Translation: Please note that the following purports to be an accurately translated
excerpt of the original Japanese version prepared for the convenience of investors
outside Japan. However, in the case of any discrepancy between the translation and
the Japanese original, the latter shall prevail.
Stock Exchange Code: 3105
June 6, 2018

Dear Shareholders:Nisshinbo Holdings Inc.
2-31-11, Ningyo-cho, Nihonbashi, Chuo-ku, Tokyo

Masaya Kawata
President and Director

Notice of Convocation of
The 175th Ordinary General Meeting of Shareholders
You are cordially invited to attend the 175th Ordinary General Meeting of Shareholdersof Nisshinbo Holdings Inc. (the “Company”).
If you are unable to attend the aforesaid meeting, you can exercise your votes
through either of the methods stated below. The Company respectfully requests you
to study the “Reference Document Concerning the General Meeting of Shareholders”
below and exercise your voting rights on or before 5:00 p.m. (JST) June 27, 2018
(Wednesday):[In case of exercising voting rights by mail]Please indicate on the Voting Rights Exercise Form enclosed herewith your approval ordisapproval to the items on the agenda, and return the form to be received by the Company
by mail on or before the time limit stated above.
[In case of exercising voting rights via the Internet]
Please log in and indicate whether you approve or disapprove the items on the agenda by thetime limit stated above upon making reference to “Procedures for exercising voting rights by
the Internet” (though available for Japanese resident shareholders only).

PARTICULARS
1.

Date and Time of the Meeting:Thursday, June 28, 2018 at 10:00 a.m.

2.

Place of the Meeting:Large Conference Room, 7th Floor, Head Office of the Company at 2-31-11,
Ningyo-cho, Nihonbashi, Chuo-ku, Tokyo, Japan1

3.

Matters to be dealt with at the Meeting:
Matters to be Reported:
1. Report on the Business Report, the Consolidated Financial
Statements for the 175th Fiscal Year (from April 1, 2017 to March
31, 2018) and the Results on the Audits of Consolidated Financial
Statements by the Accounting Auditor and the Audit & Supervisory
Board.
2. Report on the Non-Consolidated Financial Statements for the 175th
Fiscal Year (April 1, 2017 to March 31, 2018).
Matters to be Resolved:

4.

Partial Amendment to the Articles ofIncorporation

Second Item of Business:

Election of Ten (10) Directors

Third Item of Business:

Election of One (1) Substitute Audit &Supervisory Board Member

Fourth Item of Business:

Determination of Remuneration for
Directors (excluding Outside Director) in
the form of assignment of restricted
sharesMatters related to Exercise of Voting Rights:
(1)
(2)
(3)

5.

First Item of Business:

In the event that a shareholder exercises voting rights both via return mail(Voting Rights Exercise Form) and the Internet, the Company will consider
the exercise of voting rights via the Internet to be valid.
In the event that a shareholder exercises voting rights via the Internet morethan once, the Company will consider the last exercise of voting rights to bevalid.
In the event that a shareholder exercises voting rights through an agent, theagent shall be a shareholder having a voting right. Furthermore, a document
verifying the power of attorney shall be submitted to the Company.

Matters related to document attached to the Notice of Convocation andReference Document Concerning the General Meeting of Shareholders(1)

Among documents to be attached to the Notice of Convocation, following
matters are made available on the Company’s website pursuant to therelevant laws and regulations, and the Articles of Incorporation of theCompany, but are not stated in the documents attached to the Notice of2

Convocation.
ሺⅰሻ Notes to Consolidated Financial Statements
ሺⅱሻ Notes to Non-Consolidated Financial Statements(2)

If there is any amendment to the contents of the Reference Document
Concerning the General Meeting of Shareholders, the Business Report, theConsolidated Financial Statements, the Non-consolidated Financial
Statements, the Company will announce such amendment on the
Company’s website (in only Japanese).
The Company’s website: http://www.nisshinbo.co.jp/[To Institutional Investors]
You may use the "electronic proxy-voting platform" for electromagnetic voting for the
General Shareholders Meeting of the Company.

3

Reference Document Concerning the General Meeting of Shareholders
Item of Business and reference matter
First Item of Business: Partial Amendment to the Articles of Incorporation
1. Reasons for the amendments
The Company currently fixes the fiscal year to be started from April 1 of each year andended on March 31 of the following year. By unifying the accounting period within the
Nisshinbo Group (the “Group”), the Company aims to improve the efficiency of global
business management and the transparency of the management through the timely andprecise disclosure of the management information. As such, it is proposed that theCompany’s fiscal year be amended to the year starting from January 1 of each year andending on December 31, and Article 11, 12, 35 and 37 of the current Articles ofIncorporation be amended to that effect.
Also, since the duration of 176th fiscal year shall become 9 months starting from April 1
and ending on December 31 upon amendments to the fiscal year, it is proposed that certain
supplementary provisions as transitional measures be established.
2. Description of the amendments
Description of the amendments is as follows:(Amended parts are underlined)

Current

Proposed amendment(Record Date)
Article 11
The Company shall fix the record date to be
March 31 of each year.
2 (Omitted)(Record Date)
Article 11
The Company shall fix the record date to be
December 31 of each year.
2 (As is )(Convening of General Meetings)
Article 12
The ordinary General Meeting of Shareholderof the Company shall be convened on June ofeach year.
2 (Omitted)(Convening of General Meetings)
Article 12
The ordinary General Meeting of Shareholderof the Company shall be convened on March ofeach year.
2 (As is)(Fiscal Year)
Article 35
The fiscal year of the Company shall being on
April 1 of each year and end on March 31 of thefollowing year.

(Fiscal Year)
Article 35
The fiscal year of the Company shall being on
January 1 of each year and end on December
31.

(Record Date of surplus dividends)
Article 37
The record date for year-end dividends of theCompany shall be March 31 of each year.
2 The record date for interim dividends of theCompany shall be September 30 of each year.
3 (Omitted)(Record Date of surplus dividends)
Article 37
The record date for year-end dividends of theCompany shall be December 31 of each year.
2 The record date for interim dividends of theCompany shall be June 30 of each year.
3 (As is )4(Amended parts are underlined)

Current

Proposed amendment
SUPPLEMENTARY PROVISIONS[Newly Established](Terms of 176th Fiscal Year)
Article 1
Notwithstanding Article 35, the duration of176th fiscal year shall be 9 months startingfrom April 1 and ending on December 31.
(Record Date of Interim Dividends for 176th
Fiscal Year)
Article 2
Notwithstanding Article 37.2, the record date ofinterim dividends for 176th fiscal year shall be
September 30, 2018.
(Effective Terms of Supplementary Provisions)
Article 3
Preceding two Articles and this Article shall beeffective until December 31, 2018 and shall be
removed upon passing of the same date.

5

Second Item of Business: Election of Ten (10) Directors
The term of office of all of the ten (10) Directors will expire at the conclusion of this
General Meeting. Accordingly, ten (10) Directors including four (4) Outside Directors areproposed to be elected.
The candidates are as follows:
No.

Name
(Date of Birth)

Brief personal profile, title, responsibilities and significant
concurrent positions at companies other than the Company
April 1975
June 2006

1

Number ofCompany’s
shares held

Joined the Company
Managing Officer and General Manager of
Human Resources Division of the Company
April 2007
Deputy General Manager of Accounting and
Finance Division of the Company (served
concurrently)
June 2007
Director of the Company
April 2008
Deputy Chief of Business Support Center of
the Company
April 2009
President and Representative Director of
Nisshinbo Brake Inc.
June 2010
Director and Executive Managing Officer of
the Company
Masaya Kawata
June 2011
Deputy Chief of Corporate Strategy Center
90,092andGeneral Manager of Business(April 20, 1952)
Development Division of the Company (served
concurrently)
President and Representative Director of
Nisshinbo Chemical Inc.
June 2012
Director and Senior Executive Managing
Officer of the Company
President and Representative Director of
Nisshinbo Mechatronics Inc.
June 2013
President and Representative Director of theCompany (to the present)(Significant concurrent positions at companies other than the
Company)
Director of New Japan Radio Co., Ltd.
[Reason for election of candidate for Director]
After his assumption of office as a Director of the Company, Mr. Masaya Kawata served as
President and Representative Director of three consolidated subsidiaries and chief officer of theBusiness Development Division. He has served as President and Representative Director of theCompany since 2013. The Company has judged that he would be fully able to perform his duties as
Director in light of his substantial management experience and expertise. Accordingly, he has been
proposed as a candidate.
[Attendance at the Board of Directors' meetings]
All 16 meetings

6

No.

Name
(Date of Birth)

Brief personal profile, title, responsibilities and significant
concurrent positions at companies other than the Company
April 1982
April 2008

2

Number ofCompany’s
shares held

Joined the Company
Managing Officer, Senior Manager ofCorporate Governance Department ofCorporate Strategy Center, Senior Manager
of Human Resources & Administration
Service Department of Business Support
Center (served concurrently) and General
Manager of Property Management
Department of the Company (served
concurrently)
April 2009
Deputy Chief of Business Support Center(served concurrently), Senior Manager ofCorporate Strategy Department of Corporate
Strategy Center (served concurrently) andSenior Manager of Finance and Accounting &Masahiro Murakami
IT Service Department of Business Support
22,000(September 7, 1958)
Center of the Company (served concurrently)
June 2010
Director and Chief of Business Support
Center of the Company (served concurrently)
January 2012
Responsible for Property Management
Department of the Company (to the present)
June 2012
Director, Executive Managing Officer and
Deputy Chief of Corporate Strategy Center of
the Company (served concurrently)
June 2014
Chief of Corporate Strategy Center of theCompany (served concurrently, to thepresent)
June 2015
Director and Senior Executive Managing
Officer of the Company (to the present)
June 2016
Representative Director of the Company (tothe present)[Reason for election of candidate for Director]
After his assumption of office as a Director of the Company, Mr. Masahiro Murakami served as chief
officer of the Finance and Accounting Department and the Administration Service Department. He
presently serves as chief officer of the Corporate Strategy Department and the Property
Management Department. The Company has judged that he would be fully able to perform his
duties as Director in light of his substantial administrative experience and expertise. Accordingly,
he has been proposed as a candidate.
[Attendance at the Board of Directors' meetings]
All 16 meetings

7

No.

Name
(Date of Birth)

Brief personal profile, title, responsibilities and significant
concurrent positions at companies other than the Company
April 1976
April 2002

3

Number ofCompany’s
shares held

Joined Japan Radio Co., Ltd.
General Manager of Government Business
Department of System Electronics Division ofJapan Radio Co., Ltd.
January 2006
Deputy General Manager of System
Equipment Division and General Manager ofGovernment Business Department of Japan
Radio Co., Ltd.
April 2006
General Manager of Solution Business
Department of Sales & Marketing
Headquarters of Japan Radio Co., Ltd.
April 2008
Executive Officer and General Manager ofSales & Marketing Headquarters of Japan
Radio Co., Ltd.
April 2009
Executive Officer and General Manager of
Solution Business Division of Japan Radio
Co., Ltd.
June 2011
Director, Executive Officer, and General
Manager of Solution Business Division of
Kenji Ara
Japan Radio Co., Ltd.
5,888
(November 21, 1953) June 2012
Director of JRC System Service Co., Ltd.
April 2013
Executive Officer and Deputy General
Manager of Business Operation
Headquarters of Japan Radio Co., Ltd.
April 2014
Executive Officer and General Manager ofBusiness Operation Headquarters of Japan
Radio Co., Ltd.
June 2014
Director, Executive Officer, and General
Manager of Business Operation
Headquarters of Japan Radio Co., Ltd.
June 2016
President and Representative Director ofJapan Radio Co., Ltd. (to the present)
June 2017
Director and Senior Executive Managing
Officer of the Company (served concurrently,
to the present)(Significant concurrent positions at companies other than the
Company)
President and Representative Director of Japan Radio Co., Ltd.
Director of New Japan Radio Co., Ltd.
[Reason for election of candidate for Director]
Since 2016, Mr. Kenji Ara has served as President and Representative Director of Japan Radio Co.,
Ltd., which is a consolidated subsidiary of the Company. Since 2017, he also has served as Directorof the Company. The Company has judged that he would be fully able to perform his duties as
Director in light of his substantial business experience and expertise in the electronics business.
Accordingly, he has been proposed as a candidate.
[Attendance at the Board of Directors' meetings]
All 13 meetings (after his appointment on June 29, 2017)

8

No.

Name
(Date of Birth)

Brief personal profile, title, responsibilities and significant
concurrent positions at companies other than the Company
February 1985
June 1999
April 2001

4

Number ofCompany’s
shares held

Joined New Japan Radio Co., Ltd.
Director of New Japan Radio Co., Ltd.
General Manager of Standard IC Division of
New Japan Radio Co., Ltd.
June 2004
Managing Director of New Japan Radio Co.,Ltd.
April 2005
Executive of Semiconductor Business
Divisions and General Manager of
Semiconductor Technology Headquarters of
New Japan Radio Co., Ltd.
April 2006
General Manager of Semiconductor
Ryo Ogura
Production Headquarters of New Japan
2,500
Radio Co., Ltd.
(October 1, 1948)
June 2009
Representative Director and Executive
Managing Director of NJR FUKUOKA CO.,LTD.
June 2011
President and Representative Director of
New Japan Radio Co., Ltd. (to the present)
June 2016
Director and Executive Managing Officer of
the Company (to the present)(Significant concurrent positions at companies other than the
Company)
President and Representative Director of New Japan Radio Co.,Ltd.
[Reason for election of candidate for Director]
Since 2011, Mr. Ryo Ogura has served as President and Representative Director of New Japan
Radio Co., Ltd., which is a consolidated subsidiary of the Company. Since 2016, he also has served
as Director of the Company. The Company has judged that he would be fully able to perform his
duties as Director in light of his substantial business experience and expertise in the electronics
business. Accordingly, he has been proposed as a candidate.
[Attendance at the Board of Directors' meetings]
All 16 meetings

9

No.

Name
(Date of Birth)

Brief personal profile, title, responsibilities and significant
concurrent positions at companies other than the Company
April 1981
January 2007

5

Number ofCompany’s
shares held

Joined the Company
Assistant Manager of Miai Plant of theCompany
July 2007
Joined ALOKA CO., LTD.
June 2009
Director in charge of General Affairs andGeneral Manager of Internal Control
Promotion Department of ALOKA CO., LTD.
June 2011
Managing Officer, Senior Manager of CSR
Department and Corporate Strategy
Department of Corporate Strategy Center(served concurrently), and Senior Manager of
Takayoshi Okugawa
23,300Overseas Administration Service(September 13, 1957)
Department of Business Support Center of
the Company (served concurrently)
June 2012
Director, Senior Executive Managing Officer
and General Manager of Business
Administration Department of Nisshinbo
Mechatronics Inc.
June 2014
Director, Managing Officer and Chief ofBusiness Support Center of the Company (tothe present)
June 2016
Director and Executive Managing Officer of
the Company (to the present)[Reason for election of candidate for Director]
Mr. Takayoshi Okugawa previously served as Managing Officer of the Company and Director of aconsolidated subsidiary. He presently serves as a Director of the Company, and concurrently serves
as chief officer of the Finance and Accounting Department and the Administration Service
Department. The Company has judged that he would be fully able to perform his duties as Director
in light of his substantial administrative experience and expertise. Accordingly, he has been
proposed as a candidate.
[Attendance at the Board of Directors' meetings]
All 16 meetings

10

No.

Name
(Date of Birth)

Brief personal profile, title, responsibilities and significant
concurrent positions at companies other than the Company
April 1981
April 2007

Koji Nishihara(April 14, 1958)

6

Joined the Company
Managing Officer and General Manager ofStrategic Planning Department andOverseas Operation Department of Brake
Division of the Company (serviced
concurrently)
April 2009
Director, Executive Managing Officer andGeneral Manager of Administration Divisionof Nisshinbo Brake Inc.
April 2010
Director, Vice President and General
Manager of Sales & Marketing Division of
Nisshinbo Brake Inc.
April 2011
General Manager of Production Division of
Nisshinbo Brake Inc.
June 2011
Director and Managing Officer of theCompany, President and Representative
Director of Nisshinbo Brake Inc. (served
concurrently)
January 2012
Responsible for Brake Business of theCompany
June 2012
Responsible for Supervising Brake Businessof the Company
June 2015
Director and Executive Managing Officer of
the Company (to the present)
June 2017
Chairman and Representative Director of
Nisshinbo Brake Inc. (served concurrently, tothe present)(Significant concurrent positions at companies other than the
Company)
Chairman and Representative Director of Nisshinbo Brake Inc.

Number ofCompany’s
shares held

22,460[Reason for election of candidate for Director]
After his assumption of office as a Director of the Company, Mr. Koji Nishihara served as President
and Representative Director of Nisshinbo Brake Inc., which is a consolidated subsidiary of theCompany. He presently serves as Chairman and Representative Director of Nisshinbo Brake Inc.
The Company has judged that he would be fully able to perform his duties as Director in light of his
substantial business experience and expertise in the brake business. Accordingly, he has been
proposed as a candidate.
[Attendance at the Board of Directors' meetings]
All 16 meetings

11

No.

Name
(Date of Birth)

Brief personal profile, title, responsibilities and significant
concurrent positions at companies other than the Company
April 1959

7

Number ofCompany’s
shares held

Joined Fukoku Mutual Life Insurance
Company
July 1984
Director of Fukoku Mutual Life Insurance
Company
March 1989
Managing Director of Fukoku Mutual Life
Insurance Company
July 1998
President and Representative Director of
Fukoku Mutual Life Insurance Company
June 2003
Outside Audit & Supervisory Board Member[Candidate forof the Company
Outside Director] June 2006
Outside Director of the Company (to the0present)
Tomofumi Akiyama
July 2010
Chairman and Director of Fukoku Mutual(August 13, 1935)
Life Insurance Company (to the present)(Significant concurrent positions at companies other than the
Company)
Chairman and Director of Fukoku Mutual Life Insurance
Company
Outside Director of FUJIKYUKO CO., LTD.
Outside Director of Imperial Hotel, Ltd.
Outside Director of Tokyo Dome Corporation
Outside Director of Showa Denko K.K.
[Reason for election of candidate for Outside Director]
Mr. Tomofumi Akiyama has been involved with corporate management for many years as presidentof Fukoku Mutual Life Insurance Company. The Company appointed him as a candidate for Outside
Director in the hope that he would be able to utilize his substantial management experience andexpertise in the supervision of the management of the Group.
[Attendance at the Board of Directors' meetings]
13 out of 16 meetings

12

No.

Name
(Date of Birth)

Brief personal profile, title, responsibilities and significant
concurrent positions at companies other than the Company
April 1963

8

Number ofCompany’s
shares held

Public Prosecutor of Tokyo District Court
Public Prosecutors Office
January 1981
Director of Juvenile Division of Criminal
Affairs Bureau of Ministry of Justice
August 1985
Special Trial Director of Tokyo High Public
Prosecutors Office
August 1987
Special Investigation Director of Tokyo
District Court Public Prosecutors Office
September 1989 Public Prosecutor of Supreme Public
Prosecutors Office
December 1991 Chief Prosecutor of Mito District Court Public
Prosecutors Office[Candidate forJuly 1993
Director-General of the Correction Bureau of
Outside Director]
Ministry of Justice0
July 1995
Director of the Criminal Affairs Bureau ofNoboru Matsuda
Supreme Public Prosecutors Office(December 13, 1933)
June 1996
Governor of Deposit Insurance Corporation ofJapan
June 2004
Advisor of Deposit Insurance Corporation ofJapan
September 2004 Registered as attorney-at-law (to the present)
June 2012
Outside Director of the Company (to thepresent)(Significant concurrent positions at companies other than the
Company)
Outside Director of Hakuhodo DY Holdings Inc.
Outside Director of Mitsubishi UFJ NICOS Co., Ltd.
Outside Director of Yomiuri Giants[Reason for election of candidate for Outside Director]
Mr. Noboru Matsuda has work experience as a prosecuting attorney and lawyer, and professional
knowledge about laws, etc. The Company appointed him as a candidate for Outside Director in thehope that he would be able to utilize his significant expert knowledge, substantial experience andexpertise in the supervision of the management of the Group.
[Attendance at the Board of Directors' meetings]
15 out of 16 meetings

13

No.

Name
(Date of Birth)

Brief personal profile, title, responsibilities and significant
concurrent positions at companies other than the Company

Number ofCompany’s
shares held

April 1989

9

10

Professor of Faculty of Commerce andManagement of Hitotsubashi University
August 2000
Dean of Graduate School of Commerce andManagement and Faculty of Commerce andManagement of Hitotsubashi University
April 2003
Executive Vice President of Hitotsubashi
University
May 2004
President of Japan Society of Monetary[Candidate for
Economics
Outside Director] September 2004 Vice President of The Mont Pelerin Society0Professor Emeritus of Hitotsubashi
Yoshinori Shimizu April 2011
University (to the present) and Specially(February 9, 1948)
Appointed Professor of Graduate School ofCommerce and Management of Hitotsubashi
University
June 2012
Outside Director of the Company (to thepresent)(Significant concurrent positions at companies other than the
Company)
Outside Director of Tokyo Century Corporation[Reason for election of candidate for Outside Director]
Mr. Yoshinori Shimizu, as a university professor, has professional knowledge mainly about
monetary and finance. The Company appointed him as a candidate for Outside Director in the hopethat he would be able to utilize his significant expert knowledge, substantial experience andexpertise in the supervision of the management of the Group.
[Attendance at the Board of Directors' meetings]
15 out of 16 meetings
April 1987
Joined Ryoka Systems Inc.
[Candidate forOpened a counseling business office (to theOutside Director] June 2003
present)0
Shinobu Fujino
June 2015
Outside Director of the Company (to thepresent)(July 13, 1957)[Reason for election of candidate for Outside Director]
Ms. Shinobu Fujino, as a career counselor, has professional knowledge and experience mainly abouthuman resources development. The Company appointed her as a candidate for Outside Director in
the hope that she would be able to utilize her substantial knowledge and experience, as well as her
female viewpoint and sensitivity in the supervision of the management of the Group and thepromotion of diversity management.
[Attendance at the Board of Directors' meetings]
All 16 meetings(Notes)1.
Mr. Ryo Ogura is president and representative director of New Japan Radio Co.,
Ltd., a subsidiary of the Company, with which the Company has a transactional
relationship for lending funds, etc.
2.
There is no special interest between each of the other candidates and theCompany.
3.
Mr. Tomofumi Akiyama, Mr. Noboru Matsuda, Mr. Yoshinori Shimizu and Ms.
Shinobu Fujino are candidates for Outside Directors.
4.
Mr. Tomofumi Akiyama, Mr. Noboru Matsuda, Mr. Yoshinori Shimizu and Ms.
14

5.
(1)

(2)
(3)
(4)

6.

7.

Shinobu Fujino have been designated as Independent Officers provided for by thestock exchanges on which the Company’s shares are listed and have been filedwith the relevant stock exchanges.
The term of office of candidates for Outside Directors and other related
information are as follows:
The term of office of Mr. Tomofumi Akiyama as Outside Director of theCompany will have been twelve (12) years at the conclusion of this General
Meeting. Furthermore, he had been in the office of Outside Audit &Supervisory Board Member of the Company for three (3) years prior to hisassumption of the office of Outside Director of the Company.
The term of office of Mr. Noboru Matsuda as Outside Director of the Company
will have been six (6) years at the conclusion of this General Meeting.
The term of office of Mr. Yoshinori Shimizu as Outside Director of theCompany will have been six (6) years at the conclusion of this General
Meeting.
The term of office of Ms. Shinobu Fujino as Outside Director of the Company
will have been three (3) year at the conclusion of this General Meeting.
Furthermore, her name on the Family Registration is Ms. Shinobu Kato but her
name on business is Ms. Shinobu Fujino.
Japan Radio Co., Ltd., where Mr. Noboru Matsuda served as Outside Director
until June 2015, was subject to an on-site investigation by Japan Fair Trade
Commission on November 18, 2014 regarding transactions involving the deliveryof fire-fighting and emergency radio communication equipment. Subsequently,
on February 2, 2017, the Commission issued a cease-and-desist order and an
administrative surcharge payment order to the company for a suspected violationof the Antimonopoly Act of Japan. Although Mr. Matsuda had routinely given
guidance and advice from the perspective of compliance at the company's boardof directors meetings, he served his responsibility as Outside Director to require
investigation of facts and strengthen its systems and structure to prevent
recurrence after an on-site investigation by the Commission.
The Company has entered into a liability limiting agreement with Mr. Tomofumi
Akiyama, Mr. Noboru Matsuda, Mr. Yoshinori Shimizu and Ms. Shinobu Fujino
under which the liability for damages set forth in Article 423, Paragraph 1 of theCompanies Act shall be limited to the prescribed 5 million yen, or the amountprovided for in laws and regulations, whichever is higher, on the assumption thathe/she discharges his/her duties in good faith and without gross negligence. In theevent that each of them is reelected, the agreement will be continued.

15

Third Item of Business: Election of One (1) Substitute Audit & Supervisory Board
MemberIn preparation for a case in which the number in the office of Audit & Supervisory Board
Members becomes less than the minimum number provided for in laws and regulations, wewould like to ask shareholders to elect one (1) Substitute Audit & Supervisory Board
Member in advance.
The Board of Audit & Supervisory Board Members has consented to this Item ofBusiness.
The candidate for Substitute Audit & Supervisory Board Member is as follows:
Name(Date of Birth)(candidate for

Brief personal profile, title and significant concurrent
positions at companies other than the Company
April 1988

Substitute Audit April 1988
& Supervisory May 2001
Board Member) May 2011
October 2014
Atsushi

Registered as an attorney-at-law (to thepresent)
Joined Tanaka & Takahashi Law Office
Joined Clifford Chance Law Office
Joined K&L Gates LLP
Joined Sonderhoff & Einsel Law andPatent Office (to the present)

Number ofCompany’s
shares held0

Yamashita(March 5, 1958)[Reason for election of candidate for Substitute Audit & Supervisory Board Member]
Mr. Atsushi Yamashita has work experience as a lawyer and professional knowledge about
international legal affairs. The Company appointed him as a candidate for Substitute Audit &Supervisory Board Member in the hope that he would be able to utilize his significant expert
knowledge, substantial experience and expertise in the supervision of the management of theGroup.

(Notes)1.
There is no special interest between the candidate and the Company.
2.
Mr. Atsushi Yamashita is a candidate for Substitute Outside Audit & Supervisory
Board Members.
3.
In the event that Mr. Atsushi Yamashita assumes the office of Outside Audit &Supervisory Board Member, the Company is scheduled to report Independent
Officers provided for by the stock exchanges on which the Company’s shares arelisted and will be filed with the relevant stock exchanges.
4.
Kuroda Electric Co., Ltd., where Mr. Atsushi Yamashita assumed office as an
Outside Director until March 2018, received a representation by one of its
shareholders with regard to the proposal of electing directors submitted by theshareholder and rejected at the extraordinary meeting of shareholders held on
August 21, 2015. Prior to the extraordinary meeting of shareholders, thestatement was published under the name of “Jiseikai Group and All Employees”
to express opposition against the proposal. Kuroda was claimed by theshareholder that the statement had been prepared wrongfully by some of
Kuroda’s executive managers. In order to address this issue, Mr. Yamashita took
the lead in the establishment of an outside investigation committee and personnel
selection to track down the facts. In addition, he was actively involved with theimposition of disciplinary punishment of persons concerned, the implementationof recurrence prevention measures and other necessary actions.
5.
In the event that Mr. Atsushi Yamashita assumes the office of Outside Audit &16Supervisory Board Member, the Company is scheduled to enter into a liability
limiting agreement with him, under which the liability for damages set forth in
Article 423, Paragraph 1 of the Companies Act shall be limited to the prescribed
5 million yen, or the amount provided for in laws and regulations, whichever ishigher, on the assumption that he discharges his duties in good faith and withoutgross negligence.

17

Fourth Item of Business: Determination of Remuneration for Directors (excluding
Outside Directors) in the form of assignment of restricted
shares
The total amount of remuneration, etc. to Directors of the Company is not more than
400 million yen per year (excluding a portion of salaries paid to Directors who work
concurrently as employees) which has been approved at the 162nd Ordinary General
Meeting of Shareholders of the Company held on June 29, 2005. Furthermore, theOrdinary General Meeting of Shareholders of the Company approved each and every year
to determine the amount of remuneration, etc. in the form of stock subscription rights as
stock option for Directors (excluding Outside Directors), separately from the aforesaid
total amount of remuneration to Directors.
The Directors (excluding Outside Directors) should share furthermore with shareholders
merits and risks associated with fluctuation of the market price of the Company’s shares sothat to further enhance motivation of Directors (excluding Outside Directors) contributing
to the enhancement of share price and the corporate value of the Company more seriously
than the current level, the Company would like to hereby propose to assign to Directors(excluding Outside Directors) common shares with restricted transferable period andsubject to acquisition of the restricted shares, free of charge, by the Company (hereinafterreferred to as the “restricted shares”), instead of the aforesaid current stock subscription
rights as stock option.
The Company hereby proposes to discontinue the resolution of the 174th Ordinary
General Meeting of Shareholders of the Company held on June 29, 2017 by which
remuneration amount in the form of stock subscription rights as stock option to Directors(excluding Outside Directors) was resolved upon. Then, the pecuniary remuneration credit
amount equal to the total amount of the remuneration by way of the assignment of
restricted shares shall be not more than 40 million yen per year, in addition to the total
amount of remuneration, etc. as aforesaid, taking into account overall conditions including
various factors such as a degree of contributions by Directors to the Company. Furthermore,assignment of restricted shares has been determined taking into account overall conditions
including various factors such as a degree of contributions by Directors to the Company sothat the contents are reasonable in the Company’s judgement.
Moreover, the number of Directors of the Company is currently ten (10) (including four(4) Outside Directors) and even if the Second Item of Business is approved as proposed thenumber of Directors is the same.
PARTICULAES
Details and Maximum Number of Restricted Shares Assigned to Directors of theCompany (excluding Outside Directors)
1. Assignment of and payment for restricted shares
Based on resolution of the Board of Directors of the Company, the Company will
provide Directors (excluding Outside Directors) with pecuniary remuneration credit in the
aforesaid range of the annual amount in the form of restricted shares, and each Director
shall receive all the pecuniary remuneration credit in the form of investment in kind whichis assignment of restricted shares.
Furthermore, the payment amount for restricted shares will be determined at the Boardof Directors of the Company on the basis of the closing price of the common shares of theCompany on the day preceding to the trading day (if no closing price is reported on thatday, the closing price reported immediately preceding day) in the Tokyo Stock Exchange
on which the Company decides the issue or disposal of the subject shares with
under-market-value not to excess.
Moreover, the aforesaid pecuniary remuneration credit will be provided on conditions
that each Director has agreed on receipt of the investment in kind and entered into
assignment agreement of restricted shares providing for the details stated in 3 below.

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2. Total number of restricted shares
The maximum total number of restricted shares assigned to Directors (excluding
Outside Directors) during each business year shall be 50,000.
Provided, however, that if any event such as stock split of common shares of theCompany (including free distribution of common shares of the Company) takes placenecessitating to make adjustment of the total number of restricted shares, the Company isentitled to make adjustment of the total number of restricted shares to the reasonable
extent.
3. Details of the assignment agreement of restricted shares
The assignment agreement of restricted shares based on resolution of the Board of
Directors of the Company shall consist of the following.
(1) Details of restricted transfer
Director who receives the assignment of restricted shares shall not render any disposal
at all on restricted shares such as to transfer to any third party, create pawn or transfer
collateral, make lifetime gift or gift by will during a period (hereinafter referred to as the“transfer restricted period”) to be determined by the Board of Directors of the Company
within the period of three years to five years.
(2) Acquisition free of charge of restricted shares
The Company will acquire free of charge restricted shares (hereinafter referred to as the“subject restricted shares”) assigned to Director who has retired as the position of Director,
Managing Officer or employee of the Company or Company’s subsidiary or severed fromthe Company or Company’s subsidiary on or after the commencement day of the transfer
restricted period before the day preceding the day on which the Ordinary General Meetingof Shareholders of the Company is held first following the commencement of the transfer
restricted period except in which the Board of Directors of the Company deems it
reasonable that the aforesaid should not be applicable.
Furthermore, the Company will acquire as a matter of course free of charge therestricted shares which have not been released from the restricted transfer pursuant to theprovisions of (3) below at the termination of the restricted transfer period stated in (1)above.
(3) Release from restricted transfer
If Director who has been assigned restricted shares continues to have position of
Director, Managing Officer or employee of the Company or the Company’s subsidiary
until the day on which the Ordinary General Meeting of Shareholders first held after thecommencement day of the transfer restricted period, the restricted transfer will be releasedon all the subject restricted shares at the termination of the transfer restricted period.
However, if Director retires as Director, Managing Officer or employee of the Company
or the Company’s subsidiary or severs from the Company or the Company’s subsidiary
before the termination of the restricted transfer period for the reason the Company deems
reasonable, the Company will render adjustment with respect to the number of therestricted shares and the timing as to which the restricted transfer is released reasonably asnecessary.
(4)

Treatment in connection with reorganization, etc. of the Company
In the event that proposal for merger agreement in which the Company is an absorbed
company, or share exchange agreement or share transfer plan in which the Company iswholly the owned subsidiary of the opponent party, reorganization, etc. of the Company isapproved at the General Meeting of the Company (however, is approved at the Board of
Directors of the Company in case the subject reorganization shall not be required at theGeneral Meeting of the Company), the Company will release the restricted transfer before
the effective date of the subject reorganization, etc. with respect to such reasonable numberof the subject restricted shares as the Board of Directors of the Company resolves upontaking into account the period from the commencement date of the transfer restrictedperiod to the date of approval of the subject reorganization, etc.
In this case, the Company will acquire free of charge the subject restricted shares which
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have not yet been released from the restricted transfer pursuant to the above immediately
after the time the aforesaid release taking effect.
(Reference)
The Company is schedule to assign restricted shares similar to the restricted shares
stated above to Managing Officer and employees of the Company after the close of thisOrdinary General Meeting of Shareholders of the Company.
- End -

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