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: 6328
March 6, 2024
Start date of electronic provision measures: February 27, 2024
To our shareholders:Toshinori Yoshida
Representative Director, President,
Executive Officer & COO
EBARA JITSUGYO CO., LTD.
7-14-1 Ginza, Chuo-ku, Tokyo

Notice of the 85th Annual General Meeting of Shareholders
We are pleased to announce the 85th Annual General Meeting of Shareholders of EBARA JITSUGYO CO., LTD.
(the “Company”), which will be held as described below.
When convening this general meeting of shareholders, the Company takes electronic provision measures for
information contained in the reference documents, etc. for the general meeting of shareholders (matterssubject to electronic provision measures), and posts this information on websites. Please access one of thefollowing websites to review the information.
The Company’s website: https://www.ejk.co.jp/ir/news.html (in Japanese)(Please access the above website and review the Notice of Convocation Annual General Meeting 2024 dated February
27, 2024.)
Website containing materials for the general meeting of shareholders:
https://d.sokai.jp/6328/teiji/ (in Japanese)
Tokyo Stock Exchange website (Listed Company Search):https://www2.jpx.co.jp/tseHpFront/JJK010010Action.do?Show=Show (in Japanese)(Access the TSE website by using the Internet address shown above, enter “EBARA JITSUGYO” in “Issue name(company name)” or the Company’s securities code “6328” in “Code,” and click “Search.” Then, click “Basic
information” and select “Documents for public inspection/PR information.” Under “Filed information available forpublic inspection,” click “Click here for access” under “[Notice of General Shareholders Meeting /Informational
Materials for a General Shareholders Meeting].”)If you will not attend the meeting in person, you may exercise your voting rights via the Internet, etc. or in writing(by mail). In that case, please review the Reference Documents for General Meeting of Shareholders, and voteaccording to the “Information on Exercising Voting Rights” (in Japanese only) by 5:30 p.m. on Monday, March 25,2024 (JST).
1. Date and Time: Tuesday, March 26, 2024, at 10:00 a.m. (JST)(Reception will open at 9:30 a.m.)
2. Venue:
6-14-10 Ginza, Chuo-ku, Tokyo“Sakura,” 2F, Courtyard by Marriott Ginza Tobu Hotel
3. Purpose of the Meeting
Matters to be reported:(1) The Business Report and the Consolidated Financial Statements for the 85th fiscal year (from January 1,
2023 to December 31, 2023), and the results of audits of the Consolidated Financial Statements by the
Financial Auditor and the Audit and Supervisory Committee(2) Report on the Non-consolidated Financial Statements for the 85th fiscal year (from January 1, 2023 to
December 31, 2023)-1-

Matters to be resolved:<Company Proposals>
Proposal No. 1
Appropriation of Surplus
Proposal No. 2
Election of Four Directors (Excluding Audit and Supervisory Committee Members)
Proposal No. 3
Election of Five Directors Who Are Audit and Supervisory Committee Members
Proposal No. 4
Election of One Substitute Director Who Is an Audit and Supervisory Committee Member<Shareholder Proposals>
Proposal No. 5
Revision of Remuneration Amount under Restricted Share-based Remuneration System
Proposal No. 6
Acquisition of Treasury Shares
Proposal No. 7
Amendment to the Articles of Incorporation Concerning the Number of Outside Directors
The outlines regarding the shareholder proposals (Proposal No. 5 to Proposal No. 7) are as stated in the attached“Reference Documents for General Meeting of Shareholders.”-

When attending the meeting in person, please hand in the voting form at the reception desk at the meeting venue.
If revisions to the matters subject to electronic provision measures arise, a notice of the revisions and the details of the matters
before and after the revisions will be posted on the Company’s aforementioned website, the website containing materials for thegeneral meeting of shareholders and the Tokyo Stock Exchange website.
- Matters subject to electronic provision measures in principle are to be checked by accessing one of the aforementioned websites
and paper-based documents will be only delivered to those shareholders who have made a request before the record date fordelivery of paper-based documents. However, for this General Meeting of Shareholders, regardless of any request made fordelivery of paper-based documents, documents stating matters subject to electronic provision measures will be delivered without
exception to shareholders regardless of whether they have made a request for delivery of such documents or not.
Among the matters subject to electronic provision measures, in accordance with the provisions of laws and regulations and Article
15 of the Articles of Incorporation of the Company, the following matters are not provided in the paper-based documents delivered
to shareholders.
(1) “System to Ensure the Properness of Operations and Operational Status of the System” of the Business Report(2) Notes to the Consolidated Financial Statements(3) Notes to the Non-consolidated Financial Statements
Therefore, the Business Report, Consolidated Financial Statements and Non-consolidated Financial Statements provided in such
documents constitute part of the documents included in the scope of audits over the course of the preparation of the accounting
audit report and audit report by the Financial Auditor and the Audit and Supervisory Committee, respectively.

-2-

Highlights of initiatives for corporate governance
1. Capital policy and shareholder returns[Basic Policy]♦ Continuously implement stable dividends with a target consolidated payout ratio of 35%.
♦ As one means of returning profits to shareholders, the Company will flexibly purchase its own shares, taking
into consideration such factors as demand for funds and stock price levels.
[Action in 2023]♦ The Company decided on paying an annual dividend of ¥85 per share, and based on a resolution made at theBoard of Directors Meeting held on November 2, 2022, the Company acquired 253,200 treasury shares at avalue of ¥673 million during the fiscal year ended December 31, 2023. Based on this, the total payout ratio for
the fiscal year ended December 31, 2023, will be 53.8%.
2. Reduction of cross-shareholdings♦ As of December 31, 2022, the Company’s cross-shareholdings were four issues other than unlisted shares,
valued at a market capitalization of ¥1,537 million (equivalent to 8.3% of consolidated net assets as ofDecember 31, 2022). However, as of December 31, 2023, the Company had sold part of two issues on themarket. As a result, cross-shareholdings other than unlisted shares as of December 31, 2023 were four issues,
valued with a market capitalization of ¥2,204 million (equivalent to 10.4% of consolidated net assets as ofDecember 31, 2023) due to a rise in the market value of the shares.
3. Activities by the Nomination Committee and the Remuneration Committee♦ To strengthen the independence and objectivity of the functions of the Board of Directors as well as its
accountability, the Company has established a Nomination Committee and a Remuneration Committee chairedby an Independent Outside Director and with Independent Outside Directors making up the majority ofmembers as voluntary advisory bodies.
♦ The Nomination Committee met seven times in the fiscal year ended December 31, 2023, and consideredmatters including the establishment and operation of succession plans, a review of the skill matrix, a review of
the Independence Standard for Outside Directors, and the composition of the Board of Directors, etc.
♦ The Remuneration Committee met twice in the fiscal year ended December 31, 2023, and considered matters
including the remuneration amount for Directors and other individuals (basic remuneration, performance-linked
remuneration, non-monetary remuneration) and the director remuneration system, etc.

-3-Highlights of initiatives for enhancing sustainability
1. Identifying materiality♦ The Company has identified the following four subjects as materiality in order to actualize its policy in relation
to sustainability and share an awareness of the relevant issues involved in business with stakeholders.
Realizing a sustainable global environment through innovation

Building infrastructure for water and air for the future

Decarbonization

Coexistence with nature

Water infrastructure

Water/resource circulation

Reduction of environmentalload of our business

Clean airProviding trusted solutions
Quality

Resilience

Creating organizations that turn change into growth
SafetySupply chain

Human resource development

Working environment

Corporate culture

Governance

2. Main initiatives for maximizing human capital♦ As part of its efforts to “Creating organizations that turn change into growth,” the Company is actively working
on efforts to maximize human capital. Through a range of initiatives, including promoting diversity byappointing women to management positions and engaging in fair hiring, improving work-styles throughmeasures that encourage people to take paid leave, enhancing the abilities of each individual through theintroduction of stage-appropriate education and training and 360-degree evaluations, and making a commitment
to the employees’ health through regular health checkups and the like, the Company is creating an environment
in which all employees can give full play to their abilities. To monitor the effects of these measures, theCompany has introduced and continually conducts engagement surveys.

-4-

Reference Documents for General Meeting of Shareholders<Company Proposal>
Proposal No. 1
Appropriation of Surplus
The Company pursues a balance between financial soundness, capital efficiency, and profit returns, while aiming to
expand profits by making capital investments for new business development, growth investment such as businessalliances and M&As, and improving profitability, aiming to improve shareholder value. The Company also
recognizes that returning profits to shareholders is a significant management issue.
Regarding year-end dividends for the current fiscal year and other appropriation of surplus, the Company proposes
the following, having given consideration to business performance for the current fiscal year and future businessdevelopment.
1. Year-end dividends(1) Type of dividend property
Cash(2) Allotment of dividend property and their aggregate amount¥42.50 per common share of the Company
Total dividends: ¥508,510,630
As the Company has already paid an interim dividend of ¥42.50 per share, the annual dividend for the fiscal
year will be ¥85 per share.
(3) Effective date of dividends of surplus
March 27, 2024
2. Other appropriation of surplus(1) Item of surplus to be increased and amount of increase
General reserve: ¥1,000,000,000(2) Item of surplus to be decreased and amount of decrease
Retained earnings brought forward: ¥1,000,000,000-5-<Company Proposal>
Proposal No. 2
Election of Four Directors (Excluding Audit and Supervisory Committee Members)
The terms of office of all four Directors (excluding Directors who are Audit and Supervisory Committee Members;
applicable to the rest of this proposal) will expire at the conclusion of this meeting.
In that regard, the Company proposes the election of four Directors.
In addition, the Company’s Audit and Supervisory Committee has judged each candidate to be an appropriate
nomination for the position of Director of the Company for this proposal.
The candidates for Director are as follows:
Candidate No.

Name

Position in the Company

1

Hisashi Suzuki

Representative Director, Chairman & CEO

Reelection

2

Takashi Ishii

Director, Senior Managing Executive Officer, Supervising
Sales

Reelection

3

Shuji Ohno

Director, Managing Executive Officer, Head of Planning &Strategy Office

Reelection

4

Masufumi Shimojo

Executive Officer, General Manager of Administration
Division, General Manager of Legal Affairs Department

New

New Candidate for new Director to be elected
Reelection Candidate for Director to be reelected-6-Candidate
No.

Name
(Date of birth)

Hisashi Suzuki(November 30, 1939)
Reelection
12Career summary, position and responsibility in the Company,
and significant concurrent positions outside the Company
Sept. 1961
Nov. 1983
Dec. 1986
Mar. 1990
Oct. 1991
Dec. 1993
Dec. 1993
Feb. 2000
Apr. 2001
Oct. 2002
Jan. 2007
Jan. 2007
Mar. 2016
Jan. 2017
Apr. 2020

Joined the Company
Director
Managing Director
Senior Managing Director
Supervising Ozone Business Department
Representative Director
Supervising Administration
Representative Director & Vice President
Supervising Environmental Development
Division
Supervising New Business Promotion Office
Representative Director & President
Supervising Sales
Representative Director & Chairman
Representative Director, Chairman & President
Representative Director, Chairman & CEO(current position)

Number of theCompany’s shares
owned

291,767 shares(Reasons for nomination as candidate for Director)
Mr. Hisashi Suzuki has endeavored to enhance medium- to long-term corporate value and create a governance system
as Representative Director & President since 2007, and since he was appointed to the position of Representative
Director, Chairman & CEO in 2020, he has led the way in further driving the Group’s growth strategy forward andstrengthening corporate governance.
Based on his abundant experience concerning the Company’s business and advanced insight concerning corporate
management and sales strategy, he has responded to changes in the management environment and endeavored toenhance sustained enhancement of corporate value. Therefore, the Company proposes his reelection as Director.
Mar. 1996
Joined the Company
Jan. 2005
General Manager of Environmental Equipment
Sales Department II
July 2009
General Manager of Wind & Water Power
DivisionJan. 2012
Executive Officer
Jan. 2013
Senior Executive Officer
Takashi Ishii
Jan. 2013
General Manager of Environmental Equipment(February 10, 1962)
Division
24,856 sharesJan. 2017Managing Executive Officer
Reelection
Mar. 2019
Director (current position)
Mar. 2019
Supervising Sales as deputy
Apr. 2020
Supervising Sales (current position)
Mar. 2022
Senior Managing Executive Officer (current
position)
Sept. 2022
General Manager of Energy-Saving Equipment
Business Division(Reasons for nomination as candidate for Director)
Mr. Takashi Ishii has long been engaged in wind and water powered cooling device-related business, and driven thegrowth of the business as the supervisor of the business. He was appointed to the position of Supervising Sales in 2020,and since he was appointed, he has led company-wide efforts for sales activities and promotion. He also has actively
promoted the creation of a risk management system for quality, etc. on the Project Review Committee for responding tobusiness risks, exhibiting strong leadership and fulfilling his role contributing to the sustained enhancement of corporate
value.
Based on the skills and knowhow including corporate management, sales and management strategy obtained throughhis experience to date, he has promoted the management vision and Medium- to Long-term Management Plan, and is
expected to contribute to further enhancement of sustained corporate value of the Group in future. Therefore, theCompany proposes his reelection as Director.

-7-

Candidate
No.

Name
(Date of birth)

Shuji Ohno
(June 9, 1967)
Reelection

3

4Notes:

Career summary, position and responsibility in the Company,
and significant concurrent positions outside the Company
Oct. 1996
Apr. 2002
Jan. 2007
Jan. 2013
Jan. 2013
July 2015
July 2016

Joined the Company
General Manager of Accounting Department
Executive Officer
Senior Executive Officer
General Manager of Administration Division
Head of President’s Office
Head of Planning & Strategy Office (current
position)
Director (current position)
Managing Executive Officer (current position)

Number of theCompany’s shares
owned

31,067 sharesMar. 2020
Mar. 2020(Reasons for nomination as candidate for Director)
Mr. Shuji Ohno has been involved in operations such as accounting and finance, corporate planning and public relations
since joining the Company, and has abundant experience and knowledge in these areas. He accurately understands
management issues, and also engaged in the formulation of the Medium- to Long-term Management Plan designed
around initiatives including accelerating the creation of new businesses and development of new products, and has
performed a central function in the drafting of the entire Group’s management strategy.
Based on the skills and knowhow including sales and management strategy as well as finance and accounting obtained
through his experience to date, he is expected to contribute to further enhancement of the Group’s sustained corporate
value. Therefore, the Company proposes his reelection as Director.
Feb. 2002
Joined the Company
Jan. 2013
General Manager of Accounting Department
Feb. 2018
Deputy General Manager of Administration
Masufumi Shimojo
Division(March 29, 1971)
6,144 sharesAug. 2021
General Manager of Administration Division(current position)
New
Apr. 2022
Executive Officer (current position)
Apr. 2022
General Manager of Legal Affairs Department(current position)(Reasons for nomination as candidate for Director)
Mr. Masufumi Shimojo has served in key positions in the Company’s corporate divisions, such as accounting andfinance and legal affairs, for many years since joining the Company, and has supported the management of the Groupby leveraging his wide network of contacts both inside and outside the Company as well as his abundant practicalknowledge and experience. He currently serves not only as the supervisor for the Company’s administration divisions,but also participates in measures for strengthening the foundations of management including sustainability andsuccession plans, fulfilling an important role in contributing to the sustained enhancement of corporate value.
He possesses overall skills and knowhow including finance and accounting, legal, compliance and risk management at
the Company through his knowledge to date, and is expected to contribute as an essential human resource to further
enhancement of sustained corporate value of the Group in future. Therefore, the Company proposes his election as a
new Director.
1. There is no special interest between any of the candidates for Director and the Company.
2. The number of the Company’s shares owned by each candidate is the current number of shares held as of the end of the
fiscal year under review (December 31, 2023). In addition, the number presented includes shareholdings of the candidatein the Company’s officer stock ownership or employee stock ownership.
3. The Company has concluded an officer liability insurance policy pursuant to the provision of Article 430-3, paragraph (1)of the Companies Act with an insurance company, and damages in the event of the insured including the Company’s officers
being liable for damages arising from operations are covered by the insurance. Each of the candidates will be insured under
the insurance policy if elected and appointed as Directors. The Company bears the entire cost of insurance premiums. The
Company also plans to renew the insurance policy with the same conditions at the time of the next renewal.

-8-

<Company Proposal>
Proposal No. 3
Election of Five Directors Who Are Audit and Supervisory Committee Members
The terms of office of all five Directors who are Audit and Supervisory Committee Members will expire at theconclusion of this meeting.
In that regard, the Company proposes the election of five Directors who are Audit and Supervisory Committee
Members.
This proposal has been approved by the Audit and Supervisory Committee.
The candidates for Director who are Audit and Supervisory Committee Members are as follows:
Candidate No.

Name

Current Position in the Company

Candidate
Attributes

1

Hitoshi Kobayashi

Director (Full-time Audit and Supervisory Committee
Member)Reelection

2

Kazuo Ishibashi

Outside Director (Audit and Supervisory Committee Member)

OutsideIndependent
Reelection

3

Aki Shimizu

Outside Director (Audit and Supervisory Committee Member)

OutsideIndependent
Reelection

4

Tomoki Kitagawa–

OutsideIndependent
New

5

Atsuko Sakamoto–

OutsideIndependent
New

Outside Candidate for Outside Director
Independent Candidate for independent officer
New Candidate for new Director to be elected
Reelection Candidate for Director to be reelected-9-Candidate
No.

Name
(Date of birth)

Career summary, position and responsibility in the Company,
and significant concurrent positions outside the Company
Mar. 1978
Apr. 1996

1

Number of theCompany’s shares
ownedJoined the Company
General Manager of General Affairs
Department
Jan. 2007
Executive Officer
May 2007General Manager of Legal Affairs Department
Mar. 2008
Director
Hitoshi Kobayashi(February 25, 1958)
Mar. 2008
General Manager of Administration Division
29,466 sharesJan. 2013
Senior Executive Officer
Reelection
Jan. 2013
General Manager of Measurement Equipment
and Medical Division
Jan. 2015
General Manager of Engineering Division
Jan. 2022
General Manager of Audit Office
Mar. 2022
Director (Full-time Audit and Supervisory
Committee Member) (current position)(Reasons for nomination as candidate for Director who is an Audit and Supervisory Committee Member)
Mr. Hitoshi Kobayashi has served in key positions not only in the Company’s corporate divisions such as General
Affairs, Legal Affairs and the Business Planning Office, but also business divisions playing a role in the environmental
business that the Company is focusing upon, and has abundant experience such as building internal controls required oflisted companies for ensuring the appropriateness of financial reporting. In addition, he currently handles the role ofmonitoring and supervising the Company’s management as Director (Full-time Audit and Supervisory Committee
Member).
He is expected to continue to supervise management as a Director who is an Audit and Supervisory Committee Member
based on skills and knowhow including production/technology/quality/R&D, legal/compliance obtained through his
experience to date. For this reason, the Company proposes his reelection as Director who is an Audit and Supervisory
Committee Member.

- 10 -

Candidate
No.

Name
(Date of birth)

Career summary, position and responsibility in the Company,
and significant concurrent positions outside the Company
Nov. 1975

2

Number of theCompany’s shares
ownedJoined Tohmatsu Awoki & Co. (now Deloitte
Touche Tohmatsu LLC)
Aug. 1980
Registered as a Certified Public Accountant
July 1988
Partner, Tohmatsu Awoki & Co. (now Deloitte
Touche Tohmatsu LLC)
Aug. 1989
Assigned to New York Office of Touche Ross
& Co. (now Deloitte&Touche LLP), Executive
Partner of New York Regional Operations
Nov. 2007
Headquarters Auditor, Tohmatsu Awoki & Co.
(now Deloitte Touche Tohmatsu LLC)
Kazuo Ishibashi
Nov. 2014
Chairman of Audit Committee, Deloitte(November 5, 1952)
Tohmatsu LLC
Jan. 2018
Managing Partner, Kazuo Ishibashi Certified
0 shares
OutsidePublic Accountant’s Office (current position)
Independent
June 2018
Auditor, the Amada Foundation (current
Reelection
position)
June 2019
Auditor, the Salt Industry Center of Japan(current position)
Mar. 2020
Outside Director of the Company (Audit andSupervisory Committee Member) (current
position)Mar. 2023
Auditor, Sugino Gakuen (current position)<Significant concurrent positions outside the Company>
Managing Partner, Kazuo Ishibashi Certified Public
Accountant’s Office(Reasons for nomination as candidate for Outside Director who is an Audit and Supervisory Committee Member andoverview of expected roles)
Mr. Kazuo Ishibashi has abundant experience and advanced knowledge in his specialized area accumulated as a
Certified Public Accountant at a globally operating, major audit firm, taking charge of the audit of a large company formany years. In particular, he actively comments on areas such as auditing, accounting and risk management, stimulates
discussion in the Board of Directors and contributes to the improvement of effectiveness of the Company’s Board of
Directors, in addition to actively offering suggestions on the Company’s corporate governance as chair of theRemuneration Committee and as a member of the Nomination Committee.
He can be expected to supervise management from an objective viewpoint independent of executives as an Outside
Director who is an Audit and Supervisory Committee Member based on up-to-date skills and knowhow including not
only audit/finance/accounting, but also human resource development, compliance and capital policy obtained throughhis experience to date and current work involved in operations as a Certified Public Accountant. For this reason, theCompany proposes his reelection as Outside Director who is an Audit and Supervisory Committee Member.
Although Mr. Ishibashi has not been directly involved in corporate management in ways other than being an outside
officer, he has overseen management meetings, etc. as an Auditor, etc. of a large auditing firm for many years and has
experience of being involved in organizational management. The Company has determined that he will appropriately
fulfill his duties as Outside Director for the reasons above.

- 11 -

Candidate
No.

Name
(Date of birth)

Career summary, position and responsibility in the Company,
and significant concurrent positions outside the Company
Nov. 2004
Oct. 2006
Apr. 20093

Number of theCompany’s shares
owned

Passed the bar exam
Assistant Judge, Saitama District Court
Prosecutor attached to the Litigation
Department, Sapporo Legal Affairs Bureau
Apr. 2011
Assistant Judge, Yokohama Family Court
Apr. 2012
Assistant Judge, Yokohama District Court
Apr. 2015
Assistant Judge of Matsudo Branch, Chiba
District and Family Court
Oct. 2016
Judge, Chiba District and Family Court
Aki Shimizu(June 18, 1977)
Jan. 2018
Registered as an attorney at law
Jan. 2018
Joined Seiwa Meitetsu Law Office (now
0 shares
OutsideMeitetsu Law Offices)
IndependentMar. 2022
Outside Director of the Company (Audit andReelection
Supervisory Committee Member) (current
position)Mar. 2022
Outside Director (Audit and Supervisory
Committee Member), ISB Corporation (current
position)
Oct. 2022
Partner, Meitetsu Law Offices (current position)<Significant concurrent positions outside the Company>
Outside Director (Audit and Supervisory Committee Member),
ISB Corporation(Reasons for nomination as candidate for Outside Director who is an Audit and Supervisory Committee Member andoverview of expected roles)
Ms. Aki Shimizu has served as a judge resolving general civil cases, labor cases and administrative cases, etc., andcurrently works as an attorney. She has advanced knowledge and abundant experience in legal affairs in general,
including corporate law.
She can be expected to supervise management from an objective viewpoint independent of executives as an Outside
Director who is an Audit and Supervisory Committee Member such as providing expert suggestions on strengthening
the supervisory functions of the Company’s Board of Directors, strengthening compliance management and promoting
diversity from a position independent from management by utilizing the abundant experience and advanced insight andexpertise in the legal field based on skills and knowhow including legal affairs/compliance and labor/human resource
development. For this reason, the Company proposes her reelection as Outside Director who is an Audit andSupervisory Committee Member.
Although Ms. Shimizu has not been directly involved in corporate management in ways other than being an outside
director, the Company has determined that she will appropriately fulfill her duties as Outside Director for the reasons
above.

- 12 -

Candidate
No.

Name
(Date of birth)

Career summary, position and responsibility in the Company,
and significant concurrent positions outside the Company
Apr. 1982
Apr. 2014

4

Number of theCompany’s shares
ownedJoined HAZAMA CORPORATION
Deputy Director of Metropolitan Area Building
Branch and General Manager of Administration
Division, HAZAMA ANDO CORPORATION
June 2015
General Manager of CSR Promotion
Department, President Office, HAZAMAANDO CORPORATION
Tomoki Kitagawa
Apr. 2017
Executive Officer, Deputy Director of President(September 7, 1959)
Office and General Manager of CSR Promotion
Department, HAZAMA ANDO
0 shares
OutsideCORPORATION
Independent
Apr. 2018
Executive Officer and Director of President
New
Office, HAZAMA ANDO CORPORATION
June 2019
Audit and Supervisory Board Member,
HAZAMA ANDO CORPORATION
June 2023
Corporate Advisor, HAZAMA ANDOCORPORATION (current position)<Significant concurrent positions outside the Company>
Corporate Advisor, HAZAMA ANDO CORPORATION(Reasons for nomination as candidate for Outside Director who is an Audit and Supervisory Committee Member andoverview of expected roles)
Mr. Tomoki Kitagawa has advanced insight and a wide range of knowledge on areas such as CSR, group governance,internal audits and compliance, and risk management cultivated through work experience accumulated as the supervisor
for the corporate planning, financial, administration, CSR and other divisions at a globally operating general
construction corporation.
He can be expected to supervise management from an objective viewpoint independent of executives such as providing
suggestions on strengthening the supervisory functions of the Company’s Board of Directors and toward strengthening
the systems for group governance, compliance, risk management, etc., based on skills and knowhow including not only
audit/finance/accounting, but also sales and management strategy through his work experience and knowledge
accumulated to date. For this reason, the Company proposes his election as a new Outside Director who is an Audit andSupervisory Committee Member.

- 13 -

Candidate
No.

Name
(Date of birth)

Career summary, position and responsibility in the Company,
and significant concurrent positions outside the Company

Number of theCompany’s shares
owned

Apr. 1983
Apr. 1991
Feb. 1995

5

Notes:

Joined Japan Airlines Co., Ltd.
Joined BASF Japan Ltd.
CEO, Prime (now Prime Time, Inc.) (current
position)
Apr. 2004
Member of Independent Administrative
Institution Evaluation Committee, Ministry of
Economy, Trade and Industry
Atsuko Sakamoto
Apr. 2015
Expert Member of Open Hearing on Business(October 15, 1962)
Performance Evaluation, Japan External Trade0 shares
OutsideOrganization (JETRO)
Independent
Apr. 2018
Expert Member on Management, Japan
New
External Trade Organization (JETRO) (current
position)
June 2022
External Director, SUN-WA TECHNOSCORPORATION (current position)<Significant concurrent positions outside the Company>
CEO, Prime Time, Inc.
External Director, SUN-WA TECHNOS CORPORATION(Reasons for nomination as candidate for Outside Director who is an Audit and Supervisory Committee Member andoverview of expected roles)
Ms. Atsuko Sakamoto has abundant experience and advanced insight on diversity and cultivating next-generation
leaders in addition to corporate management. She has also maintained a proactive stance toward external activities as
exemplified by her appointment to multiple positions, including as Expert Member on Management at Japan External
Trade Organization (JETRO), and provides a wide range of suggestions on areas such as human resource cultivationand career development.
She can be expected to supervise management from an objective viewpoint independent of executives as an Outside
Director who is an Audit and Supervisory Committee Member such as providing expert suggestions from an external
perspective on strengthening the supervisory functions of the Company’s Board of Directors, promoting diversity andmaximizing human capital based on skills and knowhow including corporate management and labor/human resource
development through her experience to date. For this reason, the Company proposes her election as a new Outside
Director who is an Audit and Supervisory Committee Member.
1. There is no special interest between any of the candidates for Outside Director who are Audit and Supervisory Committee
Members and the Company.
2. The number of the Company’s shares owned by each candidate is the current number of shares held as of the end of the
fiscal year under review (December 31, 2023). In addition, the number presented includes shareholdings of the candidatein the Company’s officer stock ownership.
3. Mr. Kazuo Ishibashi and Ms. Aki Shimizu are Outside Directors of the Company, and their respective terms of office are as
follows as of the conclusion of this meeting.
Kazuo Ishibashi: 4 years, Aki Shimizu: 2 years
4. The Company has concluded agreements with Mr. Kazuo Ishibashi and Ms. Aki Shimizu limiting liability for damages
under Article 423, paragraph (1) of the Companies Act pursuant to Article 427, paragraph (1) of the Companies Act, andthe limit on damages pursuant to the agreement is the minimum liability amount specified in Article 425, paragraph (1) of
the Companies Act. The Company intends to renew the agreements with the same content if the reappointment of the twocandidates is approved. Furthermore, the Company intends to conclude a similar agreement limiting liability with Mr.
Tomoki Kitagawa and Ms. Atsuko Sakamoto if the appointment of the two candidates is approved.
5. The Company has concluded an officer liability insurance policy pursuant to the provision of Article 430-3, paragraph (1)of the Companies Act with an insurance company, and damages in the event of the insured including the Company’s officers
being liable for damages arising from operations are covered by the insurance. Each of the candidates will be insured under
the insurance policy if elected and appointed as Directors who are Audit and Supervisory Committee Members. The
Company bears the entire cost of insurance premiums. The Company also plans to renew the insurance policy with the same
conditions at the time of the next renewal.
6. The Company has provided notification that Mr. Kazuo Ishibashi and Ms. Aki Shimizu are independent officers pursuant
to the provisions set forth by the Tokyo Stock Exchange. The Company intends to continue to treat the two candidates as
independent officers if their reappointment is approved.
Furthermore, the Company intends to provide notification to the Tokyo Stock Exchange on Mr. Tomoki Kitagawa and Ms.
Atsuko Sakamoto as independent officers.

- 14 -

7. Matters regarding the unfair execution of business at a company where a candidate for Outside Director has held office inthe past five years as a director, executive officer, or company auditor which occurred during their term of office are as
follows:
ISB Corporation (hereinafter referred to as “ISB”), where Ms. Aki Shimizu has served as an Outside Director and Audit
and Supervisory Committee Member since March 2022, was informed by tax authorities that inappropriate transactions,etc., had been conducted over the past several years by officers of Three-s inc., a consolidated subsidiary of ISB, and of
infix & Co., which was a consolidated subsidiary of ISB prior to its absorption through a merger with Three-s inc. in 2019.
She had been unaware of these inappropriate transactions, etc. until the company was informed of their existence by tax
authorities. After such matters were revealed, she requested an accurate investigation and report on the facts of the matterand assumed the position as a member of the special investigation committee established with the aim of accurately
identifying the facts of the matter and considering measures to prevent recurrence, etc. as an Outside Director who is amember of the Audit and Supervisory Committee. She also identified issues with internal controls and expressed her
opinions on suggestions for measures to prevent recurrence while analyzing causes and considering measures to prevent
recurrence.

- 15 -

(Reference)
Skill Matrix
The Company has achieved growth by contributing to the development of infrastructure for the sustainability ofsociety. In addition, as climate change and other environmental and social issues are brought to the forefront, the rolethat the Company must fulfill is gaining importance.
In this pursuit, the Company believes that in order for the Board of Directors to appropriately fulfill its own decisionmaking function and its function of management oversight, the following skill matrix is presented to specify the
expected roles and possessed skills and experience of each director candidate. In addition, consideration is given not
only to a candidate’s power of judgment, expertise and knowledge required of them, but also their high sense of
ethics.
The nominations of the candidates for Director were decided by the Board of Directors after it received advice andsuggestions from the Nomination Committee, after said committee, which is chaired by an Independent Outside
Director and whose members are made up by a majority of Independent Outside Directors, deliberated the matter.
Areas of specialization and experience

Corporate
management

Sales andmanagement
strategy

Production andtechnology
Quality
Research anddevelopment

Finance andaccounting

Hisashi Suzuki

●

●

●

●

Takashi Ishii

●

●

●

●

●

Directors

Name

Shuji Ohno

Directors who are Audit andSupervisory Committee Members
Notes:●

Hitoshi Kobayashi

Aki Shimizu●

Atsuko Sakamoto

●

●

●

●
●

●

Tomoki Kitagawa●●

Kazuo Ishibashi

OutsideIndependence●●

Masufumi Shimojo

Labor
Legal,
Human resource compliance, risk
development
management

●

●

●

●

●

●

●

●
●

●

●

1. The above table does not represent all of the knowledge and experience of each person.
2. The areas of specialization and experience in the Skill Matrix are defined as follows.
[Corporate management]
・Having experience as a management executive of a listed company or equivalent organization, and the skill to makedecisions and execute business management for the enhancement of medium- to long-term corporate value
・Experience as a supervising officer, etc. negotiating with both internal and external parties from a company-wide
perspective[Sales and management strategy]
・Having the skill to draft management visions and medium- to long-term management plans from a medium- to long-term
perspective, monitor progress, and formulate action to take as needed
・Experience working in management strategy, corporate planning divisions and/or experience as an officer, etc.
[Production and technology, Quality, Research and development]
・Having the skill of making decisions in the area of production and technology and research and development, such as
capital investment, production planning, allocation of resources such as funds and personnel, and formulation of researchand development themes, in addition to maintaining and improving quality of products and services, and implementing
quality improvements for safety and health or environmental preservation in production facilities, etc.
・Experience working in production and technology, quality, research and development divisions and/or experience as adirector or other officer[Finance and accounting]・Having knowledge and experience in finance and accounting, and having the skill to monitor and report management
issues and perform disclosure in an appropriate way- 16 -

・Experience working in finance and accounting divisions and/or experience as an officer, etc.
[Labor, Human resource development]
・Having the skill of securing diverse human resources, supporting the growth of each person and promoting humanresource strategy such as work styles based on the approach that human resources are the cornerstone of businessactivities
・Experience working in human resource divisions and/or experience as an officer, etc.
[Legal, compliance, risk management]
・The skill of having a perspective of legal compliance while building systems and raising awareness of various risks that
could arise in business activities
・Experience working in legal and compliance divisions and/or experience as a director or other officer- 17 -

(Reference)
Independence Standard for Outside Directors
EBARA JITSUGYO CO., LTD. (hereinafter referred to as “the Company”) has specified the following independence
standards for Outside Directors in the Company, and if an Outside Director is found to not fall under any of thefollowing items, the Outside Director is judged to have adequate independence for the Company.
1.

A former employee (Note 1) of the Company or a consolidated subsidiary of the Company (hereinafter referred
to as “the Group”)

2.

A person below who is currently related to the Group or has been in the past three years:(1) An executive of a company, etc. falling under any of the following:(i) A major customer to which sales account for more than 2% of the consolidated net sales of the Group(ii) A major supplier from which purchases account for more than 2% of the consolidated net sales of the
supplier(iii) A financial institution from which outstanding borrowings exceed 2% of the Group’s consolidated
total assets(2) A shareholder holding 10% or more of the total voting rights in the Company, or an executive thereof if
the shareholder is an organization such as a corporation(3) A person who was directly engaged in accounting audit operations pertaining to the Company(4) A person providing professional services who receives a large amount of consideration (Note 2)(5) A recipient of a large donation, financing or credit guarantee (Note 3)

3.

A spouse, relative within the second degree of kinship or person living with a person falling under any of theabove items

4.

A person who has served as Outside Director of the Company for a total of over 12 years (Note 4)(Note 1) Former employee refers to a Director (excluding Outside Directors), company auditor (excluding outsidecompany auditors), executive officer, other similar person or employee (hereinafter referred to as“executive”) of the Group or person who has served as an executive of the Group in the past ten years.
(Note 2) A person providing professional services such as an attorney, a certified public accountant, a certified
public tax accountant, a patent attorney, a judicial scrivener or a management consultant receiving morethan ¥10 million (excluding tax) per year in consideration other than officer remuneration from the Group,
or if the party is an organization such as a corporation, executives and persons belonging to anorganization whose consideration from the Group exceeds 2% of the organization’s consolidated net sales.
(Note 3) A person who has received donations, financing or credit guarantees exceeding ¥10 million per year fromthe Group, or an executive thereof if the recipient is an organization such as a corporation.
(Note 4) This standard shall not apply to persons who have already been appointed as an Outside Director of theCompany until the end of their term of office.

- 18 -

<Company Proposal>
Proposal No. 4
Election of One Substitute Director Who Is an Audit and Supervisory Committee Member
In case of a shortage in the number of Directors who are Audit and Supervisory Committee Members specified bylaw, the Company proposes the election of one substitute Director who is an Audit and Supervisory Committee
Member.
This proposal has been approved by the Audit and Supervisory Committee.
The candidate for substitute Director who is an Audit and Supervisory Committee Member is as follows:
Name(Date of birth)

Career summary, position and responsibility in the Company,
and significant concurrent positions outside the Company

Number of theCompany’s shares
owned

Apr. 1993

Registered as an attorney at law
Joined Hirayama, Suzuki and Urabe Law Office
0 shares(now Hirayama, Fukushima and Suzuki Law
Office) (current position)(Reasons for nomination as candidate for substitute Outside Director who is an Audit and Supervisory Committee Member andoverview of expected roles)
Mr. Akihiro Fukushima has expert knowledge and experience as an attorney, and the Company proposes him as a candidate for
substitute Outside Director who is an Audit and Supervisory Committee Member because it is of the view that he will reflect his
perspective from an outside independent position in auditing and that the Company’s Audit and Supervisory Committee will be
rejuvenated. Although Mr. Fukushima does not have experience of direct involvement in corporate management, the Company has
determined that he will appropriately fulfill his duties as Outside Director for the reasons above.
Akihiro Fukushima(June 15, 1961)

Notes:

1. There is no special interest between the candidate and the Company.
2. Mr. Akihiro Fukushima is a candidate for substitute Outside Director.
3. If Mr. Akihiro Fukushima is appointed as a Director who is an Audit and Supervisory Committee Member, the Company
intends to conclude an agreement with him limiting liability for damages under Article 423, paragraph (1) of the Companies
Act pursuant to Article 427, paragraph (1) of the Companies Act. The limit on damages pursuant to the agreement will be
the minimum liability amount specified in Article 425, paragraph (1) of the Companies Act.
4. The Company has concluded an officer liability insurance policy pursuant to the provision of Article 430-3, paragraph (1)of the Companies Act with an insurance company, and damages in the event of the insured including the Company’s officers
being liable for damages arising from operations are covered by the insurance. Mr. Akihiro Fukushima will be insured under
the insurance policy if appointed as a Director who is an Audit and Supervisory Committee Member.
5. The Company intends to provide notification on Mr. Akihiro Fukushima as an independent officer if he is appointed as a
Director who is an Audit and Supervisory Committee Member.

- 19 -

Proposal No. 5 to Proposal No. 7 are proposals by one shareholder (hereinafter referred to as “proposing
shareholder”).
The outline of the proposal and reason for the proposal submitted are translated into English in this document
and stated without changes to the original Japanese text.
<Shareholder Proposal>
Proposal No. 5
Revision of Remuneration Amount under Restricted Share-based Remuneration System(1) Outline of the Proposal
It is proposed that, in order to grant a monetary remuneration claim for granting restricted shares, theremuneration amount for Directors eligible for the Restricted Share-based Remuneration System (hereinafterreferred to as “the System”) (excluding Outside Directors and Directors who are Audit and Supervisory
Committee Members) is set to within a total amount of ¥280 million per year apart from the annual
remuneration amount of basic remuneration, and that the maximum number of shares to be granted is 112,000
shares, and also that the annual remuneration amount for Outside Directors and Directors who are Audit andSupervisory Committee Members who are eligible for the System for granting a monetary remuneration claim
for granting restricted shares is set to ¥60 million apart from the annual remuneration amount of basic
remuneration, and that the maximum number of shares granted is 24,000 shares. It is proposed that the specifictiming of payment and distribution is to be determined in the Board of Directors.
(2) Reasons for the Proposal
The Company resolved to pay up to a total amount of ¥35 million per year as remuneration for granting
restricted shares to Directors (excluding Outside Directors and Directors who are Audit and Supervisory
Committee Members) in the Annual General Meeting of Shareholders held in March 2021, but it cannot be
considered that value is sufficiently shared between Directors and shareholders, which is the objective of the
Restricted Share-based Remuneration System, because the amount is extremely small and Outside Directors
and Directors who are Audit and Supervisory Committee Members are excluded from the Eligible Directors.
Looking at the results of granting by the Company in the 84th fiscal year (from January 1, 2022 to December
31, 2022), in contrast to fixed remuneration of ¥94 million, restricted share-based remuneration was equivalentto ¥26 million, which is only 27.6% of the amount of fixed remuneration. At this pace, it would take 11 years
until this reaches three times the amount of fixed remuneration, which is a guideline for effective share-based
remuneration for sharing value between Directors and shareholders. Due to the purpose being to share value
between Directors and shareholders, restricted share-based remuneration has no meaning unless granted while
in office, and as it cannot be assumed that the term of office will be approximately 11 years, it is necessary to
grant a certain amount within a shorter period.
Furthermore, the Company should establish shareholding guidelines pertaining to the restricted share-based
remuneration system, specify that the target for acquisition of the Company’s shares while an officer is in officeis equivalent to three times the amount of fixed basic remuneration, and disclose the status of acquisition of theCompany’s shares by individual officers in the Corporate Governance Report submitted to the Tokyo Stock
Exchange by the Company.

- 20 -

Opinion of the Company’s Board of Directors
The Board of Directors opposes this Shareholder Proposal.
The Company’s basic policy on remuneration for the Company’s Directors is to have a remuneration system that
promotes the sharing of value with shareholders, thereby enabling the recruitment and retention of excellent humanresources who can implement the Company’s management philosophy while suitably functioning as an incentive tosustainably improve the Company’s corporate value, and to determine an appropriate level of remuneration for
Directors based on their respective responsibilities.
At the Annual General Meeting of Shareholders held in March 2021, the introduction of a restricted share-based
remuneration system was approved with the aim of providing Directors (excluding Outside Directors and Directors
who are Audit and Supervisory Committee Members) an incentive to continuously improve the Company’s corporate
value and to further promote shared value with shareholders. When introducing the system, the overall remunerationlevel, the percentage of each type of remuneration, etc. were analyzed by referring to officer remuneration survey
data provided by an external research organization, and consideration was given to the suitability of introducing thesystem. Furthermore, the Company has established the Remuneration Committee chaired by an Independent Outside
Director and with Independent Outside Directors making up the majority of members as a voluntary advisory bodyto the Board of Directors in order to ensure objectivity and fairness concerning the remuneration of Directors, andthe introduction of the system was submitted to the General Meeting of Shareholders after undergoing deliberationin the Remuneration Committee.
Based on the above determination process, the current remuneration for the Company’s Directors is made up of fixedbasic remuneration determined according to position and duties, performance-linked remuneration for the purposeof increasing responsibility and consciousness of achievement of fiscal year performance targets, and restricted sharebased remuneration providing an incentive for continuously increasing corporate value.
The fixed basic remuneration is calculated based on the required duties and responsibilities, etc., and theperformance-linked remuneration is calculated based on a comprehensive assessment of the achievement rates, etc.
of the respective management indicators, including consolidated operating profit, consolidated net profit, along withconsolidated ROE, etc., that are set as the performance items in order to clearly express the Group’s businessperformance for the fiscal year. Moreover, the total amount of monetary remuneration paid for granting restricted
share-based remuneration is set to within ¥35 million per year as an amount that is adequate for achieving the above
objective and considering the current level of Director remuneration while considering the balance with fixed basic
remuneration and performance-linked remuneration, with up to 19,200 of the Company’s common shares being
delivered as restricted shares (the maximum number may be reasonably adjusted in the event of a share split, etc.),
and this was approved at the Annual General Meeting of Shareholders held in March 2021. The Company believes
that such a balanced remuneration system supports the recruitment and retention of excellent human resources who
can implement the Company’s management philosophy and meet the expectations of its shareholders and a wide
range of stakeholders, leading to continuous improvement of corporate value.
The Remuneration Committee periodically deliberates on the appropriateness of the Company’s remuneration systemdescribed above, and reports to the Board of Directors. The Remuneration Committee met twice in the fiscal year
ended December 31, 2023, and its evaluation was that the current remuneration system is appropriate in view of thestate of directors’ execution of their duties, and the Board of Directors also grasped the details of this evaluation.
Meanwhile, under such a remuneration system, the shareholder proposal to set the remuneration amount for Directors
eligible for the restricted share-based remuneration system to within a total amount of ¥280 million per year
(maximum number of shares to be granted of 112,000 shares) lacks a balance between the fixed basic remunerationand the performance-linked remuneration and deviates considerably from the Company’s basic policy for Director
remuneration, and it can be considered as an excessive remuneration amount.
Furthermore, this shareholder proposal indicates that this restricted share-based remuneration system would be
introduced for all Directors including Directors who are Audit and Supervisory Committee Members, but theCompany, after giving consideration based on the contents of the report from the Remuneration Committee, has set
a policy to not include Directors who are Audit and Supervisory Committee Members within the scope of thoseeligible for restricted share-based remuneration because they are expected to audit the execution of operations by
Directors and strengthen management supervisory functions of the Board of Directors.
The Board of Directors therefore opposes this Shareholder Proposal.

- 21 -

<Shareholder Proposal>
Proposal No. 6
Acquisition of Treasury Shares(1) Outline of the Proposal
It is proposed that the Company acquires a total of 1,293,000 of the Company’s common shares in exchange
for cash with a total acquisition value of up to ¥3,879,000,000 within one year of the conclusion of this Annual
General Meeting of Shareholders pursuant to the provision of Article 156, Paragraph (1) of the Companies Act.
(2) Reasons for the Proposal
Irrespective of the fact that the Company’s business has displayed favorable performance, the Company’s shareprice remained stagnant during 2023. It could be said that the market has assessed the Company’s measures tobe inadequate. The Company holds approximately ¥20,000 million in cash and cross-shareholdings andmaintains a state of inadequate capital efficiency. As such, it is believed that steps should be taken to acquireapproximately 10% of the Company’s total number of issued shares (excluding treasury shares) to further
expand shareholder returns and increase capital efficiency.

- 22 -

Opinion of the Company’s Board of Directors
The Board of Directors opposes this Shareholder Proposal.
The Company strives to expand profits by making capital investments for new business development, making growthinvestment such as business alliances and M&A, and improving profitability, aiming to continuously improve
corporate value while also pursuing a balance between financial soundness, capital efficiency, and profit returns.
Regarding growth investment, as outlined in the EJ2024 Medium-term Management Plan, the Company plans toallocate a total of between ¥2,500 million and ¥4,500 million to growth investment, which includes between ¥1,500
million and ¥2,000 million for capital investment and between ¥1,000 million and ¥2,500 for M&A, etc. The
Company considers the return of profits to shareholders to be an important management issue, and our basic policy
for the distribution of profits is to continue to provide stable dividends with a target consolidated payout ratio of 35%,
and to flexibly acquire treasury shares with consideration for aspects such as funding needs and share price as one
means of providing returns.
Based on this basic policy, the Company is continuously engaged in improving and strengthening returns toshareholders as shown in the table below.
Meanwhile, the upper limit of ¥3,879 million set for the acquisition of treasury shares based on this shareholder
proposal is well above the ¥3,150 million consolidated profit forecast for the fiscal year ending December 31, 2024,
and is also an excessive level when considering the liquidity of the Company’s shares. If such a proposal were to beapproved, the source of funding for growth investment would be impaired, and this may stagnate the Company’s
medium- to long-term growth and improvement of corporate value, and it is believed that this would damage theinterests of shareholders as a result.
The Board of Directors therefore opposes this Shareholder Proposal.
(Reference) Status of shareholder returns
Fiscal year ended
December 31, 2020

Fiscal year ended
December 31, 2021

Fiscal year ended
December 31, 2022

¥55

¥85

¥85

Acquisition oftreasury shares¥570 million¥1,000 million¥320 million

Payout ratio

29.8%

33.6%

48.0%

(Note 2)

Total payout ratio

53.9%

65.3%

63.1%

(Note 2)

Classification
Annual dividend per
share

Notes:

Fiscal year ended
December 31, 2023

Fiscal year ending
December 31, 2024

(Note 2)¥85

(Note 3)¥95¥670 million(Note 4)–32.3%

(Note 3)

36.0%

53.8%

(Note 4)–

1. A 1:2 share split was conducted on July 1, 2021, and the values of the annual dividend per share for the fiscal year ended
December 31, 2021 and earlier are also shown based on the value after the share split.
2. The annual dividend per share for the fiscal year ended December 31, 2023 is subject to approval of the Company proposal
at this Annual General Meeting of Shareholders.
3. The annual dividend per share and payout ratio for the fiscal year ending December 31, 2024 is the forecast amount.
4. The Company maintains the basic policy to flexibly purchase its own shares, taking into consideration such factors as
demand for funds and stock price levels, as one means of returning profits to shareholders, in the fiscal year ending
December 31, 2024. However, the Company has not made any decisions on the acquisition of treasury shares as of thecurrent point in time.

- 23 -

<Shareholder Proposal>
Proposal No. 7
Amendment to the Articles of Incorporation Concerning the Number of Outside Directors(1) Outline of the Proposal
It is proposed to amend Article 18 of the Company’s Articles of Incorporation as follows to make theCompany’s Outside Directors a majority.
Before Amendment

After Amendment(Number of Directors)(Number of Directors)

Article 18

Article 18

1.

The number of the Company’s Directors (excluding
Directors who are Audit and Supervisory Committee
Members) shall not exceed eight (8).

1.

The number of the Company’s Directors (excluding
Directors who are Audit and Supervisory Committee
Members) shall not exceed eight (8).

2.

The number of the Company’s Directors who are
Audit and Supervisory Committee Members shall be
no more than five (5).

2.

The number of the Company’s Directors who are
Audit and Supervisory Committee Members shall be
no more than five (5).

3.

(New)

3.

The majority of the Company’s Directors shall be
Outside Directors prescribed under Article 2,paragraph (1), item (xv) of the Companies Act.

(2) Reasons for the Proposal
Principle 4.8 of Japan’s Corporate Governance Code states “Independent directors should fulfill their roles andresponsibilities with the aim of contributing to sustainable growth of companies and increasing corporate value
over the mid- to long-term. Companies listed on the Prime Market should therefore appoint at least one-thirdof their directors as independent directors that sufficiently have such qualities. Irrespective of the above, if acompany listed on the Prime Market believes it needs to appoint the majority of directors as independent
directors based on a broad consideration of factors such as the industry, company size, business characteristics,
organizational structure and circumstances surrounding the company, it should appoint a sufficient number of
independent directors.” Furthermore, Principle 4.7 of Japan’s Corporate Governance Code states one of theroles and responsibilities of independent outside directors to be “Appropriately representing the views ofminority shareholders and other stakeholders in the boardroom from a standpoint independent of the
management and controlling shareholders.”
Although the Company satisfies the requirement of one-third or more with four Outside Directors among thenine Directors, it is believed that more actively appointing Outside Directors as a majority of Directors will
enable the establishment of a governance system that increase capital efficiency, seeks shareholder returns, andcontributes to the Company’s sustained growth and enhancement of medium- to long-term corporate value.
Furthermore, with regard to not only the number of Outside Directors, but also the qualifications of Outside
Directors, personnel able to contribute to the Company’s sustained growth and enhancement of medium- tolong-term corporate value are required, and the appointment of stock analysts with a high level of experienceand skill should be considered to address this point.
The appointment of “personnel with a high level of experience and skill as stock analysts” will bring the
viewpoints of external investors and shareholders to the Board of Directors, and at the same time, is believed
to be an effective means of contributing to the enhancement of corporate value through sound risk taking.
Although the Board of Directors of a listed company originally share the same goal as investors andshareholders of enhancing long-term corporate value, unfortunately, the two are often understood as in conflictin Japan. Directors with the experience and skills mentioned above participating in discussion and decision
making in the Board of Directors is believed to make the intrinsic constructive relationship between the Boardof Directors and the stock market through sound risk taking and capital allocation, and better communication
with the market. It is frequently explained that personnel from banks or accountants handle the financial partof the Director skill matrix, but expertise in accounting and debt markets is inadequate from the perspective ofpromoting “sound risk taking,” and the appointment of equity market experts is believed to be meaningful inthis respect.

- 24 -

Opinion of the Company’s Board of Directors
The Board of Directors opposes this Shareholder Proposal.
The Company has established the Nomination Committee chaired by an Independent Outside Director and with
Independent Outside Directors making up the majority of members as a voluntary advisory body to the Board of
Directors in order to ensure objectivity and fairness concerning the election of Directors. The selection of candidates
for Director is determined in the Board of Directors based on advice and proposals from the Nomination Committee,
and the candidates for Director submitted to this Annual General Meeting of Shareholders have also undergone thesame determination process.
The Nomination Committee defines skills such as in corporate management; labor and human resource development;
and legal, compliance, and risk management as those that will contribute to the monitoring function of the Board of
Directors aimed at continuously improving the Company’s corporate value. In addition, to further ensure theindependence of Outside Directors and periodically bring new viewpoints into the Board of Directors, the Company
has newly established a provision in the Independence Standard for Outside Directors that prevents cumulative termof office from exceeding 12 years. The Company believes that the Board of Directors, which is composed based on
this view, has realized high capital efficiency through the practical implementation of the management philosophy
and constructive discussions aimed at continuously improving corporate value, and also by flexibly acquiring
treasury shares while emphasizing a balance between growth investment, such as research and development
investment, human resource investment, and capital investment, and the return of profits to shareholders.
At this Annual General Meeting of Shareholders, if the proposal on the election of Directors (including Directors
who are Audit and Supervisory Committee Members) submitted by the Company is approved, the composition of
the Board of Directors will be four of the nine Directors as Independent Outside Directors.
All four candidates for Director (excluding Directors who are Audit and Supervisory Committee Members) are wellversed in the Company’s operations, and each has knowledge, experience and expertise in areas such as sales;
production and technology; finance and accounting; and labor and human resource development. Furthermore, of thefive candidates for Director who are Audit and Supervisory Committee Members, four are Independent Outside
Directors, and its former composition of one person with corporate management experience, two attorneys, and one
certified public accountant, will be changed to one person with corporate management experience, one attorney, one
certified public accountant, and one person with corporate planning division experience, with each having expert
knowledge and a wide variety of experience in addition to deep insight into corporate governance. The election will
also add one female Director for a total of two females among the nine Directors. The Company expects this change
in Board of Director composition to increase diversity and further enhance Board of Director effectiveness. Pleaserefer to the attached Skill Matrix for information on the skills possessed by the candidates for Director proposed by
the Company at this Annual General Meeting of Shareholders.
The Company’s Board of Directors believes that the Board of Directors made up of the candidates for Director
proposed by the Company have adequate independence and is the optimal composition with diversity for supervising
the execution of management aimed at the achievement of the Company’s EJ2024 Medium-term Management Planas well as the long-term vision, and that this will lead to the continuous improvement of the Company’s corporate
value, and is thereby in the interest of shareholders.
Meanwhile, the Company believes that establishing this provision in the Articles of Incorporation as proposed in thisshareholder proposal will limit the scope when selecting candidates for Director and that, as a result, it could hinder
the Company’s efforts to optimize the composition of and enhance the effectiveness of the Board of Directors.
The Board of Directors therefore opposes this Shareholder Proposal.

- 25 -