(Note) This document is an abridged translation of the Japanese original for reference
purposes only. In the event of any discrepancy between this translated document and theJapanese original, the original shall prevail(Stock Exchange Code 4350)
June 5, 2023
(Start date of measures for electronic provision: May 30, 2023)
To Our Shareholders
Inao Tajiri
President and Representative Director
Medical System Network Co., Ltd.
24-3 Kitajujo-Nishi, Chuo-ku, Sapporo

Notice of the 25th Ordinary General Meeting of Shareholders
We are pleased to announce that the 25th Ordinary General Meeting of Shareholders of Medical
System Network Co., Ltd. (the “Company”) will be held for the purposes as described below.
For the convocation of this General Meeting of Shareholders, the Company has adopted themeasures for electronic provision of materials, and the items that apply to the said measures areposted on the website shown below.
Company website

https://www.msnw.co.jp/ir/stock/general-meeting/In addition to the above website, such items are also posted on the following website.
Tokyo Stock Exchange website
https://www2.jpx.co.jp/tseHpFront/JJK020030Action.do
Please access the above website, enter the Company name or securities code, click “Search,”and select “Basic information,” then “Documents for public inspection/PR information” to view theitems.
You may exercise your voting rights in writing or via electronic means (the Internet, etc.) in lieu
of attending the meeting in person. Please review the attached Reference Documents for the
General Meeting of Shareholders, and follow the guide on page 3 to exercise your voting rights nolater than 5:30 p.m. on Tuesday, June 20, 2023 (JST).
1

Wednesday, June 21, 2023 at 9:30 a.m. (JST)
1. Date and Time:(The time of the meeting is different from last year. Please make sure to arrive at the correct time)
Park Hall A and B, 3F, Sapporo Park Hotel
2. Place:
3-1-1 Minamijujo-Nishi, Chuo-ku, Sapporo
3. Meeting Agenda:
Matters to be reported: 1. Business Report and Consolidated Financial Statements for theCompany’s 25th Fiscal Year (April 1, 2022–March 31, 2023)
and results of audits of the Consolidated Financial Statements
by the Accounting Auditor and the Audit & Supervisory Board
2. Non-consolidated Financial Statements for the Company’s 25th
Fiscal Year (April 1, 2022–March 31, 2023)
Proposals to be resolved:
Proposal 1: Appropriation of surplus
Proposal 2: Partial amendments to the Articles of Incorporation
Proposal 3: Election of thirteen (13) Directors (excluding those serving as
Audit & Supervisory Committee Members)
Proposal 4: Election of four (4) Directors serving as Audit & Supervisory
Committee Members
Proposal 5: Setting of the amount of remuneration for Directors (excluding
those serving as Audit & Supervisory Committee Members)
Proposal 6: Setting of the amount of remuneration for Directors serving as
Audit & Supervisory Committee Members
Proposal 7: Introduction of stock compensation plan for Directors (excluding
those serving as Audit & Supervisory Committee Members)
In the event the status of COVID-19 and other factors going forward result in major changes in the operation of
the General Meeting of Shareholders such as a decision to change the date, time, or place of the event stated inthis Notice, we shall make an announcement on our website (https://www.msnw.co.jp/ir/stock/general-meeting/).
* When attending the meeting, please submit the enclosed Voting Rights Exercise Form at the reception desk.
* If amendments are made to the items provided as per the measures for electronic provision, details of such
amendments will be posted on the respective websites where the materials are being posted.
* Reference Document for the General Meeting of Shareholders will be sent together with the Voting Rights
Exercise Form to those shareholders who have not requested delivery of printed documents.
* A printed document covering the items provided as per the measures for electronic provision will also be sent tothose shareholders who have requested delivery of printed documents. However, the following items will not be
stated in such document in accordance with the laws and regulations as well as Article 13 of the Company’s
2Articles of Incorporation.
(1) Notes to Consolidated Financial Statements(2) Notes to Non-consolidated Financial Statements
Therefore, such document is only a part of the document audited by the Audit & Supervisory Board Members
and the Accounting Auditor upon preparation of the Company’s Audit Report.

Information regarding a Management Policy Briefing
Following the 25th Ordinary General Meeting of Shareholders, we will hold a briefing session at thesame venue to discuss our management policy. We cordially invite you to attend this session as well.
(The event will last approximately 20 minutes.)3

Reference Documents for the General Meeting of Shareholders
Proposals and reference items
Proposal 1: Appropriation of surplus
The Company’s basic policy is to maintain stable payment of dividends to shareholders ina manner commensurate with our business performance, while securing the internal reserves
necessary to strengthen our financial position, expand the scale of business, and develop
human resources.
In accordance with the above policy, the Company proposes to pay year-end dividends forthe fiscal year under review as follows.
Matters concerning year-end dividends(1) Matters concerning the allotment of dividend property to shareholders and the total
amount thereof
Per share of ordinary shares of the Company: 6 yen
Total amount:
183,477,270 yen(2) Effective date of distribution of surplus: June 22, 2023
* As the Company has already paid an interim dividend of 6 yen per share, the annual
dividend for the fiscal year under review will be 12 yen per share.

4

Proposal 2: Partial amendments to the Articles of Incorporation(1) Reason for the proposal
In order to strengthen the supervisory function of the Board of Directors, further improve
corporate governance, and increase efficiency through prompt decision-making andexecution of duties by means of delegating authority, the Company wishes to transition to acompany with an Audit & Supervisory Committee by having Audit & Supervisory Committee
Members in charge of audit, etc. of the Directors’ execution of duties serve as members of
the Board of Directors. To this end, the Company proposes to establish new provisions
concerning the Audit & Supervisory Committee and Audit & Supervisory Committee
Members and delete the provisions concerning the Audit & Supervisory Board and the Audit& Supervisory Board Members.
(2) Details of the changes
The details of the changes are as follows.
The amendments to the Articles of Incorporation in this proposal shall come into effect at
the conclusion of this General Meeting of Shareholders.
Current Articles of Incorporation
Chapter 1: General Provisions
Articles 1 to 4 (Omitted)(Underlines indicate changes.)
Proposed change
Chapter 1: General Provisions
Articles 1 to 4 (No change)

Chapter 2: Shares
Articles 5 to 7 (Omitted)

Chapter 2: Shares
Articles 5 to 7 (No change)(Shareholder Registry Administrator)
Article 8
1. (Omitted)
2. The Shareholder Registry Administrator andlocation of the handling office shall be selected byresolution of the Board of Directors, and be publicly
announced.

(Shareholder Registry Administrator)
Article 8
1. (No change)
2. The Shareholder Registry Administrator andlocation of the handling office shall be determinedby resolution of the Board of Directors or the
Directors entrusted by resolution of the Board of
Directors, and be publicly announced.
3. (No change)

3. (Omitted)(Share Handling Rules)
Article 9
The handling and fees pertaining to shares of theCompany, other than as stipulated by laws andregulations or these Articles of Incorporation, shall begoverned by the Share Handling Rules set forth by the
Board of Directors.

(Share Handling Rules)
Article 9
The handling and fees pertaining to shares of theCompany, other than as stipulated by laws andregulations or these Articles of Incorporation, shall begoverned by the Share Handling Rules set forth by the
Board of Directors or the Directors entrusted byresolution of the Board of Directors.
5Current Articles of Incorporation
Chapter 3: General Meeting of Shareholders
Articles 10 to 15 (Omitted)

Proposed change
Chapter 3: General Meeting of Shareholders
Articles 10 to 15 (No change)

Chapter 4: Directors, Board of Directors, andExecutive Officers
Article 16 (Omitted)

Chapter 4: Directors, Board of Directors, andExecutive Officers
Article 16 (No change)(Number of Directors)
Article 17
1. The Company shall have up to fifteen (15)Directors.

(Number of Directors)
Article 17
1. The Company shall have up to fifteen (15) Directors(excluding those serving as Audit & Supervisory
Committee Members).
2. The Company shall have up to four (4) Directors
serving as Audit & Supervisory Committee
Members.

(Newly established)(Election Method)
Article 18
1. Directors shall be elected at a General Meeting of
Shareholders.

(Election Method)
Article 18
1. Directors shall be elected at a General Meeting of
Shareholders, making a distinction between
Directors serving as Audit & Supervisory Committee
Members and the other Directors.
2. (No change)
3. (No change)

2. (Omitted)
3. (Omitted)(Term of Office)
Article 19
1. The term of office of Directors shall expire at theclose of the Ordinary General Meeting of
Shareholders convened for the last fiscal year
ending within two (2) years from their election.

(Term of Office)
Article 19
1. The term of office of Directors (excluding thoseserving as Audit & Supervisory Committee
Members) shall expire at the close of the Ordinary
General Meeting of Shareholders convened for thelast fiscal year ending within one (1) year from theirelection.
2. The term of office of Directors serving as Audit &Supervisory Committee Members) shall expire at
the close of the Ordinary General Meeting of
Shareholders convened for the last fiscal year
ending within two (2) years from their election.
3. The term of office of a substitute Director serving asan Audit & Supervisory Committee Member who
has been elected to fill a vacancy left by a Director
serving as an Audit & Supervisory Committee
Member who retired before the end of term shall be
the remaining term of the said retired Director.

(Newly established)

2. The term of office of a Director elected due to anincrease in the number of Directors or as a
substitute to fill a vacancy shall be the remaining
term of those Directors in office.

6

Current Articles of Incorporation(Newly established)

Proposed change
4. The resolution of the election of a substitute
Director serving as an Audit & Supervisory
Committee Member under Article 329, Paragraph 3of the Companies Act shall remain in effect until thestart of the Ordinary General Meeting of
Shareholders convened for the last fiscal year
ending within two (2) years from the said election.

(Representative Director and Directors with Title)
Article 20
1. The Board of Directors shall, by its resolution,
select a Representative Director.

(Representative Director and Directors with Title)
Article 20
1. The Board of Directors shall, by its resolution,
select a Representative Director from among the
Directors (excluding those serving as Audit &Supervisory Committee Members).
2. The Board of Directors may, by its resolution,
appoint from among the Directors (excluding thoseserving as Audit & Supervisory Committee
Members) a President as well as other Directors
with title whom it deems necessary.

2. The Board of Directors may, by its resolution,
appoint a President as well as other Directors withtitle whom it deems necessary.

(Convener and Chair of Board of Directors Meeting)
Article 21 (Omitted)(Convener and Chair of Board of Directors Meeting)
Article 21 (No change)(Notification of Convocation of Board of Directors
Meeting)
Article 22
1. Notification of the convening of a Board of Directors
meeting shall be issued to each Director and Audit& Supervisory Board Member no later than three (3)days before the meeting date. However, this period
may be shortened in the event of an emergency.
2. A Board of Directors meeting may be convened
without following the convocation procedures,provided there is consent of all Directors and Audit& Supervisory Board Members.

(Notification of Convocation of Board of Directors
Meeting)
Article 22
1. Notification of the convening of a Board of Directors
meeting shall be issued to each Director no later
than three (3) days before the meeting date.
However, this period may be shortened in the eventof an emergency.
2. A Board of Directors meeting may be convened
without following the convocation procedures,provided there is consent of all Directors.

7

Current Articles of Incorporation
Articles 23 and 24 (Omitted)

Proposed change
Articles 23 and 24 (No change)(Newly established)(Delegation of Decisions on Important Business
Execution)
Article 25
Pursuant to the provisions of Article 399-13,
Paragraph 6 of the Companies Act, the Company may
delegate all or part of the decision-making onimportant business execution (excluding the matters
outlined in each item of Paragraph 5 of the same
article) to the Directors (excluding those serving as
Audit & Supervisory Committee Members) by meansof a resolution of the Board of Directors.

Article 25 (Omitted)

Article 26 (No change)(Remuneration, etc.)
Article 26
Remuneration, bonus, and other financial benefits(hereinafter, “remuneration, etc.”) the Directors receivefrom the Company as compensation for the executionof duties shall be determined by resolution of theGeneral Meeting of Shareholders.

(Remuneration, etc.)
Article 27
Remuneration, bonus, and other financial benefits(hereinafter, “remuneration, etc.”) the Directors receivefrom the Company as compensation for the executionof duties shall be determined by resolution of theGeneral Meeting of Shareholders, making a distinction
between Directors serving as Audit & Supervisory
Committee Members and the other Directors.

Articles 27 and 28 (Omitted)

Articles 28 and 29 (No change)

Chapter 5: Audit & Supervisory Board Members
And Audit & Supervisory Board(Establishment of an Audit & Supervisory Board)
Article 29
The Company shall have Audit & Supervisory Board
Members and an Audit & Supervisory Board.

Chapter 5: Audit & Supervisory Committee(Establishment of an Audit & Supervisory Committee)
Article 30
The Company shall have an Audit & Supervisory
Committee.

(Number of Audit & Supervisory Board Members)
Article 30
The Company shall have up to four (4) Audit &Supervisory Board Members.

(Deleted)8

Current Articles of Incorporation(Election Method)
Article 31
1. Audit & Supervisory Board Members of theCompany shall be elected at a General Meeting of
Shareholders.
2. Resolutions to elect Audit & Supervisory Board
Members shall require the attendance ofshareholders representing no less than one-third(1/3) of the voting rights of all shareholders entitled
to exercise voting rights, and shall be adopted by amajority of affirmative votes thereof.

(Deleted)

Proposed change(Term of Office)
Article 32
1. The term of office of Audit & Supervisory Board
Members shall expire at the close of the Ordinary
General Meeting of Shareholders convened for thelast fiscal year ending within four (4) years fromtheir election.
2. The term of office of an Audit & Supervisory Board
Member who has been elected as a substitute shallbe the remaining term of the Audit & Supervisory
Board Member who retired.

(Deleted)(Full-time Audit & Supervisory Board Members)
Article 33
The Audit & Supervisory Board shall, by its resolution,
select full-time Audit & Supervisory Board Members.

(Full-time Audit & Supervisory Committee Members)
Article 31
The Audit & Supervisory Committee may, by its
resolution, select full-time Audit & Supervisory
Committee Members.

(Notification of Convocation of an Audit & Supervisory
Board Meeting)
Article 34
1. Notification of the convening of an Audit &Supervisory Board meeting shall be issued to each
Audit & Supervisory Board Member no later than
three (3) days before the meeting date. However,this period may be shortened in the event of an
emergency.
2. An Audit & Supervisory Board meeting may be
convened without following the convocation
procedures, provided there is consent of all Audit &Supervisory Board Members.

(Notification of Convocation of an Audit & Supervisory
Committee Meeting)
Article 32
1. Notification of the convening of an Audit &Supervisory Committee meeting shall be issued toeach Audit & Supervisory Committee Member nolater than three (3) days before the meeting date.
However, this period may be shortened in the eventof an emergency.
2. An Audit & Supervisory Committee meeting may be
convened without following the convocation
procedures, provided there is consent of all Audit &Supervisory Committee Members.
9Current Articles of Incorporation(Method of Resolutions of the Audit & Supervisory
Board)
Article 35
Resolutions of the Audit & Supervisory Board shall be
adopted by a majority of Audit & Supervisory Board
Members unless otherwise stipulated by laws andregulations.

Proposed change(Method of Resolutions of the Audit & Supervisory
Committee)
Article 33
Resolutions of the Audit & Supervisory Committee
shall be adopted by a majority of Audit & Supervisory
Committee Members present at a meeting where amajority of Audit & Supervisory Committee Members
who are entitled to participate in the voting arepresent.

(Audit & Supervisory Board Rules)
Article 36
Matters pertaining to the Audit & Supervisory Board,
other than as stipulated by laws and regulations orthese Articles of Incorporation, shall be governed by
the Audit & Supervisory Board Rules set forth by the
Audit & Supervisory Board.

(Audit & Supervisory Committee Rules)
Article 34
Matters pertaining to the Audit & Supervisory
Committee, other than as stipulated by laws andregulations or these Articles of Incorporation, shall begoverned by the Audit & Supervisory Committee Rules
set forth by the Audit & Supervisory Committee.

(Remunerations, etc.)
Article 37
Remunerations, etc. of the Audit & Supervisory Board
Members shall be determined by resolution of theGeneral Meeting of Shareholders.

(Deleted)(Exemption from Liability of Audit & Supervisory Board (Deleted)
Members)
Article 38
1. Pursuant to the provisions of Article 426, Paragraph
1 of the Companies Act, the Company may, byresolution of the Board of Directors and to the extent
permitted by laws and regulations, exempt Audit &Supervisory Board Members (including former Audit& Supervisory Board Members) from liability fordamages due to negligence of their duties.
2. The Company may enter into agreements with Audit& Supervisory Board Members, limiting the amountof liability for damages due to negligence of theirduties, pursuant to the provisions of Article 427,
Paragraph 1 of the Companies Act. However, themaximum amount of liability shall be the higher of apreviously designated amount no less than one
hundred (100) million yen or the amount stipulated
by laws and regulations.
10Current Articles of Incorporation
Chapter 6: Accounting Auditor
Articles 39 to 41 (Omitted)

Proposed change
Chapter 6: Accounting Auditor
Articles 35 to 37 (No change)

Chapter 7: Accounts
Articles 42 to 45 (Omitted)

Chapter 7: Accounts
Articles 38 to 41 (No change)(Newly established)(Newly established)(Newly established)(Supplementary Provisions)(Transitional measures for exemption from liability of
Audit & Supervisory Board Members)
1. Pursuant to the provisions of Article 426, Paragraph
1 of the Companies Act, the Company may, byresolution of the Board of Directors and to theextent permitted by laws and regulations, exempt
Audit & Supervisory Board Members (including
former Audit & Supervisory Board Members) fromliability for damages due to negligence of duties
occurring before the partial amendments to the
Articles of Incorporation resolved at the 25th
Ordinary General Meeting of Shareholders takes
effect.
(Transitional measures for agreements that limit theliability of Audit & Supervisory Board Members)
2. The provisions of Article 38, Paragraph 2 of the
Articles of Incorporation prior to amendments
through resolution of the 25th Ordinary General
Meeting of Shareholders shall apply with respect tothe agreements, based on Article 423, Paragraph 1of the Companies Act, that limit liability for the actsof Audit & Supervisory Board Members (including
former Audit & Supervisory Board Members) before
the conclusion of the said Ordinary General
Meeting of Shareholders
3. These supplementary provisions shall be deleted at
the close of the Ordinary General Meeting of
Shareholders convened for the last fiscal year
ending within one (1) year since the 25th Ordinary
General Meeting of Shareholders.

11Proposal 3: Election of thirteen (13) Directors (excluding those serving as Audit &Supervisory Committee Members)
Subject to approval of Proposal 2 “Partial amendments to the Articles of Incorporation,” theCompany will transition to a company with an Audit & Supervisory Committee. At the sametime, the terms of office of all twelve (12) Directors will expire at the end of this General Meetingof Shareholders. Therefore, we propose to elect thirteen (13) Directors (excluding thoseserving as Audit & Supervisory Committee Members) with the addition of one (1) such Director
to the current number, so that we can further strengthen our management structure.
The resolution of this proposal will only take effect on the condition that Proposal 2 “Partial
amendments to the Articles of Incorporation” is approved as originally proposed, and theamendments to the Articles of Incorporation come into effect as a result.
The candidates for Directors (excluding those serving as an Audit & Supervisory Committee
Members) are as follows.

12

No.

Name
(Date of birth)

Past experience, positions in the Company(significant concurrent positions)
March 1974

1

Number ofCompany
shares held

Joined Ichino Yamagata Pharmaceutical Co.,Ltd.
January 1981
Joined Medical Yamagata Pharmaceutical Co.,Ltd.
November 1989 Representative Director of Medical Yamagata
Pharmaceutical Co., Ltd.
June 1991
Director of Akiyama Aiseikan Co., Ltd. (currently
Suzuken Co., Ltd.)
September 1999 Established the Company and became
Representative Director and President (current
position)
April 2000
President of Social Welfare Corporation Nomad
Fukushikai (current position)
December 2004 Representative Director of Nihon Leben Co.,Ltd.
February 2005 Representative Director of MM Net Co., Ltd.
Inao Tajiri
757,500
April 2013
Representative Director and President of SMO(May 20, 1948)
MDS Co., Ltd.
July 2013
Executive Vice President and Representative
Director of H&M Co., Ltd.
June 2015
Representative Director and President of H&M
Co., Ltd.
January 2016
President of Social Welfare Corporation
Hokushikai
September 2016 Representative Director and President ofFeldsenf Pharma Co., Ltd.
October 2017
In charge of the SCM Division of the Company
In charge of the Development Division of theCompany
June 2019
In charge of the Leasing and Facility Related
Business of the Company (current position)
June 2020
Representative Director and Chairman ofFeldsenf Pharma Co., Ltd. (current position)
Reason for nomination as candidate for Director:
The candidate works to expand operations and enhance sustainable corporate value of the Company
and the Group as a whole through strong leadership, and based on abundant business experienceand broad insight concerning all aspects of business management. He also fulfills his role
appropriately in making decisions on important management matters and in supervising businessexecution. Therefore, we propose his continued appointment as Director.

13

No.

Name
(Date of birth)

Past experience, positions in the Company(significant concurrent positions)
March 1971

2

Number ofCompany
shares held

Joined Ichino Yamagata Pharmaceutical Co.,Ltd.
January 1983
Established Ichino Akino YK and became
Representative Director
September 1999 Established the Company and became
Representative Director and Senior Managing
Jiro Akino
Director
2,220,700(May 7, 1948)
September 2004 Representative Director of Pharma Holding Co.,Ltd.
June 2015
Executive Vice President of the Company(current position)
October 2017
In charge of the Pharmacy Division of theCompany
Reason for nomination as candidate for Director:
The candidate works to expand operations and enhance sustainable corporate value of the Company
and the Group as a whole through strong leadership, and based on abundant business experience inall aspects of business management as well as broad insight into management of community
pharmacies. He also fulfills his role appropriately in making decisions on important management
matters and in supervising business execution. Therefore, we propose his continued appointment as
Director.

14

No.

Past experience, positions in the Company(significant concurrent positions)

Name(Date of birth)
April 1992

3

Number ofCompany
shares held

Joined The Industrial Bank of Japan, Limited(currently Mizuho Bank, Ltd.)
June 2006
Joined the Company as General Manager ofCorporate Planning Department
December 2006 Director and General Manager of Corporate
Planning Department of the Company
December 2008 Managing Director and General Manager ofCorporate Planning Department of theCompany
Yoshihiro Tanaka October 2012Managing Director of the Company
72,000(December 4, 1969)
June 2015
Senior Managing Director of the Company
June 2017
Director and Senior Managing Executive Officerof the Company
October 2017
In charge of the Management Strategy Divisionof the Company (current position)
June 2019
In charge of the Community Pharmacy Network
Business of the Company (current position)
June 2021
Representative Director and Executive Vice
President of the Company (current position)
Reason for nomination as candidate for Director:
The candidate has abundant experience and broad insight concerning corporate planning and M&A.
As the one in charge of the community pharmacy network and management strategy domains, he also
fulfills his role appropriately in making decisions on important management matters and in supervisingbusiness execution. Therefore, we propose his continued appointment as Director.

15

No.

4

Name
(Date of birth)

Past experience, positions in the Company(significant concurrent positions)

Number ofCompany
shares held

May 2001
Joined Pharma Holding Co., Ltd.
December 2004 Director of the Company
June 2005
Representative Director of AKK Co., Ltd.
December 2005 Retired from the position of Director of theCompany
December 2007 Joined the Company and became General
Manager of General Affairs Department
December 2008 Director and General Manager of General
Affairs Department of the Company
Makoto Sakashita
11,500(May 23, 1957)
December 2010 Managing Director and General Manager ofGeneral Affairs Department of the Company
April 2012Managing Director of the Company
June 2015
Senior Managing Director of the Company
June 2017
Director and Senior Managing Executive Officerof the Company (current position)
October 2017
Head of Administrative Division and General
Head of Medical and Welfare Support Divisionof the Company (current position)
Reason for nomination as candidate for Director:
The candidate has abundant experience and broad insight in the HR, general affairs, and the medical
and welfare consulting domains, and fulfills his role appropriately in making decisions on importantmanagement matters and in supervising business execution. Therefore, we propose his continued
appointment as Director.

16

No.

Name
(Date of birth)

Past experience, positions in the Company(significant concurrent positions)
April 1986

5

Number ofCompany
shares held

Joined Yasuda Trust & Banking Co., Ltd.
(currently Mizuho Trust & Banking Co., Ltd.)
September 2000 Director of the Company
April 2002
Managing Director of the Company
June 2005
Managing Director and General Manager ofProject Promotion Office of the Company
Kazuhiko Sumi June 2017
Director and Managing Executive Officer of the356,900(January 23, 1963)
Company (current position)
General Manager of Project Promotion Office of
the Company
October 2017
In charge of Risk Management Office of theCompany (current position)
May 2020
In charge of Project Promotion Office of theCompany (current position)
Reason for nomination as candidate for Director:
The candidate has abundant experience and insight in the development-based sales domain, andfulfills his role appropriately in making decisions on important management matters and in supervisingbusiness execution. Therefore, we propose his continued appointment as Director.

17

No.

Name
(Date of birth)

Past experience, positions in the Company(significant concurrent positions)
April 1980

6

Number ofCompany
shares held

Joined Suwa Seikosha Co., Ltd. (currently
Seiko Epson Corporation)
January 1992
Director of Epson Medical Co., Ltd. (currently
EM Systems Co., Ltd.)
October 1994
Managing Director of Epson Medical
June 2002
Representative Director and Senior Managing
Director of Epson Medical
November 2012 Director and Executive Vice President of Epson
MedicalAkira Aoyama
100,000(February 23, 1957)
June 2013
Managing Director of the Company
June 2017
Director and Managing Executive Officer of theCompany (current position)
October 2017
Head of Systems Division of the Company(current position)
April 2019
General Manager of Pharmacy Systems
Department of the Company
June 2020
General Manager of Field Service Departmentof the Company
Reason for nomination as candidate for Director:
The candidate has abundant experience and broad insight in the information systems domain, andfulfills his role appropriately in making decisions on important management matters and in supervisingbusiness execution. Therefore, we propose his continued appointment as Director.

18

No.

Name
(Date of birth)

Past experience, positions in the Company(significant concurrent positions)
April 1987

7

Number ofCompany
shares held

Joined Yasuda Trust & Banking Co., Ltd.
(currently Mizuho Trust & Banking Co., Ltd.)
September 1999 Director of the Company
June 2001
Director and General Manager of Administrative
Department of the Company
December 2007 Director and General Manager of Finance
Eiji Hirashima
337,100
Department of the Company(December 2, 1961)
June 2017
Director, Executive Officer, and General
Manager of Finance Department of theCompany
June 2021
Director, Managing Executive Officer, and Headof Accounting and Finance Division of theCompany (current position)
Reason for nomination as candidate for Director:
The candidate has abundant experience and broad insight in the accounting and finance domain, andfulfills his role appropriately in making decisions on important management matters and in supervisingbusiness execution. Therefore, we propose his continued appointment as Director.

19

No.

Name
(Date of birth)

Past experience, positions in the Company(significant concurrent positions)
April 1997

8

Number ofCompany
shares held

Joined The Industrial Bank of Japan, Limited(currently Mizuho Bank, Ltd.)
April 2002
Joined Mizuho Securities Co., Ltd.
September 2015 Joined the Company
January 2016
General Manager of Corporate Planning
Department of the Company
June 2016
Director and General Manager of Corporate
Planning Department of the Company
June 2017
Executive Officer and General Manager of
Kentaro Tago
24,300
Corporate Planning Department of the(May 29, 1974)
Company
October 2017
Head of Management Strategy Division of theCompany (current position)
June 2019
Director and Executive Officer of the Company(current position)
In charge of Meal Catering Business of theCompany (current position)
October 2020
Representative Director and President ofPharmaShift Co., Ltd. (current position)
Reason for nomination as candidate for Director:
In addition to having abundant experience and broad insight in the management strategy domain, thecandidate drives the Digital Shift Business as Representative Director and President of PharmaShiftCo., Ltd., and also fulfills his role appropriately in making decisions on important management mattersand in supervising business execution. Therefore, we propose his continued appointment as Director.

20

No.

Name
(Date of birth)

Past experience, positions in the Company(significant concurrent positions)
April 1984

9

Number ofCompany
shares held

Joined Sanseido Co., Ltd. (currently Mediceo
Corporation)
Joined the Company and became General* Kenji Shimizu April 2020
0
(October 29, 1961)
Manager of the SCM DivisionDecember 2020 Executive Officer and Head of the SCM Divisionof the Company (current position)
Reason for nomination as candidate for Director:
The candidate has abundant experience in the pharmaceuticals wholesale industry and has achieved
results in the Company’s pharmaceuticals network business domain. As such, we believe he will
sufficiently fulfill a Director’s role in making decisions on important management matters and insupervising business execution, and thus propose his appointment as Director.

21

No.

Name
(Date of birth)

Past experience, positions in the Company(significant concurrent positions)
April 1973
August 2002

10

Number ofCompany
shares held

Joined Ministry of Health and Welfare
Director General of Health and Welfare Bureau
for the Elderly at the Ministry of Health, Labourand Welfare
August 2005
Director General of Social Welfare and War
Victims’ Relief Bureau
September 2008 Head of Health Insurance Claims Review &Reimbursement Services
October 2010
Head of team on social security reform
deliberations, Cabinet Secretariat of Japan
Shuichi Nakamura
0(August 22, 1948)
January 2012
President of general incorporated association,
Forum for Social Security Policies (current
position)
April 2012
Professor, Graduate School of the International
University of Health and Welfare (current
position)
June 2014
Outside Director (Audit & Supervisory
Committee Member) of France Bed Holdings
Co., Ltd. (current position)
June 2019
Director of the Company (current position)
Reason for nomination as candidate for Director:
The candidate has many years of government experience in health, labor, and welfare administration,
and we would like him to apply his abundant experience and broad insight in the fields of medicalcare, long-term care, and welfare to the management of the Company. Therefore, we propose his
continued appointment as Director.

22

No.

Name
(Date of birth)

Past experience, positions in the Company(significant concurrent positions)

Number ofCompany
shares held

July 1969
April 1987

11

Joined Japanese National Railways
Joined Hokkaido Railway Company (HRC)
General Manager of Business Management
Office, General Planning Division
June 1994
Director and Deputy Head of General Planning
Division of HRC
June 2000
Representative Director, Senior Managing
Akio Koike
22,800
Director, and General Manager of Development(July 28, 1946)
Division of HRC
June 2003
Representative Director and President of HRC
June 2007
Representative Director and Chairman of HRC
November 2011 Representative Director and President of HRC
June 2013
Representative Director and Chairman of HRC
June 2015
Director of the Company (current position)
Reason for nomination as candidate for Outside Director:
We would like the candidate to apply his knowledge, abundant experience, and broad insight as a top
executive to the management of the Company. Therefore, we propose his continued appointment as
Director.
Summary of expected role to be fulfilled if elected Outside Director:
If elected an Outside Director, we expect Mr. Akio Koike to provide appropriate advice and supervision
regarding the Company’s business management, from a standpoint that is independent from those
Directors engaging in business execution.

23

No.

Name
(Date of birth)

Past experience, positions in the Company(significant concurrent positions)

Number ofCompany
shares held

July 1969

12

Joined Development Bank of Japan (currently
Development Bank of Japan Inc.)
June 2001
Executive Director of Development Bank ofJapan Inc.
May 2005
Director and Chairman of Technology Alliance
Investment Ltd.
July 2007
Outside Director of Fukoku Mutual Life
Kozo Isshiki
0
Insurance Company(January 28, 1946)
June 2009
Full-time Audit & Supervisory Board Member ofIsuzu Motors Limited
July 2013
Senior Advisor to New Otani Co., Ltd.
June 2015
Director of the Company (current position)
June 2019
Outside Director of Showa Denko K.K.
(currently Resonac Holdings Corporation)(current position)
Reason for nomination as candidate for Outside Director:
We would like the candidate to apply to the management of the Company his extensive knowledge offinance, deep insight into corporate audit, and business experience in a wide range of fields.
Therefore, we propose his continued appointment as Director.
Summary of expected role to be fulfilled if elected Outside Director:
If elected an Outside Director, we expect Mr. Kozo Isshiki to provide appropriate advice andsupervision regarding the Company’s business management, from a standpoint that is independent
from those Directors engaging in business execution.

24

No.

Name
(Date of birth)

Past experience, positions in the Company(significant concurrent positions)

Number ofCompany
shares held

April 1969
April 1987

13

Joined St. Luke’s International Hospital
Lecturer, Japanese Red Cross College ofNursing
May 1993
Vice President of the Hospital and Chief
Nursing Officer, St. Luke’s International Hospital
April 2003
Professor, St. Luke’s College of Nursing(currently St. Luke’s International University)
April 2004
President, St. Luke’s College of Nursing
April 2012
Director of general incorporated association
Forum for Social Security Policies (current
position)
October 2014
Representative Director and President ofToshiko Ibe
0(January 3, 1947)
Japanese Nursing Association Publishing
Company (current position)
April 2016
Specially Appointed Professor, St. Luke’s
International University
April 2017
Professor Emeritus, St. Luke’s International
University (current position)
Representative Director of IBE Institute of
Nursing Administration (current position)
April 2019
Vice Chairperson and Dean of the Faculty of
Nursing, Nagano University of Health andMedicine
June 2019
Director of the Company (current position)
Reason for nomination as candidate for Outside Director:
The candidate has many years of experience in the work, management, and education of nurses, andwe would like her to apply her abundant experience and broad insight in the fields of medical care,long-term care, and welfare to the management of the Company. Therefore, we propose her
continued appointment as Outside Director.
Summary of expected role to be fulfilled if elected Outside Director:
If elected an Outside Director, we expect Ms. Toshiko Ibe to provide appropriate advice andsupervision regarding the Company’s business management, from a standpoint that is independent
from those Directors engaging in business execution.

25

(Notes) 1. The asterisk (*) next to a name represents a candidate for newly appointed Director.
2. Matters that require special mention regarding special interests between the Director candidates andthe company are as follows.
(1) Mr. Shuichi Nakamura and Ms. Toshiko Ibe concurrently serve as President and Director of thegeneral incorporated association Forum for Social Security Policy, respectively, and the Company
makes donations to the said entity. Ms. Toshiko Ibe serves the said entity on a part-time basis anddoes not receive and remuneration therefrom.
(2) There are no special interests between the other Director candidates and the Company.
3. Matters concerning the candidates for Outside Directors are as follows.
(1) Mr. Akio Koike, Mr. Kozo Isshiki, and Ms. Toshiko Ibe are candidates for Outside Directors.
(2) Mr. Akio Koike and Mr. Kozo Isshiki are currently Outside Directors of the Company, and they will
have served for eight (8) years in office as of the end of this Ordinary General Meeting of
Shareholders. Ms. Toshiko Ibe is currently an Outside Director of the Company, and she will have
served for four (4) years in office as of the end of this Ordinary General Meeting of Shareholders.
(3) The Company has notified the Tokyo Stock Exchange, Inc. of the positions of Mr. Akio Koike, Mr.
Kozo Isshiki, and Ms. Toshiko Ibe as Independent Officers stipulated in Article 436-2 of the
Securities Listing Regulations of the said Exchange. If elected, they will continue to be Independent
Officers.
4. The Company has entered into agreements with Mr. Shuichi Nakamura, Mr. Akio Koike, Mr. Kozo
Isshiki, and Ms. Toshiko Ibe to limit their liability for damages in accordance with Article 423, Paragraph
1 of the Companies Act. If they are elected, the Company plans to continue to have these agreements
in place.
5. The Company has entered into an indemnity agreement with each Director as stipulated in Article 4302, Paragraph 1 of the Companies Act. Under the indemnity agreement, the Company will provide
compensation for expenses as per Paragraph 1, Item 1 of the said Article and for losses as per Item 2of the said Paragraph, within the range stipulated by laws and regulations. If the Directors are reelected,
the Company plans to continue the said indemnity agreement with each of them. If the appointment of
Kenji Shimizu is approved, the Company also plans to enter into the same indemnity agreement withhim.
6. The Company enters into a directors and officers liability insurance agreement stipulated in Article 4303, Paragraph 1 of the Companies Act, with an insurance company. The agreement covers
compensation for damages that may be incurred by the insured as a result of assuming responsibility
for the execution of their duties or for being subject to claims related to the pursuit of such responsibility.
Each candidate, if elected, will be insured under the said insurance agreement. The Company alsoplans to have such agreement renewed under the same conditions during each Director’s term in office.

26

Proposal 4: Election of four (4) Directors serving as Audit & Supervisory Committee
Members
Subject to approval of Proposal 2 “Partial amendments to the Articles of Incorporation,” theCompany will transition to a company with an Audit & Supervisory Committee. Accordingly,
we propose to newly elect four (4) Directors serving as Audit & Supervisory Committee
Members. Please note that the Company has already obtained the approval of the Audit &Supervisory Board for submitting this proposal.
The resolution of this proposal will only take effect on the condition that Proposal 2 “Partial
amendments to the Articles of Incorporation” is approved as originally proposed, and theamendments to the Articles of Incorporation come into effect as a result.
The candidates for Directors serving as an Audit & Supervisory Committee Members are as
follows.

27

No.

Name
(Date of birth)

Past experience, positions in the Company(significant concurrent positions)

Number ofCompany
shares held

April 1979
April 2009

1

Joined the City of Sapporo municipal officeDirector of Construction Bureau, City of
SapporoApril 2011
Director of Economy Bureau, City of Sapporo
April 2013
Director, Policy Office of the Mayor of City of* Mitsuharu Watanabe
Sapporo1,800(January 31, 1956)
May 2015
Director of Waterworks Projects, City of
Sapporo City
June 2016
Representative Director and President, Sapporo
Urban Development Public Corporation
June 2021
Full-time Audit & Supervisory Board Member of
the Company (current position)
Reason for nomination as candidate for Outside Director serving as Audit & Supervisory Committee
Member:The candidate has assumed leadership roles of the City of Sapporo over many years and also has
experience in corporate management. As such, we have determined that he would be able to apply
his abundant experience and broad insight concerning public administration and corporate
management to the audit and supervision of the Company’s Community Pharmacy Business andother businesses. Therefore, we propose his appointment as Outside Director serving as an Audit &Supervisory Committee Member.
Summary of expected role to be fulfilled if elected Outside Director serving as Audit & Supervisory
Committee Member:If elected Outside Director serving as an Audit & Supervisory Committee Member, we expect Mr.
Mitsuharu Watanabe to provide appropriate advice and supervision regarding the Company’sbusiness management, from a standpoint that is independent from those Directors engaging inbusiness execution.

28

No.

Name
(Date of birth)

Past experience, positions in the Company(significant concurrent positions)

Number ofCompany
shares held

April 1983
April 2012

2

Joined Hokkaido Government
Health and Safety Bureau Chief, Health andWelfare Department, Hokkaido Prefecture
April 2014
Community Safety Promotion Bureau Chief,
Environmental and Community Affairs
Department, Hokkaido Prefecture
April 2016
Deputy Executive Director, Construction
Department, Hokkaido Prefecture* Satoshi Sato0
April 2017
Executive Director of Health and Welfare(September 7, 1960)
Department, Hokkaido Prefecture
April 2019
Executive Director of General Affairs
Department and Head of the Northern
Territories Task Force
April 2020
Audit and Inspection Commissioner, Hokkaido
Prefecture
June 2022
Full-time Audit & Supervisory Board Member of
the Company (current position)
Reason for nomination as candidate for Outside Director serving as Audit & Supervisory Committee
Member:The candidate has many years of experience in administrative posts at the Hokkaido Government aswell as experience as an Audit and Inspection Commissioner of the Hokkaido Prefecture. As such, wehave determined that he would be able to apply his abundant experience and broad insightconcerning public administration to the audit and supervision of the Company’s Community Pharmacy
Business and other businesses. Therefore, we propose his appointment as Outside Director serving
as an Audit & Supervisory Committee Member.
Summary of expected role to be fulfilled if elected Outside Director serving as Audit & Supervisory
Committee Member:If elected Outside Director serving as an Audit & Supervisory Committee Member, we expect Mr.
Satoshi Sato to provide appropriate advice, audit, and supervision regarding the Company’s business
management, from a standpoint that is independent from those Directors engaging in businessexecution.

29

No.

Past experience, positions in the Company(significant concurrent positions)

Name(Date of birth)
April 1987

3

Number ofCompany
shares held

Registered as an attorney at law (Sapporo Bar
Association)
April 1987
Joined Akio Hashimoto Law Office
April 1991
Opened Yoshifumi Yoneya Law Office (currently
Yoneya & Hayashi Law Office) (current position)* Yoshifumi Yoneya April 2000
0
Audit & Supervisory Board Member of the(February 17, 1960)
Company (current position)
September 2000 Audit & Supervisory Board Member of Nihon
Leben Co., Ltd.
December 2001 Audit & Supervisory Board Member of Pharma
Holding Co., Ltd.
Reason for nomination as candidate for Outside Director serving as Audit & Supervisory Committee
Member:As the candidate has abundant experience and broad knowledge as an attorney at law, we havedetermined that he would appropriately perform his duties as an Audit & Supervisory Committee
Member mainly from a legal perspective. Therefore, we propose his appointment as Outside Director
serving as an Audit & Supervisory Committee Member.
Summary of expected role to be fulfilled if elected Outside Director serving as Audit & Supervisory
Committee Member:If elected Outside Director serving as an Audit & Supervisory Committee Member, we expect Mr.
Yoshifumi Yoneya to provide appropriate advice, audit, and supervision regarding the Company’sbusiness management, from a standpoint that is independent from those Directors engaging inbusiness execution.

30

No.

4

Name
(Date of birth)

Past experience, positions in the Company(significant concurrent positions)

Number ofCompany
shares held

February 1990 Registered as a certified public accountant
July 2000
Director, Maeda CPA Office (current position)
October 2015 Director, One Nine Consulting Co., Ltd. (current* Yuji Maeda0
position)(October 18, 1958)
March 2016
Director (Audit & Supervisory Committee
Member) of SOLXYZ Co., Ltd.
July 2018
Partner, Grant Thornton Taiyo LLC
Reason for nomination as candidate for Outside Director serving as Audit & Supervisory Committee
Member:With many years of experience as a certified public accountant, the candidate has specialized
knowledge on finance and accounting as well as experience as director and audit & supervisorycommittee members of other corporate entities. Accordingly, we have determined that he would
appropriately perform his duties as an Audit & Supervisory Committee Member mainly from a broad
and advanced perspective. Therefore, we propose his appointment as Outside Director serving as an
Audit & Supervisory Committee Member.
Outline of expected roles to be fulfilled when elected Outside Director serving as Audit & Supervisory
Committee Member:If elected Outside Director serving as an Audit & Supervisory Committee Member, we expect Mr. Yuji
Maeda to provide appropriate advice, audit, and supervision regarding the Company’s business
management based on his broad insight and specialized experience in finance and accounting, andfrom a standpoint that is independent from those Directors engaging in business execution.

31

(Notes) 1. The asterisk (*) next to a name represents a candidate for newly appointed Director serving as an
Audit & Supervisory Committee Member.
2. There are no special interests between the candidates for Directors serving as Audit & Supervisory
Committee Members and the Company.
3. Matters concerning the candidates for Outside Directors serving as Audit & Supervisory Committee
Members are as follows.
(1) Mr. Mitsuharu Watanabe, Mr. Satoshi Sato, Mr. Yoshifumi Yoneya, and Mr. Yuji Maeda are
candidates for Outside Directors serving as Audit & Supervisory Committee Members.
(2) The Company has notified the Tokyo Stock Exchange, Inc. of the positions of Mr. Mitsuharu
Watanabe, Mr. Satoshi Sato, and Mr. Yoshifumi Yoneya as Independent Officers stipulated in Article
436-2 of the Securities Listing Regulations of the said Exchange. If elected, they will continue to be
Independent Officers. Further, if Mr. Yuji Maeda is elected an Outside Director serving as an Audit& Supervisory Committee Member, the Company plans to newly notify the said Exchange of his
position as an Independent Officer.
4. Pursuant to the provisions of Article 427, Paragraph 1 of the Companies Act, the Company has enteredinto agreements with Mr. Mitsuharu Watanabe, Mr. Satoshi Sato, and Mr. Yoshifumi Yoneya to limit
their liability for damages as Audit & Supervisory Board Members, under Article 423, Paragraph 1 of
the Companies Act. Upon approval of the appointment of Mr. Mitsuharu Watanabe, Mr. Satoshi Sato,
Mr. Yoshifumi Yoneya, and Mr. Yuji Maeda as Directors serving as Audit & Supervisory Committee
Members, the Company plans to enter into an agreement with each of them, limiting each of their
liability to the higher of 5 million yen or the minimum amount stipulated by laws and regulations,provided they perform their duties as Audit & Supervisory Committee Members in good faith and withoutgross negligence.
5. The Company has entered into an indemnity agreement with each Audit & Supervisory Board Member
as stipulated in Article 430-2, Paragraph 1 of the Companies Act. Under the indemnity agreement, theCompany will provide compensation for expenses as per Paragraph 1, Item 1 of the said Article and forlosses as per Item 2 of the said Paragraph, within the range stipulated by laws and regulations. If Mr.
Mitsuharu Watanabe, Mr. Satoshi Sato, Mr. Yoshifumi Yoneya, and Mr. Yuji Maeda are elected as
Directors serving as Audit & Supervisory Committee Members, the Company plans to enter into thesaid indemnity agreement with them.
6. The Company enters into a directors and officers liability insurance agreement stipulated in Article 4303, Paragraph 1 of the Companies Act, with an insurance company. The agreement covers
compensation for damages that may be incurred by the insured as a result of assuming responsibility
for the execution of their duties or for being subject to claims related to the pursuit of such responsibility.
Each candidate, if elected a Director serving as an Audit & Supervisory Committee Member, will be
insured under the said insurance agreement. The Company also plans to have such agreement
renewed under the same conditions during each Director’s term in office.

32

Proposal 5: Setting of the amount of remuneration for Directors (excluding those serving
as Audit & Supervisory Committee Members)
At the 18th Ordinary General Meeting of Shareholders held on June 24, 2016, the maximum
amount of total remuneration for the Company’s Directors was approved at 500 million yen
per year (of which the maximum amount of total remuneration for Outside Directors wasapproved at 50 million yen per year), and the resolution stands to date.
Subject to approval of Proposal 2 “Partial amendments to the Articles of Incorporation,” theCompany will transition to a company with an Audit & Supervisory Committee. Accordingly,
we propose to set the total remuneration for Directors (excluding those serving as Audit &Supervisory Committee Members) after the transition to a company with an Audit &Supervisory Committee at the same amount, no more than 500 million yen per year (of which
the amount of total remuneration for Outside Directors will be set at no more than 50 million
yen per year).
Please note that this remuneration amount for Directors (excluding those serving as Audit& Supervisory Committee Members) does not include employee salaries for Directors who
concurrently serve as employees.
This proposal was determined upon discussions by the Board of Directors, taking into
account the opinions of several outside officers, and in comprehensive consideration of theCompany’s business scale, the executive compensation system and its payment level, thecurrent number of Directors and future trends, among other factors. As such, we believe that
this proposal is appropriate.
The Company’s policy for determining the details of remuneration, etc. for each Director isas described in the Business Report section, 2. Company Status, 3) Status of Company
Officers, (5) Remuneration, etc. for Directors and Audit & Supervisory Board Members for the
fiscal year under review, A. Matters related to the policy for determining the details of
remuneration, etc. for each Director.
Currently, there are twelve (12) Directors. In the event Proposal 2 “Partial amendments to
the Articles of Incorporation” and Proposal 3 “Election of thirteen (13) Directors (excluding
those serving as Audit & Supervisory Committee Members) are approved as originallyproposed, the number of Directors (excluding those serving as Audit & Supervisory Committee
Members) after the Company’s transition to a company with an Audit & Supervisory
Committee will be thirteen (13; of which three [3] are Outside Directors).
The resolution of this proposal will only take effect on the condition that Proposal 2 “Partial
amendments to the Articles of Incorporation” is approved as originally proposed, and theamendments to the Articles of Incorporation come into effect as a result.

33

Proposal 6: Setting of the amount of remuneration for Directors serving as Audit &Supervisory Committee Members
In the event Proposal 2 “Partial amendments to the Articles of Incorporation” is approved asoriginally proposed, the Company will transition to a company with an Audit & Supervisory
Committee. Accordingly, we propose to set the total remuneration for Directors serving as
Audit & Supervisory Committee Members at no more than 100 million yen per year, with thespecific amounts for each Director serving as an Audit & Supervisory Committee Member, thetiming of payment, and other matters being determined through discussions among the
Directors serving as Audit & Supervisory Committee Members.
Upon comprehensive assessment of the responsibilities of the Directors serving as Audit &Supervisory Committee Members, the Company’s business scale, the current number ofofficers, and future trends of the business environment, among other factors, we believe that
this proposal is appropriate.
In the event Proposal 2 “Partial amendments to the Articles of Incorporation” and Proposal
4 “Election of four (4) Directors serving as Audit & Supervisory Committee Members” areapproved as originally proposed, the number of Directors serving as Audit & Supervisory
Committee Members) will be four (4).
The resolution of this proposal will only take effect on the condition that Proposal 2 “Partial
amendments to the Articles of Incorporation” is approved as originally proposed, and theamendments to the Articles of Incorporation come into effect as a result.

34

Proposal 7: Introduction of stock compensation plan for Directors (excluding thoseserving as Audit & Supervisory Committee Members)
1. Reasons for the proposal and for deeming it appropriate
At the 17th Ordinary General Meeting of Shareholders held on June 19, 2015, theintroduction of a stock compensation plan, the Board Benefit Trust (hereinafter, the “Plan”),
for the Company’s Directors (excluding Outside Directors) was approved (hereinafter, the“Original Resolution”), and the resolution stands to date. The Company will transition to acompany with an Audit & Supervisory Committee, subject to the approval of Proposal 2“Partial amendments to the Articles of Incorporation” as originally proposed. Accordingly, this
proposal requests approval to abolish the Plan’s compensation framework pertaining tocurrent Directors (excluding Non-Executive Directors and Outside Directors) and introduce a
new compensation framework pertaining to Directors (excluding Directors serving as Audit &Supervisory Committee Members, Non-Executive Directors, and Outside Directors;
hereinafter, the “Directors”).
This is a procedural proposal in line with the Company’s transition to a company with an
Audit & Supervisory Committee, and the substance of the Plan’s compensation framework is
effectively the same as that, which was approved at the 17th Ordinary General Meeting of
Shareholders held on June 19, 2015. As with the Original Resolution, the purpose of thePlan’s introduction is to raise awareness toward making contributions to improve Company
performance and enhance corporate value over the medium to long term by further clarifying
the linkage between Directors’ remuneration and the value of the Company’s shares. Since
this is also consistent with the policy of determining Directors’ remuneration as resolved by
the Company’s Board of Directors, we believe the content of this proposal is appropriate.
As stock compensation will be provided to the Company’s Directors separately from the
remuneration amount for Directors proposed for approval in Proposal 5, this proposal
requests approval of the specific calculation method and specific details of the amount ofsuch stock compensation, etc. Please note that the details of the Plan will be entrusted to theBoard of Directors within the framework outlined in section 2 below.
At present, there are eight (8) Directors subject to the Plan. However, in the event Proposal
2 and Proposal 3 are approved as originally proposed, the number of Directors subject to thePlan will be nine (9).
The resolution of this proposal will only take effect on the condition that Proposal 2 “Partial
amendments to the Articles of Incorporation” is approved as originally proposed, and theamendments to the Articles of Incorporation come into effect as a result.
2. Specific method to calculate compensation, etc. and specific details pertaining tocompensation, etc. under the said Plan
(1) Overview of the Plan
The Plan is a stock compensation plan under which shares of the Company will be acquired35

through a trust (the trust established based on the Plan shall be hereinafter referred to as the“Trust”) using the Company’s cash contributions as the source of funds; the Company shares
will be delivered to the Directors through the Trust in accordance with the Officer Stock Benefit
Regulations set forth by the Company. In principle, the Directors will be delivered theCompany shares at the time of their retirement from office.
(2) Persons eligible for the Plan
Directors of the Company (excluding Directors serving as Audit & Supervisory Committee
Members, Non-Executive Directors, and Outside Directors)(3) Trust period
From November 2, 2015 until the termination of the Trust. No specific termination date of
the Trust will be set, as the Trust shall continue as long as the Plan continues. The Plan shallbe terminated when the Company stock is delisted or the Officer Stock Benefit Regulations
is abolished, etc.
(4) Amount in trust
The company has introduced the Plan to cover the four (4) fiscal years from the fiscal year
ended March 31, 2016 to the fiscal year ended March 31, 2019 (hereinafter, the “Initial
Applicable Period”; each four-fiscal-year period that starts after the Initial Applicable Period
is referred to as the “Applicable Period”) and each subsequent Applicable Period. To deliver
the Company shares to the Directors, the Company has established the Trust by contributing
210 million yen in cash for the Initial Applicable Period and 120 million yen in cash for the
Applicable Period from the fiscal year ended March 31, 2020 to the fiscal year ended March
31, 2023.
With the transition to a company with an Audit & Supervisory Committee at this time, theTrust will continue to exist as a trust whose beneficiaries are the Directors who satisfy therequirements for beneficiaries.
Until the termination of the Plan, the Company will, in principle, make a reasonable estimateof the number of shares necessary to deliver to the Directors in accordance with the Plan,
and additionally contribute to the Trust, per each Applicable Period going forward, the funds
deemed necessary for acquiring such shares in advance. However, in cases where such
additional contributions are being made, if Company shares (excluding any undelivered
portion of the Company shares corresponding to the number of points granted to the Directors
for each Applicable Periods immediately preceding) and cash (hereinafter, the “Remaining
Shares, etc.”) remain within the trust assets, the Remaining Shares, etc. will be used as asource of shares for delivery as per the Plan in the Applicable Periods that follow or as sourceof funds to acquire shares. Accordingly, the Company will calculate the amount of additional
36

contributions, taking into account the Remaining Shares, etc.
When the Company decides to make additional contributions, the matter shall be disclosed
in a timely and appropriate manner.
(5) Method of acquiring shares of the Company
The Trust will use the funds contributed, as per (4) above, and acquire shares of theCompany through the stock market, etc. or by means of subscription to the treasury shares
being disposed by the Company. Whenever the Trust acquires the Company shares, thedetails will be disclosed in a timely and appropriate manner.
(6) Calculation method and maximum number of Company shares to be delivered to the
Directors
Every fiscal year, Directors are granted a certain number of points as determined by theirposts in accordance with the Officer Stock Benefit Regulations. The upper limit of the total
number of points granted to Directors per fiscal year is set at 70,000. The number has been
determined upon comprehensive consideration of the current level of officer remunerations,trends in the number of Directors and future outlook, etc., and we believe this to beappropriate.
With regard to the points granted to Directors, one (1) point will be converted to one (1)common share of the Company when Company shares are granted, as per (7) shown below.
(However, should a stock split, gratis allotment of shares, or a reverse stock split, etc. in
relation to the Company’s shares take place after the approval of this proposal, the upper
limit of the number of points, the number of points already granted, or the conversion ratio,etc. shall be adjusted reasonably, depending on the ratio, etc. of such transactions.)
In principle, a Director’s point count, which forms the basis for the delivery of Company
shares as shown in (7) below, is calculated by multiplying the sum of points that have been
granted to the said Director up to his/her retirement by a predetermined coefficient set foreach reason for retirement (hereinafter, points calculated in this manner shall be referred toas the “Number of Fixed Points”).
(7) Delivery of shares and the method to calculate the total amount of compensation, etc.
When a Director retires from office and meets the beneficiary requirements prescribed in
the Officer Stock Benefit Regulations, in principle, such Director shall receive from the Trust,after his/her retirement, the Company shares whose numbers correspond to the “Number of
Fixed Points” determined in accordance with (6) above, provided relevant beneficiary
determination procedures are followed by the said Director.
Regardless of whether a Director has been granted points, if a resolution is passed at a
General Meeting of Shareholders to dismiss such Director, or if such Director retires fromoffice due to a breach of duties as an officer, he/she shall no longer have the right to be37

delivered shares.
The total amount of compensation, etc. received by the Directors shall be based on thesum of the number of points granted to each Director, multiplied by the book value per shareof the Company shares held by the Trust, at the time the points are granted. (However, shoulda stock split, gratis allotment of shares, or a reverse stock split, etc. in relation to theCompany’s shares take place, a reasonable adjustment shall be made based on the ratio,etc. of such transactions.) When cash is granted as an exceptional case in accordance with
the Officer Stock Benefit Regulations, the total amount of compensation, etc. received by the
Directors shall include such cash if deemed appropriate.

38