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 shall prevail.

Ticker symbol 8830
June 5, 2019
Sumitomo Realty & Development Co., Ltd.
2-4-1 Nishi-Shinjuku, Shinjuku-ku, Tokyo
Kojun Nishima
Executive Managing Director and President
To Our Shareholders:

NOTICE OF CONVOCATION OF THE 86TH ORDINARY GENERAL MEETING OF
SHAREHOLDERS
You are hereby notified that the 86th Ordinary General Meeting of Shareholders of Sumitomo Realty & Development
Co., Ltd. (the “Company”) will be held as stated below. Your attendance is respectfully requested.
In the event that you are unable to attend, you can exercise your voting rights with the appropriate form. You arerequested to review the attached Reference Documents for General Meeting of Shareholders and indicate yourapproval or disapproval on the enclosed Form for the Exercise of Voting Rights and return it to the Company by 5:40
p.m. of Wednesday, June 26, 2019.
Particulars
1. Date and Time: 10:00 a.m. on Thursday, June 27, 2019
2. Place:
Bellesalle Shinjuku Central Park, Sumitomo Fudosan Shinjuku Central Park Building 1F
6-13-1 Nishi-Shinjuku, Shinjuku-ku, Tokyo
3. Purpose of the Meeting:
Matters to be reported:
1. Business Report, Consolidated Financial Statements and Audit Reports for Consolidated Financial
Statements for the 86th fiscal year (from April 1, 2018 to March 31, 2019) by Accounting Auditor and theBoard of Statutory Auditors
2. Financial Statements for the 86th fiscal year (from April 1, 2018 to March 31, 2019)
Matters to be resolved:
Agenda 1.
Appropriation of Retained Earnings
Agenda 2.
Election of Eleven Directors
Agenda 3.
Election of Three Statutory Auditors
Agenda 4.
Election of One Substitute Statutory Auditor
Agenda 5.
Renewal of the Policy on Large-Scale Purchase of Shares of the Company (Takeover
Defense Measures)
If attending the meeting, you are kindly requested to submit the enclosed Form for the Exercise of Voting Rights to a receptionist.
If any matter is found to be modified in this notice of the 86th Ordinary General Meeting of Shareholders and/or accompanying Reference
Documents for General Meeting of Shareholders until the day before the meeting, it will be notified by mail or posted on the Company
website. (http://www.sumitomo-rd.co.jp/)-1-

REFERENCE DOCUMENTS FOR GENERAL MEETING OF SHAREHOLDERS
Agenda and References
Agenda 1.

Appropriation of Retained Earnings

The Company’s basic policy of profit distribution is to ensure prioritization of investment in rental buildings in orderto enhance the long-term revenue base and a “sustainable increase on dividend payments” in line with profit growth.
In the fiscal year under review, we planned to pay an annual dividend of 29 yen (interim dividend of 14 yen, yearend dividend of 15 yen). However, as the ordinary profit exceeded the 200 billion yen mark for the first time, reaching
204.2 billion yen, which is higher than the plan, we would like to propose to increase the year-end dividends for the86th fiscal year by 1 yen to pay 16 yen per share.
Accordingly, the total dividends for this fiscal year, including the interim dividends of 14 yen per share, will be 30
yen per share, which is 3 yen higher than the amount of those paid in the previous fiscal year.

Matters concerning year-end dividends(1) Type of dividends
Cash(2) Matters concerning allocation of dividends to shareholders and the aggregate amount
Dividends of 16 yen per share of common stock of the Company
The aggregate amount: 7,583,042,384 yen(3) The effective date of the appropriation of retained earnings
June 28, 2019-2-

Agenda 2.

Election of Eleven Directors

The term of office of all directors will expire upon the conclusion of this meeting. The Company proposes the electionof 11 directors, in conjunction with the replacement of two outside corporate directors retired during this fiscal year.
Candidates for director:
CandidatenumberName(Date of birth)

1

Junji Takashima(April 11, 1930)

2

Kenichi Onodera(February 4, 1947)

3

Kojun Nishima(March 6, 1961)

4

Nobuaki Takemura(February 13, 1959)

Career summary, position and responsibility in the Company, andsignificant concurrent positions outside the Company
Apr. 1954
Sept. 1971
June 1979
June 1983
June 1985
June 1986
June 1991
June 1994
June 2007
Apr. 1970
June 1998
June 2001
Apr. 2004
June 2005
June 2007
June 2013

Joined Sumitomo Coal Mining Co., Ltd.
Joined the Company
Director
Managing Director
Senior Managing Director
Executive Managing Director (present)
Director - Deputy President
Director - President
Director - Chairman of the Board (present)
Joined the Company
Director
Managing Director
Director, Senior Executive Officer
Executive Managing Director
Director - President
Director - Deputy Chairman of the Board(present)
Apr. 1984
Joined the Company
Apr. 2004
Executive Officer
Apr. 2007
Managing Executive Officer
Apr. 2009
Head of Residential Business Division
June 2009
Director
Sept. 2009
Head of Building Development Division
June 2010
Executive Managing Director (present)
June 2013
Director - President (present)
May 2017
Head of Building Development Division(present)
Apr. 1981
Joined the Company
Apr. 2004
Executive Officer
Apr. 2007
Managing Executive Officer
June 2008
Director
Oct. 2008
Head of Finance and Accounting Division
June 2010
Executive Managing Director (present)
Oct. 2012
Head of Business Management Division
June 2013
Director - Deputy President (present)
Mar. 2016
Head of Management Division (present)(Significant concurrent positions outside the Company)
Director of Sumitomo Real Estate Sales Co., Ltd.

-3-

Number of theCompany’s shares
held

23,53420,5008,700

18,900Candidate
number5

Name(Date of birth)

Masato Kobayashi(June 14, 1960)

Career summary, position and responsibility in the Company, andsignificant concurrent positions outside the Company
Apr. 1983
Apr. 2004
Apr. 2007
Apr. 2009
June 2009
June 2010
Aug. 2010
June 2013
Feb. 2014
Mar. 2016

Sept. 2016
Nov. 2017
Apr. 1984
Apr. 2000
Apr. 2007

6

Hiroshi Kato
(August 1, 1961)

Apr. 2010
Aug. 2010
Apr. 2012
Apr. 2013
June 2013
Mar. 2016
Sept. 2016
Apr. 1985
Dec. 2004
May 2005
Dec. 2005

7

Hisatoshi Katayama(July 11, 1961)

Apr. 2010
Feb. 2014
Apr. 2016
Sept. 2016
June 2018

Joined the Company
Executive Officer
Managing Executive Officer
Head of Site Acquisition Division
Director
Executive Managing Director (present)
Head of Residential Business Division
Director - Deputy President (present)
Head of Site Acquisition Division in the
Metropolitan Area
Head of Building Development Division,
Head of Urban Property Development
Division
Head of Building Development Division
Head of Residential Business Division(present)
Joined the Company
General Manager of Related Businesses
Department, Building Development Division
Executive Officer, General Manager of Site
Acquisition Department, Urban Property
Development Division
Deputy Head of Site Acquisition Division
Deputy Head of Building Development
DivisionManaging Executive Officer, Head of New
Business Development Division
Head of Assets Development Division
Director (present)
Head of Residential Business Division of theCompany
Head of Shinchiku - Sokkurisan Business
Division (present)
Joined the Company
Branch Manager of West Tokyo Branch,
Urban Property Management Division
Executive Officer
General Manager of Redevelopment, Tokyo
Metropolitan Area Business Department,
Urban Property Development Division
Deputy Head of Building Development
Division
Deputy Head of Site Acquisition Division in
the Metropolitan Area
Deputy Head of Urban Property
Development Division
Head of Urban Property Development
Division (present)
Director (present)-4-

Number of theCompany’s shares
held

13,000

6,600

7,500

Candidate
numberName(Date of birth)

Career summary, position and responsibility in the Company, andsignificant concurrent positions outside the Company

8

Yoshiyuki Odai
(June 9, 1961)

Apr. 1985
Apr. 2005
Apr. 2010
Nov. 2010
June 2011
Nov. 2011
Jan. 2014

9

Koji Ito(December 13, 1959)

Joined the Company
Executive Officer
Head of Residential Business Division
Head of Corporate Planning Division
Director (present)
Head of Finance and Accounting Division
Executive Managing Director
Head of Overseas Business Division
Mar. 2016
General Manager of Planning Department,
Management DivisionNov. 2016
General Manager of Finance and Accounting
Department, Management Division (present)
Apr. 1984
Joined the Company
Apr. 2000
General Manager of Jyosai Operation
Department, Building Management Division
Apr. 2004
Executive Officer, General Manager ofDevelopment and Planning Department,
Urban Property Development Division
Apr. 2009Managing Executive Officer, Head ofConstruction Technology Division
Apr. 2010
Head of Customer Division
Oct. 2012
Head of Business Development Division
Apr. 2013
Head of Residential Business Division
June 2013
Director (present)
Jan. 2014
General Manager of General Affairs
Department
Mar. 2016
Head of Housing Renovation Division of theCompany
Sept. 2016
General Manager of Human Resources
Development Department, Management
Division
Apr. 2017
General Manager of General Affairs
Department, Management Division
Apr. 2019
Executive Managing Director - President of
Sumitomo Real Estate Sales Co., Ltd.
(present)(Significant concurrent positions outside the Company)
Executive Managing Director - President of Sumitomo Real Estate
Sales Co., Ltd.

-5-

Number of theCompany’s shares
held

13,40016,068

Candidate
number10

11

Notes:

1.

2.
3.
4.
5.

Name
(Date of birth)

Career summary, position and responsibility in the Company, andsignificant concurrent positions outside the Company

Number of theCompany’s shares
held

Apr. 1962
Joined Nippon Sheet Glass Co., Ltd.
June 1996
Managing Director
June 1998
Representative Director, President
June 2004
Representative Director, Chairman
Yozo Izuhara
June 2008
Director, Chairman of the Board
0(September 23, 1938)
Oct. 2009
Director, Chairman of the Board - Chairman
June 2010
Executive Advisor
June 2012
Honorary Senior Advisor (present)
June 2014
Statutory Auditor of the Company (present)
Sept. 1980
Sumitomo Metal Mining Co., Ltd.
June 2006
Director, Managing Executive Officer
June 2007
President, Representative Director
June 2013
Chairman, Representative Director
Nobumasa Kemori
June 2016
Chairman0(April 12, 1951)
June 2017
Executive Advisor (present)(Significant concurrent positions outside the Company)
Executive Advisor of Sumitomo Metal Mining Co., Ltd.
Outside Director of NAGASE & CO., LTD.
Outside Director of JFE Holdings, Inc.
Mr. Yozo Izuhara and Mr. Nobumasa Kemori are candidates for outside corporate director. You are kindly requested toelect them based on the judgment that they are appropriate as outside corporate directors of the Company since they haverich experience and wide discernment as managers.
Mr. Yozo Izuhara is currently an outside statutory auditor of the Company, and his tenure as an outside statutory auditor
will have been five years at the conclusion of this meeting.
The Company has registered Mr. Yozo Izuhara and Mr. Nobumasa Kemori as independent officers with Tokyo Stock
Exchange, Inc.
There is no special conflict of interest between each of the candidates for director and the Company.
The Company has entered into a limited liability agreement with Mr. Yozo Izuhara as an outside statutory auditor inaccordance with laws and regulations and the articles of incorporation. Under the agreement, his liability is limited to theminimum limit stipulated by laws and regulations. If his election as outside corporate director is approved, the Company
plans to enter into a limited liability agreement of the same content as above with him as an outside corporate director.
Furthermore, if the election of Mr. Nobumasa Kemori is approved, the Company plans to enter into a limited liability
agreement of the same content as above with him.

-6-

Agenda 3.

Election of Three Statutory Auditors

At the conclusion of this meeting, statutory auditors Tadashi Kitamura and Yozo Izuhara will retire and the term ofoffice of statutory auditor Yoshifumi Nakamura will expire. Accordingly, we propose the election of three statutory
auditors. The board of statutory auditors has consented to this agenda.
Candidates for statutory auditor:
Candidates
numberName(Date of birth)

Career summary, position in the Company, and significant
concurrent positions outside the Company
Apr. 1973
July 1996
June 2002
Apr. 2004

1

Yoshifumi Nakamura(March 29, 1951)

May 2005
June 2005
June 2007
Aug. 2010
June 2011
Apr. 1983
Apr. 2000
Apr. 2004

2

3

Notes:

Toshikazu Tanaka(April 8, 1960)

Apr. 2007
Oct. 2008
Apr. 2010
Sept. 2011
June 2013

Joined the Company
General Manager of Building Management
Department, Building Development Division
Director
Managing Executive Officer, Deputy Headof Urban Property Management Division
Deputy Head of Urban Property
Management Division
Senior Executive Officer
Executive Managing Director
Controller of Residential Division
Statutory Auditor (present)
Joined the Company
General Manager of Central Operation
Department, Building Development Division
Executive Officer, Deputy Head of Housing
Business Division
Managing Executive Officer
Head of General Affairs Division
Head of Related Businesses Division

Number of theCompany’s shares
held

10,00011,800

Head of Housing Renovation Division
Executive Managing Director - President of
Sumitomo Real Estate Sales Co., Ltd.
Director of the Company (present)
Apr. 1969
Joined Sumitomo Construction Co., Ltd.
June 1999
General Manager of PC Operation
Department, Civil Engineering Division
June 2000
Director
June 2001
Executive Officer
Jan. 2003
Managing Executive Officer
Apr. 2003
Managing Director, Managing Executive
Officer, Deputy Head of Civil Engineering
Yoshiyuki Norihisa
Construction Division, General Manager of0(December 9, 1946)
PC Operation Department of Sumitomo
Mitsui Construction Co., Ltd.
Senior Managing Director, Senior Managing
June 2005
Executive Officer
Apr. 2007
Director, Executive Vice President
Apr. 2008
Representative Director
Apr. 2010
Representative Director, President & CEO
Apr. 2015
Representative Director, Chairman
June 2018
Executive Advisor (present)
1. Mr. Yoshiyuki Norihisa is a candidate for outside statutory auditor. The Company proposes the election of him, based on
the judgment that he is qualified for outside statutory auditor of the Company since he has rich experience and wide
discernment as a manager.
2. There is no special interest between each of the candidates and the Company.
3. The Company has registered Mr. Yoshiyuki Norihisa as an independent officer with Tokyo Stock Exchange, Inc.

-7-

4. If the election of Mr. Yoshiyuki Norihisa is approved, the Company will enter into a limited liability agreement with him
in accordance with laws and regulations and the articles of incorporation. Under the agreement, his liability is limited tothe minimum limit stipulated by laws and regulations.

-8-Agenda 4.

Election of One Substitute Statutory Auditor

The number of outside statutory auditors of the Company is two upon the approval of Agenda 3. The Company
requests approval for the election of one substitute statutory auditor to be ready to fill a vacant position should thenumber of outside statutory auditors fall below the number required by laws and regulations. The board of statutory
auditors has consented to this agenda.
Candidate for substitute statutory auditor:
Name(Date of birth)

Career summary, position in the Company, and significant concurrent
positions outside the Company
Aug. 1963
July 1969

Notes:

Number of theCompany’s shares
held

Registered as certified public accountant
Senior Partner of the auditing corporation Asahi & Co.
(Currently KPMG AZSA LLC)
Apr. 1974
Registered as certified tax accountant
May 1974
Founded Uno Kozo Certified Public Accountant
Kozo Uno
Office (present)
0(July 3, 1933)
Oct. 1993
Vice President of Asahi & Co (Currently KPMG
AZSA LLC)
May 1997
President of Asahi & Co
May 1999
Chairman of Asahi & Co
May 2001
Retired from Asahi & Co
1. Mr. Kozo Uno is a candidate for substitute outside statutory auditor. The Company proposes the election of him, based on
the judgment that he is qualified for substitute outside statutory auditor of the Company since he has expertise, richexperience and wide discernment as certified public accountant and certified tax accountant.
2. There is no special interest between the candidate and the Company.
3. If this agenda is approved and he assumes office as an outside statutory auditor, the Company will register him as anindependent officer with Tokyo Stock Exchange, Inc.
4. If this agenda is approved and he assumes office as an outside statutory auditor, the Company will enter into a limited
liability agreement with him in accordance with laws and regulations and the articles of incorporation. Under theagreement, his liability is limited to the minimum limit stipulated by laws and regulations.

-9-Agenda 5.

Renewal of the Policy on Large-Scale Purchase of Shares of the Company (Takeover Defense
Measures)

Sumitomo Realty & Development Co., Ltd. (the “Company”) adopted a policy toward large-scale purchase of theCompany shares based on the decision of the meeting of its Board of Directors dated May 17, 2007. The policy wascontinued based on the resolution of the shareholders’ meeting of the 74th fiscal year dated June 28, 2007, and wasrenewed with partial modifications based on the resolutions of the shareholders’ meetings of the 77th fiscal year
dated June 29, 2010, the 80th fiscal year dated June 27, 2013 and the 83rd fiscal year dated June 29, 2016 (the policy
after the renewal shall be hereinafter referred to as the “Current Policy”). The term of the Current Policy will expire
upon the conclusion of this meeting. The Company has continued to consider the proper role of the Current Policy
as one of its initiatives for increasing corporate value and common interests of shareholders since renewal of theCurrent Policy, in light of changes in social and economic circumstances, and trends and progress made in various
discussions surrounding takeover defense measures.
After examining the issue, the Company made the decision, by resolution of the meeting of the Board of Directors
held on May 16, 2019, to renew the Current Policy, subject to the approval of this meeting (the “Renewal.” The
policy after the renewal shall be hereinafter referred to as the “Policy”). Views expressing objection to the Renewal
were not raised by any of the Company’s statutory auditors, including the two outside statutory auditors, with respect
to the resolution of the meeting of the Company’s Board of Directors where the decision on the Renewal was made.
The Company has also gained approval with respect to the Renewal from all outside director candidates and outside
statutory auditor candidates who are slated for election at this meeting.
The primary changes to the Policy in comparison with its content at the time of the previous renewal include: (i) theboard assessment period has been shortened (changed to calendar days from business days; page 14), and (ii) limits
have been placed on requirements for taking countermeasures (page 15).
Therefore, we would like to kindly ask you to approve the Renewal.
1. Initiatives to increase the Company’s corporate value and common interests of shareholders, and the necessity
for the Policy(1) Steadily achieving objectives of the medium-term management plans and maintaining the revenue andprofit growth trajectoryWith top priority placed on achieving objectives of the medium-term management plans it draws up every
three years, the Company has increased its corporate value as a result of having steadily carried out suchinitiatives.
The Company has been steadily achieving its anticipated objectives under each of the plans, having
implemented seven management plans thus far, starting with the First Management Plan (April 1997 to
March 2001) whose aims involved overcoming the adverse effects encountered by the Company when
Japan’s bubble economy burst, and achieving a rebound to record-high financial results.
The Seventh Management Plan (April 2016 to March 2019), concluded in March 2019, assumed an outlook
whereby the 6th Plan’s favorable business environment was unlikely to persist into the 7th Plan, yet theSeventh Management Plan marked the start of our stated objective of setting new record-high financial
results beyond those achieved under the 6th Plan and thereby maintaining our “revenue and profit growthtrajectory”. Fortunately, the Company’s business environment remained favorable overall, particularly
with respect to leasing office buildings in Tokyo amid a scenario of business conditions in Japan looking
increasingly upbeat year by year, driven by favorable economies worldwide. As a result, the Company
substantially exceeded its initial targets across the board in terms of revenue from operations, operating
income and ordinary profit over the cumulative three year period. Moreover, the Company achieved recordhigh financial results over six consecutive fiscal years, having achieved revenue from operations andordinary profit in the final fiscal year of the plan, the fiscal year ended March 31, 2019, respectively
exceeding 1 trillion yen and 200 billion yen for the first time ever. The Seventh Management Plan ended
on a successful note with the Company having achieved profit growth exceeding initial expectations.
Moreover, the Company has been taking steps to furthermore strengthen its corporate governance. This has
entailed eliminating risk involving conflict of interest due to parent-subsidiary listing by having made its
real estate brokerage subsidiary Sumitomo Real Estate Sales Co., Ltd. a wholly-owned subsidiary in June
- 10 -

2017, and building a framework for promoting increased corporate value over the medium- to long-termby optimally allocating the Group’s managerial resources.
The Company’s newly released medium-term management plan, the Eighth Management Plan (April 2019
to March 2022) cites as its first objective the goal of achieving consecutive record-highs with respect tofinancial performance while maintaining the pace of growth attained under the previous SeventhManagement Plan. Meanwhile, we remain committed to increasing the Company’s corporate value by
steadily implementing plans for capital investment of 2 trillion yen in leasing properties with respect todevelopment plans that have taken shape in central Tokyo, and continuing to strengthen our platform forgenerating revenues over the long-term.
(2)

Growth underpinned by central Tokyo office building leasing business and corporate value
The real estate leasing business primarily involving office buildings in central Tokyo has been a driving
force underpinning the Company’s growth thus far. Given that this business accounts for nearly 70% of
the Company’s operating income overall, it clearly forms the core aspect of its corporate value acting as amajor pillar of operations.
The Company has been expanding its business platform by promoting development of office buildings
with a specific focus on central Tokyo over roughly half a century since the early 1970s, an era that usheredin completion of the Shinjuku Sumitomo Building, often referred to as “the triangle building.” The
Company has experienced various changes in the business environment such as unprecedented economic
crises that include the bursting of Japan’s bubble economy and the 2008 global financial crisis in wake of
the Lehman Brothers collapse, along with Japan’s bubble economy and recent business conditions underJapan’s Abenomics policies. Still, the Company has consistently persisted with respect to unwaveringly
implementing its management policies such that: (i) the Company will not pursue temporary gains by
selling assets; (ii) the Company will hold ownerships of buildings constructed on sites it has developed;and (iii) the Company will generate stable leasing income over the long-term by owning and leasing suchbuildings. Having consequently grown to become a building owner professing to be “No. 1 in Tokyo” withmore than 220 buildings located in central Tokyo, the Company’s outlook projects 200 billion yen in cash
flows from the leasing business for the fiscal year ending March 31, 2020 (operating income of the realestate leasing business + depreciation).
The office building leasing business calls for comprehensive strengths for carrying out businessencompassing everything from acquisition of development sites to operations that include planning
projects, marketing tenants, providing services for tenants and managing buildings. Given that acquiring
development sites is the most important of these operations, the Company has been developing sites forbuildings as if it were a manufacturer in terms of the approach it takes to redevelopment in terms of buying
up land and coordinating rights and interests of landowners.
In addition, the Company attaches importance to performing building management, tenant marketing, etc.
directly, thus grasping the actual condition of clients and sites appropriately and always eagerly working
on the improvement of project planning and making operations more efficient. As a result, we have realized
high profitability, and have increased the value of the property possessed as well as of the corporation. Asof March 31, 2019, unrealized gains from rental and other investment properties amounted toapproximately 2.7 trillion yen having accumulated over the years.

(3)

The necessity for the takeover defense measures
The Eighth Management Plan cites as its secondary objective the notion of steadily promoting new building
development plans in central Tokyo to achieve gross floor area exceeding 800,000 tsubo (one tsubo isroughly 3.3m²), which constitutes more than 50% of the 1,520,000 tsubo in gross floor area for leasing asof March 31, 2019. The Company aims to further expand its earnings base, increase its corporate value andaugment shareholder returns by successively completing such developments and putting them into
operation.
Such large-scale development plans involve ultimately generating revenues from the substantial amount of
cumulative upfront investment made thus far. The Company has long managed to continuously expand its
business platform by developing lease buildings while avoiding exposure to vicissitudes of the real estatemarket and business conditions, given that it has normally been buoyed by its leasing business cash flows
which have been a stable source of revenues. As such, the Company needs to maintain and further expand- 11 -

its cash flows from the leasing business, which have grown to around 200 billion yen, in order toconfidently carry out such upfront investment without having to continually resort to interest-bearing debt.
Moreover, it is likely to take another six or seven years before the Company achieves full profitability
given that the focus has been on large-scale redevelopment.
Meanwhile, if the Company adopts a short-term management policy to seek temporary earnings andrealizes latent gains by selling real estate holdings prior to having accomplished the objectives of thedevelopment plans formulated to contribute to higher corporate value in the future, the leasing businesscash flows that act as a stable revenue source will decrease, thereby exposing the development plans tofinancial risk. As such, the Company is unable to rule out a possible threat of damage to the foundations of
the Company’s corporate value.
The Company’s management policy aims to steadily increase corporate value based on a medium- to longterm outlook, and is consequently incompatible with such short-term goals. As such, if an investor seeking
to orchestrate a takeover emerges, the Company must seek a mandate from its shareholders upon having
ensured sufficient information and time for completing discussions. Accordingly, the Company deems that
preliminary development of procedures through the Policy aligns with the common interests ofshareholders.
2. Basic conceptions regarding the Policy
The Company believes that if a large-scale purchase, as defined below, of the Company shares (“Large-Scale
Purchase”) is initiated, the shareholders should decide to accept or reject the Large-Scale Purchase. In order forthe shareholders to correctly recognize the effect on the corporate value and common interests of shareholders,
however, it is necessary that both the party making the Large-Scale Purchase (the “Large-Scale Purchaser”) andthe Board of Directors of our company provide to the shareholders necessary and sufficient information, opinions,alternative proposals etc., and necessary and sufficient time to consider the provided information, opinions,alternative proposals etc.
Based on the above basic conceptions, the Board of Directors of the Company set out rules on Large-Scale
Purchase (hereinafter referred to as “Large-Scale Purchase Rules”) and request the Large-Scale Purchaser tocomply with the Large-Scale Purchase Rules. The Board of Directors shall take certain measures if the LargeScale Purchaser does not comply with the Large-Scale Purchase Rules, or even though the Large-Scale Purchaser
complies with the Large-Scale Purchase Rules, if it is clear that the Large-Scale Purchase will cause
unrecoverable damages to the Company or if the Large-Scale Purchase significantly damages the corporate value
and common interests of shareholders.
To ensure the objectivity, fairness and rationality of decisions of the Board of Directors as to whether the LargeScale Purchase Information Provision Period (to be defined in section 3. below) should be extended or not,whether the Large-Scale Purchaser complies with the Large-Scale Purchase Rules, whether it is clear that theLarge-Scale Purchase will cause unrecoverable damages to the Company, whether the Large-Scale Purchase will
significantly damage the corporate value and common interests of shareholders, whether the Board of Directors
should take countermeasures, etc., the Board of Directors shall consult the Special Committee consisting of
external academic experts, lawyers, certified public accountants etc., and its recommendation shall be taken into
the fullest account.
Large-Scale Purchase
A Large-Scale Purchase refers to either of items (i) through (iii) below:(i) A purchase or purchases of shares of the Company where a specific shareholder group (Note 1) intends tohold a ratio of voting rights (Note 2) of not less than 20%(ii) A purchase or purchases of shares where a specific shareholder group will hold a ratio of voting rights of
not less than 20% as a consequence(iii) An agreement etc. with other shareholders of the Company where a specific shareholder group will hold aratio of voting rights of not less than 20% as a consequence (Note 3)
Purchases or agreements include all transactions regardless of whether the specific purchase means is a market
transaction, a takeover bid etc., except for transactions with the Board of Directors approvals in advance.
- 12 -

3. Setting out Large-Scale Purchase Rules
The Board of Directors of the Company deems that the notion of any Large-Scale Purchase being carried out inaccordance with the Large-Scale Purchase Rules, as defined below, aligns with the corporate value and common
interests of shareholders.
(1)

Outline of the Large-Scale Purchase Rules
1) The Large-Scale Purchaser must provide the Board of Directors of the Company with necessary andsufficient information regarding the Large-Scale Purchase in advance.
2) The Large-Scale Purchaser is to abstain from commencing the Large-Scale Purchase until a certain
assessment period by the Board of Directors of the Company has elapsed.

Specifically, the Large-Scale Purchaser will, first of all, provide to the Board of Directors information necessary
and sufficient for the shareholders to make a judgment and for the Board of Directors to form its opinion (“LargeScale Purchase Information”). The specific content of the information requested differs depending on the natureof the Large-Scale Purchaser and the content of the Large-Scale Purchase, but the general items are as follows:
1) Profile of the Large-Scale Purchaser and its group
2) Purpose and contents of the Large-Scale Purchase (especially in the case of a purchase of only a part of theCompany’s stocks, this item includes the approach concerning the setting of an upper limit for the numberof the stocks planned to be purchased and the plan related to the modifications of the capital structure after
the purchase)3) Calculation basis for the purchase price and proof of purchase funds
4) Management policy to manage the Group after completion of the Large-Scale Purchase (measures for the
specific realization of this management policy, i.e. business plans (including already existing restructuring
plans, new business plans and capital investment plans), financial planning, capital policy, dividend policy,
labor policy, plan for efficient use of assets etc., as well as approach concerning the integration or cooperationof businesses of the Large-Scale Purchaser with businesses of the Company or of the Group and specificmeasures so as to avoid conflicts of interests between the Large-Scale Purchaser and the Company or theGroup)
5) Policy to deal with the Group’s stakeholders including customers, suppliers, local communities andemployees after completion of the Large-Scale Purchase6) If the Large-Scale Purchaser is operating business of the same type as the Company or the Group, approachconcerning the legitimacy of the Large-Scale Purchase under Antimonopoly Law and foreign competition
laws
(2)

Submission of a letter of intent
If a Large-Scale Purchaser intends to make a Large-Scale Purchase, the Board of Directors will request it
to submit a letter of intent stating that it will comply with the Large-Scale Purchase Rules. The Large-Scale
Purchaser will be required to write its name and address, the governing law of incorporation, the name of
the representative, domestic contact information, and an outline of the proposal of the Large-Scale Purchase.
When a letter of intent has been submitted by the Large-Scale Purchaser, the information of the letter ofintent shall be disclosed in a timely manner.

(3)

Request for the Large-Scale Purchaser to provide information
The Board of Directors will deliver a list of Large-Scale Purchase Information to the Large-Scale Purchaser
within ten days of the receipt of the letter of intent above. If it is deemed that the information provided isinsufficient for the Large-Scale Purchase Information, the Large-Scale Purchaser may be requested toprovide additional information until necessary and sufficient Large-Scale Purchase Information is received.
In principle, the provision of Large-Scale Purchase Information shall be completed within 60 days fromthe delivery of the Large-Scale Purchase Information list by the Board of Directors to the Large-Scale
Purchaser (“Large-Scale Purchase Information Provision Period”). However, since the specific content of
the Large-Scale Purchase Information might differ depending on the content of the Large-Scale Purchaseand its scale, the Board of Directors can extend the Large-Scale Purchase Information Period for a
maximum of 30 days, taking into consideration the content of the Large-Scale Purchase, its scale and the- 13 -

condition of the provision of Large-Scale Purchase Information, based on the recommendation of theSpecial Committee. The Board of Directors will disclose all or part of the Large-Scale Purchase
Information provided to the Board of Directors at the time considered appropriate if the disclosure isconsidered to be necessary for the shareholders’ decision.
(4)

Board Assessment Period
Depending on the difficulty of the assessment etc. of Large-Scale Purchases, the Board of Directors will
have 60 days (for a tender offer in cash only, in yen currency, for all shares of the Company) or 90 days
(for other Large-Scale Purchases) after the completion of Large-Scale Purchase Information Provision
Period (“Board Assessment Period”) to assess and examine the Large Scale Purchase Information,negotiate with the Large Scale Purchaser, form an opinion regarding the Large Scale Purchase, and develop
an alternative proposal. The fact that the Board Assessment Period has started shall be disclosed in a timely
manner. Hence a Large-Scale Purchase must be initiated only after the expiration of the Board Assessment
Period. During the Board Assessment Period, the Board of Directors will assess and examine the provided
Large-Scale Purchase Information sufficiently, taking advice from external experts into consideration, andwill disclose its opinion. The Board of Directors may negotiate with the Large-Scale Purchaser to improvethe conditions of the Large-Scale Purchase and may present its alternative proposal to the shareholders asneeded.

4. Policy for handling Large-Scale Purchase
As previously stated, the Company will not overlook abusive behavior with respect to a Large-Scale Purchase.
Accordingly, if the Large-Scale Purchaser does not comply with the Large-Scale Purchase Rules, if it is clearthat the Large-Scale Purchase will cause unrecoverable damages to the Company, and if the Large-Scale
Purchase significantly damages the corporate value and common interests of shareholders, then the Board of
Directors of the Company must take suitable and appropriate action to ensure protection thereof, acting as afiduciary who assumes the duty of due care of a prudent manager.
(1)

If the Large-Scale Purchaser does not comply with the Large-Scale Purchase Rules
If the Large-Scale Purchaser does not comply with the Large-Scale Purchase Rules, the Board of Directors
may take countermeasures, including the issuance of stock options, permitted by the Corporate Code andother laws and the Company’s Articles of Incorporation, to protect the corporate value and common
interests of shareholders. The Board of Directors will decide to take countermeasures, taking the opinions
of external experts including lawyers and financial advisors into consideration and taking therecommendations of the Special Committee into the fullest account. The Board of Directors will choose
specific measures considered to be appropriate at the time. If the issuance of stock options at no cost to
subscribers is chosen as a countermeasure, the terms of the stock options will be those outlined in
Attachment 3 in principle. If stock options are issued, the Board of Directors may set a period andconditions to exercise the stock options, taking the effect of the countermeasure into consideration.
It is reiterated that the Large-Scale Purchaser should not begin Large-Scale Purchase without complying
with the Large-Scale Purchase Rules.

(2)

If the Large-Scale Purchaser complies with the Large-Scale Purchase Rules
The objective of the Large-Scale Purchase Rules is to provide the shareholders with information necessary
to make a decision to accept or reject a proposal to purchase the shares of the Company that could affectthe management of the Company, the assessment and opinion of the Board of Directors which is in chargeof management of the Company, and the opportunities to receive an alternative proposal so that thecorporate value and common interests of shareholders will be protected. If the Large-Scale Rules arecomplied with, the Board of Directors will in principle choose not to take a countermeasure.
However, even if the Large-Scale Purchaser complies with the Large-Scale Purchase Rules, if the Boardof Directors determines that it is clear that the Large-Scale Purchase will cause unrecoverable damages to
the Company or that the Large-Scale Purchase will significantly damage the corporate value and common
interests of shareholders, specifically, that the Large-Scale Purchase will fall under (i) and (ii) below, after
considering the opinions of external experts including lawyers and financial advisors and taking into the- 14 -

fullest account the recommendations of the Special Committee, the Board of Directors may take theexceptional countermeasures to deter the Large-Scale Purchase as described in section 4. (1). If the Boardof Directors decides to take countermeasures, it will disclose information appropriately and in a timely
manner.
1) The Large-Scale Purchaser clearly damages the corporate value and common interests of shareholders
through activities described in “i)” through “iv)” below:i)
To buy up shares and request the Company to buy them back at a high priceii) To control the management of the Company temporarily, and realize the interests of the purchaser
at the cost of the Company’s interests by acquiring important assets of the Company at low prices
etc.
iii) To divert assets of the Company to collateral for debts of the purchaser or its group companies
etc. or to resources for payments for themiv) To control the management of the Company temporarily, have the Company dispose of highvalue assets not connected to the Company’s immediate business, and have the Company pay a
temporary high dividend based on gains from the disposal or sell shares at a profit when theshares price surges following a temporary high dividend
2) The Large-Scale Purchaser threatens to purchase shares in the manner by which the purchaser will
effectively force shareholders to sell shares through a high-handed, two-step purchase (i.e., thepurchase proposal through tender offer etc. in the manner that the purchaser sets the purchase terms
for the second step less favorable to shareholders than those for the first step or that the purchaser does
not make clear the purchase terms for the second step).
Further, if the Board of Directors judges that it is appropriate to confirm the intent of the shareholders
concerning whether to take countermeasures, it can confirm such intent of the shareholders by convoking
a shareholders meeting etc., taking into account the time necessary for such confirmation. In this case, theLarge-Scale Purchaser shall be requested to abstain from the Large-Scale Purchase until the completion of
the procedure for the confirmation of the shareholders’ intention.
(3)

Establishment of a Special Committee
A Special Committee independent of the Board of Directors is established to properly operate the Policy
and to ensure the objectivity, fairness and rationality of decisions of the Board of Directors. The Special
Committee consists of three members, selected from external academic experts, lawyers, certified public
accountants, certified tax accountants, outside directors, outside statutory auditors, experienced corporate
executives etc. (Please refer to Attachment 1 for outline of the Special Committee.) The names and careersummaries of the Special Committee members upon the renewal of the Policy are described in Attachment
2.
The Board of Directors of the Company shall consult the Special Committee and shall receive therecommendations of the Committee when taking important decisions related to the Policy, i.e. with respect
to deciding whether to extend the Large-Scale Purchase Information Provision Period, whether or not theLarge-Scale Purchaser complies with the Large-Scale Purchase Rules, whether or not it is clear that theLarge-Scale Purchase will cause unrecoverable damages to the Company, whether or not the Large-Scale
Purchase will significantly damage the corporate value and common interests of shareholders, and whether
or not countermeasures should be taken. The Board of Directors of the Company shall take the Special
Committee’s recommendations into the fullest account.
When deliberating and adopting resolutions about the items submitted by the Board of Directors of theCompany, the Special Committee will receive advice from third parties (including experts such as financial
advisors, certified public accountants, lawyers and consultants) independent of the Board of Directors of
the Company, at the expense of the Company. The Special Committee will also request directors, statutory
auditors, employees, etc. of the Company to attend meetings of the Committee and provide necessary
information. The Special Committee will then make a recommendation to the Board of Directors based on
the content of the resolutions adopted.

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5. Effects on the Company’s shareholders and investors
If the Board of Directors decides to take countermeasures, the Company will disclose information on the decision
appropriately and in a timely manner in accordance with laws and regulations and the rules of the sharesexchanges, although we do not anticipate a situation where the Company’s shareholders (excluding the LargeScale Purchaser and the specific shareholder group) will incur economic losses or damages to their rights due tosuch countermeasure taken by the Company. If the countermeasure taken is an allotment of stock options at nocost, shareholders are required to pay a certain amount of money within a prescribed period so as to exercise thestock options and to obtain the stocks. Moreover, if the Board of Directors decides to obtain stock options, newstocks might be delivered to shareholders as equivalent value of the acquisition of stock options by the Company,
without the shareholders having to pay an amount equivalent to the exercise price. The details of the procedures
will be communicated separately in accordance with laws and regulations and the rules of the stock exchanges
when stock options are issued.
The Company may cancel allocation of stock options or acquire stock options at no cost to the Company incertain cases (e.g., if the Large-Scale Purchaser cancels the Large-Scale Purchase) before issuing shares of theCompany to the stock option holders until the day immediately before the first day of the period for exercisingstock options even after the record date for allocation of stock options or after the allocation of stock options iseffective. Since dilution of the value of each share does not occur in this case, investors who have sold sharesbased on the assumption of dilution of the value of each share may incur losses depending on the change in thestock price.
6. Expiration date of the Policy
The Policy shall expire at the closing of the annual shareholders’ meeting for the last fiscal year ending within
three years from the day of this meeting. This shall apply subsequently.
When the Board of Directors decides to continue the Policy, it will report the decision promptly. The Board of
Directors will revise the necessity of the Policy from time to time based on the development and revisions etc.
of relevant laws and regulations including the Corporate Code and the Financial Instruments and Exchange Act
to protect the corporate value and common interests of shareholders.
If the Shareholders Meeting or the Board of Directors adopts a resolution abolishing the Policy, the Policy shallbe abolished immediately even before its expiration date.
7. Rationality of the Policy(1)

The Policy meets the requirements of the guidelines regarding takeover defense measures
The Policy fully satisfies the three basic principles (principle of protection and enhancement of corporate
value and common interests of shareholders, principle of prior disclosure and shareholders’ intentions,principle of securing necessity and suitability) provided in the “Guidelines Regarding Takeover Defense
Measures for the Purposes of the Protection and Enhancement of Corporate Value and Common Interestsof Shareholders” released by the Ministry of Economy, Trade and Industry and the Ministry of Justice on
May 27, 2005 (hereinafter referred to as the “Guidelines”), and its content is based on the above-mentioned
three principles provided by the Guidelines and takes into consideration the content of “The Proper Roleof Takeover Defense Measures in Light of Recent Changes in Various Environments” published on June30, 2008 by the Corporate Value Study Group established within the Ministry of Economy, Trade andIndustry, and other practices and debates regarding takeover defense measures. Further, the Policy
conforms to the purpose of various regulations etc. regarding the introduction of takeover defense measures
as provided by the Tokyo Stock Exchange.

(2)

The Policy is renewed with the purpose of enhancing corporate value and common interests of shareholders
The Policy is renewed with the purpose of enhancing corporate value and common interests of shareholders
in cases of Large-Scale Purchases. For this purpose, the Board of Directors obtains the necessary
information from the Large-Scale Purchaser, sufficient time for the assessment and consideration of the- 16 -

Large-Scale Purchase is secured, and necessary information for making a decision, including alternative
proposals, is provided to the shareholders, so that the shareholders can make a proper decision about
whether or not to accept the purchase.
(3)

The Policy respects the shareholders’ intentions
The renewal from the Current Policy to the Policy will be effective from the day of approval by theshareholders at this meeting, and the term of its validity will expire at the closing of the annual shareholders’meeting for the last fiscal year ending within three years from the day of this meeting. Further, the Policy
will be abolished even before its expiration date, if there is a resolution of the shareholders’ meeting forthe abolition of the Policy, in order to respect the shareholders’ intentions.
Moreover, if the judgment regarding whether or not it is clear that the Large-Scale Purchase will cause
unrecoverable damages to the Company or whether or not the Large-Scale Purchase will significantly
damage the corporate value and common interests of shareholders, the shareholders’ intention regardingwhether or not countermeasures should be taken will be confirmed at a shareholders’ meeting.

(4)

Importance attached to the decision of a Special Committee with a high level of independence
In order to properly operate the Policy, to prevent arbitrary decisions taken by the Board of Directors, andto ensure the objectivity, fairness and rationality of such decisions, a Special Committee independent of
the Board of Directors is established. The Special Committee consists of three members, selected fromexternal academic experts, lawyers, certified public accountants, certified tax accountants, outside directors,
outside statutory auditors, experienced corporate executives etc. The Board of Directors shall consult theSpecial Committee, obtain its recommendation and take such recommendation to the fullest account,regarding whether or not a Large-Scale Purchaser complies with the Large-Scale Purchase Rules, whether
or not it is clear that the Large-Scale Purchase will cause unrecoverable damages to the Company, whether
or not the Large-Scale Purchase will significantly damage the corporate value and common interests ofshareholders, and whether or not countermeasures should be taken.

(5)

Setting out reasonable objective requirements
The Policy has been set out so that it cannot be activated unless reasonable and detailed objective
requirements are fulfilled. It is therefore considered that a system for ensuring the prevention of any
arbitrary activation by the Board of Directors has been ensured.

Note

1: Specific shareholder group refers to either (i) or (ii) below:(i) A holder (holder stipulated in Article 27-23, paragraph 1 of the Financial Instruments and ExchangeAct, including a person deemed to be a holder under Article 27-23, paragraph 3) of shares etc. of theCompany (shares etc. set out in Article 27-23, paragraph 1) and joint holders of the holder (joint
holders prescribed in Article 27-23, paragraph 5, including holders regarded as joint holders under
Article 27-23, paragraph 6)(ii) A person carrying out purchase etc. (purchase etc. specified in Article 27-2, paragraph 1, including
a purchase made in securities markets) of share certificates etc. of the Company (share certificatesetc. stipulated in Article 27-2, paragraph 1) and persons having special relationships with the person(persons set out in Article 27-2, paragraph 7)

Note

2: Ratio of voting rights
If the specific shareholder group falls under (i) in the note 1 above
The ratio of voting rights means the ratio of share certificates etc. held by a holder of share certificatesetc. of the Company (ratio of share certificates etc. set out in Article 27-23, paragraph 4; the number ofthe shares held by the joint holders as specified in the same paragraph shall be taken into consideration).
If the specific shareholder group falls under (ii) in the note 1 above- 17 -

The ratio of voting rights means the total of the ratio of share certificates etc. (ratio of share certificatesetc. prescribed in Article 27-2, paragraph 8) of a person carrying out a purchase etc. of share certificatesetc. of the Company and that of persons having a special relationship with the purchaser.
In calculating the ratio of voting rights, the number of voting rights (stipulated in Article 27-2, paragraph8) and the number of shares issued (set out in Article 27-23, paragraph 4) in the latest financial statement
report, semiannual report or share buyback report can be used.
Note

3: An agreement etc. with other shareholders of the Company
An agreement etc. with other shareholders of the Company means any agreement concerning the joint
acquisition or transfer of stocks of the Company, or the exertion of voting rights or any other rights asshareholder of the Company, as well as any other action falling under the joint possessor stipulated in
Article 27-23, paragraph 5 and paragraph 6.

- 18 -

Attachment 1
Outline of the Special Committee
1. Establishment
The Special Committee shall be established by resolution of the Board of Directors of the Company.
2. Members
The Special Committee shall consist of three persons commissioned by the Board of Directors of the Company.
Persons qualified to serve on the Special Committee shall include external academic experts, lawyers, certified
public accountants, certified tax accountants, outside directors, outside statutory auditors and experienced
corporate executives.
3. Term
The term of office of members of the Special Committee shall be decided by resolution of the Board of Directorsof the Company.
4. Requirements for Resolution
In principle, resolutions by the Special Committee shall be adopted by a majority vote of members present atmeetings at which all members are present; provided, however, that resolutions by the Special Committee shallbe adopted by a majority vote of those present at meetings at which a majority of members are present if
circumstances prevent the attendance of all members.
5. Items for Resolution
If consultation is requested by the Board of Directors of the Company, the Special Committee shall accept therequest, decide on the items stated below in principle, and submit the details of its decisions to the Board of
Directors of the Company together with the reasons for such decisions. Members of the Special Committee shallbe required to make such decisions from the viewpoint of whether or not they contribute to corporate value and,by extension, the common interests of shareholders, and shall refrain from making decisions in their own
personal interests or in the personal interests of the Directors of the Company.
(1)
(2)
(3)

(4)
(5)

Whether or not to extend the Large-Scale Purchase Information Provision Period
Whether or not a Large-Scale Purchaser complies with the Large-Scale Purchase Rules
Whether or not it is clear that the Large-Scale Purchase will cause unrecoverable damages to the Company
or whether or not the Large-Scale Purchase will significantly damage the corporate value and common
interests of shareholders
Whether or not countermeasures should be taken
Other items pertaining to this Policy for which the Board of Directors of the Company requested
consultation

6. Advice of Experts etc.
In forming decisions stated above under 5, the Special Committee shall make its efforts to collect necessary andsufficient information to ensure the proper judgment. The Special Committee may seek, at the expense of theCompany, advice from third parties independent of the management of the Company (including financial
advisors, certified public accountants, lawyers, consultants and other experts).

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Attachment 2
Career Summaries of the Special Committee Members
At the time of the Renewal of the Policy, the Special Committee will consist of the following three members:
Kozo Uno<Career summary>July 1933

Born

August 1963
July 1969

Registered as certified public accountant (present)
Senior Partner of the auditing corporation Asahi & Co (Currently KPMG AZSA LLC)

April 1974
May 1974

Registered as certified tax accountant (present)
Founded Uno Kozo Certified Public Accountant Office (present)

October 1993
May 1997

Vice President of Asahi & Co (Currently KPMG AZSA LLC)
President of Asahi & Co

May 1999
May 2001

Chairman of Asahi & Co
Retired from Asahi & Co

* A proposal calling for the election of a substitute statutory auditor is to be submitted in this meeting.

Yukihiko Inoue<Career summary>November 1937
April 1962

Born
Entered the National Police Agency

June 1989
September 1994

Chief of Chiba Prefectural Police Headquarters
Superintendent-General of the Metropolitan Police of Japan

September 2003

President of Japan Guide Dog Association (present)

Yozo Izuhara<Career summary>
September 1938
April 1962

Born
Entered Nippon Sheet Glass Co., Ltd.

June 1998
June 2004

Representative Director, President of Nippon Sheet Glass Co., Ltd.
Representative Director, Chairman of Nippon Sheet Glass Co., Ltd.

June 2010
June 2012

Executive Advisor of Nippon Sheet Glass Co., Ltd.
Honorary Senior Counselor of Nippon Sheet Glass Co., Ltd. (present)

June 2014
June 2019

Outside Statutory Auditor of the Company (present)
Outside Director of the Company (planned)* The Company has reported Mr. Yozo Izuhara to Tokyo Stock Exchange as an independent officer. His original company, Nippon
Sheet Glass Co., Ltd. and the Company have some transactions etc., but we have judged that in view of the scale, nature etc. ofsuch transactions, there is no fear of his independence as a Special Committee member being influenced.
* A proposal calling for the election of an outside director is to be submitted in this meeting.

There is no special conflict of interests between the persons mentioned above and the Company.

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Attachment 3
Description of Stock Options
1. Shareholders to whom stock options shall be granted and conditions for issue
Stock options shall be allotted to shareholders indicated or recorded in the register of shareholders or beneficiaryshareholders as of the closing of the base date decided by the Board of Directors of the Company at a ratio of
one stock options to one share of common stock of the Company which is held by the shareholders (excluding
shares of common stock held by the Company) without requiring any new payment.
2. Type and number of shares to be issued upon exercise of stock options
The type of shares to be issued upon exercise of stock options shall be the common stock of the Company. The
upper limit of the total number of shares to be issued upon exercise of stock options shall be the number of sharesobtained by deducting the total number of outstanding shares of common stock of the Company (excluding
shares of common stock held by the Company) from the total number of shares authorized to be issued by theCompany as of the base date decided by the Board of Directors of the Company. The number of shares to beissued upon exercise of one stock option (hereinafter referred to as “the Number of Shares to Be Issued”) shallbe separately decided by the Board of Directors of the Company. However, if the Company conducts a share
split or a reverse share split, proper adjustments shall be made.
3. Total number of stock options to be issued
The total number of stock options to be issued shall be a number separately decided by the Board of Directorsof the Company. The Board of Directors of the Company may allot stock options more than once.
4. Value of investment at the time of the exercise of each stock option (the amount to be paid)
The value of the investment at the time of the exercise of each stock option (the amount to be paid) shall beseparately decided by the Board of Directors of the Company, which shall be one yen or more.
5. Restriction on the transfer of stock options
The acquisition of a stock option through the transfer of the stock option shall be subject to the approval of theBoard of Directors of the Company.
6. Conditions for the exercise of stock options
In principle, a person who belongs to a specified shareholders’ group with a ratio of voting rights of 20% or more
may not exercise stock options. A person who is required to follow a certain procedure to exercise stock options
by applicable foreign laws and ordinances of certain foreign jurisdiction, in which he/she/it is located, may not
exercise stock options in principle (However, such persons including a person to whom an exemption from theprocedure is available under the applicable laws and ordinances of the foreign jurisdiction may exercise stock
options, if certain requirements are met. In addition, the stock options held by the person shall become the objectof acquisition by the Company in exchange for the shares of the Company as compensation as stated in 8 below.).
In addition, a person who does not submit a form prescribed by the Company to confirm, among others, that theperson does not belong to any specified shareholders’ group may not exercise these stock options (excluding
persons who are not required by the Company to submit such form). The details shall be separately decided by
the Board of Directors of the Company.
7. Period for the exercise of stock options
The period for the exercise of stock options shall be determined at the Board of Directors meeting resolving theissuance of stock options at no cost to subscribers, which shall be one to three months, and the first day(hereinafter referred to as “the first day of the exercise period”) of which shall be separately decided at the Boardof Directors meeting resolving the issuance of stock options at no cost to subscribers. If the final day of theperiod for exercise falls on a holiday of the organization handling the payment of money to be paid at the timeof exercise, the final day shall be the preceding business day.

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8. Acquisition of stock options by the Company(1) If the Board of Directors of the Company deems that the acquisition of stock options by the Company isappropriate, the Company may acquire all stock options without compensation on a day separately decided
by the Board of Directors of the Company at any time prior to the day preceding the first day of the exercise
period.
(2) The Company may acquire on a day separately specified by the Board of Directors of the Company all
stock options held by persons other than persons belonging to a specified shareholders’ group and persons
who do not submit a form prescribed by the Company to confirm that the persons do not belong to any
specified shareholders’ group by the day of acquisition (excluding, however, persons who are not requiredby the Company to submit such form) which have not been exercised as of the day preceding the day
specified by the Board of Directors of the Company, and deliver the Number of Shares to Be Issued of theCompany for one stock options in exchange for all stock options acquired.
If the Board of Directors of the Company determines on or after the day of acquisition that there is a person
holding stock options who does not belong to a specified shareholders’ group (however, the Board of
Directors of the Company may request the submission of a form prescribed by the Company as set out inthe first paragraph of this Section 8. (ii) above for the Board of Directors determination), the Company
may acquire on a day falling after the day of acquisition as specified by the Board of Directors of theCompany all stock options held by the person which have not been exercised as of the day preceding the
day specified by the Board of Directors of the Company, and deliver the Number of Shares to Be Issued of
the Company for one stock options in exchange for all stock options acquired. This shall apply subsequently.
(3) The details of the acquisition provision shall be determined separately at a meeting of the Board of
Directors.

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