Securities Code: 5957
March 9, 2023

To Our Shareholders:
20 Umegahata, Inokura-Cho, Ayabe, Kyoto

NITTOSEIKO CO., LTD.
Masami Zaiki, President

Notice of the 117th Annual Meeting of Shareholders
The Company would hereby like to inform shareholders that the Company’s 117th Annual Meeting of
Shareholders will be held as described below
As the Annual Meeting of Shareholders has adopted Electronic Provision Measures, pursuant to Article325-3 of the Companies Act, the items subject to Electronic Provision Measures are posted on our company
website, so please visit the following website for your confirmation.
Our company website https://www.nittoseiko.co.jp/ir/ir_calendar.html
The items of Electronic Provision Measures are posted on the website of the Tokyo Stock Exchange in
addition to our company website. If you are unable to view the items of Electronic Provision Measures on
our company website, please visit the following Tokyo Stock Exchange website (Listed Company Search),enter and search “Nittoseiko” in “Issue name (company name)” or our Securities Code “5957” in “Code,”
select “Basic information” and “Documents for public inspection/PR information,” and then view the
information listed on the “Notice of General Shareholders Meeting /Informational Materials for a General
Shareholders Meeting” page.
Tokyo Stock Exchange website (Listed Company Search)https://www2.jpx.co.jp/tseHpFront/JJK010010Action.do?Show=Show
If you are unable to attend the meeting on the date, you may also exercise your voting rights via theInternet or in writing (by postal mail). We kindly request you to read the following Reference
Document for the Annual Meeting of Shareholders and exercise your voting rights in conformity to
the guide below no later than 5:00 p.m. on Wednesday, March 29, 2023.

-1-1. Date:
2. Venue:

1:00 p.m. on Thursday, March 30, 2023
Meeting Room of the Company, 20 Umegahata, Inokura-Cho, Ayabe,
Kyoto

3. Purposes:
Items to be reported:

1.

2.

Items to be resolved:
Item No. 1:
Item No. 2:
Item No. 3:
Item No. 4:
Item No. 5:
Item No. 6:

The business report, the consolidated financial statements andthe results of consolidated financial statement audits by the
Accounting Auditor and the Board of Auditors for the 117th
business period (January 1, 2022 to December 31, 2022)
The non-consolidated financial statements for the 117th businessperiod (January 1, 2022 to December 31, 2022)

Appropriation of Retained Earnings
Partial Amendment to the Articles of Incorporation
Election of Nine (9) Directors
Election of One (1) Auditor
Election of One (1) Substitute Auditor
Revision of Amount and Details of Stock Compensation, etc., toDirectors and Continuation of the System

4. Instructions on exercise of voting rights(1) When exercising your voting rights via the Internet
If you wish to exercise your voting rights via the Internet, etc., please read the “Instructions on
exercising your voting rights via the Internet, etc.” below and exercise your voting rights by 5:00 p.m.
on Wednesday, March 29, 2023.
(2) When exercising your voting rights in writing (by postal mail)Please indicate your approval or disapproval on the enclosed Voting Rights Exercise Form and returnit to us to arrive no later than 5:00 p.m. on Wednesday, March 29, 2023. If no approval or disapprovalis indicated for each proposal, it will be treated as approved.
(3) If you exercise your voting rights more than once
If you exercise your voting rights both via the Internet, etc. and in writing (by postal mail) and , theexercise via the Internet will be treated as a valid exercise of voting rights. If you exercise your voting
rights more than once via the Internet, etc., the last vote will be treated as a valid exercise of yourvoting rights.
◎ When you attend the meeting, we kindly request that you submit the enclosed Voting Right Exercise
Form to the receptionist at the venue.
◎ In accordance with laws and regulations and Article 18, Paragraph 2 of our company’s Articles ofIncorporation, among the items of Electronic Provision Measures, the following items are not includedin the documents to be delivered to shareholders who have requested the delivery of materials in paperbased format.
(1) “Consolidated Statement of Changes in Net Assets” in the Consolidated Financial Statements(2) Consolidated Notes to Consolidated Financial Statements(3) “Non-consolidated Statement of Changes in Net Assets” in the Financial Statements(4) “Non-consolidated Notes” to Financial Statements
Accordingly, the contents of these documents are part of the consolidated and non-consolidated
financial statements audited by the Auditors in preparing the Auditors’ Report, and the consolidated andnon-consolidated financial statements audited by the Accounting Auditor in preparing the Accounting
Auditors’ Report.
◎ If any amendment is made to the items of Electronic Provision Measures, a statement to that effect andthe items before and after the amendment will be posted on our above company website and the Tokyo
Stock Exchange website (Listed Company Search).
-2-

Instructions on exercise of voting rights
Voting rights at a meeting of shareholders are precious rights of shareholders.
Please ensure you read the following Reference Document for the Annual Meeting of
Shareholders before exercising your voting rights.
There are three ways to exercise your voting rights, as shown below.

Exercise your voting rights
by attending the meeting inpersonExercise your voting rights via
the Internet

Exercise your voting rights inwriting (by postal mail)Please submit the enclosed Voting
Right Exercise Form to the venue
reception desk.

Please input your approval ordisapproval for each of the items to
be resolved in conformity to the
instructions on the next page.

Meeting Time & Date
Thursday, March 30, 2023
1:00 p.m. (JST)(in operation from noon)

Exercise deadline
Wednesday, March 29, 2023
5:00 p.m. (JST)(on an input completion basis)

Please indicate your approval ordisapproval for each of the items
to be resolved on the enclosed
Voting Right Exercise Form andreturn it to the Company.
Exercise deadline
Wednesday, March 29, 2023
5:00 p.m. (JST)(on an arrival basis)

How to fill in your Voting Right Exercise Form
Voting Right Shareholder
No.
Exercise Form

No. ofvoting rights

Please indicate here your approval or disapproval for each of
the items to be resolved

nn

To:

Item Nos. 1, 2, 4, 5 and 6
mm dd, yyyy
(Cut here)● If approving● If disapproving>> Put a circle in the “Approve” box>> Put a circle in the “Disapprove”
box

Smartphonelogin QR codefor voting
websiteSampleItem No. 3:● If approving all>> Put a circle in the “Approve” box
the candidates● If disapproving all >> Put a circle in the “Disapprove”
the candidatesbox● If disapprovingsome candidates*The Voting Right Exercise Form is a conceptual image.

-3->> Put a circle in the “Approve” boxand fill in the number(s) of thecandidates disapproved

Instructions on exercising your voting rights via the Internet
By reading QR code:
Smart Exercise®

By inputting voting right
exercise code/password

You can log in to the voting right exercise website
without entering your Voting Right Exercise Codeand Password.

Voting right
exercise website

1. Read the QR code shown on the lower right section of your1. Access the voting right exercise website

https://www.web54.net

Voting Right Exercise Form
Voting Right
Exercise Form

No. of voting
rightsShareholder
No.

nn

To:

mm dd, yyyy
(Cut here)

Click “Next”
Smartphone login
QR code for voting
websiteSampleSample2. Please enter the “Voting Right Exercise Code” shown on the
Voting Right Exercise Form.
*QR code is a registered trademark of Denso Wave Incorporated.

Input the “Voting
Right Exercise
Code”

2. From then onwards, indicate approval or disapproval by
inputting according to the diagram instructions

Click “Log in”

3. Input the “Password” shown on your Voting Right Exercise
Form.
Input the “Initial
Password”

Set a new password
to be used

Exercise of your voting rights via Smart
Exercise® can be done only once.
To revise the exercise of your voting rights after the exercise,you should access the website for PCs and log in by inputting
your voting right exercise code and password shown on your
Voting Right Exercise Form, and then exercise your voting
rights again.
* Reading the QR code again will let you transition to thewebsite for PCs.

Click “Register”

4. From then onwards, indicate approval or disapproval by
inputting according to the diagram instructions* The operational diagram is a conceptual image.

Should you have any doubt about how to use a PC,
smartphone or mobile phone for exercising voting
rights via the internet, please feel free to inquire at
the contact point shown on the right.

Sumitomo Mitsui Trust Bank
Securities proxy web support-dedicated telephone number
Tel.: 0120-652-031 (toll-free number)(Reception hours 9:00 - 21:00)

Institutional investors are able to use a voting rights electronic exercise platform for them that is run by ICJ, Inc.

-4-

Reference Documents for the Annual Meeting of Shareholders
Meeting Agenda and Referential Matters

Item No. 1: Appropriation of Retained Earnings
The Company deems the distribution of profits to shareholders as one of its most important management
policies. Its basic policy on profit distribution is to continue to pay dividends stably and adequately in ways
in keeping with its business performance while working to strengthen its corporate structure and accumulateinternal reserves in preparation for future business expansion. The Company intends to pay an ordinary
dividend of 8 yen per share, and appropriate retained earnings as follows.
1. Other appropriation of retained earnings(1) Item causing higher retained earnings and its amount
General reserve
1,000,000,000 yen(2) Item causing lower retained earnings and its amount
Retained earnings brought forward
1,000,000,000 yen
2. Year-end dividend(1) Form of dividends
Cash payment(2) Allocation of dividends to shareholders and total amount of dividends
Dividend per common share of the Company: 8 yen
Total amount of dividends: 297,462,488 yen(3) Effective date on which dividends are disbursed from retained earnings
March 31, 2023
As the Company paid an interim dividend of 8 yen per share in September last year, the annual
dividend will be 16 yen per share.

-5-

Item No. 2: Partial Amendment to the Articles of Incorporation
1. Reason for proposal
To strengthen the management structure, we propose making an addition to Article 22(Representative Directors and Directors with Executive Positions) of the current Articles ofIncorporation stating that the Board of Directors may appoint a Chief Executive Officer (CEO), Chief
Operating Officer (COO) and Chief Financial Officer (CFO).
2. Revision
The proposed revision is as follows.
The existing Articles of Incorporation(Representative Director and Director with
Executive Position)
Article 22 (Omitted)[2] (Omitted)(New stipulation)(The part underlined denotes the revision.)
Proposed revision(Representative Director and Director with
Executive Position)
Article 22 (Unchanged)[2] (Unchanged)[3] The Board of Directors may, by its
resolution, appoint a Chief Executive
Officer (CEO), Chief Operating
Officer (COO), and Chief Financial
Officer (CFO), one each.

-6-

Item No. 3: Election of Nine (9) Directors
The term of office of all nine (9) Directors will expire at the conclusion of the Annual Meeting of
Shareholders. Accordingly, the Company requests the election of nine (9) Directors.
The candidates for Director are as follows.
CandidateNo.

Current Position and Responsibility at
Company

Name

Attendance atmeetings ofBoard ofDirectors
14 times/14 times(100%)

Masami Zaiki

Re-electionMale

2

Makoto Araga

Re-election
Male

3

Nobuhiro Uejima

Re-election
Male

4

Shigehiro Yamazoe

Re-election
Male

Director and Corporate Officer
General Manager, Control System
Division in charge of productionengineering unit

14 times/14 times(100%)

5

Shinichi Matsumoto

Re-election
Male

Director and Corporate Officer
in charge of finance unit and branchadministration unit

14 times/14 times(100%)

6

Motoki Asai

Director and Corporate Officer
General Manager of Fastener Division

12 times/12 times(100%)

7

Mitsuru Shiomi

Director

14 times/14 times(100%)

8

Kazuyuki Hirao

Director

14 times/14 times(100%)

9

Konomi Katsumi

Director

14 times/14 times(100%)

1Re-electionMale
Re-election
Male
OutsideIndependentRe-election
Male
OutsideIndependentRe-election
FemaleOutsideIndependent

Representative Director and President
Representative Director and Senior
Managing Corporate Officer in charge ofbusiness administration units and Headof Sustainability Promotion OfficeDirector and Corporate Officer
General Manager, Business Department,
Medical New Business Division in
charge of research & development unit,
General Manager, Research &Development Department

14 times/14 times(100%)

14 times/14 times(100%)

Notes: 1. Outside and Independent represent candidates for Outside Director and independent officer, respectively.
2. Mr. Motoki Asai’s attendance covers the Board of Directors meetings held after his appointment on March
30, 2022.

-7-

Candidate
No.

Name
(Date of birth)
March 1971
March 2005
March 2010
March 2011
March 2013
March 2019

April 1991
March 2018

2

Number of theCompany’s
shares owned

Joined the Company
Director
Managing Director
81,212
Representative Director
Representative
DirectorandPresident
Re-election
Representative Director, President and Chief
Male
Executive Officer (incumbent)(Reasons for nominating as candidate for Director)
Mr. Zaiki, having been serving as President of the Company since March 2013, drives the business
management of the Group with a strong leadership and decision-making ability toward achieving its longterm vision and the Medium-term Management Plan. He is nominated for the position of Director withthe expectation that he will contribute to the realization of the Company’s management vision of“Offering manufacturing solutions that will make us a company known and sought after worldwide,”with his high level of knowledge in corporate management and domestic and overseas industries.
Masami Zaiki(October 22,
1950)

1

Brief profile, position and responsibility,
and significant concurrent positions

Joined the Company
Director General Manager, Corporate Planning
Department General Manager, Personnel andGeneral Affairs Department General Manager,
Audit Department
October 2018
Director in charge of business administration
units
March 2019
Director and Corporate Officer in charge ofbusiness administration units
Managing Director and Managing Corporate
Makoto Araga March 2020
Officer in charge of business administration(October 11,
units
1968)
21,808March 2021
Representative Director and Managing
Corporate
Officerinchargeofbusiness
Re-election
administration units
Male
October 2021
Representative Director and Managing
Corporate Officer in charge of businessadministration units and Head of Sustainability
Promotion Office
March 2022
Representative Director and Senior Managing
Corporate Officer in charge of businessadministration units and Head of Sustainability
Promotion Office
President and Representative Director, Nitto
Koshin Co., Ltd. (incumbent)(Reasons for nominating as candidate for Director)
Mr. Araga has been performing the function of overseeing and supervising our overall operations in his
capacity as Representative Director since March 2021. As officer in charge of business administration
units, Mr. Araga also plays a central role in various ways, such as working towards achieving the
Medium-term Management Plan, promoting sustainability management, reinforcing governance, andpursuing regional vitalization and health and productivity management under our founding philosophy.
We expect that he will continue to play a leading role in our Group’s new medium-term management
plan, and we continue to nominate him as a candidate for Director.

-8-

Candidate
No.

Name
(Date of birth)

Brief profile, position and responsibility,
and significant concurrent positions
November 1986
April 2008

3

Number of theCompany’s
shares owned

Joined the Company
Managing Director of Shiho Screw IndustrialCo., Ltd. and Chairman of Nitto Precision
Screw Industrial (Zhejiang) Co., Ltd.
October 2012
General Manager, Quality Control Department,
Fastener Division, the Company
March 2015
Director, Deputy General Manager of Fastener
Division and General Manager ofNobuhiro
Manufacturing
Division
UejimaMarch
2016Director,
GeneralManager of Fastener(August 4, 1959)
17,734
Division and Quality Control Division
March
2018
Directorinchargeofbranchadministration
Re-election
units and Tokyo Branch Manager
Male
March 2019
Director and Corporate Officer in charge ofbranch administration units
Branch Manager, Tokyo Branch
March 2021
Director and Corporate Officer, General
Manager of Business Department, Medical
New Business Division in charge of research &development unit, General Manager, Research& Development Department (incumbent)(Reasons for nominating as candidate for Director)
Mr. Uejima demonstrates leadership in promoting new businesses in the medical field by leveraging his
awareness for innovation and global matters nurtured through managing the Fastener Division andoverseas group companies. He continues to be a candidate for Director in anticipation of his role in the
expansion of the medical business in the new Medium-term Management Plan, including the practicalapplication of in vivo dissolvable high-purity magnesium materials for medical use and the developmentof medical devices.

-9-

Candidate
No.

Name
(Date of birth)

Brief profile, position and responsibility,
and significant concurrent positions

Number of theCompany’s
shares owned

October 1989
April 2011

4

Joined the Company
General Manager, Manufacturing Department,
Control System Division
October 2014
General Manager, Production Engineering
Shigehiro
Department
YamazoeMarch 2017
Director, General Manager, Control System(February 15,
Division General Manager, Production
1960)
12,607
Engineering Department
March 2019
Director and Corporate Officer, General
Re-election
Manager, Control System Division General
Male
Manager, Production Engineering Department
March 2020
Director and Corporate Officer, General
Manager of Business Department, Control
System Division, in charge of Production
Engineering units (incumbent)(Reasons for nominating as candidate for Director)
Mr. Yamazoe has extensive knowledge of the inspection equipment industry through managing theControl System Division. As an officer in charge of production engineering units, he exercises leadershipfor our environment control activities towards improving global environments. He continues to be a
candidate for Director in anticipation of his role in the expansion of the Control System business in the
new Medium-term Management Plan, environmental responsiveness in all business activities, andinnovative research and development.
April 1987
April 2015
March 2018

5

Joined the Company
General Manager of Finance Department
Director and General Manager of Finance
Department
October 2018
Director in charge of finance unit, General
ShinichiManager of Finance Department
Matsumoto
March 2019
Director and Corporate Officer in charge of(October 16,
finance unit, General Manager of Finance
1964)
11,476
Department
March 2020
Director and Corporate Officer in charge of
Re-election
finance and audit units
Male
March 2021
Director and Corporate Officer in charge offinance and audit units, General Manager ofAudit Department
March 2022
Director and Corporate Officer in charge offinance and branch administration units(incumbent)(Reasons for nominating as candidate for Director)
Mr. Matsumoto contributes from a financial aspect to the management of our Company Group by
utilizing his extensive knowledge in accounting and finance, while providing leadership in improving themanagement of bases in Japan and strengthening the governance structure. He continues to be a candidate
for Director in anticipation of his role in the financial strategy of the new Medium-term Management
Plan and in supporting business expansion at bases in Japan.

- 10 -

Candidate
No.

Name
(Date of birth)

Brief profile, position and responsibility,
and significant concurrent positions

Number of theCompany’s
shares owned

April 1985
October 2013
April 2015

6

Joined the Company
Branch Manager, Osaka Branch
Branch Manager, Nagoya Branch General
Motoki AsaiManager, Sales Department, Fastener Division(January 14,
April 2018
Deputy General Manager, Fastener Division
1967)
7,371
March 2019
Corporate Officer, Deputy General Manager ofFastener
Division
Re-election
March 2020
Corporate Officer, General Manager ofMale
Fastener Division
March 2022
Director and Corporate Officer, General
Manager, Fastener Division (incumbent)(Reasons for nominating as candidate for Director)
Mr. Asai contributes to the growth of the Fastener Business by leveraging his extensive knowledge ofthe fastener industry along with advanced information-gathering ability based on his sales experience
over many years. He also demonstrates leadership in our effort to expand the business domain throughgroup-wide collaboration. He continues to be a candidate for Director in anticipation of his role inexpanding the Fastener Business in the new Medium-term Management Plan and improving management
efficiency by optimizing the Group.
April 1989
July 2002
October 2006

7

Joined the Company
Resigned from the Company
Registered as a practicing attorney (Kyoto Bar
Association) (incumbent)
Established Shiomi Law Office (Kyoto City)
Mitsuru Shiomi April 2007
Relocated Shiomi Law Office (Fukuchiyama(July 29, 1962)
City) (incumbent)
March 2008
Registered as Certified Public Tax Accountant
Re-election(Kinki Certified Public Tax Accountants’
17,265
Male
Association)
OutsideMarch 2016
Outside Director of the Company (incumbent)
May 2019
Audit & Supervisory Board Member, SATO,
Independent
Inc. (incumbent)
October 2019
Director, social welfare corporation
Kuushinfukushikai (incumbent)
May 2021
Audit & Supervisory Board Member, Maizuru
Warehouse Co., Ltd. (incumbent)(Reasons for nominating as candidate for Outside Director and outline of expected roles )Mr. Shiomi provides appropriate advice by leveraging his advanced professional knowledge of legal
matters, accounting and taxation. As a member of the Nomination and Remuneration Committee, he also
carries out an oversight function from an objective viewpoint in the process of nominating Directors anddetermining their remuneration and in setting the succession plan for the CEO, etc. He continues to be
nominated as an outside Director with the expectation that he will provide advice on intellectual property
and financial strategies, in addition to ensuring the transparency of the Board of Directors.

- 11 -

Candidate
No.

Name
(Date of birth)

Brief profile, position and responsibility,
and significant concurrent positions
August 1998

8

Number of theCompany’s
shares owned

Professor, Department of Material Chemistry,
Graduate School of Engineering, Kyoto
University
December 2006 President, Kyoto City Innovation Center
President, Nanotechnology Hub, Kyoto
Kazuyuki Hirao January 2013
University(May 29, 1951)
July 2014
Chairman, Kyoto Green Chemical Network(incumbent)
Re-election
4,385
March 2017
Outside Director of the Company (incumbent)
MaleApril 2017
Professor Emeritus and Specially Appointed
OutsideProfessor, Kyoto University (incumbent)
Independent
April 2017
President, Advanced Chemical Technology
Center in Kyoto (incumbent)
June 2017
President, The Ceramic Society of Japan
April 2018
President, Katsura Innovation Center in Kyoto(incumbent)(Reasons for nominating as candidate for Outside Director and outline of expected roles )Mr. Hirao has experience as head of many organizations and extensive knowledge as university professor,
and gives us appropriate advice although he has not been directly involved in corporate operations expect
for as outside director. As a member of the Nomination and Remuneration Committee, he also carries
out an oversight function from an objective viewpoint in the process of nominating Directors anddetermining their remuneration and in setting the succession plan for the CEO, etc. He continues to be
nominated as an outside Director with the expectation that he will provide advice on monozukuri(manufacturing) contributing to the market materiality and financial strategies, in addition to ensuring
the transparency of the Board of Directors.

- 12 -

Candidate
No.

Name
(Date of birth)

Brief profile, position and responsibility,
and significant concurrent positions
January 2000

9

Number of theCompany’s
shares owned

Registered as a Labor and Social Security
Attorney(Osaka Association of Labor and Social
Security Attorneys)
January
2000
Established Katsumi Labor and Social Security
Konomi
Attorney
Office (incumbent)
KatsumiSeptember
2005
FounderandPresident of Three by Three(September 10,
April
2007
Industrial
Counselor(certified by the
1964)
Association of Industrial
867
Counselors) (incumbent)
Re-election
April 2007
Registered as a Specified Labor and Social
FemaleSecurity Attorney
Outside(Kyoto Association of Labor and Social
Independent
Security Attorneys) (incumbent)
April 2008
Career consultant (incumbent)
March 2019
Outside Director of the Company (incumbent)
July 2019
Representative Director, Three by Three Co.,
Ltd. (incumbent)(Reasons for nominating as candidate for Outside Director and outline of expected roles )Ms. Katsumi, providing human capital consulting incorporating mental health and work-life balance
perspectives as corporate business strategy elements, gives us appropriate advice towards vitalizing
human resources as aimed for by the Company. As a member of the Nomination and Remuneration
Committee, he also carries out an oversight function from an objective viewpoint in the process of
nominating Directors and determining their remuneration and in setting the succession plan for the CEO,etc. She continues to be nominated as an outside Director with the expectation that she will provide advice
on human capital management to revitalize the organization, in addition to ensuring transparency of theBoard of Directors.

- 13 -

Notes:1.
There are no special conflicts of interest between each of the candidates and the Company.
2.
Mr. Mitsuru Shiomi, Mr. Kazuyuki Hirao, and Ms. Konomi Katsumi are the candidates for Outside Director.
3.
Mr. Mitsuru Shiomi’s term in office as Outside Director of the Company will be seven years at the conclusionof the Annual Meeting of Shareholders.
4.
Mr. Kazuyuki Hirao’s term in office as Outside Director of the Company will be six years at the conclusion of
the Annual Meeting of Shareholders.
5.
Ms. Konomi Katsumi’s term in office as Outside Director of the Company will be four years at the conclusionof the Annual Meeting of Shareholders.
6.
Mr. Mitsuru Shiomi served the Company as an employee in the past but satisfies the independence criteria
stipulated by the Tokyo Stock Exchange in addition to requirements for an outside director prescribed by theCompanies Act. If Mr. Shiomi is re-elected, the Company will continue to designate him as an independent
officer and file the designation with the Exchange.
7.
Mr. Kazuyuki Hirao and Ms. Konomi Katsumi satisfy the independence criteria stipulated by the Tokyo Stock
Exchange in addition to requirements for an outside director prescribed by the Companies Act. If they are reelected, the Company will continue to designate them as independent officers and file the designation with the
Exchange.
8.
Pursuant to the provisions of Article 427, Paragraph 1 of the Companies Act, the Company has concluded anagreement with each of Mr. Mitsuru Shiomi, Mr. Kazuyuki Hirao, and Ms. Konomi Katsumi to limit their
liability under Article 423, Paragraph 1 of the Act. The Company will continue the agreement in the event they
are re-elected. The amount of liability under the agreement shall be limited to the minimum amount provided forby laws and regulations.
9.
The Company has concluded with an insurance company a director liability insurance agreement as stipulated
in Article 430-3, Paragraph 1 of the Companies Act, and the insurance agreement is intended to indemnify forlegal damage liability and litigation expenses, etc. to be incurred by an insured entity. If nominees are re-elected,
they will continue to be included as insured under the insurance policy. The next renewal is expected to bewithout alteration.

- 14 -

<Reference>
If Item No. 3 is approved as proposed, the composition of Directors will be as shown below. In light of the management
strategies of the Company, the expertise and experience of Directors are as follows.

Corporate
Operations
Sustainability,
ESG
Finance,
Accounting
Corporate legal
affairs,
Riskmanagement,
Compliance
Governance
Manufacturing,Technology,
Innovation
Personnel,
Labor,
Human resource
development
Brand
strategies,
Marketing,
Sales
Overseas
operation,
International
experience,
Globalawareness
Industryknowledge

Masami
Zaiki

MakotoAraga●●

Nobuhiro
Uejima●Shigehiro
Yamazoe

ShinichiMatsumoto

Motoki
Asai

●

●

●

●

●

●

●
●

Mitsuru
Shiomi
OutsideLawyerKazuyuki
Hirao
OutsideUniversity
professor

Konomi
KatsumiOutsideLabor
andSocialSecurity
Attorney

●

●

●
●

●

●

●
●

●

●

●

●

●

●

●

●

●

- 15 -●●

Item No. 4: Election of One (1) Auditor
The term of office of Auditor Katsuhiko Mizoguchi will expire at the conclusion of the Annual Meeting of
Shareholders. Accordingly, the Company requests the election of one (1) Auditor.
In addition, the Board of Auditors has given consent to this proposed Item.
The candidate for Auditor is as follows.
Name(Date of birth)
Shinichiro
Morita(June 13, 1957)
New candidate
Male
OutsideIndependent

Brief profile, position, and significant concurrent positions
September 1988
April 2011
April 2013
April 2018
June 2021

Joined Gunze Ltd.
Head of 5th Laboratory , Research and Development
Department
Corporate Officer, General Manager of Medical DivisionCorporate Officer, General Manager of Medical Division
and General Manager of QOL Research Center
Corporate Auditor (incumbent)

Number of theCompany’s
shares owned

0(Reasons for nominating as candidate for outside Auditor)
Mr. Shinichiro Morita has served as a corporate officer of Gunze Ltd. and currently serves as Corporate Auditor of
Gunze Ltd. We have nominated him as a candidate for Outside Auditor in the belief that he will apply his extensive
experience and broad knowledge to improve soundness and transparency of the Company’s auditing operations.
Notes:
1.
There are no special conflicts of interest between Mr. Morita and the Company.
2.
Mr. Morita is a new candidate for Outside Auditor.
3
Gunze Ltd., where Mr. Morita serves as Corporate Auditor, is a shareholder of the Company, but there are notransactions between Gunze and the Company that require special mention.
4.
Mr. Morita satisfies the independence criteria stipulated by the Tokyo Stock Exchange in addition torequirements for an outside auditor prescribed by the Companies Act. If he is elected, the Company will designate
him as an independent officer and file the designation with the Exchange.
5.
If Mr. Morita is elected as Auditor, the Company will conclude an agreement with him to limit his liability under
Article 423, Paragraph 1 of the Companies Act pursuant to the provisions of Article 427, Paragraph 1 of thesame Act. The amount of liability under the agreement shall be limited to the minimum amount provided for bylaws and regulations.
6.
The Company has concluded with an insurance company a director liability insurance agreement as stipulated
in Article 430-3, Paragraph 1 of the Companies Act, and the insurance agreement is intended to indemnify forlegal damage liability and litigation expenses, etc. to be incurred by an insured entity. If Mr. Morita is elected,
he will be included as insured under the insurance policy. The next renewal is expected to be without alteration.

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Item No. 5: Election of One (1) Substitute Auditor
As the appointment of a Substitute Auditor will expire at the commencement of this Annual Meeting of
Shareholders, in preparing for the event where the number of Outside Auditors stipulated by law is not met,
the Company requests the election of Mr. Hiroto Shikata as a substitute for Outside Auditor Hirokazu
Tagano and Outside Auditor Shinichiro Morita, who will assume the office of Outside Auditor if Item No.
4 is approved as proposed.
In addition, the Board of Auditors has given consent to this proposed Item.
The candidate for substitute Auditor is as follows.
Name(Date of birth)

Brief profile, position, and significant concurrent positions

Number of theCompany’s
shares owned

April 1995

Registered as Registered Management Consultant(Kyoto Small and Medium Enterprise Management
Consultant Association)(incumbent)
June 2006
Registered as Certified Public Accountant (The JapaneseInstitute of Certified Public Accountants, Keijikai)
Hiroto Shikata(incumbent)(July 27, 1968) November 2007 Registered as Certified Public Tax Accountant (Kinki
Certified Public Tax Accountants’ Association)0
Outside(incumbent)
Independent
July 2011
Established MHC Advisory Service Co., Ltd.
President (incumbent)
Male
July 2017
Established MHC Tax co.
President (incumbent)
June 2019
Vice Chairman, The Japanese Institute of Certified Public
Accountants, KeijikaiJune 2022(Vice Chairman, Kyoto Small and Medium EnterpriseManagement Consultant Association) (incumbent)(Reasons for nominating as candidate for substitute outside Auditor)
As a certified public accountant and certified public tax accountant, Mr. Shikata is equipped with advanced
specialized knowledge in corporate accounting and tax affairs. We have nominated Mr. Shikata as a candidate for
Substitute Outside Auditor as we expect he will utilize such knowledge for enhancing the soundness and transparencyof audit duties at the Company.
Notes:
1.
There are no special conflicts of interest between Mr. Hiroto Shikata and the Company.
2.
Mr. Hiroto Shikata is the candidate for Substitute Outside Auditor.
3.
Mr. Hiroto Shikata satisfies the independence criteria stipulated by the Tokyo Stock Exchange in addition torequirements for an outside auditor prescribed by the Companies Act. If he is elected and assumes office, theCompany will designate him as an independent officer and file the designation with the Exchange.
4.
In the event Mr. Hiroto Shikata is elected and assumes office, the Company will conclude an agreement with
him to limit his liability under Article 423, Paragraph 1 of the Companies Act pursuant to the provisions ofArticle 427, Paragraph 1 of the same Act. The amount of liability under the agreement shall be limited to theminimum amount provided for by laws and regulations.
5.
The Company has concluded with an insurance company a director liability insurance agreement as stipulated
in Article 430-3, Paragraph 1 of the Companies Act, and the insurance agreement is intended to indemnify forlegal damage liability and litigation expenses, etc. to be incurred by an insured entity. If Mr. Hiroto Shikata iselected and assumes office as Outside Auditor, he will be included as insured under the insurance policy. The
next renewal is expected to be without alteration.

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Item No. 6: Revision of Amount and Details of Stock Compensation, etc., to Directors andContinuation of the System
1. Reason for the Proposal and Basis for Appropriateness of the Remuneration
The remuneration of the Company’s Directors (excluding Outside Directors) consists of baseremuneration, officer’s bonus, and stock compensation. Stock compensation was introduced at the111th Annual Meeting of Shareholders held on March 30, 2017, with the approval of the shareholders
as a stock compensation plan using a trust (hereinafter referred to as the “Plan”). Based on a reviewof the remuneration system for Directors, the Company requests approval to add a performancelinked element to this Plan and to continue this Plan after changing the maximum amount that theCompany will contribute to the Trust to fund the acquisition of the Company’s shares necessary fordelivering them to Directors.
The Company also requests that the details be left to the discretion of the Board of Directors within
the framework of 2. below.
The Plan was introduced for the purpose of clarifying the linkage between Directors’ remunerationand the Company’s share value, so that Directors will not only enjoy the benefits of an increase in
the stock price but also bear the risk of a decline in the stock price, and share the benefits and risks
associated with stock price fluctuations with shareholders, thereby enhancing their awareness of theneed to contribute to improving the Company’s performance and increasing its value over the
medium to long term. In addition to this purpose, we have decided to add a new performance-linked
element to the Plan, which is linked to the Medium-term Management Plan “Mission G-second,” inorder to give Directors more incentives to further achieve their performance targets and sustainably
increase corporate value. We believe that achieving the above purposes will contribute to therealization of a “Sustainable Group,” which is the strategic theme set forth in the Medium-termManagement Plan “Mission G-second.”
As before, the remuneration limit for the Plan will be separate from the limit on remuneration for
Directors approved at the 101st Annual Meeting of Shareholders held on March 29, 2007 (themaximum annual amount of 200 million yen). The remuneration under the Plan as modified by the
proposed Item will be paid to Directors (excluding Outside Directors; the same shall apply
hereinafter) in office during the three fiscal years from the fiscal year ending December 31, 2023 to
the fiscal year ending December 31, 2025; provided, however, that the eligible period (hereinafterreferred to as “Period Covered”) may be extended, as described below.
A summary of the policy details for determining remuneration of individual Directors at our company
shall be as described in “3. Matters Concerning Company Officers,” under “(2) Compensation, etc.
of Directors and Auditors” in [1] of the Business Report. Subject to approval of the Proposal, theBoard of Directors resolved at its meeting held on February 14, 2023 to change the policy details as
described in this Proposal. Accordingly, the Board of Directors has determined that the contents ofthis Proposal are appropriate because they are necessary and reasonable in order to achieve thepurpose of the Plan after the change (as described above) and to pay remuneration in accordancewith such policy after the change.
If Item No. 3, “Election of Nine (9) Directors,” is approved as proposed, the number of Directors
subject to the Plan shall be six (6).
* If this proposal is approved as originally proposed, the Company plans to introduce a similar
performance-linked stock option plan for the Company’s corporate officers and certain employees.

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2. Amount and Details of Remuneration, etc. under the Plan
In order to continue the Plan, some changes will be made to the previous Plan. The amount anddetails of remuneration, etc. under the Plan after the change are as follows.
(1) Outline of the Plan
The Plan is a Stock Compensation Plan under which the Company contributes money to thetrust (which was already established when the Plan was introduced in 2017; hereinafter referred
to as the “Trust”), which acquires the Company’s shares, and delivers to each Director throughthe Trust a number of Company shares equivalent to the number of points granted by theCompany to each Director.
Directors shall, in principle, receive the Company’s shares when they retire.
[1]

Persons Covered by the Plan

[2]

Period Covered

[3]

[4]
[5]
[6]
[7]

Directors (excluding outside Directors)
For the fiscal year ending December 31, 2023
through the fiscal year ending December 31, 2025

Maximum amount of money the Company willcontribute as funds for the acquisition of its
shares necessary to deliver to the persons in [1] Total amount of 150 million yen
during the period covered in [2] in the three fiscal
years
By way of disposition of treasury shares or by
Method of acquisition of Company’s sharesacquiring them from the stock exchange markets(including off-floor transactions)
Maximum total number of points to be granted to150,000 points per fiscal year
persons in [1]Points shall be granted based on the degree of
Criteria for granting points
achievement expected of their position andperformance targets, etc.
Timing of delivery of Company shares to the
In principle, at the time of retirement
persons in [1](2) Maximum amount of money to be contributed by the Company
The Company will extend the trust period of the Trust already established, and will additionallyplace an amount of money up to 150 million yen in total in trust as remuneration for Directors
during the Period Covered by the Plan to fund the acquisition of the Company’s Stock
Compensation necessary for the delivery of shares to Directors as stock compensation under thePlan; provided, however, that if the number of the Company’s shares in the Trust is insufficient
to deliver the Company’s shares equivalent to the points granted under the Plan before theamendment, the Company may additionally entrust money up to such limit to fund theacquisition of Company's shares equivalent to the points granted before the amendment under
the Plan after the approval of this proposed item. The Trust will acquire shares of the Company’s
stock using the money held in trust by the Company as the source of funds (in addition to themoney additionally entrusted by the Company as described above, this includes the money
remaining in the Trust from before the additional trust), either by disposing of the Company’s
own shares or by acquiring such shares from the stock exchange markets (including off-floortransactions).
Notes: The amount of money that the Company will actually additionally entrust to the Trust
will be the sum of the above-mentioned funds for the acquisition of the Company’s
shares and the estimated amount of necessary expenses such as trust fees and trust
administrator’s commissions.
In addition, the Company’s Board of Directors may, by its resolution, extend the Period Covered
for a period of up to 5 fiscal years, determined each time, and further extend the trust period of
the Trust accompanying such extension (including the extension of the Trust period in effect by- 19 -

transferring trust assets of the Trust to a trust established by the Company for the same purposeas the Trust; the same shall apply hereinafter) to continue the Plan.
In this case, during the
Period Covered by such extension, the Company shall additionally entrust the Trust with anamount of money up to 50 million yen multiplied by the number of fiscal years during the period
covered by such extension, as funds for additional acquisition of the Company shares necessary
to be delivered to the Directors under the Plan, to continue the granting of points and deliveryof Company’s shares as described in (3) below.
In addition, if the Plan is not continued without extending the period covered by the Trust as
described above, for Directors who have already been granted points but have not yet retired at
the expiration of the Trust period, the trust period may be extended until such Directors retire
and the delivery of Company shares is completed.
(3) Maximum number of Company shares to be delivered to Directors and calculation method
thereof[1] Method of granting points to Directors, etc.
In accordance with the share delivery rules stipulated by the Company’s Board of Directors,
the Company shall grant points to each Director on the date of grant as stipulated in theshare delivery rules during the trust period in proportion to their position and achievementof performance targets, etc. (initially, “Operating Margin,” “ROE,” “ROIC,” and “ESG
Indicators (% of achievement of CO2 reduction targets)” as set forth in the Medium-termManagement Plan “Mission G-second”); provided, however, that the total number ofpoints to be granted to Directors by the Company shall be limited to 150,000 points per
fiscal year, the same as in the Plan before the change.
[2] Delivery of Company shares in proportion to the number of points granted
Directors shall receive Company shares in proportion to the number of points grantedin [1] above, in accordance with the procedures described in [3] below; provided, however,that if the Directors retire for personal reasons, etc., all or part of the points granted up tothat time shall be extinguished, and such Directors shall not receive shares of the Company
in proportion to the points that have been extinguished.
One point shall be equivalent to one share of Company stock; provided, however, that if it
is deemed reasonable to adjust the number of Company shares to be delivered, such as in
the case of a stock split or reverse stock split, the number of Company shares per point shallbe adjusted according to the split or reverse stock split ratio.
[3] Delivery of Company shares to Directors
Each Director shall, in principle, acquire the beneficial interest in the Trust by following
the prescribed procedures upon retirement, and as a beneficiary of the Trust, receive fromthe Trust the delivery of shares of the Company as described in [2] above (this includes
shares of Company stock in proportion to the points granted under the Plan prior to thechange);provided, however, that a certain proportion of the Company’s shares may be sold andconverted into cash on the Trust for the purpose of the Company’s withholding of funds
for withholding taxes and other tax payments and they may be paid in cash in lieu ofCompany’s shares. In addition, if shares of the Company in the Trust are converted into
cash, such as when such shares are tendered and settled, they may be paid in cash in lieu ofshares of the Company.
(4) Exercise of voting rights
Voting rights pertaining to the Company’s shares in the Trust shall not be exercised uniformly
based on the instructions of the Trust Administrator, who is independent of the Company andits officers. In this way, the Company intends to ensure neutrality toward the Company’s
management with respect to the exercise of voting rights pertaining to the Company’s shares in
the Trust.
(5) Handling of dividends
Dividends on the Company’s shares in the Trust shall be received by the Trust and used to pay
for the acquisition of the Company’s shares and trust fees for the trustee of the Trust.
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Reference: Policy for Determining Individual Remuneration, etc. of the Company’s Directors for the 118th
Period (FY2023)
At the Board of Directors meeting held on February 12, 2021, the Company resolved a policy for
determining the content of remuneration, etc. for each individual Director. We have decided to add a new
performance-linked element to the Stock Compensation Plan, which is linked to the Medium-termManagement Plan “Mission G-second,” and partially review the Plan, in order to give Directors more
incentives to further achieve their performance targets and sustainably increase corporate value.
Subject to approval of the proposed Item on remuneration, etc. of Directors at the 117th Annual Meetingof Shareholders as originally proposed, the Company has established the following policy for determining
remuneration, etc. of individual Directors of the Company.
[1] Matters on the policy for determining the amount of remuneration, etc. of Directors and themethod of calculation thereof
The Company’s Basic Policy is to link the remuneration of Directors to the interests ofshareholders in order to function as an incentive to continuously increase corporate value, andto set the remuneration of individual Directors at an appropriate level considering theirrespective duties.
Specifically, remuneration for Executive Directors consists of a fixed base remuneration,
Officers’ bonuses, and a performance-linked stock option, while for Outside Directors, onlybase remuneration is paid in consideration of their duties.
The Nomination and Remuneration Committee shall, in consultation with the Board of Directors,
deliberate and report to the Board of Directors on the basic policy for the Directors’
remuneration, etc., the maximum amount of Directors’ remuneration, and other importantmanagement items related thereto.
a. Policy on determining the amount of base remuneration (monetary compensation) paid toeach individual
The base remuneration of Directors shall be a monthly fixed compensation, determinedaccording to the position, role, and job responsibilities, considering the balance of theCompany’s business performance, social standards, and employee payroll, as well as theCompany’s corporate size.
b. Policy for determining the details and amount of performance-linked incentives, etc. andnon-monetary rewards, etc. and the calculation method thereof
Performance-linked incentives, etc. are based on the level of consolidated operating income
achieved in a single fiscal year, and are paid at a certain time each year as bonuses
calculated by comprehensively considering the status of medium-term management tasks,
bonus payments to employees, governance status, and other factors.
Introduced for the purpose of providing incentives for medium- and long-term performance
improvement and increase in corporate value, the non-monetary rewards, etc. shall be a
performance-linked stock option in which Company’s stock are granted through a trust
established by the Company in proportion to the number of points granted to Directors inaccordance with the Company’s share delivery rules, setting performance achievement
criteria such as “operating margin,” “ROE,” “ROIC,” and “ESG indicator (achievementtargets for CO2 reduction rate).
c. Policy for determining the proportion of base remuneration (monetary compensation),
performance-linked incentives, and non-monetary rewards, etc. for each individual
Director
The Nomination and Remuneration Committee will consider the proportion of
remuneration for each type of executive Director, based on a remuneration survey
conducted by a third-party organization, and considering remuneration levels benchmarked
to companies of a similar size and affiliated enterprises in the same or related industries
and business categories as the Company, with the structure where the more senior the
position, the more performance-linked the compensation will be. The Board of Directors
respects the Nomination and Remuneration Committee’s report and determines the detailsof remuneration for each individual Director within the scope of the categories indicated in
the report.
- 21 -

The proportion of amount for base remuneration, performance-linked incentives, and non-monetary
rewards, etc. for each position is shown in the table below.
Position

Base Remuneration

Performance-linked
Non-monetary Rewards,
Incentives, etc.
etc.
Representative Director
50% - 80%
10% - 30%
5% - 25%
Senior Managing Director 50% - 80%
10% - 30%
5% - 25%
Managing Director
50% - 80%
10% - 30%
5% - 25%
Director
60% - 90%
5% - 20%
5% - 20%* Performance-linked incentives, etc. are Officers’ bonuses, and non-monetary rewards, etc. include
performance-linked stock option.
d.

Determination of remuneration for individual Directors
The President and Representative Director shall be delegated by the Board of Directors todetermine the specific amount of remuneration for each individual Director, based on the
resolution of the Board of Directors. Such authority shall include the evaluation andallocation of bonuses considering the amount of each Director’s base remuneration and theperformance of businesses for which the Director is responsible.
The Board of Directors shall obtain a report from the Nomination and Remuneration
Committee to ensure that such authority is properly exercised by the President andRepresentative Director, and shall make decisions considering the contents thereof.

The amount of remuneration, etc. of Auditors or the method of calculation thereof is determined
only by base remuneration, which is decided through consultation among Auditors within the
maximum amount of total remuneration resolved at the Annual Meeting of Shareholders.

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