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 shallprevail. The Company assumes no responsibility for this translation or for direct, indirect or any other formsof damages arising from the translation.
(Stock Exchange Code 1822)
June 7, 2021
To Shareholders with Voting Rights:
Kenichi Osumi
Representative Director
DAIHO CORPORATION
24-4, Shinkawa 1-Chome, Chuo-ku, Tokyo,
Japan

NOTICE OF CONVOCATION OF THE 72ND ANNUAL GENERAL MEETING OF
SHAREHOLDERS
We would like to express our appreciation for your continued support and patronage.
We are pleased to inform that the 72nd Annual General Meeting of Shareholders of DAIHOCORPORATION (the “Company”) will be held for the purposes as described below.
Due to the continued spread of COVID-19, we consider the safety of our shareholders as top priority
and kindly ask you to refrain from attending the meeting as much as possible and exercise your voting
rights in writing or via the Internet etc.
For exercising your voting rights in advance, please review the attached Reference Documents for the
General Meeting of Shareholders and exercise your voting rights by 5:30 p.m. on Monday, June 28, 2021,
Japan time.
1. Date and Time:

Tuesday, June 29, 2021 at 10:00 a.m. Japan time

2. Place:

2F Conference room at the Corporate Headquarters located at
24-4, Shinkawa 1-Chome, Chuo-ku, Tokyo, Japan

3. Meeting Agenda:
Matters to be reported: 1. The Business Report and Consolidated Financial Statements for theCompany’s 72nd Fiscal Year (April 1, 2020 - March 31, 2021) and results ofaudits by the Independent Auditor and the Board of Corporate Auditors of
the Consolidated Financial Statements
2. Non-Consolidated Financial Statements for the Company’s 72nd Fiscal Year
(April 1, 2020 - March 31, 2021)
Proposals to be resolved:
Proposal 1:
Appropriation of Surplus
Proposal 2:
Partial Amendments to the Articles of Incorporation
Proposal 3:
Election of 7 Directors
Proposal 4:
Election of 4 Corporate Auditors
Proposal 5:
Revision to Remuneration Limit for Directors-1-

4. Disclosure via the Internet:
From among the document to be provided with this Notice, Consolidated Statements of Changes in Net
Assets and Notes to Consolidated Financial Statements of Consolidated Financial Statements, as well as
Non-Consolidated Statements of Changes in Net Assets and Notes to Non-Consolidated Financial Statementsof Non-Consolidated Financial Statements, are posted on the Company’s website (https://www.daiho.co.jp) in
accordance with laws and regulations as well as Article 18 of the Company’s Articles of Incorporation andtherefore are not provided in the Appendix of this Notice.
________________________________________________________________________________________
 When attending the meeting, please submit the enclosed Voting Rights Exercise Form at the reception desk.
 Please note that we do not provide gifts for meeting attendees. We appreciate your understanding.
 Should the Business Report, Consolidated Financial Statements, Non-Consolidated Financial Statements,
and the Reference Documents for the General Meeting of Shareholders require revisions, the revised
versions will be posted on the Company’s website (https://www.daiho.co.jp).

-2-Reference Documents for the General Meeting of Shareholders
Proposals and References
Proposal 1:

Appropriation of Surplus

The Company holds a basic policy of maintaining and enhancing stable dividends while improving thefinancial strength as a basis for long-term development, and plans to secure a consolidated dividend payout
ratio of 30% or more, as indicated in the Medium-term Management Plan (FY2020-22). Based on the above
policy, it is proposed that the year-end cash dividend for the 72nd fiscal year be ¥110.0 per share of common
stock, in comprehensive consideration of the financial results and management environment during the fiscal
year under review.
Matters relating to the year-end cash dividend(1) Matters related to the distribution of dividend properties and the total amount thereof¥110.0 per share of the Company’s common stock
Total amount of dividends ¥1,993,226,620(2) Effective date of dividends of surplus
June 30, 2021

-3-

Proposal 2:

Partial Amendments to the Articles of Incorporation

1. Reasons for amendments(1) Term of office of Directors
In order to clarify the management responsibilities of Directors, establish a management structure thatcan promptly respond to changes in the business environment, and further strengthen corporate
governance, the Company proposes to shorten the term of office of Directors from the current 2 years
to 1 year, and amend Article 21 (Term of Office of Directors) of the current Articles of Incorporation.
(2) Convener and Chairperson of the Board of Directors
In order to enable flexible operation of the Board of Directors and improve the objectivity andtransparency of decision-making in line with the Company’s management structure, the Company
proposes to amend Article 28 (Convener and Chairperson of the Board of Directors) of the current
Articles of Incorporation as follows.
2. Details of amendments
The details of amendments are as follows:
The amendments to the Articles of Incorporation in this proposal shall take effect at the conclusionof this General Meeting of Shareholders.
(Amended sections are underlined.)
Current Articles of Incorporation

Proposed Amendments(Term of Office of Directors)(Term of Office of Directors)
Article 21 The term of office of Directors shall be until the Article 21 The term of office of Directors shall be until theconclusion of the Annual General Meeting of
conclusion of the Annual General Meeting of
Shareholders relating to the last fiscal year that
Shareholders relating to the last fiscal year that
ends within two (2) years after they are elected.
ends within one (1) year after they are elected.
(Deleted)
The term of office of Directors elected as
substitutes shall be until the time of expiration of
the term of office of the retired Directors.
(Newly established)

Supplementary Provision
Notwithstanding the provisions of Article 21, theterm of office of Directors elected at the Annual
General Meeting of Shareholders held on June 26,
2020 shall be until the conclusion of the Annual
General Meeting of Shareholders to be held in
2022. This Supplementary Provision shall bedeleted after the conclusion of the General
Meeting of Shareholders to be held in 2022.

(Convener and Chairperson of the Board of Directors)(Convener and Chairperson of the Board of Directors)
Article 28 The Representative Director (President) shall Article 28 The Director previously determined by the Board
convene the Board of Directors and serve as theof Directors shall convene the Board of Directors
and serve as the Chairperson thereof. In the event
Chairperson thereof. In the event that thethat the said Director is unable to serve as theRepresentative Director (President) is unable toserve as the Convener and Chairperson due to an
Convener and Chairperson due to an accident,
accident, another Director, determined inanother Director, determined in accordance withaccordance with an order of priority previously
an order of priority previously determined by thedetermined by the Board of Directors, shall
Board of Directors, shall convene the Board ofconvene the Board of Directors and serve as the
Directors and serve as the Chairperson thereof.
Chairperson thereof.

-4-

Proposal 3:

Election of 7 Directors

The terms of office of Directors Fumio Tada, Masanobu Nakasugi, Kakue Morishita, Shuichi Nagata,
Tetsuro Kawaguchi, Kimiyoshi Kakitsuba, and Shizu Machino will expire at the conclusion of this year’s
Annual General Meeting of Shareholders. Accordingly, the Company proposes adding one External Director
to enhance the function of management oversight and electing 7 Directors.
The candidates are as follows:
No.

Name

Positions and responsibilities at the Company

1

Kakue Morishita

Director; Operating Vice President
General Manager, Civil Engineering Division;in charge of Overseas Division

Reappointment

2

Minoru Kugimoto

Managing Executive Officer
General Manager, Administration Division

New Appointment

3

Momoki Nakamura

Managing Executive Officer
General Manager, Construction Division

New Appointment
New Appointment

4

Tatsujiro Naito−

External
Independent
New Appointment

5

Kazuhiro Fujita−

External
Independent
New Appointment

6

Yoshitaka Oshima−

External
Independent
New Appointment

7

Yoko Atsumi

External−

Independent
Female

-5-

No.

Name
(Date of birth)

Past experience, positions, responsibilities,
and significant concurrent positions

Number ofshares of theCompany held

April 1979
October 2003
April 2005
June 2008
April 2009

1

2

Joined the Company
Acting General Manager, Sales Department, Hiroshima Branch
General Manager, Sales Department, Hiroshima Branch
General Manager, Hiroshima Branch
General Manager, Civil Engineering Technology Department,
Osaka Branch
Kakue Morishita
April
2010
General Manager, Civil Engineering Sales Department, Osaka(April 23, 1956)
BranchApril 2013
General Manager, Kyushu Branch<Reappointment>
April 2014
Executive Officer; General Manager, Kyushu Branch
1,764
April 2017
Executive Officer; General Manager, Nagoya BranchTerm of office as
Director: 2 years
April 2018
Managing Executive Officer; General Manager, Nagoya Branch
April 2019
Senior Managing Executive Officer; General Manager, Civil
Attendance at theEngineering Division
Board of Directors June 2019
Director; Senior Managing Executive Officer; General Manager,
meetings: 14/14
Civil Engineering Division
April 2020
Director; Senior Managing Executive Officer; General Manager,
Civil Engineering Division; in charge of Overseas Division
April 2021
Director; Operating Vice President; General Manager, Civil
Engineering Division; in charge of Overseas Division (current
position)[Reasons for nomination as candidate for Director]
Mr. Kakue Morishita has held key positions in the civil engineering division and has abundant experience and advanced
knowledge in the Company’s business activities. Since April 2019, he has supervised the civil engineering business as
General Manager of the Civil Engineering Division, and since assuming the position of Director, he has been fulfilling his
duties as Director, including decision-making on important management matters and supervision over business execution.
The Company, therefore, nominates him as a candidate for Director again.
April 1983
Joined the Company
February 2009Manager, Finance Section, Accounting Department,
Administration Division
April 2011
Manager, General Affairs Section, General Affairs Department,
Administration Division
May 2013
General Manager, General Affairs Department, Tohoku Branch
Minoru Kugimoto July 2017
General Manager, Accounting Department, Administration(November 6, 1960)
722
Division
April 2018
Executive Officer; General Manager, Accounting Department,<New Appointment>
Administration Division
April 2019
Managing Executive Officer; Deputy General Manager,
Administration Division; General Manager, Accounting
Department
April 2021
Managing Executive Officer; General Manager, Administration
Division (current position)[Reasons for nomination as candidate for Director]
Mr. Minoru Kugimoto has held key positions in the administration division for many years and has abundant experience andgeneral management knowledge. Since July 2017, he has contributed to strengthening and maintaining the financial structure as
General Manager of Accounting Department, Administration Division. The Company has determined that, based on theseknowledge and experience, he will fulfill his duties as Director, including controlling all aspects of administrative operations,decision-making on important matters, and supervising business execution. The Company, therefore, nominates him as a candidate
for new Director.

-6-

No.

Name
(Date of birth)

Past experience, positions, responsibilities,
and significant concurrent positions
April 1985
April 2008

3

4

Number ofshares of theCompany held

Joined the Company
Manager, 2nd Works Section, Construction Department, Tokyo
BranchJanuary 2010
Acting General Manager, Construction Department, Tokyo
BranchOctober 2010
Deputy General Manager, Construction Department, Tokyo
BranchMomoki Nakamura April 2011
General Manager, Construction Department, Tokyo Branch(December 24, 1960)
940
January 2015
Deputy General Manager; General Manager, Construction
Department, Tokyo Branch<New Appointment>
April 2016
Deputy General Manager, Tokyo Branch
April 2017
Executive Officer; Deputy General Manager, Tokyo Branch
April 2018
Executive Officer; General Manager, Tokyo Construction Branch
April 2020
Managing Executive Officer; General Manager, Tokyo
Construction Branch
April 2021
Managing Executive Officer; General Manager, Construction
Division (current position)[Reasons for nomination as candidate for Director]
Mr. Momoki Nakamura has held key positions in the construction division and has abundant experience in business andadvanced knowledge of all aspects of construction business operations. Since April 2018, he has contributed to improving
profitability as General Manager of Tokyo Construction Branch. The Company has determined that, based on theseknowledge and experience, he will fulfill his duties as Director, including controlling all aspects of construction business
operations, decision-making on important matters, and supervising business execution. The Company, therefore, nominates
him as a candidate for new Director.
April 1981
Joined SUMITOMO CORPORATION
November 2002 General Manager, Information Systems Department; Assistant toGeneral Manager for the Americas (in charge of IT), Sumitomo
Corporation of Americas (stationed in New York)
April 2007
General Manager, Information Technologies Planning andPromotion Dept., SUMITOMO CORPORATION
June 2007
Outside Director, Sumisho Computer Systems Corporation
April 2011
Corporate Officer; General Manager, Network Division, Media,
Network& Lifestyle Retail Business Unit, SUMITOMO
Tatsujiro Naito
CORPORATION(November 26, 1957)
June 2011
Outside Director, T-Gaia Corporation0
Outside Director, SCSK Corporation<New Appointment> October 2011
<External>
April 2016
Director; Senior Managing Executive Officer; General Manager,<Independent>
Distribution Systems Business Group; General Manager, Global
System Business Division; Chief Representative, China & Asia,SCSK Corporation
June 2018
Joined LIXIL Corporation
October 2018
Corporate Director; General Manager, SOR System Division,
LIXIL Corporation
July 2019
Managing Officer, Group CIO; Officer in charge of Digital
Strategy Department, RIZAP GROUP, Inc.
January 2021
Representative, Office The-T (current position)[Reasons for nomination as candidate for External Director and expected roles]
Mr. Tatsujiro Naito has long working experience in a general trading company and management as a member of the
management team in a major IT company. He is expected to enhance the supervisory function for business execution andprovide advice on general management, based on his abundant experience in business companies and extensive knowledge
mainly in the IT field. The Company has determined that he will fulfill his duties as Director, and therefore nominates him
as a candidate for new External Director.

-7-

No.

Name
(Date of birth)

Past experience, positions, responsibilities,
and significant concurrent positions
October 1990

5

6

Number ofshares of theCompany held

Joined Tohmatsu & Co. (currently Deloitte Touche Tohmatsu
LLC)
August 1994
Registered as a certified public accountant
May 1997
Established Fujita and Partners (current position)
August 1998
Manager, Strategic Business Department, Deloitte Tohmatsu
Consulting Co., Ltd.
October 2000
Senior Manager, B2B Venture Business Department, Deloitte
Kazuhiro Fujita
Tohmatsu Consulting Co., Ltd.
(May 5, 1965)
September 2001 Senior Manager, Deloitte Consulting LLP (New York, the U.S.)
June 2005
Executive Officer and Principal, ABeam Consulting Ltd.
Corporate Secretary, Regional Leader, East Region, ABeam
0<New Appointment>
Consulting (USA) Ltd.
<External>
August 2007
Executive Officer and Principal, Manufacturing and Distribution<Independent>
Control Business Department; Leader, Strategic AccountManagement Office, ABeam Consulting Ltd.
August 2010
Partner, Strategy Consulting, Global Business Service, IBM
Japan, Ltd.
August 2010
Registered as a certified tax accountant
October 2013
Supervisory Officer, KENEDIX Private Investment Corporation(current position)
May 2014
Partner, Tokyo Kyodo Accounting Office (current position)[Reasons for nomination as candidate for External Director and expected roles]
Mr. Kazuhiro Fujita has many years of experience as a certified public accountant, and experience and advanced knowledge
in corporate management as a business consultant. He is expected to enhance the supervisory function for business execution
and provide advice on corporate accounting and corporate finance from a professional perspective. The Company has
determined that he will fulfill his duties as Director, and therefore nominates him as a candidate for new External Director.
October 2001
Registered as an attorney-at-law
Joined Hideyuki Sakai Law Office
October 2009
Seconded to Enterprise Turnaround Initiative Corporation of
Yoshitaka Oshima
Japan (currently Regional Economy Vitalization Corporation of(January 20,1970)
Japan)
April 2012
Partner Attorney, Bingham Sakai Mimura Aizawa (Foreign Law
0
Joint Enterprise)<New Appointment>
April 2015
Partner Attorney, Anderson Mori & Tomotsune LPC<External>
July 2017
Established Tokyo Bay Law Office; Representative Attorney<Independent>(current position)
October 2017
Outside Audit & Supervisory Board Member, SG Holdings Co.,
Ltd. (current position)[Reasons for nomination as candidate for External Director and expected roles]
Although Mr. Yoshitaka Oshima has not been directly involved in corporate management other than as an External Officer,
he has professional knowledge and abundant experience as an attorney-at-law. In addition, he has contributed to theinvestigation of facts and the cause as the chairperson of the External Investigation Committee established in response to thediscovery of misconduct by an employee of the Company that was announced in January 2021. He is expected to provide
advice on general management from the perspective of enhancing the supervisory function for business execution andcorporate governance. The Company has determined that he will fulfill his duties as Director, and therefore nominates him
as a candidate for new External Director.
Considering that he served as the chairperson of the abovementioned External Investigation Committee and that thecommission fees that the Company paid to him was less than ¥6 million, the Company determines that there is no risk of
conflict of interest between him and general shareholders of the Company, and that he has sufficient independence.

-8-

No.

Name
(Date of birth)

Past experience, positions, responsibilities,
and significant concurrent positions

Number ofshares of theCompany held

December 2009
January 2010
December 20117

Registered as an attorney-at-law
Joined Nishimura & Asahi
Seconded to Legal Department, JP Morgan Securities Japan Co.,
Yoko Atsumi
Ltd.
(March 12, 1984)
June 2014
Joined Law Office Hironaka<New Appointment> October 2017
0Established Atsumi Law Office; Representative Attorney<External>
June 2019
Outside Director, KOSAIDO Co., Ltd.
<Independent>
September 2019 Outside Audit & Supervisory Board Member, KIDSLINE Inc.
<Female>(current position)
December 2020 Senior Partner, Head of Kojimachi Office, Atsumi & Sakai(current position)[Reasons for nomination as candidate for External Director and expected roles]
Although Ms. Yoko Atsumi has not been directly involved in corporate management other than as an External Officer, she
has professional knowledge and experience as an attorney-at-law and has served as an Outside Audit & Supervisory Board
Member at another company. She is expected to provide the supervisory function from an independent and objective
standpoint and advice on general management based on her legal knowledge. The Company has determined that she will
fulfill her duties as Director, and therefore nominates her as a candidate for new External Director.
(Notes)1. There are no special interests between any of the candidates for Directors and the Company.
2. Responsibilities, etc. are as posted in the Directors and Corporate Auditors column in the Business Report (available inJapanese only).
3. Mr. Tatsujiro Naito, Mr. Kazuhiro Fujita, Mr. Yoshitaka Oshima and Ms. Yoko Atsumi are candidates for External
Directors. The Company intends to designate Mr. Tatsujiro Naito, Mr. Kazuhiro Fujita, Mr. Yoshitaka Oshima and Ms.
Yoko Atsumi as independent directors prescribed by the Tokyo Stock Exchange, and notify the Exchange of their
appointment as independent directors.
4. Mr. Tatsujiro Naito is scheduled to be appointed as Outside Director of Mr Max Holdings Ltd. at the company’s 72nd
Annual General Meeting of Shareholders to be held in May 2021.
5. If the election of Mr. Tatsujiro Naito, Mr. Kazuhiro Fujita, Mr. Yoshitaka Oshima and Ms. Yoko Atsumi as Directors isapproved as proposed, the Company intends to enter into an agreement with each of them to limit their liabilities under
Article 423, Paragraph 1 of the Companies Act in accordance with Article 427, Paragraph 1 of the same act. The
maximum amount of liability pursuant to the agreement is ¥10 million or the minimum amount of liability stipulated
in Article 425, Paragraph 1 of the same act, whichever is higher.
6. The Company shall enter into a directors and officers liability insurance agreement with an insurance company, as
stipulated in Article 430-3, Paragraph 1 of the Companies Act. The insurance agreement will cover damages that may
arise due to the insured directors and officers assuming liability for the execution of their duties, or receiving a claim
for the pursuit of such liability. Each candidate shall be included as an insured under the said insurance agreement. The
insurance agreement is scheduled to be renewed on July 1, 2021.

-9-

Proposal 4:

Election of 4 Corporate Auditors

The terms of office of Corporate Auditors Yoshiyuki Kiya, Kazuo Hashimoto and Ryosuke Harada will
expire at the conclusion of this year's Annual General Meeting of Shareholders. Accordingly, the Company
proposes adding one External Corporate Auditor to strengthen and enhance the audit system and electing 4
Corporate Auditors.
The Board of Corporate Auditors has previously given its approval to this proposal.
The candidates are as follows:

No.

Name
(Date of birth)

Past experience, positions, and significant concurrent positions

Number ofshares of theCompany held

April 1982
July 2006

1

2

Joined the Company
Manager, Finance Section, Accounting Department,
Administration Division
Kenzo Akiba
February 2009Manager, Accounting Section, Accounting Department,(March 5, 1960)
659
Administration Division
July 2012
General Manager, Accounting Department, Administration<New Appointment>
Division, Morimoto Corporation
July 2017
General Manager, General Affairs Department, Tohoku Branch
April 2021
Assistant Manager, Administration Division (current position)[Reasons for nomination as candidate for Corporate Auditor]
Mr. Kenzo Akiba has held key positions in the accounting divisions of the Company and its important subsidiary. The
Company has determined that, based on his abundant knowledge and extensive experience in finance and accounting, hewill be able to appropriately perform his duties as full-time Corporate Auditor, and therefore nominates him as a candidate
for new Corporate Auditor.
April 1982
Joined Tokyo Regional Taxation Bureau
July 2004
Deputy Director, Accounts Division, Commissioner’s Secretariat,
National Tax Agency
July 2006
Deputy District Director, Shinagawa Tax Office, Tokyo Regional
Taxation Bureau
July 2008
Special Examiner, Sagamihara Tax Office, Tokyo Regional
Taxation Bureau
Yoshiaki Osumi July 2010
Internal Inspector, Tokyo Regional Taxation Bureau,(December 8, 1957)
Commissioner’s Secretariat, National Tax Agency
July 2012
District Director, Miyakojima Tax Office, Okinawa Regional
0<New Appointment>
Taxation Office<External>
July 2014
District Director, Sagamihara Tax Office, Tokyo Regional<Independent>
Taxation Bureau
July 2015
Director, Accounts Division, Tokyo Regional Taxation Bureau
July 2016
Deputy Assistant Regional Commissioner, Planning and
Administration Department, Tokyo Regional Taxation Bureau
July 2017
District Director, Kojimachi Tax Office, Tokyo Regional
Taxation Bureau
August 2018
Registered as a certified tax accountant and established Yoshiaki
Osumi Tax Accountant Office (current position)[Reasons for nomination as candidate for External Corporate Auditor]
Although Mr. Yoshiaki Osumi has not been directly involved in corporate management except as an External Officer, he has been
involved in national tax administration for many years, and has knowledge and abundant experience in tax accounting. The
Company has determined that he will appropriately provide oversight and supervision from a neutral and fair standpoint as anExternal Corporate Audit of the Company, and therefore nominates him as a candidate for new External Corporate Auditor.

- 10 -

No.

Name(Date of birth)

Past experience, positions, and significant concurrent positions

Number ofshares of theCompany held

October 1992

Joined Aoyama Audit Corporation (currently
PricewaterhouseCoopers Aarata LLC)
(June 15, 1963)
March 1998
Registered as a certified public accountant
January 2000
Registered as a certified tax accountant and established Takeuchi
0
Certified Public Accountant and Tax Accountant Office (current<New Appointment>
position)<External>
August 2016
Outside Corporate Auditor, Maezawa Industries, Inc. (current<Independent>
position)[Reasons for nomination as candidate for External Corporate Auditor]
Although Mr. Shoichi Takeuchi has not been directly involved in corporate management except as an External Officer, he
has abundant knowledge and experience regarding corporate accounting and finance as a certified public accountant andcertified tax accountant. The Company has determined that he will appropriately provide oversight and supervision from aneutral and objective standpoint as an External Corporate Auditor of the Company, and therefore nominates him as a
candidate for new External Corporate Auditor.
October 1992
Joined Tohmatsu & Co. (currently Deloitte Touche Tohmatsu
LLC)
Noriko Ichiba
July 1997
Joined Tadao Kato Accounting Office(May 15, 1971)
August 1999
Joined Taiyo Audit Corporation (currently Grant Thornton Taiyo
LLC)
Registered as a certified public accountant
0<New Appointment> May 2000
November 2002 Established Ichiba Certified Public Accountant Office<External>
August 2006
Joined COMPASS Co. Ltd. (current position)<Independent>
August 2008
Registered as a certified tax accountant<Female>October 2008
Established UPRISE Certified Tax Accountant’s Co. (current
position)[Reasons for nomination as candidate for External Corporate Auditor]
Although Ms. Noriko Ichiba has not been directly involved in corporate management except as an External Officer, she has
been involved in accounting audits of publicly held corporations as a certified public accountant and has abundant
experience and professional knowledge regarding accounting and finance. The Company has determined that she willappropriately provide oversight and supervision from an objective and fair standpoint as an External Corporate Auditor of
the Company, and therefore nominates her as a candidate for new External Corporate Auditor.

Shoichi Takeuchi

34(Notes)1. There are no special interests between any of the candidates for Corporate Auditors and the Company.
2. Mr. Yoshiaki Osumi, Mr. Shoichi Takeuchi and Ms. Noriko Ichiba are candidates for External Corporate Auditors. The
Company intends to designate Mr. Yoshiaki Osumi, Mr. Shoichi Takeuchi and Ms. Noriko Ichiba as independent
auditors prescribed by the Tokyo Stock Exchange, and notify the Exchange of their appointment as independent
auditors.
3. If the election of Mr. Kenzo Akiba, Mr. Yoshiaki Osumi, Mr. Shoichi Takeuchi and Ms. Noriko Ichiba as Corporate
Auditors is approved as proposed, the Company intends to enter into an agreement with each of them to limit their
liabilities under Article 423, Paragraph 1 of the Companies Act in accordance with Article 427, Paragraph 1 of thesame act. The maximum amount of liability pursuant to the agreement is ¥10 million or the minimum amount ofliability stipulated in Article 425, Paragraph 1 of the same act, whichever is higher.
4. The Company shall enter into a directors and officers liability insurance agreement with an insurance company, as
stipulated in Article 430-3, Paragraph 1 of the Companies Act. The insurance agreement will cover damages that may
arise due to the insured directors and officers assuming liability for the execution of their duties, or receiving a claim
for the pursuit of such liability. Each candidate shall be included as an insured under the said insurance agreement. The
insurance agreement is scheduled to be renewed on July 1, 2021.

- 11 -

Independence Criteria for External Officers
The Company determines that the independence of external officers will not be satisfied if an external officer
falls under any of the following items.
1. A person who is or was a business executor (an executive director, executive officer, or an employee, thesame applies hereinafter) of the Company or any of the Company’s subsidiaries or affiliates (hereinafterreferred to as the “Group”)
2. A person who directly or indirectly holds 10% or more of the total voting rights of the Company or abusiness executor thereof, or a person who held 10% or more of the total voting rights of the Company ora business executor thereof in any of the past 3 years
3. A person who is a business executor of a person of whom the Group directly or indirectly holds 10% ormore of the total voting rights, or a person who was a business executor of such person in any of the past
3 years
4. A person who is a business executor, corporate auditor, or accounting advisor of a company, or its parent
company, subsidiary, or affiliated company that receives a director or corporate auditor from the Group
5. A person for whom the Group is a major business partner in any of the past 3 fiscal years (a person who
has received payment of an amount equivalent to 2% or more of its annual consolidated net sales from theGroup in any of the past 3 fiscal years), or a business executor thereof
6. A person who is a major business partner of the Group in any of the past 3 fiscal years (a person who paid
an amount equivalent to 2% or more of the Company’s annual consolidated net sales to the Group in anyof the past 3 fiscal years, or a person who provided the Group with monetary loans equivalent to 2% ormore of the Company’s consolidated total assets in any of the past three fiscal years), or a businessexecutor thereof
7. A person who is a professional, such as a certified public accountant, attorney-at-law, certified tax
accountant, or consultant, who has received monetary or other property benefits exceeding ¥10 million
per year, other than officer remuneration, from the Group in any of the past 3 years (if the person
receiving remuneration is a legal entity, etc., a person affiliated with such legal entity, etc.)
8. A person who has received donations or subsidies exceeding ¥10 million per year from the Group in anyof the past 3 years, or a director, business executor, or an equivalent person of such person’s organization
9. A person who is a spouse, relative within the second degree of relationship or a relative living together ofthe person who falls under any of the items 1 through 8 above- 12 -

Proposal 5:

Revision to Remuneration Limit for Directors

The 70th Annual General Meeting of Shareholders held on June 27, 2019 approved a proposal to set theupper limit of remuneration for the Company’s Directors at ¥180 million per year (up to ¥15 million ofwhich is for External Directors). The upper limit has remained unchanged since then. However, if Proposal 3
is approved as originally proposed, there will be one more External Director.
Accordingly, with the addition of one External Director, the Company proposes keeping the upper limitof remuneration for Directors at ¥180 million per year and revising only the upper limit of remuneration forExternal Directors from ¥15 million per year to ¥30 million per year.
As in the past, the remuneration limit for Directors does not include the salaries as employees for
Directors who concurrently serve as employees.
The current number of Directors is 8 (3 of which are External Directors). If Proposal 3 is approved asoriginally proposed, the number of Directors will be 8 (4 of which are External Directors).

- 13 -