Note: This document has been translated from a part of the Japanese original for reference purposes only. In the event of any
discrepancy between this translated document and the Japanese original, the original shall prevail.

Securities code: 5451
June 1, 2020
To our shareholders:Satoshi Nitta
President and Representative Director
Yodogawa Steel Works, Ltd.
4-1-1 Minami-honmachi, Chuo-ku, Osaka

NOTICE OF THE 121ST ORDINARY GENERAL MEETING OF SHAREHOLDERS
You are hereby notified of the 121st Ordinary General Meeting of Shareholders of Yodogawa Steel Works, Ltd. (the“Company”), which will be held as described below.
With regard to this year’s Ordinary General Meeting of Shareholders, having taken into account the continuing riskof infection with the novel coronavirus (COVID-19), and the safety and security of our shareholders, we humbly
request that, if at all possible, you forgo attending the meeting on the day.
You may exercise your voting rights either by postal mail (voting form) or electronically (via the Internet). Please
review the attached ‘Reference Documents for the General Meeting of Shareholders’ and we request that you
exercise your rights no later than 5:00 p.m., Monday, June 22, 2020 (Japan Standard Time).
1. Date and Time: Tuesday, June 23, 2020 10:00 a.m. (Japan Standard Time)
2. Venue:
Banquet Room “Kujaku,” 4th Floor, Hotel Nikko Osaka
1-3-3 Nishi-Shinsaibashi, Chuo-ku, Osaka
3. Purposes:
Items to be reported:
1. Business Report and Consolidated Financial Statements for the 121st Term (from April 1, 2019 to March
31, 2020), as well as the results of audit of the Consolidated Financial Statements by the Accounting
Auditor and the Audit & Supervisory Board.
2. Non-Consolidated Financial Statements for the 121st Term (from April 1, 2019 to March 31, 2020)
Items to be resolved:
Proposal 1:
Election of Six (6) Directors
Proposal 2:
Election of Four (4) Audit & Supervisory Board Members
Proposal 3:
Election of One (1) Substitute Audit & Supervisory Board Member
Proposal 4:
Continuation of the Company’s Policy for Responding to Large-Scale Acquisitions of
the Company’s Shares, etc. (Takeover Defense Measures)
4. Exercise of Voting Rights:
You may exercise your voting rights by one of the following three (3) methods.
(1) Exercise of voting rights by attendance at the General Meeting of Shareholders
Please submit the enclosed voting form to the receptionist on the day of the General Meeting of
Shareholders.
Date and Time of the General Meeting of Shareholders: Tuesday, June 23, 2020, at 10:00 a.m. (Japan
Standard Time)(2) Exercise of Voting Rights by Postal Mail
Please indicate your approval or disapproval of the proposals on the enclosed voting form and return it bypostal mail to reach us no later than the deadline for exercising voting rights.
Deadline for exercising voting rights: To reach us no later than 5:00 p.m., Monday, June 22, 2020 (Japan
Standard Time)(3) Exercise of Voting Rights via the Internet
Kindly peruse the “Guide to the Exercise of Voting Rights via the Internet” on page 3, and please exercise
your voting rights by accessing the “Smart Exercise” or “Exercise of Voting Rights Website”(https://soukai.mizuho-tb.co.jp/) no later than the deadline for exercising voting rights.

-1-

Deadline for exercising voting rights: To input no later than 5:00 p.m., Monday, June 22, 2020 (Japan
Standard Time)
Duplicate Exercises of Voting Rightsi.
In cases of duplicate exercise of voting rights both by using the voting form and by using the Internet, theexercise of the voting rights via the Internet shall be treated as valid.
ii. In cases in which multiple exercises of voting rights have been made via the Internet, the most recent
exercise of voting rights shall be treated as valid.

-2-Guide to the Exercise of Voting Rights via the Internet
1. Exercise of Voting Rights by the “Smart Exercise”
1) Please read the QR code*1 on the right-hand side of the enclosed Voting Form using a smartphone orsimilar device*2, access the “Smart Exercise” website designated by the Company, and indicate yourapproval or disapproval of the proposals in accordance with the guidance on the screen (It is notnecessary to enter the Exercise of Voting Rights Code and the Password).
2) The exercise of voting rights using “Smart Exercise” can only be performed once. In the event that you
wish to revise the approval or disapproval indicated after exercising voting rights, you must use method 2.
below to exercise your voting rights once again.
*1. QR Code is a registered trademark of DENSO WAVE INCORPORATED.)*2. An application (or a feature) to read QR Codes will be required.

2. Exercise of Voting Rights by the entry of the Exercise of Voting Rights Code and the Password
1) Please access the “Exercise of Voting Rights Website” (refer to the URL below), and enter the Exercise of
Voting Rights Code and the Password printed on the enclosed voting form to log in, then indicate yourapproval or disapproval in accordance with the guidance on the screen. It is necessary for you to change
your password when you log in for the first time.

https://soukai.mizuho-tb.co.jp/
2)
3)

4)

The Exercise of Voting Rights Code and the Password (including the new password selected by yourself
when asked to change it) shall be valid only for this Ordinary General Meeting of Shareholders.
Please be careful how you manage your password, as it is used as a means of confirming the identity ofthe shareholder exercising voting rights. Please be noted that the Company (shareholder registryadministrator) will not contact you to ask for your password.
If you enter your password incorrectly for a certain number of times, the password will be locked andyou will no longer be able to use it. If this occurs, please complete the procedures indicated in theguidance on the screen.

(Notes)- The deadline for exercising voting rights is 5:00 p.m., Monday, June 22, 2020 (Japan Standard Time).
Voting rights reaching the Company (shareholder registry administrator) before the deadline are valid, so werequest that you kindly exercise them well in advance.
- In the event that voting rights are exercised both by using the voting form and via the Internet, only the voteperformed via the Internet shall be deemed effective. If you exercise your voting rights more than once via
the Internet, only your final vote shall be deemed effective.
- You shall bear your own expenses for connection to the Internet.
- Although operational checks have been carried out for the exercise of voting rights for common Internet
connection devices, there is a possibility that you may be unable to access the site due to the device you areusing and the situation at the time.
3. For your inquiries
If you have any inquiries, please contact the Securities Agent Dept. of Mizuho Trust & Banking Co., Ltd.,
which is the Company’s shareholder registry administrator, as shown below.
1) Inquiries regarding the operation of the “Smart Exercise” and “Exercise of Voting Rights Website”
Tel: 0120-768-524 (toll free only from Japan) (Business hours: 9 a.m. to 9 p.m. on weekdays)
2) Inquiries regarding share handling matters other than the above:Tel: 0120-288-324 (toll free only from Japan) (Business hours: 9 a.m. to 5 p.m. on weekdays)-3-

Reference Documents for the General Meeting of Shareholders
Items to be Resolved and Reference Documents
Proposal 1:
Election of Six (6) Directors
The terms of office of all seven (7) Directors will expire at the conclusion of this General Meeting of Shareholders.
In that regard, the Company proposes the election of six (6) Directors.
The candidates for Directors are as follows:
No.

Name
(Date of birth)

Career summary, position, responsibilities, and significant
concurrent positions outside the Company
Apr. 1980
Nov. 2009
Sept. 2010
Apr. 2012

Apr. 2014
Satoshi Nitta(March 26, 1956)
1

June 2017

Joined the Company
Was seconded to Sheng Yu Steel Co., Ltd.
Was treated as General Manager of Sheng Yu
Steel Co., Ltd.
Senior Executive Officer, Senior General
Manager Corporate Planning Division, General
Manager of Overseas Business Planning Dept.,
and Supervisor of Steel Coil & Sheet Plants of
the Company
Senior Executive Officer of the Company, andPresident of YODOGAWA-SHENGYU(HEFEI) HIGH-TECH STEEL CO., LTD.

Number of theCompany’s shares
owned

9,091

Director, Managing Executive Officer of theCompany, and President of YODOGAWASHENGYU (HEFEI) HIGH-TECH STEEL
CO., LTD.

June 2018

President and Representative Director of theCompany (Current Position)[Significant concurrent position outside the Company]
Chairman of the Board, YODOGAWA-SHENGYU (HEFEI)HIGH-TECH STEEL CO., LTD.
Reasons for selection as a candidate for Director
Satoshi Nitta has worked mainly in the production and corporate planning department of steel-coil and sheet-related
operations. Since he also has considerable operational experience relating to the management of overseas subsidiarycompanies, we request that he continue to be appointed as a Director to utilize his extensive experience and knowledge
as a member of the Board of Directors of the Company.

-4-

No.

Name
(Date of birth)

Career summary, position, responsibilities, and significant
concurrent positions outside the Company
Apr. 1986
June 2011
Sept. 2012

Apr. 2014

June 2016

June 2017

Toshio Kumamoto(March 13, 1963)

June 20182

Apr. 2019

June 2019

Joined the Company
General Manager of General Affairs Dept. of
the Company
General Manager of General Affairs Dept. andGeneral Manager of General Affairs Dept. ofTokyo Branch of the Company
Executive Officer, General Manager Kure Plant
and General Manager of General Affairs Dept.
Kure Plan of the Company
Senior Executive Officer, General Manager
Administration Division, General Manager ofGeneral Affairs Dept. and General Manager ofGeneral Affairs Dept. of Tokyo Branch of theCompany
Senior Executive Officer, Senior General
Manager Administration Division, General
Manager of General Affairs Dept., General
Manager of General Affairs Dept. of Tokyo
Branch, in charge of affiliated companies of theCompany
Director, Managing Executive Officer, Senior
General Manager Administration Division,
General Manager of General Affairs Dept.,
General Manager of General Affairs Dept. ofTokyo Branch, in charge of affiliatedcompanies of the Company
Director, Managing Executive Officer, Senior
General Manager Administration Division,
General Manager of General Affairs Dept.,
General Manager of General Affairs Dept. ofTokyo Branch, Senior General Manager
Corporate Planning Division, General Managerof Overseas Business Planning Dept., in chargeof affiliated companies of the Company
Director, Managing Executive Officer, Senior
General Manager Administration Division,
General Manager of General Affairs Dept.,
General Manager of General Affairs Dept. ofTokyo Branch, in charge of affiliatedcompanies of the Company (Current Position)

Number of theCompany’s shares
owned

4,423

Reasons for selection as a candidate for Director
Toshio Kumamoto has worked mainly in the general affairs department. Since he also has considerable operational
experience as a leader of main plants, we request that he continue to be appointed as a Director to utilize his extensive
experience and knowledge as a member of the Board of Directors of the Company.

-5-

No.

Name
(Date of birth)

Career summary, position, responsibilities, and significant
concurrent positions outside the Company
Apr. 1982
June 2011
Apr. 2012

Apr. 2015

Tadashi Hattori(July 16, 1958)
3

June 2016

June 2019

Apr. 2020

4

Joined the Company
General Manager of Sales Dept. - 1 of Sales
Division of the Company
Executive Officer, General Manager Sales
Division, General Manager of Sales Dept. - 1,
and Branch Manager of Tokyo of the Company
Executive Officer, General Manager Sales
Division, and General Manager of Sales Dept. 1 of the Company
Senior Executive Officer of the Company
President and Representative Director of
YODOKO SHOJI CO., LTD.
Director, Managing Executive Officer, Senior
General Manager of the Sales Division, General
Manager of Sales Dept. - 1 and Sales Dept. - 2,
and Branch Manager of Tokyo of the Company
Director, Managing Executive Officer, Senior
General Manager of the Sales Division, General
Manager of Sales Dept. - 1, and BranchManager of Tokyo of the Company (Current
Position)

Number of theCompany’s shares
owned

7,424

Reasons for selection as a candidate for Director
Tadashi Hattori has worked mainly in the sales department of steel-coil and sheet-related operations. Since he also has
considerable operational experience relating to the management of subsidiary companies, we request that he continue tobe appointed as a Director to utilize his extensive experience and knowledge as a member of the Board of Directors of
the Company.
Apr. 1970
Joined Kobe Steel, Ltd.
June 2001
Administration Officer and General Manager
Osaka branch of Kobe Steel, Ltd.
June 2002
President and Representative Director of
Shinko Care Life Co., Ltd. (currently Sumirin
Care Life Co., Ltd.)
June 2011
Advisor of Shinko Care Life Co., Ltd.
Apr. 2012
Specially Appointed Professor and Assistant toToshikazu Saeki0
the President of Kobe University(March 1, 1948)
June 2015
Outside Director of the Company (Current
Position)
Dec. 2016
Director (Audit & Supervisory Committee
Member) of LOCKON CO., LTD. (currently
YRGLM Inc.) (Current Position)[Significant concurrent position outside the Company]
Director (Audit & Supervisory Committee Member) of YRGLM
Inc.
Reasons for selection as a candidate for Outside Director
Toshikazu Saeki has extensive experience as a manager and a wide range of knowledge, and so we request that hecontinue to be appointed as an Outside Director so that such abundance of experience and knowledge can be reflectedin the management of the Company.

-6-

No.

Name
(Date of birth)

Career summary, position, responsibilities, and significant
concurrent positions outside the Company

Number of theCompany’s shares
owned

Apr. 1976

5

6

Notes:

Joined The Daiwa Bank, Ltd. (currently Resona
Bank, Limited)
June 2006
Representative Director, Vice President andExecutive Officer of Resona Bank, Limited
June 2008
President and Representative Director of
Resona Research Institute Co., Ltd.
June 2009
Director of The Kinki Osaka Bank, Ltd.
(currently Kansai Mirai Bank, Limited)
June 2011
Part-time Auditor-secretary of Osaka Cosei
Shinkin Bank (Current Position)
June 2011
Part-time Auditor of Japan Foundation
Hiroshi Okamura
Engineering Co., Ltd. (Current Position)0(April 13, 1952)
June 2012
President and Representative Director of
Shikishima Printing Co., Ltd. (Current Position)
June 2012
Part-time Director of Koyubusiness Co., Ltd.
(Current Position)
June 2013
Auditor of Osaka International Convention
Center Corporation (Current Position)
June 2015
Outside Director of the Company (Current
Position)[Significant concurrent position outside the Company]
President and Representative Director of Shikishima Printing
Co., Ltd.
Reasons for selection as a candidate for Outside Director
Hiroshi Okamura has extensive experience as a manager and a wide range of knowledge, and so we request that hecontinue to be appointed as an Outside Director so that such abundance of experience and knowledge can be reflectedin the management of the Company.
Sept. 1973
Registered as Certified Public Accountant
June 2006
Retired from KPMG AZSA & Co. (currently
KPMG AZSA LLC)
July 2006
Opened Mitsuaki Yuasa CPA Office (Current
Position)
June 2008
Outside Audit & Supervisory Board Member of
the Company
Mitsuaki Yuasa
0
Nov. 2008
Outside Member of the Board of WORLD Co.,
(June 30, 1946)
Ltd.
June 2009
Outside Audit & Supervisory Board Member ofSojitz Corporation
June 2016Retired from Outside Audit & Supervisory
Board Member of the Company
June 2018
Outside Director of the Company (Current
Position)
Reasons for selection as a candidate for Outside Director
Mitsuaki Yuasa has experience as Outside Officer at listed companies in addition to considerable knowledge of financeand accounting and a wide range of insight from his many years of experience as a Certified Public Accountant. We
request that he continue to be appointed as an Outside Director so that such experience and knowledge can be reflectedin the management of the Company. He has not been directly involved with the management of a company other thanserving as an outside officer. However, he has considerable expertise involving finance, and accounting matters as a
Certified Public Accountant. Since he has sufficient knowledge to deal with these matters, the Company believes that hewill be able to properly perform the duties of an Outside Director.
1. There is no particular business or other relationship between any of the candidates and the Company.
2. Director candidate Satoshi Nitta will resign as Chairman of the Board, YODOGAWA-SHENGYU (HEFEI) HIGHTECH STEEL CO., LTD. as of June 23, 2020, and is scheduled to be appointed as the President and Representative
Director of Keiyo Tekko Futo Co., Ltd. on June 18, 2020. The Company has transactional relationship with the company
such as storage and transportation services of the Company’s products and so on.

-7-

3. Number of Years since the Candidates for Outside Directors were appointed as Outside Directors of the Company
As of the date of the conclusion of this General Meeting of Shareholders, Toshikazu Saeki and Hiroshi Okamura bothwill have served as Outside Directors of the Company for a period of five (5) years and Mitsuaki Yuasa will have served
for a period of two (2) years.
4. Director candidates Toshikazu Saeki, Hiroshi Okamura and Mitsuaki Yuasa are candidates for election as Outside
Directors. A notice has been submitted to the Tokyo Stock Exchange that these three candidates are designated as
Independent Officers in accordance with the regulations of this exchange.
5. The Company has agreements with Toshikazu Saeki, Hiroshi Okamura and Mitsuaki Yuasa respectively that limit their
liability as prescribed in Article 423, Paragraph 1 of the Companies Act, in accordance with Article 427, Paragraph 1 of
the Companies Act and the Company’s Articles of Incorporation. The liability limit in these agreements is the higher of
8 million yen or the minimum limit on liability in Article 425, Paragraph 1 of the Companies Act, and in case they are
re-elected, the Company plans to continue such agreements with them.

-8-Proposal 2:

Election of Four (4) Audit & Supervisory Board Members

The term of office of all four (4) Audit & Supervisory Board Members will expire at the conclusion of this General
Meeting of Shareholders. Accordingly, the Company proposes the election of four (4) Audit & Supervisory Board
Members.
The Audit & Supervisory Board has given its consent to this proposal.
The candidates for Audit & Supervisory Board Members are as follows:
No.

Name
(Date of birth)

Career summary, position, and significant concurrent position
outside the Company
Aug. 1975
Sept. 2007

1

2

Number of theCompany’s shares
ownedJoined the Company
General Manager of Steel Sheet Sales Dept. ofSales Division of Tokyo branch of theCompany
Jan. 2011
Managing Director of YODOKOShirou Morioka(THAILAND) CO., LTD. (seconded)
1,574(August 24, 1950)
Sept. 2011
Joined HAKUYO SANGYO CO., LTD.
(currently YODOKO SHOJI CO., LTD.)
June 2013
Councilor of HAKUYO SANGYO CO., LTD.
June 2014
Audit & Supervisory Board Member of theCompany (Current Position)
Reasons for selection as a candidate for Audit & Supervisory Board Member
Shirou Morioka has worked mainly in the marketing department of steel-coil and sheet-related operations, and since healso has considerable overseas and other operational experience, we request that he continue to be appointed as an Audit& Supervisory Board Member to utilize his extensive experience and knowledge as an Audit & Supervisory Board
Member of the Company.
Apr. 1988
Joined the Company
Oct. 2015
Deputy General Manager of Development
Dept. of Development Division of theCompany*
1,536
Kazuki Miyajima
July 2018
Deputy General Manager of Purchasing Dept.
(April 24, 1961)
of Administration Division of the Company
Apr. 2019
General Manager of Corporate Planning Dept.
of Corporate Planning Division of the Company(Current Position)
Reasons for selection as a candidate for Audit & Supervisory Board Member
Kazuki Miyajima has considerable operational experience and knowledge, primarily related to the development
department and corporate planning department of the steel-coil and sheet-related operations, and consequently werequest that he be appointed as an Audit & Supervisory Board Member.

-9-

No.

Name
(Date of birth)

Career summary, position, and significant concurrent position
outside the Company

Number of theCompany’s shares
owned

Oct. 1996

3

4

Notes:

Joined Asahi & Co. (currently KPMG AZSA
LLC)Jan. 2002
Registered as Certified Public Accountant
Feb. 2006
Joined Protiviti Japan (currently Protiviti LLC)
Apr. 2009
Joined EY Advisory Co., Ltd. (currently EY
Advisory & Consulting Co., Ltd.)May 2010
Opened Ishihara Certified Public Accountant
Miho Ishihara
0
Office (currently Ishihara Certified Public(February 17, 1969)
Accountant & Certified Public Tax Accountant
Office) (Current Position)
Joined Hibiki Audit Corporation (Current
Position)
Dec. 2010
Registered as Certified Public Tax Accountant
June 2019
Audit & Supervisory Board Member of theCompany (Current Position)
Reasons for selection as a candidate for Outside Audit & Supervisory Board Member
Miho Ishihara has many years of experience as a Certified Public Account and Certified Public Tax Accountant. In
addition, she has experience with internal control and risk management, having worked as a consultant. Since she has
sufficient experience in these areas, the Company believes that she will be able to significantly strengthen and raise thelevel of the Company’s corporate governance, and consequently we request that she continue to be appointed as an
Outside Audit & Supervisory Board Member. She has not been directly involved with the management of a company.
However, she has considerable expertise involving finance and accounting matters as a Certified Public Account andCertified Public Tax Accountant. The Company believes that she will be able to properly perform the duties of an
Outside Audit & Supervisory Board Member.
Sept. 2007
Registered as Attorney*
Joined Hommachi Chuo Law Office (Current
0
Ritsuko Watanabe
Position)(June 15, 1977)
Reasons for selection as a candidate for Outside Audit & Supervisory Board Member
Ritsuko Watanabe has extensive experience as an Attorney and we request that she be appointed as an Outside Audit &Supervisory Board Member so that her independent viewpoints from outside the Company can be reflected in theauditing process and because we believe that the effectiveness of the Company’s Audit & Supervisory Board will
benefit as a result of her participation. She has not been directly involved with the management of a company. However,as an Attorney she has considerable expertise in legal matters and the Company believes that she will be able toproperly perform the duties of an Outside Audit & Supervisory Board Member.
1. Asterisks (*) indicate new candidates for Audit & Supervisory Board Member.
2. There is no particular business or other relationship between the candidate as above and the Company.
3. Miho Ishihara and Ritsuko Watanabe are both candidates for election as Outside Audit & Supervisory Board Members.
4. Number of years since the Candidates for Outside Audit & Supervisory Board Members were appointed as Outside
Audit & Supervisory Board Members of the Company
As of the date of the conclusion of this General Meeting of Shareholders, Miho Ishihara will have served as Outside
Audit & Supervisory Board Member of the Company for a period of one (1) year.
5. Audit & Supervisory Board Member candidates Miho Ishihara and Ritsuko Watanabe are candidates for election as
Outside Audit & Supervisory Board Members. A notice has been submitted to the Tokyo Stock Exchange that they aredesignated as Independent Officers in accordance with the regulations of this exchange.
6. If Miho Ishihara is elected, in accordance with Article 427, Paragraph 1 of the Companies Act and the Company’s
Articles of Incorporation, the Company plans to continue an agreement with this individual to limit her liability asprescribed in Article 423, Paragraph 1 of the Companies Act. The liability limit in this agreement will be the higher of apredetermined amount that is at least 8 million yen or the minimum limit on liability in Article 425, Paragraph 1 of theCompanies Act.

- 10 -

7. If Ritsuko Watanabe is elected, in accordance with Article 427, Paragraph 1 of the Companies Act and the Company’s
Articles of Incorporation, the Company plans to establish an agreement with this individual to limit her liability asprescribed in Article 423, Paragraph 1 of the Companies Act. The liability limit in this agreement will be the higher of apredetermined amount that is at least 8 million yen or the minimum limit on liability in Article 425, Paragraph 1 of theCompanies Act.
8. Audit & Supervisory Board Member candidate Ritsuko Watanabe is listed in the Family Register under the name of
Ritsuko Oura.

- 11 -

Proposal 3:

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

The Company proposes that one (1) substitute Audit & Supervisory Board Member be elected to prepare for a casewhere the number of the members of Audit & Supervisory Board falls below the number stipulated by laws andregulations.
The Audit & Supervisory Board has given its consent to this proposal.
The candidate for substitute Audit & Supervisory Board Member is as follows:
Name(Date of birth)

Career summary and significant concurrent position outside the Company

Number of theCompany’s shares
owned

Nov. 1976
Sept. 1980
June 2000
June 2008
Sept. 2010
July 2014

Joined Asahi & Co. (currently KPMG AZSA LLC)
Registered as Certified Public Accountant
Appointed as Partner
Ichiro Inui0
Appointed as Board Member(March 2, 1952)
Appointed as Internal Auditor
Opened Inui Certified Public Accountant Office (Current
Position)
Reasons for selection as a candidate for substitute Outside Audit & Supervisory Board Member
Ichiro Inui has considerable knowledge of finance and accounting from his many years of experience as a Certified Public
Accountant. He was asked to become an Outside Audit & Supervisory Board Member candidate in order to utilize this knowledge in
the Company’s auditing activities. He has not been directly involved with the management of a company. However, he has
considerable expertise involving finance, and accounting matters as a Certified Public Accountant. Since he has sufficientknowledge to deal with these matters, the Company believes that he will be able to properly perform the duties of an Outside Audit& Supervisory Board Member.
Notes:

1. There is no particular business or other relationship between the candidate as above and the Company.
2. Ichiro Inui is a candidate for election as a substitute Outside Audit & Supervisory Board Member.
3. Ichiro Inui fulfills the requirements as an Outside Audit & Supervisory Board Member.
4. If Ichiro Inui is elected as Outside Audit & Supervisory Board Member, the Company plans to submit notification to
Tokyo Stock Exchange, Inc. that he is designated as an Independent Officer in accordance with the regulations of thisexchange.
5. If Ichiro Inui is elected as Outside Audit & Supervisory Board Member, in accordance with the Company’s Articles ofIncorporation and Article 427, Paragraph 1 of the Companies Act, the Company plans to establish an agreement withthis individual that limit his liability as prescribed in Article 423, Paragraph 1 of the Companies Act. The liability limit
in this agreement will be the higher of 8 million yen or the minimum limit on liability in Article 425, Paragraph 1 of theCompanies Act.

- 12 -

Proposal 4:

Continuation of the Company’s Policy for Responding to Large-Scale Acquisitions of theCompany’s Shares, etc. (Takeover Defense Measures)

The Company introduced “The Company’s Policy for Responding to Large-Scale Acquisitions of the Company’s
Shares, etc.” (Takeover Defense Measures) at the Board of Directors meeting held on May 23, 2006. Subsequently,
we continued to consider the policy as one of the initiatives to protect and increase the Company’s corporate value
and the common interests of shareholders, including whether or not to continue it and its form if it were to continue,
based on social and economic changes, various developments surrounding takeover defense measures, theunfolding of various discussions, and the Corporate Governance Code, and so on.
At the 118th annual general meeting of shareholders held on June 22, 2017, the shareholders approved a partial
amendment to update “The Company’s Policy for Responding to Large-Scale Acquisitions of the Company’s
Shares, etc.” (Takeover Defense Measures) (hereinafter referred to as the “Current Plan”). Further, prior to the
expiry of the Current Plan, at the Company’s Board of Directors meeting held on May 12, 2020, it was resolvedthat the Takeover Defense Measures would be continued subject to the approval of the shareholders at the generalshareholders meeting (hereinafter, the Takeover Defense Measures after continuation will be referred to as the“Plan”).
Accordingly, the shareholders’ approval of the Plan shareholders is requested.
The main points of alteration of the Plan from the Current Plan from the perspective of protection and enhancementof our corporate value and the common interest of shareholders, in addition to revision of words and phrases andparaphrase, are as follows:
(1)
(2)

1.

It sets the maximum term (within 60 days calculated from the date when a list of Necessary Information
is first submitted) for a time limit that sets for the Large-Scale Buyer to provide information.
It sets the rule, in case of execution of the countermeasures against the Large-Scale Buyer, to hold ashareholders meeting, in principle, for confirmation of the shareholders’ intention, in order to preclude
arbitrary decision-making by the Company’s Board of Directors.

Purpose of the Plan
The environment surrounding the Company’s primary business, the manufacture and sale of surface-treatedsteel sheet, has increasingly changing and is becoming more difficult. Under such circumstances, thecompany group has made efforts to expand businesses that take advantage of our strengths, such as
management that focuses on flexibility only available to companies that are independent with respect to their
management policies, raw material procurement, and so on, an optimal balance of geographical locations in
Asia, our customer base and reputation which we have built up through over 80 years of operations, and ourstrong financial structure. In conjunction with this, we are also taking measures to improve corporate value,such as enhancement of fundamental earning power primarily on sheet steel segment, and reforms to our
corporate management structure. In terms of the Company’s management, we believe that, in order to have aproper appreciation of corporate value, it is indispensable to understand not only our technology andexperience in relation to surface finishing for steel sheet, casting rolls, etc., which we have accumulated overmany years, and the relationships of trust which we have been built not only with stakeholders such as theCompany’s trade partners and employees, but also with business partners and their employees in countries
and regions where the company group has conducts business. Further, we believe that, for manufacturingbusinesses in particular, which require a considerable amount of time in order to research and develop newbase technologies and commercialize them, management that takes initiatives to improve medium to longterm growth in corporate value rather than short-term profit would contribute to the interests of theshareholders overall.
On the other hand, due to the current state of Japan’s capital markets and legal system, we cannot deny thepossibility that there will be a Large-Scale Acquisition that damages such strength of the company group andclearly harms corporate value of the company group and eventually the common interests of shareholders.
Under the Financial Instruments and Exchange Act, while tender offers are mandatory for certain large-scaleacquisitions, and rules pertaining to disclosure and procedures are prescribed, in principle, it is only
applicable to off-market transactions, not to market transactions. Further, in the event of a sudden hostile- 13 -

large-scale acquisition, it is considered that there is a risk that shareholders may not be able to securenecessary information and sufficient time for considerations, since the buyer may refuse to answer thequestions of the target company as long as it provides a clear reason and it is highly possible that the actual
maximum tender offer period becomes 30 business days.
Having considered the points above, the Company’s Board of Directors has, believing that securing necessary
information and time for shareholders’ appropriate decision making, and securing negotiations with buyers to
be made in accordance with certain reasonable rules would lead to enhancement of our corporate value andthe common interests of shareholders, set forth certain rules below in relation to securing of information
provision and consideration time in case of a large-scale acquisition (hereinafter referred to as the “LargeScale Acquisition Rules”). And the Board of Directors has decided to keep a takeover defense measuressubject to the approval of the shareholders at the general shareholders meeting, that includes thecountermeasures in the event of a large-scale acquisition by an unsuitable buyer, in accordance with “TheCompany’s Basic Policy in Relation to Those Who Controls its Finances and Business Policy Decisions.”
2.

The Targets of the Plan
The Plan is applied to an acquisition of the Company’s shares, etc. (note 3), for the purpose of making theratio of voting rights (note 2) of the specific shareholder group (note 1) 20% or more, or any acquisition of
the Company’s shares, etc., where as a result the ratio of voting rights of a specific shareholder group
becomes 20% or more (with respect to both cases, acquisitions where the Company’s Board of Directors has
given its consent in advance are excluded and the method of acquisition, market transaction or tender offer,does not matter. Hereinafter, such acquisition is referred to as a “Large-Scale Acquisition” and the entity
making such acquisition is referred to as the “Large-Scale Buyer”).
Note 1:

Specific Shareholder Group means:(i)
A holder (including a person included in a holder pursuant to Article 27-23, Paragraph 3 of the Financial
Instruments and Exchange Act, and hereinafter the same applies) of the Company’s shares, etc., (meaning
securities, etc., as defined in Article 27-23, Paragraph 1 of the Financial Instruments and Exchange Act) or a
joint holder (meaning a joint holder as defined by Article 27-23, Paragraph 5 of the Financial Instruments andExchange Act; including those considered to be joint holders pursuant to Article 27-23, Paragraph 6) of theCompany’s shares, etc., as well as a person having a certain relationship with said holders or their joint-holders,which is similar to that among holders or joint holders (hereinafter referred to as a “quasi-joint holder”;
hereinafter the same applies);or(ii) A person engaged in purchase, etc., (meaning purchase, etc., as defined by Article 27-2, Paragraph 1 of the
Financial Instruments and Exchange Act, including conducts made on financial instruments exchange markets)of the Company’s shares, etc., (meaning securities, etc., as defined by Article 27.3.1 of the Financial
Instruments and Exchange Act) and persons in special relationships with such person (meaning persons in
special relationships as defined by Article 27-2, Paragraph 7 of the Financial Instruments and Exchange Act;
hereinafter the same applies).

Note 2:

Ratio of voting rights means(i)
In the case of a specific shareholder group noted in (i) of note 1, the combined ratio of (1) the holding ratio ofsuch holder (meaning the holding ratio of shares, etc., as defined by Article 27-23, Paragraph 4 of the Financial
Instruments and Exchange Act; in such case, the number of shares, etc., held by the joint holders of such holder(meaning the number of shares, etc., held as defined in the same Paragraph; hereinafter the same applies) shallalso be included) and (2) the holding ratio of shares, etc., of quasi-joint holders of such holder (however, inrespect of the addition of (1) and (2), the number of shares, etc., held that overlaps between (1) and (2) shall be
subtracted);or(ii) In the case of a specific shareholder group noted in (ii) of note 1, the total of the ratio of shares, etc., held
(meaning the ratio of shares held as defined in Article 27-2, Paragraph 8 of the Financial Instruments andExchange Act) by the large-scale buyer and the persons in a special relationship with it. For the calculation of
the holding ratio of shares, etc., the most recently calculated figures in securities reports, quarterly financial
statements, and share buyback reports may be referred to in terms of the total number of voting rights (asdefined by Article 27-2, Paragraph 8 of the Financial Instruments and Exchange Act) and the total number ofissued shares (as defined in Article 27-23, Paragraph 4 of the Financial Instruments and Exchange Act).

- 14 -

Note 3:

3.

Shares, etc. means securities, etc., as defined in Article 27-23, Paragraph 1 and 27-2, Paragraph 1 of the Financial
Instruments and Exchange Act.

Establishment of an Independent Committee and Confirmation of Shareholders’ Intention
The Company’s Board of Directors will, under the Plan, just like under the Current Plan, establish an
independent committee composed of persons independent of the Company (hereinafter referred to as the“Independent Committee”) in order to preclude arbitrary decision-making by the Company’s Board of
Directors.
The Independent Committee will be composed of three members or more to be elected by the Board of
Directors from among the Company’s outside directors, outside auditors, or other outside experts (the names
and career summaries of Independent Committee members are attached as Appendix 1).
Prior to execution of the countermeasures, the Company’s Board of Directors will consult with the
Independent Committee on whether or not to execute the countermeasures. The Independent Committee will
evaluate and consider the Large-Scale Acquisition based on the provided Necessary Information, and,according the result of such evaluation and consideration, will make recommendations with reasons andgrounds on whether or not to execute the countermeasures to the Company’s Board of Directors. The
Company’s Board of Directors will decide whether or not to execute the countermeasures, respecting therecommendations of the Independent Committee to the fullest extent. The contents of the recommendationsof the Independent Committee will be appropriately disclosed at a proper time.
Further, the Company’s Board of Directors sets the rule, in case of deciding to execute the countermeasures,to hold a shareholders meeting, in principle, for confirmation of the shareholders’ intention (hereinafterreferred to as the “Shareholders Meeting for Confirmation of the Shareholders’ Intention”).
An outline of the Independent Committee is attached as Appendix 2.

4.

Details of Large-Scale Acquisition Rules(1) Submission of Letter of intent to the Company
When a prospective Large-Scale Buyer intends to carry out a Large-Scale Acquisition, prior to theLarge-Scale Acquisition or proposal of the Large-Scale Acquisition, it is firstly requested that such
Large-Scale Buyer shall submit to the Company’s Board of Directors a legally binding affidavit tocomply with the Large-Scale Acquisition Rules and a letter of intent stating, in Japanese, the name of
the Large-Scale Buyer, their address or location of headquarter or branch office, the governing law of
their incorporation, names of representatives, domestic contacts, and an outline of the proposed LargeScale Acquisition (to be signed or affixed with the name and seal of the representative(s) of the LargeScale Buyer).
In the event the Company receives a letter of intent from the prospective Large-Scale Buyer, we willpromptly make public announcement of such fact and, if necessary, the details of the letter of intent.
(2)

Request to the Large-Scale Buyer to Provide Information
The Company’s Board of Directors will, within ten business days from the day immediately following
the day of receiving the letter of intent in (1) above, submit a list of necessary and sufficient information(hereinafter referred to as the “Necessary Information”) that should be submitted by the Large-Scale
Buyer to the Company’s Board of Directors in order to allow the Company’s shareholders to make adecision and the Company’s Board of Directors to form an opinion. The Large-Scale Buyer shallprovide the Necessary Information in writing and in Japanese to the Company’s Board of Directors inaccordance with the list of Necessary Information. Matters that will generally be part of the Necessary
Information are as per the below. Although their specific contents will differ depending on the type of
Large-Scale Buyer and the details of the Large-Scale Acquisition, in any cases, the scope of theNecessary Information will be limited to the extent which is necessary and sufficient to allow
shareholders to make a decision and the Company’s Board of Directors to form an opinion.
(a)

Details (including name, business details, capital composition, financial details, and career orcompany history, details of past transactions similar to the Large-Scale Acquisition, the result andthe impact on the corporate value of the target company of such past transaction; and information- 15 -

relating to their experience, etc., with regard to the Company’s business or similar businesses) of
the Large-Scale Buyer and its group (including joint holders, persons in special relationships withit, and other constituent members).
(b) The purpose and details of the Large-Scale Acquisition (including the amount and type of
consideration for the Large-Scale Acquisition, purchase period, related transaction mechanisms,
legality of purchase method, and feasibility of such Large-Scale Acquisition and relatedtransactions).
(c) The basis for the calculations of the purchase price for the Company’s shares and substantiation of
the purchasing funds with respect to the Large-Scale Acquisition (including facts assumed in thecalculations, calculation method, numerical information used for calculations, contents of
expected synergy generated by a series of transactions related to the Large-Scale Acquisition, thespecific name of the fund provider (including the actual provider), funding method, and details of
related transactions).
(d) Composition of directors (including name and career summaries of candidates, whether or not
informal consents of appointment are obtained from such candidates, and information relating totheir experience, etc., in the Company’s industry and similar industries), management policy,
business plan, finance plan, capital policy, dividend policy, capital utilization policy, etc.,
envisioned after they become involved in the Company’s management (hereinafter referred to as
the “Post-Acquisition Management Policy, etc.”).
(e) The expected Company’s stakeholders after the completion of the Large-Scale Acquisition(customers, trade partners, employees, regional companies, etc.), and whether or not there will be
any changes regarding the Company’s relationships with them and the details thereof.
(f) Other information reasonably deemed to be necessary by the Company’s Board of Directors.
The Company’s Board of Directors may set a time limit for the Large-Scale Buyer to provide
information, if necessary, in light of prompt management of the Large-Scale Acquisition rules.
However, in the case that the Large-Scale Buyer makes an application for an extension based onreasonable grounds, the time limit may be extended.
Further, in the event that, as a result of careful examination of the information that is initially provided,
the Company’s Board of Directors finds that the information itself is insufficient, the Company’s Boardof Directors may request the Large-Scale Buyer to provide with additional information, setting anappropriate time limit (within 60 days calculated from the date when a list of Necessary Information is
first submitted). In the event the Company’s Board of Directors determines that the provision of
Necessary Information by the Large-Scale Buyer has been completed, it will send the Large-Scale
Buyer a notification to such effect and make a public announcement.
Further, in the event part of the corresponding information is not provided by the Large-Scale Buyer,
despite the request of an additional information by the Company’s Board of Directors, there may beinstances where our negotiations, etc., with the Large-Scale Buyer pertaining to information provision
are concluded without obtaining all of the Necessary Information requested by the Company’s Board of
Directors and a public announcement is made to such effect along with the commencement of theevaluation and consideration by the Company’s Board of Directors in (3) below, as long as reasonable
explanation is given by the Large-Scale Buyer regarding the reason why such information has not been
provided.
The Necessary Information provided to the Company’s Board of Directors will be submitted to the
Independent Committee and, if it is deemed to be necessary for the shareholders to make a decision, it
will be publicly announced in whole or in part at the point in time determined to be appropriate by theCompany’s Board of Directors.
(3)

Evaluation and Consideration by the Board of Directors
After the Large-Scale Buyer has completed providing the Necessary Information, the Company’s Boardof Directors will set a period for the evaluation, consideration, negotiation, formation of opinions andalternate proposals by the Board of Directors (hereinafter referred to as “Board of Directors Evaluation
Period”), which will be a maximum of 60 days in case where all of the shares of the Company are
acquired through a tender offer using cash only remuneration (yen), and a maximum of 90 days in caseof any other Large-Scale Acquisition. The Large-Scale Acquisition may only commence after the Board- 16 -

of Directors Evaluation Period.
During the Board of Directors Evaluation Period, the Company’s Board of Directors will, taking advice
from external experts (financial advisers, lawyers, CPAs, etc.) as necessary, thoroughly evaluate andconsider the Necessary Information provided, to prudently form an opinion as the Company’s Board of
Directors, respecting the recommendations of the Independent Committee to the fullest extent, from thepoint of view of whether or not it contributes to the Company’s corporate value and the common
interests of shareholders, and then publicly announce the outcome. Also, as necessary, the Company’s
Board of Directors may negotiate with the Large-Scale Buyer to improve the details of the Large-Scale
Acquisition and offer alternative proposals.
Further, in the event the Independent Committee cannot reach a decision as to whether or not thecountermeasures are to be taken or a decision to hold a Shareholders Meeting for Confirmation of the
Shareholders’ Intention during the Board of Directors Evaluation Period, due to unavoidable reasons,the Company’s Board of Directors may, pursuant to the recommendations of the Independent
Committee, extend the Board of Directors Evaluation Period within the scope necessary by up to 30
days. In the event the Company’s Board of Directors resolves to extend the Board of Directors
Evaluation Period, the specific period of extension and the reason such specific extension is required
will be publicly announced.
5.

Response Policy in the Event of a Large-Scale Acquisition(1) In the Event the Large-Scale Buyer Has Complied with the Large-Scale Acquisition Rules
In the event the Large-Scale Buyer has complied with the Large-Scale Acquisition Rules, even if theCompany’s Board of Directors has an opinion against the Large-Scale Acquisition, it will not, inprinciple, take the countermeasures against the Large-Scale Acquisition, but will only try persuading
the Company’s shareholders by providing dissenting opinions against the Large-Scale Acquisition or
making alternate proposals. As for whether or not to accept the offer of the Large-Scale Acquisition, theshareholders will make decision upon consideration of the acquisition proposal, etc., and the opinion of
the Company regarding such acquisition proposal and alternate proposals of the Company.
Even in the event the Large-Scale Acquisition Rules are complied with, however, if it is decided by theCompany’s Board of Directors that the Company’s corporate value and the common interests ofshareholders will be significantly harmed by the Large-Scale Acquisition, the Company’s Board of
Directors may take the countermeasures against the Large-Scale Acquisition in order to protect andenhance the common interests of the Company’s shareholders in the medium to long term.
The Company’s Board of Directors determines that in case of execution of the countermeasures in theevent the Large-Scale Buyer has complied with the Large-Scale Acquisition Rules, the Company willhold a Shareholders Meeting for Confirmation of the Shareholders’ Intention, in principle, to confirm
the intention of shareholders. However, the countermeasures may be executed without holding a
Shareholders Meeting for Confirmation of the Shareholders’ Intention, in the cases that the Large-Scale
Acquisition falls in any of (a) through (e) below where it is clearly foreseeable that irreparable harm
will be done to the Company and execution of countermeasures are found appropriate, or theCompany’s Board of Directors does not have enough time to hold a Shareholders Meeting for
Confirmation of the Shareholders’ Intention. In such cases, the Company’s Board of Directors will
respect the recommendations of the Independent Committee to the fullest extent to assure objectivity
and reasonableness of the judgment whether or not to execute the countermeasures against the LargeScale Buyer.
Further, the countermeasures can be executed only in the cases where it can be decided on reasonablegrounds that the Company’s corporate value and the common interests of shareholders will besignificantly harmed by the Large-Scale Acquisition. The countermeasures will not be executed solely
on the ground that the Large-Scale Acquisition falls in the definition of any of (a) through (e) below.
(a)

In case that, despite having no real intention to participate in the Company’s management, theLarge-Scale Buyer is acquiring the shares only for the purpose increasing the share price andcausing the Company’s related parties to purchase the shares at an overstated price (so-calledgreenmail case);- 17 -

(b)

(c)

(d)

(e)

(2)

In case that the Large-Scale Buyer is acquiring the shares for the purpose of conducting so-calledscorched earth management, such as temporarily taking control of the Company’s management inorder to cause the transfer of intellectual property, know-how, trade secrets, key trading partners
or key customers, etc., that are necessary for the management of the Company’s business to thebuyer or its group company, etc.;
In case that the Large-Scale Buyer is acquiring the shares with a plan to use the assets as collateralfor or source of funds for repayment of the debts of the buyer or its group company after it takes
control of the company’s management;
In case that it is acquiring the shares for the purpose of temporarily taking control of thecompany’s management in order to dispose of, such as by selling, the high value assets of theCompany which are not directly related to the Company’s business for the time being, such as realestate and marketable securities, and, with the profits from such disposal, temporarily distributing
high dividends or aiming to cause the share price to suddenly increase through high dividends inorder to sell the shares at higher price;
In case that the method of acquisition of the Company’s shares proposed by the Large-Scale
Buyer may restrain the shareholder’s opportunities or freedom to make a decision, having a risk to
substantially force the shareholders to sell the Company’s shares, such as in the cases of so-called“coercive two-tiered tender offers” (meaning conducting a tender offer, setting more unfavorable
acquisition conditions for the second stage than the first stage, or not setting clear conditions forthe second stage).

In the Event the Large-Scale Buyer Does Not Comply with the Large-Scale Acquisition Rules
In the event the Large-Scale Buyer has not complied with the Large-Scale Acquisition Rules, regardlessof the specific acquisition method, the Company’s Board of Directors may take the countermeasuresagainst the Large-Scale Buyer for the purpose of protecting the Company’s corporate value and thecommon interests of shareholders.
Further, in case of judging whether or not the Large-Scale Buyer has complied with the Large-Scale
Acquisition Rules, the context of the Large-Scale buyer shall be fully taken into account to a reasonable
extent. At least, the Large-Scale Buyer shall not be judged to have not complied with the Large-Scale
Acquisition Rules only for the reason that some of the Necessary Information has not be submitted.

(3)

Procedures for Taking the Countermeasures
In the event the countermeasures against a Large-Scale Buyer in cases of (1) or (2) above is executed, inregard to what measures will be taken in particular, the Company’s Board of Directors will select themeasure, which it deems to be the most appropriate at the time, from the measures authorized by theCompanies Act, other laws and the Company’s articles of incorporation. As for the specificcountermeasures taken by the Company’s Board of Directors, for example, an overview of theallotment of share acquisition rights without contribution is as per Appendix 3, while, in the event of an
actual allotment of share acquisition rights without contribution, some conditions may be added in lightof the effectiveness of the countermeasure, such as a condition that shareholder shall not belong to a
specific shareholder group having certain ratio or more of voting rights for exercise of the shareacquisition rights, or adding the condition to share acquisition right that the Company shall be entitledto acquire such share acquisition right in exchange for the Company’s shares. In such an event, however,
the Company will not offer monetary consideration for the acquisition of share acquisition rights heldby a Large-Scale Buyer.
Further, in case a Shareholders Meeting for Confirmation of the Shareholders’ Intention is to be held,
the Large-Scale Acquisition shall not be commenced until the closure of such shareholders meeting.
Besides, in case the general shareholders meeting has resolved to execute the countermeasures, theLarge-Scale Acquisition shall not be commenced until the closure of the Company’s Board of Directors
meeting to resolve to execute the countermeasures according to the resolution of the shareholders
meeting.
In the event the Company’s Board of Directors and general shareholders meeting have decided to takethe specific countermeasures, such will be appropriately disclosed at a proper time in accordance withlaws and listing regulations of financial instruments exchanges.
- 18 -

(4)Suspension, etc., of the Countermeasures
Even in the event the Company’s Board of Directors has decided to take the specific countermeasuresin case of (1) or (2) above, the countermeasures may be suspended or changed in the cases below,
respecting the opinions and recommendations of the Independent Committee to the fullest extent. For
example, in the event share acquisition rights without contribution are allotted as a countermeasure,even if the Company’s Board of Directors has passed a resolution for allotment without contribution oreven after allotment without contribution has taken place, in the event the Company’s Board of
Directors decides that taking such countermeasures is not appropriate due to the withdrawal oramendment of the Large-Scale Acquisition by the Large-Scale Buyer, the countermeasures may besuspended by revoking the allotment of the share acquisition rights without contribution on or prior to
the day immediately before the effective date of the share acquisition rights, or, after the shareacquisition rights have been allotted without contribution, by having the Company acquire the shareacquisition rights without consideration on or prior to the date immediately before the commencement
date of the exercise period.
(a)
(b)
(c)
(d)

In case that the Large-Scale Buyer changes the acquisition proposal and the Company’s Board of
Directors has determined that such alternate proposal is reasonable and appropriate;
In case that the Company’s Board of Directors and the Large-Scale Buyer reaches an agreement
not to take the countermeasures or suspend the countermeasures;
In case that the Large-Scale Buyer has withdrawn from the acquisition or the acquisition nolonger exists for some other reasons;
In case that there are changes in the facts on which the taking of the countermeasures is premised
and the acquisition by the Large-Scale Buyer no longer fulfills the requirements for suchcountermeasures, or in the event the Company’s Board of Directors reaches a decision that the
taking of such countermeasures is not appropriate despite the fact that the requirements for suchcountermeasures are fulfilled.

In such cases of suspensions, etc., of the countermeasures, such will be appropriately disclosed at aproper time in accordance with laws and listing regulations of financial instruments exchanges.
6.

Effective Period, Abolition, and Amendment of the Plan
The Plan shall become effective on the same day of and subject to the resolution at this annual general
meeting of shareholders, and its effective period ends upon conclusion of the regular shareholders meeting of
the final business in the business year concluding within three years of the effective date (the annual general
meeting of shareholders scheduled to be held in June 2020).
However, even prior to the expiration of the effective period of the Plan, in the event the Company’s
shareholders pass a resolution to abolish the Plan or the Company’s Board of Directors passes a resolution toabolish the plan (the period of appointment of the Company’s directors is one year and it is possible that theintention of the shareholders will be manifested through the election of directors each year), the Plan shall beabolished at such time.
Further, it is possible that the Company’s Board of Directors may change the Plan, upon obtaining consent of
the Independent Committee, to the extent it is reasonably deemed to be necessary due to changes to theCompanies Act, Financial Instruments and Exchange Act, or other laws or changes to the rules of financial
instruments exchanges, or changes to their interpretation or application, or changes to the taxation system,judicial precedent, etc.
In the event the Company’s Board of Directors abolishes or changes the Plan, prompt disclosure will be madewith respect to such abolition or change, and the details of the change (in the event of change), and othermatters recognized to be appropriate by the Company’s Board of Directors.
<For Your Reference>
While the details of the Plan are as described in 1. to 6. above, the impact on shareholders and investors andthe reasonableness of the plan are as follows.

- 19 -

1.

Impact, etc., on Shareholders and Investors(1) The Impact, etc., of the Plan on Shareholders and Investors
The purpose of the plan is to secure an opportunity for the Company’s shareholders to determine
whether or not to accept a Large-Scale Acquisition, by providing necessary information and the viewsof the Board of Directors in charge of the management of the Company at the time, and, further, an
opportunity for the Company’s shareholders to have alternative proposals. This makes it possible for theCompany’s shareholders to appropriately determine whether or not to accept the Large-Scale
Acquisition based on appropriate information, which we believe will contribute to the protection of theoverall interests of the Company’s shareholders. The establishment of the Plan, therefore, is aprerequisite for the Company’s shareholders and investors to make appropriate investment decisions,and we believe that it will contribute to the interests of the Company’ shareholders and investors.
Further, as the way the Company handles Large-Scale Acquisitions may vary, depending on whether or
not the Large-Scale Buyer complies with the Large-Scale Acquisition Rules, we would like to advise
shareholders and investors to pay closer attention to actions and movements of the Large-Scale Buyer.
(2)2.

The Impact, etc., of Execution of the Countermeasures on Shareholders and Investors
In the event a Large-Scale Buyer does not comply with the Plan or the acquisition proposal of a
Large-Scale Buyer is recognized to be harmful to the Company’s corporate value and the common
interests of shareholders, there may be instances where the Company may take thecountermeasures described in 5. above against the Large-Scale Buyer. We do not envision,
however, that execution of such countermeasures will bring any significant losses to theCompany’s shareholders (excluding the Large-Scale Buyer) in terms of the legal rights or
economic aspects.
Further, in the event that the allotment of share acquisition right without contribution is executed
as one of the countermeasures, allotment will be made for shareholders who are registered on theshareholder registry on the date of allotment of share acquisition right. Shareholders will beallotted share acquisition rights without any application procedure for subscriptions and, in casethat the Company takes procedures to acquire share acquisition rights, shareholders do not need totake any procedures such as applications or payments, since shareholders will receive shares of
the Company consideration for the Company’s acquisition of the share acquisition rights without
paying an amount equivalent to the exercise price of the share acquisition rights. In such cases,
however, it is possible that the Company may request shareholders to submit prescribed forms,
including representations and warranties, supplementary terms, and other affidavits with respect
to the shareholder themselves fulfilling the conditions for the exercise of share acquisition rights,
etc. The details of relevant procedures will be appropriately disclosed at a proper time inaccordance with laws and listing regulations of financial instruments exchanges. Further, theCompany’s Board of Directors, upon recommendations of the Independent Committee, may
suspend the allotment of share acquisition rights or cause the Company to acquire the shareacquisition rights without consideration, even after the date of allotment of share acquisition rights
or after the share acquisition rights have come into effect, due to circumstances such as
withdrawal of the Large-Scale Acquisition by the Large-Scale Buyer. In such cases, there may be
a possibility that shareholders or investors who have conducted sales, etc., assuming that there
will be dilution of per share price will suffer unexpected losses due to fluctuations in the shareprice.

Regarding the Reasonableness of the Plan
For the reasons below, we believe that the Plan is in line with the Company’s Basic Policy in Relation
to Those who Controls its Finances and Business Policy Decisions and contributing to the Company’s
corporate value and the common interests of shareholders, and does not have the purpose ofmaintaining the positions of the Board members of the Company.
(1)

Satisfying the Requirements of the Guideline regarding Takeover Defense Measures
The Plan satisfies the three principles prescribed by the “Guideline regarding Takeover Defense
Measures in Order to Protect and Improve Corporate Value and the Common Interests of- 20 -

Shareholders” published by the Ministry of Economy, Trade and Industry and the Ministry ofJustice on May 27, 2005 ( (1) the principle of protecting and improving corporate value and thecommon interests of shareholders; (2) the principle of disclosure in advance and respect forshareholders’ intention; and (3) the principle of securing necessity and reasonableness). Further, italso takes into consideration the contents of the report, “Takeover Defense Measures in Light ofRecent Environmental Changes,” published by the Corporate Value Research Group establishedwithin the Ministry of Economy, Trade and Industry, on June 30, 2008, and “Principle 1-5. SoCalled Takeover Defense Measures” in the “Corporate Governance Code” published by the
Tokyo Stock Exchange on June 1, 2015.
(2)

Continued with the Purpose of Securing and Improving the Common Interests of Shareholders
The Plan makes it possible, when a Large-Scale Acquisition is being conducted for theCompany’s shares, to secure the necessary time and information for shareholders to decide
whether or not they should agree to the Large-Scale Acquisition as well as an opportunity to havealternative proposals from the Company’s Board of Directors, etc., and will be continued with the
purpose of securing and improving the Company’s corporate value and the common interests ofshareholders.

(3)

Reflecting the Intention of Shareholders
The Company will confirm the intention of the shareholders in relation to the continuation of theplan at this annual general meeting of shareholders.
The Company’s Board of Directors will also confirm the intention of the shareholders as towhether or not to execute the countermeasures in the event the Large-Scale Buyer has compliedwith the Large-Scale Acquisition Rules, by holding a Shareholders Meeting for Confirmation of
the Shareholders’ Intention, in principle, as described in 5. above.
Further, even during the effective period of the Plan, in the event a resolution is passed to abolishthe Plan in a Board of Directors composed of directors elected by the Company’s generalshareholders meeting, the Plan will be abolished at the time, which duly reflects the intention of
the shareholders.

(4)

Exclusion of Arbitrary Decision-Making by the Board of Directors
Under the Plan, an Independent Committee is established as a separate organization independentof the Company’s Board of Directors and, in case the Company’s Board of Directors decides
whether or not to take the countermeasures, it must respect the recommendations of the
Independent Committee to the fullest extent, in order to assure the transparency, objectivity,
fairness, and reasonableness of its decisions and to preclude arbitrary decision-making by theCompany’s Board of Directors. It is stipulated that an overview of the decision of the Independent
Committee shall be disclosed to shareholders, in order to ensure establishment of a structure fortransparent operation of the Plan that conforms to the Company’s corporate value and thecommon interests of shareholders.

(5)

Setting Reasonable and Objective Requirements for the Execution of the Plan
The countermeasures in the plan are designed in the way that they cannot be executed without
fulfilling reasonable and objective requirements in order to ensure that there is a structure thatprevents arbitrary execution of the countermeasures by the Company’s Board of Directors.

(6)

No Dead-Hand or Slow-Hand Takeover Defense Measure
The Plan may be abolished by a Board of Directors composed of directors elected by theCompany’s general shareholders meeting. Accordingly, the Plan is not a dead-hand takeover
defense measure (a takeover defense measure the taking of which cannot be prevented even if amajority of the members of the Board of Directors are replaced).
Further, as the period of appointment of the directors at the Company is one year with nostaggered terms, the Plan is not a slow-hand takeover defense measure (a takeover defense
measure the prevention of which requires a period of time due to the members of the Board of- 21 -

Directors not being capable of being replaced all at once).
Further, there is no additional requirement for resolution, such as special resolution, regarding
dismissal of directors.
End- 22 -

Appendix 1
Names and Career Summaries of Independent Committee Members
The seven persons below are planned to continue to be members of the Independent Committee after the Plan is
implemented.
1. Toshikazu Saeki
Career Summary
Apr. 1970
June 2001
June 2002
June 2011
Apr. 2012
June 2015
June 2015
Dec. 2016

Joined Kobe Steel, Ltd.
Administration Officer and General Manager Osaka branch of Kobe Steel, Ltd.
President and Representative Director of Shinko Care Life Co., Ltd. (currently Sumirin Care
Life Co., Ltd.)
Advisor of Shinko Care Life Co., Ltd.
Specially Appointed Professor and Assistant to the President of Kobe University
Outside Director of the Company (Current Position)
Member of Independent Committee of the Company (Current Position)
Director (Audit & Supervisory Committee Member) of LOCKON CO., LTD. (currently
YRGLM Inc.) (Current Position)* Toshikazu Saeki is an Outside Director as provided by Article 2.15 of the Companies Act.
Further, Toshikazu Saeki is registered as an Independent Officer in accordance with the regulation of the Tokyo
Stock Exchange.
2. Hiroshi Okamura
Career Summary
Apr. 1976
June 2006
June 2008
June 2009
June 2011
June 2011
June 2012
June 2012
June 2013
June 2015
June 2015

Joined The Daiwa Bank, Ltd. (currently Resona Bank, Limited)
Representative Director, Vice President and Executive Officer of Resona Bank, Limited
President and Representative Director of Resona Research Institute Co., Ltd.
Director of The Kinki Osaka Bank, Ltd. (currently Kansai Mirai Bank, Limited)
Part-time Auditor-secretary of Osaka Cosei Shinkin Bank (Current Position)
Part-time Auditor of Japan Foundation Engineering Co., Ltd. (Current Position)
President and Representative Director of Shikishima Printing Co., Ltd. (Current Position)
Part-time Director of Koyubusiness Co., Ltd. (Current Position)
Auditor of Osaka International Convention Center Corporation (Current Position)
Outside Director of the Company (Current Position)
Member of Independent Committee of the Company (Current Position)* Hiroshi Okamura is an Outside Director as provided by Article 2.15 of the Companies Act.
Further, Hiroshi Okamura is registered as an Independent Officer in accordance with the regulation of the Tokyo
Stock Exchange.
3. Mitsuaki Yuasa
Career Summary
Sept. 1973
June 2006
July 2006
June 2008
Nov. 2008
June 2009
June 2016
June 2018
June 2018

Registered as Certified Public Accountant
Retired from KPMG AZSA & Co. (currently KPMG AZSA LLC)
Opened Mitsuaki Yuasa CPA Office (Current Position)
Outside Audit & Supervisory Board Member of the Company
Outside Member of the Board of WORLD Co., Ltd.
Outside Audit & Supervisory Board Member of Sojitz Corporation
Retired from Outside Audit & Supervisory Board Member of the Company
Outside Director of the Company (Current Position)
Member of Independent Committee of the Company (Current Position)* Mitsuaki Yuasa is an Outside Director as provided by Article 2.15 of the Companies Act.
Further, Mitsuaki Yuasa is registered as an Independent Officer in accordance with the regulation of the Tokyo
Stock Exchange.

- 23 -

4. Miho Ishihara
Career Summary
Oct. 1996
Jan. 2002
Feb. 2006
Apr. 2009
May 2010
May 2010
Dec. 2010
June 2019
June 2019

Joined Asahi & Co. (currently KPMG AZSA LLC)
Registered as Certified Public Accountant
Joined Protiviti Japan (currently Protiviti LLC)
Joined EY Advisory Co., Ltd. (currently EY Advisory & Consulting Co., Ltd.)
Opened Ishihara Certified Public Accountant Office (currently Ishihara Certified Public
Accountant & Certified Public Tax Accountant Office) (Current Position)
Joined Hibiki Audit Corporation (Current Position)
Registered as Certified Public Tax Accountant
Audit & Supervisory Board Member of the Company (Current Position)
Member of Independent Committee of the Company (Current Position)* Miho Ishihara is an Outside Audit & Supervisory Board Member as prescribed by Article 2.16 of the Companies
Act.
Further, Miho Ishihara is registered as an Independent Officer in accordance with the regulation of the Tokyo Stock
Exchange.
5. Ritsuko Watanabe
Career Summary
Sept. 2007

Registered as Attorney
Joined Hommachi Chuo Law Office (Current Position)* Ritsuko Watanabe is a candidate for an Outside Audit & Supervisory Board Member as prescribed by Article 2.16of the Companies Act.
Further, Ritsuko Watanabe is planned to be registered as an Independent Officer in accordance with the regulationof the Tokyo Stock Exchange.
6. Hidetaka Tomita
Career Summary
Jan. 1965
Oct. 1965
July 2004
May 2006

Joined Tomijima Certified Public Accountant Office (currently Ernst & Young ShinNihon
LLC)
Registered as Certified Public Accountant
Opened Tomita Certified Public Accountant Office (Current Position)
Member of Independent Committee of the Company (Current Position)

7. Yasuhiro Kawaguchi
Career Summary
April 1999
April 2000
April 2009
June 2017

Professor of the Faculty of Law, Kobe Gakuin University
Professor of the Faculty of Law, Doshisha University (Current Position)
Dean of the Faculty of Law, Doshisha University
Member of Independent Committee of the Company (Current Position)End- 24 -

Appendix 2
Overview of the Independent Committee
1. The Independent Committee is established by the resolution of the Company’s Board of Directors.
2. The Independent Committee shall have three or more members and, in order to make it possible for their decisionmaking to be fair and neutral, they are to be elected by the Board of Directors from among the outside directors,
outside auditors, and other outside qualified experts who are independent from the management team that engages inthe execution of the company’s operations.
3. Even before the expiry of the effective period of the Plan, the Company’s Board of Directors may change the Plan,
upon consent of the Independent Committee, to the extent it is reasonably recognized to be necessary due to changes
to the Companies Act, Financial Instruments and Exchange Act, or other acts or changes to the regulations offinancial instruments exchanges, or changes to their interpretation or application, or changes to the taxation system, or
judicial precedent, etc.
4. With regard to the resolutions of the Independent Committee, a quorum shall be established by a majority of themembers being present and resolutions shall be passed by a majority vote of attending members.
5. In the event the Independent Committee have been consulted by the Board of Directors, it shall decide on the mattersbelow and make recommendations of the contents of such decision with reasons and grounds to the Board of
Directors.
(1) Whether to take or not to take the countermeasures authorized by the Companies Act, other laws or the articles ofincorporation, such as the issuance of share acquisition rights in order to resist a Large-Scale Buyer;(2) Whether to suspend the acquisition of share acquisition rights without consideration, issuance of share acquisitionrights, and other countermeasures based on the withdrawal, etc., of the Large-Scale Acquisition by the LargeScale Buyer;(3) Any other matters that should be decided by the Board of Directors, and that the Board of Directors consulted theIndependent Committee among.
6. The Independent Committee will perform the following matters and will make recommendations of the contents withreasons and grounds to the Board of Directors.
(1) Judging whether or not the Large-Scale Buyer has complied with the Large-Scale Acquisition Rules(2) Deciding the Necessary Information that should be provided by the Large-Scale Buyer to the Board of Directors;(3) Judging whether the Necessary Information provided has sufficient detail and whether the submission of theNecessary Information is complete;(4) Examining and considering the details of the Large-Scale Acquisition of the Large-Scale Buyer;(5) Judging whether or not the Large-Scale Acquisition leads to doing significant harm to corporate value and thecommon interests of shareholders;(6) Deciding whether to extend the Board of Directors Evaluation Period;(7) Other matters, prescribed by the Board of Directors, that the Independent Committee may be entitled to do.
7. The Independent Committee may obtain advice from investment banks, securities companies, lawyers, and otherexternal experts at the cost of the Company.
End- 25 -

Appendix 3
Overview of the Allotment of Share Acquisition Rights Without Contribution
1. Shareholders to be Allotted Share Acquisition Rights Without Contribution
Share acquisition rights will be allotted without payment to shareholders registered on the final shareholder registry asof the record date determined by the Company’s Board of Directors and at a ratio of one right per one ordinary shareof the Company (excluding ordinary shares of the Company held by the Company).
2. Class and Number of Shares Subject to Share Acquisition Rights
The class of shares that is subject to share acquisition rights is the ordinary share of the Company, and the total
number of shares subject to share acquisition rights shall be limited to the total number of issuable shares of theCompany as of the record date determined by the Board of Directors less the number of outstanding ordinary sharesof the Company (excluding ordinary shares of the Company held by the Company). The number of shares to beacquired upon exercise of a share acquisition right shall be separately determined by the Company’s Board of
Directors; provided, however, that necessary adjustments shall be made in case of share split or share consolidation by
the Company.
3. Total Number of Share Acquisition Rights to Be Issued
The total number of share acquisition rights to be issued shall be a number that is separately determined by theCompany’s Board of Directors. The Company’s Board of Directors may make allotment of the share acquisitionrights over multiple times.
4. Value of Property to be Contributed Upon Exercise of Each Share Acquisition Right (Price to be Paid)
The value of property to be contributed upon exercise of each share acquisition right (price to be paid) shall be an
amount of one yen or more determined by the Company’s Board of Directors.
5. Restrictions on Transfer of Share Acquisition Rights
Any acquisition of share acquisition rights by transfer shall be subject to approval of the Company’s Board of
Directors.
6. Conditions for Exercise of Share Acquisition Rights
Conditions for exercise of share acquisition rights is that shareholder shall not belong to a specific shareholder grouphaving 20% or more of the voting rights, excluding the case that the Company’s Board of Directors has given priorconsent. The details shall be separately determined by the Company’s Board of Directors. Monetary consideration
shall not be offered for the acquisition of share acquisition rights owned by a shareholder who is not allowed toexercise the share acquisition rights.
7. Exercise Period, etc., of Share Acquisition Rights
The Company’s Board of Directors shall separately determine the effective date of allotment of share acquisitionrights, exercise period, terms of acquisition, and other necessary matters. Further, terms of acquisition may be set
forth in a way that the Company may acquire the share acquisition rights from shareholders except those who are notallowed to exercise share acquisition rights due to the conditions for exercise provided in 6. above, and may deliver
ordinary shares of the Company at certain ratio per each share acquisition right as separately determined by theCompany’s Board of Directors.
END- 26 -