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. AOI TYO
Holdings Inc. assumes no responsibility for this translation or for direct, indirect or any other forms of damages arisingfrom the translation.
Stock Code: 3975
March 10, 2021
To Shareholders with Voting Rights:
Yasuhito Nakae
Representative Director & Group CEO
AOI TYO Holdings Inc.
2-2-24, Higashi-shinagawa, Shinagawa-ku,
TokyoConvocation Notice of the Fourth Ordinary General Meeting of Shareholders of
AOI TYO Holdings Inc.
Dear Shareholder,
AOI TYO Holdings Inc. hereby announces that its fourth ordinary general meeting of shareholders will be convened as
described below.
Although we will take measures at the venue to prevent infection from COVID-19, you are requested to exercise your voting
rights in advance, whenever possible, either in writing or via the internet no later than 5:30 PM on Wednesday, March 24,
2021 (Japan Time) in order to prevent the spread of COVID-19. We urge caution in deciding to attend the meeting in person.
Meeting Details:
1. Date and Time

10:00 AM, Thursday, March 25, 2021

2. Venue

Function room Yamabuki on 4F of Palace Hotel Tokyo
1-1-1 Marunouchi, Chiyoda-ku, Tokyo

3. Agenda

Matters toReport1. Report on the AOI TYO Holdings Inc. Period 4 (January 1, 2020 through December 31,2020) business report, consolidated financial statements, and results of consolidated
financial statement audits conducted by the independent financial statement auditor andthe AOI TYO Holdings Audit and Supervisory Committee
2. Report on details of Period 4 financial statements (January 1, 2020 through December
31, 2020)

Matters for
Resolution

Item 1
Item 2Item 3Item 4Item 5

Appropriation of Retained Earnings
Election of Five (5) Directors (Excluding Directors Serving as Members of
the Audit and Supervisory Committee)
Election of Three (3) Directors Serving as Members of the Audit andSupervisory Committee
Election of One (1) Director Serving as a Substitute Member of the Audit andSupervisory Committee
Partial Amendments to Performance-linked Stock Compensation Plan for
Directors (Excluding Directors Serving as Members of the Audit andSupervisory Committee and Outside Directors)

Notice to Shareholders

If you are attending the meeting of shareholders in person, please bring the enclosed voting form to present at theregistration desk.

-1-



AOI TYO Holdings Inc. has published the following information on the Company’s website (http://aoityo.com/) as
provided by law and Article 18 of the Company’s articles of incorporation. Accordingly, the informationreferenced below is not included in this convocation notice:・ Matters related to subscription rights to company stock, status of independent financial statement auditor audit,

and company systems and policies from the Company’s business report・ Statement of changes in shareholders’ equity and notes to consolidated financial statements from theCompany’s consolidated financial statements
・ Statement of changes in shareholders’ equity and notes to non-consolidated financial statements from theCompany’s non-consolidated financial statements.
Documents attached to this convocation notice reflect a portion of those items audited by the Company’s Audit andSupervisory Committee and the independent financial statement auditor when preparing their respective audit
reports.
Further, if corrections to general meeting of shareholders reference materials, business reports, financial statements,
or consolidated financial statements are necessary, corrected information will be posted to the AOI TYO Holdings
corporate website (http://aoityo.com/en/index.html).

-2-General Meeting of Shareholders Reference Materials
Agenda and Reference Documents
Item 1

Appropriation of Retained Earnings

AOI TYO Holdings believes that returning profits to its shareholders is an important management concern. Therefore, theCompany has made the following decision in consideration of securing sufficient internal reserves necessary for expanding
its business in the future and strengthening the Company’s business infrastructure.
(1) Nature of Asset Distributed as Dividend
Cash(2) Matters Related to Asset Distributed as Dividend and Total Amount Distributed
Per share of common stock of AOI TYO Holdings Inc.

JPY12

Total amount

JPY286,672,188

The annual dividend amount is JPY12 per share, including interim dividends.
(3) Effective Date of Allocation of Retained Earnings
March 26, 2021

-3-

Item 2

Election of Five (5) Directors (Excluding Directors Serving as Members of the
Audit and Supervisory Committee)

As of the conclusion of this ordinary general meeting of shareholders, all three (3) directors (excluding directors serving
as members of the Audit and Supervisory Committee, hereinafter the same in this proposal) will reach the end of their termsof office. We propose the election of five (5) directors, adding two more Directors to further reinforce our management
structure.
Our proposed candidates for director are as described below.

1

Yasuhito Nakae(DOB: April 28, 1967)

ReElection

Career Background, Positions Held Within the Company, Important Concurrent Positions
1991

April

Joined Aoi Advertising Promotion Inc. (currently AOI Pro. Inc.)

2006

July

Named executive officer

2008

June

2010

June

Named senior executive officer and general manager, Production
Division
Named managing director

No. of Shares Owned

2015

February

Named representative director & president

39,700 shares

2017

January

Named representative director, AOI TYO Holdings Inc.

Board of Director Meeting
Attendance Record

2018

January

Named representative director, president & COO

2019

March

2019

April

Named vice chair, Special Olympics Nippon Foundation (current
position)
Named external director, TSUNAGU GROUP HOLDINGS Inc.
(current position)

2020

March

Named representative director, president & CEO, AOI TYO Holdings
Inc.

2020

AugustNamed Director, Kabushiki Kaisha C-Seven Hayabusa (current
position)

2021

January

Named representative director & group CEO

100 percent (13 of 13
meetings)

Reasons for Nomination as Candidate for Director
Mr. Yasuhito Nakae has served as representative director of the AOI TYO Holdings Groupsince its founding, leveraging his experience in leading AOI Pro. Inc. and its Group
companies. He has reinforced the overwhelming position of the Group within the video
advertising market amid impacts from COVID-19 by pursuing high-quality images, andactively promoted alliances as well as investments in the peripheral solutions businessextended from video production. Based on the preceding, we believe Mr. Nakae willcontribute to the growth of AOI TYO Holdings.

-4-

2

Hiroaki Uekubo(DOB: January 1, 1970)

ReElection

Career Background, Positions Held Within the Company, Important Concurrent Positions

No. of Shares Owned

29,820 shares
Board of Director Meeting
Attendance Record

100 percent (13 of 13
meetings)

1992

April

Joined The Fuji Bank, Limited (currently Mizuho Bank, Ltd.)

2002

June

Joined TYO Inc. (currently xpd Inc.)

2005

July

Named general manager, Business Planning Department

2007

AugustNamed director and general manager, Business Strategy Division

2010

July

2016

October

Named managing director and general manager, Business Strategy
Division
Named representative director & vice president

2017

January

Named managing director, AOI TYO Holdings Inc.

2020

March

Named representative director & vice president

2020

March

Named director, AOI Pro. Inc. (current position)

2021

January

Named director, TYO Inc. (currently xpd Inc.) (current position)

2021

January2021

January

Named representative director & group COO, AOI TYO Holdings Inc.
(current position)
Named board director, TYO Inc. (current position)

Reasons for Nomination as Candidate for Director
Leveraging his experience at financial institutions and as representative director & vicepresident of TYO Inc. (currently xpd Inc.), Mr. Hiroaki Uekubo has served as officer incharge of corporate planning, business management and human resources of the AOI TYO
Holdings Group since its founding, and has accomplished his duties and responsibilities tominimize the impact on the Company from COVID-19 pandemic-induced fluctuations in
the business climate. Based on the preceding, we believe Mr. Uekubo will continue tocontribute to improving the corporate value of AOI TYO Holdings.

-5-

3

Satoshi Yuzurihara(DOB: June 2, 1965)

ReElection

Career Background, Positions Held Within the Company, Important Concurrent Positions

No. of Shares Owned

21,700 shares
Board of Director Meeting
Attendance Record

100 percent (13 of 13
meetings)

1988

April

Joined Dai-Ichi Kangyo Bank, Limited (currently Mizuho Bank, Ltd.)

2008

April

2010

January

2010

June

Named deputy general manager, Group Strategy Division, Mizuho
Financial Group, Inc.
Joined Aoi Advertising Promotion Inc. (currently AOI Pro. Inc.),
named executive officer and general manager, Finance Department
Named director

2011

April

Named managing director

2014

April

Named executive director

2014

December Named representative director

2015

February

Named representative director & vice president

2017

January

Named executive director, AOI TYO Holdings Inc.

2019

March

Named executive director & CFO

2020

March

Named director, TYO Inc. (currently xpd Inc.) (current position)

2021

January

Named director & group CFO (current position)

2021

January

Named director, AOI Pro. Inc. (current position)

2021

January

Named board director, TYO Inc. (current position)

2021

January

Named director, TREE Digital Studio Inc. (current position)

Reasons for Nomination as Candidate for Director
Leveraging his experience at financial institutions and as representative director and vicepresident of AOI Pro. Inc., Mr. Satoshi Yuzurihara has served as officer in charge of financeand accounting of the AOI TYO Holdings Group since its founding, and has accomplished
his duties and responsibilities to minimize the impact on the Company from COVID-19
pandemic-induced fluctuations in the economic climate. Based on the preceding, we believe
Mr. Yuzurihara will continue to contribute to improving the corporate value of AOI TYO
Holdings.

-6-

4

Ippei Matsuo(DOB: May 27, 1977)

New
Nominee

Career Background, Positions Held Within the Company, Important Concurrent Positions
2002

April

Joined ABeam Consulting Ltd.

2008

July

Joined TYO Inc. (currently xpd Inc.)

2014

August2017

January

2018

March

Named executive officer and general manager, Business Planning
Department
Named general manager, Corporate Planning Department, AOI TYO
Holdings
Named auditor, MAZRI Inc. (current position)

2020

February

Named board director, C3Film Co., Ltd. (current position)

2021

January2021

January

Named corporate officer and general manager, Corporate Planning
Department, AOI TYO Holdings (current position)
Named auditor, TREE Digital Studio Inc. (current position)

No. of Shares Owned

1,020 shares
Board of Director Meeting
Attendance Record－

Reasons for Nomination as Candidate for Director
Since his stint at TYO Inc. (currently xpd Inc.), Mr. Ippei Matsuo has held leadership
positions mainly in corporate planning. He has a wealth of experience and track record inbusiness management, and has actively contributed to the AOI TYO Holdings Group’s
development. We believe that his insight is indispensable for the Group to push ahead withits medium-term plan and business strategy and thus propose his election as director.

-7-

5

Koiso Wada

(DOB: January 11, 1970)

New
Nominee(Current legal family name: Mizuno)
Career Background, Positions Held Within the Company, Important Concurrent Positions

No. of Shares Owned

4,180 shares
Board of Director Meeting
Attendance Record－

Notes:
1.
2.
3.

2004

February

Joined TYO Administration Inc.

2007

AugustJoined TYO Inc. (currently xpd Inc.)

2010

July

Named corporate officer and general manager of finance, Financeand Accounting Department
2012
AugustNamed corporate officer and general manager, Finance
Department
2017
January
Named general manager, Treasury & Accounting Department,
AOI TYO Holdings
2019
July
Named general manager, Financial & Accounting Department,
AOI TYO Holdings
2021
January
Named corporate officer and general manager, Financial &Accounting Department (current position)
Reasons for Nomination as Candidate for Director
Since her stint at TYO Inc. (currently xpd Inc.), Ms. Koiso Wada has held leadership
positions mainly in financial affairs, and has contributed to improving the corporate value of
AOI TYO Holdings Inc., leveraging her abundant knowledge in the area of finance andaccounting. We believe that her insight is indispensable for the Group to push ahead with its
medium-term plan and business strategy and thus propose her election as director.

The Company has no special interest relations with the director candidates noted above.
Candidate Ms. Koiso Wada uses her maiden name, Wada, in her job although she has legally adopted her married name, Mizuno.
The Company has entered into a directors and officers liability insurance contract stipulated in Article 430-3 of the Companies Act.
Candidates whose reappointment or appointment is approved will be named as the insured in this contract. The details of the contract are
as outlined below:(1) Scope of the insured
Board Members & Officers, employees in managerial positions, employees who have been named as codefendants with Board Members& Officers, and employees who have received claims for damages from other employees or workers dispatched from temp agencies on
account of unfair labor practices, including harassment, of the Company or its subsidiaries, as well as spouses or legal heirs thereof(2) Other details
・ Premiums: Paid in full by the Company
・ Insured events: Claims for damage filed by a third party, actions seeking liability, etc. filed by shareholders-8-

Item 3

Election of Three (3) Directors Serving as Members of the Audit andSupervisory Committee

As of the conclusion of this ordinary general meeting of shareholders, all three (3) directors serving as members of the
Audit and Supervisory Committee will reach the end of their terms of office.
Accordingly, we propose the election of three (3) directors serving as members of the Audit and Supervisory Committee.
Prior consent for this proposal has been obtained from the Audit and Supervisory Committee.
Our proposed candidates for directors serving as members of the Audit and Supervisory Committee are as described
below.

1

Yoshiharu Hagiwara(DOB: February 4, 1969)

ReElection

Career Background, Positions Held Within the Company, Important Concurrent Positions
1994

May

Registered as Judicial Scrivener

1997

April

2008

OctoberFounded Beck One Partners General Office & Judicial Scrivener
Hagiwara Yoshiharu Office (currently ALEX Counsel & Services),named representative judicial scrivener (current position)
Named auditor, TYO Inc. (currently xpd Inc.)

2013

NovemberNamed full-time auditor

2,100 shares

2015

February

Board of Director Meeting
Attendance Record

2017

January

Named representative director, Alex Real Estate Co., Ltd. (current
position)
Named director & member of the Audit and Supervisory Committee,
AOI TYO Holdings Inc. (current position)

2021

January

No. of Shares Owned

100 percent (13 of 13
meetings)
Audit and Supervisory Committee
Meeting Attendance Record

100 percent (13 of 13
meetings)

Named director, Hagijimu Yugen Kaisha (current position)

Reasons for Nomination as Candidate for Outside Director
As a judicial scrivener, Mr. Yoshiharu Hagiwara has specialized in business related tocorporate legal affairs, including listing preparations for companies, organizational
restructuring, and M&A, with a wealth of experience and insight in these areas. During the
fiscal year under review, he has utilized his knowledge to appropriately oversee the legality,
etc. of the execution of business by the directors of AOI TYO Holdings, and has
accomplished his duties and responsibilities. Based on the preceding, we believe that as
outside director, Mr. Hagiwara will continue to appropriately execute the duties of director
serving as a member of the Audit and Supervisory Committee.

-9-

2

Kazuki Takada(DOB: July 4, 1965)

ReElection

Career Background, Positions Held Within the Company, Important Concurrent Positions

No. of Shares Owned

18,300 shares
Board of Director Meeting
Attendance Record

100 percent (13 of 13
meetings)
Audit and Supervisory Committee
Meeting Attendance Record

100 percent (13 of 13
meetings)

1995

July

2002

DecemberNamed representative director, Accounting System Co., Ltd. (current
position)
Registered as certified tax accountant

2004

April

Opened Takada Accounting Office

2011

April

2011

June

2016

June

Named representative partner, TAKADA ACCOUNTING FIRM
(current position)
Named auditor, Aoi Advertising Promotion Inc. (currently AOI Pro.
Inc.)
Named director and member of the Audit and Supervisory Committee

2017

January

2017

March

Named director & member of the Audit and Supervisory Committee,
AOI TYO Holdings Inc. (current position)
Named auditor, AOI Pro. Inc. (current position)

Reasons for Nomination as Candidate for Outside Director
As a certified tax accountant, Mr. Kazuki Takada has worked mainly in the areas of tax
advisory service and formulation of management plans. In addition to his expertise as a tax
accountant, he has a wealth of experience and knowledge in these areas. During the fiscal
year under review, he has utilized this knowledge to appropriately oversee the legality, etc.
of the execution of business by the directors of AOI TYO Holdings, accomplishing his
duties and responsibilities. Based on the preceding, we believe that as outside director, Mr.
Takada will continue to appropriately execute the duties of director serving as a member ofthe Audit and Supervisory Committee.

- 10 -

3

Takashi Kokubo(DOB: January 18, 1974)

ReElection

Career Background, Positions Held Within the Company, Important Concurrent Positions

No. of Shares Owned

1,602 shares
Board of Director Meeting
Attendance Record

100 percent (13 of 13
meetings)

2000

October

Registered as attorney with Dai-Ichi Tokyo Bar Association

2000

OctoberJoined Nishimura & Partners (currently Nishimura & Asahi)

2006

April

Graduated from School of Law, Duke University, U.S.

2006

SeptemberWorked for Cleary Gottlieb Steen & Hamilton LLP (New York City)

2008

December

Graduated from INSEAD, France

2009

February

Joined Integral Corporation

2011

October

Named auditor, TYO Inc. (currently xpd Inc.)

2014

March

Established Kokubo Law Office2014

October

Named director, TYO Inc. (currently xpd Inc.) (current position)
Named director and member of the Audit and Supervisory Committee
AOI TYO Holdings Inc. (current position)
Named outside director, AZOOM co., ltd. (current position)

2017

January

Audit and Supervisory Committee
Meeting Attendance Record

2017

January

100 percent (13 of 13
meetings)

2017

March

2017

August

2019

June

2020

June

Established Legal professional corporation Kokubo Law Office,named representative partner (current position)
Named outside auditor, AlpacaJapanCo.,Ltd. (current position)
Named outside director, Suteki Nice Group Kabushiki Kaisha(currently Nice Corporation) (current position)
Named external auditor, Oisix ra daichi Inc. (current position)

Reasons for Nomination as Candidate for Outside Director
As an attorney-at-law, Mr. Takashi Kokubo has consistently specialized in corporate legal
affairs, including organizational restructuring, M&A, and corporate governance. His trackrecord and insight as an attorney, supported by knowledge of finance acquired through his
experience at an investment business company, are highly valued. During the fiscal year
under review, he has utilized this knowledge to appropriately oversee the legality, etc. of theexecution of business by the directors of AOI TYO Holdings, accomplishing his duties andresponsibilities. Based on the preceding, we believe that as outside director, Mr. Kokubo willcontinue to appropriately execute the duties of director serving as a member of the Audit andSupervisory Committee.
Notes:
1.
2.
3.

4.
5.
6.

The Company has no special interest relations with the director candidates noted above.
The candidates are candidates for outside director as stipulated in Article 2, Paragraph 3, Item 7 of The Regulation for Enforcement of theCompanies Act.
The Company has stipulated in the articles of incorporation that the Company shall enter into agreements with directors serving as
members of the Audit and Supervisory Committee to limit their liability for damages to the minimum liability amount as provided by laws
and regulations, pursuant to the provisions of Article 427, Paragraph 1 of the Companies Act, and has entered into said liability limitationagreements with each director serving as a member of the Audit and Supervisory Committee. In the event that each candidate is reelected,
the Company intends to continue the said liability limitation agreements with each director.
Each candidate’s term of office as director serving as a member of the Audit and Supervisory Committee will be four years at theconclusion of this ordinary general meeting of shareholders.
The Company has reported each candidate as an independent director in accordance with the stipulations of Tokyo Stock Exchange, Inc. If
elected, the Company intends that each candidate shall continue as an independent director.
The Company has entered into a directors and officers liability insurance contract stipulated in Article 430-3 of the Companies Act.
Candidates whose reappointment or appointment is approved will be named as the insured in this contract. The details of the contract are
as outlined below:(1) Scope of the insured
Board Members & Officers, employees in managerial positions, employees who have been named as codefendants with Board Members& Officers, and employees who have received claims for damages from other employees or workers dispatched from temp agencies on
account of unfair labor practices, including harassment, of the Company or its subsidiaries, as well as spouses or legal heirs thereof(2) Other details
・ Premiums: Paid in full by the Company
・ Insured events: Claims for damage filed by a third party, actions seeking liability, etc. filed by shareholders- 11 -

Item 4

Election of One (1) Director Serving as a Substitute Member of the Audit andSupervisory Committee

The election of one (1) director serving as a substitute member of the Audit and Supervisory Committee is proposed in
preparation for an event in which AOI TYO Holdings lacks the number of directors serving as members of the Audit andSupervisory Committee stipulated by laws and regulations. If the candidate assumes office as a substitute member of the
Audit and Supervisory Committee, his term of office shall be the remaining term of his predecessor.
Prior consent for this proposal has been obtained from the Audit and Supervisory Committee.
Our proposed candidate for director serving as a substitute member of the Audit and Supervisory Committee is as
described below.

1

Tomohito Yamaki(DOB: March 27, 1960)

Career Background, Positions Held Within the Company, Important Concurrent Positions

No. of Shares Owned

0 shares

1982

April

Joined The Hokkaido Takushoku Bank, Ltd.

1998

April

Joined BNP Paribas Bank

2008

June

Joined HOKKAN HOLDINGS LIMITED

2011

July

2012

April

2017

April

Joined Aoi Advertising Promotion Inc. (currently AOI Pro. Inc.),
named General Manager of Group Management Division, Finance
Department
Named General Manager, Global Management Division, Corporate
Department, AOI Pro. Inc.
Internal Audit Department, AOI TYO Holdings Inc.

2019

February

Auditor, tko Inc. (current position)

2019

March

Named auditor, AOI Pro. Inc. (current position)

2019

March

Named auditor, C3Film Co., Ltd. (current position)

Reasons for Nomination as Candidate for Substitute Director
Mr. Tomohito Yamaki has expertise in corporate finance and accounting from his wealth ofexperience at financial institutions. Since joining AOI Pro. Inc. in July 2011, he has
experienced international business and internal audits. By utilizing such insight andexperience, we believe Mr. Yamaki will appropriately execute the duties of director serving
as a member of the Audit and Supervisory Committee of AOI TYO Holdings.
Note: The Company has no special interest relations with the candidate noted above.

- 12 -

Item 5

Partial Amendments to Performance-linked Stock Compensation Plan for
Directors (Excluding Directors Serving as Members of the Audit andSupervisory Committee and Outside Directors)

1. Reason for the Proposal
The Company’s 1st Annual General Meeting of Shareholders, held on March 28, 2018, approved aproposal to introduce a “Board Benefit Trust (BBT)” performance-linked stock compensation plan (the“Plan”) for directors of the Company (excluding directors serving as members of the Audit andSupervisory Committee and outside directors) and directors of subsidiaries of the Company (refers to AOIPro. Inc., hereinafter “AOI Pro.,” and xpd Inc., hereinafter “xpd,” formerly TYO Inc.; hereinafter thesesubsidiaries are collectively referred to as the “former eligible subsidiaries”) (excluding directors who are
not business execution directors; hereinafter, together with directors of the Company, referred to as“Former Eligible Directors”), and the Plan remains in force.
The Plan is designed to clarify the relationship between the compensation of the Former Eligible
Directors and the business performance and share value of the Group, and increase Former Eligible
Directors’ awareness of contributing to enhancing the medium- to long-term business performance of theGroup and maximizing corporate value, by ensuring they share not only the merits of an increase in theshare value but also the risks of a decline in the share value with shareholders.
Effective January 4, 2021, the Company executed an incorporation-type company split of xpd,
transferring part of its businesses to the newly established TYO Inc. (hereinafter “TYO”), and anabsorption-type merger of xpd and four consolidated subsidiaries of the Company (Quark tokyo Inc., ZEO
Corporation, TYO Digital Works Inc., and TYO Public Relations Inc.) with xpd as the surviving company.
As a result of this Group restructuring (hereinafter “the Group Restructuring”), changes occurred withrespect to the posts of some of the Former Eligible Directors of the Plan. The Company requests approval
to amend the scope of directors eligible for the Plan to include directors of the Company (excluding
directors serving as members of the Audit and Supervisory Committee and outside directors) and directorsof AOI Pro., xpd and TYO (hereinafter, together with directors of the Company, referred to as “Eligible
Directors”), in order to maintain the purpose of the Plan as stated above.
The proposed amendments to the scope of the Company’s subsidiaries eligible for the Plan under this
proposal are an adjustment in the scope of eligibility pursuant to the implementation of the Group
Restructuring, and the content of the Plan will be substantively maintained. The proposed amendments arealso in accord with the Company’s policy regarding the determination of compensation, etc. for individual
directors. They are, therefore, deemed appropriate. (Please refer to the <Reference> section below for theCompany’s policy regarding the determination of compensation, etc. for individual directors.)
Furthermore, the Company requests that the details of the amended Plan be left to the discretion of theBoard of Directors, within the framework of Item 2. below.
At present, the number of directors of the Company who shall be eligible for the Plan is three (3). If
Proposal 2 is approved and passed as proposed, then five (5) directors of the Company shall be eligible for
the Plan.
2. Amount of compensation, etc. under the amended Plan and referential information(1) Overview of the Plan
The Plan is a performance-linked stock compensation system under which the Company’s shares
will be acquired through a trust (the “Trust”) using money contributed by the Company (the Company
established the Trust through the transfer of the position of entrustor of the trust established by AOIPro. on September 1, 2015 (the “Pre-succession Trust”), and paid a certain settlement amount to AOIPro. in line with the transfer of the position of entrustor in May 2018), and the Company’s shares andmoney equivalent to the market value of the Company’s shares (the “Company’s shares, etc.”) will bedelivered to Eligible Directors through the Trust in accordance with the Officer Stock Benefit
Regulations established by the Company and eligible subsidiaries. Eligible Directors will receive
delivery of the Company’s shares, etc., in principle, upon their retirement from office.
(2) Persons eligible for the Plan
Eligible Directors (directors of the Company serving as members of the Audit and Supervisory
Committee and outside directors, and directors of eligible subsidiaries who are not business execution
directors are not eligible for the Plan).

- 13 -

(3) Trust period
From May 2018 until the end of the Trust (In regard to the trust period of the Trust, the Trust shallcontinue without determining a specific expiration date as long as the Plan continues. The Plan shallend if the Company’s shares are delisted or the Officer Stock Benefit Regulations are discontinued,etc.)(4) Amount to be entrusted (amount of compensation, etc.)
The Company will apply the Plan to cover the four consecutive applicable service periods fromthe applicable service period corresponding to the fiscal year ended December 31, 2018 (for any
given fiscal year, the applicable service period refers to the period from the date of the Annual
General Meeting of Shareholders pertaining to the fiscal year before the relevant fiscal year, until the
day before the Annual General Meeting of Shareholders pertaining to the relevant fiscal year;
hereinafter the same applies) until the applicable service period corresponding to the fiscal year
ending December 31, 2021 (hereinafter, this period is referred to as the “Initial Applicable Period,”
and the Initial Applicable Period and each period consisting of four consecutive applicable service
periods starting after the Initial Applicable Period are each referred to as an “Applicable Period”) andeach subsequent Applicable Period, and the Company shall contribute to the Trust funds to acquire
the Company’s shares, in order to deliver the Company’s shares, etc., to Eligible Directors.
During the Initial Applicable Period, the Company received the position of entrustor of the Presuccession Trust from AOI Pro. in May 2018. As a settlement fee, the Company paid a certain amountto AOI Pro., in addition to contributing the necessary funds for the Initial Applicable Period. The
Company contributed a total amount to the Trust of 534 million yen including the settlement fee(including 180 million yen as the portion for directors of the Company).
In addition, even after the Initial Applicable Period has passed, the Company shall make additional
contributions to the Trust up to a maximum of 540 million yen (including 180 million yen as the
portion for directors of the Company), in principle, for each Applicable Period until the Plan ends.
However, when making these additional contributions, if there are shares in the Company (excluding
those that correspond to points granted to Eligible Directors for any preceding Applicable Period andhave not yet been delivered to the Eligible Directors) and money remaining in the trust assets(“Remaining Shares, etc.”), the maximum total amount of the Remaining Shares, etc. (for theCompany’s shares, this shall be the book value on the final day of the directly preceding Applicable
Period), and any additional contributions shall be 540 million yen (including 180 million yen as the
portion for directors of the Company).
(5) Method of acquiring the Company’s shares and number of shares to be acquired
In addition to the Company’s shares remaining in the Pre-succession Trust when the position of
entrustor was transferred to the Company, the Trust shall also acquire the Company’s shares throughthe stock market or disposal of treasury stock by the Company, using the funds contributed as
described in Item (4) above.
418,900 shares have been acquired during the Initial Applicable Period, including shares in the
Company remaining in the Pre-succession Trust when the position of entrustor was transferred to theCompany in May 2018.
(6) Maximum number of the Company’s shares, etc., to be delivered to Eligible Directors andcalculation method
Eligible Directors shall be granted a number of points for each Applicable Service Period
determined in consideration of his or her rank, consolidated EBITDA, and consolidated ROE in therelevant fiscal year, based on the Officer Stock Benefit Regulations.
In regard to points granted to Eligible Directors, one point shall be converted into one share ofcommon stock in the Company when the Company’s shares, etc., are delivered as described in Item(7) below (however, in the event of stock split, gratis allotment of shares, or reverse stock split, etc.,
in relation to the Company’s shares after this proposal is approved, in accordance with the ratio
thereof, reasonable adjustment shall be made to the maximum number of points, the number of points
already granted, or the conversion ratio).
When the Company’s shares, etc., are delivered to an Eligible Director as described in Item (7)below, the number of points granted to the Eligible Director up to the time of his or her retirement
shall be referred to, in principle (hereinafter, the number of points calculated in this way shall bereferred as the “Final Number of Points”).
The total maximum number of points to be granted to Eligible Directors for each Applicable
Service Period shall be 418,900 points (including 139,600 points as the portion for directors of theCompany). Therefore, the maximum number of shares of common stock of the Company to be- 14 -

delivered to Eligible Directors for each Applicable Service Period shall be 418,900 shares (including
139,600 shares as the portion for directors of the Company). (However, in the event of stock split,
gratis allotment of shares, or reverse stock split, etc., in relation to the Company’s shares after this
proposal is approved, reasonable adjustment shall be made, in accordance with the ratio thereof, tothe maximum number of points, the number of points already granted, or the conversion ratio).
(7) Delivery of the Company’s shares, etc.
If an Eligible Director retires and he or she fulfills the conditions for beneficiaries set forth in the
Officer Stock Benefit Regulations, then after his or her retirement, the Eligible Director shall bedelivered a number of the Company’s shares corresponding to his or her Final Number of Points
determined as described in Item (6) above from the Trust, in principle. However, if the conditions set
forth in the Officer Stock Benefit Regulations are fulfilled, then a certain proportion may be paid asmoney converted at an amount equivalent to the market value of the Company’s shares, instead ofdelivery of the Company’s shares. Furthermore, in order to make a monetary payment, theCompany’s shares may be sold by the Trust.
The conditions for beneficiaries set forth in the Officer Stock Benefit Regulations include
exclusions in the case of dismissal by resolution of the General Meeting of Shareholder, and in thecase of resignation resulting from a breach of duty as a corporate officer.
(8) Exercise of voting rights
Voting rights pertaining to the Company’s shares held in the Trust shall not be exercised, as a rule,
pursuant to the instructions of the trust administrator. In this way, the neutrality of the exercise of
voting rights pertaining to the Company’s shares held in the Trust shall be ensured in regard to the
management of the Company.
(9) Dividends
Dividends pertaining to the Company’s shares held in the Trust shall be received by the Trust, andshall be used as acquisition funds for the Company’s shares, trust compensation for the trustee of theTrust, etc. If the Trust ends, dividends, etc., remaining in the Trust shall be divided and paid to
Eligible Directors in office at that time, in accordance with their respective number of points held.
(10) End of the Trust
The Trust shall end in the event of circumstances arising whereby the Company’s shares aredelisted, the Officer Stock Benefit Regulations are discontinued, etc.
All the Company’s shares in the Trust’s remaining assets when the Trust ends shall be acquired by
the Company, without consideration, and cancelled by resolution of the Board of Directors. Money in
the Trust’s remaining assets when the Trust ends shall be paid to the Company, after deducting money
to be paid to Eligible Directors as described in Item (9) above.

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1) The Company and subsidiaries of the Company shall establish Officer Stock Benefit Regulations
within the scope of the framework approved in this proposal and proposals for compensation ofsubsidiaries of the Company.
2) The Company shall entrust money to the Trust, within the scope approved in this proposal.
3) In addition to the Company’s shares remaining in the Pre-succession Trust when the position of
entrustor was transferred to the Company, the Trust shall also acquire the Company’s shares throughthe stock market or disposal of treasury stock by the Company, using the money entrusted in theabove item 2) as funds.
4) The Company and subsidiaries of the Company shall grant points to Eligible Directors based on the
Officer Stock Benefit Regulations.
5) The Trust shall not exercise voting rights pertaining to the Company’s shares held in the Trust, in
accordance with the instructions of the trust administrator, who shall be independent from theCompany.
6) The Trust shall deliver the Company’s shares to retired Eligible Directors who fulfill the conditions
for beneficiaries set forth in the Officer Stock Benefit Regulations (“beneficiaries”), in accordancewith the number of points granted to the beneficiary. However, if the Eligible Director fulfills theconditions set forth in the Officer Stock Benefit Regulations, then, for a certain proportion of points,
an amount of money equivalent to the market value of the Company’s shares may be paid.

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<Reference: The Company’s Policy Regarding the Determination of Compensation, etc. for Individual

Directors (Summary)>
Compensation for the Company’s directors (excluding directors serving as members of the Audit andSupervisory Committee and outside directors) shall be composed of basic compensation, comprising a fixed
portion and a performance-variable portion, and performance-linked stock compensation (a Board Benefit
Trust).
The amount of basic compensation shall be within the scope of the compensation limit of 500 million yen
approved at the Annual General Meeting of Shareholders held on March 28, 2018. Basic composition shall becomposed of (i) a fixed portion paid monthly in cash, determined each year in accordance with each director’srank and management ability, and (ii) a performance-variable portion paid monthly in cash, determined inaccordance with factors including the degree to which the targets for consolidated net sales and operating
profit were achieved in the previous fiscal year, and the director’s contribution in his or her area of
responsibility.
Meanwhile, performance-linked stock compensation is designed to clarify the relationship between thecompensation of the directors and the business performance and share value of the Group, and increase
directors’ awareness of contributing to enhancing the medium- to long-term business performance of theGroup and maximizing corporate value, by ensuring they share not only the merits of an increase in the sharevalue but also the risks of a decline in the share value with shareholders. The number of shares and the amountof money to be delivered shall be determined based on a consideration of factors including consolidated
EBITDA and consolidated ROE, which the Group regards as key management indicators for the growth of its
business scale, stronger earning capacity and enhanced return on investment, as well as factors such as therank of each director. The shares and money constitute performance-linked stock compensation shall bedelivered, in principle, after the eligible director’s retirement from office, provided that the director has
satisfied conditions including that the retirement is not due to a breach of duties as an officer.
The performance-variable portion of basic compensation for directors (excluding directors serving as
members of the Audit and Supervisory Committee and outside directors) shall, in principle, be no more thanapproximately 25% of the fixed portion. The Company’s policy regarding performance-linked stockcompensation shall be to set it at a proportion that will function appropriately as an incentive to sustainably
enhance corporate value, based on factors including the amount of basic compensation and rank of eachdirector, the Group’s performance, and the level of the Company’s share price.
Representative director & Group CEO shall prepare a proposal for the basic compensation for each director,
premised on the policy above. Taking account of the report of the Nomination and Compensation Committee
and the opinion of the Audit and Supervisory Committee, the Board of Directors shall delegate determinationon this proposal to the representative director & Group CEO. The Nomination and Compensation Committee
shall conduct a subsequent evaluation of this process. The amount of performance-linked stock compensationfor each director shall be determined in accordance with the policy above, and the Officer Stock Benefit
Regulations established by separate resolution of the Board of Directors. No delegation of decision authority
to the representative director & Group CEO or other person shall be made for performance-linked stockcompensation.

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