The share exchange described in this press release involves securities of a foreign company. This
share exchange is subject to disclosure requirements of Japan that are different from those of theUnited States. Financial information included in this notice has been prepared in accordancewith generally accepted Japanese accounting standards and may not be comparable to the financial
statements of United States companies.
It may be difficult for you to enforce your rights and any claim you may have arising under theU.S. federal securities laws, since the issuer is located in a foreign country, and some or all of its
officers are residents of a foreign country. You may not be able to sue a foreign company or its
officers in a foreign court for violations of the U.S. securities laws. It may be difficult to compel
a foreign company and its affiliates to subject themselves to a U.S. court’s judgment.
This document has been translated from the Japanese-language original for reference purposes
only. While this English translation is believed to be generally accurate, it is subject to, andqualified by, in its entirety, the Japanese-language original. Such Japanese-language original
shall be the controlling document for all purposes.

(Reference Translation)
November 18, 2015
Company Name:

Kaga Electronics Co., Ltd.

Code No.:

8154
Tokyo Stock Exchange 1st Section

Location of the

20 Kandamatsunagacho,

Head Office:Chiyoda-ku, Tokyo

Name and Title of

Ryoichi Kado

the Representative:

President & COO

Contact:

Eiji Kawamura
Managing Director, Administration
Headquarters
Tel: 03-5657-0111

Company Name:

UKC Holdings Corporation

Code No.:3156
Tokyo Stock Exchange 1st Section

Location of the1-11-2 Osaki, Shinagawa -ku,

Head Office:Tokyo

Name and Title ofYukio Fukuju

the Representative:

President

Contact:

Tsuyoshi Osawa
Senior General Manager, Group
Business Planning Division
Tel: 03-3491-6575

Announcement of the Execution of a Memorandum of Understanding
Concerning Management Integration between Kaga Electronics Co., Ltd. and
UKC Holdings Corporation
We are pleased to announce that Kaga Electronics Co., Ltd. (“Kaga Electronics”) and UKC
Holdings Corporation (“UKC Holdings”) resolved to execute a Memorandum ofUnderstanding in connection with their intentions to achieve a management integration
with the spirit of equal partnership (the “Management Integration”) (the “MOU”) at themeetings of the board of directors of the two companies held today, and executed the MOU
on the same day.
Both companies will conduct further examinations toward the Management Integration in
the spirit of equal partnership.
1.
(1)

Background and Objectives of the Management Integration
Background of the Management Integration
As an electronics trading company, Kaga Electronics has been expanding its area ofbusiness by meeting the various needs of its diverse customers, with “Everything
we do is for our customers” as its motto.

Kaga Electronics offers its services byestablishing a system which enables it to provide broad range of support in various
business scenes both in Japan and abroad, such as support for procuring electroniccomponents and semiconductors for customers; support for product planning,development and design; support for manufacturing a wide variety of products insmall lots; support for producing software and videos related to the amusement
industry; system support centering on network solutions; and distribution support
mainly for wholesale to mass volume home electronics retailers.

The recent

global trend of technical innovation and price decline is prominent especially in theelectronics industry, and customers’ needs have become increasingly sophisticatedand diversified.

Under these circumstances, it is essential for Kaga Electronics tohave an accurate understanding of, and make a swift and flexible response to, theconstantly changing needs of its customers.
Since its foundation in October 2009 through a Joint Share Transfer by USC
Corporation and Kyoshin Technosonic Co., Ltd., UKC Holdings has been engaged
in the semiconductors and electronic components business, which mainly deals intouch screen panels and liquid crystal display-related components along with imagesensors manufactured by Sony; the electronic equipment business, which primarily
2handles broadcasting cameras and other products for professional use; and thesystem equipment business, which principally covers NFC/FeliCa-compatible
contactless IC card-related products.

By combining these competitive productswith meticulous technical support from its specialized engineering group, EMS(Electronics Manufacturing Service), reliability tests for semiconductors andelectronic components and environmental material analysis services, UKC
Holdings offers solutions which satisfy its customers.

In the electronics industry,where technology is making constant and rapid advances, there have been market
shifts, and rises and declines of manufacturers worldwide.

Especially in recentyears, while the developed markets, which have led markets so far, have matured
and slowed down, emerging countries such as China and India have seen a clear
trend in the expansion of their consumer markets and the prosperity of their
manufacturing industry.

Under these circumstances, UKC Holdings needs toachieve its continuous growth and the enhancement of its corporate value byextending its field of business in all aspects, including customers, applications andfunctions.
The business environment surrounding electronics trading companies is becoming
even harsher due to accelerated changes in the external environment, such as theconsolidations of semiconductor manufacturers, customers’ shift toward overseas
production, and a review of distributor policies by suppliers.
In this business environment, each of the two companies has considered variousoptions, including forming an alliance with another company, to ensure an
appropriate response to the needs of its customers and the continuous growth anddevelopment of its business in the future. As a result, the two companies haveformed a common view that further expansion and the pursuit of both scale andquality of business is necessary to further improve utilities and provide customers
with higher value-added services. Under these circumstances, both companies
have held discussions and shared a view that they are the best partner to utilize their
management resources, because there is a strong affinity between Kaga Electronics’
corporate philosophy “Everything we do is for our customers” and UKC Holdings’
management vision “Offer the highest quality with the optimum cost,” “Evolve andgrow with customers” and “Create new markets and new values,” and they arehighly complementary in terms of their business suppliers and customers, EMS
business and overseas expansion.

Thus the two companies have agreed to take a

step toward the management integration in the spirit of equal partnership.

3

(2)

Objectives of the Management Integration
The two companies will ensure industry-leading scale and quality in Japan byaccomplishing the following goals.

In addition, the two companies will develop

into one of the premier electronics trading companies in the world that meet thevarious needs of their customers, thereby enhancing their corporate value.
(i) Improving the ability to respond to customer needs
The two companies will further strengthen their business and product line-up to
be expanded by the management integration, and build a business platform
which will enable them to provide a one-stop solution in response to thevarious needs of their existing and new customers.
(ii) Accelerating global strategy
By utilizing their overseas bases, the two companies will enhancecomplementarity in the group, and increase the ability to deal with overseas
expansion by their customers and to deal with their local customers.
(iii) Reducing costs through improving business efficiency
The two companies will improve the business efficiency of the group andreduce costs by, for example, establishing efficient and rational shared
operations, sharing and rationalizing their distribution networks and otherinfrastructure in their domestic and overseas bases, and integrating their coresystems in the future.
(iv) Establishing a strong managerial foundation
The two companies will establish a stronger managerial foundation by, forexample, strengthening their financial base and fund-raising ability that enable
new investments and mergers and acquisitions by two companies, andenergizing the organization by mutually utilizing their human resources andknow-how.
2.

Outline of the Management Integration
On the condition of gaining approvals at the shareholders’ meetings of the twocompanies and obtaining the approvals of the relevant authorities and the likenecessary for carrying out the Management Integration, the companies aim to realize
the Management Integration as summarized below. Further details will be decided onor before the execution of the definitive agreement regarding the Management
Integration upon consultation between the two companies.

4

(1)

Method of Management Integration
The two companies have selected a holding company system as the organizational
structure following the Management Integration in order to take advantage of thestrengths of the two companies while preserving their individuality. Specifically,
the two companies plan to carry out the Management Integration in the following
manner.
(i) Share Exchange
A share exchange will be carried out between UKC Holdings as the wholly
owning parent company in the share exchange and Kaga Electronics as thewholly owned subsidiary company in the share exchange (the "ShareExchange").

As Kaga Electronics will become a wholly owned subsidiarycompany of UKC Holdings by the Share Exchange, the common shares ofKaga Electronics are scheduled to be delisted, in accordance with the delisting
standards of the Tokyo Stock Exchange, before the effective date of the ShareExchange.
(ii) Company Split
Following the completion of the Share Exchange, a company split will becarried out, in which UKC Holdings will be the splitting company and all of
UKC Holdings' businesses (excluding certain functions necessary for making
UKC Holdings a holding company after the Share Exchange takes effect; thesame shall apply hereinafter) will be the businesses subject to the split (the"Company Split"). As a result of the Company Split, all of UKC Holdings'businesses will be taken over by either a new company to be incorporated
through the Company Split or a succeeding company to be wholly owned by
UKC Holdings, whereby UKC Holdings will become a holding company(UKC Holdings after becoming a holding company; the "Holding Company"),(2)

Schedule (Planned)

November 18, 2015 (today)

Execution of the MOUby May 2016 (planned)

Execution of the definitive agreement regarding
the Management Integration(including the execution of a share exchange
agreement regarding the Share Exchange andeither the preparation of a plan for theincorporation-type company split or the executionof an agreement on an absorption-type company
split regarding the Company Split)

5late June 2016 (planned)

late June 2016 (planned)

October 1, 2016 (planned)

Approval of the share exchange agreement
regarding the Share Exchange at the annual
general meeting of shareholders of Kaga
Electronics
Approval of the share exchange agreement
regarding the Share Exchange and either a plan for
an incorporation-type company split or anagreement on an absorption-type company split
regarding the Company Split at the annual general
meeting of shareholders of UKC Holdings
Effective date of the Share Exchange and theCompany Split

The two companies plan to execute a definitive agreement regarding theManagement Integration as well as to execute a share exchange agreement
regarding the Share Exchange and either prepare a plan for an incorporation-typecompany split or execute an agreement on an absorption-type company split
regarding the Company Split by May 2016, and to present a proposal on theapproval of the Share Exchange and the Company Split (for UKC Holdings only) at
the annual general meeting of shareholders of each company to be held in late June
2016.
However, the above schedule may be changed as necessary for carrying out theprocedures or for other reasons, upon consultation and agreement between the twocompanies.

Also, in carrying out the procedures and consultations for theManagement Integration, the companies will promptly announce any events which
would delay or prohibit implementation of the Management Integration due tofiling to be made with the Japan Fair Trade Commission or other relevant
authorities (including filing to be made under foreign laws), obtaining of approvals
and permissions or other reasons.
(3)

Overview of the Holding Company(i) Trade name (tentative)
UKC Kaga Holdings Corporation(ii) Location of the Head Office (tentative)
20 Kandamatsunagacho, Chiyoda-ku, Tokyo(Note)“Location of the Head Office” indicates the location of the registeredhead office. The principal place of business of the Holding Company
shall be decided upon consultation between the two companies.

6

(iii) Management structure (tentative)
The Holding Company is planned to have six directors, including the following
four directors.
Chairperson: Isao Tsukamoto (currently Founder & CEO of Kaga Electronics)
Representative Director and President: Yukio Fukuju (currently President ofUKC Holdings)
Representative Director and Executive Vice President: Ryoichi Kado (currentlyPresident & COO of Kaga Electronics)
Director and Executive Vice President: Masaaki Taguchi (currently Executive
Vice President of UKC Holdings )(iv) Others
Other details shall be decided on or before the execution of the definitive
agreement regarding the Management Integration upon consultation between
the two companies.
(4)

Share Exchange Ratio
The ratio of the Share Exchange shall be decided on or before the execution of thedefinitive agreement regarding the Management Integration upon consultation
between the two companies.

(5)

Establishment of Integration Preparation Committee
In advancing the deliberations for the Management Integration, an integration
preparation committee will be established as the organization for holding
consultations between the two companies regarding the Management Integration.

7

3.

Company Profile(1) Name

Kaga Electronics Co., Ltd.

(2) Location ofregistered headoffice20 Kandamatsunagacho, Chiyoda-ku, 1-11-2 Osaki, Shinagawa -ku,
TokyoTokyo(3) Name and title of
Ryoichi Kado, President&COO
representative(4)

Description ofbusiness

UKC Holdings Corpor ation

Yukio Fukuju, President

Planning, development,
Businesses, including sales ofmanufacture, procurement and various semiconductor s andsale of electronic devi ces andelectronic components, sales ofelectronic components,
electronic equipment, and EMS
procurement and sale ofbusiness, and control andcomputers and peripheral
management of the businessdevices, associated components, activities of the companies thataccessories, software, etc., and engage in the above -mentioned
export and i mport of t he above businesses by hold ing theiritems
shares(5) Paid-in capital

JPY 12,133 million(as of September 30, 2015)

JPY 4,383 million(as of September 30, 2015)(6) Date ofincorporation

September 12, 1968

October 1, 2009(7) Number of issued 28,702,118 sharesshares(as of November 12, 2015)

15,700,021 shares(as of November 9, 2015)(8) End of fiscal year March 31

March 31

(9) Number ofemployees(Non -consolidated)593(Consolidated)5, 048(as of September 30, 2015)(Non -consolidated) 250(Consolidated) 1,338(as of September 30, 2015)
Sony Corporation
NIKON CORPORAT ION
SAMSUNG HIGH -TECH
ELECTRO-MECHANICS(TIANJ IN) CO.,LTD.

(10) Major customers －8

(11) Major banks

The Bank of Tokyo -Mitsubishi
UFJ, Ltd.
Mizuho bank, Ltd.
The Tokyo Tomin Bank, Ltd.
Mitsubishi UFJ Trust andBanking Corporation
Sumitomo Mitsui Banking
Corporation
13.32% Trust & Custody
14.23%
Services Bank, Ltd., astrustee for Mizuho
Trust and Banking Co.,
Ltd. (RetirementBenefits Trust Accountheld by Sony
Corporation: 003)

The Bank of Tokyo -Mitsubishi
UFJ, Ltd.
Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
The Hokuri ku Bank, Ltd.

(12) Major
Sankyo Co., Ltd.
shareholders andshareholding ratio

Japan Trustee Services
Bank, Ltd.

11.62% BBH for Fidelit y
Low-Priced Stock Fund
(Principal all sector
subportfolio) (standingproxy: The Bank ofTokyo -Mitsubishi UFJ,Ltd.)

9.18%

OKOZE CO., LTD

6.06% Trust & Custody
Services Bank, Ltd., astrustee for Mizuho
Trust and Banking Co.,
Ltd. (Retirement
Benefits Trust Accountheld by the Tokyo
Tomin Bank, Ltd.)

3.97%

Kaga Electronics
Employee Shareowner sAssociation

4.51% The Bank ofTokyo -Mitsubishi UFJ,
Ltd.

3.16%

The Bank ofTokyo -Mitsubishi UFJ,Ltd.

4.22% The Master Trust Bankof Japan, Ltd. (TrustAccount)

3.15%

Mizuho Bank, Ltd.
3.31% Japan Trustee Services(standing pr oxy: Trust &Bank, Ltd. (TrustCustody Ser vices Bank,Account)
Ltd.)

3.07%

Isao Tsukamoto

2.74% Kuniko Nakayama

2.42%

Oki Electric Industr yCo., Ltd.

1.83% Mizuho Bank, Ltd.
(standing proxy: Trust& Custody Ser vices
Bank, Ltd.)

2.35%9Mitsubishi ElectricCorporation

1.74% Meij i Yasuda Life
Insurance Company(standing proxy: Trust& Custody Ser vices
Bank, Ltd.)

1.88%

JAPAN SECURIT IES
FINANCE CO., LTD.

1.62% Trust & Custody
Services Bank, Ltd.
(Pension TrustAccount)

1.84%(as of September 30, 2015)(as of September 30, 2015)(13) Relationship between the two companies, etc.
Capital relationship N/A
Personnel
relationshipTransactional
relationship
Status as a Related
Party

N/A
N/A
Neither of the two companies, nor their affiliated persons orcompanies, is a Related Part y of the other party(14) Operating results and financial conditions for the latest three fiscal years

Fiscal year ended:

Kaga Electronics(consolidated)
March
March
March2013
2014
2015

UKC Holdings(consolidated)
March
March
March2013
2014
2015

Consolidated net
assets48,80652,82559,60345,40250,42556,370Consolidated total
assets111,888

126,028

127,948

114,223

118,436

131,784

Consolidated net
assets per share (JPY)

1,721.86

1,868.07

2,108.04

2,869.23

3,186.08

3,565.03

Consolidated sales

216,405

257,852

255,143284,508

317,042

280,672

Consolidated
operating income

1,260

5,106

6,362

7,360

6,925

5,578

Consolidated ordinary
income1,9315,847

7,664

8,162

7,237

6,233

444

3,877

4,416

5,025

4,398

4,037

Consolidated net
income per share(JPY)

16.09

137.22

156.28320.14280.21

257.21Dividend per share(JPY)

30.00

35.00

40.00

40.00

40.00

40.00

Consolidated net
income(Unit: JPY million, except as otherwise noted)
End10