CONVOCATION NOTICE OF
THE 24TH ANNUAL SHAREHOLDERS’ MEETING■Date and Time:
Monday, June 24, 20191:00 p.m.

■Contents
Convocation Notice ……………………………………………………………………………1
Reference Documents for the Annual Shareholders’ Meeting■Venue:Keidanren Kaikan
Conference Rooms #401‐402
1‐3‐2 Otemachi, Chiyoda‐ku, Tokyo

Shareholders unable to attend
Please review the reference documents
and exercise your voting rights
either by mailing the enclosed ballot,
or via the internet.

Matters to be resolved
Proposed Resolution 1 ……………………………………………………………………3
Appropriation of Surplus
Proposed Resolution 2 ……………………………………………………………………4
Election of Three (3) Directors (excluding Directors who are Audit andSupervisory Committee Member)
Proposed Resolution 3 ……………………………………………………………………7
Election of One (1) Substitute Director who is an Audit andSupervisory Committee Member
Proposed Resolution 4 ……………………………………………………………………8
Determination of Remuneration for Assignment of Restricted Stockto Directors (excluding Directors who are Audit and Supervisory
Committee Member)This unofficial 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.
The Company assumes no responsibility for this translation or for direct, indirect or any other forms of damages arising from the translation.

Digital Arts Inc.
(Securities Code: 2326)

Securities Code: 2326
June 6, 2019

Dear Shareholders:Toshio Dogu
Representative Director, President and Chief Executive Officer

Digital Arts Inc.
1‐5‐1 Otemachi Chiyoda‐ku, Tokyo

CONVOCATION NOTICE OF
THE 24TH ANNUAL SHAREHOLDERS’ MEETING
You are cordially invited to attend the 24th Annual Shareholders’ Meeting of Digital Arts Inc. (the“Company”). If you are unable to attend the Meeting, please review the Reference Documents for the
Annual Shareholders’ Meeting (described hereinafter) and exercise your voting rights either in writing bysubmitting the enclosed ballot, or via the internet. In either way, the deadline is no later than 7 p.m. on
Friday, June 21, 2019 (JST).

RESULTS BRIEFING

After the close of the Annual Shareholders’ Meeting, a Results Briefing Session will beheld in the same venue as an opportunity for our shareholders to better understand theCompany.

‐1‐1. Date and Time

Monday, June 24, 2019 at 1:00 p.m. (JST)

2. Venue

Keidanren Kaikan Conference Rooms #401‐402
Located at 1‐3‐2 Otemachi, Chiyoda‐ku, Tokyo
Matters to be Reported
1. Business review and consolidated financial statements for FY2018 (April 1, 2018 –March 31, 2019) and report by the Accounting Auditor and the Audit & Supervisory
Committee on the audit results of the consolidated financial statements
2. Nonconsolidated financial statements for FY2018 (April 1, 2018 – March 31, 2019)

3. Agenda

Matters to be Resolved
Proposed Resolution 1: Appropriation of Surplus
Proposed Resolution 2: Election of Three (3) Directors (excluding Directors who are
Audit and Supervisory Committee Members)
Proposed Resolution 3: Election of One (1) Substitute Director who is an Audit andSupervisory Committee Member
Proposed Resolution 4: Determination of Remuneration for Assignment of Restricted
Stock to Directors (excluding Directors who are Audit andSupervisory Committee Member)◎ Shareholders are requested to present the enclosed ballot at the reception desk upon arrival at the meeting.
◎ In accordance with applicable laws and regulations and Article 16 of the Articles of Incorporation, the following information in
Japanese is posted on the Company’s website (http://www.daj.jp/ir/stock/meeting) and are not presented in this Notice:① Notes to consolidated financial statements of the consolidated financial statements② Notes to non‐consolidated financial statements of the non‐consolidated financial statements◎ Any updates to the reference materials for the Annual Shareholders’ Meeting, business reports, consolidated financial statements, andnon‐consolidated financial statements will be posted in the Investor’s Relation section of the Company’s website (Japanese only).

‐2‐

Reference Documents for the Annual Shareholders’ Meeting
Proposed Resolution 1

Appropriation of Surplus

The Company recognizes the return of profits to shareholders as one of its most important management tasks.
While the Company maintains internal reserves to enhance financial standings, expand existing businesses anddevelop new businesses, the Company adopts a basic policy to deliver adequate and stable returns to shareholders,taking into consideration its operating performance.
Based on this policy, the year‐end dividend per share for the fiscal year ended March 31, 2019 would be as
follows:

Type of dividend property

CashMattes relevant to dividend property
and its total cash amount

30 yen per common stock of the Company
Total cash amount is 417,020,400 yen

Effective date of distribution of surplus

June 25, 2019‐3‐

Proposed Resolution 2

Election of Three (3) Directors(Excluding Directors who are Audit and Supervisory Committee Members)

The term of office for all three (3) Directors (excluding Directors who are Audit and Supervisory Committee
Members) will expire at the conclusion of this Meeting. Therefore, the Company asked for three (3) Directors to beappointed.
The Audit and Supervisory Committee concludes that all candidates are qualified as Director of the Company.
The candidates are as follows:

Current Position and Responsibilities
at the Company

No.

Name

1

ToshioDogu

Re‐election2

Hidenobu
Akazawa

Re‐election

3

TakuyaMatsumotoRe‐election

Representative Director, President andChief Executive Officer
General Manager, Sales
General Manager, Marketing
General Manager, Administration
General Manager, Corporate Planning

General Manager, Development

‐4‐

Board
Meeting
Attendance
100%(13/13)100%(13/13)100%(13/13)No.

Name(Date of Birth)

Re‐election

1

ToshioDogu(Feb 17, 1968)

Past experience, positions, responsibilities
and significant concurrent positions

Number of theCompany shares
owned

Oct 1997 Representative Director, President & CEO, Digital Arts Inc.
Oct 2003 General Manager‐ Corporate Planning
Mar 2005 Director, IQS. Co. Limited
Nov 2005 Representative Director, President & CEO, IQS. Co. Limited
Dec 2006 Representative Director, President & CEO, DAM Corporation (incumbent)
Apr 2011 Director, President & CEO, Digital Arts America, Inc. (incumbent)
June 2012 Director, Digital Arts Investment, Inc. (incumbent)
May 2013 Representative Director, President & CEO, Polkast Japan LLC
Oct 2013 Representative Director, President & CEO, DA Corporation (incumbent)
Oct 2013 Representative Director, President & CEO, DM Corporation (incumbent)
Apr 2014 Director, President & CEO, FinalCode, Inc.
Nov 2014 Representative Director, President & CEO, General Manager‐ Sales
Apr 2015 Representative Director, President & CEO, General Manager‐ Sales,
General Manager‐ FinalCode BusinessNov 2015 Director, Digital Arts Asia Pacific Pte. Limited (incumbent)
Apr 2016 Representative Director, President & CEO, General Manager‐ Sales
Apr 2016 Representative Director, Chairman, Digital Arts Consulting Inc. (incumbent)
Sep 2016 Director, Digital Arts Europe Limited (incumbent)
Apr 2017 Representative Director, President & CEO, General Manager‐ Sales,
General Manager‐ Marketing, General Manager‐ Corporate PlanningApr 2018 Representative Director, President & CEO, General Manager‐ Sales,
General Manager‐ Marketing (incumbent)

2,496,316
SharesReasons for selection as a candidate:Toshio Dogu is the founder and CEO of the company and group companies for many years, and based on his extensive experience and highknowledge, he has established a group strategy for business growth and improvement of corporate performance, and conducts the
management of the entire group. He has made sufficient result with the above content. In consideration of high management knowledge,
track record and ability, etc., the candidate was considered.

‐5‐

No.

Name
(Date of Birth)

Re‐election2

Hidenobu
Akazawa(Sep 12, 1975)

Past experience, positions, responsibilities
and significant concurrent positions

Number of theCompany shares
owned

Apr 1999 Joined Nippon Life Insurance Company
Dec 2004 Joined Shin Nihon & Co.
(currently Ernst & Young ShinNihon LLC)
Jul 2014 Joined Digital Arts Inc., General Manager‐ Administration
Jun 2015 Director, General Manager‐ Administration
Nov 2015 Director, Digital Arts Asia Pacific Pte. Limited (incumbent)
Apr 2016 Director, Digital Arts Consulting Inc. (incumbent)
Sep 2016 Director, Digital Arts Europe Limited (incumbent)
Jan 2017 Director, General Manager‐ Administration,
General Manager‐ Corporate PlanningApr 2017 Director, General Manager‐ Administration
Apr 2017 Director and CFO, FinalCode, Inc.
Apr 2018 Director, General Manager‐ Administration,
General Manager‐ Corporate Planning
General Manager‐ Human Resources
Nov 2018 Director, General Manager‐ Administration,
General Manager‐ Corporate Planning (incumbent)

77
SharesReasons for selection as a candidate:
Based on his extensive experience as a certified public accountant and a high level of knowledge, Hidenobu Akazawa has been
contributing to the improvement of corporate value by promoting the strengthening of the group’s overall management base andmanagement system centering on the management division. As a candidate of the board of Directors, the company considers the highlevel of expertise and management knowledge related to his achievements and finances.

No.

Name
(Date of Birth)

Re‐election

3

TakuyaMatsumoto(Nov 4, 1976)

Past experience, positions, responsibilities
and significant concurrent positions

Number of theCompany shares
owned

Apr 1999 Joined COMAS Co., Limited
Apr 2003 Joined Digital Arts Inc., Development
Apr 2014 Associate General Manager‐ Development
Oct 2016 General Manager‐ Development
June 2017 Director, General Manager‐ Development
Dec 2017 Director, General Manager‐ Development,
General Manager‐ New Development
Apr 2018 Director, General Manager‐ Development (incumbent)

2,969
SharesReasons for selection as a candidate:
As a developer, Takuya Matsumoto is highly insightful and has been involved in the production of many of our products over the years,
leading to new product development, and accelerating the company’s expansion and innovation. The company contributes the
improvement of corporate value of the entire group through our abundant experience and achievements. As a candidate of the board of
Directors, the company considers the high level of expertise and advanced expertise related to his achievements.
(Note)

1. None of the above candidates have any special interest in the Company.
2. The number of the Company shares owned represents figures as of March 31, 2019.
3. The number of the Company shares owned include equity share owned by the shareholders’ association made up of Directors.

‐6‐

Proposed Resolution 3

Election of One (1) Substitute Director
Who is an Audit and Supervisory Committee Member

The effect of appointment for Komei Sasaki, appointed as Substitute Director at the Annual Shareholders’Meeting held on June 22, 2018, will terminate prior to the commencement of this Meeting. In the event that theCompany lacks the number of Audit and Supervisory Committee Members required by laws and regulations, theCompany hereby request that one (1) Substitute Audit and Supervisory Committee Member be elected.
This resolution may be cancelled before the proposed Substitute Director who is an Audit and Supervisory
Committee Member assumes office by a resolution of the Board of Directors, subject to the approval of the Audit
and Supervisory Committee.
The submission of this proposal at this Meeting was approved by the Audit and Supervisory Committee.
The candidate is as follows:
Name(Date of Birth)

Komei
Sasaki(Mar 15, 1966)(Note)

Past experience, positions, responsibilities
and significant concurrent positions
Aug 1999 Partner Attorney, Tokyo Ginza Law Office
May 2003 Partner Attorney, AMUREC Law Firm
(currently Kasumigaseki Law & Accounting Offices)Jun 2004 Outside Auditor, TAKE AND GIVE. NEEDS Co., Limited
Apr 2005 Director, Junior College Accreditation Association(currently Japan Association for College Accreditation) (incumbent)
Mar 2015 Senior Partner, Sakurada Dori Partners (incumbent)
Jun 2016 Outside Director, TAKE AND GIVE. NEEDS Co., Limited (incumbent)

Number of the Company
shares owned－

1. This candidate has no special interest in the Company.
2. Komei Sasaki is a candidate for a substitute outside director.
3. The Company seeks Komei Sasaki’s professional expertise as a legal advisor to be reflected in the Company’s audit structure.
He has not been involved in corporate management, other than being appointed as outside director, however for the above reason,
the Company concluded that he can adequately perform his duties as outside director.
4. Komei Sasaki’s independence from the management of the Company as outside director:
1) Komei Sasaki has not been in a Director or taken a position to execute operations of the Company and its affiliates in the past five
years.
2) Komei Sasaki has no plans to receive large amounts of monetary payments or other financial assets (separate from thecompensation paid for services as director or Audit & Supervisory Committee member) from the Company, its subsidiaries, or its
affiliates, and has not received such payments for the past two years.
3) Komei Sasaki is not a spouse or a relative (within the third‐degree) of an individual involved in operation of the Company and its
affiliates.
5. In accordance with the provisions of the Articles of Incorporation and Article 427, Paragraph 1 of the Corporation Law, the Company
will enter into agreement with Komei Sasaki to limit his liability, as stipulated in Article 423, Paragraph 1 of the Corporation Law. The
amount of limit of liability for damage compensation under such contract is limited to the minimum liability amount specified by
Article 425, Paragraph 1 of the Corporation Law.

‐7‐

Proposed Resolution 4

Determination of remuneration for assignment of
Restricted Stock to Directors(Excluding Directors who are Audit and Supervisory Committee Member)

It was approved at the Company’s 21st Annual Shareholders’ Meeting held on June 24, 2016 that the amount of
remuneration for the Company’s Directors (excluding Directors who are Audit and Supervisory Committee
Members) be within 300 million yen per year (excluding employee salaries paid to Directors who concurrently
serve as employees).
The Company plans to allot the Company’s common stock in accordance with a certain Transfer Restriction
Period and Reason for Acquisition Without Compensation (hereinafter “Restricted Stock”) to the Company’s
Directors (excluding Outside Directors and Directors who are Audit and Supervisory Committee Members;hereinafter “Eligible Directors”) to share benefits and risks of stock price movement with shareholders andfurther enhance their desire to contribute to rises in stock prices and improvement of enterprise value as follows.
In addition to the current upper limit of remuneration, the Company plans to propose to set the maximum total
amount of the monetary remuneration claims for Restricted Stocks at 50 million yen per year. The allocation of
Restricted Stock is determined by taking into consideration the matters of various reasons of the contribution of
Directors (excluding Directors who are Audit and supervisory Committee Member) in the company
comprehensively, and considers that the contents are valid.
Moreover, regarding this proposal, the Audit and Supervisory Committee Member judges that the contents arereasonable.
Furthermore, the Company is having three (3) Eligible Directors and if Proposed Resolution 2 is approved, thesame applies to three (3) Eligible Directors.
The upper limit of the specific content and number of Restricted Stock for Eligible Directors
1. Allotment and payment of Restricted Stock
The Company will deliver monetary remuneration claims within the above annual limit as remuneration related
to Restricted Stock to Eligible Directors based on a resolution of the Company’s Board of Directors. Each Eligible
Director will receive Restricted Stock by making an in‐kind contribution of all the monetary remuneration claims.
The payment amount for Restricted Stock will be determined by the Company’s Board of Directors, based on the‐8‐closing price of the Company’s common stock on the Tokyo Stock Exchange on the business day prior to the day
when the Company’s Board of Directors makes a resolution related to the issuance or disposal of Restricted Stock(in case no trade is concluded on that day, the closing price on the most recent trading day before that), within arange such that the amount is not particularly advantageous to Eligible Directors who receive Restricted Stock.
The above monetary remuneration claims will be delivered to Eligible Directors on the condition that they agree
to the above in‐kind contribution and that they have concluded with the Company an agreement on allotting
Restricted Stock containing the terms stipulated in (3) below.
2. Total number of Restricted Stock
The maximum number of Restricted Stock to be allotted to Eligible Directors will be 5,000 shares per businessyear.
However, if a share split of the Company’s common stock (including allotment of the Company’s common stock
without contribution), a share consolidation of the Company’s common stock, or any other event occurs that
requires an adjustment of the total number of Restricted Stock to be allotted to Eligible Directors after the day of
the resolution of this proposal, the Company may reasonably adjust the total number of Restricted Stock.
3. Details of the agreement on allotting Restricted Stock
The agreement on allotting Restricted Stock to be concluded between the Company and Eligible Directors who
receive an allotment of Restricted Stock based on a resolution of the Company’s Board of Directors will containthe following terms.
(1) Details of the restriction on the transfer of shares
Eligible Directors to whom Restricted Stock is allotted may not transfer to a third‐party, create a pledge or
mortgage by transfer on, make an advancement, make a bequest, or otherwise dispose of Restricted Stockallotted to them (hereinafter “Allotted Stock”) for terms of twenty years to thirty years which has decided by theCompany’s Board of Directors (hereinafter the “Transfer Restriction Period”).
(2) Acquisition of Restricted Stock without compensation
If an Eligible Director who receives an allotment of Restricted Stock retires or resigns from the position of
Director of the Company and Director as well as employees of the Group Company before the day of the first‐9‐

annual shareholders’ meeting of the Company after the start of the Transfer Restriction Period, all of his or her
Allotted Stock will automatically be acquired by the Company without consideration except in the case that theCompany’s Board of Directors deems that the reason for the resignation is valid.
The Company will automatically acquire all Allotted Stock without consideration if the transfer restriction on the
Allotted Stock has not been lifted at the expiration of the Transfer Restriction Period of (1) above based on theterms provided in (3) “Lifting of transfer restriction” below.
(3) Lifting of transfer restriction
On the condition that an Eligible Director to whom the Restricted Stocks were allotted has continuously held theposition of Director of the Company and Director as well as employees of the Group Company for the period
commencing from the first date of the Transfer Restriction Period and ending on the date of the Annual
Shareholders’ Meeting to be held immediately following such first date, the transfer restriction on all of his or her
Allotted Stock will be lifted by the Company when the Transfer Restriction Period expires.
However, if the Eligible Director retires or resigns from the position of Director of the Company and Director aswell as employees of the Group Company before the expiration of the Transfer Restriction Period for reasonsdeemed valid by the Company’s Board of Directors, the number of Allotted Stock for which the transfer restriction
will be lifted and the timing of the lifting of the transfer restriction will be reasonably adjusted as necessary.
(4) Treatment in the event of reorganizationIf, during the Transfer Restriction Period, proposals relating to a merger agreement in which the Company is thedissolving company, a share exchange agreement or share transfer plan in which the Company becomes awholly‐owned subsidiary, or other reorganization are approved at the Company’s shareholders’ meeting (or if theapproval at the Company’s shareholders’ meeting is not required in relation to the reorganization in question, ameeting of the Company’s Board of Directors), based on a resolution of the Company’s Board of Directors, theCompany will lift the transfer restriction on the number of Allotted Stock that is reasonably calculated considering
the period from the beginning of the Transfer Restriction Period to the date of approval of the reorganization prior
to the date on which the reorganization becomes effective.
In this case, the Company will automatically acquire without compensation Allotted Stock on which the transfer
restriction is not lifted, as of the time immediately after the transfer restriction is lifted under the above provision.

‐ 10 ‐

In addition, Eligible Directors and the Company’s employee will issue or dispose of the Company’s Common Stockas Restricted Stock by the Company’s Board of Directors in this plan.

‐ 11 ‐