(TRANSLATION FOR REFERENCE PURPOSES ONLY)
Securities code: 6118
June 4, 2019
To Our Shareholders with Voting Rights
Kimikazu Aida
Representative Director,
Chairman & President (CEO)AIDA ENGINEERING, LTD.
2-10 Ohyama-cho, Midori-ku, Sagamihara,
Kanagawa 252-5181, Japan
Notice of the 84th Ordinary General Meeting of Shareholders
Dear Shareholders:
We would like to take this opportunity to express our sincere appreciation for your support.
You are cordially invited to attend the 84th Ordinary General Meeting of Shareholders of AIDA ENGINEERING,
LTD. (hereinafter, the “Company”), to be held as described below.
If you are unable to attend the meeting, you may exercise your voting rights in writing or via the Internet.
Please review the Reference Documents for the General Meeting of Shareholders provided in the following
pages and exercise your voting rights by no later than 6:00 p.m., Tuesday, June 25, 2019.
1. Date:
2. Place:

10:30 a.m., Wednesday, June 26, 2019
The conference room of the Company
2-10 Ohyama-cho, Midori-ku, Sagamihara, Kanagawa, Japan

3. Objectives of the Meeting:
Reports:
1. Report on the Business Report, Consolidated Financial Statements andNon-Consolidated Financial Statements for the 84th Fiscal Year (from April 1,2018 to March 31, 2019)
2. Audit Reports of the Accounting Auditors and the Board of Statutory Auditorson the Consolidated Financial Statements for the 84th Fiscal Year (from April 1,2018 to March 31, 2019)
Agenda:Proposal 1
Proposal 2
Proposal 3

Appropriation of Retained Earnings
Election of Eight (8) Directors
Continuation of Policy toward a Large-Scale Purchase (Takeover Defense
Measures)

4. Other matters regarding this Notice(1) Among the documents to be provided in this Notice, Subscription Rights for New Shares etc. and Corporate
Systems and Policies in the Business Report, the Consolidated Statements of Changes in Net Assets, theNotes to Consolidated Financial Statements, the Non-Consolidated Statements of Changes in Net Assets,
and the Notes to Non-Consolidated Financial Statements are posted on the Company’s website(http://www.aida.co.jp) pursuant to applicable laws and regulations and Article 16 of the Articles ofIncorporation of the Company. The attached documents in this Notice are therefore parts of the Business
Report, the Consolidated Financial Statements and the Non-Consolidated Financial Statements audited by
the Statutory Auditors in the preparation of Audit Report and the Consolidated Financial Statements and theNon-Consolidated Financial Statements audited by the Accounting Auditors in the preparation of
Independent Auditor’s Report.
(2) If circumstances occur that may require changes to the Reference Documents for the General Meeting of
Shareholders, the Business Report, the Consolidated Financial Statements, and the Non-Consolidated
Financial Statements, such changes shall be posted on the Company’s website (http://www.aida.co.jp) on
the Internet.

1

(3) You may exercise your voting rights by proxy by having another shareholder who holds voting rights attend
the General Meeting of Shareholders on your behalf. Please note, however, that a document evidencing theauthority of proxy must be submitted.
(4) Notice of resolutions made by this General Meeting of Shareholders shall be posted on the Company’s
website, shown above, instead of by mail as in the past. Thank you for your understanding.

(Information)
 For those attending, please present the enclosed Voting Rights Exercise Form at the reception desk upon
arrival at the meeting. Also, please bring this Notice with you for resource-saving purposes.
 Proceedings on the day will be in Japanese. Please note that we will not provide an interpreter.

2

Reference Documents for the General Meeting of Shareholders
Proposals and references
Proposal 1-Appropriation of Retained Earnings
The Company strives to increase its corporate value and to ensure continuous growth of earnings per share bystrengthening its operation basis, improving Company quality and by carrying out its operation from a global
perspective, while recognizing that improvement of profit distribution to shareholders is one of our mostimportant management issues.
Our basic policy on dividends is to maintain stable dividends, targeting 30% or more of the consolidated dividend
payout ratio, while taking into account such matters as securing stability of the business base and maintaining
internal reserves for growth investment in the future.
Based on the above policy, for the fiscal year under review, the Company will pay an ordinary dividend of ¥30 per
share.
Matters relating to year-end dividends(1) Category of dividend assets
Cash(2) Matters relating to the allocation of dividend assets and the total amount of such allocation¥30 per share of the Company’s common stock
Total payment: ¥1,955,096,730(3) Date on which the dividend of retained earnings shall take effectJune 27, 20193

Proposal 2-Election of Eight (8) Directors
The terms of office of all seven (7) Directors (of which, two (2) are Outside Directors) will expire at theconclusion of this General Meeting of Shareholders. Accordingly, it is proposed to elect eight (8) Directors (ofwhich, three (3) are Outside Directors), increasing the number of Outside Directors by one (1), to further
strengthen the management supervision function.
If this Proposal is approved in its current form, the proportion of Independent Outside Directors in the Board of
Directors will be greater than one third.
The candidates for Directors are listed below.
Current positions and duties at theNo.
Name
Candidate attribute
Company
Representative Director, Chairman &President (CEO)Candidate for re-election
1 Kimikazu Aida
Division Manager, Research andDevelopment Headquarters
Director, Executive Vice President andCandidate for re-election
2 Naoyoshi Nakanishi
COO
Director, Senior Managing Executive
Officer
Candidate for re-election
3 Toshihiko Suzuki
Division Manager, Sales & Customer
Service Headquarters
4

Yap Teck Meng

Director, Managing Executive Officer

Candidate for re-election

5

Masahiro Kawakami

Director, Operating Officer

Candidate for re-election

6

Kimio Oiso

Director

7

Hirofumi Gomi

Director

8

Jiro Makino-

Candidate for re-election
Outside Director
Independent Director
Candidate for re-election
Outside Director
Independent Director
New candidate
Outside Director
Independent Director

4

No.

Name
(Date of birth)

Joined AIDA ENGINEERING, LTD.
Director
Representative Director (current position)
President (current position)
Chief Executive Officer (CEO)Kimikazu Aida
(current position)(December 13, 1951) October 2011 Division Manager, Research & Development
Headquarters (current position)
June
2018 Chairman (current position)<Concurrent holding of important positions>
Chairman, AIDA AMERICA CORP.
Chairman, AIDA S.r.l.
< Reasons for electing the candidate for Director>
Kimikazu Aida has led global strategies and development of new products as
Representative Director since 1989, and has been contributing to rapid expansion ofbusiness up to the present time. He has abundant experience and knowledge as amanager and we judge that he is the right person for realization of sustainableimprovement of corporate value. Based on the above, the Company requests his
re-election as Director to make good use of his experience and knowledge formanagement of the Company and further enhancement of the decision-making andsupervisory functions of the Board of Directors.

Candidate forre-election

1

Number of theCompany’s
shares held

December 1976
June
1982
September 1989
April
1992
April
2001

Joined AIDA ENGINEERING, LTD.
Director
Executive Director
Director (current position)
Division Manager, Production Headquarters
Chief Operating Officer (COO)
Naoyoshi Nakanishi(current position)(June 3, 1951)
October 2011 Executive Vice President (current position)
January
2013 Division Manager, Sales & Customer Service
Headquarters
March
2014 General Manager, Global Operation
Promotion Office<Concurrent holding of important positions>
Chairman, ACCESS, LTD.
< Reasons for electing the candidate for Director>
Naoyoshi Nakanishi has been supervising the manufacturing division of the entire
Company as Director since 1997 and the business of the entire Group as Chief Operating
Officer since 2010. He is well versed in the Company’s business administration in
general and has abundant experience and knowledge, and we judge that he isindispensable to management of the Company. Based on the above, the Company
requests his re-election as Director to make good use of his experience and knowledge
for management of the Company and further enhancement of the decision-making andsupervisory functions of the Board of Directors.

Candidate forre-election

2

Brief personal history, position, duties andconcurrent holding of important positions

March
June
May
June
JanuaryJune

1,445,823

1970
1997
2000
2001
2010
2010

5

125,548

No.

Name(Date of birth)

Joined AIDA ENGINEERING, LTD.
Operating Officer
Division Manager, Engineering Headquarters
Director (current position)
Toshihiko Suzuki
Managing Executive Officer(August 28, 1961)
Division Manager, Sales Headquarters
June
2018 Senior Managing Executive Officer (current
position)
October 2018 Division Manager, Sales & Customer Service
Headquarters (current position)<Concurrent holding of important positions>
Chairman, ＲＥＪ Co., Ltd.
< Reasons for electing the candidate for Director>
Toshihiko Suzuki has mainly engaged in the engineering division to date and currently
supervises the engineering and sales divisions of the entire Consolidated Group as Senior
Managing Executive Officer of the Company, while assuming management as Chairmanof an important domestic subsidiary. He has abundant experience and knowledge
concerning operations and management of the Company. To make good use of such
experience and knowledge for management of the Company and further enhancement of
the decision-making and supervisory functions of the Board of Directors, the Company
requests his re-election as Director.
Candidate forre-election

3

Number of theCompany’s
shares held

December 2011
June
2014
May
2015
June
2015
June
2017

Joined AIDA MANUFACTURING(MALAYSIA) SDN.BHD. (currently AIDAENGINEERING (M) SDN. BHD.)
November 2007 Operating Officer, AIDA ENGINEERING,
LTD.
June
2010 Managing Executive Officer
Yap Teck Meng
June
2013 Director (current position)(September 4, 1962) June2013 Executive Officer
June2014 Managing Executive Officer (current
position)<Concurrent holdings of important positions>
Chairman and Managing Director, AIDA GREATER ASIA PTE.
LTD.
Chairman, AIDA ENGINEERING (M) SDN. BHD.
Chairman, AIDA ENGINEERING CHINA CO., LTD.
Chairman, AIDA PRESS MACHINERY SYSTEMS CO., LTD.
< Reasons for electing the candidate for Director>
Yap Teck Meng has assumed management for many years as the top of Asian regional
subsidiaries of the Consolidated Group, and currently supervises the service divisions of
the entire Consolidated Group and management of the Group’s businesses in South East
Asia and China as Managing Executive Officer of the Company. He has abundant
experience and knowledge concerning operations in general and management of theCompany. To make good use of such experience and knowledge for management of theCompany and further enhancement of the decision-making and supervisory functions of
the Board of Directors, the Company requests his re-election as Director.
Candidate forre-election

4

Brief personal history, position, duties andconcurrent holding of important positions

June

5,935

1996

6

0

No.

Name
(Date of birth)

Joined AIDA ENGINEERING, LTD.
General Manager, Fabrication & Machining
Department
January
2013 General Manager, Sales Management
Department, Sales & Customer Service
Headquarters
Masahiro Kawakami June2014 Vice President, AIDA S.r.l.
(September 24, 1968) June2015 Operating Officer (current position)
July
2016 President, AIDA S.r.l. (current position)
June
2018 Director (current position)
Vice Chairman, AIDA AMERICA CORP.
(current position)<Concurrent holdings of important positions>
President, AIDA S.r.l.
Vice Chairman, AIDA AMERICA CORP.
< Reasons for electing the candidate for Director>
Masahiro Kawakami has mainly engaged in the production division since joined theCompany and taken part in other divisions including sales and marketing as well. He also
has experience in working in Europe and the USA, and currently serves as Operating
Officer to supervise management of businesses in Europe and the USA and assist thesupervising of the production division of the entire Consolidated Group as well as being
in charge of management of an Italian subsidiary, our important base, as President. He
has abundant experience and knowledge concerning operations in general andmanagement of the Company. To make good use of such experience and knowledge formanagement of the Company and further enhancement of the decision-making andsupervisory functions of the Board of Directors, the Company requests his re-election as
Director.
July
2000 Statutory Auditor, The Dai-ichi Mutual Life
Insurance Company (currently Dai-ichi Life
Candidate for
Insurance Company, Ltd.)re-election
Representative Director and Senior Executive
July
2007
Outside Director
Officer, The Dai-ichi Mutual Life Insurance
Independent Director
CompanyJune2008 Statutory Auditor, AIDA ENGINEERING,
Kimio Oiso
LTD.
(October 8, 1946) April
2010 Director, The Dai-ichi Life Insurance
Company, Ltd.
Board of Directors’ June2010 Retired (resigned) from Director, The
meeting attendanceDai-ichi Life Insurance Company, Ltd.
during the fiscal year July2010 President, The Cardiovascular Instituteended March 31,
June2012 Director, AIDA ENGINEERING, LTD.
2019 - 100% (all 12(current position)
meetings)<Concurrent holding of important positions>Not applicable< Reasons for electing the candidate for Outside Director>
Kimio Oiso has abundant experience and knowledge as a corporate manager and has
been providing advice and suggestions useful for management of the Company from an
independent and objective point of view. For reasons mentioned above, the Company
judges that he is suitable as Outside Director of the Company and requests his re-election
as Outside Director.
Candidate forre-election

5

6

Brief personal history, position, duties andconcurrent holding of important positions
March
OctoberNumber of theCompany’s
shares held

1991
2011

7

4,988

7,407

No.

Name
(Date of birth)
April
Candidate forJulyre-election
Outside Director
Independent Director June

1998

July

2000

July

2001

July

2002

Hirofumi Gomi
(May 13, 1949)

7

Brief personal history, position, duties andconcurrent holding of important positions
1972
1996

July
2004
July
2007
November 2009

Board of Directors’
meeting attendance
during the fiscal year June
ended March 31,
2019 - 100% (all 12 January
meetings)
February

Number of theCompany’s
shares held

Joined the Ministry of FinanceDirector of the Research Division, Banking
Bureau, Ministry of FinanceDirector-General, Inspection Department,
Financial Supervisory Agency (currently
Financial Services Agency)
Secretary-General, Executive Bureau,
Securities and Exchange SurveillanceCommission, Financial Services Agency
Director-General, Inspection Bureau,
Financial Services Agency
Director-General, Supervisory Bureau,
Financial Services Agency
Commissioner, Financial Services Agency
Resigned Financial Services Agency
Visiting Professor, Aoyama Gakuin
University (current position)

2011

Auditor, MIROKU JYOHO SERVICE CO.,LTD.
2014 Advisor, NISHIMURA & ASAHI (current
position)2015 Senior Advisor, THE BOSTON
CONSULTING GROUP (current position)June
2015 Director, AIDA ENGINEERING, LTD.
(current position)
June
2016 Director, Infoteria Corporation (currently
Asteria Corporation) (current position)
Director, MIROKU JYOHO SERVICE CO.,LTD. (current position)
June
2017 Director, SBI Holdings, Inc. (current
position)<Concurrent holding of important positions>Not applicable< Reasons for electing the candidate for Outside Director>
Hirofumi Gomi has abundant experience and advanced expertise acquired through his
participation in the financial administration of the country as Commissioner of the
Financial Services Agency, etc. and has been providing advice and suggestions useful for
management of the Company from an independent and objective point of view. He hasabundant experience in corporate management as an outside director or outside auditor ofother companies, and the Company judges that he is suitable as Outside Director of theCompany and requests his re-election as Outside Director.

8

0

No.

Name
(Date of birth)

Brief personal history, position, duties andconcurrent holding of important positions

New Candidate
December 1967
Outside Director
May
1974
Independent Director March
1977

8

July

1978

June

1979

October

1982

Jiro Makino(September 10, 1939) June

1985

May

1997

June

2006

Number of theCompany’s
shares held

Joined Makino Milling Machine Co., Ltd.
Director, Makino Milling Machine Co., Ltd.
Director, Executive Manager, Sales Division,
Makino Milling Machine Co., Ltd.
Vice President, Director, Makino Milling
Machine Co., Ltd.
Executive Manager, Makino Milling MachineCo., Ltd.
Executive Vice President, General Manager
of Engineering Division, Makino Milling
Machine Co., Ltd.
President & Representative Director, Makino
Milling Machine Co., Ltd.
Vice Chairman, Japan Machine Tool
Builders’ Association (JMTBA)

Director, TOKYO OHKA KOGYO CO.,
LTD.
June
2016 Retired (resigned) as President &Representative Director, Makino Milling
Machine Co., Ltd.
<Concurrent holding of important positions>Not applicable< Reasons for electing the candidate for Outside Director>
Jiro Makino has a thorough understanding of the machine tool business, as well as
abundant experience and knowledge in the management of a publicly listed company,
acquired through many years of service as President & Representative Director of
Makino Milling Machine Co., Ltd. From this, the Company judges that he is a suitable
candidate, capable of providing advice and suggestions useful for management of theCompany from an independent and objective point of view, and requests his election as
Outside Director.

0(Note) 1. There is no special interest between the above candidates and the Company.
2. The number of the Company’s shares each candidate holds is shown including shares of stock in
Officer’s Shareholding Association.
3. Kimio Oiso, Hirofumi Gomi and Jiro Makino are candidates for Outside Director as stipulated in
Article 2, Paragraph 3, Item 7 of the Ordinance for Enforcement of the Companies Act.
4. The Company designated Kimio Oiso and Hirofumi Gomi as Independent Directors as defined by
Tokyo Stock Exchange, Inc., and registered them with the Tokyo Stock Exchange as Independent
Directors. If the re-election of both Kimio Oiso and Hirofumi Gomi is approved at this General
Meeting of Shareholders, the Company will re-designate them as Independent Directors.
Furthermore, if the election of Jiro Makino is approved, then the Company will designate and register
him with the Tokyo Stock Exchange as an Independent Director.
5. The term of office of Kimio Oiso as Outside Director is seven (7) years at the closing of this General
Meeting of Shareholders, and the term of office of Hirofumi Gomi as Outside Director is four (4)years at the closing of this General Meeting of Shareholders.
6. Pursuant to the Articles of Incorporation, the Company has entered into contracts with Kimio Oiso and
Hirofumi Gomi, which provide that the liability for damages stipulated in Article 423, Paragraph 1 of
the Companies Act shall be up to the minimum liability amount specified in each item of Article 425,
Paragraph 1 of the same law. If the re-election of both Kimio Oiso and Hirofumi Gomi is approved at
9this General Meeting of Shareholders, the Company will continue the aforementioned liability
limitation contracts with them.
Furthermore, if the election of Jiro Makino is approved, then the Company will enter into a similar
contract with him.
(Reference) Independence Criteria for Outside Officers
The Company has stipulated the criteria for the independence of Outside Officers as follows for the determinationof their independence.
In principle, a person who does not fall under any of the following items at present or within the past three years(1) A party whose major business partner is the Company, or an executor of business thereof if the party is a
corporation, etc.
(2) A major business partner of the Company, or an executor of business thereof if the party is a corporation, etc.
(3) A consultant, accounting specialist or legal specialist who receives a significant amount of money or otherproperty from the Company other than the compensation from the Company as an Outside Officer.
(4) An employee, etc. of the consulting firm, accounting office or law firm, etc. whose major business partner isthe Company(5) A party who receives a significant amount of donation, etc. from the Company, or an executor of businessthereof if the party is a corporation, etc.
(6) A major shareholder (a party who holds more than 10% of the total voting rights) of the Company, or an
executor of business thereof if the party is a corporation, etc.
(7) A close relative of the following (excluding insignificant person)
A. A person who falls under (1) to (6) described above
B. A Director, Statutory Auditor, Operating Officer or important employee of the Company or its subsidiary10

Proposal 3-Continuation of Policy toward a Large-Scale Purchase (Takeover Defense Measures)
AIDA ENGINEERING, LTD. (hereinafter referred to as the “Company”) resolved (i) to maintain the “basic
policy concerning the person who controls the decisions on the Company’s financial and business policies” asprovided for in Article 118, Item 3 of the Ordinance for Enforcement of the Companies Act (hereinafter referred
to as the “Basic Policy Concerning Company Control”), and (ii) to continue to adopt the policy toward thelarge-scale purchase of the Company’s shares, etc. (hereinafter referred to as the “Current Policy”) at the meetingof the Board of Directors held on May 12, 2016, and these resolutions were approved by the shareholders at an
Ordinary General Meeting of Shareholders held on June 28, 2016.
Since the Current Policy expires at the close of the Ordinary General Meeting of Shareholders to be held in June
2019, based on changes in economic outlook, amendments to the laws and regulations and other circumstances,
the Company has further examined the Current Policy in an effort to secure and improve the common interests ofthe shareholders.
As a result of such examination, the Company resolved at the meeting of the Board of Directors held on May 14,
2019, (i) to maintain the Basic Policy Concerning Company Control, and (ii) to continue to adopt such Current
Policy as a policy toward the large-scale purchase of the Company’s shares, etc. (hereinafter referred to as the“Policy”), as set forth below, on condition that the Company’s shareholders approve the Policy at the Ordinary
General Meeting of Shareholders to be held on June 26, 2019. Accordingly, we request for the approval by theshareholders.
In order to continue the Policy, the Company has amended the following points as well as some of theexpressions:With respect to the Necessary Information (defined in III.2. below), the Company sets 60 days for theupper limit of the period during which the Company may require additional information from theLarge-Scale Purchaser (defined in III. below) (see III.2. below).
The Company may extend the Board Assessment Period (defined in III.2. below) as needed up to a
maximum of 30 days (see III. 2. below).
Except for the 5 types of cases the so-called “four types of takeovers that harm shareholders’ interest heldby the Tokyo High Court judgment” ((Note 4) (i) through (iv) of III.3. (1) below) or the coercive,
two-tiered takeover (see (Note 4) (v) of III.3.(1) below), the Company has tightened the requirements for
implementing countermeasures so that the countermeasures can be taken only by resolution of the General
Meeting of Shareholders (see III.3. (1)).
The Company has changed the details of “every special effort to realize the Basic Policy Concerning
Company Control” (see II below).
If the approval of the Company’s shareholders is obtained at the Ordinary General Meeting of Shareholders to beheld on June 26, 2019, the Policy will become effective on the date of such approval and expire at the close of theOrdinary General Meeting of Shareholders to be held in June 2022.
The Policy was unanimously approved by the Directors present at the aforementioned meeting of the Board of
Directors, and all of three Auditors (all of whom are Outside Auditors) agreed with the Policy on condition thatthe specific operation of the Policy will be appropriately made.
At present, no specific proposal concerning the large-scale purchase of the Company’s shares, etc. has been made.

11

〈Summary of the Policy〉
Basic Policy Concerning Company Control andPolicy toward a Large-Scale Purchase (Take-over Defense Measures)〇 Purpose of the Policy

1. The Company believes that the Policy is necessary because it enables the Company to protect the common
interests of the shareholders against sudden large-scale purchases by making appropriate judgments thattake into account highly-technical knowledge concerning the press machine business, specific management
know-how, relationships established with the company's stakeholders and other factors.
2. By continuing the Policy:(i) information and time can be secured to sufficiently examine and assess the proposal of a large-scalepurchase taken by the Large-Scale Purchaser.
(ii) countermeasures may be taken against large-scale purchases that fail to observe the Large-Scale
Purchase Rules, ones that have abusive purposes or are inappropriate or that are deemed seriously
undermine the common interests of the shareholders.
3. At the time of implementation of countermeasures:(i) the Board of Directors shall respect the recommendations of the Special Committee, which is ensured
its independence, to the utmost extent.
(ii) for any large-scale purchases that fail to observe the Large-Scale Purchase Rules or any large-scalepurchases that have abusive purposes or are inappropriate, the countermeasures can be performed
after being passed by a resolution at the General Meeting of Shareholders as necessary.
(iii) for any large-scale purchases except above (ii), but still deemed seriously undermine the common
interests of shareholders, the countermeasures can be performed only after being passed by aresolution at the General Meeting of Shareholders.
As stated above, the purpose of the Policy is to protect the common interests of the shareholders by preventing
the impairment of the Company’s corporate value.

〇 Flow Chart concerning the Policy

The above summary was prepared to explain the outline of the Policy.

12

Please refer to the main text for details.

I.

Substance of Basic Policy Concerning the Person Who Controls the Decisions on the Company’s Financial
and Business Policies

The Board of Directors believes that since the Company, as a public corporation, allows the free purchase and saleof the Company’s shares, if a specific person intends to conduct a large-scale purchase aiming at acquiring such
number of the Company’s shares as may have an influence on the decisions of the Company’s financial andbusiness policies, the Company’s shareholders should make the final decision regarding whether or not to accept
such large-scale purchase.
However, in managing the Company, it is indispensable to have specific management know-how based onhighly-technical knowledge concerning the press machine business, which is the Company’s principal business,
and an understanding of the relationships established with the Company’s stakeholders, such as the Company’s
domestic and foreign affiliated companies, business partners and customers, and without a sufficientunderstanding of the above matters by a person controlling decisions on the Company’s financial and business
policies, the common interests of the shareholders that could be realized in the future by the Company’s
shareholders may be damaged.
The Company has made and shall make every effort to cultivate investors’ understanding of the fair value of theCompany’s shares through IR activities; provided, however, that it is indispensable that the Company’s
shareholders be provided with appropriate and sufficient information by both the large-scale purchaser and theBoard of Directors in order to appropriately determine, within a short period of time, whether or not the purchaseprice of the Company’s shares proposed by the large-scale purchaser is reasonable, when a large-scale purchase issuddenly made. In addition, the potential impact of the large-scale purchase on the Company’s future
management, as well as management policies and business plans, including a policy on the relationships with theCompany’s stakeholders, such as the Company’s employees, affiliated companies, business partners andcustomers, which the large-scale purchaser wishes to adopt when the large-scale purchaser participates in the
Company’s management, are material information for the Company’s shareholders in order to decide whether tocontinue to hold shares in the Company or not. The Company also believes that the opinion of the Board of
Directors toward the large-scale purchase is material to the decision-making process of the Company’s
shareholders.
Taking the above into account, the Company believes that, if a specific person intends to make a large-scalepurchase aiming at acquiring the number of the Company’s shares which may have an influence on the decisions
on the Company’s financial and business policies, such large-scale purchaser should provide the Board of
Directors with necessary and sufficient information regarding the large-scale purchase in advance and should beallowed to commence the large-scale purchase only after a certain assessment period for the Board of Directors
elapses, in accordance with certain reasonable rules established and disclosed in advance by the Company for the
benefit of the decision-making process of the Company’s shareholders.
In addition, among large-scale purchases, it cannot be said that there are never cases where the large-scalepurchase in question has clearly abusive purposes or is inappropriate (please refer to III. 3. (1), Note 4 below for
details) and as a result will seriously undermine the common interests of the shareholders, including the cases
where irreparable damage is caused to the Company. In order to protect the common interests of theshareholders, the Company believes that it is necessary to take such measures against such kind of large-scalepurchase as the Board of Directors deems appropriate in accordance with certain reasonable rules established anddisclosed in advance by the Company. (The aforementioned basic policy concerning what and how a person
controlling decisions on the Company’s financial and business policies should be is hereinafter referred to as the“Basic Policy Concerning Company Control.”)II.

Effective Utilization of the Company’s Assets, Formation of Appropriate Consolidated Group and Other
Special Efforts to Realize the Basic Policy Concerning Company Control

In addition to the efforts set forth in III. below, the Company has made and shall make every special effort torealize the Basic Policy Concerning Company Control, as follows.
The Company and its subsidiaries (with the Company, hereinafter referred to as the “Consolidated Group”) haveadopted the corporate philosophy to develop activities as a forming system builder and to contribute to people andsociety.

13

Pursuant to this corporate philosophy, the Consolidated Group focuses on the technical and product developmentof forming systems that meet the diversified values and needs of our many customers in the global marketplace, as
the pillar of its management strategies to become the world’s “top runner” over the long term in the area of
forming systems. The Consolidated Group also promptly provides high-quality products and services tocustomers located all over the world, by fully leveraging its five production bases within Japan, four overseas
production bases (U.S.A., Italy, Malaysia and China), and the sales and service bases in 19 countries around theworld.
The mid-term management plan (FY 2018/3-2020/3), which commenced in April 2017, presents the slogan “New
Challenges for the AIDA’s Next Century” and we set core strategies such as (i) develop markets and customers,(ii) improve product competitiveness, (iii) strengthen strategic business segments, (iv) sophistication of our global
business structure, (v) human resource development and (vi) strengthen our foundation for growth.
Amid these efforts, the Consolidated Group will build a relationship of long-term trust with the Company’s
stakeholders, such as the Company’s shareholders, customers, business partners, employees and local
communities, through development, production, sales and services in respect of innovative forming systems thatdeal with various materials, including metals, and contribute to people and society in accordance with its
corporate philosophy.
The Company believes that, since the aforementioned efforts will improve the corporate value of the Consolidated
Group and, consequently, decrease the risk of appearance of large-scale purchasers who may considerably impair
the common interests of the shareholders, the said efforts will go along with the Basic Policy Concerning
Company Control. In addition, the Company believes it is clear that, since such efforts aim at improving thecorporate value of the Consolidated Group, such efforts will not impair the common interests of the shareholders
nor will they aim at maintaining the status of the Company’s Officers.
III.

Efforts to Prevent the Company’s Property and Decisions on Business Policies from Being Controlled by
an Inappropriate Person according to the Basic Policy Concerning Company Control

In the event that any purchase of the Company’s Shares and Other Securities1 by a Group of SpecificShareholders2 is implemented with the intent to hold 20% or more of the Voting Rights Ratio3 of the Group ofSpecific Shareholders or any purchase of the Company’s Shares and Other Securities resulting in the Group ofSpecific Shareholders holding 20% or more of the Voting Rights Ratio is implemented (with respect to any ofsuch purchase, the purchase to which the Board of Directors has given prior consent is excluded and any specificmeans of purchase, such as market transactions or tender offers, are acceptable. Such purchase is hereinafterreferred to as a “Large-Scale Purchase” and a person that conducts a Large-Scale Purchase is hereinafter referred
to as a “Large-Scale Purchaser.”), the Company requests the Large-Scale Purchaser to follow reasonable rules as
described below (the “Large-Scale Purchase Rules”) as the efforts to prevent the Company’s property anddecisions on business policies from being controlled by an inappropriate person according to the Basic Policy
Concerning Company Control. In addition, the Company has established certain policy depending on whether or
not such Large-Scale Purchaser has observed the Large-Scale Purchase Rules. (Such policy toward theLarge-Scale Purchase of the Company’s Shares and Other Securities as described in this section III is hereinafterreferred to as the “Policy.”)Note 1.

“Shares and Other Securities” means those falling under any of (i) such Shares and Other Securities as
set forth in Article 27-23, Paragraph 1 of the Securities and Exchange Law or (ii) such Shares and Other
Securities as set forth in Article 27-2, Paragraph 1 of the same Law.

Note 2.

“Group of Specific Shareholders” means:(i)

Any Holder (including a person deemed as a holder pursuant to Article 27-23, Paragraph 3 of
the Financial Instruments and Exchange Act; the same shall apply hereinafter) and any Joint
Holder of such Holder (who means the joint holder set forth in Article 27-23, Paragraph 5 ofthe same Act and includes a person deemed as the relevant joint holder pursuant to Paragraph
6 of the same Article; the same shall apply hereinafter) of the Company’s Shares and Other
Securities (which mean the shares and other securities set forth in Article 27-23, Paragraph 1of the same Act), and any person who is in a certain relationship with such Holder or such
Joint Holder, which relationship is similar with the relationship between a Holder and a Joint
Holder (such person being hereinafter referred to as the “Quasi-Joint Holder”); or
14

(ii)

Note 3.

Any person who makes Purchases, etc. (which mean the purchases, etc. set forth in Article
27-2, Paragraph 1 of the same Act and include any purchases, etc. made on a securities
exchange market whether or not such purchases are made by the method of auction) of theCompany’s Shares and Other Securities (which mean the shares and other securities set forthin Article 27-2, Paragraph 1 of the same Act) and any Specially Related Parties of such person(which mean the specially related parties set forth in Article 27-2, Paragraph 7 of the same
Act).

“Voting Rights Ratio” means:(i)

In the case where the Group of Specific Shareholders falls under the description of Note 2 (i)above, the ratio obtained by totaling (a) the Shares and Other Securities Holding Ratio ofsuch Holder (which ratio means the shares and other securities holding ratio set forth in
Article 27-23, Paragraph 4 of the Financial Instruments and Exchange Act; in this case, theNumber of the Shares and Other Securities Held by the Joint Holders of such Holder (which
number means the Number of the Shares and Other Securities Held as set forth in the same
Paragraph; the same shall apply hereinafter) shall be added); and (b) the Shares and Other
Securities Holding Ratio of the Quasi-Joint Holders of such Holder (provided, however, thatin totaling the ratios stated in (a) and (b) above, the Number of the Shares and Other
Securities Held duplicated in (a) and (b) above shall be deducted.); or(ii)

In the case where the Group of Specific Shareholders falls under the description of Note 2 (ii)above, the total of the Shares and Other Securities Holding Ratio (which means the sharesand other securities holding ratio set forth in Article 27-2, Paragraph 8 of the same Act) of theperson who makes purchases, etc. of the Company’s Shares and Other Securities and theShares and Other Securities Holding Ratio of the Specially Related Parties of such person.

In calculating the Voting Rights Ratio, the Company’s annual report, quarterly report or treasury stock
purchase report, whichever document has been most recently submitted to the authorities, may bereferred to in deciding the Total Number of Voting Rights (which means the total number of voting rights
set forth in Article 27-2, Paragraph 8 of the same Act) or the Total Number of Issued Shares (whichmeans the total number of issued shares set forth in Article 27-23, Paragraph 4 of the same Act).
1.

Necessity of introducing the Large-Scale Purchase Rules

As described in I. above, the Company believes that, in the event of a Large-Scale Purchase, the Large-Scale
Purchaser should provide the Board of Directors with necessary and sufficient information regarding theLarge-Scale Purchase in advance and should be allowed to commence the Large-Scale Purchase only after acertain assessment period for the Board of Directors elapses, in accordance with the Large-Scale Purchase Rules
established and disclosed in advance by the Company for the benefit of the decision-making process of theCompany’s shareholders.
After such information is provided, the Board of Directors will immediately start to consider the Board of
Directors’ opinion on the Large-Scale Purchase and shall subsequently form and disclose such opinion after
careful consideration with advice from independent outside experts, etc. In addition, the Board of Directors may
negotiate with the Large-Scale Purchaser in order to improve the proposal of the Large-Scale Purchaser or offer
the Company’s shareholders alternative plans developed by the Board of Directors, if deemed necessary. Suchprocess shall enable the Company’s shareholders to examine the proposal of the Large-Scale Purchaser and thealternative plans (in the case that any alternative plans are proposed) with reference to the Board of Directors’
opinion, and thus, the shareholders shall be given the opportunity to make the final decision as to whether or not
to accept the proposal of the Large-Scale Purchaser.
When it comes to establishing such rules, a court has issued the following decision: “In the case a hostilepurchaser, who intends to acquire control of management, appears, it is not an abuse of rights for the Board of
Directors (i) to require such hostile purchaser to propose a business plan and establish a period for assessment, (ii)to assess the business plan through discussion with the purchaser, (iii) to disclose the opinion of the Board of
Directors, and (iv) to offer shareholders alternative plans, so long as the contents of the materials that are required
to be submitted and the period for assessment are reasonable” so that establishing such rules was deemed to be15

legitimate (Decision of the Tokyo District Court, July 29, 2005).
As of March 31, 2019, the Company has 7,805 shareholders and most of them are individual shareholders. The
Company has no specific major shareholders since it is an independent company. The Company’s major
shareholders as of March 31, 2019 are as described in Exhibit 1 attached hereto.
2.

Details of the Large-Scale Purchase Rules

The Large-Scale Purchase Rules established by the Board of Directors require that (i) a Large-Scale Purchaser
provide the Board of Directors, in advance, with necessary and sufficient information regarding the Large-Scale
Purchase, and that (ii) the Large-Scale Purchaser commence the Large-Scale Purchase only after a certain
assessment period for the Board of Directors elapses.
More specifically, first, a Large-Scale Purchaser is required to submit to the Company’s Representative Director a“letter of intent” to the effect that the Large-Scale Purchaser will comply with the Large-Scale Purchase Rules,
which shall specify the name, address, law governing the incorporation, name of the representative and contact
details in Japan of the Large-Scale Purchaser and an outline of the proposed Large-Scale Purchase. In addition, aLarge-Scale Purchaser is required to provide the Board of Directors with necessary and sufficient information(hereinafter referred to as the “Necessary Information”) to allow the Company’s shareholders to make theirdecisions and the Board of Directors to form its opinion.
Within 10 business days after receipt of such letter of intent, the Board of Directors will deliver to the Large-Scale
Purchaser a list of the Necessary Information to be initially provided by the Large-Scale Purchaser. In this case,the Board of Directors will establish the period for the provision of Necessary Information (the “Information
Provision Period”) to be a maximum of 60 days starting from the date on which the list of the Necessary
Information is delivered to the relevant Large-Scale Purchaser (the “Delivery Date”) and notify such Information
Provision Period to the Large-Scale Purchaser. If the information initially provided by the Large-Scale Purchaser
is deemed to fall short of the Necessary Information as a result of the Board of Directors’ examination, the Boardof Directors will extend the Information Provision Period to the extent not exceeding 60 days counting from the
Delivery Date and require the Large-Scale Purchaser to provide additional information to the extent necessary for
the Company’s shareholders to make their decisions and for the Board of Directors to make an examination andassessment and to form its opinion.
Details of the Necessary Information may differ according to the properties of the Large-Scale Purchaser and the
purpose and details of the Large-Scale Purchase; provided, however, that items to be generally included as theNecessary Information shall be as follows. With respect to any of the following items, however, the Necessary
Information shall be limited to the information that is necessary and sufficient to allow shareholders of theCompany to make their decisions and the Board of Directors to form its opinion:
1)

An outline (including information relating to the Large-Scale Purchaser, such as the substance ofthe business, capital structure and experience in the same category of business as that of theCompany) of the Large-Scale Purchaser and its group (including Joint Holders and Specially
Related Parties);

2)

The purpose and details of the Large-Scale Purchase (including amount/type of consideration forthe purchase, etc., timing of the purchase, etc., structure of related transactions, legality of themeans of the purchase, etc., and feasibility of the purchase, etc. and related transactions;particularly, in the case of the purchase of merely part of the Company’s shares, including theway of thinking concerning the upper limit on the number of shares to be purchased and theschedule of changes in capital structure after such purchase);

3)

The basis for the calculation of the value of the Company’s shares and financial resources
backing the purchase (including specific names of the financial backers (including substantial
backers), financing methods, and substance of related transactions);

4)

The candidates for the management team (including information regarding experience in thesame category of business as that of the Company and the Consolidated Group) and the
management policy (including the way of thinking with respect to the integration andcollaboration between the business of the Large-Scale Purchaser and the business of the16Company and the Consolidated Group and the specific measures to avoid any conflict of interest
between the Large-Scale Purchaser and the Company/the Consolidated Group, as well as thepolicies to specifically realize such management policy, such as a business plan (including a plan
for restructuring of existing businesses, new business plan and capital investment plan), financial
plan, capital policy, distribution policy, labor policy, policy of utilization of assets; hereinafterreferred to as the “Management Policy, etc. after Purchase”), as intended and expected after thecompletion of the Large-Scale Purchase;5)

Policy concerning the relationship with stakeholders of the Company and the Consolidated
Group, such as employees, affiliated companies, business partners and customers of the Company
and the Consolidated Group, as intended after the completion of the Large-Scale Purchase; and6)

If the Large-Scale Purchaser is engaged in the same category of business as that of the Company,
the way of thinking concerning the legality of the Large-Scale Purchase in light of the
Antimonopoly Act and competition laws in foreign countries.

The Board of Directors will disclose the fact that a Large-Scale Purchase was proposed at the time such proposal
is made, and the Board of Directors will also disclose all or part of the Necessary Information provided to theBoard of Directors at the time it deems appropriate, if such disclosure is considered necessary for the Company’s
shareholders to make their decisions.
Next, the Board of Directors believes that a period of 60 days (in the case of the purchase of all the Company’s
shares through a tender offer in which the consideration is delivered only in cash (yen)) or a period of 90 days (inthe case of other Large-Scale Purchases) after the Large-Scale Purchaser completes its provision of the Necessary
Information to the Board of Directors should, according to the level of difficulty in making an assessment of theLarge-Scale Purchase, be given as the period necessary for the Board of Directors to assess, examine, negotiate,
form an opinion and seek alternative plans (such period being hereinafter referred to as the “Board Assessment
Period”). Accordingly, the Large-Scale Purchase may be commenced only after the Board Assessment Period
has elapsed. However, if the Board of Directors determines it difficult to complete the assessment, etc. for theLarge-Scale Purchase within the Board Assessment Period above, the Board of Directors will extend the Board
Assessment Period to the extent not exceeding 30 days as needed. The Board of Directors shall thoroughly
assess and examine the Necessary Information it receives, with advice from independent outside experts, etc.
during the Board Assessment Period and shall deliberately summarize and disclose its opinion. In addition, theBoard of Directors may negotiate with the Large-Scale Purchaser in order to improve the terms of the proposed
Large-Scale Purchase or offer the Company’s shareholders alternative plans, if deemed necessary.
3.

Policy toward the Large-Scale Purchase(1) In the event that a Large-Scale Purchaser observes the Large-Scale Purchase Rules
In the event that a Large-Scale Purchaser observes the Large-Scale Purchase Rules, the Board of Directors, even if
it disagrees with the proposed Large-Scale Purchase, will not take countermeasures against the Large-Scale
Purchase, although it may attempt to persuade the Company’s shareholders by expressing an objection to the
proposal of the Large-Scale Purchaser or by offering alternative plans. The Board of Directors believes that theCompany’s shareholders should make their own decision as to whether or not they accept the proposal of theLarge-Scale Purchaser upon consideration of such proposal of the Large-Scale Purchaser and the opinion on suchproposal and alternative plans provided by the Company.
However, (i) in the event that it is considered that the Large-Scale Purchase obviously has abusive purposes or isinappropriate4 or (ii) in the event that the Large-Scale Purchase will seriously undermine the common interests ofthe shareholders and it is deemed reasonable to take countermeasures, including the event in which theLarge-Scale Purchase will cause irreparable damage to the Company (excluding cases falling under (i) above), theBoard of Directors may, aside from the adoption of the Policy, take exceptional countermeasures in order toprotect the common interests of the shareholders based on the duty of due care of a prudent manager assumed byeach Director. The Board of Directors assesses the specific details of the Large-Scale Purchaser and theLarge-Scale Purchase (such as the purpose, method, subject, kinds/amount of the consideration) and the influenceof the Large-Scale Purchase on the common interests of the shareholders as a whole based on the Necessary
Information, including the Management Policy, etc. after Purchase, provided by the Large-Scale Purchaser, whileobtaining the advice of independent outside experts, etc., and gives respect to the recommendations of the Special
17Committee, before making such judgment. The Countermeasures include the issuance, etc., of stock acquisitionrights or any other measures that the Board of Directors is permitted to take under the Companies Act or otherlaws and the Articles of Incorporation of the Company as in the case that a Large-Scale Purchaser does notobserve the Large-Scale Purchase Rules set forth in (2) below. In addition, in the event that the Board of
Directors takes a countermeasure, if it receives the recommendations of the Special Committee to the effect that itshould obtain the prior approval of the General Meeting of Shareholders, the countermeasures may be taken after
being resolved at the General Meeting of Shareholders in order that the intentions of the shareholders of theCompany may be reflected; provided, however, the resolution of the General Meeting of Shareholders is always
required to take countermeasures with respect to the event that falls under (ii) above.
Note 4. “(the Large-Scale Purchase that has) Abusive purposes or (is) inappropriate” refers to the following
actions taken by a Large-Scale Purchaser:(i)

A Large-Scale Purchaser intends to purchase the shares for the sole purpose of forcing therelevant parties related to the company to purchase the shares at a higher price, by boosting thecompany’s share price, even though the Large-Scale Purchaser does not have the true intention
to participate in the company’s management;(ii)

A Large-Scale Purchaser purchases the shares for the purpose of so-called scorched-earth
management, which includes having the company transfer the intellectual property rights,
know-how, corporate secrets, main business partners and customers, etc. necessary for thecompany’s business and management to such Large-Scale Purchaser or its group companies,
etc., by temporarily controlling the company’s management;(iii)

A Large-Scale Purchaser purchases the company’s shares and plans to divest the company’s
assets with the intention of using such assets as security or the source of repayment of the debt
of such Large-Scale Purchaser or its group companies, etc. after controlling the company’s
management;(iv)

A Large-Scale Purchaser purchases the company’s shares for the purpose of having the company
sell or dispose of its valuable assets, including real property or securities that have no immediate
relationship with the company’s businesses, and temporarily pay large dividends against the
profits gained from such disposition, or for the purpose of taking the opportunity to rapidly
increase the share price influenced by the temporary payment of large dividends and then sellsuch shares at a higher price, by temporarily controlling the company’s management; or(v)

A Large-Scale Purchaser purchases shares through a tender offer, etc., by not making solicitation
for the sale of all the company’s shares at the first stage of the tender offer and setting
disadvantageous second stage purchase terms or not clarifying such purchase terms (so called
coercive, two-tiered takeover).

(2) In the event that a Large-Scale Purchaser does not observe the Large-Scale Purchase Rules
In the event that a Large-Scale Purchaser does not observe the Large-Scale Purchase Rules, regardless of thespecific method of purchase, the Board of Directors may take countermeasures, respecting the recommendation of
the Special Committee, against the Large-Scale Purchase to protect the Company’s corporate value and thecommon interests of the shareholders. Countermeasures include the issuance of stock acquisition rights or any
other measures that the Board of Directors is permitted to take under the Companies Act or other laws and theCompany’s Articles of Incorporation. The Board of Directors will adopt the specific countermeasures that it
deems most appropriate at that time. In the event that the Board of Directors elects to make an allotment of stockacquisition rights without contribution as a specific countermeasure, the outline of such allotment of stockacquisition rights without contribution shall be as described in Exhibit 2 attached hereto; provided, however, that,
if the Board of Directors actually elects to issue stock acquisition rights as a countermeasure, it may determine theexercise period and the terms for exercise of the stock acquisition rights and stock acquisition terms, all of which
consider the effectiveness thereof as countermeasures, including, for instance, the terms for such exercise not tobelong to a specific Group of Shareholders with a certain Voting Rights Ratio. In addition, if the Board of
Directors receives the recommendations of the Special Committee to the effect that it should obtain the priorapproval of the General Meeting of Shareholders, the allotment of stock acquisition rights without contribution,etc. may be performed after being resolved at the General Meeting of Shareholders in order that the intentions of
18

the Company’s shareholders may be reflected. The Company filed a shelf registration statement for the issuanceof stock acquisition rights on June 27, 2018; however, since the effective period of the shelf registration will
expire on July 4, 2019, the Company will file another shelf registration statement for the issuance of stockacquisition rights.
(3) Establishment of the Special Committee
The Special Committee is established as a body to ensure that the Policy is properly applied and to prevent
arbitrary decisions by the Board of Directors. Pursuant to the administration rules of the Special Committee (forthe outline thereof, please refer to Exhibit 3), the Special Committee shall have at least three members and inorder to enable fair and neutral judgment, its members shall be elected from the Company’s Outside Directors andOutside Auditors or outside knowledgeable persons5 who are independent of the management team operating theCompany’s businesses. The name and profile of members of the Special Committee are described in Exhibit 4
attached hereto.
The Policy satisfies the objective requirements for the invocation of countermeasures, by prescribing that theBoard of Directors will not take the countermeasures in principle in the event that the Large-Scale Purchaser
observes the Large-Scale Purchase Rules (described in III. 3 (1) above) and that the Board of Directors may takethe countermeasures in the event that the Large-Scale Purchaser does not observe the Large-Scale Purchase Rules(described in III. 3 (2) above); provided, however, that, in the event that the Board of Directors makes asignificant determination pertaining to the Policy, including an event in which the Board of Directors takes an
exceptional countermeasure in order to protect the common interests of the shareholders as described in III. 3 (1)above and an event in which the Board of Directors takes the countermeasures as described in III. 3 (2) above, theBoard of Directors must consult with the Special Committee and respect the recommendations of the Special
Committee to the utmost extent.
Note 5: Outside knowledgeable persons are elected from among corporate managers who have sufficientexperience, persons who are familiar with the investment banking business, lawyers, certified public
accountants, academic experts who specialize in the Companies Act, etc. or persons who are equivalent
to these personnel.
(4) Suspension, etc., of Invocation of Countermeasures
In the event that (i), after the Company decides to take exceptional countermeasures as described in III. 3 (1)above or take countermeasures as described in III. 3 (2) above, the Large-Scale Purchaser revokes or changes theLarge-Scale Purchase or (ii) any changes occur in the facts on which a decision is based as to whether or notcountermeasures should be implemented and it becomes unreasonable to implement countermeasures from theviewpoint of the assurance and improvement of the corporate value of the Company and the common interests ofthe shareholders, the Board of Directors may suspend or change the invocation of the countermeasures after
consulting with the Special Committee and giving respect to the recommendation of the Special Committee. In
the event that the Board of Directors elects to make an allotment of stock acquisition rights without contribution
as a countermeasure, if the Board of Directors wishes to suspend the invocation of the countermeasure, (i) until
the day on which such stock acquisition rights become effective, the Board of Directors shall suspend theallotment of stock acquisition rights without contribution, and (ii) after the allotment of stock acquisition rights
without contribution, the Board of Directors shall acquire such stock acquisition rights on or before the day
immediately preceding the commencement date of the exercise period of the stock acquisition rights.
4.

Influence, etc. on shareholders and investors(1) Influence, etc. of the Large-Scale Purchase Rules on shareholders and investors
The purpose of the Large-Scale Purchase Rules is to provide the Company’s shareholders with the informationnecessary for them to determine whether or not to accept a Large-Scale Purchase, and with the opinion of theBoard of Directors that is actually in charge of the Company’s management and to ensure the period necessary forsuch provision, as well as to ensure that the Company’s shareholders have opportunities to receive any alternativeplans. The Board of Directors believes that, under the Large-Scale Purchase Rules, the Company’s shareholders
will be provided with sufficient information and will be able to make appropriate decisions as to whether or not to
accept the Large-Scale Purchase, whereby the common interests of the shareholders shall be protected.
Accordingly, the Board of Directors believes that the establishment of the Large-Scale Purchase Rules is a proper
19prerequisite for appropriate investment decisions of the Company’s shareholders and investors and contributes tothe common interests of the shareholders and investors.
The Board of Directors hereby advises the Company’s shareholders and investors to observe carefully any actions
by a Large-Scale Purchaser, because the Company will make a different response depending on whether or not theLarge-Scale Purchaser complies with the Large-Scale Purchase Rules, as described in III. 3 above.
(2) Influence, etc. of countermeasures on shareholders and investors at the time of invocation of suchcountermeasures
If a Large-Scale Purchaser does not observe the Large-Scale Purchase Rules, the Board of Directors may takecountermeasures, which the Board of Directors is permitted to take under the Companies Act or other laws and theCompany’s Articles of Incorporation, in order to protect the Company’s corporate value and the common interestsof the shareholders. However, the Board of Directors does not expect that, under the structure of thecountermeasures, the Company’s shareholders (excluding a Large-Scale Purchaser who has violated theLarge-Scale Purchase Rules) will sustain any substantial loss in terms of legal rights or economic aspect. If theBoard of Directors elects to take any specific countermeasures, the Board of Directors will make appropriate
disclosure in a timely manner in accordance with the relevant laws, regulations and stock exchange regulations.
In respect of the issuance of stock acquisition rights, as one of the possible countermeasures, it may be necessary
for a Company’s shareholder to make a payment of a certain amount of money in order to acquire new shares
upon exercising his/her stock acquisition right. In addition, if the Board of Directors has decided to acquire
stock acquisition rights, it may issue new shares to the Company’s shareholders without paying the amountequivalent to the exercise price, in exchange for the acquisition of the stock acquisition rights by the Company.
Details of these procedures will separately be provided in accordance with the laws and regulations in the event of
actual issuance of stock acquisition rights.
In the event that the Board of Directors suspends the issuance of stock acquisition rights as a countermeasure or
acquires such stock acquisition rights without contribution pursuant to III. 3 (4) above, stock value per share will
not be ultimately diluted. Therefore, investors who purchase or sell their shares of the Company on theassumption that the stock value of shares of the Company will be diluted on and after the ex-rights date related tothe allotment of such stock acquisition rights without contribution may be subject to contingent damages as aresult of share price movements.
5.

Period of validity, continuation, changes and termination of the Policy

On condition that the shareholders approve the Policy at the Ordinary General Meeting of Shareholders to be heldon June 26, 2019, the Policy will become effective on the date of such approval and expire at the close of theOrdinary General Meeting of Shareholders to be held in June 2022; provided, however, that, if the Policy isapproved to be continued at the Ordinary General Meeting of Shareholders to be held in June 2022, theaforementioned effective term of the Policy will be extended for another three years and the same shall apply
thereafter. If the continuation of the Policy is approved, the Board of Directors shall promptly notify theshareholders of such fact.
In addition, even if the Policy is decided to be continued, the Board of Directors will, from the viewpoint of the
improvement of corporate value and the realization of the common interests of the shareholders, review the Policy
from time to time based on the improvement, etc. of related laws and regulations and the improvement, etc. of thelisting system of the Tokyo Stock Exchange, and may change or terminate the Policy upon the approval of theGeneral Meeting of Shareholders. In such case, the Board of Directors will promptly notify such fact.
IV.

The Policy Complies with the Basic Policy Concerning Company Control, does not Damage the Common
Interests of the Shareholders and does not Pursue the Maintenance of the Status of the Company’s Officers,
and the Reasons therefor

1.

The Policy complies with the Basic Policy Concerning Company Control

The Policy sets forth matters such as the substance of the Large-Scale Purchase Rules, the policy toward a
Large-Scale Purchase, the establishment of the Special Committee, and the influence on shareholders andinvestors.
20

The Policy specifies that (i) a Large-Scale Purchaser is required to provide the Board of Directors with allnecessary and sufficient information concerning the Large-Scale Purchase in advance, (ii) the Large-Scale
Purchaser shall be allowed to commence the Large-Scale Purchase only after a certain assessment period for the
Board of Directors has elapsed, and (iii) the Board of Directors may take countermeasures against any
Large-Scale Purchaser who does not observe the aforementioned commencement rule.
The Policy also specifies that, even if the Large-Scale Purchaser observes the Large-Scale Purchase Rules, in theevent that the Board of Directors judges that the Large-Scale Purchase by the Large-Scale Purchaser willmaterially damage the common interests of the shareholders, the Board of Directors may take countermeasuresagainst the Large-Scale Purchaser that are considered necessary in order to protect the common interests of theshareholders.
As set forth above, it can be said that the Policy is consistent with the Basic Policy Concerning Company Control.
2.

The Policy does not damage the common interests of the shareholders

As described in I. above, the Basic Policy Concerning Company Control is based on the assumption that thecommon interests of the shareholders should be respected. The Policy has been prepared consistent with the
Basic Policy Concerning Company Control and is intended to ensure that the Company’s shareholders areprovided with the information necessary to decide whether or not to accept a Large-Scale Purchase, the opinion of
the Board of Directors and the opportunity to receive alternative plans. Since the Company’s shareholders andinvestors can make proper investment decisions through the Policy, the Policy does not damage the common
interests of the shareholders, but rather contributes to their interests.
In addition, the Company believes that the facts that the effectuation and extension of the Policy and terminationof the Policy before its expiration date depend on the approval of the Company’s shareholders and that theshareholders can terminate the Policy if they desire ensure that the Policy does not damage the common interestsof the shareholders.
The Policy satisfies the three principles (i.e., (i) principle of protecting and enhancing corporate value andshareholders’ common interests, (ii) principle of prior disclosure and shareholders’ will, and (iii) principle of
ensuring necessity and reasonableness) provided for in the “Guidelines Regarding Takeover Defense for the
Purpose of Protection and Enhancement of Corporate Value and Shareholder’s Common Interests,” which was
issued by the Ministry of Economy, Trade and Industry and the Ministry of Justice on May 27, 2005. The Policy
is also based on the “Takeover Defense Measures in Light of Recent Environmental Changes”, which was issued
on June 30, 2008, by the Corporate Value Study Group established within the Ministry of Economy, Trade andIndustry.
3.

The Policy does not pursue the maintenance of the status of the Company’s Officers

While the Policy has a broad principle that leaves the final decision on whether or not a Large-Scale Purchaseshall be accepted to the judgment of the shareholders, the Policy requires compliance with the Large-Scale
Purchase Rules and takes countermeasures to the extent necessary in order to protect the common interests of theshareholders. The Policy discloses in advance and in detail the cases where the Board of Directors will takecountermeasures, and the Board of Directors shall take countermeasures in accordance with the provisions of the
Policy. The Board of Directors cannot solely effectuate and extend the Policy, and the approval of theCompany’s shareholders is required for such effectuation and extension.
In addition, the Policy specifies that, in the event that the Board of Directors makes a material decision related to
the Policy, such as if it takes countermeasures in connection with a Large-Scale Purchase, it shall request advice
from independent outside experts, etc. as necessary, must consult with the Special Committee consisting ofmembers who are independent of the management team operating the Company’s businesses, and give utmost
respect to the recommendation of such Special Committee. As mentioned above, the Policy includes procedures
through which the appropriate operations by the Board of Directors are ensured.
Moreover, as stated in III.3 (4) above, since the Board of Directors consisting of the directors elected at a General
Meeting of Shareholders may cancel the invocation of countermeasures even after a decision to take acountermeasure has been made, the Policy does not fall under a dead-hand takeover defense measure (a takeover21

defense measure whose invocation cannot be prevented even if the majority of the Board of Directors is replaced).
In addition, the term of office of the Directors of the Company is one year, and staggered terms are not adopted.
Therefore, the Policy is not a slow-hand takeover defense measure (a takeover defensive measure that requires
more time to prevent its invocation because it does not allow the replacement of all Board members at once).
As described above, the Company believes that it is clear that the Policy does not pursue the maintenance of thestatus of the Company’s Officers.
End of Document

22

Exhibit 1
The Company’s Major Shareholders
The table below shows the Company’s major shareholders as of March 31, 2019.

Name of Shareholders
The Dai-ichi Life Insurance Company, Limited
Trust & Custody Services Bank, Ltd. (‘E’ trust account)
The Master Trust Bank of Japan, Ltd. (trust account)
JP MORGAN CHASE BANK 385632
Nippon Life Insurance Company
Meiji Yasuda Life Insurance Company
Mizuho Bank, Ltd.
Japan Trustee Services Bank, Ltd. (trust account)
Kimikazu AidaAIDA ENGINEERING Trading-partner Shareholding
Association

Number of Shares
Held (thousands)
4,000
3,434
2,877
2,650
2,533
2,516
2,179
1,849
1,445
1,338

Shareholding Ratio (%)
6.14
5.27
4.42
4.07
3.89
3.86
3.34
2.84
2.22
2.05

Note 1:The Company has treasury stock of 6,477 thousand shares other than those listed above.

Note 2:The shareholding ratios are calculated based on the number of shares (65,169,891 shares) obtained bydeducting the number of treasury stock from the total number of issued and outstanding shares.

Note 3:

Trust & Custody Services Bank, Ltd. (‘E’ trust account) is a trustee, entrusted with the Company’s
shares in Japanese-style Employee Stock Ownership Plan (J-ESOP) and Board Benefit Trust (BBT).

23

Exhibit 2
Outline of Allotment of Stock Acquisition Rights without Contribution
1.

Shareholders who are entitled to receive stock acquisition rights and conditions of issuance thereof:
One (1) stock acquisition right shall be allotted without contribution to a Company’s shareholder for eachshare of the Company’s common stock held by such shareholder (excluding the shares of the Company’scommon stock, which have been held by the Company), whose name is inscribed or recorded in the registerof shareholders as of the end of the date of allotment to be specified by the Board of Directors.

2.

Type and number of shares to be acquired upon exercise of the stock acquisition rights:
The type of shares to be acquired upon exercise of the stock acquisition rights shall be the shares of theCompany’s common stock, and the total number of such shares shall be up to the number of shares obtainedby reducing the total number of issued and outstanding shares of the Company’s common stock (excluding
the shares of the Company’s common stock, which have been held by the Company) from the total numberof shares authorized to be issued by the Company as of the date of allotment to be specified by the Board of
Directors. The number of shares to be acquired upon exercise of one (1) stock acquisition right shall beseparately determined by the Board of Directors; provided, however, that such number shall be adjusted tothe extent necessary if the Company makes a stock split or a stock consolidation.

3.

Total number of stock acquisition rights to be allotted:
The total number of stock acquisition rights to be allotted shall be separately determined by the Board of
Directors. The Board of Directors may allot stock acquisition rights in installments.

4.

Amount of properties to be contributed upon exercise of stock acquisition rights:
The amount of properties to be contributed upon exercise of a stock acquisition right shall be an amount to be
determined by the Board of Directors which shall be at least one (1) Japanese yen.

5.

Restriction on acquisition of stock acquisition rights through transfer:
Stock acquisition rights may not be acquired through transfer without the Company’s approval through theresolution of the Board of Directors.

6.

Conditions of exercise of stock acquisition rights:
The conditions of exercise of stock acquisition rights shall be separately determined by the Board of
Directors. Certain conditions of exercise may be provided, including a condition that a person belonging toa Group of Specific Shareholders that holds at least 20% of the Voting Rights Ratio may not exercise stockacquisition rights.

7.

Exercise period and terms and conditions of acquisition, etc. of stock acquisition rights:
The exercise period, terms and conditions of acquisition and other necessary matters of the stock acquisitionrights shall be separately determined by the Board of Directors.
Upon the establishment of the terms and conditions of acquisition that the stock acquisition rights held by aperson who belongs to the Group of Specific Shareholders holding twenty percent (20%) or more of the
Voting Rights Ratio are to be acquired, no payment of economic consideration such as cash shall be made forthe acquisition. In addition, during the period commencing on the effective date of the stock acquisitionrights and ending on the day that is immediately preceding the commencement date of the exercise period of
the stock acquisition rights, the Company may acquire the stock acquisition rights without contribution on a
day separately determined by the Board of Directors, if the Board of Directors considers that it is appropriate
to acquire the stock acquisition rights.

24Exhibit 3
Outline of the Administration Rules of the Special Committee
1.

The Special Committee shall have at least three (3) members, and the members shall be elected by aresolution of the Board of Directors among from Outside Directors and Auditors of the Company, lawyers,certified public accountants, academic experts, persons who are familiar with the investment banking
business or outside persons who have good track records and experience as a director or operating officer andwho, in each case, are independent of the management team operating the businesses of the Company.

2.

The term of office of members of the Special Committee shall be until the close of the meeting of the Boardof Directors to be held immediately after an Ordinary General Meeting of Shareholders pertaining to the last
fiscal year that ends within one (1) year after their election; provided, however, that unless otherwise
determined by a resolution at such meeting of the Board of Directors, the members shall be deemed to be
re-elected at such meeting of the Board of Directors.

3.

The Special Committee shall be convened by the president and representative director of the Company(should the president and representative director be unable to act, one of the other directors shall take theplace of the president and the representative director, in accordance with the order of precedence previously
determined by the Board of Directors) or each member of the Special Committee.

4.

The chairman of the Special Committee shall be served by the head of the Special Committee chosen by themembers of the Special Committee. Should the head of the Special Committee be unable to act, one of theother members shall serve as the chairman.

5.

Resolutions of the Special Committee shall be adopted by an affirmative vote of a majority of the membersof the Special Committee present, which shall constitute all members of the Special Committee, other thanrelated parties; provided, however, that, in case of unavoidable circumstances, resolutions of the Special
Committee may be adopted by an affirmative vote of a majority of the members of the Special Committee
present, which shall constitute a majority of all members of the Special Committee.

6.

The Special Committee shall deliberate on and make resolutions with respect to the matters on which theBoard of Directors has consulted with the Special Committee and shall give recommendations to the Boardof Directors based on such resolutions. The Board of Directors must consult with the Special Committee
concerning the matters described in each of the following items in the respective cases of (1) and (2) below:(1) When the Board of Directors determines to implement a countermeasure on the ground that a
Large-Scale Purchaser does not observe the Large-Scale Purchase Rules:(i)

Whether or not the purchase by such purchaser corresponds to the Large-Scale Purchase;(ii) Whether or not the Company has properly administered the Large-Scale Purchase Rules;(iii) Whether or not the Large-Scale Purchaser has observed the Large-Scale Purchase Rules; and(iv) Necessity and reasonableness of such countermeasure and whether or not such countermeasure
should be implemented.
(2) When a Large-Scale Purchaser observes the Large-Scale Purchase Rules, and the Board of Directors
determines to implement an exceptional countermeasure on the ground that it is considered that such
Large-Scale Purchase will seriously undermine the common interests of the shareholders:(i)Whether or not such Large-Scale Purchase is considered to seriously undermine the common
interests of the shareholders; and(ii) Necessity and reasonableness of such countermeasure and whether or not such countermeasure
should be implemented.

25

7.

Upon deliberation and resolution as described in 6. above, the Special Committee, at the expense of theCompany, may take each of the actions described in (1) through (3) below to the necessary extent:(1) Receive advice from any third parties (including financial advisers, certified public accountants, lawyers,
consultants and other professionals) who are independent of the management team of the Company;(2) Request the Directors, Auditors and employees of the Company and any other person the Special
Committee considers necessary to attend a meeting of the Special Committee and receive an explanation
on any necessary information from them; and(3) Any other actions permitted by the Board of Directors.

26

Exhibit 4

Name and brief personal history of candidates for the Special Committee member
The following three (3) candidates are to be members of the Special Committee.
Hirotada Komatsu
Born in 1940
June
1994
Director, Honda Motor Co., Ltd.
June
1998
Managing Director, Honda Motor Co., Ltd.
June
2000
Resigned from Managing Director, Honda Motor Co., Ltd.
*There is no special interest between Hirotada Komatsu and AIDA ENGINEERING, LTD. In addition, although
he worked for Honda Motor Co., Ltd., it has been more than 18 years since his resignation in 2000. Also, Honda
Motor Co., Ltd. is not a business partner with which the Company has significant business transactions to impact
on the Company’s decision-making, and therefore the Company determined that his status of independence fromthe management team operating the Company’s businesses is sufficiently ensured.
Hirofumi Gomi
Born in 1949
Apr
1972
Jul
1996
Jun
1998

Joined the Ministry of FinanceDirector of the Research Division, Banking Bureau, Ministry of FinanceDirector-General, Inspection Department, Financial Supervisory Agency(currently Financial Services Agency)
Jul
2000
Secretary-General, Executive Bureau, Securities and Exchange Surveillance Commission,
Financial Services Agency
Jul
2001
Director-General, Inspection Bureau, Financial Services Agency
Jul
2002
Director-General, Supervisory Bureau, Financial Services Agency
Jul
2004
Commissioner, Financial Services Agency
Jul
2007
Resigned Financial Services Agency
Nov
2009
Visiting Professor, Aoyama Gakuin University (current position)
Jun
2011
Auditor, MIROKU JYOHO SERVICE CO., LTD.
Jan
2014
Advisor, NISHIMURA & ASAHI (current position)
Feb
2015
Senior Advisor, THE BOSTON CONSULTING GROUP (current position)
Jun
2015
Director, AIDA ENGINEERING, LTD. (current position)
Jun
2016
Director, Infoteria Corporation (currently Asteria Corporation) (current position)
Director, MIROKU JYOHO SERVICE CO., LTD. (current position)
Jun
2017
Director, SBI Holdings, Inc. (current position)*Hirofumi Gomi is currently an Outside Director of AIDA ENGINEERING, LTD. If the re-election of Hirofumi
Gomi is approved at the 84th General Meeting of Shareholders on June 26, 2019, he will be reappointed as an
Outside Director.
There is no special interest between Hirofumi Gomi and the Company. The Company registered Hirofumi Gomi
with the Tokyo Stock Exchange as an Independent Director.
Shigeru Makinouchi
Born in 1949
Apr
1979
Admission as an attorney-at-law (current position)
Mar
2001
Practicing-Attorney-Professor for Civil Advocacy, Legal Training and Research Institute,
Supreme Court of Japan (up to Jan 2004)
Jun
2013
Statutory Auditor, AIDA ENGINEERING, LTD. (current position)*Shigeru Makinouchi is currently an Outside Statutory Auditor of AIDA ENGINEERING, LTD.
There is no special interest between Shigeru Makinouchi and the Company. The Company registered Shigeru
Makinouchi with the Tokyo Stock Exchange as an Independent Auditor.
<Note>
Akio Masuda, Chikao Fukuda and Hiroo Wakabayashi will resign from the Special Committee since the term ofoffice of those three (3) will expire at the conclusion of the board of directors to be held after the 84th General
Meeting of Shareholders on June 26, 2019.
End of document27