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

Securities Code: 4611
June 5, 2019
To our shareholders:
Takayuki Sato
President
Dai Nippon Toryo Co., Ltd.
1-124, Nishikujo 6-chome, Konohana-ku, Osaka

NOTICE OF THE 136TH ORDINARY GENERAL MEETING OF SHAREHOLDERS
You are cordially invited to attend the 136th Ordinary General Meeting of Shareholders of Dai Nippon Toryo Co.,
Ltd. (the “Company”), which will be held as described below.
If you are unable to attend the meeting in person, you may exercise your voting rights by postal mail or by theInternet. In this case, after reviewing the attached Reference Documents for the General Meeting of Shareholders,please indicate your approval or disapproval of the proposals on the enclosed voting form and return it by postal
mail to reach us no later than 5:00 p.m., Wednesday, June 26, 2019 (Japan Standard Time), or enter your approvalor disapproval of the proposals on the voting website designated by the Company (https://evote.tr.mufg.jp/) no later
than the above-mentioned deadline.
1. Date and Time: Thursday, June 27, 2019 at 10:00 a.m. (Japan Standard Time) (Reception scheduled to open at
9:00 a.m.)
2. Venue:
The Company’s Head Office, 4th Floor Conference Room
1-124, Nishikujo 6-chome, Konohana-ku, Osaka
3. Purposes:
Items to be reported:
1. Business Report and Consolidated Financial Statements for the 136th Term (from April 1, 2018 to March
31, 2019), as well as the results of audit of the Consolidated Financial Statements by the Accounting
Auditor and the Board of Corporate Auditors.
2. Non-Consolidated Financial Statements for the 136th Term (from April 1, 2018 to March 31, 2019)
Items to be resolved:
Proposal 1:
Appropriation of Surplus
Proposal 2:
Election of Nine (9) Directors
Proposal 3:
Election of One (1) Substitute Corporate Auditor
Proposal 4:
Revision of Remuneration Amount for Directors- If you attend the meeting in person, please submit the enclosed voting form at the reception.
- Of documents to be attached to this notice, the Notes to Consolidated Financial Statements and Notes to Non-Consolidated
Financial Statements are not included in the attached documents of this notice because they are posted on the Company’s website(https://www.dnt.co.jp/) on the Internet in accordance with laws and regulations and Article 14 of the Articles of Incorporation. The
Notes to Consolidated Financial Statements and Notes to Non-Consolidated Financial Statements are a portion of the Consolidated
Financial Statements and Non-Consolidated Financial Statements that were audited by Corporate Auditors or the Accounting
Auditor, in producing the audit reports.
- In case any changes are made to the Business Report, the Consolidated Financial Statements and the Non-Consolidated Financial
Statements, the Company will post such changes on the Company’s website (https://www.dnt.co.jp/).

-1-

Reference Documents for the General Meeting of Shareholders
Proposals and Reference Matters
Proposal 1:

Appropriation of Surplus

Returning profits stably to our shareholders is one of the important management issues, and the Company aims tomaintain consistent and stable payment of dividends as our basic policy, while striving to strengthen corporate
structure and maintaining financial soundness of the Company.
Based on the business performance for the current fiscal year and future business development of the Company, weplan to pay a year-end dividend of ¥25 per share, the same as the previous year-end dividend.
1. Type of dividend property
Cash
2. Allocation of dividend property to shareholders and total amount thereof¥25 per common share of the Company
Total amount of dividends: ¥714,869,300
3. Effective date of distribution of dividends of surplus
June 28, 2019

(Reference) Basic Strategy for Capital Policy
The Company recognizes its priority challenges in achieving a medium- and long-term increase in its share value inthree columns: improving financial health; effective utilization of the investors’ equity to boost its earnings power;
and amplified returns to shareholders. The Company makes it a basic principle that underlies its capital policies,
based on which it takes into overall consideration the optimal balance between these three challenges, to attaincontinued growth.
Note:

The Company conducted a five-to-one consolidation of common shares on October 1, 2017. Dividend amounts for the 134th
term and earlier have been recalculated on the assumption that the share consolidation was conducted prior to that term.

-2-

Proposal 2:

Election of Nine (9) Directors

The term of office of all eight (8) Directors will expire at the conclusion of this meeting.
To enhance diversity of the Board of Directors allowing for decision making based on more thorough discussions
and to further strengthen the supervisory function, the Company proposes to add one (1) female Outside Director
and ask that nine (9) Directors (of whom three (3) are Outside Directors) be elected. Candidates for Directors havebeen determined by the Board of Directors based on the recommendation of the Nominating Committee, a majorityof which consists of Outside Directors.
The candidates for Directors are as follows:
No.

Name

Position and responsibilities in the Company

1

Toshijiro Iwasa

Reelection

Representative Director and Chairman

2

Takayuki Sato

Reelection

Representative Director and President
Director, Managing Executive Officer

3

Naoyuki Kimura

Reelection

4

Tatsuhiko Nagano

Reelection

5

Hideyoshi Noda

Reelection

6

Motohiro Yamamoto

Reelection

7

Kyoichi Haizaki

Reelection
OutsideGeneral Manager, Overseas Operations
Division in charge of Procurement

Michitaka Mukohara

Reelection
Outside100%(11/11)100%(11/11)100%(11/11)

Director, Managing Executive Officer

100%

General Manager, Administrative Division(9/9)

Director, Executive Officer

100%

General Manager, Production Division(11/11)

Director, Executive Officer
General Manager, Coating Business Division100%(11/11)100%

Director(11/11)

Independent
8

Attendance to theBoard of Directors

100%
(9/9)

Director

Independent
New
9

Note:

Kimiyo Hayashi

candidateOutside--Independent
The attendance statuses for Tatsuhiko Nagano and Michitaka Mukohara are of the meetings since their assignment on June 28,
2018.

-3-

No.

Name
(Date of birth)

Career summary, position and responsibilities[Significant concurrent positions outside the Company]
Apr. 1971
Apr. 2002

June 2004

Apr. 2005
Toshijiro Iwasa(September 27, 1947)
Reelection
1

Apr. 2006
June 2006
Apr. 2007
Apr. 2010
June 2010
June 2018

Joined the Company
General Manager, Planning Department,
Corporate Planning Department of theCompany
Executive Officer, General Manager, Corporate
Planning Department, Administrative Divisionof the Company
Deputy General Manager, Administrative
Division of the Company
Deputy General Manager, Production Divisionof the Company
Director of the Company
Managing Executive Officer of the Company
Senior Managing Executive Officer in charge ofSales & Marketing of the Company
Representative Director and President of theCompany
Representative Director and Chairman of theCompany (present position)

Number of theCompany’s shares
owned

36,600 shares[Reasons for nomination as candidate for Director]
As the chairman of the Board of Directors, he has been managing the Board of Directors meetings appropriately, andhas been contributing to corporate value improvement through strengthening of corporate governance. As theRepresentative Director and President, and later as the Representative Director and Chairman, he has been in charge ofmanagement of the Company over the years. The Company requests his election as a Director in the belief that he will
be able to contribute to strengthening the decision-making and supervisory functions of the Board of Directors byleveraging his ample experience and achievements.

-4-

No.

Name
(Date of birth)

Career summary, position and responsibilities[Significant concurrent positions outside the Company]
Apr. 1984
Apr. 2009

Apr. 2010

Apr. 2011

Takayuki Sato
(January 15, 1961)
Reelection
2

Apr. 2012

June 2012
Apr. 2014

Apr. 2016

Apr. 2018
June 2018

Joined the Company
Deputy General Manager, Protective Coating
Department, General Coating Business Divisionof the Company
General Manager, Development Department,
Technical Development Division of theCompany
Executive Officer, Deputy General Manager,
General Coating Business Division (Head ofTechnology), and Deputy General Manager,
Industrial Coating Business Division (Head ofTechnology) of the Company
General Manager, Technical Development
Division and Deputy General Manager, Coating
Business Division (Head of Technology) of theCompany
Director of the Company
General Manager, Coating Business Division,and General Manager, Marketing & Sales
Department of the Company
Managing Executive Officer, General Manager,
Protective & Decorative Coatings Department,
Coating Business Division of the Company
Senior Managing Executive Officer, Overallmanagement of the Company
Representative Director and President of theCompany (present position)

Number of theCompany’s shares
owned

7,300 shares[Reasons for nomination as candidate for Director]
As the Representative Director and President, he has been managing the Company and the Group, appropriately making
important decisions in the Board of Directors meetings and supervising execution of business. Having long served in
the Technical and Sales & Marketing Divisions of the Company, he has extensive experience and achievements, as well
as strong leadership qualities. As such, the Company requests his election as a Director in the belief that he will be able
to oversee the Group and contribute to strengthening the decision-making and supervisory functions of the Board of
Directors.

-5-

No.

Name
(Date of birth)

Career summary, position and responsibilities[Significant concurrent positions outside the Company]
Apr. 1982
Mar. 2003
July 2006

3

4

Number of theCompany’s shares
ownedJoined Mitsubishi Corporation
CEO of Miteni S.p.A (Italy)
Manager, Fine Chemicals Unit, Head Office,Mitsubishi Corporation
Mar. 2010
President of PT.Kaltim Parna Industri(Indonesia)
Apr. 2013
General Manager, Warsaw Branch, Mitsubishi
Corporation
Apr. 2016
Executive Officer, Deputy General Manager,
Naoyuki Kimura
Overseas Operations Division; General(May 28, 1959)
400 shares
Manager, Overseas Business Planning
Reelection
Department; and Deputy General Manager,
Procurement Division of the Company
Apr. 2017
General Manager, Overseas Operations
Division (present position) in charge ofProcurement (present position) of the Company
June 2017
Director (present position), Managing
Executive Officer of the Company (present
position)[Responsibilities]
Overseas Operations Division, Procurement Division[Reasons for nomination as candidate for Director]
He has extensive knowledge and experience of business nurtured at a general trading company, and currently is
responsible for the Overseas Operations Division and the Procurement Division of the Company. As such, the Company
requests his election as a Director in the belief that he will be able to contribute to strengthening the decision-making
and supervisory functions of the Board of Directors by leveraging his ample experience and achievements.
Apr. 1987
Joined The Mitsubishi Bank, Ltd. (currently
MUFG Bank, Ltd.)May 2012
General Manager, Corporate Banking Division
No. 5, Corporate Banking Group No. 2, The
Mitsubishi Bank, Ltd.
June 2014
General Manager, Marunouchi Branch, The
Mitsubishi Bank, Ltd.
Tatsuhiko Nagano
June 2017
Executive Officer, Deputy General Manager,(September 22, 1963)
200 shares
Administrative Division, and in charge ofReelection
Finance of the Company
Apr. 2018
General Manager, Administrative Division of
the Company (present position)
June 2018
Director (present position), Managing
Executive Officer of the Company (present
position)[Responsibilities]
Administrative Division[Reasons for nomination as candidate for Director]
He has extensive knowledge and experience nurtured in financial institutions, and currently has responsibility for the
Administrative Division of the Company. As such, the Company requests his election as a Director in the belief that hewill be able to contribute to strengthen the decision-making and supervisory functions of the Board of Directors byleveraging his ample experience and achievements.

-6-

No.

Name
(Date of birth)

Career summary, position and responsibilities[Significant concurrent positions outside the Company]
Apr. 1985
Apr. 1991

5

6

Number of theCompany’s shares
ownedJoined Nippon Paint Co., Ltd.
Joined Nippon Steel Chemical Co., Ltd.
(currently NIPPON STEEL Chemical &Material Co., Ltd.)
Apr. 2007
Joined NITTO CHEMICAL CO., LTD.
Apr. 2010
Joined the Company as Deputy General
Manager, Production Engineering Department,
Production Division
Oct. 2010
General Manager, Production Engineering
Department, Production Division of theCompany
Apr. 2013
Executive Officer of the Company (present
Hideyoshi Noda
position)
10,100 shares(September 28, 1962)
May 2013
Deputy General Manager, Coating Business
Reelection
Division and General Manager, Coating
Business Planning Department of the Company
Apr. 2015
General Manager, Production Division of theCompany (present position)
June 2015
Director (present position), General Manager,
Production Engineering Department,
Production Division of the Company[Responsibilities]
Production Division[Significant concurrent position outside the Company]
Representative Director and President, Nitto Sanwa Toryo Co.,
Ltd.
Representative Director and President, Okayama Kako Co., Ltd.
[Reasons for nomination as candidate for Director]
He has extensive knowledge nurtured through his experience in the coating industry and, in addition to having
experience in the Sales & Marketing Division, is responsible for the Production Division at the Company. As such, theCompany requests his election as a Director in the belief that he will be able to contribute to strengthening the decisionmaking and supervisory functions of the Board of Directors by leveraging his ample experience and achievements.
Apr. 1986
Joined the Company
Apr. 2014
Deputy General Manager, TechnicalDevelopment Division, General Manager,
Development Department, Head of FirstTechnical Development Group, and Deputy
General Manager, Protective & Decorative
Coatings Department of the Company
Apr. 2015
Executive Officer of the Company (present
Motohiro Yamamoto
position)(January 18, 1964)
2,900 shares
Apr. 2016
General Manager, Technical Development
Reelection
Division and Deputy General Manager, Coating
Business Division (Head of Technology) of theCompany
June 2017
Director of the Company (present position)
Apr. 2018
General Manager, Coating Business Division of
the Company (present position)[Responsibilities]
Coating Business Division, Specialty Business Division[Reasons for nomination as candidate for Director]
Having long served in technical divisions of the Company, he has extensive experience and achievements in the
Company, and currently is responsible for the Sales & Marketing Department. As such, the Company requests hiselection as a Director in the belief that he will be able to contribute to strengthening the decision-making andsupervisory functions of the Board of Directors.

-7-

No.

Name
(Date of birth)

Career summary, position and responsibilities[Significant concurrent positions outside the Company]
Mar. 1971

7

Number of theCompany’s shares
ownedJoined Nippon Yusoki Co., Ltd. (currently
Mitsubishi Logisnext Co., Ltd.)
Sept. 2005
General Manager, Domestic Sales Planning
Department, Domestic Sales Division, Nippon
Yusoki Co., Ltd.
June 2006
Executive Officer, Nippon Yusoki Co., Ltd.
June 2007
Director, Nippon Yusoki Co., Ltd.
June 2008
Managing Director, Nippon Yusoki Co., Ltd.
Apr. 2009
Director, Nippon Yusoki Co., Ltd.
Kyoichi Haizaki
Representative Director, Nichiyu MHI Forklift(December 22, 1948)
Co., Ltd.
200 shares
Reelection
June 2010
Managing Director, Nippon Yusoki Co., Ltd.
OutsideJune 2011
Senior Managing Director, Nippon Yusoki Co.,
IndependentLtd.
Apr. 2013
Director, Senior Managing Executive Officer,
Mitsubishi Nichiyu Forklift Co., Ltd. (Currently
Mitsubishi Logisnext Co., Ltd.)
June 2015
Senior Advisor, Mitsubishi Nichiyu Forklift
Co., Ltd.
June 2016
Advisor, Mitsubishi Nichiyu Forklift Co., Ltd.
(retired in June 2017)
Director of the Company (present position)[Reasons for nomination as candidate for Outside Director]
The Company requests election of him as an Outside Director in the belief that he will be able to contribute tostrengthening the corporate governance of the Company by providing suggestions and proposals concerning theCompany’s overall management by leveraging his ample business expertise and wealth of insight gained through his
many years of experience at a listed company and experience as a Director of the same company.

-8-

No.

Name
(Date of birth)

Career summary, position and responsibilities[Significant concurrent positions outside the Company]
Apr. 1977

8

9Number of theCompany’s shares
ownedJoined The Mitsubishi Bank, Ltd. (currently
MUFG Bank, Ltd.)
Jan. 1997
General Manager, Tamachi Higashi-guchi
Branch, The Bank of Tokyo-Mitsubishi, Ltd.
(currently MUFG Bank, Ltd.)
Oct. 2000
General Manager, Media Relations Office, The
Bank of Tokyo-Mitsubishi, Ltd.
June 2004
Executive Officer, General Manager of Credit
Department, The Bank of Tokyo-Mitsubishi,Ltd. (retired in June 2006)
Michitaka Mukohara
June 2006
Representative Director and President,(November 3, 1954)
Marunouchi Yorozu Co., Ltd. (retired in June
Reelection
2007)
300 shares
OutsideJune 2007
Deputy President, Mitsubishi UFJ Capital Co.,Ltd.
Independent
June 2008
President, Mitsubishi UFJ Capital Co., Ltd.
(retired in June 2011)
June 2011
Full-time Audit & Supervisory Board Member,
MARUI GROUP CO., LTD. (retired in June2015)
Dec. 2015
Deputy President, MST Insurance Service Co.,
Ltd. (retired in June 2018)
June 2018
Corporate Auditor, Marunouchi Yorozu Co.,
Ltd. (present position)
Director of the Company (present position)[Reasons for nomination as candidate for Outside Director]
The Company requests election of him as an Outside Director in the belief that he will be able to contribute tostrengthening the corporate governance of the Company with suggestions and proposals concerning the Company’s
overall management by leveraging his ample business expertise and wealth of insight gained through his experience asa full-time Audit & Supervisory Board Member in a listed company and a senior corporate executive of businesscompanies, in addition to that in financial institutions over many years.
Oct. 1982
Joined Asahi & Co. (currently KPMG AZSA
LLC)Mar. 1986
Registered as a certified public accountant (tothe present)
Oct. 1995
Senior Manager, Asahi & Co. (retired in
September 2009)
Kimiyo Hayashi
Oct. 2009
Founded Hayashi Kimiyo Certified Public(April 29, 1958)
Accountant Office
New candidate
0 sharesOct. 2010
Corporate Auditor, Iwatani Direct Co., Ltd.
Outside(currently IWATANI-I-COLLECT Co., Ltd.)(present position)
Independent
Jan. 2016
Corporate Auditor, Lotus Thermal Solution Inc.
(present position)
Dec. 2017
Corporate Auditor, TAKUTO Holdings Co.,
Ltd. (present position)[Significant concurrent position outside the Company]
Certified public accountant[Reasons for nomination as candidate for Outside Director]
In addition to her wealth of insight in finance and accounting as a certified public accountant, she has ample experience
as an auditor of business corporations. Although Kimiyo Hayashi has never been involved in the management of acompany except as an outside officer, the Company requests election of her as an Outside Director in the belief that, in
addition to the above reason, she will be able to contribute to strengthening the corporate governance of the Company
by providing suggestions and proposals concerning the Company’s overall management as well as to enhance diversityof the organization.

-9-Notes:

1. Hideyoshi Noda, a candidate for Director, serves concurrently as Representative Director and President of Nitto Sanwa
Toryo Co., Ltd. and Okayama Kako Co., Ltd. The Company outsources the production of paints to Nitto Sanwa Toryo
Co., Ltd. and Okayama Kako Co., Ltd.
2. There are no special interests between the other candidates and the Company.
3. Matters pertaining to candidates for Outside Director are as follows.
(1) Kyoichi Haizaki, Michitaka Mukohara and Kimiyo Hayashi are candidates for Outside Director.
The Company has designated Kyoichi Haizaki, Michitaka Mukohara and Kimiyo Hayashi as Independent Officers
and notified such designations to the Tokyo Stock Exchange in accordance with the rules of Tokyo Stock Exchange,
Inc.
(2) At the conclusion of this meeting, Kyoichi Haizaki will have been an Outside Director for three (3) years. Also, atthe conclusion of this meeting, Michitaka Mukohara will have been an Outside Director for one (1) year.
(3) The Company has entered into limited liability agreements with Kyoichi Haizaki and Michitaka Mukohara under
Article 423, paragraph 1 of the Companies Act. Limitation on liability of Outside Director to compensate damages
under such agreements is set out to be the minimum amounts set forth in the relevant laws and regulations. If thereappointment of Kyoichi Haizaki and Michitaka Mukohara is approved, the Company intends to continue theabove limited liability agreements. Moreover, if the appointment of Kimiyo Hayashi is approved, the Company
intends to enter into a similar limited liability agreement with her.
(4) There are business transactions such as providing coatings, etc., between the Company and Mitsubishi Logisnext
Co., Ltd., where Kyoichi Haizaki served as a business executive, but the amount of these transactions in the mostrecent fiscal year is negligible (less than 0.2%) for the consolidated net sales of the Company. Accordingly, theCompany has determined that the independence of Kyoichi Haizaki is secured.
(5) There are business transactions such as borrowings, etc., between the Company and MUFG Bank, Ltd., where
Michitaka Mukohara served as a business executive; however, the amount of these borrowings at the end of themost recent fiscal year is small (less than 2.5%) for the consolidated total assets of the Company. Also, a significant
period of time (thirteen (13) years) has passed since he left the said bank. There are business transactions such aspurchasing of insurance, etc., between the Company and MST Insurance Service Co., Ltd., where Michitaka
Mukohara served as a business executive, but the amount of these transactions in the most recent fiscal year is
negligible (less than 1%) for the consolidated net sales of MST Insurance Service Co., Ltd. Accordingly, theCompany has determined that the independence of Michitaka Mukohara is secured.
There has been no transaction in the most recent fiscal year between the Company and other companies where
Michitaka Mukohara served as a business executive.
(6) Although Kimiyo Hayashi was formerly a member of KPMG AZSA & Co. (currently KPMG AZSA LLC), theaccounting auditor of the Company, a significant period of time has passed since she left the said firm (nine (9)years). Therefore, the Company deems Kimiyo Hayashi to be independent.

- 10 -

Proposal 3:

Election of One (1) Substitute Corporate Auditor

The effect of assignment of substitute Corporate Auditor Hiroshi Maeshima will expire at the commencement of
this meeting. Therefore, we propose the election of one (1) substitute Corporate Auditor, to prepare for a situation
where the number of Corporate Auditor does not satisfy the number prescribed by laws and regulations. The
candidate for substitute Corporate Auditor has been determined by the Board of Directors based on therecommendation of the Nominating Committee, a majority of which consists of Outside Directors.
The Board of Corporate Auditors has given its consent to this proposal.
The candidate for substitute Corporate Auditor is as follows:
Name(Date of birth)

Career summary[Significant concurrent positions outside the Company]
Mar. 1970

Number of theCompany’s shares
ownedJoined Nippon Yusoki Co., Ltd. (currently Mitsubishi
Logisnext Co., Ltd.)
June 2004
Deputy General Manager, Corporate Planning Department,
Nippon Yusoki Co., Ltd.
Sept. 2005
General Manager, Corporate Planning Department, Nippon
Yusoki Co., Ltd.
Jan. 2006
Deputy General Manager, Corporate Planning Office,Hiroshi Maeshima
Nippon Yusoki Co., Ltd.
0 shares(November 25, 1951)
June 2010
General Manager, Internal Audit Office, Administrative
Division, Nippon Yusoki Co., Ltd.
Oct. 2010
Corporate Auditor, Nichiyu MHI Forklift Co., Ltd.
June 2011
Senior Corporate Auditor, Nippon Yusoki Co., Ltd. (present
position)[Significant concurrent positions outside the Company]
Audit and Supervisory Board Member, Mitsubishi Logisnext Co., Ltd.
[Reasons for nomination as candidate for substitute Outside Corporate Auditor]
The Company requests election of him as a substitute Outside Corporate Auditor in the belief that he will be able to execute his
duties as Corporate Auditor from his expert perspective by leveraging his ample knowledge of the corporate planning office andinternal control, etc. gained through his many years of experience including his current position as an Audit and Supervisory Board
Member at a listed company.
Notes: 1. There is no special interest between Hiroshi Maeshima, a candidate for substitute Outside Corporate Auditor, and theCompany.
2. Hiroshi Maeshima is a candidate for substitute Outside Corporate Auditor. If he is appointed Corporate Auditor, theCompany plans to designate Hiroshi Maeshima as an Independent Officer and notify such designation to the Tokyo
Stock Exchange in accordance with the rules of Tokyo Stock Exchange, Inc.
3. If he is appointed Corporate Auditor, the Company intends to enter into a liability limitation agreement with Hiroshi
Maeshima per Article 423, paragraph 1 of the Companies Act. Based on this agreement, the limitation of liability forcompensation for damages is set to be the minimum amount specified in the relevant laws and regulations.
4. There are business transactions such as providing coatings, etc. between the Company and Mitsubishi Logisnext Co.,
Ltd., where Hiroshi Maeshima serves as an Audit and Supervisory Board Member, but the amount of these transactionsin the most recent fiscal year is negligible (less than 0.2%) for the consolidated net sales of the Company. Accordingly,
the Company has determined that the independence of Hiroshi Maeshima is secured.

- 11 -

Proposal 4:

Revision of Remuneration Amount for Directors

At the 124th Ordinary General Meeting of Shareholders held on June 28, 2007, remuneration for the Company’s
Directors was approved at an amount not to exceed ¥204 million p.a. However, as the Company proposes toincrease the number of Outside Directors by one to further enhance the corporate governance system, as describedin the Proposal No. 2, and taking into consideration the increasingly larger responsibilities and roles expected to be
fulfilled by Directors, the Company proposes to revise the remuneration amount for Directors to an amount not toexceed ¥300 million p.a.
This proposal has been prepared by the Board of Directors based on the recommendation of the Remuneration
Advisory Committee, a majority of which consists of Outside Directors.
Currently, there are eight (8) Directors (of whom two (2) are Outside Directors), but the number will increase tonine (9) Directors (of whom three (3) are Outside Directors) upon approval of Proposal No. 2 “Election of Nine (9)Directors.”(Reference) Policy and Procedure for Determining Remuneration for Directors, etc.
The remuneration for Directors and other officers of the Company is composed of the monthly base remuneration,a bonus linked with performance, paid in cash, and a stock option as stock-based remuneration in treasury shares
aimed at medium- and long-term improvement in financial results. The Company will specify the ratio of
remuneration linked with medium- and long-term financial results and the ratio of remuneration in cash to that intreasury shares at proper levels in order to provide sound incentives that help to further continuous growth(i) Policy on Determining Remuneration for Directors, etc.
The Company will define the following as a basic policy on determining remuneration for Directors and otherpersonnel.
- A structure of remuneration suited to the roles, responsibilities, and results of individual Directors andother personnel.
- A structure of remuneration that reflects the Company’s financial conditions and medium- and long-term
financial results.
- A structure of remuneration that gives incentives to improve the Company’s financial results and its
corporate value.
- A structure of remuneration that enables them to share the same value standard with shareholders and otherstakeholders.
(ii) Details of Remuneration and Procedures of Determining Remuneration- The remuneration for directors is composed of monthly remuneration, a bonus, and a stock-based
compensation stock option, and the amount of remuneration for each director will be determined by the
Board of Directors within the limit approved by the General Meeting of Shareholders. The remunerationfor each Outside Director consists of monthly remuneration and a bonus.
- The remuneration of each Executive Officer will consist of monthly remuneration, a bonus, and a stockbased compensation stock option, subject to a decision by the Board of Directors.

- 12 -