This document has been translated from a part of the Japanese original for reference purposes only. In the event of any discrepancy
between this translated document and the Japanese original, the original shall prevail. The Company assumes no responsibility forthis translation or for direct, indirect or any other forms of damages arising from the translation.

(Securities identification code: 6462)
June 3, 2022
To our shareholders:
Yasunori Maekawa
President (CEO & COO)
Riken Corporation
8-1, Sanbancho, Chiyoda-ku, Tokyo

Notice of the 98th Ordinary General Meeting of Shareholders
We are pleased to announce the 98th Ordinary General Meeting of Shareholders of Riken Corporation (the“Company”), which will be held as described below.
Although we will hold the Meeting upon implementation of proper infection prevention measures toprevent the spread of the novel coronavirus (COVID-19) infections, we request that our shareholders
refrain from attending the Meeting to the extent possible, irrespective of their individual health condition,and instead exercise their voting rights in writing (via postal mail) or via the Internet, etc.
Please review the attached Reference Documents for the General Meeting of Shareholders, and exercise
your voting rights by the method of exercising voting rights no later than 5:30 p.m., Thursday, June 23,
2022 (Japan Standard Time).
Meeting Details
1.
2.

Date and time:
Venue:

3.

Purposes of the Meeting:Items to be reported:

Friday, June 24, 2022 at 3:30 p.m. (Japan Standard Time)
Lecture Hall, 2F annex
The International House of Japan
5-11-16, Roppongi, Minato-ku, Tokyo

1. Business Report and Consolidated Financial Statements for the 98th
Term (from April 1, 2021 to March 31, 2022), as well as the results of
the audit of the Consolidated Financial Statements by the Accounting
Auditor and the Audit and Supervisory Committee
2. Non-Consolidated Financial Statements for the 98th Term (from April
1, 2021 to March 31, 2022)
Items to be resolved:
Proposal 1:
Proposal 2:
Proposal 3:
Proposal 4:
4.

Appropriation of surplus
Partial change to Articles of Incorporation
Election of seven (7) Directors (excluding Directors who are Audit andSupervisory Committee Members)
Continuation of Measures to Respond to a Large-Scale Acquisition of Our
Company’s Stock

Exercising Voting Rights
If you exercise your voting rights multiple times via the Internet, etc., your last vote shall be deemed
effective.
If you exercise your voting rights through multiple methods such as in writing (by postal mail) and via
the Internet, etc., the vote via the Internet, etc. shall be deemed effective.

-1-

5.

Internet Disclosure
The reference materials appended to this Notice do not include the documents listed below, as these
documents have been posted on the Company’s website (https://www.riken.co.jp/english/) pursuant tolaws and regulations and Article 15 of the Company’s Articles of Incorporation.
(1)
Matters Related to Company Stock Acquisition Rights, etc. from Business Report(2)
System to Ensure the Appropriateness of Operations from Business Report(3)
Consolidated Statement of Changes in Equity from Consolidated Financial Statements(4)
Notes to the Consolidated Financial Statements(5)Statement of Changes in Equity from Non-Consolidated Financial Statements(6)
Notes to Non-Consolidated Financial Statements
Therefore, please note that these appended documents do not fully encompass the Consolidated Financial
Statements and Non-Consolidated Financial Statements that the Accounting Auditor audited when
preparing the Accounting Auditor Report; nor do they fully encompass the Business Report,
Consolidated Financial Statements, and Non-Consolidated Financial Statements that the Audit andSupervisory Committee audited when preparing its Audit Report.

1.

A summary of measures to prevent the spread of infection at the venue is stated on our website(https://www.riken.co.jp/english/). Please check it out.

2.

When attending the meeting, please submit the enclosed voting form at the reception desk.

3.

When there are any revisions to the details of the Reference Documents for the General Meeting of
Shareholders, Business Report, Consolidated Financial Statements, and Non-Consolidated Financial
Statements, we will notify shareholders by posting on our website (https://www.riken.co.jp/english/).

4.

We request your understanding about the fact that we will refrain from giving out souvenirs on thisoccasion in light of fairness, etc., between shareholders who visit the venue and those who havedifficulty visiting the venue.

-2-This document has been translated from a part of the Japanese original for reference purposes only. In the event of any discrepancy
between this translated document and the Japanese original, the original shall prevail. The Company assumes no responsibility forthis translation or for direct, indirect or any other forms of damages arising from the translation.

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

Appropriation of surplus
The Company aims to deliver stable shareholder returns while considering the Company’s
current performance as well as the future business climate and prospects for businessdevelopment.
According to the policy, the Company proposes as a term-end dividend to pay 60 yen per
share.
The Company has already paid an interim dividend of 60 yen per share. Accordingly, theproposed annual dividend for the fiscal year under review amounts to 120 yen per share.
1. Matters related to year-end dividends(1) Type of dividend property
Cash(2) Allotment of dividend property to shareholders and their aggregate amount
60 yen per common share of the Company
Total amount of dividends: 600,164,160 yen(3) Effective date of distribution of dividends of surplus
June 27, 2022

-3-

Proposal 2:

Partial change to Articles of Incorporation
1. Reasons for proposal
Because the revised provisions set forth in the proviso to Article 1 of the Supplementary
Provisions of the Act Partially Amending the Companies Act (Act No. 70 of 2019) are to be
enforced on September 1, 2022, the Company proposes to make the following changes to its
Articles of Incorporation due to the introduction of the system for providing reference
documents for the general meeting of shareholders in electronic format.
(1) Because it is compulsory to allow for the provision of information that

constitutes the content of reference documents for the general meeting ofshareholders, etc. in electronic format, the Company proposes to establish
Article 15, paragraph 1 of the Proposed Amendments (Measures, etc. for
Providing Information in Electronic Format).
(2) Among items for which measures will be taken to provide information that

constitutes the content of reference documents for the general meeting ofshareholders, etc. in electronic form, the Company proposes to establish Article
15, paragraph 2 of the Proposed Amendments (Measures, etc. for Providing
Information in Electronic Format) to enable it to restrict the scope of paperbased document delivery to shareholders who have requested the same, to thescope set out in the Ministry of Justice Order.
(3) When the system for providing reference documents for the general meeting ofshareholders in electronic format is adopted, the provisions of Article 15 of thecurrent Articles of Incorporation (Internet Disclosure and Deemed Provision ofReference Documents for the General Meeting of Shareholders, Etc.) will
become unnecessary, and the Company therefore proposes to delete them.
(4) The Company proposes to establish supplementary provisions regarding theeffective date, etc. of the above-mentioned establishment and deletion ofprovisions. Furthermore, these supplementary provisions will be deleted after theappointed date has passed.
2. Details of amendments
The details of the amendments are as follows.
(The underlined sections denote the amended text.)
Proposed Change

Current Articles of Incorporation(Internet Disclosure and Deemed Provision of Reference
Documents for the General Meeting of Shareholders, Etc.)
Article 15
When the Company convenes a general meeting ofshareholders, if it discloses information that is to be statedor presented in the reference documents for the general
meeting of shareholders, business report, financial
statements and consolidated financial statements throughthe internet in accordance with the provisions prescribed by
the Ministry of Justice Order, it may be deemed that theCompany has provided this information to shareholders.

-4-(Deleted)

Current Articles of Incorporation(New)

Supplementary Provisions(New)

Proposed Change(Measures, etc. for Providing Information in Electronic
Format)Article 15
1. When the Company convenes a general meeting ofshareholders, it shall take measures for providing
information that constitutes the content of reference
documents for the general meeting of shareholders, etc.
in electronic format.
2. Among items for which the measures for providing
information in electronic format will be taken, theCompany may exclude all or some of those items
designated by the Ministry of Justice Order fromstatements in the paper-based documents to be delivered
to shareholders who requested the delivery of paperbased documents by the record date of voting rights.
Supplementary Provisions(Transitional Measures for Providing Information inElectronic Format)
Article 2
1. The deletion of Article 15 (Internet Disclosure andDeemed Provision of Reference Documents for the
General Meeting of Shareholders, Etc.) in the preamended Articles of Incorporation and theestablishment of the new Article 15 (Measures, Etc. for
Providing Information in Electronic Format) in theamended Articles of Incorporation shall be effectivefrom September 1, 2022, which is the date ofenforcement of the revised provisions set forth in theproviso to Article 1 of the Supplementary Provisions of
the Act Partially Amending the Companies Act (ActNo. 70 of 2019) (hereinafter referred to as the “Date of
Enforcement”).
2. Notwithstanding the provisions of the preceding
paragraph, Article 15 of the Articles of Incorporation(Internet Disclosure and Deemed Provision ofReference Documents for the General Meeting of
Shareholders, Etc.) shall remain effective with regard to
any general meeting of shareholders held on a datewithin six months from the Date of Enforcement.
3. The provisions of this Article shall be deleted on thedate when six months have elapsed from the Date of
Enforcement or three months have elapsed from the dateof the general meeting of shareholders in the preceding
paragraph, whichever is later.

-5-

Proposal 3:

Election of seven (7) Directors (excluding Directors who are Audit and Supervisory
Committee Members)
The terms of office of all six (6) Directors (excluding Directors who are Audit andSupervisory Committee Members; hereinafter the same shall apply in this proposal) will
expire at the conclusion of this Meeting.
The Company proposes to increase the number of Directors by one (1) in order tostrengthen the management structure, and therefore requests the election of seven (7)Directors.
Selection of candidates for Director has undergone deliberations by our voluntary
Nomination and Compensation Committee, of which a majority of members are independent
Outside Directors.
In addition, in relation to this proposal, the Audit and Supervisory Committee of theCompany has determined that all of the candidates for Director are suitable for these roles.
The candidates for Director are as follows:

No.

Name
(Date of birth)

Career summary, position and responsibilities, andsignificant concurrent positions outside the Company
April 1976
April 2005
March 2008
June 2012
June 2013

June 2015

1

Kaoru Itoh
(April 9, 1953)[Reelection]

April 2018
April 2020
April 2022

Joined The Industrial Bank of Japan,
LimitedManaging Executive Officer of Mizuho
Bank, Ltd.
President and CEO of Mizuho ResearchInstitute Ltd.
Managing Director of the Company
Senior Managing Director, Chairman of
the Corporate Strategy Committee of
the Company
Representative Director, President(COO) of the Company
Representative Director, President(CEO & COO) of the Company
Chairman (CEO) of the Company
Representative Director, Chairman of
the Company (present position)

Reasons for nomination as candidate for Director
As CEO and COO, Kaoru Itoh has successfully led theCompany’s operations. We have nominated him again
for the post of Director, believing his wide-ranging
experience and competence to be invaluable to theCompany’s management.
Attendance at the Board of Directors Meetings
during the fiscal year
18/18 (100%)-6-

Number of theCompany’s
shares owned

23,800No.

Name(Date of birth)

Career summary, position and responsibilities, andsignificant concurrent positions outside the Company
March 1986
February
2004
June 2010
May 2013
June 2015
May 2016
April 2019
June 2019

April 2020
April 2022
2

Yasunori Maekawa(February 27, 1958)[Reelection]

Joined the Company
General Manager of Nagoya Sales
Division of the Company
Director, Chairman of Overseas
Committee of the Company
Director of the Company
Managing Director of the Company
Director, Managing Executive Officerof the Company
Director, Senior Managing Executive
Officer of the Company
Representative Director, Senior
Managing Executive Officer of theCompany
Representative Director, President(COO) of the Company
Representative Director, President(CEO & COO) of the Company(present position)

Reasons for nomination as candidate for Director
During his long years of service in the Company,
Yasunori Maekawa has engaged in overseas sales,
domestic sales and overseas business and contributed to
the global expansion of the Group. Since becoming
COO in 2020 and CEO in 2022, he has steadily beenworking on management issues including theformulation and execution of a new medium-term
management plan. We have nominated him again for thepost of Director, believing his wide-ranging experienceand competence to be invaluable to the Company’s
management.
Attendance at the Board of Directors Meetings
during the fiscal year
18/18 (100%)-7-

Number of theCompany’s
shares owned

18,200No.

Name(Date of birth)

Career summary, position and responsibilities, andsignificant concurrent positions outside the Company
April 1983
October 2014
April 2017

April 2020

April 2021

June 2021
3

Kouei Watanabe(November 19, 1958)[Reelection]

Joined the Company
General Manager of Quality Assurance
Division of the Company
Executive Officer, General Manager ofPiston Ring Division # 2 of theCompany
Managing Executive Officer, General
Manager of the Technology
Management Division of the Company
Managing Executive Officer, General
Manager of Technology Management
Head Office of the Company
Director, Managing Executive Officer& CTO of the Company (present
position)

Reasons for nomination as candidate for Director
During his long years of service in the Company, Kouei
Watanabe has led manufacturing operations, quality
assurance operations and technical management
operations for piston rings, one of the Company’s key
products, which has helped the Company increase
profitability. We have nominated him again for the postof Director, believing his wide-ranging experience andcompetence to be invaluable to the Company’s
management.
Attendance at the Board of Directors Meetings
during the fiscal year
14/14 (100%)-8-

Number of theCompany’s
shares owned

9,100

No.

Name
(Date of birth)

Career summary, position and responsibilities, andsignificant concurrent positions outside the Company
November
1989
June 2008

November
2011
November
2017
April 2018

June 20184

Takashi Ohashi(September 7, 1958)[Reelection]

April 2020
June 2021

Number of theCompany’s
shares owned

Joined the Company
General Manager of Business Process
Reengineering Division of theCompany
General Manager of Production
Management Division of the Company
General Manager of Information
Systems Division of the Company
Executive Officer, General Manager ofInformation Systems Division of theCompany
Executive Officer, General Manager ofRing Production Engineering Divisionof the Company
Managing Executive Officer of theCompany
Director, Managing Executive Officerof the Company (present position)

Reasons for nomination as candidate for Director
During his long years of service in the Company,
Takashi Ohashi has led production management,
information systems and production technology
operations, which has contributed to the reinforcementof management systems, as the base for improvement ofour profitability. We have nominated him again for thepost of Director, believing his wide-ranging experienceand competence to be invaluable to the Company’s
management.
Attendance at the Board of Directors Meetings
during the fiscal year
14/14 (100%)-9-10,800No.

Name(Date of birth)

Career summary, position and responsibilities, andsignificant concurrent positions outside the Company
April 1985
June 2011
May 2016

June 2020
April 2022

May 20225

Hidehiro Sakaba(November 22, 1962)[New election]

Joined the Company
General Manager of Corporate Planning
Division of the Company
Executive Officer, General Manager ofCorporate Planning Division of theCompany
Executive Officer of the Company,
President of Riken Mexico, S.A. DE
C.V.
Managing Executive Officer of theCompany, President of Riken Mexico,
S.A. DE C.V.
Managing Executive Officer, General
Manager of Corporate Management
Head Office (present position)

Reasons for nomination as candidate for Director
During his long years of service in the Company,
Hidehiro Sakaba has led corporate management in suchareas as corporate planning and accounting and finance,
and the formulation and promotion of management
plans, including external alliances, in addition to which,as the president of the Company’s main overseas
manufacturing subsidiary since 2020, he has contributed
to enhancing the corporate value of the Company. We
have nominated him for the post of Director, believing
his wide-ranging experience and competence to beinvaluable to the Company’s management.

- 10 -

Number of theCompany’s
shares owned

5,100

No.

Name
(Date of birth)

Career summary, position and responsibilities, andsignificant concurrent positions outside the Company
April 1973
May 1999
June 2002
June 2006
May 2015
June 2015
June 2016
September
2017
October 2017
June 2022

6

Eiji Hirano(September 15,
1950)[Reelection][Outside][Independent]

Number of theCompany’s
shares owned

Joined Bank of Japan
Director-General of International
Department of Bank of Japan
Executive Director of Bank of Japan
Director, Vice President of Toyota
Financial Services Corporation
Director, Representative Statutory
Executive Officer of MetLife, Inc.
Outside Director of the Company(present position)
Outside Director of NTT DATA
Corporation (present position)
Director, Vice Chairman of MetLife,
Inc. (present position)
Chairperson of the Board of Governorsof Government Pension Investment
Fund
External Director, Ichiyoshi Securities
Co., Ltd. (scheduled to assume theposition)

Reasons for nomination as candidate for Outside
Director and outline of expected role
Eiji Hirano held a top post in the Bank of Japan andsubsequently held executive posts in a number ofcompanies. We have nominated him again for the post of
Outside Director because we expect that the Company’s
management will benefit from his in-depth expertise andglobal and extensive experience. In addition, if he isreelected, the Company would like him to continue to bea member of the voluntary Nomination andCompensation Committee of the Company, and be
involved in selection of candidates for officer of theCompany and decisions on compensation for officers,etc., from an objective and neutral standpoint. He will
have served as Outside Director for seven (7) years at
the conclusion of this General Meeting of Shareholders.
Attendance at the Board of Directors Meetings
during the fiscal year
17/18 (94.4%)- 11 -

0

No.

Name
(Date of birth)

Career summary, position and responsibilities, andsignificant concurrent positions outside the Company
April 1975

July 2002

April 2005

February
2012
April 2017

June 2019
January 2021
7

Koji Tanabe(February 1, 1952)[Reelection][Outside][Independent]

Number of theCompany’s
shares owned

Joined the Ministry of International
Trade and Industry (currently the
Ministry of Economy, Trade andIndustry)
Director-General of Research andStatistics Department of the Ministry of
Economy, Trade and Industry
Professor of Graduate School of
Innovation Management of Tokyo
Institute of Technology
Director of the Japan Asia Group
LimitedProfessor Emeritus of Tokyo Institute ofTechnology (present position)
Specially-Appointed Professor of
School of Environment and Society ofTokyo Institute of Technology
Outside Director of the Company(present position)
Director of Intron Space Inc. (present
position)

Reasons for nomination as candidate for Outside
Director and outline of expected role
Koji Tanabe worked as a professor at the Tokyo Instituteof Technology after serving at the Ministry of Economy,
Trade and Industry for many years. We have nominatedhim again for the post of Outside Director because we
expect that the Company’s management will benefit
from in-depth expertise and extensive experience
particularly in innovation management. In addition, if heis reelected, the Company would like him to continue tobe a member of the voluntary Nomination andCompensation Committee of the Company, and be
involved in selection of candidates for officer of theCompany and decisions on compensation for officers,etc., from an objective and neutral standpoint. He will
have served as Outside Director for three (3) years at theconclusion of this General Meeting of Shareholders.

0

Attendance at the Board of Directors Meetings
during the fiscal year
18/18 (100%)(Notes)1. There is no special interest between each of the candidates and the Company.
2. Eiji Hirano and Koji Tanabe are candidates for Outside Director. In addition, both satisfy the requirements under“Standards for Judgment of Independence of Outside Directors” (page 14) provided by the Company.
3. The Company has designated Eiji Hirano and Koji Tanabe as independent officers according to the rules of the Tokyo
Stock Exchange, Inc., and has registered them with the said exchange. If they are reelected, they will continue to beregistered as independent officers.
4. In accordance with Article 427 (1) of the Companies Act, the Company has entered into agreements with Eiji Hirano andKoji Tanabe regarding liability for damages under Article 423 (1) of the Companies Act to the Company, limiting their- 12 -

liability to the extent stipulated in legislation. The Company intends to continue these agreements if their reelection isapproved.
5. The Company has concluded a liability insurance contract for officers, etc. (D&O Insurance Contract) under Article 430-3(1) of the Companies Act with an insurance company, with all the Directors including Directors who are Audit andSupervisory Committee Members as the insured. Under the insurance contract, damages or legal costs, etc. that may be
incurred by the insured due to claims for damages being filed arising due to acts (including omissions) committed by the
insured based on the status of company officer, etc. will be covered. However, there are certain exclusion reasons, such as
damages arising from an act upon recognition of the illegality of the act not being covered. Insurance premiums for the
insurance contract are covered by the Company, based on approval by the Board of Directors and the consent of theOutside Directors.
If election of candidates for Director is approved, they will be included in the insured under the insurance contract. The
Company plans to renew the insurance contract with the same terms at the next renewal in February 2023.

- 13 -

(Reference) Standards for Judgment of Independence of Outside Directors
The Company will elect persons who are judged not to fall under any of the following items as independent
Outside Director, in order to ensure objectiveness and transparency of management.
1. Business executors of the Group (executive directors, executive officers, operating officers, and otherequivalent persons and employees; the same shall apply hereinafter), or persons who used to be businessexecutors of the Group in the past ten (10) years
2. The Company’s current major shareholders (shareholders who hold 10% or greater on a voting rights basis
in their own name or in the name of others at the end of the most recent fiscal year of the Company) or theirbusiness executors
3. Major business partners of the Group that fall under any of the following items or business executors
thereof(i) Business partners to whom the Group provides products, etc., who have paid the Company 2% or greaterof the Company’s annual consolidated sales in the most recent fiscal year.
(ii) Business partners who provide products, etc. to the Group and have received payment of 2% or greater of
the annual consolidated sales of those parties in the most recent fiscal year.
(iii) Financial institutions from which the Group borrows funds and from which the actual borrowing balance(after offsetting deposits) exceeds 2% of the Company’s consolidated total assets at the end of the mostrecent three (3) fiscal years of the Company.
4. Persons who belong to an audit firm that is an accounting auditor of the Company or its consolidated
subsidiaries
5. Parties (if it is an organization such as a corporation or association, etc., persons who belong to the relevantorganization) who provide professional services such as consultants, lawyers, certified accountants, etc.
who receive a large amount of money or other property* from the Group in addition to officer
compensation.
6. Parties who have received a large amount of donations from the Group (meaning the case of the annual
amount exceeding 10 million yen in the most recent fiscal year) (if a party is a group such as a corporation
or association, etc., a business executor of the relevant group)
7. Business executors of companies that have appointed a business executor of the Group as their officer
8. Those who used to fall under any of the above 2 to 7 in the past five (5) years
9. Spouses or relatives within the second degree of kinship of parties that fall under any of the above 1 to 7
10. Persons who have been in office as outside officers of the Company for ten (10) years or longer in total
11. Any other persons who have a risk of conflict of interest with general shareholders and have circumstances
under which they are reasonably judged to be unable to perform duties as independent outside directors.
*“Large amount of money or other property” is defined as follows.
If the party who provides professional services is an individual: those that exceed 10 million yen per year on average inthe most recent three (3) business years
If the party who provides professional services is a group: those that exceed 2% of consolidated sales or annual total
income of the relevant group on average in the most recent three (3) business years- 14 -

(Reference) List of Officers After the Conclusion of this Meeting
If Proposal 3 “Election of seven (7) Directors (excluding Directors who are Audit and Supervisory Committee
Members)” is approved and adopted in its original form, officers of the Company after the conclusion of thisMeeting will be as follows.
Position in the
Company
Representative Director,
Chairman

Responsibilities and significant concurrent
positions outside the Company

Name
Kaoru Itoh

Chairman of the Board of Directors

Representative Director,
President

Yasunori Maekawa

Director

Kouei Watanabe

Director

Takashi Ohashi

Director

Hidehiro Sakaba

Outside Director

Eiji Hirano

Outside Director

Koji Tanabe

Director (Full-Time
Audit and Supervisory
Committee Member)

Akira Kunimoto

CEO, COO, General Manager of Sales Head
Office, General Manager of Digital
Transformation (DX) Promotion Division
Managing Executive Officer, CTO (Chief
Technical Officer), General Manager ofTechnology Management Head Office, in chargeof Quality Assurance, Precision Components
Business, Thermal Engineering Business, EMC
Business, and supervising Kumagaya Plant
Managing Executive Officer, in charge ofInformation (IT), Global Procurement,
Maintenance Division, Engineered Plastic
Products Business, Casting Components
Business, Marine and Industrial Business, andCamshaft Business, General Manager ofKashiwazaki Plant
Managing Executive Officer, General Manager
of Corporate Management Head OfficeDirector, Vice Chairman of MetLife, Inc.
Outside Director of NTT DATA Corporation
External Director, Ichiyoshi Securities Co., Ltd.
Professor Emeritus of Tokyo Institute ofTechnology
Director of Intron Space Inc.

Outside Director (Audit
and Supervisory
Committee Member)

Shuji Iwamura

Outside Auditor of CANON ELECTRONICS
INC.
Outside Corporate Auditor of The HokkaidoBank, Ltd.
Outside Director of Hayashikane Sangyo Co.,Ltd.
Attorney at T&K Partners

Outside Director (Audit
and Supervisory
Committee Member)

Osamu Honda

Outside Auditor of Kurimoto Ltd.

- 15 -

Main areas in which Directors are expected to have experience

Name

Corporate
management

Globalmanagement

Kaoru Itoh

○

○

○

○

Yasunori
Maekawa
Kouei
Watanabe
TakashiOhashi
Hidehiro
SakabaEiji Hirano
Koji
TanabeAkira
Kunimoto
Shuji
Iwamura
Osamu
Honda

○

○

○

○

Legal affairs/ Riskmanagement

Finance /Accounting○

Marketing /
Sales

○
○
○

○

○

○

○
○

○

○

○
○

Technology / Manufacturin
R&D
g

○
○

○

○

○

○

○

○

○

- 16 -○○

Proposal 4:

Continuation of Measures to Respond to a Large-Scale Acquisition of Our
Company’s StockOn June 28, 2007, Measures to Respond to a Large-Scale Acquisition of Our Company’s
Stock were adopted by our shareholders at the Company’s 83rd Annual General Meeting of
Shareholders and were most recently reapproved by shareholders at the 95th Annual General
Meeting of Shareholders on June 21, 2019 (hereinafter the continued measures are referred toas “the Existing Plan”). The effective term of the Plan lasts until the end of the 98th Annual
General Meeting of Shareholders to be held on June 24, 2022 (hereinafter referred to as “theGeneral Meeting of Shareholders”). In light of securing and improving not only the value of
the Company but also the common interests of our shareholders, we have given ongoing
consideration to how to best respond to a large-scale acquisition of the Company’s stock, andeven discussed whether the Plan should stay in effect. We would like to inform you that our
Board of Directors met on May 24, 2022, to discuss this matter, and decided that, upon
approval of our shareholders at the General Meeting of Shareholders, we will continue to use
the Existing Plan after changing part of it (the modified Plan is hereinafter referred to as “thePlan”).
Although the basic framework of the Plan remains unchanged from the previous one, someminor changes have been made, including clarification of wording.
I. Basic Policy Regarding Who Should Oversee Decisions Regarding the Financial andBusiness Policies of the Company
As a publicly traded company, we believe that shareholders come to us thanks to a freedom
to trade on the share market. Therefore, we believe that the final decision concerning whether
or not to accept proposals regarding acquisitions accompanying the transfer of control of theCompany should lie with the shareholders. We do not necessarily deny large-scale shareacquisitions, especially when they can contribute to the value of the Company and thecommon interests of our shareholders.
However, some large-scale share acquisitions can undermine the value of the Company or
the common interests of our shareholders, including those that may virtually force
shareholders into selling their shares or those that do not provide the Board of Directors andshareholders of the Company with the reasonably needed amount of time and information toconsider the details of the acquisition. As an exception, the Company considers any person
who undertakes this kind of inappropriate large-scale acquisitions to be unfit to oversee
decisions concerning the financial and business policies of the Company.

- 17 -

II. Efforts that Contribute to the Realization of the Basic Policy for the Control of theCompany
In 1927, RIKEN, formerly known as the Institute of Physical and Chemical Research, wasfounded to commercialize its own invention, the piston ring manufacturing method. Since
then, the Company has been operating globally by providing a wide variety of products,
including, of course, piston rings which are its core competency, camshafts and other internalcombustion engine parts, cast iron parts for automobiles and industrial machinery, piping
materials, and products for thermal engineering and EMC businesses.
The Company has defined the Group Mission Statements outlined in the following
paragraph. It also sets out the following Guiding Principles: “Be Customer Driven. Be
Compliant with the Law. Be focused on the Basics. Be Open. Be Proactive. Be Prompt.” In
addition, it developed the Midterm Strategic Plan and the Annual Management Plan in its
effort to help its customers strengthen their global competitiveness and to develop and sell
products that are highly satisfactory in terms of quality, technology, and price.
<Mission Statement>• We continue to be a corporate citizen committed to protecting global environment andserving the society in which we conduct our business.
• We are committed to creating corporate value from a global perspective by effectively
utilizing the capital invested by our shareholders.
• We will offer products and services that continually exceed our customers’ increasing
expectations through constant innovation and continued advancements in knowledge andtechnology.
• We have high aspirations and a broad vision, and we are always willing to change.
Based on the policy stated above, and with the aim of achieving the continuous growth of
the Group Companies, the Company established and has been promoting “PLAN 2022,”
which is a three-year midterm strategic plan running from fiscal 2020 through fiscal 2022.
Under the plan with its main theme of “Manufacturing Transformation that challenges the
Future,” the Company has been focusing its efforts on “strengthening competitiveness in thecore businesses,” “rebuilding the business infrastructure,” and “expanding the next-generation(non-ICE) businesses” to ensure that “PLAN 2022” is successfully executed until its
completion at the end of fiscal 2022, thereby further enhancing the Company’s value.
The Company aims for continuous improvement in corporate value by fulfilling its
responsibilities in a variety of fields including economy, environment, and society. It regards
the implementation of corporate governance as the top-priority management issue.
The Company has introduced an executive officer system to separate the businessexecution function from the management decision-making and supervision function.
In June 2019, the Company transitioned from “Company with Board of Corporate
Auditors” to “Company with Audit and Supervisory Committee” in its effort to strengthen theaudit and supervision functions of the Board of Directors and further promote corporate
governance. The Company’s Audit and Supervisory Committee comprises a full-time internal
director and two external directors who maintain a fair and neutral standpoint independent
from the management. This committee composition helps enhance the audit function over the
execution of duties by directors.
Furthermore, in May 2019, the Company established the Nomination and Compensation
Committee, which is a voluntary advisory body with the majority of members being
independent outside directors, in its efforts to reinforce the supervision function of the Board- 18 -

of Directors by assuring the transparency and objectivity of the procedure related to thenomination and compensation of directors, etc., and further enhance corporate governance.
Thus far, the Company has been working to appropriately operate management bodies(Board of Directors and Management Meeting) and ensure corporate transparency, efficiency
and soundness, such as thorough compliance and complete risk management in accordancewith the Basic Policy for Developing an Internal Control System (the development of systems
necessary to ensure that the execution of the duties by the directors complies with the laws
and regulations and the articles of incorporation, and other systems prescribed by Ministry ofJustice Order as systems necessary to ensure the properness of operations of a Stock
Company).
Furthermore, the Company has reinforced internal control by establishing the Sustainability
Committee and the Compliance Committee, and works to improve further by having theentire Group oversee environmental activities, activities that contribute to society, accurate
and appropriate information disclosure, the creation of CS (customer satisfaction), etc.
III. Description of the Plan to Be Approved
1. Purpose of Continuing the Plan
The Plan, which replaces the existing one, has been introduced and implemented to prevent
someone who is deemed unfit to control decisions concerning the financial and business
policies of the Company in light of the Basic Policy for the Control of the Company fromtaking control of the Company.
In the event of a large-scale acquisition of the Company’s shares, our shareholders should
be given enough information, time, and the opportunity to negotiate with the purchaser orother relevant parties in accordance with certain reasonable rules so as to allow them to makeappropriate decisions about the acquisition and to ensure that both the corporate value and thecommon interest of the shareholders are protected. Based on this understanding, theCompany’s Board of Directors defined the following rules concerning the assurance ofenough information and time to allow shareholders to consider the possible consequences oflarge-scale share acquisitions (hereinafter referred to as “Rules for Large-Scale
Acquisitions”), and decided to ask the shareholders attending this Annual General Meeting of
Shareholders for approval to continue using the Plan to address large-scale share acquisitions
by someone who is deemed unfit to take control of the company in light of the Basic Policy
for the Control of the Company.
2. Acquisition of the Company’s Shares That Is Addressed in the Plan
The acquisition of the Company’s shares that is addressed in the Plan refers to an attempt
to acquire the Company’s share certificates, etc. (Note 3), for the purpose of allowing a groupof specific shareholders (Note 1) to hold at least 20% of the voting rights (Note 2), or an
attempt to acquire the Company’s share certificates, etc., that can cause a group of specificshareholders to hold at least 20% of the voting rights. (In either of these cases, suchacquisitions do not include those that have been approved by the Company’s Board of
Directors. Large-scale share acquisitions can take any forms, including market trading andtakeover bids. Hereinafter, a large-scale acquisition of the Company’s shares is referred to asa “large-scale share acquisition,” and an entity involved in such acquisitions is referred to as a“large-scale purchaser.”)- 19 -

Note 1:A group of specific shareholders refers to:(i)holders of the Company’s share certificates, etc., (meaning share certificates, etc., as
stipulated in Article 27-23, paragraph 1 of the Financial Instruments and ExchangeAct) (including entities regarded as holders pursuant to Article 27-23, paragraph 3 ofthe said Act, and hereinafter the same applies) and their joint holders (meaning joint
holders as stipulated in Article 27-23, paragraph 5 of the said Act, which include
entities regarded as joint holders pursuant to paragraph 6 of the same Article, andhereinafter the same applies), or;(ii) entities involved in the acquisition, etc., (meaning the acquisition, etc., as stipulated in
Article 27-2, paragraph 1 of the said Act, including those carried out in the financial
instruments exchange market) of the Company’s share certificates, etc., (meaning
share certificates, etc., as stipulated in Article 27-2, paragraph 1 of the said Act) andtheir special parties involved in the acquisition (meaning special parties involved in
the acquisition as stipulated in Article 27-2, paragraph 7 of the said Act).
Note 2:Voting rights ratio refers to:(i)in the case of a group of specific shareholders mentioned in (i) under Note 1, thepercentage of shares held by the said holders (meaning the holding ratio of sharecertificates, etc., as stipulated in Article 27-23, paragraph 4 of the Financial
Instruments and Exchange Act. In this case, the number of share certificates, etc., heldby joint holders (meaning the number of share certificates, etc., held as stipulated in
the said paragraph, and hereinafter the same applies) shall also be added in calculationof the voting rights ratio); or(ii) in the case of a group of specific shareholders mentioned in (ii) under Note 1, the total
percentage of shares held by the said large-scale purchasers and the said special
parties involved in the acquisition (meaning the holding ratio of share certificates,
etc., as stipulated in Article 27-2, paragraph 8 of the said Act).
The most recent of the following three documents can be used to determine thenumber of total voting rights (meaning the one stipulated in Article 27-2, paragraph 8of the said Act) and the total number of issued shares (meaning the one stipulated in
Article 27-23, paragraph 4 of the said Act) to calculate each voting rights ratio:
Annual Securities Report, Quarterly Securities Report, and Share Buyback Report.
Note 3: Share certificates, etc., refers to share certificates, etc., as stipulated in Article 27-23,
paragraph 1 or Article 27-2, paragraph 1 of the Financial Instruments and ExchangeAct.
3. Establishment of an Independent Committee
The final decision as to whether the Rules for Large-Scale Acquisitions have been observedor whether a countermeasure must be taken against an attempt at large-scale share acquisition
that adheres to the Rules but substantially undermines not only the value of the Company but
also the common interests of our shareholders lies with the Company’s Board of Directors. To
properly execute the Plan, to prevent the Board from making arbitrary decisions, and toensure rationality and fairness in the Board’s decision-making process, the Company decided
to establish an Independent Committee in accordance with the Rules for the Independent
Committee, as it did during the execution of the Existing Plan (for a summary of the Rules for
the Independent Committee, see Attachment 1). The Independent Committee shall becomprised of three (3) or more members who are selected from among external directors or
external experts (Note) independent of the management responsible for the execution of theCompany’s operations to enable them to make a fair and neutral judgement. Please refer to- 20 -

Attachment 2 for the profiles of the four candidates for membership on the Independent
Committee, i.e., Eiji Hirano, Shuji Iwamura, Koji Tanabe, and Osamu Honda.
The Board of Directors contemplating a countermeasure against a large-scale shareacquisition must first consult the Independent Committee for advice on the matter. After
careful evaluation and examination of the large-scale share acquisition in question in light ofthe possible impact of the acquisition on the value of the Company and the common interestsof the shareholders, the Committee advices the Board on whether the implementation of acountermeasure is justifiable under the current circumstances. Following the advice of theCommittee (unless doing so constitutes a duty of care breach), the Board makes a final
decision as to whether a countermeasure should be implemented against the acquisition. A
summary of the advice given by the Independent Committee will be announced in a timely
manner.
To enable the Independent Committee to make judgments that contribute to the value of theCompany and the common interests of the shareholders, the Company allows the Independent
Committee to seek advice of independent external experts (including financial advisers,
certified accountants, attorneys, consultants, and other specialists) as necessary, and pays forthe cost of it.
Note: External experts refers to experienced corporate managers, individuals familiar withinvestment banking, attorneys, certified accountants, academic experts specializing in
the Companies Act, etc., or any other individuals with similar expertise.
4. Overview of the Rules for Large-Scale Acquisitions(1) The prospective large-scale purchaser submits a statement of intent to the Company.
A prospective large-scale purchaser seeking a large-scale acquisition of the Company’s
shares is required to first submit, in a form prescribed by a Company, a statement of intent
to the Company’s Board of Directors prior to initiating or proposing a large-scaleacquisition of the Company’s shares. The statement of intent must be written in Japaneseand contain the following information, along with a written pledge stating the prospective
purchaser’s intent to observe the Rules for Large-Scale Acquisitions.
(i) The name and address of the prospective purchaser(ii) The law on which the establishment is based(iii) The name of the representative(iv) Contact address in Japan(v) A summary of the proposed large-scale share acquisition(vi) A written pledge stating the prospective purchaser’s intent to observe the Rules forLarge-Scale Acquisitions stipulated in the Plan
Upon receiving the statement of intent from the prospective purchaser, the Company’s
Board of Directors immediately announces the receipt of the statement and, if necessary,details of the information provided in the statement.
(2) The prospective large-scale purchaser submits the information required for evaluation to
the Company.
Within ten (10) business days of the day following the day on which the statement ofintent containing all the information outlined in (i) to (vi) under (1) in the preceding section
is received, the Company’s Board of Directors provides the prospective large-scalepurchaser with a document describing all the information the Board needs from thepurchaser pertaining to the proposed large-scale share acquisition. The prospective largescale purchaser then prepares a document containing a detailed account of the proposedlarge-scale share acquisition, covering all the information requested in the document
provided by the Board, and submits it to the Board.

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The following information is generally required for evaluation. Although the specificdetails of the information required for evaluation may vary depending on the attributes ofthe large-scale purchaser and the purpose and specific details of the proposed large-scaleacquisition, they must be “detailed enough” and “sufficient enough” to allow the
Company’s shareholders and Board of Directors to reach a decision about the proposedlarge-scale acquisition.
(i)Outline of the large-scale purchaser and its group (including joint holders, special
parties involved in the acquisition, partners (applicable for funds), and other membersof the group). (The outline must include names, business details, background or
history, capital composition, and information about the purchaser’s (or group’s)
experience in the fields of business that are similar to the one in which the Company
and its Group Companies specialize in.)(ii) The purpose, method, and details of the large-scale share acquisition (including theamount and type of payment to be made for the proposed large-scale share acquisition,
when it is scheduled to take place, how the related transactions work, legality of themethod of the proposed large-scale share acquisition, and the feasibility of the
proposed large-scale share acquisition and all the related transactions)(iii) The basis of the calculation of the price to be paid for the large-scale acquisition of theCompany’s shares (including the facts that constitute the preconditions for the
calculation, the method of calculation, information regarding the figures used in thecalculation, and details about the synergy that is expected to occur as a result of aseries of transactions that are expected to be executed in relation to the proposedlarge-scale share acquisition)(iv) The proof of availability of funds for the proposed large-scale share acquisition(including the specific names of the funders (including those individuals or entities
who are effectively regarded as funders), information on how to appropriate funds forthe acquisition, and details about the related transactions)(v) Information about the individuals the large-scale purchaser intends to elect to serve on
the Company’s Board after the purchaser joins the management of the Company and
its Group Companies (including information about their experience in the fields ofbusiness that are similar to the one in which the Company and its Group Companies
specialize in), as well as a detailed account of the suggested management policies,
business plans, financial plans, capital policies, dividend policies, asset utilization
measures, etc.
(vi) Whether or not the large-scale purchaser, after joining the management of theCompany and its Group Companies, intends to make changes to the relationship theCompany and its Group Companies have with their stakeholders (including business
partners, customers, employees, etc.), and, if such changes are expected, a detailed
account of the changes to be expected
In the interest of ensuring the timely implementation of the Rules for Large-Scale
Acquisitions, the Board of Directors of the Company may, as necessary, give the largescale purchaser a time limit for the submission of information. However, when the largescale purchaser asks for an extension of the time limit on reasonable grounds, the time limit
may be extended.
After scrutinizing the information required for evaluation prepared and submitted inaccordance with the rules described above, the Company’s Board of Directors may
conclude that the submitted information does not contain all the details necessary for theevaluation and examination of the proposed large-scale share acquisition. In this case, theBoard may give a reasonable time frame for a reply (up to 60 days from the day on which- 22 -

the initial information was received) and ask the large-scale purchaser for submission of
additional information until it has all the information necessary for the evaluation.
When the Board of Directors conclude that the large-scale purchaser has submitted all
the information necessary for the Board to evaluate and examine the proposed large-scale
share acquisition, it informs the large-scale purchaser to that effect and announces it
publicly.
If the large-scale purchaser receiving a request for additional information required forevaluation from the Company’s Board of Directors offers a reasonable explanation as towhy the purchaser is unable to provide some of the requested information, the Board may
decide to end the negotiation or other forms of communication with the large-scalepurchaser pertaining to the request for information, and proceed to theevaluation/examination process described hereafter under (3), even if it does not have all
the information it needs to evaluate the proposed large-scale share acquisition.
The Board submits the received information required for evaluation to the Independent
Committee, and, if the Board determines that the same information must be provided to theshareholders to allow them to make their own decisions about the proposed large-scale
share acquisition, it will disclose all or part of such information to the public at the time itsees fit.
(3) Evaluation and examination of the information required for evaluation by the Company’s
Board of Directors
After the Company’s Board of Directors receives all the information it needs from thelarge-scale purchaser to evaluate the proposed large-scale share acquisition, it sets a period
to evaluate, examine, negotiate, and form opinions about, and propose alternative options
for, the proposed large-scale share acquisition (hereinafter referred to as the “Board’s
evaluation period”). This period may vary depending on the difficulty involved in theevaluation of the proposed large-scale share acquisition, but must be no longer than 60 days
when all of the Company’s shares are to be acquired through a takeover bid and the bidder
is to pay the offer price in cash only (in yen value), or no longer than 90 days for all theother types of large-scale share acquisition.
During the Board’s evaluation period, the Board, after a thorough evaluation andexamination of the provided information required for evaluation, carefully formulates its
opinion about the proposed large-scale share acquisition by following the advice of the
Independent Committee (unless doing so constitutes a duty of care breach), and announces
its opinion publicly. During this process, the Board may, as necessary, seek advice ofindependent third-party specialists, such as financial advisers, certified accountants,
attorneys, and consultants. When necessary, the Board may negotiate with the large-scalepurchaser to ask for better conditions with respect to the proposed large-scale shareacquisition, and propose alternative options to the shareholders.
5. Policy for Addressing Large-Scale Share Acquisitions(1) When the large-scale purchaser fails to observe the Rules for Large-Scale Acquisitions
Whatever the specific method of acquisition, if the large-scale purchaser fails to observe
the Rules for Large-Scale Acquisitions, the Company’s Board of Directors may take legallyjustified countermeasures against the large-scale share acquisition (including the allotmentof stock acquisition rights without contribution) pursuant to the Companies Act and otherrelevant laws as well as the Company’s Articles of Incorporation in order to protect thevalue of the Company and the common interests of its shareholders. A decision as towhether the Rules for Large-Scale Acquisitions have been observed will be made taking
into consideration, to a reasonable extent, the circumstances of the large-scale purchaser.

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The Board shall not conclude that the Rules for Large-Scale Acquisitions have been
violated solely on the ground that part of the information required for evaluation has notbeen submitted by the large-scale purchaser.
(2) When the large-scale purchaser observes the Rules for Large-Scale Acquisitions
When the large-scale purchaser observes the Rules for Large-Scale Acquisitions, theCompany’s Board of Directors will not, in principle, take countermeasures against thelarge-scale share acquisition in question. Even when the Board is against the proposed
acquisition, it will not go beyond expressing its disagreement with the proposed acquisitionor persuading the shareholders by proposing alternative options to them. The shareholdersof the Company are asked to make their own decision as to whether to accept theacquisition proposal made by the large-scale purchaser after considering the said
acquisition proposal as well as the opinion and alternative options the Company offers in
response to the proposal.
Even when the Rules for Large-Scale Acquisitions are observed, if the Board determines
the said large-scale acquisition is being executed for one of the purposes described in (i) to(v) below, and is clearly being driven by an abusive motive, which, in the end, can cause
irreversible damage to the Company and significantly undermine the value of the Company
and the common interests of the shareholders, the Board may, as an exception, take thecountermeasures described in section (1) above to the extent necessary and adequate toprotect the value of the company and the common interests of our shareholders.
(i)

The large-scale purchaser has no intention of participating in the management of theGroup Companies, and is purchasing the Company’s shares for the sole purpose ofdriving up the stock price and forcing the concerned parties of the Company to buy thepurchased shares back at a premium (the so-called “greenmailing”).
(ii) The large-scale purchaser is purchasing the shares of the Company for the purpose of
implementing the so-called “scorched-earth management,” wherein the purchaser
gains a temporary control over the management of the Group Companies to transfer
the intellectual property, know-how, commercial secrets, primary suppliers, andcustomers, which are essential to the Group Companies’ business operations, to thepurchaser or its group companies.
(iii) The large-scale purchaser is purchasing the shares of the Company for the purpose ofgaining control over the management of the Group Companies so that it can use theirassets to provide collateral for, or to liquidate, its or its group companies’
indebtedness.
(iv) The large-scale purchaser is purchasing the shares of the Company for the purpose ofgaining temporary control over the management of the Group Companies to make theGroup Companies sell off expensive assets such as real estate and securities of no
immediate importance for their businesses, to make them use the proceeds totemporarily pay a high level of dividends, or to take the opportunity of an enhanced
share price due to temporarily high dividends to sell its holding at a profit.
(v) The method of share acquisition proposed by the large-scale purchaser is deemed toconstitute a so-called “high-handed, two-stage buyout” (wherein the purchaser
initially do not solicit for the acquisition of all of the Company’s shares but later onproceeds to buy out the remaining shares of the Company through a takeover bid orother means, setting disadvantageous conditions for the second-stage share acquisition
or concealing such conditions), which can not only restrict the opportunity andfreedom of decision-making by the Company’s shareholders but also, in effect, force
them to sell their shares.

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(3) Resolutions of the Board of Directors and the convocation of a General Meeting of
Shareholders
The Company’s Board of Directors, which, under the circumstances described under (1)or (2) above, is required to make a decision as to whether to take countermeasures against alarge-scale purchaser, must follow the advice of the Independent Committee (unless doing
so constitutes a duty of care breach), and, after careful consideration of the necessity andadequacy of the countermeasures being proposed, make a final decision as an establishment
responsible for making decisions about the implementation of countermeasures and matterspertaining to real estate as defined in the Companies Act.
The Board is responsible for selecting the specific measures to be implemented after
careful consideration of the best options available at that moment. The Board may choose
the allotment of stock acquisition rights without contribution as the specificcountermeasure to be taken against the large-scale purchaser. In principle, the allotment ofsuch stock acquisition rights is carried out as outlined in Attachment 3. In practice,
however, an appropriate period and proper conditions (for example, allowing only thosestock acquisition rights holders who do not belong to a group of specific shareholders
having more than a specified percentage of the voting rights to exercise their stockacquisition rights) may be set for the exercise of the stock acquisition rights so that theallotment of these rights can actually function as a countermeasure. Under thiscircumstance, however, the Company has no intention of offering money to acquire thestock acquisition rights held by the large-scale purchaser.
When the Independent Committee provides recommendations about a countermeasure
and calls for a General Meeting of Shareholders to be held to obtain the shareholders’approval for the countermeasure, the Board shall set a period of no longer than 60 days
(hereinafter referred to as the “consideration period for shareholders”) to allow theshareholders to carefully consider the pros and cons of taking such a countermeasurepursuant to the Plan, and hold a General Meeting of Shareholders during the consideration
period for shareholders.
When the Board has reached a decision on the convocation of a General Meeting of
Shareholders and the base date, the Board’s evaluation period will end on that date and theconsideration period for shareholders will begin.
Prior to holding the said General Meeting of Shareholders, the Board will prepare adocument containing the information necessary for evaluation provided by the large-scalepurchaser, the opinions of the Board concerning that information, alternative option
proposed by the Board, and other matters deemed appropriate by the Board, and send it to
the shareholders together with the convocation notice for the General Meeting of
Shareholders to disclose information pertaining to the meeting in a timely and appropriatemanner.
When a decision is reached during the General Meeting of Shareholders as to whether or
not to proceed with the countermeasure being proposed, the Board shall comply with thatdecision. In other words, if the shareholders attending the Meeting decide against thecountermeasure, the Board will not take that countermeasure against the large-scale
shareholder. The consideration period for shareholders ends at the conclusion of theGeneral Meeting of Shareholders, and the decisions reached during the Meeting will be
disclosed in a timely and appropriate manner.
(4) Waiting period for a large-scale acquisition
In the absence of a consideration period for shareholders, the Board’s evaluation period
is set as the waiting period for a large-scale acquisition. If a consideration period for- 25 -

shareholders is set, the Board’s evaluation period plus the consideration period forshareholders is set as the waiting period for a large-scale acquisition.
A large-scale acquisition can only take place after the elapse of the waiting period for alarge-scale acquisition.
(5) Withdrawal, etc., of countermeasures
If, after a decision is reached to take a specific countermeasure against the large-scalepurchaser during the Board’s meeting or the General Meeting of Shareholders, as describedunder (3) above, the said large-scale purchaser decides to back down from or make changes
to its method of the large-scale share acquisition, the Company’s Board of Directors may
decide that it is no longer appropriate to take the countermeasure against the purchaser. In
that case, the Board may, following the opinion and recommendations of the Independent
Committee (unless doing so constitutes a duty of care breach), withdraw the saidcountermeasure.
For example, even if the allotment of stock acquisition rights without contribution has
been selected as the countermeasure against the large-scale share acquisition, approved by
the Board, and/or actually carried out, the Board may still decide to withdraw thecountermeasure if the said large-scale purchaser decides to back down from or makechanges to its method of the large-scale share acquisition and the Board decides that it is nolonger appropriate to take the countermeasure against the purchaser. In that case, the Board
may follow the recommendations of the Independent Committee (unless doing so
constitutes a duty of care breach) and cancel the allotment of stock acquisition rights
without contribution up until the day prior to the day when the stock acquisition rights takeeffect. Even after the stock acquisition rights have been allotted without contribution, theBoard can still withdraw the countermeasure by way of stock acquisition by the Company
without contribution up until the day prior to the day when the exercise period begins.
When a decision is made to withdraw or otherwise cancel the countermeasure, thatdecision, along with other information deemed necessary by the Independent Committee,
will be disclosed in a timely and appropriate manner pursuant to the relevant laws andregulations as well as to the listing rules set out by the stock exchange where theCompany’s stock is listed.
6. Commencement, Effective Period, and Cancellation of the Plan
Upon approval of our shareholders at this General Meeting of Shareholders, the Plan shallcome into effect immediately and remain effective until the end of the Annual General
Meeting of Shareholders, which is scheduled to be held in June 2025. However, even after thecontinuation of the Plan is approved at the General Meeting of Shareholders and the Plan
comes into effect, (1) if a resolution is passed in a General Meeting of Shareholders of theCompany regarding the cancellation of the Plan, or (2) if such a resolution is passed by the
Board of Directors of the Company, the Plan shall be canceled immediately.
Even during the effective term of the Plan, the Board may review the Plan from time totime to ensure that it contributes to improving the value of the company and the common
interests of our shareholders, and revise the plan with the approval of the shareholders inattendance at the General Meeting. Whenever the Board decides to continue, revise, or cancel
the Plan, it immediately discloses information to that effect.
There are some circumstances under which the Board may decide to revise or makechanges to the Plan even when the effective term of the Plan has not expired, provided thatsuch revisions or changes do not create disadvantage for the shareholders, and with theapproval of the Independent Committee if necessary. These circumstances include thelegislation, amendment, or abolishment of the relevant laws and regulations, including the- 26 -

rules set out by the stock exchange, which necessitates the revision of the Plan, and thepresence of some typographical errors and omissions that require correction.
IV. Supplementary Information
1. Possible Impact of the Plan on Our Shareholders(1) Possible impact of the Rules for Large-Scale Acquisitions on our shareholders
The Rules for Large-Scale Acquisitions have been set out to ensure that our shareholders
are provided with the information necessary to determine whether the offer made by thelarge-scale purchaser is acceptable for them, to allow them to hear what the Company’s
Board members who are actually involved in the Company’s management have to say
about the acquisition, and to give them the opportunity to be presented with alternative
options. In other words, the Rules are designed to allow our shareholders to make informed
decisions about whether to accept the offer made by the large-scale purchaser, which cancontribute to protecting not only the value of the Company but also the common interestsof our shareholders. By setting these Rules, we lay the foundation for proper decisionmaking by our shareholders, thereby contributing to the benefit of our shareholders.
However, as stated in 5. above, our policies for addressing large-scale share acquisitions
vary depending on whether or not the Rules for Large-Scale Acquisitions are observed bylarge-scale purchasers. Shareholders are therefore advised to pay close attention to the
movements of large-scale purchasers.
(2) Possible impact of the countermeasures taken against large-scale share acquisitions on
our shareholders
When a large-scale purchaser fails to observe the Rules for Large-Scale Acquisitions, orwhen the large-scale share acquisition in question is in line with the Rules but can cause
irreversible damage to the Company and significantly undermine the value of the Company
and the common interests of our shareholders, the Company’s Board of Directors may takelegally justified countermeasures against the large-scale share acquisition pursuant to theCompanies Act and other relevant laws as well as the Company’s Articles of Incorporationin order to protect the value of the Company and the common interests of its shareholders.
Due to the nature of these countermeasures, the Company thinks it highly unlikely that theshareholders (except large-scale purchasers who do not observe the Rules for Large-Scale
Acquisitions and those whose act of share acquisition can cause irreversible damage to theCompany and substantially undermine the common interests of our shareholders) could
incur substantial losses in terms of their legal rights and financial status. If the Board
decides to take a specific countermeasure against the large-scale purchaser, it will disclose
information to that effect in a timely and appropriate manner pursuant to the relevant laws
and regulations as well as to the listing rules set out by the stock exchange where theCompany’s stock is listed.
For example, when stock acquisition rights are to be allotted to our shareholders as acountermeasure against a large-scale share acquisition, all of our shareholders who arelisted on the Shareholder Register as of the date of the allotment will receive stockacquisition rights. Our shareholders will be allotted stock acquisition rights without themneeding to make a request. The Company will be carrying out the procedure necessary toacquire the stock acquisition rights, so that our shareholders can receive the shares of theCompany in exchange for the stock acquisition rights the Company has acquired for them,without them having to pay an amount equivalent to the price of exercising the stockacquisition rights. This means that our shareholders do not have make any requests or
payments or go through any special procedures whatsoever in association with the said
stock acquisition rights. However, in such cases, the Company may request the- 27 -

shareholders who will be allotted stock acquisition rights to submit, in a form prescribed by
the Company, a written pledge stating that they are not involved in the said large-scale
share acquisition themselves.
Even on the date of the allotment of stock acquisition rights or even after the exercise of
the stock acquisition rights takes effect, there are circumstances under which the Company
may decide to withdraw the countermeasure (such as when the large-scale purchaser has
backed down from the large-scale share acquisition). In this case, the Company may cancel
the allotment of stock acquisition rights up until the day prior to the day when the exercise
period begins, or acquire the stock acquisition rights without contribution instead of issuing
the Company’s share to the stock acquisition rights holders. Under these circumstances,
shareholders who have sold their holdings under the assumption that the price per share
would eventually become diluted may incur losses due to fluctuations in the share price.
2. Rationality of the Plan (The Plan That Complies With Our Basic Policies and Seeks to
Enhance the Common Interests of Our Shareholders, Instead of Focusing on Maintaining
the Positions of the Company Executives)(1) The Plan satisfies the requirements of policies regarding takeover defense measures.
The Plan satisfies the three principles defined in the Guidelines on Takeover Defense
Measures for Securing and Improving Corporate Value and the Common Interests ofShareholders, which were announced by the Ministry of Economy, Trade and Industry andthe Ministry of Justice on May 27, 2005: the principle of protecting and enhancing
corporate value and the common interests of shareholders; the principle of prior disclosureand respect for the intent of shareholders; and the principle of confirming necessity andlegitimacy).
The Plan is also informed by a report titled “Takeover Defense Measures in Light ofRecent Environmental Changes,” which was published by the Corporate Value Study
Group of the Ministry of Economy, Trade and Industry on June 30, 2008, and by “Principle
1.5 Anti-Takeover Measures” in the “Japan’s Corporate Governance Code,” which wasannounced by the Tokyo Stock Exchange on June 1, 2015, and most recently revised onJune 11, 2021.
(2) The Plan assures continued focus on the aim of securing and improving the common
interests of shareholders.
As stated in “III. 1. Purpose of Continuing the Plan” above, the Plan, which is aimed atsecuring and improving the value of the Company and the common interests of theshareholders, assures continued focus on securing enough information and time for both
our shareholders and the Board of Directors when an attempt is made at a large-scaleacquisition of the Company’s shares, so that the shareholders can decide whether the offer
made by the large-scale purchaser is acceptable for them and the Board can propose
alternative options and negotiate with the purchaser on behalf of the shareholders.
Accordingly, it is not for the purpose of defending the current management team fromgeneral takeover.
(3) The plan reflects the intent of the shareholders.
The Plan comes into effect with the approval of the shareholders attending the General
Meeting of Shareholders. The intent of our shareholders regarding the Plan is confirmed at
the General Meeting of Shareholders so as to ensure that the Plan reflects the intent of ourshareholders.
If our shareholders attending a General Meeting of Shareholders decide to cancel thePlan, that decision will immediately take effect to respect the intent of the shareholders,even when the effective term of the renewed Plan has not expired yet.

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(4) The Plan respects the decision made by independent external entities.
As stated in “III. 5. Policy for addressing large-scale share acquisitions” above, theBoard of Directors contemplating a countermeasure pursuant to the Plan must first consult
the Independent Committee comprised of members independent of the Company’s
management team responsible for the execution of the Company’s business operations, andfollow the advice of the Committee (unless doing so constitutes a duty of care breach) withregard to the countermeasure being proposed. This procedure is taken to ensure thetransparent operation of the Plan so that the Plan contributes to the value of the Company
and serves the common interests of our shareholders.
(5) The Plan does not constitute a dead-hand or slow-hand takeover defense measure.
The Company’s Board of Directors, which is comprised of members selected byshareholders attending a General Meeting of Shareholders hosted by the Company, has theauthority to cancel the Plan. The Plan therefore does not constitute a “dead-hand” measure(in which the execution of takeover defense measures cannot be canceled even when the
majority of board members are replaced).
Furthermore, because the Company does not adopt staggered terms, the Plan does notconstitute a “slow-hand” measure (in which there is no way to replace all members of theboard at a time, and it therefore takes a long time to stop the execution of the takeover
defense measure) either.
End of document- 29 -

(Attachment 1)
Summary of the Rules for the Independent Committee• The Independent Committee shall be established by means of a resolution of the Board of Directors.
• The Independent Committee shall be comprised of three (3) or more members appointed by the Company’s
Board of Directors from among external directors or external experts who are independent of the management
responsible for the execution of the Company’s operations and are therefore capable of making fair and neutral
judgment. External experts shall be experienced corporate managers, individuals familiar with investmentbanking, attorneys, certified accountants, academic experts specializing in the Companies Act, etc., or any
other individuals with similar expertise.
• As a general rule, the Independent Committee shall respond to inquiries from the Company’s Board of
Directors by providing recommendations, along with the reason and evidence supporting therecommendations. Each member of the Independent Committee shall make recommendations that can best
contribute to the value of the Company and serve the common interests of the shareholders, and not with the
purpose of pursuing the committee member’s own personal benefit or that of the management team of theCompany.
• The Company allows the Independent Committee to seek advice of independent external experts (including
financial advisers, certified accountants, attorneys, consultants, and other specialists) as necessary, and pays
for the cost of it.
• A resolution of the Independent Committee shall be passed by means of a majority vote of the committee
members.
End of document- 30 -

(Attachment 2)
Profiles of the candidates for membership on the Independent Committee
Name
ProfileEiji Hirano
April 1973

Joined Bank of JapanMay 1999

Director-General of International Department of Bank of Japan

June 2002

Executive Director of Bank of Japan

June 2006

Director, Vice President of Toyota Financial Services Corporation

May 2015

Director, Representative Statutory Executive Officer of MetLife, Inc.

June 2015

Outside Director of the Company (present position)

June 2016

Outside Director of NTT DATA Corporation (present position)

September 2017 Director, Vice Chairman of MetLife, Inc. (present position)
October 2017

Chairperson of the Board of Governors of Government Pension Investment
Fund

June 2022

External Director of Ichiyoshi Securities Co., Ltd. (scheduled to assume theposition)

Name
ProfileShuji Iwamura
April 1976

Appointed as a public prosecutor

June 2010

Superintending Prosecutor at Sendai High Public Prosecutors Office

August 2011

Superintending Prosecutor at Nagoya High Public Prosecutors Office

July 2012

Resigned from the office

October 2012

Registered as an Attorney-at-Law
Advisor for Nagashima Ohno & Tsunematsu

June 2013

Outside Audit and Supervisory Board Member of the Company

March 2015

Outside Auditor of Canon Electronics Inc. (present position)

June 2015

Outside Corporate Auditor of Hokkaido Bank, Ltd. (present position)

October 2017

Governor and Auditor of the Board of Governors of Government Pension
Investment Fund (present position)

June 2018

Outside Director of Hayashikane Sangyo Co., Ltd. (present position)

June 2019

Outside Director who is a member of the Audit and Supervisory Committeeof the Company (present position)

January 2020

Attorney-at-Law at the Tokyo Flex Law Office

April 2021

Attorney-at-Law at T&K Partners (present position)- 31 -

Name
ProfileKoji Tanabe
April 1975

Joined the Ministry of International Trade and Industry (currently the
Ministry of Economy, Trade and Industry)

July 2002

Director-General of Research and Statistics Department of the Ministry of

April 2005

Professor of Graduate School of Innovation Management of Tokyo InstituteEconomy, Trade and Industryof Technology
February 2012
April 2017

Director of the Japan Asia Group Limited
Professor Emeritus of Tokyo Institute of Technology (present position)
Specially-Appointed Professor of School of Environment and Society ofTokyo Institute of Technology
Corporate Auditor of Shimazaki Denki Corporation

Name
ProfileJune 2019

Outside Director of the Company (present position)

January 2021

Director of Intron Space Inc. (present position)

Osamu Honda
April 1981

Joined the Industrial Bank of Japan, Limited

April 2009

Executive Officer of Mizuho Securities Co., Ltd. and General Manager of
the Corporate Planning Group HR Division of the same company

June 2011

Vice President and Director of Japan Securities Agents, Ltd.

June 2012

Director of Japan Information Processing Service Co., Ltd.

June 2015

Director and Senior Managing Executive Officer of Securities Japan, Inc.

June 2017

Representative Director and Senior Managing Director of Nitchitsu Co., Ltd.

June 2019

Representative Director and Vice President of Nitchitsu Co., Ltd.

June 2021

Outside Director who is a member of the Audit and Supervisory Committeeof the Company (present position)
Outside Auditor of Kurimoto Ltd. (present position)

The Company has no conflict of interest with any of these candidates.
The Company appointed Eiji Hirano, Shuji Iwamura, Koji Tanabe, and Osamu Honda as independent officers,
and registered them as such with the Tokyo Stock Exchange per the regulations of the Exchange.
End of document- 32 -

(Attachment 3)
Outline of the Allotment of Stock Acquisition Rights Without Contribution
1.

Shareholders Eligible for an Allotment of Stock Acquisition Rights Without Contribution and the Allotment
MethodShareholders registered in the latest Shareholder Register as of the allotment date designated by theCompany’s Board of Directors will be allotted stock acquisition rights without new contribution, whereby one(1) stock acquisition right will be allotted per one (1) share of common stock of the Company held byrespective shareholders (this does not include common stock held by the Company).

2.

Type and Number of Shares to be Acquired Upon the Exercise of the Stock Acquisition Rights
The shareholders exercising their stock acquisition rights will be acquiring the common stock of theCompany, and the number of shares they acquire for each stock acquisition right they exercise shall be as
separately determined by the Company’s Board of Directors. However, in cases where a stock split or areverse stock split is carried out by the Company, the required adjustment shall be carried out.

3.

Total Number of Stock Acquisition Rights to be Allotted to the Shareholders
The maximum number of stock acquisition rights that can be allotted to the shareholders shall be thedifference between the total number of authorized shares of the Company as of the allotment date set by theCompany’s Board of Directors and the total number of issued shares of common stock of the Company(excluding those held by the Company). The Board may allot stock acquisition rights multiple times.

4.

Property to be Contributed Upon Exercise of Respective Stock Acquisition Rights and Its Value
The contributions upon exercise of each stock acquisition right shall be made in money, and the value
thereof shall be an amount of no less than one (1) yen as determined by the Company’s Board of Directors.
When the Board decides to acquire stock acquisition rights, the Company may grant new shares to its
shareholders in exchange for the stock acquisition rights the Company has acquired, without paying an amountequivalent to the price of exercising the stock acquisition rights.

5.

Restrictions on the Transfer of Stock Acquisition Rights
Acquisition of stock acquisition rights by means of transfer of such rights requires the approval of theCompany’s Board of Directors.

6.

Condition for Exercising the Stock Acquisition Rights
Stock acquisition rights holders who belong to a group of specific shareholders having 20% or more of thevoting rights are not allowed to exercise their stock acquisition rights (this condition does not apply to those
who have the prior approval of the Company’s Board of Directors).

7.

Exercise Period, Etc., of Stock Acquisition Rights
The date on which the allotted stock acquisition rights take effect, the period during which they must be
exercised, the provisions relevant to the acquisition of stock acquisition rights, and other necessary mattersshall be as separately defined by the Company’s Board of Directors. The Company may set a provision statingthat it may acquire the stock acquisition rights held by individuals other than those who are not allowed toexercise their stock acquisition rights pursuant to the condition described in section 6 above, and grant themshares of common stock of the Company whereby the stock acquisition rights holders receive the number ofshares of common stock of the Company separately defined by the Board for each stock acquisition right they

- 33 -

hold. Under this circumstance, the Company has no intention of offering money to acquire the stockacquisition rights held by those individuals who are not allowed to exercise their stock acquisition rights.
End of document- 34 -