(Translation)

Securities Code: 8068
April 3, 2019NOTICE OF THE 59TH ANNUAL SHAREHOLDERS’ MEETING

Dear Shareholders,
I would like to invite you to attend the 59th Annual Shareholders’ Meeting to be held as
described hereunder.
If you are unable to attend this Annual Shareholders’ Meeting (the “Meeting”) in person,
you may exercise your voting rights in writing or via the Internet. Please peruse the attached
Reference Documents for Annual Shareholders’ Meeting and exercise your voting rights byreturning the enclosed Exercise Voting Rights Form with your selections to us, or byaccessing the Website for Exercising Voting Rights designated by us(https://evote.tr.mufg.jp/) and inputting your selections, by 5:30 p.m. on April 24(Wednesday), 2019.
Sincerely yours,
Moritaka Nakamura
Representative Director & President
Ryoyo Electro Corporation
1-12-22 Tsukiji, Chuo-ku, Tokyo

1. Date and Time:

10:00 a.m. on April 25 (Thursday), 2019(the reception desk opens at 9:00 a.m.)

2. Venue:

JIJI PRESS HALL (on the 2nd floor of Jiji Press Building)
5-15-8 Ginza, Chuo-ku, Tokyo-1-3. Agenda:
Matters to be reported:

1. The business report, the consolidated financial statements, andthe audit reports on the consolidated financial statements by
the Accounting Auditor and the Audit & Supervisory Boardfor the 59th term (from February 1, 2018 to January 31, 2019)
2. The non-consolidated financial statements for the 59th term(from February 1, 2018 to January 31, 2019)

Matters to be proposed:
Proposal No. 1

Appropriation of Surplus

Proposal No. 2

Partial Amendments to Articles of Incorporation

Proposal No. 3

Election of Nine (9) Directors

Proposal No. 4

Determination of Remuneration for Granting Restricted Shares to
Directors*

When attending the Meeting in person, shareholders are requested to submit the enclosed Exercise
Voting Rights Form at the reception desk on the above-mentioned date.

*

We will post any modification to the reference documents for the Meeting, the business report, theconsolidated financial statements and the non-consolidated financial statements on our corporatewebsite (https://www.ryoyo.co.jp).

This is an English translation prepared for the convenience of non-resident shareholders. If there is any
discrepancy between the translation and the original Japanese text, the latter shall prevail.

-2-

Reference Documents for Annual Shareholders’ Meeting

Proposal No. 1: Appropriation of Surplus
We propose that surplus be appropriated in the following manner:
Matters related to year-end dividendWith a stable dividend to our valued shareholders as a base and generally taking into
consideration business performance for the term under review, retained earnings set aside for
future plans for business development, and other factors, we propose that the year-end
dividend for the 59th term be as follows:(1) Type of dividend property
Cash(2) Allotment of dividend property and its aggregate amount¥30 per share;
Including the interim dividend, the dividend for the full year will be ¥60 per share, andthe aggregate amount of dividend will be ¥735,642,270.
(3) Effective date of dividend distribution
April 26, 2019-3-

Proposal No. 2: Partial Amendments to Articles of Incorporation
1. Reason for Amendments
In order to respond to the diversification of our business in line with changes in the businessenvironment, we will amend business purposes mentioned in “Purposes” (Article 2 of the
Articles of Incorporation) as necessary.
Also, the numbering of the provisions will be changed in accordance to the amendmentsof purposes.
2. Details of Amendments
Details of the amendments are stated below.
(The underlined parts indicate the proposed amendments.)
Current Articles of Incorporation

Proposed Amendments

Chapter 1. General Provisions
Article 2 (Purposes)
The business purposes of the Company shall be
as follows:(1) Sale and manufacture of semiconductor
elements, integrated circuits, electronic
apparatus, electric equipment, medical
equipment and the materials and parts
thereof.

Chapter 1. General Provisions
Article 2 (Purposes)
The business purposes of the Company shall be
as follows:(1) Sale, lease, manufacture and processing ofsemiconductor elements, integrated
circuits, electronic apparatus, electric
equipment, medical equipment and thematerials and parts thereof, andintermediation of these businesses.
(2) Sale, lease, development and establishmentof software and information system, andintermediation of these businesses.
(3) Telecommunication work(4) Telecommunication work under
Telecommunications Business Act(5) Secondhand goods dealer business under
Secondhand Articles Dealer Act.
(6) (Change in Japanese only; English
unchanged)(To be newly instituted)(2) Telecommunication work
(To be newly instituted)(To be newly instituted)(3) Installation work and maintenance of theequipment related to each of the preceding
paragraphs.
(To be newly instituted)(7) Planning, research, development anddesign related to each of the preceding
paragraphs.

-4-Current Articles of Incorporation(To be newly instituted)(4) to (7) (Description omitted)

Proposed Amendments(8) Acquisition, management, licensing andtransfer of patents, trademarks, design
rights, copyrights, and know-how and otherintellectual property rights related to eachof the preceding paragraphs.
(9) to (12) (Same as at present)-5-

Proposal No. 3: Election of Nine (9) Directors
The term of office of all eight (8) Directors will expire at the conclusion of this Annual
Shareholders’ Meeting. In that regard, we propose that nine (9) Directors be elected, with theaddition of one (1) Director to strengthen the management structure.
The candidates’ profiles are provided below.
CandidatenumberAttribute ofcandidate

Name

Current positions
at the Company

Attendance tothe Meetingsof the Boardof Directors(FY2018)

1

Kenhachiro Ogawa

Reelection

Representative
Director & Chairman

12/12
100%

2

Moritaka Nakamura

Reelection

Representative
Director & President

10/10
100%

3

Kiyoshi Waki

Reelection

Director & Managing
Executive Officer

12/12
100%

4

Masaaki Tanabe

Reelection

Director & Senior
Executive Officer

12/12
100%

5

Yoshitsugu Tamakoshi

Reelection

Director & Senior
Executive Officer

12/12
100%

6

Yasushi Okazaki

New candidate

Senior Executive
Officer–

7

Seiju Yasuda

New candidate

Senior Executive
Officer–8

Yoshiharu Hayakawa

Reelection
OutsideIndependent

Outside Director

12/12
100%

9

Masumi Shiraishi

New candidate
OutsideIndependent––

Reelection: Candidate for Director to be reelected
New candidate: Candidate for Director to be newly elected
Outside: Candidate for outside Director
Independent: Independent Director pursuant to the provisions of Tokyo Stock Exchange,
Inc.

-6-

No.

1

Number of
Career summary and positions and responsibilities at the
the Company’s
Company (status of important concurrent occupations orshares held
positions at other organizations)Sep. 1963 Joined Ryoyo Electro
May 1982 General Manager, Accounting Dept.
Apr. 1984 Director & General Manager, Accounting
Dept. and Administration Dept.
Apr. 1989 Managing Director & General Manager,
Administration Div., in charge of General
Affairs & Human Resources Div.
Jul. 1995 Senior Managing Director in charge ofComputer System Products Sales Div. andInformation Technology Dept.
<Reelection>
Kenhachiro
Apr. 1999 Representative Director & Senior Managing
85,816
Ogawa
Director in charge of Computer System(January 8, 1945)
Products Sales and Electronic Devices Sales
Apr. 2006 Representative Director & Executive Vice
President in charge of Computer System
Products Sales
Aug. 2006 Representative Director & Executive Vice
President in charge of all sales and technology
divisionsApr. 2008 Representative Director & President
Apr. 2013 Representative Director & Chairman(incumbent)
Reasons for nominating the candidate for Director
The candidate has extensive business experience in the Company, and having been involved in
the management of the Company as a Director for many years, he possesses broad insight of theoverall management of an electronics trading company and demonstrates strong leadership. For
these reasons, the Company believes that he is a suitable candidate capable of improving its
corporate value and accordingly proposes his reelection as a Director of the Company.
Name(date of birth)

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No.

Name
(date of birth)<Reelection>
Moritaka
Nakamura(September 7,
1959)

2

Number of
Career summary and positions and responsibilities at the
the Company’s
Company (status of important concurrent occupations orshares held
positions at other organizations)Apr. 1984 Joined Isetan Co., Ltd. (currently Isetan
Mitsukoshi Ltd.)
Apr. 2011 Director, Executive Officer, General Manager,
Corporate Planning Division, Isetan
Mitsukoshi Ltd.
Apr. 2012 Executive Officer, General Manager,
Personnel Division, Isetan Mitsukoshi
Holdings Ltd.
Apr. 2016 Managing Executive Officer, General
Manager, IT & Group Marketing Strategy
Headquarters, Isetan Mitsukoshi Holdings
Ltd.
May 2017 Joined Ryoyo Electro as Special Advisor
2,500
Aug. 2017

Senior Managing Executive Officer in chargeof Business Renovation
Dec. 2017 Senior Managing Executive Officer in chargeof Sales, Technology, Overseas Marketing andBusiness Renovation
Mar. 2018 Senior Managing Executive Officer in chargeof Sales, Technology and Overseas Marketing,General Manager, Sales and Business
Development Div., in charge of Business
Renovation
Apr. 2018 Representative Director & President(incumbent)
Reasons for nominating the candidate for Director
In his previous positions, the candidate gained extensive experience, knowledge, and personal
network cultivated through being engaged in work related to corporate planning, sales planning,
personnel, IT and group marketing strategy, and being involved in senior management as a
Director. As well as him bringing such experience to the Company, after he was inaugurated as
Representative Director & President, he has been demonstrating strong leadership in thebusiness renovation. For these reasons, the Company believes that he is a suitable candidate
capable of improving its corporate value and accordingly proposes his reelection as a Director of
the Company.

-8-

No.

3

Number of
Career summary and positions and responsibilities at the
the Company’s
Company (status of important concurrent occupations orshares held
positions at other organizations)Apr. 1983 Joined The Mitsubishi Bank, Limited(currently MUFG Bank, Ltd.)
Nov. 2011 Seconded to Ryoyo Electro as General
Manager, Corporate Strategy Div.
Feb. 2012 Executive Officer & General Manager,
Corporate Strategy Div. and Deputy General
Manager, Overseas Marketing Div.
Apr. 2012 Joined Ryoyo Electro
Nov. 2012 Executive Officer & General Manager,
Overseas Marketing Div.
Feb. 2014 Senior Executive Officer & General Manager,
Overseas Marketing Div.
<Reelection>
Kiyoshi Waki
Oct. 2014 Registered as U.S. Certified Public
8,000(October 22,
Accountant
1959)
Feb. 2015 Senior Executive Officer & General Manager,
Administration Div., Overseas Marketing
Div., in charge of CSR Dept.
Nov. 2015 Senior Executive Officer & General Manager,
Administration Div., in charge of CSR Dept.
May 2016 Director & Senior Executive Officer in chargeof Corporate Strategy Div. and General
Manager, Administration Div., in charge ofCSR Dept.
Feb. 2019 Director & Managing Executive Officer incharge of Corporate Strategy Div. andAdministration Div. (incumbent)
Reasons for nominating the candidate for Director
The candidate has gained experience and made achievements in Japan and overseas working fora financial institution, and since joining the Company, he has gained management experience inCorporate Strategy Div., Overseas Marketing Div. and Administration Div. He possesses highly
specialized knowledge and broad insight in accounting and finance. For these reasons, theCompany believes that he is a suitable candidate capable of improving its corporate value andaccordingly proposes his reelection as a Director of the Company.
Name(date of birth)

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No.

4

Number of
Career summary and positions and responsibilities at the
the Company’s
Company (status of important concurrent occupations orshares held
positions at other organizations)Apr. 1980 Joined Ryoyo Electro
Aug. 2003 General Manager, Sales Administration Dept.,
Computer System Products Sales
Jun. 2009 General Manager, Computer System Products
Div. I
Feb. 2011 Executive Officer & General Manager,
Computer System Products Div. I
Feb. 2014 Senior Executive Officer & General Manager,
Computer System Products Div. I<Reelection>
Apr. 2015 Director, Senior Executive Officer & General
Masaaki Tanabe
Manager, Computer System Products Div. I
5,800(October 18,
and Global Solution Div.
1959)
Feb. 2016 Director & Senior Executive Officer in chargeof Computer System Products Div. I and
Computer System Products Div. II and
General Manager, New Business Div. andGlobal Solution Div.
Mar. 2018 Director & Senior Executive Officer in charge
of ICT Div. 1 and ICT Div. 2
Feb. 2019 Director & Senior Executive Officer in chargeof Eastern Region and Western Region(incumbent)
Reasons for nominating the candidate for Director
The candidate has many years of management experience in the ICT and solutions business, andpossesses extensive experience and broad insight of the Company’s business. For these reasons,the Company believes that he is a suitable candidate capable of improving its corporate value
and accordingly proposes his reelection as a Director of the Company.
Name(date of birth)- 10 -

No.

5

Number of
Career summary and positions and responsibilities at the
the Company’s
Company (status of important concurrent occupations orshares held
positions at other organizations)Apr. 1982 Joined Mitsubishi Electric Corporation
Apr. 2010 Group Vice President, General Manager,
Semiconductor & Device Marketing Div. A,
Mitsubishi Electric Corporation
Apr. 2014 Group Vice President, General Manager,
Semiconductor & Device Marketing Div. B,
Mitsubishi Electric Corporation
Apr. 2016 Joined Ryoyo Electro
Senior Executive Officer in charge ofDomestic Semiconductor Sales and General
Manager, Semiconductor Sales Div. II andHead of Eastern Region<Reelection>
Feb. 2017 Senior Executive Officer in charge of
Yoshitsugu
Domestic Semiconductor Sales and Eastern
2,100
Tamakoshi
Region and General Manager, Semiconductor& Device Business Div.
(June 27,
1959)
Apr. 2017 Director & Senior Executive Officer in chargeof Domestic Semiconductor Sales and Eastern
Region and General Manager, Semiconductor& Device Business Div.
Nov. 2017 Director & Senior Executive Officer in chargeof Semiconductor & Device Business andEastern Region and General Manager,
Semiconductor & Device Business Div.
Mar. 2018 Director & Senior Executive Officer in chargeof Semiconductor & Device Div. and General
Manager, Semiconductor & Device Div.
Feb. 2019 Director & Senior Executive Officer in chargeof Semiconductor & Device Div. (incumbent)
Reasons for nominating the candidate for Director
The candidate has many years of experience in the semiconductor and device business at
Mitsubishi Electric Corporation, and having been involved in management as a general manager
in that business since joining the Company, he possesses extensive experience and broad insightof this business area. For these reasons, the Company believes that he is a suitable candidate
capable of improving its corporate value and accordingly proposes his reelection as a Director of
the Company.
Name(date of birth)- 11 -

No.

6

Number of
Career summary and positions and responsibilities at the
the Company’s
Company (status of important concurrent occupations orshares held
positions at other organizations)Apr. 1981 Joined MITSUI & CO., LTD.
Jun. 1999 Vice President, MITSUI & CO. (U.S.A.),
INC.
Apr. 2009 General Manager, Internet Business Div.,MITSUI & CO., LTD.
<New candidate>
Yasushi Okazaki Dec. 2016 General Manager and internal auditor, Audit
395(September 14,
Dept. III, Internal Auditing Div., MITSUI &1958)
CO., LTD.
Jun. 2018 Joined Ryoyo Electro
Senior Executive Officer in charge of IoT Div.
Feb. 2019 Senior Executive Officer in charge of Solution
Div. (incumbent)
Reasons for nominating the candidate for Director
In his former employment, the candidate gained extensive experience and insight in a wide
range of mostly IT related fields on the frontline of business and in internal auditing departments
both in Japan and overseas. After joining the Company, bringing such experience, etc. to theCompany, he has been in charge of the IoT and solutions business. For these reasons, theCompany believes that he is a suitable candidate capable of improving its corporate value andaccordingly proposes his election as a Director of the Company.
Name(date of birth)- 12 -

No.

7

Number of
Career summary and positions and responsibilities at the
the Company’s
Company (status of important concurrent occupations orshares held
positions at other organizations)Apr. 1985 Joined Ryoyo Electro
Aug. 2006 General Manager, Sales Dept. II, Nagoya
Branch OfficeJun. 2009 General Manager, Sales Dept. III, Computer
System Products Div. II<New candidate>Aug. 2013 Deputy General Manager, Computer System
Seiju Yasuda
126
Products Div. II(December 3,
Feb. 2016 General Manager, Computer System Products
1961)
Div. II
Feb. 2017 Executive Officer & General Manager, ICT
Sales Div. II
Feb. 2019 Senior Executive Officer deputy in charge of
Solution Div. (incumbent)
Reasons for nominating the candidate for Director
In addition to possessing broad experience in the respective business fields handled by theCompany, including both Semiconductors/Devices, and ICT/Solutions, the candidate also has
experience of various operational perspectives at both head office and regional bases. As such,
he has extensive experience and wide-ranging insight related to the Company’s business. For
these reasons, the Company believes that he is a suitable candidate capable of improving its
corporate value and accordingly proposes his election as a Director of the Company.
Name(date of birth)- 13 -

No.

8

Number of
Career summary and positions and responsibilities at the
the Company’s
Company (status of important concurrent occupations orshares held
positions at other organizations)Aug. 1973 Registered as Certified Public Accountant
Apr. 1985 Representative Director, Chuo Coopers andLybrand Consulting Co., Ltd.
Jan. 1992 Representative, Chuo Audit Corporation
Nov. 1997 Representative, Kasumi Empowerment<Reelection/Outside
Research Institute (incumbent)/Independent>
Jun. 2007 Outside Director, Mitsui Fudosan Co., Ltd.
Yoshiharu–
Jun. 2012 External Director, Kakaku.com, Inc.
Hayakawa(incumbent)(February 23,
Apr. 2013 Outside Director, Ryoyo Electro (incumbent)
1948)
Jun. 2014 Outside Director, Sanrio Company, Ltd.
(Status of important concurrent occupations or positions atother organizations)Representative, Kasumi Empowerment Research Institute
External Director, Kakaku.com, Inc.
Reasons for nominating the candidate for outside Director
The candidate has expert knowledge as a certified public accountant, as well as extensive
experience and broad insight as a management consultant. For these reasons, the Company
believes that he is a suitable candidate capable of strengthening its corporate governance andimproving its corporate value and accordingly proposes his reelection as an outside Director of
the Company.
Name(date of birth)- 14 -

No.

9

Number of
Career summary and positions and responsibilities at the
the Company’s
Company (status of important concurrent occupations orshares held
positions at other organizations)
May 1989 Joined NLI Research InstituteApr. 2001 Senior Researcher, NLI Research InstituteApr. 2006 Professor, Department of Social Economic
Systems, Faculty of Economics, Toyo
University
Apr. 2007 Professor, Faculty of Policy Studies, Kansai
University (incumbent)
Jun. 2013 Outside Director, Asahi Kasei Corp.
(incumbent)<New candidate/
Jun.
2014
Outside Audit & Supervisory Board Member,
Outside/CentralNippon Expressway Company
Independent>–
Limited (incumbent)
Masumi Shiraishi
Jun. 2015 Outside Audit & Supervisory Board Member,(November 6,
NEW KANSAI INTERNATIONAL1958)
AIRPORT COMPANY, LTD. (incumbent)(Status of important concurrent occupations or positions atother organizations)
Professor, Faculty of Policy Studies, Kansai University
Outside Director, Asahi Kasei Corp.
Outside Audit & Supervisory Board Member, Central
Nippon Expressway Company Limited
Outside Audit & Supervisory Board Member, NEW
KANSAI INTERNATIONAL AIRPORT COMPANY, LTD.
Reasons for nominating the candidate for outside Director
The candidate has never engaged in company management in the past except as an outside
officer. However, she possesses wide-ranging knowledge of the economy and society based onher extensive experience encompassing private enterprise, academia and public office. For thesereasons, the Company believes that she is a suitable candidate who can offer advice frommultifaceted perspectives capable of improving its corporate value and accordingly proposes her
election as an outside Director of the Company.
Name(date of birth)- 15 -

Notes: 1. There are no special interests between the Company and these candidates for Director.
2. Yoshiharu Hayakawa and Masumi Shiraishi are candidates for outside Director.
3. Yoshiharu Hayakawa is currently outside Director of the Company. At the conclusion of thisMeeting, he will have served as outside Director for six (6) years.
4. Agreements for limitation of liability concluded with outside Directors are outlined below.
Currently, the Company has concluded an agreement for limitation of liability for damages
with Yoshiharu Hayakawa in accordance with the provisions of Article 27 of the Articles ofIncorporation. Provided that the proposal of his reelection as Director is approved, theCompany will maintain the agreement that offers limitation of liability with him.
The Company also intends to conclude an agreement for limitation of liability with Masumi
Shiraishi provided that she is elected as outside Director.
Outline of the agreement for limitation of liability is as follows.
Pursuant to the provisions of Article 427, Paragraph 1 of the Companies Act, when theoutside Directors cause damages to the Company arising from their negligence of theirduties, the Company shall limit their liability to the Company to either ¥8 million or theminimum liability amount as stipulated by Article 425, Paragraph 1 of the Companies Act,
whichever is higher, if the relevant outside Directors are without knowledge and are notgrossly negligent in performing their duties. The Company naturally exempts the outside
Directors from the exceeding liability thereof.
5. The Company has given notice of Yoshiharu Hayakawa to Tokyo Stock Exchange, Inc. as anindependent director. Provided that the proposal of his reelection as Director is approved, theCompany plans for his appointment as an independent officer to continue. Also, Masumi
Shiraishi satisfies the independent director requirements pursuant to the provisions of Tokyo
Stock Exchange, Inc., and the Company intends to give notice of her as an independent
director to the said exchange.
6. In order to ensure the independence of the candidates it recommends for outside officer(outside Director and outside Audit & Supervisory Board Member), the Company has
formulated criteria for the selection of outside officers.
The criteria for the selection of outside officers require that candidates shall not fall under
any of the following categories.
(1) A party who is or has been a Director, an Auditor or an employee at the Ryoyo Group in
the past ten years or a relative within the second degree of kinship of such a party(2) A party that is or has been a Director, an Auditor or an employee of a major business
partner (*1) of the Ryoyo Group in the past five years- 16 -

(3) A shareholder that holds 10% or more of the voting rights of the Company’ shares (in thecase of an institutional shareholder, this shall apply to business executives at such an
institutional shareholder)(4) A provider of specialist services (*2) that has received ¥10 million or more of
remuneration on an annual basis from the Ryoyo Group in the past five years(5) A party that has received a donation of ¥10 million or more on an annual basis from the
Ryoyo Group in the past five years(6) A party that has a relationship with the Ryoyo Group in which exchange of Directors is
carried out by mutual dispatch(7) Any other party with a significant interest in the Ryoyo Group*1. This signifies a business partner that has a relationship with the Ryoyo Group that
constitutes 2% or more of the consolidated net sales of the Ryoyo Group in the mostrecent fiscal year.
*2. This signifies an attorney, a certified public accountant, a certified public tax
accountant, a judicial scrivener, a consultant or an advisor.

- 17 -

Proposal No. 4: Determination of Remuneration for Granting Restricted Shares to
Directors
With regard to the amount of remuneration for Directors of the Company, it was approved atthe 48th Annual Shareholders’ Meeting held on April 25, 2008, that the annual remuneration
shall be ¥280 million or less (the salary portion of a Director’s remuneration for Directorsthat also serve as employees is not included), and at the 52nd Annual Shareholders’ Meeting
held on April 26, 2012, that separately from the said amount of remuneration, the annual
remuneration for stock options shall be ¥100 million or less.
Now, in order to give Directors an incentive to endeavor to sustainably enhance thecorporate value of the Company, as well as to promote further shared value between
Directors and shareholders, the Company proposes to pay new remuneration for granting
restricted shares (meaning shares with Transfer Restrictions as defined below) to Directorsof the Company, separately from the aforementioned amounts of remuneration.
Note that subject to the approval and adoption of this proposal as originally proposed, theCompany plans to abolish the stock option scheme for Directors, except for stockacquisition rights that were already granted under the scheme, and not grant stockacquisition rights as stock options to Directors in the future.

The total amount of monetary remuneration claims to be given to Directors (excluding
outside Directors) of the Company (“Eligible Directors”) for the purpose of granting them
restricted shares based on this proposal shall be ¥100 million or less per year, as an amountconsidered reasonable in light of the aforementioned purposes. In addition, the specificallocation to each Eligible Director shall be determined by resolution of the Board of
Directors.
The number of Directors is currently eight (8) (including two (2) outside Directors). Subject
to the approval and adoption of Proposal No. 3 as originally proposed, the number of
Directors will be nine (9) (including two (2) outside Directors).

Additionally, based on a resolution of the Board of Directors of the Company, Eligible
Directors shall contribute all monetary remuneration claims to be provided under this
proposal as property contributed in kind, and shall have shares of common stock of theCompany be issued or disposed of, and the total number of shares of common stock of the- 18 -

Company to be issued or disposed of in this way shall be 100 thousand shares or less per
year (however, if a share split (including allotment of its shares of common stock without
contribution) or a share consolidation of the Company’s common stock is conducted on orafter the date this proposal is approved and adopted, or if other circumstances arise whereby
an adjustment is necessary to the total number of shares of common stock of the Company
to be issued or disposed of as restricted shares, then the total number shall be adjusted
within a reasonable range), and the amount to be paid in per share shall be determined by the
Board of Directors within a range that is not particularly advantageous for Eligible Directors,
based on the closing price of the Company’s common stock on the Tokyo Stock Exchangeon the business day immediately preceding the relevant date of resolution by the Board of
Directors (if there are no trades on that day, the closing price on the most recent preceding
day with trades). In addition, with regard to the issuance or disposition of shares of common
stock of the Company, an agreement mainly containing the following provisions shall beconcluded between the Company and each of the Eligible Directors for the allotment of
restricted shares (the “Allotment Agreement”).

(1) An Eligible Director must not transfer, create a security interest on, or otherwise disposeof shares of common stock of the Company allotted under the Allotment Agreement (the“Allotted Shares”) for a period between the date of delivery of the Allotted Shares andthe day when the Eligible Director resigns or retires from the position of Director of theCompany or any other position designated by the Board of Directors of the Company(the “Transfer Restriction Period” and such restrictions above as the “Transfer
Restrictions”).
(2) If an Eligible Director loses his or her position defined in item (1) above before theperiod determined by the Board of Directors of the Company (the “Period of Service
Rendered”) expires, the Company shall automatically acquire the Allotted Shares
without contribution, unless there are reasons recognized as justifiable by the Board of
Directors of the Company.
(3) Notwithstanding the provision of item (1) above, the Company shall lift the Transfer
Restrictions on all Allotted Shares when the Transfer Restriction Period expires,provided an Eligible Director has been in his or her position designated in item (1)above continuously for the Period of Service Rendered. However, if the Eligible
Director loses his or her position defined in item (1) above prior to the expiration of the- 19 -

Period of Service Rendered for a reason recognized as justifiable by the Board of
Directors of the Company as defined in item (2) above, the Transfer Restrictions shall be
lifted on all the Allotted Shares held by the Eligible Director immediately after the lossof the position.
(4) When the Transfer Restriction Period expires, the Company shall automatically acquire
without contribution Allotted Shares on which the Transfer Restrictions have not been
lifted based on the provision of item (3) above.
(5) Notwithstanding the provision of item (1) above, if, during the Transfer Restriction
Period, matters relating to a merger agreement in which the Company is the extinct
company, a share exchange agreement or share transfer plan in which the Company
becomes a wholly owned subsidiary, or other reorganization, etc. are approved at theCompany’s shareholders’ meeting (or at a meeting of its Board of Directors in cases
where approval at the Company’s shareholders’ meeting is not required in relation to thereorganization, etc.), the Company shall lift the Transfer Restrictions on the Allotted
Shares with the number of shares that is reasonably determined considering the period
from the start date of the Transfer Restriction Period to the date of approval of thereorganization, etc. prior to the date on which the reorganization, etc. becomes effective,by resolution of the Board of Directors of the Company.
(6) In cases specified in item (5) above, the Company shall automatically acquire without
contribution the Allotted Shares on which the Transfer Restrictions have not still been
lifted as of the time immediately after the Transfer Restrictions were lifted based on theprovision of item (5) above.
(7) Procedures for conveying intentions and notifications concerning the Allotment
Agreement, procedures for amending the Allotment Agreement, and other matters to be
determined by the Board of Directors shall be included in the terms and conditions of
the Allotment Agreement.

(Reference)
The Company intends allotting restricted shares, of the same kind as the restricted shares
explained above, to Executive Officers of the Company.

- 20 -