Note: This document has been translated from a part of the Japanese original for reference purposes only. In
the event of any discrepancy between this translated document and the Japanese original, the original shallprevail. The Company assumes no responsibility for this translation or for direct, indirect or any other formsof damages arising from the translation.
(Securities Code 6814)
May 13, 2020
To Shareholders with Voting Rights:
Yukio Furuno
President
FURUNO ELECTRIC CO., LTD.
9-52 Ashihara-cho, Nishinomiya City,
Hyogo, JapanNOTICE OF
THE 69th ANNUAL SHAREHOLDERS’ MEETING
Dear Shareholders:
We would like to express our appreciation for your continued support and patronage.
We hereby announce that the 69th Annual Shareholders’ Meeting of FURUNO ELECTRIC CO., LTD.
(hereinafter the “Company”) will be held for the purposes as described below.
To prevent the spread of novel coronavirus infection, you are kindly asked to exercise your voting rights by
mail or via the Internet wherever possible. Please review the attached Reference Documents for the
Shareholders’ Meeting and exercise your voting rights by no later than 5:20 p.m. on Wednesday, May 27,
2020, Japan time.
1. Date and Time:Thursday, May 28, 2020 at 10:00 a.m. JST (Japan Standard Time)

2. Place:

Conference room at Headquarters, the Company
9-52 Ashihara-cho, Nishinomiya City, Hyogo, Japan

3. Meeting Agenda:
Matters to be reported: 1. The Business Report, Consolidated Financial Statements for the Company’s
69th Fiscal Year (March 1, 2019 to February 29, 2020) and results of audits
by the Accounting Auditor and the Audit & Supervisory Board of theConsolidated Financial Statements
2. Non-consolidated Financial Statements for the Company’s 69th Fiscal Year
(March 1, 2019 to February 29, 2020)
Proposals to be resolved:
Distribution of Surplus
Proposal 1:
Election of Ten (10) Directors
Proposal 2:
Election of One (1) Substitute Audit & Supervisory Board Member
Proposal 3:
Determination of Remuneration for Granting Restricted Stock to Directors
Proposal 4:-1-◎ When attending the meeting, please submit the enclosed Voting Rights Exercise Form at the reception
desk to confirm your identity. In addition, we ask that you kindly print out this Notice by yourselves, only
when it is considered necessary, to reduce paper consumption.
◎ The following items are posted on the Company’s website (https://www.furuno.co.jp), in accordance withthe provisions of laws and regulations as well as Article 15 of the Company’s Articles of Incorporation,
and are therefore not included in the documents accompanying this Notice.
1. “Systems for Ensuring the Appropriateness of Business Activities” and “Operational Status of Systems
for Ensuring the Appropriateness of Business Activities” in the Business Report
2. “Consolidated Statement of Changes in Equity” and “Notes to Consolidated Financial Statements” in
the Consolidated Financial Statements
3. “Statement of Changes in Equity” and “Notes to Non-consolidated Financial Statements” in the
Non-consolidated Financial Statements
Accordingly, the documents accompanying this Notice comprise part of the documents audited by Audit& Supervisory Board Members and the Accounting Auditor when preparing their respective audit reports.
◎ Should the Reference Documents for the Shareholders’ Meeting, Business Report, Consolidated Financial
Statements, and Non-consolidated Financial Statements require revisions, the revised versions will be
posted on the Company’s website (https://www.furuno.co.jp).
◎ The results of this meeting will be posted on the Company’s website (https://www.furuno.co.jp), in placeof sending a Notice of Shareholders’ Meeting Resolutions.

-2-Reference Documents for the Shareholders’ Meeting
Proposals and References
Proposal 1:

Distribution of Surplus

The Company considers its dividend policy one of its most important management policies. The
Company’s basic policy when making decisions about the distribution of profits is to comprehensively take
into consideration the Company’s financial position, level of profitability, dividend payout ratio, and otherfactors while keeping in mind continuous and stable dividend. In addition, the Company intends to utilize
internal reserves for far-sighted investment and further strengthening of the Company’s corporate structure.
The Company proposes a year-end dividend for the fiscal year under review as follows, in order toreward shareholders for their support while taking into consideration the management environment
surrounding the Company and business performance in the fiscal year under review.
The Company previously paid out 10 yen per share as an interim dividend and the aggregate amount ofannual dividends will therefore amount to 20 yen per share.
Items Related to the Year-end Dividend(1) Type of dividend property
Cash(2) Items related to the allocation of dividend property to shareholders and its total amount
10 yen per common share of the Company, for a total of 315,111,850 yen(3) Date on which the distribution of surplus comes into effectMay 29, 2020-3-

Proposal 2:

Election of Ten (10) Directors

The terms of office of all eleven (11) Directors will expire at the conclusion of this Shareholders’ Meeting.
Accordingly, the election of ten (10) Directors is proposed, decreasing the number of Directors by one (1) toenable swift decision-making.
The candidates for Director are as follows:

No.

Name

Position1

Yukio Furuno

President

2

Muneyuki Koike

SeniorManaging
Director

3

Shinji Ishihara

Managing
Director

4

Kazuma Waimatsu

Director

5

Yasushi Nishimori

Director

6

Satoshi Ohya

Director

7

Naosumi Fujita

Director

8

Hidenori Yamamiya

Director

9

Hideo Higuchi

Director

10

Shingo Kagawa

Reappointment

Candidate forreappointment
as Director

Responsibilities
General Manager, Security Assurance& Export Control Committee
Chief AEO (Authorized Economic
Operator) Control Officer
Head of Marine Electronic Products
Divisional General Manager, Marine
Electronic Products Division
Integration Chief Manager, Product
Designing, Development &Value-engineering Headoffice, Marine
Electronic Products Division
General Manager, Products Planning& Marketing Department, Marine
Electronic Products Division
Head of Research and Innovation
Center, R&D Planning &Management Center, andCompany-wide Technology
General Manager, Research andInnovation Center
Head of Personnel & General Affairs
Department and Legal Office
General Manager, Personnel &General Affairs Department
Factory General Manager, MIKI
Factory, Marine Electronic Products
Division
Head of System Products, andAvionics and Defense Electronics,
Quality Commanding & Supervisory
Office, Management Planning &Intelligence Department, Information
Technology Department, Accounting& Financing Department, andEnvironment
General Manager, Management
Planning & Intelligence Department
Energy Management Control Officer-Newappointment

Candidate fornew
appointment as
Director

External-4-

Candidate forappointment as
External
Director

Attendanceat meetingsof the Boardof Directors

Candidate
attributes

100%(13 out of 13
meetings)

Reappointment100%(13 out of 13
meetings)

Reappointment100%(13 out of 13
meetings)

Reappointment

92%(12 out of 13
meetings)

Reappointment100%(13 out of 13
meetings)

Reappointment100%(13 out of 13
meetings)

Reappointment100%(13 out of 13
meetings)

Reappointment100%(13 out of 13
meetings)

Reappointment100%(13 out of 13
meetings)

Reappointment
External
Independent-

New appointment
External
Independent

Independent

Independent Director
pursuant to the rulesof the Tokyo Stock
Exchange

No.

Name
(Date of birth)

Yukio Furuno(February 2, 1948)
Reappointment

1[Number of shares of theCompany held]
319,600[Term of office as Director]
33 years (at the conclusionof this Shareholder’sMeeting)[Attendance at meetings ofthe Board of Directors]
13 out of 13 meetings

Past experience, positions, responsibilities,
and significant concurrent positions
March 1987
Deputy General Manager, Administration Division, the Company
May 1987
Director and Deputy General Manager, Administration Division
March 1990
Director and General Manager, Administration Division
May 1990
Managing Director and General Manager, Administration Division
March 1997
Managing Director and Divisional General Manager, SI Division
May 1999
Senior Managing Director and General Manager, TOKYO Regional Head
OfficeMarch 2007
President (present)[Responsibilities at the Company]
General Manager, Security Assurance & Export Control Committee and Chief AEO(Authorized Economic Operator) Control Officer[Reason for nomination as candidate for Director]
Mr. Yukio Furuno has driven the management of the Group with leadership based on his
abundant experience and achievements as a manager, and contributed to the further
development of the Group. We propose his election as Director with an expectation that hewill continue contributing to the Company’s management.

March 2002

Muneyuki Koike(March 7, 1957)
Reappointment

2[Number of shares of theCompany held]
44,500[Term of office as Director]
15 years (at the conclusionof this Shareholder’sMeeting)[Attendance at meetings ofthe Board of Directors]
13 out of 13 meetings

General Manager, International Marketing Department, Marine
Electronic Products Division, the Company
May 2005
Director and General Manager, International Marketing Department,
Marine Electronic Products Division
March 2009
Director and Deputy Divisional General Manager, Marine Electronic
Products Division
May 2009
Managing Director and Deputy Divisional General Manager, Marine
Electronic Products Division
March 2012Managing Director and Divisional General Manager, Marine Electronic
Products Division
May 2016
Senior Managing Director and Divisional General Manager, Marine
Electronic Products Division (present)[Responsibilities at the Company]
Head of Marine Electronic Products[Reason for nomination as candidate for Director]
Mr. Muneyuki Koike has abundant experience as a manager as well as knowledge of all
aspects of operations in the marine business, and has contributed to the enhancement of theCompany’s corporate value as Director of the Company. We propose his election as Director
with an expectation that he will continue contributing to the Company’s management.

-5-

No.

Name
(Date of birth)

Shinji Ishihara(January 30, 1961)
Reappointment

3[Number of shares of theCompany held]
27,500[Term of office as Director]
13 years (at the conclusionof this Shareholder’sMeeting)[Attendance at meetings ofthe Board of Directors]
13 out of 13 meetings

Kazuma Waimatsu(January 6, 1960)
Reappointment

4[Number of shares of theCompany held]
22,200[Term of office as Director]
11 years (at the conclusionof this Shareholder’sMeeting)[Attendance at meetings ofthe Board of Directors]
12 out of 13 meetings

Past experience, positions, responsibilities,
and significant concurrent positions
February 2006 General Manager, Research & Development Department, Marine
Electronic Products Division, the Company
May 2007
Director and General Manager, Research & Development Department,
Marine Electronic Products Division
May 2016
Managing Director and General Manager, Research & Development
Department, Marine Electronic Products Division
March 2018
Managing Director and Integration Chief Manager, Product Designing,
Development & Value-engineering Headoffice, Marine Electronic
Products Division (present)[Reason for nomination as candidate for Director]
Mr. Shinji Ishihara has abundant experience as a manager as well as knowledge of all
aspects of operations concerning development and technology, and has contributed to theenhancement of the Company’s corporate value as Director of the Company. We propose
his election as Director with an expectation that he will continue contributing to theCompany’s management.

September 2003 General Manager, Products Planning & Marketing Office, Marine
Electronic Products Division, the Company
March 2006
General Manager, Products Planning & Marketing Department, Marine
Electronic Products Division
May 2009
Director and General Manager, Products Planning & Marketing
Department, Marine Electronic Products Division
April 2012
Director; General Manager, Products Planning & Marketing Department,
Marine Electronic Products Division and General Manager, Satellite
Communication Business Department
March 2017
Director and General Manager, Products Planning & Marketing
Department, Marine Electronic Products Division (present)[Reason for nomination as candidate for Director]
Mr. Kazuma Waimatsu has leadership qualities based on abundant experience centered on
products planning and marketing departments as well as his wide-ranging knowledge, andhas contributed to the enhancement of the Company’s corporate value as Director of theCompany. We propose his election as Director with an expectation that he will continue
contributing to the Company’s management.

-6-

No.

Name
(Date of birth)
Yasushi Nishimori(November 1, 1958)
Reappointment

5[Number of shares of theCompany held]
12,600[Term of office as Director]
8 years (at the conclusion ofthis Shareholder’s Meeting)[Attendance at meetings ofthe Board of Directors]
13 out of 13 meetings
Satoshi Ohya
(January 29, 1962)
Reappointment

6[Number of shares of theCompany held]
14,900[Term of office as Director]
8 years (at the conclusion ofthis Shareholder’s Meeting)[Attendance at meetings ofthe Board of Directors]
13 out of 13 meetings

Past experience, positions, responsibilities,
and significant concurrent positions
March 2006
General Manager, Research Department, Research and Innovation
Center, the Company
March 2012
General Manager, Research and Innovation CenterMay 2012
Director and General Manager, Research and Innovation Center (present)[Responsibilities at the Company]
Head of Research and Innovation Center, R&D Planning & Management Center, andCompany-wide Technology[Reason for nomination as candidate for Director]
Mr. Yasushi Nishimori has leadership qualities based on abundant experience centered on
research and development departments as well as his wide-ranging knowledge, and has
contributed to the enhancement of the Company’s corporate value as Director of theCompany. We propose his election as Director with an expectation that he will continue
contributing to the Company’s management.

May 2007General Manager, Personnel & General Affairs Department, theCompany
May 2012
Director and General Manager, Personnel & General Affairs Department(present)[Responsibilities at the Company]
Head of Personnel & General Affairs Department and Legal Office[Reason for nomination as candidate for Director]
Mr. Satoshi Ohya has leadership qualities based on abundant experience centered on
personnel and general affairs departments as well as his wide-ranging knowledge, and has
contributed to the enhancement of the Company’s corporate value as Director of theCompany. We propose his election as Director with an expectation that he will continue
contributing to the Company’s management.

-7-

No.

Name
(Date of birth)

Naosumi Fujita(July 20, 1952)
Reappointment
7[Number of shares of theCompany held]
5,200[Term of office as Director]
4 years (at the conclusion ofthis Shareholder’s Meeting)[Attendance at meetings ofthe Board of Directors]
13 out of 13 meetings

Hidenori Yamamiya(October 29, 1963)
Reappointment

8[Number of shares of theCompany held]
2,600[Term of office as Director]
2 years (at the conclusion ofthis Shareholder’s Meeting)[Attendance at meetings ofthe Board of Directors]
13 out of 13 meetings

Past experience, positions, responsibilities,
and significant concurrent positions
November 1999 President, Panasonic AVC Networks Taiwan Co., Ltd.
February 2004 General Manager, Product Center, IT Products Business Division, AVC
Network Company, Matsushita Electric Industrial Co., Ltd. (currently
Panasonic Corporation)
April 2007
General Counselor Responsible for Avionics Business Unit, AVC
Network Company
July 2011
Counselor Responsible for Special Projects, Avionics Business Unit,
AVC Network Company
February 2012 Assistant to Factory General Manager, MIKI Factory, Marine
Electronic Products Division, the Company
September 2015 Factory General Manager, MIKI Factory, Marine Electronic Products
Division
May 2016
Director and Factory General Manager, MIKI Factory, Marine
Electronic Products Division
April 2018
Director; Factory General Manager, MIKI Factory, Marine Electronic
Products Division and General Manager, Production & FactoryManagement Department, MIKI Factory, Marine Electronic Products
Division
September 2018 Director and Factory General Manager, MIKI Factory, Marine
Electronic Products Division (present)[Reason for nomination as candidate for Director]
Mr. Naosumi Fujita has abundant experience related to manufacturing developed over many
years in the manufacturing industry as well as knowledge of all aspects of operations in
manufacturing departments, and has contributed to the enhancement of the Company’s
corporate value as Director of the Company. We propose his election as Director with an
expectation that he will continue contributing to the Company’s management.

February 2011 Branch Manager, Dojima Branch, Mizuho Bank, Ltd.
September 2015 General Manager, Administration Department, Avionics and Defense
Electronics Division, the Company
March 2018
General Manager Responsible for Management Planning & Intelligence
Department
May 2018
Director; General Manager, Management Planning & Intelligence
Department and Energy Management Control Officer (present)[Responsibilities at the Company]
Head of System Products, and Avionics and Defense Electronics, Quality Commanding &Supervisory Office, Management Planning & Intelligence Department, Information
Technology Department, Accounting & Financing Department, and Environment[Reason for nomination as candidate for Director]
Mr. Hidenori Yamamiya has expertise as someone who previously served at a financial
institution as well as knowledge of all aspects of operations, mainly in management planningand other administrative departments, and has contributed to the enhancement of theCompany’s corporate value as Director of the Company. We propose his election as Director
with an expectation that he will continue contributing to the Company’s management.

-8-

No.

Name
(Date of birth)

Hideo Higuchi(March 5, 1950)
Reappointment
External
Independent
9[Number of shares of theCompany held]—[Term of office as External
Director]
4 years (at the conclusion ofthis Shareholder’s Meeting)[Attendance at meetings ofthe Board of Directors]
13 out of 13 meetings

Past experience, positions, responsibilities,
and significant concurrent positions
June 2004
Executive Officer and Senior General Manager, Operational Reform
HQ, OMRON Corporation
June 2007
Managing Executive Officer and Senior General Manager, Business
Process Innovation HQ
December 2008 Managing Executive Officer; Senior General Manager, Business
Process Innovation HQ and Senior General Manager, Corporate
Strategic Planning HQMarch 2009Managing Executive Officer and Senior General Manager, Corporate
Strategic Planning HQ
November 2011 Outside Director, SOLOEL Co., Ltd.
March 2012
Director
June 2012
Outside Audit & Supervisory Board Member, Toyo BusinessEngineering Corporation (currently Business Engineering Corporation)
May 2016
External Director, the Company (present)
June 2016
Outside Director, Toyo Business Engineering Corporation (currently
Business Engineering Corporation) (present)[Significant concurrent positions]
Outside Director, Business Engineering Corporation[Reason for nomination as candidate for External Director]
Mr. Hideo Higuchi has provided appropriate advice and views, mainly from a manager’s
viewpoint based on his abundant experience as a corporate manager in the manufacturingindustry and an external officer as well as his advanced knowledge. We propose his election
as External Director based on the judgment that he will contribute to strengthening thesupervisory function of the Board of Directors of the Company.

-9-

No.

Name
(Date of birth)

Shingo Kagawa(March 8, 1958)
New appointment
External

10

Independent[Number of shares of theCompany held]—[Term of office as External
Director]— years[Attendance at meetings ofthe Board of Directors]—

Past experience, positions, responsibilities,
and significant concurrent positions
April 2012
Corporate Executive Officer; Group President, Network Service
Business Unit; Head of Image Internet Service Business Division,
FUJITSU LIMITED
June 2012
Corporate Executive Officer; Group President, Outsourcing Business
Unit; Head of Image Internet Service Business Division
April 2015
Corporate Executive Officer; Vice President, Integration Services
Business; Group President, Network Service Business Unit
April 2016
Corporate Executive Officer; Chief Technology Officer; Head of
Digital Services Business
April 2018
President and Representative Director, FUJITSU RESEARCHINSTITUTE
April 2020
Special Adviser, APAMAN Co., Ltd. (present)[Significant concurrent positions]
Special Adviser, APAMAN Co., Ltd.
[Reason for nomination as candidate for External Director]
Mr. Shingo Kagawa has abundant experience and advanced knowledge as a corporate
manager of an ICT (information and communication technology) company. Therefore, we
propose his election based on the judgment that he will sufficiently fulfill his role asExternal Director.

(Notes) 1. There are no special conflict of interest between each candidate and the Company.
2. Mr. Hideo Higuchi and Mr. Shingo Kagawa are candidates for External Director. Furthermore, the Company has
designated Mr. Hideo Higuchi as Independent Director as defined by the Tokyo Stock Exchange, and if thecandidate is reelected, the Company intends for him to continue acting as Independent Director. If Mr. Shingo
Kagawa is elected as Director of the Company, the Company intends for him to act as Independent Director as
defined by the Tokyo Stock Exchange.
3. The Company has entered into a liability limitation agreement with Mr. Hideo Higuchi, who is a candidate forExternal Director, and the maximum amount of liability based on this agreement is the minimum amount ofliability provided for in Article 425, Paragraph 1 of the Companies Act. If the candidate is elected, the Company
intends to continue the agreement. If Mr. Shingo Kagawa is elected, the Company intends to enter into the same
liability limitation agreement with him.

- 10 -

Proposal 3:

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

In order to prepare for cases where there is a shortfall in the number of Audit & Supervisory Board
Members prescribed by laws and regulations, the election of one (1) Substitute Audit & Supervisory Board
Member is proposed.
Furthermore, the effectiveness of the election of this candidate may be canceled by a resolution of theBoard of Directors, with the consent of the Audit & Supervisory Board, provided it is before his
appointment.
The consent of the Audit & Supervisory Board has been obtained in regard to this Proposal.
The candidate for Substitute Audit & Supervisory Board Member is as follows:
Name(Date of birth)
Toshifumi Kurahashi(February 18, 1954)
External
Independent[Number of shares of theCompany held]—

Past experience, positions,and significant concurrent positions
September 1980 Registered as certified public accountant
September 1996 Employee, Asahi Audit Corp. (currently KPMG AZSA LLC)
August 2008
Representative Partner, Ernst & Young Shinnihon Tax
July 2010
Representative, Kurahashi General Accounting Office (present)
September 2010 Representative Director, The Strategic M&A Institute Co., Ltd. (present)
February 2013
Audit & Supervisory Board Member, Hayashi Pure Chemical Ind., Ltd. (present)[Significant concurrent positions]Representative, Kurahashi General Accounting Office; Representative Director, The Strategic M&A
Institute Co., Ltd.; and Audit & Supervisory Board Member, Hayashi Pure Chemical Ind., Ltd.
[Reason for nomination as candidate for Substitute External Audit & Supervisory Board Member]
Mr. Toshifumi Kurahashi has advanced knowledge as a certified public accountant. Therefore, we
propose his election as Substitute External Audit & Supervisory Board Member based on the
judgment that he will sufficiently fulfill his role as Audit & Supervisory Board Member.

(Notes) 1. There are no special conflict of interest between the candidate and the Company.
2. Mr. Toshifumi Kurahashi is a candidate for Substitute External Audit & Supervisory Board Member. Furthermore,
if Mr. Toshifumi Kurahashi is appointed External Audit & Supervisory Board Member, the Company intends todesignate him as an Independent Auditor as defined by the Tokyo Stock Exchange.
3. If Mr. Toshifumi Kurahashi, who is a candidate for Substitute External Audit & Supervisory Board Member, isappointed External Audit & Supervisory Board Member, the Company intends to enter into a liability limitationagreement with him to limit his liability to the minimum amount provided for in Article 425, Paragraph 1 of theCompanies Act.

- 11 -

Proposal 4:

Determination of Remuneration for Granting Restricted Stock to Directors

The amount of remuneration for Directors of the Company was approved by the resolution of the 56th
Annual Shareholders’ Meeting held on May 24, 2007 to be within the annual amount of ¥480 million(however, excluding the amount of employee salary and bonuses paid to Directors who serve concurrently as
employees). In this Proposal, the Company proposes to allot common shares of the Company with a certaintransfer restriction period and bound by provisions such as grounds for acquisition without consideration by
the Company (the “Restricted Stock”) to Directors of the Company (excluding External Directors,
hereinafter the “Eligible Directors”) with the details as shown below, for the purpose of having Eligible
Directors share with shareholders the benefits and risks arising from the fluctuation of the share price and forfurther raising their motivation to contribute to improvement in the corporate value.
The Company, upon comprehensively taking into consideration various circumstances including thedegree of contribution made by Eligible Directors of the Company, proposes to set the total amount ofmonetary remuneration receivables to be used for granting Restricted Stock to Eligible Directors as
remuneration, etc. at within the annual amount of ¥100 million, separate from the above-stated amount ofannual remuneration for Directors.
The allotment of the Restricted Stock has been determined upon comprehensively taking into
consideration various circumstances including the degree of contribution made by Eligible Directors of theCompany and thus the Company deems the content of this allotment to be reasonable.
Currently, the number of Eligible Directors of the Company is nine (9). If Proposal 2 is approved, thenumber of Eligible Directors will be eight (8).
Specific Details of Restricted Stock for Eligible Directors and the Maximum Number of Stock
1. Allotment and payment of Restricted Stock
The Company, based on the resolution of the Board of Directors of the Company, shall pay the Eligible
Directors monetary remuneration receivables within the above-stated annual amount as remuneration
relating to Restricted Stock, and each one of the Eligible Director will make an in-kind contribution of theentire amount of the said monetary remuneration receivables, and receive allotment of the Restricted Stock.
The payment amount of the Restricted Stock will be determined at the Board of Directors based on theclosing price of common shares of the Company on the Tokyo Stock Exchange on the business day before
each resolution by the Board of Directors for its issue or disposal (if no transactions are made on that day, theclosing price on the most recent trading date), and within a scope which is not a particularly advantageous
price for the Eligible Directors receiving the allotment of the Restricted Stock.
Additionally, the monetary remuneration receivables above will be paid on the condition that the Eligible
Directors have agreed to the above contribution in kind and have executed the Restricted Stock Allotment
Agreement which contains the details set forth in paragraph 3 below.
2. Total number of Restricted Stock
The total number of the Restricted Stock of 50,000 shares which may be allotted to the Eligible Directors,
shall be the maximum number of the Restricted Stock which may be allotted each fiscal year.
However, in the case of a share split (including gratis allocation of the common shares of the Company),or the consolidation of shares, or in other similar cases when adjustments are necessary, the total number ofthe Restricted Stock can be adjusted within a reasonable scope.
3. Details of the Restricted Stock Allotment Agreement
The Restricted Stock Allotment Agreement to be executed between the Company and the Eligible
Directors to receive the allotment of the Restricted Stock, based on the resolution of the Board of Directorsof the Company, in the allotment of Restricted Stock shall include the following.
(1) Details of the restrictions on transfer
During the period from the allotment date of the Restricted Stock until the day of retirement as Directorsof the Company (the “Transfer Restriction Period”), the Eligible Directors allotted the Restricted Stock are
not to transfer to a third party, create a pledge or transfer security interest on, use as inter vivos gift, bequestor otherwise dispose of the said Restricted Stock allotted to the Eligible Directors (the “Allotted Shares”)(the “Transfer Restriction).

- 12 -

(2) Acquisition of Restricted Stock without consideration
In the case that the Eligible Director allotted the Restricted Stock retires from the position of Director of
the Company during the period from the date of commencement of the Transfer Restriction Period until the
day prior to the holding of the first Annual Shareholders’ Meeting after such date, the Company, as a matterof course, shall acquire without consideration the “Allotted Shares,” except where there is a justifiablereason approved by the Board of Directors of the Company.
Additionally, the Company, as a matter of course, is to acquire without consideration the Allotted Sharesfor which restrictions on transfer have not been canceled based on the provisions listed in (3) below at the
point at which the Transfer Restriction Period in (1) above expires.
(3) Cancellation of restrictions on transfer
On the condition that the Eligible Director allotted the Restricted Stock continues to hold the position of
Director of the Company during the period from the date of commencement of the Transfer Restriction
Period until the holding day of the first Annual Shareholders’ Meeting after such date, the Company shallcancel the restrictions on transfer on all Allotted Shares at the point at which the Transfer Restriction Period
expires.
However, if the Eligible Director retires from the position of Director of the Company during the period
from the date of commencement of the Transfer Restriction Period until the day prior to the holding of thefirst Annual Shareholders’ Meeting after such date due to a justifiable reason, as approved by the Board of
Directors of the Company, the number of Allotted Shares, for which the restrictions on transfer are to becanceled, and the timing thereof are to be reasonably adjusted, as necessary.
(4) Treatment in the case of organizational restructuring
During the Transfer Restriction Period, if a proposal relating to a merger agreement under which theCompany will become the dissolving company, a share exchange agreement or a share transfer plan underwhich the Company will become a wholly-owned subsidiary or any other organizational restructuring isapproved at a Shareholders’ Meeting of the Company (or, if an approval at a Shareholders’ Meeting of theCompany is not required regarding the above-mentioned organizational restructuring, then the approval by
the Board of Directors of the Company), pursuant to the resolution of the Board of Directors of the Company,
the restrictions on transfer, at the time prior to the effective date of such organizational restructuring, shall becanceled in respect of a certain number of Allotted Shares, which has been reasonably determined, taking
into consideration the period from the date of commencement of the Transfer Restriction Period until thedate of the approval regarding the above-mentioned organizational restructuring. In such cases, the Company,
as a matter of course, shall acquire without consideration the Allotted Shares for which restrictions ontransfer were not canceled at the point directly after restrictions on transfer were canceled based on the above
provision.

- 13 -