Note: This document has been translated from a part of the Japanese original for reference purposes only. In the event ofany discrepancy between this translated document and the Japanese original, the original shall prevail.

Securities identification code: 1973
May 30, 2019
To our shareholders:
Yushi Ushijima
President and Representative Director
NEC Networks & System Integration Corporation
2-6-1, Koraku, Bunkyo-ku, Tokyo, JapanNOTICE OF THE 87th ORDINARY GENERAL MEETING OF
SHAREHOLDERS
You are cordially invited to attend the 87th Ordinary General Meeting of Shareholders of NEC Networks &System Integration Corporation (the “Company”), which will be held as described below.
If you are unable to attend the meeting in person, you may exercise your voting rights by postal mail or via
the Internet. Please review the attached Reference Documents for the General Meeting of Shareholders andexercise your voting rights by 5:15 p.m., Thursday, June 20, 2019 (Japan Standard Time).

Meeting Outline

1. Date and Time: Friday, June 21, 2019 at 10:00 a.m. (Japan Standard Time)(Reception will begin at 9:00 a.m.)
2. Venue:

Bellesalle Iidabashi First
B1F, Iidabashi First Tower
2-6-1, Koraku, Bunkyo-ku, Tokyo, Japan

3. Agenda:
Items to be reported:
1.

Business Report and Consolidated Financial Statements for the 87th Term (from April 1, 2018 toMarch 31, 2019), as well as the results of audit of the Consolidated Financial Statements by the
Accounting Auditor and the Board of Corporate Auditors2.

Non-consolidated Financial Statements for the 87th Term (from April 1, 2018 to March 31, 2019)

Items to be resolved:
Proposal 1:

Election of ten (10) Directors

Proposal 2:

Election of three (3) Corporate Auditors

Proposal 3:

Determination of Remuneration for Granting Restricted Shares to Directors

Any revisions that should be made to this document will be posted on the Company’s website.
Company’s website: https://www.nesic.co.jp-1-Reference Documents for the General Meeting of Shareholders
Proposal 1:

Election of ten (10) Directors

The terms of office of all ten (10) present Directors will expire at the conclusion of this General Meeting of
Shareholders. The Company proposes to elect ten (10) Directors.
The candidates for Directors are as follows:
No.

Name

Position and responsibilities at the Company

1

Masao Wada

Chairman of the Board[Reelection]

2

Yushi Ushijima

President and Representative Director[Reelection][Reelection]

3

Masafumi Gouji

Senior Vice President and Member of the Board
Executive General Manager, Engineering & Support Services
Business Unit

Osamu Noda

Senior Vice President and Member of the Board
Executive General Manager, Business Design Operations Unit
Executive General Manager, Digital Solutions Business Unit

[Reelection]

4

5

Hisayoshi Fuwa

Outside Director[Reelection][Candidate for
Outside Director][Independent
Director]

Outside Director[Reelection][Candidate for
Outside Director][Independent
Director]

6

Michiko Ashizawa

7

Junji Ashida

Member of the Board

8

Morihiko Kudo

Member of the Board[Reelection]

9

Hiroyuki Sekizawa

Senior Vice President[New Candidate]10[Reelection][New Candidate][Candidate for
Outside Director][Independent
Director]

Kuniko Muramatsu

Policy in the nomination of candidates for Directors[Policy]
In nominating candidates for Directors, the Board of Directors of the Company has a basic policy of
selecting individuals who have skills and experience to lead management and can contribute to thedevelopment of the Company’s businesses, while giving consideration to the following and making
comprehensive consideration from the standpoint of placing the right person in the right place.
(Aptitude for Directors)
 A person who has a high level of knowledge about management, objective judgment ability, foresightand insight A person who has a high level of dignity and high ethical standards
 A person who has ability, knowledge, experience and track records in his/her special fields
 A person who is unbiased and decisive A person who understands the overall business activities of the Company

-2-

No.

Name (Date of birth/othernotes)

Apr. 2010

Associate Senior Vice President, Executive
General Manager, Social System Operations
Unit, NEC Corporation

Apr. 2012

Advisor to the Company

June 2012

President and Representative Director of theCompany

Years of service as Director: June 2017
7 years

Chairman of the Board and Representative
Director of the Company

Masao Wada
(August 31, 1953)[Reelection]

1

Career summary, position and responsibilities(Significant concurrent positions outside the Company)

Attendance at Board of
Directors meetings:
13/13 meetings

June 2018

Number of theCompany’s
shares owned

3,000

Chairman of the Board of the Company(present position)[Significant concurrent positions outside the Company]
President and Representative Director, K&N System
Integrations Corporation[Reasons for selection as a candidate for Director]
Masao Wada possesses an abundance of experience and a track record of accomplishments in business
operations through fulfilling his duties in the area of social infrastructure over many years. Since 2012,
becoming President of the Company, then Chairman of the Board, as its top executive he has successfully taken
the lead in achieving the growth of its infrastructure and service businesses that the Company aimed for. The
Company believes he will continue to contribute to decision making and strengthening the effectiveness ofsupervisory functions of the Board of Directors by making use of his track record of accomplishments andexperience. In light of these reasons, the Company proposes his election as Director.
Apr. 1984

Joined the Company

Apr. 2013

Associate Senior Vice President, General
Manager of Higashinihon Regional Divisionof Marketing & Sales Development Unit of
the Company

June 2014

Member of the Board, Associate Senior Vice
President of the Company

Yushi Ushijima(April 29, 1960)[Reelection]
Years of service as Director:
5 years2

Attendance at Board of
Directors meetings:
13/13 meetings

Senior Executive Vice President and Memberof the Board, Q&A Corporation
Apr. 2015

3,000

Member of the Board, Associate Senior Vice
President of the Company
President and CEO, Q&A Corporation

Apr. 2016

Member of the Board of the Company
President and CEO, Q&A Corporation

June 2017

President and Representative Director of theCompany (present position)[Reasons for selection as a candidate for Director]
Yushi Ushijima has accumulated an abundance of knowledge and experience regarding the businessenvironment and industries of the Company from having served as General Manager of branch divisions andperforming other duties. Since 2014, he has served as Senior Executive Vice President and President and CEOof a Group company, and President of the Company. He has acquired considerable knowledge and experienceon business management and has contributed to business expansion of the Company. The Company believes hewill continue to contribute to further progress and development of the Company’s businesses, such as toincreasing the Group’s corporate value and coping with drastic changes in the environment in Japan andoverseas, by making use of his track record of accomplishments and experience. In light of these reasons, theCompany proposes his election as Director.

-3-

No.

Name (Date of birth/othernotes)

Career summary, position and responsibilities(Significant concurrent positions outside the Company)
Apr. 1982

Joined the Company

Apr. 2013

General Manager, Office Service Division of
SI & Services Operations Unit of theCompany

Apr. 2014

Associate Senior Vice President, AssistantExecutive General Manager, Enterprise
Solutions Operations Unit of the Company

Years of service as Director: Apr. 2016
3 years

Senior Vice President (present position),
Executive General Manager, Technical
Services Operations Unit of the Company

Masafumi Gouji(September 17, 1959)[Reelection]

3

Attendance at Board of
Directors meetings:
13/13 meetings

June 2016

Member of the Board of the Company(present position)

Apr. 2019

Executive General Manager, Engineering &Support Services Business Unit of theCompany (present position)

Number of theCompany’s
shares owned

1,000[Reasons for selection as a candidate for Director]
Masafumi Gouji possesses an abundance of knowledge about all aspects of IT management, and he has
proposed and implemented solutions that have led to improvements in business operations and profitability inthe area of IT/network integration for customers in various industrial sectors. Through having served in
responsible positions in several business divisions, he has played a part in the Company’s business growth invarious fields and the establishment of the Company’s business foundation. The Company believes he willcontinue to contribute to increasing the Group’s corporate value by making use of this knowledge andexperience. In light of these reasons, the Company proposes his election as Director.

Osamu Noda
(May 1, 1958)[Reelection]

Apr. 2013

General Manager, Enterprise Network
Division, NEC Corporation

Apr. 2015

Associate Senior Vice President, AssistantExecutive General Manager, Enterprise
Solutions Operations Unit of the Company

Apr. 2016

Senior Vice President (present position),
Executive General Manager, Enterprise
Solutions Operations Unit of the Company

Years of service as Director:
1 year4

Attendance at Board of
Directors meetings:
11/11 meetings

June 2018

Member of the Board of the Company(present position)

Apr. 2019

Executive General Manager, Business Design
Operations Unit and Executive General
Manager, Digital Solutions Business Unit
(present position)

1,000[Reasons for selection as a candidate for Director]
Osamu Noda has a track record of establishing a base system for global information sharing in the area of
business solutions and leading business expansion in the enterprise telephony market at NEC Corporation. As
an executive officer of the Company since 2015, he has contributed to business expansion of the Company,
including the growth of the enterprise network business, the track record in profitability improvement andinitiatives as an officer responsible for DX*. The Company believes he will continue to contribute to increasing
the Group’s corporate value by making use of his knowledge and experience. In light of these reasons, theCompany proposes his election as Director.
* DX stands for digital transformation, referring to significantly transforming activities of businesses andindustries, as well as city management, by making use of cutting-edge technologies such as AI, IoT, and
RPA (Robotic Process Automation).

-4-

No.

Name (Date of birth/othernotes)
Hisayoshi Fuwa
(July 6, 1949)

Career summary, position and responsibilities(Significant concurrent positions outside the Company)
May 2011[Reelection][Candidate for Outside
Director][Independent Director]
Years of service as
Outside Director:
3 years
5

Attendance at Board of
Directors meetings:
13/13 meetings

Number of theCompany’s
shares owned

President, Representative Director of theBoard and Chief Executive Officer (CEO),JVC KENWOOD Holdings, Inc. (currently
JVC KENWOOD Corporation)
President and Representative Director of theBoard, Victor Company of Japan, Limited
President, Kenwood Corporation
President, J&K Car Electronics Corporation

Oct. 2011

President and Representative Director of theBoard, JVC KENWOOD Corporation

June 2012

Special Adviser, JVC KENWOOD
Corporation

June 2016

Outside Director of the Company (present
position)0[Reasons for selection as a candidate for Outside Director]
After joining a major electric appliance manufacturer, Hisayoshi Fuwa served in a number of important posts,
such as the General Manager of the Corporate Strategic Planning Division, as well as Vice President inoverseas subsidiaries. Following these positions, he became President of JVC KENWOOD Holdings, Inc.,
where he demonstrated his management ability in business rehabilitation and other initiatives. The Company
expects him to continue to utilize the abundance of experience that he has acquired from global business
operations for the Company’s business management. The Company also believes he will continue to be capableof giving appropriate advice and proposals on all matters relating to the business management of the Company
from a standpoint independent from that of the Company’s executives. In light of these reasons, the Company
proposes his election as Outside Director.

Michiko Ashizawa(October 23, 1972)[Reelection][Candidate for Outside
Director][Independent Director]

Oct. 1996

Joined Century Audit Corporation (currently
KPMG AZSA LLC), International
Department (left in May 2001)

Sept. 2003

Joined Industrial Revitalization Corporationof JapanFeb. 2006

Joined Advantage Partners LLP (currently
Advantage Partners, Inc.)

Apr. 2013

Associate Professor, International College ofArts and Science (currently School of
Economics and Business Administration),
Yokohama City University (present position)
Associate Professor, Graduate School ofInternational Management, Yokohama City
University (present position)

Years of service as
Outside Director:
1 year
6
Attendance at Board of
Directors meetings:
11/11 meetings

Sept. 2016

Part-time instructor at Graduate School ofBusiness Administration, Keio University(present position)

June 2018

Outside Director of the Company (present
position)

0[Significant concurrent positions outside the Company]
Outside Director (Audit and Supervisory Committee
Member), Netyear Group Corporation[Reasons for selection as a candidate for Outside Director]
Michiko Ashizawa has an abundance of experience, including business experience as a certified public
accountant at an audit firm and engaging in revitalization projects of major companies at Industrial
Revitalization Corporation of Japan. She also possesses expertise in business administration as a whole, mainly
researching M&A for corporate restructuring and serving as an instructor at a graduate school. The Company
believes she will continue to be capable of giving appropriate advice and providing supervision relating tomanagement of the Company from an objective standpoint by making use of her knowledge and experience. In
light of these reasons, the Company proposes her election as Outside Director.

-5-

No.

Name (Date of birth/othernotes)

Career summary, position and responsibilities(Significant concurrent positions outside the Company)
Apr. 2013

Senior Manager, System Integration &Services Planning Division, NEC
Corporation

Apr. 2014

General Manager, Corporate Planning
Division, NEC Solution Innovators, Ltd.

Apr. 2016

Associate Senior Vice President, General
Manager, Corporate Planning Division, NEC
Solution Innovators, Ltd.

Apr. 2017

General Manager, Corporate Strategy
Division, NEC Corporation (present position)

June 2017

Member of the Board of the Company(present position)

Junji Ashida(March 12, 1969)[Reelection]
Years of service as Director:
2 years
7

Attendance at Board of
Directors meetings:
13/13 meetings

Number of theCompany’s
shares owned

0[Reasons for selection as a candidate for Director]
Junji Ashida is the General Manager of the Corporate Strategy Division of NEC Corporation, a company with astrong business relationship with the Company. He possesses knowledge and experience on corporate
governance and internal controls, as well as in corporate strategies and planning as expected of a Director. The
Company believes he will continue to contribute to increasing the Group’s corporate value by making use ofthis knowledge and experience. In light of these reasons, the Company proposes his election as Director.
Morihiko Kudo
(April 14, 1963)

Apr. 2013

Assistant General Manager, Telecom Carrier
Business Planning Division, NEC
Corporation[Reelection]

Apr. 2018

General Manager, Network Services
Business Planning Division, NEC
Corporation (present position)

Years of service as Director:
1 year8

Attendance at Board of
Directors meetings:
11/11 meetings

June 2018

0

Member of the Board of the Company(present position)[Reasons for selection as a candidate for Director]
Morihiko Kudo serves as General Manager of Network Services Business Planning Division of NEC
Corporation, a company with a strong business relationship with the Company. He has knowledge andexperience on corporate governance and internal controls as expected of a Director. He also possesses expertisein the network solutions business, which is necessary for the expansion of the Company’s service and businessfields. The Company believes he will continue to contribute to increasing the Group’s corporate value bymaking use of this knowledge and experience. In light of these reasons, the Company proposes his election as
Director.

-6-

No.

Name (Date of birth/othernotes)

Hiroyuki Sekizawa(July 6, 1960)[New Candidate]

Career summary, position and responsibilities(Significant concurrent positions outside the Company)
July 2011

General Manager, Corporate Controller
Division, NEC Corporation

May 2015

General Manager, Corporate Controller
Division, NEC Corporation (change inJapanese only; English title unchanged)

June 2017

Associate Senior Vice President of theCompany

Apr. 2019

Senior Vice President of the Company(present position)

9

Number of theCompany’s
shares owned

2,000[Reasons for selection as a candidate for Director]
Hiroyuki Sekizawa has accumulated an abundance of knowledge and experience regarding accounting andfinance, having served in responsible positions in the accounting divisions at NEC Corporation, as well as a
track record in the administrative division at an overseas associated company. He was also appointed as
Associate Senior Vice President of the Company in 2017 and has been overseeing accounting and financestrategies. He has been actively facilitating a dialogue with the capital market as an officer responsible for IR,
and enhancing the Group’s CSR initiatives and the corporate brand. The Company believes he will contributeto increasing the Group’s corporate value by making use of his knowledge and experience. In light of thesereasons, the Company proposes his election as Director.

Kuniko Muramatsu(September 1, 1958)[New Candidate][Candidate for Outside
Director][Independent Director]
10Nov. 2003

Officer, Ethics Office, Texas Instruments
Japan Limited

Oct. 2009

Chief Researcher, Business Ethics ResearchCenterJan. 2010

Representative Director, Wellness Systems
Institute (present position)

Apr. 2016

Chair of the board, NPO GEWEL

June 2016

Outside Director, C’BON COSMETICS Co.,Ltd.

Apr. 2018

Senior Researcher, Business Ethics ResearchCenter (present position)0

Councilor, Japan Professional Football
League (present position)[Significant concurrent positions outside the Company]
Outside Director, YOKOWO CO., LTD.
[Reasons for selection as a candidate for Outside Director]
Kuniko Muramatsu joined a foreign-affiliated semiconductor manufacturer and served in positions including
Officer of Ethics Office as well as a responsible role for promoting diversity. She subsequently established
Wellness Systems Institute with the aim of laying a foundation for sustainable society, and has been acting as
an advisor to improve corporate ethics and promote CSR and diversity while managing the business. She also
has experienced various positions such as a chair of the board of a non-profit organization and a university
lecturer. The Company believes she will be capable of giving appropriate advice and providing supervision
relating to management of the Company from an objective standpoint by making use of her global mindset anddeep insight on compliance matters and CSR. In light of these reasons, the Company proposes her election as
Outside Director.

Notes:

1. There is no special interest between the Company and any of above candidates.
2. Liability limitation agreement with candidates for Directors
The Company has entered into a liability limitation agreement with Hisayoshi Fuwa, Michiko Ashizawa, Junji
Ashida, and Morihiko Kudo that shall limit the maximum amount of his/her liability to compensate for damages
due to a failure to perform his/her duties as set forth in the provisions of Article 423, Paragraph 1 of the Companies
Act. The limit of liability under this agreement is 1,200,000 yen or the minimum liability amount prescribed in thelaws and regulations, whichever is the higher.
If their reelections are approved at this General Meeting of Shareholders, the Company will continue to enter into
this agreement with each of them.
If the election of Kuniko Muramatsu is approved at this General Meeting of Shareholders, the Company will enter
into the same liability limitation agreement with her.
3. Junji Ashida and Morihiko Kudo serve as executives of NEC Corporation, the parent company of the Company.
4. The Company has filed declarations naming Hisayoshi Fuwa and Michiko Ashizawa as independent directors, asprescribed by the Tokyo Stock Exchange. If their reelections are approved at this General Meeting of Shareholders,-7-the Company will continue to designate both of them as independent directors. Kuniko Muramatsu meets therequirements for independence set forth in the listing rules of the Tokyo Stock Exchange. If her election is approvedat this General Meeting of Shareholders, the Company will file a declaration naming her as an independent director
with the Tokyo Stock Exchange.

[About Independence Standards]
In selecting candidates for Independent Outside Directors and Independent Outside Corporate Auditors,
the Company considers the requirements for Outside Directors and Outside Corporate Auditors stipulated
in laws and regulations, the Independence Standards set by the Tokyo Stock Exchange and other criteria.

-8-Proposal 2:

Election of three (3) Corporate Auditors

The terms of office of Corporate Auditors Shoichi Fukaya and Masayuki Horie will expire at the conclusionof this General Meeting of Shareholders. Corporate Auditor Tokuo Yamamoto will resign his position at theconclusion of this General Meeting of Shareholders. The Company proposes to elect three (3) Corporate
Auditors.
The Board of Corporate Auditors has given its consent to this proposal.
The candidates for Corporate Auditors are as follows:
No.

Name (Date of birth/othernotes)

Komei Sakanashi(June 24, 1957)

Career summary and position(Significant concurrent positions outside the Company)
Oct. 2011

Department Manager, Human Resources
Development Carrier Network Business
Planning Division, NEC Corporation

Apr. 2013

Associate Senior Vice President of theCompany

Apr. 2017

Senior Vice President of the Company(present position)[New Candidate]1

Number of theCompany’s
shares owned

0[Reasons for selection as a candidate for Corporate Auditor]
Komei Sakanashi has accumulated an abundance of knowledge and experience regarding human resourcesmanagement, labor affairs, and talent development, having experienced administrative positions at NEC
Corporation including at human resources divisions and domestic affiliates. He was also appointed as Associate
Senior Vice President of the Company in 2013 and has made significant contribution to the enhancement ofrisk management as an officer in charge of compliance and legal affairs. He has been responsible for the
corporate staff divisions as Senior Vice President since 2017, working to improve the Group’s corporate value
and strengthen the management foundation. The Company believes he will be capable of auditing thelegitimacy of its business operations from a fair and objective standpoint by making use of his knowledge andexperience. In light of these reasons, the Company proposes his election as Corporate Auditor.
Apr. 1983

Joined the Company

July 2008

General Manager, Corporate Finance &Controller Division of the Company

Apr. 2013

General Manager, Business Planning Office,SI & Services Operations Unit of theCompany

Apr. 2014

Associate Senior Vice President and memberof the Board, Toyo Networks & System
Integration Co., Ltd. (currently NEC Magnus
Communications, Ltd.)

Apr. 2015

Associate Senior Vice President, NEC
Magnus Communications, Ltd.

Oct. 2015

General Manager, Business Planning Office,Technical Services Operations Unit of theCompany

Apr. 2018

General Manager, Corporate Auditing
Division of the Company

Apr. 2019

Associate Senior Vice President of theCompany (present position)

Naoki Iwasaki(December 5, 1959)[New Candidate]

2

1,048

[Reasons for selection as a candidate for Corporate Auditor]
Naoki Iwasaki has accumulated an abundance of knowledge and experience regarding corporate management,
corporate accounting, and business strategy planning, having experienced positions including in the accounting
division, administrative division at the Company’s domestic branch, business planning divisions within
operation units, and officer of affiliate. He has also contributed to accomplishments of highly effective businessaudits in a wide range of fields as a head of the Corporate Auditing Division. The Company believes he will becapable of auditing the legitimacy of its business operations from a fair and objective standpoint, by making
use of his knowledge and experience. In light of these reasons, the Company proposes his election as Corporate
Auditor.

-9-

No.

Name (Date of birth/othernotes)
Masayuki Horie(September 28, 1958)[Reelection][Candidate for Outside
Corporate Auditor][Independent Auditor]
Years of service as Outside
Corporate Auditor:
4 years3

Career summary and position(Significant concurrent positions outside the Company)
Apr. 1996

Professor, College of Commerce, Nihon
University (present position)

June 2015

Outside Corporate Auditor of the Company(present position)

Oct. 2016

Executive Director, Japan Internal Control
Research Association (present position)

June 2017

Executive Director, Japan Society for
Systems Audits (present position)

Sept. 2018

President, Japan Auditing Association(present position)

Number of theCompany’s
shares owned

0

Attendance at Board of
Directors meetings:
12/13 meetings
Attendance at Board of
Corporate Auditors meetings:
14/15 meetings[Reasons for selection as a candidate for Outside Corporate Auditor]
Masayuki Horie possesses deep insight mainly on internal control and IT risk management in corporate
management as a university professor. He also has an abundance of experience, such as serving as President of
the Japan Auditing Association. Although he has not been directly involved in business management, theCompany believes he will continue to audit the legitimacy of its business operations from a fair and objective
standpoint, by making use of his knowledge and experience. In light of these reasons, the Company proposes
his election as Outside Corporate Auditor.

Notes:

1. There is no special interest between the Company and any of above candidates.
2. Liability limitation agreement with a candidate for Corporate Auditor
The Company has entered into a liability limitation agreement with Masayuki Horie that shall limit the maximum
amount of his liability to compensate for damages due to a failure to perform his duties as set forth in the provisionsof Article 423, Paragraph 1 of the Companies Act. The limit of liability under this agreement is 1,200,000 yen or
the minimum liability amount prescribed in the laws and regulations, whichever is the higher.
If his reelection is approved at this General Meeting of Shareholders, the Company will continue to enter into thisagreement with him.
3. The Company has filed declarations naming Masayuki Horie as independent auditor, as prescribed by the Tokyo
Stock Exchange. If his reelection is approved at this General Meeting of Shareholders, the Company will continue
to designate him as an independent auditor.

- 10 -

Proposal 3:

Determination of Remuneration for Granting Restricted Shares to Directors

The Company requests your approval for the new provision of restricted shares remuneration to Directors(excluding those who are not involved in business execution) of the Company (“Eligible Directors”) for the
purpose of providing them an incentive to sustainably increase the Company’s corporate value and further
promoting shared value between shareholders and them, as part of the revision to the Company’s
remuneration package for Directors.
Based on this proposal, the total amount of monetary remuneration to be paid to Eligible Directors of theCompany for the purpose of granting them restricted shares shall be not more than 30 million yen per year
as deemed reasonable in light of the aforementioned purposes. The specific allocation to each Eligible
Director shall be determined by the Board of Directors.
The 83rd Ordinary General Meeting of Shareholders held on June 23, 2015 approved that the amount of
remuneration for Directors of the Company shall be not more than 300 million yen per year (of which, 30
million yen for Outside Directors). Monetary Remuneration Claims for the purpose of granting restricted
shares shall be provided within that limit, and the total amount of remuneration shall not be changed.
There are currently ten (10) Directors (of which, five (5), including three (3) Outside Directors, are not
involved in business execution), including five (5) Eligible Directors. In the event that Proposal 1 is approved
and adopted in its original form, there shall be no change in the number of Eligible Directors who are eligible
to receive the said remuneration.
Furthermore, Eligible Directors shall pay all Monetary Remuneration Claims to be provided under this
proposal in the form of property contributed in kind, in accordance with the resolution of the Board of
Directors of the Company, and shall, in return, receive common shares of the Company that shall be issued
or disposed of by the Company, and the total number of common shares of the Company to be issued or
disposed of thereby shall be not more than 20,000 shares per year, (however, if, on or after the day on which
this proposal is approved and adopted, the Company performs a share split (including allotment of shares
without contribution) or a reverse share split of its common shares, or any other reason arises necessitating
an adjustment to the total number of common shares of the Company to be issued or disposed of as restricted
shares, the relevant total number shall be reasonably adjusted). The amount to be paid in per allotted share
shall be determined by the Board of Directors based on the closing price of the common shares of theCompany on the Tokyo Stock Exchange on the business day immediately before each date of resolution by
the Board of Directors (if there is no closing price on such date, the closing price on the closest preceding
trading day) and within the extent that would not be particularly advantageous to Eligible Directors. For such
issuance or disposal of the common shares of the Company, an agreement on allotment of restricted shares(the “Allotment Agreement”) shall be entered into between the Company and each Eligible Director, whichshall include the provisions as summarized below:(1) An Eligible Director shall not transfer, create a security interest on, or otherwise dispose of the commonshares of the Company allotted under the Allotment Agreement (the “Allotted Shares”) during the period
from the issue date of the Allotted Shares to the date on which he/she loses his/her Director or otherpositions defined by the Board of Directors of the Company (the “Restriction Period”) (the “Transfer
Restrictions”).
(2) In the event that an Eligible Director loses his/her Director or other positions defined by the Board of
Directors of the Company before the expiration of the period specified by the Board of Directors (the“Service Provision Period”), the Company shall automatically acquire the Allotted Shares without
contribution, unless there is a reason that the Board of Directors deems justifiable.
(3) The Company shall lift the Transfer Restrictions of all of the Allotted Shares upon expiration of the
Restriction Period, on the condition that the Eligible Director has remained in the position of Director orother positions defined by the Board of Directors of the Company continuously throughout the Service
Provision Period specified by the Board of Directors of the Company.
However, if the Eligible Director loses his/her position as set forth in (2) above before the expiration of
the Service Provision Period, for the reason that the Board of Directors deems justifiable as set forth in(2) above, the Company shall rationally adjust the number of the Allotted Shares and the timing of lifting
the Transfer Restrictions as necessary.

- 11 -

(4) The Company shall automatically acquire without contribution the Allotted Shares on which the Transfer
Restrictions have not been lifted at the expiration of the Restriction Period in accordance with theprovision of (3) above.
(5) Notwithstanding the provision of (1) above, if, during the Restriction Period, matters relating to a merger
agreement in which the Company is the disappearing company, a share exchange agreement or sharetransfer plan in which the Company becomes a wholly owned subsidiary, or other reorganization, etc. areapproved at the Company’s General Meeting of Shareholders (or at a meeting of its Board of Directors
in cases where approval at the Company’s General Meeting of Shareholders is not required in relation to
the reorganization, etc.), the Company shall lift the Transfer Restrictions on the Allotted Shares with thenumber of shares that is reasonably determined considering the period from the payment date to the dateof approval of the reorganization, etc. prior to the date on which the reorganization, etc. becomes effective,by resolution of the Board of Directors of the Company.
(6) In cases specified in (5) above, the Company shall automatically acquire without contribution the Allotted
Shares on which the Transfer Restrictions have not been lifted as of the time immediately after theTransfer Restrictions were lifted in accordance with the provision of (5) above.
(7) The method for expressing intentions and giving notifications in the Allotment Agreement, the method
for amending the Allotment Agreement, and other matters to be determined by the Board of Directors
shall be laid out in the Allotment Agreement.

▌Remuneration System for Directors (excluding Directors who are not involved in business execution)

Current

RevisedBasic remuneration(Monthly salary)

Bonus

Fixed portion

Performance-linked
portionBasic remuneration(Monthly salary)- 12 -

Bonus

Restricted
share
remuneration

Short-term
incentive

Long-term
incentive