This document has been translated from the Japanese original version for the reference and convenience of non-Japaneseshareholders without any warranty for its accuracy or otherwise. In the event of any discrepancy between this translation
version and the Japanese original version, the Japanese original shall prevail.

Securities identification code: 6376
March 14, 2022

To our shareholders:Toshihiko Kai

President & Representative Director

NIKKISO CO., LTD.
4-20-3 Ebisu, Shibuya-ku, TokyoNOTICE OF THE 81ST ORDINARY GENERAL MEETING OF SHAREHOLDERS
We are pleased to announce the 81st Ordinary General Meeting of Shareholders of NIKKISO CO., LTD.
(the “Company”), which will be held as described below.
To prevent the spread of novel coronavirus disease (COVID-19), we ask that all shareholders exercise
their voting rights in advance by postal mail or via the Internet, if at all possible (see Page 3). Pleaseindicate your approval or disapproval of the proposals on the enclosed voting form after reviewing theattached Reference Documents for the General Meeting of Shareholders, and return it by postal mail or
via the Internet to reach us no later than 5:30 p.m., Tuesday, March 29, 2022 (Japan Standard Time).

Meeting Details
1.

Date and time:

Wednesday, March 30, 2022, at 10:00 a.m. (Japan Standard Time)(The reception desk will open from 9:00 a.m.)2.

Venue:

Nikkiso Higashimurayama Plant, R&D Center
Multi-Purpose Bldg. 7F, Conference Room
2-16-2 Noguchi-cho, Higashimurayama-shi, Tokyo

3.

Purposes:
Items to be reported:
1. Business Report and Consolidated Financial Statements for the 81st Term (from January 1,
2021 to December 31, 2021), as well as the results of audits of the Consolidated Financial
Statements by the Accounting Auditors and the Audit & Supervisory Board
2. Non-Consolidated Financial Statements for the 81st Term (from January 1, 2021 to
December 31, 2021)
Items to be resolved:
Proposal 1:
Partial amendment to the Articles of Incorporation
Proposal 2:
Election of eight (8) Directors
Proposal 3:
Election of two (2) Audit & Supervisory Board Members
Proposal 4:
Election of one (1) Substitute Outside Audit & Supervisory Board Member
Proposal 5:
Determination of remuneration for the issuance of restricted shares to Directors

14.

Other decisions concerning convocation of this General Meeting of Shareholders(1)

Voting by postal mail(2)

Voting via the Internet(3)

Voting by multiple methods
such as by postal mail andvia the Internet(4)

Voting multiple times via
the Internet

Please follow the “Instructions on How to Exercise Voting Rights”(Page 3), indicate your approval or disapproval of each proposal on theenclosed voting form, and return it by mail to reach us by the below
deadline. Must be exercised by
Tuesday, March 29, 2022, at 5:30 p.m. (Japan Standard Time)
Please follow the “Instructions on How to Exercise Voting Rights via
the Internet” (Page 4, in Japanese only), and exercise your voting rights
by the below deadline from the voting website designated by theCompany (https://www.web54.net). Must be exercised by
Tuesday, March 29, 2022, at 5:30 p.m. (Japan Standard Time)If you have exercised your voting rights through multiple methods suchas by postal mail and via the Internet, etc., the vote that has reached theCompany last shall be deemed effective.
However, if voting rights are exercised by postal mail and via theInternet on the same date, the exercise of voting rights via the Internet
shall be deemed effective.
If you exercise your voting rights multiple times via the Internet, thelast exercise shall be deemed effective.

 If you will attend the meeting, please submit the enclosed voting form at the reception desk of the General
Meeting of Shareholders.
 Of the documents to be submitted upon this notification, the following matters are posted on the Company’s
website (https://www.nikkiso.co.jp) pursuant to laws and regulations as well as Article 19 of the Company’s
Articles of Incorporation, and thus these documents are not included in the attached documents.
1) Stock Acquisition Rights, Etc. of the Company; Overview of System to Ensure Business Appropriateness andOperation Status of Said System; and Basic Policy for Controlling the Company in the Business Report2) Notes to the Consolidated Financial Statements
3) Notes to the Non-Consolidated Financial Statements
These items are included in the Business Report, Consolidated Financial Statements and Non-Consolidated
Financial Statements audited when the Audit & Supervisory Board Members prepare the Audit Report. In
addition, items 2) and 3) in the above are included in the Consolidated Financial Statements and NonConsolidated Financial Statements audited when the Accounting Auditors prepare the Accounting Audit Report.
 In the event of circumstances requiring amendments to the Business Report, Consolidated Financial Statements,
Non-Consolidated Financial Statements, and Reference Documents for the General Meeting of Shareholders, thematters that have been amended will be posted on the Company’s website (https://www.nikkiso.co.jp).

2

Instructions on How to Exercise Voting Rights
Voting rights can be exercised via the following three (3) methods.
To prevent the spread of COVID-19, we ask that all shareholders exercise their voting rights
in advance by postal mail or via the Internet, if at all possible.
If exercising your voting rights by postal mail (voting form)
Please indicate your approval or disapproval of the proposals on the enclosed voting form, and thenreturn the form to us by postal mail without affixing a stamp.
Deadline for exercising
your voting rights:

Must be received by the Company
by 5:30 p.m. on Tuesday, March 29, 2022 (Japan Standard Time)

If exercising your voting rights via the Internet
Follow the instructions given under “Instructions on How to Exercise Voting Rights via the Internet”
on the next page (in Japanese only). If you are unsure about exercising your voting rights via theInternet, please contact Stock Transfer Agency Web Support, Sumitomo Mitsui Trust Bank, Limited,
listed on the next page (in Japanese only).
Deadline for exercising
your voting rights:

Must be exercisedby 5:30 p.m. on Tuesday, March 29, 2022 (Japan Standard Time)If attending the General Meeting of Shareholders
Please submit the enclosed voting form at the reception desk of the General Meeting of
Shareholders. (You are not required to sign and affix a seal on this form.)
Date andtime:
Venue:

Wednesday, March 30, 2022, at 10:00 a.m. (Japan Standard Time) (Thereception desk will open from 9:00 a.m.)
Nikkiso Higashimurayama Plant, R&D Center
Multi-Purpose Bldg. 7F, Conference Room

[Requests to Shareholders]* As was the case for last year’s meeting, the number of seats available this year will be fewer than in normal
years to provide spacing between seats so as to prevent the spread of COVID-19. Consequently, someshareholders may not be permitted entry to the venue on the day of the meeting.
* To prevent the spread of COVID-19, the staff of the Company who are administering the general meetingof shareholders will wear masks. Also, alcohol-based sanitizer will be available close to venue entrancesand exits. We ask that all shareholders considering attending the meeting cooperate by spraying theirhands and fingers with alcohol-based sanitizer and wearing a mask. Uncooperative shareholders may not
be permitted entry to the venue. Note that factory tours will not be held after the general meeting.

3

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

Partial amendment to the Articles of Incorporation

1. Reasons for the amendment(1) The amended provisions stipulated in the proviso of Article 1 of the Supplementary
Provisions of the Act Partially Amending the Companies Act (Act No.70 of 2019) will be
enforced on September 1, 2022. In order to prepare for the resulting introduction of a systemof providing materials for General Meeting of Shareholders in electronic format, theArticles of Incorporation of the Company shall be amended as indicated below.
(i) The proposed amended Article 19, paragraph 1 stipulates that measures be taken toprovide information in electronic format when the said information corresponds to thecontent of the Reference Documents, etc. for General Meeting of Shareholders(Reference Documents for the General Meeting of Shareholders, voting forms, Financial
Statements and business reports per Article 437 of the Companies Act, and Consolidated
Financial Statements per Article 444, paragraph 6 of the Companies Act).
(ii) The proposed amended Article 19, paragraph 2 shall include provisions that limit thescope of the stipulations of the document delivered to those shareholders who requestdelivery of materials in paper-based format.
(iii) As regulations on disclosure via the Internet and deemed provision of Reference
Documents, etc. for General Meeting of Shareholders (Article 19 of the current Articles
of Incorporation) will be no longer necessary, they shall be deleted.
(iv) In accordance with the above newly established provisions and deletions, supplementaryprovisions relating to their date of coming into effect, etc. shall also be established.
(2) Under the proposed amended Article 27, paragraph 1, a notice of convocation of the Boardof Directors shall be issued to each Director and Audit & Supervisory Board Member at
least three (3) days prior to the date of the meeting, amending the relevant provisions ofArticle 27, paragraph 1 of the current Articles of Incorporation. In addition, Article 37,
paragraph 1 of the current Articles of Incorporation shall be similarly amended for noticesof convocation of the Audit & Supervisory Board.

42. Contents of the amendment
The contents of the amendment are as follows:(The underlined portions have been amended.)
Current Articles of Incorporation
Proposed amendment
Article 19. (Disclosure via Internet and Deemed<Deleted>
Provision of Reference Documents, etc. for General
Meeting of Shareholders)
When convening the General Meeting of Shareholders,the Company may deem that information concerning thematters required to be specified or indicated in thereference materials of the General Meeting of
Shareholders, business reports, financial statements andconsolidated financial statements has been furnished toShareholders of the Company by disclosing suchinformation in a manner using the Internet pursuant to theprovisions of the Ordinance of the Ministry of Justice.
<Newly established>
Article 19. (Electronic Provision Measures, Etc.)(1) The Company shall, when convening a General
Meeting of Shareholders, take measures to provide
information in electronic format when the said
information corresponds to the content of theReference Documents, etc. for General Meeting of
Shareholders.
(2) The Company may omit some or all of the content
mandated by the Ordinance of the Ministry of Justicefor inclusion in the electronic-format materials fromthe materials in paper-based format delivered to thoseshareholders who request delivery of materials in
paper-based format by the record date for voting
rights.
Article 27 (Notice of Convocation for the Board of
Article 27 (Notice of Convocation for the Board of
Directors)
Directors)(1) The notice to convene a meeting of the Board of(1) The notice to convene a meeting of the Board of
Directors shall be issued to each Director and each
Directors shall be issued to each Director and each
Audit & Supervisory Board Member three (3) days
Audit & Supervisory Board Member at least three (3)prior to the date of the meeting; provided, however,days prior to the date of the meeting; provided,that the period of notice may be shortened in case of
however, that the period of notice may be shortened inemergency.
case of emergency.
(2) <Omitted>(2) <No change>5Current Articles of Incorporation
Proposed amendment
Article 37 (Notice of Convocation for Audit &Article 37 (Notice of Convocation for Audit &Supervisory Board)Supervisory Board)(1) The notice to convene a meeting of the Audit &(1) The notice to convene a meeting of the Audit &Supervisory Board shall be issued to each Audit &Supervisory Board shall be issued to each Audit &Supervisory Board Member three (3) days prior to theSupervisory Board Member at least three (3) days
date of the meeting; provided, however, that theprior to the date of the meeting; provided, however,period of notice period may be shortened in case ofthat the period of notice period may be shortened inemergency.
case of emergency.
(2) <Omitted>(2) <No change><Newly established>(Supplementary Provisions)
1. The amendment to Article 19 of the Articles ofIncorporation shall be effective from September 1,
2022, 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”).
2. Notwithstanding the provisions of the preceding
paragraph, Article 19 (Disclosure via Internet andDeemed Provision of Reference Documents, etc. for
General Meeting of Shareholders) of the Articles ofIncorporation shall remain in effect for any General
Meeting of Shareholders held on a date not exceedingsix (6) months after the Enforcement Date.
3. These supplementary provisions shall be deleted after
either the date six (6) months after the Enforcement
Date or three (3) months after the date of the General
Meeting of Shareholders per the preceding paragraph,
whichever is later.

6

Proposal 2:

Election of eight (8) Directors

The terms of all of the current seven (7) Directors will expire at the conclusion of this Ordinary
General Meeting of Shareholders. Therefore, to strengthen our systems for globally based businesspromotion and corporate governance, the Company proposes that the number of Directors be
increased by one (1), and eight (8) Directors be elected.
The Directors of the Company have a fiduciary duty and accountability to the shareholders, and theyalso have a responsibility to sustainably grow the Company’s Group (“the Group”) and improve
medium- and long-term corporate value through the implementation of efficient and effective
corporate governance.
The candidates for Director are shown below. These candidates are nominated in accordance with
the Company’s Policies and Procedure for Nominating Candidates for Director (Page 20-21).
Current position andresponsibilities in the Group

Significant concurrent
positions outside the Group

No.

Name

1

Toshihiko Kai

President & Representative
Director[Reelection]

2

YoshihikoKinoshita

Director, Executive Officer,
General Manager of Medical
Business Unit, General
Manager of Medical Division,and General Manager ofResearch & Engineering
Institute[Reelection]

3

Masaru Yamamura Director, Executive Officer,
General Manager of Industrial
Business Unit, and General
Manager of Industrial Division[Reelection]

4

Tsunehisa Suita

Executive Officer, General
Manager of Administration
Division, General Manager ofCorporate Planning Division,and General Manager ofKanazawa Plant[New election]

5

Kenji Saito

Executive Officer and General
Manager of Aerospace
Division[New election]

6Peter Wagner

CEO and Director, Cryogenic
Industries, Inc. (the Company’s
consolidated subsidiary in
America)[New election]

7

Haruko Hirose

Outside Director

Outside Director, S&B Foods [Reelection]
Inc.
[Independent Officer]
Outside Director,[Outside Officer]
MITSUBISHI GASCHEMICAL COMPANY,
INC.

8

Mitsuaki Nakakubo Outside Director

Attorney (Partner, Asahi Law [Reelection]
Offices)[Independent Officer]
Outside Audit & Supervisory [Outside Officer]
Board Member, Nippon
Kodo Holdings Co., Ltd.
Outside Director, FANCLCORPORATION

Notes:
1. There is no special interest between each candidate and the Company.
2. The name of Haruko Hirose in the family register is Haruko Makinouchi.
3. Summary of contents of liability insurance for Directors and other officers to enter into with each candidate:

7

The Company has entered into a liability insurance agreement for Directors and other officers of the Company
and its Group companies inside and outside of Japan with an insurance company in which the Company takes
responsibility for the entire insurance premium to compensate Directors and other officers for damages that may
arise due to their liability for the execution of their duties or due to the pursuit of said liability. If each candidate
assumes a position as a Director, said individual shall be covered by this insurance agreement. A summary of thecontents of this insurance agreement is included on pages 40-41 (in Japanese only).

8

No.

Career summary, position and areas of responsibility(significant concurrent positions outside the Company)

Name (Date of birth)

Toshihiko Kai

March 2000

Joined the Company

April 2001

Executive Officer of the Company

April 2002

President, Medical Equipment Unit
(currently Medical Division) of theCompany

June 2003

Director of the Company (present
position)

December 2004

President & Representative Director of
the Company (present position)(August 19, 1946)[Reelection]
1

Number of theCompany’s
shares owned

64,874[Position and areas of responsibility at the Company]
President & Representative Director[Significant concurrent positions outside the Company]–[Reasons for selection as a candidate for Director]
Toshihiko Kai has exhibited strong leadership and excellent management capabilities over many years, andsteadily promoted business expansion and the strengthening of the business foundation, pursuing thesustainable growth of the Group and improvement of medium- and long-term corporate value. His powerfulleadership and experienced management capability will continuously enable him to realize further
development of the Group. As such, he is nominated as a candidate for Director.

9

No.

Career summary, position and areas of responsibility(significant concurrent positions outside the Company)

Name (Date of birth)

Yoshihiko Kinoshita

April 1989

Joined the Company

October 2011

Deputy General Manager, Medical
Division of the Company

January 2016

General Manager of Medical Division of
the Company (present position)

October 2016

Director, Vice Chairman, Weigao
Nikkiso (Weihai) Dialysis Equipment
Co., Ltd. (the Company’s equity method
affiliated company in China) (present
position)January 2017

Executive Officer of the Company(present position)

March 2017

Director (present position) and in chargeof Medical Business Unit of theCompany

October 2017

CEO, Managing Director, Nikkiso
Europe GmbH (the Company’s
consolidated subsidiary in Germany)

January 2019

General Manager of Medical Business
Unit of the Company (present position)

January 2022

General Manager of Research &Engineering Institute of the Company(present position)(September 13, 1966)[Reelection]

2

Number of theCompany’s
shares owned

21,392[Position and areas of responsibility at the Company]
Director, Executive Officer, General Manager of Medical
Business Unit, General Manager of Medical Division, andGeneral Manager of Research & Engineering Institute[Significant concurrent positions outside the Company]–[Reasons for selection as a candidate for Director]
Yoshihiko Kinoshita has obtained extensive experience and made many achievements while in charge of theMedical Business for a long time. Furthermore, he has been responsible for the management of theCompany and the Group since assuming the position of Director of the Company in March 2017. He iscurrently promoting the expansion of the overseas market for the hemodialysis business and strengtheningof the business foundation under the difficult environment caused by the COVID-19 pandemic. It has been
determined that he can further strengthen the management function and the supervisory function of theBoard of Directors using these experiences and past results. As such, he is nominated as a candidate for
Director.

10

No.

Career summary, position and areas of responsibility(significant concurrent positions outside the Company)

Name (Date of birth)

November 1990

Joined the Company

October 2009

General Manager of Business Promotion
Department, Medical Division of theCompany

July 2012

General Manager of Osaka Branch of theCompany

April 2017

General Manager of Industrial Divisionof the Company (present position)

January 2018

Executive Officer of the Company(present position)(May 27, 1965)

January 2019

General Manager of Industrial Business
Unit of the Company (present position)[Reelection]

March 2019

Director of the Company (present
position)

October 2021

CEO, Managing Director, LEWA GmbH(the Company’s consolidated subsidiaryin Germany) (present position)

Masaru Yamamura

3

Number of theCompany’s
shares owned

12,483[Position and areas of responsibility at the Company]
Director, Executive Officer, General Manager of Industrial
Business Unit, and General Manager of Industrial Division[Significant concurrent positions outside the Company]–[Reasons for selection as a candidate for Director]
Masaru Yamamura has obtained extensive experience and made many achievements while in charge of theIndustrial Business after holding successive important positions in the Medical Business. Furthermore, he
has been responsible for the management of the Company and the Group since assuming the position of
Director of the Company in March 2019. Currently he is promoting business strategies focused on
worldwide energy conversion. It has been determined that he can further strengthen the management
function and the supervisory function of the Board of Directors of the Company using these experiences andpast results. As such, he is nominated as a candidate for Director.

11

No.

Career summary, position and areas of responsibility(significant concurrent positions outside the Company)

Name (Date of birth)

Tsunehisa Suita

April 2010

Joined the Company

April 2013

General Manager of Corporate Planning
Department of the Company

June 2013

Director of the Company

October 2013

Director, General Manager of Medical
Division of the Company

June 2018

CEO, Managing Director, LEWA GmbH(the Company’s consolidated subsidiaryin Germany)

October 2019

CEO, Managing Director, Nikkiso
Europe GmbH (the Company’s
consolidated subsidiary in Germany)

January 2022

Executive Officer, General Manager of
Administration Division, General
Manager of Corporate Planning Division,
General Manager of Kanazawa Plant of
the Company (present position)(October 23, 1959)[New election]

4

Number of theCompany’s
shares owned

15,000[Position and areas of responsibility at the Company]
Executive Officer, General Manager of Administration
Division, General Manager of Corporate Planning Division,and General Manager of Kanazawa Plant[Significant concurrent positions outside the Company]–[Reasons for selection as a candidate for Director]
Tsunehisa Suita has obtained extensive experience and made many achievements while in charge ofbusiness management such as corporate planning, financial affairs and legal affairs and while in charge ofthe Medical Business. Furthermore, he has been responsible for risk management in overseas businessdevelopment and for the management of the Group while taking part in the management of overseas
subsidiaries in the Industrial Division and Medical Division since 2018. He currently holds the positions ofGeneral Manager of Administration Division, General Manager of Corporate Planning Division and General
Manager of Kanazawa Plant of the Company. It has been determined that he can further strengthen the
management function and the supervisory function of the Board of Directors of the Company by using theseexperiences and past results. As such, he is nominated as a new candidate for Director.

12

No.

Kenji Saito(August 24, 1964)[New election]

5

Career summary, position and areas of responsibility(significant concurrent positions outside the Company)

Name (Date of birth)

April 2013

General Manager, Paris Branch, Mizuho
Bank, Ltd.

July 2016

Chief Executive Officer, Mizuho Bank
Europe N.V.

November 2020

Joined the Company

January 2022

Executive Officer, General Manager ofAerospace Division of the Company(present position)

Number of theCompany’s
shares owned

0[Position and areas of responsibility at the Company]
Executive Officer and General Manager of Aerospace
Division[Significant concurrent positions outside the Company]–[Reasons for selection as a candidate for Director]
Kenji Saito has obtained extensive knowledge and experience regarding international business andmanagement, having served in such positions as General Manager of the Paris Branch of Mizuho Bank, Ltd.
He is presently in charge of the Aerospace Division of the Company and has vigorously worked in thisindustry to implement various policies such as promoting business strategies focused on society after the
COVID-19 pandemic, strengthening the business foundation and reducing costs. It has been determined that
he can further strengthen the management function and the supervisory function of the Board of Directors of
the Company by using these experiences and past results. As such, he is nominated as a new candidate for
Director.

13

No.

Career summary, position and areas of responsibility(significant concurrent positions outside the Company)

Name (Date of birth)

April 2003

Vice President, Gas and Process
Division, Atlas Copco Energas GmbH(consolidated subsidiary of Atlas Copcoin Germany)

August 2007

General Manager, Atlas Copco Comptec
LLC (America)

January 2011

General Manager, Gas and Process
Division, Atlas Copco Energas GmbH(consolidated subsidiary of Atlas Copcoin Germany)

January 2016

CEO, Managing Director, LEWA GmbH(the Company’s consolidated subsidiaryin Germany)

June 2018

CEO and Director, Cryogenic Industries,
Inc. (the Company’s consolidated
subsidiary in America) (present position)Peter Wagner(November 30, 1965)[New election]
6

Number of theCompany’s
shares owned

0[Position and areas of responsibility in the Group]
CEO and Director, Cryogenic Industries, Inc. (the Company’s
consolidated subsidiary in America)[Significant concurrent positions outside the Group]–[Reasons for selection as a candidate for Director]
Peter Wagner is the CEO of the Company’s consolidated subsidiary Cryogenic Industries, Inc. (America),
which is the core company of the Company’s consolidated subsidiary group the Clean Energy & Industrial
Gas Group (CE & IG Group), and has obtained extensive knowledge and experience regarding international
business, technology development and business management. This group vigorously works on initiatives for
new business areas that focus on a carbon-free society, such as LNG and business related to hydrogen. It has
been determined that he can take the initiative in establishing new business areas and increasing medium- tolong-term corporate value for the Group. As such, he is nominated as a new candidate for Director.
Note:

While it is focused on America, the CE & IG Group is expanding its business globally as a solutions
company that not only provides pumps and heat exchangers but can also provide full systems of pumprelated equipment and plants for extremely low-temperature operation including EPC (Engineering,
Procurement and Construction) in the industrial gas and LNG-related fields.

14

No.

Name (Date of birth)

Haruko Hirose(September 23, 1945)[Reelection][Independent Officer][Outside Officer]
7

Career summary, position and areas of responsibility(significant concurrent positions outside the Company)
December 1968

Appointed to the National Personnel
Authority of Japan

January 1992

Director, Bureau of Human Resources
Management of Headquarters, United
Nations Educational, Scientific andCultural Organization (UNESCO)

September 2002

Deputy to the Director General andManaging Director of Program
Coordination and Field Operations
Division, United Nations Industrial
Development Organization (UNIDO)

November 2006

Japanese Ambassador Extraordinary andPlenipotentiary to Kingdom of Morocco

May 2014

President, Japan Morocco Association(present position)

June 2016

Outside Director, S&B Foods Inc.
(present position)

March 2018

Outside Director of the Company(present position)

June 2020

Outside Director, MITSUBISHI GASCHEMICAL COMPANY, INC. (present
position)

Number of theCompany’s
shares owned

4,100[Position and areas of responsibility at the Company]
Outside Director[Significant concurrent positions outside the Company]
Outside Director, S&B Foods Inc.
Outside Director, MITSUBISHI GAS CHEMICALCOMPANY, INC.
[Reasons for selection as a candidate for Outside Director and summary of expected role]
Haruko Hirose possesses extensive international experience and advanced knowledge about personnel
development, acquired by providing meritorious service in the areas of personnel and industrial
development for the United Nations system. It is expected that she can supervise management in an
objective, independent and fair manner using these experiences and past results. As such, she is nominatedas a candidate for Outside Director. Although she has not been involved in corporate management in thepast except as an Outside Officer, it has been determined that she will appropriately fulfill her duties as an
Outside Director for the reasons outlined above.
Note:

Haruko Hirose is a candidate to be our Outside Director.
The Company has executed with her, pursuant to the provisions ofSummary of contents of limited
liability agreement
Articles of Incorporation for an Outside Director, a limited
liability agreement that provides that the higher amount of either
five (5) million yen or the minimum total liability specified bylaws and regulations shall be the maximum amount of liability fordamages. If she assumes the position of Outside Director, theCompany plans to maintain the limited liability agreement.
Tenure as Outside Director

She is currently one of the Company’s Outside Directors, and she
will have been in this position for four (4) years at the conclusionof this Ordinary General Meeting of Shareholders.

Notification of Independent Officer

She meets the “Independence Judgment Criteria of Outside
Officers” of the Company. The Company has registered her with
the Tokyo Stock Exchange, Inc. as an Independent Officer. If her
reelection is approved, the Company plans to continue registering
her as an Independent Officer.

15

No.

Name (Date of birth)

Career summary, position and areas of responsibility(significant concurrent positions outside the Company)
April 1995

Registered as an attorney of Japan(affiliated with the Daini Tokyo Bar
Association) (to present)

April 2001

Partner, Asahi Law Offices (present
position)

June 2008

Substitute Audit & Supervisory Board
Member of the Company

June 2015

Outside Audit & Supervisory Board
Member of the Company

June 2017

Outside Audit & Supervisory Board
Member, Nippon Kodo Holdings Co.,
Ltd. (present position)

June 2019

Outside Director, FANCLCORPORATION (present position)

March 2021

Outside Director of the Company(present position)

Mitsuaki Nakakubo(November 24, 1966)[Reelection][Independent Officer][Outside Officer]
8

Number of theCompany’s
shares owned

7,153[Position and areas of responsibility at the Company]
Outside Director[Significant concurrent positions outside the Company]
Attorney (Partner, Asahi Law Offices)
Outside Audit & Supervisory Board Member, Nippon Kodo
Holdings Co., Ltd.
Outside Director, FANCL CORPORATION[Reasons for selection as a candidate for Outside Director and summary of expected role]
As an attorney, Mitsuaki Nakakubo has obtained advanced and specialized knowledge and has mainly acted
in areas such as disputes on officers’ liability, copyright-related matters, and matters related to the Unfair
Competition Prevention Act of Japan. It is expected that he can supervise management in an objective,
independent and fair manner using these experiences and past results. As such, he is nominated as a
candidate for Outside Director. Although he has not been involved in corporate management in the past
except as an Outside Officer, it has been determined that he will appropriately fulfill his duties as an Outside
Director for the reasons outlined above.
Note:

Mitsuaki Nakakubo is a candidate to be our Outside Director.
The Company has executed with him, pursuant to the provisions
Summary of contents of limited
liability agreementof Articles of Incorporation for an Outside Director, a limited
liability agreement that provides that the higher amount of either
five (5) million yen or the minimum total liability specified bylaws and regulations shall be the maximum amount of liability fordamages. If he assumes the position of Outside Director, theCompany plans to maintain the limited liability agreement.
Tenure as Outside Director

He is currently one of the Company’s Outside Directors, and hewill have been in this position for one (1) year at the conclusion ofthis Ordinary General Meeting of Shareholders.

Notification of Independent Officer

He meets the “Independence Judgment Criteria of Outside
Officers” of the Company. The Company has registered him with
the Tokyo Stock Exchange, Inc. as an Independent Officer. If his
reelection is approved, the Company plans to continue registering
him as an Independent Officer.

16

Proposal 3:

Election of two (2) Audit & Supervisory Board Members

Hiroaki Asakura, who is currently an Audit & Supervisory Board Member, will leave office due toresignation at the conclusion of this Ordinary General Meeting of Shareholders. Additionally,
Hiroyuki Muneta, who is currently an Outside Audit & Supervisory Board Member, will leave officedue to expiration of the term of office at the conclusion of this Ordinary General Meeting of
Shareholders. Therefore, the Company proposes the election of two (2) new Audit & Supervisory
Board Members.
The Audit & Supervisory Board Members and the Audit & Supervisory Board of the Company havea fiduciary duty to the shareholders and have the main duty of, from a position independent of the
Directors and the Board of Directors, effectively auditing the Directors and the Board of Directors toensure that they fulfill their duties in a legal and appropriate manner.
The candidates for Audit & Supervisory Board Member are shown below. These candidates arenominated in accordance with the Company’s Policies and Procedure for Nominating Candidates for
Audit & Supervisory Board Member (Page 20-21).
In addition, the Audit & Supervisory Board has given its consent to this proposal.
No.

Career summary and position(significant concurrent positions outside the Company)

Name (Date of birth)

March 2011

General Manager of Quality Control
Department, Philips Electronics Japan,
Ltd. (currently Philips Japan, Ltd.)

January 2014

General Manager of Service & Repair
Department, Medicon Inc.

January 2018

Joined the Company

January 2019

General Manager of Biomedical
Engineering Center, Medical Division of
the Company

January 2020

Executive Officer (present position),
General Manager of Research &Engineering Institute of the Company

January 2022

In charge of Quality Control of theCompany (present position)

Motohiro Takeuchi(November 11, 1958)[New election]
1

Number of theCompany’s
shares owned[Position at the Company]
Executive Officer and in charge of Quality Control[Significant concurrent positions outside the Company]–[Reasons for selection as a candidate for Audit & Supervisory Board Member]Motohiro Takeuchi has obtained extensive experience and made many achievements in quality control
through participation in the comprehensive improvement of products and business processes from a global
point of view by serving in important positions in departments in charge of research and development andquality control in the manufacturing industry for a long time and has demonstrated such abilities within theGroup. It has been determined that he will audit the performance of duties by Directors in an objective,
independent and fair manner using these experiences and past results. As such, he is nominated as a new
candidate for Audit & Supervisory Board Member.

17

0

No.

Name (Date of birth)

Naoshi Ogasawara

Career summary and position(significant concurrent positions outside the Company)
December 1991

Joined Taiyo Audit Corporation(currently Grant Thornton Taiyo LLC)

August 1992

Registered as certified public accountant(to present)

April 2007

Senior Partner, Grant Thornton Taiyo
ASG (currently Grant Thornton Taiyo
LLC)

October 2008

President, Avantia GP (General
Partnership) (present position)

April 2010

Auditor, Center for National University
Finance and Management (currently
National Institution for Academic
Degrees and Quality Enhancement ofHigher Education) (present position)(August 19, 1965)[New election][Independent Officer]

June 2016[Outside Officer]
2

Number of theCompany’s
shares owned

0

Outside Audit & Supervisory Board
Member, TSUZUKI DENKI CO., LTD.
(present position), Outside Director,
Topre Corporation (present position)[Position at the Company]
To be elected as Audit & Supervisory Board Member[Significant concurrent positions outside the Company]
President, Avantia GP (General Partnership)
Auditor, National Institution for Academic Degrees andQuality Enhancement of Higher Education
Outside Audit & Supervisory Board Member, TSUZUKI
DENKI CO., LTD., Outside Director, Topre Corporation[Reasons for selection as a candidate for Outside Audit & Supervisory Board Member]
Naoshi Ogasawara has obtained advanced and specialized knowledge relating to financial affairs andaccounting as a certified public accountant and has obtained extensive experience in roles such as auditor and
M&A assistant in companies listed on stock exchanges. It is expected that he will appropriately audit theperformance of duties by Directors in an objective, independent and fair manner using this knowledge andthese experiences. As such, he is nominated as a new candidate for Outside Audit & Supervisory Board
Member. Although he has not been involved in corporate management in the past except as an Outside
Officer, it has been determined that he will appropriately fulfill his duties as an Outside Audit & Supervisory
Board Member for the reasons outlined above.
Notes:
1. There is no special interest between each candidate and the Company.
2. Summary of contents of limited liability agreement with Motohiro Takeuchi:
If he assumes the position of Audit & Supervisory Board Member, the Company plans to execute with him,
pursuant to the provisions of Articles of Incorporation, a limited liability agreement that provides that the higher
amount of either three (3) million yen or the minimum total liability specified by laws and regulations shall be
the maximum amount of liability for damages.
3. Naoshi Ogasawara is a candidate to be our Outside Audit & Supervisory Board Member.
If he assumes the position of Outside Audit & Supervisory Board
Summary of contents of limited
liability agreement
Member, the Company plans to execute with him, pursuant to theprovisions of Articles of Incorporation, a limited liability
agreement that provides that the higher amount of either three (3)million yen or the minimum total liability specified by laws andregulations shall be the maximum amount of liability for damages.
Notification of Independent Officer

He meets the “Independence Judgment Criteria of Outside
Officers” of the Company. If he assumes the position of Outside
Audit & Supervisory Board Member, the Company plans toregister him with the Tokyo Stock Exchange, Inc. as an
Independent Officer.

18

4. Summary of contents of liability insurance for Directors and other officers to enter into with each candidate:
The Company has entered into a liability insurance agreement for Directors and other officers of the Company
and its Group companies inside and outside of Japan with an insurance company in which the Company takes
responsibility for the entire insurance premium to compensate Directors and other officers for damages that may
arise due to their liability for the execution of their duties or due to being interrogated on said liability. Wheneach candidate assumes a position as an Audit & Supervisory Board Member, said individual shall be covered bythis insurance agreement. A summary of the contents of this insurance agreement is included on pages 40-41 (inJapanese only).

19

(Reference) Policies and Procedure for Nominating Candidates for Director and Audit &Supervisory Board Member
In order to sustain the growth of the Group and improve medium- and long-term corporate value,
the Company has established policies and a procedure for nominating candidates for Director and
Audit & Supervisory Board Member. Summaries of these items are as follows:<Criteria for the Election of Directors>
 For a Director, we designate a person who has knowledge, capability and leadership that will
enable him or her to gain an overview of the management environment of our Group,
promote important management issues speedily and decisively, and achieve results, and who
can be committed to establish corporate governance that supports the realization of ourcorporate philosophy.
 For an Outside Director, we designate a person who can sufficiently fulfill his or her role insupervising the decision-making and execution of duties of Directors from an objective andexpert standpoint independent from the execution of the Company’s operations while clearlyproviding advice based on his or her knowledge in order to promote the sustainable growthof the Group and improve medium- and long-term corporate value.
<Criteria for the Election of Audit & Supervisory Board Members>
 For an Audit & Supervisory Board Member, we designate a person who can performbusiness audits and accounting audits as well as actively exercise his or her authority andgive appropriate opinions at the Board of Directors. Furthermore, at least one (1) Audit &Supervisory Board Member shall possess appropriate expertise related to financial affairs
and accounting.
 For an Outside Audit & Supervisory Board Member, we designate a person who cansufficiently fulfill his or her role in auditing the decision-making and execution of duties of
Directors from an objective and expert standpoint independent from the execution of theCompany’s operations while providing instructions and advice related to items such as
management strategy risks on the basis of extensive expertise.
<Independence Judgment Criteria and Concurrent Post Restrictions of Outside Officers>
 The Company uses the independence criteria of Tokyo Stock Exchange, Inc. as theindependence judgment criteria of Outside Directors and Outside Audit & Supervisory Board
Members. In the interpretation and application of these criteria, it is substantially and strictly
judged (i) that the individual has no personal relationships, capital relationships or business
relationships with or interests in the Company other than the relationship between the
Company and the individual as an Outside Officer and (ii) whether the individual has aconflict of interests with the shareholders. Furthermore, Independent Outside Officers shallnot concurrently hold positions as Director or Audit & Supervisory Board Member at morethan three (3) public companies other than the Company as a general rule.
<Procedure for Nominating Candidates for Director and Audit & Supervisory Board
Member> To nominate a candidate for Director, the Nomination and Compensation Committee shall be
consulted regarding the original form of the proposal for the election of said Director at theGeneral Meeting of Shareholders. After that report is received, the nomination shall be
introduced to the Board of Directors.
 To nominate a candidate for Audit & Supervisory Board Member, the Nomination andCompensation Committee shall be consulted regarding the original form of the proposal forthe election of said Audit & Supervisory Board Member at the General Meeting of
Shareholders. After that report and the consent of the Audit & Supervisory Board regarding
the corresponding election are received, the nomination shall be introduced to the Board of
Directors.
 The Board of Directors shall fully respect the report of the Nomination and Compensation
Committee.

20

(Reference) Composition of the Board of Directors and the Audit & Supervisory Board (IfThis Proposal Is Approved in Its Original Form)
The fields in which there are special expectations for the Directors and Audit & Supervisory Board
Members to contribute to the Nikkiso Group’s sustainable growth and its improvement of mediumand long-term corporate value are defined as (i) corporate management and business strategy; (ii)global business; (iii) technology, R&D and quality; (iv) sales and marketing; (v) human resources
and personnel development; (vi) financial affairs and accounting; (vii) legal affairs and risk
management; (viii) IT; and (ix) ESG. In the appropriate assignment of Directors and Audit &Supervisory Board Members, consideration shall be given to their knowledge, experience andcapability as well as to diversity in the composition of these boards.
* This information does not express the entirety of each person’s knowledge and experience.
* Eleven (11) individuals with Japanese nationality/one (1) individual with foreign nationality, ten(10) men/two (2) women

Organization

Name/position and areasof responsibility

Toshihiko Kai
President &Representative Director

(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
Corporate Global Technol- Sales Human Financial Legal
andresources affairs
affairs
manage- business
ogy,
and
and
ment
R&D marketing andpersonnel accountrisk
and
and
ing
developmanagebusinessquality
strategy
ment
ment
●

●

●

●

(viii)
IT

(ix)
ESG

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

Yoshihiko Kinoshita

Board of Directors

Director, Executive
Officer, General Manager
of Medical Business Unit,
General Manager ofMedical Division, andGeneral Manager ofResearch & Engineering
Institute
Masaru Yamamura
Director, Executive
Officer, General Manager
of Industrial Business
Unit, and General
Manager of Industrial
Division
Tsunehisa Suita
Director, Executive
Officer, General Manager
of Corporate Unit, General
Manager of
Administration Division,
General Manager ofCorporate Planning
Division, and General
Manager of Kanazawa
Plant

●

21

●

●

Organization

Name/position and areasof responsibility

Board of Directors
Audit & Supervisory Board

Kenji Saito
Director, Executive
Officer, General Manager
of Aerospace Business
Unit, and General
Manager of Aerospace
Division
Peter Wagner
Director; CEO and
Director, Cryogenic
Industries, Inc. (theCompany’s consolidated
subsidiary in America);
and CEO, Nikkiso Clean
Energy & Industrial Gases
Group
Haruko Hirose
Independent Outside
Officer
Mitsuaki Nakakubo
Independent Outside
Officer
Toshiaki Mitsumi
Audit & Supervisory
Board Member
Motohiro Takeuchi
Audit & Supervisory
Board Member
Junko Fukuda
Independent Outside
Officer
Naoshi Ogasawara
Independent Outside
Officer

(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
Corporate Global Technol- Sales Human Financial Legal
andresources affairs
affairs
manage- business
ogy,
and
and
ment
R&D marketing andpersonnel accountrisk
and
and
ing
developmanagebusinessquality
strategy
ment
ment

●

●

●

●

●

●

●

●

●

(viii)
IT

(ix)
ESG

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

22

●

●

●

●

●

●

(Reference) Nikkiso Group Corporate Governance System
1. Basic Approach concerning Corporate Governance
The Group believes that structuring the Company as a company with an Audit & Supervisory
Board is an important step towards achieving our ideal corporate governance through which we
can secure transparency and fairness in decision-making while realizing our corporate philosophy
through speedy and decisive decision-making. In line with the following basic approach, we will
construct the appropriate corporate governance that conforms to the development stage of theGroup.
(i)
Respect the rights of our shareholders and ensure equality to them.
(ii) Respect the profits of the stakeholders and cooperate appropriately with them.
(iii) Disclose the information of the Group appropriately to ensure transparency.
(iv) Endeavor to separate the supervision and execution of management. Ensure effective
supervision of management and secure the auditing system through cooperation among
independent Outside Directors, Audit & Supervisory Board Members, Internal Auditors
and Accounting Auditors, and establish an environment that will support the improvementof business profitability through the operations business unit, which is led by the President& Representative Director.
(v)
Have constructive conversations with shareholders with an investment policy that meetsthe medium- and long-term profits of shareholders.
2. Composition and Duties of the Board of Directors
In accordance with the Articles of Incorporation, the Board of Directors shall be made up of nine(9) or less Directors, two (2) or more of which are independent Outside Directors. The Board of
Directors has a fiduciary duty and accountability to the shareholders. It also has a duty tosustainably grow the Group and it aims to maximize medium- and long-term corporate value
through the implementation of efficient and effective corporate governance. The Board of
Directors serves the following roles to fulfill these duties.
(i)
Indicating major management directions such as management strategies(ii) Establishing corporate structures that support speedy and decisive management decisions(iii) Demonstrating supervisory functions for the whole of management in order to secure
fairness and transparency in management
3. Composition and Role of the Nomination and Compensation Committee
The Nomination and Compensation Committee shall be composed of three (3) or more Directors
selected by resolutions of the Board of Directors. The majority of the committee members shall be
Independent Outside Officers to ensure objectivity and independence. As a consultative body of
the Board of Directors, this committee shall increase the transparency and objectivity related toactions such as the nomination of Directors and Audit & Supervisory Board Members and the
remuneration of Directors, thereby serving the role of strengthening the supervisory functions of
the Board of Directors.
4. Composition and Duties of the Board of Directors
In accordance with the Articles of Incorporation, the Audit & Supervisory Board shall be made up
of four (4) or less Audit & Supervisory Board Members. The Audit & Supervisory Board
Members and the Audit & Supervisory Board have a fiduciary duty to the shareholders and havethe main duty of, from a position independent of the Directors and the Board of Directors,
auditing the Directors and the Board of Directors to ensure that they fulfill their duties in a legal
and appropriate manner. To fulfill these duties, Audit & Supervisory Board Members and the
Audit & Supervisory Board not only exercise the authority permitted by laws and regulations inan active and assertive manner but also work in close cooperation with Outside Directors and the
Accounting Auditors in order to improve sustainable growth and medium- and long-term

23corporate value of the Group. Furthermore, without excessively restraining their own functions,they appropriately offer opinions on management to the Board of Directors and the management
team.
5. Reason for Adopting an Organization as a Company with an Audit & Supervisory Board
The Company has adopted a system as a company with an Audit & Supervisory Board. Thissystem consists of a Board of Directors that determines the important execution of businessconcerning the entire Group and that supervises the execution of Directors’ duties and an Audit &Supervisory Board made up of Audit & Supervisory Board Members who audit the execution of
Directors’ duties.
As a company with an Audit & Supervisory Board, the Company shall not only transfer theauthority for the execution of individual business operations from the Board of Directors to theoperations business unit wherever possible but shall also establish and improve a system for theeffective supervision and auditing of management through cooperation between Full-time Audit& Supervisory Board Members, Independent Outside Officers, Internal Auditors and the
Accounting Auditors.
Additionally, the existence of Full-time Audit & Supervisory Board Members thoroughly
knowledgeable in the business and organization of the Group effectively complements theindependent and objective supervision of management by Independent Outside Officers and isalso useful in daily cooperation between the Internal Auditors and Accounting Auditors.
Furthermore, it is vital to provide Independent Outside Officers with information pertaining to the
execution of business so as to allow for supervision by said officers. The existence of Full-time
Audit & Supervisory Board Members helps realize this provision of information. The Company
shall endeavor to construct and strengthen an effective corporate governance system while using
these advantages obtained as a company with an Audit & Supervisory Board.
6. Initiatives to Improve the Effectiveness of the Board of Directors
The Company is working to strengthen the corporate governance of the Group and to enhance
fairness and transparency in management, thereby leading to improvement in corporate value. In
order to bring this about, the Company is strengthening the supervision function of the Board of
Directors through implementing initiatives to improve the effectiveness of the Board of Directors.
Over the period from November to December 2021 during this business year, a questionnaire wasissued to all Directors and Audit & Supervisory Board Members, and an evaluation of theeffectiveness of the Board of Directors overall was then implemented. The results of thisevaluation and analysis were reported to and discussed by the Board of Directors on December
23, 2021.
The questionnaire covered the composition, operation and status of discussions (such as strategic
discussions) by the Board of Directors; response to issues identified from effectivenessevaluations of the previous fiscal year and officer training opportunities. The result was that amajority of the answers to each question were affirmative, so the Board of Directors is evaluatedas being effective. Furthermore, on the basis of the result of the effectiveness evaluation from theprevious fiscal year, improvements were made to the provision of information to Outside Officers,
to the expansion of support for Outside Officers and to the Officer election process. All Directors
and Audit & Supervisory Board Members have evaluated these areas as indeed having been
improved.
In the future, to further increase effectiveness for the realization of the Nikkiso 2025 mediumterm business plan, the Company shall strive to strengthen the governance system even more byimplementing initiatives aimed at the newly identified topics of securing diversity among
personnel, carrying out substantial discussions regarding sustainability including ESG and
improving the effectiveness of the Nomination and Compensation Committee.

24Proposal 4:

Election of one (1) Substitute Outside Audit & Supervisory Board Member

At the start of this Ordinary General Meeting of Shareholders, the efficacy of the election of Shuichi
Tajima—elected as a Substitute Audit & Supervisory Board Member at the 77th Ordinary General
Meeting of Shareholders held on March 29, 2018—will expire. Therefore, the Company proposesthat one (1) Substitute Outside Audit & Supervisory Board Member be elected to prepare for thesituation in which the number of Audit & Supervisory Board Members does not meet the number
prescribed by laws and regulations and by the Articles of Incorporation.
Pursuant to the provisions of the Articles of Incorporation, the efficacy of this election shall expire at
the start of the Ordinary General Meeting of Shareholders for the last business year out of thebusiness years terminating within four (4) years after the election of the Substitute Outside Audit &Supervisory Board Member. However, in the event of the Substitute Audit & Supervisory Board
Member assuming the position of Audit & Supervisory Board Member, the above election may becanceled through the consent of the Audit & Supervisory Board and the resolution of the Board of
Directors only before this position is assumed. The Audit & Supervisory Board has given its consent
to this proposal.
The candidate for Substitute Audit & Supervisory Board Member is shown below.
Name (Date of birth)

Career summary and position(significant concurrent positions outside the Company)
April 1984

Joined Tohmatsu Awoki & Co.
(currently Deloitte Touche Tohmatsu
LLC)

April 1993

Registered as an attorney of Japan (DaiIchi Tokyo Bar Association) (to present)
and joined Asanuma Law Offices

December 1995

Founder and Representative, Makoto
Law & Accounting Firm (present
position)

December 2006

Registered as certified public accountant(to present)

October 2007

Registered as licensed tax accountant (topresent)[Independent Officer]

April 2014

Outside Director, KOHSAI CO., LTD.

[Outside Officer]

April 2016

Outside Director (Audit and Supervisory
Committee Member), KOHSAI CO.,LTD. (present position)

Makoto Suzuki(January 18, 1962)[New election]

Number of theCompany’s
shares owned[Position at the Company]
To be elected as Audit & Supervisory Board Member[Significant concurrent positions outside the Company]
Attorney, certified public accountant, and licensed tax
accountant (Makoto Law & Accounting Firm)
Outside Director (Audit and Supervisory Committee
Member), KOHSAI CO., LTD.
[Reasons for selection as a candidate for Substitute Outside Audit & Supervisory Board Member]
Makoto Suzuki has obtained advanced and specialized knowledge and extensive experience relating to corporate
legal affairs, M&A, tax affairs and accounting as an attorney, certified public accountant and licensed tax
accountant. It is expected that he will appropriately audit the performance of duties by Directors in an objective,
independent and fair manner using this knowledge and these experiences. As such, he is nominated as a new
candidate for Substitute Outside Audit & Supervisory Board Member. Although he has not been involved incorporate management in the past except as an Outside Officer, it has been determined that he will appropriately
fulfill his duties as an Outside Audit & Supervisory Board Member for the reasons outlined above.
Notes:
1. There is no special interest between the candidate and the Company.

2502. Makoto Suzuki is a candidate to be our Substitute Outside Audit & Supervisory Board Member.
If he assumes the position of Outside Audit & Supervisory Board
Summary of contents of limited
liability agreement
Member, the Company plans to execute with him, pursuant to theprovisions of Articles of Incorporation, a limited liability
agreement that provides that the higher amount of either three (3)million yen or the minimum total liability specified by laws andregulations shall be the maximum amount of liability for damages.
Notification of Independent Officer

He meets the “Independence Judgment Criteria of Outside
Officers” of the Company. If he assumes the position of Outside
Audit & Supervisory Board Member, the Company plans toregister him with the Tokyo Stock Exchange, Inc. as an
Independent Officer.
3. Summary of contents of liability insurance for Directors and other officers to enter into with the candidate:
The Company has entered into a liability insurance agreement for Directors and other officers of the Company
and its Group companies inside and outside of Japan with an insurance company in which the Company takes
responsibility for the entire insurance premium to compensate Directors and other officers for damages that may
arise due to their liability for the execution of their duties or due to being interrogated on said liability. If thecandidate assumes a position as an Audit & Supervisory Board Member, said individual shall be covered by thisinsurance agreement. A summary of the contents of this insurance agreement is included on pages 40-41 (inJapanese only).

26

Proposal 5:

Determination of remuneration for the issuance of restricted shares to Directors

1. Reasons for the proposal
The amount of remuneration, etc. for Directors of the Company was agreed to be an amount notexceeding 280 million yen per year (however, this amount excludes the employee salaries of
Directors who concurrently serve as employees) at the 66th Ordinary General Meeting of
Shareholders held on June 26, 2007, and at the 71st Ordinary General Meeting of Shareholders
held on June 26, 2012 it was decided that share remuneration-type stock options (stockacquisition rights) would be issued, within the scope of the amount of the said remuneration, etc.,
to Directors (excluding Outside Directors). (Note that at the 73rd Ordinary General Meeting of
Shareholders held on June 25, 2014, it was decided that the maximum number of shares to beissued would be changed.)With the purposes of providing an incentive to pursue continuous improvement of the corporate
value of the Company and promoting further sharing of value with shareholders, approval isrequested for the receipt by Directors (excluding Outside Directors; hereinafter referred to as“Subject Directors”) of remuneration, etc. in the form of restricted shares within the remuneration
scope described above (not exceeding 280 million yen per year) instead of stock options.
On condition that this proposal is approved and adopted at this Ordinary General Meeting of
Shareholders, the stock option system for Directors (excepting already-issued stock options) shallbe abolished, and no further stock acquisition rights in the form of stock options shall be issued
to Directors in the future.
2. Outline of restricted share remuneration system contents(1) System outline
Subject Directors under this system shall, as Director remuneration, etc., be the recipients of
the issuance or disposal of ordinary shares in the Company without a requirement for thepayment of money or provision of property, and the total number of ordinary shares in the
Company issued or disposed of for Subject Directors based on this proposal shall not exceed
150,000 shares per year, and their value shall not exceed 280 million yen per year.
However, in the event that the total number of shares in the Company issued increases ordecreases as a result of merging or splitting of shares (including gratis allotment of shares),the upper limit shall be adjusted accordingly. Specific allotments to each Director shall be
determined at a meeting of the Board of Directors.
Whereas there are currently five (5) Subject Directors, if Proposal 2 is approved andadopted in its original form, the number of Subject Directors shall be six (6).
(2) Outline of restricted share allotment contract contents
With regard to the issuance of restricted shares based on this proposal, a restricted shareallotment contract including the following details (hereinafter referred to as “This Allotment
Contract”) shall be concluded between the Company and the Subject Directors.
(i) Restriction on Transfer
Subject Directors cannot dispose of the ordinary shares in the Company allotted underThis Allotment Contract (hereinafter referred to as “These Allotted Shares”) by means oftransfer, establishment of security interest, or other such means during the period
between the date of issuance of These Allotted Shares and the date of resignation orretirement from their position as a Director of the Company or from a position
determined by the Board of Directors of the Company (however, in the event of both [a]resignation or retirement occurring before the passage of three (3) months after the endof the business year containing the date of issuance of These Allotted Shares and [b]resignation or retirement occurring on the date of the Ordinary General Meeting of
Shareholders of the Company in the particular business year, and the Board of Directorsof the Company has separately designated a date no more than six (6) months after theend of the relevant business year, “the date of resignation or retirement” shall instead bethe said date). (Hereinafter, this restriction shall be referred to as the “Restriction on
Transfer,” and this period shall be referred to as the “Period of Restriction on Transfer.”)27

(ii) Handling in cases of resignation or retirement prior to the conclusion of the Term ofService
In the event of a Subject Director resigning or retiring from the position designated by (i)above before the conclusion of the period designated by the Board of Directors of theCompany (hereinafter referred to as the “Term of Service”), except in cases where there
are deemed by the Board of Directors of the Company to be a legitimate reason for such
resignation or retirement, the Company shall naturally acquire These Allotted Shares freeof charge.
(iii) Lifting of Restriction on Transfer
The Company shall, on condition that a Subject Director has remained in their position
defined in (i) above continuously throughout their Term of Service, lift the Restriction
on Transfer on These Allotted Shares in their entirety upon the conclusion of the Period
of Restriction on Transfer. However, in the event of a Subject Director resigning or
retiring from the position designated by (i) above before the conclusion of the Term ofService for a reason deemed legitimate by the Board of Directors of the Company as
stipulated in (ii) above, the number of These Allotted Shares for which the Restriction on
Transfer is to be lifted shall be adjusted in a rational manner as necessary.
(iv) Free acquisition of These Allotted Sharesa. The Company shall, upon the conclusion of the Period of Restriction on Transfer,
naturally acquire, free of charge, any of These Allotted Shares for which the
Restriction on Transfer has not been lifted based on the provisions of (iii) above.
b. In the event that any event specified by the Board of Directors of the Company asan event for which free acquisition of These Allotted Shares is reasonable, such as
the Subject Director, during the Period of Restriction on Transfer, violating laws or
regulations, internal company rules, or This Allotment Contract, occurs, theCompany shall naturally and freely acquire These Allotted Shares.
(v) Handling in the event of reorganization, etc.
Notwithstanding the provisions of (i) above, in the event of approval being granted at a
General Meeting of Shareholders of the Company (or, in the event of a reorganization,etc. that does not require approval at a General Meeting of Shareholders of the Company,
at a meeting of the Board of Directors of the Company) for items relating to areorganization, etc. such as a merger contract whereby the Company is the absorbed
company, a share exchange contract whereby the Company becomes a wholly-owned
subsidiary, or a share transfer plan, during the Period of Restriction on Transfer, theCompany shall naturally acquire, free of charge and in advance of the said
reorganization, etc. coming into effect, a number of These Allotted Shares determined ina rational manner by a resolution of the Board of Directors of the Company based on thelength of time between the beginning of the Term of Service and the date on whichapproval of the said reorganization, etc. is granted. In advance of the said freeacquisition, the Restriction on Transfer can be lifted, by a resolution of the Board of
Directors of the Company, for a number of These Allotted Shares determined in arational manner at a meeting of the Board of Directors of the Company.
In circumstances governed by the provisions of the present paragraph, the Company
shall, immediately following the lifting of the Restriction on Transfer based on theprovisions of the present paragraph, naturally acquire, free of charge, any of These
Allotted Shares for which the Restriction on Transfer has not been lifted.
3. Reasons for the appropriateness of issuing restricted sharesThis proposal, with the purposes of providing Subject Directors with an incentive to pursue
continuous improvement of the corporate value of the Company and promoting their further
sharing of value with shareholders, will issue the Subject Directors with remuneration, etc. in theform of restricted shares.
At a meeting of the Board of Directors held on February 24, 2022, it was decided that, on
condition that this proposal is approved and adopted in its original form, the policy for28

determining the contents of Directors’ individual remuneration, etc. at the end of this businessyear (Page 43, in Japanese only) would be amended (described below [Reference 2]), but it was
stipulated that under the said policy restricted share remuneration would be issued as Director
remuneration, etc., and the contents of this proposal address necessary and reasonable contents for
issuing restricted shares in accordance with the said policy following the amendment.
The ratio of the upper limit on the number of shares to be issued or disposed of in a single year
based on this proposal to the total number of shares issued (as of December 31, 2021) is 0.2%, so
the dilution rate is not significant.
For this reason, the content of this proposal has been judged appropriate.

29

(Reference 1) Outline of Contents of This System
Purpose Continuous improvement of the corporate value of the Company
 Further sharing of value with shareholders

Subject Directors

Directors of the Company other than Outside Directors

Type of share

Ordinary shares in the Company

Upper limit on
issuance
Restriction on
Transfer
Dilution rate as aresult of thisallotment (upper
limit)

 Number of shares: Not exceeding 150,000 per year
 Amount: Not exceeding 280 million yen per year (within the existing scope of
remuneration)
For the duration of the period of time until the date of resignation or retirement of the
Subject Directors, These Allotted Shares cannot be disposed of by means of transfer,
establishment of security interest, or other such means.
0.2%* Calculated based on total number of shares issued as of December 31, 2021

(Reference 2) Outline of Contents of the Policy for Determining Contents of Individual
Remuneration, Etc. for Directors (after Amendment)
The Company believes that the accumulation of solid single-year performance will lead to thesustainable growth of the Group and the enhancement of corporate value, and in reflection on theperformance, actual results, etc. for each single year, considers it appropriate to provide bothmonetary and share remuneration to Directors in order to enhance their responsibilities andmotivation to contribute. Under this policy, Director remuneration structure will be as follows.
(1) Remuneration for executive directors consists of basic remuneration based on their roles, ayear-end bonus (monetary remuneration) that changes according to factors such as businessperformance, and share remuneration linked to the enhancement of medium- to long-term
corporate value.
 Basic remuneration is determined every March according to the Director’s position andduties. The said remuneration shall be paid in twelve (12) equal installments between themonth following the decision and March of the following year.
 The year-end bonus is calculated based on comprehensive consideration of performancefactors such as business performance in the individual fiscal year and forecasts for thefollowing year, as well as other factors such as actual past payment, the individual
Director’s position, and their level of contribution. The said remuneration shall be paid
upon the conclusion of their service for the specific year.
 The decision to pay or not to pay share remuneration is based on business performance,
etc. If share remuneration is paid, based on payment standards according to the
Director’s position in comprehensive consideration of business performance, their levelof contribution, etc., ordinary shares in the Company shall be issued in May of each year,with a Restriction on Transfer until resignation.
(2) Remuneration for Outside Directors, in order that they supervise management from an
objective and professional standpoint independent of business execution, consists solely ofbasic remuneration. The payment method shall be the same as for executive directors.
(3) The basic remuneration and year-end bonus per (1) and (2) above will be determined within
the scope of the total remuneration amount decided at the 66th Ordinary General Meeting of
Shareholders held on June 26, 2007 (not exceeding 280 million yen per year. However, thisamount excludes the employee salaries of Directors who concurrently serve as employees.).
Furthermore, the share remuneration will be determined within both the scope of the said
total remuneration amount and the scope of the number of shares decided at this Ordinary
General Meeting of Shareholders (150,000 or less ordinary shares in the Company per year).

30