Make The World
More Sustainable[Provisional Translation Only]
This English translation of the original Japanese document is provided solely for information purposes.
Should there be any discrepancies between this translation and the Japanese original, the latter shall prevail.

September 14, 2020
IssuerIchigo Hotel REIT Investment Corporation (“Ichigo Hotel,” 3463)
1-1-1 Uchisaiwaicho, Chiyoda-ku, Tokyo
Representative: Osamu Miyashita, Executive Director
www.ichigo hotel.co.jp/english
Asset Management Company
Ichigo Investment Advisors Co., Ltd.
Representative: Hiroshi Iwai, President
Inquiries: Hidehito Iwasaka, Head of Ichigo Hotel
Tel: +81-3-3502-4892

Proposed Amendments to Articles of Incorporationand Election of Directors
Ichigo Hotel’s Board of Directors has decided to submit the following proposals toamend its Articles of Incorporation (AOI) and elect Directors at its October 24, 2020
Shareholder Meeting. The amended AOI and the election of Directors will become
effective upon shareholder approval at the Shareholder Meeting.
1. Purpose of the Proposed Amendments to the AOI
a. Pursuant to Article 93, Clause 1 of the Act on Investment Trusts and Investment
Corporations, Ichigo Hotel has a “Deemed Approval” provision in Article 15 of its
Articles of Incorporation (AOI), under which if a shareholder does not vote at ashareholder meeting, the shareholder will be deemed to have approved proposals
submitted at the shareholder meeting (excluding cases where there are competing
proposals with respect to the same agenda item).
However, because it is difficult to submit alternative proposals under a Deemed
Approval system, and proposals that significantly impact shareholders and theInvestment Corporation’s governance structure or that may pose conflicts of interests
between shareholders and Ichigo Hotel’s directors and asset management company may
be approved under a Deemed Approval system without sufficient shareholder
deliberation and support from a majority of shareholders, and given the current debatewith respect to shareholder proposals by minority shareholders, Ichigo Hotel proposes
amendments to limit the scope of the Deemed Approval system such that it will not
apply to certain proposals that have been clearly opposed in advance by minority
shareholders or the Investment Corporation.
Such proposals include: 1) the appointment or dismissal of the Executive Director orSupervisory Directors; 2) the execution or termination of asset management agreementswith the asset management company; 3) the dissolution of the Investment Corporation;4) reverse share splits; 5) the waiving of liability of the Executive Director, Supervisory
Directors, or External Auditors; and 6) the approval of absorption-type andconsolidation-type (new entity) mergers.
To ensure fairness and transparency in the application of these rules, both minority
shareholders and the Investment Corporation will be able to register opposition toshareholder meeting proposals. Minority shareholders can submit a notice of opposition
to the Investment Corporation (or if the convener of the shareholder meeting is not the1

Executive Director or Supervisory Directors, then to the Investment Corporation and theshareholder meeting convener), and the Investment Corporation can notify its
opposition in shareholder meeting materials or on its website.
In summary, Ichigo Hotel thus proposes to:
Define exceptions to the Deemed Approval system, and amend the Deemed Approvalsystem rules to reflect the necessary changes. (Article 15)
b. Amend the current no fixed fee, performance-fee only asset management structure tofurther drive shareholder value creation (effective date February 1, 2021, the beginningof Ichigo Hotel’s July 2021 fiscal period).
(Article 41 and Attachments).
Specifically, Ichigo Hotel proposes to:(1) Calculate the NOI & Dividend Performance Fee based on Dividend payments
instead of Net Income to more strongly align with shareholder interests.
(2) Introduce a “Gains on Merger Performance Fee” of 15% directly linked toshareholder value creation. (The fee has a high-water mark, such that it will only be
paid if the merger share price is higher than net assets per share.)(3) Introduce a “Gains on REIT TOB Sale Performance Fee” of 15% directly linked toshareholder value creation. (The fee has a high-water mark, such that it will only be
paid if the merger share price is higher than net assets per share.)Proposed Amendments to Asset Management Fee Structure
Fee

AM Fee Structure

BeforeNOI & Dividend
Performance Fee

DPS * NOI * Fee

Gains on Sale
Performance Fee

Gains on Sale * Fee

After0.0036% 0.0036%
Unchanged

Earnings-Based

15.0%

15.0%

–

15.0%

Gains on Merger per Share
Gains on Merger
Performance Fee(Merger Price － Net Assets
per Share) * No. of Shares
Outstanding * Fee

New

Gains on REIT TOB Sale per
Gains on REITTOB Sale
Performance Fee

Share (TOB Price － Net
Assets per Share) * No. of
Shares Purchased in TOB * Fee

2

–

15.0%

Proposed Amendments to Articles of Incorporation (AOI)(Amended areas underlined)
Current

After Amendment

Article 15 Deemed Approval

Article 15 Deemed Approval

1. – 2. (omitted)

1. – 2. (no change)(NEW)

3. Clause 2 above is not applicable toproposals regarding the following if (i) aminority shareholder owning at least 1% of
total shares outstanding for at least six
consecutive months submits a notice of
opposition to the Investment Corporation(or if the convener of the shareholder
meeting is not the Executive Director or a
Supervisory Director, then to theInvestment Corporation and the shareholder
meeting convener) within two weeks of theearlier of the date that the Investment
Corporation announces the proposals on its
website or the date the convener announces
the proposal; or (ii) the Investment
Corporation expresses opposition to the
proposals in shareholder meeting materials
or on its website.
(1) the appointment or dismissal of the
Executive Director or Supervisory
Directors;(2) the execution or termination of asset
management agreements with the AssetManagement Company;(3) the dissolution of the Investment
Corporation;(4) reverse share splits;(5) the waiving of the liability of the
Executive Director, Supervisory
Directors, or External Auditors; and(6) approval for absorption-type andconsolidation-type (new entity) mergers.

(NEW)

4. Clauses 1 and 2 above are not applicable toproposals regarding amendments to Article
15.

(NEW)

Supplement
Article 41 Effective Date of Amendments
The amendments in the Attachments will takeeffect on February 1, 2021. This Article shallbe deleted after the amendments take effect.

3

Attachments

Current

After Amendment
Attachments

1. NOI & Dividend Performance Fee

1. NOI & Dividend Performance Fee

The NOI & Dividend Performance Fee iscalculated by: 1) dividing the Investment
Corporation’s distributable earnings3 (before
the deduction of the NOI & Dividend
Performance Fee) in the relevant fiscal period
by total shares outstanding in the same period
to generate the Dividend per Share (DPS);
2) multiplying the DPS in 1) by Net Operating
Income (NOI), calculated as total rental
income minus total rent-related expenses(excluding depreciation and losses on disposalof fixed assets) of the relevant fiscal period;and 3) multiplying the amount in 2) by
0.0036%.

The NOI & Dividend Performance Fee iscalculated by: 1) dividing the Investment
Corporation’s distributable earnings3 (before
the deduction of the NOI & Dividend
Performance Fee) in the relevant fiscal period
by total shares outstanding in the same period
to generate the Dividend per Share (DPS);
2) multiplying the DPS in 1) by Net Operating
Income (NOI), calculated as total rental
income minus total rent-related expenses(excluding depreciation and losses on disposalof fixed assets) of the relevant fiscal period;and 3) multiplying the amount in 2) by
0.0036%.

NOI & Dividend Performance Fee = DPS(before the deduction of the NOI & Dividend
Performance Fee) * NOI * 0.0036%

NOI & Dividend Performance Fee = DPS(before the deduction of the NOI & Dividend
Performance Fee) * NOI * 0.0036%“DPS (before the deduction of the NOI &Dividend Performance Fee)” is the DPS as
approved by the Investment Corporation’s
Board of Directors. However, if the NOI &Dividend Performance Fee need be calculated
before calculating the DPS (i.e., if there arereserves, allowances, or other retained
amounts that would require doing so), it will
be calculated using a reasonably estimated
DPS in line with this provision’s objectives.
(No adjustment will be made to reconcile
differences between this calculated amountand the final amount, if any.)33Distributable earnings (before the deductionof the NOI & Dividend Performance Fee) is
pre-tax net income (before the deduction of
the NOI & Dividend Performance Fee andapplicable consumption taxes) calculated incompliance with generally accepted
accounting standards, and with the additionof losses carried forward, if any.

When the Investment Corporation holds
treasury shares during the relevant fiscal
period, the total number of shares outstanding
shall be reduced by the number of treasury
shares held; in the event that a stock split or a

Per the dividend policy specified in Article
37, distributable earnings are calculated as
pre-tax net income (before the deduction of
the NOI & Dividend Performance Fee andapplicable consumption taxes, and excluding
the portion of the dividend exceeding
earnings pursuant to Article 37, Clause 2 thatis treated as a return of capital for tax
purposes (excluding deemed dividends)),
plus any reversal of reserves and allowances,minus any reserves, allowances, and retained
amounts.

When the Investment Corporation holds
treasury shares during the relevant fiscal
period, the total number of shares outstanding
shall be reduced by the number of treasury
shares held; in the event that a stock split or a4Current
reverse stock split has been implemented, thetotal number of shares outstanding insubsequent periods shall be adjusted by theratio of the stock split or of the reverse stock
split.

After Amendment
reverse stock split has been implemented, thetotal number of shares outstanding insubsequent periods shall be adjusted by theratio of the stock split or of the reverse stock
split.

Payment shall be made within three months of Payment shall be made within three months ofthe end of the Investment Corporation’s
the end of the Investment Corporation’s
relevant fiscal period.
relevant fiscal period.
2. (omitted)

2. (no change)(NEW)

3. Gains on Merger Performance Fee
When the Investment Corporation merges
with another investment corporation (the“Merging Entity”), the Gains on Merger
Performance Fee shall be calculated bymultiplying the Gains per Share at the time of
the merger (as defined below) by the numberof shares outstanding and multiplying by
15%.
Gains on Merger Performance Fee = Gains per
Share (Merger Price per Share – Net Assets per
Share) * Number of Shares Outstanding * 15%
However, where the Gains per Share isnegative, the Gains on Merger PerformanceFee shall be zero.
The Gains on Merger Performance Fee arises
when the Investment Corporation merges withanother investment corporation either via a
new merged entity or absorption-type merger,
in response to a merger proposal from theother investment corporation (including cases
both where the Investment Corporation issurviving entity or the extinguished entity inan absorption-type merger). The Investment
Corporation’s Merger Price per Share is
calculated by multiplying the closing price ofthe Merging Entity on the day before themerger is approved at the Shareholder
Meeting by the merger ratio. “Net Assets per
Share at the time of the merger” refers to net
assets (book value) at the time the merger isapproved at the Shareholder Meeting divided
by the number of shares outstanding at thattime.
Note that the underlying philosophy of theGains on Merger Performance Fee is that it becalculated in recognition of the appraisedvalue of the real estate assets of the5Current

After Amendment
Investment Corporation used in thecalculation of the merger ratio at the time of
the merger. When the above (before deductionof the Gains on Merger Performance Fee)
exceeds the value of the real estate assets on
the Investment Corporation’s balance sheet atthe time of the merger, 15% of the excess
amount is deemed appropriate as a fee to the
Asset Management Company. The calculation
shall be made with due consideration of such
purpose.
The Gains on Merger Performance Fee willarise on the date the merger is approved at theshareholder meeting, and the payment dateshall be within one month of the merger date.

(NEW)

4. Gains on REIT TOB Sale Performance Fee
When the Investment Corporation is acquiredby a third party via a TOB, the Gains on REITTOB Sale Performance Fee shall becalculated by multiplying the Gains per Shareat the time of the TOB by the number ofshares purchased by the third-party via the
TOB and multiplying by 15%.
Gains on REIT TOB Sale Performance Fee =Gains per Share (TOB Price – Net Assets per
Share) * Number of Shares Purchased in TOB* 15%
However, where the Gains per Share isnegative, the Gains on REIT TOB Sale
Performance Fee shall be zero.
The Gains on REIT TOB Sale Performance
Fee arises when the Investment Corporation’sshares are acquired by a third party via a
TOB. “Net Assets per Share at the time of theacquisition” refers to net assets (book value)at the time the acquisition is approved at the
Shareholder Meeting divided by the numberof shares outstanding at that time.
The Gains on REIT TOB Sale Performance
Fee will arise on the date the acquisition isapproved at the shareholder meeting, and thepayment date shall be within one month of theacquisition date.

62. Election of Directors
Due to the expiration of the Directors’ current terms of office as of this Shareholder
Meeting, Ichigo Hotel’s Board of Directors is proposing the re-election of Executive
Director Osamu Miyashita and Supervisory Directors Masaru Iida and Satoko Suzuki.
To ensure the availability of the minimum number of Directors required by law, Ichigo
Hotel’s Board of Directors is also proposing the election of a new Alternative Executive
Director and a new Alternative Supervisory Director.
Career Summaries of Director Candidates
Title

Name
(Birth Date)

Career Summary, Positions, Responsibilities, andImportant Concurrent Positions

April 1974
March 1976
April 1984
December 1986
October 1991
December 1996
Executive
Director(Candidate)

Osamu Miyashita(June 13, 1949)

June 2000
June 2005
April 2011
June 2014
July 2014
July 2015

7

Joined Imperial Hotel, Ltd.
Sales Department, Imperial Hotel, Ltd.
HR Department, Imperial Hotel, Ltd.
Corporate Planning Department,
Imperial Hotel, Ltd.
Seconded to Imperial HotelEnterprises (Tsudanuma Crest Hotel)
Tenant Affairs Manager, Imperial
Hotel, Ltd.
Head of Real Estate Division, Imperial
Hotel, Ltd.
Director, Head of Real Estate Division,
Imperial Hotel, Ltd.
President and Representative Director,
Imperial Hotel Hire K.K.
Representative, Miyashita Associates
LLC (current)
Advisor, Endo Research Institute, Ltd.
(current)
Executive Director, Ichigo Hotel(current)TitleName(Birth Date)

Career Summary, Positions, Responsibilities, andImportant Concurrent Positions

April 1989
May 1993
April 2001
April 2008
December 2009
January 2010
June 2011
Supervisory
Director(Candidate)

Masaru Iida
(February 15, 1967)

July 2011
May 2013
March 2015
July 2015
August 2015
June 2016
February 2019
June 2019
April 2020
October 1996
September 2000
August 2005

Supervisory
Director(Candidate)July 2006
Satoko Suzuki(November 22, 1973)

September 2010
September 2012
July 2015
June 20198

Joined The Sumitomo Bank, Limited(Now Sumitomo Mitsui Banking
Corporation)
LL.M. degree, University ofPennsylvania Law School
Vice President Planning Dept.
Treasury Unit, Sumitomo Mitsui
Banking Corporation
J.D., Hitotsubashi University Schoolof Law
Qualified as Attorney at Law
Joined Masuda & Partners Law Office
External Corporate Auditor, DeNA
Co., Ltd.
Founded Iida Business Law Office(current)
External Director, Stats Investment
Management Co., Ltd.
External Corporate Auditor, Archaea
Energy Co., Ltd.
Supervisory Director, Ichigo Hotel(current)
Corporate Auditor, Nishi-Tokyo
Recycle Center Co., Ltd. (current)
External Corporate Auditor, Medicare
Life Insurance Co., Ltd. (current)
Auditor, Stats Investment Management
Co., Ltd.
External Corporate Auditor,
ExaWizards Inc. (current)
External Director, Archaea EnergyCo., Ltd. (current)
Joined Tohmatsu & Co.
(Now Deloitte Touche Tohmatsu LLC)
Director, Yurakusha Y.K.
Representative, Suzuki Satoko CPA
Office (current)
Auditor, PlaNet Finance Japan, NPO(Now Positive Planet Japan) (current)
Auditor, Machizukuri Information
Center Kanagawa, NPO (current)
Director, NPO Accounting & Tax
Professional Network, NPO
Supervisory Director, Ichigo Hotel(current)
External Director, BULL-DOG
SAUCE CO., LTD. (current)TitleName(Birth Date)

Career Summary, Positions, Responsibilities, andImportant Concurrent Positions

April 1977
April 1984
April 1987
September 1989
Alternative
Executive
Director(Candidate)

May 1994
Hiromi Yamaguchi(March 6, 1954)

April 1996
January 2000

January 2005
July 2007
October 2008
July 2013
October 2004
December 2007

Alternative
Supervisory
Director(Candidate)

Eriko Ishii(January 3, 1981)

August 2010
October 2010
February 2011
April 2016
July 2016
June 2018
May 2019

Tokyu Hotels International
Corporation (Now Pan Pacific Hotels
and Resorts)
Head of Operations & Development
Division, Tokyu Hotels International
Corporation
Seconded to Pan Pacific Properties
Ltd. as Controller, Administration &Finance
Vice President & Financial Controller,
Alpha U.S.A. Inc.
Assistant Controller, Westin HotelTokyo
Director of Finance, Pan Pacific
Yokohama
Assistant General Manager, Finance,
People Innovation/Education, andFacilities Development &Maintenance, Pan Pacific Yokohama
Head of Accounting & Finance,
Mandarin Oriental Tokyo K.K.
Director, Archon Hospitality K.K.
(Now Abilitas Hospitality Co., Ltd.)
Chief Operating Officer, Archon
Hospitality K.K.
Representative Director, Hospitality
Directions Co., Ltd. (current)
Qualified as Attorney at Law
Mori Hamada & Matsumoto LPC
Seconded to Planning and
Coordination Bureau, Corporate
Accounting and Disclosure Division,
Financial Services Agency
LL.M. degree, Columbia Law School
Seconded to Legal Department, Itochu
Europe PLC (London)
Admitted as lawyer in New York
Visiting Lecturer, Keio University Law
School (current)
Partner, Shin Saiwai Law Office(current)
External Director, Sophia Holdings
Co., Ltd. (current)
Supervisory Director, Canadian Solar
Infrastructure Fund, Inc. (current)

Note: The Director candidates are not related parties of Ichigo Hotel or its asset
management company, and they hold no Ichigo Hotel shares.

93. Schedule
September 14, 2020
October 5, 2020
October 24, 2020

Board of Directors Resolution
Distribution of Shareholder Meeting Materials (expected)
Shareholder Meeting (expected)

10