This English translation is made for reference purposes only, and in the event of any discrepancies
between the English version and the Japanese version, the Japanese version prevails.
Securities Code: 5988
June 10, 2016

To Our Shareholders:
51 Iwai-cho, Hodogaya-ku,
Yokohama-shi, Kanagawa

Piolax, Inc.
Yukihiko Shimazu, President

Notice of the 100th Annual Meeting of Shareholders
The Company would hereby like to request shareholders to attend the Company’s 100th Annual
Meeting of Shareholders as described below.
If you are unable to attend the meeting on the date, you may also exercise your voting rights
in writing. We kindly request you to read the following Reference Document for the Annual
Meeting of Shareholders, indicate “for” or “against” on each agenda item on the voting form
enclosed herewith, and return it no later than the end of business at 5:30 p.m., June 27, 2016
(Monday).
Sincerely yours,

1.

Date:

10:00 a.m., June 28 (Tuesday), 2016

2.

Venue:

4F Hall, Yokohama Technical Center, Piolax, Inc.
179 Kariba-cho, Hodogaya-ku, Yokohama-shi, Kanagawa

3.

Purposes:
Items to be reported:

1.

2.

Items to be resolved:
Agenda No. 1:
Agenda No. 2:
Agenda No. 3:

The Business Report, the Consolidated Financial
Statements and the Results of Consolidated Financial
Statement Audits by the Accounting Auditor and the Board
of Auditors for the 100th business period (April 1, 2015 toMarch 31, 2016)
The Non-Consolidated Financial Statements for the 100th
business period (April 1, 2015 to March 31, 2016)

Appropriation of Retained Earnings
Partial Amendment to the Articles of Incorporation
Election of Four (4) Directors (excluding Directors who are
Audit and Supervisory Committee Members)

Agenda No. 4:

Election of Three (3) Directors who are Audit and Supervisory
Committee Members

Agenda No. 5:

Election of One (1) Director who is Substitute for Audit andSupervisory Committee Member

Agenda No. 6:

Decision of Amount of Remunerations for Directors (excluding
Directors who are Audit and Supervisory Committee Members)

Agenda No. 7:

Decision of Amount of Remunerations for Directors who are
Audit and Supervisory Committee Members-1-

・ When you attend the meeting, we kindly request that you submit the enclosed voting form to
the receptionist at the venue. Please also bring this notice to the meeting with you to help us
preserve resources.
・ Of the matters to be included in this notice, the following matters are not listed in this notice, but
are put on the Company’s website (http://www.piolax.co.jp/en/) in accordance with laws andregulations and the provisions of Article 19 of the Company’s Articles of Incorporation.
・

Notes to the Consolidated Financial Statements

・

Notes to the Non-Consolidated Financial Statements

・ The Consolidated Financial Statements and Non-Consolidated Financial Statements audited by the
Auditors and Accounting Auditors in the preparation of the Auditor’s Report and the Accounting
Auditor’s Report respectively include the matters stated in the document attached to this notice.
They also include matters to be reported in the Notes to the Consolidated Financial Statements andNotes to the Non-Consolidated Financial Statements.

・ If there are any revisions to the Reference Document for the Annual Meeting of Shareholders,the Business Report, and/or the Non-Consolidated and the Consolidated Financial Statements,
such revisions will be listed on the Company’s website. (URL: http://www.piolax.co.jp/en/)-2-

Reference Document for the Annual Meeting of Shareholders
Meeting Agenda and Referential Matters

Agenda No. 1:

Appropriation of Retained Earnings

The Company’s fundamental policy on the appropriation of profits is to execute balanced
management on steady returns of earnings to shareholders and adequate internal reserves tostrengthen the business foundations. Based on this policy, the Company proposes theyear-end dividends and the appropriation of other retained earnings for the fiscal year underreview as follows.
1. Year-end Dividend(1)Type in which dividends are paid
Cash payment(2)

Allocation of dividends and total amount of dividends
The Company would like to disburse 45.00 yen per common share of the Company.
In this case, the total amount of dividends shall be 555,362,055 yen.
As a result, the dividends on an annual basis will be 80.00 yen per share including theinterim dividends of 35.00 yen per share.

(3)

Effective date on which dividends are disbursed from retained earnings
June 29, 2016

2. Appropriation of Other Retained Earnings(1)

Increased retained earning item and its amount
General reserve(2)

3,200,000,000 yen

Reduced retained earning item and its amount
Retained earnings brought forward

3,200,000,000 yen-3-Agenda No. 2:
1.

Partial Amendment to the Articles of Incorporation

Reasons for proposal(1) In response to the enforcement of the “Act on Partial Revision of Companies Act“ (Act No.
90 of 2014) on May 1, 2015, the system of a Company with Audit and Supervisory
Committee was introduced as a new organizational design. Accordingly, the Company
would like to shift from a Company with a Board of Auditors to a Company with Audit andSupervisory Committee. The aim of this is to enhance corporate governance with thestrengthened supervisory function of the Board of Directors. For this purpose, theCompany sets new provisions concerning a Director who is Audit and Supervisory
Committee Member and the Audit and Supervisory Committee, deletes provisions
concerning the Auditor and the Board of Auditors and makes other changes that arenecessary for shifting from a Company with a Board of Auditors to a Company with
Audit and Supervisory Committee.
(2) With the revision of the Companies Act, the scope of Directors, etc. who may enter into alimited liability agreement changed. Even after such change, the Company should be able
to enter into a limited liability agreement with Directors other than Executive Directors inorder to bring valuable human resources on board as Directors on an ongoing basis. To thisend, the Company proposes to amend Article 33, Paragraph 2 of the existing Articles ofIncorporation. With regard to this amendment, the consent of all of the Auditors has beenobtained.
(3) Now that the business environment surrounding the Company has considerably changed
from the time when the Company introduced the takeover defense measures and that legal
procedures of large-scale purchase have also been developed in the Financial Instruments
and Exchange Act, the purpose for which the Company introduced the existing
countermeasures (i.e., securing information and time necessary for the shareholders tomake appropriate decision) is guaranteed to a certain extent.
In response to the above changes in the situation and evaluation of the existing
countermeasures by certain shareholders and investors, etc., the Company resolved to
discontinue the existing countermeasures after the closing time of this Annual Meeting of
Shareholders as a result of carefully discussing the future handling of the existing
countermeasures internally and, accordingly, proposes to amend the Articles ofIncorporation.
(4) In addition to those mentioned above, necessary amendments such as modification ofwordings shall be made in line with each of the above amendments.

-4-

2.

The details of revision
The details of revision of the Articles of Incorporation are as follows.
Amendments to the Articles of Incorporation proposed in this agenda item shall take effectat the closing time of this Annual Meeting of Shareholders.
(Those to be amended are underlined.)
Proposed revisions
Chapter 1 General Provisions

Current Articles of Incorporation
Chapter 1 General Provisions
Articles 1 through 3 (provisions omitted)(Organs)
Article 4 The Company shall have a Meetingof Shareholders, Directors and thefollowing organs in place.
(1) Board of Directors(2) Auditor(3) Board of Auditors(4) Accounting Auditor
Article 5 (provision omitted)
Chapter 2

Articles 1 through 3 (unchanged)(Organs)
Article 4 The Company shall have a Meetingof Shareholders, Directors and thefollowing organs in place.
(1) Board of Directors(2)Audit and Supervisory Committee(deleted)(3) Accounting Auditor
Article 5 (unchanged)

Shares

Articles 6 through 12 (provisions omitted)

Chapter 2

Articles 6 through 12 (unchanged)

Chapter 3 Meeting of Shareholders
Articles 13 through 19 (provisions omitted)
Chapter 4

Shares

Chapter 3 Meeting of Shareholders
Articles 13 through 19 (unchanged)

Directors and Board of Directors

Chapter 4

Directors and Board of Directors(Number of Directors)(Number of Directors)
Article 20 The number of Directors of the Article 20 The number of Directors (excluding
Directors who are Audit andCompany shall be ten or less.
Supervisory
Committee
Members) of the Company shall beeight or less.
(new provision)
2. The number of Directors who are
Audit and Supervisory Committee
Members shall be five or less.
(Method of Election)(Method of Election)
Article 21 Directors shall be elected at a Article 21 Directors shall be elected at a
Meeting of Shareholders.
Meeting of Shareholders as Directors
who are Audit and Supervisory
Committee Members or other
Directors, distinctively.
2. (provision omitted)
2. (unchanged)
3. (provision omitted)
3. (unchanged)(Term of office)(Term of office)
Article 22 The term of office of each Director Article 22 The term of office of each Director
shall expire at the closing of an(excluding Directors who is Audit
andSupervisory
Committeeannual meeting of shareholders for
Member) shall expire at the closing
the last fiscal year ending within oneof an annual meeting of shareholders
year following his/her election.
for the last fiscal year ending within
one year following his/her election.
-5-

Current Articles of Incorporation(new provision)

2. The term of office of a Director
elected due to an increase in thenumber of Directors or as a
substitute shall be the remainder of
the term of office of other Directors.
(new provision)(new provision)

Articles 23 through 24 (provisions omitted)(Board of Directors)
Article 25 The Board of Directors shall decidematters set forth in laws andregulations, these Articles ofIncorporation and other importantmatters
concerningbusiness
execution of the Company.

Article 26 (provision omitted)

Proposed revisions
2. The term of office of each Director
who is Audit and Supervisory
Committee Member shall expire at theclosing of an Annual Meeting of
Shareholders for the last fiscal year
ending within two years following
his/her election.
(deleted)

3. The term of office of a Director who
is Audit and Supervisory Committee
Member elected as a substitute for a
Director who is Audit andSupervisory Committee Member
who retired from office before theexpiration of the term of office shallbe the remainder of the term ofoffice of such retired Director who is
Audit and Supervisory Committee
Member.
4. The effect of the resolution of electionof a Director who is Audit andSupervisory Committee
Memberelected as a substitute under Article
329, Paragraph 3 of the Companies
Act shall expire at the opening of an
Annual Meeting of Shareholders forthe last fiscal year ending within two
years following his/her election.
Articles 23 through 24 (unchanged)(Board of Directors)
Article 25 The Board of Directors shall decidematters set forth in laws andregulations, these Articles ofIncorporation and other importantmatters
concerningbusiness
executionoftheCompany.
However, the Board of Directors
may, pursuant to the provision of
Article 399-13, Paragraph 6 of theCompanies Act, delegate all or partof the decisions on importantbusiness execution (except for thematters set forth in each Item of
Article 399-13, Paragraph 5) to a
Director by resolution of the Boardof Directors.
Article 26 (unchanged)-6-Current Articles of Incorporation(Calling Procedureof Meeting of Board of Directors)
Article 27 A notice of calling a meeting of theBoard of Directors shall be issued toeach Director and Auditor at least
three days prior to the date of themeeting together with the agenda
items; provided, however, that theabove notice period may be
shortened in cases of an emergency.
2. With the consent of all of the
Directors and Auditors, a meeting of
the Board of Directors may be held
without the calling procedure.
Article 28 (provision omitted)(Method of Resolution
at Meeting of Board of Directors)
Article 29 (provision omitted)
2. With the consent of all of the
Directors who are entitled to a voting
right on an item to be resolved at a
meeting of the Board of Directors inwriting or by electromagnetic record,
the Company may deem that suchitem to be resolved has been adopted
unless an Auditor raises anobjection.
(Minutes of Meeting of Board of Directors)
Article 30 Procedures at a meeting of the Boardof Directors shall be recorded in theminutes in accordance with laws andregulations and the Directors andAuditors who attended the meetingshall affix their name and seal
thereto or electronically sign theminutes
Article 31 (provision omitted)(Remuneration, etc.)
Article 32 Financial benefits to be received
from the Company as consideration
for the execution of the duties suchas remuneration and bonuses of
Directors shall be determined byresolution of a Meeting of
Shareholders.

(Exemption from Liability of Director)
Article 33 (provision omitted)

Proposed revisions(Calling Procedureof Meeting of Board of Directors)
Article 27 A notice of calling a meeting of theBoard of Directors shall be issued toeach Director at least three days
prior to the date of the meeting
together with the agenda items;
provided, however, that the above
notice period may be shortened incases of an emergency.
2. With the consent of all of the
Directors, a meeting of the Board of
Directors may be held without thecalling procedure.
Article 28 (unchanged)(Method of Resolution
at Meeting of Board of Directors)
Article 29 (unchanged)
2. With the consent of all of the
Directors who are entitled to a voteon an item to be resolved at a
meeting of the Board of Directors inwriting or by electromagnetic record,
the Company may deem that suchitem to be resolved has been
adopted.
(Minutes of Meeting of Board of Directors)
Article 30 Procedures at a meeting of the Boardof Directors shall be recorded in theminutes in accordance with laws andregulations and the Directors who
attended the meeting shall affix their
name
and
seal
theretoorelectronically sign the minutes
Article 31 (unchanged)(Remuneration, etc.)
Article 32 Financial benefits to be received
from the Company as consideration
for the execution of the duties suchas remuneration and bonuses of
Directors shall be determined byresolution of a Meeting of
Shareholders for Directors who are
an Audit and Supervisory Committee
Members or for other Directors,
distinctively.
(Exemption from Liability of Director)
Article 33 (unchanged)-7-

Current Articles of Incorporation
2. The Company may, pursuant to theprovision of Article 427, Paragraph 1of the Companies Act, enter into acontract with an External Director tolimit the liability of such External
Director for damages caused as aresult of such External Director’s
negligence of duties; provided,
however, that the limited amount ofliability under such contract shall be
the amount stipulated by laws andregulations.
Chapter 5

Auditors and Board of Auditors

Proposed revisions
2 The Company may, pursuant to theprovision of Article 427, Paragraph 1of the Companies Act, enter into acontract with a Director (other than
Executive Director) to limit theliability of such Director fordamages caused as a result of such
Director’s negligence of duties;
provided, however, that the limited
amount of liability under suchcontract shall be the amountstipulated by laws and regulations.
(deleted)(Number of Auditors)
Article 34 The number of Auditors of theCompany shall be four or less.
(Method of Election)
Article 35 Auditors shall be elected at a
Meeting of Shareholders.
2. A resolution to elect an Auditor shallbe adopted in the presence of voting
shareholders who, entitled toexercise their vote, holding at least
one-third of all of the votes and theaffirmative votes of the majority ofthe votes held by the voting
shareholders so present.
(Term of Office)
Article 36 The term of office of each Auditor
shall expire at the closing of an Annual
Meeting of Shareholders for the last
fiscal year ending within four years
following his/her election.
2. The term of office of an Auditor
elected as a substitute for an Auditor
who retired from office before theexpiration of the term of office shallbe the remainder of the term ofoffice of such retired Auditor.
(Full-time Auditor)
Article 37 The Board of Auditors shall appointa full-time Auditor by resolution of
the Board of Auditors.

-8-(deleted)(deleted)(deleted)(deleted)

Current Articles of Incorporation(Board of Auditors)
Article 38 The Board of Auditors shall decidematters set forth in laws andregulations, these Articles ofIncorporation and other mattersconcerning execution of duties of the
Auditors such as audit policies of theCompany, and method of assessmentof the business operation and assetsof the Company.
(Calling Procedure of Meeting of Board ofAuditors)
Article 39 A meeting of the Board of Auditors
shall be called by each Auditor.
2. A notice of calling a meeting of theBoard of Auditors shall be issued toeach Auditor at least three days prior
to the date of the meeting; provided,
however, that the above notice
period may be shortened in cases ofan emergency.
3. With the consent of all of the
Auditors, a meeting of the Board ofAuditors may be held without thecalling procedure.
(Method of Resolution at Meeting of Board ofAuditors)
Article 40 Resolution of the Board of Auditors
shall be adopted with the affirmative
vote of the majority of the Auditors
unless otherwise provided for inlaws and regulations.
(Minutes of Meeting of Board of Auditors)
Article 41 Procedures at a meeting of the Board
of Auditors shall be recorded in theminutes in accordance with laws andregulations and the Auditors who
attended the meeting shall affix their
name
and
seal
theretoorelectronically sign the minutes.
(Rules of Board of Auditors)
Article 42 Matters concerning the Board ofAuditors shall be subject to laws andregulations, these Articles ofIncorporation and the Rules of Board
of Auditors separately established by
the Board of Auditors.

-9-

Proposed revisions(deleted)(deleted)(deleted)(deleted)(deleted)

Current Articles of Incorporation(Remuneration, etc.)
Article 43 Financial benefits to be received
from the Company as consideration
for the execution of the duties suchas remuneration and bonuses of
Auditors shall be determined byresolution of a Meeting of
Shareholders.
(Exemption from Liability of Auditor)
Article 44 The Company may, pursuant to theprovision of Article 426, Paragraph 1of the Companies Act, exempt theliability of an Auditor (including aperson who used to be an
Auditor) for damages caused as aresult of such Auditor’s negligenceof duties by resolution of the Boardof Directors to the extent permitted
by laws and regulations.
2. The Company may, pursuant to theprovision of Article 427, Paragraph 1of the Companies Act, enter into acontract with an External Auditor tolimit the liability of such External
Auditor for damages caused as aresult of such External Auditor’s
negligence of duties; provided,
however, that the limited amount ofliability under such contract shall be
the amount stipulated by laws andregulations.

Proposed revisions(deleted)(deleted)(new provision)

Chapter 5(new provision)(Calling Procedure of Meeting of Audit andSupervisory Committee)
Article 34 A notice of calling a meeting of the
Audit and Supervisory Committee
shall be issued to each Audit andSupervisory Committee Member at
least three days prior to the date of
the meeting; provided, however, thatthe above notice period may be
shortened in cases of an emergency.
2. With the consent of all of the Audit
andSupervisory
Committee
Members, a meeting of the Audit andSupervisory Committee may be held
without the calling procedure.

- 10 -

Audit and Supervisory Committee

Current Articles of Incorporation(new provision)

Proposed revisions(Method of Resolution at Meeting of Audit andSupervisory Committee)
Article 35 A resolution of the Audit andSupervisory Committee shall be
adopted in the presence of the
majority of the Audit andSupervisory Committee Members
who are entitled to participate in thevote and the affirmative votes of the
majority of the Audit andSupervisory Committee Members sopresent.
(Minutes of Meeting of Audit and Supervisory
Committee)
Article 36 Procedures at a meeting of the Audit
and Supervisory Committee shall berecorded in the minutes inaccordance with laws and regulations
and the Audit and Supervisory
Committee Members who attended
the meeting shall affix their nameand seal thereto or electronically sign
the minutes.
(Rules of Audit and Supervisory Committee)
Article 37 Matters concerning the Audit andSupervisory Committee shall be
subject to laws and regulations, these
Articles of Incorporation and theRules of Audit and Supervisory
Committee separately established by
the
Audit
and
Supervisory
Committee.

(new provision)(new provision)

Chapter 6

Accounting Auditors

Chapter 6

Articles 45 through 47 (provisions omitted)
Chapter 7

Accounting Auditors

Articles 38 through 40 (unchanged)

Accounting

Chapter 7

Articles 48 through 51 (provisions omitted)

Accounting

Articles 41 through 44 (unchanged)

Chapter 8 Takeover Defense Measures(deleted)(Introduction of Takeover Defense Measures)
Article 52 The Company may decide, also at a
Meeting of Shareholders, on the
introduction, continuation or changeof takeover defense measures against
takeovers by a person who isdisqualified in light of the basic
policy concerning a concept of theperson to control the policies on the
Company’s financial and businessmatters.

(deleted)- 11 -

Current Articles of Incorporation(Organ to Decide Allotment of Share Options
without Contribution)
Article 53 The Company may allot shareoptions without contribution by
resolution of the Board of Directors,
resolutionofMeetingof
Shareholders or resolution of theBoard of Directors under adelegation resolved by a Meeting of
Shareholders, pursuant to theprocedures set forth in the takeover
defensemeasuresunderthepreceding article.
(new provision)

Proposed revisions(deleted)

Supplementary Provisions(Transitional Measures Concerning Exemption
from Liability of Auditor)
Article 1 The Company may, pursuant to theprovision of Article 426, Paragraph 1of the Companies Act, exempt theliability of an Auditor (including aperson who used to be an
Auditor) for damages caused as aresult of such Auditor’s negligenceof duties regarding the acts before
the closing of the 100th Annual
Meetingof
Shareholders
byresolution of the Board of Directors
to the extent permitted by laws andregulations.

- 12 -

Agenda No. 3:

Election of Four (4) Directors (excluding Directors who are Audit
and Supervisory Committee Members)

Provided that Agenda No. 2, “Partial Amendment to the Articles of Incorporation” isapproved as drafted, the Company shall shift to a Company with Audit and Supervisory
Committee and all five (5) Directors will retire due to the expiration of their terms of officeat the time when the partial amendment to the Articles of Incorporation becomes effective.
Accordingly, the Company hereby proposes the election of four (4) Directors (excluding
Directors who are Audit and Supervisory Committee Members, and hereinafter the same
shall be applied). This agenda shall become effective provided that the amendment to the
Articles of Incorporation under Agenda No. 2, “Partial Amendment to the Articles ofIncorporation” comes into effect.
The candidates for Directors are as follows.
Candi
date
No.

Name
(Date of birth)

Brief profile, position and responsibility at the Company(Significant concurrent positions)
October 1966
November
1968

1

Number of theCompany’s
shares owned

Joined Piolax, Inc.
Director
General Manager, Materials Department,
Piolax, Inc.
Kazuhiko Kato
June 1977
Managing Director, Piolax, Inc.
335,000(April 12,
1940)
June 1984
President, Piolax, Inc.
April 2010
Chairman, Piolax, Inc. (incumbent)(Significant concurrent positions)
Chairman, Piolax Medical Devices, Inc.
Reason for the election:
As President and Representative Director of the Company during the period from June 1984 toMarch 2010, Mr. Kazuhiko Kato led the Company toward growth and has made contributions
as a keystone for the formation of the corporate culture of the Company. After taking the post
as Chairman and Representative Director of the Company in April 2010, Mr. Kato has
provided a broad range of directions to the Group in light of the development of businessstrategies. In addition, he currently holds the concurrent position of Chairman and Director of
Piolax Medical Devices, Inc., the Company’s subsidiary specialized in the manufacture of
medical devices.
The Company believes that Mr. Kato would continue to make use of his abundant experience,
considerable insight and extensive networks gained over the years for contributing todecision-making at the Board of Directors and bringing benefits for business development on a
global scale and improvement in corporate value. Accordingly, the Company proposes that he
be a candidate for Director.

- 13 -

Candi
date
No.

Name
(Date of birth)

Brief profile, position and responsibility at the Company(Significant concurrent positions)
March 1981
July 1999

Yukihiko
Shimazu(September
10, 1957)

2

August 2001
June 2005
June 2006

Joined Piolax, Inc.
General Manager, Overseas Sales
Department, Piolax, Inc.
President, Piolax Corporation
Director, Piolax, Inc.
Director
General Manager, Overseas Sales
Department, Piolax, Inc.
President, Piolax, Inc. (incumbent)

Number of theCompany’s
shares owned

15,700April 2010
(Responsibility)
Supervision of Sales Department(Significant concurrent positions)
CEO, Wuhan Piolax Co., Ltd.
CEO, Dongguan Piolax Co., Ltd.
Reason for the election:
Mr. Yukihiko Shimazu served as President and Representative Director of the Company from
April 2010 up to the present and has led domestic and overseas the Company group companies
under the slogan, “ONE PIOLAX,” toward growth. He had undertaken the role of President of
the U.S. subsidiary of the Company from August 2001 to May 2006, and currently has theconcurrent position of CEO (Chairman) of two Chinese subsidiaries of the Company, thus
having made contributions to transforming the Company as a global entity.
The Company believes that Mr. Shimazu would continue to make use of his abundant
experience, considerable insight and extensive networks gained over the years for contributing
to decision-making of the Board of Directors, and bringing benefits for business development
on a global scale as well as improvement in corporate value of the Company. Accordingly, theCompany proposes that he be a candidate for Director.

- 14 -

Candi
date
No.

Name
(Date of birth)

Brief profile, position and responsibility at the Company(Significant concurrent positions)
April 1979
June 2003

June 2007
July 2007

April 2008
MichioNagamine(March 15,
1957)

June 2008

June 2012
April 20133
April 2015

Joined Japan Development Bank (current
Development Bank of Japan Inc.)
General Manager, Information Resources
Department, Development Bank of JapanInc.
Senior Executive Officer, Piolax, Inc.
Senior Executive Officer
General Manager, ERP Promotion
Department, Piolax, Inc.
Senior Executive Officer
General Manager, Purchasing
Department, Piolax, Inc.
Director
General Manager, Purchasing
Department, Piolax, Inc.
Director
General Manager, HR Office, Piolax, Inc.
Managing Director
General Manager, HR Office, Piolax, Inc.
Managing Director, Piolax, Inc.
(incumbent)

Number of theCompany’s
shares owned-(Responsibility)
Supervision of Planning and Administration Department,
Purchasing Department, Information Technology
Department, and affiliated companies
Reason for the election:
Mr. Michio Nagamine has served as Managing Director of the Company since April 2013 up
to the present, and contributed to the growth of the Company by undertaking roles as General
Manager responsible for Planning and Administration, Purchasing, and Information
Technology Departments, as well as operations of the affiliates of the Company. He has gained
considerable knowledge and insight in IT and finance fields through managerial jobs including
the management of Development Bank of Japan Inc. prior to joining the Company in June
2007.
The Company believes that Mr. Nagamine would continue to make use of his abundant
experience, sufficient insight and extensive networks gained over the years for contributing todecision-making of the Board of Directors, and bringing benefits for business development ona global scale as well as improvement in corporate value of the Company. Accordingly, theCompany proposes that he be a candidate for Director.

- 15 -

Candi
date
No.

Name
(Date of birth)

Brief profile, position and responsibility at the Company(Significant concurrent positions)
March 1978
October 2002
April 2004
June 2011

Seiichi Sato
(May 31,
1955)
June 2014

4

Joined Piolax, Inc.
President, Piolax OC Systems Co., Ltd.
Executive Officer, Piolax, Inc.
President, Piolax OC Systems Co., Ltd.
Managing Executive Officer
Director
General Manager, Design Department,
Piolax, Inc.
Managing Director
General Manager, Design Department,
Piolax, Inc. (incumbent)

Number of theCompany’s
shares owned

8,500(Responsibility)
Supervision of Design Department, Production andLogistics Department, and Quality Assurance Department
Reason for the election:
Mr. Seiichi Sato has served as Managing Director of the Company since June 2014 up to thepresent, and contributed to the growth of the Company by undertaking roles as General
Manager responsible for Design, Production and Logistics, and Quality Assurance
Departments. He also gained managerial experience through the role as President of theCompany’s subsidiary from October 2002 to September 2005 and accumulated knowledge andinsight in the fields of finance as well as design and production.
The Company believes that Mr. Sato would continue to make use of his abundant experience,
sufficient insight and extensive networks gained over the years for contributing todecision-making of the Board of Directors, and bringing benefits for business development ona global scale as well as improvement in corporate value of the Company. Accordingly, theCompany proposes that he be a candidate for Director.

Note: There are no special conflicts of interests between the candidates and the Company.

- 16 -

Agenda No. 4:

Election of Three (3) Directors who are Audit and Supervisory
Committee Members

Provided that Agenda No. 2, “Partial Amendment to the Articles of Incorporation” isapproved as drafted, the Company shall shift to a Company with Audit and Supervisory
Committee.
The Company hereby proposes the election of three (3) Directors who are Audit andSupervisory Committee Members.
With regard to this agenda item, the consent of the Board of Auditors has been obtained.
This agenda shall become effective provided that the amendment to the Articles ofIncorporation under Agenda No. 2, “Partial Amendment to the Articles of Incorporation”
comes into effect.
The candidates for Directors who are Audit and Supervisory Committee Members are as
follows.
Candi
date
No.

Name
(Date of birth)

Brief profile and position at the Company(Significant concurrent positions)
April 1978

1

Number of theCompany’s
shares owned

Joined The Industrial Bank of Japan,
Limited (current Mizuho Bank, Ltd.)May 2004
Joined Piolax, Inc.
December
General Manager, Management and2004
Planning Department, Piolax, Inc.
General Manager, IR Department, Piolax,
Yukio
Inc.
Nagamura
3,400
Senior Executive Officer, Piolax, Inc.
(February 19, August 2011
1956)
General Manager, Management andPlanning Department, Piolax, Inc.
President and Director, Piolax Business
Service, Co. Ltd. (incumbent)(Significant concurrent positions)
President and Director, Piolax Business Service, Co. Ltd.
Reason for the election:
Mr. Yukio Nagamura has served as General Manager of the Management and Planning
Department from December 2004 up to the present, and also undertaken the managerial role ofPresident of the Company’s subsidiary since August 2011 to date. He gained experience in theinvestment banking business of Japanese local subsidiary in Europe when he worked at thefinancial institution, and accumulated considerable knowledge and insight in overall business
management and planning including business planning, finance, accounting and internal
control, as well as investor relations.
The Company expects him to make use of his abundant experience and extensive knowledge
gained over the years for auditing the Company’s business execution from an objective point ofview, and accordingly proposes that he be a candidate for Director who is Audit andSupervisory Committee Member.

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Candi
date
No.

Name
(Date of birth)

Brief profile and position at the Company(Significant concurrent positions)

Number of theCompany’s
shares owned

July 1998

2

Director, Certified Public Accountant,
Hiroyuki Imanishi’s Office (incumbent)
October 2001
Director, Runsystem Co., Ltd.
March 2003
Employee, Imanishi Tax and Accounting
Corporation (incumbent)
March 2005
External Auditor, Asahi Net, Inc.
Hiroyuki(incumbent)
ImanishiJune 2005
Auditor, Piolax, Inc. (incumbent)
100
June
2008
External Auditor, Sockets Inc.
(September(incumbent)
22, 1966)(Significant concurrent positions)
Director, Certified Public Accountant, Hiroyuki Imanishi’s
OfficeEmployee, Imanishi Tax and Accounting Corporation
External Auditor, Asahi Net, Inc.
External Auditor, Sockets Inc.
Reason for the election:
Given that Mr. Hiroyuki Imanishi is qualified as a certified public accountant and has served as
Auditor of the Company since June 2005 up to the present, the Company expects him to makeuse of his experience and knowledge gained over the years for auditing the Company’sbusiness execution from an objective point of view. Accordingly, the Company proposes that
he be a candidate for Director who is Audit and Supervisory Committee Member.
April 1996

3

Registered with Daiichi Tokyo Bar
Association
Joined Ueno and Takayama Law Firm
February 2001 External Auditor, Naigai TEC
Corporation (incumbent)
June 2004
External Auditor, Shibaura Electronics
Co., Ltd. (incumbent)
Representative, Ueno and Asano Law
Kenichi Asano October 2004
Firm (incumbent)(December 11,
NovemberDirector, Credit Guarantee Servicer
1967)
2004
Incorporated (incumbent)
June 2011
Auditor, Piolax, Inc. (incumbent)(Significant concurrent positions)Representative, Ueno and Asano Law Firm
External Auditor, Naigai TEC Corporation
External Auditor, Shibaura Electronics Co., Ltd.
Director, Credit Guarantee Servicer Incorporated
Reason for the election:
Given that Mr. Kenichi Asano is qualified as an attorney and has served as Auditor of theCompany since June 2011 up to the present, the Company expects him to make use of his
experience and knowledge gained over the years for auditing the Company’s businessexecution from an objective point of view. Accordingly, the Company proposes that he be a
candidate for Director who is Audit and Supervisory Committee Member.

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Notes:1.
There are no special conflicts of interest between the candidates and the Company.
2.
Mr. Hiroyuki Imanishi and Mr. Kenichi Asano are the candidates for External Directors.
3.
Mr. Hiroyuki Imanishi and Mr. Kenichi Asano currently serve as External Auditors of the Company.
Mr. Hiroyuki Imanishi will have held office as External Auditor of the Company for eleven (11) years,
while Mr. Kenichi Asano for five (5) years at the closing time of this Annual Meeting of Shareholders.
4.
The Company designated Mr. Hiroyuki Imanishi and Mr. Kenichi Asano as Independent Directors inconformity with the regulation of the Tokyo Stock Exchange, Inc. and registered them as such at theTokyo Stock Exchange, Inc. Provided that these two candidates are approved at the election of
Directors, they will continue to be Independent Directors.
5.
In the event that these candidates are appointed to Directors who are Audit and Supervisory Committee
Members, provided that Agenda No. 2 is approved as drafted, the Company plans to enter into acontract with each of them to limit the liability for damages prescribed in Article 423, Paragraph 1 of
the Companies Act in accordance with the provision of Article 427, Paragraph 1 thereof. The limited
amount of liability under such contracts shall be the amount stipulated in laws and regulations.

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Agenda No. 5:

Election of One (1) Director who is Substitute for Audit andSupervisory Committee Member

Provided that Agenda No. 2, “Partial Amendment to the Articles of Incorporation” isapproved as drafted, the Company shall shift to a Company with Audit and Supervisory
Committee.
To prepare for a contingency where the number of Directors who are Audit and Supervisory
Committee Members does not reach the number required under laws and regulations, theCompany hereby proposes an appointment of one (1) Director who is Substitute for Audit
and Supervisory Committee Member.
With regard to this agenda item, the consent of the Board of Auditors has been obtained.
This agenda shall become effective provided that the amendment to the Articles ofIncorporation under Agenda No. 2, “Partial Amendment to the Articles of Incorporation”
comes into effect.
The candidate for Director who is Substitute for Audit and Supervisory Committee Member
is as follows.
Name(Date of birth)

Brief profile(Significant concurrent positions)
April 1966

May 2000

Yasuo Aizawa(December 18,
1942)

June 2003
March 2005
July 2007

Joined Japan Finance Corporation for Small andMedium Enterprise (current Japan FinanceCorporation)
Director, Japan Finance Corporation for Smalland Medium Enterprise
Auditor, Tokyo Small and Medium Business
Investment and Consultation Co., Ltd.
Managing Director, Tokyo Small and Medium
Business Investment and Consultation Co., Ltd.
Retired Tokyo Small and Medium Business
Investment and Consultation Co., Ltd.
Representative, AY Associates Inc. (incumbent)

Number of theCompany’s
shares owned-

July 2007(Significant concurrent positions)Representative, AY Associates Inc.
Reason for the election:
After retiring from the post of Director of Japan Finance Corporation for Small and Medium Enterprise,
Mr. Yasuo Aizawa, as Representative of AY Associates Inc., a management consulting company, hasprovided managerial guidance to medium-sized enterprises since July 2007. He has served as a member of
the Company’s Special Committee in charge of anti-takeover measures for four years since June 2012.
The Company expects him to make use of the wealth of experience and knowledge gained over the years
for auditing the Company’s business execution from an objective viewpoint, and accordingly proposes that
he be a candidate for Director who is Substitute for Audit and Supervisory Committee Member.

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Notes:1.
There are no special conflicts of interest between the candidate and the Company.
2.
Mr. Yasuo Aizawa is a candidate for Substitute for External Director.
3.
In the event that Mr. Yasuo Aizawa is appointed as Director who is Audit and Supervisory Committee
Member, the Company plans to enter into a contract with him to limit liability for damages prescribedin Article 423, Paragraph 1 of the Companies Act in conformity with the provision of Article 427,
Paragraph 1 of thereof. The limited amount of liability under such contracts shall be the amountstipulated in laws and regulations.

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Agenda No. 6:

Decision of Amount of Remunerations for Directors (excluding
Directors who are Audit and Supervisory Committee Members)

Pursuant to the resolution of the 91st Annual Meeting of Shareholders held on June 28, 2007,
the Company set the remuneration limit for Directors at 250,000,000 yen per year (excludingsalaries paid as the employee portion for Directors who also work as employees). Provided
that Agenda No. 2, “Partial Amendment to the Articles of Incorporation” is approved asdrafted, the Company shall shift to a Company with Audit and Supervisory Committee.
Considering various circumstances including economic conditions in recent years, theCompany hereby proposes that after the shift to a Company with Audit and Supervisory
Committee, the remuneration limit for Directors (excluding Directors who are Audit andSupervisory Committee Members, and the same shall be applied hereinafter) shall be set at
250,000,000 per year, and decisions on the specific remuneration amount for each Director
and the timing for payments, etc. shall be determined at resolutions of the Board of Directors’Meetings.
The aforementioned remuneration shall exclude salaries paid as the employee portion for
Directors who also work as employees.
While the Company has five (5) Directors currently, provided that Agenda No. 2, “Partial
Amendment to the Articles of Incorporation” and Agenda No. 3, “Election of four(4) Directors (excluding Directors who are Audit and Supervisory Committee Members)” areapproved as drafted, the number of Directors shall become four (4).
This agenda shall come into effect provided that the amendment to the Articles ofIncorporation under Agenda No. 2, “Partial Amendment to the Article of Incorporation”
becomes effective.

Agenda No. 7:

Decision of Amount of Remunerations for Directors who are Audit
and Supervisory Committee Members

Provided that Agenda No. 2, “Partial Amendment to the Articles of Incorporation” isapproved as drafted, the Company shall shift to a Company with Audit and Supervisory
Committee. Considering various circumstances including economic conditions in recent
years, the Company hereby proposes that after the shift to a Company with Audit andSupervisory Committee, the remuneration limit for Directors who are Audit and Supervisory
Committee Members shall be set at 50,000,000 per year, and decisions on the specificremuneration amount for each Director who is Audit and Supervisory Committee Member
and the timing for payments, etc. shall be determined through discussions among Directors
who are Audit and Supervisory Committee Members.
Provided that Agenda No. 2, “Partial Amendment to the Articles of Incorporation” andAgenda No. 4, “Election of three (3) Directors who are Audit and Supervisory Committee
Members” are approved as drafted, the number of Directors who are Audit and Supervisory
Committee Members shall become three (3), of which two (2) shall be External Directors.
This agenda shall come into effect provided that the amendment to the Articles ofIncorporation under Agenda No. 2, “Partial Amendment to the Article of Incorporation”
becomes effective.

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