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: 9052
June 1, 2022
To our shareholders:
Kazuhiro Uekado,
President and Representative Director
Sanyo Electric Railway Co., Ltd.
1-1 Oyashikidori 3-chome, Nagata-ku, Kobe

Notice of the 133rd Annual General Meeting of Shareholders
It is my pleasure to inform you that the 133rd Annual General Meeting of Shareholders of Sanyo Electric Railway
Co., Ltd. (hereinafter the “Company”) will be held as described below.
In view of the novel coronavirus disease (COVID-19) pandemic, we request that you carefully consider
whether to attend the meeting in person. Please read the attached Reference Documents for the General Meetingof Shareholders and exercise your voting rights in writing or through the Internet, etc. by 5:30 p.m. on Thursday,June 16, 2022.
1. Date and Time: Friday, June 17, 2022, at 10:00 a.m. (JST)(Reception opens at 9:00 a.m.)
2. Venue:
Kobe Shimbun Matsukata Hall, 4F, Kobe Information Culture Building
5-7 Higashi-kawasaki-cho 1-chome, Chuo-ku, Kobe
3. Purpose of the Meeting
Matters to be reported
1. The Business Report, Consolidated Financial Statements, and Non-consolidated Financial Statements for
the Company’s 133rd Fiscal Year (April 1, 2021 to March 31, 2022)
2. The audit results of the Consolidated Financial Statements by the Financial Auditor and the Audit &Supervisory Board
Matters to be resolved
Proposal No. 1:
Dividend of Surplus
Proposal No. 2:
Amendment to the Articles of Incorporation
Proposal No. 3:
Election of Two Directors
Proposal No. 4:
Election of Two Audit & Supervisory Board Members
Proposal No. 5:
Determination of the Amount and Details of Stock-based Remuneration, etc. for Directors
Who Concurrently Serve as Executive Officers
Proposal No. 6:
Revision of the Amount of Remuneration, etc. for Directors
4. Other

If attending the meeting, please submit the enclosed voting form to the reception desk at the venue upon yourarrival.
If the Reference Documents for the General Meeting of Shareholders, the Business Report, Consolidated
Financial Statements, or Non-consolidated Financial Statements are amended, then the amendments will be
posted on the Company’s website (https://www.sanyo-railway.co.jp/company/soukai.html).

-1-

Reference Documents for the General Meeting of Shareholders
Proposals and Reference Information
Proposal No. 1:

Dividend of Surplus

The Company determines dividends based on comprehensive consideration of factors such as maintenance of stabledividend payments that are balanced with internal reserves, financial position, the level of profits and the dividend
payout ratio.
In the fiscal year ended March 31, 2022, the Company was again significantly impacted by COVID-19 and wasforced to operate its business in a difficult business environment. However, considering that extraordinary income
was recorded due to the sale of business real estate, the Company proposes to pay a year-end dividend for the fiscal
year under review as follows.
Year-end dividend(1) Allotment of dividend property to shareholders and the aggregate amount of this allotment¥15 per common share of the Company Total payment: ¥333,289,425
The annual dividend will be ¥30 per share, including the interim dividend of ¥15.
(2) Effective date of dividend of surplus
June 20, 2022-2-

Proposal No. 2:

Amendment to the Articles of Incorporation

1. Reasons for the proposal(1) The Company proposes to delete Article 15 (Venue) of the current Articles of Incorporation, which limits theplace of convocation of the General Meeting of Shareholders, in order to broaden the options for the venueof the General Meeting of Shareholders in case of natural disasters or other unforeseen circumstances.
(2) Since the revised provisions provided for in the proviso to Article 1 of the Supplementary Provisions of the
Act Partially Amending the Companies Act (Act No. 70 of 2019) are to be enforced on September 1, 2022,
the Company proposes to make the following changes to its Articles of Incorporation in preparation for the
introduction of the system for providing informational materials for the general meeting of shareholders inelectronic format.
(i) A new provision is to be established in Article 17 in “Proposed amendments” below, which stipulates
that the Company shall take measures for providing information that constitutes the content of reference
documents for the general meeting of shareholders, etc. in electronic format, and limits the scope of theitems to be stated in the paper-based documents to be delivered to shareholders who requested thedelivery of paper-based documents.
(ii) Since Article 18 of the current Articles of Incorporation (Internet Disclosure and Deemed Provision ofReference Documents for the General Meeting of Shareholders, Etc.) will no longer be required, it will
be deleted.
(iii) Accompanying the aforementioned establishment and deletion of provisions, supplementary provisions
regarding the effective date, etc. will be established.
(3) Accordingly, the Company intends to renumber the articles of the Articles of Incorporation.
2. Details of the amendment
Details of the amendment are as follows:(Amended parts are underlined)
Proposed amendments

Current Articles of Incorporation
Chapter 3
General Meeting of Shareholders

Chapter 3
General Meeting of Shareholders(Venue)Article 15
The Company shall hold its general meeting of shareholders in
Kobe, Japan.
(Record Date of Annual General Meeting of Shareholders)
Article 16
to(Omitted)(Chairperson)
Article 17(Deleted)(Record Date of Annual General Meeting of Shareholders)
Article 15
to(Unchanged)(Chairperson)
Article 16(Internet Disclosure and Deemed Provision of Reference
Documents for the General Meeting of Shareholders, Etc.)
Article 18
When the Company convenes a general meeting of shareholders,
if it discloses information that is to be stated or presented in thereference documents for the general meeting of shareholders,business report, financial statements and consolidated financial
statements through the internet in accordance with the provisions
prescribed by the Ministry of Justice Order, it may be deemedthat the Company has provided this information to shareholders.

-3-(Deleted)

Current Articles of Incorporation(Newly established)(Method of Resolution)
Article 19
to(Omitted)(Exclusion Period for Dividends)
Article 40(Newly established)(Newly established)(Newly established)

Proposed amendments(Measures, etc. for Providing Information in Electronic Format)
Article 17
When the Company convenes a general meeting of shareholders,it shall take measures for providing information that constitutes
the content of reference documents for the general meeting ofshareholders, etc. in electronic format.
Among items for which the measures for providing informationin electronic format will be taken, the Company may exclude allor some of those items designated by the Ministry of Justice
Order from statements in the paper-based documents to bedelivered to shareholders who requested the delivery of paperbased documents by the record date of voting rights.
(Method of Resolution)
Article 18
to(Unchanged)(Exclusion Period for Dividends)
Article 39
Supplementary Provisions
Article 1
The deletion of Article 18 (Internet Disclosure and Deemed
Provision of Reference Documents for the General Meeting of
Shareholders, Etc.) in the pre-amended Articles of Incorporationand the establishment of the new Article 17 (Measures, etc. for
Providing Information in Electronic Format) in the amended
Articles of Incorporation shall be effective from September 1,
2022, which is the date of enforcement of the revised provisions
provided for in the proviso to Article 1 of the Supplementary
Provisions of the Act Partially Amending the Companies Act(Act No. 70 of 2019) (hereinafter referred to as the “Date of
Enforcement”).
Article 2
Notwithstanding the provision of the preceding article, Article 18of the pre-amended Articles of Incorporation shall remain
effective regarding any general meeting of shareholders held ona date within six months from the Date of Enforcement.
Article 3
These Supplementary Provisions shall be deleted on the datewhen six months have elapsed from the Date of Enforcement or
three months have elapsed from the date of the general meetingof shareholders in the preceding article, whichever is later.

-4-

Proposal No. 3:

Election of Two Directors

As two Directors, Ikuo Yoshida and Akihiko Kanatani will resign at the conclusion of this General Meeting of
Shareholders, the Company proposes the election of two Directors to fill their vacancies. In accordance with theprovisions of Article 23 of the Company’s current Articles of Incorporation, the term of office of the Directors elected
at this General Meeting of Shareholders will expire at the conclusion of the Annual General Meeting of Shareholders
to be held in June 2023, the remaining term of office of their predecessors.
The candidates are as follows:
Candidate
No.

Name(Date of birth)

Career summary, position and responsibility in the Company,
and significant concurrent positions outside the Company
Apr. 1987
July 2007

1

Number of theCompany’s shares
ownedJoined the Company
General Manager of Automotive Department,
Automotive Sales DivisionFeb. 2011
President and Representative Director of Osaka
Sanyo Taxi Co., Ltd.
Feb. 2014
Senior Managing Director of Sanyo Bus Co.,
Masahiro Ito
Ltd.
(January 2, 1964)
1,400
New election
July 2017
President and Representative Director of Sanyo
Male
Taxi Co., Ltd. (current position)
Dec. 2021
Manager of Sustainability Promotion
Department, Corporate Management Division,
the Company (current position)
Significant concurrent positions outside the Company
President and Representative Director of Sanyo Taxi Co., Ltd.
(Reasons for election and summary of expected roles)
Mr. Ito currently serves as Manager of Sustainability Promotion Department, Corporate Management Division, as wellas President and Representative Director of a subsidiary. He possesses abundant knowledge acquired through service as
Director of subsidiaries, as well as in important positions in the Company’s management division. The Company has
nominated him as a new candidate for Director because he can be expected to contribute to further enhancing the Group’s
corporate value.

-5-

Candidate
No.

Name
(Date of birth)

Career summary, position and responsibility in the Company,
and significant concurrent positions outside the Company
Apr. 1993
July 2009

Fumiteru Kawakubo(December 31, 1970)
New election
Male
2

Notes:

1.
2.
3.

4.

Joined the Company
Manager of Housing Business Department,
Development Business Division
Jan. 2014
Manager of Housing Business Department,
Development Business Division
July 2016
Manager of Development Business Division
Apr. 2020
Executive Officer (current position)
In charge of Sales Management, Site
Management and Business Promotion Group,
Development Business Division and Manager
of Development Business Division
July 2020
In charge of Sales Management, Site
Management and Business Promotion Group,
Development Business Division and Manager
of Development Business Division
July 2021
In charge of Sales Management, Site
Management and Business Promotion Group,
Development Business Division and Manager
of Business Promotion Department (current
position)
Responsibilities:

Number of theCompany’s shares
owned

2,200

In charge of Sales Management, Site Management and Business
Promotion Group, Development Business Division and Manager
of Business Promotion Department(Reasons for election and summary of expected roles)
Mr. Kawakubo currently serves as Executive Officer in charge of Sales Management, Site Management and Business
Promotion Group, Development Business Division. He possesses abundant knowledge acquired through service inimportant positions in the real estate division. The Company has nominated him as a new candidate for Director because
he can be expected to contribute to further enhancing the Group’s corporate value.
Masahiro Ito and Fumiteru Kawakubo are new candidates for Director.
There are no special interests between either of the candidates for Director, Mr. Ito and Mr. Kawakubo, and the Company.
The Company has entered into a directors and officers liability insurance contract with an insurance company, as set forthin Article 430-3, paragraph (1) of the Companies Act. Insured parties under this contract include Directors, Audit &Supervisory Board Members, and Executive Officers of the Company, as well as Directors and Audit & Supervisory Board
Members of all subsidiaries of the Company. The insurance premium associated with this contract is paid entirely by theCompany. The contract covers losses that may arise from an insured party’s assumption of liability incurred as a result of
his or her performance of duties, or receipt of claims pertaining to the pursuit of such liability. The Company intends torenew the contract under the same terms after the present term of the insurance expires. The contract also contains certain
exceptions, excluding from coverage liability arising from acts that deliberately contravene laws or regulations. Eachcandidate elected will be an insured party under the insurance contract.
Both Ikuo Yoshida and Akihiko Kanatani will retire from the position of Executive Officer at the conclusion of this General
Meeting of Shareholders.

-6-Proposal No. 4:

Election of Two Audit & Supervisory Board Members

As two Audit & Supervisory Board Members, Osamu Moriya and Hironori Katsuda will resign at the conclusion ofthis General Meeting of Shareholders, the Company proposes the election of two Audit & Supervisory Board
Members to fill their vacancies. In accordance with the provisions of Article 32 of the Company’s current Articles ofIncorporation, the term of office of the Audit & Supervisory Board Members elected at this General Meeting of
Shareholders will expire at the conclusion of the Annual General Meeting of Shareholders to be held in June 2024,
the remaining term of office of their predecessors.
The consent of the Audit & Supervisory Board has been obtained for this proposal.
The candidates are as follows:
Candidate
No.

Name(Date of birth)

Career summary and position in the Company, and significant
concurrent positions outside the Company
Apr. 1976

Jiroh Kagawa(January 3, 1953)
New election
Male
OutsideIndependent Officer

1

2

Notes:

1.
2.
3.
4.

Joined The Kansai Electric Power Company,
Incorporated
June 2009Managing Director
June 2011
Executive Vice President and Representative
Director
June 2013
Representative Director and Executive Vice
President
June 2018
Chairperson, Representative Director ofKanden Realty & Development Co., Ltd.
(current position)
Significant concurrent positions outside the Company
Chairperson, Representative Director of Kanden Realty &Development Co., Ltd.

Number of theCompany’s shares
owned

0

(Reasons for election)
Mr. Kagawa possesses broad experience related to corporate management, abundant knowledge acquired through thepractice of real estate business, etc., as well as insight into audit services. The Company has nominated him as a new
candidate for outside Audit & Supervisory Board Member to harness his experience and knowledge in the audit of theCompany.
Apr. 1984
Joined the Company
July 2006
Counselor to Business Promotion OfficeFeb. 2007
Counselor to Audit Office
July 2007
Manager of Technical Department, Railway
Business Division
June 2013
Manager (Manager in charge of Safety) of
Akihiko Kanatani
Railway Sales Department, Railway Business(January 21, 1961)
7,100
Division
New election
June 2015
Director (current position)
Male
Deputy General Manager of Railway Business
Division, and Manager of Safety Promotion and
Planning Department
Apr. 2020
Executive Officer (current position)
June 2020
General Manager of Audit Office (current
position)(Reasons for election)
Mr. Kanatani has gained, through his service in important positions in the railway and audit divisions, experience andabundant knowledge required of an audit & supervisory board member within the Company. The Company has nominatedhim as a new candidate for Audit & Supervisory Board Member to harness his experience and knowledge in the audit of
the Company.
Jiroh Kagawa and Akihiko Kanatani are new candidates for Audit & Supervisory Board Member.
There are no special interests between either of the candidates for Audit & Supervisory Board Member, Mr. Kagawa and
Mr. Kanatani, and the Company.
Mr. Kagawa is a candidate for outside Audit & Supervisory Board Member.
In accordance with Article 427, paragraph (1) of the Companies Act, if the election of Mr. Kagawa is approved, theCompany intends to enter into an agreement with him under which his liability for damages pursuant to Article 423,
paragraph (1) of the same act is limited to the amount provided for by laws and regulations.

-7-5. At The Kansai Electric Power Company, Incorporated of which Mr. Kagawa served as Director and Kanden Realty &Development Co., Ltd. of which he currently serves as Chairperson, Representative Director, executives and employees
of both companies received cash and gifts, etc. from Eiji Moriyama, a former Deputy Mayor of the town Takahama, Oigun, Fukui Prefecture, and other relevant parties. The tax inspection conducted by the Kanazawa Regional Taxation
Bureau of the National Tax Agency from February 2018 led to an internal investigation and an investigation by a thirdparty committee. In March 2020, The Kansai Electric Power Company, Incorporated received a business improvement
order from the Minister of Economy, Trade and Industry under the Electricity Business Act.
6. The Company has entered into a directors and officers liability insurance contract with an insurance company, as set forthin Article 430-3, paragraph (1) of the Companies Act. Insured parties under this contract include Directors, Audit &Supervisory Board Members, and Executive Officers of the Company, as well as Directors and Audit & Supervisory Board
Members of all subsidiaries of the Company. The insurance premium associated with this contract is paid entirely by theCompany. The contract covers losses that may arise from an insured party’s assumption of liability incurred as a result of
his or her performance of duties, or receipt of claims pertaining to the pursuit of such liability. The Company intends torenew the contract under the same terms after the present term of the insurance expires. The contract also contains certain
exceptions, excluding from coverage liability arising from acts that deliberately contravene laws or regulations. Eachcandidate elected will be an insured party under the insurance contract.
7. Mr. Kagawa fulfills the criteria for an independent officer as prescribed by the Tokyo Stock Exchange, and the Company
intends to register him as an independent officer with the exchange.

-8-

(Reference) If Proposals No. 3 and No. 4 are approved and passed without alteration, the skill matrix of theCompany’s Directors and Audit & Supervisory Board Members will be as follows:
Name

Kazuhiro Uekado
Takashi Nakano
Shinichi Yoneda

Corporate
management●●●

Finance andaccounting

Human
Legal, risk
resources, labor
management
relations and Transportationand internalorganizational
audit
strategy

●
●

●

●
●

Masahiro Ito

●
●
●
●

Ryuji Masuda
Director●●

Fumiteru
Kawakubo
Takaoki Fujiwara
Makoto Nagao●●●

Audit &
Akihiko Kanatani
Supervisory
Board Member Kazuhiko Nakao
Jiroh Kagawa●●●

Yoko Sato
Takashi Imae

Real estate

●
●
●
●

●
●
●
●
●

●

-9-

●
●
●
●

●
●

●
●

Proposal No. 5:

Determination of the Amount and Details of Stock-based Remuneration, etc. for Directors Who
Concurrently Serve as Executive Officers

1. Reasons for the proposal and reasons that the proposed remuneration plan is considered to be appropriate
The remuneration for the Company’s Directors who concurrently serve as Executive Officers (excluding outside
Directors; hereinafter the same applies and referred to as “Eligible Persons”) is composed of “fixed remuneration(supervisory remuneration and executive remuneration)” and “performance-linked remuneration.” The Company
now requests approval to additionally introduce a stock-based remuneration plan (hereinafter the “Plan”). The
Company would like to leave the decision on the details of the Plan to the discretion of the Board of Directors
within the scope shown in 2 below.
The Plan is aimed at further clarifying the linkage between the remuneration for Eligible Persons and theCompany’s stock value and having the Eligible Persons share profit and risk arising from stock price fluctuations
with shareholders, thereby motivating the Eligible Persons to contribute to improving business performance andraising corporate value in the medium to long term.
Specifically, this proposal is separate from the maximum amount of remuneration, etc. for Directors of ¥250
million per annum (including up to ¥32 million per annum as remuneration, etc. for outside Directors, but notincluding remuneration, etc. received in the capacity of an employee), for which the Company requests approvalin Proposal No. 6. The amount of remuneration under the Plan shall be paid to the Eligible Persons who will bein office during the three fiscal years from the fiscal year ending on March 31, 2023 to the fiscal year ending on
March 31, 2025 (hereinafter the “Covered Period”).
The current maximum amount of remuneration, etc. for Directors is ¥290 million per annum (including up to¥32 million per annum as remuneration, etc. for outside Directors, but not including remuneration, etc. received
in the capacity of an employee). The Company requests approval to revise the maximum amount to be ¥250
million (including up to ¥32 million per annum as remuneration, etc. for outside Directors, but not including
remuneration, etc. received in the capacity of an employee), subject to passing of this proposal without alterationin Proposal No. 6. Such revision will reduce the amount of remuneration, etc. paid in cash to Directors by ¥40
million. However, this amount is equivalent to the maximum amount per annum of stock-based remuneration
under the Plan (the maximum amount to be contributed by the Company as funds for stock acquisition during
the Covered Period divided by the number of fiscal years during the Covered Period as described below), so even
if this proposal and Proposal No. 6 are passed without alteration, there will be no actual increase in the amountof remuneration, etc. paid to Directors.
The purpose of introducing the Plan is as described above. In addition, a summary of the Policy Regarding theDetermination of Officers’ Remuneration which was established at the meeting of the Board of Directors heldon May 16, 2022, is shown on page 14. This proposal is necessary and reasonable to provide remuneration, etc.
in accordance with the policy. Based on the above, the Company believes that the contents of this proposal areappropriate.
If Proposal No. 3 is passed without alteration, the number of Directors who are Eligible Persons for the Plan will
be six.
If this proposal is passed without alteration, the Company intends to introduce a similar stock-based remuneration
plan for Executive Officers who do not concurrently serve as Directors of the Company.
2. Amount of remuneration, details, etc. under the Plan
(1) Summary of the Plan
Under the Plan, a trust to be established through monetary contribution by the Company (hereinafter the“Trust”) shall acquire the Company’s shares, then the number of the Company’s shares equivalent to thenumber of points granted by the Company to each Eligible Person shall be delivered to the Eligible Person
through the Trust.
In principle, an Eligible Person shall receive the delivery of the Company’s shares upon the Eligible Person’s
resignation (“resignation” as used herein means resignation from the position of Director who concurrently
serves as Executive Officer, and does not include the case where the Eligible Person resigns from one of thepositions but continues to serve in the other position; hereinafter the same applies).

- 10 -

(i)Eligible Persons of the Plan(ii)

Covered Period

Directors who concurrently serve as Executive Officers of
the Company
From the fiscal year ending March 31, 2023 to the fiscal
year ending March 31, 2025

Maximum amount of money to be contributed by theCompany to fund the acquisition of the Company’s shares(iii) necessary to deliver the Company’s shares to the Eligible Total ¥120 million
Persons in (i) during the Covered Period in (ii)
Disposing of treasury shares or acquiring shares from the(iv) Method of acquiring the Company’s sharesstock exchange (including off-floor trading)Maximum total number of points to be granted to the
25,000 points per fiscal year(v) Eligible Persons in (i)Points to be granted according to positions, etc.
(vi) Criteria for granting points
When to deliver the Company’s shares to the Eligible
In principle, upon resignation(vii) Persons in (i)(2) Upper limit of cash contributed by the Company
The initial trust period of the Trust shall be approximately three years, and during the Covered Period, theCompany shall contribute a total of up to ¥120 million as remuneration to the Eligible Persons in officeduring the Covered Period to fund the acquisition of the Company’s shares necessary to be delivered to the
Eligible Persons under the Plan, and shall establish the Trust with the Eligible Persons who will acquire
beneficial interests in the Trust as beneficiaries as described in (3)(iii) below. The Trust shall acquire theCompany’s shares by disposing of treasury stock held by the Company or acquiring the Company’s sharesfrom the stock exchange (including off-floor trading) using the money entrusted by the Company as thesource of funds.
Note: In addition to the funds for the acquisition of the Company’s shares necessary for delivery to theaforementioned Eligible Persons, necessary expenses such as trust fees and trust administrator fees
shall also be entrusted. In addition, as stated in “1. Reasons for the proposal and reasons that the
proposed remuneration plan is considered to be appropriate,” if a remuneration plan similar to the Plan
is introduced for Executive Officers who do not concurrently serve as Directors, the funds necessary
to acquire the Company’s shares to be delivered to such Executive Officers shall also be placed intrust.
The Covered Period may be extended for a period of not more than three fiscal years, as determined by the
Board of Directors of the Company on a case-by-case basis. The trust period of the Trust may be extended
accordingly (including extending the trust period substantially by transferring the trust assets of the Trust toa trust established by the Company for the same purpose as the Trust; hereinafter the same applies), and thePlan may be continued. In this case, during the extended Covered Period, the Company shall make an
additional contribution to the Trust in an amount up to ¥40 million multiplied by the number of fiscal yearsof the extended Covered Period, as funds for additional acquisition of the Company’s shares necessary fordelivery to the Eligible Persons under the Plan, and shall continue to grant points and deliver the Company’s
shares as described in (3) below.
Even if the Plan is not continued by extending the Covered Period as described above, if there are Eligible
Persons who have already been granted points but have not yet resigned at the expiration of the trust period,
the trust period of the Trust may be extended until such Eligible Persons resign and the delivery of theCompany’s shares is completed.
(3) Method for calculating the Company’s shares to be delivered to the Eligible Persons and the upper limit(i) Method, etc. of granting points to the Eligible Persons
In accordance with the Share Delivery Regulations established by the Board of Directors of the Company,
the Company shall grant points to each Eligible Person on the point grant date specified in the Share
Delivery Regulations during the trust period in accordance with his/her position, etc. However, the total
number of points to be granted by the Company to the Eligible Persons shall be up to 25,000 points per
fiscal year.
(ii) Delivery of the Company’s shares corresponding to the number of points granted
The Eligible Persons shall receive delivery of the Company’s shares in accordance with the proceduredescribed in (iii) below in proportion to the number of points granted in (i) above.
- 11 -

One point shall be equal to one share of the Company’s shares. However, in the event of a stock split,
reverse stock split, or other event in which it is deemed reasonable to adjust the number of the Company’s
shares to be delivered, the number of the Company’s shares per point shall be adjusted in accordancewith such split or reverse stock split ratio.
(iii) Delivery of the Company’s shares to the Eligible Persons
Each Eligible Person shall, in principle, acquire beneficial interests in the Trust by following theprescribed procedures at the time of his/her resignation and shall receive delivery of the Company’s
shares in (ii) from the Trust as a beneficiary of the Trust.
However, a certain percentage of the Company’s shares may be sold and converted into cash by the Trustfor the purpose of the Company’s withholding funds for the payment of withholding income tax, etc.,
and then delivered in cash instead of the Company’s shares. In addition, in the event that the Company’s
shares in the Trust are converted into cash, such as when the Company’s shares in the Trust are tendered
to a takeover bid and settled, the Eligible Persons may receive in cash instead of the Company’s shares.
(4) Exercise of voting rights
Voting rights of the Company’s shares in the Trust shall not be exercised uniformly based on the instructionsof a trust administrator who is independent of the Company and its officers. This method is intended to ensure
the neutrality of the Company’s management with respect to the exercise of voting rights relating to theCompany’s shares in the Trust.
(5) Handling of dividends
Dividends on the Company’s shares in the Trust shall be received by the Trust and shall be used to pay forthe acquisition of the Company’s shares and to cover the trustee’s trust fees related to the Trust.

- 12 -

Proposal No. 6:

Revision of the Amount of Remuneration, etc. for Directors

A maximum amount of remuneration, etc. for Directors of the Company of ¥290 million per annum (including up to¥32 million per annum as remuneration, etc. for outside Directors) was approved by the Company’s 132nd Annual
General Meeting of Shareholders held on June 18, 2021. These limits still apply. Since Proposal No. 5 requests theintroduction of a stock-based remuneration plan for Directors who concurrently serve as Executive Officers, theCompany now requests approval to reduce the amount by ¥40 million, which is equivalent to the maximum amount
per annum of stock-based remuneration under the plan, and to amend the maximum amount of remuneration, etc. for
Directors to ¥250 million per annum (including up to ¥32 million per annum as remuneration, etc. for outside
Directors), subject to approval and passing of the Proposal No. 5.
In addition, a summary of the Policy Regarding the Determination of Officers’ Remuneration which was establishedat the meeting of the Board of Directors held on May 16, 2022, is shown on page 14. This proposal is necessary andreasonable to provide remuneration, etc. in accordance with the policy. Based on the above, the Company believes
that the contents of this proposal are appropriate.
The abovementioned amounts of remuneration, etc. for Directors, both current and proposed, do not include
remuneration received in the capacity of an employee, for those Directors concurrently serving as employees.
If Proposal No. 3 is approved and passed without alteration, the number of Directors will remain unchanged at nine(of which three will be outside Directors).

- 13 -

(Reference) Policy Regarding the Determination of Officers’ Remuneration
The maximum amount of remuneration, etc. for Directors shall be determined by resolution of the General Meetingof Shareholders, but the Board of Directors shall, in advance, consult the Nominating and Remuneration Committee,
which consists of the President and Representative Director and all outside Directors, about the calculation methodof remuneration to be paid and the policy for allocation of remuneration to each individual Director, and based on
the recommendation of the committee, shall resolve to leave the determination of the amount to be paid to eachindividual Director to the discretion of the President and Representative Director.
The Board of Directors shall also confirm that the method of determining the amount to be paid to each individual
Director for the fiscal year in question and the details determined are consistent with the following policies and inaccordance with the recommendation of the Nominating and Remuneration Committee.
• Remuneration for Directors shall consist only of “fixed remuneration (supervisory remuneration),” while
remuneration for Executive Officers shall consist of “fixed remuneration (executive remuneration),”“performance-linked remuneration,” and “stock-based remuneration.”• The monthly “fixed remuneration (supervisory remuneration and executive remuneration)” shall be determinedin consideration of the roles and responsibilities of Directors and Executive Officers, as well as such factors as
the remuneration levels of other companies in the same industry and of the same size and the business environment.
• The “performance-linked remuneration” to be paid after the closing of accounts for the relevant fiscal year shallvary according to the evaluation of each individual Director in comprehensive consideration of the degree ofachievement against management indicators (operating revenue, operating profit, etc.) and priority targets set in
the medium-term management plan based on the Company’s business characteristics as well as the position andthe degree of contribution to the Company, and shall be approximately 20% of the total amount of “fixed
remuneration (executive remuneration)” and “performance-linked remuneration.”• With respect to “stock-based remuneration,” a trust to be established through monetary contribution by theCompany shall acquire the Company’s shares and deliver the Company’s shares to each Executive Officer
through the trust, in order to clarify the linkage between the remuneration for Executive Officers and theCompany’s stock value and to have the Executive Officers share profit and risk arising from stock pricefluctuations with shareholders, thereby motivating the Executive Officers to contribute to improving businessperformance and raising corporate value in the medium to long term.
The “stock-based remuneration” shall be approximately 15% of the total amount of “fixed remuneration(executive remuneration),” “base amount of performance-linked remuneration,” and “stock-based remuneration,”and each Executive Officer shall be granted points in accordance with the Share Delivery Regulations establishedby the Board of Directors.
In principle, the delivery of the Company’s shares in proportion to the accumulated points granted shall be madeupon resignation from both Executive Officer and Director.

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