Press Release
May 11, 2015
To Whom It May Concern:
Funai Electric Co., Ltd.
Representative Director
President and CEO: Tomonori Hayashi(Code No.: 6839 First Section of TSE)

Notice of Transition to a Company with an Audit and Supervisory Committee and Partial
Amendment of the Articles of Incorporation
Osaka, Japan— Funai Electric Co., Ltd. (“Funai”) hereby announces that it resolved at a meeting of the Board of Directors
held today to transition to a company with an audit and supervisory committee, a governance structure newly created as aresult of the Act for Partial Revision of the Companies Act (Act No. 90 of 2014), enforced on May 1, 2015, and to submit a
proposal to partially amendment the Articles of Incorporation to the 63rd Ordinary General Meeting of Shareholders,scheduled to be held on June 25, 2015, as outlined below.
Information on executive officers after the transition to a company with an audit and supervisory committee has been
separately disclosed in “Notice of Determination of Executive Candidates,” released today.

1. Transition to a company with an audit and supervisory committee
1) Purpose of the transition
FUNAI seeks to further strengthen the oversight function of the Board of Directors and enhance corporate
governance by granting to Audit and Supervisory Board members voting rights on the Board of Directors bytransitioning to a company with an audit and supervisory committee.
2) Timing of the transition
FUNAI plans to obtain approval for a necessary amendment to the Articles of Incorporation and transition to acompany with an audit and supervisory committee at the 63rd Ordinary General Meeting of Shareholders, scheduled
to be held on June 25, 2015.

2. Partial amendment of the Articles of Incorporation
1) Reason for the amendment(1) Following the enforcement on May 1, 2015 of the amended Companies Act as a result of the Act for Partial
Revision of the Companies Act (Act No. 90 of 2014) (hereafter the “Revised Companies Act”), FUNAI will makeamendments necessary for transitioning to the newly created audit and supervisory committee governancestructure in the interest of strengthening the oversight function of the Board of Directors and enhancing
corporate governance.
(2) Funai will newly add a provision concerning the election of alternate directors who are Audit and Supervisory
Committee members by way of a precaution against cases where a vacancy results in a shortfall in the number of
directors who are Audit and Supervisory Committee members prescribed by law, stipulate the effective period of
the election of said alternates, and stipulate the term of office if an alternate assumes office.
(3) In response to the broadening of the scope of corporate officers with whom agreements limiting liability can beconcluded in the Revised Company Act, FUNAI will make an amendment necessary to enable the conclusion ofagreements limiting liability even with non‐executive directors and enable non‐executive directors to fulfill theroles expected of them.
(4) FUNAI will add as a supplementary provision a transitional measure concerning the exemption of corporate
auditors from liability provided in the current Articles of Incorporation so that the exemption remains in force
even after transition to a company with an audit and supervisory committee.
(5) In addition, FUNAI will amend article numbers and make other necessary amendments in conjunction with theabovementioned amendments.

2) Details of the amendment
The details of the amendment are set forth in the Appendix.
3) Schedule
Date of the General meeting of Shareholders to amend the Articles of Incorporation (planned)
June 25, 2015
Effective date of amendments to the Articles of Incorporation
June 25, 2015

For further information, please contact
Tetsuhiro Maeda
Representative Director, Officer, and General Manager of Corporate Planning Division
Investors and Public Relations
E‐mail: investor_relations@funai.co.jp

Appendix(Amendments are underlined.)
Current Articles of Incorporation
Chapter 1. General Provisions
Article 1. ‐ Article 3.

(Text omitted)

Proposed Amendments
Chapter 1. General Provisions
Article 1. ‐ Article 3.

(Corporate Organs）(Corporate Organs）

Article 4.

Article 4.

The Corporation shall have the following(Unchanged)

The Corporation shall have the following

corporate organs in addition to the General Meeting

corporate organs in addition to the General Meetingof Shareholders, Directors, and Corporate Auditors.

of Shareholders and Directors

1. A Board of Directors

1. A Board of Directors

2. A Board of Corporate Auditors

2. An Audit and Supervisory Committee

3. Independent Auditors

3. Independent Auditors

Article 5.

(Text omitted)

Article 5.

(Unchanged)

Chapter 2. Shares
Article6. ‐ Article 10. (Text omitted)

Chapter 2. Shares
Article 6. ‐ Article 10.

Chapter 3. General Meeting of Shareholders
Article 11. ‐ Article 16. (Text omitted)(Unchanged)

Chapter 3. General Meeting of Shareholders
Article 11. ‐ Article 16. (Unchanged)

Chapter 4. Directors and Board of Directors

Chapter 4. Directors and Board of Directors(Number of Directors）(Number of Directors）

Article 17. The Corporation shall have no more than

Article 17. The Corporation shall have no more thantwenty (20) Directors.

twenty (20) Directors (excluding Directors who are
Audit and Supervisory Committee Members) andshall have no more than five (5) Directors who are
Audit and Supervisory Committee Members.

(Method of Election)(Method of Election)

Article 18. Directors shall be elected at a General

Article 18.

Directors who are Audit and Supervisory

Committee Members and other Directors shall be

Meeting of Shareholders.

elected separately at a General Meeting of
Shareholders.
2(Text omitted)

2(Unchanged)

3(Text omitted)

3(Unchanged)(Newly added)

4

Pursuant to the provisions of Article 329,
Paragraph 3 of the Companies Act, the Corporation
may elect at a General Meeting of Shareholders

３

one or more alternate Directors who are Audit andSupervisory Committee Members by way of
precaution against cases where a vacancy results ina shortfall in the number of Directors who are
Audit and Supervisory Committee Membersprescribed by law or ordinance.
Current Articles of Incorporation(Newly added)

Proposed Amendments
5

The effective period of a resolution to electalternate Directors who are Audit and Supervisory
Committee Members in the preceding paragraphshall expire at the start of the Ordinary General
Meeting of Shareholders pertaining to the lastbusiness year ending within two (2) years after the
General Meeting of Shareholders at which said
election resolution was adopted.

(Term of Office）(Term of Office）

Article 19. The term of office of Directors shall expire

Article 19. The term of office of Directors (excluding

at the conclusion of the Ordinary General Meeting

Directors who are Audit and Supervisory Committeeof Shareholders pertaining to the last business year

Members) shall expire at the conclusion of thethat ends within one (1) year after their election.

Ordinary General Meeting of Shareholders
pertaining to the last business year that ends withinone (1) year after their election.

(Newly added)
2

The term of office of Directors who are Audit andSupervisory Committee Members shall expire at theconclusion of the Ordinary General Meeting of
Shareholders pertaining to the last business yearthat ends within two (2) years after their election.

(Newly added)
3

The term of office of any Director serving as an
Audit and Supervisory Committee Member elected
as a substitute for a Director serving as an Audit andSupervisory Committee Member shall expire upon
the expiration of the term of office of the retired
Director serving as an Audit and Supervisory

Article 20. ‐ Article 21. (Text omitted)

Committee Member.

(Notice of Convocation of Meetings of the Board of

Article 20. ‐ Article 21. (Unchanged)

Directors）(Notice of Convocation of Meetings of the Board of

Article 22. Notice of convocation of a meeting of the

Directors）

Board of Directors shall be issued to each Director

Article 22. Notice of convocation of a meeting of theand each Corporate Auditor at least three (3) days

Board of Directors shall be issued to each Director４

2

before the date of the meeting; provided, however,at least three (3) days before the date of thethat in case of urgency, such period may bemeeting; provided, however, that in case of

shortened.

urgency, such period may be shortened.

If the consent of all Directors and Corporate
Auditors is obtained, a meeting of the Board of2

Directors may be held without following themeeting of the Board of Directors may be held without

convocation procedure.

following the convocation procedure.

Article 23.

If the consent of all Directors is obtained, a(Text omitted)
Article 23.

(Unchanged)(Delegation of Decisions on the Execution of Important(Newly added)

Business）
Article 24.

Pursuant to the provisions of Article

399‐13, Paragraph 6 of the Companies Act, theBoard of Directors may, by its resolution, delegate toa Director all or part of a decision on the executionof important business (excluding matters set forth in
Article 24.

the items of Paragraph 5 of the Companies Act).

(Text omitted)

Article 25.

Current Articles of Incorporation(Unchanged)

Proposed Amendments(Remuneration, etc.)(Remuneration, etc.)

Article 25.

Article 26.

Remuneration, bonuses, and other

Remuneration, bonuses, and otherfinancial benefits received from the Corporation as

financial benefits received from the Corporation as

consideration for performance of duties (hereafter

consideration“Remuneration, etc.”) for directors shall be

Directors who are Audit and Supervisory Committee

determined by a resolution of a General Meeting ofMembers and other Directors shall be determined

Shareholders.

separately by a resolution of a General Meeting offor

performance of duties for

Shareholders.
(Exemption from Liabilities of Directors）
Article 26.
2(Text omitted)(Exemption from Liabilities of Directors)

Pursuant to the provisions of Article 427, ParagraphArticle 27.

1 of the Companies Act, the Corporation may enter

2(Unchanged)

Pursuant to the provisions of Article 427, Paragraphinto agreements with Outside Directors limiting their

1 of the Companies Act, the Corporation may enter

liability for compensation for damages under Article

into agreements with Directors (excluding Directors

423, Paragraph 1 of the Companies Act to the total

whoof the amounts set forth in the items of Article 425,

Members) limiting their liability for compensation
５

are

Audit

and

Supervisory

Committee

for damages under Article 423, Paragraph 1 of theParagraph 1 of the Companies Act.

Companies Act to the total of the amounts set forthin the items of Article 425, Paragraph 1 of theCompanies Act.
Chapter 5. Corporate Auditors and Board of Corporate
Auditors(Deleted)(Number of Corporate Auditors）
Article 27. The Corporation shall have no more than
three (3) Corporate Auditors.

(Deleted)(Method of Election)
Article 28. Corporate Auditors shall be elected at a
General Meeting of Shareholders.
2(Deleted)

Resolutions to elect Corporate Auditors shall be
adopted by a majority vote at a General Meeting of(Deleted)

Shareholders attended by shareholders who holdone‐third (1/3) or more of the voting rights ofshareholders entitled to exercise voting rights.
3

Pursuant to the provisions of Article 329,
Paragraph 2 of the Companies Act, the Corporation(Deleted)

may elect one or more Alternate Corporate Auditors
at a General Meeting of Shareholders by way of
precaution against cases where a vacancy results ina shortfall in the number of Corporate Auditorsprescribed by law or ordinance.
4

The effective period of a resolution to electAlternate Corporate Auditors in the preceding(Deleted)paragraph shall expire at the start of the Ordinary
General Meeting of Shareholders pertaining to thelast business year ending within four (4) years after
the election.
(Term of Office）
Article 29. The term of office of Corporate Auditors
shall expire at the conclusion of the Ordinary(Deleted)

General Meeting of Shareholders pertaining to thelast business year that ends within four (4) years
after their election.
Current Articles of Incorporation2

Proposed Amendments

The term of office of any Corporate Auditor elected(Deleted)６

as a substitute for a Corporate Auditor who has
retired prior to the expiration of the term of officeshall be until the expiration of the term of office ofthe retired Corporate Auditor.
(Full‐Time Corporate Auditors)(Deleted)

Article 30. The Board of Corporate Auditors shall, by
its resolution, appoint one or more Full‐time
Corporate Auditors.
(Notice of Convocation of Meetings of the Board of
Corporate Auditors)(Deleted)

Article 31. Notice of convocation of a meeting of theBoard of Corporate Auditors shall be issued to each
Corporate Auditor at least three (3) days before thedate of the meeting; provided, however, that in caseof urgency, such period may be shortened.
2(Deleted)

If the consent of all the Corporate Auditors is
obtained, a meeting of the Board of Corporate
Auditors may be held without following theconvocation procedure.

(Method of Resolution by the Board of Corporate
Auditors)(Deleted)

Article 32. Resolutions of the Board of Corporate
Auditors shall be adopted by a majority vote of the
Corporate Auditors.
(Board of Corporate Auditors Regulations)
Article 33.

(Deleted)

Matters concerning the Board of

Corporate Auditors shall be governed by laws,
ordinances,, and these Articles of Incorporation as
well as by the Board of Corporate Auditors
Regulations established by the Board of Corporate
Auditors.
(Remuneration, etc.)
Article 34.

(Deleted)Remuneration, etc. for Corporate Auditors

shall be determined by a resolution of a General
Meeting of Shareholders.
(Exemption from Liabilities of Corporate Auditors)(Deleted)

Article 35. Pursuant to the provisions of Article 426,
Paragraph 1 of the Companies Act, the Corporation
may, by a resolution of the Board of Directors,
７exempt

Corporate

Auditors(including

formerCorporate Auditors) from liability for compensation
for damages under Article 423, Paragraph 1 of theCompanies Act to the extent permitted by law orordinance.
2

Pursuant to the provisions of Article 427, Paragraph(Deleted)

1 of the Companies Act, the Corporation may enter
into agreements with Outside Corporate Auditors
limiting their liability for compensation for damages
under Article 423, Paragraph 1 of the Companies Act
to the total of the amounts set forth in the items of
Article 425, Paragraph 1 of the Companies Act.

Current Articles of Incorporation

Proposed Amendments(Newly added)

Chapter 5. Audit and Supervisory Committee(Notice of Convocation of Audit and Supervisory
Committee Meetings)(Newly added)

Article 28. Notice of convocation of a meeting of the
Audit and Supervisory Committee shall be issued toeach Audit and Supervisory Committee Member at
least three (3) days before the date of the meeting;provided, however, that in case of urgency, such
period may be shortened.
2(Newly added)

If the consent of all the Audit and Supervisory
Committee Members is obtained, a meeting of the
Audit and Supervisory Committee may be held
without following the convocation procedure.

(Method of Resolution by the Audit and Supervisory
Committee)(Newly added)

Article 29. Except as otherwise provided by law orordinance, resolutions of the Audit and Supervisory
Committee shall be adopted by a majority vote at
meetings attended by a majority of Audit andSupervisory Committee Members entitled to voteon resolutions.
(Audit and Supervisory Committee Regulations)(Newly added)

Article 30. Matters concerning the Audit andSupervisory Committee shall be governed by laws,
８

ordinances, and these Articles of Incorporation as
well as by the Audit and Supervisory Committee
Regulations established by the Audit andSupervisory Committee.
Chapter 6. Accounts

Chapter 6. Accounts

Article 36. ‐ Article 39. (Text omitted)

Article 31. ‐ Article 34. (Unchanged)

Supplementary Provisions
Article 1.

Supplementary Provisions(Text omitted)

Article 1.

(Unchanged)(Newly added)

Article 2. Pursuant to the provisions of Article 426,
Paragraph 1 of the Companies Act, the Corporation
may, by a resolution of the Board of Directors,
exemptCorporate

Auditors(including

formerCorporate Auditors) from liability for compensation
for damages under Article 423, Paragraph 1 of theCompanies Act to the extent permitted by law until
prior to the conclusion of the 63rd Ordinary Meetingof Shareholders.

９