Note: This document has been translated from a part of the Japanese original for reference purposes only. In
the event of any discrepancy between this translated document and the Japanese original, the original shallprevail. The Company assumes no responsibility for this translation or for direct, indirect or any other formsof damages arising from the translation.
(Stock Exchange Code 5357)
June 9, 2021
To Shareholders with Voting Rights:
Mitsuo Taguchi
President
YOTAI REFRACTORIES CO., LTD.
8-1, Nishikinaka-machi, Kaizuka-shi, Osaka

NOTICE OF THE 123RD ANNUAL GENERAL MEETING OF SHAREHOLDERS
Dear Shareholders:
We would like to express our appreciation for your continued support and patronage.
We are pleased to inform you that the 123rd Annual General Meeting of Shareholders of YOTAIREFRACTORIES CO., LTD. (the “Company”) will be held for the purposes as described below.
Amid the spread of the novel coronavirus (COVID-19) infections, requests have been made to refrain fromholding a large-scale gathering. Accordingly, we would like you to consider your health and decide onwhether or not to attend the Annual General Meeting of Shareholders.
Instead of attending the meeting, you can exercise your voting rights in writing or via electromagnetic
methods (the Internet, etc.); please examine the Reference Documents for the General Meeting of
Shareholders below, and exercise your voting rights by 5:40 p.m. on Wednesday, June 23, 2021, Japantime.
1. Date and Time:
2. Place:

Thursday, June 24, 2021 at 10:00 a.m. Japan time
Conference room at the Company’s Head Office 2nd Floor located at
8-1, Nishikinaka-machi, Kaizuka-shi, Osaka

3. Meeting Agenda:
Matters to be reported: 1. The Business Report, Consolidated Financial Statements for the Company’s
123rd Fiscal Year (April 1, 2020 - March 31, 2021) and results of audits by
the Accounting Auditor and the Board of Corporate Auditors of theConsolidated Financial Statements
2. Non-consolidated Financial Statements for the Company’s 123rd Fiscal Year
(April 1, 2020 - March 31, 2021)
Proposals to be resolved:<Company proposals (Proposals 1 and 2)>
Proposal 1:
Election of 6 Directors
Proposal 2:
Determination of Amount of Compensation for Granting Restricted Stock to
Directors (Excluding External Directors)<Shareholder proposals (Proposals 3 through 5)>
Proposal 3:
Partial Amendments to the Articles of Incorporation
Proposal 4:
Appropriation of Surplus
Proposal 5:
Repurchase of Company Shares〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰
◎ When attending the meeting, please submit the enclosed Voting Rights Exercise Form at thereception desk.
◎ If the Reference Documents for the General Meeting of Shareholders, the Business Report,
Non-consolidated Financial Statements and Consolidated Financial Statements are revised,
the revised versions will be posted on the Company’s website (https://www.yotai.co.jp/).

-1-

Reference Documents for the General Meeting of Shareholders
Proposals and References<Company proposals>
Proposal 1:
Election of 6 Directors
The terms of office of all (6) Directors will expire at the conclusion of this year’s Annual General
Meeting of Shareholders. Accordingly, the election of 6 Directors is proposed.
The candidates are as follows:
No.

Positions and responsibilities
at the Company

Name

Attendance at Board of
Directors meetings

1

Mitsuo Taguchi[Reappointment]

President

13 out of 13 Meetings(100%)

2

Yasuo Kawamori[Reappointment]

Managing Director, Manager of
Mizunami Plant and in Charge of
Yoshinaga Plant and Kaizuka Plant

13 out of 13 Meetings(100%)

3

Shinichiro Takebayashi[Reappointment]

Director, General Manager of General
Affairs Department of Head Office

13 out of 13 Meetings(100%)

4

Tadashi Taniguchi[Reappointment]

Director, Manager of Hinase Plant

13 out of 13 Meetings(100%)

5

Hiroshi Itano

External Director

10 out of 10 Meetings(100%)

6

Shinobu Akiyoshi[Reappointment][External][Independent][New candidate][External][Independent]

－

-2-

－

No.

Name
(Date of birth)

Past experience, positions
and significant concurrent positions

Joined the Company
Technical General Manager of Engineering Division
Engineering General Manager and Technical General Manager
of Engineering Division
March 2008
Engineering General Manager of Engineering Division
Director, General Manager of Engineering Division
June 2009
June 2015
Managing Director, General Manager of Engineering Divisionand in Charge of Technical Research Laboratory
April 2017Managing Director, Manager of Hinase Plant and in Charge ofEngineering Division
Mitsuo Taguchi
June 2019
President (to present)(October 21, 1960)[Reasons for nomination as a candidate for Director]
Mr. Mitsuo Taguchi has been engaged in the management of the Company as[Reappointment]
Director since 2009. He served as Director and General Manager of Engineering
Division and as Managing Director and Manager of Hinase Plant. Starting from[Attendance at the Board 2019, he has been responsible for the Company’s management as the President.
of Directors meetings] He has a wealth of experience and extensive insight in the Company’s business,
13 out of 13 meetings
and therefore we propose his reelection as Director.
(100%)(Note)
There are no special interests between Mr. Mitsuo Taguchi and the Company.
April 1984
Joined OSAKA YOGYO CO., LTD
March 2008
General Manager of Production Department of Hinase Plant
June 2013
Director, Manager of Hinase Plant
April 2017
Director, Manager of Yoshinaga Plant
June 2019
Managing Director, Manager of Yoshinaga Plant

Number ofshares of theCompany held

April 1984
March 2006
October 2006

1

2

September 2019 Managing Director, Manager of Yoshinaga Plant and Mizunami
Plant
July 2020
Managing Director, Manager of Mizunami Plant and in Chargeof Yoshinaga Plant and Kaizuka Plant (to present)[Reasons for nomination as a candidate for Director]
Yasuo Kawamori
Mr. Yasuo Kawamori has been engaged in the management of the Company as(September 18, 1959)
Director since 2013, and has been serving as Managing Director since 2019. He
has a wealth of experience and extensive insight in the Company’s business, and[Reappointment]
therefore we propose his reelection as Director.
(Note)[Attendance at the Board
There are no special interests between Mr. Yasuo Kawamori and the Company.
of Directors meetings]
13 out of 13 meetings(100%)-3-

66,70039,700No.

Name(Date of birth)

Past experience, positions
and significant concurrent positions
April 1986
March 2015
June 20173
Shinichiro Takebayashi(January 16, 1964)

Joined the Company
General Manager of General Affairs Department of Head OfficeDirector, General Manager of General Affairs Department of
Head Office (to present)[Reasons for nomination as a candidate for Director]
Mr. Shinichiro Takebayashi has mainly been involved in the administrative
department for many years, and has been engaged in the management of theCompany as Director since 2017. He has a wealth of experience andextensive insight in the Company’s business, and therefore we propose hisreelection as Director.
(Note)
There are no special interests between Mr. Shinichiro Takebayashi and theCompany.

Number ofshares of theCompany held

15,600[Reappointment][Attendance at the Boardof Directors meetings]
13 out of 13 meetings(100%)

4
Tadashi Taniguchi(September 13, 1972)

April 1995
Joined the Company
April 2017
General Manager of Production Department of Hinase Plant
June 2019
Director, Manager of Hinase Plant (to present)[Reasons for nomination as a candidate for Director]
Mr. Tadashi Taniguchi has mainly been involved in the production
department for many years, and has been engaged in the management of theCompany as Director since 2019. He has a wealth of experience andextensive insight in the Company’s business, and therefore we propose hisreelection as Director.
(Note)
There are no special interests between Mr. Tadashi Taniguchi and the Company.

[Reappointment][Attendance at the Boardof Directors meetings]
13 out of 13 meetings(100%)

-4-

6,400

No.

Name
(Date of birth)

Past experience, positions
and significant concurrent positions
April 1980

5

Joined Nomura Computer Systems Co., Ltd. (present Nomura
Research Institute, Ltd.)
April 2005
Senior Managing Director and Deputy Division Manager ofServices & Industrial Systems Division of Nomura ResearchInstitute, Ltd.
April 2009
Senior Corporate Managing Director, Division Manager ofServices & Industrial Systems Division, General Manager of
Kansai Regional Headquarters and General Manager of Chubu
Regional Headquarters of Nomura Research Institute, Ltd.
April 2014
Senior Executive Managing Director in charge of Supervising ofCorporate Administration, Risk Management and Compliance
Hiroshi Itanoof Nomura Research Institute, Ltd.
(February 19, 1957)
June 2014
Member of the Board and Senior Executive Managing Director
in charge of Supervising of Corporate Administration, Risk
[Reappointment]
Management and Compliance of Nomura Research Institute,[External]
Ltd.
[Independent]
April 2015
Representative Director, Member of the Board and Senior
Executive Managing Director in charge of Supervising of[Attendance at the Board
Corporate Administration, Risk Management, Compliance andof Directors meetings]
Health and Productivity Management of Nomura Research
10 out of 10 meetings
Institute, Ltd.
(100%)
April 2016
Representative Director, Member of the Board and Senior
Executive Managing Director in charge of Supervising ofCorporate Administration of Nomura Research Institute, Ltd.
April 2017
Member of the Board of Nomura Research Institute, Ltd.
June 2017
External Director, Data Applications Co., Ltd. (to present)
June 2018
Retired from Nomura Research Institute, Ltd.
September 2018 Director, FIXER Inc.
August 2019
Retired from FIXER Inc.
June 2020
External Director, the Company (to present)
External Director, YAMASHIN-FILTER CORP. (to present)[Reasons for nomination as a candidate for External Director and asummary of expected roles]
Mr. Hiroshi Itano has a wealth of experience and insight in corporate
management and sufficient knowledge in overall management, information
technology, etc. We believe that his extensive experience and broad knowledge
will contribute to the management of the Company, and therefore we propose hisreelection as External Director. If he is elected, he is expected to fulfill duties
including providing advice on management policies, determining importantmatters, and supervising the business execution.
Years served as External Director: 1 year (at the conclusion of this General
Meeting of Shareholders)(Notes)1. There are no special interests between Mr. Hiroshi Itano and the Company.
2. Mr. Hiroshi Itano is a candidate for External Director. He is also a candidate
for Independent Director prescribed by Tokyo Stock Exchange, Inc.
3. The Company has entered into an agreement with Mr. Hiroshi Itano to limit
his liability under Article 423 Paragraph 1 of the Companies Act, pursuant to
Article 427 Paragraph 1 of the Companies Act. The maximum amount ofliability for damages under this agreement shall be the amount provided for inlaws and regulations. If the reelection of Mr. Hiroshi Itano is approved, theCompany intends to continue such agreement.

Number ofshares of theCompany held

-5-

3,400

No.

6

Name
(Date of birth)

Past experience, positions
and significant concurrent positions

December 2008 Registered as attorney-at-law, Osaka Bar Association
January 2009
Joined Doujima Sougou Law Office
January 2018
Partner, Doujima Sougou Law Office (to present)
April 2018
Regular Delegate, Osaka Bar Association
March 2019
Retired from Regular Delegate, Osaka Bar Association
November 2020 Consultant, Nonprofit Organization Hikosen
Member of Living Environment Dispute Conciliation
Committee, Ashiya City
February 2021 Registered as an Employment Environment Improvement
Expert (Class 1)[Reasons for nomination as a candidate for External Director and a
Shinobu Akiyoshi
summary of expected roles](March 29, 1977)
Ms. Shinobu Akiyoshi has a wealth of experience and insight as an expert in law.
She also has knowledge in creating a society where not only women, but also
[New candidate]persons with disabilities and the aged can play active roles. We believe that her[External]
extensive experience and broad knowledge will contribute to the management of[Independent]
the Company, and therefore we propose her election as External Director. If she is[Attendance at the Board elected, she is expected to provide valuable advice on corporate legal affairsof Directors meetings] based on her expertise as an attorney-at-law, and encourage the promotion of
women’s participation in the Company.
－(Notes)1. There are no special interests between Ms. Shinobu Akiyoshi and theCompany.
2. Ms. Shinobu Akiyoshi is a candidate for External Director. She is also a
candidate for Independent Director prescribed by Tokyo Stock Exchange, Inc.
3. If the appointment of Ms. Shinobu Akiyoshi is approved, the Company
intends to enter into an agreement with her to limit her liability under Article
423 Paragraph 1 of the Companies Act, pursuant to Article 427 Paragraph 1 of
the Companies Act. The maximum amount of liability for damages under thisagreement shall be the amount provided for in laws and regulations.

Number ofshares of theCompany held

0

(Note)The Company has entered into a directors and officers liability insurance contract stipulated in Article 430-3 of theCompanies Act to insure all the Directors of the Company. The said insurance contract covers legal damages andlitigation expenses incurred by the insured. If the candidates take office as Director, they will be insured under the
insurance contract, which is to be renewed with the same terms and conditions during their terms of office.

-6-

Proposal 2:

Determination of Amount of Compensation for Granting Restricted Stock to Directors(Excluding External Directors)

The amount of compensation for Directors of the Company was approved to be within 320 million yen
per year (excluding employee salaries for Directors concurrently serving as employees) at the 108th Annual
General Meeting of Shareholders held on June 28, 2006. In this proposal, as part of our efforts to review theofficer compensation system, the Company proposes the payment of compensation for granting restricted
stock to Directors of the Company (excluding External Directors, hereinafter “Eligible Directors”), in a new
category separate from the one above. The purpose of this proposal is incentivize Eligible Directors tosustainably improve the Company’s corporate value and to foster a greater sense of shared value withshareholders. The compensation paid for granting restricted stock to Eligible Directors based on this
proposal shall be monetary claims, and the total amount thereof shall be within 50 million yen per year
(however, this excludes employee salaries for Directors concurrently serving as employees). The specifictiming of payment to each Eligible Director shall be at a certain time each year, and the specific distribution
shall be determined by the Board of Directors after consulting the Nomination and Compensation Advisory
Committee. However, the compensation for granting restricted stock shall not be paid to External Directors.
As the allocation of restricted stock is determined via a comprehensive consideration of various matters
including the level of the Director’s contribution at the Company, the contents thereof are deemed to bereasonable.
While there are currently 6 Directors (including 2 External Directors), if Proposal 1 “Election of 6
Directors” is approved as originally proposed at the 123rd Annual General Meeting of Shareholders, there
will be 6 Directors (including 2 External Directors). Based on a Board of Directors resolution, Eligible
Directors shall pay all monetary claims received via this proposal as property contributed in kind, andreceive the issuance or disposal of the Company’s common stock. The total number of the Company’scommon stock to be issued or disposed of as a result shall be within 100,000 shares per year (however, in theevent of a stock split [including gratis allocation of the Company’s common stock] or reverse stock split of
the Company’s common stock, or any other event that requires an adjustment to the total number of theCompany’s common stock issued or disposed of as restricted stock on or after the day this proposal isapproved, the said total number shall be adjusted within a reasonable scope). The amount to be paid in per
share shall be determined by the Board of Directors, within a scope that will not be particularly
advantageous to the Eligible Directors who will receive the said common stock, based on the closing price of
the Company’s common stock on the Tokyo Stock Exchange on the business day prior to the date of each
Board of Directors resolution (if no transactions were made on that day, the closing price on the trading day
immediately preceding that day). In addition, the issuance or disposal of the Company’s common stock
based on this proposal and the payment of monetary claims as property contributed in kind shall be subject
to the conclusion of a restricted stock allocation contract (hereinafter the “Allocation Contract”) between the
Company and the Eligible Directors, which includes the contents below. The Company deems that the
maximum amount of compensation in this proposal, the total number of shares of the Company’s common
stock to be issued or disposed of, and other conditions for granting restricted stock to Eligible Directors
based on this proposal are reasonable, as they have been determined in consideration of the abovementioned
purpose, business conditions of the Company, the policy for determining the contents of compensation, etc.
for individual Directors of the Company, and various other factors.
[Outline of Contents of the Allocation Contract](1) Period of transfer restrictions
Eligible Directors may not transfer, collateralize, or dispose of (hereinafter the “Transfer Restrictions”)
the Company’s common stock that they receive via the Allocation Contract (hereinafter the “AllocatedShares”) during the period (hereinafter the “Transfer Restriction Period”) from the date of receiving theallocation via the Allocation Contract, until the time immediately after retirement from the position of
executive or employee of the Company or its subsidiaries predetermined by the Company’s Board of
Directors (hereinafter the “Predetermined Position”).
(2) Treatment at the time of retirement
If an Eligible Director retires from the Predetermined Position before the expiration of a period
predetermined by the Company’s Board of Directors (hereinafter the “Service Provision Period”), theCompany shall automatically acquire the Allocated Shares without consideration, except in the case of an
expiration of the term of office, death or any other justifiable reason for retirement.

-7-

(3) Lifting of the Transfer Restrictions
Notwithstanding the provisions of (1) above, the Company shall lift the Transfer Restrictions on all
Allocated Shares when the Transfer Restriction Period expires, on the condition that the Eligible Director
was continuously in the Predetermined Position during the Service Provision Period. However, in thefollowing cases the Company shall rationally adjust, as necessary, the number of Allocated Shares on which
the Transfer Restrictions will be lifted and the time when the Transfer Restrictions will be lifted: i) the
Eligible Director retires from the Predetermined Position before the expiration of the Service Provision
Period due to the expiration of the term of office, death or any other justifiable reason set forth in (2) above;or ii) after the expiration of the Service Provision Period, the Eligible Director retires from thePredetermined Position before the expiration of the Transfer Restriction Period due to the expiration of theterm of office, death or any other justifiable reason set forth in (2) above. In addition, the Company shall
automatically acquire without consideration the Allocated Shares on which Transfer Restrictions have notbeen lifted, immediately after the Transfer Restrictions have been lifted pursuant to the provisions above.
(4) Treatment in the case of organizational restructuring, etc.
Notwithstanding the provisions of (1) above, if, during the Transfer Restriction Period, a merger
agreement in which the Company will become a disappearing company, a share exchange agreement or ashare transfer plan in which the Company will become a wholly owned subsidiary, or other mattersconcerning organizational restructuring, etc. is approved at a General Meeting of Shareholders of theCompany (or by the Company’s Board of Directors, if the said organizational restructuring, etc. does not
require approval at a General Meeting of Shareholders), the Company shall lift, prior to the effective date of
the said organizational restructuring, etc., Transfer Restrictions on the Allocated Shares, in a number
determined rationally by a resolution of the Company’s Board of Directors based on the period from thecommencement date of the Transfer Restriction Period to the approval date of the said organizational
restructuring, etc. In the cases set forth above, the Company shall automatically acquire without
consideration the Allocated Shares on which Transfer Restrictions have not been lifted, immediately after theTransfer Restrictions have been lifted.
(5) Other matters
Other matters concerning the Allocation Contract shall be stipulated by the Company’s Board of
Directors.
[Reference]
At the Board of Directors meeting held on May 13, 2021, the Company revised the policy for
determining the contents of compensation, etc. for individual Directors. The details are as follows.
1. Basic policy
The basic policy on compensation for Directors of the Company is to have a compensation system tied toshareholder interests so that it duly functions as an incentive for Directors to sustainably improve corporate
value, and to determine an appropriate level of compensation for individual Directors based on the
responsibilities of each Director. Specifically, the compensation of Directors is comprised of components
including basic compensation as fixed compensation, performance-linked compensation, and non-monetarycompensation.
2. Policy for determining amount of compensation, etc. of fixed compensation (monetary compensation) for
individual Directors (including policy for determining timing or conditions of the payment ofcompensation, etc.)
The basic compensation of the Company’s Directors is a monthly fixed compensation, determinedthrough a comprehensive consideration of factors including the Director’s position, duties and years in office,the business performance of each fiscal year, and the balance with employee salaries.
3. Policy for determining contents, amounts and methods of calculating figures of performance-linked
compensation, etc. and non-monetary compensation, etc. (including policy for determining timing or
conditions of the payment of compensation, etc.)
Performance-linked compensation, etc. shall be monetary compensation that reflects businessperformance, etc., in order to raise the motivation of improving business performance in each fiscal year.
Bonuses, calculated based on factors including the total amount of dividends and the operating profit of eachfiscal year, are paid at a certain time every year.
Non-monetary compensation, etc. shall be composed of restricted stock for the purpose of incentivizing-8-Directors to sustainably improve the Company’s corporate value and to foster a greater sense of shared value
with shareholders. Monetary claims will be paid for granting restricted stock to Directors of the Company(excluding External Directors, hereinafter “Eligible Directors”), in a total amount within 50 million yen per
year. The total number of common stock to be newly issued or disposed of by the Company shall be within
100,000 shares per year (however, in the event of a stock split [including gratis allocation of the Company’scommon stock] or reverse stock split of the Company’s common stock with an effective date on or after thedate of the resolution at the 123rd Annual General Meeting of Shareholders, the said total number shall be
adjusted as necessary within a reasonable scope on or after the said effective date based on the ratio, etc. ofthe stock split or reverse stock split.). The monetary claims are paid at a certain time every year.
The above is reviewed as necessary based on recommendations by the Nomination and Compensation
Advisory Committee.
4. Policy for determining the ratio of amounts of monetary compensation, performance-linked
compensation, etc., or non-monetary compensation, etc. in the amount of compensation, etc. forindividual Directors
The ratio of each type of compensation for Directors shall be designed so that the higher the Director’s
position, the greater the weight of performance-linked compensation, etc. and non-monetary compensation,etc. This ratio is examined by the Nomination and Compensation Advisory Committee. Based onrecommendations by the Nomination and Compensation Advisory Committee, the Board of Directors (thePresident who is delegated authority in 5) shall determine the contents of compensation, etc. for individual
Directors.
As a guideline, the ratio of each type of compensation, etc. shall be 7 : 2 : 1 for basic compensation,
performance-linked compensation, etc. and non-monetary compensation, etc. respectively.
However, the compensation composition ratio will fluctuate according to each Director’s position andduties, and the degree of achievement of business performance, etc. in each fiscal year.
5. Matters regarding determination of contents of compensation, etc. for individual Directors
Regarding the amount of compensation for individual Directors, based on a Board of Directors resolution,
the task of determining the specific contents has been delegated to the President. The contents of the said
authority are: within the scope of standards set forth by the Board of Directors, determine each Director’sbasic compensation amount and the evaluation distribution of bonuses based on the business performance of
duties each Director is in charge of. To ensure the said authority is appropriately exercised by the President,
the Board of Directors requires the President to consult with and receive recommendations from theNomination and Compensation Advisory Committee regarding the original proposal. The President, who has
been delegated with the above task, shall make decisions based on recommendations by the Nomination andCompensation Advisory Committee. For stock-based compensation, based on recommendations by the
Nomination and Compensation Advisory Committee, the number of shares allocated to individual Directors
shall be resolved by the Board of Directors.

-9-<Shareholder proposals>
Proposals 3 to 5 have been proposed by a single shareholder. Furthermore, Proposals 4 and 5 have beenplaced on the agenda as proposals subject to the approval of Proposal 3.
The Board of Directors opposes all the Proposals 3 to 5.
As a general rule, the contents of shareholder proposals and their reasons are presented as they were
submitted by the proposing shareholders.
Proposal 3:

Partial Amendments to the Articles of Incorporation(1) Contents of the proposal<Partial Amendments to the Articles of Incorporation>
Delete Article 40, Paragraph 3 of the Articles of Incorporation of the Company.
(2) Reasons for the proposal
In view of the current state of business activities of the Company, in order to realize ample shareholder
returns, the Company should reflect the opinions of shareholders, delete Article 40, Paragraph 3 of thecurrent Articles of Incorporation, and set forth that matters listed in each item of Article 459, Paragraph 1 of
the Companies Act should be determined based on a resolution of the General Meeting of Shareholders. Outof the shareholder proposals presented by the claimant, Proposal 4 “Appropriation of Surplus” and Proposal
5 “Repurchase of Company Shares” have been proposed subject to the approval of this proposal.
<Opinion of the Board of Directors on Proposal 3>
1. Opinion of the Board of Directors of the Company
The Board of Directors opposes Proposal 3.
2. Reasons for the opposition
From the perspective of striving for harmony with society and sustainably improving corporate value,
the Company’s capital policy should be determined upon considering changes in the business environment
surrounding the Company, the nature of the Company’s business, and other factors. Therefore, theCompany believes that determining dividends of surplus, etc. of the Company, as matters that requirebusiness judgment, are best handled by the Board of Directors for flexible judgment instead of by a General
Meeting of Shareholders.
From the perspective of striving for a flexible capital policy, it is necessary for the Board of Directors to
be able to make swift judgments.
For the reasons above, the Board of Directors shall be the decision-making body to resolve on dividendsof surplus, etc. of the Company pursuant to provisions of Article 459, Paragraph 1 and Article 460 of theCompanies Act.
In the First Medium-Term Management Plan announced on May 13, 2021, the Company set forth its
goals of strengthening capital distribution towards strategic investments and shareholder returns, paying
stable dividends with the aim of a 30% consolidated payout ratio, and implementing appropriate returns via
flexible repurchases of Company shares. Going forward, we shall continue striving to strike a balance
between sustainably improving corporate value and providing shareholder returns stably and flexibly.
Accordingly, the Board of Directors of the Company opposes Proposal 3.

- 10 -

Proposal 4:

Appropriation of Surplus(1) Contents of the proposal<Appropriation of Surplus (Subject to approval of Proposal 3 “Partial Amendments to the Articles ofIncorporation”)>
Using retained earnings of the Company, pay a year-end dividend for the fiscal year ended March 31,
2021 as follows.
(a) Type of dividend property
Cash(b) Matters regarding allocation of dividend property and total amount thereof
Pay a dividend of 50 yen per share of the Company’s common stock(c) Effective date of dividends of surplus
June 25, 2021
(2) Reasons for the proposal
According to the “Consolidated Financial Results for the Nine Months Ended December 31, 2020” of
the Company, on the Quarterly Consolidated Balance Sheets as of December 31, 2020, the cash and deposits
held were around 10.7 billion yen. On the other hand, there were no borrowings. Moreover, the Company
held around 1.7 billion yen of investment securities including cross-shareholdings. Therefore, it can be seenthat the Company already holds an ample amount of cash and near-cash assets.
According to the aforementioned Consolidated Financial Results, as of December 31, 2020, theCompany’s equity (consolidated) was 28,436 million yen (about 1,305 yen per share) with an equity ratio of
81.6%, while the expected profit (consolidated) was 1.9 billion yen (87.1 yen per share). However, based on
the assumption of an annual dividend of 10 yen per share as announced by the Company, the dividend
payout ratio will be around 11.4%. In light of the large amount of shareholders’ equity and the expected
profit, from the perspective of shareholders, the level of this expected dividend amount is not sufficient.
Meanwhile, compensation per Director increased significantly from 13.86 million yen in the fiscal year
ended March 31, 2010 to 24.29 million yen in the fiscal year ended March 31, 2020. Moreover, over thesame period, although average wages of employees rose from 5.60 million yen to 6.25 million yen, thedividend payout ratio significantly decreased from 42.3% to 12.4%. While it is natural for the compensationof Directors to increase when business performance improves, a company has various types of stakeholders.
The representative types of stakeholders are employees, shareholders, Directors externally customers andbusiness partners. Directors should stay disciplined and demonstrate the Company’s purpose of existence by
emerging victorious against rivals in the competition and providing products that offer merits to customers.
On top of that, Directors have a responsibility to distribute merits in a balanced manner among all sorts ofstakeholders, including the above representative stakeholders.
The Company’s share price has a PBR of less than 1, and without debt, the Company’s financialbalance is extremely good. The profit margin on sales is also high, and the competitive advantage of
products is unquestionable. On the other hand, salaries of employees are around the same level as theindustry average, and the dividend payout ratio of 12.4% is significantly lower than the TSE average. As aresult, the share price, which indicates a company’s future potential, is struggling with a PBR of less than 1,
and the path of capital procurement, which is the biggest merit of being a listed company, has been closed
off due to a lack of necessity.
The Company does not need to retain any more funds internally. Furthermore, any further increase inequity will simply lead to a decrease in ROE. By returning surplus funds to shareholders, the Company canraise shareholder value, which will ultimately lead to an increase in the share price. Therefore, the dividendsof surplus should be greatly increased.
Even if the appropriation of surplus in this proposal is implemented, the total dividend amount is within
the scope of profit. Therefore, there will be no considerable changes to the levels of equity, cash and depositsof the Company from the previous fiscal year-end, and the Company’s financial condition will remainrobust.

- 11 -

<Opinion of the Board of Directors on Proposal 4>
1. Opinion of the Board of Directors of the Company
The Board of Directors opposes Proposal 4.
2. Reasons for the opposition
In the First Medium-Term Management Plan announced on May 13, 2021, the Company set forth its
basic strategy and key measures of investing in people, things and information to build a businessfoundation to support sustainable growth while maintaining high profitability and strong soundness. The
basic approach is to sustainably improve corporate value by striving for harmony with society and raisingfinancial and non-financial value through maintaining profitability and promoting ESG management.
In the said Medium-Term Management Plan, the Company stipulates that it will sustainably improve
corporate value and strengthen capital distribution towards strategic investments and shareholder returns
while striving for high profitability and strong soundness of the financial structure. The Company’s
shareholder return policy is to pay stable dividends with the aim of a 30% consolidated payout ratio, and to
implement appropriate returns via flexible repurchases of Company shares. Furthermore, the Company’s
basic policy on dividends is to pay them according to revenue while strengthening the corporate financial
structure and enhancing internal reserves, based on the continuous payment of stable dividends. The
Company’s plan to increase the dividend per share by 1.0 yen compared to the previous fiscal year to 17.0
yen for the fiscal year ended March 31, 2021 was announced on May 13, 2021. Since the fiscal year ended
March 31, 2014, we have been meeting the expectations of our shareholders by raising the annual dividend
from 9.0 yen per share to 17.0 yen per share.
Furthermore, on May 13, 2021, the Company announced that during the period from May 14, 2021 toMarch 31, 2022, it will repurchase a maximum of 1.5 billion yen or 1.80 million shares of its own stock.
While this shareholder proposal refers to the current level of the Company’s cash and deposits, as statedin the First Medium-Term Management Plan announced on May 13, 2021, the business environment andsocietal circumstances surrounding the Company are rapidly changing. These changes are based on
numerous factors including concerns over a deterioration in the performance of the Company’s business
partners due to the maturation of the Japanese market; reduced demand for refractories in the long-term
perspective; soaring raw material prices for example due to environmental regulations in China; rising calls
for decarbonization, ESG and SDGS; and natural disasters. Therefore, in order to continue raisingprofitability while maintaining strong financial soundness going forward, aside from shareholder returns,
the Company needs to distribute capital to strategic investments and utilize internal reserves for purposessuch as to 1) secure raw materials globally; 2) replace deteriorated equipment with latest IoT-based
equipment; 3) invest in energy conservation and decarbonization; and 4) invest in a Business Continuity
Plan (BCP) that analyses the hazard information of each office. Implementing such initiatives ahead of peer
companies will lead to strengthening our competitiveness, and we are certain that this will lead to securing
stable profits. Among the initiatives, the decarbonization initiatives stated in 3) above are a lifeline for theCompany, which operates in the materials industry with high levels of energy consumption. Going forward,
the Company needs to further accelerate its investments in renewable energy, and such investments require
funds over the long term. However, this shareholder proposal concerning the appropriation of surplus does
not take into account the abovementioned medium- to long-term capital distribution of the Company, andits focus is on short-term shareholder returns. Therefore, the Company believes that this shareholder
proposal is likely to degrade the Company’s competitiveness, and has a risk of impairing the medium- tolong-term interests of all shareholders.
The Company intends to realize the goals in the First Medium-Term Management Plan to sustainably
improve corporate value and strengthen capital distribution towards strategic investments and shareholder
returns while striving to maintain high profitability and strong soundness of financial structure, thereby
meet the expectations of all stakeholders including shareholders.
Accordingly, the Board of Directors of the Company opposes Proposal 4.

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Proposal 5:

Repurchase of Company Shares(1) Contents of the proposal<Repurchase of Company Shares (Subject to approval of Proposal 3 “Partial Amendments to the
Articles of Incorporation”)>
Pursuant to provisions of Article 156, Paragraph 1 of the Companies Act, within 360 days from the dateof the conclusion of this Annual General Meeting of Shareholders, the Company shall pay a total of 3.0
billion yen in cash to acquire a total of 3 million shares of the Company’s common stock. However, if thetotal acquisition cost permitted by the Companies Act (distributable amounts stipulated in Article 461 of theCompanies Act) is below the said amount, the maximum amount shall be the maximum acquisition costpermitted by the Companies Act.
(2) Reasons for the proposal
Although Sumitomo Osaka Cement Co., Ltd. is the leading shareholder in terms of the Company’s
capital policy, it has a holding ratio of less than 20%, and other shareholders are also small and dispersed,
resulting in an unstable situation. While the Company currently holds around 16% of its own stock, since theshare price has a PBR of less than 1, it will be rational for the Company to buy its own stock to stabilize its
capital policy and improve ROE.
Even if the repurchase of Company shares in this proposal is implemented, there will be no
considerable changes to the levels of equity, cash and deposits of the Company from the previous fiscal
year-end, and the Company’s financial condition will remain robust.

<Opinion of the Board of Directors on Proposal 5>
1. Opinion of the Board of Directors of the Company
The Board of Directors opposes Proposal 5.
2. Reasons for the opposition
As the Company has developed an environment to secure the rights of all shareholders as well as
fairness among them all, the Company does not intend to stabilize its capital policy by repurchasing
Company shares for the reason mentioned in the shareholder proposal, that the leading shareholder of theCompany Sumitomo Osaka Cement Co., Ltd. has a holding ratio of less than 20%.
The Company’s basic policy on dividends is to pay them according to revenue while strengthening thecorporate financial structure and enhancing internal reserves, while keeping the continuous payment of
stable dividends in mind. The Company’s plan to increase the dividend per share by 1.0 yen compared tothe previous fiscal year to 17.0 yen for the fiscal year ended March 31, 2021 was announced on May 13,2021. Since the fiscal year ended March 31, 2014, we have been meeting the expectations of ourshareholders by raising the annual dividend from 9.0 yen per share to 17.0 yen per share.
In addition, in the First Medium-Term Management Plan announced on May 13, 2021, the Company
has declared to strengthen capital distribution towards strategic investments and shareholder returns,
stipulating the payment of stable dividends with the aim of a 30% consolidated payout ratio as well as
appropriate returns via flexible repurchases of Company shares.
Furthermore, on May 13, 2021, the Company announced that during the period from May 14, 2021 toMarch 31, 2022, it will repurchase a maximum of 1.5 billion yen or 1.80 million shares of its own stock.
Similar to what was mentioned in the previous shareholder proposal concerning the appropriation of
surplus, this shareholder proposal concerning the repurchase of Company shares does not take into accountthe medium- to long-term capital distribution of the Company, and its focus is on short-term shareholder
returns. Therefore, the Company believes that this shareholder proposal is likely to degrade the Company’scompetitiveness, and has a risk of impairing the medium- to long-term interests of all shareholders.
The Company intends to realize the goals in the First Medium-Term Management Plan to sustainably
improve corporate value and strengthen capital distribution towards strategic investments and shareholder
returns while striving to maintain high profitability and strong soundness of financial structure, thereby
meet the expectations of all stakeholders including shareholders.
Accordingly, the Board of Directors of the Company opposes Proposal 5.

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Notice Regarding Year-End Dividend Payment for the 123rd Fiscal Year
The Company resolved, in accordance with the provisions of Articles of Incorporation of the Company, at
the meeting of its Board of Directors held on May 13, 2021 that the year-end cash dividend shall be 12 yen per
share and effective date (payment start date) shall be June 25, 2021.
The total dividend will be 17 yen per share as the Company has made an interim dividend payment of 5 yen
per share in December 2020.
Documents related to the year-end dividend for the 123rd fiscal year are scheduled to be mailed to theregistered address by June 24, 2021.

Shareholders’ Memorandum
Fiscal Year

From April 1 to March 31 of the next year

Date to fix shareholders toreceive year-end dividend

March 31

Date to fix shareholders toreceive interim dividend

September 30

Annual General Meetingof Shareholders

June every year

Transfer agent/special
account

Mitsubishi UFJ Trust and Banking Corporation

Contact information

Mitsubishi UFJ Trust and Banking Corporation
Osaka Corporate Agency Department
3-6-3, Fushimimachi, Osaka Chuo-ku, Osaka 541-8502
Tell: 0120-094-777

Stock exchange listings

Tokyo Stock Exchange (First Section)

Method of public notice

Public notices are made electronically on the Company’s
website (https://www.yotai.co.jp/ir/j_annual.html).
(However, in the event that electronic public notices are
not available due to accidents or other unavoidable
circumstances, public notices shall be given in the
Nikkei.)- 14 -