[English Translation of Convocation Notice Originally Issued in the Japanese Language]【Note】This document has been translated from 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．
The Company assumes no responsibility for this translation or for direct, indirect or any other forms ofdamages arising from the translation.

Securities Code: 6460
May 27, 2014
Hajime Satomi
Chairman of the Board and Chief Executive Officer
SEGA SAMMY HOLDINGS INC.
Shiodome Sumitomo Building,
1-9-2 Higashi Shimbashi, Minato-ku, Tokyo, Japan
Dear Shareholders:

Notice of the 10th Ordinary General Meeting of
Shareholders to be held on June 18, 2014
You are cordially invited to attend the 10th Ordinary General Meeting of Shareholders of SEGA SAMMYHOLDINGS INC. (the “Company”) to be held at Convention Hall, B2F, The Prince Park Tower Tokyo, 4-8-1
Shiba-koen, Minato-ku, Tokyo, 105-8563, Japan on Wednesday, June 18, 2014 at 10:00 a.m. for the purposes
listed below.
If you are unable to attend the meeting in person, you may exercise your voting rights by either mail (inwriting) or via the Internet. Therefore, please review the attached Reference Documents for General Meetingof Shareholders, and kindly exercise your voting rights before 6:00 p.m., Japan Standard Time, on Tuesday,June 17, 2014.
Details of the Meeting
1. Date and time:

Wednesday, June 18, 2014 at 10:00 a.m.

2. Venue:

Convention Hall, B2F, The Prince Park Tower Tokyo
4-8-1 Shiba-koen, Minato-ku, Tokyo, 105-8563, Japan

3. Agenda:
Matters to be reported:

1. The Business Report and the Consolidated Financial Statements for the 10th

fiscal year (from April 1, 2013 to March 31, 2014) and results of audits by
the Accounting Auditor and the Board of Corporate Auditors on theConsolidated Financial Statements
2. Non-Consolidated Financial Statements for the 10th fiscal year (from April
1, 2013 to March 31, 2014)
Matters to be resolved:
Proposal 1: To amend certain parts of the Articles of Incorporation
Proposal 2: To elect nine (9) Directors
Proposal 3: To elect one (1) Corporate Auditor
Proposal 4: To issue share subscription rights as share options to Directors
Proposal 5: To issue share subscription rights as share options to employees of the Company and of its
subsidiaries* If you attend the meeting in person, please submit the enclosed voting form at the reception desk at the meeting location on
the day of the meeting.
* Please note that persons other than shareholders of the Company such as a proxy and an accompanying person cannot attend
the meeting.
* Should any change need to be made to the Reference Documents for General Meeting of Shareholders, Business Report or
Consolidated/Non-Consolidated Financial Statements, such changes shall be posted on the website of the Company (Japaneseonly).
* For voting results, an extraordinary report shall be posted on the website of the Company in place of Notice of Resolutions.
Information in English will be posted on our English website (http://www.segasammy.co.jp/english/ir/event/meeting.html).

1

[English Translation of Convocation Notice Originally Issued in the Japanese Language]

Information on Disclosure on the Internet
Pursuant to the provisions of laws and regulations and the Articles of Incorporation, the section “Outline of
Resolutions Regarding Preparation of Internal Control System and so forth to Ensure Appropriate Business
Execution” from the Business Report, Notes to Consolidated Financial Statements and Individual Notes areposted on the website(http://www.segasammy.co.jp/english/ir/event/meeting.html) of the Company and not attached to thisdocument.
* The Business Report and Consolidated/Non-Consolidated Financial Statements audited by the Accounting Auditor and theBoard of Corporate Auditors include the section “Outline of Resolutions Regarding Preparation of Internal Control Systemand so forth to Ensure Appropriate Business Execution” from the Business Report, Notes to Consolidated Financial
Statements and Individual Notes, respectively, which are posted on the website of the Company.

Information on the Method of Receiving Convocation Notice
You may request the receipt of convocation notice, shareholder information and other documents for future
General Meetings of Shareholders by email if your email address is registered with the Company. (Please notethat mobile phone email addresses are not accepted.)
If you wish to receive the above documents by email, please access the voting website designated by theCompany (http://www.evote.jp/) from a PC or smartphone, log on using the “logon ID” and “temporary
password” printed on the enclosed voting form and follow the on-screen instructions from the “Receipt byemail” screen.
The statutory convocation notice and other documents to be sent by email to the registered addresses(including the notice that such documents have been posted on the website designated by the Company) are asshown below. Convocation notice will be sent by e-mail by the Shareholder Registry Administrator.
(1) Convocation Notice of Ordinary General Meeting of Shareholders: Date and time, venue, agenda,
attached documents (including Business Report) and Reference Documents for General Meeting of
Shareholders(2) Convocation Notice of Extraordinary Meeting of Shareholders: Date and time, venue, agenda andReference Documents for General Meeting of Shareholders* Please note that, if you take the procedure after a certain period from the record date of General Meeting of Shareholders (thefiscal year end in case of Ordinary General Meeting of Shareholders and a date separately determined by the Board of
Directors in case of Extraordinary Meeting of Shareholders), your email address may not be reflected for sending a
convocation notice.

2

[English Translation of Convocation Notice Originally Issued in the Japanese Language]

Information on Exercise of Voting Rights
Exercise of voting rights by mail (in writing)
Indicate “for” or “against” the proposals on the voting form enclosed and return the said form to theCompany so that it is received no later than the deadline for exercising your voting rights, indicated above.
Exercise of voting rights via the Internet(1) Exercise of voting rights(i) Access the voting website designated by the Company (http://www.evote.jp/), log on using the“voting rights exercise code” and “temporary password” printed on the enclosed voting form, andfollow the on-screen instructions (Japanese language only) to enter “for” or “against” the proposals
before the deadline for exercising your voting rights, indicated above.
(ii) In order to prevent unauthorized access by persons other than shareholders (spoofing) andfalsification of entries, you are kindly requested to change the “temporary password” once you log
on to the voting website.
(2) Voting website(i) You may exercise your voting rights by accessing the voting website
designated by the Company (http://www.evote.jp/) from a PC, smartphone ormobile phone (i-mode, EZweb or Yahoo! Keitai). (Please note that the website
cannot be accessed between 2:00 a.m. and 5:00 a.m. daily, Japan Standard
Time.) (“i-mode”, “EZweb” and “Yahoo!” are trademarks or registeredtrademarks of NTT DOCOMO, Inc., KDDI Corporation and U.S. Yahoo! Inc.,
respectively.)
You may also access the voting website by using a smartphone or mobile
phone equipped with a QR code reader to read the QR code on the right:
Please check the usage instructions for your smartphone or mobile phone forfurther details regarding the use of the QR code reader.
(“QR code” is a registered trademark of DENSO WAVE INCORPORATED.)(ii) You may be unable to use the voting website depending on your Internet configuration, firewall,anti-virus software and proxy server settings.
(iii) You must have access to either i-mode, EZweb or Yahoo! Keitai services to exercise your voting
rights via mobile phone. Please note that the voting website is only accessible from a mobile
handset capable of communicating encrypted data (i.e. SSL) and mobile phone data for security
purposes.
(iv) Please note that any costs incurred in accessing the designated voting website (e.g. internet
connection fees, etc.) shall be borne by the shareholder. Please note that any costs incurred invoting via mobile phone, including packet charges, shall also be borne by the shareholder.
Treatment of votes cast more than once(i) When any shareholder exercises voting rights both by voting form and via the Internet, only theInternet vote will be deemed as valid.
(ii) When any shareholder exercises voting rights more than once via the Internet, only the last votewill be deemed as valid. Similarly, when any shareholder exercises voting rights more than once
via PC, smartphone and / or mobile phone, only the last vote will be deemed as valid.
Electronic proxy voting platform for institutional investors
Institutional investors can use the electronic proxy voting platform that is operated by Investor
Communications Japan, Inc., which is designed for institutional investors to exercise their voting rights
electronically.

3

[English Translation of Convocation Notice Originally Issued in the Japanese Language]For inquiries concerning the online voting system:
Number of recipient
1,250[Helpdesk]
Notes:
1.
Numberofsharesofsharesubscription
rights
is
100
per
the
right
Shareholder registry administrator: Transfer Agent Department,
2. Terms and conditions for exercise of share subscription rights are as follows:
Mitsubishi UFJ Trust and Banking Corporation
The grantee shall be Director, Corporate Auditor, Executive Officer, Consultant, Counsel,
Direct line: or employee of the Company
0120-173-027(Domestic [Japan] call only)or any of its subsidiaries when he or she exercises the(Weekdays
9:00
a.m. -as
9:00
p.m.)rights. However, the following cases are treatedexceptions.
a. Where the loss of such position is due to expiration of the term of office or amendment* Please note that the above contact number is not for inquiries concerning shares.
of law or Articles of Incorporation of the Company or any of its subsidiaries;
b. Where the loss of such position is due to company regulations, including mandatory

4

[English Translation of Convocation Notice Originally Issued in the Japanese Language]

Business Report(From April 1, 2013 To March 31, 2014)
I Group’s Current Condition
1. Business Development and Results
During the fiscal year ended March 31, 2014, there were growing hopes that the Japanese economy
would break out of deflation and experience economic recovery amid the trend toward yen depreciation
and rising stock prices backed by the effects of monetary and financial policies. However, uncertainty
still prevailed due to factors such as worries over the effect of increase in the consumption tax rate to
the economy.
In this climate, with regard to the pachislot and pachinko industry, as orders tended toconcentrate on some mainstay products due to pachinko parlor operators becoming increasingly
selective about machines, there has been continuing strong replacement demand for new
pachislot machines, while replacement demand for new pachinko machines has been rather
weak. In order to revitalize the market in the future, it is essential to develop and supply
machines that will be supported by end users.
In the amusement machine and amusement center industry, the market was sluggish due to theabsence of major market-driving titles, along with the diversification of ways to play on
smartphones and other devices. In the future, however, development and supply of innovative
new game machines in line with diversifying customer needs is expected to revitalize themarket.
In the home video game software industry, demand expanded in the market for digital games
geared toward social networking services (SNS) and smartphones, while the market for
packaged games softened.
In this business environment, net sales for the fiscal year ended March 31, 2014 amounted to ¥378,011
million (an increase of 17.6% from the previous fiscal year). The Group posted an operating income of¥38,533 million (an increase of 102.0% from the previous fiscal year) and ordinary income of ¥40,531
million (an increase of 93.8% from the previous fiscal year).
Also, while the Group recorded extraordinary income of ¥15,795 million including gain on sales ofinvestment securities, the Group recorded extraordinary loss of ¥8,782 million including loss on
liquidation of subsidiaries and affiliates from realization of foreign currency translation adjustment
resulted from the completion of the liquidation of some of the subsidiaries in the U.S. and Europe.
As a result, the Group recorded a net income of ¥30,721 million (a decrease of 8.2% from the previous
fiscal year). The main reason for net income of the fiscal year fell short of the previous fiscal year is theGroup recorded deferred tax asset related to the tax loss which was resulted from the completion ofliquidation of some of the subsidiaries in the U.S. for the amount that would be deductible from thefuture taxable income in the previous fiscal year.
Result of each segment is as follows《Pachislot and Pachinko Machines》
In the pachislot machine business, sales of “Pachislot Hokuto No Ken Chapter of Resurrection” and“Pachislot Eureka Seven 2” under the Sammy brand were solid. In spite of the rescheduling of thelaunch of certain titles, overall sales of the pachislot machines were 301 thousand units and exceeded
results for the previous fiscal year.
In the pachinko machine business, although the Group launched “Pachinko CR Hokuto No Ken 5
Hyakuretsu” and “Pachinko CR Monster Hunter” under the Sammy brand, titles other than the major
titles performed weakly due to the stagnant market environment. Overall sales of the pachinko machines
were 200 thousand units and fell short of the previous fiscal year.
As a result, net sales in this segment were ¥181,984 million (an increase of 27.4% from the previous
fiscal year) and operating income was ¥45,292 million (an increase of 92.4% from the previous fiscal
year).
5

[English Translation of Convocation Notice Originally Issued in the Japanese Language]
Main Pachislot Machines and Units Sold
Model name

Brand

Pachislot Hokuto No Ken Chapter of Resurrection
Pachislot Eureka Seven 2
Pachislot JuohPachislot Bakemonogatari
Pachislot Kaiji 3(Sammy)(Sammy)(Sammy)(Sammy)(GINZA)

Units sold(Thousands)
114
59
43
31
25

Main Pachinko Machines and Units Sold
Model name

Brand

Pachinko CR Hokuto No Ken 5 Hyakuretsu
Pachinko CR Monster Hunter
Pachinko CR SOUTEN-NO-KEN
CR Kayou Suspense Gekijou
Pachinko CR Rookies(Sammy)(Sammy)(Sammy)(Taiyo Elec)(Sammy)Units sold(Thousands)
69
32
27
18
12

《Amusement Machine Sales》
In the amusement machine sales business, although the Group launched CVT KITs and expendables
such as cards for “WORLD CLUB Champion Football” and reported distribution revenue from revenue
sharing titles such as “CODE OF JOKER,” new titles including “THE WORLD of THREE
KINGDOMS” struggled due to the harsh market environment. As a result, net sales in this segment were
¥43,855 million (an increase of 2.9% from the previous fiscal year) and operating loss was ¥1,264
million (operating income of ¥1,902 million for the previous fiscal year).
《Amusement Center Operations》
In the amusement center operations business, efforts to reinforce management capabilities of existing
amusement centers continued from the previous fiscal year. However, due to the absence ofindustry-driving titles, sales at existing amusement centers in Japan dipped and registered 96.1% of thelevel compared to the previous fiscal year.
The Group opened 5 amusement centers and closed 9 amusement centers in the domestic market in thefiscal year. Consequently, the Group operated a total of 198 amusement centers in Japan at the end of theperiod. Meanwhile, from the fiscal year ended March 31, 2014, numbers counted as amusement
centers in the domestic market are based on amusement centers (game arcades) directly operated
by the Group.
As a result, net sales in this segment were ¥43,227 million (an increase of 1.2% from the previous fiscal
year) and operating income was ¥60 million (a decrease of 94.9% from the previous fiscal year).
《Consumer Business》
In the consumer business, although the Group launched multiple titles including “Total War: ROME
II” and “Football Manager 2014” in the packaged game software field, sales were low due to the harshmarket environment. A year-on-year decline in total volume of packaged software sales to 8,730
thousand copies, which includes 2,800 thousand copies in the U.S., 3,770 thousand copies in Europe,and 2,150 thousand copies in Japan.
In the field of digital game software for mobile phones, smartphones, and PC downloading, performanceremained favorable for the online RPG “PHANTASY STAR ONLINE 2” as well as titles for
smartphones, “Puyopuyo!! Quest” and “CHAIN CHRONICLE.” Meanwhile, on the pachinko andpachislot game website for mobile phones and PCs, the smartphone version of “777TOWN for
Android,” “777TOWN for iOS” and service for DeNA Co., Ltd.’s “Moba7” were enhanced.
Also, the number of titles distributed domestically as of March 31, 2014 was 141 (including 73
Pay-to-play types and 68 Free-to-play types).
In the toy sales division, the Group implemented the sale of mainstay products such as “Anpanman
Series” and “Jewelpod Series,” however the toy sales division as a whole performed weakly.
6

[English Translation of Convocation Notice Originally Issued in the Japanese Language]
In the animated films division, theater film “LUPIN THE 3rd VS DETECTIVE CONAN THE MOVIE”
recorded an audience of over 3 million and was favorable.
As a result, net sales in this segment were ¥100,541 million (an increase of 18.6% from the previous
fiscal year) and operating income was ¥2,089 million (operating loss of ¥732 million for the previous
fiscal year).
In addition, a newly established subsidiary, which is a wholly owned subsidiary of SEGACORPORATION, a subsidiary of the Company, concluded a business transfer agreement with Index
Corporation on September 18, 2013 and the business transfer took place on November 1, 2013.
2. Issues to be Addressed
In the pachislot and pachinko machines business, pachinko parlor operators are facing increasingly harshbusiness conditions due to the widespread practice of lowering ball rental fees and a decline in thenumber of players. There has also been a tendency for demand to concentrate on large major titles thatpromise greater profitability. Under these circumstances, while the Group is required to adapt to thechanges in the business environment through efforts including development and supply of products with
innovative gameplay that meet market needs, we also need to deal with rising development andmanufacturing costs caused by products becoming more high-quality.
In the amusement machine sales business, even in the struggling market environment, the Group willseek a broad range of users by not only providing various products from high value added items tohousehold items that meet user needs but also simultaneously enhancing investment efficiency for
operators and securing sources of long-term and stable earnings for the Company as a machine
manufacture. At the same time, the Group will also strive to achieve the optimum distribution ofmanagement resources into the growing fields of digital game software for mobile phones, smartphones
and PC downloading, among others.
In the amusement center operations business, because profits from existing amusement centers will becompressed due to the effects of the increase in the consumption tax rate, the Group’s challenge will beto recover profits by strengthening management capabilities and competitiveness at its amusement
centers, acquiring new customers, and by developing new business categories besides the traditional
game arcades.
In the packaged game software field of the consumer business, one management issue is how to address
the expanding market for new content for the field of digital game software, along with the improvementin profitability through the streamlining of development efforts by focusing on a smaller number of titles.
In the toy business and the animated films business, further reinforcement of our business byintra-Group collaboration and other measures is our focus.
The Company set up a “Group Structure Reform Division” on May 9, 2014 to reassess the earnings
structure of the entire group from a medium- to long-term perspective and has started the reviewing
activities. In the “Group Structure Reform Division,” together with tackling issues in each existing
business, we will prepare and implement measures aimed at increasing our earning capacity by the endof the fiscal year ending March 31, 2015 through implementations such as deploying our management
resources on growth areas, including new areas.
3. Fund Procurement, etc.
(1) Fund Procurement
The Company concluded commitment line contract aimed at securing medium- to long-term
capital liquidity and otherwise providing a Group wide safety net. The company formed a
syndicate arrangement with two financial institutions covering ¥20,000 million.
Regarding fund procurement for the fiscal year ended March 31, 2014, the Company procured¥11,000 million including public offering of straight bonds, for the purpose of securing medium- tolong-term working capital and diversifying means for procuring funds.
For effective use of the Group funds, the Group is operating the Cash Management System(“CMS”) involving nine Group companies including the Company, Sammy Corporation, SEGACORPORATION, Sammy Networks Co., Ltd., SEGA TOYS CO., LTD. and TMS
ENTERTAINMENT CO., LTD.
(2) Capital Expenditures
The Group’s capital expenditures totaled ¥38,182 million, including ¥7,905 million for increasing
mold tools, construction of the new factory and other investments in the pachislot and pachinko
machines business and ¥7,729 million in capital expenditures related to amusement centers
7

[English Translation of Convocation Notice Originally Issued in the Japanese Language]
operated by SEGA ENTERTAINMENT Co., Ltd. and other companies. In addition, there was
acquisition of land for the purpose of developing a complex in Centum-city, Busan Metropolitan
City, the Republic of Korea.
(3) Business Transfers, Absorption-type Demergers, and Incorporation-type Demergers
There is no applicable material information for the fiscal year ended March 31, 2014.
(4) Business Transfer from Other Companies
Business of Index Corporation was transferred on November 1, 2013 to a wholly owned subsidiary
newly established by SEGA CORPORATION, a subsidiary of the Company.
(5) Succession of Rights and Obligations Related to Businesses of Other Corporations, etc., throughAbsorption-type Mergers or Demergers
There is no applicable material information for the fiscal year ended March 31, 2014.
(6) Acquisition or Disposition of Stocks and Other Interests or Share Subscription Rights, etc., of
Other Companies
There is no applicable material information for the fiscal year ended March 31, 2014.
4. Assets and Profits and Losses for the Previous Three Fiscal Years
Fiscal YearItem
Net sales
Ordinary income
Net income
Net income per
share
Total assets
Net assets

FY2011FY2012FY2013
From April 1, 2010 From April 1, 2011 From April 1, 2012
To March 31, 2011 To March 31, 2012 To March 31 2013

FY2014
From April 1, 2013
To March 31 2014(¥ million)(¥ million)(¥ million)

396,732
68,12341,510395,50258,164
21,820321,407
20,91433,460378,01140,53130,721(¥)(¥ million)(¥ million)

163.19458,624
285,46186.73
497,451
296,376

137.14
528,504
320,034

126.42542,936
348,270

Notes: 1. Figures shown in millions of yen have been rounded down to the nearest million.
2. Net income per share is calculated based on the average number of shares outstanding
during the period.
5. Major Business Segments
The business segments of the SEGA SAMMY Group are Pachislot and Pachinko Machines, Amusement
Machine Sales, Amusement Center Operations, Consumer Business and Other Businesses. The primarybusiness activities are as follows.
Segment
Pachislot and Pachinko
Machines

Main Business
Development, manufacture and sales of pachislot and pachinko machines
Design for parlors
Development, manufacture and sales of game machines used in
Amusement Machine Sales
amusement arcades
Amusement Center
Development, operation, rent and maintenance of amusement centers
Operations
Development and sales of home video game software;
Development, manufacture, and sales of toys;
Consumer Business
Planning and production of entertainment contents through mobile
phones, etc.;Planning, production and sales of animated movies
Other
Resort complex business, Information provider services, etc.

8[English Translation of Convocation Notice Originally Issued in the Japanese Language]
6. Major Business Locations of the Group(1) The Company: SEGA SAMMY HOLDINGS INC.
Head Office (Minato-ku, Tokyo)(2) Office of the main subsidiaries① Sammy Corporation
Head Office (Toshima-ku, Tokyo)
Kawagoe Factory (Kawagoe, Saitama)
Branches (8 Branches)② SEGA CORPORATIONHead Office (Shinagawa-ku, Tokyo)③ SEGA ENTERTAINMENT Co., Ltd.
Amusement Center Operating Locations: (198 locations)(3) Employees of the Group
Number of employees (change from end of previous year) 7,472 (464 up)
Note: The number of employees includes full-time staff and staff on loan, but not temporary
employees.
7.

Material Parent Company and Subsidiaries(1) Relationships with parent company
There is no pertinent matter.
(2) Relationships with subsidiaries

CapitalPercentage
ratio ofissuedsharesSammy Corporation¥18,221 million

100.0％SEGA CORPORATION¥60,000 million

100.0％

Company

RODEO Co., Ltd.

¥100 million

Sammy Design Co., Ltd.

¥40 million

TAIYO ELEC Co., Ltd.

¥5,125 million

Sega Logistics Service Co., Ltd.

¥200 million

SEGA ENTERTAINMENT
Co., Ltd.

¥100 million

SEGA Networks Co., Ltd.

¥10 million

DARTSLIVE Co., Ltd.

¥10 million

Sega Amusements Europe Ltd.
Sega of America, Inc.
Sega Europe Ltd.

￡26,485
thousand
US$110,000
thousand￡10,000
thousand965.0％(Note 1)100.0％(Note 1)100.0％(Note 1)100.0％(Note 1)100.0％(Note 1)100.0％(Note 1)100.0％(Note 1)100.0％(Note 1)100.0％(Note 1)100.0％(Note 1)Main business
Development/manufacture/sales ofpachislot and pachinko machines
Development/manufacture/sales of gamemachines used in amusement arcades
Development/operations of amusement
centers
Development/sales of home videogame
softwareDevelopment/manufacture/sales ofpachislot machines
Planning/design/construction ofpachinko parlors
Development/manufacture/sales ofpachislot and pachinko machines
Maintenance service, transportation andwarehouse business
Operation of amusement centers
Development/sales of digital games
Planning/development/sales of gameequipment and game software
Import/manufacture/sales of amusement
equipment
Development/management/sales of home
video game software
Sales of home video game software

[English Translation of Convocation Notice Originally Issued in the Japanese Language]Company
Sega Publishing Europe Ltd.

Capital￡0
thousand

Percentage
ratio ofissuedshares100.0％(Note 1)

¥10 million

100.0％(Note 1,2)

Sammy Networks Co., Ltd.

¥2,330 million

100.0％SEGA TOYS CO., LTD.
TMS ENTERTAINMENT CO.,LTD.

¥100 million

100.0％¥8,816 million

100.0％MARZA ANIMATION
PLANET INC.

¥100 million

100.0％

Japan Multimedia Services
Corporation¥835 million

95.5％

PHOENIX RESORT CO., LTD.

¥93 million

100.0％

Index Corporation

Main business
Sales of home video game software
Design/development of content formobile phones, development of home
video game software
Planning/production/sales of game andmusic contents through mobile phones
and Internet, etc.
Development/manufacture/sales of toys
Planning/production/sales and otheractivities involving animated movies
Production of computer graphics
animations, planning/production ofanimated movies, licensing business,investment advisory business andoperation/management of investment
business partnership (funds), etc.
Information providing service, call center
service and temporary staffing service
Operation of resort facilities, including
hotels, spas, golf courses,
restaurants and international conference
halls

Note 1. Percentage of ratio of issued shares includes rights of indirectly owned shares.
2. Business of Index Corporation was transferred to SEGA DREAM CORPORATION, awholly owned subsidiary newly established by SEGA CORPORATION. Also, SEGADREAM CORPORATION has changed its trade name to Index Corporation.

8.

Main Banks and Borrowings
Lenders
Aozora Bank, Ltd.
Resona Bank, Limited.
Mitsubishi UFJ Trust and Banking Corporation
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Sumitomo Mitsui Banking Corporation
The Bank of Yokohama, Ltd.
The Hokuriku Bank, Ltd.
Mizuho Bank, Ltd.
Others
Total

Balance of loans payable¥10,567 million¥6,850 million¥5,430 million¥4,925 million¥4,885 million¥4,363 million¥3,385 million¥3,200 million¥4,511 million¥48,117 million

10[English Translation of Convocation Notice Originally Issued in the Japanese Language]
9.

Where the Articles of Incorporation Provide for the Board of Directors to Determine
Distributions, etc., of Retained Earnings, Policy Regarding Exercise of Such Authority
SEGA SAMMY HOLDINGS INC. gives priority to returning profits to shareholders. The Company’s
basic policy is to pay an appropriate dividend that is commensurate with earnings.
For the distribution of surplus, the Company paid second quarter and plans to pay year-end dividends of¥20 per share, respectively. This reflects the Group’s policy of paying dividends to shareholders stably.
Furthermore, the Company’s policy is to effectively use retained earnings to bolster its financial
position and operating base as well as for investments in line with business expansion.

10. Other Significant Events of the GroupA subsidiary of the Company, RODEO Co., Ltd., has ended the “Basic Agreement on Exclusive Sales
Agency Transactions Regarding Sales and Purchase of Pachislot Machines,” which was concluded with
FIELDS CORPORATION in order to make the profitability of their pachislot and pachinko machines
business more robust, on March 31, 2014 due to expiry of the term of contract. Likewise, Sammy
Corporation has ended the “Basic Agreement on Representation Transactions Regarding Sales andPurchase of Pachinko Machines” and “Outsourcing Agreement on Representation Management of
Designated Agency and Halls,” which were concluded with FIELDS CORPORATION, on April 30,
2014. Consultations will be held with FIELDS CORPORATION on other details incidental to therelevant contracts.
II Shares Outstanding and Shareholders
1.

Number of shares authorized for issue

800,000,000 shares

2.

Total shares issued and outstanding

266,229,476 shares

3.

Number of shareholders

89,771

4.

Principal shareholders (Top 10)
Investment in
SEGA SAMMY HOLDINGS
Shareholding ratio
Shares held(%)

Name of shareholder
Hajime Satomi

33,619,338

13.80

FSC Co., Ltd.

12,972,840

5.32

HS Company

10,000,000

4.10Japan Trustee Services Bank, Ltd. (Trustee)

8,687,100

3.56

The Master Trust Bank of Japan, Ltd. (Trustee)

7,881,200

3.23

State Street Bank and Trust Company

5,751,937

2.36

CBNY-ORBIS SICAV

4,358,332

1.78

BNYM TREATY DTT 15

4,140,114

1.69

MACQUARIE BANK LIMITED - MBL LONDONBRANCH

3,892,000

1.59

3,822,900
JPMorgan Chase Bank 380072
Note: Shareholding ratio was calculated excluding treasury stock (22,627,725 shares)

11

1.56

[English Translation of Convocation Notice Originally Issued in the Japanese Language]
III Company’s Share Subscription Rights
1.

Outline of Share Subscription Rights Issued to the Company’s Directors and Corporate Auditors
as Remuneration for Their Services as of the End of the Fiscal Year Ended March 31, 2014
Date of Resolutions of the Ordinary
General Meeting of Shareholders
Number of individuals with rights
Company directors
Number of share subscription rights (Note 1)
Class of shares for share subscription rights
Number of shares for share subscription rights
Payment on exercise of share subscription rights
Capital contribution upon exercise of sharesubscription rights (per share)
Period for exercise of share subscription rights
Terms and conditions for exercise of sharesubscription rights
Matters concerning the transfer of sharesubscription rights

June 30, 2010
2248
Common stock
24,800
There is no need of delivering payment toexchange with the share subscription rights.
¥1,312
August 1, 2012 – July 31, 2014
(Note 2)

When transferring share subscription rights,
approval must be obtained from the Board of
Directors
Notes: 1. Number of shares of share subscription rights is 100 per the right. Numbers above include
Share Subscription Rights given before taking office as a Director.
2. Terms and conditions for exercise of share subscription rights are as follows:
The grantee shall be Director, Corporate Auditor, Executive Officer, Consultant, Counsel,
or employee of the Company or any of its subsidiaries when he or she exercises therights. However, the following cases are treated as exceptions.
a. Where the loss of such position is due to expiration of the term of office oramendment of law or Articles of Incorporation of the Company or any of its
subsidiaries;
b. Where the loss of such position is due to company regulations, including mandatory
retirement or termination on account of business contraction;c. Where, immediately after the loss of such position due to the reasons held by theCompany, the grantee becomes Director, Corporate Auditor, Executive Officer,
Consultant, Counsel, or employee of the Company, any of its Group companies, anyof its business partners or any other company sanctioned by the Company.

Date of Resolutions of the Ordinary
General Meeting of Shareholders
Number of individuals with rights
Company directors
Number of share subscription rights (Note 1)
Class of shares for share subscription rights
Number of shares for share subscription rights
Payment on exercise of share subscription rights
Capital contribution upon exercise of sharesubscription rights (per share)
Period for exercise of share subscription rights
Terms and conditions for exercise of sharesubscription rights
Matters concerning the transfer of sharesubscription rights

December 24, 2010
1
132
Common stock
13,200
There is no need of delivering payment toexchange with the share subscription rights.
¥1,753February 2, 2013 – February 1, 2015
(Note 2)

When transferring share subscription rights,
approval must be obtained from the Board of
Directors
Notes: 1. Number of shares of share subscription rights is 100 per the right. Numbers above are Share
Subscription Rights given before taking office as a Director.
12

[English Translation of Convocation Notice Originally Issued in the Japanese Language]
2. Terms and conditions for exercise of share subscription rights are as follows:
The grantee shall be Director, Corporate Auditor, Executive Officer, Consultant, Counsel,
or employee of the Company or any of its subsidiaries when he or she exercises therights. However, the following cases are treated as exceptions.
a. Where the loss of such position is due to expiration of the term of office oramendment of law or Articles of Incorporation of the Company or any of its
subsidiaries;
b. Where the loss of such position is due to company regulations, including mandatory
retirement or termination on account of business contraction;c. Where, immediately after the loss of such position due to the reasons held by theCompany, the grantee becomes Director, Corporate Auditor, Executive Officer,
Consultant, Counsel, or employee of the Company, any of its Group companies, any of
its business partners or any other company sanctioned by the Company.
Date of Resolutions of the Ordinary
General Meeting of Shareholders
Number of individuals with rights
Company directors
Number of share subscription rights (Note 1)
Class of shares for share subscription rights
Number of shares for share subscription rights
Payment on exercise of share subscription rights
Capital contribution upon exercise of sharesubscription rights (per share)
Period for exercise of share subscription rights
Terms and conditions for exercise of sharesubscription rights
Matters concerning the transfer of sharesubscription rights

July 31, 2012
6
2,400
Common stock
240,000
There is no need of delivering payment toexchange with the share subscription rights.
¥1,686
September 2, 2014 – September 1, 2016
(Note 2)

When transferring share subscription rights,
approval must be obtained from the Board of
Directors
Notes: 1. Number of shares of share subscription rights is 100 per the right. Numbers above include
Share Subscription Rights given before taking office as a Director.
2. Terms and conditions for exercise of share subscription rights are as follows:
The grantee shall be Director, Corporate Auditor, Executive Officer, Consultant, Counsel,
or employee of the Company or any of its subsidiaries when he or she exercises therights. However, the following cases are treated as exceptions.
a. Where the loss of such position is due to expiration of the term of office or amendmentof law or Articles of Incorporation of the Company or any of its subsidiaries;
b. Where the loss of such position is due to company regulations, including mandatory
retirement or termination on account of business contraction;c. Where, immediately after the loss of such position due to the reasons held by theCompany, the grantee becomes Director, Corporate Auditor, Executive Officer,
Consultant, Counsel, or employee of the Company, any of its Group companies, any of
its business partners or any other company sanctioned by the Company.

2.

Outline of Share subscription rights Issued to Company Employees or Subsidiary Directors,
Corporate Auditors, or Employees as Remuneration for Their Services During the Fiscal Year
Ended March 31, 2014
Not applicable.

13

[English Translation of Convocation Notice Originally Issued in the Japanese Language]
IV Company Directors and Corporate Auditors
1. Directors and Corporate Auditors
Title
Chairman of the Board andChief Executive Officer
Director
Executive for Group Executive
Office, New Business Office,Administrations Division,
Group CSR Promotion Office,Group-Related Business OfficeDirector

Name
Hajime Satomi

Main Responsibilities
Chairman of the Board, Sammy Corporation
Chairman and CEO, SEGA CORPORATION
Director, Sammy Corporation
Director, SEGA CORPORATION

Akira Sugano

Haruki Satomi

Director

Naoya Tsurumi

Director

Hisao Oguchi

Director

Shigeru Aoki

Director

Yuji Iwanaga

DirectorTakeshi Natsuno

Standing Corporate Auditor

Tomio Kazashi

Director, SEGA CORPORATION
President and Representative Director, SEGACORPORATION
President and Representative Director, Sammy
Corporation
AttorneyStanding Corporate Auditor, Sammy
Corporation
Standing Corporate Auditor, SEGA
Corporate Auditor
Hisashi Miyazaki
CORPORATION
Corporate Auditor, SEGA CORPORATION,
Corporate Auditor
Mineo Enomoto
AttorneyNotes:1. Yuji Iwanaga and Takeshi Natsuno are outside director as stipulated in Article 2, Clause 15of the Companies Act.
2. Tomio Kazashi, Toshio Hirakawa and Mineo Enomoto are outside corporate auditor as
stipulated in Article 2, Clause 16 of the Companies Act.
3. The Company has submitted an Independent Directors/Corporate Auditors Notification Formto register Directors Yuji Iwanaga and Takeshi Natsuno, Standing Corporate Auditor Tomio
Kazashi, and Corporate Auditors Toshio Hirakawa and Mineo Enomoto as Independent
Directors/Corporate Auditors at Tokyo Stock Exchange, Inc.
4. The Company has adopted the executive officer system to speed up decision-making,strengthen oversight of business execution, and reinforce business execution functions. The
Company has six executive officers: Shunichi Shimizu, Division Manager of the
Administrative Division; Koichi Fukazawa and Takatoshi Akiba, Group-Related Business
Office; Koichiro Ueda, General manager of New Business Office; Seiichiro Kikuchi,
General manager of Group Executive Office, Corporate Strategy Department, Executive
Secretariat Department and Investor Relations Department; Hiroshi Ishikura, Division
Manager of the Group Internal Control Office, Group CSR Promotion Office and Internal
Audit Office.
5. Director and Adviser Keishi Nakayama retired from office due to resignation on January 20,
2014.
6. Director Naoya Tsurumi took office as Senior Managing Director and Representative
Director of the Company on April 1, 2014.
Corporate Auditor

Toshio Hirakawa

2. Total Remuneration, etc., to Directors and Corporate Auditors
Title
Director
Corporate Auditor
Total

Number of individuals
9
2
11
14

Remuneration, etc.
¥664 million¥25 million¥689 million

[English Translation of Convocation Notice Originally Issued in the Japanese Language]
Notes: 1. Remuneration, etc., includes bonuses to directors/corporate auditors in the amount of ¥183
million (¥180 million for directors, ¥3 million for corporate auditors) and stock options to
directors in the amount of ¥31 million (¥31 million for directors).
2. The remuneration limit for directors is ¥1,000 million, pursuant to the resolution at theOrdinary General Meeting of Shareholders on June 19, 2012.
3. The remuneration limit for corporate auditors is ¥50 million, pursuant to the resolution at
the Ordinary General Meeting of Shareholders of Sammy Corporation on June 25, 2004,
and at the Ordinary General Meeting of Shareholders of SEGA CORPORATION on June29, 2004.
3. Main Activities of Outside Directors and Corporate Auditors
Title

Name

Outside Director

Yuji Iwanaga

Outside Director

Takeshi Natsuno

Outside Corporate Auditor

Tomio Kazashi

Outside Corporate Auditor

Toshio Hirakawa

Outside Corporate Auditor

Mineo Enomoto

Major Activities
He attended 20 Board of Directors meetings out of
the 20 meetings during the year (11 out of 11 regularmeetings) and expressed his opinion on professionaland managerial view points as an attorney. He also
made some proposals to secure the adequateness andfairness of decision making of the Board of
Directors.
He attended 20 Board of Directors meetings out of
the 20 meetings during the year (11 out of 11 regularmeetings) and expressed his opinion on managerial
viewpoints. He also made some proposals to secure
the adequateness and fairness of decision making of
the Board of Directors.
He attended 20 Board of Directors meetings out of
the 20 meetings during the year (11 out of 11 regularmeetings) and expressed his opinion on managerial
viewpoints. He also made some proposals to secure
the adequateness and fairness of decision making of
the Board of Directors.
He also attended 14 Corporate Auditors meetings outof the 14 meetings during the year exchanging theopinions on auditing results and deliberating thesignificant issues related to audits.
He attended 20 Board of Directors meetings out of
the 20 meetings during the year (11 out of 11 regularmeetings) and expressed his opinion on managerial
viewpoints. He also made some proposals to secure
the adequateness and fairness of decision making of
the Board of Directors.
He also attended 14 Corporate Auditors meetings outof the 14 meetings during the year exchanging theopinions on auditing results and deliberating thesignificant issues related to audits.
He attended 18 Board of Directors meetings out of
the 20 meetings during the year (11 out of 11 regularmeetings) and expressed his opinion on professionaland managerial viewpoints as an attorney. He also
made some proposals to secure the adequateness andfairness of decision making of the Board of
Directors.
He also attended 13 Corporate Auditors meetings outof the 14 meetings during the year exchanging theopinions on auditing results and deliberating thesignificant issues related to audits.

15

[English Translation of Convocation Notice Originally Issued in the Japanese Language]
4. Liability Limitation Agreements for Outside Directors and Corporate Auditors
At the Second Ordinary General Meeting of Shareholders on June 20, 2006, the Company amended its
Articles of Incorporation and established regulations regarding liability limitation agreements for
Outside Corporate Auditors.
An outline of the contents of the liability limitation agreement that the Company has entered into with
Outside Corporate Auditor Mineo Enomoto is as follows:(Outline of Liability Limitation Agreement)
The liability to compensate for damages under Article 423, Section 1 of the Companies Act will belimited to the minimum liability set forth by law in the absence of malicious intent or material
negligence.
5. Total Remuneration, etc., to Outside Directors and Corporate Auditors
Number ofindividuals

Remuneration, etc.

Remuneration, etc., fromsubsidiary

Total remuneration, etc., to outside
5¥74 million¥18 million
Directors and Corporate Auditors
Notes: 1. The remuneration, etc. includes director’s bonuses in the amount of ¥3 million (¥3 million
for corporate auditor), that is planned to be paid from the Company.
2. The remuneration, etc. includes director’s bonuses in the amount of ¥3 million (¥3 million
for corporate auditor), that is planned to be paid from subsidiary.
V

Independent Auditors
1.

Name
KPMG AZSA LLC

2.

Liability Limitation Agreement with Independent Auditors
Although, the Company amended its articles of incorporation and established regulations regarding
liability limitation agreements with independent auditors at the Second Ordinary General Meeting of
Shareholders on June 20, 2006, the Company has not entered into the liability limitation agreement with
KPMG AZSA LLC.

3.

Remuneration, etc.
Remuneration, etc¥129 million

Remuneration, etc., related to the fiscal year ended March 31, 2014
Total of cash and other profits that should be paid to independent¥361 million
auditors by the Company and its subsidiaries
Notes: 1. The Company’s subsidiaries, Sega Europe Ltd., etc. are audited by auditors that differ fromthe Company’s.
4.

Policy Regarding Determination of Termination or Not Reappointing
The Company entrusts the Board of Corporate Auditors with the responsibility for deciding on thedismissal or non-reappointment of the independent auditor, and if any clause within Article 340, Section
1 of the Companies Act is deemed to apply, the independent auditor will be dismissed in accordancewith the Company’s policy. The Board of Corporate Auditors also determines the reappointment or
non-reappointment of the independent auditor upon consideration of the current status related to theirperformance, etc.

16

[English Translation of Convocation Notice Originally Issued in the Japanese Language]

Consolidated Balance Sheet(As of March 31, 2014)

Item
AssetsCurrent assets
Cash and deposits
Notes and accounts
receivable-trade
Short-term investment securities
Merchandise and finished goods
Work in process
Raw materials and supplies
Income taxes receivable
Deferred tax assets
Other
Allowance for doubtful accounts
Noncurrent assets
Property, plant and equipment
Buildings and structures, net
Machinery, equipment andvehicles, net
Amusement machines andfacilities, net
LandConstruction in progress
Other, net
Intangible assets
Goodwill
Other
Investments and other assets
Investment securities
Long-term loans receivable
Lease and guarantee deposits
Deferred tax assets
Other
Allowance for doubtful accounts

Amount

Item（Unit: millions of yen）
AmountLiabilities
Current liabilities
Notes and accounts payable-trade
Short-term loans payable
Current portion of bonds
Income taxes payable
Accrued expenses
Provision for bonuses
Provision for directors' bonuses
Provision for businessrestructuring
Provision for point cardcertificates
Asset retirement obligations
Deferred tax liabilities
Other

325
5
15,4999,041

Noncurrent liabilities

103,596

9,436

Bonds payable

37,800318,475
101,220
48,108
107,7136,130
13,61016,1891,993
12,627
11,203(323)
224,461
102,162
34,10339,0292,239
8,311
31,795
18,915
12,87990,50360,825710
13,342875
15,554(805)

Long-term loans payable
Net defined benefit liability
Provision for directors' retirement
benefits
Deferred tax liabilities
Deferred tax liabilities for land
revaluation
Asset retirement obligations
Other
Total liabilities
Net assets
Shareholders' equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Accumulated other comprehensive
incomeValuation difference on
available-for-sale securities
Deferred gains or losses on hedges
Revaluation reserve for land
Foreign currency translation
adjustment
Remeasurements of defined benefit
plans
Subscription rights to shares
Minority interests
Total net assets
Total assets
542,936 Total liabilities and net assets
Note: Figures shown in millions of yen have been rounded down to the nearest million.

17

91,06937,292
12,9181,700
6,288
12,255
3,868
614
243
56

35,198
6,053
146
4,294
745
2,165
17,192
194,666
330,977
29,953
119,312219,684(37,971)
12,322
16,8040(4,705)(2,281)
2,504
1,078
3,892
348,270
542,936

[English Translation of Convocation Notice Originally Issued in the Japanese Language]

Consolidated Statement of Income(From April 1, 2013 To March 31, 2014)(Unit: millions of yen)Amount378,011230,040
147,970
109,437
38,533Item
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividends income
Gain on investments in partnership
Foreign exchange gains
Other
Non-operating expenses
Interest expenses
Equity in losses of affiliates
Sales discounts
Commission fee
Loss on investments in partnership

341
917
1,623
966
953

4,802

849
257
125
91
357

Penalty payment for cancellation of game center lease
Loss on retirement of noncurrent assets
Bond issuance cost
Other
Ordinary income

18

18
400
64
639

2,804
40,531

[English Translation of Convocation Notice Originally Issued in the Japanese Language](Unit: millions of yen)AmountItem

Extraordinary income
Gain on sales of noncurrent assets
3,585
Gain on sales of subsidiaries and affiliates' stocks
21
Gain on sales of investment securities
11,970
Other
217
Extraordinary loss
Loss on sales of noncurrent assets
9
Impairment loss
1,799
Loss on valuation of investment securities
196
Loss on liquidation of subsidiaries and affiliates
6,601
Other
176
Income before income taxes and minority interests
Income taxes-current
8,131
Income taxes-deferred
8,098
Income before minority interests
Minority interests in income
Net income
Note: Figures shown in millions of yen have been rounded down to the nearest million.

19

15,795

8,782
47,545
16,23031,315593
30,721

[English Translation of Convocation Notice Originally Issued in the Japanese Language]

Consolidated Statement of Changes in Net Assets(From April 1, 2013 To March 31, 2014)(Unit: millions of yen)
Shareholders’ equity
CapitalsurplusCapital stock
Balances as of April 1, 2013
Changes of items during theperiodDividends from surplus
Net income
Purchase of treasury stock
Disposal of treasury stock
Change of scope of
consolidation
Total changes of items during theperiodBalances as of March 31, 2014

29,953

119,335

Retainedearnings

Treasurystock

198,924(40,540)

Total
shareholders’equity307,673

(55)
2,623

(9,701)30,721(55)
2,608(9,701)30,721
(14)
(8)

(260)

(269)

－

(23)

20,7592,568

23,30429,953

119,312219,684(37,971)

330,977

Accumulated other comprehensive income
Valuation
Deferred gains Revaluationdifference on
reserve foror losses onavailable - for land
hedgessale securities

Balances as of April 1,
2013
Changes of items during
the period
Dividends from surplus
Net income
Purchase of treasury
stock
Disposal of treasury
stock
Change of scope of
consolidation
Net changes of items
other than shareholders’equityTotal changes of items
during the period
Balances as of March 31,
2014

Foreigncurrencytranslation
adjustment

Total
Remeasurements accumulated
otherof defined
benefit plans comprehensive
income27,385－(4,705)(14,601)－

8,078(10,581)0－

12,319

2,504

4,243

(10,581)0－

12,319

2,504

4,243

16,8040(4,705)(2,281)

2,504

12,32220

[English Translation of Convocation Notice Originally Issued in the Japanese Language](Unit: millions of yen)
Subscription
rights toshares1,146

Minority
interests

Total
net assets

Balances as of April 1, 2013
3,136
320,034
Changes of items during theperiodDividends from surplus(9,701)
Net income
30,721
Purchase of treasury stock(55)
Disposal of treasury stock
2,608
Change of scope of(269)
consolidation
Net changes of items other than
(68)
756
4,931
shareholders’ equity
Total changes of items during the(68)
756
28,235
periodBalances as of March 31, 2014
1,078
3,892
348,270
Note: Figures shown in millions of yen have been rounded down to the nearest million.

21

[English Translation of Convocation Notice Originally Issued in the Japanese Language]

Independent Auditor’s Report
May 8, 2014
The Board of Directors
SEGA SAMMY HOLDINGS INC.
KPMG AZSA LLC
Kiyoyuki Sakurai
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Naoya Miyaki
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Hiroyuki Nakamura
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
We have audited the consolidated financial statements, comprising the consolidated balance sheet, theconsolidated statement of income, the consolidated statement of changes in net assets and the related notes of
SEGA SAMMY HOLDINGS INC. as at March 31, 2014 and for the year from April 1, 2013 to March 31,
2014 in accordance with Article 444-4 of the Companies Act.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements inaccordance with accounting principles generally accepted in Japan, and for such internal control as
management determines is necessary to enable the preparation of consolidated financial statements that are
free from material misstatements, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on the consolidated financial statements based on our audit as
independent auditor. We conducted our audit in accordance with auditing standards generally accepted inJapan. Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
consolidated financial statements. The procedures selected depend on our judgement, including the assessmentof the risks of material misstatement of the consolidated financial statements, whether due to fraud or error.
In making those risk assessments, we consider internal control relevant to the entity’s preparation and fairpresentation of the consolidated financial statements in order to design audit procedures that are appropriate in
the circumstances, while the objective of the financial statement audit is not for the purpose of expressing an
opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of accounting estimates made bymanagement, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.

22

[English Translation of Convocation Notice Originally Issued in the Japanese Language]
OpinionIn our opinion, the consolidated financial statements referred to above present fairly, in all material respects,
the financial position and the results of operations of SEGA SAMMY HOLDINGS INC. and its consolidated
subsidiaries for the period, for which the consolidated financial statements were prepared, in accordance withaccounting principles generally accepted in Japan.
Other Matter
Our firm and engagement partners have no interest in the Company which should be disclosed pursuant to theprovisions of the Certified Public Accountants Law of Japan.
Notes to the Reader of Independent Auditor’s Report:
The Independent Auditor’s Report herein is the English translation of the Independent Auditor’s Report as
required by the Companies Act.

23

[English Translation of Convocation Notice Originally Issued in the Japanese Language]

Non-Consolidated Balance Sheet（As of March 31, 2014）
Item
AssetsCurrent assets
Cash and deposits

Amount475
19,911241
5,177

Accrued expenses

48,4807,385

13,3251,746
86
130
389,849
6,843
847
691
2
3,312
81

Tools, furniture and fixtures, net

489

Intangible assets
Right of trademark
Software
Other
Investments and other assets
Investment securities
Stocks of subsidiaries and affiliates
Long-term loans receivable fromsubsidiaries and affiliates
Long-term loans receivable
Long-term prepaid expenses(Unit: millions of yen)AmountLiabilities
Current liabilities
Current portion of long-term loans
payableCurrent portion of bonds
Accounts payable-other
Income taxes payable

Accounts receivable-trade
Short-term investment securities
Prepaid expenses
Short-term loans receivable fromsubsidiaries and affiliates
Accounts receivable-other
Income taxes receivable
Deferred tax assets
Other
Noncurrent assets
Property, plant and equipment
Buildings, net
Structures, net
Machinery and equipment, net
Aircraft, net
Vehicles, net
Land

Item

1,418

19,381
41
12

Other

3,591

Allowance for doubtful accounts(2,176)

1,600
16,660
195
362
7,741
23
126
183
185
54,56122,80022,588
78
8,836
258

Total liabilities

92,241

Treasury stock

329,239
29,953
192,270
29,945
162,325
145,283
145,283
145,283(38,267)

Valuation and translation
adjustments
Valuation difference on
available-for-sale securities
Subscription rights to shares

15,771

Total net assets

346,088

Total assets
438,330 Total liabilities and net assets
Note: Figures shown in millions of yen have been rounded down to the nearest million.

24

10,600

Deposits received
Unearned revenue
Provision for bonuses
Provision for directors' bonuses
Other
Noncurrent liabilities
Bonds payable
Long-term loans payable
Provision for retirement benefits
Deferred tax liabilities
Other
Net assets
Shareholders' equity
Capital stock
Capital surplus
Legal capital surplus
Other capital surplus
Retained earnings
Other retained earnings
Retained earnings brought
forward25
1
22
2
382,980
35,078327,051

37,67915,771

1,078
438,330

[English Translation of Convocation Notice Originally Issued in the Japanese Language]

Non-Consolidated Statement of Income(From April 1, 2013 To March 31, 2014)(Unit: millions of yen)AmountItem
Operating revenue
Consulting fee income
Dividends income

5,440
10,171

15,611

Operating expenses
Operating expenses

7,087

7,087

Operating income
Non-operating income
Interest income
Interest on securities
Dividends income
Income from operation of noncurrent asset
Gain on investments in partnership
Foreign exchange gains
Other

8,524
244
20
684
94
800
912
73

2,829

Non-operating expenses
Interest expenses
Interest on bonds
Commission fee
Bond issuance cost
Loss on investments in partnership
Other

367
142
37
64
139
142

893

Ordinary income
Extraordinary income
Gain on sales of noncurrent assets
Gain on sales of investment securities
Gain on reversal of subscription rights to shares

10,461
10
10,4220

10,433Extraordinary loss
Provision of allowance for doubtful accounts
Loss on valuation of shares of subsidiaries and associates

2,176
720

2,896

Income before income taxes
Income taxes-current
Income taxes-deferred

17,9972,869(44)

Net income
Note: Figures shown in millions of yen have been rounded down to the nearest million.

25

2,824
15,173

[English Translation of Convocation Notice Originally Issued in the Japanese Language]

Non-Consolidated Statement of Changes in Net Assets(From April 1, 2013 To March 31, 2014)(Unit: millions of yen)

29,953

Shareholders’ equity
Capital surplus
Legal capital
Other capitalsurplussurplus29,945
162,360

Total capitalsurplus192,305－
29,953(35)(35)
162,325(35)(35)
192,270

Shareholders’ equity
Retained earnings
Other retained
earnings
Total retained Treasury stock
Retainedearnings
earnings
brought
forward139,811
139,811(40,855)

Total
shareholders’equityCapital stock
Balances as of April 1, 2013
Changes of items during the period
Dividends from surplus
Net income
Purchase of treasury stock
Disposal of treasury stock
Total changes of items during the period
Balances as of March 31, 2014

Balances as of April 1, 2013
Changes of items during the period
Dividends from surplus
Net income
Purchase of treasury stock
Disposal of treasury stock
Total changes of items during the period
Balances as of March 31, 2014

(9,701)
15,173
5,471
145,283－
29,945(9,701)
15,173
5,471
145,283

(55)
2,643
2,588
(38,267)

Valuation andtranslation adjustments
Subscription
Valuation
Total
rightsto shares
difference on valuation andavailable - for - translation
sale securities adjustments
Balances as of April 1, 2013
26,271
26,271
1,146
Changes of items during the period
Dividends from surplus
Net income
Purchase of treasury stock
Disposal of treasury stock
Net changes of items other than
(10,500)(10,500)(68)
shareholders’ equity
Total changes of items during the period(10,500)(10,500)(68)
Balances as of March 31, 2014
15,771
15,7711,078
Note: Figures shown in millions of yen have been rounded down to the nearest million.

26

321,213(9,701)
15,173
(55)
2,608
8,025
329,239

Total
net assets
348,631(9,701)
15,173(55)
2,608(10,568)(2,543)
346,088

[English Translation of Convocation Notice Originally Issued in the Japanese Language]

Independent Auditor’s Report
May 8, 2014
The Board of Directors
SEGA SAMMY HOLDINGS INC.
KPMG AZSA LLC
Kiyoyuki Sakurai
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Naoya Miyaki
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Hiroyuki Nakamura
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
We have audited the financial statements, comprising the balance sheet, the statement of income, the statementof changes in net assets and the related notes, and the supplementary schedules of SEGA SAMMYHOLDINGS INC. as at March 31, 2014 and for the year from April 1, 2013 to March 31, 2014 in accordancewith Article 436-2-1 of the Companies Act.
Management’s Responsibility for the Financial Statements and Others
Management is responsible for the preparation and fair presentation of the financial statements and the
supplementary schedules in accordance with accounting principles generally accepted in Japan, and for suchinternal control as management determines is necessary to enable the preparation of financial statements andthe supplementary schedules that are free from material misstatements, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial statements and the supplementary schedules basedon our audit as independent auditor. We conducted our audit in accordance with auditing standards generally
accepted in Japan. Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements and the supplementary schedules are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in thefinancial statements and the supplementary schedules. The procedures selected depend on our judgement,
including the assessment of the risks of material misstatement of the financial statements and the
supplementary schedules, whether due to fraud or error. In making those risk assessments, we consider
internal control relevant to the entity’s preparation and fair presentation of the financial statements and the
supplementary schedules in order to design audit procedures that are appropriate in the circumstances, while
the objective of the financial statement audit is not for the purpose of expressing an opinion on theeffectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of accounting estimates made by management, as well as
evaluating the overall presentation of the financial statements and the supplementary schedules.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.

27

[English Translation of Convocation Notice Originally Issued in the Japanese Language]
OpinionIn our opinion, the financial statements and the supplementary schedules referred to above present fairly, in allmaterial respects, the financial position and the results of operations of SEGA SAMMY HOLDINGS INC. forthe period, for which the financial statements and the supplementary schedules were prepared, in accordancewith accounting principles generally accepted in Japan.
Other Matter
Our firm and engagement partners have no interest in the Company which should be disclosed pursuant to theprovisions of the Certified Public Accountants Law of Japan.
Notes to the Reader of Independent Auditor’s Report:
The Independent Auditor’s Report herein is the English translation of the Independent Auditor’s Report as
required by the Companies Act.

28

[English Translation of Convocation Notice Originally Issued in the Japanese Language]

Audit Report
The Board of Corporate Auditors has received the reports of the audit procedures and results concerning theexecution of the duties of the Directors during the 10th fiscal year from April 1, 2013 through March 31, 2014
prepared by each of the auditors. After discussing the reports, we have prepared this Audit Report and reportas follows.
1. Procedures and details of the audits by the Auditors and the Board of Corporate Auditors
The Board of Corporate Auditors established the audit policy, allocation of duties, and other relevant
matters, and received reports from each Corporate Auditor regarding the implementation of audits andresults thereof, as well as reports from the Directors, other relevant personnel, and the independent
auditor regarding the execution of their duties, and sought explanations as necessary.
Each Corporate Auditor complied with the auditing standards for Corporate Auditors established by the
Board of Corporate Auditors, according to the audit policy, allocation of duties, and other relevant
matters, communicated with the Directors, the internal audit department, other employees, and anyother relevant personnel. We also made efforts to optimize the environment for information collection
and audit, and participated in meetings of the Board of Directors and other important meetings, received
reports from the Directors, employees, and other relevant personnel regarding performance of theirduties, and sought explanations as necessary. We examined important authorized documents andassociated information, and investigated the operations and assets at the head office and principal
offices.
In addition, we received the periodical reports from Directors, employees, and other relevant personnel,sought explanations as necessary, and expressed our opinions on the status of development andoperation of the system for ensuring that the execution of the duties of the Directors conforms to therelevant laws and regulations and the Articles of Incorporation, as well as the details of the resolutionsof the Board of Directors regarding the organization of the system stipulated in Article 100, Item 1 andItem 3 of the Enforcement Regulations of the Companies Act and the status of the system (internal
control system) based on said resolutions, a necessary measure for ensuring that a joint stock
corporation’s business is proper.
As to the internal control system associated with financial reports, we received the reports from the
Directors and the independent auditor, KPMG AZSA LLC regarding the evaluation of the internal
control, and the implementation of audits, and sought explanations as necessary.
With respect to subsidiaries, we communicated and exchanged information with directors, corporate
auditors, and other relevant personnel of the subsidiaries, and received business reports fromsubsidiaries as necessary.
Based on the above methods, we examined the business report and supporting schedules related to therelevant Fiscal Year.
Furthermore, we monitored and verified whether the independent auditor maintained its independence
and implemented appropriate audits, and we received reports from the independent auditor regarding
the performance of its duties and sought explanations as necessary. In addition, we received notice fromthe independent auditor that “systems for ensuring that duties are performed properly” (matters set forthin each Item of Article 131 of the Corporate Calculation Regulations) were maintained in accordancewith the “Quality Management Standards Regarding Audits” (Business Accounting Council, October 28,2005) and other relevant standards, and sought explanations as necessary.
Based on the above methods, we examined the financial statements (balance sheet, statement of income,statement of changes in net assets, and individual notes) and supporting schedules, and the consolidated
financial statements (consolidated balance sheet, consolidated statement of income, consolidated
statement of changes in net assets, and notes to consolidated financial statements) related to the relevant
Fiscal Year.
2. Result of audit(1) The Report of Business Operations
1) In our opinion, the business report and supporting schedules are in accordance with the related
laws and regulations and Articles of Incorporation, and fairly represent the Company’s condition.
2) With regard to the execution of the duties of the Directors, we have found no evidence ofwrongful action or material violation of the relevant laws and regulations, nor of any violation
with respect to the Articles of Incorporation.
29

[English Translation of Convocation Notice Originally Issued in the Japanese Language]3) In our opinion, the contents of the resolutions of the Board of Directors regarding the internal
control system are fair and reasonable. In addition, we have found no matters on which to remark
in regard to the execution of the duties of the Directors regarding the internal control system,
including the one associated with financial reports.
(2) Audit result of the Financial Statements and supporting schedules
In our opinion, the audit procedures and audit results received from the independent auditor KPMG
AZSA LLC are appropriate.
(3) Audit result of the Consolidated Financial Statements and consolidated supporting schedules
In our opinion, the audit procedures and audit results received from the independent auditor KPMG
AZSA LLC are appropriate.
May 9, 2014
Board of Corporate Auditors,
SEGA SAMMY HOLDINGS INC.
Tomio Kazashi, Standing Corporate Auditor(Outside Auditor)
Toshio Hirakawa, Corporate Auditor(Outside Auditor)
Hisashi Miyazaki, Corporate Auditor
Mineo Enomoto, Corporate Auditor(Outside Auditor)

30

[English Translation of Convocation Notice Originally Issued in the Japanese Language]

Reference Documents for General Meeting of Shareholders
Proposals and reference information
Proposal 1: To amend certain parts of the Articles of Incorporation
1. Reasons for the amendments(1) In order to control and manage companies that have newly entered the SEGA SAMMY Group as a holding
company, the Company will newly establish, amend or sort out a part of provisions of the purpose of theCompany.
(2) In line with the aforementioned establishment, amendment and sorting out of provisions, the Company will
move up or down clauses or items, and partly amend the wording.

2. Details of the amendments
The details of the amendments in the Articles of Incorporation are as follows:(The modified parts are indicated by underlining.)
Present Articles of Incorporation
Article 1

Proposed Amendment
Article 1(Omitted)(Unchanged)

Article 2 (Purpose)
The purpose of the Company shall be: tomanage and control the business activities of
the corporations that conduct the following
businesses and businesses equivalent thereto
and to engage in operations incidental thereto
by owning shares in such corporations:

Article 2 (Purpose)(1) to (4)(1) to (4)(Omitted)(5) Planning, development, production, marketingand consulting of computer software, andcomputer systems;(6)(Unchanged)(Unchanged)[Moved down (new number:
Article 2, paragraph 1, item 10)]

(5)

(Omitted)(7) Planning, design, development, administration,
operation and maintenance of network systems,
such as the Internet, computer networks, cell
phones, car navigation systems, and television
game networks, etc.;(Unchanged)[Moved down (new number:
Article 2, paragraph 1, item 11)](8) Marketing, dealership, importing and exporting,manufacture, processing, installation andmaintenance of telecommunications equipment
and peripheral equipment and terminal units
equipment thereof and dealership concerning
the subscription of telecommunications service;(6) Planning, development, consulting, marketing,dealership, importing and exporting,manufacture, processing, installation andmaintenance of telecommunications equipment
and peripheral equipment and terminal units
equipment thereof as well as audio-visuals, anddealership concerning the subscription of
telecommunications service;(7) Planning, manufacture, marketing, importingand exporting of three dimensional visionequipment and planning, manufacture,marketing, importing and exporting of image
processing systems;[Moved up (present number:
Article 2, paragraph 1, item 36)]

31

[English Translation of Convocation Notice Originally Issued in the Japanese Language]

Present Articles of Incorporation

Proposed Amendment[Moved up (present number:
Article 2, paragraph 1, item 37)]

(8) Planning, development, manufacture,marketing, importing and exporting of jet skis,
motor boats, and scuba diving equipment, fabricproducts for clothing, fur clothing, dry goods
for clothing, dress accessories, accessories,
leather goods, shoes, suitcases, bags, indoor
ornament, furniture, arts and crafts, watches,glasses, acoustic instruments, home appliances,cosmetics, medical consumables, and medical
equipment;[Moved up (present number:
Article 2, paragraph 1, item 38)]

(9) Planning, development, manufacture,marketing, importing and exporting of gems,
precious metals, antiques, cameras, stationery,books, magazines, musical instruments, sports
gear, DIY tools, gardening tools, fertilizers,
feed, soil conditioners, automobiles, automobile
parts, automobile goods, bicycles, food, dietary
supplement, food for specified health use,alcoholic beverages, soft drinks, tobaccos, daily
necessities, system equipment for emergency
notification for the prevention of crimes, fires
and disaster damages, disposal units ofindustrial wastes (kitchen garbage),photovoltaic generators, food processing
machines and equipment;(9) Construction work, installation work, interior
and exterior decoration work, and installation ofmachines and equipment;[Moved down (new number:
Article 2, paragraph 1, item 26)]

(10) Planning, design, construction, andadministration of various facilities, such ascommercial and industrial facilities, andeducational facilities, building equipment, anddisplays;[Moved down (new number:
Article 2, paragraph 1, item 27)](11) Manufacture and marketing of various
construction materials;[Moved down (new number:
Article 2, paragraph 1, item 28)](12) Maintenance of buildings and related facilities,
as well as providing invitation of and guidance
to member shops on franchise systems andmarketing of cleanup products (carpets, mops,
cloth, rolls of towels, air fresheners forbathrooms and home, air purifiers, and water
purifiers) and lease thereof;[Moved down (new number:
Article 2, paragraph 1, item 29)](13) Operation of entertainment facilities such as
amusement centers, game arcades, andamusement parks, hotel facilities, restaurants,
golf courses, sports facilities, shopping
facilities, cultural facilities, spa facilities,
healthcare facilities, Karaoke facilities, parking
facilities and car washes; and recruitment andsupport of franchisees, and sale of franchises
through a franchise system of those businesses
listed above;[Moved down (new number:
Article 2, paragraph 1, item 31)](14) Planning, management and operation of avariety of events such as sports, entertainment,
theater plays, theatrical entertainment, movies,
and concerts;[Moved down (new number:
Article 2, paragraph 1, item 33)]

32

[English Translation of Convocation Notice Originally Issued in the Japanese Language]

Present Articles of Incorporation

Proposed Amendment[Moved down (present number:
Article 2, paragraph 1, item 5)](10) Planning, development, production, marketingand consulting of computer software, andcomputer systems;(11) Planning, design, development, administration,
operation and maintenance of network systems,
such as the Internet, computer networks, cell
phones, car navigation systems, and television
game networks, etc.;(12) Information services to collect, analyze,
process, market, import, export and provide avariety of information;(13) Creation, marketing and maintenance of
databases;(14) Information and software provision service
through domestic and global VAN (value added
network);(15) to (17)(Unchanged)(18) Planning, production, marketing, import andexport of digital content;(19) Publishing;[Moved down (present number:
Article 2, paragraph 1, item 7)](15) Information services to collect, analyze, process
and provide a variety of information;[Moved up (present number:
Article 2, paragraph 1, item 39)]
[Moved up (present number:
Article 2, paragraph 1, item 47)](16) to (18)
(Omitted)(Newly established)[Moved up (present number:
Article 2, paragraph 1, item 27)](19) Advertising and publicity businesses[Moved down (new number:
Article 2, paragraph 1, item 43)](20) Production, issuance and marketing ofnewspapers;(21) to (22)(Unchanged)(23) Intermediary and wholesale business using
computer for promotion of product circulation
among businesses;(Newly established)(20) to (21)(Omitted)(Newly established)(22) Management and promotion of entertainment
talent and artists;(23) School management concerning the training of
scenario writers, voice actors, film-making
engineers and others;(24) Planning and management of early capability
development targeting preschool children;(25) Planning, development, manufacture andmarketing of character goods;(26) Administration, acquisition, licensing, sale andpurchase, and leasing of industrial property
rights, including patent rights, utility modelrights, design rights, and trademark rights, andintangible property rights, including copyright,
copyright neighboring rights, andmerchandising rights, and studying on the use
thereof;[Moved up (present number:
Article 2, paragraph 1, item 35)]
[Moved up (present number:
Article 2, paragraph 1, item 45)]

(Deleted)[Moved down (new number:
Article 2, paragraph 1, item 46)]
[Moved down (new number:
Article 2, paragraph 1, item 47)]
[Moved down (new number:
Article 2, paragraph 1, item 49)]

[Moved down (new number:
Article 2, paragraph 1, item 50)](24) Mail order sale;(25) Trading in antiques;(26) Construction work, installation work, interior
and exterior decoration work, and installation ofmachines and equipment;[Moved down (present number:
Article 2, paragraph 1, item 9)]33

[English Translation of Convocation Notice Originally Issued in the Japanese Language]

Present Articles of Incorporation

Proposed Amendment(27) Planning, design, construction, andadministration of various facilities, such ascommercial and industrial facilities, andeducational facilities, building equipment, anddisplays;(28) Manufacture and marketing of various
construction materials;(29) Maintenance of buildings and related facilities,
as well as providing invitation of and guidance
to member shops on franchise systems andmarketing of cleanup products (carpets, mops,
cloth, rolls of towels, air fresheners forbathrooms and home, air purifiers, and water
purifiers) and lease thereof;[Moved up (new number:
Article 2, paragraph 1, item 19)](30)
(Unchanged)(31) Operation of entertainment facilities such as
amusement centers, game arcades, andamusement parks, hotel facilities, restaurants,
golf courses, sports facilities, shopping
facilities, cultural facilities, spa facilities,
healthcare facilities, Karaoke facilities, parking
facilities and car washes; and recruitment andsupport of franchisees, and sale of franchises
through a franchise system of those businesses
listed above;(32) Laundry business;[Moved down (present number:
Article 2, paragraph 1, item 10)]
[Moved down (present number:
Article 2, paragraph 1, item 11)]

[Moved down (present number:
Article 2, paragraph 1, item 12)](27) Publishing;(28)(Omitted)[Moved down (present number:
Article 2, paragraph 1, item 13)]

[Moved up (present number:
Article 2, paragraph 1, item 49)](33) Planning, management and operation of avariety of events such as sports, entertainment,
theater plays, theatrical entertainment, movies,
and concerts;(34) Business concerning rights for mineral springs;[Moved down (present number:
Article 2, paragraph 1, item 14)]
[Moved up (present number:
Article 2, paragraph 1, item 44)]
[Moved up (present number:
Article 2, paragraph 1, item 48)]
(Newly established)[Moved up (present number:
Article 2, paragraph 1, item 50)]
[Moved down (present number:
Article 2, paragraph 1, item 32)](35) Gardening construction and forestry
management businesses;(36) Development of tourism services;(37) Tour business under the Travel Agency Act;(38) Serving as a travel agent;(39) Management of entertainment talent and artists
and operation of entertainment and modelingagencies;(40) Specific employment agency business;(Newly established)[Moved down (present number:
Article 2, paragraph 1, item 33)]
[Moved down (present number:
Article 2, paragraph 1, item 40)](41) Management of conference halls as well asplanning and management of meetings;(42) Interpretation and translation services as well asplanning and management thereof;(43) Advertising and publicity businesses;(Newly established)[Moved down (present number:
Article 2, paragraph 1, item 19)]
[Moved down (present number:
Article 2, paragraph 1, item 34)]
(Newly established)(44) Management consulting;(45) Marketing research;

34

[English Translation of Convocation Notice Originally Issued in the Japanese Language]

Present Articles of Incorporation

Proposed Amendment[Moved down (present number:
Article 2, paragraph 1, item 23)](46) School management concerning the training of
scenario writers, voice actors, film-making
engineers and others;(47) Planning and management of early capability
development targeting preschool children;[Moved down (present number:
Article 2, paragraph 1, item 24)]
(Newly established)[Moved down (present number:
Article 2, paragraph 1, item 25)]

[Moved down (present number:
Article 2, paragraph 1, item 26)](29) to (31)

(Omitted)(32) Serving as a travel agent;(33) Specific employment agency business;(34) Management consulting;(35) Mail order sale;(36) Planning, manufacture, marketing, importingand exporting of three dimensional visionequipment and planning, manufacture,marketing, importing and exporting of image
processing systems;(37) Planning, development, manufacture,marketing, importing and exporting of jet skis,
motor boats, and scuba diving equipment, fabricproducts for clothing, fur clothing, dry goods
for clothing, dress accessories, accessories,
leather goods, shoes, suitcases, bags, indoor
ornament, furniture, arts and crafts, watches,glasses, acoustic instruments, home appliances,cosmetics, medical consumables, and medical
equipment;(38) Planning, development, manufacture,marketing, importing and exporting of gems,
precious metals, antiques, cameras, stationery,books, magazines, musical instruments, sports
gear, DIY tools, gardening tools, fertilizers,
feed, soil conditioners, automobiles, automobile
parts, automobile goods, bicycles, food,alcoholic beverages, soft drinks, tobaccos, daily
necessities, system equipment for emergency
notification for the prevention of crimes, fires
and disaster damages, disposal units ofindustrial wastes (kitchen garbage),photovoltaic generators, food processing
machines and equipment;(39) Creation, marketing and maintenance of
databases;

35(48) Planning, management, import and export oflearning classrooms;(49) Planning, development, manufacture andmarketing of character goods;(50) Administration, acquisition, licensing, sale andpurchase, and leasing of industrial property
rights, including patent rights, utility modelrights, design rights, and trademark rights, andintangible property rights, including copyright,
copyright neighboring rights, andmerchandising rights, and studying on the use
thereof;(51) to (53)(Unchanged)[Moved down (new number:
Article 2, paragraph 1, item 38)]
[Moved down (new number:
Article 2, paragraph 1, item 40)]
[Moved down (new number:
Article 2, paragraph 1, item 44)]
[Moved up (new number:
Article 2, paragraph 1, item 24)]
[Moved up (new number:
Article 2, paragraph 1, item 7)][Moved up (new number:
Article 2, paragraph 1, item 8)][Moved up (new number:
Article 2, paragraph 1, item 9)][Moved up (new number:
Article 2, paragraph 1, item 13)]

[English Translation of Convocation Notice Originally Issued in the Japanese Language]

Present Articles of Incorporation

Proposed Amendment(40) Management of conference halls as well asplanning and management of meetings;[Moved down (new number:
Article 2, paragraph 1, item 41)]

(41)

(54)

(Omitted)[Moved down (present number:
Article 2, paragraph 1, item 46)](42) to (43)(Omitted)(44) Business concerning rights for mineral springs;(55) Warehousing;(56) to (57)

(Unchanged)[Moved up (new number:
Article 2, paragraph 1, item 34)]
[Moved up (new number:
Article 2, paragraph 1, item 25)]
[Moved down (new number:
Article 2, paragraph 1, item 55)](45) Trading in antiques;(46) Warehousing;(47) Information and software provision service
through domestic and global VAN (value added
network);(48) Gardening construction and forestry
management businesses;(49) Laundry business;[Moved up (new number:
Article 2, paragraph 1, item 14)](50) Tour business under the Travel Agency Act;
2.

Articles 3 to 54(Unchanged)

2.

(Omitted)[Moved up (new number:
Article 2, paragraph 1, item 35)]
[Moved up (new number:
Article 2, paragraph 1, item 32)]
[Moved up (new number:
Article 2, paragraph 1, item 37)]

Articles 3 to 54(Omitted)(Unchanged)(Unchanged)

Note: Some underlining does not coincide with the Japanese version because of translation adjustments.

36

[English Translation of Convocation Notice Originally Issued in the Japanese Language]
Proposal 2: To elect nine (9) Directors
The terms of office of all eight (8) Directors will expire at the conclusion of this Ordinary General Meetingof Shareholders. Accordingly, we are seeking to elect nine (9) Directors, increasing the number of Directors
by one (1) in order to further enhance the management structure.
The nominees for Directors are as described below:
Nominee
No.

1

Name
(Date of Birth)

Hajime Satomi(January 16, 1942)

Brief Career Profile, Important Concurrent Duties outside the Company,
Title and Area of Responsibilities at the Company
Mar.

1980

Nov.

2003

Feb.

2004

May

2004

Jun.

2004

Jun.

2004

Oct.

2004

Mar.

2005

May

2005

Jun.

2005

Jun.

2005

Dec.

2006

May
Jun.

2007
2007

May

2008

Mar.
Apr.
May
Jun.
Jul.
May

2012
2012
2012
2012
2012
2013

President and Representative Director of Sammy Industry Co.,
Ltd. (now Sammy Corporation)
Chairman and Director of Sammy NetWorks Co., Ltd.
(current position)
Chairman and Representative Director of SEGACORPORATION
Chairman of JAMMA (Japan Amusement Machinery and
Manufacturers’ Association, Inc.) (current position)
Chairman, Representative Director and Chief Executive
Officer of Sammy Corporation
Chairman, CEO and Representative Director of SEGACORPORATION
Chairman of the Board and Chief Executive Officer of theCompany (current position)
Senior Advisor to NICHIYUKYO (Japan Play Equipment
Industry Association) (current position)
Advisor to NDK (Japan Electric Game Manufacturers’
Association)
Chairman and Director of SEGA TOYS CO., LTD.
(current position)
Chairman and Director of TMS ENTERTAINMENT CO.,LTD. (current position)
Chairman of Japan Amusement Industry Association(current position)
Chairman of NDK (current position)
President, Representative Director, Chief Executive Officer
and Chief Operating Officer of SEGA CORPORATION
Chairman, Representative Director and Chief Executive
Officer of the above (current position)
Outside Director of PHOENIX RESORT CO., LTD.
Chairman of Sammy Corporation
Director of PHOENIX RESORT CO., LTD.
Chairman and Director of the above (current position)
Director of SEGA Networks Co., Ltd (current position)
Chairman, Representative Director and Chief Executive
Officer of Sammy Corporation (current position)

37

Number of theCompany’s
Shares Owned

33,619,338
shares[English Translation of Convocation Notice Originally Issued in the Japanese Language]

Nominee
No.

2

Name
(Date of Birth)

Naoya Tsurumi(February 8, 1958)

Brief Career Profile, Important Concurrent Duties outside the Company,
Title and Area of Responsibilities at the Company
Mar.
Dec.
Sep.
Jun.
Jun.
Oct.
Oct.
May

1992
2004
2005
2006
2006
2006
2006
2007

May

2008

May

2009

Jun.

2009

Sep.
Jul.

2009
2010

Aug.
Jun.

2010
2011

Apr.

2012

May

2012

Jun.
Jun.
Jul.
Sep.

2012
2012
2012
2013

Apr.
Apr.

2014
2014

Joined Sega Enterprises, Ltd. (now SEGA CORPORATION)
Executive Officer of SEGA CORPORATION
CEO of SEGA PUBLISHING EUROPE LTD.
Senior Executive Officer of SEGA CORPORATION
CEO and President of SEGA HOLDINGS U.S.A., INC.
Chairman of SEGA OF AMERICA, INC.
Chairman of SEGA PUBLISHING AMERICA, INC.
Senior Executive Officer, General Manager of Europe and US
Consumer Business Division of SEGA CORPORATION
Director, General Manager of Overseas Consumer Business
Division of the above
Director of General Manager of Consumer Business Divisionof the above
Managing Director of General Manager of Consumer Business
Division of the above
Chairman of SEGA EUROPE LTD.
Managing Director, General Manager of Overseas Regional
Department of SEGA CORPORATION
CEO of SEGA AMUSEMENT EUROPE LTD.
Managing Director, General Manager of Overseas Regional
Department and in charge of Global Consumer Business of
SEGA CORPORATION
President, Representative Director and Chief Operating Officerof the above
Vice Chairman and CEO of Sega Jinwin (Shanghai)
Amusements Co., Ltd.
CEO and President of SEGA HOLDINGS EUROPE LTD.
Director of the Company
Director of SEGA Networks, Co., Ltd. (current position)
President and Representative Director of SEGA DREAMCORPORATION (now ATLUS. CO., LTD.)
Vice Chairman of SEGA CORPORATION (current position)
Senior Managing Director and Representative Director of theCompany (current position)

38

Number of theCompany’s
Shares Owned

3,000
shares[English Translation of Convocation Notice Originally Issued in the Japanese Language]

Nominee
No.

3

4

Name
(Date of Birth)

Akira Sugano(March 8, 1964)

Haruki Satomi(January 11, 1979)

Brief Career Profile, Important Concurrent Duties outside the Company,
Title and Area of Responsibilities at the Company
Dec.

1998

Jun.

2000

Jun.
Jun.

2001
2002

Feb.

2004

Jun.
Oct.
Jun.

2004
2004
2008

May
Jun.

2009
2009

Dec.

2009

Jan.

2010

Jun.

2010

May

2011

May
Jun.
Jun.
Jun.
Jun.
Apr.

2013
2013
2013
2013
2013
2001

Mar.
Jan.
Oct.
Oct.
Jul.

2004
2005
2005
2005
2009

Oct.

2011

Nov.
Apr.

2011
2012

Jun.
Jun.
Jul.

2012
2012
2012

Apr.

2014

Manager of Business Planning Office of Sega Enterprises, Ltd.
(now SEGA CORPORATION)
Executive Officer in charge of group business strategy of theabove
Corporate Auditor of SEGA TOYS CO., LTD.
Senior Executive Officer and General Manager of Finance
Department of SEGA CORPORATION
Senior Executive Officer, General Manager of Finance
Department, General Manager of Business Planning
Department and General Manager of the President’s Office of
the above
Director in charge of Corporate Department of the above
Executive Officer of the Company
Director and General Manager of Corporate Division of SEGACORPORATION
Director of the above
Senior Managing Director, General Manager of Corporate
Department of SEGA TOYS CO., LTD.
Executive Vice President and Director, General Manager ofCorporate Department, General Manager of Business Planning
Office of the above
Executive Vice President, Director, and General Manager ofBusiness Control Department of the above
Executive Vice President and Representative Director, General
Manager of Business Control Department of the above
Executive Vice President and Representative Director of theabove
Senior Executive Officer of the Company
Director of SEGA TOYS CO., LTD. (current position)
Director of SEGA CORPORATION (current position)
Director of Sammy Corporation (current position)
Director of the Company (current position)
Joined KOKUSAI Securities Co., Ltd. (now Mitsubishi UFJ
Morgan Stanley Securities Co., Ltd.)
Joined Sammy Corporation
Joined SEGA CORPORATION
Director of SEGA OF AMERICA, INC.
Director of Sega Holdings U.S.A., INC.
Vice President of Digital Business of SEGA OF AMERICA,
INC.
Senior Vice President of Digital Business of SEGA OFAMERICA, INC. (current position)
Director, Sammy NetWorks Co., Ltd.
President, Representative Director (CEO) of the above (current
position)
Director of SEGA CORPORATION (current position)
Director of the Company (current position)
President and CEO, Representative Director of SEGA
Networks Co., Ltd. (current position)
Director of Sammy Corporation (current position)

39

Number of theCompany’s
Shares Owned

9,052
shares475,648
shares[English Translation of Convocation Notice Originally Issued in the Japanese Language]

Nominee
No.

5

6

Name
(Date of Birth)

Shigeru Aoki
(January 3, 1952)*Hideki Okamura(February 1, 1955)

Brief Career Profile, Important Concurrent Duties outside the Company,
Title and Area of Responsibilities at the Company
May
Jun.

2005
2005

Aug.
Jun.

2006
2008

Aug.

2008

Apr.

2009

Jun.

2011

Apr.

2012

Jun.
Jan.
Jun.

2013
1987
1997

Jun.

2000

Jun.

2002

Jun.

2003

Jun.
Jun.

2004
2004

Oct.
Jun.
Jun.

2004
2007
2008

Apr.

2014

Apr.

2014

Joined SEGA CORPORATION as Head Councilor
Corporate Officer and General Manager of Office of China andAsia Business Management of the above
President of Sega Networks (China) Co., Ltd.
Executive Officer and General Manager of Business
Administration Department of Sammy Corporation
Executive Officer and General Manager of Corporate Divisionof the above
Director and General Manager of Corporate Division of theaboveManaging Director and General Manager of Corporate
Division of the above
President, Representative Director and COO of the above(current position)
Director of the Company (current position)
Joined Sega Enterprises, Ltd. (now SEGA CORPORATION)
Director and Deputy Division Manager of Consumer BusinessGroup Division, General Manager of Saturn Business Divisionof the above
Director in charge of Dreamcast Business Division of theabove
Vice President and Representative Director of DigiCube Co.,Ltd.
Senior Executive Officer, Division Manager of Consumer
Business Group Division of SEGA CORPORATION
Director of TMS ENTERTAINMENT CO., LTD.
Managing Director, Division Manager of Consumer BusinessGroup Division of SEGA CORPORATION
Director of the Company
Director of SEGA CORPORATION
President and Representative Director of TMS
ENTERTAINMENT CO., LTD.
Vice Chairman and Director of TMS ENTERTAINMENT CO.,LTD. (current position)
President, Representative Director and COO of SEGACORPORATION (current position)

40

Number of theCompany’s
Shares Owned

17,000shares19,112shares[English Translation of Convocation Notice Originally Issued in the Japanese Language]

Nominee
No.

7

8

Name
(Date of Birth)

Hisao Oguchi(March 5, 1960)

Yuji Iwanaga(April 3, 1941)

Brief Career Profile, Important Concurrent Duties outside the Company,
Title and Area of Responsibilities at the Company
Apr.
Jun.
Jun.
Jun.
Jun.
Oct.
Aug.
May
Jun.

1984
2000
2002
2003
2004
2004
2005
2006
2007

Feb.
May
May
Jun.
Jun.
Apr.
Jun.

2008
2008
2008
2008
2008
2009
2009

Apr.

2011

Sep.
Apr.
Jun.

2011
2012
2013

Apr.
Sep.
Apr.

1964
1970
1981

Apr.
Sep.

1981
1984

Dec.
Apr.
Jun.

1984
2003
2005

Jun.

2006

Jun.

2007

Joined Sega Enterprises, Ltd. (now SEGA CORPORATION)
Corporate Officer of the above
Senior Corporate Officer of SEGA CORPORATION
President and Representative Director of the above
President, COO and Representative Director of the above
Vice Chairman and Director of the Company
CEO of SEGA HOLDINGS EUROPE LTD.
Chairman of SEGA HOLDINGS U.S.A., INC.
Executive Vice President and Representative Director of SEGACORPORATION
Representative Director of the above
Director of the above
Director of Sammy Corporation
CCO and Director of SEGA CORPORATION
CCO and Director of the Company (current position)
Senior Managing Director of Sammy Corporation
Director of SEGASAMMY VISUAL ENTERTAINMENT
INC. (now MARZA ANIMATION PLANET INC.)
Senior Managing Director, Representative Director of Sammy
Corporation
Director of D×L CREATION Co., Ltd. (current position)
Vice President, Representative Director of Sammy Corporation
President and Representative Director of SEGA SAMMY
CREATION INC. (current position)
Joined Tohato Inc.
Joined General Aircon Inc.
Registered with the Japan Federation of Bar Associations(current position)
Joined Yanagita Sakuragi Law OfficePartner of Lillick McHose and Charles Law Office (Now
Pilsbury Winthrop Shaw Pittman LLP) (current position)
Registered with the State Bar of California (current position)
Outside Director of Manufacturers Bank
Outside Director of JMS North America Corporation (current
position)
Outside Director of TAIYO YUDEN CO., LTD.
(current position)
Outside Director of the Company (current position)

41

Number of theCompany’s
Shares Owned

22,400shares−[English Translation of Convocation Notice Originally Issued in the Japanese Language]

NomineeNo.

Name(Date of Birth)

Brief Career Profile, Important Concurrent Duties outside the Company,
Title and Area of Responsibilities at the Company
Apr.
Sep.

1988
1997

Number of theCompany’s
Shares Owned

Joined TOKYO GAS Co., Ltd.
Joined NTT Mobile Communications Network, Inc. (now NTT
DOCOMO, Inc.)
Jun.
2005 Executive Officer and General Manager of Multimedia
Services Department of the aboveMay
2008 Guest Professor, Graduate School of Media and Governance of
Keio UniversityJun.
2008 Outside Director of the Company (current position)
Jun.
2008 Director of PIA Corporation (current position)
Jun.
2008 Outside Director of transcosmos inc. (current position)
Jun.
2008 Director of NTT Resonant Inc. (current position)
2,000
Takeshi Natsuno
Jun.
2008 Director of SBI Holdings, Inc.
9
(March 17, 1965)
sharesDec.
2008 Director of DWANGO Co., Ltd. (current position)
Jun.
2009 Outside Director of DLE, Ltd. (current position)
Sep.
2009 Outside Director of GREE, Inc. (current position)Jan.
2010 Outside Director of bitWallet, Inc. (Now Rakuten Edy, Inc.)
Dec.
2010 Outside Director of U-NEXT Co., Ltd. (current position)
Apr.
2011 Outside Director of CUUSOO SYSTEM Co., Ltd.
Apr.
2013 Guest Professor, Faculty of Environment and Information
Studies of Keio UniversityJun.
2013 Outside Director of TRENDERS, Inc. (current position)
Nov.
2013 Guest Professor, Graduate School of Media and Governance of
Keio University (current position)(A nominee marked with “*” is a new nominee for Director.)
Notes: 1. Business arrangements including an outsourcing agreement exist between Hajime Satomi and the Company.
2. There are no special interests between the Company and the other Director-nominees.
3. Yuji Iwanaga and Takeshi Natsuno are Outside Director-nominees, and the Company has notified the Tokyo Stock
Exchange (TSE) of their inauguration as independent directors under the regulations of TSE.
4. We seek appointment of Mr. Iwanaga as an Outside Director, as he has performed at a high level in international
corporate law and international corporate legal affairs in a global corporation from the viewpoint of an expert
international attorney at law. Furthermore, Mr. Iwanaga has business management experience gained in senior
corporate management prior to his registration as an attorney. Thus, given Mr. Iwanaga’s deep insight into
management, he has been judged to be capable of properly performing the duties of an Outside Director.
5. We seek appointment of Mr. Natsuno as an Outside Director so that the management of the Company may benefit
from his extensive managerial experience and broad insight into management.
6. Mr. Iwanaga and Mr. Natsuno shall have served as Outside Directors of the Company for seven years and six years,
respectively, at the conclusion of this Ordinary General Meeting of Shareholders.

42[English Translation of Convocation Notice Originally Issued in the Japanese Language]
Proposal 3: To elect one (1) Corporate Auditor
Corporate Auditor Hisashi Miyazaki will resign at the conclusion of this Ordinary General Meeting of
Shareholders. Accordingly, we are seeking the election of one (1) Corporate Auditor.
The term of office of Yukito Sakaue, the nominee for Corporate Auditor, shall be the remaining term of the
Corporate Auditor who has retired from office according to the Articles of Incorporation since the nominee
is to be elected as the substitute for Corporate Auditor Hisashi Miyazaki.
We have obtained the consent of the Board of Corporate Auditors with respect to the submission of this
proposal.
The nominee for Corporate Auditor is as described below:
Name(Date of Birth)

Brief Career Profile, Important Concurrent Duties outside the Company andTitle at the Company
Apr.
Jan.

2003
2004

Joined Sammy Corporation as General Manager of Audit Office
General Manager of Legal Department of Administration
Yukito Sakaue
Division of the above(December 23, 1951)
Nov.
2006 General Manager of Corporate Auditors’ Office of the Company(current position)
Note: There are no special interests between the nominee for Corporate Auditor and the Company.

43

Number of theCompany’s
Shares Owned
3,100
shares[English Translation of Convocation Notice Originally Issued in the Japanese Language]
Proposal 4: To issue share subscription rights as share options to Directors
The current annual remuneration amount to Directors was approved to be within ¥1 billion (excluding
employee salaries paid to Directors who concurrently serve as employees) at the 8th Ordinary General
Meeting of Shareholders held on June 19, 2012. We propose issuing share subscription rights as shareoptions to the Directors excluding Outside Directors, of the Company to be within the annual amount of¥150 million in addition to the above-mentioned remuneration for Directors.
This remuneration excludes the employee salaries paid to Directors who concurrently serve as employees.
Currently the number of Directors excluding Outside Directors is six (6). If Proposal 2 is approved asoriginally proposed, the number will increase to seven (7).
1. Reasons why it is appropriate to grant the share subscription rights as remuneration of the Directors of
the Company
The share options will be granted in order to raise the motivation of the Directors of the Company toimprove business performance, and to promote management which puts into consideration ourshareholders as well as the stock price.
2. Outline of the share subscription rights(1) Total number of the share subscription rights to be issued
The maximum total number of the share subscription rights shall be 2,500 units. If it is appropriate toadjust the relevant number of shares because of a merger, issuance of shares for subscription, acompany split, a share split or consolidation of shares in which the Company engages, the Company
shall make such adjustment which it considers necessary.
(2) Class and number of shares to be issued upon exercise of the share subscription rights
The maximum total number of shares issued upon the exercise of the share subscription rights shall be
250,000 common shares of the Company. The number of shares to be issued upon exercise of one (1)unit subscription right shall be 100 shares.
If it is appropriate to adjust the number of shares because of a merger, issuance of shares forsubscription, a company split, a share split or consolidation of shares in which the Company engages,
the Company shall make such adjustment which it considers necessary.
(3) Cash payment for the share subscription rights
No cash payment will be required for the share subscription rights.
(4) Amount of property to be contributed upon the exercise of the share subscription rights
The amount of property to be contributed upon the exercise of the share subscription rights shall be theamount to be gained by multiplying the amount of property paid for one (1) share to be received upon
the exercise of the share subscription rights (hereinafter referred to as the “Exercise Price”) by the
number of shares underlying the relevant share subscription rights.
The Exercise Price shall be the amount to be gained by multiplying 1.05 by the average closing price ofregular transactions of the common shares of the Company at the Tokyo Stock Exchange on each day(excluding days where a transaction is not closed) of the month preceding the month in which the sharesubscription rights were allotted, and any fractional amount of less than one (1) yen resulting from suchcalculation shall be rounded up. However, if the amount is smaller than the closing price on the day
preceding the allotment day of the share subscription rights (if the closing price is not available, theclosing price of the latest day prior to the day will be adopted), the closing price shall be the Exercise
Price.
If it is appropriate to adjust the Exercise Price because of a merger, issuance of shares for subscription,
a company split, a share split or consolidation of shares in which the Company engages, the Company
shall make such adjustment which it considers necessary.

44

[English Translation of Convocation Notice Originally Issued in the Japanese Language](5) Fair value of the share subscription rights
It shall be based on the fair evaluation value to be computed based on the Black-Scholes formula inaccordance with various terms such as the Exercise Price.
(6) Period during which the share subscription rights are exercisable
Such period shall be two (2) years from the day on which two (2) years have passed since the day after
the day on which the share subscription rights were allotted.
(7) Terms for the excise of the share subscription rights
A person who has received the allotment of the share subscription rights must be a Director of theCompany or in a position equivalent to this as well when the share subscription rights are exercised.
However, this does not apply to a case where there is a valid reason, such as retirement due to the
expiration of his/her term of office or other reason equivalent to this.
(8) Restriction on acquisition of the share subscription rights by assignment
An acquisition of the share subscription rights by assignment requires the approval of the Board of
Directors of the Company.
(9) Capital stock and legal capital surplus that will be increased in cases where shares will be issued as aresult of the exercise of share subscription rights(i) Capital stock that will be increased in cases where common shares of the Company will be issued asa result of the exercise of share subscription rights must be a half of the maximum capital increaseamount obtained by the calculation pursuant to Article 17 of the Corporate Accounting Rules. If theobtained figure has a fraction less than ¥1, the figure is rounded up to the nearest yen.
(ii) Legal capital surplus that will be increased in cases where common shares of the Company will be
issued as a result of the exercise of share subscription rights must be the amount obtained bysubtracting the capital stock to be increased as specified in (i) above from the maximum capitalincrease amount described in (i) above.
(10) Other matters concerning the share subscription rights
Other matters concerning the share subscription rights shall be determined by the Board of Directors of
the Company, which determines the subscription requirements of the share subscription rights.

45

[English Translation of Convocation Notice Originally Issued in the Japanese Language]
Proposal 5: To issue share subscription rights as share options to employees of the Company and of its
subsidiaries
We propose issuing share subscription rights as share options to employees of the Company and its
subsidiaries under the provisions of Articles 236, 238 and 239 of the Companies Act, as summarized below.
1. Reasons why the issuance is made under specially advantageous terms
The share option program will be implemented by granting share subscription rights to employees of theCompany and its subsidiaries (including lower-tier subsidiaries; the same shall apply hereinafter) who are
engaged in specific businesses in the SEGA SAMMY Group. The purpose is to grant share subscription
rights as an incentive for excellent performance of the businesses expecting it will inspire such
employees to contribute to the businesses and raise their morale as well as to secure excellent humanresources.
2. Outline of the share subscription rights(1) Total number of the share subscription rights to be issued
The maximum total number of the share subscription rights shall be 1,000 units. If it is appropriate toadjust the relevant number of shares because of a merger, issuance of shares for subscription a company
split, a share split or consolidation of shares in which the Company engages, the Company shall makesuch adjustment which it considers necessary.
(2) Class and number of shares to be issued upon exercise of the share subscription rights
The maximum total number of shares issued upon the exercise of the share subscription rights shall be
100,000 common shares of the Company. The number of shares to be issued upon exercise of one (1)unit subscription right shall be 100 shares.
If it is appropriate to adjust the number of shares because of a merger, issuance of shares forsubscription, a company split, a share split or consolidation of shares in which the Company engages,
the Company shall make such adjustment which it considers necessary.
(3) Cash payment for the share subscription rights
No cash payment will be required for the share subscription rights.
(4) Amount of property to be contributed upon the exercise of the share subscription rights
The amount of property to be contributed upon the exercise of the share subscription rights shall be theamount to be gained by multiplying the amount of property paid for one (1) share to be received upon
the exercise of the share subscription rights (hereinafter referred to as the “Exercise Price,” which willbe ¥1) by the number of shares underlying the relevant share subscription rights.
(5) Fair value of the share subscription rights
It shall be based on the fair evaluation value to be computed based on the Black-Scholes formula inaccordance with various terms such as the Exercise Price.
(6) Period during which the share subscription rights are exercisable
Such period shall be one (1) year from the day on which three (3) years have passed since the day after
the day on which the share subscription rights were allotted.
(7) Terms for the excise of the share subscription rights
A person who has received the allotment of the share subscription rights must be a Director, Corporate
Auditor or employee of the Company, or a director, corporate auditor or employee of a subsidiary of theCompany, or in a position equivalent to this as well when the share subscription rights are exercised.
However, this does not apply to a case where there is a valid reason, such as retirement due to the
expiration of his/her term of office or other reason equivalent to this.
46

[English Translation of Convocation Notice Originally Issued in the Japanese Language](8) Restriction on acquisition of the share subscription rights by assignment
An acquisition of the share subscription rights by assignment requires the approval of the Board of
Directors of the Company.
(9) Capital stock and legal capital surplus that will be increased in cases where shares will be issued as aresult of the exercise of share subscription rights(i) Capital stock that will be increased in cases where common shares of the Company will be issued asa result of the exercise of share subscription rights must be a half of the maximum capital increaseamount obtained by the calculation pursuant to Article 17 of the Corporate Accounting Rules. If theobtained figure has a fraction less than ¥1, the figure is rounded up to the nearest yen.
(ii) Legal capital surplus that will be increased in cases where common shares of the Company will be
issued as a result of the exercise of share subscription rights must be the amount obtained bysubtracting the capital stock to be increased as specified in (i) above from the maximum capitalincrease amount described in (i) above.
(10) Other matters concerning the share subscription rights(i) The grant period for the share subscription rights subject to this Proposal is one (1) year from thedate of approval of this Proposal, or the day before the date on which the next Ordinary General
Meeting of Shareholders will be held, whichever comes first. In the period the Company may grant
the share subscription rights in multiple times by resolution of the Board of Directors of theCompany if it is carried out within the prescribed period and the total number of the sharesubscription rights is within the prescribed total number.
(ii) The subscription requirements for the share subscription rights shall be determined by the Board of
Directors of the Company.

47