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.
(Securities Code 7242)
June 2, 2016
To Shareholders with Voting Rights:
Yasusuke Nakajima
Representative Director,
President Executive Officer
KYB Corporation
World Trade Center Bldg.,
2-4-1, Hamamatsu-cho,Minato-ku, TokyoNOTICE OF
THE 94TH ORDINARY GENERAL MEETING OF SHAREHOLDERS
We would like to express our appreciation for your continued support and patronage.
You are cordially invited to attend the 94th Ordinary General Meeting of Shareholders of KYB Corporation(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 or via
electromagnetic means (the Internet, etc.). Please exercise your voting rights by 5:15 p.m. on Thursday, June23, 2016 (Japan time), by indicating your vote for or against the proposals on the enclosed Voting Rights
Exercise Form or by following the instructions described in the “Guide for the Exercise of Voting Rights via
the Internet, etc.”

1. Date and Time:

Friday, June 24, 2016 at 10:00 a.m. (Japan time)

2. Place:

2nd Floor, Annex Bldg., Shiba Park Hotel,
1-5-10, Shiba Koen, Minato-ku, Tokyo

3. Meeting Agenda:
Matters to be reported: 1. The Business Report, Consolidated Financial Statements for the Company’s
94th Fiscal Year (April 1, 2015 - March 31, 2016) and results of audits by the
Accounting Auditor and the Audit & Supervisory Board of the Consolidated
Financial Statements
2. Non-consolidated Financial Statements for the Company’s 94th Fiscal Year
(April 1, 2015 - March 31, 2016)
Proposals to be resolved:
Appropriation of the Surplus
Proposal 1:
Partial Amendment to the Articles of Incorporation
Proposal 2:
Election of seven (7) Members of the Board of Directors
Proposal 3:
Election of four (4) Audit & Supervisory Board Members
Proposal 4:
Election of one (1) Substitute Audit & Supervisory Board Member
Proposal 5:
Renewal of Countermeasures to Large-Scale Purchase of the Company’s Shares
Proposal 6:(Takeover Defense Measures)-1-

4. Exercise of voting rights:
If you vote both in writing on the Voting Rights Exercise Form and via the Internet, only your vote
placed via the Internet will be counted.
If you vote multiple times via the Internet, only the last vote will be counted.

-------------------------------------------------------------------------------------------------------------------------------------------- When attending the meeting, please submit the enclosed Voting Rights Exercise Form at the reception
desk. For the purpose of saving resources, please bring this Notice and the Business Report for the 94th
Fiscal Year to the meeting.

- The following items have been posted on the Company’s website (http://www.kyb.co.jp/) in accordance with laws
and regulations and the provisions of Article 15 of the Articles of Incorporation of the Company and areaccordingly not included in the attached the Business Report for the 94th Fiscal Year.
・Notes to the consolidated Financial Statements
・Notes to the Non-consolidated Financial Statements- Any updates to the Reference Documents for the General Meeting of Shareholders, the Business Report,
the Non-consolidated Financial Statements, or the Consolidated Financial Statements will be posted on
the Company’s website (http://www.kyb.co.jp/).

-2-

Reference Documents for the General Meeting of Shareholders

Proposal 1: Appropriation of the Surplus
Appropriate shareholder return is an important management policy of the Company. In accordance with theCompany’s basic policy, and in consideration of the results for the fiscal year ended March 31, 2016, future
capital investments and other factors, the Company proposes the payment of the year-end dividends asfollows.
Matters concerning the year-end dividend:
1. Type of dividend assets
Cash
2. Allocation of dividend assets and the total amount of dividends
6 yen per share of common stock of the Company
Total amount of dividends: 1,532,849,292 yen
3. Effective date of appropriation of surplus
June 27, 2016

Proposal 2: Partial Amendment to the Articles of Incorporation
1.

Reasons for the proposed amendments
The Company proposes a change in the total number of authorized shares by the Company, in orderto enable the Company to implement an agile and flexible capital policy, etc. by utilizing the shares
and also to secure the effectiveness of Takeover Defense Measures in the event that the shareholders
approve the “Renewal of Countermeasures to Large-Scale Purchase of Company’s Share (Takeover
Defense Measures)” to be proposed at this Annual Shareholders Meeting.

2.

Details of the proposed amendment
Details of the proposed amendment are as follows:(Amended parts are underlined.)
Proposed amendment

Current
Article 1 to Article 5 (Omitted)

Article 1 to Article 5 (Unchanged)(Total number of shares to be issued by theCompany)
Article 6 The total number of authorized sharesby the Company shall be four hundred
ninety one million nine hundred fifty
five thousand (491,955,000) shares.

(Total number of shares to be issued by theCompany)
Article 6 The total number of authorized sharesby the Company shall be five hundred
seventy three million (573,000,000)
shares.

Article 7 to 40 (Omitted)

Article 7 to 40 (Unchanged)-3-

Proposal 3: Election of seven (7) Members of the Board of Directors
As the terms of office of all the seven (7) Members of the Board of Directors will expire at the conclusionof this meeting, we propose election of seven (7) Members of the Board of Directors.
The candidates for the Members of the Board of Directors are as follows:
No.

Name
(Date of birth)

Career summary, positions, responsibilities at the Company,
and significant concurrent positions
April 1971
April 2001
June 2003
September 2003

Masao Usui
April 2005
(November 11, 1948)(Reappointment)
June 2006
1

Joined the Company
Deputy General Manager, Sagami Plant
Member of the Board of Directors, General Manager, Sagami
Plant and Hydraulics Div., General Manager, Urawa Plant
Member of the Board of Directors, General Manager, Sagami
Plant
Member of the Board of Directors, Hydraulic Components
Operations, General Manager, Sagami Plant
Managing Member of the Board of Directors, General Manager,
Hydraulic Components Operations
Senior Managing Member of the Board of Directors, General
Manager, Corporate Planning Div.
Member of the Board of Directors, President
Member of the Board of Directors, President Executive Officer
Chairman of the Board of Directors (current position)

Term of office as aJune 2009
Member of the Boardof Directors: 13 years
June 2010
June 2011
Attendance of theJune 2015
meetings of the Boardof Directors: (19/19)[Reasons for proposing him as a candidate for Member of the Board of Directors]
We expect that the wealth of experience and deep insight in general management he
has acquired as a long-time leader of the management of the Company will be
useful for the management of the Company. Consequently, we reappoint him as a
candidate for Member of the Board of Directors.

-4-

Number ofshares of theCompany held

35,000No.

Name(Date of birth)

Career summary, positions, responsibilities at the Company,
and significant concurrent positions
April 1979
April 2005
June 2005

April 2007

June 2009
Yasusuke Nakajima(November 2, 1955)(Reappointment)

2June 2010

June 2011
Term of office as a
Member of the Boardof Directors: 11 years April 2012
Attendance of themeetings of the Board April 2014of Directors: (19/19)
June 2015

Joined the Company
General Manager, Hydraulics Sales & Marketing Headquarters,
Hydraulic Components Operations
Member of the Board of Directors, General Manager,
Hydraulics Sales & Marketing Headquarters, HydraulicComponents Operations
Member of the Board of Directors, General Manager,
Hydraulics Sales Headquarters, Hydraulic Components
Operations
Managing Member of the Board of Directors, General
Manager, Hydraulic Components Operations
Senior Managing Member of the Board of Directors, in chargeof purchasing, general affairs and human resources
Member of the Board of Directors, Senior Managing Executive
Officer, in charge of purchasing, general affairs and humanresources
Member of the Board of Directors, Senior Managing Executive
Officer, in charge of purchasing, General Manager, HydraulicComponents Operations
Member of the Board of Directors, Senior Managing Executive
Officer, in charge of purchasing, General Manager, Corporate
Planning Div.
Member of the Board of Directors, President Executive Officer(current position)[Reasons for proposing him as a candidate for Member of the Board of Directors]
We expect that the wealth of experience and deep insight he has acquired as along-time corporate manager will be useful for the decision-making on importantmatters and the supervision of business execution of the Company. Consequently,
we reappoint him as a candidate for Member of the Board of Directors.

-5-

Number ofshares of theCompany held

33,000No.

Name(Date of birth)

Career summary, positions, responsibilities at the Company,
and significant concurrent positions
April 1973
October 2001
January 2005
April 2005
June 2006
June 2007

Morio Komiya(November 5, 1950)(Reappointment)

3

April 2009
June 2009

June 2011
Term of office as a
April 2014
Member of the Boardof Directors: 6 years
June 2014
Attendance of theJune 2015
meetings of the Boardof Directors: (19/19)
April 2016

Joined the Company
General Manager, Quality Assurance Dept., Sagami Plant
General Manager, Manufacturing Dept., Sagami Plant
Hydraulic Components Operations, General Manager,
Manufacturing Dept., Sagami Plant
Hydraulic Components Operations, General Manager, Sagami
Plant
Member of the Board of Directors, Hydraulic Components
Operations, General Manager, Sagami Plant
Member of the Board of Directors, General Manager, Quality
Div. and General Manager, Quality Control Dept., Quality Div.
Member of the Board of Directors, General Manager, Quality
Div.
Managing Executive Officer, General Manager, Quality Div.
Senior Managing Executive Officer, in charge of production,
General Manager, Quality Div.
Member of the Board of Directors, Senior Managing Executive
Officer, in charge of production, General Manager, Quality Div.
Member of the Board of Directors, Senior Managing Executive
Officer, in charge of production and purchasing, General
Manager, Quality Div.
Member of the Board of Directors, Executive Vice President
Executive Officer (current position)[Reasons for proposing him as a candidate for Member of the Board of Directors]
We expect that the deep knowledge of monozukuri (manufacturing) he has acquired
through his long-time engagement in the areas of quality and production will be
useful for the management of the Company, a manufacturer. Consequently, we
reappoint him as a candidate for Member of the Board of Directors.

-6-

Number ofshares of theCompany held

18,000No.

Name(Date of birth)

Career summary, positions, responsibilities at the Company,
and significant concurrent positions
April 1983
August 2002
September 2005

July 2007

Keisuke Saito(August 18, 1959)(Reappointment)

4

July 2008
July 2009

September 2010
Term of office as a June 2011
Member of the Boardof Directors: 5 years
April 2014
Attendance of themeetings of the Boardof Directors: (19/19) January 2016

Joined the Ministry of International Trade and Industry (present
Ministry of Economy, Trade and Industry)
General Manager, Beijing Office, Japan-China Economic
Association
Director, Industrial Revitalization Division, Economic andIndustrial Policy Bureau, Ministry of Economy, Trade andIndustry
Director, Industrial Science and Technology Policy Division,
Industrial Science and Technology Policy and Environment
Bureau, ditto
Director, Finance Division, Minister’s Secretariat, ditto
Director-General for Energy Conservation and Renewable
Energy Department, Agency for Natural Resources and Energy,
dittoSpecial Adviser of the Company
Member of the Board of Directors, Senior Managing Executive
Officer, General Manager, Engineering Div. and General
Manager, Corporate Planning Div.
Member of the Board of Directors, Senior Managing Executive
Officer, in charge of legal affairs and information technology
administration, General Manager, Engineering Div.
Member of the Board of Directors, Senior Managing Executive
Officer, in charge of Aircraft Components Div., in charge ofInformation Technology Administration, General Manager,
Engineering Div. (current position)[Reasons for proposing him as a candidate for Member of the Board of Directors]
We expect that his diverse experience in the Ministry of Economy, Trade andIndustry and the deep knowledge he has cultivated in the areas of engineering,
research and development in the Company will be useful for the management of theCompany. Consequently, we reappoint him as a candidate for Member of the Boardof Directors.

-7-

Number ofshares of theCompany held

18,000No.

Name(Date of birth)

Career summary, positions, responsibilities at the Company,
and significant concurrent positions
April 1980
March 2005
April 2008
April 2009
April 2011
April 2013

Takaaki Kato
(June 12, 1957)(Reappointment)

5June 2014

April 2015
Term of office as a
Member of the Board June 2015of Directors: 1 year
Attendance of themeetings of the Board April 2016of Directors: (15/15)

Joined The Fuji Bank, Limited (present Mizuho Bank, Ltd.)
General Manager, Hong Kong Branch, Mizuho Corporate Bank,
Ltd.
Executive Officer, Mizuho Securities Co., Ltd.
Managing Executive Officer, dittoManaging Executive Officer, ditto and Chairman, Mizuho
Securities Asia Limited
Joined the Company, Managing Executive Officer, Deputy
General Manager, Finance & Accounting Div.
Managing Executive Officer, General Manager, Finance &Accounting Div.
Senior Managing Executive Officer, General Manager, Finance& Accounting Div.
Member of the Board of Directors, Senior Managing Executive
Officer, in charge of audit, in charge of CSR, General Manager,
Finance & Accounting Div., General Manager, Corporate
Planning Div.
Member of the Board of Directors, Senior Managing Executive
Officer, General Manager, Finance & Accounting Div. (current
position)

Number ofshares of theCompany held

6,000

[Reasons for proposing him as a candidate for Member of the Board of Directors]
We expect that his deep knowledge of finance, accounting, and IR and wealth ofinternational experience and insight will be useful for the management of theCompany. Consequently, we reappoint him as a candidate for Member of the Boardof Directors.
April 1970
April 2005
July 2006
June 2007

6

Prosecutor, Tokyo District Public Prosecutors Office
Superintending Prosecutor, Nagoya High Public Prosecutors
OfficeRegistered as an attorney (Daini Tokyo Bar Association)
Outside Director, TEIKOKU PISTON RING CO., LTD. (present
TPR Co., Ltd.) (current position)
Outside Audit & Supervisory Board Member, J. FRONTRETAILING Co., Ltd. (current position)
Outside Corporate Auditor, Sumitomo Mitsui Financial Group,
Inc. (current position)
Member of the Board of Directors (Outside) (current position)

September 2007
Rokurou Tsuruta(June 16, 1943)
June 2012(Reappointment)(Candidate forJune 2015
Member of the Boardof Directors[Reasons for proposing him as a candidate for Member of the Board of Directors(Outside))(Outside)](Independent Officer)
In consideration of his expertise and experience as an attorney, we expect him tocontinue giving us useful opinions and recommendations to strengthen the internal
Term of office as acontrol, compliance, etc. of the Company. Consequently, we reappoint him as a
Member of the Board
candidate for Member of the Board of Directors (Outside).
of Directors: 1 year
Although he has not participated in corporate management other than as an outside
director or outside audit & supervisory board member, we judge that he will duly
Attendance of theperform his duties as an Member of the Board of Directors (Outside) for the
meetings of the Board
abovementioned reasons.
of Directors: (12/15)[Significant concurrent positions]
Attorney and representative, Tsuruta Rokurou Law OfficeOutside Director, TPR Co., Ltd.
Outside Audit & Supervisory Board Member, J. FRONT RETAILING Co., Ltd.
Outside Corporate Auditor, Sumitomo Mitsui Financial Group, Inc.

-8-

0

No.

Name
(Date of birth)

Career summary, positions, responsibilities at the Company,
and significant concurrent positions
April 1981
April 1987
April 1994
January 2001
October 2005
March 2012

*7

Number ofshares of theCompany held

Assistant, Faculty of Economics, Keio University
Associate Professor, Faculty of Economics, Keio University
Professor, Faculty of Economics, Keio University (current
position)
Director for International Economic Affairs, Cabinet Office
Dean, Faculty of Economics, Keio University
Member of the Board of Directors (Outside), Kenedix, Inc.
(current position)

Shuhei Shiozawa(September 19, 1955)(New appointment) [Reasons for proposing him as a candidate for Member of the Board of Directors(Candidate for(Outside)]
Member of the Board We expect him to give us useful opinions and recommendations on finance and CSRof Directorsof the Company based on his wealth of knowledge and insight as a specialist in(Outside))
economics. Consequently, we appoint him as a candidate for Member of the Board(Independent Officer) of Directors(Outside).
Although he has not participated in corporate management other than as an outside
director or outside audit & supervisory board member, we judge that he will duly
perform his duties as an Outside Director for the above mentioned reasons.

0[Significant concurrent positions]
Professor, Faculty of Economics, Keio University
Member of the Board of Directors (Outside), Kenedix, Inc.
(Notes)1. No conflict of interests exists between any of the above candidates and the Company.
2. The person with an asterisk (*) in the “No.” column is a candidate for a new Member of the Board of Directors.
3. Mr. Rokurou Tsuruta and Mr. Shuhei Shiozawa are candidates for Members of the Board of Directors (Outside).
The Company has designated Mr. Rokurou Tsuruta as an independent officer under the rules of the Tokyo Stock
Exchange.
If Mr. Shuhei Shiozawa assumes office as an Outside Director, the Company will register him as an independent
officer under the rules of the Tokyo Stock Exchange as well as Mr. Rokurou Tsuruta.
4. Mr. Shuhei Shiozawa will assume office as a non-executive Member of the Board of Directors (Outside). The
Company will enter into an agreement with him to limit his liability.
The outline of the agreement is as follows:・ If a Member of the Board of Directors becomes liable to the Company for failure to perform his/her duties as a
Member of the Board of Directors after the conclusion of this agreement, the maximum amount of his/her liability
shall be twice the value of the annual property benefits that he/she has received or should receive from theCompany as consideration for the execution of his/her duties during his/her term of office as calculated by themethod provided in Article 113, Item 1 of the Ordinance for Enforcement of the Companies Act, and any amount inexcess of the maximum amount shall be exempted from the liability, provided that the said Member of the Board of
Directors has conducted his/her duties in good faith and without gross negligence.
5. The Company entered into an agreement with Mr. Rokurou Tsuruta to limit his liability under the same conditions
detailed in 4. above when he assumed office in the previous year.

-9-

Proposal 4:

Election of four (4) Audit & Supervisory Board Members

As the terms of office of all the four (4) Audit & Supervisory Board Members will expire at theconclusion of this meeting, we propose election of four (4) Audit & Supervisory Board Members.
The Audit & Supervisory Board has given its consent to this proposal in advance.
The candidates for Audit & Supervisory Board Members are as follows:
No.

Name
(Date of birth)

Career summary, positions at the Company
and significant concurrent positions
April 1979
April 2004
April 2005
February 2006

Tomoo Akai
(June 16, 1954)(Reappointment)

1June 2008
June 2009
June 2011

Number ofshares of theCompany held

Joined the Company
General Manager, Legal & Auditing Dept.
General Manager, Legal Affairs Dept.
General Manager, General Affairs & Personnel Administration
Dept.
General Manager, Human Resources Div.
General Manager, Audit Dept.
Audit & Supervisory Board Member of the Company (Fulltime) (current position)

Term of office of as
an Audit &[Reasons for proposing him as a candidate for Audit & Supervisory Board Member]Supervisory Board
We expect that the wealth of experience he has garnered through his engagement in
Member: 5 years
internal audits and service as an audit & supervisory board member of Group
companies will be useful for the auditing of the Company. Consequently, we
Attendance of thereappoint him as a candidate for Audit & Supervisory Board Member.
meetings of Audit &Supervisory Board:[Significant concurrent positions](29/29)None.

12,000[Conflicts of interest between the candidate and the Company]
No conflicts of interest exist between Mr. Tomoo Akai and the Company.
April 1975
August 2000
April 2002
July 2002
April 2003

Michio Tani
(January 30, 1952)
June 2006(Reappointment)
July 2010(Candidate for Audit
June 2011& Supervisory Board
Member (Outside))2

Joined The Fuji Bank, Limited (present Mizuho Bank, Ltd.)
General Manager, Securitization Sales Dept., ditto
General Manager, Capital Market Dept., Mizuho Bank, Ltd.
General Manager, Securities IB Dept., dittoManaging Executive Officer, Mizuho Securities Co., Ltd. andPresident, Mizuho Securities USA Inc.
Senior Executive Managing Officer, Hulic Co., Ltd.
Adviser, ditto
Audit & Supervisory Board Member of the Company (Fulltime) (current position)[Reasons for proposing him as a candidate for Audit & Supervisory Board Member(Outside)]
We expect that he will continue to give us useful opinions and recommendations
based on the knowhow and experience he acquired while serving in financial
institutions and his considerable knowledge of finance and accounting overall.
Attendance of the Consequently, we reappoint him as a candidate for Audit & Supervisory Board
meetings of Audit & Member (Outside).
Supervisory Board:[Significant concurrent positions](29/29)None.
Term of office of as
an Audit &Supervisory Board
Member: 5 years[Conflicts of interest between the candidate and the Company]
No conflicts of interest exist between Mr. Michio Tani and the Company.

- 10 -

7.000

No.

Name
(Date of birth)

Career summary, positions at the Company
and significant concurrent positions
April 1978
April 2003
April 2006
April 2009

April 2011
Osamu Kawase(July 22, 1954)(Reappointment)
June 2011(Candidate for Audit& Supervisory Board
Member (Outside))
April 2012
(Independent Officer)
June 20123

Joined The Yasuda Fire and Marine Insurance Co., Ltd．(present
Sompo Japan Nipponkoa Insurance Inc.)
General Manager, 1st Osaka Corporate Business Dept., ditto
General Manager, 3rd Head Office Business Dept., ditto
Executive Officer, ditto, and General Manager, Sompo Japan
Insurance (China) Co., Ltd.
Managing Executive Officer, Sompo Japan Insurance Inc. (incharge of China and Asia regions), ditto, and General Manager,
Sompo Japan Insurance (China) Co., Ltd.
Managing Executive Officer, Sompo Japan Insurance Inc. (incharge of China and Asia regions), ditto and Managing Director,
Sompo Japan Insurance (China) Co., Ltd.
Advisor, Sompo Japan Insurance Inc.
Audit & Supervisory Board Member of the Company (Fulltime) (current position)

Term of office of as
an Audit &Supervisory Board [Reasons for proposing him as a candidate for Audit & Supervisory Board Member(Outside)]
Member: 4 years
We expect that he will continue to give us useful opinions and recommendations
Attendance of the mainly from the viewpoint of operational auditing based on the knowledge andmeetings of Audit & experience he acquired while serving in a non-life insurance company.
Supervisory Board: Consequently, we propose him as a candidate for Audit & Supervisory Board
Member (Outside).
(29/29)Number ofshares of theCompany held

5,000

[Significant concurrent positions]
None.
[Conflicts of interest between the candidate and the Company]
No conflicts of interest exist between Mr. Osamu Kawase and the Company.
April 1977
April 2004
June 2005
June 2007
Motoo Yamamoto(October 31, 1952)(Reappointment)

4June 2009
April 2012

Joined the Company
Deputy Executive Officer, Corporate Planning Dept.
General Manager, Operations Planning Dept., Related Business
Operations
Member of the Board of Directors and General Manager,
Administration Dept., Kayaba System Machinery Co., Ltd.
Managing Member of the Board of Directors and General
Manager, Administration Dept., ditto
Member of the Board of Directors and Executive Vice President,
KYB Trondule Co., Ltd.
Audit & Supervisory Board Member of the Company (Full time)(current position)

Term of office of as June 2015
an Audit &Supervisory Board
Member: 1 year
[Reasons for proposing him as a candidate for Audit & Supervisory Board Member]
We expect that the diverse experience he has garnered in the Company, including
Attendance of the his involvement in corporate management of the Group companies, will be usefulmeetings of Audit & for the auditing of the Company. Consequently, we reappoint him as a candidate forSupervisory Board: Audit & Supervisory Board Member.
(23/23)[Significant concurrent positions]
None.
[Conflicts of interest between the candidate and the Company]
No conflicts of interest exist between Mr. Motoo Yamamoto and the Company.

- 11 -

10,000(Notes)1.
Mr. Michio Tani and Mr. Osamu Kawase are candidates for Audit & Supervisory Board Members (Outside).
The Company has registered Mr. Osamu Kawase with the Tokyo Stock Exchange as an independent officer under therules of the said exchange.
2.
Liability limitation agreement with the candidates for Audit & Supervisory Board Members:
The Company has entered into agreements with the candidates for Audit & Supervisory Board Members to limit their
liabilities effective from the previous fiscal year.
The outline of the agreement is as follows:・ If an Audit & Supervisory Board Member becomes liable to the Company for failure to perform his/her duties as an
Audit & Supervisory Board Member after conclusion of this agreement, the maximum amount of his/her liability
shall be twice the total value of the annual property benefits that he/she has received or should receive from theCompany as consideration for the execution of his/her duties during his/her term of office as calculated by themethod provided in Article 113, Item 1 of the Ordinance for Enforcement of the Companies Act, and any amount inexcess of the maximum amount shall be exempted from the liability, provided that the said Audit & Supervisory
Board Member has conducted his/her duties in good faith and without gross negligence.

Proposal 5:

Election of one (1) Substitute Audit & Supervisory Board Member

Mr. Atsushi Shigeta was elected as a Substitute Audit & Supervisory Board Member at the 93rd Ordinary
General Meeting of Shareholders held on June 24, 2015 by its resolution effective until the commencementof this meeting. To prepare for any case where the number of Outside Audit & Supervisory Board Members
becomes less than the number required by laws and regulations, we propose to elect one (1) Substitute Audit& Supervisory Board Member.
Such Substitute Audit & Supervisory Board Member will assume the office of Audit & Supervisory
Board Member only if the number of Outside Audit & Supervisory Board Members becomes less than thenumber required by laws and regulations. His/her term of office shall be equal to the remaining term ofoffice of his/her predecessor.
The Audit & Supervisory Board has given its consent to this proposal in advance.
The candidate for Substitute Audit & Supervisory Board Member is as follows:
Name(Date of birth)

Past experienceand significant concurrent positions
March 2006
April 2008
May 2010
May 2011
April 2013
June 2015

Number ofshares of theCompany held

Executive Officer and General Manager, 7th Sales Dept.,
Mizuho Corporate Bank, Ltd.
Managing Executive Officer, ditto
Senior Managing Director, Tobu Department Store Co., Ltd.
Representative Senior Managing Director, ditto
Representative Director and President, ditto
Representative Director and President, Tobu Hotel Management
Co., Ltd. (current position)
Part-time Audit & Supervisory Board Member, Tokyo Tatemono
Real Estate Sales Co., Ltd. (current position)

Atsushi Shigeta(March 31, 1957)

March 2016

(Candidate for
Substitute Audit &Supervisory Board
Member (Outside))[Reasons for proposing him as a candidate for Substitute Audit & Supervisory
Board Member (Outside)]
We expect that he will give us useful opinions and recommendations to securesoundness of the auditing and corporate management of the Company based on his
wealth of experience as a long-time corporate manager. Consequently, we appoint
him as a candidate for Substitute Outside Audit & Supervisory Board Member.
[Significant concurrent positions]Representative Director and President, Tobu Hotel Management Co., Ltd.
Part-time Audit & Supervisory Board Member, Tokyo Tatemono Real Estate Sales
Co., Ltd.
[Conflicts of interest between the candidate and the Company]
No conflicts of interest exist between Mr. Atsushi Shigeta and the Company.

- 12 -

0(Note) The liability limitation agreement with a Substitute Audit & Supervisory Board Member:
The Company has entered into an agreement with Mr. Shigeta Atsushi to limit his liability on condition that he iselected as Substitute Audit & Supervisory Board Member. The outline of the agreement is as follows:・ If an Audit & Supervisory Board Member becomes liable to the Company for failure to perform his/her duties as an
Audit & Supervisory Board Member after the conclusion of this agreement, the maximum amount of his/her liability
shall be twice the total value of the annual property benefits that he/she has received or should receive from theCompany as consideration for the execution of his/her duties during his/her term of office as calculated by the method
provided in Article 113, Item 1 of the Ordinance for Enforcement of the Companies Act, and any amount in excess ofthe maximum amount shall be exempted from the liability, provided that the said Audit & Supervisory Board Member
has conducted his/her duties in good faith and without gross negligence.

Proposal 6:

Renewal of Countermeasures to Large-Scale Purchase of the Company’s Shares(Takeover Defense Measures)

The Company introduced Countermeasures to Large-Scale Purchase of the Company’s Shares (“Takeover
Defense Measures”) with the approval of the shareholder of the Company at the 85th Ordinary General
Meeting of Shareholders held on June 26, 2007, and the most recent renewal of the Takeover Defense
Measures took place pursuant to a resolution at the 91st Ordinary General Meeting of Shareholders held on
June 25, 2013 (hereinafter, the “Present Plan”). However, the effective period of the Present Plan will expire
at the conclusion of the 94th Ordinary General Meeting of Shareholders of the Company to be held in June
2016 (hereinafter, “this Shareholders’ Meeting”). In an effort to ensure and enhance the Company’s corporate
value and ultimately shareholders’ common interests for the medium and long terms, the Company has
continued to review the approach to the Takeover Defense Measures since the renewal of the Present Plan,
including the pros and cons of its continuation, in view of the changes of the social and economic situations,the various trends of takeover defense measures and the development of diverse discussions.
As a result, the Company decided at the Board of Directors’ meeting held on May 17, 2016 to renew the
Present Plan with partial amendments (hereinafter, the plan after the amendment is referred to as the “Plan”)
subject to the approval of the shareholders at this Shareholders’ Meeting. The partial amendments shall bemade with regard to the framework to avoid control over the Company’s financial and business policy
decisions by inappropriate entities in light of the Company’s basic policy for entities who control thefinancial and business policy decisions of the Company, in accordance with Article 118, Item 3 of theOrdinance for Enforcement of the Companies Act. We request the approval of the shareholders on this
proposal.
The major amendments to the Plan from the Present Plan are a set of changes to the structure of the
Independent Panel. The members of the Independent Panel shall be composed of Member of the Board of
Directors (Outside) and Audit & Supervisory Board Member (Outside), as shown below. (Please see “3.
Establishment of an Independent Panel” on Page 18 and the “Overview of the Independent Panel Rules” on
Page 28)
Present Plan
Outside Advisories and Audit & Supervisory
Board Member (Outside)

The PlanMember of the Board of Directors (Outside)and Audit & Supervisory Board Member(Outside)

In addition, wording and expressions have been changed.
For details on the Plan, please refer to the attached document (the timely disclosure document announced
as “Renewal of Countermeasures to the Large-scale Purchase of the Company’s shares (Takeover Defense
Measures)” dated May 17, 2016).
END- 13 -

<Attached Document>
May 17, 2016
PRESS RELEASE
Company name: KYB Corporation
Representative: Yasusuke Nakajima
Representative Director,
President Executive Officer(Securities code: 7242, TSE (First
Section))Contact: Masaru Tsuboi
Executive Officer,
General Manager, Legal Affairs Dept.
(Tel: +81-3-3435-6460)

Renewal of Countermeasures to Large-Scale Purchase of the Company’s Shares(Takeover Defense Measures)

KYB Corporation (the “Company”) introduced Countermeasures to Large-Scale Purchase of theCompany’s Shares (Takeover Defense Measures) with the approval of the shareholder of the Company at the85th Ordinary General Meeting of Shareholders held on June 26, 2007, and the most recent renewal of the
Takeover Defense Measures took place pursuant to a resolution at the 91st Ordinary General Meeting of
Shareholders held on June 25, 2013 (hereinafter, the “Present Plan”). However, the effective period of the
Present Plan will expire at the conclusion of the 94th Ordinary General Meeting of Shareholders of theCompany to be held in June 2016 (hereinafter, this “Shareholders’ Meeting”). In an effort to ensure andenhance the Company’s corporate value and ultimately shareholders’ common interests for the medium andlong terms, the Company has continued to review the approach to the Takeover Defense Measures since therenewal of the Present Plan, including the pros and cons of its continuation, in view of the changes of thesocial and economic situations, the various trends of takeover defense measures and the development ofdiverse discussions.
As a result, the Company decided at the Board of Directors’ meeting held today to renew the Present Plan
with partial amendments (hereinafter, the plan after the amendment is referred to as the “Plan”) subject to theapproval of the shareholders at this Shareholders’ Meeting. The partial amendments shall be made with regard
to the framework to avoid control over the Company’s financial and business policy decisions by
inappropriate entities in light of the Company’s basic policy for entities who control the financial andbusiness policy decisions of the Company (hereinafter, “the Basic Policy on the Control of the Company”), in
accordance with Article 118, Item 3 of the Ordinance for Enforcement of the Companies Act.
The major amendments to the Plan from the Present Plan are a set of changes to the structure of the
Independent Panel. The Independent Panel, which has been composed of outside Advisories and Audit &Supervisory Board Members (Outside) in the Present Plan, shall be composed of Members of the Board of
Directors (Outside) and Audit & Supervisory Board Members (Outside) in the Plan. In addition, wording andexpressions have been modified and streamlined as necessary.
All of the Auditors attended the Board of Directors’ meeting that determined the Plan, and none of them
expressed objections to the Plan.
The status of the Company’s shares as of March 31, 2016 is as per Exhibit 1. For your information, no
approach or proposal for a large-scale purchase of the Company’s shares has been made as of today.

- 14 -

I. Basic Policy on the Control of the Company
As a listed company, we consider that the shares of the Company, can be freely traded by shareholders andinvestors, and that any proposal for a large-scale purchase of the Company’s shares or similar actions shallnot be denied out of hand and shall ultimately be judged by the free opinions of shareholders.
However, the Japanese capital market once showed a trend of large-scale purchases of shares or similaractions being forced on target corporations unilaterally without the consent of the management of the target
corporations. We cannot deny that such actions may possibly be forced on the Company in the future.
We believe that a person who controls the financial and business policy decisions of the Company should
be a person who fully understands the management principles, the various sources of the corporate value of
the Company, and the Company’s relationship of confidence with the stakeholders supporting the Company,
and works to ensure and enhance the Company’s corporate value and shareholders’ common interests for the
medium and long terms. Therefore, we consider that any person who may impair the Company’s corporate
value and shareholders’ common interests by an inappropriate proposal for a large-scale purchase or similaractions is inappropriate as an entity that controls the financial and business policy decisions of the Company.
II. Effective Use of the Company’s Assets, Formation of an Appropriate Business Group, and Other
Special Efforts to Contribute to the Realization of the Basic Policy
The Company implements the following measures in an effort to ensure and enhance the Company’s
corporate value and shareholders’ common interests for the medium and long terms, in order to have many
investors continually invest in the Company for the long term. We believe that this effort will contribute to
the realization of the Basic Policy on the Control of the Company described in I. above.
1. Efforts to Enhance Corporate Value under the “Medium-Term Business Plan”
The Company has set a medium-term business plan for fiscal years 2014 to 2016 under the slogan:“Compete and Win on the Global State with the Power of the KYB Group”
In this plan, we will move and act in order to guide forward the Company towards significant growth in
the 100th anniversary, starting from the 80th anniversary as the turning point based on the following:(1) AC (Automotive Components) Operations
Acquire customers and expand aftermarket business worldwide through development at the 5 global
points (Japan, Europe, China, ASEAN, and North America)(2) HC (Hydraulic Components) Operations
Expand aircraft components, agricultural machinery, railroad instruments, etc. and ensure costcompetitiveness in hydraulic products for construction machinery(3) Human Resources Development
Acquire and develop human assets that can support KYB’s global growth strategy and develop
management personnel(4) Technology and Product Development
Strengthen product development systems based on each market’s needs and develop related newtechnologies(5) Monozukuri (manufacturing expertise)
Boost group-wide productivity and reduce international logistics costs by expanding development of
our lead-time-halving activities overseas and to our clients(6) Management
Improve regional controlling function in Europe, China, and the US
2. Basic Concept for Corporate Governance
The Company aims at sustainable and stable growth and enhancement of corporate value with its missionof contributing to society including the development of its stakeholders based on the following management
principles:<Management Principles>“By serving technologies and products that make people’s life safe and comfortable, KYB Group dedicates tothe society.”
1. We shall build a corporate culture full of vitality, and hold high goals.
2. We shall value sincerity, cherish nature, care for the environment.

- 15 -

3. We shall constantly pursue creativity, contribute to the prosperity of customers, shareholders, suppliers
and society.
In order to fulfill the corporate social responsibility as to contribution to the society as well as to meetshareholders’ expectations through realization of sustainable and stable growth and the increase of corporate
value, we pursue a speedy and efficient management structure, a highly fair and transparent management
supervisory function, and continuous efforts to strengthen and enhance our corporate governance by thefollowing basic policies.
<Basic Policies>
1. We shall respect the rights of shareholders, and ensure the equal and fair treatment of all shareholders.
2. We shall take the benefits of stakeholders into consideration and endeavor to appropriately cooperate withthose stakeholders.
3. We shall disclose not only the information in compliance with the relevant laws and regulations, but also
actively provide the important and/or useful information to stakeholders for their well-informed decision
making.
4. The Board of Directors shall be cognizant of its fiduciary responsibility and accountability to shareholders,and shall appropriately fulfill its roles and responsibilities in order to promote sustainable and stablecorporate growth and increase corporate value, profitability, and capital efficiency.
5. We shall engage in constructive dialogue with shareholders, and make efforts to obtain shareholders’support regarding the Company’s Business Policies and also reflect shareholders’ opinions and concerns in
the improvement of management.
In addition, the Company works on the following matters:i) We have developed the “Corporate Guiding Principle” as a set of rules for officers and employees toobserve in their corporate activities and are striving for legal compliance and the establishment ofcorporate ethics. We have developed an internal whistle-blowing system (prompt report & box for
opinion and/or claim) for all of the Group companies and have established an exclusive whistle-blowing
and consultancy contact to ensure full compliance with the Whistleblower Protection Act.
ii) The Company has adopted a “Company with Board of Company Auditors” System. The Board of
Directors’ meeting of the Company is held once a month, in principle (attended by Auditors every time),
and proactively discusses matters to be discussed as stipulated in the “Board of Directors Regulations.”
The Company ensures the transparency and fairness of audits by including two outside Auditors in the
Board of Company Auditors.
III. Contents of the Plan (Efforts to avoid Control over Financial and Business Policy Decisions by
Inappropriate Entities in Light of the Basic Policy on the Control of the Company)
1. Purpose of Introduction of the Plan
For the management of the Company, aiming to enhance or ensure corporate value and shareholders’common interests for the medium and long terms, a wide range of know-how, a wealth of experience, and afull understanding of the relationships constructed with stakeholders such as customers, employees andclients etc. are indispensable. Without a full understanding of the business characteristics of the Company,
shareholders will not be able to appropriately judge the shareholder value which may be realized in the future.
Upon a sudden execution of a large-scale purchase, shareholders are obliged to promptly and appropriately
judge whether the purchase price offered by those conducting the large-scale purchase is reasonable incomparison with the Company’s corporate value and shareholders’ common interests. For this judgment, it isessential for shareholders to be provided necessary and sufficient information from both the Board of
Directors of the Company and the large-scale purchaser. The concept of the management policy and businessplan which the large-scale purchaser may pursue when joining the management of the Company is an
important piece of information for shareholders to study when they intend to continue holding the shares of
the Company. The opinions of the Board of Directors of the Company about the said large-scale purchase will
be similarly important for shareholders.
Considering the above, the Board of Directors of the Company reached the conclusion that, upon alarge-scale purchase, the large-scale purchaser should provide necessary and sufficient information on thelarge-scale purchase in advance to allow shareholders to appropriately judge the large-scale purchase. After
this information is provided, the Board of Directors of the Company will announce its opinion on thelarge-scale purchase based on careful examinations and the advice of external experts (financial advisors,certified public accountants, lawyers, consultants and other experts) as necessary. The Board of Directors will

- 16 -

negotiate for improvement of conditions for the large-scale purchase and propose an alternative plan toshareholders as necessary. Through this process, shareholders will be able to examine both the proposal of thelarge-scale purchaser and an alternative plan proposed by the Board of Directors of the Company, if any, byreferring to the opinions of the Board of Directors of the Company. Thus, the shareholders will be given thenecessary information and opportunity to make a final decision.
Accordingly, the Board of Directors of the Company considers that a large-scale purchase conductedbased on a certain rational guideline will be conducive to the Company’s aim to enhance or ensure theCompany’s corporate value and shareholders’ common interests over the medium and long terms. The
Company decided to establish a guideline on the information to be provided in the case of a large-scalepurchase, as described below (hereinafter, the “Large-scale Acquisitions Rule”), and to renew the Present
Plan with partial amendments, namely, the Plan (please see the flow chart in Exhibit 2), subject to theapproval of the shareholders at this Shareholders’ Meeting, as Takeover Defense Measures including theCompany’s policy toward large-scale purchases, in an effort to avoid control over financial and business
policy decisions by inappropriate entities who attempt a large-scale purchase, in light of the Basic Policy on
the Control of the Company described in I. above.
2. Purchase of the Company’s Shares Subject to the Plan
“Purchase of the Company’s Shares subject to the Plan” shall mean an act, with the intention of bringing
the specified shareholder group’s (Note 1) proportion of voting rights (Note 2) to 20% or more, of purchasing
share certificates, etc. of the Company (Note 3), or the act of purchasing share certificates, etc. of theCompany resulting in the specified shareholder group’s proportion of voting rights of 20% or more(regardless of specific purchase methods such as market transaction or tender offer, and excluding a purchasepreviously approved by the Board of Directors, in both acts; hereinafter, such a purchase is referred to as a“large-scale purchase” and a person who conducts such a purchase is referred to as a “Large-scale
Purchaser.”)
Note 1: Specified shareholder group means:(i) Holders (meaning those who are included among the holders based on Article 27-23, Paragraph 3 of the
Financial Instruments and Exchange Act (including those recognized to apply by the Board of Directorsof the Company); hereinafter the same shall apply.) of the share certificates, etc. (share certificates, etc.
provided in Article 27-23, Paragraph 1 of the same Act) of the Company and joint holders (joint holders
provided in Article 27-23, Paragraph 5 of the same Act and including those deemed as joint holders basedon Paragraph 6 of the same Article; hereinafter the same shall apply) thereof or,(ii) those who conduct purchase, etc. (purchase, etc. provided in Article 27-2, Paragraph 1 of the same Act
and including transactions in the Financial Instruments Exchange Markets) of share certificates, etc.
(including share certificates, etc. provided in Article 27-2, Paragraph 1 of the same Act) of the Company
and persons in special relationships (persons in special relationships provided in Article 27-2, Paragraph
7 of the same Act; hereinafter the same shall apply).
Note 2: Proportion of voting rights means:(i)
If the specified shareholder group corresponds to (i) of Note 1, the holding ratio of the sharecertificates, etc. (the holding ratio of the share certificates, etc. provided in Article 27-23, Paragraph
4 of the Financial Instruments and Exchange Act. In this case, the number of share certificates, etc.
held by the joint holders of such holders (the number of share certificates, etc. provided in the same
Paragraph) shall be added. In the calculation of such holding ratio of share certificates, etc., persons
in special relationships defined in Article 27-2, Paragraph 7 of the same Act, financial institutions
who have concluded financial advisor contracts with the Large-scale Purchasers such as investmentbanks and securities firms, and agents of tender offeror and brokerage lead managers of theLarge-scale Purchasers shall be deemed to be joint holders of the Large-scale Purchasers) of suchholders or,(ii)
if the specified shareholder group corresponds to (ii) of Note 1, the total of the holding ratio of theshare certificates, etc. of such purchasers and persons in special relationships (the holding ratio ofshare certificates, etc. provided in Article 27-2, Paragraph 8 of the same Act).
In calculating the proportion of voting rights, the total amount of voting rights and outstanding shares
stated in the most recently submitted annual securities report, semi-annual securities report, or sharebuyback report may be used.

- 17 -

Note 3: Share certificates, etc. shall correspond to either share certificates, etc. provided in Article 27-23,
Paragraph 1 of the Financial Instruments and Exchange Act or share certificates, etc. provided in Article
27-2, Paragraph 1 of the same Act.
3. Establishment of Independent Panel
The Board of Directors of the Company will make the final judgment on whether or not a series ofprocedures has been taken according to the Large-scale Purchase Rule, or, even if the Large-scale Purchase
Rule is observed, whether or not countermeasures against the large-scale purchase should be taken because
the said large-scale purchase is expected to severely undermine the Company’s corporate value andshareholders’ common interests. In order to implement the Plan appropriately and prevent an arbitrary
decision by the Board of Directors of the Company, so as to secure objectivity and rationality of the decision,
we will establish an Independent Panel similar to the Present Plan (for an overview of the Independent Panel
Regulations, please see Exhibit 3). The number of panel members of the Independent Panel shall be three (3)or greater, and in order to enable fair and neutral judgment, the panel members shall be elected from among
Member of the Board of Directors (Outside) and Audit & Supervisory Board Member (Outside) of theCompany who are independent from the management responsible for business execution. Mr. Osamu Kawase,an Audit & Supervisory Board Member (Outside) and current member of the Independent Panel, will remain
in office after the implementation of the Plan, and Member of the Board of Directors (Outside) Mr. Rokurou
Tsuruta and Mr. Shuhei Shiozawa will become new members of the Independent Panel (please see Exhibit 4
for their brief career history).
Before implementing the countermeasures, the Board of Directors of the Company shall consult with the
Independent Panel on whether or not to do so. The Independent Panel shall recommend to the Board of
Directors of the Company whether or not the situation allows the Board of Directors of the Company toimplement the countermeasures, after careful evaluation and examination of the large-scale purchase from theviewpoint of ensuring and enhancing the Company’s corporate value and shareholders’ common interests forthe medium and long terms. The Board of Directors of the Company shall decide on the implementation of
the countermeasures with utmost respect to the recommendations of the Independent Panel. An outline of therecommendations of the Independent Panel shall be announced as needed.
In order to ensure that the judgment of the Independent Panel will contribute to the Company’s corporate
value and shareholders’ common interests, the Independent Panel may obtain advice from independent
third-party experts (financial advisors, certified public accountants, lawyers, consultants, and other experts) at
the expense of the Company, as needed.
4. Overview of the Large-scale Purchase Rule
(1) Submission of the Letter of Intent by the Large-scale Purchaser to the Company in advance
Prior to conducting a large-scale purchase or the proposal of a large-scale purchase, Large-scale
Purchasers who intend to conduct the large-scale purchase must first submit to the Representative Director of
the Company a pledge on observance with the Large-scale Purchase Rule, along with a Letter of Intent
written in Japanese language, including the following information:(i)Name and address of the Large-scale Purchaser(ii) Governing law for incorporation(iii) Name of the representative(iv) Contact in Japan(v)
Outline of the large-scale purchase to be proposed and such
In case of receipt of the Letter of Intent from a Large-scale Purchaser, the Board of Directors of theCompany shall promptly announce its receipt and, if deemed necessary, its contents.
(2) Provision of Necessary Information by the Large-scale Purchaser
Within ten (10) business days from the day following the day of receipt of a complete Letter of Intent(including all of items (i) through (v) of (1) above), the Board of Directors of the Company shall issue to theLarge-scale Purchaser a written document describing the documentation required to be submitted to theBoard of Directors of the Company as information on the large-scale purchase, and, in accordance with thiswritten document, the Large-scale Purchaser must submit to the Board of Directors of the Company therequired information in writing on the large-scale purchase (hereinafter, “the Necessary Information”).
Further, provision of the Necessary Information based on the Large-scale Purchase Rule and other notices orcommunication to the Company, Japanese should be the only language to be used.
The Necessary Information usually includes the items below. Specific contents of the Necessary- 18 -

Information may differ according to the attributes of the Large-scale Purchaser and purpose and contents of
the large-scale purchase. In any case, the Necessary Information must be limited to a range necessary andsufficient to allow the shareholders to form judgments and allow the Board of Directors of the Company toconstruct opinions.
(i)
Details (specific name, investment ratio, contents of business, career or corporate history, capitalcomposition, financial status, total number of outstanding shares, existence of any legal violations overthe past 10 year period (if any, an outline), number of the Company’s shares held, history of buying
and selling the Company’s shares; name, brief history, number of shares held, and existence of any
legal violations in the past (if any, an outline), number(s) of the Company’s shares held and history ofbuying and selling the Company’s shares with regard to officers) of the Large-scale Purchaser and its
group (including major shareholders or investors, principal subsidiaries and affiliates, joint holders,and persons in special relationships; and, in a case where the Large-scale Purchaser is a fund or entity
invested by funds, its principal partners, investors (whether direct or indirect), other constituent
members, executive partners, and persons who continually provide advice on investment; hereinafter,
the same shall apply).
(ii) Specific contents of the internal control system of the Large-scale Purchaser and its group and theeffectiveness and status thereof.
(iii) Purpose (specific contents of the purpose disclosed in the Letter of Intent), method and contents(including the price and class of consideration (in a case where securities, etc. are used asconsideration, the class and exchange rate of the said securities, etc.; in a case where securities, etc.
and money are used as consideration, the class and exchange rate of the said securities, etc. andamount of money), timing of the purchase, structure of related transactions, legality of the method of
the large-scale purchase, feasibility of the large-scale purchase and related transactions, and, in a casewhere the Company’s shares will be delisted after the completion of the large-scale purchase, theextent and the reason thereof; to be submitted together with the written opinion of a qualified lawyer
on the legality of the method of the large-scale purchase).
(iv) Basis for calculating the price of the large-scale purchase (the basis for calculation includes: thespecific calculation base; in a case where the money for consideration differs from the market priceand/or from the price of the transaction conducted recently by the Large-scale Purchaser, the amount ofdifference, the calculation method, the specific contents of basis for conversion in case of any
difference in purchase price according to class of shares, numerical information used for the calculation,
the details of synergy expected to arise through the series of transactions regarding the purchase, etc.,
and the dis-synergy amount and basis for calculating the same; and in a case where an opinion is
obtained from a third party for calculation, the name of the said third party and an outline of the opinion
and specific circumstances in which the price was determined based on the said opinion).
(v)
Existence of any communication of intent with a third party on the large-scale purchase (including
communication of intent to act of making important decision, etc. (“Act of Making Important
Decision” provided in Article 27-26, Paragraph 1 of the Financial Instruments and Exchange Act) to
the Company) and, if such communication of intent exists, the specific situation and contents of thecommunication of intent.
(vi) Source of funds for the Large-scale Purchase (balance of a deposit by class of deposit in the case of adeposit, the specific name and type of business of the fund provider (including the substantial fundprovider (whether direct or indirect)), the procurement method, the amount to be procured, theexistence of any conditions pertaining to the execution of the funding, the existence of any collateraland pledge after the provision of the funding, the contents of the collateral and pledge, if any, and thecontents of related transactions.).
(vii) If there are any existing lease agreements, collateral agreements, reselling agreements, agreements topurchase with a promise, or other significant contracts or agreements regarding the Company’s sharesalready held by the Large-scale Purchaser (hereinafter, the “collateral agreements, etc.”), the specificcontents of the collateral agreements, etc., such as the types of agreement, the counterparties of theagreements, and the quantities, etc. of shares subject to the agreements.
(viii) In a case where the Large-scale Purchaser plans to conclude collateral agreements, etc. or otheragreements with third parties regarding the Company’s shares that the Large-scale Purchaser plans to
obtain in the large-scale purchase, the specific contents of the collateral agreements, etc. or otheragreements with third parties, including the types of agreement, the counterparties of the agreements,
and the quantities of shares subject to the agreements.
(ix) Candidates for officers (including information about their experience in the same kind of business asthat of the Company and the Group), management policy, business plan, financial plan, cash plan,
investment plan, capital policy, and dividend policy of the Company and the Group (including plans- 19 -

for organization restructuring, reorganization of the business group, dissolution, selling of the assets of
the Company, provision of collateral and other disposition, expected after the completion of thelarge-scale purchase).
(x)
Whether or not there will be any changes in the relationships with the customers, clients, employees,
officers, or local public organizations in the locations where the Company’s laboratories, factories, orother facilities are located, or the relationships with other interested parties related to the Company and
the Group, and if so, the contents of the changes.
(xi) In a case where the large-scale purchase is conducted for the purpose of pure investment or investment
for other purpose than profits, the shareholding policy, purchase and sale policy, and policy of
exercising voting rights after the large-scale purchase and the reasons for those policies, and in a casewhere the large-scale purchase is conducted as non-pure investment for the purpose of long-term
capital tie-up, the necessity thereof.
(xii) In a case where the purpose of the large-scale purchase is to conduct an Act of Making Important
Decision or a case where an Act of Making Important Decision may possibly be made after thelarge-scale purchase, information on the purpose, contents, necessity, and timing of the Act of Making
Important Decision and on the specific case or cases where the Acts of Important Decision will be
made.
(xiii) In a case where an additional purchase of the Company’s shares is intended after the large-scalepurchase, the reasons and contents thereof.
(xiv) Regulatory items that will possibly apply to the large-scale purchase based on laws and regulations inJapan and abroad, and the probability of obtaining approvals, permissions or authorizations required
from the relevant governments in Japan and abroad or from third parties based on the anti-monopoly
law and other laws and regulations (to be submitted together with a written opinion of a qualified
lawyer on these matters).
(xv) The probability that permissions and authorizations necessary in Japan and abroad for the managementof the Company group will be maintained, and the probability that the various relevant laws andregulations in Japan and abroad will be observed after the completion of the large-scale purchase.
(xvi) Existence of any relationship (whether direct or indirect) with anti-social forces or terrorism-relatedorganizations, and, if any, the details of such relationship and any existing policy to deal with them.
(xvii) Other matters deemed to be reasonably necessary by the Board of Directors of the Company or the
Independent Panel.
The Board of Directors of the Company may establish a time-limit on the provision of information by theLarge-scale Purchaser, as needed, from the viewpoint of prompt implementation of the Large-scale Purchase
Rule. If, however the Large-scale Purchaser requests an extension based on rational grounds, the Board of
Directors of the Company may extend it.
If the information provided initially is considered to be insufficient after careful examination, the Board of
Directors of the Company may continue to request the Large-scale Purchaser additional information until the
Necessary Information is collected, within a reasonable time-limit, if needed.
If the Board of Directors of the Company considers that all of the Necessary Information has been
provided by the Large-scale Purchaser, the Board of Directors of the Company shall notify the Large-scale
Purchaser to that effect, provide the Necessary Information to the Independent Panel, and announce the same.
If, despite the request by the Board of Directors of the Company for additional provision of the Necessary
Information, the Large-scale Purchaser reasonably explains any difficulty entailed in providing a portion of
the additional information, the Board of Directors of the Company may start the evaluation and examination
as described in (3) hereinafter, even though the Necessary Information requested by the Board of Directors of
the Company has not been fully collected.
The Necessary Information provided to the Board of Directors of the Company shall be provided to the
Independent Panel, and, if it is deemed necessary for shareholders to make judgment, the Necessary
Information shall be announced in full or in part at the point the Board of Directors of the Company considers
it appropriate.
(3) Evaluation and examination, etc. by the Board of Directors
In accordance with the difficulty of evaluation, etc. of the large-scale purchase, the Board of Directors of
the Company will establish a time span for the evaluation, examination, negotiations, formation of opinions,and preparation of an alternative plan by the Board of Directors of the Company (hereinafter, the “BOD’s
Evaluation Period”), of up to a maximum of 60 days in the case of a purchase of all of the Company’s sharesby tender offer with only cash (JPY currency) as consideration, or a maximum of 90 days in other cases oflarge-scale purchase, after the Large-scale Purchaser has provided all of the Necessary Information to the- 20 -

Board of Directors of the Company. Therefore, the large-scale purchase shall start only after the elapse of the
BOD’s Evaluation Period.
During the BOD’s Evaluation Period, the Board of Directors of the Company will carefully form an
opinion of the Board of Directors of the Company, paying utmost respect to the recommendations of the
Independent Panel, after fully evaluating and examining the Necessary Information and receiving any
necessary advice from independent external experts (financial advisors, certified public accountants, lawyers,
consultants and other specialists), and announce such opinion. The Board of Directors of the Company may
also negotiate with the Large-scale Purchaser for improvement of the conditions of the large-scale purchaseand propose an alternative plan to the shareholders, as needed.
5. Policy toward Large-scale Purchase(1) Case where the Large-scale Purchaser Observes the Large-scale Purchase Rule
If the Large-scale Purchaser observes the Large-scale Purchase Rule, the Board of Directors of theCompany will limit its attempts to persuade the shareholders by presenting objections against the proposedlarge-scale purchase and the proposal of an alternative plan, and, in principle, will not take countermeasuresagainst the large-scale purchase. The shareholders will judge whether or not to accept the Large-scale
Purchaser’s proposal by considering the proposal of the large-scale purchase, opinions on the proposal andthe alternative plan submitted by the Company, if any.
Even in the case where the Large-scale Purchase Rule is observed, the Board of Directors of the Company
may exceptionally take countermeasures that can be legitimately taken under the provisions of the Companies
Act or other laws or the Articles of Incorporation of the Company, such as the allotment of share options
without contribution, in compliance with duty of due care of prudent manager, if the Board of Directors of theCompany decides that the said large-scale purchase corresponds to any of the cases (i) to (ix) below, forexample, and would result in a serious impairment of the Company’s corporate value and shareholders’common interests, such as an irreparable damage to the Company.
Such specific method to be taken shall be one that the Board of Directors of the Company judges as mostappropriate at such time. Exhibit 5 presents an outline of the allotment of share options without contributionthat the Board of Directors of the Company may, for example, select as a countermeasure. If an allotment ofshare options without contribution is actually conducted, conditions may be established in consideration of
the effectiveness of the allotment as a countermeasure, such as the addition of a condition for the exercise ofshare option whereby those who exercise share option should not belong to the specified shareholder group
including the Large-scale Purchaser, or a condition for acquisition whereby the Company will acquire shareoption from those entitled to receive share option in exchange for the Company’s shares.
(i)

(ii)

(iii)

(iv)

(v)

(vi)

The share purchase conducted without any real intention to join the management of the Company, butrather to require the parties concerned with the Company to purchase the share certificates at an
inflated price (so-called “green mailer” case).
The share purchase conducted for the purpose of so-called “scorched earth management,” whereby theintellectual property rights, know-how, confidential corporate information, principal clients andcustomers necessary for business management of the Company are transferred to the Large-scale
Purchaser and its group companies through a temporary gain of control of the management of theCompany.
The share purchase conducted for the expected appropriation of the assets of the Company as collateral
for the debt of the Large-scale Purchaser and its group companies and resource for liquidation after theLarge-scale Purchaser takes control of the management of the Company.
The share purchase conducted for the purpose of gaining temporary control of the management of theCompany in order to sell or dispose of high-value assets such as real estate and securities with noimmediate relation to the business of the Company and to pay a one-time high dividend with theproceeds from such disposals, or to sell the Company’s shares at a high price by taking advantage ofthe sharp rise in the share price due to such a one-time high dividend.
The method proposed by the Large-scale Purchaser for the purchase of the Company’s shares isdeemed to restrict the shareholders’ opportunity or discretion to judge, as in the case of a so-called“Coercive Two-Tiered Takeovers” (the Large-scale Purchaser initially effects a tender offer or anothermethod of purchase by not targeting all of the Company’s shares and setting conditions for a second
tiered purchase that are unfavorable or equivocal for shareholders), and practically coerce shareholders
to sell their Company’s shares.
The conditions of purchase of the Company’s shares proposed by the Large-scale Purchaser (including
but not limited to the class and amount of consideration, the basis for calculating such amount, any- 21 -

other specific details of the conditions, any illegality, and feasibility) are considered to be remarkably
insufficient or inappropriate in light of the Company’s corporate value, by which the Company’s
corporate value and shareholders’ common interests will be severely undermined.
(vii) The acquisition of control by the Large-scale Purchaser is considered to destroy the Company’s
relationships with customers, employees, local society, or other parties of interest, by which theCompany’s corporate value and shareholders’ common interests will be severely undermined.
(viii) The corporate value of the Company in a case where the Large-scale Purchaser acquires control isconsidered to be obviously inferior to that in a case where the said Large-scale Purchaser does notacquire control on a medium and long-term basis, by which the Company’s corporate value andshareholders’ common interests will be severely undermined.
(ix) The Large-scale Purchaser is considered to be inappropriate as a controlling shareholder of theCompany from the viewpoint of public order and good morals in such a case where the management,
principal shareholders, or investors of the Large-scale Purchaser include persons related with
anti-social forces or terrorism-related organizations, by which the Company’s corporate value andshareholders’ common interests will be severely undermined.
If the countermeasures are judged to be implemented exceptionally as above, the Board of Directors of theCompany shall consult with the Independent Panel on whether or not to implement the countermeasures inadvance, and the Independent Panel shall make recommendations within the BOD’s Evaluation Period of 4.
(3) above after full examination of the necessity and reasonableness of its implementation, in order to secure
the objectivity and rationality of the judgment.
In respect of implementing countermeasures, the Board of Directors of the Company may undertake
procedures to confirm the will of the shareholders if the Independent Panel recommends to the Board of
Directors of the Company that the will of the shareholders be confirmed, or, even in a case where no such
recommendation is made, if the Board of Directors of the Company considers it appropriate to confirm thewill of shareholders.
The Board of Directors of the Company shall decide whether or not to implement the countermeasureswith the utmost respect to the recommendations of the Independent Panel and intent of the shareholders.
(2) Case where the Large-scale Purchaser Does Not Observe the Large-scale Purchase Rule
If the Large-scale Purchaser does not observe the Large-scale Purchase Rule, the Board of Directors of theCompany may act against the large-scale purchase by taking the countermeasures mentioned in (1) above forthe purpose of protecting the Company’s corporate value and shareholders’ common interests, irrespective of
the specific method of purchase. Upon deciding the implementation of countermeasures, the Board of
Directors of the Company shall judge whether or not to implement the countermeasures with the utmost
respect to the recommendations of the Independent Panel, after full examination of the necessity andreasonableness of the countermeasures.
(3) Suspension, etc. of Implementation of the Countermeasures
If the Board of Directors of the Company considers that the implementation of the countermeasures isinappropriate in cases such as where the said Large-scale Purchaser revokes or changes the large-scalepurchase after the Board of Directors of the Company decides to implement the countermeasures in cases (1)or (2) above, the said countermeasures may be suspended with due consideration of the opinion or
recommendation of the Independent Panel. If the Board of Directors of the Company considers that theimplementation of the countermeasures is inappropriate in response to the revocation or changes of thelarge-scale purchase by the Large-scale Purchaser after the shareholders entitled to the share option in thecase of an allotment of share option without contribution is fixed, for example, the implementation of thecountermeasures may be suspended at the recommendation of the Independent Panel, by cancelling the said
allotment of share option without contribution during the period until the day preceding the effective date of
the allotment. After the allotment of share option without contribution, the Company shall acquire withoutcompensation the said share option during the period until the day preceding the commencement of theexercise period of the said share option (the shareholders will lose the share option due to the acquisition of
the share option by the Company).
Such suspension of the implementation of the countermeasures will be disclosed in a timely andappropriate manner together with the matters that the Independent Panel considers to be necessary, in
accordance with laws, regulations and the regulations of the financial instruments exchange on which theCompany is listed.

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6. Impact, etc. of the Plan on Shareholders and Investors(1) Impact, etc. of the Large-scale Purchase Rule on Shareholders and Investors
The Large-scale Purchase Rule in the Plan aims to ensure opportunities to provide the shareholders withinformation and the opinions of the Board of Directors of the Company, the body actually responsible for the
management of the Company, as necessary to enable shareholders to judge whether or not to accept thelarge-scale purchase and to enable the Board of Directors of the Company to submit an alternative plan to theshareholders. Accordingly, the shareholders will be able to appropriately judge whether or not to accept thelarge-scale purchase based on sufficient information, which in turn will protect the Company’s corporate
value and shareholders’ common interests. The establishment of the Large-scale Purchase Rule is a premisefor shareholders and investors to make appropriate judgments on investment, and contributes to their benefit.
As mentioned in 5. above, the policy of the Company toward the large-scale purchase differs subject towhether or not the Large-scale Purchaser observes the Large-scale Purchase Rule. Shareholders and investors
are requested to watch the trend of Large-scale Purchasers.
(2) Impact on Shareholders and Investors by Implementation of Countermeasures
The decision by the Board of Directors of the Company on taking specific countermeasures as describedin 5. above for the purpose of protecting the Company’s corporate value and shareholders’ common interests
shall be disclosed in a timely and appropriate manner in accordance with laws, regulations and the regulationsof the financial instruments exchange on which the Company is listed.
A situation where the shareholders other than the Specified shareholder group including a Large-scale
Purchaser suffer any special loss in their legal right or economic aspects is not assumed at the time of
implementation of countermeasures. In a case where the allotment of share option without contribution isconducted as a countermeasure, for example, shareholders as of the allotment date will be allotted the shareoption without contribution according to the number of shares held. If the Company afterwards takes
procedures to acquire the share option with the acquisition provision attached, shareholders other than thespecified shareholder group including the Large-scale Purchaser will not be specially prejudiced, because
they will receive the Company’s shares as consideration for acquisition of the said share option by theCompany.
In a case where the Company cancels the issue of the said share option or acquires without compensation
the share option issued according to the decision of the Board of Directors of the Company following therecommendations of the Independent Panel (the shareholders will lose the share option due to the purchase ofshare option without contribution by the Company), shareholders or investors who have conductedtransactions on the assumption that the value of the Company’s shares would be diluted may possibly suffer acorresponding loss due to the change of the share price.
The specified shareholder group including the Large-scale Purchaser may possibly be prejudiced in theirlegal right or economic aspects as a result of the implementation of countermeasures in a case where they do
not observe the Large-scale Purchase Rule or even in a case where they observe the Large-scale Purchase
Rule but the said large-scale purchase is nonetheless considered to severely undermine the Company’s
corporate value and shareholders’ common interests. The Plan is announced in order to promote awareness inadvance so that a Large-scale Purchaser will not violate the Large-scale Purchase Rule.
(3) Procedures Required for Shareholders on the Implementation of Countermeasures
In a case where allotment of share option without contribution, for example, is conducted, shareholders asof the allotment date receive the said allotment of the share option without applying for acceptance of such
option, and in a case where the Company takes procedures to acquire the share option with the acquisition
provision, shareholders will receive the Company’s shares as consideration for the acquisition of the shareoption by the Company without paying an amount corresponding to the exercise price of the share option.
Therefore, no procedures of application or payment with respect to the share option are required. In this case,however, the Company may separately request the shareholders who will receive the allotment of the shareoption to submit a written document in the form designated by the Company, pledging that the shareholders
do not belong to the specified shareholder group including the Large-scale Purchaser.
Details of these procedures shall be disclosed in a timely and appropriate manner in accordance with thelaws, regulations and the regulations of the financial instruments exchange on which the Company is listed,when the allotment of share option without contribution is actually conducted.

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7. Commencement, Effective Period, Renewal, and Abolition of the Plan
The Plan takes effect from the day when it is approved at this Shareholders’ Meeting and shall remain in
effect from the conclusion of this Shareholders’ Meeting to the conclusion of the 97th Ordinary General
Meeting of Shareholders to be held in June 2019.
In cases (i) where the shareholders’ meeting resolves the abolition of the Plan and (ii) where the Board of
Directors of the Company consisting of Directors elected at the shareholders’ meeting of the Company
resolves the abolition of the Plan, the Plan shall be abolished at that time, even after renewal of the Plan takes
effect based on the approval at a shareholders’ meeting.
During the effective period, the Board of Directors of the Company may change the Plan with approval at
the Shareholders’ Meeting, according to a review made as needed from the viewpoint to ensure and enhance
the Company’s corporate value and shareholders’ common interests for the medium and long terms.
The contents of the decisions made by the Board of Directors of the Company on renewal, change,
abolition, etc. of the Plan shall be promptly disclosed.
During the effective period, the Board of Directors of the Company may amend or change the Plan withthe approval of the Independent Panel, as needed, in a case where an establishment, change or abolition is
implemented of the laws, regulations and the regulations of the financial instruments exchange on which theCompany is listed, etc. and it is necessary to reflect them, and in a case where amendment of wording is
considered to be appropriate for reasons of errors, omissions, etc., provided that such amendment will notprejudice shareholders.
IV. That the Plan is in Accordance with the Basic Policy on the Control of the Company, Consistent
with the Company’s Corporate Value and Shareholders’ Common Interests, and Not for the
Purpose of Maintaining the Position of the Corporate Officers of the Company(1) Satisfying Requirements of the Guidelines with Regard to the Takeover Countermeasures
The Plan satisfies the three principles stipulated in the “Guidelines Regarding Takeover Defense for the
Purpose of Protection and Enhancement of Corporate Value and Shareholder’s Common Interests,” publishedby the Ministry of Economy and Ministry of Justice on May 27, 2005, i.e. the principle of protecting andenhancing corporate value and the interests of shareholders as a whole, the principle of prior disclosure andshareholders’ will and the principle of ensuring the necessity and reasonableness).
The Plan is also based on the contents of the report, “Takeover Defense Measures in Light of Recent
Environmental Changes” published on June 30, 2008 by the Corporate Value Study Group established in the
Ministry of Economy, Trade and Industry and the “Principle 1.5 Anti-Takeover Measures” of the “Corporate
Governance Code” announced publicly by the Tokyo Stock Exchange on June 1, 2015.
(2) Introduction for the Purpose of Ensuring and Enhancing Shareholders’ Common Interests
As described in III 1. above, “Purpose of Introduction of the Plan,” the Plan is introduced for the purposeof ensuring and enhancing the Company’s corporate value and shareholders’ common interests for the
medium and long terms, in the case of a large-scale purchase of the Company’s shares, by making it possible
for the shareholders to judge whether or not to accept the said large-scale purchase and by ensuring that theBoard of Directors of the Company has the necessary information and time to submit an alternative plan andnegotiate with the Large-scale Purchaser, etc. on behalf of the shareholders.
(3) Emphasis on the Judgment of Highly Independent Outsiders and Disclosure of Information
The substantial judgment on the implementation of the countermeasures shall be made by consulting with
the Independent Panel consisting only of highly independent outsiders, and by the utmost respect to therecommendations of the Independent Panel. Thus, a scheme for the transparent implementation of the Plan ina manner appropriate for the Company’s corporate value and shareholders’ common interests is ensured.
(4) The Plan Valuing the Will of Shareholders
The Plan takes effect from the day when it is approved at this Shareholders’ Meeting upon inquiring thewill of the shareholders with regard to the Plan. Thus, the will of the shareholders will be reflected.
In a case where a change or abolition of the Plan is resolved at the Shareholders’ Meeting, the Plan will bechanged or abolished at that time, even before the expiry of the effective period after the renewal of the Plan.
Thus, such change or abolition is based on the reasonable will of shareholders.

- 24 -

(5) Neither a Dead-Hand Type Takeover Defense Measure nor a Slow-Hand Type Takeover Defense Measure
As stated in III 7. above, “Commencement, Effective Period, Renewal, and Abolition of the Plan,” thePlan may be abolished by the Board of Directors of the Company, a body consisting of the Directors elected
at the shareholders’ meeting of the Company. Thus, it is possible for a person who purchases a large amountof the Company’s shares to have Directors appointed at the shareholders’ meeting of the Company and then tohave the Plan abolished by the Board of Directors of the Company consisting of such Directors. Therefore,
the Plan is not a dead-hand type takeover defense measure (a takeover defense measure whose
implementation cannot be avoided even after a majority of the constituent members of the Board of Directors
are replaced). Moreover, as the Company has not adopted a system of staggered terms of office, the Plan is
not a slow-hand type takeover defense measure (a takeover defense measure whose implementation cannot be
avoided until sufficient time has elapsed, as it is impossible to replace the constituent members of the Boardof Directors in one round).

- 25 -

(Exhibit 1)
The status of the Company’s shares (as of March 31, 2016)1.

Total Number of Authorized Shares

491,955,000 shares

2.

Common Stock Issued

257,484,315 shares

3.

Number of Shareholders

16,482

4.

Major Shareholders (Top 10)
Shareholders’ Name

Status of shareholding
Shareholdings
Shareholding(Thousands ofratio (%)
shares)
19,654
7.7
10,893
4.3
10,046
3.9
8,920
3.5
6,745
2.6
6,521
2.6

TOYOTA MOTOR CORPORATIONThe Master Trust Bank of Japan, Ltd. (Trust Account)
Meiji Yasuda Life Insurance Company
Hitachi Construction Machinery Co., Ltd.
KYB suppliers’ stock ownershipJapan Trustee Services Bank, Ltd. (Trust Account)
Trust & Custody Services Bank, Ltd. as trustee for Mizuho Bank,
Ltd. Retirement Benefit Trust Accountre-entrusted by Mizuho Trust and Banking Co., Ltd.
6,115
The Ogaki Kyoritsu Bank, Ltd.
5,914
Mizuho Bank, Ltd.
4,905
NORTHERN TRUST CO. (AVFC) RE NVI01
4,163(Note) Shareholding ratio is calculated after the deduction of own shares (2,009,433 shares)- 26 -

2.4
2.3
1.9
1.6

(Exhibit 2)

Overview of the Plan

Flow chart at the beginning of a large-scale purchase

Large-Scale Purchaser

If the Large-Scale Purchase Rule is observed

If the Large-Scale Purchase Rule is not observed

Large-Scale Purchase Rule
Submission of Letter of Intent from
Large-Scale Purchaser

Letter of Intent not submitted

Submission of Necessary Information List
from Board of Directors
Submission of Necessary Information from

Necessary Information not submitted

Large-Scale Purchaser
Board of Directors decides to

Board of Directors’ Evaluation Period

evaluate/examine nevertheless

60 days or 90 days

・ Evaluation/Examination of Proposed

Purchase before expiry of Evaluation Period

Purchase・ Preparation of Alternative Plan
・ Negotiation with Large-Scale Purchaser

Consult
Recommend

If corporate value and shareholders’

Independent

Consult

Panel

Recommend

Board ofDirectorscommon interests are severely

Judgment: Implementation

undermined

Judgment: Non-implementation, in principle

Procedures to confirm will of
shareholders
Disapproved

Approved

Implementation decided by Board of Directors

Non-implementation of countermeasures↓

Implementation of countermeasures

To be judged by shareholders(Note) This chart describes the flow of typical procedures to facilitate understanding of the Plan and does not always
show the entire procedure. For details, please read the main text.

- 27 -

(Exhibit 3)
Overview of the Independent Panel Rules
・ The Independent Panel shall be established by the resolution of the Board of Directors of the Company.
・ The number of members of the Independent Panel shall be three (3) or greater. In order to enable fair andneutral judgment, Panel members shall be elected by the Board of Directors of the Company from among
Member of the Board of Directors (Outside) and Audit & Supervisory Board Member (Outside) of theCompany who are independent from the management responsible for business execution.
・ The Independent Panel shall recommend to the Board of Directors of the Company the contents ofdetermination by the Independent Panel with respect to the matters consulted upon by the Board of
Directors of the Company, together with the reasons and bases for the same, in principle. Each memberof the Independent Panel shall make such determination with a view to contributing to the Company’s
corporate value and common interests of shareholders.
・ The Independent Panel may obtain advice from investment banks, securities firms, lawyers, and otherexternal experts at the expense of the Company.
・ Resolutions of the Independent Panel shall be made by a majority of the members present at a meeting
attended by a majority of the members.

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(Exhibit 4)
Brief Career Histories of the Independent Panel Members

The following three (3) persons are planned to be members of the Independent Panel after the renewal of thePlan:
Rokurou Tsuruta
Date of Birth:
June 16, 1943
(History)

April 1970
April 2005
July 2006
June 2007

Prosecutor, Tokyo District Public Prosecutors Office
Superintending Prosecutor, Nagoya High Public Prosecutors Office
Registered as an attorney (Daini Tokyo Bar Association)
Outside Director, TEIKOKU PISTON RING CO., LTD. (present TPR
Co., Ltd.) (current position)
September 2007 Outside Audit & Supervisory Board Member, J. FRONT RETAILING
Co., Ltd. (current position)
June 2012 Outside Corporate Auditor, Sumitomo Mitsui Financial Group, Inc.
(current position)
June 2015 Member of the Board of Directors (Outside) (current position)

Shuhei Shiozawa
Date of Birth:
September 19, 1955
(History)
April 1981
April 1987
April 1994
January 2001

Assistant, Faculty of Economics, Keio University
Associate Professor, Faculty of Economics, Keio University
Professor, Faculty of Economics, Keio University (current position)
Director for International Economic Affairs, Cabinet Office (position
ended March 2003)
October 2005 Dean, Faculty of Economics, Keio University (position ended
September 2009)
March 2012 Member of the Board of Directors (Outside), Kenedix, Inc. (current
position)

Osamu Kawase
Date of Birth:
July 22, 1954
(History)

April 1978 Joined The Yasuda Fire and Marine Insurance Co., Ltd. (present Sompo
Japan Nipponkoa Insurance Inc.)
April 2003 General Manager, 1st Osaka Corporate Business Dept., ditto
April 2006 General Manager, 3rd Head Office Business Dept., ditto
April 2009 Executive Officer, ditto, and General Manager, Sompo Japan Insurance(China) Co., Ltd.
April 2011 Managing Executive Officer, Sompo Japan Insurance Inc. (in charge ofChina and Asia regions), ditto, and General Manager, Sompo Japan
Insurance (China) Co., Ltd.
June 2011 Managing Executive Officer, Sompo Japan Insurance Inc. (in charge ofChina and Asia regions), ditto and Managing Director, Sompo Japan
Insurance (China) Co., Ltd.
April 2012 Advisor, Sompo Japan Insurance Inc.
June 2012 Audit & Supervisory Board Member (Outside) (current position)

No conflict of interests exists between the above Independent Panel members and the Company.

- 29 -

(Exhibit 5)
Outline of Allotment of Share Options Without Contribution
1. Shareholders entitled to the allotment of Share Options without contribution, and issuance conditions
One Share Options will be allotted for each share of common shares of the Company (excluding the shares ofcommon shares of the Company held by the Company) held by shareholders recorded in the latest
shareholders’ register as of the record date determined by the Board of Directors of the Company, without
additional payment by the shareholders.
2. Class and number of shares to be issued upon the exercise of the Share Options
The Class of shares to be issued upon the exercise of the Share Options shall be shares of the common sharesof the Company. The total number of shares to be issued at maximum shall be the number of shares obtainedby deducting the number of issued shares of common shares of the Company (excluding the shares ofcommon shares of the Company held by the Company) from the total number of authorized shares of theCompany as of the record date determined by the Board of Directors of the Company. The number of shares
to be issued for one Share Options shall be separately decided by the Board of Directors of the Company. In
case the Company conducts a share split or a share consolidation, however, necessary adjustments shall be
made.
3. Total number of Share Options to be issued
The total number of Share Options to be issued shall be the number determined separately by the Board of
Directors of the Company. The Board of Directors of the Company may conduct allotments of Share Options
multiple times.
4. Price for investment upon the exercise of the Share Options (amount to be paid)
The price for investment upon the exercise of the Share Options (amount to be paid) shall be no less than JPY
1 and shall be determined by the Board of Directors of the Company. In any case where the Board of
Directors of the Company decides to acquire the Share Options, shareholders may be granted new shares as aconsideration for their Share Options by the Company without paying the amount corresponding to theexercise price.
5. Restriction on transfer of the Share Options
Acquisition of the Share Options by transfer of the said Share Options requires the approval of the Board of
Directors of the Company.
6. Exercise conditions for the Share Options
The exercise conditions for the Share Options shall include a condition whereby those who receive Share
Options should not belong to the specified shareholder group including the Large-scale Purchaser (excluding
those previously approved by the Board of Directors of the Company). Details shall be separately determinedby the Board of Directors of the Company.
7. Exercise period for the Share Options
The date on which the allotment of the Share Options becomes effective, exercise period, acquisition
provisions, and other necessary matters with respect to the Share Options shall be separately determined by
the Board of Directors of the Company. The acquisition provisions may stipulate that the Company may
acquire the Share Options held by persons other than persons who are not permitted to exercise the Share
Options due to the exercise conditions of 6. above and issue the shares of common shares of the Company inthe number of shares per Share Options separately determined by the Board of Directors of the Company, andthat the Company may acquire the Share Options without consideration and without issuing the Company’s
shares for the Share Options.

- 30 -