Note: This is an unofficial translation of the Japanese original version and is provided foryour reference and convenience only, without any warranty as to the accuracy ofthe information.
To Our Shareholders:
Stock Code:6741
June 3, 2015
The Nippon Signal Co., Ltd.
5-1, Marunouchi、1-Chome,
Chiyoda-ku, Tokyo
President & CEO
Yohei Furuhata
Notice of Convocation of the Ordinary General Meeting ofShareholders for the 132nd Business Term
Notice is hereby given that the Ordinary General Meeting of Shareholders for the 132ndBusiness Term of The Nippon Signal Co., Ltd. (hereinafter referred to as ‘Company’) will
be held as described below.
Your attendance at the meeting is cordially requested.
If you are unable to attend the Meeting, you may exercise your voting rights in writing
either by returning the Voting Rights Exercise Form by the Internet, or as instructed
below. After reviewing the following Reference Documents for General Meeting ofShareholders, please exercise your voting rights by no later than 5:05 p.m. on Tuesday,June 23, 2015 (Japan time).
When votes are registered by both methods, the vote registered via the Internet will betreated as the vote of record.
1. Date and Time : Wednesday, June 24, 2015 at 10:00 a.m. (Japan time)
2. Venue:Hall of Otemachi Sankei Plaza 4th Floor, Tokyo Sankei Building
7-2, Otemachi 1-chome, Chiyoda-ku, Tokyo

3. Agenda for the Meeting：[Matters for Reporting]1

1 - Reports on the contents of the Business Report and Consolidated Financial
Statements for the 132nd Business Term (from April 1, 2014 to March 31, 2015),
and reports on the Auditing Results of Accounting Auditor and Audit &Supervisory Board regarding the Consolidated Financial Statements.
2 - Reports on the content of the Financial Statements for the 132nd Business Term(from April 1, 2014 to March 31, 2015).
[Matters for Resolution]
1 - Appropriation of Surplus
2 - Partial Amendment to the Articles of Incorporation
3 - Election of one Director
4 - Election of four Audit & Supervisory Board Members
5 - Election of one Alternate Audit & Supervisory Board Member
6 - Grant of Bonuses to Directors
7 - Revision to Amount of Remuneration for Directors• Upon attending the Meeting, please present the enclosed Voting Form to thereceptionist of the Meeting.
• When you exercise the voting rights through a proxy, such proxy must be only one
shareholder who is entitled to attend the general meeting of shareholders. In thiscase, please submit a written power of attorney and the enclosed Cards for
Exercise of Voting Rights to the receptionist of the Meeting.
• Any changes in the matters described in Reference Documents for General
Meeting of Shareholders, Business Report, Consolidated Financial Statements andFinancial Statements will be posted on our website (http://www.signal.co.jp/ir/).
No.1 - Appropriation of Surplus
The Nippon Signal Group’s basic policy regarding earnings distribution is to seek toestablish a stable earnings structure and management foundation, and strengthen
its financial condition from a long-term perspective. In addition, the Company aims tosustain research and development, manufacturing infrastructure, and humanresources development, and provide investors with stable dividends and returns
commensurate with performance. We have set a target payout ratio of around 25%
on a consolidated basis.
Under this policy, considering the Company’s performance which achieved a record
high, we would like to increase the year-end dividend by 3 yen from the previous
fiscal year, taking it to 14 yen per share, in order to reward shareholders’ support and2patronage.
Based on this policy, the Company proposes the following.
1. Matters concerning year-end dividend(1)Type of dividend:Cash(2)Matters concerning allocation of dividend and the total amount:
14.00 yen per one common share of the Company
Total amount of dividend 956,070,220 yen
As we have already paid an interim dividend of 6.00 yen per share, thefull-year dividend will be 20.00 yen per share.
(3)Effective date of the dividend from surplus:
June 25, 2015
2. Matters relating to other appropriation of earned surplus Value of increase in items
under earned surplus(1)Value of decrease in items under earned surplus Other reserves:
1,700,000,000 yen(2)Accumulated earned surplus:
1,700,000,000 yen
No.2 - Partial Amendment to the Articles of Incorporation
1. Reasons for Amendment(1) The Board of Directors proposes that the name of the Company in English beamended to the common expression.
(2) To create an environment in which the Outside Directors and Outside Audit &Supervisory Board Members to be appointed will be able to fully perform his or
her expected role and the Company will be able to continuously secure suitablepersonnel as its Outside Directors and Outside Audit & Supervisory Board
Members, the Company established the Articles that will enable it to enter into
an agreement with Outside Directors and Outside Audit & Supervisory Board
Members which limit their liabilities to the extent permitted by laws andregulations.
The range of company executives that can enter into a limited liability contract
has been changed, as the "Act for Partial Revision of the Companies Act"
(2014 Law No. 90) came into force on May 1, 2015.

3We intend to amend some of the provisions of Article 27 and Article 36 in theArticles of Incorporation. The Company has obtained the consent of each ofthe Audit & Supervisory Board Member for the change to Article 27 of theArticles of Incorporation.
2. Substance of Amendment
The substance of the amendment is as follows:(amended sections underlined)
Current Articles of Incorporation

Proposed Amendment(Name of the Company)
Article 1.

(Name of the Company)

The name of the Company Article 1.

The name of the Company

shall

shall

be

NipponShingobe

NipponShingoKabushikigaisha and it shall

Kabushikigaisha and it shallbe called “The Nippon Signal

beCompany, Limited. in English.

Company, Limited. in English.

(Contract of limited

called“NipponSignal

liability for Outside (Contract of limited liability for Directors)

Directors)

Article 27. Under Article 427-1 of theArticle 27. Under Article 427-1 of theCompanies Act, the Company

Companies Act, the Company

is permitted to conclude ais permitted to conclude acontract which limits liability

contract which limits liability

withwithexecutive

anOutside

DirectoraDirector

Directors)

under Article 423-1 of the Act.

Article 423-1 ofProvided,

Provided,

however,that(excludes
underthe Act.

however,thatamount limit based on thisamount limit based on thiscontract

contractistheamountprovided for by law.

istheamountprovided for by law.

(Contract of limited liability for Outside (Contract of limited liability for Audit &Audit & Supervisory Board Members)

Supervisory Board Members)

Article 36. Under Article 427-1 of the Article 36. Under Article 427-1 of theCompanies Act, the Company

Companies Act, the Company

is permitted to conclude ais permitted to conclude acontract which limits liability

contract which limits liability

with an Outside Audit

with an Audit & Supervisory&4Supervisory Board Member

Board Member under Article

under Article 423-1 of the Act.

423-1 of the Act. Provided,Provided,

thathowever, that amount limit

amount limit based on thisbased on this contract is thecontract

amount provided for by law.

however,istheamountprovided for by law.
No.3 - Election of one Director
To strengthen the supervisory function, the Company has decided to increase thenumber of Outside Directors by one and requests the election of one Outside
Director.
The term of office of the candidate for Outside Director will be until the expiry of theterm of office of the other serving Directors under the provision of Article 21-2 of theArticles of Incorporation.
The candidate for Outside Director is as follows:
NameBiography, status, and(Date of birth)

significant concurrent positions
April 1978

Number of theCompany's
shares held

Registered as Attorney,
Joined Yamashita Oshima
Law Office

April 2000
YasukoMatsumotoPart-time Lecturer ofSeikei University

February 2001

Member of Independent
Administrative Institution(September 2,0Evaluation Committee,1953)

the Ministry of Economy,
Trade and Industry
April 2007

Part-time Lecturer ofTokyo University of the Arts(to Present)

1. Yasuko Matsumoto has no special interest in the Company.
2. Yasuko Matsumoto is an Outside Director candidate.
3. The Company expects that Yasuko Matsumoto will provide management
supervision and advice based on her high level of knowledge and experience as alegal expert and requests her election as the Outside Director.

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4. Yasuko Matsumoto meets the conditions of an Independent Officer as defined byTokyo Stock Exchange, Inc.
5. If Yasuko Matsumoto is elected as an Outside Director, the Company plans toform a limited liability agreement with Yasuko Matsumoto that sets the amount of
her liability at the minimum liability amount prescribed in Article 423-1 of theCompanies Act.
No.4 - Election of four Audit & Supervisory Board Members
The terms of office of all of the four Audit & Supervisory Board Members will expire at
the end of this General Meeting of Shareholders. Accordingly, the Company
requests the election of four Audit & Supervisory Board Members, including two new
candidates. The Company has obtained the consent of the Audit & Supervisory
Board for this proposal.
The candidates for the Audit & Supervisory Board Members are as follows:No.

Name

Biography, status, and(Date of birth)

significant concurrent positions
April 1975

Joined the Company

July 2001

General Manager of

Number of theCompany's
shares held

Production Control Dept.
of Utsunomiya Plant
1

Shoji Kawada

June 2003

Executive Officer(May 2,1951)

June 2008

Senior Executive Officer

June 2012

DirectorJune 2013

Corporate Audit &40,300

Supervisory Board
Member (to present)
April 1973

Joined National Police
AgencyFebruary 2003
Yukio
2

YoshikawaDirector of Japan Safe
Driving Center

March 2007

(May 23, 1947)

Full-time Adviser ofthe Company

June 2011

Corporate Audit &Supervisory Board
Member (to present)620,900

April 1979

Joined The Yasuda Trust &Banking Company, Limited

April 2010

Research Institute, Corp.

Tsutomu
3Tsunashima(September 8,President of Urban(to present)

June 2011

Corporate Audit &0Supervisory Board Member1956)

of DYNIC CORPORATION(to present)(Significant concurrent positions)
President of Urban Research Institute, Corp.
October 2006

Registered as Attorney,Joined Anderson Mori &Tomotsune LPC

March 2011
Naoko Sato4(June 20,Registered as Attorney inNew York

September 2013 Joined Sidley Austin
Nishikawa Foreign1978)

0Law Joint Enterprise(to present)(Significant concurrent positions)
Sidley Austin Nishikawa Foreign Law
Joint Enterprise as attorney

1. None of the candidates for the Audit & Supervisory Board Members have any
special interest in the Company.
2. Tsutomu Tsunashima and Naoko Sato are the Outside Audit & Supervisory Board
Members candidate.
3. The Company expects Tsutomu Tsunashima to provide supervision and advice
utilizing his extensive experience as an executive officer at a trust bank andrequests his election as the Outside Audit & Supervisory Board Member.
4. The Company expects Naoko Sato to provide supervision and advice based onher high level of knowledge and experience as a legal expert and requests herelection as the Outside Audit & Supervisory Board Member.
5. Tsutomu Tsunashima and Naoko Sato meet the conditions of an Independent
Officer as defined by Tokyo Stock Exchange, Inc.
6. If Tsutomu Tsunashima and Naoko Sato are elected as Outside Audit &7

Supervisory Board Members, the Company plans to form a limited liability
agreement with Tsutomu Tsunashima and Naoko Sato that sets the amount of
their liability at the minimum liability amount prescribed in Article 423-1 of theCompanies Act.
No.5 - Election of one Alternate Audit & Supervisory Board Member
To ensure that the Company will not lack the number of Audit & Supervisory Board
Members stipulated by law, the Company requests the election of one Alternate
Audit & Supervisory Board Member.
The Company has obtained the consent of the Audit & Supervisory Board regarding
this proposal.
The Alternate Audit & Supervisory Board Member candidate is as follows:
Name

Biography, status, and(Date of birth)

significant concurrent positions

Michiaki Morita(March 7,1949)

April 1972

Joined the Bank of Japan

September 2005

Adviser of Ueda Yagi

Number of theCompany'sshares heldTanshi Co., Ltd.
May 2006

President of Ueda Yagi
Tanshi Co., Ltd.

May 2014

1,000

Director and Senior Adviser ofUeda Yagi Tanshi Co., Ltd.
(To Present)

1. Michiaki Morita has no special interest in the Company.
2. Michiaki Morita is an Alternate Outside Audit & Supervisory Board Member
candidate.
3. The Company expects Michiaki Morita to provide supervision and advice utilizing
his experience as a manager and requests his election as the Alternate Audit &Supervisory Board Member.
4. If Michiaki Morita is elected as an Outside Audit & Supervisory Board Member, theCompany plans to form a limited liability agreement with Michiaki Morita that sets
the amount of his liability at the minimum liability amount prescribed in Article
423-1 of the Companies Act.

8

No.6 - Grant of Bonus to Directors
It is proposed that bonus be granted to the seven Directors including one Outside
Director as of the end of this term, which totals 127,000,000 yen (2,500,000 yen for
one Outside Director) considering the Company’s financial performance for thisBusiness Term.
No.7 - Revision to Amount of Remuneration for Directors
It was approved at the Company’s Ordinary General Meeting of Shareholders for the123rd Business Term, held on June 28, 2006, that the amount of remuneration for
Directors of the Company shall be a monthly amount of 20 million yen or less, andthis has remained the amount of remuneration for Directors up until today.
In addition, at the Company’s 131st Ordinary General Meeting of Shareholders, heldon June 25, 2014, the number of Directors was changed from seven or less to nineor less.
However, considering the increase in the number of Directors, we propose that theamount of remuneration for Directors be revised to be a monthly amount of 30 million
yen or less (which includes 3 million yen or less for Outside Directors).
Although there are presently seven Directors (which includes one Outside Director),
if Resolution No.3 is approved, the number of Directors will rise to eight (which will
include two Outside Directors).

9