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

(Securities code: 3708)(June 5, 2023)
To Our Shareholders
Yuji Matsuda, President and Chief Executive Officer
Tokushu Tokai Paper Co., Ltd.
4379 Mukaijima-cho, Shimada-shi, Shizuoka, JAPAN

Notice of the 16th Annual General Meeting of Shareholders
It is a pleasure to inform you that the 16th Annual General Meeting of Shareholders of Tokushu Tokai Paper Co.,
Ltd. (the “Company”) will be held as indicated below.
In convening this General Meeting of Shareholders, the Company has taken measures for providing informationthat constitutes the content of “Reference Documents for the General Meeting of Shareholders,” etc. (matters forwhich measures for providing information in electronic format are to be taken) in electronic format, and has posted
the information on the Company’s website. Please access the following website to view the information.
The Company’s website:
https://www.tt-paper.co.jp/ir/meeting/ (in Japanese)
In addition to the Company’s website, the Electronic Provision Measures Matters are also posted on the website of
the Tokyo Stock Exchange (TSE). Please access the following website to view the information.
TSE website (Listed Company Search):https://www2.jpx.co.jp/tseHpFront/JJK010010Action.do?Show=Show (in Japanese)(Access the TSE website by using the internet address shown above, enter “Tokushu Tokai Paper” in “Issue name(company name)” or the Company’s securities code “3708” in “Code,” and click “Search.” Then, click “Basic
information” and select “Documents for public inspection/PR information.” Under “Filed information available forpublic inspection,” click “Click here for access” under “[Notice of General Shareholders Meeting /Informational
Materials for a General Shareholders Meeting].”)
You may exercise your voting rights via the internet or in writing (postal mail) in lieu of attending the meeting inperson. Please review the Reference Documents for the General Meeting of Shareholders, and exercise your voting
rights by 5:40 p.m. on Tuesday, June 27, 2023 (JST).
1. Date and Time: Wednesday, June 28, 2023, at 10:00 a.m. (JST) (Reception will open at 9:15 a.m.)
2. Venue:
Concert Hall Shizuoka AOI, 7th Floor Auditorium
1-9, Kurogane-cho, Aoi-ku, Shizuoka-shi, Shizuoka Prefecture
Please be aware that there will be no gifts for shareholders who attend the General Meeting of
Shareholders in person.
Thank you for your understanding.
3. Meeting Agenda:
Matters to be reported:
1. Business Report and Consolidated Financial Statements for the 16th fiscal year (April 1, 2022 to March
31, 2023) and Audit Results of Consolidated Financial Statements by Financial Auditor and the Audit &Supervisory Board
2. Non-consolidated Financial Statements for the 16th fiscal year (April 1, 2022 to March 31, 2023)
Matters to be resolved:
Proposal No. 1
Appropriation of Surplus
Proposal No. 2
Amendment to the Articles of Incorporation-1-

Proposal No. 3

Election of Eight (8) Directors (Excluding Directors Who Are Members of the Audit &Supervisory Committee)
Proposal No. 4
Election of Three (3) Directors Who Are Members of the Audit & Supervisory
Committee
Proposal No. 5
Election of One (1) Substitute Director Who is a Member of the Audit & Supervisory
Committee
Proposal No. 6
Setting of the Amount of Compensation for Directors (Excluding Directors Who Are
Members of the Audit & Supervisory Committee)
Proposal No. 7
Setting of the Amount of Compensation for Directors Who Are Members of the Audit &Supervisory Committee
Proposal No. 8
Determination of the Amount of Compensation, etc. in Stock Options for Directors(Excluding Outside Directors and Directors Who Are Members of the Audit &Supervisory Committee), and the Details Thereof
4. Matters to be Resolved in Convening the General Meeting of Shareholders (Guide to Exercising Voting
Rights):(1) For shareholders opting to exercise their voting rights in writing (by post) using the Voting Rights Exercise Form,any voting right exercised without indicating approval or disapproval for a particular proposal will be treated as
an intention of approval.
(2) For shareholders exercising their voting rights more than once via the Internet, the last voting right exercised shallbe deemed valid.
(3) If any voting right is exercised both by mail and via the Internet, the voting right exercised via the Internet shallbe deemed to be the valid exercise of the voting right.
(4) If you intend to vote by proxy, you may appoint another shareholder with voting rights to vote on your behalf as
proxy. Please note, however, that written proof of their right of proxy must be submitted.

- When you attend the meeting in person, please submit the Voting Form to the reception desk at the venue.
- For this General Meeting of Shareholders, paper-based documents stating Electronic Provision Measures Matters aresent to all shareholders, regardless of whether or not they have made a request for delivery of such documents. However,those documents do not include the following matters in accordance with the provisions of laws and regulations andArticle 16 of the Company’s Articles of Incorporation.
(i) Systems for ensuring the properness of business activities and outline of the operation of the systems(ii) Statement of changes in equity and notes to consolidated financial statements(iii) Statement of changes in equity and notes to financial statements
Please note that the business reports, consolidated financial statements and financial statements described in thisdocument are part of the documents audited by the Audit & Supervisory Board Members and the Financial Auditor in
the course of preparing the Audit Report or Accounting Audit Report.
- If there are any revisions to the matters subject to measures for electronic provision, a notice of the revisions and thedetails of the matters before and after the revisions will be posted on the aforementioned Company website and the TSE
website.

-2-

Reference Documents for the General Meeting of Shareholders
Proposal No. 1

Appropriation of Surplus

Year-end dividends
The Group regards the return of profit to its shareholders as an important management theme and maintains a basic
policy of paying stable dividends aiming for a dividend payout ratio of 30% while giving comprehensive
consideration to factors, including strengthening the financial base for the future business environment and returning
profit by way of purchasing its own shares.
The Company has given consideration to matters including the business performance of the fiscal year and futurebusiness development, and it proposes to pay fiscal year-end dividends as follows. Accordingly, the annual dividend
including the interim dividend will be ¥100 per share.
(1)
(2)
(3)

Type of dividend property
Cash
Allotment of dividend property to shareholders and the aggregate amount¥50 per common share of the Company, Total payment: ¥594,715,000
Effective date of dividends of surplus
June 29, 2023

-3-

Proposal No. 2

Amendment to the Articles of Incorporation

1.

Reasons for the proposal
The Company seeks to transition to a Company with an Audit & Supervisory Committee to strengthen auditing
functions by shifting to a monitoring-oriented Board of Directors, further enhance transparency and objectivity
by increasing the ratio of Outside Directors, and further strengthen corporate governance. In accordance with
this, the Company proposes the addition of new provisions concerning the Audit & Supervisory Committee andits members, and the removal of provisions concerning Audit & Supervisory Board Members and the Audit &Supervisory Board, in addition to amendments to Article numbers and other necessary changes.
Further, the proposed amendments shall take effect upon the conclusion of the General Meeting of Shareholders.

2.

Details of amendments
The details of the proposed amendments to the Articles of Incorporation are as follows.
(Underlined parts are amended.)
Current Articles of Incorporation

Proposed Amendments

Chapter 1 General Provisions
Articles 1 to 3 (Article text omitted)

Chapter 1 General Provisions
Articles 1 to 3 (Unchanged)

Article 4 (Bodies)
In addition to the General Meeting of Shareholders andDirectors, the Company is comprised of the following bodies.
(1) Board of Directors(2) Audit & Supervisory Board Members(3) Audit & Supervisory Board(4) Financial Auditor

Article 4 (Bodies)
In addition to the General Meeting of Shareholders andDirectors, the Company is comprised of the following bodies.
(1) Board of Directors(2) Audit & Supervisory Committee<Deleted>(3) Financial Auditor

Articles 5 to 18 (Article text omitted)

Articles 5 to 18 (Unchanged)

Chapter 4 Directors and the Board of Directors
Article 19 (Number of Members)
1 The Company shall have up to 15 Directors.

Chapter 4 Directors and the Board of Directors
Article 19 (Number of Members)
1 The Company shall have up to 15 Directors.

<Newly established>

2 Of the Directors described in the preceding paragraph, up to
five (5) Directors shall be members of the Audit &Supervisory Committee.

Article 20 (Selection Process)Article 20 (Selection Process)1 Directors shall be elected by a resolution at the General
Meeting of Shareholders.

2 (Article text omitted)

1 Directors shall be distinguished between Directors who aremembers of the Audit & Supervisory Committee, and nonmembers of said Committee, and shall be elected by aresolution at the General Meeting of Shareholders.
2 (Unchanged)

3 (Article text omitted)

3 (Unchanged)

Article 21 (Term of Office)

Article 21 (Term of Office)1 The term of office for Directors shall be until the conclusionof the Annual General Meeting of Shareholders for the final
fiscal year ending within one (1) year of their appointment.

1 The term of office for Directors (excluding Directors who
are members of the Audit & Supervisory Committee) shallbe until the conclusion of the Annual General Meeting of
Shareholders for the final fiscal year ending within one (1)year of their appointment.
2 The term of office for Directors who are members of the
Audit & Supervisory Committee shall be until theconclusion of the Annual General Meeting of Shareholders
for the final fiscal year ending within two (2) years of their
appointment.

<Newly established>-4-Current Articles of Incorporation<Newly established>

Proposed Amendments
3 The term of office for Directors who are members of the
Audit & Supervisory Committee that are elected as a
substitute for a Director who is a member of the Audit &Supervisory Committee who is resigning their post prior tothe completion of their term of office shall be until thecompletion of the term of office of the resigning Director
who is a member of the Audit & Supervisory Committee.

Article 22 (Dismissal)

Article 22 (Dismissal)

Resolutions to dismiss Directors must be passed with two-thirdsof the vote, with at least one-third of shareholders eligible tovote in attendance.

Resolutions to dismiss Directors (excluding Directors who aremembers of the Audit & Supervisory Committee) must be
passed with two-thirds of the vote, with at least one-third of
shareholders eligible to vote in attendance.

Article 23 (Representative Director and Directors with Roles)

Article 23 (Representative Director and Directors with Roles)

1 Representative Director shall be elected by a resolution of
the Board of Directors.

1 Representative Director shall be elected among Directors(excluding Directors who are members of the Audit &Supervisory Committee) by a resolution of the Board of
Directors.
2 The Board of Directors may elect a Chairman of the Boardof Directors, a President, and several Vice Presidents, Senior
Managing Directors, and Managing Directors among
Directors (excluding Directors who are members of the
Audit & Supervisory Committee) by a resolution of theBoard of Directors.

2 The Board of Directors may elect a Chairman of the Boardof Directors, a President, and several Vice Presidents, Senior
Managing Directors, and Managing Directors by a resolutionof the Board of Directors.

Article 24(Article text omitted)

Article 24(Unchanged)

Article 25(Notice of Meetings of the Board of Directors)

Article 25(Notice of Meetings of the Board of Directors)

1 Notices of meetings of the Board of Directors shall be issued
to each Director and Audit & Supervisory Board Member at
least three days before the day of the meeting. However, thisperiod may be shortened where urgency is needed.
2 Meetings of the Board of Directors may be held without
notice procedures with the consent of all Directors and Audit& Supervisory Board Members.

1 Notices of meetings of the Board of Directors shall be issued
to each Director at least three days before the day of themeeting. However, this period may be shortened where
urgency is needed.
2 Meetings of the Board of Directors may be held without
notice procedures with the consent of all Directors.

Article 26

Article 26(Article text omitted)<Newly established>(Unchanged)

Article 27(Delegation of Decisions Concerning the Executionof Important Business Matters)
Pursuant to the provisions of Article 399-13, paragraph (6) of
the Companies Act, the Company may, by resolution of theBoard of Directors, delegate decisions concerning the executionof important business matters (excluding matters prescribed ineach item of paragraph (5) of the same Article), in whole or inpart, to Directors.

Article 27(Article text omitted)

Article 28(Unchanged)

Article 28(Compensation, etc.)

Article 29(Compensation, etc.)

Director compensation, bonuses, and other property benefits
received from the Company as compensation for the executionof duties (hereafter collectively referred to as “Compensation,etc.”) shall be determined by a resolution of the General
Meeting of Shareholders.

Director compensation, bonuses, and other property benefits
received from the Company as compensation for the executionof duties (hereafter collectively referred to as “Compensation,etc.”) shall be determined by a resolution of the General
Meeting of Shareholders, with Directors who are members of
the Audit & Supervisory Committee distinguished from nonmembers.

-5-Current Articles of Incorporation
Article 29 (Exemption from Liability of Directors)

Proposed Amendments
Article 30 (Exemption from Liability of Directors)

Pursuant to the provisions of Article 427, paragraph (1) of theCompanies Act, the Company may enter into an agreement with
Directors (excluding Executive Directors, etc.) to limit their
liability for damages in the event he or she fails to perform hisor her duties. However, the limit of liability in the agreement
shall be a predetermined amount of 1 million yen or more, or
the minimum liability limit stipulated by laws and regulations,whichever is higher.

Pursuant to the provisions of Article 427, paragraph (1) of theCompanies Act, the Company may enter into an agreement with
Directors (excluding Executive Directors, etc. as prescribed in
Article 2, item (15) (a) of the Companies Act) to limit their
liability for damages in the event he or she fails to perform hisor her duties. However, the limit of liability in the agreement
shall be a predetermined amount of 1 million yen or more, or
the minimum liability limit stipulated by laws and regulations,whichever is higher.

Chapter 5 Audit & Supervisory Board Members and the Audit& Supervisory Board
Article 30 (Number of Members)<Deleted><Deleted>

The Company shall have up to 4 Audit & Supervisory Board
Members.
Article 31 (Selection Process)<Deleted>

1 Audit & Supervisory Board Members shall be elected by aresolution at the General Meeting of Shareholders.
2 Resolutions for the election of Audit & Supervisory Board
Members shall be made in the presence of shareholders who
hold one-third or more of the voting rights of shareholders
who are eligible to exercise their voting rights and by amajority of those voting rights.
Article 32 (Term of Office)<Deleted>

1 The term of office for Audit & Supervisory Board Members
shall be until the conclusion of the Annual General Meetingof Shareholders for the final fiscal year ending within four(4) years of their appointment.
2 The term of office for Audit & Supervisory Board Members
appointed as a substitute to an Audit & Supervisory Board
Member resigning before the end of his or her term of officeshall be until the end of the term of office of the resigning
Audit & Supervisory Board Member.
Article 33 (Full-time Audit & Supervisory Board Members)<Deleted>

The Audit & Supervisory Board shall elect full-time Audit &Supervisory Board Members from the Audit & Supervisory
Board Members elected by a resolution of the Audit &Supervisory Board.
Article 34 (Notice of Meetings of the Audit & Supervisory
Board)
1 Notices of meetings of the Audit & Supervisory Board shallbe issued to each Audit & Supervisory Board Member at
least three days before the day of the meeting. However, thisperiod may be shortened where urgency is needed.
2 Meetings of the Audit & Supervisory Board may be held
without notice procedures with the consent of all Audit &Supervisory Board Members.

<Deleted>

Article 35 (Rules of the Audit & Supervisory Board)<Deleted>

Matters concerning the Audit & Supervisory Board shall begoverned in accordance with the Rules of the Audit &Supervisory Board determined by the Audit & Supervisory
Board, in addition to the laws and regulations and these Articles
of Incorporation.

-6-

Current Articles of Incorporation
Article 36 (Compensation, etc.)

Proposed Amendments<Deleted>

Audit & Supervisory Board Member compensation, etc. shallbe determined by a resolution of the General Meeting of
Shareholders.
Article 37 (Exemption from Liability of Audit & Supervisory
Board Members)
Pursuant to the provisions of Article 427, paragraph (1) of theCompanies Act, the Company may enter into an agreement with
Audit & Supervisory Board Members to limit their liability fordamages in the event he or she fails to perform his or her duties.
However, the limit of liability in the agreement shall be apredetermined amount of 1 million yen or more, or theminimum liability limit stipulated by laws and regulations,whichever is higher.

<Deleted><Newly established>

Chapter 5 Audit & Supervisory Committee<Newly established>

Article 31 (Full-time Audit & Supervisory Committee
Members)
The Audit & Supervisory Committee may appoint full-timemembers of the Audit & Supervisory Committee from the Audit& Supervisory Committee members elected by a resolution of
the Audit & Supervisory Committee.

<Newly established>

Article 32 (Notice of Meetings of the Audit & Supervisory
Committee)
1 Notices of meetings of the Audit & Supervisory Committee
shall be issued to each member of the Audit & Supervisory
Committee at least three days before the day of the meeting.
However, this period may be shortened where urgency isneeded.
2 Meetings of the Audit & Supervisory Committee may beheld without notice procedures with the consent of all
members of the Audit & Supervisory Committee.

<Newly established>

Article 33 (Method of Resolution by the Audit & Supervisory
Committee)
Resolutions by the Audit & Supervisory Committee shall beenacted by majority vote with over half of all members of the
Audit & Supervisory Committee eligible to vote in attendance,
except in special circumstances otherwise prescribed by laws
and regulations.

<Newly established>

Article 34 (Minutes of Meetings of the Audit & Supervisory
Committee)
The minutes of meetings of the Audit & Supervisory
Committee shall be prepared in writing or in electronic format
as provided for in laws and regulations, and signed in writing,or by digital signature, by each member of the Audit &Supervisory Committee in attendance.

<Newly established>

Article 35 (Rules of the Audit & Supervisory Committee)
Matters concerning the Audit & Supervisory Committee shallbe governed in accordance with the Rules of the Audit &Supervisory Committee determined by the Audit & Supervisory
Committee, in addition to the laws and regulations and these
Articles of Incorporation.

-7-

Current Articles of Incorporation
Chapter 6 Financial Auditor

Proposed Amendments
Chapter 6 Financial Auditor

Articles 38 to 39 (Article text omitted)

Articles 36 to 37 (Unchanged)

Article 40 (Compensation, etc. for Financial Auditor)

Article 38 (Compensation, etc. for Financial Auditor)

Compensation, etc. for the Financial Auditor shall be
determined by Representative Directors with the consent of the
Audit & Supervisory Board.

Compensation, etc. for the Financial Auditor shall be
determined by Representative Directors with the consent of the
Audit & Supervisory Committee.

Articles 41 to 45 (Article text omitted)

Articles 39 to 43 (Unchanged)<Newly established>(Supplementary Provisions)<Newly established>

Article 1(Transitional Measures Concerning the Exemption of
Liability for Audit & Supervisory Board Members)
Agreements to limit the liability for damages of Audit &Supervisory Board Members in accordance with Article 423,
paragraph (1) of the Companies Act concerning acts by Audit &Supervisory Board Members (including persons who previously
served as Audit & Supervisory Board Members) prior to theconclusion of the 16th General Meeting of Shareholders held
June 2023 shall be governed in accordance with Article 37 of
the Articles of Incorporation prior to the amendments made to
the Articles of Incorporation by resolution at said General
Meeting of Shareholders.

-8-Proposal No. 3

Election of Eight (8) Directors (Excluding Directors Who Are Members of the Audit &Supervisory Committee)

The Company will transition to a Company with an Audit & Supervisory Committee on the condition that Proposal
No. 2 “Amendment to the Articles of Incorporation” is approved and as such, at the conclusion of this General
Meeting of Shareholders, the terms of office of all nine Directors will expire. Therefore, the Company proposes theelection of eight candidates to the posts of Directors as follows.
Candidate
No.

Position and responsibility
in the Company

Name

President and Chief Executive Officer,and Head of the Growth Strategy Center
Director, Managing Executive Officer
Head of the Core Business Center
and General Manager of the Households
Products Business Headquarter
Director, Managing Executive Officer,and Head of the Corporate Center
Director, Executive Officer, and General
Manager of the FIBLIC Business
Headquarter
Director, Executive Officer,
and General Manager of the Specialty
Materials Business Headquarter1

Yuji Matsuda

2

Katsuhiro Watanabe

3Michiaki Sano4

Toyohisa Mouri

5

Hiroyuki Onuma

6

Akira Isogai

Outside Director

7

Yuzo Ishikawa

Outside Director

8

Ritsue Miyashita–-9-

Attributes

Attendance at Boardof Directors
Meetings

Re-election

14/14

Re-election

14/14

Re-election

14/14

Re-election

14/14

Re-election

14/14

Re-election
OutsideIndependentRe-election
OutsideIndependent
New election
OutsideIndependent
Female

14/14

11/12

–

CandidateNo.

1

Number of the
Career summary, and position and responsibility in the
Company’s sharesCompany (Significant concurrent positions outside theownedCompany)
Mar. 1985
Joined Tokushu Paper Mfg. Co., Ltd.
Mar. 2006
Senior General Manager, Deputy General
Manager of the Sales Division, and Manager of
the Sales Planning Department
President and CEO of Tokushu Paper Trading
Co., Ltd. (currently TT TRADING CO., LTD.)
Jun. 2009
Executive Officer of the Company
Executive Officer and General Manager of the
Yuji Matsuda
Sales Development Division of Tokushu Paper(June 10, 1962)
Mfg. Co., Ltd.
Jun. 2011
Director, Deputy Head of the Specialty
Re-election
Materials Business Group, and General
Manager of the Sales Development Division of
4,546 shares
Number of years in office: 12
the Company
years
Jun. 2012
Director, Deputy Head of the Comprehensive
Development Center, General Manager of the
Attendance at Board of
Research and Development Division, andDirectors Meetings 14/14
General Manager of the Overseas Business
Promotion Department
Jun. 2014
Director, Managing Executive Officer, andHead of Specialty Materials Business Group
Apr. 2016
President and Chief Executive Officer (current
position)
Apr. 2023
Head of the Growth Strategy Center (current
position)[Reasons for nomination as candidate for Director]
Mr. Matsuda has a wealth of knowledge and experience in research and development and sales in the Specialty
Materials Business, and has successively held positions such as the head of related sectors, Head of a Business Group,and President of a Group company. Seven years have passed since he took office as President and Chief Executive
Officer of the Company, and during his term of office he has delivered positive results including achieving record-highconsolidated ordinary income three times. He has been engaged in the development of new products and expanding into
new growth fields in his role as Head of the Growth Strategy Center during the 6th Medium Term Management Plan
that the Company has embarked on from April this year, and is therefore expected to make a significant contribution tocontinually enhancing corporate value. Accordingly, we propose his re-election as a Director.
Name(Date of birth)- 10 -

CandidateNo.

2

Number of the
Career summary, and position and responsibility in the
Company’s sharesCompany (Significant concurrent positions outside theownedCompany)
Apr. 1983
Joined Canon Inc.
Apr. 1999
Joined Tokai Pulp & Paper Co., Ltd.
Jun. 2010
Executive Officer, Manager of Shimada Mill in
Industrial Materials Business Group, andGeneral Manager of Pulp & Power Departmentof the Company
Jul. 2013
Managing Director and General Manager of the
Corporate Planning Department of the
President Office
Katsuhiro Watanabe
Jun. 2014
Director, Executive Officer, and Head of the(October 6, 1960)
Comprehensive Development Center
Apr. 2016
Director, Executive Officer, and CEO of
Re-election
Industrial Materials Company
900 shares
Jul. 2017
Director, Executive Officer, and COO of
Number of years in office: 9Household Products Company
years
Jun. 2018
Director, Executive Officer, and CEO of
Household Products Company
Attendance at Board ofPresident of TRY-FU CO., LTD. (current
Directors Meetings 14/14
position)
Apr. 2020
Director, Executive Officer, and General
Manager of the Households Products Business
Headquarter of the Company
Jul. 2021
In charge of Package Division
Jul. 2022
Director, Managing Executive Officer, Head of
the Core Business Center, and General Managerof the Households Products Business
Headquarters of the company (current position)[Reasons for nomination as candidate for Director]
Mr. Watanabe has held positions as the head of mills, corporate planning and technical development divisions, and has
extensive insight and experience in management. He currently presides over the industrial materials and specialty
materials businesses as the Head of the Core Business Center, and supervises the Household Products Business
Headquarters as the General Manager. He also serves as President of TRY-FU CO., LTD. that handles paper towels andlaminates, and is expected to bring further growth in the paper manufacturing business with the leadership he has
demonstrated from his achievements and experience. Accordingly, we propose his re-election as a Director.
Name(Date of birth)- 11 -

Candidate
No.

3

Number of the
Career summary, and position and responsibility in the
Company’s sharesCompany (Significant concurrent positions outside theownedCompany)
Apr. 1989
Joined Daishowa Paper Manufacturing Co.,Ltd.
Dec. 2004
Joined Tokushu Paper Mfg. Co., Ltd.
Jun. 2010
Executive Officer and Manager of Mishima
Mill in Specialty Materials Business Group of
the Company
Jun. 2014
Executive Officer and General Manager of the
Corporate Planning Division of the President
OfficeJun. 2015
Executive Officer, Deputy Head of Industrial
Materials Business Group, and Manager of
Shimada Mill
Jun. 2016
Director, Executive Officer, COO of Industrial
Materials Company, Manager of Shimada Mill,
General Manager of Minami Alps Business of
the Corporate Planning & Administration
Michiaki Sano
Office(January 31, 1966)
Oct. 2016
Director, Executive Officer, General Manager
Re-electionof Minami Alps Business of the Corporate
Planning & Administration Office
400 shares
Number of years in office: 7
President of Shin Tokai Paper Co., Ltd.
years
Jul. 2017
Director, Executive Officer, CEO of Industrial
Materials Company, and General Manager ofAttendance at Board of
Minami Alps Business of the President OfficeDirectors Meetings 14/14of the Company
Jun. 2019
Director, Executive Officer, and CEO of
Industrial Materials Company
Apr. 2020
Director, Executive Officer, General Managerof the Industrial Materials Business
Headquarter, and in charge of Resource Reuse
DivisionJul. 2021
Director, Executive Officer, and General
Manager of the Corporate Planning Division
Jul. 2022
Director, Managing Executive Officer
Head of the Corporate Center
General Manager of the Practical-Use of
Natural Environment Division
Apr. 2023
Director, Managing Executive Officer
Head of the Corporate Center(current position)[Reasons for nomination as candidate for Director]
Mr. Sano has extensive knowledge and experience in the fields of production technology and paper manufacturing andprocessing, and has contributed greatly to improving production and quality, served as a Mill Manager of the Specialty
Materials Business and Industrial Materials Business and as President of Shin Tokai Paper Co. Ltd., which handles
containerboard and kraft paper. He is therefore expected to leverage his knowledge, experience, and management skills
as the current Head of the Corporate Center to make a significant contribution to enhancing group governancecompliance and corporate value and maximizing human capital value. Accordingly, we propose his re-election as a
Director.
Name(Date of birth)- 12 -

Candidate
No.

4

5

Number of the
Career summary, and position and responsibility in the
Company’s sharesCompany (Significant concurrent positions outside theownedCompany)
Mar. 1991
Joined Tokushu Paper Mfg. Co., Ltd.
Mar. 2006
Senior General Manager and Manager of theSpecialty Functional Paper Department
Apr. 2007
Executive Officer, Manager of Mishima Mill in
Toyohisa Mouri
the Production Division(June 21, 1966)
Jun. 2010
Executive Officer, General Manager of the
Research and Development Division of theRe-election
Comprehensive Development Center, and Head
1,246 sharesof Basic Research Laboratories of the Company
Number of years in office: 9Jun. 2014
Director, Executive Officer, and General
yearsManager of the FIBLIC Business Headquarter
Jul.
2017
Director, Executive Officer, Deputy Manager ofAttendance at Board of
New
Business Promotion Office, and General
Directors Meetings 14/14
Manager of the FIBLIC Business Headquarter
Apr. 2020
Director, Executive Officer, and General
Manager of the FIBLIC Business Headquarter(current position)[Reasons for nomination as candidate for Director]
Mr. Mouri has a wealth of knowledge and experience in the field of research and development, as well as experienceand knowledge in management as he served as the head of the research sector and Mill Manager in the Specialty
Materials Business. His efforts in establishing new businesses associated with the development of new high-functional
sheets have led to the commercialization of FIBLIC, a separator for lithium-ion rechargeable batteries. He is therefore
expected to make FIBLIC one of the main businesses in the future, while also uncovering and developing new
businesses. Accordingly, we propose his re-election as a Director.
Mar. 1987
Joined Tokushu Paper Mfg. Co., Ltd.
Jul. 2013
General Manager of the Sales Division ofSpecialty Materials Business Group of theCompany
Hiroyuki Onuma
Jun. 2014
Executive Officer and General Manager of the(February 23, 1965)
Sales Division of Specialty Materials BusinessGroupRe-election
Apr. 2016
Executive Officer and CEO of Specialty
873 shares
Materials Company
Number of years in office: 7
Jun. 2016
Director, Executive Officer, and CEO ofyears
Specialty Materials Company
Apr. 2020
Director, Executive Officer, Deputy General
Attendance at Board ofManagerof the Specialty Materials BusinessDirectors Meetings 14/14
Headquarter, and Head of Core Business Center
Jul. 2021
Director, Executive Officer, and General
Manager of the Specialty Materials Business
Headquarter (current position)[Reasons for nomination as candidate for Director]
Mr. Onuma has a wealth of sales experience and knowledge in the Specialty Materials Business, and as the head of theSpecialty Materials Business division he has worked on measures aimed at developing and expanding sales ofenvironmentally friendly products, and better streamlining production and sales of existing products, he is expected tomake a significant contribution to enhancing corporate value. Accordingly, we propose his re-election as a Director.
Name(Date of birth)- 13 -

Candidate
No.

Name
(Date of birth)
Akira Isogai(October 19, 1954)
Re-election
OutsideIndependent
Number of years in office: 3
years

6

7

Number of the
Career summary, and position and responsibility in the
Company’s sharesCompany (Significant concurrent positions outside theownedCompany)
Sept. 1985
Doctoral Research Fellow of the Chemistry
Department of The Institute of Paper Chemistry
Sept. 1986
Hired at the Faculty of Agriculture of the
University of Tokyo
May 2003
Professor at Graduate School of Agriculturaland Life Sciences
100
Apr. 2020
Special Professor (current position)
Jun. 2020
Outside Director of the Company (current
position)[Significant concurrent positions outside the Company]
Special Professor at the University of Tokyo

Attendance at Board of
Directors Meetings 14/14[Reasons for nomination as candidate for outside Director and overview of expected roles]
Mr. Isogai has long been involved in research and development related to cellulose and paper at universities, and has ahigh level of expertise. In recent years, he has established a manufacturing method for cellulose nanofibers (CNF), andhis accomplishments have been recognized with numerous prestigious awards both domestically and internationally.
Although he has not been involved in corporate management in the past, he provides advice and recommendations
based on his knowledge, and has appropriately carried out duties as an outside Director.
Based on his wealth of knowledge and experience, he is not only expected to advise and contribute to the training ofresearchers for the Company’s research and development, but also provide opinions at the Board of Directors based on
his own knowledge and experience. Accordingly, we propose his re-election as an outside Director.
Sept. 1985
Joined DDI CORPORATION (currently KDDI
CORPORATION)
Yuzo Ishikawa
Jun. 2016
Executive Vice President, Representative(October 19, 1956)
Director of KDDI CORPORATION
Jun. 2019
Chairman of the Board, Representative Director
Re-electionof JCOM Co., Ltd.
OutsideJun. 2020
President, Representative Director
Independent200
Apr. 2022
Special Advisor
Number of years in office: 1
Jun. 2022
Outside Director of the Company (current
year
position)Jul. 2022
Advisor of KDDI CORPORATION (current
Attendance at Board of
position)
Directors Meetings 11/12[Significant concurrent positions outside the Company]
Advisor of KDDI CORPORATION[Reasons for nomination as candidate for outside Director and overview of expected roles]
Mr. Ishikawa has vast and extensive experience, knowledge, and insight in all aspects of corporate management as hehas successively held positions such as a representative director of KDDI CORPORATION and JCOM Co., Ltd. He is
therefore expected to not only supervise decision-making processes and business execution in the Company’s groupmanagement, but also to continue providing suitable proposals with a lot of advice and recommendations for enhancing
corporate value. Accordingly, we propose his re-election as an outside Director.

- 14 -

CandidateNo.

8Notes:

1
2
3

4

5

Number of the
Career summary, and position and responsibility in the
Company’s sharesCompany (Significant concurrent positions outside theownedCompany)
Apr. 1986
Joined JAL Information Technology Co., Ltd.
Jul. 2001
Manager of Corporate Planning Department
Oct. 2015
Executive Officer, Application Business
Ritsue Miyashita
Department of Airline Business Division(May 3, 1962)
Oct. 2018
Director of Brighton Consulting, Inc.
Dec. 2018
Established Eternaria Co., Ltd., President–
New election(current position)
OutsideJun. 2022
Outside Director, ENDO Lighting Corp.
Independent(current position)
Female[Significant concurrent positions outside the Company]
President, Eternaria Co., Ltd.
Outside Director, ENDO Lighting Corp.
[Reasons for nomination as candidate for outside Director and overview of expected roles]
Ms. Miyashita is a former Executive Officer at JAL Information Technology Co., Ltd. and has a wealth of experienceand knowledge, having successfully completed large-scale IT projects being involved with mission critical systems at
Japan Airlines, including a large-scale system renewal, and is therefore expected to contribute to enhancing IT and
implementing DX at the Company. In her current independent role, she has played an extensive role promoting theadvancement of women in fields other than IT and supporting the implementation of SDGs and GX (green
transformation). We propose her election as an outside Director in the expectation that she can supervise efforts toenhance corporate value from an objective standpoint.
There is no special interest between any of the candidates and the Company.
Mr. Isogai, Mr. Ishikawa, and Ms. Miyashita are candidates for outside Director.
Pursuant to the provisions of Article 427, paragraph (1) of the Companies Act, the Company has entered into an agreementwith Mr. Isogai and Mr. Ishikawa to limit their liability for damages under Article 423, paragraph (1) of the said Act. The
maximum amount of liability for damages based on this agreement is ¥1 million or the amount stipulated in Article 425,
paragraph (1) of the Companies Act, whichever is higher. If the re-election of Mr. Isogai and Mr. Ishikawa is approved at
this General Meeting of Shareholders, the Company plans to renew the agreement with them. If the election of Ms.
Miyashita is approved, the Company also plans to enter into such agreement with her under the same terms and conditions.
The Company has entered into a directors and officers liability insurance agreement with an insurance company. If the reelection and election of each candidate are approved, each candidate will be included in the insured of this agreement.
The Company plans to renew the insurance agreement at the next renewal under the same terms and conditions.
The Company has submitted notification to Tokyo Stock Exchange, Inc. that Mr. Isogai and Mr. Ishikawa satisfy
requirements for an independent officer as provided for by the exchange and the Company. If the re-election of bothcandidates is approved, the Company plans for their designation as independent officers to continue. If the election of Ms.
Miyashita is approved, the Company also plans to submit notification to the exchange concerning her designation as anindependent officer.
Name(Date of birth)- 15 -

Proposal No. 4

Election of Three (3) Directors Who Are Members of the Audit & Supervisory Committee

The Company will transition to a Company with an Audit & Supervisory Committee on the condition that Proposal
No. 2 “Amendment to the Articles of Incorporation” is approved.
Therefore, the Company proposes the election of three Directors Who Are Members of the Audit & Supervisory
Committee.
In addition, the consent of the Audit & Supervisory Board has been obtained for this proposal.
The candidates for Directors Who Are Members of the Audit & Supervisory Committee are as follows.
Candidate
No.

Position and responsibility
in the Company

Name

1

Takashi Nagasaka

Outside Director

2

Naoto Higaki

Outside Audit & Supervisory Board
Member3

Kayoko Yamato–- 16 -

Attributes
New election
OutsideIndependent
New election
OutsideIndependent
New election
OutsideIndependent
FemaleAttendance at Boardof Directors
Meetings
14/14

12/12

–

Candidate
No.

1

2

Number of the
Career summary, and position and responsibility in the
Company’s sharesCompany (Significant concurrent positions outside theownedCompany)
Apr. 1979
Joined Chuo Audit Corporation
Jun. 1981
Registered as a certified public accountant
Jul. 1998
Senior Partner of Chuo Audit Corporation
May 2005
General Manager, Audit Department of Chuo
Aoyama Audit Corporation
Aug. 2007
Managing Director of Ernst & Young
ShinNihon (currently Ernst & Young
ShinNihon LLC)
Aug. 2010
Senior Partner
Takashi NagasakaJun. 2019
Representative of Nagasaka Takashi Certified(January 13, 1957)
Public Accountant Office (current position)
Outside Director of Contec Co., Ltd.
New election
Outside Audit & Supervisory Board Member of
Outsidethe Company
Independent
100
Jan. 2020
Outside Director of PARK24 CO., LTD.
Number of years in office: 1
May 2020
Outside Director of AEON Financial Service
year
Co., Ltd. (current position)
Jun. 2022
Outside Director of the Company (current
Attendance at Board of
position)
Directors Meetings 14/14
Nov. 2022
Outside Director (Audit and Supervisory
Committee Member) of PARK24 CO., LTD.
(current position)[Significant concurrent positions outside the Company]
Representative of Nagasaka Takashi Certified Public
Accountant OfficeOutside Director (Audit and Supervisory Committee Member)of PARK24 CO., LTD.
Outside Director of AEON Financial Service Co., Ltd.
[Reasons for nomination as candidate for outside Director and overview of expected roles]
Mr. Nagasaka has advanced knowledge, insight and experience as a certified public accountant and with financial audits
and internal controls.
After serving as an independent outside Audit & Supervisory Board Member for the Company, he became an
independent Director and monitors management and proactively provides recommendations to promote theenhancement of governance, and as the Chairperson of the Nomination and Compensation Committee that is theadvisory body to the Board of Directors, he contributes to the development of institutional design and officer’s
compensation system for achieving continued corporate growth. We propose his election as an outside Director Who isa Member of the Audit & Supervisory Committee in the expectation that he can continue providing suitable proposals
from an objective standpoint.
Oct. 2002
Attorney at law (current position)
Naoto Higaki
Apr.
2008
Established
Higaki General Law Office (current(December 11, 1968)
position)
Lecturer at Tsukuba Law School (part-time)
New election(current position)–
OutsideIndependent
Jun. 2022
Outside Audit & Supervisory Board Member of
the Company (current position)
Attendance at Board of[Significant concurrent positions outside the Company]
Directors Meetings 12/12
Attorney at law[Reasons for nomination as candidate for outside Director and overview of expected roles]
Mr. Higaki has advanced knowledge and insight and a wealth of experience as an attorney at law, and although he has
not been involved in corporate management in the past, he provides suitable advice for supervising the directors; dutyof care and the Company’s compliance and corporate governance. We have determined that he is capable of making asignificant contribution to strengthening auditing functions into the future, and thus propose his election as an outside
Director Who is a Member of the Audit & Supervisory Board Committee.
Name(Date of birth)- 17 -

CandidateNo.

3

Notes:

1
2
3

4

5

Number of the
Career summary, and position and responsibility in the
Company’s sharesCompany (Significant concurrent positions outside theownedCompany)
Oct. 2006
Attorney at law (current position)
Oct. 2006
Joined Miwa & Yamazaki Law Office (current
Miwa Sogo Law Office)Jan. 2015
Joined Mitoshiro Law Office, Partner
Kayoko YamatoFeb. 2016
Joined Shinjuku Law Office, Partner (current(January 9, 1976)
position)
Jun. 2019
Outside Director (Audit and Supervisory–
New election
Committee Member) of HABA Laboratories
OutsideInc. (current position)
Independent[Significant concurrent positions outside the Company]
FemaleAttorney at law
Partner, Shinjuku Law OfficeOutside Director (Audit and Supervisory Committee Member)of HABA Laboratories Inc.
[Reasons for nomination as candidate for outside Director and overview of expected roles]
Ms. Yamato has a wealth of experience and achievements, and extensive knowledge and insight as an attorney at law,and also has insight into diversity from her role as Deputy Director of the Center for Gender Equality Promotion at theTokyo Bar Association. Although she has never been directly involved in corporate management in the past, she isexpected to provide recommendations and advice on strengthening auditing and monitoring of the Board of Directors,
and enhance the compliance and corporate governance system based on her specialist standpoint, and thus propose herelection as an outside Director Who is a Member of the Audit & Supervisory Committee.
There is no special interest between any of the candidates and the Company.
Mr. Nagasaka, Mr. Higaki and Ms. Yamato are candidates for outside Director.
Pursuant to the provisions of Article 427, paragraph (1) of the Companies Act, the Company has entered into an agreementwith Mr. Nagasaka and Mr. Higaki to limit their liability for damages under Article 423, paragraph (1) of the said Act. The
maximum amount of liability for damages based on this agreement is ¥1 million or the amount stipulated in Article 425,
paragraph (1) of the Companies Act, whichever is higher. If the election of both candidates is approved at this General
Meeting of Shareholders, the Company plans to renew the agreement with them. If the election of Ms. Yamato is approved,
the Company also plans to enter into such agreement with her under the same terms and conditions.
The Company has entered into a directors and officers liability insurance agreement with an insurance company. If theelection of each candidate is approved, they will be included in the insured of this agreement. The Company plans torenew the insurance agreement at the next renewal under the same terms and conditions.
The Company has submitted notification to Tokyo Stock Exchange, Inc. that Mr. Nagasaka and Mr. Higaki satisfy
requirements for an independent officer as provided for by the exchange and the Company. If the election of bothcandidates is approved, the Company plans for their designation as independent officers to continue. If the election of Ms.
Yamato is approved, the Company also plans to submit notification to the exchange concerning her designation as anindependent officer.
Name(Date of birth)- 18 -

Proposal No. 5

Election of One (1) Substitute Director Who is a Member of the Audit & Supervisory
Committee

The Company will transition to a Company with an Audit & Supervisory Committee provided that Proposal No. 2“Amendment to the Articles of Incorporation” is approved as proposed.
Accordingly, the Company requests approval for the election of one substitute Director Who is a Member of the
Audit & Supervisory Committee to be ready to fill a vacant position should the number of Audit & Supervisory
Committee Members fall below the number required by laws and regulations.
In addition, the consent of the Audit & Supervisory Board has been obtained for this proposal.
The candidates for substitute Directors Who Are Members of the Audit & Supervisory Committee are as follows.
Name(Date of birth)

Career summary and position in the Company(Significant concurrent positions outside the Company)
Nov. 2000
Apr. 2018

Notes:

Number of theCompany’s shares
owned

Attorney at law (current position)
Professor, Faculty of Business Sciences at University ofTsukuba (current position)–
Apr. 2019
Lecturer, Law School at Meiji University (current
position)
Hiroaki Himeno[Significant concurrent positions outside the Company](August 4, 1964)
Attorney at law[Reasons for nomination as candidate for substitute outside Director and overview of expected
Outsideroles]
Independent
Although Mr. Himeno has not been involved in company management in the past, having
judged that based on the experience and knowledge that he has cultivated as an attorney at law,
he is capable of ensuring soundness of corporate management and adequately contributing to
the enhancement of compliance practices and the strengthening of functions for monitoring thelegality in business execution across the Company, we propose his election as a substitute
Director Who is a Member of the Audit & Supervisory Committee.
1 There is no special interest between the candidate and the Company.
2 Mr. Himeno is a candidate for substitute outside Director.
3 If the election of Mr. Himeno is approved, the Company plans to enter into an agreement with him, pursuant to theprovisions of Article 427, paragraph (1) of the Companies Act, to limit his liabilities for damages under Article 423,
paragraph (1) of the said Act. The maximum amount of liability for damages based on this agreement is ¥1 million or theamount stipulated in Article 425, paragraph (1) of the Companies Act, whichever is higher.
4 The Company has entered into a directors and officers liability insurance agreement with an insurance company. If thecandidate becomes as an outside Director, he will be included in the insured of this agreement. The Company plans torenew the insurance agreement at the next renewal under the same terms and conditions.
5 Mr. Himeno satisfies requirements for an independent officer as provided for by Tokyo Stock Exchange, Inc. and theCompany. If he became an outside Director, the Company plans to submit notification to the exchange concerning his
designation as an independent officer.

- 19 -

[Reference 1]
Significant experience and expertise of candidates for Directors(including Audit & Supervisory Committee Members)
Legal
Manufacturing
Finance and affairs
andaccounting CompliantechnologyceCorporate
management

GlobalResearchanddevelopment

Sales andmarketingYuji Matsuda

●

●

●

●

Katsuhiro Watanabe●●Michiaki Sano●●

Toyohisa Mouri●

Hiroyuki Onuma

●

Name

●

IT/DX

Sustainabil
ity
ESG

●
●

●

Akira Isogai
Yuzo Ishikawa●

Ritsue Miyashita●

Takashi Nagasaka●

Naoto Higaki

●

●

●

●
●

●

●
●
●

Kayoko Yamato

Note: The table above does not indicate all of the experiences and expertise possessed by each candidate.

- 20 -●

[Reference 2]
Independence Standards for Independent Outside Officers
In the independence standards for the Company’s independent outside officers, it is set out that they shall not fallunder the following criteria.
1. Persons who currently execute business at the Company and its subsidiaries (hereinafter the “Group”) or havedone so in the last ten years
2. Persons who belong to or execute business at a company, etc. (in case of a subsidiary, it is limited to an importantone) that is a major shareholder of the Company
3. Persons who belong to or execute business at a company, etc. that is a main business partner of the Group
4. Persons who belong to or execute business at a company, etc. whose main business partner is the Group5. Consultants, attorneys at law, certified public accountants, or certified public tax accountants who receive a large
amount of money or other property other than executive remuneration from the Group
6. Persons who receive a large amount of donations from the Group or who are executives belonging to anorganization that receives a large amount of donations from the Group
7. Spouses or relatives within the second degree of kinship of persons who execute business at the Group
8. Notwithstanding any of the preceding paragraphs, persons who cause a conflict of interest with the Company

Notes: 1“Persons who execute business” shall mean Executive Director, Executive Officer, General Manager or above,or any other person equivalent thereto.
2 “A major shareholder” shall mean a person or an entity that directly or indirectly holds 10% or more of theCompany’s total voting rights.
3 “A main business partner” shall mean a business partner with which payments of 2% or more of consolidated
net sales were made to or from the Group over the past three years.
4 “A large amount of money or other property” shall mean that the total value of money and property is ¥10
million or more per year on average over the past three years, and in the case of an organization, it exceeds
2% of consolidated net sales.
5 “A large amount of donations” shall mean donations worth more than ¥10 million per year on average over the
past three years.

- 21 -

Proposal No. 6

Setting of the Amount of Compensation for Directors (Excluding Directors Who Are Membersof the Audit & Supervisory Committee)

The Company will transition to a Company with an Audit & Supervisory Committee on the condition that Proposal
No. 2 “Amendment to the Articles of Incorporation” is approved.
The amount of compensation for the Company’s Directors was resolved at the 2nd Annual General Meeting of
Shareholders held on June 23, 2009, to be no more than ¥450 million per year (of which, no more than ¥50 million
for Outside Directors), which has been in effect to this day. Following the transition to a Company with an Audit &Supervisory Committee and pursuant to the provisions of Article 361, paragraphs (1) and (2) of the Companies Act,
the Company proposes to abolish this limit and establish a new compensation amount for Directors (excluding
Directors Who Are Members of the Audit & Supervisory Committee). The amount of compensation is proposed to
be no more than ¥350 million (of which, no more than ¥50 million for Outside Directors). As in the past, the amountof compensation for Directors shall not include the employee’s salary of Directors who concurrently serve as
employees.
If this proposal is approved, the Company plans to amend the terminology in its policy for determining the details of
individual compensation, etc. for Directors due to the transition to a Company with an Audit & Supervisory
Committee. The Company believes that the content of this proposal is necessary and rational for determining thedetails of individual remuneration, etc. for Directors in line with the amended policy. Furthermore, the Board of
Directors has judged this proposal as appropriate as it was decided after consultation with the voluntary Nomination
and Compensation Committee and discussion with the Board of Directors.
The current number of Directors is nine (9) (including four (4) Outside Directors), but if Proposal 2, “Amendment
to the Articles of Incorporation” and Proposal 3 “Election of Eight (8) Directors (Excluding Directors Who Are
Members of the Audit & Supervisory Committee)” is approved as proposed, the number of Directors (Excluding
Directors Who Are Members of the Audit & Supervisory Committee) will be eight (8) (including three (3) Outside
Directors).
The items under this proposal shall take effect subject to the amendments to Proposal 2 “Amendment to the Articles
of Incorporation” coming into force.

- 22 -

Proposal No. 7

Setting of the Amount of Compensation for Directors Who Are Members of the Audit &Supervisory Committee

The Company will transition to a Company with an Audit & Supervisory Committee on the condition that Proposal
No. 2 “Amendment to the Articles of Incorporation” is approved.
Accordingly, the Company proposes the amount of compensation for Directors Who are Members of the Audit &Supervisory Committee to be up to ¥60 million per year pursuant to the provisions of Article 361, paragraphs (1) and(2) of the Companies Act.
This Proposal determined the amount of compensation for Directors Who are Members of the Audit & Supervisory
Committee, taking into consideration the roles and responsibilities of Directors Who are Members of the Audit &Supervisory Committee and the payment level of compensation for Directors Who are Members of the Audit &Supervisory Committee, and is deemed appropriate.
The amount of compensation for Audit & Supervisory Board Members for the Company with an Audit & Supervisory
Board was resolved in the stock exchange agreement at the general shareholders meeting for Tokai Pulp & Paper
Co., Ltd. and Tokushu Paper Mfg. Co., Ltd. held on February 21, 2007, where the amount of compensation for Audit& Supervisory Board Members was approved to be no more than ¥50 million per year.
If Proposal 2 “Amendment to the Articles of Incorporation” and Proposal 4 “Election of Three (3) Directors Who
Are Members of the Audit & Supervisory Committee” are approved as originally proposed, the number of Directors
Who Are Members of the Audit & Supervisory Committee will be three (3).
This proposal shall take effect subject to the amendments to Proposal 2 “Amendment to the Articles of Incorporation”
coming into force.

- 23 -

Proposal No. 8

Determination of the Amount of Compensation, etc. in Stock Options for Directors (Excluding
Outside Directors and Directors Who Are Members of the Audit & Supervisory Committee),and the Details Thereof

The Company will transition to a Company with an Audit & Supervisory Committee on the condition that Proposal
No. 2 “Amendment to the Articles of Incorporation” is approved. In order to enhance corporate value by further
bolstering the motivation and morale of the Company’s Directors (Excluding Outside Directors and Directors Who
Are Members of the Audit & Supervisory Committee), the Company proposes granting stock options as shareacquisition rights of no more than ¥30 million per year separate from monetary remuneration for Directors(Excluding Outside Directors and Directors Who Are Members of the Audit & Supervisory Committee).
The amount of compensation separate from monetary remuneration for Directors for the Company with an Audit &Supervisory Board was approved to be no more than ¥75 million per year (including ¥3 million per year for Outside
Directors) for granting stock options as share acquisition rights at the 2nd general shareholders meeting held on June23, 2009, which remains in effect to this day. Following the transition to a Company with an Audit & Supervisory
Committee, the Company will also expand this allotment to include Outside Directors and Directors Who Are
Members of the Audit & Supervisory Committee after taking into consideration various societal and othercircumstances.
If this proposal is approved, the Company plans to amend the terminology in its policy for determining the details of
individual compensation, etc. for Directors due to the transition to a Company with an Audit & Supervisory
Committee. The Company believes that the content of this proposal is necessary and rational for determining thedetails of individual remuneration, etc. for Directors in line with the amended policy. Furthermore, the Board of
Directors has judged this proposal as appropriate as it was decided after consultation with the voluntary Nomination
and Compensation Committee and discussion with the Board of Directors.
The current number of Directors is nine (9) (including four (4) Outside Directors), but if Proposal 3 “Election ofEight (8) Directors (Excluding Directors Who Are Members of the Audit & Supervisory Committee)” is approved
as proposed, the number of Directors (including three (3) Outside Directors, excluding Directors Who Are Membersof the Audit & Supervisory Committee) will be eight (8).
Details of the granted share acquisition rights are as follows.
1. Reason of share acquisition rights as remuneration
Share acquisition rights have been allocated as share-based stock options to Directors (Excluding Outside Directors
and Directors Who Are Members of the Audit & Supervisory Committee) as a way of further strengthening the link
between the Company’s business performance and the stock price, and to share not only the benefits of an increasein the stock price but also the risks of a decline in the stock price with the shareholders, thereby increasing the
motivation and morale of Directors in terms of continually improving business performance and raising the stock
price over the medium to long term.
2. Details of share acquisition rights(1) Class and number of shares to be issued for share acquisition rights
The class of shares subject to share acquisition rights shall be common shares of the Company. The number of shares
to be issued as share acquisition rights allocated to Directors (Excluding Outside Directors and Directors Who Are
Members of the Audit & Supervisory Committee) within one year after the date of the General Meeting of
Shareholders in each fiscal year is a maximum of 15,000 upon exercising the share acquisition rights.
If the Company declares a share split or consolidation, the number of the shares to be issued shall be adjusted
according to the following formula. Note that such adjustment shall be made to the number of the share to whichshare acquisition rights have not been exercised at the time of such adjustment, and that any fraction less than one
share shall be discarded.
Number of Granted Shares after adjustment = Number of Granted Shares before adjustment x Ratio of split orconsolidation
In addition to the above, if any inevitable event arises where the number of shares must be adjusted after the resolution
date, the Company will adjust the number of shares necessary to a reasonable extent.
(2) Total number of share acquisition rights- 24 -

The maximum number of shares to be issued as share acquisition rights to Directors (Excluding Outside Directors
and Directors Who Are Members of the Audit & Supervisory Committee) within one year after the date of theCompany’s General Meeting of Shareholders in each fiscal year is a maximum of 150. The number of shares to beissued upon exercise of each share acquisition right will be 100 shares (the “Allotted Number of Shares”) (in theevent of adjustment stipulated in (1) above, the same adjustment to the number of granted shares shall be made).
(3) Amount of assets to be paid upon exercise of share acquisition rights
The amount of the assets to be paid upon the exercise of the share acquisition rights shall be calculated by multiplying
the price of ¥1 per share to be delivered through the exercise of the share acquisition rights by the number of granted
shares.
(4) Exercise period
The exercise period shall be up to a maximum of 20 years starting on the day immediately following the Allotment
Date.
(5) Restrictions on acquisition of share acquisition rights by transfer
Acquisition of the share acquisition rights by means of transfer shall be subject to the approval of the Board of
Directors.
(6) Conditions for exercise of share acquisition rights(i) The Holder of Share Acquisition Rights may only exercise their share acquisition rights during a period
until the day on which 10 days have elapsed from the day immediately following the day on which a
Director or Audit & Supervisory Board Member of the Company or its subsidiary ceases to hold any such
positions.
(ii) In the case where holders of share acquisition rights deceases, their heir shall be able to exercise those shareacquisition rights. The conditions for exercising the share acquisition rights by such eligible heirs are
stipulated in the contract outlined in (iii) below.
(iii) The other conditions shall be specified in the ‘Contract for the Allotment of Share Acquisition Rights’ tobe concluded between the Company and the holders of the share acquisition rights, based on a resolution
at a meeting of the Board of Directors.

- 25 -