Note: This document has been translated from a part of the Japanese original for reference purposes only. In the event ofany discrepancy between this translated document and the Japanese original, the original shall prevail.

Securities identification code: 1973
June 2, 2021

To our shareholders:

Yushi Ushijima
President and Representative Director
NEC Networks & System Integration Corporation
2-6-1, Koraku, Bunkyo-ku, Tokyo, JapanNOTICE OF THE 89th ORDINARY GENERAL MEETING OF
SHAREHOLDERS
We are pleased to inform you that the 89th Ordinary General Meeting of Shareholders of NEC Networks &System Integration Corporation (the “Company”) will be held as described below.
In order to prevent the spread of the COVID-19 pandemic, we request that shareholders exercise their voting
rights before the meeting by postal mail or via the Internet, and refrain from attending the meeting in person
if at all possible. Please review the attached Reference Documents for the General Meeting of Shareholders
and exercise your voting rights by 5:15 p.m., Wednesday, June 23, 2021 (Japan Standard Time).
Meeting Outline
1. Date and Time: Thursday, June 24, 2021 at 10:00 a.m. (Japan Standard Time)(Reception will begin at 9:00 a.m.)
2. Venue:

Bellesalle Iidabashi First
B1F, Iidabashi First Tower
2-6-1, Koraku, Bunkyo-ku, Tokyo, Japan

3. Agenda:
Items to be reported:
1.

Business Report and Consolidated Financial Statements for the 89th Term (from April 1, 2020 toMarch 31, 2021), as well as the results of audit of the Consolidated Financial Statements by the
Accounting Auditor and the Board of Corporate Auditors2.

Non-consolidated Financial Statements for the 89th Term (from April 1, 2020 to March 31, 2021)

Items to be resolved:
Proposal 1:

Election of nine (9) Directors

Proposal 2:

Election of one (1) Substitute Corporate Auditor

Proposal 3:

Revision of Remuneration Amount for Directors

Proposal 4:

Revision of Remuneration System for Granting Restricted Shares to Directors

Any revisions that should be made to this document will be posted on the Company’s website.
Company’s website: https://www.nesic.co.jp-1-Reference Documents for the General Meeting of Shareholders
Proposal 1:

Election of nine (9) Directors

The terms of office of all nine (9) present Directors will expire at the conclusion of this General Meeting of
Shareholders. The Company proposes to elect nine (9) Directors.
The candidates for Directors are as follows:
No.

Name

1

Yushi Ushijima

President and Representative Director[Reelection]

2

Osamu Noda

Senior Vice President and Member of the Board
Executive General Manager, Business Design Operations Unit

[Reelection]

3

Hiroyuki Sekizawa

Senior Vice President and Member of the Board[Reelection]

Kazuhiko Takeuchi

Senior Vice President and Member of the Board
Executive General Manager, Network Infrastructure Business
Unit[Reelection]

4

5

6

Michiko Ashizawa

Kuniko Muramatsu

Position and responsibilities at the Company

Outside Director[Reelection][Candidate for
Outside Director][Independent
Director]

Outside Director[Reelection][Candidate for
Outside Director][Independent
Director]

Outside Director[Reelection][Candidate for
Outside Director][Independent
Director]

7

Mamoru Yoshida

8

Junji Ashida

Member of the Board[Reelection]

9

Toru Kawakubo

Member of the Board[Reelection]

Policy in the nomination of candidates for Directors[Policy]
In nominating candidates for Directors, the Board of Directors of the Company has a basic policy of
selecting individuals who have skills and experience to lead management and can contribute to thedevelopment of the Company’s businesses, while giving consideration to the following and making
comprehensive consideration from the standpoint of placing the right person in the right place.
(Aptitude for Directors)
・A person who has a high level of knowledge about management, objective judgment ability, foresightand insight・A person who has a high level of dignity and high ethical standards
・A person who has ability, knowledge, experience and track records in his/her special fields
・A person who is unbiased and decisive
・A person who understands the overall business activities of the Company

-2-

No.

Name (Date of birth/othernotes)

Yushi Ushijima(April 29, 1960)[Reelection]
Years of service as Director:
7 years

1

Attendance at Board of
Directors meetings:
14/14 meetings

Career summary, position and responsibilities(Significant concurrent positions outside the Company)
Apr. 1984

Joined the Company

Apr. 2011

General Manager, Nakanihon Regional
Division, Regional Operations Unit of theCompany

Apr. 2013

Associate Senior Vice President, General
Manager of Higashinihon Regional Divisionof Marketing & Sales Development Unit of
the Company

June 2014

Member of the Board, Associate Senior Vice
President of the Company
Senior Executive Vice President and Memberof the Board, Q&A Corporation

Apr. 2015

Member of the Board, Associate Senior Vice
President of the Company
President and CEO, Q&A Corporation

Apr. 2016

Member of the Board of the Company

Number of theCompany’s
shares owned

18,600President and CEO, Q&A Corporation
June 2017

President and Representative Director of theCompany (present position)[Reasons for selection as a candidate for Director]
Mr. Yushi Ushijima has accumulated an abundance of knowledge and experience regarding the businessenvironment and industries of the Company from having served as General Manager of branch divisions andperforming other duties. Since 2014, he successively has served as Senior Executive Vice President andPresident and CEO of a Group company, and President of the Company. He has acquired considerable
knowledge and experience on business management and has contributed to business expansion of theCompany. The Company believes he is a suitable candidate to further progress and develop the Company’sbusinesses, such as by increasing the Group’s corporate value and coping with drastic changes in theenvironment in Japan and overseas, making use of his track record of accomplishments and experience. In lightof these reasons, the Company proposes his election as Director.

Osamu Noda
(May 1, 1958)[Reelection]

Oct. 2010

General Manager, 1st Enterprise Solution
Division, Enterprise Solutions Operations
Unit, NEC Corporation

Jan. 2013

Executive General Manager, Enterprise
Solutions Operations Unit, NEC Corporation

Apr. 2015

Associate Senior Vice President, AssistantExecutive General Manager, Enterprise
Solutions Operations Unit of the Company

Years of service as Director: Apr. 2016
3 years2

Attendance at Board of
Directors meetings:
13/14 meetings

Senior Vice President (present position),
Executive General Manager, Enterprise
Solutions Operations Unit of the Company

June 2018

Member of the Board of the Company(present position)

Apr. 2019

Executive General Manager, Business Design
Operations Unit (present position) and
Executive General Manager, Digital
Solutions Business Unit of the Company

8,400[Reasons for selection as a candidate for Director]
Mr. Osamu Noda has a track record of establishing a base system for global information sharing in the area of
business solutions undertakings, and leading business expansion in the enterprise telephony market as the
person responsible at NEC Corporation. As an executive officer of the Company since 2015, he has contributed
to business expansion of the Company, including the growth of the enterprise network business, the trackrecord in profitability improvement and initiatives as an officer responsible for DX*. The Company believes heis a suitable candidate to increase the Group’s corporate value by making use of his knowledge and experience.
In light of these reasons, the Company proposes his election as Director.
* DX: Abbreviation of “digital transformation.” This refers to significantly transforming activities of businessand industries, as well as city management, by making use of cutting-edge technologies such as Artificial
Intelligence (AI), Internet of Things (IoT), and Robotic Process Automation (RPA).

-3-

No.

Name (Date of birth/othernotes)

Career summary, position and responsibilities(Significant concurrent positions outside the Company)
July 2009

Hiroyuki Sekizawa(July 6, 1960)

Assistant General Manager, Corporate
Controller Division, NEC Corporation

July 2011

General Manager, Corporate Controller
Division, NEC Corporation[Reelection]

May 2015

General Manager, Corporate Controller
Division, NEC Corporation (change inJapanese only; English title unchanged)

Years of service as Director:
2 years
June 20173

Attendance at Board of
Directors meetings:
14/14 meetings

Associate Senior Vice President of theCompany

Apr. 2019

Senior Vice President of the Company(present position)

June 2019

Member of the Board of the Company(present position)

Number of theCompany’s
shares owned

11,400[Reasons for selection as a candidate for Director]
Mr. Hiroyuki Sekizawa has accumulated an abundance of knowledge and experience regarding accounting andfinance, having served in responsible positions in the accounting divisions at NEC Corporation, as well as a
track record as a cheif financial officer and senior vice president at an overseas associated company. He wasappointed an Associate Senior Vice President of the Company in 2017. Since June 2019, as Senior Vice
President and Member of the Board, he has been working to improve the Group’s corporate value andstrengthen the management foundation as the person responsible for the corporate staff divisions in addition to
overseeing accounting and finance strategies. The Company believes he is a suitable candidate to increase theGroup’s corporate value by making use of his knowledge and experience. In light of these reasons, theCompany proposes his election as Director.
Apr. 1985

Joined the Company

Apr. 2011

General Manager, 1st Enterprise Solution
Marketing & Sales Division, Marketing &Sales Development Unit of the Company

Kazuhiko Takeuchi(November 10, 1962)

Apr. 2014

Associate Senior Vice President, AssistantExecutive General Manager, Technical
Services Operations Unit of the Company[Reelection]

Oct. 2016

Associate Senior Vice President, AssistantExecutive General Manager, Public
Infrastructures Solutions Operations Unit of
the Company

Years of service as Director:
1 year4

Attendance at Board of
Directors meetings:
14/14 meetings

Apr. 2019

Associate Senior Vice President, AssistantExecutive General Manager, Marketing &Sales Operations Unit of the Company

Apr. 2020

Senior Vice President, Executive General
Manager, Network Infrastructure Business
Unit of the Company (present position)

June 2020

Member of the Board of the Company(present position)

5,400[Reasons for selection as a candidate for Director]
Mr. Kazuhiko Takeuchi has accumulated an abundance of knowledge and experience regarding the businessenvironment surrounding the Company and in both technical and marketing aspects through his service inbusiness and marketing divisions as well as his achievement while he was a General Manager of Marketing &Sales Development Unit. After his appointment as Associate Senior Vice President in 2014, he continued
playing a role in business growth over wide areas by serving in responsible positions in support service
business, public infrastructure business, as well as marketing and sales operation to establish the Company’sbusiness platform. The Company believes he is a suitable candidate to increase the Group’s corporate value bymaking use of his knowledge and experience. In light of these reasons, the Company proposes his election as
Director.

-4-

No.

Name (Date of birth/othernotes)

Career summary, position and responsibilities(Significant concurrent positions outside the Company)
Oct. 1996

Joined Century Audit Corporation (currently
KPMG AZSA LLC), International
Department (left in May 2001)

Sept. 2003

Joined Industrial Revitalization Corporationof Japan (resigned in January 2006)

Michiko Ashizawa(October 23, 1972)

Feb. 2006

Joined Advantage Partners LLP (currently
Advantage Partners, Inc.) (resigned in
January 2007)[Reelection][Candidate for Outside
Director][Independent Director]

Apr. 2013

Associate Professor, International College ofArts and Science (currently School of
Economics and Business Administration),
Yokohama City University (present position)
Associate Professor, Graduate School ofInternational Management, Yokohama City
University (present position)

Years of service as Outside
Director: 3 years
5

Attendance at Board of
Directors meetings:
13/14 meetings

Sept. 2016

Part-time instructor at Graduate School ofBusiness Administration, Keio University(present position)

June 2018

Outside Director of the Company (present
position)

Number of theCompany’s
shares owned

0[Significant concurrent positions outside the Company]
Outside Director (Audit and Supervisory Committee
Member), Netyear Group Corporation
Outside Corporate Auditor of NHK SPRING Co., Ltd.
Reasons for selection as Outside Director and overview of expected role
Ms. Michiko Ashizawa has an abundance of experience, including business experience as a certified public
accountant at an audit firm and engaging in revitalization projects of major companies at Industrial
Revitalization Corporation of Japan. She also possesses expertise in business administration as a whole, mainly
researching M&A for corporate restructuring and serving as an instructor at a graduate school. The Company
believes she will continue to be capable of playing an appropriate role in matters such as giving advice andproviding supervision relating to management of the Company from an objective standpoint by making use ofher extensive experience in finance and management. In light of these reasons, the Company proposes her
election as Outside Director.
Kuniko Muramatsu(September 1, 1958)[Reelection][Candidate for Outside
Director][Independent Director]
Years of service as
Outside Director:
2 years
6

Attendance at Board of
Directors meetings:
14/14 meetings

Nov. 2003

Officer, Ethics Office, Texas Instruments
Japan Limited (resigned in September 2009)

Oct. 2009

Chief Researcher, Business Ethics ResearchCenterJan. 2010

Representative Director, Wellness Systems
Institute (present position)

Apr. 2016

Chair of the board, NPO GEWEL (resigned
in March 2019)

Apr. 2018

Senior Researcher, Business Ethics ResearchCenter (present position)

June 2019

Outside Director of the Company (present
position)

0[Significant concurrent positions outside the Company]
Outside Director, YOKOWO CO., LTD.
Outside Director of Kyushu Railway Company

Reasons for selection as Outside Director and overview of expected role
Ms. Kuniko Muramatsu joined a foreign-affiliated semiconductor manufacturer and served in positions
including Officer of Ethics Office as well as a responsible role for promoting diversity. She subsequently
established Wellness Systems Institute with the aim of laying a foundation for sustainable society, and has been
acting as an advisor in sustainability management while managing the business. She also has experienced
various positions such as a chair of the board of a non-profit organization and a university lecturer. The
Company believes she will continue to be capable of playing an appropriate role in giving advice and providing
supervision relating to management of the Company from an objective standpoint by making use of her global
mindset and deep insight on compliance matters and ESG related areas such as the promotion of diversity. In
light of these reasons, the Company proposes her election as Outside Director.

-5-

No.

Name (Date of birth/othernotes)

Mamoru Yoshida(May 21, 1956)[Reelection][Candidate for Outside
Director][Independent Director]
Years of service as
Outside Director:
1 year7

Career summary, position and responsibilities(Significant concurrent positions outside the Company)
June 2009

Officer, Panasonic Corporation(Vice President Panasonic AVC Networks
Company, in charge of Consumer Business)

June 2012

Director, Managing Executive Officer,
Panasonic Corporation(President, Panasonic AVC Networks
Company)

Apr. 2013

Director, Managing Executive Officer, Chief
Technology Officer (CTO), Panasonic
Corporation

Apr. 2015

Director, Managing Executive Officer,
Panasonic Corporation(Senior Vice President, Appliances Company,
President, Air-con Company, in charge of TV
Business)

June 2015

Managing Executive Officer, Panasonic
Corporation(Senior Vice President, Appliances Company,
President, Air-con Company, in charge of TV
Business)

June 2016

Senior Audit & Supervisory Board Member,
Panasonic Corporation (resigned in June
2020)

June 2020

Outside Director of the Company (present
position)

Attendance at Board of
Directors meetings:
11/12 meetings

Number of theCompany’s
shares owned

0

Reasons for selection as Outside Director and overview of expected role
After joining a major electrical appliance manufacturer, Mr. Mamoru Yoshida demonstrated broad management
skills and strategy building ability through his career as manager of various areas. He also served as CTO andgained extensive knowledge and experience in technology management, manufacturing, marketing, etc. Since
2016, he had promoted corporate management governance reform as Senior Audit & Supervisory Board
Member. The Company believes he will continue to be capable of playing an appropriate role in matters suchas giving advice and providing supervision relating to management of the Company from an objective
standpoint by making use of his manufacturing knowledge and extensive experience in corporate management.
In light of these reasons, the Company proposes his election as Outside Director.

Junji Ashida(March 12, 1969)

Apr. 2009

Senior Manager, Information Technology &Services Planning Division, NEC
Corporation

Apr. 2013

Senior Manager, System Integration &Services Planning Division, NEC
Corporation[Reelection]

Apr. 2014
Years of service as Director:
4 years
Apr. 20168

Attendance at Board of
Directors meetings:
14/14 meetings

General Manager, Corporate Planning
Division, NEC Solution Innovators, Ltd.
Associate Senior Vice President, General
Manager, Corporate Planning Division, NEC
Solution Innovators, Ltd.

Apr. 2017

General Manager, Corporate Strategy
Division, NEC Corporation (present position)

June 2017

Member of the Board of the Company(present position)

0[Reasons for selection as a candidate for Director]
Mr. Junji Ashida is the General Manager of the Corporate Strategy Division of NEC Corporation. He possesses
knowledge and experience on corporate governance and strengthening internal controls, as well as in corporate
strategies and planning as expected of a Director. The Company believes he will continue to contribute toincreasing the Group’s corporate value by making use of this knowledge and experience. In light of thesereasons, the Company proposes his election as Director.

-6-

No.

Name (Date of birth/othernotes)

Career summary, position and responsibilities(Significant concurrent positions outside the Company)
Apr. 2009

Toru Kawakubo(April 19, 1965)

Department Manager, NTT Systems
Division, NEC Corporation

Apr. 2014[Reelection]

Deputy General Manager, NTT Systems
Division, NEC Corporation

Apr. 2015

General Manager, NTT Sales Division, NEC
Corporation

Years of service as Director:
Apr. 2017
1 year9

Attendance at Board of
Directors meetings:
12/12 meetings

Number of theCompany’s
shares owned

General Manager, NTT Sales Division, NEC
Corporation

June 2020

Member of the Board of the Company(present position)

Apr. 2021

Senior Vice President, NEC Corporation(present position)

0[Reasons for selection as a candidate for Director]
Mr. Toru Kawakubo served as General Manager of NTT Sales Division of Network Service Business Unit,
NEC Corporation, which is closely related to the Company’s business. He possesses an abundance ofknowledge and experience of telecommunication carrier business that is essential for expanding service andbusiness areas of the Company. The Company believes he will continue to contribute to increasing the Group’s
corporate value by making use of this knowledge and experience. In light of these reasons, the Company
proposes his election as Director.
Notes:

1. There is no special interest between the Company and any of above candidates.
2. Messrs. Osamu Noda and Hiroyuki Sekizawa were executing persons at NEC Corporation, which is the parent
company of the Company, within the past ten years. Their positions while working for NEC Corporation are as
described in “Career summary and position (Significant concurrent positions outside the Company).”
3. Liability limitation agreement with candidates for Directors
The Company has entered into liability limitation agreements with Mss. Michiko Ashizawa and Kuniko
Muramatsu and Messrs. Mamoru Yoshida, Junji Ashida, and Toru Kawakubo that shall limit the maximum amountof their liability to compensate for damages due to a failure to perform their duties as set forth in the provisions ofArticle 423, paragraph 1 of the Companies Act. The limit of liability under these agreements is 1,200,000 yen or
the minimum liability amount prescribed in the laws and regulations, whichever is the higher.
If their reelections are approved at this General Meeting of Shareholders, the Company will continue to enter into
this agreement with each of them.
4. Directors and officers liability insurance policy, with candidates for Directors
NEC Corporation, the parent company of the Company, has entered into a directors and officers liability insurance
policy as provided for in Article 430-3, paragraph (1) of the Companies Act with an insurance company. An
overview of the details of the insurance policy is described in the Business Report 2. (2) “① Status of Directors
and Corporate Auditors.”
Each candidate will be insured under this policy if his/her reelection is approved.
5. Messrs. Junji Ashida and Toru Kawakubo serve as executing persons of NEC Corporation, the parent company of
the Company.
6. The Company has filed declarations naming Mss. Michiko Ashizawa and Kuniko Muramatsu and Mr. Mamoru
Yoshida as independent directors, as prescribed by the Tokyo Stock Exchange. If their reelection is approved at
this General Meeting of Shareholders, the Company will continue to designate them as independent directors.

[About Independence Standards]
In selecting candidates for Independent Outside Directors and Independent Outside Corporate Auditors,
the Company considers the requirements for Outside Directors and Outside Corporate Auditors stipulated
in laws and regulations, the Independence Standards set by the Tokyo Stock Exchange and other criteria.

-7-Proposal 2:

Election of one (1) Substitute Corporate Auditor

The effective tenure of Mr. Hirohisa Ryu as Substitute Corporate Auditor will expire at the commencementof this General Meeting of Shareholders. We therefore propose the election of one Substitute Corporate
Auditor in the case that the number of Outside Corporate Auditors does not meet the requirements stipulated
in laws and regulations.
In addition, before being appointed, the validity of the nomination in this proposal is subject to approval fromthe Board of Corporate Auditors, and the nomination may be revoked by a resolution of the Board of Directors.
The candidate for Substitute Corporate Auditor is as follows:
The Board of Corporate Auditors has given its consent to this proposal.
Name (Date of birth/othernotes)

Career summary and position(Significant concurrent positions outside the Company)

Hirohisa Ryu(August 4, 1964)

Apr. 1994[Reelection][Candidate for Outside
Corporate Auditor][Independent Auditor]

Registered as an attorney at Sakano / Seo /Hashimoto Law Office (currently, Tokyo
Hatchobori Law Office)Apr. 2001

Assistant Manager, Financial Crisis Response
Office, General Affairs Division, Supervision
Bureau of Financial Services Agency (fixedterm official)

Years of service as
Corporate Auditor:– years

Apr. 2003

Returned to Tokyo Hatchobori Law Office

Apr. 2004

Partner, Tokyo Hatchobori Law Office (present
position)

Attendance at Board of
Directors meetings:–/– meetings

Number of theCompany’s shares owned

0[Significant concurrent positions outside the Company]
Outside Corporate Auditor of eGuarantee, Inc.

Attendance at Board of
Corporate Auditors meetings:–/– meetings
Reason for selection as Substitute Outside Corporate Auditor
Mr. Hirohisa Ryu has knowledge of corporate legal affairs as an attorney, and an abundance of practical experience, suchas serving as a fixed-term official in the Financial Services Agency. Although he has not been directly involved in business
management, the Company judges he is qualified to audit the legitimacy of its business operations from a fair andobjective standpoint, by making use of his knowledge and experience. In light of these reasons, the Company proposes hiselection as Substitute Outside Corporate Auditor.
Notes:

1. There is no special interest between the Company and the above candidate.
2. Mr. Hirohisa Ryu is a candidate for Substitute Outside Corporate Auditor.
3. Liability limitation agreement with candidate for Substitute Corporate Auditor
If Mr. Hirohisa Ryu is elected as an Outside Corporate Auditor, the Company plans to enter into a liability
limitation agreement with him as set forth in the provisions of Article 423, Paragraph 1 of the Companies Act.
The limit of liability under this agreement is 1,200,000 yen or the minimum liability amount prescribed in the laws
and regulations, whichever is the higher.
4. Directors and officers liability insurance policy, with candidate for Substitute Corporate Auditor
NEC Corporation, the parent company of the Company, has entered into a directors and officers liability insurance
policy as provided for in Article 430-3, paragraph (1) of the Companies Act with an insurance company. An
overview of the details of the insurance policy is described in the Business Report 2. (2) “① Status of Directors
and Corporate Auditors.”
Mr. Hirohisa Ryu will be insured under this policy if he is elected as an Outside Corporate Auditor.
5. Mr. Hirohisa Ryu meets the requirements for independence set forth in the listing rules of the Tokyo Stock
Exchange. If he is elected as an Outside Corporate Auditor, the Company will file a declaration naming him as anindependent director with the Tokyo Stock Exchange.

-8-Overview of Proposal 3 and Proposal 4
Our remuneration systems reflect work responsibilities and results. Remunerations for Directors of theCompany are set at an appropriate level and linked with the business performance, etc., in order to maintaincompetitiveness in the industry and function as an incentive to improve business performance.
We have decided to review the remuneration level in light of the increasing roles and responsibilities of
Directors in response to the rapidly changing business environment and the need to maintain a remunerationlevel appropriate for securing excellent personnel to further strengthen corporate governance.
Remunerations for Directors of the Company (excluding directors not involved in business execution)
includes the following components:i)Monthly remuneration (fixed remuneration based on role and performance),ii)

Performance-based bonuses as short-term incentive,iii) The granting of restricted shares as a long-term incentive.
Remunerations for Directors not involved in business execution are paid as a monthly fixed amount that is
not linked to business performance due to their role of supervising business execution.
This revision proposes increasing the total amount of remunerations for Directors of the Company from not
more than 300 million yen per year to not more than 350 million yen per year, and the amount of
remunerations for Outside Directors from not more than 30 million yen per year to not more than 50 million
yen per year. In addition, we propose setting the restricted share-based remuneration which is currently paid
within the amount of remunerations for Directors of the Company apart from the remunerations for Directors,
and increasing the amount of Monetary Remuneration Claims for the purpose of granting restricted sharesfrom not more than 30 million yen to not more than 60 million yen per year.
At the Board of Directors meeting held on February 22, 2021, the Company established a policy regarding
the details of individual remuneration for Directors, an overview of which is described in 2. (2) “②
Remunerations for Directors and Corporate Auditors” of the Business Report. The revision of the amount of
remunerations for Directors based on Proposal 3 “Revision of Remuneration Amount for Directors” and therevision of the remuneration system for granting restricted shares based on Proposal 4 “Revision of
Remuneration System for Granting Restricted Shares to Directors” (hereinafter “the Proposals”) in the
Reference Documents for the General Meeting of Shareholders, are in line with the aforementioned policy,
and we do not plan to change the policy even if the Proposals are approved. The Proposals were decided
based on the results of deliberation at the Advisory Panel, of which the majority of members are Independent
Outside Directors and which is chaired by an Independent Outside Director.
Item

Current
After proposed revision
Not more than 300 million yen per
Not more than 350 million yen per
Theamountofyear
year
remunerations for Directors(Not more than 30 million yen per (Not more than 50 million yen per(of which Outside Directors)year) year)
Not more than 30 million yen per
Not more than 60 million yen per
The amount of restricted year
year
share-based remuneration* Included in the remunerations for * Separate from the remunerations for
Directors above
Directors above-9-

Proposal 3:

Revision of Remuneration Amount for Directors

At the 83rd Ordinary General Meeting of Shareholders held on June 23, 2015, the total amount of
remunerations for Directors was approved to be not more than 300 million yen per year as set out in the“Revision of Remuneration for Directors and Corporate Auditors” (of which, 30 million yen per year for
Outside Directors). We propose increasing this to not more than 350 million yen per year (of which, not morethan 50 million yen per year for Outside Directors) in light of the increasing roles and responsibilities of
Directors in response to the rapidly changing business environment and the need to maintain a remunerationlevel appropriate for securing excellent personnel to further strengthen corporate governance.
This revision aims to raise the level of remuneration to a level that is competitive with industry peers, andwe believe that it is appropriate.
As before, the total amount of remunerations for Directors does not include employee salaries for Directors
who also serve as employees. The Company does not provide employee salaries (including bonuses) to
Directors who also serve as employees.
In addition, if Proposal 1 is approved and adopted in its original form, the number of Directors after theconclusion of this General Meeting of Shareholders will be nine (including three Outside Directors).

- 10 -

Proposal 4:

Revision of Remuneration System for Granting Restricted Shares to Directors

1. Reasons for Revision of this System
At the 87th Ordinary General Meeting of Shareholders held on June 21, 2019, we received approval of
its proposed “Determination of Remuneration for Granting Restricted Shares to Directors” (hereinafter,
resolutions regarding the proposal at the meeting will be referred to as the “Initial Resolution”). We
introduced this system for Directors of the Company (excluding Directors who are not involved inbusiness execution and, hereinafter, will be referred to as “Applicable Directors”) with the aim ofproviding incentives for the sustainable improvement of our corporate value and promoting further value
sharing between our Directors and shareholders.
This time, we propose that the Initial Resolution be partially revised as follows to increase the total amountof Monetary Remuneration Claims to be paid to the Applicable Directors of the Company for the grantingof restricted shares.
This revision comprehensively considers factors such as the progress of the medium-term management
plan and changes in the Company’s stock price since the Initial Resolution, and has no impact on the
dilution rate because it does not change the upper limit of the number of shares granted to Directors under
this system. We therefore consider the revision to be appropriate.
2. Overview of Revision of this System
The 83rd Ordinary General Meeting of Shareholders held on June 23, 2015 approved that the amount of
remunerations for Directors of the Company shall be not more than 300 million yen per year (of which,
30 million yen for Outside Directors) as set out in the “Revision of Remuneration for Directors andCorporate Auditors.” In addition, the Initial Resolution specified that Monetary Remuneration Claims forthe purpose of granting restricted shares shall be provided within that limit, and the total amount ofMonetary Remuneration Claims was approved to be not more than 30 million yen per year.
Under this system, based on a resolution of the Board of Directors, in order to grant restricted shares toApplicable Directors, Monetary Remuneration Claims will be provided to Applicable Directors who will
deliver all such Monetary Remuneration Claims to the Company in the form of property contributed in
kind and receive the Company’s common shares which the Company issues or disposes. The total amountof Monetary Remuneration Claims to be paid to the Applicable Directors of the Company based on thissystem will be revised to not more than 60 million yen per year, separately from the above remuneration
limit.
There are no changes to the Initial Resolution other than the above revision. A 3-for-1 share split ofcommon shares was conducted on June 1, 2020, and we have adjusted for this by changing the maximum
number of common shares of the Company to be issued or disposed of for the granting of restricted sharesto 60,000 shares per year.
If Proposal 1 is approved and adopted in its original form, the number of Directors after the conclusionof this General Meeting of Shareholders will be nine (of which, five Directors, including three Outside
Directors, are not involved in business execution), meaning there will be four Applicable Directors.

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<Reference>
The outline of the Remuneration System for Granting Restricted Shares approved at the 87th Ordinary
General Meeting of Shareholders held on June 21, 2019 is as follows.
Directors of the Company (excluding Directors not involved in business execution; hereinafter, Applicable
Directors) shall provide all of the Monetary Remuneration Claims generated by this system in the form ofproperty contributed in kind, in accordance with the resolution of the Board of Directors of the Company,
and in return will receive common shares of the Company that shall be issued or disposed of by the Company,
and the total number of common shares of the Company to be issued or disposed of thereby shall be not morethan 60,000 shares per year. However, if, on or after the day on which this proposal is approved and adopted,
the Company performs a share split (including allotment of shares without contribution) or a reverse share
split of its common shares, or any other reason arises necessitating an adjustment to the total number ofcommon shares of the Company to be issued or disposed of as restricted shares, the relevant total number
shall be reasonably adjusted. The amount to be paid in per allotted share shall be determined by the Board of
Directors based on the closing price of the common shares of the Company on the Tokyo Stock Exchange on
the business day immediately before each date of resolution by the Board of Directors (if there is no closing
price on such date, the closing price on the closest preceding trading day) and within the extent that would
not be particularly advantageous to Applicable Directors.
For such issuance or disposal of the common shares of the Company, an agreement on allotment of restricted
shares (the “Allotment Agreement”) shall be entered into between the Company and each Applicable Director,
which shall include the provisions as summarized below:(1) An Applicable Director shall not transfer, create a security interest on, or otherwise dispose of thecommon shares of the Company allotted under the Allotment Agreement (the “Allotted Shares”) during
the period from the issue date of the Allotted Shares to the date on which he/she loses his/her Director
or other positions defined by the Board of Directors of the Company (the “Restriction Period”) (the“Transfer Restrictions”).
(2) In the event that an Applicable Director loses his/her Director or other positions defined by the Boardof Directors of the Company before the expiration of the period specified by the Board of Directors (the“Service Provision Period”), the Company shall automatically acquire the Allotted Shares without
contribution, unless there is a reason that the Board of Directors deems justifiable.
(3) The Company shall lift the Transfer Restrictions of all of the Allotted Shares upon expiration of the
Restriction Period, on the condition that the Applicable Director has remained in the position of Director
or other positions defined by the Board of Directors of the Company continuously throughout theService Provision Period specified by the Board of Directors of the Company. However, if the
Applicable Director loses his/her position as set forth in (2) above before the expiration of the Service
Provision Period, for the reason that the Board of Directors deems justifiable as set forth in (2) above,
the Company shall rationally adjust the number of the Allotted Shares and the timing of lifting theTransfer Restrictions as necessary.
(4) The Company shall automatically acquire without contribution the Allotted Shares on which theTransfer Restrictions have not been lifted at the expiration of the Restriction Period in accordance withthe provision of (3) above.
(5) Notwithstanding the provision of (1) above, if, during the Restriction Period, matters relating to a merger
agreement in which the Company is the disappearing company, a share exchange agreement or sharetransfer plan in which the Company becomes a wholly owned subsidiary, or other reorganization, etc.
are approved at the Company’s General Meeting of Shareholders (or at a meeting of its Board of
Directors in cases where approval at the Company’s General Meeting of Shareholders is not required inrelation to the reorganization, etc.), the Company shall lift the Transfer Restrictions on the Allotted
Shares with the number of shares that is reasonably determined considering the period from the payment
date to the date of approval of the reorganization, etc. prior to the date on which the reorganization, etc.
becomes effective, by resolution of the Board of Directors of the Company.
(6) In cases specified in (5) above, the Company shall automatically acquire without contribution the
Allotted Shares on which the Transfer Restrictions have not been lifted as of the time immediately after
the Transfer Restrictions were lifted in accordance with the provision of (5) above.
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(7) The method for expressing intentions and giving notifications in the Allotment Agreement, the method
for amending the Allotment Agreement, and other matters to be determined by the Board of Directors
shall be laid out in the Allotment Agreement.

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