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 9010)
June 1, 2018
To Shareholders with Voting Rights:
Koichiro Horiuchi
President and Representative Director
FUJI KYUKO CO., LTD.
2-1, Shin-nishihara 5-chome,
Fujiyoshida-shi, Yamanashi

NOTICE OF
THE 117TH ANNUAL GENERAL MEETING OF SHAREHOLDERS
Dear Shareholders:
We would like to express our appreciation for your continued support and patronage.
You are cordially invited to attend the 117th Annual General Meeting of Shareholders of FUJI KYUKO
CO., LTD. (the “Company”). The meeting will be held for the purposes described below.
If you are unable to attend the meeting, you can exercise your voting rights in writing or by electromagnetic
means, such as the Internet. Please review the attached Reference Documents for the General Meeting of
Shareholders, and indicate your vote for or against each proposal on the enclosed Voting Rights Exercise Formand return it to us or cast your vote on the voting website designated by the Company after reading “Guidance
for the Exercise of Voting Rights via the Internet” on pages 2–4. Either way, your vote must be received by 6
p.m. on Thursday, June 21, 2018, Japan time.
1. Date and Time:

Friday, June 22, 2018, at 10 a.m. Japan time

2. Place:

Highland Resort Hotel & Spa “Grand Banquet Fuji”
6-1, Shin-nishihara 5-chome, Fujiyoshida-shi, Yamanashi(By train, get off at the Fuji-Q Highland Station on the Fujikyuko Line)

3. Meeting Agenda:
Matters to be reported: 1. The Business Report, Consolidated Financial Statements for the Company’s
117th Fiscal Year (April 1, 2017‒March 31, 2018) 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 117th Fiscal Year
(April 1, 2017‒March 31, 2018)
Proposals to be resolved:
Appropriation of Surplus
Proposal 1:
Partial Amendments to the Articles of Incorporation
Proposal 2:
Election of Seven (7) Directors
Proposal 3:
Election of One (1) Corporate Auditor
Proposal 4:
Introduction of a Stock-based Incentive Plan for Directors
Proposal 5:
4. Matters concerning the exercise of voting rights:(1) If you have exercised your voting rights both by sending the Voting Rights Exercise Form and via theInternet, the vote cast through the Internet shall be deemed valid.
(2) If you have exercised your voting rights via the Internet more than once, the latest vote shall bedeemed valid.
(3) In accordance with laws and regulations and Article 18 of the Company’s Articles of Incorporation,-1-

the Notes to the Consolidated Financial Statements and the Notes to the Non-consolidated Financial
Statements are not attached to this notice of annual general meeting of shareholders and instead areprovided on the Company’s website (https://www.fujikyu.co.jp/soumu/investors/meeting.html). As
part of the Consolidated Financial Statements and the Non-consolidated Financial Statements, said
notes have been audited by the Accounting Auditor and the Corporate Auditors of the Company.
(4) Should the Reference Documents for the General Meeting of Shareholders, the Business Report, theConsolidated Financial Statements and the Non-consolidated Financial Statements require revisions,the revised versions will be posted on the Company’s website shown in (3) above.
When attending the meeting, please submit the enclosed Voting Rights Exercise Form at the receptiondesk.
After the shareholders’ meeting, we will have an informal gathering for shareholders as usual.

-2-Guidance for the Exercise of Voting Rights via the Internet
Exercise of voting rights via the Internet should be done by accessing the voting website designated by theCompany and casting your vote upon understanding of the following matters.
Any inquiries about the use of the voting website should be directed to the Help Desk shown below.
If you attend the shareholders’ meeting in person, voting via the Voting Rights Exercise Form or the Internet isunnecessary.
1. Voting website
The voting website on the Internet: https:// evote.tr.mufg.jp/<QR code>

If you use a smartphone or a mobile phone to exercise your voting rights, you can accessthe voting website by reading the QR code on the left.
“QR code” is a registered trademark of DENSO WAVE INCORPORATED.

(1) Exercise of voting rights via the Internet is only possible by accessing the above voting website
through a computer, a smartphone or a mobile phone (i-mode, EZweb or Yahoo! Keitai).* (However,this voting service is not available from 2 a.m. to 5 a.m. each day.)(2) The exercise of voting rights through a computer or a smartphone might not be possible, depending on
your system environment for using the Internet, in such cases that an antivirus software is in operation,
the proxy server is in use and/or TLS-encrypted communication is not available.
(3) For the exercise of voting rights via a mobile phone, please use any of the services of i-mode, EZweb
or Yahoo! Keitai. For security reasons, the voting system is available only through models that allow
TLS-encrypted communication and transmission of information on mobile phones.
(4) You will be able to exercise your voting rights via the Internet up to 6 p.m. on Thursday, June 21,
2018. However, we would be grateful if you would exercise your voting rights as early as possible.
Note: “i-mode,” “EZweb” and “Yahoo!” are trademarks or registered trademarks of NTT DOCOMO
INC., KDDI CORPORATION and Yahoo! Inc., respectively.

2. Exercise of voting rights via the Internet(1) Please enter the “Login ID” and “Temporary Password,” which are shown on the enclosed Voting
Rights Exercise Form, and vote for or against each proposal in accordance with the on-screen
instructions.
(2) To prevent unauthorized access by third parties other than the Company’s shareholders and thealteration of votes, the voting site will request a user to change his/her “Temporary Password.”(3) Shareholders will be notified of a new “Login ID” and “Temporary Password” each time ashareholders’ meeting is convened.

-3-

3. Handling of multiple votes(1) If you have exercised your voting rights both by sending the Form for Exercising Voting Rights andvia the Internet, those exercised via the Internet will be taken as valid.
(2) If you have exercised your voting rights multiple times on the Internet, the final vote will be deemedvalid. If you have cast multiple votes by using two or more of a computer, a smartphone or a mobile
phone, the final vote will be deemed valid.

4. Charges for accessing the voting site
Please be aware that you shall incur the fees and charges for accessing the voting site (Internet accessfees, phone charges and others). If you access said website by mobile phone, you shall also incur the
packet communication fees and other charges related to the use of the mobile phone.

For any inquiries about the use of the voting website, contact:
Toll-free number: 0120-173-027 (9 a.m.‒9 p.m.)
Stock Transfer Agency Department (Help Desk)
Mitsubishi UFJ Trust and Banking Corporation
To Institutional Investors:
The Company subscribes to the “ICJ Platform,” an electronic voting platform operated by ICJ, Inc.
End

-4-

Reference Documents for the General Meeting of Shareholders
Proposals and References
Proposal 1:

Appropriation of Surplus

The Company proposes to pay a year-end dividend of ¥15.50 per share for the fiscal year ended March
31, 2018, while conforming to the basic policy of maintaining stable dividends and taking into accountthe business results for the fiscal year under review and other factors.
1)

Type of property for dividends
Cash

2)

Allotment of property for dividends and total amount thereof¥15.50 per share of the Company’s common stock
Total amount: ¥827,244,936

3)Effective date of distribution of surplus
June 25, 2018
As of October 1, 2017, the Company conducted a reverse stock split by consolidating two shares of
its common stock into one share. If this proposal is approved as originally proposed, the year-end
dividend for the fiscal year ended March 31, 2018, will have increased by ¥0.50 per share comparedwith the previous year’s result of ¥15 per share reflecting the reverse stock split.

-5-

Proposal 2: Partial Amendments to the Articles of Incorporation
1. Reasons for the amendments(1) Adding a new item to the line of businesses of the Company
Fuji Q Kids Garden, a child-care center run by the Company, was opened on September 1, 2017,
accepting children from neighboring communities as well as children of the employees of the Fujikyu
Group. Accordingly, to clarify the line of businesses offered by the Company, it is proposed to add“child-care service business” to its line of businesses in Article 3 (Purpose).
(2) Changing the term of office of Directors
To further clarify the management responsibility of Directors and construct a management systemthat enables flexible responses to a changing business environment, it is proposed to change the termof office of Directors as prescribed in Article 21 (Term of Office of Directors) of the current Articles
of Incorporation from two (2) years to one (1) year and to delete the provision allowing theadjustment of the term of office. It is also proposed to establish a supplementary rule that prescribes
the term of the Directors currently in office.
(3) Other amendments
It is proposed to make partial changes to the wording.
2. Details of the amendments
Details of the amendments are as follows.
(Amended portions are underlined.)
Amended Articles
CHAPTER I
GENERAL PROVISIONS

Current Articles
CHAPTER I
GENERAL PROVISIONS
Article 1 through Article 2 (Text Omitted)

Article 1 through Article 2 (Unchanged)(Purpose)
Article 3
The Company makes it a purpose to operate thefollowing businesses.
(1) through (13) (text omitted)(New item)(14) Any incidental business that would become
necessary to expand each of the abovementioned
businesses
The Company may hold shares in other companies
whenever that is regarded as necessary or effective
to operate any of the businesses listed above.

(Purpose)
Article 3
The Company’s purpose is to operate the following
businesses.
(1) through (13) (text omitted)(14) Child-care service business(15) Any incidental business that is necessary to
expand each of the abovementioned businesses

Article 4 through Article 18 (Text Omitted)

Article 4 through Article 18 (Unchanged)(Unchanged)

CHAPTER IV
DIRECTORS AND BOARD OF DIRECTORSCHAPTER IV
DIRECTORS AND BOARD OF DIRECTORS

Article 19 through 20 (Text Omitted)

Article 19 through 20 (Unchanged)(Term of Office of Directors)
Article 21
The term of office of Directors shall be until theconclusion of the annual general meeting ofshareholders for the latest year of the fiscal years
ending within two (2) years following their
appointment.
Provided, however, that the term of a Director who
is elected as a substitute for any Director retiring
before the expiration of his/her term shall be until(Term of Office of Directors)
Article 21
The term of office of Directors shall be until theconclusion of the annual general meeting ofshareholders for the latest year of the fiscal years
ending within one (1) year following their
appointment.

-6-the term of the retiring Director expires.
Article 22 through Article 44 (Text Omitted)

Article 22 through Article 44 (Unchanged)(New Provision)

Supplementary Provision
Article 1
Notwithstanding the provision of Article 21, the termof office of Directors who were appointed at theannual general meeting of shareholders held on June22, 2017, shall be until the conclusion of the annual
general meeting of shareholders to be held in 2019.
This supplementary provision shall be deleted upon
said conclusion.

-7-

Proposal 3:

Election of Seven (7) Directors

The terms of office of six (6) Directors—Koichiro Horiuchi, Tetsuo Horiuchi, Ikuo Uno, Kazunari Wada,
Hisao Takabe and Kaoru Suzuki—will expire at the conclusion of this Annual General Meeting of
Shareholders. Accordingly, the election of seven (7) Directors is proposed.
The candidates are as follows:
No.

1

Name
(Date of birth)

Past experience, positions, responsibilities
and significant concurrent positions
April 1983
Joined the Long-Term Credit Bank Ltd. (currently Shinsei BankLtd.)
March 1988
General Manager, Corporate Planning Div. of the Company
June 1988
Managing Director of the Company
February 1989
Senior Managing Director of the Company
Representative Director; Senior Managing Director of theJune 1989
Koichiro Horiuchi
Company(September 17, 1960) September 1989 President and Representative Director of the Company (topresent)
To be reappointed[Significant concurrent positions]・Representative Director, FJ Co., Ltd.
Number of the・Representative Director, Highland Resort Hotel & Spa Co., Ltd.
Company’s shares・Representative Director, Minobusan Ropeway Co., Ltd.
held: 471,346
・Chairman and Representative Director, Television Yamanashi Co., Ltd.
・President, Public Interest Incorporated Foundation Horiuchi Koankai
・Outside Director, MARUI GROUP Co., Ltd. (to retire from this position in June
2018)
・Outside Auditor, The Yamanashi Chuo Bank, Ltd.
・Chairman and Representative Director, FUJI mineral water Co., Ltd.
Reasons for selecting the candidate for Director
As President of the Company, Koichiro Horiuchi has long engaged in the overall management of
the Company, thereby acquiring significant experience. In addition, he has a broad network of
personal contacts and deep insight through his experience of taking important posts, including
Chairman of the Nihon Bus Association. For these reasons, he is judged as qualified to be
nominated again for Director.

-8-

No.

Name
(Date of birth)
June 1996

June 1998

Tetsuo Horiuchi(February 12, 1948)
To be reappointed

2

Number of theCompany’s shares
held: 6,900

June 2000
July 2000
April 2004
June 2004
June 2005
December 2005
July 2006
June 2008
April 2010
June 2012

Past experience, positions, responsibilities
and significant concurrent positions
Director-General, Niigata District Transport Bureau, Ministry ofTransport (currently Ministry of Land, Infrastructure, Transport
and Tourism)
Director, Information Management Div., Transport Policy
Bureau, Ministry of Transport
Resigned from the Ministry of Transport
Auditor, Honshu-Shikoku Bridge Authority
Advisor of the Company
Director of the Company
Managing Director of the Company
General Manager, Transportation Business Div. of the Company
In charge of Transportation Business Div. of the Company
Senior Managing Director of the Company
General Manager, Transportation Business Div. of the Company
Senior Executive Officer of the Company

June 2014

Vice-president and Representative Director of the Company (topresent)
General Manager, Transportation Business Div., and in charge
June 2015of Audit Section, General Affairs Div., Purchasing Div. andCompliance Div. (to present)
Chief Officer supervising Operations Div. and in charge of Audit
April 2018
Section and Compliance Div. (to present)[Significant concurrent positions]
・Chairman and Representative Director, Fujikyu Shonan Bus Co., Ltd.
・President and Representative Director, Fujigokokisen Co., Ltd.
・President and Representative Director, Fujikisen Co., Ltd.
・Chairman and Representative Director, Fujikyu Yamanashi Bus Co., Ltd.

Reasons for selecting the candidate for Director
Tetsuo Horiuchi has considerable experience and expertise accumulated through his long years ofservice at the Ministry of Transport. Since joining the Company, he has taken charge of thetransportation business and engaged in the overall management of the Company as Vice-president
and Representative Director. These achievements make him judged as qualified to be nominatedagain for Director.

-9-

No.

3

Name
(Date of birth)

Past experience, positions, responsibilities
and significant concurrent positions
July 1986
Director, Nippon Life Insurance Company
March 1989
Managing Director, Nippon Life Insurance Company
March 1992
Senior Managing Director, Nippon Life Insurance Company
March 1994
Exective Vice President, Nippon Life Insurance Company
Ikuo Uno
April 1997
President, Nippon Life Insurance Company(January 4, 1935)
June 1998
Director of the Company (to present)
April 2005
Chairman, Nippon Life Insurance Company
To be reappointed
April 2011
Executive Advisor to the Board, Nippon Life Insurance Company
July 2015
Executive Advisor, Nippon Life Insurance Company (to present)
Number of the[Significant concurrent positions]Company’s shares・Honorary Advisor, Nippon Life Insurance Company
held: 0・Outside Auditor, Odakyu Electric Railway Co., Ltd.
・External Audit & Supervisory Board member, Tohoku Electric Power Co., Inc.
・Outside Member of the Board of Directors, Toyota Motor Corporation(scheduled to retire in June 2018)
Reasons for selecting the candidate for Outside Director
Ikuo Uno has considerable experience in corporate management as is seen by the fact that he iscurrently assigned as an Honorary Advisor of Nippon Life Insurance Company. We believe hishighly professional experience in corporate management will enable him to provide appropriate
advice on the overall matters of corporate management from an objective standpoint independent
from the Company’s officers responsible for business execution, thereby further reinforcing theCompany’s management structure. For these reasons, he is judged as qualified to be nominatedagain for Outside Director.
February 1984
January 1999
August 2008
Kaoru Suzuki(September 13, 1958) February 2010
To be reappointed

4

Number of theCompany’s shares
held: 5,000

June 2012
June 2014
June 2014
December 2014
June 2015

Joined Fujikyu Corporation (currently FJ Co., Ltd.)
Joined the Company
Manager, General Affairs Div.; Manager, Planning Div. of theCompany
Chief of the Sales Promotion Section; Manager, Planning Div. of
the Company
Executive Officer of the Company (to present)
Director of the Company (to present)
Chief of the Sales Promotion Section; General Manager, Planning
Div. of the Company
General Manager, Publicity Div.; General Manager, Planning
Div. of the Company
General Manager, Publicity Div.; In charge of Planning Div. of
the Company (to present)

Reasons for selecting the candidate for Director
Kaoru Suzuki has accumulated considerable experience by having long engaged in the planningand publicity divisions of the Company. As a Director, he has taken an active role in the discussions
at meetings of the Board of Directors. These achievements make him judged as qualified to be
nominated again for Director.

- 10 -

No.

Name(Date of birth)
March 1981
October 2009
June 2012
Kenji Omata(January 23, 1959)

5

To be newly appointed November 2013
June 2016
Number of theCompany’s shares
held: 4,500
February 2018

April 2018

Past experience, positions, responsibilities
and significant concurrent positions
Joined the Company
General Manager status of the Company
Executive Officer of the Company (to present)
Manager, Group Business Div. of the Company
Senior Managing Director and Representative Director,
Fujikyu Highland Co., Ltd.
General Manager, Purchasing Div. of the Company
Manager, Group Business Div. of the Company
President and Representative Director, Fujikyu Kensetsu Co.,Ltd.
Manager, Group Business Div., Manager, Transportation
Business Div., and Manager, Real Estate Business Div. of theCompany
Manager, Operations Div. of the Company (to present)

Reasons for selecting the candidate for Director
Kenji Omata has accumulated considerable experience by having long engaged in the planning,development and engineering divisions of the Company and taken an active role as an Executive
Officer of the Company in the discussions at meetings of the Board of Executive Officers. These
achievements make him judged as qualified to be newly nominated for Director.
Masanori Hirose(March 7, 1958)
To be newly appointed

6

Number of theCompany’s shares
held: 3,820

March 1981
August 2010
June 2012
June 2013
June 2014
June 2015

Joined the Company
General Manager status of the Company
Executive Officer of the Company
Manager, Transportation Business Div. of the Company
President and Representative Director, Fujikyu Sales Co., Ltd.
President and Representative Director, Fuji Express Co.,
Executive Officer of the Company (to present)
General Manager, Audit Section and General Manager, General
Affairs Div. of the Company (to present)

Reasons for selecting the candidate for Director
Masanori Hirose has accumulated considerable experience by having long engaged in the generalaffairs division and management of the group companies and taken an active role as an Executive
Officer of the Company in the discussions at meetings of the Board of Executive Officers. These
achievements make him judged as qualified to be newly nominated for Director.

- 11 -

No.

Name(Date of birth)
March 1983
June 2014

Tsuyoshi Furuya(April 29, 1959)
To be newly appointed

7

June 2015
June 2016

Number of theCompany’s shares
held: 2,200
February 2018

April 2018

Past experience, positions, responsibilities
and significant concurrent positions
Joined the Company
General Manager status of the Company
President and Representative Director, Fujikyu City Bus Inc.
President and Representative Director, Fujinomiya Fujikyu Hotel
Co., Ltd. (currently Hotel Fujikyu Co., Ltd.)
President and Representative Director, Shizuhoka Holding, Co.,Ltd.
Manager, Transportation Business Div. of the Company
Executive Officer of the Company (to present)
President and Representative Director, Fujikyu Yamanashi Bus
Co., Ltd.
President and Representative Director, Fujikyu Auto Service
Co., Ltd.
Manager, Transportation Business Div., Manager, Group
Business Div., and Manager, Real Estate Business Div. of theCompany
General Manager, Operations Div. of the Company (to present)

Reasons for selecting the candidate for Director
Tsuyoshi Furuya has accumulated considerable experience by having long engaged in thetransportation, leisure and service divisions and management of the group companies and taken an
active role as an Executive Officer of the Company in the discussions at meetings of the Board of
Executive Officers. These achievements make him judged as qualified to be newly nominated for
Director.
Notes:
1.

The Company has business relationships with FJ Co., Ltd., and Public Interest Incorporated Foundation Horiuchi
Koankai relating to real estate rental and the outsourcing of business.
FJ Co., Ltd., engages in the golf course and real estate businesses, which fall under the same categories of businesses
operated by the Company.

2.

Minobusan Ropeway Co., Ltd., operates the cableway business, which falls under the same category of abusiness operated by the Company.
The Company has a business relationship with FUJI mineral water Co., Ltd., relating to the purchase of articles,
real estate rental and lending of funds.
The Company has a business relationship with Fujigokokisen Co., Ltd., relating to real estate rental lending andthe borrowing of funds through the cash management system (CMS).

3.
4.
5.
6.

7.

Mr. Ikuo Uno is a candidate for Outside Director as stipulated in Article 2, Paragraph 3, Item 7, of the Ordinance for
Enforcement of the Companies Act.
Matters concerning the candidate for Outside Director:
Mr. Ikuo Uno has been notified with the Tokyo Stock Exchange as an independent director as set forth by theregulations of said Exchange, and will have served as Director of the Company for 20 years as of June 2018.
While he was serving as Outside Director of Panasonic Corporation (“Panasonic”), Panasonic received an order fromthe European Commission in December 2012 to pay a penalty for violation of an antitrust law on the Braun tube
business. Although Panasonic appealed to the European Court of Justice, the appeal was rejected in July 2016,
finalizing the penalty. In addition, regarding an act of violating a competition law as to the automobile parts businessfor certain customers, Panasonic reached agreements with the U.S. Department of Justice in July 2013 and theCompetition Bureau of Canada in February 2014 to pay penalties to the respective bodies. Although Mr. Uno had notbeen able to recognize the fact of such violation until it was revealed, from the perspective of legal compliance he wasmaking constant efforts to prevent the occurrence of business execution that would violate laws by carrying out his
duties on the Company’s Board of Directors. Since the fact was revealed, he has monitored the measures taken by
Panasonic to prevent the recurrence of such a problem.
An agreement of limitation of liability with the candidate for Outside Director
Pursuant to Article 427, Paragraph 1, of the Companies Act, Mr. Ikuo Uno and the Company have an agreement to limit
the liability for damages prescribed in Article 423, Paragraph 1, of said Act. The maximum amount of liability pursuant
to the agreement is the amount stipulated by law.
If the reelection of Mr. Uno is approved, the Company will continue said agreement with him.

- 12 -

Proposal 4:

Election of One (1) Corporate Auditor

The term of office of Corporate Auditor Masayuki Kobayashi will expire at the conclusion of this Annual
General Meeting of Shareholders. Accordingly, the election of one (1) Corporate Auditor is proposed.
The Board of Corporate Auditors has previously given its approval to this proposal.
The candidate is as follows:
Name(Date of birth)

Masayuki Kobayashi(November 1, 1951)
To be reappointed
Number of theCompany’s shares
held: 6,900

March 1975
April 2002
October 2002
August 2003
December 2005
June 2006
July 2006
April 2010

April 2011
June 2012
June 2014

Past experience, positions
and significant concurrent positions
Joined the Company
Manager, Second Administration Div. of the Company
Manager, Planning Div. of the Company
General Manager, Second Administration Div. of the Company
Manager, Transportation Business Div.
Director of the Company
General Manager, Transportation Business Div.
President and Representative Director, Fuji Kyuko Kanko Co.,
Ltd., President and Representative Director, Fuji Express Co.,
Ltd., and President and Representative Director, Fujikyu Shonan
Bus Co., Ltd.
General Manager, Human Resources Div. of the Company
Executive Officer of the Company
Full-time Corporate Auditor of the Company (to present)

Reasons for selecting the candidate for Corporate Auditor
Masayuki Kobayashi has served as a full-time Corporate Auditor of theCompany for four years, capitalizing on his considerable knowledge as to thetransportation business and experience in the human resources division of theCompany. Based on such experience and his expertise acquired throughservice as the full-time Corporate Auditor, Masayuki Kobayashi is expected
to help conduct better audits of the Company. These reasons make him
judged as qualified to be nominated again for Corporate Auditor.

- 13 -

Proposal 5:

Introduction of a New Stock-based Incentive Plan for Directors

1. Reasons for the proposal
The Company operates businesses of a highly public nature, centering on transportation via railway
and other vehicles, and seeks to ensure a stable business foundation over the long term. To help achieve
that, the Company has addressed the issue of incentives for Directors in line with the principle given in
Japan’s Corporate Governance Code: “the proportion linked to mid- to long-term results and thebalance of cash and stock should be set appropriately.”This proposal is submitted to request the approval of shareholders for introducing a new stock-based
incentive plan, “Board Benefit Trust (BBT)” (hereinafter called “the Plan”), for the Company’s
Directors (excluding Outside Directors; hereinafter the same applies unless otherwise noted).
By further clarifying a link between the remuneration for Directors and the stock value of theCompany so that Directors can share not only in the advantages of higher stock prices but also in therisks of falling stock prices with shareholders, this proposal intends to raise the motivation of Directors
to contribute to enhancing business performance and corporate value of the Company over the mid- tolong-term.
Accordingly, the remuneration for the Company’s Directors will consist of “basic remuneration,” a“bonus” and a “share-based incentive” linked to the business performance of the Company. As stated in
2. (1) below, Directors will receive the share-based incentive at the time of their retirement from office
as a general rule.
The Plan involves an additional amount of remuneration for Directors, separately from the amountof remuneration for Directors (up to ¥270 million per year, which does not include the amount ofsalaries for service as employee) that was approved at the 105th Annual General Meeting of
Shareholders held on June 27, 2006. Therefore, we hereby request the approval of shareholders as tothe additional amount of share-based remuneration for Directors. It is also proposed that details of thePlan be left to the discretion of the Board of Directors within the range of those described in 2. below.
The number of Directors eligible for the Plan is currently six (6) but will be seven (7) if Proposal 3
is approved as originally planned.
2. Amount of remuneration, etc., relating to the Plan and reference information(1) Overview of the Plan
The Plan is a stock-based incentive system in which the Company’s shares are acquired
through a trust (hereinafter, a trust established under the Plan is called “the Trust”) by using
funds contributed by the Company; and the Company’s shares and the cash equivalent to themarket price of the Company’s shares (hereinafter collectively called “the Company Shares,etc.”) are granted to Directors through the Trust in accordance with the Share Grant Regulations
for Directors set forth by the Company. The timing for Directors to receive the Company Shares,
etc., will be when they retire from office as Director as a general rule.
(2) Persons eligible for the Plan
Directors (Outside Directors and Corporate Auditors are not eligible for the Plan.)(3) Trust period
From August 2018 (planned) until the conclusion of the Trust. (Any specific ending date of
the Trust is not determined. The Trust will continue as long as the Plan continues. The Plan willend with the delisting of the Company’s stock, abolition of the Share Grant Regulations for
Directors or other reasons.)(4) Amount of money entrusted (amount of remuneration, etc., relating to the Plan)
Subject to approval of this proposal at this annual general meeting of shareholders, theCompany will introduce the Plan for a period of five (5) fiscal years beginning with the fiscal
year ending March 31, 2019, and ending with the fiscal year ending March 31, 2023 (hereinafter“the Initial Trust Period”, and for any additional period in increments of five fiscal years
following the Initial Trust Period. Any such additional period and the Initial Trust Period arehereinafter collectively called “the Trust Periods”) and contribute the following amount ofmoney as funds necessary for the Trust to acquire shares of the Company to grant the Company
Shares, etc., to eligible Directors.
Initially, the Company will contribute an amount not exceeding ¥60 million as necessary
funds for the Initial Trust Period at the time of planned establishment of the Trust in August- 14 -

2018.
After the elapse of the Initial Trust Period, the Company will additionally contribute an
amount not exceeding ¥60 million for each of the Trust Periods as a general rule until the Plan isconcluded. In the case of making such additional contribution, however, if there remain in thetrust assets any Company shares (Those assets which are equivalent to the number of points
given to Directors relating to each of the Trust Periods until immediately before the additional
contribution and do not include shares not yet granted to Directors) and money (hereinafter
called the “Residual Shares, etc.”), the total sum of the amount of the Residual Shares, etc. (theamount of any Company shares included shall be calculated at the market price at the closing
date of the Trust Period immediately before the additional contribution) and an amountadditionally contributed by the Company shall not exceed ¥60 million.
In addition, the Company may contribute funds to the Trust in several installments during theTrust Periods including the Initial Trust Period, within the range that the accumulated amount ofcontributions reaches the abovementioned maximum amount for each of the Trust Periods.
Whenever the Company decides to make such additional contribution, it will be disclosed ina timely and appropriate manner.
(5) The method of acquiring the Company shares and the number of shares to be acquired
Acquisition of the Company shares by the Trust shall be conducted by purchasing themthrough the stock market or subscribing to the treasury shares to be disposed of by the Company,
using the funds contributed as described in (4) above. There shall be no issuance of new sharesby the Company.
For the Initial Trust Period, up to 15,000 shares of the Company shall be acquired without
delay after the Trust is established.
Details of each acquisition of the Company shares by the Trust will be disclosed in a timely
and appropriate manner.
(6) The method of determining the number of the Company Shares, etc., to be awarded to Directors
Each Director will be awarded the number of points that is determined for each fiscal year inconsideration of his/her position, etc., in accordance with the Share Grant Regulations for
Directors. The total number of points to be awarded to Directors for a single fiscal year shall not
exceed 3,000 points. This number was determined by considering the current level of
remuneration for Directors and Corporate Auditors, the current and estimated future number of
Directors and other factors, and we judge that as reasonable.
The points awarded to Directors will be converted into shares of the Company’s common
stock on the basis of one share per point at the time of granting the Company Shares, etc., as
described in (7) below. (Provided, however, if a stock split, gratis allotment of shares or shareconsolidation, etc., occurs subsequent to the approval of this proposal, reasonable adjustments
may be made to the maximum number of points and the number of points already awarded or theratio of conversion, according to the related ratios applied to such events.)
The number of points referred to when the Company Shares, etc., are granted to a Director as
described in (7) below shall be, as a general rule, the accumulated number of points that havebeen awarded to said Director until he or she retires from the office of Director (hereinafter such
number of points is called “the Finalized Number of Points”).
(7) Granting of the Company Shares, etc.
If a Director retires from office and satisfies the requisites to be a beneficiary set forth in the
Share Grant Regulations for Directors, said Director will receive from the Trust after retirement
shares of the Company based on the Finalized Number of Points that is determined as describedin (6) above, as a general rule, upon completion of the required procedures to be designated as abeneficiary. Provided, however, that Directors may receive an amount of cash equivalent to a
portion of the shares of the Company to be granted, being quoted at their market price, instead ofreceiving that in the form of Company shares, if they satisfy the relevant requirements prescribedin the Share Grant Regulations for Directors. To enable the granting of such money, the Trust
may sell shares of the Company.
(8) Exercise of voting rights
The voting rights associated with the shares of the Company in the Trust account shall not be
exercised without exception as per instructions from the trust administrator. That way we intend- 15 -

to ensure neutrality toward the management of the Company with respect to the exercise of
voting rights associated with the shares of the Company in the Trust account.
(9) Handling of dividends
Dividends relating to the shares of the Company in the Trust account shall be received by theTrust to be used to acquire shares of the Company and for trust fees to be paid to the trustee withrespect to the Trust. Any dividends, etc., remaining in the Trust at the conclusion of the Trust willbe allocated to the Directors then in office according to the number of points they hold, asprescribed by the Share Grant Regulations for Directors.
(10) Handling of assets remaining at the end of the trust period
The Trust will be concluded in the event of any relevant reasons, including delisting of theCompany shares and abolition of the Share Grant Regulations for Directors.
Of the assets remaining in the Trust at the conclusion of the Trust, all shares of the Company
are to be acquired by the Company without consideration and then cancelled by resolution of theBoard of Directors, whereas any remaining cash, less the amount of money to be granted to
Directors as described in (9) above, is to be granted to the Company.

- 16 -

<Reference: Structure of the Plan>(1) Establish the Share Grant Regulations
for Directors【Trustor】
The Company(3) Acquire shares【Trustee】
Mizuho Trust & Banking Co., Ltd.
(re-trusted to Trust & Custody Services
Bank, Ltd.)The Company’s shares

(1)
(2)
(3)
(4)
(5)
(6)

(5) Not exercise
voting rights(2) Entrust money(4) Points to be awarded

Directors

Acquire theright to receive
benefits

Trust administrator
Instruction not
to exercise
voting rights【Beneficiary】
Directors who have retired fromoffice and satisfiy the requisites to(6) The Company Shares,
etc., to be granted

be a beneficiary

The Company establishes the Share Grant Regulations for Directors within the framework approved in relation
to this proposal.
The Company entrusts money within a range approved in relation to this proposal.
The Trust acquires shares of the Company using the money entrusted (2) through the stock market or by
subscribing to the treasury shares to be disposed of by the Company.
The Company awards points to Directors in accordance with the Share Grant Regulations for Directors.
Following the instructions from the trust administrator, the Trust shall not exercise the voting rights associatedwith the shares of the Company in the Trust account.
To a Director who retires from office and satisfies the requisites to be a beneficiary (hereinafter “theBeneficiary”), the Trust grants the shares of the Company according to the accumulated number of points
awarded to the Beneficiary. If a Director satisfies the relevant requirements set forth in the Share Grant
Regulations for Directors, such Director may receive cash instead of Company shares as to a certain portion of
the points awarded.

End- 17 -