerning year-end dividend
1. Type of dividend: Cash
2. Matters concerning allocation of dividend and the total amount:
16.00 yen per one common share of the Company
Total amount of dividend
1,060,991,248 yen
Full-year dividend
23.00 yen per share*As we have already paid an interim dividend of 7.00 yen per share on December
1, 2016, the full-year dividend will be 23.00 yen per share.
3. Effective date of the dividend from surplus: June 26, 2017
Trends in full-year dividend and consolidated payout ratio

3

No.2 - Partial Amendment to the Articles of Incorporation
1. Reasons for Amendment(1) Change of the Term of Office of Directors
The Company proposes that the term of office of Directors prescribed in Article
21 (Term of Office of Directors) of the Company’s Articles of Incorporation be
shortened from two years to one year, together with deletion of Paragraph 2 ofArticle 21 concerning the adjustment of the term of office in association withthe change, in order to build a management structure capable of responding
flexibly to changes in the business environment, as well as to increase
opportunities to gain confidence from our shareholders and clarify themanagerial responsibility of Directors. In addition, to clarify the term of office ofthe current Directors, the Company proposes that a supplementary provision
be added.
(2) Change of the Decision-making Organization with respect to Appropriation ofSurplus etc.
In order to ensure flexible capital and dividend policies, the Company proposesthat Article 37 be newly established in the Company’s Articles of Incorporation,pursuant to Article 459, Paragraph 1 of the Companies Act. This change will
enable the Company to determine the dividend from surplus and other related
matters by resolution of the Board of Directors. In association with this change,
the Company proposes that Article 7 (Acquisition of Own Shares) and Article
39 (Interim Dividends), with which some contents of Article 37 overlap, bedeleted, and certain Articles be renumbered due to insertion of a new Article.

42. Substance of Amendment

Current Articles of Incorporation(Acquisition of Own Shares)
Article 7. TheCompany
may,byresolution of the Board ofDirectors,
acquiretheCompany’s own shares throughmarket trading etc. pursuant toArticle 165, Paragraph 2 of theCompanies Act.

Article 8. - 20. (Omitted)(amended sections underlined)
Proposed Amendment(Deleted)

Article 7. - 19. (Unchanged)(Term of Office of Directors)(Term of Office of Directors)
Article 21.The term of office of a Director Article 20.The term of office of a Director
shall expire upon conclusion ofshall expire upon conclusion of
the ordinary general meeting of
the Ordinary General Meetingshareholders held with respectof Shareholders held withto the last business year ending
respect to the last businesswithin two years from his/heryear ending within one year
election to office.
from his/her election to office.
2 The term of office of a Director(Deleted)
who is elected as a substitute or
to increase the number of
Directors shall expire upon
expiry of the term of office of theother current Directors.

Article 22. - 37. (Omitted)

Article 21. - 36. (Unchanged)

5Current Articles of Incorporation(New)

Proposed Amendment(Decision-making Organization withrespect to Appropriation of Surplus etc.)
Article 37. Except as otherwise provided bylaws and regulations, the mattersspecified in each item of Article
459, Paragraph 1 of theCompanies Act, including
appropriation of surplus, etc.,
shall be determined by resolution
not of the General Meeting ofShareholders but of the Board ofDirectors of the Company.

(Record Date for Appropriation from (Record Date for Appropriation fromSurplus)
Surplus)
Article 38. The record date for payment of Article 38. The record date for payment ofyear-end dividends shall beyear-end dividends shall be
March 31 of each year.
March 31 of each year.
(New)
2 The record date for payment ofinterim dividends shall be
September 30 of each year.
(New)
3 In addition to the provisions of
the above two paragraphs, theCompany
may
distributesurplus by specifying any otherrecord date.

6

Current Articles of Incorporation

Proposed Amendment(Interim dividends)
Article 39. The Company may pay aninterim dividend from surplus
on September 30 as the record
date by resolution of the Boardof Directors.

(Deleted)

Article 40. - 41. (Omitted)

Article 39. - 40. (Unchanged)(New)

SUPPLEMENTARY PROVISION
Notwithstanding the provisionsof Article 20 of the Articles ofIncorporation, the term of officeof Directors elected at theOrdinary General Meeting of
Shareholders held on June 24,
2016
shall
expireupon
conclusion of the Ordinary
GeneralMeetingof
Shareholders to be held in2018.
This supplementary provision
shall be deleted after the period
has lapsed.

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No.3 - Election of one Alternate Audit & Supervisory Board Member
To ensure that the Company will not lack the number of Audit & Supervisory BoardMembers stipulated by law, the Company requests the election of one Alternate
Audit & Supervisory Board Member.
The Company has obtained the consent of the Audit & Supervisory Board regarding
this proposal.
The candidate for the Alternate Audit & Supervisory Board Member is as follows:
Number of theBiography, status, andName
Company's(Date of birth)
significant concurrent positions
shares held
April 1971
Joined The Industrial Bank ofJapan, Limited
September 1981 Director of Tokyo Tatsuno
CorporationMay 1984
Managing Director of Tokyo
Tatsuno CorporationMay 1986
President of Tokyo Tatsuno
CorporationMay 1996
President of Nippon EngineerService Co., Ltd.
April
2012
Presidentof Tatsuno
OutsideCorporation (to Present)
Hiromichi
Tatsuno0(November 1,1948)
Age:68[Reason for nomination as a candidate for
Alternate Audit & Supervisory Board Member]
Hiromichi Tatsuno is the President of one of theworld’s three major gasoline weighing machine
manufacturers and possesses a wealth ofexperience, achievements and knowledge as aglobal manager. We expect that he will offer
auditing and advice on the Company’smanagement by making use of these capabilities.
Therefore, we have nominated him as a candidatefor Alternate Audit & Supervisory Board Member.
1. Hiromichi Tatsuno has no special interest in the Company.
2. Hiromichi Tatsuno is an Alternate Outside Audit & Supervisory Board Membercandidate.
3. If this proposal is approved as proposed and Hiromichi Tatsuno assumes the officeof Outside Audit & Supervisory Board Member, the Company plans to enter into alimited liability agreement with him, which limits his liability for damages underArticle 423, Paragraph 1 of the Companies Act. However, based on the agreement,
the minimum liability amount will be the amount prescribed by laws andregulations.

8(Reference) Criteria for the Independence of Outside Officers
The Company prescribes the following criteria for the independence of Outside Officers
to objectively determine the independence of Outside Officers. If an Outside Officer falls
under any of the following items, the Company determines that the Outside Officer is not
sufficiently independent from the Company.
An Outside Officer designated as an Independent Officer as stipulated under the Tokyo
Stock Exchange, Inc. shall endeavor to maintain independence as prescribed in thisCriteria until resignation. If the Outside Officer loses his/her independence, the Outside
Officer shall notify the Company in advance (or as soon as possible after an event underunavoidable circumstances).
1. A person who is, or has been in the past 10 years, a business executor (*1) orNon-executive Director (if the person is an Outside Audit & Supervisory BoardMember) at the Group (i.e. the Company or its subsidiaries).
2. Any person (party) who falls under any of the following items (1) to (8) in thepast three years.
(1) A party for whom the Group is a major business partner (*2) or a businessexecutor of such party(2) A major business partner of the Group (*3) or a business executor of such partner(3) A consultant, accounting professional, or legal professional who has received asignificant amount of money (*4) or other property from the Group other thanofficer remunerations (if a party who receives such property is a corporation,
association, or any other entity, a party who belongs to the relevant entity)(4) A current major shareholder of the Group (*5) or a business executor of suchshareholder(5) A business executor of a corporation that is a current major shareholder of theGroup (*5)(6) A person who belongs to the appointed audit firm for the statutory audit of theGroup(7) A business executor of an entity whose Outside Officer is also a businessexecutor of the Group(8) A person, an officer or other business executor of a corporation, association, or
any other entity who receives a large amount of donation or grant (*6) from theGroup
3. If a person who falls under 1. and 2. above is a key person (*7), close relatives(spouse, first or second degree relatives) of such person
4. A person who has assumed the office of Outside Officer for eight years ormore in total

9(*1) A business executor refers to a person who executes the duties of a Director (excluding anOutside Director), Executive Officer, or employees, etc.
(*2) A party for whom the Group is a major business partner refers a party who has business
transactions with the Group, with total amount of sales in any of the fiscal year within thelast three fiscal years exceeding 2% of the consolidated net sales of such business partner.
Such business partner shall include its parent company and important subsidiaries if suchbusiness partner is a corporation.
(*3) A major business partner of the Group refers to a party with whom the Group has business
transactions, with total amount of sales in any of the fiscal year within the last three fiscal
years exceeding 2% of the consolidated net sales of the Group, or a party who has made aloan to the Group in the amount at 2% or more of the consolidated net assets of theCompany at the end of the most recent fiscal year.
(*4) A significant amount of money refers to the yearly average money exceeding 10 million yen
over the three most recent fiscal years.
(*5) A major shareholder refers a shareholder who holds, directly or indirectly, 10% or more of
the total voting rights. Such major shareholder shall include its parent company or important
subsidiaries if such major shareholder is a corporation.
(*6) A large amount of donation or grant refers to a yearly average amount exceeding 10 million
yen over the three most recent fiscal years.
(*7) A key person refers to a Director, Corporate Officer, Executive Officer, business executor
who serves as a General Manager or in a higher rank, or business executor who hasauthority equivalent to that of a General Manager or higher position.

10No.4 - Revision to Amount of Remuneration for Directors
It was approved at the 132nd Ordinary General Meeting of Shareholders, held on
June 24, 2015, that the maximum amount of monthly remuneration for Directors shallbe 30 million yen. This amount has remained unchanged to date.
Apart from the portion of the remuneration, the Company has granted bonuses toDirectors through approval of the General Meeting of Shareholders. From this year
onwards, the Company would like to change the monthly remuneration for Directors
to performance-linked remuneration on an annual basis instead of paying bonuses. In
this regard, the Company proposes that the maximum amount of the annual
remuneration for Directors be 500 million yen or less (of which an amount of 36 million
yen or less for Outside Directors).
Based on the maximum amount approved at the 132nd Ordinary General Meeting ofShareholders, this maximum amount of remuneration is calculated in consideration of
the number of Directors prescribed in the Articles of Incorporation and past bonus
payments. There are currently eight Directors (including two Outside Directors).
At present, the Company has decided not to introduce share-based remuneration thathas been adopted more in recent years. Directors of the Company have continued acertain level of share-purchasing through the Officer Shareholding Association. In thisregard, the Company believes that even now, the Directors are fulfilling their
management responsibility with the shareholders’ perspectives in mind.

11