This English translation is made for reference purposes only, and in the event of any discrepancies
between the English version and the Japanese version, the Japanese version prevails.
Securities Code: 1720
June 7, 2018

To Our Shareholders:
1-16-14 Shibuya, Shibuya-ku, Tokyo

Tokyu Construction Co., Ltd.
Tsuneo Iizuka, Representative Director,
President

Notice of the 15th Annual General Meeting of Shareholders
The Company would hereby like to request shareholders to attend the Company’s 15th Annual
Meeting of Shareholders as described below.
If you are unable to attend the meeting on the date, you may also exercise your voting rights
in writing. We kindly request you to read the following Reference Document for the Annual
Meeting of Shareholders, indicate “for” or “against” on each agenda item on the voting form
enclosed herewith, and return it no later than 6:00 p.m., June 25, 2018 (Monday).
Sincerely yours,

1.

Date:

2.

Venue:

3.

Purposes:
Items to be reported:

10:00 a.m., June 26 (Tuesday), 2018
(Reception will begin at 9:00 a.m.)
Meeting room of Head Office of the Company, 8F,
Shibuya Subway Building
1-16-14 Shibuya, Shibuya-ku, Tokyo1.

2.

The business report, the consolidated financial statements
and the results of consolidated financial statement audits by
the Accounting Auditor and the Board of Auditors for the
15th business period (April 1, 2017 to March 31, 2018)
The non-consolidated financial statements for the 15th
business period (April 1, 2017 to March 31, 2018)-1-

Items to be resolved:
Agenda No. 1:
Agenda No. 2:
Agenda No. 3:
Agenda No. 4:
Agenda No. 5:

Appropriation of Retained Earnings
Partial Amendment to the Articles of Incorporation
Election of Ten (10) Directors
Election of One (1) Auditor
Decision on the Amount and Contents of Share Remuneration,etc. for Directors- When you attend the meeting, we kindly request that you submit the enclosed voting form to thereceptionist at the venue. For conservation of resources, please bring this Notice of Convocation of theGeneral Meeting of Shareholders.
- Of the documents included in the Appendix to this Notice of Convocation of the General Meeting of
Shareholders, the Business Report is among the documents audited by the Board of Auditors, and theConsolidated Financial Statements and Non-consolidated Financial Statements are among the documents
audited by the Accounting Auditor and the Board of Auditors. The circumstances of the accounting
auditor and the system to secure the appropriateness of business operations and the outline of theoperating circumstances of the said system of the Business Report, the Consolidated Statements ofchanges in net assets and the Notes to the Consolidated Financial Statements of the Consolidated
Financial Statements, and the Non-consolidated Statements of Changes in Net Assets and the Notes to the
Non-consolidated Financial Statements of the Non-consolidated Financial Statements are posted on the
Company’s website in accordance with laws and ordinances and provisions of Article 16 of theCompany’s Articles of Incorporation.
- If there are any revisions to the Reference Document for the Annual Meeting of Shareholders, and/or thebusiness report, the consolidated and the non-consolidated financial statements, such revisions will belisted on the Company’s website.
Company’s website http://www.tokyu-cnst.co.jp/-2-Reference Document for the Annual Meeting of Shareholders
Meeting Agenda and Referential Matters

Agenda No. 1: Appropriation of Retained Earnings
The Company regards returning profits to shareholders as one of its most important tasks, while
recognizing the importance of building a sound financial base enabling it to cope with changes
in the business environment. Given its business performance in each year and outlooks, its basic
policy is to pay dividends with the aim of a consolidated dividend payout ratio of 20% or
higher.
Under this policy, the Company will request appropriation of retained earnings as follows:
Year-end Dividend(1) Matters concerning allocation of dividend property to shareholders and total amountthereof21 yen per common share of the Company

Total amount: ¥ 2,240,857,542

This will bring the annual dividend to 31 yen per share, including the interim dividend of
10 yen per share.
(2) Effective date on which dividends are disbursed from retained earnings
June 27, 2018

-3-

Agenda No. 2: Partial Amendment to the Articles of Incorporation
1.

2.

Reasons for proposal(1)

The Company proposes that the business purposes stated in the current provision of
Article 2 of the Articles of Incorporation be partially eliminated in order to beconsistent with the current Company’s business profile.

(2)

The Company proposes that the number described in the current provision of Article
20 of the Articles of Incorporation be changed from twenty (20) or less to twelve(12) or less, to set an appropriate upper limit of the number of directors to reflectreality.

The details of revision
The details of revision of the Articles of Incorporation are as follows.
(Those to be amended are underlined.)
Proposed amendments

Current Articles of Incorporation
Article 1(Article omitted)(Purpose)
Article 2 The purpose of the Company shall be toperform the following businesses.
1 to 9(Articles omitted)
10 Worker dispatch business
11 to 18
(Articles omitted)
Articles 3 to 19(Articles omitted)(Number)
Article 20 The number of directors of the Company shallbe twenty (20) or less.
Articles 21 to 43(Articles omitted)

Article 1(Same as the current article)(Purpose)
Article 2 The purpose of the Company shall be toperform the following businesses.
1 to 9(Same as the current articles)(To be eliminated)
10 to 17 (Same as the current articles)
Articles 3 to 19(Same as the current articles)(Number)
Article 20 The number of directors of the Company shallbe twelve (12) or less.
Articles 21 to 43 (Same as the current articles)-4-Agenda No. 3: Election of Ten (10) Directors
The terms of office of all of the current Directors will expire at the close of this General
Meeting of Shareholders. Accordingly, we propose the election of ten (10) Directors with anincrease of two (2) Directors (including one (1) Outside Director) to strengthen the
Company’s management structure.
The candidate for Director is as follows.
[Reference: List of Candidates]
CandidateNo.

Current positions

Attendance at Board of
Directors meetings

Representative Director,
President
Representative Director,
Senior Executive Vice
President
Representative Director,
Senior Managing
Executive Officer
Director, Senior Executive
Officer
Director, Senior Executive
Officer

15/15 meetings(100%)

Name

1[Reappointed]

Tsuneo Iizuka

2[Reappointed]

Mitsuhiro Terada

3[Reappointed]

Kazushige Asano

4[Reappointed]

Motoyuki Takagi

5[Reappointed]

Masatoshi Shimizu

15/15 meetings(100%)
14/15 meetings(93.3%)
15/15 meetings(100%)
12/12 meetings(100%)[Reappointed][Outside Director]
14/15 meetings
6
Hiroshi Otsuka
Director[Independent(93.3%)
Officer][Reappointed][Outside Director]
15/15 meetings
7
Yutaka Kubota
Director[Independent(100%)
Officer][Newly Appointed]
8Masao Tomoe**[Outside Director]
9[Newly Appointed] Toshio Imamura**
10[Newly Appointed] Yushi Tsukui**
Note: No description marked with * means not being applicable due to a newly appointed candidate.

-5-

Candidate
No.

Name
(Date of birth)

Brief profile, position, responsibility andsignificant concurrent positions

Number of theCompany’s shares
owned

April 1971

1

Joined Tokyu Construction Co., Ltd. (“theCompany”)
October 2003
Executive Officer of the Company
June 2004
Senior Executive Officer of the Company
June 2006
Director, Senior Executive Officer of the
Tsuneo Iizuka
Company(August 5, 1948)
April 2008
General Manager, Civil Engineering[Reappointed]
Division of the Company
72,640 shares
Attendance at Board ofJune 2009
Representative Director, Senior Managing
Directors meetings:
Executive Officer of the Company
15/15 meetings (100%)
April 2010
Representative Director, President of theCompany (to present)(significant concurrent positions)
Outside Director of Seikitokyu Kogyo Co., Ltd.
Chairman of The Associated General Contractors of Tokyo[Reasons for the election of candidate for Director]
Mr. Iizuka has been elected as candidate for Director due to his abundant management experience at theCompany and strong leadership as the Representative Director and President in the Group.
April 1979
Joined Tokyu Construction Co., Ltd.
June 2010
April 2012

Executive Officer of the Company
Senior Executive Officer of the Company

June 20122

Director, Senior Executive Officer of theCompany
Mitsuhiro Terada
April 2013
General Manager, Civil Engineering(March 1, 1957)
Division of the Company[Reappointed]
12,320 shares
April 2016
Director, Senior Managing Executive
Attendance at Board of
Officer of the Company
Directors meetings:
April 2018
Representative Director, Senior Executive
15/15 meetings (100%)Vice President of the Company (to present)
In charge of overseeing the Company’s
overall business, Safety & Environment
Department, and International Departmentof the Company (to present)[Reasons for the election of candidate for Director]
Mr. Terada has been elected as candidate for Director for his rich management experience at theCompany and strong insights pertaining to civil engineering.

-6-

Candidate
No.

Name
(Date of birth)

Brief profile, position, responsibility andsignificant concurrent positions
April 1974
June 2005
June 2008
April 2011
June 20123

4

5

Number of theCompany’s shares
ownedJoined Tokyu Construction Co., Ltd.
Director, Executive Officer of the Company
Executive Officer of the Company
Senior Executive Officer of the Company
Kazushige Asano
Representative
Director, Senior Executive(September 2, 1951)
OfficeroftheCompany[Reappointed]
22,600 shares
April 2013
General Manager, Sales & Marketing
Attendance at Board of
Division of the Company
Directors meetings:
April
2014
Representative Director, Senior Managing
14/15 meetings (93.3%)
Executive Officer of the Company (topresent)
April 2018
In charge of Sales & Real Estate Division of
the Company (to present)[Reasons for the election of candidate for Director]
Mr. Asano has been elected as candidate for Director due to his rich management experience at theCompany and strong insights on overall sales.
April 1979
Joined Tokyu Construction Co., Ltd.
April 2011
Executive Officer of the Company
April 2016
Senior Executive Officer of the Company
Motoyuki Takagi
GeneralManager, Building Construction(November 25,
Divisionof the Company
1955)
June
2016
Director,
Senior Executive Officer of the[Reappointed]
2,933 sharesCompany (to present)
Attendance at Board of
April 2018
General Manager, Building Construction
Directors meetings:
Division, in charge of Institute of
15/15 meetings (100%)
Technology and Wooden Building
Construction Division of the Company (topresent)[Reasons for the election of candidate for Director]
Mr. Takagi has been elected as candidate for Director due to his rich management experience at theCompany and strong insights pertaining to the construction business.
April 1982
Joined Tokyu Construction Co., Ltd.
Masatoshi Shimizu
April 2012
Executive Officer of the Company(January 20, 1959)
April 2017
Senior Executive Officer of the Company[Reappointed]
2,001 shares
General Manager, Business Administration
Attendance at Board of
Division of the Company (to present)
Directors meetings:
June 2017
Director, Senior Executive Officer of the
12/12 meetings (100%)Company (to present)[Reasons for the election of candidate for Director]
Mr. Shimizu has been elected as candidate for Director due to his rich management experience at theCompany and strong insights pertaining to overall business administration.

-7-

Candidate
No.

Name
(Date of birth)

Brief profile, position, responsibility andsignificant concurrent positions
April 1958

Hiroshi Otsuka(February 9, 1935)[Reappointed][Outside Director][Independent
Officer]67Attendance at Board of
Directors meetings:
14 /15 meetings (93.3%)

June 1992
June 1995
June 1996
June 1997
June 1998
June 2004
June 2008

Joined Keisei Electric Railway Co., Ltd.
(“Keisei”)
Managing Director of Keisei
Senior Managing Director of Keisei
Representative Director, Senior Managing
Director of Keisei
Representative Director, Vice President of
Keisei
Representative Director, President of Keisei
Representative Director, Chairman of
KeiseiAdvisor of Keisei (to present)

Number of theCompany’s shares
owned

0 shares

June 2010
Director of the Company (to present)(significant concurrent positions)
Advisor of Keisei Electric Railway Co., Ltd.
Corporate Auditor (External) of Oriental Land Co., Ltd.
Outside Auditor of The Keiyo Bank Ltd.
[Reasons for the election of candidate for Outside Director]
Mr. Otsuka has been elected as candidate for Outside Director due to his rich management experienceand broad insights as corporate manager as well as the Company’s expectations that he will contributeto the Company’s management using his opinions from the viewpoint of one familiar with the railway
business.
April 1970
Joined Sagami Railway Co., Ltd.
(“Sagami”)
Yutaka Kubota
June 1998
Director of Sagami(November 24,
May 2000
Representative Director, President of1947)
Sotetsu Real Estate Co., Ltd.
[Reappointed]
November 2000 Representative Director, President of[Outside Director]
Sotetsu Home Co., Ltd.
0 shares[Independent
March 2001
Representative Director, President of
Officer]
Sotetsu Real Estate Sales Co., Ltd.
Attendance at Board ofJune 2002
Managing Director of Sagami
Directors meetings:
15 /15 meetings (100%)

June 2011

Representative Director, President ofSotetsu Construction Co., Ltd.
June 2015
Director of the Company (to present)[Reasons for the election of candidate for Outside Director]
Mr. Kubota has been elected as candidate for Outside Director due to his rich management experienceand broad insights as corporate manager as well as the Company’s expectations that he will contributeto the Company’s management using his opinions from the viewpoint of one familiar with the railway
and construction businesses.

-8-Candidate
No.

Name
(Date of birth)

Brief profile, position, responsibility andsignificant concurrent positions
April 1976
June 2007
April 2011
April 2014

8

9

10

Number of theCompany’s shares
ownedJoined Tokyu Corporation (“Tokyu”)
Director of Tokyu
Managing Executive Director of Tokyu
Senior Managing Executive Director of
Tokyu
Masao Tomoe
July 2014
Executive General Manager of Human(November 23,
Resources Headquaters of Tokyu
1953)
0 sharesDirector & Senior Managing Executive[Newly Appointed] June 2015
Officer of Tokyu[Outside Director]
April 2017
Representative Director & Vice President of
Tokyu (to present)(significant concurrent positions)Representative Director & Vice President of Tokyu
Corporation[Reasons for the election of candidate for Outside Director]
Mr. Tomoe is the Representative Director of Tokyu Corporation, a core company of the Tokyu Group.
He has been elected as candidate for Outside Director due to his rich management experience and broad
insights as corporate manager as well as the Company’s expectations that he will contribute to theCompany’s management using his opinions from the viewpoint of one familiar with the overall
knowledge of business administration.
April 1974
Joined Tokyu Corporation (“Tokyu”)
June 2007
Director of Tokyu
June 2008
Managing Executive Director of Tokyu
April 2011
Senior Managing Executive Director of
Toshio Imamura
Tokyu
0 shares(April 14, 1951)
Representative Director & Vice President of[Newly Appointed] April 2014
Tokyu
June 2015
Representative Director & Vice President of
Tokyu (to present)
April 2018
Counselor of the Company (to present)[Reasons for the election of candidate for Director]
Mr. Imamura has been elected as candidate for Director for his abundant management experience
gained through his work in various key positions including his role as Representative Director of Tokyu
Corporation, a core company of the Tokyu Group, and his strong insights pertaining to the railway
business.
April 1981
Joined Tokyu Construction Co., Ltd.
April 2013
General Manager, Project Engineering
Department, Civil Engineering Division of
the Company
Yushi Tsukui
April 2015
Executive Officer of the Company(November 20,
1,300 shares
GeneralManager, Osaka Branch of the
1957)
Company[Newly Appointed]
April 2018
Senior Executive Officer of the Company(to present)
General Manager, Civil Engineering
Division of the Company (to present)[Reasons for the election of candidate for Director]
Mr. Tsukui has been elected as candidate for Director for his rich management experience at theCompany and strong insights pertaining to civil engineering.

-9-

Notes:1. Special conflict of interests between the candidate and the Company(1) Mr. Masao Tomoe is Representative Director of Tokyu Corporation and the company holds 15,362
thousand shares of the Company (holding ratio of 14.40%). The company and the Company performbusinesses under the same category and the Company has transactions such as orders for construction
projects with the company.
(2) There are no special conflict of interests between other candidates and the Company.
2. Hiroshi Otsuka, Yutaka Kubota and Masao Tomoe are candidates for Outside Directors. Hiroshi Otsuka
and Yutaka Kubota satisfy the Company’s criteria for the independence of Outside Directors set forth inpages 12 to 13 and are candidates for independent officers pursuant to the regulations of the Tokyo Stock
Exchange, Inc.
3. Matters concerning candidates for Outside Directors are as follows:(1) Hiroshi Otsuka
He will have served as Outside Director for eight years at the close of this General Meeting of
Shareholders.
(2) Yutaka Kubota
He will have served as Outside Director for three years at the close of this General Meeting of
Shareholders.
4. Limited liability agreement
The Company has concluded agreements with Hiroshi Otsuka and Yutaka Kubota to limit their respective
liabilities for damages referred to in Article 423 (1) of the Companies Act pursuant to the provision of
Article 427 (1) of said Act. The maximum amount of liability for damages prescribed in such agreement is
the minimum liability amount stipulated in the items of Article 425 (1) of said Act. The Company plans toextend the aforementioned limited liability agreements if their election is approved. The Company alsoplans to conclude an agreement with the same terms and conditions with Masao Tomoe if his election isapproved.

- 10 -

Agenda No. 4: Election of One (1) Auditor
Auditor Tadachiyo Osada has resigned from the Company as of March 31, 2018.
Accordingly, we propose the election of one (1) Auditor.
The Board of Auditors’ consent has been obtained for this Proposal.
The candidate for Auditor is as follows.
Candidate
No.

Name(Date of birth)

Brief profile, position, responsibility andsignificant concurrent positions
April 1982
July 2001

July 2008

1

Yoshikazu Kato
(September 9,
1956)[Newly Appointed][Outside Director][Independent
Officer]

July 2010

April 2012
April 2015

November 2017

Joined the Science and Technology
Agency, Cabinet OfficeDirector of Research Environment andIndustrial Cooperation Division,
Research Promotion Bureau, Ministry of
Education, Culture, Sports, Science andTechnology
Counselor to Director General for
Science, Technology and Innovation
Policy, Cabinet Office
Deputy Director-General, Research andDevelopment Bureau, Ministry of
Education, Culture, Sports, Science andTechnology

Number of theCompany’s
shares owned

0 shares

Vice President of Japan Aerospace
Exploration Agency
Director of Technology Division,
Cabinet Satellite Intelligence Center,
Cabinet Intelligence and Research
Office, Cabinet Secretariat
Specially Appointed Counselor, Remote
Sensing Technology Center of Japan (topresent)(significant concurrent positions)
Specially Appointed Counselor, Remote Sensing
Technology Center of Japan[Reasons for election as a candidate for Outside Auditor]
Mr. Kato has been elected as candidate for Outside Auditor as the Company expects him to reflect in
the Company’s audit his rich experience in administrative agencies, etc. and broad insights
accumulated throughout his career. According to the above-mentioned reasons, we have decided that
he can adequately carry out his assignment as one of the Company’s Outside Auditors, even though
he has never been involved in corporate management.
Notes:
1. There are no special conflict of interests between candidate for Auditor and the Company.
2. Yoshikazu Kato is a candidate for Outside Auditor. He satisfies the Company’s criteria for the
independence of Outside Auditors set forth in pages 12 to 13 and is a candidate for independent officer
pursuant to the regulations of Tokyo Stock Exchange, Inc.
3. Limited liability agreement
If the election of Yoshikazu Kato under this Proposal is approved, the Company plans to conclude anagreement to limit his liabilities for damages referred to in Article 423 (1) of the Companies Act
pursuant to the provision of Article 427 (1) of said Act. The maximum amount of liability for damagesprescribed in such agreement is the minimum liability amount stipulated in the items of Article 425(1) of said Act.

- 11 -

[Reference: Standard for Independence of Outside Directors and Outside Auditor]
The Company determines Outside Officers (Outside Directors and Outside Auditors) who
satisfy with the following requirements as independent officers (Independent Outside Directors
and Independent Outside Auditors) without any risk of conflict of interest with generalshareholders.
1.

Outside Officers do not fall into the following category:
1) Executive persons1 of the Company and its subsidiaries (hereinafter, referred to as the“Group”);
2) A counterparty which has transactions principally with the Group2, or its executive
persons;
3)
4)

5)
6)

7)
8)

Major counterparty3 of the Group or its executives;
A consultant, accounting professional or legal professional who has been paid a large
amount of money or other assets4 in addition to the Outside Director’s remunerations(in the event that such person is a corporation or other association such as union, aperson who belongs to such association);
An accounting auditor of the Group or a certified public accountant who belongs to anaudit corporation that is an accounting auditor of the Group;
A person who receives donations or subsidies exceeding certain amount5 from theGroup (in the event that a person who receives such donation or subsidy is a
corporation or other association such as union, executive persons of such association);
A major financial institution6 from which the Group has borrowed or executive
persons of its parent company or subsidiary;
A major shareholder7 of the Group or in the event that such shareholder is a
corporation, executive persons of such corporation;9) Executive persons in a company which the Group is a major shareholder;10) A company which Director (regardless of full-time or part-time) is sent from theGroup or executive persons of its parent company or subsidiary; or
11) Persons who have recently fallen into the category of either (1) to (10) above.
2.

Outside officers are not close relative, etc.9 of persons who fall into the category of (1) to(11) in 1 above (limited to those who have important positions8).

3.

Even though an Outside Officer satisfies the requirements of 1 and 2 above, if he/she is notconsidered to be independent due to other reasons, the Company shall not deem him/her as
an independent officer.

Notes:
1. Executive persons mean executives stipulated by Item 6 in Paragraph 3 of Article 2 of the Ordinance for
Enforcement of the Companies Act and include executive Directors and employees, but not Auditors.
2. A counterparty which has transactions principally with the Group means a counterparty which received
payments from the Company, which accounted for more than 2% of its annual consolidated sales in any
year of the most recent three fiscal years.
3. A major counterparty of the Group is a counterparty whose payments to the Company accounted formore than 2% of the Company’s annual consolidated sales in any year of the most recent three fiscal
years.
4. A large amount of money or other assets means money or other assets other than Director’s
remuneration exceeding ¥10 million per year in either year in the most recent three fiscal years.
5. Donation or subsidy exceeding certain amount means donation or subsidy exceeding ¥10 million peryear in any year of the most recent three fiscal years.

- 12 -

6.
7.
8.

9.

A major financial institution is a financial institution in which the Company has year-end loan balanceof more than 2% of its consolidated total assets in any year of the most recent three fiscal years.
A major shareholder means a shareholder who has 10% or more of total voting rights (including both
direct and indirect holding).
Those who have important positions include Directors (excluding Outside Directors), executive officers,
corporate officers and employees who are at the senior management level of manager or higher,
certified public accountants who belong to an audit corporation or accounting office, attorneys who
belong to a law office, councilors who belong to an incorporated foundation, incorporated association,
educational corporation, or other corporation, administrators such as Directors, or other persons who are
objectively and reasonably deemed to have similar importance.
Close relative, etc. means spouse or relative within the second degree.

- 13 -

Agenda No. 5: Decision on the Amount and Contents of Share Remuneration, etc. for
Directors
1.

Reasons for the proposal and reasons for justifying such remuneration
The Company requests approval for the adoption of a share remuneration system (hereinafter
the “Plan”) which would provide the Company’s directors (excluding outside directors anddomestic non-residents; hereinafter the same shall apply to this Agenda) with shares of theCompany, in addition to the existing remuneration with the annual amount of ¥360 million
or less (including the amount of ¥30 million or less annually for outside directors andexcluding salaries for those who are company employees), which was approved at the 5th
Annual General Meeting Shareholders held on June 25, 2008.
The Plan is aimed at further raising directors’ motivation to contribute to improvements inthe medium- and long-term operating performance as well as maximizing shareholder value,
and the adoption of the Plan is deemed reasonable.
The number of directors who will be eligible for the Plan will be seven (7) directors if theAgenda No. 3 “Election of Ten (10) Directors” is approved as proposed.

2.

Amount and contents, etc. of the remuneration of the Plan
(1)

Overview of the Plan
The Plan is a share remuneration system, in which the Company will contribute theamount of remuneration for directors as funds to a trust, the Company’s shares will bepurchased through the trust, and the remuneration (hereinafter the “Grants, etc.”) will
be provided to directors in the form of Company shares and cash, the equivalent to theconverted value of the Company’s shares (hereinafter the “Company’s shares, etc.”).
Details are provided in the description (2) below.

Persons eligible for the Grants, etc. of theCompany’s shares, etc. of this Agenda

Directors of the Company(excluding outside directors and domestic non-residents)

Impacts of the Company’s shares subject to this Agenda, on the aggregate number of shares issued
The maximum amount of cash to be
The total amount of ¥138 million for the three planned
contributed by the Company
fiscal years* As stated in the description (2) below
 The upper limit of the aggregate number of theCompany’s shares, etc. which will be granted todirectors for the three planned fiscal years will be
90,000 shares.
 The upper limit of the total number of points awarded
to directors in each fiscal year will be 30,000 points.
This accounts for roughly 0.02% of the total number
The maximum number of the Company’sof the Company’s shares issued (as of March 31,
shares, etc. of the Grants, etc. which directors
2018, after excluding treasury shares) at thewill receive, and the method of receiving theconversion of one point into one share of theCompany’s sharesCompany’s common stock.
* As stated in the descriptions (2) and The Company’s shares will be purchased from the(3) below
stock market or the Company through the disposal oftreasury shares. However, the Trust, which will beestablished in 2018 as defined in the description(2) below, will be funded through the purchase of theCompany’s shares from the stock market, andtherefore, the Plan will not result in the dilution ofshares.
Timing for directors to receive the Grants, etc.
At the time that directors retire from the director’sof the Company’s shares, etc.
position* As stated in the description (4) below- 14 -

(2)Maximum amount of cash to be contributed by the Company
The Plan will be applied to the three consecutive fiscal years, which will initially be
the three fiscal years from the fiscal year ending March 31, 2019 to the fiscal year
ending March 31, 2021, and be further applied to a set of the three fiscal years fromthe following fiscal year onward in the event of the extension of the trust period(hereinafter, calling the period subject to the Plan as the “Applicable Period”).
The Company will establish a trust (hereinafter, the “Trust”), in which the Company
will contribute a total amount of ¥138 million or less in cash as funds for the
remuneration for directors in each Applicable Period and directors who meetbeneficiary requirements will be beneficiaries, with the trust period set as three years.
With the cash contributed to the Trust, the Trust will purchase the Company’s sharesfrom the stock market or the Company through the disposal of treasury sharesaccording to the instructions of the trust administrator. The Trust, which will beestablished in 2018, will be funded from the stock market. Directors will be awarded
predetermined points every year during the trust period, and upon their retirement,
receive from the Trust the Grants, etc. of the Company’s shares which will beequivalent to the points accumulated.
At the end of the trust period of the Trust, the Trust may be continued through theamendment of the existing trust agreement and the additional trust funds, instead of
newly setting up the Trust. In such case, the trust period of the Trust will be extended
for the period equal to the initial trust period, and the three fiscal years to follow as theextension of the trust period will be a new Applicable Period. The Company will
make an additional contribution for the total amount of ¥138 million or less in every
trust period extended and continue to provide directors with points and the Grants, etc.
of the Company’s shares, etc.
However, in the event of an additional contribution, if there are any remaining sharesof the Company (excluding the Company’s shares equivalent to points awarded but
not yet granted to directors) and cash (hereinafter the “Remaining shares, etc.”) within
the trust before the extension, the amount totaling the amount of the Remaining shares,
etc. and the additional contribution money will be ¥138 million or less.
In addition, even in the event of a termination of the Trust, if there is a director inservice, at the end of the trust period, who may satisfy the beneficiary requirements,
the Company may not terminate the Trust immediately and may extend the trust
period of the Trust only for a certain period until the said director retires and receives
the Grants, etc. of Company’s shares, etc. In such a case, however, new points will nolonger be provided to directors.

(3)

Calculation method of the number of the Company’s shares, etc. which directors will
receive and the maximum amountThe number of the Company’s shares, etc. to be granted to directors will be
determined based on the accumulated number of points which will be awarded inaccordance with titles, etc. every year.
One (1) point will be equal to one (1) common share of the Company. In the case that
the Company’s shares held by the Trust increase or decrease due to a split orconsolidation of shares, etc., the Company will adjust the number of the Company’s
shares subject to the Grants, etc.
The upper limit of the aggregate number of points to be awarded to directors will be
30,000 points in each fiscal year.

(4)

The method to deliver the Grants, etc. of the Company’s shares, etc. to directors andthe timing of the delivery- 15 -

Directors satisfying beneficiary requirements will go through a predetermined
beneficiary-finalization procedure and receive from the Trust the Company’s shares,
etc. which will be equivalent to the points accumulated at the time of their retirement.
Upon such delivery, said directors will receive the Company’s shares (rounding up forshares less than one unit) equivalent to a certain portion of the accumulated points,
and cash as the equivalent resulting from the conversion, within the Trust, of theCompany’s shares for the remaining portion of the accumulated points.
In the event that a director satisfying beneficiary requirements is no longer a domestic
resident due to an overseas assignment, the number of the Company’s shares being
equivalent to the number of points accumulated at that point will be converted to cash
within the Trust and the said director will receive the cash amount equal to the value
converted.
In the event that a director dies during the trust period, the number of the Company’s
shares being equivalent to the number of points accumulated at that point will be
converted to cash within the Trust and an heir of the said director will receive the cash
amount equal to the value converted.
(5)

Voting rights of the Company’s shares held by the Trust
Voting rights of the Company’s shares held by the Trust will not be exercised during
the trust period to ensure a neutral position to the management.

(6)

Treatment at the expiration of the trust period
In the case that there are remaining shares at the end of the expiration of the trust
period due to the reduced number of directors during the Applicable Period, etc., theCompany may continue to use the Trust for the same type of incentive plan as the Planby amending and extending the trust agreement and making an additional contribution.
In the case that the Trust is terminated upon the expiration of the trust period, said
remaining shares will be transferred from the Trust to the Company withoutcompensation in accordance with the trust agreement. In such case, the Company
plans cancellation as a measure to return profits to shareholders, through a resolution
by the Board of Directors.

(7)

Contents of other parts of the Plan
Contents of other parts of the Plan will be determined at the Board of Directors at eachtime for the set-up of the Trust, the amendment of the trust agreement, and an
additional contribution to the Trust.

[Reference]
For details of the Plan, please refer to “The Implementation of the Share
Remuneration System for Directors of the Company” released on May 24, 2018.

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