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

Securities Code: 4553
June 7, 2019
To our shareholders:
Itsuro Yoshida
President and Representative Director
TOWA PHARMACEUTICAL CO., LTD.
2-11, Shinbashi-cho, Kadoma, Osaka, JAPANNOTICE OF THE 63RD ORDINARY GENERAL MEETING OF SHAREHOLDERS
You are cordially invited to attend the 63rd Ordinary General Meeting of Shareholders of TOWA
PHARMACEUTICAL CO., LTD. (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 theinternet. Please review the appended Reference Documents for the General Meeting of Shareholders, then use
either the site for exercising voting rights designated by the Company (https://evote.tr.mufg.jp/) or the enclosed
voting form to indicate your approval or disapproval of the proposals and, if using the latter, return it to us bypostal mail. In either case, your response should reach us no later than 5:40 p.m. on Monday, June 24, 2019 (Japan
Standard Time).
1. Date and Time: Tuesday, June 25, 2019 at 10:00 a.m. (Japan Standard Time)
2. Venue:
Headquarters of the Company
Meeting room on the 2nd floor
2-11, Shinbashi-cho, Kadoma, Osaka, JAPAN3. Purposes:
Items to be reported:
1. Business Report and Consolidated Financial Statements for the 63rd Term (from April 1, 2018 to March 31,2019), as well as the results of audit of the Consolidated Financial Statements by the Accounting Auditor
and the Board of Company Auditors
2. Non-Consolidated Financial Statements for the 63rd Term (from April 1, 2018 to March 31, 2019)
Items to be resolved:
Proposal 1:
Appropriation of surplus
Proposal 2:
Partial amendments to the Articles of Incorporation
Proposal 3:
Election of three (3) Directors (excluding Directors who are Audit and Supervisory
Committee Members)
Proposal 4:
Election of three (3) Directors who are Audit and Supervisory Committee Members
Proposal 5:
Election of one (1) substitute Director who is a prospective Audit and Supervisory
Committee Member
Proposal 6:
Setting of remuneration amount for Directors (excluding Directors who are Audit andSupervisory Committee Members)
Proposal 7:
Setting of remuneration amount for Directors who are Audit and Supervisory
Committee Members
Proposal 8:
Determination of remuneration for granting Restricted Stock to Directors (excluding
Directors who are Audit and Supervisory Committee Members and Outside Directors)
Proposal 9:
Payment of bonuses to Directors-1-Reference Documents for the General Meeting of Shareholders
Proposal 1:

Appropriation of surplus

The Company has a basic policy of paying dividends in accordance with earnings as we work to reinforce thefoundations of our operations, and we consider it a major issue to continue to pay dividends in a stable manner toall shareholders.
In order to reciprocate the support of its shareholders, taking into consideration its strong performance andfinancial position for the fiscal year under review, the Company proposes to pay year-end dividends for the current
fiscal year as follows, with a 12.50 yen per share increase.
Matters related to year-end dividends(1) Type of dividend property
Cash
(2)

Allocation of dividend property and total amount thereof
60 yen per common share of the Company
Total amount of dividends: 984,182,340 yen
The Company paid an interim dividend of 47.50 yen per share, and thus the annual dividend for the fiscal
year under review is 107.50 yen per share.

(3)

Effective date of distribution of dividends of surplus
June 26, 2019

Note:

Effective April 1, 2019, the Company implemented a 1:3 share split of its common shares. For the year-end dividend for the
fiscal year under review (63rd term), since the dividend record date is March 31, 2019, dividends will be provided based on
the number of shares before the implementation of this share split.

-2-

Proposal 2:

Partial amendments to the Articles of Incorporation(1) Reasons for the proposal
The Company proposes a transition to a company with Audit and Supervisory Committee, allowing Audit andSupervisory Committee Members with voting rights at the meeting of the Board of Directors to conduct audits on
the execution of business, with the aim of strengthening audit and supervising functions of the Board of Directors
and further enhancing the corporate governance system.
(i) Provisions regarding Audit and Supervisory Committee Members and the Audit and Supervisory
Committee will be established and provisions regarding Auditors and the Board of Company Auditors
will be deleted as required for the transition to a company with Audit and Supervisory Committee.
(ii) A provision will be established regarding the delegation of authority to executive directors to improve theefficiency of management and to enable flexible decision making.
(iii) Business purposes will be added to support the future business development.
(iv) As the Company no longer finds necessity of appointment of Advisory Directors, relevant provisions will
be deleted.
(v) Amendments to article numbers and other corresponding changes will be made along with the changes
above.
(2) Details of the amendments
The details of the amendments are as follows.
Please note that these amendments to the Articles of Incorporation shall come into effect at the conclusion of thismeeting.
(Amendments are underlined.)

Current Articles of Incorporation
Article 1. (Omitted)

Proposed Amendments
Article 1. (Unchanged)(Purpose)
Article 2.
The purpose of the Company shall be to engage inthe following business activities:(1) Production, buying and selling, and export andimport of pharmaceuticals(Newly established)(2) Production, buying and selling, and export andimport of quasi-drugs and cosmetics(3) Production, buying and selling, and export andimport of pharmaceutical ingredients and industrial
chemicals(4) Production, buying and selling, and export andimport of food products and food additives(5) Buying and selling, and export and import of
medical equipment and appliances, etc.
(6) Contracted analysis tests and safety tests on
pharmaceuticals and other products(7) Information provision services, printing business,
and worker dispatching business(8) Any and all businesses incidental to any of theforegoing items(Purpose)
Article 2.
The purpose of the Company shall be to engage inthe following business activities:(1) Production, buying and selling, and export andimport of pharmaceuticals(2) Planning and development, provision, and buying
and selling of products and services related to health(3) Production, buying and selling, and export andimport of quasi-drugs and cosmetics(4) Production, buying and selling, and export andimport of pharmaceutical ingredients and industrial
chemicals(5) Production, buying and selling, and export andimport of food products and food additives(6) Buying and selling, and export and import of
medical equipment and appliances, etc.
(7) Contracted analysis tests and safety tests on
pharmaceuticals and other products(8) Information provision services, printing business,
and worker dispatching business(9) Any and all businesses incidental to any of theforegoing items

Article 3. (Omitted)

Article 3. (Unchanged)-3-Current Articles of Incorporation

Proposed Amendments(Organs)
Article 4.
The Company shall have, in addition to the general
meeting of shareholders and Directors, the following
organs:(1) Board of Directors(2) Auditors(3) Board of Company Auditors(4) Accounting Auditor(Organs)
Article 4.
The Company shall have, in addition to the general
meeting of shareholders and Directors, the following
organs:(1) Board of Directors(2) Audit and Supervisory Committee(Deleted)(3) Accounting Auditor

Article 5. to Article 17. (Omitted)

Article 5. to Article 17. (Unchanged)

Chapter 4 Directors and Board of Directors

Chapter 4 Directors and Board of Directors(Number of Directors)
Article 18.
The Company shall have not more than fifteen (15)Directors.

(Number of Directors)
Article 18.
1. The Company shall have not more than eight (8)Directors (excluding Directors who are Audit andSupervisory Committee Members).
2. The Company shall have not more than five (5)Directors who are Audit and Supervisory Committee
Members.

(Newly established)(Method of Election)
Article 19.
1. Directors shall be elected at a general meeting ofshareholders.

(Method of Election)
Article 19.
1. Directors shall be elected at a general meeting ofshareholders, while distinguishing Directors who are
Audit and Supervisory Committee Members andother Directors.
2. (Unchanged)
3. (Unchanged)
4. The Company can elect a substitute Director who
is an Audit and Supervisory Committee Member at a
general meeting of shareholders, to be ready to fill avacant position should the number of Audit andSupervisory Committee Members fall below thenumber required by laws and regulations.
5. The effective period for the resolution on theelection of a substitute Director who is an Audit andSupervisory Committee Member described in thepreceding paragraph shall expire at the start of theOrdinary General Meeting of Shareholders for thelast business year out of the business years
terminating within two (2) years after the resolution.

2. (Omitted)
3. (Omitted)(Newly established)(Newly established)-4-Current Articles of Incorporation(Term of Office)
Article 20.
1. The term of office of a Director shall expire at theconclusion of the Ordinary General Meeting of
Shareholders for the last business year out of thebusiness years within two (2) years after the electionof the Director.

Proposed Amendments(Term of Office)
Article 20.
1. The term of office of a Director (excluding
Directors who are Audit and Supervisory Committee
Members) shall expire at the conclusion of theOrdinary General Meeting of Shareholders for thelast business year out of the business years
terminating within one (1) year after the election of
the Director.
2. The term of office of Directors who are Audit andSupervisory Committee Members shall expire at theconclusion of the Ordinary General Meeting of
Shareholders for the last business year out of thebusiness years terminating within two (2) years after
the election of the Director.
3. The term of office of a Director (excluding
Directors who are Audit and Supervisory Committee
Members) who is elected due to an increase in thenumber of Directors or as the substitute for a Director
who retired from office before the expiration of theterm of office shall continue until the time the termof office of the other currently serving Directors(excluding Directors who are Audit and Supervisory
Committee Members) expire.
4. The term of office of a Director who is an Audit
and Supervisory Committee Member elected as thesubstitute for a Director who is an Audit andSupervisory Committee Member retired from office
before the expiration of the term of office shallcontinue until the time the term of office of the
Director who is an Audit and Supervisory Committee
Member retired from office expires.

(Newly established)

2. The term of office of a Director who is elected due
to an increase in the number of Directors or as thesubstitute for a Director who retired from office
before the expiration of the term of office shallcontinue until the time the term of office of the othercurrently serving Directors expire.

(Newly established)(Representative Directors and Directors With Special
Titles)
Article 21.
1. The Board of Directors shall appoint
Representative Director(s) by its resolution.

(Representative Directors and Directors With Special
Titles)
Article 21.
1. The Board of Directors shall appoint
Representative Director(s) from among the Directors(excluding Directors who are Audit and Supervisory
Committee Members) by its resolution.
2. The Board of Directors shall appoint, by its
resolution, one (1) Chairman, one (1) President, one(1) or a small number of Senior Managing Directors,
and one (1) or a small number of Managing
Directors, from among the Directors (excluding
Directors who are Audit and Supervisory Committee
Members).

2. The Board of Directors shall appoint, by its
resolution, one (1) Chairman, one (1) President, one(1) or a small number of Senior Managing Directors,
one (1) or a small number of Managing Directors,
and one (1) or a small number of Advisory Directors.

Article 22. to Article 23. (Omitted)

Article 22. to Article 23. (Unchanged)-5-Current Articles of Incorporation(Notice of Meeting of the Board of Directors)
Article 24.
1. When convening a meeting of the Board of
Directors, a notice shall be dispatched to each
Director and each Auditor at least three (3) days
before the day of the meeting; provided, however,that this period may be reduced in case of urgent
needs.
2. With the consent of all Directors and Auditors, ameeting of the Board of Directors may be held
without following the convening procedures.

Proposed Amendments(Notice of Meeting of the Board of Directors)
Article 24.
1. When convening a meeting of the Board of
Directors, a notice shall be dispatched to each
Director at least three (3) days before the day of themeeting; provided, however, that this period may be
reduced in case of urgent needs.

(Newly established)(Delegation of Decision Regarding Important
Business Execution)
Article 25.
Pursuant to the provisions of Article 399-13,
Paragraph 6 of the Companies Act, the Company
may delegate all or part of decisions regarding
important execution (excluding matters set forth initems of Paragraph 5 of the said Article) to a Director
by resolution of the Board of Directors.

2. With the consent of all Directors, a meeting of theBoard of Directors may be held without following
the convening procedures.

Article 25. (Omitted)

Article 26. (Unchanged)(Remuneration, Etc.)
Article 26.
Remuneration, bonuses and other economic benefits
given by the Company in consideration for the
execution of duties (hereinafter referred to as the“Remuneration, Etc.”) to Directors shall be
determined by resolution of a general meeting ofshareholders.

(Remuneration, Etc.)
Article 27.
Remuneration, bonuses and other economic benefits
given by the Company in consideration for the
execution of duties (hereinafter referred to as the“Remuneration, Etc.”) to Directors shall be
determined by resolution of a general meeting ofshareholders. However, the Remuneration, Etc. for
Directors who are Audit and Supervisory Committee
Members shall be determined by resolution of ageneral meeting of shareholders separately from theRemuneration, Etc. for other Directors.

Article 27. (Omitted)

Article 28. (Unchanged)

Chapter 5 Auditors and Board of Company Auditors(Deleted)(Number of Auditors)
Article 28.
The Company shall have not more than five (5)Auditors.

(Deleted)(Method of Election)
Article 29.
1. Auditors shall be elected at a general meeting ofshareholders.

(Deleted)-6-

Current Articles of Incorporation
2. Resolutions on the election of an Auditor shall bemade by a majority of the votes of the shareholders
present at the meeting where the shareholders
holding at least one-third of the voting rights of theshareholders entitled to exercise their votes at suchmeetings are present.

Proposed Amendments(Term of Office)
Article 30.
1. The term of office of an Auditor shall expire at theconclusion of the Ordinary General Meeting of
Shareholders for the last business year out of thebusiness years terminating within four (4) years after
the election of the Auditor.
2. The term of office of an Auditor who is elected as
the substitute for an Auditor who retired from office
before the expiration of the term of office shallcontinue until the time the term of office of the
Auditor who retired from office is to expire.
3. The effective period for the resolution on theelection of a substitute Auditor who is elected basedon Article 329, Paragraph 3 of the Companies Act
shall expire at the start of the Ordinary General
Meeting of Shareholders for the last business year
out of the business years terminating within four (4)years after the election of the Auditor.

(Deleted)(Full-Time Auditors)
Article 31.
The Board of Company Auditors shall appoint fulltime Auditor(s) by its resolution.

(Deleted)(Notice of Meeting of the Board of Company
Auditors)
Article 32.
1. When convening a meeting of the Board ofCompany Auditors, a notice shall be dispatched toeach Auditor at least three (3) days before the day ofthe meeting; provided, however, that this period may
be reduced in case of urgent needs.
2. With the consent of all Auditors, a meeting may beheld without following the convening procedures.

(Deleted)(Regulations of the Board of Company Auditors)
Article 33.
Matters concerning the Board of Company Auditors
shall be governed by the Regulations of the Board ofCompany Auditors established by the Board ofCompany Auditors, in addition to applicable laws
and regulations and these Articles of Incorporation.

(Deleted)-7-

Current Articles of Incorporation

Proposed Amendments(Remuneration, Etc.)
Article 34.
The Remuneration, Etc. to Auditors shall be
determined by resolution of a general meeting ofshareholders.

(Deleted)(Exemption of Auditors from Liability)
Article 35.
1. Pursuant to the provisions of Article 426,
Paragraph 1 of the Companies Act, the Company
may, by resolution of the Board of Directors, exempt
an Auditor (including a person who was formerly an
Auditor) from his/her liability for damages under
Article 423, Paragraph 1 of the same Act, to theextent permitted by laws and regulations.
2. Pursuant to the provisions of Article 427,
Paragraph 1 of the Companies Act, the Company
may enter into a liability limitation agreement with
an Auditor to limit his/her liability for damages under
Article 423, Paragraph 1 of the same Act. Note thatthe maximum amount of liability for damages under
this agreement is the minimum liability amountprovided for under laws and regulations.

(Deleted)(Newly established)

Chapter 5 Audit and Supervisory Committee(Newly established)(Notice of Meeting of the Audit and Supervisory
Committee)
Article 29.
1. When convening a meeting of the Audit andSupervisory Committee, a notice shall be dispatchedto each Audit and Supervisory Committee Member at
least three (3) days before the day of the meeting;provided, however, that this period may be reducedin case of urgent needs.
2. With the consent of all Audit and Supervisory
Committee Members, a meeting of the Audit andSupervisory Committee may be held without
following the convening procedures.

(Newly established)(Regulations of the Audit and Supervisory
Committee)
Article 30.
Matters concerning the Audit and Supervisory
Committee shall be governed by the Regulations of
the Audit and Supervisory Committee established by
the Audit and Supervisory Committee, in addition toapplicable laws and regulations and these Articles ofIncorporation.

-8-

Current Articles of Incorporation

Proposed Amendments(Newly established)(Full-time Audit and Supervisory Committee
Members)
Article 31.
The Audit and Supervisory Committee may appoint
one (1) or more full-time Audit and Supervisory
Committee Members by its resolution.

Article 36. to Article 39. (Omitted)

Article 32. to Article 35. (Unchanged)(Newly established)

Supplementary Provisions(Transitional Measures for Exemption of Auditor
from Liability)
Article 1.
Pursuant to the provisions of Article 426, Paragraph
1 of the Companies Act, the Company may, byresolution of the Board of Directors, exempt an
Auditor (including a person who was formerly an
Auditor) from his/her liability for damages arisingfrom neglecting his/her duties before the partial
amendments to the Articles of Incorporation resolved
at the 63rd Ordinary General Meeting of
Shareholders has taken effect, to the extent permitted
by laws and regulations.

-9-Proposal 3:

Election of three (3) Directors (excluding Directors who are Audit and Supervisory
Committee Members)

If Proposal 2 “Partial amendments to the Articles of Incorporation” is approved and adopted as proposed, theCompany will make the transition to a company with Audit and Supervisory Committee, and terms of office of allnine (9) Directors will expire when the amendments to the Articles of Incorporation become effective.
Therefore, the Company proposes to elect three (3) Directors (excluding Directors who are Audit and Supervisory
Committee Members; applicable to the rest of this proposal).
This proposal, however, can only take effect after the partial amendments to the Proposal 2 “Partial amendments to
the Articles of Incorporation” take effect.
The candidates for Director are as follows.
CandidateNo.

1

Career summary, and position and responsibility in the
Number of theCompany
Company’s shares(significant concurrent positions outside the Company)owned
May 1979
Joined the Company
Oct. 1983
General Manager of Finance & Accounting
Department
Dec. 1983
Director / General Manager of Finance &Accounting Department
Aug. 1986
Director / General Manager of General Affairs
Department
Apr. 1990
Director / General Manager of President Office
June 1990
Senior Managing Director / General Manager
of President Office
Itsuro Yoshida(April 27, 1951)
June 1991
Senior Managing Director / Division Manager,
485,103
Production Division / General Manager ofReelection
President OfficeNov. 1991
Senior Managing Director / General Manager
of President Office
June 1996
President and Representative Director (topresent)(significant concurrent positions outside the Company)
Chairman and Representative Director, J-DOLPH
PHARMACEUTICAL CO., LTD.
Chairman and Representative Director, DAICHI KASEI CO.,LTD.
[Reasons for nomination as candidate for Director]
Itsuro Yoshida has been involved in businesses, management and administration across the entire Group. He has
extensive experience and knowledge regarding business management, administration and operations, which theCompany expects to strengthen the decision-making function of the Board of Directors, for which reason it has again
nominated him as candidate for Director.
Name(Date of birth)-10-

CandidateNo.

2Career summary, and position and responsibility in the
Number of theCompany
Company’s shares(significant concurrent positions outside the Company)
owned
Apr. 1977
Joined Kanto Ishi Pharmaceutical Co., Ltd.
Nov. 1998
Joined the Company / Deputy General Manager
of Quality Assurance Department, Yamagata
Plant, Production Division
Apr. 2005
General Manager of Quality Assurance
Department, Yamagata Plant, Production
Division
Apr. 2007
General Manager of Quality Assurance
Department, Pharmacovigilance & Quality
Assurance Division
Oct. 2009
Plant Manager, Osaka Plant, Production
Division
June 2013
Director / Deputy Division Manager,
Kazuhiko Konno
Production Division(October 8, 1954)
1,887
Apr. 2014
Director / Division Manager, Production
Division
Reelection
June 2017Managing Director / Director in charge of
Production Division, Research & Development
Division, Pharmaceutical Research &Technology Division and API Business
Division
Apr. 2019
Managing Director / Director in charge of
Pharmacovigilance & Quality Assurance
Division, Production Division andPharmaceutical Research & Technology
Division (to present)(significant concurrent positions outside the Company)
Chairman and Representative Director, Greencaps
Pharmaceutical Co., Ltd.
[Reasons for nomination as candidate for Director]
Within the Company, Kazuhiko Konno has been involved mostly in the production and quality assurance divisions. He
has extensive experience and knowledge regarding business management, administration and operations, which theCompany expects to strengthen the decision-making function of the Board of Directors, for which reason it has again
nominated him as candidate for Director.
Name(Date of birth)-11-

Career summary, and position and responsibility in the
Number of theCompany
Company’s shares(significant concurrent positions outside the Company)
owned
Apr. 1978
Joined SANTEN PHARMACEUTICAL CO.,LTD.
Apr. 2007
Manager of Internal Auditing Group, SANTENPHARMACEUTICAL CO., LTD.
Mar. 2009
Team Manager of Finance Section Team,
Finance & Accounting Department, SANTENPHARMACEUTICAL CO., LTD.
Apr. 2009
Joined the Company / Deputy-General
Masao Tanaka
Manager, Internal Audit Office(July 4, 1954)
Apr. 2011
Manager of Internal Audit Office
640
Oct. 2016
General Manager of Public Relations andReelection
Investor Relations Office / General Manager of
Human Resources Department
June 2017
Director /Division Manager, Administration
Division
Apr. 2019
Director / Director in charge of Administration
Division (to present)(significant concurrent positions outside the Company)
None[Reasons for nomination as candidate for Director]
Masao Tanaka has been involved in the administration divisions. He has extensive experience and knowledge regarding
business management, administration and operations, which the Company expects to strengthen the decision-making
function of the Board of Directors, for which reason it has again nominated him as candidate for Director.
1. There is no special interest between any of the candidates and the Company.
2. The figure for the number of the Company’s shares held by each candidate in the above tables is the number of shares asof the end of the fiscal term under review (March 31, 2019), before the stock split conducted in April 1, 2019.

CandidateNo.

3

Notes:

Name(Date of birth)-12-

Proposal 4:

Election of three (3) Directors who are Audit and Supervisory Committee Members

If Proposal 2 “Partial amendments to the Articles of Incorporation” is approved and adopted as proposed, theCompany will make the transition to a company with Audit and Supervisory Committee.
Therefore, the Company proposes to elect of three (3) Directors who are Audit and Supervisory Committee
Members.
This proposal has been agreed to by the Board of Company Auditors.
This proposal, however, can only take effect after the amendments to the Articles of Incorporation as proposed in
Proposal 2 “Partial amendments to the Articles of Incorporation” take effect.
The candidates for Director who is an Audit and Supervisory Committee Member are as follows:
CandidateNo.

1

Career summary, and position and responsibility in the
Number of theCompany
Company’s shares(significant concurrent positions outside the Company)
owned
Sept. 1978
Joined ICI-Pharma Ltd. (currently AstraZeneca
K.K.)
Oct. 2006
Joined the Company / General Manager ofDevelopment Strategy Department, Research &Development Division
Apr. 2008
General Manager of Product Portfolio
Management Department, Corporate Planning
Division
June 2015
Managing Director / Director in charge ofToshio Shirakawa
Business Development Office and International(October 12, 1952)
2,713
Business Development Department / General
Manager of Product Strategy Management
New election
Department
Apr. 2017Managing Director / Director in charge of
Product Strategy Division, International
Business Division and Development Planning
OfficeApr. 2019
Managing Director (to present)(significant concurrent positions outside the Company)
None[Reasons for nomination as candidate for Director who is an Audit and Supervisory Committee Member]Within the Company, Toshio Shirakawa has been involved mostly in the strategy and planning divisions. The Company
expects that he will be able to enhance the supervisory function of the Board of Directors, as he has extensive
experience and knowledge regarding business management, administration and operations. For this reason, it has
nominated him as a candidate for Director who is an Audit and Supervisory Committee Member.
Name(Date of birth)-13-

CandidateNo.

2Career summary, and position and responsibility in the
Number of theCompany
Company’s shares(significant concurrent positions outside the Company)
ownedAug. 1979
Joined Ciba-Geigy Japan Limited
Jan. 1994
Joined Bayer Yakuhin, Ltd
Mar. 1997
Director / Plant Manager of Shiga Plant, Bayer
Yakuhin, Ltd
July 2002
President and Representative Director, Bayer
Yakuhin, LtdJan. 2007
Chairman and Representative Director, Bayer
Yakuhin, Ltd
Apr. 2010
Chairman and Director, Bayer Yakuhin, Ltd
Norikazu EikiMay 2014
Outside Director of AnGes MG, Inc. (currently(April 17, 1948)
AnGes, Inc.) (to present)–
Apr. 2015
Director of the Board, FunPep Co., Ltd. (toOutsidepresent)
New Election
June 2015
Outside Director of the Company (to present)
Apr. 2016
Outside Director of Solasia Pharma K.K. (topresent)
June 2018
Outside Director of the Board, Gene Techno
Science (to present)(significant concurrent positions outside the Company)
Outside Director of AnGes, Inc.
Director of the Board, FunPep Co., Ltd.
Outside Director of Solasia Pharma K.K.
Outside Director of Gene Techno Science[Reasons for nomination as candidate for Outside Director who is an Audit and Supervisory Committee Member]
Norikazu Eiki has wide-ranging insights and extensive experience at a global company, and the Company expects that
his advice and opinions will promote sound and efficient management, for which reason it has nominated him as a
candidate for outside Director who is an Audit and Supervisory Committee Member.
Name(Date of birth)-14-

Career summary, and position and responsibility in the
Number of theCompany
Company’s shares(significant concurrent positions outside the Company)
owned
Oct. 1987
KPMG Minato Audit Corporation (currently
KPMG AZSA LLC)
July 1991
Registered as Certified Public Accountant
Oct. 1995
Seconded to KPMG Consulting Co., Ltd.
Sept. 2001
Managing Director, KPMG Consulting Co.,
Ltd.
Feb. 2005
Joined KPMG Business Assurance Co., Ltd.
Executive Officer and Partner
Hidehito Nemoto
July 2009
Representative Partner, KPMG AZSA & Co.
(September 3, 1961)(currently KPMG AZSA LLC)–
Apr. 2012
Joined IBM Japan, Ltd.
OutsidePartner and Leader of Industrial Products
New Election
Services Sector, Global Business Services
DivisionJan. 2016
Partner and General Manager of Industrial
Global Projects, Industrial Services Sector,
Global Business Services Division, IBM Japan,
Ltd. (to present)
June 2018
Outside Director of the Company (to present)(significant concurrent positions outside the Company)
Partner, IBM Japan, Ltd.
[Reasons for nomination as candidate for Outside Director who is an Audit and Supervisory Committee Member]
The Company nominated Hidehito Nemoto as Outside Director, because it expects that he will be able to provide
advice and recommendations so as to enhance the transparency and objectivity of management, as he has expert
knowledge and experience accumulated through his management consulting work, and has extensive knowledge andexperience in the fields of finance and accounting, etc., gained from being a certified public accountant. Due to thesereasons, it has nominated him as a candidate for outside Director who is an Audit and Supervisory Committee Member.
1. There is no special interest between any of the candidates and the Company.
2. Norikazu Eiki and Hidehito Nemoto are candidates for outside Director. The Company has submitted notification to theTokyo Stock Exchange Inc. that they have been designated as independent officers as provided for by the
aforementioned exchange. If their election is approved, the Company plans for their appointment as independent officers
to continue.
3. Norikazu Eiki is currently an outside Director of the Company, and at the conclusion of this meeting, his tenure as an
outside Director will have been four (4) years.
4. Hidehito Nemoto is currently an outside Director of the Company, and at the conclusion of this meeting, his tenure as an
outside Director will have been one (1) year.
5. Pursuant to the provisions of Article 427, Paragraph 1 of the Companies Act, the Company has entered into anagreement with Norikazu Eiki and Hidehito Nemoto to limit their liability for damages under Article 423, Paragraph 1of the same Act to the minimum liability amount provided for by Article 425, Paragraph 1 of the same Act. If theirelection is approved, the Company plans to continue the said agreement with them.
6. The figure for the number of the Company’s shares held by Toshio Shirakawa in the above table is the number of shares
as of the end of the fiscal term under review (March 31, 2019), before the stock split conducted in April 1, 2019.

CandidateNo.

3

Notes:

Name(Date of birth)-15-

Proposal 5:

Election of one (1) substitute Director who is an Audit and Supervisory Committee Member

If Proposal 2 “Partial amendments to the Articles of Incorporation” is approved and adopted as proposed, theCompany will make the transition to a company with Audit and Supervisory Committee.
Therefore, the Company proposes to elect one (1) substitute Director who is an Audit and Supervisory Committee
Member to be ready to fill a vacant position should the number of Audit and Supervisory Committee Members fall
below the number required by laws and regulations.
This proposal has been agreed to by the Board of Company Auditors.
This proposal, however, can only take effect after the amendments to the Articles of Incorporation as proposed in
Proposal 2 “Partial amendments to the Articles of Incorporation” take effect.
The candidate for substitute Director who is an Audit and Supervisory Committee Member is as follows:
Name(Date of birth)

Career summary, and position and responsibility in the Company(significant concurrent positions outside the Company)
Apr. 1994

Number of theCompany’s shares
ownedJoined The Long-Term Credit Bank of Japan, Ltd.
(currently Shinsei Bank, Ltd.)
Dec. 2006
Joined Deloitte Touche Tohmatsu (currently,
DeloitteToucheTohmatsu LLC)
Apr. 2008
Joined GCA Savvian Group Corporation (currently GCA
Corporation)
July 2008
Registered as Certified Public Accountant (to present)
Hideaki Higuchi
May 2011
Representative of Hideaki Higuchi Certified Public(April 14, 1971)
Accountant Office (to present)–
July 2011
Registered as Certified Public Tax Accountant (toOutsidepresent)
New election
June 2012
Outside Corporate Auditor of SOFT99 corporation (topresent)
Outside Corporate Auditor of AION Co., Ltd. (topresent)(significant concurrent positions outside the Company)
Representative of Hideaki Higuchi Certified Public Accountant OfficeOutside Corporate Auditor of SOFT99 corporation
Outside Corporate Auditor of AION Co., Ltd.
[Reasons for nomination as candidate for Substitute Outside Director who is an Audit and Supervisory Committee Member]
The Company nominated Hideaki Higuchi as Outside Director, because it expects that he will be able to provide advice andrecommendations so as to enhance the transparency and objectivity of management, as he has expert knowledge and experience
accumulated through his M&A advisory work, and has extensive knowledge and experience in the fields of finance and accounting,etc., gained from being a certified public accountant and an expert who holds Master of Business Administration (MBA) degree. Dueto these reasons, it has nominated him as a candidate for substitute Outside Director who is an Audit and Supervisory Committee
Member.
Notes: 1. There is no special interest between Hideaki Higuchi and the Company.
2. Hideaki Higuchi is a candidate for substitute outside Director.
3. If Hideaki Higuchi assumes the office of Director who is an Audit and Supervisory Committee Member, the Company
plans to designate him as an independent officer as provided for by the aforementioned exchange and submit notification
therein.
4. Pursuant to the provisions of Article 427, Paragraph 1 of the Companies Act, the Company will enter into an agreementwith Hideaki Higuchi to limit his liability for damages under Article 423, Paragraph 1 of the same Act to the minimum
liability amount provided for by Article 425, Paragraph 1 of the same Act in the event that he assumes the office of
Director who is an Audit and Supervisory Committee Member.

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Proposal 6:

Setting of remuneration amount for Directors (excluding Directors who are Audit andSupervisory Committee Members)

If Proposal 2 “Partial amendments to the Articles of Incorporation” is approved and adopted as proposed, theCompany will make the transition to a company with Audit and Supervisory Committee.
At the 50th Ordinary General Meeting of Shareholders held on June 28, 2006, annual remuneration not exceeding
300 million yen for Directors of the Company was approved, and this has remained in place to this day. However,in conjunction with the transition to a company with Audit and Supervisory Committee, the Company proposes toabolish this upper limit and set a new remuneration amount for Directors (excluding Directors who are Audit andSupervisory Committee Members). Taking into consideration the duties involved, recent economic trends and othercircumstances, the Company would like to set the new annual remuneration amount at an amount not exceeding
550 million yen (including up to 30 million yen for Outside Directors), including basic remuneration, annual bonus,
and stock related remuneration based on mid- to long-term business performance (Please refer to Reference 3. (2)below.).
Note that this remuneration amount does not include the portion of salaries paid to Directors who also serve as
employees or the remuneration for granting Restricted Stock as described in Proposal 8 “Determination of
remuneration for granting Restricted Stock to Directors (excluding Directors who are Audit and Supervisory
Committee Members and Outside Directors)”.
There are currently nine (9) Directors (of which two (2) are Outside Directors), and if Proposal 2 and Proposal 3
are approved and adopted as proposed, the number of Directors to whom this proposal applies (excluding Directors
who are Audit and Supervisory Committee Members) will be three (3). Of the three (3) Directors mentioned above,
the number of Director who will be eligible for stock related remuneration based on mid- to long-term businessperformance is one (1), and Restricted Stock remuneration (Please refer to Reference 3. (1) below.) will not be paid
to the Director.
In addition, this proposal takes effect on the condition that the amendments to the Articles of Incorporations
described in Proposal 2 “Partial amendments to the Articles of Incorporation” take effect.
While the Director’s bonus amounts for the fiscal year under review are proposed in Proposal 9 “Payment ofbonuses to Directors,” if this proposal is approved and adopted as proposed in its original form, the Director’sbonus amounts for the next fiscal year onward will be set within the scope of the annual remuneration amount set
above (up to 550 million yen).
(Reference) Components of remuneration in the revised officers’ remuneration plan
1. Basic remuneration (scope of remuneration amount in this proposal)
This is monetary remuneration that is paid as a set amount every month.
2. Annual bonus (scope of remuneration amount in this proposal)
This is monetary remuneration that is paid according to factors including the achievement rate of the annual
targets and individual’s work performance during the previous fiscal year.
3. Through this proposal and Proposal 8, the Company will introduce (1) and (2) below as stock related
remuneration based on mid- to long-term business performance for the purpose of providing an incentive topromote mid- to long-term improvements in corporate value, and each applicable Director will be given either(1) or (2) below.
(1) Restricted Stock remuneration (scope of remuneration amount in Proposal 8)This is stock remuneration that fluctuates according to the achievement rate of the Mid-term Business plan.
(2) Stock related remuneration based on mid- to long-term business performance (scope of remuneration amountin this proposal)
This is monetary remuneration that fluctuates according to the achievement rate of the Mid-term Businessplan and the stock price.
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Specifically, with the Mid-term Business plan period as the evaluation period, with set amount of points
allocated to Directors according to their positions, the amount of remuneration for each Director shall becalculated by multiplying the number of points, a payout ratio determined by achievement rate of theconsolidated operating profit target prescribed in Mid-term Business Plan, and the market value of theCompany’s share as of the end of the evaluation period.
Those who are eligible to receive this remuneration will not receive the remuneration described in 3. (1) above.

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Proposal 7:

Setting of remuneration amount for Directors who are Audit and Supervisory Committee
Members

If Proposal 2 “Partial amendments to the Articles of Incorporation” is approved and adopted as proposed, theCompany will make the transition to a company with Audit and Supervisory Committee.
Therefore, taking into consideration the duties involved, recent economic trends and other circumstances, theCompany proposes to set an annual remuneration not exceeding 70 million yen as remuneration amount for
Directors who are Audit and Supervisory Committee Members (including Outside Directors).
If Proposal 2 and 4 are approved and adopted as proposed, the number of Directors who are Audit and Supervisory
Committee Members to whom this proposal applies will be three (3) (of which two (2) are Outside Directors).
In addition, this proposal takes effect on the condition that the amendments to the Articles of Incorporation
described in Proposal 2 “Partial amendments to the Articles of Incorporation” take effect.

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Proposal 8:

Determination of remuneration for granting Restricted Stock to Directors (excluding
Directors who are Audit and Supervisory Committee Members and Outside Directors)

1. Reason for the proposal
The Company will introduce a stock-related remuneration system linked to mid- to long-term business performanceas part of revision of the officer’s remuneration plan, with the objectives of clarifying the correlation between the
remuneration of the Company’s Directors (excluding Directors who are Audit and Supervisory Committee
Members and Outside Directors; hereinafter referred to as the “Eligible Directors”) and the Company’s businessperformance and shareholder value, further improving the awareness toward contributing to corporate value
improvements and a shareholder-oriented management while providing an incentive to promote mid- to long-term
improvement in corporate value.
With this proposal, the Company proposes to pay remuneration to the Eligible Directors for the granting ofRestricted Stock as part of a new stock related remuneration based on mid- to long-term business performance,outside the scope of the remuneration limit set upon the approval and adoption of Proposal 6 “Setting of
remuneration amount for Directors (excluding Directors who are Audit and Supervisory Committee Members)” (upto 550 million yen per year, not including the employee salary for Directors who also serve as an employee).
2. Amount of remuneration
Based on this proposal, the remuneration paid for granting Restricted Stock to the Eligible Directors shall behandled as monetary claims (hereinafter, “Monetary Remuneration Claims”), and the total amount shall be up to
100 million yen per year (not including the employee salary for Directors who also serve as an employee), an
amount the Company deems appropriate in light of the objectives above. However, because it is assumed that as a
general rule this remuneration amount will be paid as a lump-sum, with an amount equivalent to consideration for
the execution of duties over a period of three (3) fiscal years that is the target period of a Mid-term business plan tobe paid in the first year, this effectively means the equivalent of a payment of no more than 33 million yen in one(1) fiscal year. Note that, this remuneration may be paid in the middle of the target period in some cases, taking into
account such factors as the timing of appointment, for Directors appointed in the middle of a three (3)-fiscal-year
period that is the target period of a Mid-term Business plan. In addition, the specific payment timing and allocation
to each of the Eligible Director shall be left to the discretion of the Board of Directors.
If Proposal 2 “Partial amendments to the Articles of Incorporation” and Proposal 3 “Election of three (3) Directors(excluding Directors who are Audit and Supervisory Committee Members)” are approved and adopted as proposed,
there will be three (3) Directors (excluding Directors who are Audit and Supervisory Committee Members). Amongthem, the number of Eligible Directors for this plan is two (2).
3. Specific details of the remuneration
Eligible Directors shall pay all of the monetary remuneration claims to be provided under this proposal inaccordance with resolution of the Board of Directors of the Company in the form of property contributed in kind,and shall have the common stock of the Company be issued or disposed of. The total number of the Company’scommon stock to be issued or disposed of thereby shall be no more than 19,500 shares per year (however, if a stock
split (including an allocation of the Company’s common stock without contribution) or stock consolidation of theCompany’s common stock occurs, or if there are other reasons to adjust the total number of the Company’scommon stock to be issued or disposed of as Restricted Stock, arising after the day of approval and adoption of this
proposal, adjustment shall be made to the total number within a reasonable scope). However, as described above,
because it is assumed that as a general rule that Monetary Remuneration Claims related to the Restricted Stockremuneration system will be paid as a lump-sum, with an amount equivalent to consideration for the execution ofduties over a period of three (3) fiscal years that is the target period of a Mid-term Business plan to be paid in thefirst year, this effectively means the equivalent of granting of no more than 6,500 shares in one (1) fiscal year. Notethat for the initial year of its introduction, since the year is the second year of a Mid-term Business plan (2018 to2020), the Company plans to grant an amount equivalent to consideration for two (2) years.
The amount to be paid per share shall be determined by the Board of Directors within a scope so that the amount is
not particularly beneficial to the Eligible Directors receiving Restricted Stock, based on the closing price of the-20-Company’s common stock on the Tokyo Stock Exchange Inc. on the business day prior to the day of the resolutionof the Company’s Board of Directors (if trading does not take place on that day, the closing price for the last
trading day before that). In addition, a Restricted Stock allocation agreement (hereinafter referred to as the“Allocation Agreement”) that includes the following contents shall be signed between the Company and an Eligible
Director for issuance or disposal of the Company’s common stock.
(1) Restriction period
The Eligible Directors may not transfer, create a security interest on, or otherwise dispose of the shares of common
stock allotted under the Allocation Agreement (hereinafter the “Allocated Stock”) for a period of minimum three(3) years and maximum thirty (30) years that shall be determined in advance by the Board of Directors of theCompany (hereinafter the “Restriction Period”). The restriction described in the preceding sentence will hereinafter
be referred to as the “Restrictions.”(2) Handling at the time of resignation
If an Eligible Director resigns from the position of the Company’s Director before the completion of the Restriction
Period, the Company shall acquire the Allocated Stock free of charge as a matter of course, excluding cases ofresignation at the expiry of the term of appointment, death, or for other legitimate reasons.
(3) Removal of the Restrictions
Regardless of the provisions of (1) above, the Company shall remove the Restrictions upon the completion of the
Restriction Period for the number of Allocated Stock (hereinafter referred to as the “Performance-linked Allocated
Stock”) according to the degree of attainment of benchmarks in the Company’s Mid-term Business plan such as
consolidated operating profit prescribed in advance (hereinafter referred to as the “Degree of Performance
Attainment”), under the condition that the Eligible Director has served continuously as a Director of the Company
during the Restriction Period.
However, if an Eligible Director resigns from the position prescribed in (2) above before the completion of the
Restriction Period due to the expiry of the term of appointment, death, or other legitimate reasons prescribed in (2)above, reasonable adjustments shall be made as necessary to the number of Allocated Stock to remove Restrictions
on and the timing of the removal of Restrictions in consideration of their tenure and Degree of Performance
Attainment.
(4) Grounds for gratuitous acquisition
The Company shall acquire the Allocated Stock in part or in whole free of charge as a matter of course, at eachtime of the following:(i) Immediately after the completion of the Restriction Period pursuant to the provision of item (1) above, theCompany shall acquire the Allocated Stock for which Restrictions have not been removed until then.
(ii) Immediately after the removal of the Restriction Period pursuant to the provision of item (3) above, theCompany shall acquire the Allocated Stock for which Restrictions have not been removed until then.
(iii)As of the completion of the target period of a Mid-term Business plan, the Company shall acquire the Allocated
Stock which is not Performance-linked Allocated Stock.
(5) Handling of organizational restructuring, etc.
Regardless of the provisions of (1) above, if a merger agreement in which the Company is the non-surviving entity,
a stock exchange agreement or stock transfer plan in which the Company becomes a wholly-owned subsidiary, orother matter regarding organizational restructuring, etc. is approved by the Company’s General Meeting of
Shareholders (or the Company’s Board of Directors if the approval of the Company’s General Meeting of
Shareholders is not required for the organizational restructuring, etc.) during the Restriction Period, the Restrictions
shall be removed based on a resolution by Company’s Board of Directors ahead of the effective date of theorganizational restructuring, etc. for the number of Allocated Stock deemed appropriate in consideration of theperiod of time from the beginning date of the Restriction Period to the approval date of the organizational
restructuring, etc.
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Other matters regarding the Allocation Agreement shall be determined by the Company’s Board of Directors.
In addition, this proposal takes effect on the condition that the amendments to the Articles of Incorporation
described in Proposal 2 “Partial amendments to the Articles of Incorporation” take effect.

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Proposal 9:

Payment of bonuses to Directors

Taking into account earnings for the fiscal year under review, the amounts of past Directors’ bonus payments, andother considerations, the Company has determined Directors’ bonus amounts as follows. The seven (7) Directors
excluding two (2) Outside Directors who are in the office at the end of the fiscal year under review will be paid
Directors’ bonuses totaling 82 million yen.
The amount allocated to each Director is a matter to be determined by the Board of Directors.

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