(TRANSLATION FOR REFERENCE PURPOSE ONLY)

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

Code No: 9792
June 10, 2015
2-9 Kanda-Surugadai, Chiyoda-ku, Tokyo, Japan
Nichii Gakkan Company
Chairman, President and CEO
Akihiko Terada

Notice of the 43rd Annual Shareholders Meeting
Dear Shareholders:
You are cordially invited to attend the 43rd Annual Shareholders Meeting of Nichii Gakkan Company (the“Company”). The meeting will be held as described below.
If you are unable to attend the meeting, you can exercise your voting rights through either of thefollowing methods. Please review the Reference Documents for the Shareholders Meeting and exercise
your voting rights.
[Exercising Voting Rights by Mail]
Please indicate your vote of approval or disapproval of each proposal on the enclosed voting form, and returnthe form to us so that it arrives before 5:15 p.m., Wednesday, June 24, 2015 (JST).
[Exercising Voting Rights via the Internet]
Please access the website (http://www.evote.jp/) designated by the Company, and enter your vote of approval ordisapproval of each proposal by using the login ID and temporary password shown on the enclosed voting form
and following on-screen instructions before 5:15 p.m., Wednesday, June 24, 2015 (JST).
[Handling of duplicated exercises of voting rights by the same shareholder]If you exercise your voting rights by two different methods, that is, via the Internet as well as by mailing yourvoting form, the vote via the Internet shall be deemed valid, regardless of the date and time when your voting
results reach us.
If you exercise your voting rights more than once via the Internet, only the final execution shall be deemedvalid.
1. Date and Time:Thursday, June 25, 2015 at 10:00 a.m. (reception starts at 9:30 a.m.)

2. Location:

Tokyo Dome Hotel, Tenku, the first basement level1-3-61, Koraku, Bunkyo-ku, Tokyo, Japan

3. Agenda of the Meeting
Items to be reported:
1. Business Report, Consolidated Financial Statements, and the audit reports on Consolidated Financial
Statements by the Accounting Auditor and the Board of Auditors for the 43rd business term (from
April 1, 2014 to March 31, 2015)
2. Non-consolidated Financial Statements for the 43rd business term (from April 1, 2014 to March 31,
2015)

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Items to be resolved:
Proposal 1. Appropriation of Surplus
Proposal 2. Partial Amendments to the Articles of Incorporation
Proposal 3. Election of Four (4) Directors
Proposal 4. Election of Three (3) Auditors
Proposal 5. Granting of Retirement Benefits to Retiring Director
Proposal 6. Termination Payment of Retirement Benefits Attendant upon Abolition of Officers’
Retirement Benefit System
Proposal 7. Payment of Officers’ Bonuses
Proposal 8. Introduction of Stock Options for Directors and Decision on Specific Details

For those attending on the day, please present the enclosed voting form at the reception desk upon arrival at the meeting.
If any revision is made with regard to the Reference Documents for the Shareholders Meeting, the Business Report, theConsolidated Financial Statements and/or the Non-consolidated Financial Statements, the Company will post such revision on the
Company’s website (http://www.nichiigakkan.co.jp).

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Reference Documents for the Shareholders Meeting
Proposal 1.

Appropriation of Surplus

We propose that the appropriation of surplus be made as follows.
Matters regarding the year-end dividend
It is proposed that the year-end dividend for the 43rd business term be paid in consideration of the year’s
operating results, future business development, and other aspects, as follows.
1. Type of dividend property
Cash
2. Matters regarding allocation of dividend property and total amount thereof
It is proposed that ordinary dividends be 10 yen per common share of the Company.
Accordingly, the total amount of dividends would be 654,967,460 yen.
3. Effective date of the dividends from surplus
It is proposed to set the effective date to be June 26, 2015.
Proposal 2.

Partial Amendments to the Articles of Incorporation

1. Reasons for the amendments(1) In order to prepare for the Company’s future business development, business purposes are to be
added or deleted in Article 2 (Purpose) of the current Articles of Incorporation.
(2) In line with the above-mentioned amendments, the item numbers of the Article shall be appropriately
adjusted.
2. Contents of the amendments
Contents of the amendments are as follows:(Underlining denotes amendment.)
Current Articles of Incorporation
Proposed Amendments
CHAPTER I. GENERAL PROVISIONSCHAPTER I. GENERAL PROVISIONS(Purpose)(Purpose)
Article 2. The purpose of the Company shall be to engage Article 2. (Unchanged)
in the following businesses:(1) Education business for human resource development (1) Education business for human resource

development for medical treatment, care,childcare, etc.
(2) Management of language schools(3) Publication, planning, production and sale of books
and educational materials(4) Planning, production, publication and sale of books,
educational materials and software related tolanguage learning(5) Marketing research and development of goods,
training courses, and educational systems(6) Contract clerical services such as reception,
management of medical records, and medical fee
claims at medical institutions, etc.
(7) Business related to information processing andprovision through computer, and its operation
training(8) Operation, maintenance, development and sale ofcomputer systems and software(2) (Unchanged)(3) (Unchanged)(4) (Unchanged)(5) (Unchanged)(6) (Unchanged)(7) (Unchanged)(8) (Unchanged)

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Current Articles of Incorporation
Proposed Amendments(9) Services for preparation of reports using a(9) (Unchanged)
voice-recognition system(10) Consulting services pertaining to management of(10) (Unchanged)
medical institutions(11) Worker dispatch services(11) (Unchanged)(12) Contract services for clinical clerk and works at(12) (Unchanged)
medical institutions, etc.
(13) Contract services for inspection, maintenance, repair, (13) (Unchanged)
and storage of specially controlled medical devices,
as well as management, disinfection, andsterilization of medical equipment at medical
institutions, etc.
(14) Prenatal/postnatal care business(14) (Unchanged)(15) Consulting services related to operation and training (15) (Unchanged)
for prenatal/postnatal care business(16) Business related to provisions and operation of(16) (Unchanged)
public facilities, etc. based on Act on Promotion ofPrivate Finance Initiative (PFI Act)
(17) (Unchanged)(17) Sale and home delivery of foods, beverages,
clothing, everyday sundries, drugs and medicines,
quasi drugs, nursery items, childcare items, housing
equipment, kitchen equipment, as well as sale, homedelivery, rental and import/export of medical aidsand equipment, welfare equipment, nursing care
items, medical goods, sanitary goods, rehabilitationequipment, exercise equipment and goods(18) Management of pharmacies, and consulting services (18) (Unchanged)
pertaining to such management(19) Research and development, cultivation, and sale of (19) (Unchanged)
flowers, ornamental plants and seedlings(20) Meal providing services and catering services(20) (Unchanged)(21) Induction training business for long-term care staffers(Deleted)
based on the Long-Term Care Insurance Act(22) Practical training correspondence course of certified(Deleted)care worker training institute based on the Certified
Social Workers and Certified Care Workers Act(23) Home-visit nursing based on the Health Insurance(21) (Unchanged)Act(24) (i) Designated in-home long-term care supports (22) (i)(Unchanged)
based on the Long-Term Care Insurance Act(ii) (Unchanged)(ii) The following in-home long-term careservices based on the Long-Term Care
Insurance Act(a) Home-visit service(b) Home-visit bathing service(c) Home-visit nursing(d) Outpatient day long-term care(e) Short-term admission for daily life long-term
care(f) Daily life long-term care admitted to specified
facilities(g) Rental of equipment for long-term carecovered by public aid(h) Sale of specified equipment covered by publicaid(i) Management and guidance of in-homemedical service(iii) Community-based services based on the(iii) (Unchanged)
Long-Term Care Insurance Act

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Current Articles of Incorporation(a) Home-visit at night for long-term care(b) Outpatient long-term care for dementia
patients(c) Multifunctional long-term care in small sizegroup homes(d) Communal daily long-term care for dementia
patients(e) Daily life long-term care for persons admitted
to community-based specified facilities(f) Combined services(g) Regular and as-needed home-visit for
long-term care and nursing care(iv) Preventive long-term care services based on
the Long-Term Care Insurance Act(a) Home-visit service for preventive long-term
care(b) Home-visit bathing service for preventive
long-term care(c) Home-visit nursing service for preventive
long-term care(d) Outpatient preventive long-term care(e) Short-term stay for daily preventive long-term
care(f) Daily preventive long-term care admitted to
specified facilities(g) Rental of equipment for preventive long-termcare covered by public aid(h) Sale of specified equipment for preventive
long-term care covered by public aid(i) Management and guidance of in-homemedical service for preventive long-term care(v) Preventive long-term care supports based on
the Long-Term Care Insurance Act(vi) Community-based preventive services oflong-term care based on the Long-Term Care
Insurance Act(a) Preventive long-term care for dementia
outpatients(b) Multifunctional preventive long-term care insmall group homes(c) Preventive long-term care for dementia incommunal living(vii) Community supports based on the Long-TermCare Insurance Act(viii) Home modification for in-home long-term
care
(New)

(a)
(b)

Proposed Amendments(Unchanged)(Unchanged)(c)(Unchanged)(d)(Unchanged)(e)(Unchanged)(f)Multifunctional long-term care in a small
group home with nursing care service(g)(Unchanged)(iv)(Unchanged)(v)(Unchanged)(vi)(Unchanged)(vii) (Unchanged)(viii) (Unchanged)(ix)

Operation and development/management offacilities for businesses stated above(23) (Unchanged)(25) Consultation supports based on the Comprehensive
Supports for Daily Lives and Social Lives of Persons
with Disabilities Act(26) Transportation supports based on the Comprehensive (24) (Unchanged)
Supports for Daily Lives and Social Lives of Persons
with Disabilities Act(27) Other community life supports based on the(25) (Unchanged)
Comprehensive Supports for Daily Lives and Social
Lives of Persons with Disabilities Act(28) Welfare service for persons with disabilities based on (26) (Unchanged)
the Comprehensive Supports for Daily Lives andSocial Lives of Persons with Disabilities Act

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(TRANSLATION FOR REFERENCE PURPOSE ONLY)

Current Articles of Incorporation
Proposed Amendments(29) Services and supports to prevent physical inability of (27) (Unchanged)
the elderly(30) Assistance to persons with disabilities and the(28) (Unchanged)
elderly(31) In-home long-term care services not covered by the (29) (Unchanged)
Long-Term Care Insurance Act(32) Management of fee-based homes for the elderly, care (30) (Unchanged)
houses, and houses for the elderly(33) Operation and development/management of facilities (31) (Unchanged)
for businesses stated above(34) Consulting services related to operation and training (32) (Unchanged)
for care business(35) Consulting services related to operation and training (33) (Unchanged)
for health care business(36) Fee-based employment placement service(34) (Unchanged)(37) Goods purchasing and housekeeping services(35) Goods purchasing(New)(36) Life supporting services and private-expense carebusiness(38) Management of and management guidance for(37) Operation of child and child-raising services based
day-care centers and nurseries
on the Child Welfare Act, the Social Welfare Act, theChild and Child Care Support Act and other relevantlaws and regulations(New)(i) Operation of authorized day-care centers(New)(ii) Small-scale childcare business(New)(iii) Family day-care business(New)(iv) Childcare business on business facilities(New)(v) Operation of day-care centers on businessfacilities(New)(vi) Operation of day-care centers at hospitals(New)(vii) In-home childcare business(New)(viii) Operation of children’s clubs for after-school
activities(New)(ix) Child development services(New)(x) Operation of child-raising support bases related toother than those stated above(New)(38) Operation and development/management of facilities
for businesses stated above(39) Contract childcare services for infants and children(Deleted)(40) Contract child development services(Deleted)(41) Baby-sitter dispatch services(39) (Unchanged)(42) Consulting services related to operation and training (40) (Unchanged)
for childcare business(New)(41) Sale of goods related to child-raising for thechildcare business(43) General construction work(42) (Unchanged)(44) Antique trade(43) (Unchanged)(45) Sale, rental, and dry disinfection of bedding(44) (Unchanged)(46) Advertising agency(45) (Unchanged)(47) Office administration services including reception(46) (Unchanged)
and information service(48) Agent and mediation of clerical work for medical(47) (Unchanged)
checkup visit(49) Mail-order business(48) (Unchanged)(50) Research and development, and manufacturing of(49) (Unchanged)
welfare equipment and nursing items(51) Hotel(50) (Unchanged)(52) Eating and drinking place(51) (Unchanged)(53) Travel agency(52) (Unchanged)

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Current Articles of Incorporation(54) Consulting services for overseas study,
provision/introduction of international destination
and agency for procedures of overseas study(55) Operation and management of tourist facilities(56) Non-life insurance agent(57) Business and activities to promote the use of service
dogs and therapy dogs
(New)

Proposed Amendments(53) (Unchanged)(54) (Unchanged)(55) (Unchanged)(56) (Unchanged)(57) Operation and development/management of facilities
for businesses stated above(58) (Unchanged)(59) (Unchanged)(60) (Unchanged)(61) (Unchanged)(58) Breeding and sales of pet dogs(59) Planning, production and sales of pet supplies(60) Franchise business(61) Solicitation of membership stores under franchisesystem and managerial instruction for membershipcompanies
(New)
(New)
(New)
(New)

(62) Production of websites(63) Various notification services(64) Call center services(65) The following service businesses using
telecommunications:(i) Monitoring and supporting services for the elderly(ii) Life-supporting services for the elderly(66) Sale of alcoholic drinks(67) Consulting services for the sale of welfare
equipment, nursery-care items, and other goods(68) Export and import of therapy dogs(69) Consulting services for the housekeeping business(70) Development and operation of prenatal/postnatal
care training courses and prenatal/postnatal careservice business(71) (Unchanged)

(New)
(New)
(New)
(New)
(New)
(New)
(New)

(62) All services incidental and related to each item
above

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Proposal 3.

Election of Four (4) Directors

To strengthen the management structure, the election of four (4) new Directors is proposed. The terms of officeof the newly elected Directors shall continue until the expiration of the terms of office of the other Directors
currently in office, in accordance with the Articles of Incorporation of the Company.
The candidates for Directors are as follows:
Candidate
NumberName(Date of birth)

Career summary, and position and responsibility at the Company(Significant concurrent positions outside the Company)
December 1997
December 2005

1*

Takayuki Masuda(April 26, 1965)

April

2006

April

2008

June
April

2008
2011

December 2011
March
April

2012
2015

May

2015

Joined Healthy Life Service Co., Ltd. (merged byabsorption-type merger with the Company in July
1999)
Deputy General Manager of Business Department of
Business Management Division
General Manager of Corporate Planning Office ofCorporate Planning Division
Division Director of Corporate Planning Division andGeneral Manager of Corporate Planning OfficeDirector
Managing Director and Division Director of
Education Division
Executive Vice President and Representative Directorof GABA Corporation
President and COO and CEO of GABA Corporation
Senior Executive Officer and Chief Operating Officer(COO) of China Business (to present)
Chairman, President and CEO of Nichii Beijing Co.,
Ltd. (to present)

8

Number ofCompany
shares held

4,100
shares(TRANSLATION FOR REFERENCE PURPOSE ONLY)

Candidate
NumberName(Date of birth)

Career summary, and position and responsibility at the Company(Significant concurrent positions outside the Company)
December 1992
April
May

1999
2001

April

2004

April

2006

October

2006

April

2008

October

2008

October2009

Number ofCompany
shares held

Joined the Company
Acting Manager of Sales Section of Kansai
Division
General Manager of Okayama BranchManager of Sales Section of No.3 General
Headquarters
Senior Manager of Sales and Marketing of Kinki
OfficeExecutive Officer and General Manager of Kobe
Port Island Center
Executive Officer and Deputy Division Director ofInformation & Strategy Division

2*

Yasuhiro Hiraoka(December 5, 1961)
April

2011

October

2011

April

2012

July

2013

October

2014

April

2015

Executive Officer and Deputy Division Director of
Sales Development Division of Medical Support
Business Headquarters and General Manager ofKobe Port Island Center
Executive Officer and General Manager of Kinki
No.1 Sales Headquarters
Executive Officer and General Manager of Kinki
Sales Promotion Department of Sales andMarketing Division of Medical Support Business
Headquarters
Executive Officer and General Manager of WestJapan Sales and Marketing Department of Medical
Support Business Headquarters
Executive Officer and General Manager of Kinki
Sales Promotion Department of Priority Area
Promotion Division of Medical Support Business
Headquarters
Executive Officer, Division Director of West Japan
Sales and Marketing Division and General Manager
of Kinki Sales Headquarters
Executive Officer, Division Director of West Japan
Sales and Marketing Division of Sales
Headquarters and General Manager of Kinki Sales
Headquarters
Executive Officer and General Manager of Kinki
Sales Department of Sales and Marketing Divisionof Business Headquarters

Chief of First Business Section of West Japan
Office (to present)

9704
shares(TRANSLATION FOR REFERENCE PURPOSE ONLY)

Candidate
NumberName(Date of birth)

Career summary, and position and responsibility at the Company(Significant concurrent positions outside the Company)
October

2010

April

2011

October

2011

December 2011

3*

Makoto Nakamura(May 26, 1962)

January

2012

April

2012

December 20124*

Yuji Sugimoto(July 11, 1969)

October

2014

April

2015

April
July
June

1992
2005
2006

July

2011

July

2012

July

2014

July

2014

Joined the Company
Acting General Manager of Public Relations
Department of Public Relations Division
Acting General Manager of IR Department ofCorporate Planning Division
General Manager of IR Department of Corporate
Planning Division
General Manager of IR Department of Corporate
Planning Division and Acting General Manager ofCorporate Planning Office
General Manager of Public Relations Departmentof Corporate Planning Division
General Manager of Public Relations Department
and General Manager of Corporate Planning Officeof Corporate Planning Division
General Manager of Corporate Planning Office ofCorporate Planning Division
General Manager of Americas and Oceania
Business Department of Global Business Divisionof Business Headquarters
Acting Division Director of Education Division ofBusiness Headquarters and General Manager of
SELC Department (to present)
Joined Mitsubishi Corporation
Joined RHJ International Japan, Inc.
Joined Bain Capital Asia, LLC
Managing Director (to present)
Director of BELLSYSTEM24 Holdings, Inc. (topresent)
Director of Jupiter Shop Channel Co., Ltd. (topresent)
Director, Audit Committee Member of
MACROMILL, INC. (to present)
Director of SKYLARK CO., LTD. (to present)

Number ofCompany
shares held--

Notes: 1. Special interests between the Company and any of the candidates of Directors
There are no special interests between the Company and any of the candidates.
2. Mr. Yuji Sugimoto is a candidate for Outside Board Member.
3. Mr. Yuji Sugimoto possesses the experience of direct involvement in the management of companies, and up until now, he
has a track record of many achievements, including investment in many Japanese companies and provision ofmanagement support. It is judged that with his extensive experience and broad knowledge relating to corporate growth
gained through his participation in business at a global level, he would appropriately execute his duties as Outside Board
Member to the benefit of the Company, which is forging ahead with globalization, and we propose his election.
4. In the case that Mr. Yuji Sugimoto is elected, in accordance with Article 427, Paragraph 1 of the Companies Act, theCompany is planning to enter into an agreement with him to limit his liability for damages stipulated in Article 423,
Paragraph 1 of the Companies Act, up to the minimum liability amount specified under Article 425, Paragraph 1 of theCompanies Act.
5. In the case where Mr. Yuji Sugimoto is elected, the Company plans to appoint him as Independent Director as provided
for in the regulations of Tokyo Stock Exchange, Inc. and notify such to the Exchange.
6. An asterisk (*) indicates that the person is a new candidate for Director.

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(TRANSLATION FOR REFERENCE PURPOSE ONLY)

Proposal 4.

Election of Three (3) Auditors

The terms of office of three (3) Auditors will expire at the conclusion of this meeting. Accordingly, the electionof three (3) Auditors is proposed.
The Board of Auditors has given its approval of this proposal.
The candidates for Auditors are as follows:
Candidate
NumberName(Date of birth)1

Shuji Otomaru(January 14, 1951)

2

Shuji Oshima(December 27,
1949)

*3

Ippei Matsuno(June 6, 1961)

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

1969

March
AugustAugustJune
March
October

1999
2008
2010
2011
1985
1987

November 1987
March
2004
June
2004
February 2008
June

2014

April
March

1984
1993

Joined Metropolitan Police Department as
Police Officer
Superintendent, Metropolitan Police Department
Senior Superintendent
Chief superintendent
Full time Auditor of the Company (to present)
Registered as Certified Public Accountant
Established Tax and Accounting Office (topresent)
Registered as Certified Tax Accountant
Tentative Auditor of the Company
Auditor of the Company (to present)
Outside Audit & Supervisory Board Member for
Kyowa Engineering Consultants Co., Ltd. (topresent)
Outside Corporate Auditor for Medikit Co., Ltd.
(to present)
Joined the Tokai Bank, Ltd.
Registered as Certified Tax Accountant
Established Tax and Accounting Office (topresent)

Number ofCompany
shares held

-

-

-

Notes: 1. There are no special interests between the Company and any of the candidates.
2. Mr. Shuji Otomaru, Mr. Shuji Oshima and Mr. Ippei Matsuno are candidates for Outside Corporate Auditors.
3. Reasons for election of Outside Corporate Auditors
We would like Mr. Shuji Otomaru to use his knowledge and experience as a former chief superintendent in auditing theCompany and propose his election as Outside Corporate Auditor.
Mr. Shuji Oshima is a certified public accountant and Mr. Ippei Matsuno is a licensed tax accountant; therefore, it isjudged that they would appropriately execute their duties as Outside Corporate Auditors and we would propose them ascandidates for Outside Corporate Auditors.
4. Reasons why it was judged that the candidates would appropriately execute their duties as Outside Corporate Auditors
While having not been directly involved in corporate management, Mr. Shuji Otomaru has sufficient insight into corporate
auditing based on sophisticated expertise and abundant experience accumulated in a consistent career at the Metropolitan
Police Department. Therefore, it is judged that he would appropriately execute his duty as Outside Corporate Auditor.
Mr. Shuji Oshima and Mr. Ippei Matsuno have not been involved in corporate management directly; however, Mr.
Oshima is well informed about corporate financial and legal affairs as a certified public accountant and Mr. Matsuno isalso well versed in corporate financial and legal affairs as a licensed tax accountant, and they have sufficient knowledge
to supervise corporate management; therefore, it is judged that they would appropriately execute their duties as Outside
Corporate Auditors.
5. Agreements limiting liabilities of Outside Corporate Auditors
In accordance with Article 427, Paragraph 1 of the Companies Act, the Company is planning to enter into agreementswith Outside Corporate Auditors to limit his/her liability for damages stipulated in Article 423, Paragraph 1 of theCompanies Act, up to the minimum liability amount specified under Article 425, Paragraph 1 of the Companies Act.
6. Years served as Outside Corporate Auditor since appointment(1) Mr. Shuji Otomaru will have served as an Outside Corporate Auditor for four (4) years as of the end of this Annual
Shareholders Meeting.
(2) Mr. Shuji Oshima will have served as an Outside Corporate Auditor for eleven (11) years as of the end of this Annual
Shareholders Meeting.
7. The Company reported Mr. Shuji Oshima as an Independent Auditor pursuant to the regulations of the Tokyo Stock
Exchange. If his reappointment is approved, he will continue to be an Independent Auditor of the Company.
8. In the case where Mr. Ippei Matsuno is elected, the Company plans to appoint him as Independent Auditor as provided
for in the regulations of Tokyo Stock Exchange, Inc. and notify such to the Exchange.
9. An asterisk (*) indicates that the person is a new candidate for Auditor.

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(TRANSLATION FOR REFERENCE PURPOSE ONLY)

Proposal 5.

Granting of Retirement Benefits to Retiring Director

It is proposed that retirement benefits be granted to Mr. Kazuyoshi Yaji, who resigned from the position of
Executive Vice President of the Company on March 31, 2015 in order to reward him for his services while inoffice, in accordance with the prescribed standards of the Company.
It is also proposed that the determination as to the specific amount, timing and method of payment be left to thedecision of the Board of Directors.
The careers of the retiring Director are summarized as follows:
Name

Mr. Kazuyoshi Yaji

Proposal 6.

January
May
April
May
March

1990
1997
2001
2003
2015

Career summary
Managing Director
Senior Managing Director
Vice President
Executive Vice President
Retired from Executive Vice President

Termination Payment of Retirement Benefits Attendant upon Abolition of Officers’
Retirement Benefit System

The Company resolved at a meeting of the Board of Directors held on May 14, 2015 to abolish the retirement
benefit system as of the end of this General Meeting.
Following the resolution, the Company would like to make termination payments of retirement benefits to three(3) Directors, covering their terms of office as officers, to reward them for their services up to the end of this
General Meeting.
Payment to Mr. Hiroaki Tsujimoto will be made when he retires from his office at the Company.
With regard to Ms. Kyoko Kano and Mr. Fumio Nakabayashi, payment will be quickly made after the end of
this General Meeting following this abolition of the officers’ retirement benefit system and the accompanying
abolition of the Officer’s Retirement Benefit System Rules of the Company. It is proposed that thedetermination as to the specific amount and method of payment be left to the decision of the Board of Directors.
The careers of the three Directors are summarized as follows:
Name

Mr. Hiroaki Tsujimoto
Ms. Kyoko Kano
Mr. Fumio Nakabayashi

Proposal 7.

June
April
January
June
AugustJanuary
June
June

2012
2015
1990
2004
1973
1990
1996
1998

Career summary
Director
Retired from Director
Managing Director
Retired from Managing Director
Director
Vice President
Director and Adviser
Retired from Director and Advisor

Payment of Officers’ Bonuses

It is proposed that bonuses of 39,700 thousand yen in total be paid to fifteen (15) Directors (including one (1)Outside Board Member) and three (3) Auditors who have been in service during the year under review (37,000
thousand yen for Directors and 2,700 thousand yen for Auditors), in view of the amounts paid in the past, theoperating results of this business year, and other circumstances.

12

(TRANSLATION FOR REFERENCE PURPOSE ONLY)

Proposal 8.

Introduction of Stock Options for Directors and Decision on Specific Details

The annual remuneration for Directors of the Company was set at within 200 million yen by the resolution of
the extraordinary shareholders meeting held on January 20, 1992 (which includes directors’ bonuses, but does
not include employee salaries of Directors who concurrently serve as employees).
It was resolved at the meeting of the Board of Directors held on May 14, 2015 to abolish the retirement benefit
system for officers as of the end of this Shareholders Meeting as part of the revision of the remuneration systemfor officers. For remuneration of Directors in the future, the Company will introduce long-term businessperformance-linked remuneration linked to corporate value of the Company.
Accordingly, it is proposed that stock acquisition rights be granted to Directors of the Company (excluding
Outside Board Members) as stock options, with a view to having them share benefits and risks concerning
fluctuations in stock prices with shareholders and further enhancing their motivation to contribute to long-term
improvements of earnings and increase of corporate value.
Details of stock options shall be “ordinary-type stock options” (issuance of stock acquisition rights including
payment settlement for the retirement benefit system for officers),” which is described in 1. below, and “share
remuneration-type stock options” (the subscription amount to be paid upon the exercise of rights is set at one (1)yen), which is described in 2. below.
The ordinary-type stock options shall be issued only during one year from the end of this Shareholders Meeting
within 475,207 thousand yen a year, separately from remuneration, etc. mentioned above.
The share remuneration-type stock options shall be issued within 41,652 thousand yen a year, separately fromthe remuneration, etc. mentioned above.
With regard to the granting of stock options, the same amount as the subscription amount to be paid shall be
granted to Directors who have been allotted stock acquisition rights, enabling them to acquire stock acquisitionrights by offsetting the said remuneration credits and the subscription amount to be paid for the said stockacquisition rights. The amount of remuneration, etc. of stock options shall be the amount obtained bymultiplying the fair price per stock acquisition right, calculated on the day stock acquisition rights are allotted,
by the total number of stock acquisition rights to be allotted.
The number of Directors, which stands at fifteen (15) (including one (1) Outside Board Member) at present, will
be seventeen (17) (including two (2) Outside Board Members) if the Proposal 3 is approved as proposed.
The specific details of stock options are as follows.
1. Details of Stock Acquisition Rights as ordinary-type stock options (issuance of stock acquisition rights
including payment settlement for the retirement benefit system for officers)(1) Class and number of shares underlying Stock Acquisition Rights
The class of share underlying Stock Acquisition Rights shall be common shares of the Company, and thenumber of shares underlying each Stock Acquisition Right (hereinafter referred to as the “Number ofGranted Shares”) shall be one (1).
However, when the Company conducts a share split of its common shares (including allotment of its
common shares without a contribution. Hereinafter the same shall apply to descriptions of a share split) ora share consolidation after the date of allotting Stock Acquisition Rights (hereinafter referred to as the“Allotment Date”), the Number of Granted Shares concerning Stock Acquisition Rights that have not been
exercised as of the said share split or share consolidation shall be adjusted using the following formula.
Post-adjustment Number ofGranted Shares=

Pre-adjustment Number ofGranted Shares×

Ratio of share split orconsolidation

In addition to the above, in case any compelling reason for adjusting the Number of Granted Shares occurs,
the Company may adjust the Number of Granted Shares, which is considered to be necessary, at a meetingof the Board of Directors of the Company.
Any fraction less than one whole share arising from the aforementioned adjustment shall be rounded down
to the nearest one whole share.
(2) Total number of Stock Acquisition Rights
The upper limit of Stock Acquisition Rights to be granted shall be 1,338,600 shares, and Stock Acquisition
Rights shall be allotted within one year from the day of the 43rd Annual Shareholders Meeting.
(3) Subscription amount to be paid for Stock Acquisition Rights
The subscription amount to be paid for each Stock Acquisition Right shall be determined by the Board of
Directors based on the fair value of Stock Acquisition Rights, which is calculated using fair calculation
formulas such as the Black-Scholes model.
Individuals who have been allotted Stock Acquisition Rights (hereinafter referred to as “Stock Acquisition
Right Holder”) shall not be required to pay a monetary consideration because the said subscription amount13

(TRANSLATION FOR REFERENCE PURPOSE ONLY)

to be paid shall be offset by their remuneration credits against the Company.
(4) Amount of property to be provided as a contribution upon the exercise of Stock Acquisition Rights
The amount of property to be provided as a contribution upon the exercise of each Stock Acquisition Right
shall be the amount calculated by multiplying the subscription amount to be paid per share that may be
granted upon the exercise of Stock Acquisition Rights (hereinafter referred to as the “Exercise Price”) by
the Number of Granted Shares pertaining to the said Stock Acquisition Rights.
The Exercise Price shall be the closing price of common shares in the Company on the Tokyo Stock
Exchange on the Allotment Date, and any fraction less than one yen arising therefrom shall be rounded
down to the nearest one yen. In case any of the following occurs after the Allotment Date, the Exercise
Price shall be adjusted according to the respective case.
i. If the Company conducts any share split or share consolidation for its common shares after the
Allotment Date, the Exercise Price shall be adjusted in accordance with the formula shown below, andany fraction less than one yen arising therefrom shall be rounded up to the nearest one yen.
Post-adjustment Exercise Price=

Pre-adjustment
Exercise Price×1
Ratio of share split or consolidation

ii. If the Company issues new common shares or disposes of its treasury shares concerning its commonshares at a price that is lower than the market price at the time (excluding the case where issuance of
new shares or disposal of treasury shares is made pursuant to the exercise of Stock Acquisition Rights
and the case treasury shares are transferred through share exchanges), the Exercise Price shall be
adjusted in accordance with the formula shown below, and any fraction less than one yen arising
therefrom shall be rounded up to the nearest one yen.

Postadjustment Exercise
Price

Pre= adjustment ×
Exercise Price

Total number
of issued+
sharesAmount ofsubscription
money pershare
Market price per share

Number of newly×
issued shares

Total number of issued
shares+Number of newly issued
sharesIn the above formula, “Total number of issued shares” denotes the number obtained by subtracting thenumber of shares of treasury common share owned by the Company from the number of shares ofoutstanding common shares. If any disposal of treasury shares takes place, the formula shall beapplied by replacing “Number of newly issued shares” with “Number of disposed treasury shares,”and “Amount to be paid per share” with “Amount to be disposed per share.”iii. If the Company merges with another company, the Company conducts a company split, or the
Exercise Price needs to be adjusted in accordance with these cases, the Exercise Price shall be
adjusted to the extent that is necessary and reasonable.
(5) Exercisable period for Stock Acquisition Rights
The period shall be decided by the Board of Directors of the Company within the scope of 30 years fromthe day following the Allotment Date of Stock Acquisition Rights.
(6) Conditions for exercising Stock Acquisition Rights
If a Stock Acquisition Right Holder loses both the offices of director of the Company and its subsidiaries,
Stock Acquisition Rights he or she holds may be exercised only collectively for a period of ten (10) days (ifthe 10th day falls on a holiday, the following business day shall be included) from the day after the date of
the said loss. Other conditions for exercising Stock Acquisition Rights shall be specified by a meeting of
the Board of Directors at which essential points concerning the offering of stock acquisition rights will bedecided.
(7) Restriction on acquisition of Stock Acquisition Rights by assignment
Acquisition of the Stock Acquisition Rights by assignment shall be subject to the approval of the Board of
Directors of the Company.
(8) Other details of Stock Acquisition Rights
Other details of Stock Acquisition Rights shall be specified at a meeting of the Board of Directors at which
essential points concerning the offering of stock acquisition rights will be decided.

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(TRANSLATION FOR REFERENCE PURPOSE ONLY)

2. Details of Stock Acquisition Rights as share remuneration-type stock options(1) Class and number of shares underlying Stock Acquisition Rights
The class of share underlying Stock Acquisition Rights shall be common shares of the Company and thenumber of shares underlying each Stock Acquisition Right (hereinafter referred to as the “Number ofGranted Shares”) shall be one (1).
However, when the Company conducts a share split of its common shares (including allotment of its
common shares without a contribution. Hereinafter the same shall apply to descriptions of share split) or ashare consolidation after the date of allotting Stock Acquisition Rights (hereinafter referred to as the“Offering Date”), the Number of Granted Shares concerning Stock Acquisition Rights that have not been
exercised as of the said share split or share consolidation shall be adjusted using the following formula.
Post-adjustment Number ofGranted Shares=

Pre-adjustment Number ofGranted Shares×

Ratio of share split orconsolidation

In addition to the above, in case any compelling reason for adjusting the Number of Granted Shares occurs,
the Company may adjust the Number of Granted Shares, which is considered to be necessary, at a meetingof the Board of Directors of the Company.
Any fraction less than one whole share arising from the aforementioned adjustment shall be rounded down
to the nearest one whole share.
(2) Total number of Stock Acquisition Rights
The upper limit of Stock Acquisition Rights to be allotted within one year from the day of the Annual
Shareholders Meeting pertaining to each fiscal year shall be 45,000 shares.
(3) Subscription amount to be paid for Stock Acquisition Rights
The subscription amount to be paid for each Stock Acquisition Right shall be determined by the Board of
Directors based on the fair value of Stock Acquisition Rights, which is calculated using fair calculation
formulas such as the Black-Scholes model.
Individuals who have been allotted Stock Acquisition Rights (hereinafter referred to as “Stock Acquisition
Right Holder”) shall not be required to pay a monetary consideration because the said subscription amountto be paid shall be offset by their remuneration credits against the Company.
(4) Amount of property to be provided as a contribution upon the exercise of Stock Acquisition Rights
The amount of property to be provided as a contribution upon the exercise of each Stock Acquisition Right
shall be the amount calculated by multiplying the exercise price to be paid per share, which is set at one (1)yen, by the Number of Granted Shares.
(5) Exercisable period for Stock Acquisition Rights
The period shall be decided by the Board of Directors of the Company within the scope of 30 years fromthe day following the Allotment Date of Stock Acquisition Rights.
(6) Conditions for exercising Stock Acquisition Rights
If a Stock Acquisition Right Holder loses both the offices of director of the Company and its subsidiaries,
Stock Acquisition Rights he or she holds may be exercised only collectively for a period of ten (10) days (ifthe 10th day falls on a holiday, the following business day shall be included) from the day after the date of
the said loss. Other conditions for exercising Stock Acquisition Rights shall be specified by a meeting of
the Board of Directors at which essential points concerning the offering of stock acquisition rights will bedecided.
(7) Restriction on acquisition of Stock Acquisition Rights by assignment
Acquisition of the Stock Acquisition Rights by assignment shall be subject to the approval of the Board of
Directors of the Company.
(8) Other details of Stock Acquisition Rights
Other details of Stock Acquisition Rights shall be specified by a meeting of the Board of Directors at which
essential points concerning the offering of stock acquisition rights will be decided.
(For reference)
The Company plans to issue stock acquisition rights as share remuneration-type stock options of the samedetails as described in 1. and 2. above, to Directors of subsidiaries of the Company based on a resolution by the
Board of Directors after the end of this Annual Shareholders Meeting.

15