Note: This English translation is an abridged version of the original notice in Japanese. In the eventof a discrepancy, the Japanese version shall prevail.

TO OUR SHAREHOLDERS
June 10, 2024
(Start date of electronic provision of materials: June 4, 2024)
Securities code: 3205
Daidoh Limited
1-16 Sotokanda 3-chome, Chiyodaku, TokyoNOTICE OF THE 101st ORDINARY GENERAL MEETING OF
SHAREHOLDERS
Dear Shareholder:
Please be informed that the 101st Ordinary General Meeting of Shareholders of Daidoh Limited(the “Company”) will be held at 10:00 a.m. (the reception is scheduled to open at 9:00 a.m.) on
Thursday, June 27, 2024, at Kanda Myoujin Hall on the 2nd floor of EDOCCO EDO Culture
Complex, at 16-2 Sotokanda 2-chome, Chiyoda-ku, Tokyo. (Please note that the venue is different
from last year's venue.).
When arriving at the meeting venue, please submit the enclosed Voting Form at the reception desk.
When convening this Ordinary General Meeting of Shareholders, the Company has taken
measures for electronic provision of materials, and has posted the matters to be provided
electronically as the “Notice of the 101st Ordinary General Meeting of Shareholders” on thewebsite at the link below.
Our website: https://www.daidoh-limited.com/english/ir/meeting.html
In addition to the above, the information is also available on the following website. Please accessthe Tokyo Stock Exchange website below, enter “DAIDOH LIMITED” in “Issue name (company
name)” or “3205” in “Code,” click “Search” and select “Basic information,” “Documents for
public inspection/PR information,” “Notice of General Shareholders Meeting/Informational
Materials for a General Shareholders Meeting,” and then confirm the information.
Tokyo Stock Exchange (TSE-Listed Company Search) Website:
https://www2.jpx.co.jp/tseHpFront/JJK020010Action.do?Show=Show
The Company requests that you exercise your voting rights by using the proxy form enclosed withthis Notice of the General Meeting of Shareholders. Please review the “Reference Materials for
the Solicitation of Proxy Votes and Reference Materials for the Ordinary General Meeting of1

Shareholders” below, fill in the necessary sections of the proxy form enclosed with this Notice,affix your seal, and return the proxy form together with the Voting Form using the return envelope.
Please make sure that it reaches us no later than 6:30 p.m. on Wednesday, June 26, 2024.
Souvenirs will not be provided to the shareholders attending the meeting. We appreciate yourunderstanding.
Sincerely,
Tsukasa Nabewari
Representative Director
President & CEO

2

MEETING AGENDA
Items to be Reported:
1. The Business Report, the Consolidated Financial Statements and the Report of the Audit of
the Consolidated Financial Statements by Accounting Auditors and the Board of Corporate
Auditors for the 101st term from April 1, 2023, to March 31, 2024, will be reported at themeeting.
2. The Non-consolidated Financial Statements for the 101st term from April 1, 2023, to March
31, 2024, will be reported at the meeting.
Items to be Resolved:(Company Proposals)
Item 1: Appropriation of Surplus
Item 2: Election of Six (6) Directors
Item 3: Introduction of Remuneration for Allotting Restricted Stock to Directors andAbolishment of the Stock Compensation-Type Stock Options for Directors and Corporate
Auditors(Shareholder Proposal)
Item 4: Election of Six (6) Directors

Item 4 is proposed by a shareholder, and the Board of Directors of theCompany opposes this proposal.
Matters decided for the convening of the General Meeting of Shareholders(1) If you are exercising your voting rights by proxy, one shareholder with voting rights may
attend the General Meeting of Shareholders as your proxy. In this case, (i) a document
certifying the proxy's power of representation (a letter of proxy) and (ii) the shareholder's
Voting Form, and certificate of the seal stamped on the letter of proxy, or a copy of passport,
driver's license, health insurance card or any other document that identifies the shareholder
must be submitted along with the Voting Form of the proxy. Please note that persons otherthan shareholders, such as proxies and accompanying persons who are not shareholders, are
not permitted to attend the General Meeting of Shareholders.
(2) If you exercise your voting rights in duplicate, by proxy and in writing (by postal mail) or via
the Internet, the vote by proxy will be deemed valid.
(3) If voting rights are exercised in duplicate, in writing (by postal mail) and via the Internet, thevote exercised via the Internet will be deemed valid.
(4) If you exercise your voting rights more than once via the Internet, the last exercise of yourvoting rights will be deemed valid.
This document sent also serves as a document describing the matters for electronic provision of
information based on document delivery request. The following items are excluded in accordancewith laws and regulations and provisions of Article 16 of the Company’s Articles of Incorporation.
(1) “Consolidated Statement of Changes in Equity” in the Consolidated Financial Statements(2) “Notes to the Consolidated Financial Statements” in the Consolidated Financial Statements(3) “Non-consolidated Statement of Changes in Equity” in the Non-consolidated Financial
Statements(4) “Notes to the Non-consolidated Financial Statements” in the Non-consolidated Financial

3

Statements
Therefore, the attached documents are a part of documents audited by the Corporate Auditors andthe Accounting Auditor when they prepared the audit report.
In the event of any amendments to the electronic materials, a notice to that effect and details ofsuch amendments will be posted on each of the websites where the materials are posted as
mentioned above.

4

CONSOLIDATED BALANCE SHEET
Daidoh Limited
As of March 31, 2024
Millions of yen
Assets:Current assets:
Cash and deposits
Notes receivable - trade
Accounts receivable - trade
Inventories
Other
Allowance for doubtful accounts
Total current assets

5,377
155
2,515
7,258
2,021
(84)
17,245

Non-current assets:
Property, plant and equipment:
Buildings, net
Structures, net
Machinery and equipment, net
Vehicles, net
Tools, furniture and fixtures, net
Land
Leased assets, net
Construction in progress

15,614
9,637
170
180
12
149
5,436
21
6

Intangible assets:
SoftwareLeased assets
Other

1,671
208
21
1,442

Investments and other assets:
Investment securities
Leasehold and guarantee deposits
Deferred tax assets
Other
Allowance for doubtful accounts
Total non-current assets
Total assets

6,350
4,567
1,532
121
408
(278)
23,63640,882

5

CONSOLIDATED BALANCE SHEET
Daidoh Limited
As of March 31, 2024
Millions of yen
Liabilities:
Current liabilities:
Notes and accounts payable - trade
Short-term borrowings
Current portion of long-term borrowings
Lease liabilities
Income taxes payable
Contract liabilities
Deposits received
Provision for bonuses
Other
Total current liabilities

1,473
6,571
771
147
121
456
1,544
325
2,266
13,677

Non-current liabilities:
Long-term borrowings
Lease liabilities
Long-term guarantee deposits
Deferred tax liabilities
Retirement benefit liability
Other
Total non-current liabilities
Total liabilities

5,802
1,490
2,066
2,387
169
641
12,55826,235

Net assets:
Shareholders’ equity:
Share capital
Capital surplus
Retained earnings
Treasury shares
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Share acquisition rights
Non-controlling interests
Total net assets
Total liabilities and net assets

10,946
6,891
4,548
1,764
(2,258)
2,835
1,467
1,368
195
668
14,64640,882

6

CONSOLIDATED STATEMENT OF INCOME
Daidoh Limited
For the year ended March 31, 2024
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit (loss)
Non-operating income:Interest income
Dividend income
Foreign exchange gains
Commission income
Subsidy income
Other
Non-operating expenses:
Interest expenses
Commission expenses
Other
Ordinary profit (loss)
Extraordinary income:Gain on sale of non-current assets
Gain on sale of investment securities
Extraordinary losses:
Loss on sale and retirement of non-current assets
Impairment losses
Loss on sale of investment securities
Business restructuring expenses
Other
Profit (loss) before income taxes
Income taxes - current
Income taxes - deferred
Profit (loss)
Profit (loss) attributable to non-controlling interests
Profit (loss) attributable to owners of parent

7

Millions of yen
28,697
13,777
14,91915,362
(442)
485
70
112
56
78
26
141
379
202
85
91
(336)
471
1
469
598
29
43
233
266
26
(463)
150
(935)
321
29
291

NON-CONSOLIDATED BALANCE SHEET
Daidoh Limited
As of March 31, 2024
Millions of yen
Assets:Current assets:
Cash and deposits
Notes receivable - trade
Short-term loans receivable
Other
Allowance for doubtful accounts
Total current assets

2,482
84
9,145
160
(65)
11,806

Non-current assets:
Property, plant and equipment:
Buildings, net
Land
Other, net

116
36
56
23

Intangible assets:
Software
Other

43
2
41
15,186
4,321
10,781242(158)
15,34627,153

Investments and other assets:
Investment securities
Shares of subsidiaries and associates
Other
Allowance for doubtful accounts
Total non-current assets
Total assets

8

NON-CONSOLIDATED BALANCE SHEET
Daidoh Limited
As of March 31, 2024
Millions of yen
Liabilities:
Current liabilities:
Short-term borrowings
Current portion of long-term borrowings
Accounts payable - otherAccrued expenses
Income taxes payable
Deposits received
Provision for bonuses
Other
Total current liabilities

5,300
771
37
48
27
10
39
11
6,245

Non-current liabilities:
Long-term borrowings
Long-term accounts payable - other
Deferred tax liabilities
Other
Total non-current liabilities
Total liabilities

5,802
274
533
2
6,613
12,859Net assets:
Shareholders’ equity:
Share capital
Capital surplus
Legal capital surplus
Other capital surplus
Retained earnings
Legal retained earnings
Other retained earnings
Retained earnings brought forward
Treasury shares
Valuation and translation adjustments
Valuation difference on available-for-sale securities
Share acquisition rights
Total net assets
Total liabilities and net assets

12,508
6,891
4,959
3,147
1,812
2,916
959
1,956
1,956
(2,258)
1,590
1,590
195
14,294
27,1539

NON-CONSOLIDATED STATEMENT OF INCOME
Daidoh Limited
For the year ended March 31, 2024
Operating revenue
Selling, general and administrative expenses
Operating profit (loss)
Non-operating income:Interest and dividend income
Other
Non-operating expenses:
Interest expenses
Provision of allowance for doubtful accounts
Other
Ordinary profit (loss)
Extraordinary income:Gain on sale of investment securities
Extraordinary losses:
Loss on sale of investment securities
Profit (loss) before income taxes
Income taxes - current
Income taxes - deferred
Profit (loss)

10

Millions of yen
1,202
979
222
233
220
13
150
110
20
20
305
469
469
233
233
541
22
(42)
561

REFERENCE MATERIALS FOR THE SOLICITATION OF PROXY VOTESAND REFERENCE MATERIALS FOR THE ORDINARY GENERAL MEETINGOF SHAREHOLDERS
1. Proxy solicitor
Tsukasa Nabewari
Representative Director and President & CEO, Daidoh Limited
2. Agenda items and reference materials<Company Proposals (Items 1 to 3)>
Item 1: Appropriation of Surplus
Proposed appropriation of surplus for the 101st term is as follows:
Year-end dividends
The Company considers the returning of profits to shareholders to be one of its most importanttasks.
As a basic policy, the Company has implemented a performance-related dividend policy underwhich the basic rate of dividends is 30% of the Company’s consolidated ordinary profit, with theaim of sharing the effects of increased profits through a flexible profit-sharing scheme.
Additionally, 30% of the Company’s extraordinary income or losses that generate cash flow, suchas gain on sale of securities and non-current assets, are added to the source of basic dividend
payments for future years to provide a stable, continuous dividend while comprehensively taking
into consideration the business environment and other matters such as the necessity of bolsteringof internal reserves.
1) Type of dividends to be paid
Dividends shall be paid in cash.
2) Amount of dividend per share and total amount of dividends to be allocatedTwo (2) yen shall be paid per common share of the Company as a dividend, which brings thetotal amount of dividends to 56,163,820 yen.
3) Effective date of dividend payment
The effective date of dividend payment shall be June 28, 2024.

11

Item 2: Election of Six (6) Directors
As the terms of office of all the current five (5) Directors will expire at the conclusion of thisOrdinary General Meeting of Shareholders, the Company is requesting electing six (6) Directors.
It should be noted that Mr. Hidetoshi Hagiwara resigned as Director on May 24, 2024 due topersonal reasons.
The candidates for Directors are as follows:
Candidatenumber1

2

3

Current position and responsibilities at the Company, and significant

Name

Masahiro Yamada

Koichiro Naruse

Keiichi Shirokoda

concurrent occupations or positions at other organizations

New appointment

Representative Director and CEO of Gemini Strategy Group Inc.
Part-time Executive Director of Management of Kamegaya Co., Ltd.
Representative Director and President of Oba Baking Co., Ltd.
Representative Director of Gemini Solutions Inc.
Representative Director and President of Bakery Innovation Inc.
Professor of Tourism Management, Ritsumeikan University Graduate
School of Management

New appointment

Senior Management Expert of Gemini Strategy Group Inc.
Representative Director of ForDi Co., Ltd.
Director of Oba Baking Co., Ltd.
Director of Bakery Innovation Inc.

Reappointment

Director and Executive Officer of the Company
in charge of Corporate Administrationin charge of Diversity Promotion
Director of Brooks Brothers (Japan), Ltd.
Director of PONTETORTO S.p.A.

4

Kazutoshi Imai

New appointment

Executive Officer of the Company
General Manager of Business Promotion Office for China and Asia
in charge of Legal Affairs for Business in China
Chairman and General Manager of SHANGHAI NEWYORKER
CLOTHING SALES CO., LTD.

5

Taise Kuboki

New appointment
External Director
Independent Officer

Representative Partner of Walls and Bridges Consulting firm LLC.

6

Eri Fujiwara

New appointment
External Director
Independent Officer

Representative Partner of Aoba Labor and Social Security Attorney OfficeOutside Director of Matsuya Foods Holdings Co., Ltd.
Outside Auditor of INGS Inc.

12

Career summary, position and responsibilities at the
Number ofCompany, and significant concurrent occupations orshares of thepositions at other organizations
Company held
April 2000
Joined The Chuo Mitsui Trust andBanking Company, Limited. (currently
Sumitomo Mitsui Trust Bank, Limited)
June 2001
Joined PricewaterhouseCoopers
Consultants Co., Ltd.
(currently IBM Japan Ltd.)
July 2003
Director of f-tem Co., Ltd.
April 2010
Director in charge of Revitalization of
SHINKO SENI CO.,LTD.
June 2011
Representative Director and CEO of
Strategyx Partners, Inc. (currently
Gemini Strategy Group Inc.) (current)
Senior Managing Director of f-tem Co.,Ltd.
September 2015 Representative Director and CEO of
AKAKURA Co., Ltd.
Masahiro
December 2015 Outside Director of Kamegaya Co.,
Yamada- shares
Ltd.
(July 28, 1977) June 2018
Representative Director of Gemini
Solutions Inc. (current)

CandidateNamenumber (date of birth)1

September 2019 Director of Gemini Career Inc.
(current)
December 2019

Director of Oba Baking Co., Ltd.
Director of Bakery Innovation Inc.

January 2021

Representative Director and Presidentof Oba Baking Co., Ltd. (current)
Representative Director and Presidentof Bakery Innovation Inc. (current)
Part-time Executive Director ofManagement of Kamegaya Co., Ltd.
(current)
Professor of Tourism Management,
Ritsumeikan University Graduate
School of Management (current)

December 2023

April 2024

13

Reasons for nomination as a candidate for Director:
Mr. Masahiro Yamada has extensive experience in company management
through his activity as a management consultant in several consulting firms.
Based on this experience, he has served not only as a representative director
of consulting firms, but also as a director of many other companies. As amanagement expert, he has a wealth of insights and achievements in various
areas including corporate reform, business strategy planning, and new
business development. In addition, as an external expert, he was involved in
the formulation of the Medium-term Management Plan announced by theCompany on May 20, 2024. He thoroughly understands the details of theCompany’s business and the Medium-term Management Plan and has theexpertise to implement and realize it.
Therefore, the Company requests the election of Mr. Yamada as a new
Director as he is the optimal person to implement and realize the Mediumterm Management Plan and to increase the long-term corporate value.

14

Candidate
numberName(date of birth)

2

Koichiro
Naruse(January 14,
1970)

Career summary, position and responsibilities at the
Number ofCompany, and significant concurrent occupations orshares of thepositions at other organizations
Company held
October 1997
Joined OPT, Inc.
June 2006
Outside Director of Hotto Link Inc.
June 2007
Executive Director and COO of Hotto
Link Inc.
June 2012
Representative Director and Presidentof Gala Buzz Inc.
March 2013
President & Representative Director of
Hottolink Consulting Inc.
May 2015
Director of Effyis Inc.
September 2016 Outside Director of Visits Technology
Inc.
June 2017
Executive Vice President of Warranty
technology, inc
February 2018
Director of Warranty Solutions, Inc
June 2019
Representative Director and CEO of- shares
Warranty Solutions, Inc
June 2020
President and CEO of Warranty
technology, inc
March 2022
Management Partner of Gemini
Strategy Group Inc.
Executive Director and COO of
June 2022
Hiramatsu Inc.
Senior Management Expert of Gemini
October 2023
Strategy Group Inc. (current)
November 2023 Representative Director of ForDi Co.,
Ltd. (current)
Director of Oba Baking Co., Ltd.
January 2024
(current)
Director of Bakery Innovation Inc.
January 2024
(current)
Reasons for nomination as a candidate for Director:
Mr. Koichiro Naruse has served as the head of sales and marketing
departments in digital marketing companies. As a director, he has theexperience of leading the listing of an SNS marketing support company.
Based on this experience, he has served as a director in many companies,
including listed companies, and as a management expert, he has extensive
insights and practical experience in management strategy, marketing strategy,
DX, and other areas. In addition, as an external expert, he was involved in theformulation of the Medium-term Management Plan announced by theCompany on May 20, 2024. He thoroughly understands the details of theCompany’s business and the Medium-term Management Plan and has theexpertise to implement and realize it.
Therefore, the Company requests the election of Mr. Naruse as a new Director
as he is the optimal person to implement and realize the Medium-termManagement Plan and to increase the long-term corporate value.

15

Candidate
number3

Career summary, position and responsibilities at the
Number ofCompany, and significant concurrent occupations orshares of thepositions at other organizations
Company held
April 1990
Joined the Company
General Manager, Accounting andJune 2013
Finance Department of the Company(currently Management Control Office)June 2018
Executive Officer of the Company
January 2021
Director of Brooks Brothers (Japan),Ltd. (current)
6,000 shares
May 2023
Director of PONTETORTO S.p.A.
(current)
June 2023
Director and Executive Officer of theCompany (current)
In charge of Corporate Administration
Keiichi(current)
Shirokoda
In charge of Diversity Promotion(December 31,(current)
1967)
Reasons for nomination as a candidate for Director:
As a Director and Executive Officer, Mr. Keiichi Shirokoda carries out anappropriate role in stabilizing the financial base and strengthening
governance. As a Director of Brooks Brothers (Japan), Ltd. and
PONTETORTO S.p.A., he promotes the growth of the clothing business andthe improvement of management efficiency. He also has a wealth ofexperience and knowledge of management and the Company’s business,having served as the head of the Company’s Corporate Administration.
Therefore, the Company requests the reelection of Mr. Shirokoda as a
Director as he is the optimal person to implement and realize the Mediumterm Management Plan announced by the Company on May 20, 2024 and toincrease the long-term corporate value.

Name(date of birth)16

Candidate
number4

Career summary, position and responsibilities at the
Number ofCompany, and significant concurrent occupations orshares of thepositions at other organizations
Company held
April 1989
Joined the Company
April 2010
Director of NEWYORKER LTD.
(currently DAIDOH FORWARD LTD.)
April 2014
Managing Director of NEWYORKER
LTD. (currently DAIDOH FORWARD
LTD.)
June 2014
Executive Officer of the Company(current)
January 2017
Director of DAIDOH FORWARD
8,000 shares
LTD.
April 2022
General Manager of Business
Promotion Office for China and Asia
(current)
In charge of Legal Affairs for Business
Kazutoshi Imaiin China (current)(June 24,Chairman and General Manager of
1965)
SHANGHAI NEWYORKER
CLOTHING SALES CO., LTD.
(current)
Reasons for nomination as a candidate for Director:
As an Executive Officer of the Company and as a Chairman of SHANGHAINEWYORKER CLOTHING SALES CO., LTD., Mr. Kazutoshi Imai carries
out an appropriate role in promoting the improvement of management
efficiency and profitability of the retail division in China. He also has a wealthof experience and knowledge of management and the Company’s business,having served as a Managing Director of NEWYORKER LTD. (currently
DAIDOH FORWARD LTD.)
Therefore, the Company requests the election of Mr. Imai as a new Director
as he is the optimal person to implement and realize the Medium-termManagement Plan announced by the Company on May 20, 2024 and toincrease the long-term corporate value.
Name(date of birth)17

Candidate
number5

Career summary, position and responsibilities at the
Number ofCompany, and significant concurrent occupations orshares of thepositions at other organizations
Company held
April 1982
Joined World Co., Ltd.
June 2005
Executive Officer and Manager ofCommodity Business of World Co.,Ltd.
June 2008
Members of the Board and Managing
Executive Officer of World Co., Ltd.
President & Representative Director of
the Board of World Store Partners Co.,Ltd.
May 2010
Director, Senior Managing Executive- shares
Officer, and Executive General
Manager of Sales Headquarters of
Adastria Co., Ltd.
April 2014
Director and President of Yu-Shin
Creation Co., Ltd.
July 2016
Representative Director of BASE Co.,
Taise Kuboki
Ltd.
(September 11, February 2019
Established Walls and Bridges
1959)
Consulting firm LLC.
Representative Partner (current)
Reasons for nomination as a candidate for External Director and expectedroles:
Having served as a director of several listed apparel companies and EC
service companies, Mr. Taise Kuboki has a wealth of experience andknowledge in the business domain of the Company. Based on his experienceand knowledge of brand management and product planning and design, theCompany expects him to contribute to strengthening the supervisory
function of the Board of Directors and securing the transparency of the
management by giving opinion and advice beneficial to the management of
the Company and taking a supervisory role at the Board of Directors froman independent standpoint.
Therefore, the Company requests the election of Mr. Kuboki as a newExternal Director as he is the optimal person to implement and realize theMedium-term Management Plan announced by the Company on May 20,
2024 and to increase the long-term corporate value.
Name(date of birth)18

Candidate
numberName(date of birth)6

Eri Fujiwara(August 7,
1961)

Career summary, position and responsibilities at the
Number ofCompany, and significant concurrent occupations orshares of thepositions at other organizations
Company held
April 1987
Joined Chugai Pharmaceutical Co.,Ltd.
April 2000
Joined Nomura Securities Co., Ltd.
August 2004
Established Aoba Labor and Social
Security Attorney Office- shares
Representative Partner (current)
June 2015
Outside Director of Matsuya Foods
Co., Ltd. (currently Matsuya Foods
Holdings Co., Ltd.) (current)
March 2024
Outside Auditor of INGS Inc. (current)
Reasons for nomination as a candidate for External Director and expectedroles:In addition to her experience as a representative partner of a labor and social
security attorney office, Ms. Eri Fujiwara, as an outside director of listedcompanies, has a wealth of experience and knowledge in company
management. She also works as a seminar presenter in the field of humanresources and labor. The Company expects her to contribute tostrengthening the supervisory function of the Board of Directors andsecuring the transparency of the management by giving opinion and advice
beneficial to the management of the Company from a diversity perspective
and taking a supervisory role at the Board of Directors from an independent
standpoint.
Therefore, the Company requests the election of Ms. Fujiwara as a newExternal Director as she is the optimal person to implement and realize theMedium-term Management Plan announced by the Company on May 20,
2024 and to increase the long-term corporate value.

19

Notes: 1. No special relationship exists between the Company and the above candidates.
2. Mr. Taise Kuboki and Ms. Eri Fujiwara are candidates for External Directors.
3. The Company’s Articles of Incorporation provide that the Company may enter into acontract for limitation of liability with its External Directors. Pursuant to this provision,
if Mr. Taise Kuboki and Ms. Eri Fujiwara assume office as Directors, the Company
plans to enter into the said contract for limitation of liability with each of them. Under
the said contract, the amount of liability for damages is up to the minimum liability
amount provided by law.
4. Mr. Taise Kuboki and Ms. Eri Fujiwara meet the requirements for independent
directors as set forth by the provisions of Tokyo Stock Exchange, Inc. and Nagoya
Stock Exchange, Inc. If their election as External Directors is approved, they will be
registered as independent directors.
5. The Company shall enter into a directors and officers liability insurance contract, as
stipulated under Article 430-3, Paragraph 1 of the Companies Act, with an insurancecompany, designating all of its Directors as the insured. The contract shall coverpotential compensation for damages, litigation costs, etc. that the insured may incur inthe course of performing their duties. Each candidate will be included as the insured
under this contract if they assume office. The Company plans to renew the contract
with the same terms and conditions at the time of the next renewal.

20

(Reference) The skill matrix of the candidates for Directors and the Corporate Auditors, in the eventthat Item 2 is approved at this Ordinary General Meeting of Shareholders, is as follows:
Knowledge and experience expected of the candidates for

●
●

●
●
●

●

Masahiro Yamada

Representative Director and Chairman& CEO

Koichiro Naruse

Representative Director and President& COO

Keiichi Shirokoda

Director and Senior Executive Officer

Kazutoshi Imai

Director and Executive Officer

Taise Kuboki

External Director

Eri Fujiwara

External Director

Kanai Tozawa

Full-time Corporate Auditor

Masakuni Takeda

External Corporate Auditor

Maako Kido

External Corporate Auditor

Note:

The above contents are not an exhaustive indication of each person’s insights and experience.

Director

Current position at the Company

21

●

●

ESG, Sustainability,
Diversity●●●●

International Experience
Overseas Business

●
●
●

IT
DigitalFinance and Accounting

●
●

Legal
Risk Management

Retail, Sales, Marketing

●
●
●

Name

Corporate Auditor

Company Management
Corporate Strategy

Directors and the Corporate Auditors

●
●

●

●
●
●

●
●
●

●
●
●

●
●

Item 3: Introduction of Remuneration for Allotting Restricted Stock to Directors andAbolishment of the Stock Compensation-Type Stock Options for Directors and Corporate
Auditors
The overall limit on the Company’s executive compensation is as follows: At the 83rd Ordinary
General Meeting of Shareholders held on June 29, 2006, it was approved that the upper limit ofcompensation for Directors of the Company be 180 million yen per year (excluding salaries for
employees) and that the maximum amount of renumeration for stock acquisition rights allocatedas stock options to the Company’s Directors and Corporate Auditors be 40 million yen per year
and 10 million yen per year, respectively. In addition, at the 71st Ordinary General Meeting of
Shareholders held on June 29, 1994, the upper limit of compensation for Corporate Auditors wasapproved as 60 million yen per year.
The Company has decided to revise this executive compensation plan in order to further improve
corporate governance. As part of the revision, the Company seeks to introduce a Restricted Stock
Compensation Plan (the “Plan”) for Directors of the Company (excluding External Directors;
hereinafter “Eligible Directors”) to pay new renumeration for allotments of shares with transfer
restrictions (“Restricted Stock”), separately from the above renumeration amounts. The allotmentof Restricted Stock is intended to provide Eligible Directors with incentives to continuallyenhance the corporate value of the Company and to promote further value sharing withshareholders.
In connection with this, the Company will abolish the overall limit on above-mentioned stockcompensation-type stock options for Directors and Corporate Auditors and will not grant any
stock acquisition rights as stock compensation-type stock options from the overall limit.
Regarding the Plan, in light of the above objectives, the Company has determined appropriatethat the total amount of monetary compensation claims to be paid to Eligible Directors not toexceed 40 million yen per year. The specific timing of payment and allocation to each Eligible
Director will be determined by the Board of Directors based on the report of the Nomination andCompensation Advisory Committee.
At present, the number of Directors (excluding External Directors) is three (3) and the number ofCorporate Auditors is three (3). If Item 2 (Company Proposal) is approved and adopted asoriginally proposed and Item 4 (Shareholder Proposal) is rejected, the number of Directors(excluding External Directors) will be four (4) and the number of Corporate Auditors will be three(3).
Restricted Stock to be allotted to Eligible Directors are as follows:
1. Matters concerning payment for the issuance of Restricted Stock
Each fiscal year, Eligible Directors shall, in principle, tender all monetary compensation
claims related to the Plan awarded based on a resolution of the Board of Directors of theCompany as a contribution in kind in exchange for shares of common stock of the Company
through issuance or disposal.
2. Number of shares of Restricted Stock allotted to Eligible Directors
The total number of shares of common stock to be issued or disposed of by the Company to
Eligible Directors under the Plan shall not exceed 45,000 shares per year. However, if a stock
split (including a gratis allotment of the Company’s common stock) or a reverse stock split of
the Company’s common stock is conducted with an effective date on or after the date ofresolution of this Ordinary General Meeting of Shareholders, the Company may adjust the
total number of shares within a reasonable range, as necessary, on or after the effective date.
The amount to be paid per share of common stock issued or disposed of to Eligible Directors

22under the Plan shall be determined by the Board of Directors within a range that will not be aparticularly advantageous amount to the Eligible Directors, based on the closing price of theCompany’s common stock on the Tokyo Stock Exchange on the business day preceding thedate of the meeting of the Board of Directors held to determine the terms and conditions of theoffer of the common stock (if there are no trades on such day, the closing price on the mostrecent preceding trading day).
3. Matters concerning Restricted Stock allotted to Eligible Directors
The Company and Eligible Directors shall enter into the Restricted Stock Allotment
Agreement (the “Allotment Agreement”) including the following details. (The common stock
allotted under the Allotment Agreement are referred to as the “Allotted Shares”).
(1) Transfer restriction period
Eligible Directors may not transfer, create a security interest in, make an inter vivos gift of, orotherwise dispose of the Restricted Stock allotted to them during the period from the payment
date of the Allotted Shares until the date of resignation or retirement from Director of theCompany or any other position determined by the Board of Directors (the “Transfer Restriction
Period”).
(2) Conditions for lifting transfer restrictions
The Company will lift the transfer restrictions on all Allotted Shares at the expiration of theTransfer Restriction Period, provided that the Eligible Directors have served continuously as
Director of the Company or in the position determined by the Board of Directors for the period
from the payment date of the Allotted Shares until the close of the first Ordinary General
Meeting of Shareholders of the Company (the “Service Provision Period”) and that theperformance conditions specified in (4) below have been met.
(3) Acquisition without consideration
If an Eligible Director resigns or retires with no justifiable reason during the Service Provision
Period, the Company shall automatically acquire the Allotted Shares without consideration.
In addition, if the transfer restriction on any of the Allotted Shares has not been lifted as of the
expiration of the Transfer Restriction Period specified in (2) above, the Company shall
automatically acquire such Allotted Shares without consideration.
(4) In case of non-achievement of performance conditions
If the performance conditions, including the operating profit target, as determined by theCompany’s Board of Directors, are not achieved, the Company shall automatically acquire allof the Allotted Shares without consideration immediately after the point of time of such nonachievement.
(5) Treatment in case of organizational restructuring, etc.
Notwithstanding the provision of (1) above, in the event that a proposal for organizational
restructuring, such as a merger agreement under which the Company would be absorbed, ashare exchange agreement, a share transfer plan, or any other matter relating to organizational
restructuring in which the Company would become a wholly-owned subsidiary, is approvedby the General Meeting of Shareholders of the Company (or by the Board of Directors if
approval by the General Meeting of Shareholders is not required for the organizational
restructuring in question), the Company shall, by a resolution of its Board of Directors,
reasonably adjust the number of allotted shares from which the transfer restriction is to be
removed and the timing at which the transfer restriction is to be removed, as necessary. In suchcase, immediately after the point of time when the transfer restriction is lifted, the Company
shall automatically acquire without consideration any Allotted Shares whose transfer

23

restriction has not been lifted.
(6) Other matters
Other matters related to the Allotment Agreement shall be determined by the Board of
Directors of the Company.
4. Reason for the reasonableness of the allotment of Restricted Stock
The Company has adopted a policy for determining individual Director's renumeration at theBoard of Directors as described in the Business Report on page 43 (in Japanese only). If this
proposal is approved, the details of the stock compensation included in the policy will berevised to be consistent with the approved details. In addition, as the Plan was adopted by the
Board of Directors after discussion and recommendations by the Nomination andCompensation Advisory Committee, the Company believes that the Plan is reasonable because
under the Plan, the value of the Restricted Stock evaluated at the market value at the time of
the Board of Directors' resolution regarding the allotment is not to exceed 40 million yen peryear, and the total number of shares of common stock to be issued or disposed of to Eligible
Directors is limited to a maximum of 45,000 shares per year, keeping the dilution ratio to thetotal number of shares issued minimal at around 0.15%.
During the Transfer Restriction Period, shares allotted to each Eligible Director under the Plan
will be managed in an exclusive account opened by the Eligible Director at a securities
company designated by the Company so that the shares may not be transferred, pledged, giftedinter vivos, or otherwise disposed of during the Transfer Restriction Period.
(Reference)
The Company will also introduce a restricted stock compensation plan similar to the Plan for
the Executive Officers of the Company not concurrently serving as Director of the Company
after this proposal is approved and adopted.

24<Shareholder Proposal>
Item 4 is a proposal from a shareholder.
The following details of the proposal and the reasons thereof are presented in their original form as
submitted by the proposing shareholder in Japanese, except for formal revisions. [Translation note:This paragraph is not applicable to English translation.]
The Board of Directors of the Company opposes the shareholder proposal (Item 4). Reasons for
opposition to Item 4 are stated below on page 31.

Item 4: Election of Six (6) Directors
Outline of the Proposal
The detailed information about the shareholder proposal presented below is available on the following
website (https://stracap.jp/english/3205-DAIDOH.pdf?202405011500), or visit a special site from alink on the upper right corner of the homepage of Strategic Capital Inc. (https://stracap.jp/english/).
The figures cited in the shareholder proposal are based on the consolidated financial statements unless
noted as “non-consolidated.”
Election of Six (6) Directors
The election of six (6) candidates below for Directors is proposed.
(1) Toshihiko Nakayama(2) Michio Osawa(3) Masaki Murata(4) Shingo Shinozaki(5) Takashi Shimamura(6) Kayo Iketeru
Reason for the Proposal
The Company’s management team has continued to undermine shareholder value of the Company.
Full-time Directors, Tsukasa Nabewari and Katsuo Watabe have served as Executive Officers since2017 and 2013, respectively, and both have served as Directors since 2019, and all through their tenure,
the Company’s performance has continued to decline. In addition, External Directors Kazuyuki
Nishioka (Director since 2016) and Kensuke Narita (Director since 2020) have failed to fulfill their
management oversight responsibilities allowing the management team to run the Company at a loss.
In light of the above, the shareholder proponent stands against the reelection of four (4) Directors,
Messrs. Tsukasa Nabewari, Katsuo Watabe, Kazuyuki Nishioka, and Kensuke Narita, among six (6)incumbent Directors proposed to be reelected by the Company and elect six (6) new Directors insteadof the above four.
The management of the Company has the following problems.
Decline in stock price due to long-term losses
The Company’s operating results have been in the red for the past 10 years. An extraordinary gainfrom the sale of its headquarters building resulted in a positive net income for the year ended March
31, 2023, but this was a one-time event, and the core business continues to deteriorate.
As a result, since 2006, the stock price has declined consistently and by 2022 the value was less than25

one-tenth. The stock price has risen since the proponent began buying but it is still well below theliquidating value when accounting for the market value of the rental real estate and other real estate
properties.
Long-term slump in apparel businessOver the past 10 years, the Company’s core clothing business has posted an operating loss every yearwith the exception for the year ended March 31, 2019. The cumulative loss amounts to 9,910 million
yen over that time frame. While other apparel companies are recovering from the downturn due to the
COVID-19 pandemic, the Company is expected to remain in red for the year ended March 31, 2024
and shows little signs of improving.

Employee restructuring and management benefitting from one-yen stock options
The Company has executed voluntary retirement packages for approximately 150 employees in total
in 2017 and 2021, and in 2024 newly announced a workforce reduction of approximately 120
employees in China. The Company’s non-consolidated headcount has decreased from 73 for the year
ended March 31, 2014 to 35 in the year ended March 31, 2023, with an average annual salarydecreasing from 6.51 million yen to 5.54 million yen over that time.
On the other hand, since 2006, the management and auditors have continued to be granted stock
options that allow them to acquire shares of the Company for one yen, with the number of shares theyearn increasing as the stock price declines. This continued last year, ignoring repeated requests for
improvement by the proponent.
In this way, the Company continues to maintain a system that benefits only the management andauditors, while making employees bear the burden of poor performance.
M&A failures
The Company recorded goodwill impairment losses of 553 million yen in the year ended March 31,
2021, as a result of its acquisition of PONTETORTO S.p.A. in November 2016. In addition, an
impairment loss on fixed assets was recorded in May 2023 (which is believed to account for a certain
percentage of the 130 million yen recorded for the clothing business for the year ended March 31,2023) with respect to Brooks Brothers (Japan), Ltd., which became a consolidated subsidiary in
November 2020.
Significant impairment losses have been recorded on their M&A activities.
Continuation of real estate leasing business which earns less than cost of capital
Ignoring the proponent’s repeated requests, the Company has not only continued to hold rental
properties that provide a return far below the cost of capital, but also acquired a budget hotel(acquisition price: approximately 3,000 million yen) and an office building (approximately 6,000
million yen) using the proceeds from the sale and leaseback of its former head office building.
Although sale-and-leaseback transactions are generally conducted for improving capital efficiency,
the sale of the former head office building did not contribute to improving capital efficiency as theCompany acquired other real estate from the proceeds. The proponent assumes that the purpose of thesale was to turn the Company’s bottom line into a profit from accounting perspective in order to avoid
criticism from shareholders for continuing to operate at a loss.
The proponent made several proposals to the Company since it began investing in the Company, but

26they have rarely been adopted, which lead to a conclusion that it is impossible to improve theshareholder value under the current management. Therefore, the proponent proposes to reorganize theBoard of Directors in order to reconstruct the business and establish a sound governance structure withthe aim to improve shareholder value.
The proponent believes that the proposed candidates will contribute to enhance shareholder value.
Specifically, the candidates include those who have experience in the management of apparel and realestate businesses, etc. as well as business reconstruction who fit the needs of the Company. A female
candidate will also contribute to promoting diversity.
Since each candidate will be able to perform his/her duties independently and for the benefit of allshareholders, this proposal is not intended to acquire control over the Company.
[Candidate number, name, and career summary of candidates](1) Toshihiko Nakayama(Date of birth: June 22, 1959)
Career summary:
April 1983
Joined Silver Seiko Co., Ltd.
January 1990
Joined American Express International Japan Co., Ltd.
January 1993
Joined Sun Microsystems Japan, Inc.
January 1996
Joined Master Foods Ltd.
May 2001
Co-founded Nikko antfactory K.K.
November 2008
Joined COLE HAAN JAPAN LLC; President & CFO
October 2014
Joined Clarks Japan Co., Ltd; General Manager & Sales Director
July 2016
Joined DoCLASSE Co., Ltd.; CFO
August 2017
Joined George & Oliver Group; CFO, COO,
December 2017
Joined Brooks Brothers (Japan), Ltd.; CFO & Director of Human
Resources and General Affairs, Logistics, and Administrative
Departments
August 2021
Manages an apparel company, an operating company and an
investment consulting business (self-employed) (current)[Significant concurrent occupations]
None[Number of shares of the Company held]
0 shares[Reason for nomination as a candidate for Director]
Mr. Nakayama has extensive experience in M&A (especially hands-on corporate restructuring) having
worked for major foreign companies for 10 years before helping found an investment company. He
then moved to the fashion industry where he worked for 15 years as a CFO (concurrently as an HR
manager for eight years), mainly in foreign companies. From December 2017 to May 2021, he was
CFO of the Japanese subsidiary of Brooks Brothers, one of the main brands of the Company. With his
experience in corporate restructuring and management in the fashion industry, he is expected to lead
the Company’s management restructuring and is therefore proposed for appointment as Executive
Director of the Company.
[Special interest with the Company]
There will be no special interest between Mr. Nakayama and the Company after he is elected as
Director. Currently, Mr. Nakayama runs an apparel company, operating company and investment
consulting business but has no contracts with the Company. He intends to terminate these businesses

27immediately on the day of the appointment to Director to focus on working for the Company.
(2) Michio Osawa(Date of birth: February 2, 1956)
Career summary:
April 1978
Joined Kashiyama Co., Ltd.
March 2006
Executive Officer of Onward Kashiyama Co., Ltd.
September 2007
Managing Director of Onward Trading Co., Ltd.
March 2009
Representative Director and President of Onward Trading Co., Ltd.
September 2012Managing Executive Officer of Onward Holdings Co., Ltd.
March 2015
Representative Director and Chairman of Onward Trading Co., Ltd.
September 2015
Representative Director and President of Onward J Bridge Co., Ltd.
March 2016
Director and Senior Managing Executive Officer of Onward
Kashiyama Co., Ltd.
Director and Chairman of Onward Trading Co., Ltd.
March 2017
Representative Director and President, and Executive Officer ofOnward Kashiyama Co., Ltd.
May 2018
Senior Managing Director of Onward Holdings Co., Ltd.
May 2019
Representative Senior Managing Director of Onward Holdings Co.,Ltd.
March 2020
Chairman and Director of Onward Kashiyama Co., Ltd.
June 2020
Chairperson of Fashion Industry SCM Promotion Association(current)
June 2021
Chairman of Japan Apparel Fashion Industry Council
September 2021
Auditor of Taisei Printing Co., Ltd.
September 2022
Special Advisor of Across Transport Corp.
Special Advisor of Tokyo Nohin Daiko Co., Ltd.
[Significant concurrent occupations]
Chairperson of Fashion Industry SCM Promotion Association
Special Advisor of Across Transport Corp.
Special Advisor of Tokyo Nohin Daiko Co., Ltd.
Auditor of Taisei Printing Co., Ltd.
[Number of shares of the Company held]
0 shares[Reason for nomination as a candidate for Director]
Mr. Osawa has held various important positions at Kashiyama Co., Ltd. (currently Onward Holdings
Co., Ltd.) and its affiliated companies, and has extensive experience in the apparel business andcorporate management. He is currently engaged in the promotion of the supply chain management in
the textile industry as the chairperson of Fashion Industry SCM Promotion Association and has a broad
network in the textile industry, distribution industry and other industries in general. Therefore, he isexpected to provide accurate management supervision and advice in the management reform of theCompany’s apparel business, especially in the optimization of production and logistics etc. The
proponent proposes his appointment as External Director.
[Special interest with the Company]
None

28

(3) Masaki Murata(Date of birth: June 9, 1957)
Career summary:
April 1982
April 2003

Joined Nomura Securities Co., Ltd.
Joined The Nomura Trust Banking Co., Ltd.; Manager of Asset
Finance, Fund and Exchange Department
June 2003
President and Representative Director of Mori Trust AssetManagement Co., Ltd.
June 2005
Auditor of Business Breakthrough, Inc.
June 2006
Executive Officer of Mori Trust Sogo Reit, Inc.
February 2009
Representative Director, MT Advanced Technology Co., Ltd. (current)
June 2011
President and Representative Director, MA Platform, Inc.
[Significant concurrent occupations]Representative Director of MRT International Co., Ltd. (former MT Advanced Technology Co., Ltd.)[Number of shares of the Company held]
0 shares[Reason for nomination as a candidate for Director]
Mr. Murata has a wealth of experience and expertise in real estate having served as a representative
director in several real estate-related companies. He also has international experience including a stintin London with Nomura Securities. Therefore, the proponent proposes that he be appointed as anExternal Director expecting that he will provide accurate management supervision and advice for thefundamental reform of the Company’s real estate business.
[Special interest with the Company]
None(4) Shingo Shinozaki(Date of birth: August 17, 1962)
Career summary:
October 1990
Joined Chuo Shinko Audit Corporation. Registered as trainee certified
public accountant.
March 1994
Registered as certified public accountant(Registration number: 12028)
June 1995
Joined Microsoft Japan Co., Ltd.
June 1998
Join Master Foods Ltd.; Accounting Manager of Accounting and
Finance Division and Director of Human Resource Division
June 2000
Established and Joined Shinozaki C.P.A. Office (current)
December 2005
President, Representative Director and CEO of Lotteria Co., Ltd.
March 2011
Established S Associates and assumed the role of Director (current)
April 2015
CEO of CPN INTERNATIONAL LTD.
August 2021
Director of VCKS MANAGEMENT & CONSULTING CORP.
(current)
January 2024
Advisor, Office of the President of LAPULAPU-CEBU
INTERNATIONAL COLLEGE (current)[Significant concurrent occupations]Shinozaki C.P.A. Office29

Director of S Associates
Director of VCKS MANAGEMENT & CONSULTING CORP.
Advisor, Office of the President of LAPULAPU-CEBU INTERNATIONAL COLLEGE[Number of shares of the Company held]
0 shares[Reason for nomination as a candidate for Director]
After working as a certified public accountant at a major auditing firm, Mr. Shinozaki has held key
positions mainly in the field of accounting and finance at several foreign companies, acquiring a wealthof experience in the field. He also has experience in leading the management restructuring of Lotteria
Co., Ltd. As its President and Representative Director. In light of his expert knowledge as CPA and hisachievements in management restructuring, proponent proposes that he be appointed as an External
Director expecting that he will provide accurate management supervision and advice for theCompany’s overall management.
[Special interest with the Company]
None(5) Takashi Shimamura(Date of birth: October 12, 1963)
Career summary:
April 1987
Joined JFE Shoji Corporation
May 1996
Joined Jupiter Telecom Co., Ltd.
May 1999
Joined USJ LLC.; General Manager of Human Resource Department
July 2006
Joined Nike Japan Corp.; HR Business Partner and Asia PacificRegion Talent Acquisition (Recruiting Group) Director
May 2011
Joined Tapestry Japan, LLC.; Head of HR East Asia (Japan, Korea,
and Taiwan), SVP and Head of Talent Management for Asian Region
September 2013
Joined Adecco, Inc.; Chief HR Officer for Asian Region and Director
and Manager of Human Resources of Adecco Group JapanMay 2015
Joined Twitter Japan K.K.; Head of People, JAPAC
May 2019
Joined USJ LLC.; Executive Officer, Senior Vice President and Chief
Administrative Officer[Significant concurrent occupations]
None[Number of shares of the Company held]
0 shares[Reason for nomination as a candidate for Director]
Mr. Shimamura has extensive experience in business management in industries and management that
require speedy management such as IT-related companies and startups. He also has extensive
experience in organization and human resources, risk management and ESG/SDGs initiatives incompanies that require globalization as well as advising on business management, organization andhuman resources for new entries into Japan and Asia. Most recently as Executive Vice President of
USJ LLC, he was responsible for the company’s business management. In light of his background andexperience he is expected to provide accurate supervision and advice for the Company’s overallmanagement. The proponent proposes that he be appointed as External Director.
[Special interest with the Company]
None

30

(6) Kayo Iketeru(Date of birth: September 6, 1967)
Career summary:July 1991
Joined ECC Co. Ltd.
May 1992
Joined Master Foods Ltd.
November 1997
Joined Ford Japan Limited
December 1999
Joined adidas Japan K.K.; Senior Manager of Human Resources
Department
October 2001
Joined Pfizer Japan Inc.
June 2004
Joined Nihon Pall Ltd.; Manager of Asia Pacific HR project
March 2006
Representative Director of I’S Plus Co., Ltd. (current)
April 2021
Specially Appointed Professor of Yamano College of Aesthetics(current)[Significant concurrent occupations]Representative Director of I’S Plus Co., Ltd.
Specially Appointed Professor of Yamano College of Aesthetics[Number of shares of the Company held]
0 shares[Reason for nomination as a candidate for Director]
After starting her career at an English conversation school, Ms. Iketeru was engaged in all aspects ofhuman resource management including the design and operation of human resource systems and theplanning and implementation of programs to promote women’s advancement at several, mainly
foreign-related, companies. After returning to work from a maternity leave, she is mainly involved insupporting companies in the design and implementation of HR systems, internal and external
communications, education and career programs, consulting etc. She is also active as a management
skills and workshop facilitator. As the Company has many female employees, she is expected toprovide accurate supervision and advice regarding the creation of diverse personnel systems andmechanisms to motivate employees. Therefore, the proponent proposes that she be appointed asExternal Director.
[Special interest with the Company]
None[Opinion of the Board of Directors about Item 4]

The Company’s Board of Directors opposes the shareholder proposal.
 Reasons for opposition(1) The Company’s proposed management structure with six (6) candidates for Directors is
optimal for the recovery of the Company’s business performance and sustainableenhancement of corporate value through the implementation and realization of the new
Medium-term Management Plan.
As stated in our press release dated May 20, 2024, “Notice Concerning the Formulation of theMedium-term Management Plan,” the Company has formulated and announced a new Medium-term

31

Management Plan for the three-year period from the year ending March 31, 2025 to the year ending
March 31, 2027 (“Medium-term Management Plan”) under the theme of “Innovation and Evolution,”in order to quickly break away from the sluggish performance until the most recent fiscal year, build
a stronger profit-making structure, and make an appropriate return to our shareholders. The Mediumterm Management Plan defines “business model evolution” (specifically, “business portfolio renewal”
and “implementation of business-specific measures”) as a measure for the Company’s growth strategy,
in addition to “strengthening of management structure” as a prerequisite for the plan. Based on thisMedium-term Management Plan, the Company aims to achieve consolidated operating profit of
1.5 billion yen and ROE of 8.0% in the year ending March 31, 2027, continuously improving theCompany’s corporate value by implementing reforms and improvements without sanctuary asa unified team.
As part of the “strengthening of the management structure” mentioned above, the Company has
examined the optimal composition of the Board of Directors that can steadily implement and realize
the Medium-term Management Plan and achieve a recovery in the Company’s business performanceand sustainable improvement of its corporate value. As a result, considering that in order to increase
the probability of achieving the Medium-term Management Plan, it is necessary to complement theexpertise needed to execute and realize the plan and to improve the corporate governance. Accordingly,
the Company has decided to (i) complement the specialized know-how and human resources needed
to implement reforms decisively through cooperation with outside experts, and strengthen the
management structure fundamentally, (ii) appoint External Directors who are knowledgeable about
the apparel industry in which the Company operates, and (iii) appoint female External Directors topromote diversity. In this way, the Company believes that an optimal Board of Directors will be
realized.
Based on the above review, the Board of Directors of the Company unanimously approved thecandidates for Directors to be proposed by the Company at this Ordinary General Meeting of
Shareholders based on the report by the Nomination and Compensation Advisory Committee of theCompany of which half of the members are independent External Directors (Mr. Tsukasa Nabewari,currently Executive Director of the Company, did not participate in the Nomination and Compensation
Advisory Committee at the time of this nomination; and the same applies hereinafter). The Company’s
Corporate Auditors also unanimously agreed to this decision.
The candidates for Directors proposed by the Company, their career summary, etc., and the skill matrix
pertaining to the composition of the Board of Directors proposed by the Company are shown on pages
13 through 21, and the Company believes that the composition of the Board of Directors satisfies allof the elements described in (i) through (iii) above. Of these, Mr. Masahiro Yamada (“Mr. Yamada”)
and Mr. Koichiro Naruse (“Mr. Naruse”), both candidates for new Executive Directors, have been
involved in the formulation of the Medium-term Management Plan as outside experts and havethorough understanding of the Company’s business and the Medium-term Management Plan withexpertise to execute and realize it. Accordingly, the Company plans to appoint Mr. Yamada as
Representative Director and Chairman & CEO, and Mr. Naruse as Representative Director andPresident & COO of the Company, respectively, after this Ordinary General Meeting of Shareholders.
In addition, among the candidates for External Directors, Mr. Taise Kuboki (“Mr. Kuboki”) has
experience managing an apparel company and has extensive knowledge of the industry, and Ms. Eri
Fujiwara (“Ms. Fujiwara”) has expertise in human resources and labor strategies as a Labor and Social
Security Attorney and also has an understanding of corporate governance of listed companies as32

Outside Director of Matsuya Foods Holdings Co., Ltd. Ms. Fujiwara, as a female director, can also
contribute to bringing diversity to the Board. We are confident that their presence will contribute to
the realization of “Innovation and Evolution” of the Company.
Mr. Tsukasa Nabewari and Mr. Katsuo Watabe, who are currently Executive Directors of the Company,
and Mr. Kazuyuki Nishioka and Mr. Kensuke Narita, who are currently External Directors of theCompany, will retire from their posts as Director of the Company at the conclusion of this Ordinary
General Meeting of Shareholders. In addition, Mr. Hidetoshi Hagiwara resigned as Director on May
24, 2024 due to personal reasons.
As stated above, the Company believes that the steady implementation and realization of theMedium-term Management Plan will lead to a recovery in the Company’s business performanceand sustainable enhancement of its corporate value, and is confident that the composition of theBoard of Directors with the six (6) candidates for Directors proposed by the Company is optimal
as a management structure for this purpose.

(2) The management structure composed of candidates for Directors in the shareholder proposal
is inappropriate for the recovery of the Company’s business performance and sustainableenhancement of its corporate value.
(i) The management structure composed of candidates for Directors in the shareholder proposal
does not have a specific management plan for the recovery of the Company’s businessperformance and sustainable improvement of its corporate value.
In the shareholder proposal, the proponent has presented no feasible and specific management plan
as to how the management system to be comprised of the proposed candidates for Directors will
improve the Company’s business performance. Moreover, in the shareholder proposal, only Mr.
Toshihiko Nakayama (“Mr. Nakayama”), one of the candidates for Directors, was nominated as a
candidate for Executive Director, and when the Company’s Nomination and Compensation
Advisory Committee asked Mr. Nakayama about the Company’s management policies and plans,
Mr. Nakayama did not provide any specific answers.
The Company recognizes that it is an urgent issue for the Company to quickly recover from thesluggish business performances of up to the most recent fiscal year. Under such circumstances, theCompany believes that launching a management structure with candidates for Directors in theshareholder proposal who have no management strategy or plan for that purpose will impede therecovery of the Company’s business performance and hinder the sustainable improvement of theCompany’s corporate value.
(ii) It is possible that the management structure with candidates for Directors in the shareholder
proposal will hinder the execution and realization of the Medium-term Management Plan.
In order to nominate candidates for Directors who will truly contribute to the improvement of theCompany’s corporate value, the members of the Nomination and Compensation Advisory
Committee interviewed all of the candidates for Directors proposed by the Company and all of thecandidates for Directors in the shareholder proposal individually. During such interviews, thecommittee members endeavored to objectively and fairly evaluate the candidates' understanding of
the Company’s business and the source of the Company’s corporate value, their knowledge that33

contributes to the improvement of the Company’s corporate value, etc., from the perspective of
which candidate would contribute most to enhance the Company’s corporate value, regardless ofwhether or not they are incumbent Directors, and whether or not they are candidates in theshareholder proposal. As a result, the members of the Nomination and Compensation Advisory
Committee have come to believe that the candidates in the shareholder proposal do not have asufficient understanding of the Company’s business and are not appropriate for prompt and reliable
implementation of the Company’s management plan and realize recovery of the Company’s
performance, given the current situation of the Company.
In addition, the Company’s Board of Directors and executive structure is based on the premise that
the Company’s Executive Directors, who have deep knowledge of the Company’s business, canfunction effectively. If the Company’s Executive Director were to be a single new Director with nobusiness strategy or management plan for the Company, the Company’s business execution function
would deteriorate, and it is possible that the Company cannot conduct appropriate business
operations to achieve a recovery in its business performance. In particular, the scope of business
operations envisaged for the execution and realization of the Medium-term Management Plan is
wide-ranging, such a situation would make it extremely difficult to promote the Medium-termManagement Plan.
Furthermore, as mentioned above, under the management structure by the candidates for Directors
in the shareholder proposal, only one new Director, Mr. Nakayama, is expected to be an Executive
Director. Since Mr. Nakayama once held the position of CFO of a subsidiary of the Company, nota few of the executives and employees of the Company Group know Mr. Nakayama, and there arestrong objections within the Group against the shareholder proposal, about having Mr. Nakayama
return as Director of the Company. Therefore, if Mr. Nakayama is elected as Director of theCompany by any chance, there is a risk that a great deal of confusion will arise within the Group,
and a considerable number of officers and employees will leave the Group, which may impair theCompany’s corporate value.
Additionally, the knowledge and experience possessed by the candidates for Directors in theshareholder proposal can be more than adequately provided by the candidates proposed by theCompany. For example, Mr. Kuboki, a candidate for Director proposed by the Company, has
knowledge and experience in the apparel industry, and Ms. Fujiwara, a Labor and Social Security
Attorney and a candidate for Director proposed by the Company, has expertise in the field of HR
and personnel affairs. Under these circumstances, we believe that it is not necessary to elect thecandidates for Directors in the shareholder proposal, because duplicate appointments of candidates
for External Directors would impede the speedy and flexible decision-making of the Board of
Directors and could hinder the improvement of the Company’s corporate value.
As described above, the management structure by the candidates for Directors in the shareholder
proposal may hinder the execution and realization of the Medium-term Management Plan, and isinappropriate for the management structure of the Company to work for the recovery of businessperformance and sustainable improvement of corporate value.
(iii) Summary
Based on the above, the Company believes that the management structure consisting of the six (6)candidates for Directors in the shareholder proposal is inappropriate from the perspective of34

recovering the Company’s business performance and continuously improving the Company’s
corporate value.

(3) The shareholder proposal is inappropriate in light of the purpose of the Guidelines for
Corporate Takeovers in that it does not indicate the management policy, etc. after the
replacement of Directors.
While the Company’s Articles of Incorporation stipulate that the number of directors shall be no morethan eight (8), the shareholder proposal proposes the election of six (6) candidates for Director. In thisregard, the “Guidelines for Corporate Takeovers–Enhancing Corporate Value and Securing
Shareholder Interests–” (the “Guidelines for Corporate Takeovers”) published by the Ministry of
Economy, Trade and Industry on August 31, 2023, states in footnote 38 (page 31), “there is anotherissue regarding transparency in cases of corporate control acquisition, where a shareholder proposing
an election or dismissal of directors acquires a significant amount of shares in concert with othershareholders, without disclosing its intention to acquire corporate control, and subsequently requests
a convocation of the shareholders’ meeting to resolve its proposal to replace the directors with thosewhom it can influence.” And in such cases, “it is advisable for the acquirer requesting for the meeting
to furnish shareholders with a summary of the purpose of the request, the person requesting themeeting (and the persons, if any, who have agreed with the person requesting for the meeting on theacquisition or disposal of shares, or the exercise of rights as shareholders), the basic management
strategy after the proposal is approved, and other appropriate information at least to the same extent
as that contained in the tender offer registration statement (The underlines added by the Company).
The purpose of the above footnote made in the Guidelines for Corporate Takeovers is clearly valid forthe use of the annual shareholders' meeting to achieve a similar result by exercising the right to makeshareholder proposals.
However, the proposing shareholder did not provide any information regarding the basic management
policy, etc. after the shareholder proposal is approved, moreover, when the Company asked the
proponent in writing on March 19, 2024, they stated that the number of shares to be purchased was“undetermined at this moment,” and as for the management policy, “We do not have a management
policy because we do not plan to control the management of the Company.” As to the policy forholding the Company’s shares, the proposing shareholder only responded to the effect that “nothing
concrete has been decided.” This is a complete failure to provide the information necessary to
determine the impact of the proponent's purchase of the Company’s shares and the shareholder
proposal on the Company’s corporate value and the common interests of shareholders, and isinappropriate in light of the purpose of the Guidelines for Corporate Takeovers.
Therefore, the Company believes that the shareholder proposal is inappropriate from this perspective
as well.

35