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. The Company assumes noresponsibility for this translation or for direct, indirect or any other forms of damages arising from the translation.
* In order to prevent spread of COVID-19, we ask that you register in advance your attendance on the day of the General
Meeting of Shareholders. For procedures, please see page 3 (Even if you fail to register in advance, you may enter the venue).
* For this Extraordinary General Meeting of Shareholders, you will not be able to attend the meeting via the Internet or speak
up by telephone, etc. on the day of the meeting. If you would like to attend the meeting on the day of the meeting, please doso after registering in advance.
* When attending the meeting, we ask you that you wear masks and take your temperature to enter the venue.
* Please understand in advance that we do not prepare any souvenirs for attending shareholders.

Securities code: 9749
November 18, 2022
To Shareholders with Voting Rights:
Satoyasu Sakashita
President & Representative Director
FUJI SOFT INCORPORATED
1-1 Sakuragi-cho, Naka-ku, Yokohama-shi,
Kanagawa

NOTICE OF CONVOCATION OF
THE EXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS
Dear Shareholders:
We would like to express our appreciation for your continued support and patronage.
This is to notify you that the Extraordinary General Meeting of Shareholders of FUJI SOFT
INCORPORATED (the “Company”) will be held for the purposes as described below.
This Extraordinary General Meeting of Shareholders is to be held in accordance with a request from ashareholder. The presented proposals include that by the Company (Proposal 1), that by both the Company andthe shareholder (Proposal 2), and that by the shareholder (Proposal 3). While the details of the proposals areshown in the Reference Documents for the General Meeting of Shareholders below, the Board of Directors of
the Company is opposed to Proposal 3, the proposal only by the shareholder. For the opposition from the Boardof Directors of the Company on Proposal 3, please see pages 25 to 26.
Instead of attending the meeting, you may exercise your voting rights in writing or by voting via the Internet.
Please review the Reference Documents for the General Meeting of Shareholders as described hereinafter andexercise your voting rights by no later than 5:30 p.m. on Friday, December 2, 2022, Japan Time. You arerequested to exercise your voting rights either by indicating your votes for or against the proposals on theenclosed Voting Rights Exercise Form and returning the form so that it will be received by the above deadline,
or by accessing our designated website for exercising voting rights (https://evote.tr.mug.jp/) (Japanese only) andentering your votes by the above deadline, following the “Guidance for Exercising Your Voting Rights” as
described hereinafter.
1. Date and Time:
2. Place:

Sunday, December 4, 2022 at 3:00 p.m., Japan time (reception starts at 2:00
p.m.)
FUJISOFT AKIBA HALL, 5F, FUJISOFT Akihabara Building,
3 Kandaneribei-cho, Chiyoda-ku, Tokyo

3. Meeting Agenda:
Proposals to be resolved:<Proposal by the Company>
Election of Three (3) Directors
Proposal 1:< Proposal by the Company and a Shareholder>
Election of Two (2) Directors
Proposal 2:<Proposal by a Shareholder>
Election of Two (2) Directors
Proposal 3:-1-(1) If you submit a Voting Rights Exercise Form without indicating your approval or disapproval for any
proposal, your vote for the proposal shall be counted as approval for Proposals 1 and 2 and disapprovalfor Proposal 3.
(2) If you exercise your voting rights in advance via the Internet more than once, only your final voteshall be counted as valid.
(3) If you exercise your voting rights in advance both via the Internet and by submitting a Voting Rights
Exercise Form, your votes via the Internet shall be counted as valid.
(4) Please note that if you exercise your voting rights in advance by submitting a Voting Rights Exercise
Form or via the Internet and attend the meeting, the voting rights you have exercised in advance shallbe invalidated.
(5) You may exercise your voting rights by appointing one other shareholder with voting rights of theCompany as your proxy. In this case, please note that the proxy must submit to the Company adocument certifying authority of representation.
(6) Any revisions to the Reference Documents for the General Meeting of Shareholders will be posted on
the Company’s website.
https://www.fsi.co.jp/ir/soukai/meeting.html (Japanese only)* Live Stream at the General Meeting of Shareholders
This Extraordinary General Meeting of Shareholders will be streamed live via the Internet. For details,
please confirm the “Guidance for Live Stream and Recorded Stream at the General Meeting of Shareholders”
on page 7 (available in the Japanese version).
Viewing the live stream at this meeting will not come under attendance set forth in the Companies Act.
Accordingly, you will not be able to exercise your voting rights or make any statements at all including
questions via the Internet and by telephones on the day of the meeting. We ask that you exercise your voting
rights by no later than 5:30 p.m., on Friday, December 2, 2022, Japan time, in writing or by voting via theInternet.

-2-

Guidance for Exercising Your Voting Rights- If you exercise your voting rights in advance
Voting via the Internet, etc.:
Please enter your votes by no later than the voting deadline by following the instructions on the screen after
reviewing the “Guidance for Excising Your Voting Rights via the Internet” available in the Japanese version.
Voting deadline: Your votes must be entered by no later than 5:30 p.m., Friday, December 2, 2022, Japantime.
Voting in writing:
Please return the Voting Rights Exercise Form with your votes by mail.
Voting deadline: The completed form must reach us by 5:30 p.m., Friday, December 2, 2022, Japan time.
- If you attend the meeting
In order to take appropriate measures to prevent the spread of COVID-19 according to the number ofattendees, we ask that you register in advance by following the method as described below.
When you attend the meeting in person on the day of the meeting, we ask that you bring this notice ofconvocation and submit the enclosed Voting Rights Exercise Form at the reception desk.
Date and time: Sunday, December 4, 2022 at 3:00 p.m., Japan time
* Method of an application for attending at the venue
Please prepare the voting rights exercise document at hand and apply for your attendance by telephone oron the website.
(* Even if you fail to register in advance, you may enter the venue. However, your cooperation isappreciated.)
Application period: 10:00 a.m. on Friday, November 18, 2022 through 5:30 p.m. on Wednesday, November
30, 2022
Please inquire about your questions by telephone.
(1) Application by telephone
Telephone number of the secretariat of the General Meeting of Shareholders of the Company: 050-30002778(2) Application on the website
Website URL: https://www.fsi.co.jp/ir/soukai/meeting.html (Japanese only)* Please understand in advance that we do not prepare any souvenirs for attending shareholders.
* When attending the meeting, we ask you that you make sure to wear masks and take your temperature toenter the venue.

-3-

Reference Documents for the General Meeting of Shareholders
Proposals and References<Proposal by the Company>
Proposal 1:

Election of Three (3) Directors

1. Outline of the Proposal
Mr. Takao Tsuji, Mr. Hidetaka Nishina and Mr. Hikari Imai shall be elected as Directors.
2. Reason for the Proposal
As the Company has been managing its business taking into account corporate value improvementfrom the past, on February 10, 2022 the Company announced its medium-term management plan, which
will end in the fiscal year ending December 31, 2024. We have strived to increase net sales and operating
income as well as set management indicators taking into account capital efficiency as targets. We
proposed the election of the current Directors based on a matrix of skills necessary for members of theBoard of Directors of the Company at the 52nd Annual General Meeting of Shareholders of the Company
held in March 2022 in the Company proposal. The election was supported and approved by shareholders.
Then, we newly established the Corporate Value Committee based on talks with a variety of shareholders.
The committee intends to seriously revalidate our managerial issues, such as our business policies,
internal resource allocation, governance and dialogue with stakeholders, and develop a structure aiming
at the enhancement of corporate value. The Corporate Value Committee has its policy to ensure an
objective perspective by appointing outside advisors in addition to the attendees of the Board of Directors
meetings. (The Company announced these initiatives in “New Establishment of the Corporate Value
Committee” (Japanese only) announced on August 5, 2022.)
Under these circumstances, 3D OPPORTUNITY MASTER FUND, one of our shareholders(hereinafter referred to as the “Requesting Shareholder”), offered a shareholder proposal of the
convocation of an extraordinary general meeting of shareholders pursuant to the provisions of Article 297,
Paragraph 1 of the Companies Act and the election of four (4) Directors. For details of proposal by the
Requesting Shareholder, please see Proposals 2 and 3.
The Company had advanced discussions on what its Board of Directors should be at the Corporate
Value Committee before the receipt of the proposal by the Requesting Shareholder, and was proceedingwith specific verification in order to strengthen corporate governance by the 53rd Annual General
Meeting of Shareholders scheduled to be held in March 2023 at the latest. However, under thesecircumstances, we received a proposal from the Requesting Shareholder that requested the convocationof the extraordinary general meeting of shareholders and the election of Directors. Accordingly, we
considered it necessary to present what we believed the composition of the Board of Directors should be
if we hold the extraordinary general meeting of shareholders to confirm the intentions of shareholders
about the composition of the Board of Directors of the Company. Therefore, based on the details of pastverification we organized its point of view at that point in time as follows.
First of all, we discussed functions necessary for the Company’s Board of Directors at the Corporate
Value Committee. Aa a result, we considered it more important to further strengthen a function to decidemanagement strategies and policies and a supervisory function, while keeping functions to make decisions
for the execution of individual businesses at the current Board of Directors, in deepening discussions
toward further corporate value improvement and putting them into practice.
In addition, we believe it is necessary to strengthen the supervisory function including the perspectivesof nomination, remuneration, etc. by Outside Directors more than before, after we divide the functions of
the Management Conference (including the functions of the nomination, remuneration and ethics
committees), which is currently established as a voluntary advisory committee of the Board of Directors,
to the Nomination & Compensation Committee, the Governance & Ethics Committee, etc. Furthermore,
we will also examine a structure in which these committees will be chaired by Outside Directors in orderto enhance the objectiveness and transparency of procedures.
Furthermore, the Corporate Value Committee reexamined a set of skills necessary for the Company’s-4-Board of Directors. As a result, we added “Capital market” to the skill set and in particular we determinedthat the importance of “Capital markets,” “Corporate management,” and “Legal affairs” was higher
among the skill set. Accordingly, we considered it preferable to increase new Directors who have theseskills, have experience and track record appropriate for an Outside Director, and have intentions to takeaggressive actions as a Director in order to improve corporate value over the medium to long term.
Although the “Capital markets” item was not previously included in the skills necessary for theCompany’s Director, we have newly added it as we consider it more necessary to examine theappropriateness of the Company’s future fund raising, capital allocation, investment and shareholder
returns, from the viewpoint of investors based on the past dialogue with its shareholders.
With regard to the “Corporate management” item, we have determined that, in order to promote further
examination of corporate value improvement, a talented person will be necessary who is involved incapital markets in a listed company and has experience in the corporate management at a position
equivalent to a representative director such as strengthening corporate governance and promoting
business reform.
With regard to the “Legal affairs” item likewise, we consider it a skill desired for not only Auditors but
also members of the Board of Directors because it becomes necessary to introduce legal knowledge andexperience when the Board of Directors, which is composed of Directors with a variety of backbone,
deepens discussions so as to improve the Company’s corporate value. At the present stage in particular,
we believe that we need a talented person who is well versed in the Companies Act which is fundamental
to corporate governance, the Corporate Governance Code, and a variety of guidelines and has extensive
business experience related to the above, as well as can determine and apply the above to the Company’sbusinesses in an appropriate manner.
Before additionally electing Outside Directors, we deliberated on the total number of Directors. We
researched the number of directors of companies with board of company auditors with the market
capitalization of 200 billion yen to 300 billion yen, almost the same size with the Company. The researchfound that the number of directors was 9 on average and 13 at the maximum. In addition, as an analysis
covering all the listed companies revealed that companies with 14 or more directors accounted for only
about 1% of the total, we believed that the number of Directors of the Company should not be in excess
of 14, and that a Board of Directors with more than 14 Directors would be more detrimental to the flexible
operation and substantive discussions than beneficial.
Based on the above, while the Board of Directors of the Company is currently composed of six (6)Inside Directors and three (3) Outside Directors, we will realize the composition of the Board of Directors
where the number of Outside Directors (eight (8)) will become the majority of the total number of
Directors (fourteen (14)) as a result of increasing the number of Outside Directors by additionally electing
five (5) Outside Directors based on a set of skills necessary for the Board of Directors of the Company,
while the total number of the Board of Directors will not become excessive. Through these initiatives, we
believe that the above will be an optimal structure aiming at future corporate value improvement.
Based on the above results of examination at the Corporate Value Committee, the Company has
decided to examine the additional election of candidates for Outside Director who have the above skills
that the current Board of Directors is in need of so that Outside Directors will constitute a majority of theBoard of Directors, before the terms of office of incumbent Directors expire. This is because strengthening
the composition of the Board of Directors and improving its transparency is an urgent issue and the
additional election will be conducive to strengthening activities at the Corporate Value Committee. The
Management Conference (including the functions of the nomination, remuneration and ethics
committees), the majority of which is composed of Independent Outside Directors and which is anadvisory organ of the Board of Directors, conducted interviews with multiple candidates including those
for Outside Directors proposed by the Requesting Shareholder, and evaluated and examined them in termsof whether they are appropriate from the above perspective. Based on the results of examination at theManagement Conference, the election of five (5) candidates for Outside Director is proposed as theCompany proposal. If these candidates for Outside Director are elected, the Company will have six (6)Inside Directors and eight (8) Outside Directors, Outside Directors will account for a majority of Directors
and the number of Directors will be fourteen (14). In light of the above results of examination with regard
to the composition of the Board of Directors, the additional election will lead to an appropriate structureof the Board of Directors.
From among the five (5) candidates for Outside Director, we propose the election of two (2) candidates
in Proposal 2 that was also proposed by the Requesting Shareholder, and in this Proposal we present three-5-(3) candidates for Outside Director whose election is only proposed by the Company.

-6-

No.

Name
(Date of birth)

Career summary, positions, responsibilities
and significant concurrent positions
April 1973
June 1999

Joined Nissho Iwai Corporation (present Sojitz Corporation)
Director, NISSHO ELECTRONICS CORPORATIONMarch 2000

Outside Director, Fusion Communications Corp. (present
Rakuten Communications Corp.)
Managing Director, NISSHO ELECTRONICSCORPORATION
Representative Director and President, NISSHOELECTRONICS CORPORATION
Consecutively served as a part-time lecturer of Shinshu
University Graduate School of Management,; School ofBusiness, Aoyama Gakuin University; Faculty of Commerce,
Doshisha University; Management of Technology (MOT),Tokyo University of Science; Faculty of Economics, Soka
University; and School of International Studies, Kwansei
Gakuin University
Director and Chairman, NISSHO ELECTRONICSCORPORATION
Final Selection Committee Member, Public Application for
Universe Open Laboratory, Japan Aerospace Exploration
Agency (JAXA)
Advisor, Machine Division, Sojitz Corporation
External Director of the Board, JVCKENWOOD Corporation
Representative Director of the Board, President, Chief
Operating Officer (COO), Chief Innovation Officer (CIO), andChief Risk Officer (CRO), JVCKENWOOD Corporation
Representative Director of the Board, President, and Chief
Executive Officer (CEO), JVCKENWOOD Corporation
Representative Director of the Board, Chairman of the Board,
and Chief Executive Officer (CEO), JVCKENWOOD
Corporation
Representative Director of the Board and Chairman of theBoard, JVCKENWOOD Corporation
Outside Director, Dexerials Corporation
Special Advisor, JVCKENWOOD Corporation
Special Advisor, TACHIBANA ELETECH CO., LTD.
Chairman, Machine & Metal Industry Subcommittee, The
Yokohama Chamber of Commerce and Industry
Outside Director, FEED ONE CO., LTD. (to the present)
Outside Director (Audit & Supervisory Committee Member),
SNT Corporation (to the present)
Outside Director, TACHIBANA ELETECH CO., LTD. (to thepresent)

June 2001
June 2002
Since 2003

June 2009
Takao Tsuji
September 2009
(September 28, 1949)
1

Male[New candidate][Outside Director][Independent Officer]

July 2010
June 2013
May 2014

June 2016
April 2018

April 2019
June 2019
July 2021
November 2021
December 2021
June 2022
June 2022
June 2022-7-

Number ofshares of theCompany held

0

No.

Name
(Date of birth)

Career summary, positions, responsibilities
and significant concurrent positions[Significant concurrent positions]
Outside Director, FEED ONE CO., LTD.
Outside Director (Audit & Supervisory Committee Member), SNT Corporation
Outside Director, TACHIBANA ELETECH CO., LTD.
[Reasons for nomination and expected roles]
Mr. Takao Tsuji has experience as a representative director of listed companies
over 10 years in the aggregate such as President, Chairman of the Board and CEO
of NISSHO ELECTRONICS CORPORATION and JVCKENWOOD Corporation.
Further, he served as part-time lecturers at multiple universities, worked on lectureson the development of corporate managers at outside organizations, and assumed
office as outside director at multiple listed companies.
At NISSHO ELECTRONICS CORPORATION, in which Mr. Takao Tsuji served
as Representative Director and President, he converted the existing business related
to computers into information communication infrastructure business using IP
communication equipment, and established a firm position as a network integrator.
At the same time, Mr. Takao Tsuji built a new business model in which thecompany made investment in a lot of startups mainly in Silicon Valley, expanded
sales as a sales gateway in Japan, and significantly contributed to their listing. He
took the initiative in moving the company from the Second Section of the Tokyo
Stock Exchange to its First Section thanks to the business conversion, took the leadin the company going private as part of the group strategy, and otherwise practiced
flexible corporate management mindful of a best owner applicable toenvironmental changes surrounding the business. In addition, at JVCKENWOOD
Corporation, Mr. Takao Tsuji reviewed capital allocation, promoted reforming
business structure, executed M&A and launched new business, etc. in order toenhance corporate value and achieved track record such as increased and stableperformance, improved financial soundness and stable dividends. Furthermore, inthe corporate governance reform of the company, he quickly worked on reinforcing
corporate governance in both appearance and fact, such as making the Nomination
and Remuneration Advisory Committee comprised solely of External Directors of
the Board in 2015, and appointing an External Director of the Board as Chairmanof the Board and developing an evaluation system for External Directors of theBoard in 2016. He practiced governance reforms of a company saddled with acomplicated history of corporate integration. In addition, in these activities he has
the extensive experience in aggressive dialogue with capital markets as arepresentative of the listed company.
We have determined that when we will proceed with corporate value improvementin the future, Mr. Takao Tsuji will fulfill his important roles of the Company’s
management and corporate value improvement from a neutral and objective
position by taking advantage of his knowledge and extensive and deep experience
as a corporate manager. Therefore, we nominate him as a candidate for Outside
Director.

-8-

Number ofshares of theCompany held

No.

Name
(Date of birth)

Career summary, positions, responsibilities
and significant concurrent positions

Number ofshares of theCompany held

October 2002
April 2003
May 2006
January 2011

Hidetaka Nishina(March 25, 1979)
2

Male[New candidate][Outside Director][Independent Officer]

Registered as attorney-at-law
Operations Department, Bank of Japan
Counsellor Office, Civil Affairs Bureau, Ministry of JusticePartner attorney-at-law, Nakamura, Tsunoda & Matsumoto (tothe present)
June 2013
Outside Auditor, INES Corporation
April 2014
Committee Member, JBA TIBOR Oversight Committee, Ippan
Shadan Hojin (or General Incorporated Association) JBA
TIBOR Administration
March 2017
Outside Auditor, Nippon Aqua Co., Ltd. (to the present)
June 2017
Outside Director, KITAMURA Co., Ltd.
March 2019
Outside Auditor, Vario Secure Inc. (to the present)
April 2019
Outside Director, KITAMURA HOLDINGS Co., Ltd.
(unlisted company) (to the present)[Significant concurrent positions]
Partner attorney-at-law, Nakamura, Tsunoda & Matsumoto
Outside Auditor, Nippon Aqua Co., Ltd.
Outside Auditor, Vario Secure Inc.
Outside Director (Audit and Supervisory Committee Member), KITAMURAHOLDINGS Co., Ltd. (unlisted company)[Reasons for nomination and expected roles]
Although Mr. Hidetaka Nishina has not previously participated in corporate
management other than as an outside director or outside auditor, he has a wide
range of insights and experience as an attorney-at-law. He worked over the years
for a law firm that has strengths in the corporate legal affairs and the securities act
fields, and has experience in working for governmental organizations, etc. In
particular, he has a wide range of knowledge and extensive experience garneredthrough response to cases related to the Companies Act, a basis of corporate
governance, as well as corporate governance at listed companies including the
Corporate Governance Code and a variety of guidelines. Furthermore, heparticipated in many corporate acquisitions from the positions of third-party
committee member, etc. He has deep insights in M&A and reorganization.
Therefore, we have determined that Mr. Hidetaka Nishina will fulfill his importantroles of examination for specific measures for the Company’s management andcorporate value improvement from a neutral and objective position.
In addition, because Mr. Hidetaka Nishina has also extensive insights in internal
control and compliance and track record of participating in corporate management
as an outside officer at multiple listed companies, we have determined that he will
fulfill his roles of improving transparency and strengthening supervisory function at
the Board of Directors. Therefore, we nominate him as a candidate for Outside
Director.

-9-

0

No.

Name
(Date of birth)

Career summary, positions, responsibilities
and significant concurrent positions

Number ofshares of theCompany held

April 1974
January 1986

Joined Yamaichi Securities Co., Ltd.
Joined Morgan Stanley Japan Securities (present Mitsubishi UFJ
Morgan Stanley Securities)
April 1993
Joined Merrill Lynch Securities Co., Ltd.
January 1999
Deputy Chairman, Merrill Lynch Japan Securities Co., Ltd.
(present BofA Securities Japan Co., Ltd.)
November2007 Director and Executive Vice President, RECOF Corporation
April 2008
Representative Director and President, RECOF Corporation
July 2010
Advisor, Ebara Foods Industry, Inc.
April 2012
Outside Director, Olympus Corporation
June 2015
Outside Director, CYBERDYNE, INC. (to the present)
June 2016
Director (Outsider), PACIFIC METALS CO., LTD. (to the present)
December 2016 Director and Chairman, 3DOM Inc. (present 3DOM Alliance Inc.)
January 2019
Outside Director, GPSS Holdings, Inc. (present GPSS EngineeringInc.) (unlisted company) (to the present)
November 2019 Outside Director (Audit & Supervisory Board Member),
SHIMACHU CO., LTD.
[Significant concurrent positions]
Outside Director, CYBERDYNE, INC.
Director (Outsider), PACIFIC METALS CO., LTD.
Outside Director, GPSS Engineering Inc. (unlisted company)

Hikari Imai
(July 23, 1949)
3

Male[New candidate][Outside Director][Independent Officer][Reasons for nomination and expected roles]
Mr. Hikari Imai gave various managerial advice to a variety of corporate managers
from the perspective of capital markets in his capacity as an investment banker at
Merrill Lynch Japan Securities Co., Ltd., a major financial institution, and RECOF
Corporation, an independent M&A advisory company. After that, he contributed tothe practice of corporate management of business companies as an outside director
at multiple listed companies. Furthermore, he has extensive track record andbusiness experience in investment judgment at M&A projects at the execution
phase of business strategies and strengthening risk management, etc. in addition toclarifying companies’ managerial issues, offering specific solutions, and supporting
the execution of reform.
In particular, Mr. Hikari Imai has professional insights into capital markets gained
from extensive experience in investment banking services at multiple securities
companies and a wide range of knowledge and experience in extensive businessareas including the IT business by giving managerial advice to various businesscompanies and financial institutions.
In addition, he has specific achievements from the perspective of maximizing
corporate value and strengthening a corporate management base at listedcompanies: Previously, he promoted management reform as an Outside Director at
Olympus Corporation, and made determinations objectively from a neutral
standpoint that was not biased toward the interests of specific shareholders or the
management team as a special member in projects with multiple candidates for
management consolidation, including projects of SHIMACHU CO., LTD. andcocokara fine Inc.
Mr. Hikari Imai has deep experience and insights into financial reform such as thesoundness of assets including real estate and appropriate resource allocation, theimprovement of corporate profit margin, growth strategy and corporate governancegained primarily from experience as a specialist in corporate finance, experience inmany M&A projects and experience as an outside director at a variety ofcompanies. We have determined that when we will proceed with corporate value
improvement in the future, Mr. Hikari Imai will fulfill his important roles from aneutral and objective position by taking advantage of his knowledge and extensive
and deep experience as a corporate manager. Therefore, we nominate him as a
candidate for Outside Director.

- 10 -

0(Notes)
1. Figures for the “Number of shares of the Company held” are as of September 30, 2022.
2. There are no special interests between any of the candidates for Director and the Company.
3. When the Company nominates the candidates for Director, the Management Conference, a body that includes Outside
Directors, deliberates in advance on the nomination pursuant to the Standard for Personnel Affairs of Officers.
4. The Company makes it a rule to nominate persons who can supervise and advise the Company from outside and impartial
perspectives and who have high-level insight and a wealth of knowledge and experience in their particular areas, inaddition to following the standards for independence of independent officers set forth in the regulations of the Tokyo
Stock Exchange, as the standards for independence of an Outside Director.
5. Mr. Takao Tsuji, Mr. Hidetaka Nishina and Mr. Hikari Imai are the candidates for Outside Director. If they assume officeas Outside Directors, they will become independent officers pursuant to the provisions of the Tokyo Stock Exchange.
6. If Mr. Takao Tsuji, Mr. Hidetaka Nishina and Mr. Hikari Imai assume office, the Company will enter into liability
limitation agreements with them. The maximum liability limit under each agreement is 10 million yen or the amountprovided by laws and regulations, whichever is greater, on the condition that they have respectively conducted theirduties in good faith and without gross negligence.
7. The Company has entered into a directors and officers liability insurance (D & O Insurance) agreement stipulated in
Article 430-3, Paragraph 1 of the Companies Act with all Directors as the insured to ensure that officers can fully performtheir expected roles in the course of their duties and to allow the Company to obtain superior talent. If this proposal isapproved as originally proposed and each candidate is appointed as Director, they will be the insured under the said
insurance agreement. The said insurance agreement covers damage caused as a result of the insured Directors andofficers assuming responsibilities regarding the execution of their duties or receiving claims pertaining to the pursuit ofsuch responsibilities. Provided, however, that there are certain exemptions; for example, damage caused as a result of
any conduct committed while knowing that the conduct is in violation of laws and regulations will not be covered. The
insurance premiums, including those on riders, are fully borne by the Company and no substantial insurance premiumis borne by the insured. The said insurance agreement provides for a deductible amount and damage up to the deductible
amount shall not be covered. Also, the Company plans to renew the insurance agreement with the same terms andconditions at the time of the next renewal.

- 11 -

[Matrix of Skills Held by Directors and Auditors if Proposals 1 and 2 Are Approved]◎ Area of particular expertise
Position
Director &Executive
AdviserPresident &Representative
Director
Director &Senior Executive
Operating
Officer
Director &Executive
Operating
Officer
Director &Operating
Officer
Director &Operating
Officer
Outside Director
Outside Director
Outside Director
Outside Director
Outside Director
Outside Director
Outside Director
Outside Director
Standing Auditor
Outside Auditor
Outside Auditor

Corporate
management

Hiroshi
Nozawaadministration

Human
resources

IT system
development

Product
servicesNewbusinesses

Sales

Finance /Accounting

Legal affairs

◎

〇

◎

◎

◎

◎

◎

〇

〇

Satoyasu
Sakashita

◎

〇

〇

◎

◎

〇

〇

〇

〇

Tateyuki
Oosako

〇

〇

〇

◎

◎

〇

〇

TadashiTsutsui

〇

◎

◎

〇

Mari
Morimoto〇

MasashiUmetsu

〇

◎

〇

◎

〇

〇

〇

〇

◎

◎

〇

〇

〇

〇

Name

MinoruKoyamaTateki
Oishi
TomokoAramaki
Takao
Tsuji[Proposal 1]
Hidetaka
Nishina[Proposal 1]
HikariImai[Proposal 1]
Yuya
Shimizu[Proposal 2]
Shintaro
Ishimaru[Proposal 2]
Hiroyuki
KimuraShigeoIshii
YukakoOshimiBusiness

〇

〇

〇

〇

〇

◎
〇

〇

〇
〇

〇

◎

〇

◎
◎

〇

〇

◎

〇

〇

〇

〇

〇

〇

〇

◎

◎

〇

◎

〇

〇

〇

〇

〇

◎

◎

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

◎

- 12 -

〇

◎
◎

◎

〇

Capitalmarket<Proposal by the Company and a Shareholder>
Proposal 2:

Election of Two (2) Directors

1. Outline of the Proposal
Mr. Yuya Shimizu and Mr. Shintaro Ishimaru shall be elected as Directors.
2. Reason for the Proposal(Reason for the Proposal by the Company)
As stated in Proposal 1, the Company has decided to propose the election of five (5) candidates for
Outside Director in the Company proposal. In this Proposal, from among five (5) candidates for Outside
Director, we present two (2) candidates whose election was also proposed by the Requesting
Shareholder (Mr. Yuya Shimizu and Mr. Shintaro Ishimaru), as we propose their election as well.
(Reason for the Proposal by the Shareholder)
For reasons for the proposal by the Requesting Shareholder, please see Proposal 3.

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No.

Name(Date of birth)

Career summary, positions, responsibilities
and significant concurrent positions

Number ofshares of theCompany held

April 1994
Joined Tokyo Branch, Goldman Sachs Japan, Co., Ltd.
May 2000
Joined MOORE STRATEGIC VALUE PARTNERS, LLC
September 2003 Joined AC Capital, Inc.
Joined Asuka Asset Management Co., Ltd. (present Aizawa Asset
March 2004
Management Co., Ltd.)
August 2005
Joined Jarmin Capital Co., Ltd.
October 2007 Joined Dalton Investments Group
February 2010 Representative Director, Dalton Advisory KK
March 2011
Outside Director, SunTelephone Co., Ltd.
Founded OTS Capital Management Limited (Hong Kong)
Cofounder & Senior Portfolio Manager, OTS Capital Management
January 2015
LimitedFounded Hibiki Path Advisors Pte. Ltd. (Singapore)
Representative Director & Chief Investment Officer, Hibiki Path
January 2016
Advisors Pte. Ltd. (to the present)[Significant concurrent position]
Representative Director & Chief Investment Officer, Hibiki Path Advisors Pte. Ltd.
(Singapore)* Hibiki Path Advisors Pte. Ltd. (Singapore), at which Mr. Yuya Shimizu serves as
Representative, has concluded discretionary investment management agreementswith Hibiki Path Value Fund and Hibiki Path Aoba Fund holding 0.16% (intotal) of the Company’s stock as of August 31, 2022.

Yuya Shimizu(November 8, 1971)
1

Male[New candidate][Outside Director][Independent Officer][Reasons for nomination and expected roles](Reasons for nomination by the Company of Mr. Yuya Shimizu as a candidate for
Director)Mr. Yuya Shimizu has knowledge about securities and overall investment as he has
engaged in a wide range of investment services over 15 years including nonperforming bonds, real estate, privately traded stocks and stocks in Japan and Asia.
Currently, he serves as Representative Director & Chief Investment Officer of
Hibiki Path Advisors Pte. Ltd. (Singapore), one of our shareholders, which renders
investment management services to make investment in shares of listed companies
in Japan.
Taking advantage of his extensive experience and deep knowledge about his
initiatives to improve corporate value, as well as his experience in engagement withcompanies from an independent position, we have determined that Mr. Yuya
Shimizu will fulfill his important roles of the improved transparency andstrengthened supervisory function of the Board of Directors, as well as
management and corporate value improvement from the perspective of capital
markets. Therefore, we nominate him as a candidate for Outside Director.
(Reasons for nomination by the Requesting Shareholder of Mr. Yuya Shimizu as a
candidate for Director)
Mr. Yuya Shimizu commenced his career as an investment professional startingwith non-performing bonds and real estate investment. Since then, he has engaged
in a wide range of investment services over 17 years including a privately tradedstock and stocks in Japan and Asia. He served as President of an advisorysubsidiary in Tokyo (Dalton Advisory KK) for the period from 2009 to 2014 at
Dalton Investments and engaged in dialogue with a number of companies as ashareholder. Currently, he serves as Representative Director & Chief Investment
Officer of Hibiki Path Advisors Pte. Ltd. and continues to make investment in stockof listed companies in Japan and engage in dialogue with them, with value
investing as an investing technique. Accordingly, Mr. Yuya Shimizu has
outstanding expert knowledge and experience regarding investment in real estate inJapan, capital costs in stock markets, and the way of corporate governance. He has
professional knowledge valuable for the verification processes of management
policies at the Committee. In addition, the proposer is convinced that his point of- 14 -

0

No.

Name
(Date of birth)

Career summary, positions, responsibilities
and significant concurrent positions
view as an investor backed by the experience of extensive dialogue with othercompanies will provide huge value to the Company’s Board of Directors.
* The “Reason for nomination by the Requesting Shareholder of Mr. Yuya Shimizu
as a candidate for Director” presents the English translation of the reason forproposal as submitted by the Requesting Shareholder in Japanese.

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Number ofshares of theCompany held

No.

Name
(Date of birth)

Career summary, positions, responsibilities
and significant concurrent positions
April 1976
February 1998
August 2003

Shintaro Ishimaru(January 15, 1954)
2

Male[New candidate][Outside Director][Independent Officer]

Joined Dai-Ichi Kangyo Bank, Ltd. (present Mizuho Bank, Ltd.)
President & CEO, DKB Data Services (NY)General Manager of Taipei Branch, Mizuho Corporate Bank, Ltd.
(present Mizuho Bank, Ltd.)
Chairman, The Japanese Chamber of Commerce & Industry Taipei
June 2006
Executive Officer, ITOCHU Corporation
October 2006 General Manager of IT Planning Division, ITOCHU Corporation
Managing Executive Officer & Executive Vice President ofApril 2009
Financial Business, Real Estate, Insurance Business, & Logistic
Company, ITOCHU Corporation
Assistant to Officer in charge of Specific Services, ITOCHU
April 2011
Corporation
CIO & Assistant to Officer in charge of Specific Services,
May 2011
ITOCHU Corporation
CIO & Executive Vice President of General Products & Realty and
April 2012
ICT Company, ITOCHU Corporation
Audit & Supervisory Board Member, ITOCHU Techno-Solutions
June 2013
Corporation
July 2019
Delegated Outside Advisor in charge of IT strategy of General
Products & Realty Company, ITOCHU Corporation[Reasons for nomination and expected roles](Reasons for nomination by the Company of Mr. Shintaro Ishimaru as a candidate for
Director)
Mr. Shintaro Ishimaru has experience taking part in management as Chief
Information Officer (CIO) of a listed company, as well as has an understanding of
the industry in which the Company operates and deep knowledge about information
development, both of which are necessary to realize swift management decision.
Therefore, we have determined that Mr. Shintaro Ishimaru will fulfill his importantroles of the Company’s management and corporate value improvement andnominate him as a candidate for Outside Director.

Number ofshares of theCompany held

(Reasons for nomination by the Requesting Shareholder of Mr. Shintaro Ishimaru as
a candidate for Director)
Mr. Shintaro Ishimaru served as General Manager of IT Planning Department andother positions of Mizuho Holdings, Inc. and after that he successively served as
General Manager of IT Planning Division, Managing Executive Officer in chargeof Financial Business, Real Estate, Insurance Business, & Logistics Company, and
CIO of ITOCHU Corporation. ITOCHU Corporation is a corporation that hasrealized value growth by pursuing business and capital efficiency. Specifically, itrealized high ROE by improved business efficiency and reinvestment, its stock
price increased about 5 times (Note 8) over the past 10 years, and it became the top
domestic trading house on a market capitalization basis. Having the above past
careers, Mr. Shintaro Ishimaru has knowledge conducive to improving business andcapital efficiency at the Company. In addition, as Mr. Shintaro Ishimaru also has
experience serving as Audit & Supervisory Board Member of ITOCHU TechnoSolutions Corporation, he has outstanding expert knowledge and experience backed
by practice regarding the corporate management of an IT service provider. The
proposer believes that Mr. Shintaro Ishimaru has professional knowledge valuablefor the verification processes of management policies at the Committee, and that hewill provide huge value to the Company’s Board of Directors.
* The “Reason for nomination by the Requesting Shareholder of Mr. Shintaro
Ishimaru as a candidate for Director” presents the English translation of the reason
for proposal as submitted by the Requesting Shareholder in Japanese.

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0(Notes)
1. Figures for the “Number of shares of the Company held” are as of September 30, 2022.
2. There are no special interests between any of the candidates for Director and the Company other than those stated in thetext.
3. When the Company nominates the candidates for Director, the Management Conference, a body that includes Outside
Directors, deliberates in advance on the nomination pursuant to the Standard for Personnel Affairs of Officers.
4. The Company makes it a rule to nominate persons who can supervise and advise the Company from outside and impartial
perspectives and who have high-level insight and a wealth of knowledge and experience in their particular areas, inaddition to following the standards for independence of independent officers set forth in the regulations of the Tokyo
Stock Exchange, as the standards for independence of an Outside Director.
5. Mr. Yuya Shimizu and Mr. Shintaro Ishimaru are the candidates for Outside Director. If they assume office as Outside
Directors, they will become independent officers pursuant to the provisions of the Tokyo Stock Exchange.
6. If Mr. Yuya Shimizu and Mr. Shintaro Ishimaru assume office, the Company will enter into liability limitation agreementswith them. The maximum liability limit under each agreement is 10 million yen or the amount provided by laws andregulations, whichever is greater, on the condition that they have respectively conducted their duties in good faith andwithout gross negligence.
7. The Company has entered into a directors and officers liability insurance (D & O Insurance) agreement stipulated in
Article 430-3, Paragraph 1 of the Companies Act with all Directors as the insured to ensure that officers can fully performtheir expected roles in the course of their duties and to allow the Company to obtain superior talent. If this proposal isapproved as originally proposed and each candidate is appointed as Director, they will be the insured under the said
insurance agreement. The said insurance agreement covers damage caused as a result of the insured Directors andofficers assuming responsibilities regarding the execution of their duties or receiving claims pertaining to the pursuit ofsuch responsibilities. Provided, however, that there are certain exemptions; for example, damage caused as a result of
any conduct committed while knowing that the conduct is in violation of laws and regulations will not be covered. The
insurance premiums, including those on riders, are fully borne by the Company and no substantial insurance premiumis borne by the insured. The said insurance agreement provides for a deductible amount and damage up to the deductible
amount shall not be covered. Also, the Company plans to renew the insurance agreement with the same terms andconditions at the time of the next renewal.
8. This figure was calculated based on stock price data (August 2012 through August 2022) of Bloomberg.

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<Proposal by a Shareholder>
Proposal 3 is a proposal made by the Requesting Shareholder.
The following details of the proposal (outline of the agenda) and reasons for the proposal are presented intheir original form as submitted by the Requesting Shareholder in Japanese, and candidate numbers are added.

The Board of Directors of the Company is opposed to the Proposal 3.
The reasons for opposition to Proposal 3 are stated below on page 25.
Proposal 3:

Election of Two (2) Directors

Outline and Reason for the Proposal(1) Outline of the Proposal
Mr. Shintaro Ishimaru, Mr. Kotaro Okamura, Mr. Yuya Shimizu and Mr. Takashi Tsutsui shall beelected as Directors. (Note from the Company: the following is presented in its original form including
portions related to candidates proposed by both the Company and the Requesting Shareholder in Proposal
2 (Mr. Yuya Shimizu and Mr. Shintaro Ishimaru), and two (2) candidates subject to Proposal 3 are Mr.
Kotaro Okamura and Mr. Takashi Tsutsui; unless otherwise specified, hereinafter the same shall apply.)(2) Reason for the Convocation (Reason for the Proposal)
The Company has essential managerial issues known as low capital efficiency and business efficiency
due to management not taking into account capital costs. As a result, the Company’s return on equity(ROE) and operating income margin are significantly lower than the average of those of peer companies.
For this reason, the proposer (Note from the Company: the “proposer” refers to the Requesting
Shareholder; hereinafter the same shall apply) has so far offered proposed improvement, etc. toward thesolution of these managerial issues any number of times through discussion and the exchange of letterswith the Company’s Directors. However, the Company’s management team has not understood these
proposals, etc. and the incumbent Outside Directors who should supervise the management team haveproblems in their independence and expertise. Accordingly, the proposer believes that it is indispensable
to improve supervisory function by additionally electing Outside Directors who have expertise in
response to the managerial issues and a high degree of independence in order to improve the corporate
value of the Company.
In this regard, the Company announced the establishment of the Corporate Value Committee. The
Committee is composed of attendees of the Board of Directors meetings, including Executive Directors,
and the incumbent Outside Directors who should assume the responsibility of supervision lackindependence and expertise. Accordingly, the proposer believes that the Committee will not be likely tocome up with sufficient measures to improve corporate value. Nevertheless, the Committee plans to cometo a conclusion of measures to improve corporate value before the next Annual General Meeting of
Shareholders of the Company. Since the conclusion decisively directs the Company’s growth strategy,
the proposer believes that it is indispensable that, in order to ensure the effectiveness of the Committee
early, the composition of the Committee will be changed to be Outside Directors only, and that Outside
Directors who have expertise in response to the managerial issues and a high degree of independence will
be elected and appointed to be members of the Committee. For this reason, because the proposer cannot
wait for the election of candidates for Outside Directors recommended by the proposer until the Annual
General Meeting of Shareholders of the Company in March next year, the proposer is forced to request
the Company to convoke the Extraordinary General Meeting of Shareholders as follows. The proposer
has carried out this shareholder proposal.

- 18 -

Hereinafter, the proposer describes in detail the reason for the convocation (reason for the proposal).
Necessity for electing newly appointed Outside Directors
The proposer believes that the Company’s essential managerial issues are that the Company has notbeen allocating capital in a way that contributes to sustainable growth and medium- to long-term corporate
value improvement resulting from low capital efficiency and business efficiency.
The Company’s low capital efficiency and business efficiency are mainly attributable to excessive
investment in self-held offices, maintaining undervalued listed subsidiaries, leaving operating income
margin which remains about half of the average of those in the industry, and growth strategy without
selection and concentration (hereinafter collectively referred to as the “Company’s Managerial Issues”).
As a result that the Company’s Managerial Issues continued to reduce the Company’s capital efficiency
and business efficiency, the Company’s average return on equity (ROE) for the most recent fiscal year
and the past 10 years was 7.4% and 5.8%, respectively, which remains about half of the average１ of
13.9% and 11.3% of peer companies２ for the same periods. In addition, regarding operating income
margin, the Company’s operating income margin was 6.5%, which remains significantly lower than the
average of 11.1% of peer companies.
The proposer believes that the Company’s Managerial Issues result from management not taking into
account capital costs. In particular, although investment in real estate for self-held offices represents theprime example of management not taking into account capital costs, the Company has continued to havean investment in real estate for its self-held offices merely generating return lower than capital costs forthe past 20 years. The Company has invested an amount in excess of cumulative net income in real estatefor its self-held offices for the past 5 years through the end of December 2021. As a result, the percentageof the Company’s property, plant and equipment to total assets has reached about 39%, whichsignificantly exceeds the average of about 10% of peer companies３４. While the issue of not taking into
account capital costs can be likewise applicable to commercial real estate development, the Company has
been proceeding with the development of real estate including its self-held offices as commercial realestate as well. The Company plans to invest further several billion yen in the commercial real estatethrough 2023５.
For this reason, the proposer has analyzed the Company’s Managerial Issues in detail and has engaged
in dialogue with the Company’s management team over the past two and a half years. In addition, theproposer sent letters to the Board of Directors and provided proposed materials in excess of several
hundred pages, any number of times. Furthermore, the proposer individually held talks with Directors andOperating Officers and Outside Directors of the Company to carefully account for the results of analysis
and the content of proposals made by the proposer.
However, the proposer considers that the Company’s management team has not understood the analysisof the Company’s Managerial Issues by the proposer and the content of proposal. In addition, the proposer
is forced to believe that all the Company’s incumbent Outside Directors who assume the responsibility ofsupervising the execution of the Company have deep connections with the current management teammainly due to the situation of their assumption of office. Furthermore, since they do not have expert
knowledge (corporate finance and real estate investment) in response to the Company’s Managerial Issues
and experience (capital allocation taking into account capital costs, sale of real estate and improving profit
margin), the proposer has reached the conclusion that the Outside Directors are not sufficiently expected
to supervise the Company’s business execution.
For this reason, the proposer believes that it is indispensable to develop supervisory function by newly
elected Outside Directors who have expertise in response to managerial issues and a high degree of
independence from execution so that the Company will improve corporate value by recognizing theimportance of management taking into account capital costs and seriously addressing the improvement
１

ROE and operating income margin are based on the data of Bloomberg.
The following companies are used for comparison as peers: ITOCHU Techno-Solutions, TIS, SCSK, Nihon Unisys, NS
Solutions, NSD, Systena, and DTS, all of which have a market capitalization of 100 billion yen to 1 trillion yen and whose corebusinesses are embedded systems development and systems integration.
３
Over the past five years, the Company has allocated 38.5 billion yen to the acquisition of property, plant and equipment,
compared to total profit attributable to owners of parent of 37.9 billion yen.
４
The percentage of property, plant and equipment to total assets was calculated based on the data of Bloomberg.
５
The Company disclosed in its annual securities report for the 52nd fiscal year that it plans to invest a total of 17.4 billion yen
in the Shiodome Buildings A and B and the New Nagoya Building by 2023, of which 6.5 billion yen has already been invested, as“New Installation of Significant Facilities, etc.”２- 19 -

of capital efficiency and business efficiency.
Reason for election before the Annual General Meeting of Shareholders
The Company announced the establishment of the Corporate Value Committee (hereinafter referred toas the “Committee”) for the prime purpose of “the enhancement of capital efficiency and value provided
to customers through review of the composition of holding assets and capital allocation” on August 5,
2022６.
However, in consideration of the points below, there is an extremely low possibility that the Committee
will be operated so as not to adhere to the Company’s past connections and existing biases. In addition,
the proposer is forced to say that there is also an extremely low possibility that the Company will decidemeasures to improve corporate value which the Company should truly pursue.
(1) Composition of the Committee is the same as that of the Board of Directors
The Committee shall be composed of attendees of the Board of Directors meetings including Operating
Directors and a founder.
However, the Company’s Managerial Issues have been evolved by managerial decisions of theCompany’s Directors over many years and remain intact. For this reason, the proposer believes that there
is an extremely low possibility that the Company’s incumbent Directors will review the appropriatenessof managerial judgement which they have made in the past or the managerial judgement by thepredecessors who have nominated them as candidates for Directors from an objective point of view andcome up with measures to deny all or part of management policies until now such as drastic measures toimprove corporate value, reinvestment in core businesses (including listed subsidiaries) in accordancewith growth strategy following selection and concentration and improving profit margin by increasing
business efficiency.
(2) Incumbent Outside Directors do not have sufficient independence and expertise
As stated above, the incumbent Outside Directors have neither expertise necessary for verification of
the Company’s Managerial Issues nor independence from execution. Therefore, the proposer believes that
it is extremely difficult that the incumbent Outside Directors will show satisfactory supervisory function
when operating the Committee.
According to the Company’s announcement, the Committee plans to make an interim report inNovember 2022. In addition, the Committee plans to make a final report in February 2023 and further
announce the result of measures to improve corporate value before the next Annual General Meeting of
Shareholders. However, these measures to improve corporate value will decisively direct the Company’s
growth strategy and have important influence on shareholders. Accordingly, since upcoming six-month
period during which the Committee is active becomes extremely important as deciding the Company’s
future, the above problems at the Committee will become matters of the greatest importance to be solved
before the next Annual General Meeting of Shareholders.
Therefore, the proposer sent a letter addressed to the Company’s Board of Directors dated August 9,2022, mentioned problems at the Committee to the Company, and proposed their solutions. Specifically,
the proposer proposed the followings: (a) The Committee would be composed of Outside Directors only
so as not to adhere to existing biases; (b) The Company would assign global consulting firms, etc. withextensive experience of relevant matters in order to verify and solve the Company’s Managerial Issues;(c) The Company would form in-house teams in collaboration with the above firms; (d) The Company
would position the Committee as an organ leading and supervising these processes; and (e) The Company
would convoke the Extraordinary General Meeting of Shareholders to additionally elect Outside Directors
possessing necessary expertise and independence from execution as soon as practicable. At the same time,
the proposer informed the Company of its intention to recommend newly appointed candidates for
Outside Directors who have satisfactory capabilities to assume their responsibilities.
Meanwhile, the Company replied in the letter addressed to the proposer dated August 25, 2022 that theCompany considered it irrational that the Committee was composed of Outside Directors only, and thatfirst of all the Company would add candidates recommended by the proposer to members of theCommittee as outside advisors and review whether the Company would appoint them as candidates for
Directors in consideration of their work after that. The proposer believes that the processes proposed by
the Company in the reply will not contribute to improving the corporate value of the Company as follows.
６

Please see “New Establishment of the Corporate Value Committee,” the Company’s announced material on August 5, 2022.

- 20 -

First, the Committee has operational problems as stated above. The proposer believes that it isindispensable that the composition itself of the Committee will be changed to be Outside Directors only
and the function of the Outside Directors will be strengthened so that the Committee will come up withtruly necessary measures to improve corporate value.
In addition, even though the current Committee assigns candidates recommended by the proposer as
outside advisors, the Committee will include Operating Directors (including a founder). Outside Directors,
which are the core to ensure the effectiveness of the Committee, are also insufficient in their independence
and expertise. For this reason, the proposer does not believe that the Committee will function effectively
even if candidates recommended by the proposer become outside advisors. Furthermore, since in the caseof such method candidates recommended by the proposer are limited to outside advisors employed by the
executive, they will not assume the duty of care of a prudent manager, accountability to shareholders andother responsibilities, and will not be able to take part in the Company’s decision-making as well. As aresult, the proposer believes that there is an extremely low possibility that their expertise andindependence will be able to demonstrate sufficiently.
The proposer believes that it is indispensable that, in order for the Committee to function effectively,
the candidates recommended by the proposer will assume office of the Company’s Outside Directors who
assume the duty of care of a prudent manager to the Company and accountability to all shareholders andwill become members of the Committee. However, in consideration of a time axis that the final conclusionof the Company’s measures to improve corporate value is scheduled to be issued in February 2023, theproposer cannot wait for the election of the candidates for Outside Directors recommended by the
proposer until the Company’s Annual General Meeting of Shareholders scheduled to be held in March2023.
For this reason, the proposer is forced to request the Company to convoke the Extraordinary General
Meeting of Shareholders and propose the election of Directors as proposal by shareholders in order toavoid wasting the coming six-month period, which is extremely important, and losing the opportunity to
improve the Company’s corporate value.
Candidates for Directors recommended by the proposer
As stated above, the proposer believes that it is indispensable to additionally elect Outside Directors
who have sufficient expertise and independence in order to improve the Company’s corporate value.
Therefore, the proposer proposes that four persons, Mr. Shintaro Ishimaru, Mr. Kotaro Okamura, Mr.
Yuya Shimizu, and Mr. Takashi Tsutsui, be elected as Outside Directors of the Company. All these fourcandidates have expertise and independence of which the incumbent Outside Directors fall short and willthus be able to make the Committee’s review of measures to improve corporate value effective. In addition,
they will enhance drastically the management supervisory function of the Company’s Board of Directors
and improve governance structure, which has been the Company’s issue. Accordingly, the proposer isconvinced that candidates for Directors recommended by the proposer will significantly contribute to allshareholders by improving corporate value and strengthening governance function over the short, medium,and long term.
The career summary of the candidates is shown in “(3) Candidates’ names and career summary,” andthe reasons for their nominations are summarized below. There are no special interests between thesecandidates and the proposer.
- Mr. Shintaro Ishimaru served as General Manager of IT Planning Department and other positions ofMizuho Holdings, Inc. and after that he successively served as General Manager of IT Planning
Division, Managing Executive Officer in charge of Financial Business, Real Estate, Insurance
Business, & Logistics Company, and CIO of ITOCHU Corporation. ITOCHU Corporation is a
corporation that has realized value growth by pursuing business and capital efficiency. Specifically,
it realized high ROE by improved business efficiency and reinvestment, its stock price increased about
5 times ７ over the past 10 years, and it became the top domestic trading house on a market
capitalization basis. Having the above past careers, Mr. Shintaro Ishimaru has knowledge conducive
to improving business and capital efficiency at the Company. In addition, as Mr. Shintaro Ishimaru
also has experience serving as Audit & Supervisory Board Member of ITOCHU Techno-Solutions
Corporation, he has outstanding expert knowledge and experience backed by practice regarding thecorporate management of an IT service provider. The proposer believes that Mr. Shintaro Ishimaru
has professional knowledge valuable for the verification processes of management policies at theCommittee, and that he will provide huge value to the Company’s Board of Directors.
７

This figure was calculated based on stock price data (August 2012 through August 2022) of Bloomberg.

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- Mr. Kotaro Okamura has career at J.P. Morgan & Co. for a total period of 19 years and has engaged
in a wide range of positions including a senior position of asset management and investment bankdivision. Accordingly, he has deep knowledge about global capital markets and outstanding expert
knowledge and experience of capital costs at stock markets and the way of corporate governance. In
addition, afterwards he successively served as Japanese Representative & General Manager of Tokyo
Branch of JPMorgan Chase Bank, N.A., Representative Director & President of Thomson Reuters
Markets KK, a person responsible for Japanese subsidiary of Thomson Reuters Corporation, Senior
Advisor of Societe Generale S.A. and other positions. Therefore, he has experience backed by practice
regarding the management of global corporations with high business efficiency. Furthermore, he gives
advice on dialogue between listed companies and investors as an advisor for institutional investors
and asset management companies. He has strong enthusiasm and extensive knowledge regarding
supervisory and advisory services for listed companies. In this way, Mr. Kotaro Okamura has
professional knowledge about capital costs in stock markets, the way of corporate governance, themanagement of a global company with high business efficiency, etc. Therefore, the proposer isconvinced that Mr. Kotaro Okamura has professional knowledge valuable for the verification
processes of management policies at the Committee, and that he will provide huge value to theCompany’s Board of Directors.
- Mr. Yuya Shimizu commenced his career as an investment professional starting with non-performing
bonds and real estate investment. Since then, he has engaged in a wide range of investment services
over 17 years including a privately traded stock and stocks in Japan and Asia. He served as Presidentof an advisory subsidiary in Tokyo (Dalton Advisory KK) for the period from 2009 to 2014 at Dalton
Investments and engaged in dialogue with a number of companies as a shareholder. Currently, heserves as Representative Director & Chief Investment Officer of Hibiki Path Advisors Pte. Ltd. andcontinues to make investment in stock of listed companies in Japan and engage in dialogue with them,with value investing as an investing technique. Accordingly, Mr. Yuya Shimizu has outstanding
expert knowledge and experience regarding investment in real estate in Japan, capital costs in stock
markets, and the way of corporate governance. He has professional knowledge valuable for theverification processes of management policies at the Committee. In addition, the proposer isconvinced that his point of view as an investor backed by the experience of extensive dialogue withother companies will provide huge value to the Company’s Board of Directors.
- Mr. Takashi Tsutsui worked for Nomura Securities Co., Ltd. for many years and served as
Representative Director of Jasdaq Securities Exchange, Inc. Therefore, he has outstanding expert
knowledge and experience of capital costs in stock markets and the way of corporate governance.
After that, he engaged in management at LIXIL Group Corporation. In addition, he has served as
Outside Director at Nippon Paint Holdings Co., Ltd. since 2018 and leads the supervision of Directors
and executive compensation design conducive to the maximization of shareholder value as theCommittee Chairperson of the Compensation Committee. Nippon Paint Holdings Co., Ltd., taking
advantage of transactions with WUTHELAM HOLDINGS LIMITED in Singapore in 2014, pushed
on global M&A growth strategy which was a rare case among Japanese companies. Net sales has
risen about 4 times, operating income has increased about 3 times and market capitalization has
increased about 6 times since March 2014８. The company has realized drastic value growth throughreinvestment in core business. In this way, Mr. Takashi Tsutsui has knowledge conducive to corporate
governance and the improvement of business and capital efficiency at the Company. Therefore, theCompany (Note from the Company: sic; we understand it refers to the Requesting Shareholder) is
convinced that Mr. Takashi Tsutsui has professional knowledge valuable for the verification
processes of management policies at the Committee, and that he will provide huge value to theCompany’s Board of Directors.
The Company’s Articles of Incorporation stipulate that the number of Directors of the Company shallbe 30 or less. Therefore, even if the candidates for Directors recommended by the proposer are elected,
the number of Directors will not exceed the limit.

８

All the net sales, operating income and market capitalization are calculated based on the data of Bloomberg.

- 22 -

(3) Candidates’ names and career summary
Candidate(Note from theCompany: acandidate in
Proposal 2)

Shintaro Ishimaru

Date of birth: January 15, 1954

Number of shares of the Company held: 0■ Career summary, positions, responsibilities and significant concurrent positions
1976

Joined Dai-Ichi Kangyo Bank, Ltd. (present Mizuho Bank, Ltd.)

1998
2003

President & CEO, DKB Data Services (NY)General Manager of Taipei Branch, Mizuho Corporate Bank, Ltd.
Chairman, The Japanese Chamber of Commerce & Industry Taipei
Executive Officer, ITOCHU Corporation

2006
2006
2009
2011
2011
2012
2013
2019

Candidate 1

General Manager of IT Planning Division, ITOCHU Corporation
Managing Executive Officer & Executive Vice President of Financial Business, Real Estate, Insurance
Business, & Logistic Company, ITOCHU Corporation
Assistant to Officer in charge of Specific Services, ITOCHU Corporation
CIO & Assistant to Officer in charge of Specific Services, ITOCHU Corporation
CIO & Executive Vice President of General Products & Realty and ICT Company, ITOCHU
Corporation
Audit & Supervisory Board Member, ITOCHU Techno-Solutions Corporation
Delegated Outside Advisor in charge of IT strategy of General Products & Realty Company, ITOCHU
Corporation

Kotaro Okamura

Date of birth: November 11, 1955
Number of shares of the Company held: 0■ Career summary, positions, responsibilities and significant concurrent positions
1979

Joined The Sumitomo Bank, Ltd. (present Sumitomo Mitsui Banking Corporation)

1990

Joined J.P. Morgan & Co. and assigned to Sales Department, J.P. Morgan Trust Bank Ltd.

1995

Investment Banking Headquarters, JPMorgan Securities Japan Co., Ltd.

2004

Japanese Representative & General Manager of Tokyo Branch, JPMorgan Chase Bank, N.A.

2009

Representative Director & President, Thomson Reuters Markets KK

2012

Senior Advisor of Tokyo Branch, Societe Generale Securities Japan Limited

2019

Senior Advisor, IFM Investors (to the present)[Significant concurrent position]
Senior Advisor, IFM Investors- 23 -

Candidate(Note from theCompany: acandidate in
Proposal 2)

Yuya Shimizu

Date of birth: November 8, 1971

Number of shares of the Company held: 0■ Career summary, positions, responsibilities and significant concurrent positions
1994

Joined Tokyo Branch, Goldman Sachs Japan, Co., Ltd.

2000

Joined MOORE STRATEGIC VALUE PARTNERS, LLC

2003

Joined AC Capital, Inc.

2004

Joined Asuka Asset Management Co., Ltd.

2005

Joined Jarmin Capital Co., Ltd.

2007

Joined Dalton Investments Group2010

Assumed Representative Director, Dalton Advisory KK

2011

Assumed Outside Director, SunTelephone Co., Ltd.
Founded OTS Capital Management Limited (Hong Kong)
Assumed Cofounder & Senior Portfolio Manager, OTS Capital Management Limited
Founded Hibiki Path Advisors Pte. Ltd. (Singapore)
Representative Director & Chief Investment Officer, Hibiki Path Advisors Pte. Ltd. (to the present)[Significant concurrent position]

2015
2016

Representative Director & Chief Investment Officer, Hibiki Path Advisors Pte. Ltd. (Singapore)* Hibiki Path Advisors Pte. Ltd. (Singapore), at which Mr. Yuya Shimizu serves as Representative, has concluded discretionary

investment management agreements with Hibiki Path Value Fund and Hibiki Path Aoba Fund holding 0.15% (in total) of theCompany’s stock as of August 31, 2022.
Candidate 2

Takashi Tsutsui

Date of birth: July 3, 1950
Number of shares of the Company held: 0■ Career summary, positions, responsibilities and significant concurrent positions
1974

Joined Nomura Securities Co., Ltd. (present Nomura Holdings, Inc.)

2002

2011

Director, Nomura Holdings, Inc.
Senior Executive Officer, Nomura Securities Co., Ltd. (established as a subsidiary of Nomura
Holdings, Inc. by means of company split)
President and Representative Director, Jasdaq Securities Exchange, Inc. (present Japan ExchangeGroup, Inc.)
Director and Vice President Executive Officer, LIXIL Group Corporation

2014

Director, Vice President Executive Officer and Chief External Relations Officer, LIXIL Corporation

2017

Representative, Ryuju Consulting (to the present)

2018

Outside Director, Nippon Paint Holdings Co., Ltd. (to the present)

2021

Outside Director, Rozetta Corp. (present MetaReal Corp.) (to the present)

2003
2005

[Significant concurrent positions]Representative, Ryuju Consulting; Outside Director, Nippon Paint Holdings Co., Ltd.; Outside
Director, MetaReal Corp.

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○ Opposition from the Board of Directors on Proposal 3[Opinion]

The Board of Directors of the Company is opposed to Proposal 3.
As stated in Proposal 1, the Corporate Value Committee has been examining a set of skills necessary for the
Board of Directors of the Company and the composition of the Board of Directors.
On the other hand, the Requesting Shareholder has been rapidly purchasing the Company’s additional shares
since its shareholder proposal for requesting the election of two (2) Directors and the rejection of the proposal
at the 52nd Annual General Meeting of Shareholders of the Company held on March 11, 2022. While theownership ratio was 9.28% in the Large Volume Holding Reports submitted on December 23, 2021, that was
raised to 19.40% in June 2022. Although the acquisition of shares was temporality suspended after that, theacquisition of shares was resumed after the request dated September 1, 2022 for the convocation of an
extraordinary general meeting of shareholders and it was confirmed that the ownership ratio increased to 21.45%
in the Change Report submitted on October 4, 2022.
At the same time, we received requests from the Requesting Shareholder including the increase of Outside
Directors at the Board of Directors and Corporate Value Committee of the Company. We seriously examined
the requests and proposed that candidates recommended by the Requesting Shareholder be added to themembers of the Corporate Value Committee as outside advisors in the letter addressed to the Requesting
Shareholder. However, the Requesting Shareholder strongly requested persons recommended by the Requesting
Shareholder to become Outside Directors, resulting in the shareholder proposal for electing Directors this time.
We also recognized the necessity of an increase in the number of Outside Directors through dialogue with
the Requesting Shareholder and other institutional investors and verification at the Corporate Value Committee.
Accordingly, we believed that we should seriously examine the acceptance of candidates proposed by the
Requesting Shareholder if they are appropriate candidates. We performed deliberations and examinations in thesame manner as other candidates in the Company proposal, including interviews with the candidates at theManagement Conference. At the same time, we believed that when we accepted candidates recommended by
the Requesting Shareholder, which had become a major shareholder by rapidly purchasing additional shares asstated above, as Directors, careful examination would be required taking into consideration the interests of othergeneral shareholders.
We have been exploring ways to develop an environment for constructive dialogue with the Requesting
Shareholder even after this Extraordinary General Meeting of Shareholders, including ensuring the effective
independence of candidates in the shareholder proposal from the Requesting Shareholder, by entering into anagreement with the Requesting Shareholder which provides for restrictions on the additional purchase of theCompany’s shares by the Requesting Shareholder, restrictions on shareholder proposals, etc. during the term ofoffice of candidates for the Company’s Directors in the shareholder proposal, as a precondition for assumptionof office of such candidates. However, we have not yet reached an agreement with the Requesting Shareholder.
As a result of comprehensive examination including the above situation, although it is necessary to more
carefully examine the shareholder proposal requesting the election of Directors as the Requesting Shareholder
has been rapidly purchasing additional shares of the Company, we have determined that we will assess whether
or not a candidate has necessary skills based on the Company’s past examination for the composition of theBoard of Directors, etc. (For the details of examination at the Corporate Value Committee, etc., please see“Reason for the Proposal” in Proposal 1.), while taking into consideration the perspective of the overall
appropriate size of the Board of Directors, and that we should accept appropriate candidates for Director, if any,in light of the improvement of the Company’s corporate value.
We had the Management Conference (including the functions of the nomination, remuneration and ethics
committees), the majority of which is composed of Independent Outside Directors and which is an advisoryorgan of the Board of Directors, to deliberate on the candidates for Director in the shareholder proposal in thesame way as candidates for Director in the Company proposal. The Management Conference had interviews
with and evaluated the candidates. As a result, as presented in Proposal 2, we decided to propose the election of
two (2) candidates in the Company proposal as well from among the candidates for Director whose election was
proposed by the Requesting Shareholder.
However, the skills possessed by the other two (2) candidates for Director in the shareholder proposal overlap
with those possessed by incumbent Directors of the Company and candidates for Director in the Company
proposal (Proposal 1). The Company was also unable to confirm that they would demonstrate their abilities inorder to improve the Company’s corporate value, considering the records of interviews with the candidates- 25 -

conducted by the Management Conference.
Furthermore, because all four (4) candidates for Director in the shareholder proposal are from financial
markets and their skills are imbalanced and redundant to some extent, from the perspective of truly enhancing
corporate value of the Company which the Company is to offer to stakeholders including shareholders otherthan the Requesting Shareholder, we have determined that the order of priority of promoting Mr. Kotaro
Okamura and Mr. Takashi Tsutsui is lower. Moreover, as stated in Proposal 1, given that companies with 14 ormore Directors account for only about 1% of the total listed companies and are small in number, we believe thata Board of Directors with more than 14 Directors would be more detrimental to the flexible operation andsubstantive discussions than beneficial. Therefore, we have determined that the Director composition consistingof five (5) candidates for Director in the Company Proposals 1 and 2 and incumbent Directors of the Company
will be an optimal structure to realize the Company’s corporate value improvement.
Accordingly, the Board of Directors of the Company is opposed to the shareholder proposal presented in this
Proposal.

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