Note: This document has been translated from a part of the Japanese original for reference purposes only. In
the event of any discrepancy between this translated document and the Japanese original, the original shallprevail. The Company assumes no responsibility for this translation or for direct, indirect or any other formsof damages arising from the translation.
(Stock Exchange Code 6309)
January 11, 2019
To Shareholders with Voting Rights:
Hitoshi Yamamoto
President
Tomoe Engineering Co., Ltd.
5-15 Kitashinagawa 5-chome,
Shinagawa-ku, Tokyo, JapanNOTICE OF
THE 89TH ANNUAL SHAREHOLDERS MEETING

Dear Shareholders:
We would like to express our appreciation for your continued support and patronage.
You are cordially invited to attend the 89th Annual Shareholders Meeting of Tomoe Engineering Co., Ltd.
(the “Company”). The meeting will be held for the purposes as described below.
If you are unable to attend the meeting, you can exercise your voting rights in writing by mail orthrough electromagnetic means such as the Internet, etc. Please review the attached “Reference
Documents for the Shareholders Meeting,” and exercise your voting rights using one of the methods
written on page 3 by 5:30 p.m. on Tuesday, January 29, 2019, Japan time.
1. Date and Time:

Wednesday, January 30, 2019 at 10:00 a.m., Japan time

2. Place:

Green Wind, GardenCity Shinagawa on the 1st floor of SHINAGAWA GOOS
located at 13-3, Takanawa 3-chome, Minato-ku, Tokyo, Japan

3. Meeting Agenda:
Matters to be reported: (1) The Business Report, Consolidated Financial Statements for the Company’s
89th Fiscal Year (from November 1, 2017 to October 31, 2018) and results ofaudits by the Accounting Auditor and the Audit & Supervisory Committee of
the Consolidated Financial Statements(2) Non-consolidated Financial Statements for the Company’s 89th Fiscal Year(from November 1, 2017 to October 31, 2018)
Proposals to be resolved:
Appropriation of Surplus
Proposal 1:
Election of Ten Directors (excluding Directors serving as Audit & Supervisory
Proposal 2:
Committee Members)
Election of Four Directors serving as Audit & Supervisory Committee Members
Proposal 3:
Election of One Substitute Director serving as Audit & Supervisory Committee
Proposal 4:
Member
Payment of Bonuses to Officers
Proposal 5:-1-〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰
◎ When attending the meeting, please submit the enclosed Voting Rights Exercise Form at the receptiondesk.
◎ Should the Reference Documents for the Shareholders Meeting, Business Report, Consolidated Financial
Statements and Non-consolidated Financial Statements require revisions, the revised versions will be
posted on the Company’s website (https://www.tomo-e.co.jp/).
◎ From among the documents to be attached to this notice, the Consolidated Statements of Changes inShareholders’ Equity of the Consolidated Financial Statements and Notes to the Consolidated Financial
Statements as well as the Non-consolidated Statements of Changes in Shareholders’ Equity of theNon-consolidated Financial Statements and Notes to the Non-consolidated Financial Statements areposted on the Company’s website (https://www.tomo-e.co.jp/) in accordance with laws and ordinances
and the provisions in Article 14 of the Articles of Incorporation of the Company. Therefore, they are notstated in the Appendix provided with this notice. The Consolidated Financial Statements andNon-consolidated Financial Statements stated in the Appendix provided with this notice are part of theConsolidated Financial Statements and Non-consolidated Financial Statements that were audited by the
Audit & Supervisory Committee and the Accounting Auditor in preparing audit reports and accounting
audit reports, respectively.

-2-

Reference Documents for the Shareholders Meeting
Proposals and References
Proposal 1:

Appropriation of Surplus

1. Matters regarding the year-end dividend
As its basic policy, the Company will implement appropriate and stable dividends while seeking toincrease internal reserves to reinforce its financial position and management foundation, and byconsidering consolidated operating results, the group’s medium-term business strategy and otherfactors in a comprehensive manner.
Based on the above policy, the Company proposes a year-end dividend of 24.50 yen per share forthe current fiscal year, an increase of 2 yen per share from the previous fiscal year, taking into
consideration the operating results for the fiscal year ended October 31, 2018 and the future outlook.
(1) Matters regarding the assignment of assets to be distributed to shareholders and the total amountthereof24.50 yen per share of the Company’s common stock, in a total amount of 244,469,306 yen
As the Company has already paid the interim dividend of 22.50 yen per share, the annual
dividend for the fiscal year ended October 31, 2018 will amount to 47 yen per share.
(2) The date on which dividends of retained earnings become effective
January 31, 2019
2. Matters regarding appropriation of surplus
Regarding the internal reserves, the Company proposes as follows to reinforce the managementfoundation in preparation for the future business development.
(1) Item of surplus to be increased and the amount thereof
General reserve of 800,000,000 yen(2) Item of surplus to be decreased and the amount thereof
Retained earnings brought forward of 800,000,000 yen-3-Proposal 2:

Election of Ten Directors (excluding Directors serving as Audit & Supervisory
Committee Members)

The term of office of all ten Directors (excluding Directors serving as Audit & Supervisory Committee
Members; hereinafter the same shall apply in this proposal) will expire at the conclusion of this Annual
Shareholders Meeting. Accordingly, the election of ten Directors is proposed.
With regard to this proposal, the Audit & Supervisory Committee has decided that all candidates qualify
as a Director of the Company after reviewing each candidate’s execution of duties, performance and remarks
made at the Board of Directors during the fiscal year ended October 31, 2018, and past experience, etc.
The candidates for Directors are as follows:
No.

Name

1

Hitoshi Yamamoto2

Current positions and responsibilities, etc.
at the Company

Attributes

President

Reappointment

Yoshito Honma

Managing Director
General Manager, Machinery & Equipment Div.

Reappointment

3

Masayoshi Fukasawa

Managing Director
In charge of General Affairs Div. and Business
Coordination Div.

Reappointment

4

Akitomo Tamai

Managing Director
General Manager, Chemical Products Div.

Reappointment

Akiyoshi Shinoda

Director
Deputy General Manager, Chemical Products
Div. (in charge of Fine Chemicals Dept.,
Electronic Materials Dept., and Plastics Dept.)

Reappointment

Masahiko Nakamura

Director
Deputy General Manager, Machinery &Equipment Div. (in charge of Environmental
Equipment Sales Dept.)

Reappointment

Toshiaki Yakura

Director
In charge of Accounting Div. and Management
Planning Dept. and General Manager, Accounting
Div.

Reappointment

Katsuhiko Ito

Director
Deputy General Manager, Machinery &Equipment Div. (in charge of Industrial
Machinery Sales Dept. and Overseas Sales Dept.)

Reappointment

9

Tetsuyuki Azuma

Director
Deputy General Manager, Chemical Products
Div. (in charge of Advanced Materials Dept. andIndustrial Materials Dept.)

Reappointment

10

Atsushi Sada

General Manager, Technical Development Dept.,
Machinery & Equipment Div.

New appointment

5
6
7
8

New appointment
Reappointment
Outside Director
Independent Officer

Candidate for new Director
Candidate for reappointment as Director
Candidate for Outside Director
Candidate for independent officer stipulated by stock exchanges, etc.

-4-

No.

Name
(Date of birth)

Past experience, positions
and responsibilities
April 1979
April 2003

Hitoshi Yamamoto(July 20, 1955)
Reappointment

January 2007
January 2009
January 2013

1

January 2015

Joined the Company
General Manager, Industrial Machinery Sales Dept.,
Machinery & Equipment Div.
Director
Deputy General Manager, Machinery & Equipment
Div. (in charge of Industrial Machinery Sales Dept.)
Managing Director
General Manager, Machinery & Equipment Div.
Senior Managing Director
General Manager, Chemical Products Div.
President (current position)

Number ofshares of theCompany
held

28,451(Reasons for selecting the candidate for Director)
Mr. Hitoshi Yamamoto has abundant operational knowledge and experience on the Company’s overall business withfocus on the machinery and equipment business and chemical products business. Since assuming office as
Representative Director in January 2015, he has duly performed his duties as a senior executive officer of the Group.
Therefore, the Company believes that he is qualified as a Director of the Company and reappoints him as a candidate for
Director.

November 1975
January 2005
Yoshito Honma(October 2, 1952)
Reappointment

2

April 2008
January 2009
January 2011
January 2013

Joined the Company
General Manager, Environmental Equipment Sales
Dept., Machinery & Equipment Div.
General Manager, Osaka Branch OfficeDirector
President, Tomoe Machinery Service Co., Ltd.
Managing Director of the Company (current
position) General Manager, Machinery & Equipment
Div. (current position)

25,095(Reasons for selecting the candidate for Director)
Mr. Yoshito Honma has abundant operational knowledge and experience on the Company’s overall business with focus
on the machinery and equipment business. Since assuming office as a Director in January 2009, he has duly performed
duties in general as Director. Therefore, the Company believes that he is qualified as a Director of the Company andreappoints him as a candidate for Director.

-5-

No.

Name
(Date of birth)

Masayoshi
Fukasawa(January 14, 1952)
Reappointment

3

Past experience, positions
and responsibilities
April 1975
April 2007
January 2011

April 2013
January 2015

Joined the Company
General Manager, General Affairs Div.
Director
In charge of General Affairs Div. and Business
Coordination Div. and General Manager, General
Affairs Div.
In charge of General Affairs Div. and Business
Coordination Div. (current position)
Managing Director (current position)

Number ofshares of theCompany
held

17,076(Reasons for selecting the candidate for Director)
Mr. Masayoshi Fukasawa has abundant operational knowledge and experience on the Company’s overall business withfocus on the administrative division. Since assuming office as a Director in January 2011, he has duly performed duties
in general as Director. Therefore, the Company believes that he is qualified as a Director of the Company and reappoints
him as a candidate for Director.

April 1980
April 1988
April 2000
November 2005
January 2011

Akitomo Tamai(February 12, 1957)

November 2012

Reappointment

January 2013

4
November 2017
January 2018

Joined JDC CORPORATION
Joined Elkem Japan K.K.
Joined the Company
General Manager, Industrial Materials Dept.,
Chemical Products Div.
Director
Deputy General Manager, Chemical Products Div.
(in charge of Plastics Dept., Industrial Materials
Dept., and Fine Chemicals Dept.)
President, Tomoe Butsuryu Co., Ltd.
President, Tomoe Trading (Shenzhen) Co., Ltd.
(current position)
Deputy General Manager, Chemical Products Div.
(in charge of Plastics Dept. and Industrial Materials
Dept.) and General Manager, China Business
Promotion Dept., Chemical Products Div. of theCompany
Deputy General Manager, Chemical Products Div.
(in charge of Plastics Dept. and Industrial Materials
Dept.)
Managing Director (current position)
General Manager, Chemical Products Div. (current
position)

19,003(Reasons for selecting the candidate for Director)
Mr. Akitomo Tamai has abundant operational knowledge and experience on the Company’s overall business with focus
on the chemical products business. Since assuming office as a Director in January 2011, he has duly performed duties ingeneral as Director. Therefore, the Company believes that he is qualified as a Director of the Company and reappoints
him as a candidate for Director.

-6-

No.

Name
(Date of birth)

Past experience, positions
and responsibilities
April 1985
September 1989
November 2011
April 2014
January 2015

Akiyoshi Shinoda(August 23, 1961)
Reappointment

April 2015

5
January 2018

Joined Nippon Kaiji Kentei Kyokai
Joined the Company
General Manager, Chemical Products Sales Dept.,
Osaka Branch Office
General Manager, Fine Chemicals Dept., Chemical
Products Div.
Director (current position)
Deputy General Manager, Chemical Products Div.
(in charge of Advanced Materials Dept. andElectronic Materials Dept.) and General Manager,
Fine Chemicals Dept.
Deputy General Manager, Chemical Products Div.
(in charge of Advanced Materials Dept., Electronic
Materials Dept., and Fine Chemicals Dept.)
Deputy General Manager, Chemical Products Div.
(in charge of Fine Chemicals Dept., Electronic
Materials Dept., and Plastics Dept.) (current
position)
President, Tomoe Butsuryu Co., Ltd. (current
position)

Number ofshares of theCompany
held

16,028(Reasons for selecting the candidate for Director)
Mr. Akiyoshi Shinoda has abundant operational knowledge and experience on the Company’s overall business withfocus on the chemical products business. Since assuming office as a Director in January 2015, he has duly performed
duties in general as Director. Therefore, the Company believes that he is qualified as a Director of the Company andreappoints him as a candidate for Director.

Masahiko
Nakamura(March 10, 1956)

April 1978
December 1978
August 1990
January 2009
January 2015

Reappointment

6

April 2015

Joined MARUDAI FOOD CO., LTD.
Joined Kyushu Setsubi Kosha K.K.
Joined the Company
General Manager, Environmental Equipment Sales
Dept., Machinery & Equipment Div.
Director (current position)
Deputy General Manager, Machinery & Equipment
Div. and General Manager, Environmental
Equipment Sales Dept.
Deputy General Manager, Machinery & Equipment
Div. (in charge of Environmental Equipment Sales
Dept.) (current position)

6,451(Reasons for selecting the candidate for Director)
Mr. Masahiko Nakamura has abundant operational knowledge and experience on the Company’s overall business withfocus on the machinery and equipment business. Since assuming office as a Director in January 2015, he has duly
performed duties in general as Director. Therefore, the Company believes that he is qualified as a Director of theCompany and reappoints him as a candidate for Director.

-7-

No.

Name
(Date of birth)

Past experience, positions
and responsibilities
April 1981
April 2008

Toshiaki Yakura(May 31, 1958)
Reappointment

7

October 2012
April 2014
January 2015

Joined The Fuji Bank, Limited
General Manager, Americas Business Operations
Department, Mizuho Corporate Bank, Ltd.
Joined the Company
General Manager assistant to Accounting Div.
General Manager, Accounting Div.
Director (current position)
In charge of Accounting Div. and Management
Planning Dept. and General Manager, Accounting
Div. (current position)

Number ofshares of theCompany
held

7,050

(Reasons for selecting the candidate for Director)
Mr. Toshiaki Yakura has abundant knowledge and experience with regard to accounting and management planning.
Since assuming office as a Director in January 2015, he has duly performed duties in general as Director. Therefore, theCompany believes that he is qualified as a Director of the Company and reappoints him as a candidate for Director.

Katsuhiko Ito(September 21,
1964)
Reappointment

8

April 1987
April 2013
January 2017

Joined the Company
General Manager, Machinery & Equipment Dept.,
Osaka Branch OfficeDirector (current position)
Deputy General Manager, Machinery & Equipment
Div. (in charge of Industrial Machinery Sales Dept.
and Overseas Sales Dept.) (current position)

6,329(Reasons for selecting the candidate for Director)
Mr. Katsuhiko Ito has abundant operational knowledge and experience on the Company’s overall business with focus on
the machinery and equipment business. Since assuming office as a Director in January 2017, he has duly performed
duties in general as Director. Therefore, the Company believes that he is qualified as a Director of the Company andreappoints him as a candidate for Director.

-8-

No.

Name
(Date of birth)

Past experience, positions
and responsibilities
April 1984
November 2009

Tetsuyuki Azuma(August 16, 1960)

January 2018

Reappointment

9

April 2018

Joined the Company
General Manager, Advanced Materials Dept.,
Chemical Products Div.
Director (current position)
Deputy General Manager, Chemical Products Div.
(in charge of Advanced Materials Dept. andIndustrial Materials Dept.) and General Manager,
Advanced Materials Dept.
Deputy General Manager, Chemical Products Div.
(in charge of Advanced Materials Dept. andIndustrial Materials Dept.) (current position)

Number ofshares of theCompany
held

6,572

(Reasons for selecting the candidate for Director)
Mr. Tetsuyuki Azuma has abundant operational knowledge and experience on the Company’s overall business withfocus on the chemical products business. Since assuming office as a Director in January 2018, he has duly performed
duties in general as Director. Therefore, the Company believes that he is qualified as a Director of the Company andreappoints him as a candidate for Director.

Atsushi Sada
(October 30, 1964)
New appointment

10

April 1988
November 2016

Joined the Company
General Manager, Technical Development Dept.,
Machinery & Equipment Div. (current position)

108(Reasons for selecting the candidate for Director)
Mr. Atsushi Sada has been engaged in the machinery and equipment business since joining the Company and hasabundant knowledge and experience on said business overall. Therefore, the Company expects that he is capable of duly
performing his duties as a Director and appoints him as a candidate for Director.

(Notes)1. There are no special interests between each candidate and the Company.
2. The number of shares of the Company held by each candidate includes those held by the Tomoe Engineering officers’
shareholding association or the Tomoe Engineering employees’ shareholding association.

-9-

Proposal 3:

Election of Four Directors serving as Audit & Supervisory Committee Members

The term of office of all four Directors serving as Audit & Supervisory Committee Members will expire
at the conclusion of this Annual Shareholders Meeting. Accordingly, the election of four Directors serving as
Audit & Supervisory Committee Members is proposed. The Audit & Supervisory Committee has given its
consent to this proposal.
The candidates for Directors serving as Audit & Supervisory Committee Members are as follows:
Current positions and responsibilities, etc.
at the Company

No.

Name

1

Mitsuo Matsumoto

Director (Director serving as Audit &Supervisory Committee Member)

Reappointment

2

Toshiharu Murase

Outside Director (Director serving as Audit &Supervisory Committee Member)

Reappointment
Outside Director
Independent Officer

3

Makoto Nakamura

Outside Director (Director serving as Audit &Supervisory Committee Member)

Reappointment
Outside Director
Independent Officer

4

Tatsuo Hasunuma

New appointment
Reappointment
Outside Director
Independent Officer−

Candidate for new Director
Candidate for reappointment as Director
Candidate for Outside Director
Candidate for independent officer stipulated by stock exchanges, etc.

- 10 -

Attributes

New appointment
Outside Director
Independent Officer

No.

Name
(Date of birth)

Mitsuo Matsumoto(April 14, 1951)
Reappointment

Past experience, positions
and responsibilities
July 1998
November 2007
April 2011
January 2013

January 2015
January 2017

1

Joined the Company
General Manager, Accounting Div.
Accounting Director
Director
In charge of Accounting Div. and Management
Planning Dept.
Senior Standing Audit & Supervisory Board
MemberDirector (Director serving as Audit & Supervisory
Committee Member) (current position)

Number ofshares of theCompany
held

14,340(Reasons for selecting the candidate for Director)
Mr. Mitsuo Matsumoto served as a Director in charge of the Accounting Div. and Management Planning Dept. after
experiencing operations at the accounting division, and has financial, accounting and legal knowledge necessary for the
execution of duties. Since assuming office as a Director serving as Audit & Supervisory Committee Member in January
2017, he has duly performed duties in general as Director serving as Audit & Supervisory Committee Member.
Therefore, the Company believes that he is qualified and reappoints him as a candidate for Director serving as Audit &Supervisory Committee Member.

April 1975
April 2002
September 2003

2

Toshiharu Murase(October 16, 1951)

June 2005

Reappointment
Outside Director
Independent
OfficerJune 2008
January 2012
January 2013
January 2017

Joined The Fuji Bank, Limited
General Manager of Shinjuku Branch, Mizuho Bank,Ltd.
Deputy Director-General, Mizuho Corporate Bank,
Ltd.
Executive Officer, TAKACHIHO KOHEKI CO.,LTD.
Director and Vice President, Mizuho Factors,
LimitedOutside Audit & Supervisory Board Member of theCompany
Standing Audit & Supervisory Board Member(Outside Audit & Supervisory Board Member)
Outside Director (Director serving as Audit &Supervisory Committee Member) (current position)

4,555(Reasons for selecting the candidate for Outside Director)
Mr. Toshiharu Murase has long been engaged in corporate management and the banking business and has financial,accounting and legal knowledge necessary for the execution of duties. Since assuming office as an Outside Director
serving as Audit & Supervisory Committee Member in January 2017, he has duly performed duties in general as
Director serving as Audit & Supervisory Committee Member. Therefore, the Company believes that he is qualified andreappoints him as a candidate for Director serving as Audit & Supervisory Committee Member.

- 11 -

No.

Name(Date of birth)
Makoto Nakamura(September 28,
1955)

3

Reappointment
Outside Director
Independent
Officer

Past experience, positions
and responsibilities
April 1988
March 1993
January 2011
January 2017
September 2017

Admitted to the TOKYO BAR ASSOCIATION
Established Shinjuku Daiichi Law OfficeOutside Audit & Supervisory Board Member of theCompany
Outside Director (Director serving as Audit &Supervisory Committee Member) (current position)
Established Kamijikkoku Nakamura Law Office (tothe present)

Number ofshares of theCompany
held

1,673

(Reasons for selecting the candidate for Outside Director)
Although Mr. Makoto Nakamura has never been directly involved in corporate management except as an Outside
Officer, he is well versed in corporate legal affairs as an attorney-at-law and has financial, accounting and legal
knowledge necessary for the execution of duties. Since assuming office as an Outside Director serving as Audit &Supervisory Committee Member in January 2017, he has duly performed duties in general as Director serving as Audit& Supervisory Committee Member. Therefore, the Company believes that he is qualified and reappoints him as a
candidate for Director serving as Audit & Supervisory Committee Member.

Tatsuo Hasunuma(September 8,
1952)

4

New appointment
Outside Director
Independent
Officer

April 1971
July 2002
July 2008
July 2012
September 2013

Joined the Tokyo Regional Taxation Bureau
Professor, Research Department, National Tax
College
Chief Examiner, Second Examination Group, Tokyo
Regional Taxation Bureau
District Director, Nerima-nishi Tax OfficeOpened Tatsuo Hasunuma Certified Public Tax
Accountant Office (to the present)

0(Reasons for selecting the candidate for Outside Director)
Although Mr. Tatsuo Hasunuma has never been directly involved in corporate management, he has long been engaged incorporate taxation and has financial, accounting and legal knowledge necessary for the execution of duties. Therefore,
the Company believes that he is qualified as an Outside Director serving as Audit & Supervisory Committee Member
and appoints him as a candidate for Director serving as Audit & Supervisory Committee Member.
(Notes)1. There are no special interests between each candidate and the Company.
2. The number of shares of the Company held by each candidate includes those held by the Tomoe Engineering officers’
shareholding association.
3. Messrs. Toshiharu Murase, Makoto Nakamura and Tatsuo Hasunuma are candidates for Outside Directors.
4. Messrs. Toshiharu Murase, Makoto Nakamura and Tatsuo Hasunuma satisfy the criteria for independence of outside
officers stipulated by the Company, in addition to the criteria for independent officers stipulated by the Tokyo Stock
Exchange. Therefore, the Company believes that each candidate’s independence has been fully secured. If this
proposal is approved, the Company will notify the Tokyo Stock Exchange of each candidate as an independent officer
stipulated by the Exchange.
5. Messrs. Toshiharu Murase and Makoto Nakamura are currently serving as Outside Directors serving as Audit &Supervisory Committee Members. They will have served as Outside Directors serving as Audit & Supervisory
Committee Members for two years at the conclusion of this Annual Shareholders Meeting. Messrs. Toshiharu Murase
and Makoto Nakamura have served as Outside Audit & Supervisory Board Members of the Company before assuming
office as Outside Directors of the Company.
6. Pursuant to the provisions of Article 427, Paragraph 1 of the Companies Act, the Company has entered into
agreements with Messrs. Mitsuo Matsumoto, Toshiharu Murase and Makoto Nakamura, current Directors serving as
Audit & Supervisory Committee Members, to limit their liabilities stipulated in Article 423, Paragraph 1 of theCompanies Act. The limit on liability for damages under the agreement is the minimum liability amount specified in
Article 425, Paragraph 1 of the Companies Act. If this proposal is approved and the four candidates are elected as
Directors serving as Audit & Supervisory Committee Members, the Company intends to enter into liability limitationagreements with each of them under the same terms and conditions.

- 12 -

Proposal 4:

Election of One Substitute Director serving as Audit & Supervisory Committee
MemberIn preparation for the contingency that the number of Directors serving as Audit & Supervisory
Committee Members falls below the number stipulated by laws and ordinances, the election of one
Substitute Director serving as Audit & Supervisory Committee Member is proposed. The resolution of this
proposal will expire at the beginning of the annual shareholders meeting held for the last business year
ending within two years after the resolution.
The Audit & Supervisory Committee has given its consent to this proposal.
The candidate for Substitute Director serving as Audit & Supervisory Committee Member is as follows:
Name(Date of birth)

Past experience, positions
and responsibilities
July 2004
August 2006

Naohiro Chikada(December 19,
1969)
New appointment
Outside Director
Independent
Officer

July 2008
June 2009
June 2016
April 2018

Partner of ChuoAoyama Pricewaterhouse Coopers
Opened Chikada Certified Public Accountant Office (to thepresent)
Representative Director, Chiyoda Accounting Corporation(current position)
Representative Partner, Koa Audit Corporation (current
position)
Outside Director (Audit Committee Member), RIZAPGROUP, Inc. (current position)
Outside Director (Audit & Supervisory Committee Member),
SKIYAKI Inc. (current position)

Number ofshares of theCompany held

0

(Significant concurrent positions)

Outside Director (Audit Committee Member), RIZAP GROUP, Inc.
Outside Director (Audit & Supervisory Committee Member), SKIYAKI Inc.
(Reasons for selecting the candidate for Substitute Outside Director)
Mr. Naohiro Chikada has long been engaged in corporate accounting and taxation as a certified public accountant and tax
accountant, and has financial, accounting and legal knowledge necessary for the execution of duties. Therefore, the Company
believes that he is qualified as an Outside Director serving as Audit & Supervisory Committee Member and appoints him as a
candidate for Substitute Director serving as Audit & Supervisory Committee Member.
(Notes)1. There are no special interests between the candidate and the Company.
2. Mr. Naohiro Chikada is a candidate for Outside Director.
3. Mr. Naohiro Chikada satisfies the criteria for independence of outside officers stipulated by the Company, in addition
to the criteria for independent officers stipulated by the Tokyo Stock Exchange. Therefore, the Company believes that
his independence has been fully secured.
4. There are no special interests between RIZAP GROUP, Inc. and SKIYAKI Inc., in which Mr. Naohiro Chikada serves
as an Outside Director, and the Company, respectively.
5. In the event that Mr. Naohiro Chikada assumes office as a Director serving as Audit & Supervisory Committee
Member, the Company will, pursuant to the provisions of Article 427, Paragraph 1 of the Companies Act, enter into anagreement to limit his liability for damages stipulated in Article 423, Paragraph 1 of the Companies Act. The limit on
liability for damages under the agreement will be the minimum liability amount specified in Article 425, Paragraph 1of the Companies Act.

- 13 -

Proposal 5:

Payment of Bonuses to Officers

By considering the operating results for the fiscal year ended October 31, 2018 and other factors,
payment of bonuses to four Directors (excluding Directors serving as Audit & Supervisory Committee
Members) and four Directors serving as Audit & Supervisory Committee Members in the total amount of
64,909,000 yen (45,362,000 yen for Directors (excluding Directors serving as Audit & Supervisory
Committee Members), and 19,547,000 yen for Directors serving as Audit & Supervisory Committee
Members) is proposed. With regard to this proposal, the Audit & Supervisory Committee and Audit &Supervisory Committee Members have determined that the procedures to decide the total amount of bonuses
to Officers and the specific method of calculation, etc. are appropriate and valid.

- 14 -

(Reference)
Selection criteria for Outside Directors of the Company
Outside Directors and the candidates for Outside Director of the Company shall be the individuals
satisfying the following criteria:
1. The individuals who are capable of directly supervising the matters regarding management ingeneral, financial and legal affairs, corporate governance and other issues that are deliberated or
resolved at the Board of Directors meetings.
2. The individuals who have insight, expertise and experience conducive to the sustainable growth andmedium- to long-term enhancement of corporate value of the Company, and are capable ofexpressing useful opinions and giving advice regarding the matters related to corporate management,
including business strategy, formulation of medium-term management plan, etc.
Criteria for independence of Outside Directors of the Company
Outside Directors and the candidates for Outside Director of the Company shall be the individuals that do
not fall under the following criteria 1 to 5. The applicable period for the criteria 2 to 5 shall be the present
and the past ten years.
1. Individual related to the Group
Director (excluding Outside Director), Audit & Supervisory Board Member (excluding Outside
Audit & Supervisory Board Member), Accounting Advisor, Executive Officer, Operating Officer or
employee (hereinafter, “Executive, etc.”) of the Company, or subsidiaries and affiliates of theCompany (hereinafter, “the Group”)
2. Shareholder and individual related thereto(1) A shareholder who holds 10% or more of the Company’s voting rights, or Executive, etc. of suchshareholder(2) An Executive, etc. of the company in which the Group holds 10% or more of voting rights
3. Individual related to business partner(1) Executive, etc. of a business partner that records a transaction amount with the Group equivalent
to 2% or more of said entity’s consolidated net sales or; Executive, etc. of a business partner withwhich the Group records a transaction amount equivalent to 2% or more of the Group’s
consolidated net sales(2) Executive, etc. of a financial institution from which the Group is borrowing an amount equivalent
to 2% or more of the Group’s consolidated total assets
4. Attorney-at-law, certified public accountant, tax accountant, etc.
(1) Certified public accountant, or employee or partner of an audit corporation, which is the
Accounting Auditor of the Group(2) An individual who receives an annual remuneration of 10 million yen or more from the Group as
attorney-at-law, certified public accountant, tax accountant or other consultant, in addition to the
remuneration as an officer
5. Others(1) A spouse or any family within the second degree of kinship of the individual that falls under theabove criteria 1 to 4
(2) Executive, etc. of a company, between which and the Group directors are mutually appointed(3) Executive, etc. of a company, between which and the Group mutually hold shares- 15 -