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

(Securities Code: 7952)
June 6, 2022
To Shareholders with Voting Rights:
Hirotaka Kawai
Chairman, President & CEO
Kawai Musical Instruments
Manufacturing Co., Ltd.
200 Terajima-cho, Naka-ku, Hamamatsu,
Shizuoka, JapanNOTICE OF CONVOCATION OF
THE 95TH ANNUAL GENERAL MEETING OF SHAREHOLDERS
This is to inform you of the 95th Annual General Meeting of Shareholders of Kawai Musical Instruments
Manufacturing Co., Ltd. (the “Company”). The meeting will be held for the purposes as described below.
You may exercise your voting rights in writing or via the Internet, etc. instead of attending the meeting. Please review
the attached Reference Documents for the General Meeting of Shareholders and exercise your voting rights by 5:00
p.m. on Monday, June 27, 2022 (JST).
1. Date and Time: Tuesday, June 28, 2022 at 10:00 a.m. (JST, the reception desk opens at 9:00 a.m.)
2. Venue:
Building No. 10 at the Company Headquarters located at
200 Terajima-cho, Naka-ku, Hamamatsu,
Shizuoka, Japan
3. Meeting Agenda:
Matters to be reported:
1. The Business Report and Consolidated Financial Statements for the 95th Fiscal Year (from April 1, 2021 toMarch 31, 2022), and results of audits of the Consolidated Financial Statements by the Accounting Auditor
and the Board of Corporate Auditors
2. Non-consolidated Financial Statements for the 95th Fiscal Year (from April 1, 2021 to March 31, 2022)
Matters to be resolved:
Proposal 1:
Dividends of Surplus
Proposal 2:
Amendment to the Articles of Incorporation
Proposal 3:
Election of Ten Directors
Proposal 4:
Election of One Substitute Corporate Auditor
Proposal 5:
Determination of the Amount and Contents of Stock Compensation, etc. for Directors
Proposal 6:
Renewal of the Measures against the Large-scale Purchase of the Shares in the Company(a Takeover Defense Measure)
4. Other Matters concerning the General Meeting of Shareholders(1) If you arrange attendance by your proxy, please appoint one shareholder of the Company holding voting
rights. In this case, you are kindly requested to submit a document proving such proxy prior to the openingof the General Meeting of Shareholders.
(2) If you are diversely exercising your voting rights, please give notice in writing to the Company on yourintention of such diverse exercise and the reasons therefor, no later than three days prior to the date of theGeneral Meeting of Shareholders.
(3) Of the documents to be included in this notice of convocation, “Systems and policies of the Company” inthe Business Report, Notes to Consolidated Financial Statements and Notes to Non-consolidated Financial
Statements are posted on the Company’s website (https://www.kawai.co.jp/ir/sokai/) (in Japanese only)
pursuant to the applicable laws and regulations as well as Article 15 of the Company’s Articles ofIncorporation. Therefore, they are not included in the Attachment of this Notice. The Business Report,
Consolidated Financial Statements and Non-consolidated Financial Statements audited by Corporate-1-

Auditors and the Accounting Auditor include the aforementioned documents posted on the Company’s
website, in addition to those presented in the Attachment.

Request to shareholders: When attending the meeting, please submit the enclosed Voting Rights Exercise Form at the reception desk.
Notice:Any amendment to the Business Report, Consolidated Financial Statements, Non-consolidated Financial Statements orReference Documents for the General Meeting of Shareholders will be posted on the Company’s website(https://www.kawai.co.jp/ir/sokai/) (in Japanese only).

-2-

Reference Documents for the General Meeting of Shareholders
Proposal 1:

Dividends of Surplus

The Company’s basic principle is to provide shareholder returns with the aims of distributing stable dividends toshareholders based on the consolidated business results, while ensuring sufficient level of internal reserve forstabilizing the management base, in consideration of the business results of each fiscal year as well as the businessenvironment and business development in the future. Currently, the Company only pays year-end dividends, inprinciple.
The Company proposes to pay the year-end dividends as follows for the fiscal year under review based on suchprinciple, as a show of appreciation for the constant support by the shareholders.
Matters concerning the year-end dividends
Type of the dividend property:

CashMatters concerning the assignment of the dividend property and its amount(per common share of the Company):
Ordinary dividend:¥75
Total dividends:¥644,613,450
Effective date of the dividends of surplus:

June 29, 2022

-3-

Proposal 2:

Amendment to the Articles of Incorporation

1. Reasons for the proposal
Since the revised provisions provided for in the proviso to Article 1 of the Supplementary Provisions of the Act
Partially Amending the Companies Act (Act No. 70 of 2019) are to be enforced on September 1, 2022, theCompany proposes to make the following changes to its Articles of Incorporation in preparation for the
introduction of the system for providing informational materials for the general meeting of shareholders inelectronic format.
(1) Article 15, paragraph 1 in “Proposed amendments” below will stipulate that the Company shall takemeasures for providing information that constitutes the content of reference documents for the general
meeting of shareholders, etc. in electronic format.
(2) Article 15, paragraph 2 in “Proposed amendments” below will establish the provision to limit the scope of
the items to be stated in the paper-based documents to be delivered to shareholders who requested thedelivery of paper-based documents.
(3) Since the provisions for Internet Disclosure and Deemed Provision of Reference Documents for the
General Meeting of Shareholders, Etc. (Article 15 of the current Articles of Incorporation) will no longer
be required, they will be deleted.
(4) Accompanying the aforementioned establishment and deletion of provisions, supplementary provisions
regarding the effective date, etc. will be established.
2. Details of the amendment
The details of the amendment are as follows.
(Underlined parts indicate the amendments.)
Current Articles of Incorporation
Proposed amendments(Internet Disclosure and Deemed Provision of Reference(Deleted)
Documents for the General Meeting of Shareholders, Etc.)
Article 15
When the Company convenes a general meeting ofshareholders, if it discloses information that is to be stated orpresented in the reference documents for the general meeting ofshareholders, business report, financial statements andconsolidated financial statements through the internet inaccordance with the provisions prescribed by the Ministry ofJustice Order, it may be deemed that the Company has
provided this information to shareholders.
(Newly established)(Measures, etc. for Providing Information in Electronic Format)
Article 15
1. When the Company convenes a general meeting ofshareholders, it shall take measures for providing
information that constitutes the content of reference
documents for the general meeting of shareholders, etc. inelectronic format.
2. Among items for which the measures for providing
information in electronic format will be taken, theCompany may exclude all or some of those items
designated by the Ministry of Justice Order fromstatements in the paper-based documents to be delivered
to shareholders who requested the delivery of paper-based
documents by the record date of voting rights.
(Newly established)(Supplementary Provisions)
1. The amendment to the Articles of Incorporation pertaining
to Article 15 shall be effective from September 1, 2022,
which is the date of enforcement of the revised provisions
provided for in the proviso to Article 1 of the
Supplementary Provisions of the Act Partially Amending
the Companies Act (Act No. 70 of 2019) (hereinafterreferred to as the “Date of Enforcement”).

-4-Current Articles of Incorporation
2.

3.

-5-

Proposed amendments
Notwithstanding the provision of the preceding paragraph,
Article 15 of the pre-amended Articles of Incorporation
shall remain effective regarding any general meeting ofshareholders held on a date within six months from theDate of Enforcement.
These Supplementary Provisions shall be deleted on thedate when six months have elapsed from the Date of
Enforcement or three months have elapsed from the dateof the general meeting of shareholders in the preceding
paragraph, whichever is later.

Proposal 3:

Election of Ten Directors

The terms of office of all ten incumbent Directors will expire at the conclusion of this General Meeting of
Shareholders. Accordingly, the election of ten Directors is proposed.
The candidates for Directors are as follows.
No.

Name

Current positions
Chairman,
Reappointment
President & CEO

1

Hirotaka Kawai

2

Teruyuki Ito

Reappointment

3

Kentaro Kawai

Reappointment

4

Masakazu Kusaka

Reappointment

5

Harumitsu Makita

Reappointment

6

Hiroshi Ushio

Reappointment

7

Masafumi Minowa

Reappointment

8

Naoki Mori

Reappointment

9

Ichisei Katagiri

10

Shoji Nakamura

Responsibilities

Executive Officer
General Manager, General Affairs & Human
Resources Division
Director and Vice Executive Officer
President
General Manager, Production Control Division
Senior Managing Executive Officer
Director
General Manager, Domestic Business Division
Executive Officer
Managing Director General Manager, Material Processing
Division, Production Control Division
Executive Officer
Managing Director General Manager, Piano Division, Production
Control Division
Executive Officer
General Manager, Electronic MusicalDirector
Instruments Division, Production Control
Division
Executive Officer
Director
General Manager, Overseas Business Division
Director and Vice
President

Reappointment
OutsideDirector
Independent
Reappointment
OutsideDirector
Independent

-6-

No.

Name
(Date of birth)

Career summary, position and responsibilities in the Company
Jan. 1976
Aug. 1979
Aug. 1983
Aug. 1985

1

No.

2

Number of sharesof the Company
held

Joined the Company
Director
Managing Director
Representative Director and Senior Managing
Director
June 1987
Representative Director and Vice President
Hirotaka Kawai
Oct. 1989
President & Chief Executive Officer(June 27, 1947)
118,500
June 2015
Chairman, President & CEO (to present)
Reappointment(Significant concurrent positions)
Director, KAWAI FOUNDATION FOR SOUNDTECHNOLOGY & MUSIC
Director, KAWAI SEIMITSU KINZOKU Co., Ltd
Audit & Supervisory Board Member, Kabushiki Kaisha Kawai
ShadanReasons for nomination as a candidate for Director
Mr. Hirotaka Kawai has served as Chief Executive Officer for many years and has deep knowledge and achievements
concerning the Group’s business management. In the midst of severe changes in the business environment, he has
exerted strong leadership and contributed to the enhancement of corporate value. We believe that he will continue toexert management leadership and is qualified to supervise the business execution.
Number of shares
Name
Career summary, position and responsibilities in the Companyof the Company(Date of birth)
heldApr. 1978
Joined the Company
Oct. 2008
General Manager, Musical Education
Department, Domestic Business DivisionFeb. 2010
Executive Officer
June 2014
Director & Executive Officer
Apr. 2015
General Manager, Business Strategy
Department,
Domestic Business Division
Teruyuki Ito
4,500(September 1, 1953)
Apr. 2016
General Manager, General Affairs & Human
Reappointment
Resources Division
Apr. 2018
General Manager, Administration Division
June 2018
Executive Vice President (to present)
June 2019
General Manager, General Affairs & Human
Resources Division (to present)(Significant concurrent positions)
None
Reasons for nomination as a candidate for Director
Mr. Teruyuki Ito works on many issues and has experience and achievements as a person in charge of the General
Affairs & Human Resources Division. We believe that he is qualified to continuously carry out management strategies
and supervise the business execution as a Director.

-7-

No.

Name
(Date of birth)

Career summary, position and responsibilities in the Company
Oct. 2007
Apr. 2012

3

No.

4

Number of sharesof the Company
held

Joined the Company
General Manager, Piano Division
Executive Officer
May 2015
Auditor, PT. Kawai Indonesia (to present)
June 2015
Director & Executive Officer
Apr. 2016
General Manager, Musical Instruments
Manufacturing Division and Piano Division
Kentaro Kawai
June 2016
Managing Director(June 1, 1977)
3,100
June 2018
Senior Managing Director
Reappointment
General Manager, Production Control Division(to present)
June 2020
Director and Vice President, Executive Officer(to present)(Significant concurrent positions)
Director, KAWAI SEIMITSU KINZOKU Co., Ltd
Auditor, PT. Kawai Indonesia
Reasons for nomination as a candidate for Director
Mr. Kentaro Kawai works on many issues and has well-informed experience in the field and achievements as a person
in charge of the business administration division and the production division. We believe that he is qualified tocontinuously carry out management strategies and supervise the business execution as a Director.
Number of shares
Name
Career summary, position and responsibilities in the Companyof the Company(Date of birth)
heldMar. 1976
Joined the Company
Feb. 2008
General Manager, Chubu (central area)
Business Division
June 2008
Executive Officer
Feb. 2009
General Manager, Kanto (Tokyo andsurrounding areas) Business Division
Apr. 2013
General Manager, Domestic Business Division
June 2013
Director & Executive Officer
Masakazu Kusaka
June 2015
Managing Director
6,000(November 12, 1953)
Apr. 2016
Deputy General Manager, Business Division
Reappointment
and General Manager, Domestic Business
Division
June 2016
Senior Managing Director, Executive Officer(to present)
May 2019
General Manager, Domestic Business Division(to present)(Significant concurrent positions)
None
Reasons for nomination as a candidate for Director
Mr. Masakazu Kusaka has abundant experience and achievements in management as a person in charge of the Domestic
Business Division. We believe that he is qualified to continuously carry out management strategies and supervise thebusiness execution as a Director.

-8-

No.

Name
(Date of birth)

Career summary, position and responsibilities in the Company
Apr. 1979
Apr. 2013
June 2013

5

No.

6

Number of sharesof the Company
held

Joined the Company
General Manager, Metal Division
Representative Director and President, KAWAISEIMITSU KINZOKU Co., Ltd (to present)
June 2014
Executive Officer
Apr. 2016
General Manager, Material Processing Division
Harumitsu Makita
June 2016
Director & Executive Officer(January 18, 1957)
3,600
June 2018
Managing Director (to present)
Reappointment
General Manager, Material Processing
Division, Production Control Division (topresent)(Significant concurrent positions)Representative Director and President, KAWAI SEIMITSUKINZOKU Co., Ltd
Reasons for nomination as a candidate for Director
Mr. Harumitsu Makita works on many issues and has experience and achievements as a person in charge of the material
processing business. We believe that he is qualified to continuously carry out management strategies and supervise thebusiness execution as a Director.
Number of shares
Name
Career summary, position and responsibilities in the Companyof the Company(Date of birth)
heldJan. 1983
Joined the Company
Apr. 2005
General Manager, PT. Kawai Indonesia
June 2011
President, PT. Kawai Indonesia
Executive Officer
Apr. 2012
Deputy General Manager, Piano Division
Apr. 2016
Deputy General Manager, Piano Division,
Musical Instruments Manufacturing Division
Hiroshi Ushio
June 2017
Director & Executive Officer(February 11, 1961)
3,500
June 2018
General Manager, Piano Division, Production
Reappointment
Control Division (to present)
Feb. 2019
Representative Auditor, PT. Kawai Indonesia(to present)
June 2020
Managing Director, Executive Officer (topresent)(Significant concurrent positions)Representative Auditor, PT. Kawai Indonesia
Reasons for nomination as a candidate for Director
Mr. Hiroshi Ushio has served as a person in charge of overseas manufacturing bases for many years and has abundant
experience and achievements. In addition, he is working on many issues as a person in charge of Piano Division. We
believe that he is qualified to continuously carry out management strategies and supervise the business execution as a
Director.

-9-

No.

Name
(Date of birth)

Career summary, position and responsibilities in the Company
Apr. 1988
June 2011
June 2012

7

No.

8

No.

9

Number of sharesof the Company
held

Joined the Company
Vice President, PT. Kawai Indonesia
Deputy General Manager, Electronic MusicalInstruments Division
Apr. 2013
General Manager, Electronic MusicalInstruments Division
June 2013
Executive Officer
May 2014
Chairman, Shanghai Kawai EMI Co., Ltd. (toMasafumi Minowa
present)(February 14, 1964)
3,000
Reappointment
May 2015
Auditor, PT. Kawai Indonesia (to present)
June 2018
General Manager, Electronic MusicalInstruments Division, Production Control
Division (to present)
June 2019
Director & Executive Officer (to present)(Significant concurrent positions)
Chairman, Shanghai Kawai EMI Co., Ltd.
Auditor, PT. Kawai Indonesia
Reasons for nomination as a candidate for Director
Mr. Masafumi Minowa has served as a person in charge of Electronic Musical Instruments Division, works on many
issues and has abundant experience and achievements. We believe that he is qualified to continuously carry out
management strategies and supervise the business execution as a Director.
Number of shares
Name
Career summary, position and responsibilities in the Companyof the Company(Date of birth)
heldApr. 1981
Joined the Company
Apr. 2007
General Manager, Kawai America Corporation
June 2011
President, Kawai America Corporation
Apr. 2013
Executive Officer
Naoki Mori
May 2019
General Manager, Overseas Business Division
2,300(October 12, 1957)(to present)
Reappointment
June 2020
Director & Executive Officer (to present)(Significant concurrent positions)
Director, Kawai America Corporation
Director, Kawai Europa GmbH
Reasons for nomination as a candidate for Director
Mr. Naoki Mori has served as a person in charge of overseas sales bases, works on many issues and has abundant
experience and achievements. We believe that he is qualified to continuously carry out management strategies andsupervise the business execution as a Director.
Number of shares
Name
Career summary, position and responsibilities in the Companyof the Company(Date of birth)
heldApr. 1985
Registered as an attorney
Ichisei Katagiri
Representative, Ichisei Katagiri Law Office (to(July 9, 1947)
present)
1,400
Reappointment
June 2012
Outside Director (to present)
Outside(Significant concurrent positions)
Independent
Representative, Ichisei Katagiri Law Office
Reasons for nomination as a candidate for Outside Director and overview of expected roles
Mr. Ichisei Katagiri has abundant knowledge and deep insight as an attorney and has offered helpful advice andsupervision concerning the Company’s management from his professional perspective. We expect to continuously
receive appropriate guidance from him. Although he does not have direct experience of corporate business outside ofserving as an Outside Director and Outside Corporate Auditor, we believe that he can continue to appropriately, carryout duties as an Outside Director for the reasons stated above.

- 10 -

Name(Date of birth)

No.

Career summary, position and responsibilities in the Company
Apr. 1964
Mar. 1969
Mar. 1983
Mar. 1990
July 1992

10

Notes:

1.

2.
3.

4.

5.

Number of sharesof the Company
held

Joined Osaka Gas Co., Ltd.
Joined CHUBU GAS CO., LTD.
Director, CHUBU GAS CO., LTD
Managing Director, CHUBU GAS CO., LTD.
Representative Director and Senior Managing
Director, CHUBU GAS CO., LTD.
Mar. 1993
Representative Director and Vice President,
CHUBU GAS CO., LTD.
Mar. 1994
Representative Director and President, CHUBU
Shoji Nakamura
GAS CO., LTD.
(January 26, 1942)
Feb. 2003
Chairman and Representative Director, SALA
4,700
Reappointment
Corporation
OutsideJan. 2006
Chairman and Representative Director, SALA
Independent
HOUSE CO., LTD.
Mar. 2012
Representative Director and Chairman,
CHUBU GAS CO., LTD. (presently SALAENERGY CO., LTD.)
June 2015
Outside Director (to present)
Feb. 2022
Executive Advisor, SALA Corporation (topresent)(Significant concurrent positions)Executive Advisor, SALA Corporation
Reasons for nomination as a candidate for Outside Director and overview of expected roles
With many years of experience and knowledge through involvement in corporate management, we expect that Mr. ShojiNakamura can continuously offer valuable advice and suggestions in ensuring transparency and validity of decisionmaking for the Company’s management.
Mr. Hirotaka Kawai, a candidate for Director, is concurrently serving as Director of KAWAI FOUNDATION FOR
SOUND TECHNOLOGY & MUSIC. The Company has business relationship including donation of money and leasingof buildings with KAWAI FOUNDATION FOR SOUND TECHNOLOGY & MUSIC.
Other than the above 1., there is no special interest between each candidate for Director and the Company.
Matters concerning candidates for Outside Directors are as follows:
1) Candidates for Directors, Messrs. Ichisei Katagiri and Shoji Nakamura, are the candidates for Outside Directors. The
Company has designated them as independent directors defined under the provisions of Tokyo Stock Exchange, Inc.
and registered them as such therewith.
2) Candidates for Directors, Messrs. Ichisei Katagiri and Shoji Nakamura, are currently serving as Outside Directors of
the Company, and they will have served ten years and seven years, respectively, at the conclusion of this General
Meeting of Shareholders.
3) The Company has entered into an agreement for the limitation of liability with Messrs. Ichisei Katagiri and ShojiNakamura who are candidates for Director, pursuant to Article 427, paragraph (1) of the Companies Act, limiting
their liability for damages prescribed under Article 423, paragraph (1) of the said Act. The limit of liability fordamages based on the agreement is the minimum liability prescribed by laws and regulations, while the limitation of
liability is allowed only when the Directors are carrying out their duties in good faith without involving grossnegligence. Upon approval of their reappointment, the Company will continue the agreement for the limitation of
liability with them.
The Company has entered into a liability insurance policy for officers, etc. with an insurance company as defined in Article
430-3, paragraph (1) of the Companies Act. The scope of the insureds under this insurance policy includes the Company’s
Directors, Corporate Auditors, Executive Officers, managerial employees, and officers dispatched outside of the Company,
and the insureds do not bear insurance premiums. Under the insurance policy, the Company will be compensated for thelegal liability for damages borne by the insureds due to their actions. In addition, the Company has taken measures toensure that the appropriateness of the execution of duties by the relevant officers, etc. is not impaired by setting a limit on
the amount to be covered.
All candidates for Directors have indicated consent to the “Measures against the Large-scale Purchase of the Shares in the
Company (a Takeover Defense Measure),” scheduled to be renewed subject to the approval of Proposal 6 at this General
Meeting of Shareholders.

- 11 -

<Reference> Directors’ Skill Matrix
If Proposal 3 is approved and adopted as originally proposed, Directors’ skill matrix will be as follows.
Expected knowledge, experience, and capabilities

Name/Skill

Corporate
management

Legal
Manufacaffairs, risk Finance,
turing,manage- accounting
technology
ment

Chairman, President& CEO
Director and Vice
President
Director and Vice
President
Senior Managing
Director

Hirotaka
●
●
●
Kawai
Teruyuki●●Ito
Kentaro●●
Kawai
Masakazu
KusakaHarumitsu●●
Managing Director
MakitaHiroshi●●Managing Director
Ushio
Masafumi●
Director
MinowaNaoki●
Director
Mori
Ichisei●
Outside Director
KatagiriShoji●
Outside Director
Nakamura* The above list does not show all expertise and experiences each Director may have.

- 12 -

Sales
marketingGlobalIndustryknowledge(music,musicalinstruments)

●

●

●

●

●

●

●

●
●
●

●

Proposal 4:

Election of One Substitute Corporate Auditor

The election of one substitute Corporate Auditor is proposed in advance, in case the number of Corporate Auditors
falls below the number required by the law, as a substitute Outside Corporate Auditor for Outside Corporate Auditors
Messrs. Takahisa Tabata and Haruo Kato.
The validity of the election under this proposal can be nullified by resolution of the Board of Directors if the consent
of the Board of Corporate Auditors has been obtained; provided, however, that it is only in a time before assuming
office.
The consent of the Board of Corporate Auditors has been obtained with respect to this proposal.
The candidate for substitute Corporate Auditor is as follows.
Name(Date of birth)

Career summary and position in the Company
July 2007

Number of sharesof the Company
heldDirector, Rulings and Legal Affairs Division, Nagoya
Regional Taxation Bureau
July 2008
District Director, Mishima Tax Office
July 2014
Assistant Regional Commissioner, Second Taxation
Department, Nagoya Regional Taxation Bureau
Shinichi Mizuno
0
July 2015
Assistant Regional Commissioner, Large Enterprise(September 25, 1955)
Examination Department, Nagoya Regional Taxation Bureau
Sept. 2016
Manager, Shinichi Mizuno Tax Accountant Office (topresent)(Significant concurrent positions)Manager, Shinichi Mizuno Tax Accountant Office
Reasons for nomination as a candidate for substitute Corporate Auditor
Despite never having been involved in the management of a company in the past, except as an outside officer, Mr. Shinichi Mizuno
has worked in various national tax services, has served as a District Director, etc. of tax offices and has abundant knowledge anddeep insight concerning taxes and accounting as a tax accountant. We expect him to contribute to strengthening the Company’s audit
structure based on his abilities when he assumes the position. We believe that he can appropriately carry out duties as a Corporate
Auditor (Outside).
Notes: 1. There is no special interest between the candidate for substitute Corporate Auditor and the Company.
2. Mr. Shinichi Mizuno is a candidate for substitute Corporate Auditor (Outside).
3. When Mr. Shinichi Mizuno assumes the position of Corporate Auditor (Outside), the Company intends to enter into anagreement with him pursuant to Article 427, Paragraph (1) of the Companies Act, limiting his liability for damagesprescribed under Article 423, Paragraph (1) of the said Act. The limit of liability for damages based on the agreement is
the minimum liability amount prescribed by laws and regulations, while the limitation of liability is allowed only when
the Corporate Auditor is carrying out his duties in good faith without involving gross negligence. He will also be included
as insured under the liability insurance policy for officers, etc. as defined in Article 430-3, paragraph (1) of the Companies
Act, which the Company has entered into with an insurance company. In addition, the Company intends to designate him
as an independent director defined under the provisions of Tokyo Stock Exchange, Inc. and register him as such therewith.

- 13 -

Proposal 5:

Determination of the Amount and Contents of Stock Compensation, etc. for Directors

1. Reasons for the proposal and reasons that the proposed compensation plan is considered to be reasonable
The remuneration for Directors of the Company is currently comprised only of fixed compensation. This
proposal is to ask for approval for the introduction of a new stock compensation plan (hereinafter the “Plan”) for
Directors of the Company (excluding Outside Directors as described below). The Company requests that its
details be left to the discretion of the Board of Directors within the framework of 2. below.
The purpose of the Plan is to make the remuneration for Directors and the value of the Company’s stock moreclearly linked and increase Directors’ awareness of their contribution to the enhancement of businessperformance and improvement of corporate value over the medium to long term by having Directors shareinterests and risks of fluctuation of the stock price with shareholders.
To be specific, the proposal is to provide new stock compensation for Directors (excluding Outside Directors;
the same shall apply hereinafter) who take office during the period of five years from the next day of theconclusion of this Annual General Meeting of Shareholders to the day of the conclusion of the Annual General
Meeting of Shareholders to be held in June 2027 (hereinafter the “Applicable Period”), separately from the
maximum amount of remuneration for Directors approved at the 90th Annual General Meeting of Shareholders
held on June 27, 2017, which was ¥360 million (for Outside Directors, ¥24 million) excluding employee salaries.
The outline of the details of the policy on deciding the details of individual remuneration for Directors of theCompany is as described in (4) Amount of remuneration, etc. for Directors and Corporate Auditors 3), 4. Mattersrelated to the corporate officers in the Business Report. Subject to the approval and adoption of this proposal,
the details will be changed as described in this proposal. As this proposal is in line with the amended policy andis necessary and reasonable to provide individual remuneration, etc. for Directors, we believe the details of the
proposal are suitable.
If Proposal 3 “Election of Ten Directors” is approved and adopted as originally proposed, eight Directors will be
eligible for the Plan.
2. Amount and details of compensation under the Plan
(1) Outline of the Plan
The Plan is a stock compensation plan where a trust set up by the Company through cash contribution(hereinafter the “Trust”) acquires shares of the Company, and the Trust delivers to each Director the numberof shares of the Company corresponding to the number of points granted from the Company to each
Director.
Directors will receive shares of the Company upon their retirement, in principle.
1)

Persons eligible for the Plan

2)

Applicable Period3)

The maximum amount of cash to be contributed by theCompany during the Applicable Period in 2) as the funds
necessary for acquiring shares of the Company to bedelivered to the eligible persons in 1)¥550 million in total

4)

Method of acquiring shares of the Company

By disposing of treasury stock or acquiring from thestock market (including off-floor trading)

5)
6)
7)

(2)

Directors of the Company (excluding Outside Directors)
From the next day of the conclusion of this Annual
General Meeting of Shareholders to the day of theconclusion of the Annual General Meeting of
Shareholders to be held in June 2027

The maximum total points granted to the eligible persons
12,000 points per fiscal year
in 1)Standards for granting points
Points are granted based on the position, etc.
Timing of delivering shares of the Company to theUpon retirement, in principle
eligible persons in 1)

The maximum amount of cash to be contributed by the Company
The initial trust period of the Trust will be around five years. During the Applicable Period, the Company
will contribute cash up to ¥550 million in total as the funds necessary for acquiring shares of the Company
for delivery to the Directors under the Plan as compensation for Directors in office during the Applicable- 14 -

Period, and set up the Trust in which Directors acquiring beneficiary rights as provided for in (3) 3) below
will be beneficiaries. The Trust will use cash entrusted by the Company to acquire shares of the Company
by disposing of treasury shares or acquiring shares from the stock market (including off-floor trading).
Note: The Company will entrust necessary expenses such as trust fees and remuneration for the trust
administrator in addition to the funds for acquiring shares of the Company as described above.
The Company may extend the Applicable Period for a maximum of five years each time by the decision of
the Board of Directors of the Company, and accordingly extend the trust period of the Trust (including
practically extending the trust period by transferring the asset in the Trust to another trust that is set up
under the same purpose of the Trust set up by the Company; the same shall apply hereinafter) and continue
the Plan. In this case, the Company will contribute cash to the Trust up to the amount calculated by the
number of extended years of the Applicable Period multiplied by ¥110 million as the funds necessary for
acquiring additional shares of the Company to be delivered to the Directors under the Plan, and continue
to grant points and deliver shares of the Company as described in (3) below.
Even if we do not extend the Applicable Period or continue the Plan as mentioned above, if any of the
Directors who have already received points is still in office at the expiration of the trust period, the trust
period of the Trust may be extended until the said Director retires and receives shares of the Company.
(3)

Calculation method and maximum amount of shares of the Company to be delivered to Directors
1) Method, etc. of granting points to Directors
According to the share granting rules determined by the Board of Directors of the Company, theCompany will grant points based on the position, etc. on the point granting date stipulated in the share
granting rules during the trust period.
The maximum total points granted from the Company to a Director shall be 12,000 points per fiscal
year.
2) Delivery of shares according to the number of points granted
Directors will receive shares of the Company according to the procedures described in 3) below basedon the number of points granted in 1) above.
One share of the Company will be delivered in exchange for one point. If shares of the Company
undergo a share split, reverse share split, etc. that makes it reasonable to adjust the number of sharesof the Company to be delivered, the number of shares delivered per point shall be adjusted according
to the relevant share split ratio, reverse share split ratio, etc.
3) Delivery of shares of the Company to Directors
In principle, each Director will obtain a beneficiary right to the Trust upon retirement throughprescribed procedures and receive shares of the Company as described in 2) above from the Trust as
a beneficiary of the Trust.
A certain portion of such shares of the Company, however, may be sold and converted into cash by
the Trust to withhold tax payment funds for income tax, etc. by the Company and provided by cash
instead of shares of the Company. If shares of the Company in the Trust are converted into cash, suchas when a tender offer for shares of the Company in the Trust is accepted and settled, cash may be
granted instead of shares of the Company.

(4)

Exercise of voting rights
Voting rights of shares of the Company in the Trust will not be exercised without exception according to
the instructions of the trust administrator independent of the Company and the Company’s officers. Thismeasure will ensure the neutrality against the management of the Company regarding the exercise of voting
rights of shares of the Company in the Trust.

(5)

Treatment of dividends
The Trust will receive dividends on shares of the Company in the Trust and apply them to the funds foracquiring shares of the Company, trust fees for trustees of the Trust, etc.

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Proposal 6:

Renewal of the Measures against the Large-scale Purchase of the Shares in the Company (aTakeover Defense Measure)

Effective period of the Measures against the Large-scale Purchases of the Shares in the Company (hereinafter the“Current Plan”) currently in force after the renewal based on the resolution at the 92nd Annual General Meeting of
Shareholders held on June 26, 2019, will expire at the conclusion of this General Meeting.
In the face of the expiry of the effective period of the Current Plan, the Board of Directors of the Company has
considered various aspects including the amendment to laws and regulations after the introduction of the Current
Plan, the trend of practical operations, and changes in the business environment.
As a result of such consideration, the Company resolved at the Board of Directors’ meeting held on May 19, 2022,
that the Current Plan be renewed upon revising the purpose of renewal of the measures against a large-scale purchaseof the shares in the Company, basically succeeding the contents thereof and changing some details (the measures
after the renewal are hereinafter referred to as the “Plan”), becoming effective subject to the approval at this General
Meeting.
A key change from the Current Plan is that the Plan clearly states that, when the Company considers theimplementation of countermeasures under the Plan, the Company may confirm the shareholders’ intention at a
general meeting of shareholders under certain circumstances.
1. Objectives of the Plan
(1) A measure for ensuring and enhancing the Company’s corporate value and the common interest of its
shareholders
1) Management philosophy
The Company aims to become “a creative and well-liked corporation” with the following
management philosophy.
(i) Creating a comfortable and fulfilling living environment(ii) Providing products and services focused on customer satisfaction(iii) Promoting corporate activities for a new era(iv) Aiming to become a pleasant company that values its employees
The Company is striving to ensure and enhance the Company’s corporate value and the common
interest of its shareholders by continuously creating new values truly sought by society and providing
such values to customers on a timely basis.
2) Source of the Company’s corporate value and the common interest of its shareholders
The Company, as a business engaged in manufacturing and sales of musical instruments, has been
striving to accumulate expertise, experience and know-how with the aim of realizing our founder’s
dream of “making the world’s finest piano.” Based on the recognition that piano manufacturing is abusiness to be run with a century-long perspective, the Company is striving for further enhancementof quality and technology innovation in order to achieve the aforementioned dream.
In addition, the Company has been hitherto supported by the growth of peripheral businesses derived
from the traditional core business of manufacturing and sales of musical instruments, namely music
school business operating around 4,000 directly managed music schools throughout Japan, physicaleducation business involving physical education schools targeting children and health schools for
adults and seniors, which is attracting growing attention in recent years, metal business utilizing thehigh precision rolling technologies derived from research on the process of manufacturing thesounding body of musical instruments, and coating business capitalizing on the wood coating
technique derived from piano coating. Interactions among these businesses are enhancing theCompany’s brand image, thus creating corporate value.
Sales of musical instruments and music school business in Japan, in particular, have developed ourunique business model based on the direct selling system. Customers learn how to play the piano in
our music schools and buy Kawai pianos, for which we provide after-sales services such as tuning.
In recent years, the Company is developing this business model not only in Japan but also in overseas
markets, primarily Asian countries, in an effort to promote our business activities based on continuous
trustful relationships with customers through pianos, products involving years of use.
Furthermore, since 1963, the Company has been inviting many famous musicians to Japan throughKawai Music Foundation, contributing to the advancement of the Japanese music culture, while- 16 -

3)

4)

(2)

holding more than 2,300 times of Kawai Concerts, thereby creating opportunities to enjoy quality
music in rural areas. We recognize that these music promotion activities are conducted not only byproviding musical instruments as a manufacturer, but also by gaining the understanding and empathyof all stakeholders surrounding the Company based on consistent favorable relationships withmusicians and performers in various genres.
We believe it is such promotion of the Group’s business activities in hardware as well as softwarethat derives the Company’s corporate value and the common interest of its shareholders.
The 7th Medium-term Management Plan “Resonate 2024”
The Company has formulated the 7th Medium-term Management Plan, “Resonate 2024,” covering
the three years from April 2022 to March 2025.
The Group aims to become a creative and well-liked corporation with the management philosophyof “creating a comfortable and fulfilling living environment,” “providing products and services
focused on customer satisfaction,” “promoting corporate activities for a new era,” and “aiming tobecome a pleasant company that values its employees,” and makes it our mission to spread theexcitement to everyone through musical instruments including pianos and musical education andcontribute to the creation of a fulfilling living environment.
Specific measures under this Medium-term Management Plan are described in (4) Issues to beaddressed, 1. Matters related to the current state of the Group in the Business Report for the 95th term
as presented in the Attachment to the Notice of Convocation of this General Meeting.
We believe that the steady implementation of the various measures under the Plan should contributeto increasing the Company’s corporate value and enhancing the common interest of its shareholders.
Vital framework for ensuring and enhancing the Company’s corporate value and the common interestof its shareholders
The Company has been upholding and addressing a priority issue of enhancing corporate governanceas a framework vital for ensuring and enhancing the Company’s corporate value and the common
interest of its shareholders.
For the purpose of acceleration of decision-making and clarification of management responsibilities,
the Company has adopted the Executive Officer System as a measure for achieving separation ofbusiness execution from management supervision. The term of office of Directors is set to be one
year.
In addition, the Company has appointed highly independent Outside Corporate Auditors to be
responsible for audits on business execution by Directors and elected two Outside Directors in June
2015. Furthermore, the Company established the Corporate Governance Committee in December
2015. The committee is comprised of all independent officers registered at the Tokyo Stock Exchange,
the chairman of the Board of Directors, the Representative Director, and other Directors whom theBoard of Directors delegates as necessary, and the majority of the members shall be independent
officers. By having such a committee whose independence is ensured, the Company makes an effort
to ensure further reinforcement of corporate governance.
The Company will work on ensuring and enhancing the Company’s corporate value and the common
interest of its shareholders by further promoting various measures to enhance corporate governance.
At the same time, the Company will strive for developing stable and trustful relationships withshareholders on a long-term basis through initiatives such as holding briefings for institutional
investors and security analysts and promoting investor relations activities for individual investors.

Necessity of the Plan
The Company will promote the aforementioned corporate activities as the Group, and will aim to ensureand enhance the Company’s corporate value and the common interest of its shareholders. In order toachieve this, we believe it is essential to maintain our expertise, experience and know-how accumulated
over the years since the foundation of the Company, along with the trustful relationships with all
stakeholders both in Japan and overseas, including customers, business partners, local communities andemployees.
Core businesses of the Company are the fields such as music and education, which are not limited to justproviding hardware and software, but are profoundly related to culture. Our consistent music promotion
activities as a social contribution are also considered to be an important component of our business.
- 17 -

Education for young children, in particular, is believed to have a significant impact on those promisingchildren for their emotional as well as physical health. Thus, we believe that the operation of these special
businesses requires a well-balanced management attitude based on the considerations of cultural aspects,
in addition to economic factors.
Meanwhile, in the Japanese capital market, there are quite a few cases involving a large-volume purchaseof share certificates, etc. of a company without prior approval of its management in an attempt to gain its
control. Recently, in particular, these cases occur frequently, and more and more of those cases are brought
to court.
The Company has no intention to reject an attempt to purchase share certificates, etc. in a large-volume(hereinafter the “Large-volume Purchase of Share Certificates, etc.”), insofar as the Purchase may
contribute to ensuring and enhancing the Company’s corporate value and the common interest of its
shareholders, and believes that whether or not to accept the Large-volume Purchase of Share Certificates,etc. should ultimately be entrusted to the decision of shareholders.
However, we also believe that shareholders, in deciding whether or not to accept the Large-volume
Purchase of Share Certificates, etc., are required to adequately understand the potential impact of the Largevolume Purchase of Share Certificates, etc. on the stakeholders of the Company and the Group companies,
including customers, business partners, local communities and employees, as well as to give due
consideration to the cultural aspects of the Company’s business. For that reason, the party intending toconduct the Large-volume Purchase of Share Certificates, etc. is desired to provide shareholders theinformation regarding the Purchase in advance, allowing sufficient time for shareholders to consider
whether or not to accept the Large-volume Purchase of Share Certificates, etc. In addition, it is also believedthat the Board of Directors of the Company needs to provide shareholders the information regarding
various factors that constitute the Group’s corporate value, while evaluating the Large-volume Purchase of
Share Certificates, etc. and presenting its opinion thereon.
The Board of Directors of the Company believes, based on the aforementioned philosophy, that it is critical
for the Board of Directors of the Company, in the event of a Large-volume Purchase of Share Certificates,etc. of the Company, to provide information necessary for shareholders to decide whether or not to accept
the Large-volume Purchase of Share Certificates, etc., while ensuring sufficient time and informationnecessary for the Board of Directors of the Company to present an alternative proposition as appropriate,
and ensuring sufficient time for the Board of Directors of the Company to negotiate with the party that
intends to implement the Large-volume Purchase of Share Certificates, etc. Therefore, the Company has
determined that it is necessary to renew the Plan.
The Board of Directors of the Company has decided to renew the measures against the large-scale purchaseof the shares in the Company by continuously setting up implementation rules (hereinafter the “Large-scale
Purchase Rules”) especially for the Large-scale Purchase (as defined in 2. hereunder; hereinafter the same)among all types of the Large-volume Purchase of Share Certificates, etc.
Major shareholders of the Company as of March 31, 2022 are as stated in Appendix 1. There is no actual
circumstance at this moment, in which the Company has received any notice of the Large-scale Purchaseor proposal for acquisition from a specific third party.
2. Purchase of the Company’s shares subject to the Plan
Purchase of the Company’s shares subject to the Plan is defined as the purchase of the Company’s sharecertificates, etc. (Note 3) which, whether by intention or not, results in an increase of the voting rights ratio (Note2) of a specific shareholder group (Note 1) to 20% or higher (using whatever purchase method including market
trading and tender offer, but excluding any purchase based on the prior agreement of the Board of Directors of
the Company. Such purchase shall hereinafter be referred to as the “Large-scale Purchase,” and the party
engaging in such purchase is referred to as the “Large-scale Purchaser”).
3. Detail of the Large-scale Purchase Rules
The Large-scale Purchase Rules stipulate that the Large-scale Purchaser shall provide the Board of Directors of
the Company necessary and sufficient information in advance so that the Board has a time period to assess andconsider the Large-scale Purchase based on the information disclosed, and that the Large-scale Purchase shallcommence after the expiry of such time period.
In this process, the following specific procedures shall be followed.
- 18 -

(1)Request for information from the Large-scale Purchaser
The Large-scale Purchaser shall provide the Board of Directors of the Company necessary and sufficient
information in Japanese for shareholders to make a decision as well as for the Board to engage in an
assessment and consideration prior to the Large-scale Purchase.
The scope and contents of the information to be provided will differ depending on the manner and detailsof the Large-scale Purchase.
The Large-scale Purchaser shall prepare and submit to the Board of Directors of the Company a document
in Japanese containing a declaration to conduct the Large-scale Purchase according to the Large-scale
Purchase Rules (hereinafter the “Purchase Statement”) before engaging in the Large-scale Purchase.
The Purchase Statement shall include the following.
(i) Name of the Large-scale Purchaser (corporate name, if the Large-scale Purchaser is a body corporate
or organization such as a union)(ii) Address of the Large-scale Purchaser (address of head office or principal office, if the Large-scale
Purchaser is a body corporate or organization such as a union)(iii) Governing law of incorporation, if the Large-scale Purchaser is a body corporate or organization suchas a union(iv) Name of the representative, if the Large-scale Purchaser is a body corporate or organization such asa union(v) Name and address of a contact person in Japan(vi) Outline of the Large-scale Purchase intended(vii) Number of share certificates, etc. of the Company currently owned and scheduled to be purchased by
the Large-scale Purchaser(viii) Declaration to comply with the Large-scale Purchase Rules
The Board of Directors of the Company, upon receipt of the Purchase Statement from the Large-scale
Purchaser, immediately presents the fact of such receipt and the contents thereof to the independent
committee described in 3. (3) below (hereinafter the “Independent Committee”). In addition, the Board
immediately discloses the fact of such receipt and promptly discloses the outline thereof in a way deemed
appropriate.
The Independent Committee discloses through the Board of Directors of the Company the whole or part ofthe contents of the Purchase Statement presented by the Board, if and when deemed necessary andappropriate to disclose specific details in addition to the outline disclosed by the Board for the shareholders
to make a decision.
The Board of Directors of the Company will issue a list of information to be submitted from the Largescale Purchaser (hereinafter the “Large-scale Purchase Information”) to the Large-scale Purchaser within
five business days counting from the following day of the receipt of the Purchase Statement.
The Large-scale Purchaser shall prepare a document in Japanese that provides the Large-scale Purchase
Information as requested by the aforementioned list and submit it to the Board of Directors of the Company
within a reasonable period of time.
The Large-scale Purchase Information includes the following items.
(a)
(b)

(c)

(d)

General information on the Large-scale Purchaser and its group (such as names, capital structuresand financial conditions)Objectives, methods and details of the Large-scale Purchase (including the price and type of
consideration for the Purchase, timing, legitimacy of the method, structure of the related transactions,likelihood of delisting of the Company’s shares after the Purchase and reasons therefor)
Basis for calculating the Purchase consideration (including the facts and assumptions for the
calculation, calculation method, numerical information used in the calculation, amount of synergy
expected to be derived from the transactions related to the Purchase and the basis of calculation
thereof), as well as the source of the Purchase fund (such as the specific names of the providers of
the fund (including actual providers), funding methods and details of the related transactions)
Policies and plans intended after the completion of the Large-scale Purchase for the purpose of
ensuring and enhancing the Company’s corporate value and the common interest of its shareholders,- 19 -

(e)

(f)

(2)

such as management policies, business plans, funding plans, investment plans, capital policies anddividend policies at the Company and the Group
Changes scheduled after the completion of the Large-scale Purchase, if any, to the policies for treating
the relationships of the Company and the Group with their stakeholders, including customers,
business partners, local communities and employees, and the details of such change
Any other information reasonably considered necessary by the Board of Directors and theIndependent Committee

The Board of Directors of the Company, upon receipt of the Large-scale Purchase Information,
immediately presents the fact of such receipt and details of the information to the Independent Committee.
The Independent Committee discloses through the Board of Directors of the Company the whole or part of
the Large-scale Purchase Information presented, if and when deemed necessary and appropriate to disclose
the information for the shareholders to make a decision.
The Independent Committee may request through the Board of Directors of the Company additional
information from the Large-scale Purchaser, if the information presented by the Board is consideredinsufficient as the Large-scale Purchase Information based on a review thereof, with the time limit specified
as appropriate (provided, however, that the final time limit shall not exceed 60 days counting from the dateof receipt of the Large-scale Purchase Information, even if the necessary and sufficient information has notbeen provided).
In such case, the Large-scale Purchaser shall prepare a document in Japanese that provides the information
requested and submit it to the Board of Directors of the Company by the time limit specified.
The Independent Committee, if the provision of the Large-scale Purchase Information by the Large-scale
Purchaser is determined to be completed, immediately notifies the fact to the Large-scale Purchaser throughthe Board of Directors of the Company (hereinafter the “Notice Regarding the Completion of the Provisionof Information”) and discloses it in a manner deemed appropriate. In determining whether the provision of
the Large-scale Purchase Information has been completed, the Independent Committee may seek advice
from external specialists such as attorneys, certified public accountants and investment banks (hereinafter
the “External Specialists, etc.”) that are independent from the Board of Directors of the Company, as
appropriate.
Assessment and consideration by the Board of Directors of the Company
The Board of Directors of the Company believes that once the Large-scale Purchaser has completed theprovision of the Large-scale Purchase Information to the Board, reasonable time period commensurate with
the nature and details of the Large-scale Purchase shall be secured for the Board to engage in an assessment
and consideration of the Large-scale Purchase and the Large-scale Purchase Information, negotiate with
the Large-scale Purchaser, form opinions as the Board of Directors of the Company and formulate analternative proposition, and that the Large-scale Purchase shall commence only after the expiry of suchtime period.
Therefore, a time period of (a) or (b) below shall be established as a period for the purpose of assessment
and consideration, formation of opinions and formulation of an alternative proposition by the Board of
Directors of the Company (hereinafter the “Board of Directors’ Assessment Period”).
(a) A period of 60 days counting from the day on which the Notice Regarding the Completion of theProvision of Information is issued in the case of a tender offer of the whole of the Company’s sharecertificates, etc. through a tender offer with consideration only in cash (in Japanese yen)(b) A period of 90 days counting from the day on which the Notice Regarding the Completion of theProvision of Information is issued in all other cases of the Large-scale Purchase
However, for the purpose of ensuring and enhancing the Company’s corporate value and the common
interest of its shareholders, the Board of Directors of the Company may extend the Board of Directors’
Assessment Period for up to 30 days insofar as it is necessary for the assessment and consideration of theLarge-scale Purchase based on the Large-scale Purchase Information, negotiation with the Large-scale
Purchaser, formation of opinions as the Board of Directors of the Company and the formulation of analternative proposition. The Board of Directors of the Company, once the extension has been decided, shalldisclose the reason therefor, the extension period and other matters deemed necessary and appropriate
without delay after the resolution of the extension.

- 20 -

(3)The Board of Directors of the Company shall engage in an assessment and consideration of the Large-scale
Purchase, form opinions as the Board of Directors of the Company, and if necessary, develop an alternative
proposition and negotiate with the Large-scale Purchaser, based on the Large-scale Purchase Information
provided by the Large-scale Purchaser from the perspective of ensuring and enhancing the Company’s
corporate value and the common interest of its shareholders during the Board of Directors’ Assessment
Period. In the process, the Board of Directors of the Company shall seek advice from the External
Specialists, etc., who are independent from the Board of Directors of the Company, as appropriate and if
necessary.
The Board of Directors of the Company, once the Board of Directors’ Assessment Period expires,
immediately notifies the Large-scale Purchaser of the expiration and discloses it in a manner deemed
appropriate.
If a general meeting of shareholders to confirm shareholders’ intention (defined in 4. (3) below) is decided
to be held in the process of forming opinions of the Board of Directors of the Company during the Boardof Directors’ Assessment Period based on the result of consultation with the Independent Committee
described in 3. (3) below, the Large-scale Purchaser shall not be able to perform the Large-scale Purchase
until the shareholders’ intention is confirmed at the general meeting of shareholders to confirm shareholders’intention, and may perform the Large-scale Purchase only after the conclusion of the general meeting ofshareholders to confirm shareholders’ intention.
Consultation with the Independent Committee
The Board of Directors of the Company makes the decision on whether the Large-scale Purchaser compliedwith the Large-scale Purchase Rules and whether the Large-scale Purchase is considered to compromise
the Company’s corporate value and the common interest of its shareholders significantly, even if the Largescale Purchase Rules have been duly complied.
For the purpose of preventing the Board of Directors of the Company from making arbitrary decisions, theCompany stipulates the Independent Committee Regulations (please refer to Appendix 2 for the outline of
the Regulations) and establishes the Independent Committee as an organization independent from theBoard, which serves as an advisory body assisting the Board in making various decisions concerning theLarge-scale Purchase Rules.
The Independent Committee shall comprise three members selected from among Outside Directors,
Outside Auditor & Supervisory Board Members, attorneys, certified public accountants, tax accountants,
academics, persons familiar with investment banking business and persons outside the Company withexperience as directors or executive officers of other companies. Names and career summaries of themembers of the Independent Committee as of the renewal of the Plan are as described in Appendix 3.

4. Countermeasures by the Board of Directors of the Company(1) In the case where the Large-scale Purchaser is not acting in compliance with the Large-scale Purchase
Rules
In the event the Large-scale Purchaser violates the Large-scale Purchase Rules, the Board of Directors of
the Company may take measures against the Large-scale Purchase authorized under the Companies Act
and other laws and regulations, as well as the Articles of Incorporation of the Company, including a gratis
allotment of stock acquisition rights (hereinafter the “Countermeasures”) for the purpose of protecting theCompany’s corporate value and the common interest of its shareholders.
The overview of stock acquisition rights in the event of a gratis allotment carried out as part of theCountermeasures is as described in Appendix 4. The conditions for exercising stock acquisition rights,
exercise period and acquisition terms may be established in consideration of effectiveness as aCountermeasure.
(2) In the case where the Large-scale Purchaser is acting in compliance with the Large-scale Purchase Rules
In the case where the Large-scale Purchaser is acting in compliance with the Large-scale Purchase Rules,
the Board of Directors of the Company will not take any Countermeasure to the Large-scale Purchase, in
principle, but endeavor to persuading shareholders by expressing opposition or presenting an alternative
proposition, even if it opposes the Large-scale Purchase. It shall be entrusted to the judgment ofshareholders whether or not to accept the proposal made by the Large-scale Purchaser, based on theconsideration of factors, including the Large-scale Purchase Information, the opinion thereon of the Boardof Directors of the Company and its alternative proposition.
- 21 -

(3)However, even in the case where the Large-scale Purchase Rules are complied with, the Countermeasures
shall be taken if the Large-scale Purchaser or the Large-scale Purchase falls under any of the following
circumstances, and if it is considered to significantly compromise the Company’s corporate value and thecommon interest of its shareholders.
(a) If the Large-scale Purchaser is engaged in or intends to be engaged in the purchase of the Company’s
share certificates, etc., solely for the purpose of artificially inflating the share price and having theshares repurchased by the Company or the Group at an inflated price without serious intention toparticipate in the management of the Company (so-called green mailer);(b) If the Large-scale Purchaser is considered to have an intention of gaining temporary control over the
management of the Company for the purpose of transferring tangible and intangible assets, major
customers and business partners that have significant importance to the management of the Company
or the Group, to the Large-scale Purchaser or its group companies, etc.;(c) If the Large-scale Purchase is considered to be carried out for the purpose of diverting the assets of
the Company or the Group as collateral for the debts or funds for repayment by the Large-scale
Purchaser or its group companies, etc., after gaining control over the management of the Company;(d) If the Large-scale Purchase is considered to be carried out for the purpose of gaining temporary
control over the management of the Company, in order to force the Company or the Group to disposeof its expensive assets such as real estate and securities through sales thereof or other means, withthe aim of generating temporary high dividends based on the proceeds from the disposal, or enabling
the Large-scale Purchaser to sell the Company’s shares at a high price, taking advantage of the soaring
share price resulting from the temporary high dividends;(e) If the Large-scale Purchase is considered likely to practically force shareholders to sell the
Company’s share certificates, etc. by restricting the opportunities or discretion for the shareholders
to make judgment, such as the case of a tender offer without offering to purchase all shares at theinitial phase, and declaring that the purchase terms in the second phase will be less attractive (socalled coercive two-phase purchase) (provided, however, that a partial tender offer does not
automatically fall under this category);(f) If the Large-scale Purchase involves inadequate or inappropriate purchase terms, etc. (including theprice and type of consideration offered, timing of the Purchase, legitimacy of the method, probability
that the Purchase will be made, as well as management policies, business plans, capital policies anddividend policies intended after the Purchase) in light of the intrinsic value of the Company.
Procedures for implementing the Countermeasures
When implementing the Countermeasures, the Board of Directors of the Company shall follow theprocedures described below for the purpose of ensuring reasonableness and fairness of its decision.
The Board of Directors of the Company consults with the Independent Committee about theappropriateness of implementing the Countermeasures prior to the implementation.
The Independent Committee determines whether the Large-scale Purchaser is acting in compliance with
the Large-scale Purchase Rules and whether the Large-scale Purchase is considered to significantly
compromise the Company’s corporate value and the common interest of its shareholders based on the
consultation, and makes recommendations to the Board of Directors of the Company regarding theappropriateness of implementing the Countermeasures.
The Board of Directors of the Company determines whether the Large-scale Purchaser is acting incompliance with the Large-scale Purchase Rules and whether the Large-scale Purchase is considered tosignificantly compromise the Company’s corporate value and the common interest of its shareholders
based on the Large-scale Purchase Information provided by the Large-scale Purchaser as well as the advice
from the External Specialists, etc., as appropriate, and makes the final decision whether to implement theCountermeasures, fully respecting the recommendations from the Independent Committee.
Furthermore, the Board of the Directors of the Company may confirm the shareholders’ intention regarding
the implementation of the Countermeasures at a general meeting of shareholders (a general meeting ofshareholders to confirm shareholders’ intention is hereinafter referred to as the “General Meeting of
Shareholders to Confirm Shareholders’ Intention”) if 1) the Independent Committee makes arecommendation regarding the implementation of the Countermeasures with a reservation that confirming
shareholders’ intention in advance is suitable, or 2) the Board of Directors of the Company determines that
confirming shareholders’ intention regarding the implementation of the Countermeasures in advance is- 22 -

suitable considering the time, etc. required to hold a general meeting of shareholders and in light of a goodmanager’s duty of care. On top of that, if shareholders agree to implement the Countermeasures at theGeneral Meeting of Shareholders to Confirm Shareholders’ Intention, the Board of Directors of theCompany will decide to implement the Countermeasures, and if shareholders do not agree to implement
the Countermeasures at the General Meeting of Shareholders to Confirm Shareholders’ Intention, the Boardof Directors of the Company will decide not to implement the Countermeasures.
After having implemented the Countermeasures, the Board of Directors of the Company shall present the
specific circumstances and consult with the Independent Committee on the appropriateness of maintaining
the Countermeasures in force, if the situation falls under any of the following events.
(a)(b)

In the event the Large-scale Purchaser terminates or withdraws the Large-scale Purchase;In the event that changes have occurred to the facts that served as the basis of determining whether
or not to implement the Countermeasures, and that it has become questionable whether it isappropriate to maintain the Countermeasures in force from the perspective of ensuring and enhancing
the Company’s corporate value and the common interest of its shareholders.

The Independent Committee considers the appropriateness of maintaining the Countermeasures based on
the consultation and makes recommendations to the Board of Directors of the Company.
The Board of Directors of the Company considers whether or not to maintain the Countermeasures in force,
while receiving advice from the External Specialists, etc. The Board shall fully respect therecommendations from the Independent Committee in the process.
Thus, the Board of Directors of the Company will terminate or withdraw the Countermeasures in force, if
it comes to the conclusion that it is not appropriate to maintain the Countermeasures from the perspectiveof ensuring and enhancing the Company’s corporate value and the common interest of its shareholders
even after deciding to implement the Countermeasures.
5. Reasonableness and fairness of the Plan
The Plan satisfies the three principles set out under the “Guidelines Regarding Takeover Defense for the Purposeof Protection and Enhancement of Corporate Value and Shareholder’s Common Interests” published by the
Ministry of Economy, Trade and Industry and the Ministry of Justice on May 27, 2005, as well as a report titled“Takeover Defense Measures in Light of Recent Environmental Changes” published by the Corporate Value
Study Group of the Ministry of Economy, Trade and Industry on June 30, 2008. It is considered to represent thereasonableness and fairness as required.
(1) Ensuring and enhancing the Company’s corporate value and the common interest of its shareholders
The Plan is intended to enable shareholders to make an appropriate decision regarding whether or not to
accept the proposal by the Large-scale Purchaser, by requesting the Large-scale Purchaser to provide theLarge-scale Purchase Information in advance and to allow sufficient time to determine the appropriatenessof the Large-scale Purchase, and it shall be introduced ultimately for the purpose of ensuring and enhancing
the Company’s corporate value and the common interest of its shareholders as stated in 1. (2) above.
(2) Disclosure in advance
The Company shall disclose the Plan in advance for the purpose of enhancing foreseeability of shareholders,investors and the Large-scale Purchaser in order to assist these parties in making appropriate decisions.
(3) Respect for shareholders’ intention
The Plan shall become effective subject to the approval of shareholders at the next Annual General Meetingof Shareholders.
If the Plan is kindly approved at the next Annual General Meeting of Shareholders, the Company willconsult with shareholders on the appropriateness of renewing the Plan by submitting every three years a
proposal for approval on the renewal of its term or discontinuation at the Annual General Meeting of
Shareholders, and if the renewal is rejected at an Annual General Meeting of Shareholders, the effect of
the Plan will expire at the conclusion of the Annual General Meeting of Shareholders.
Since the Company sets the term of office of its Directors to be one year, if the Plan is kindly approved at
the next Annual General Meeting of Shareholders, each candidate for Director’s intention with respect to
the Plan shall be stated in the proposal concerning the election of Directors of the Company at the Annual
General Meeting of Shareholders each year from 2023. In addition, Directors elected by shareholders shall- 23 -

(4)(5)

resolve to renew or discontinue the Plan at the first Board of Directors’ meeting after the Annual General
Meeting of Shareholders, and promptly disclose the resolution to shareholders and investors. Thus, theCompany ensures to reflect shareholders’ intention regarding the renewal or discontinuation of the Plan
each year through the exercise of voting rights on a proposal concerning the election of Directors.
Establishment of the Independent Committee and acquiring of opinions of the External Specialists, etc.
The Company has established the Independent Committee. The Board of Directors of the Company shallfully respect the recommendations by the Committee in making the final decision whether or not to
implement the Countermeasures against the Large-scale Purchaser. Meanwhile, the Board of Directors of
the Company may seek advice from the External Specialists, etc., as appropriate. These arrangements areintended to prevent the Board of Directors of the Company from making arbitrary decisions, while ensuring
objectivity and reasonableness thereof.
The Plan classified as neither a dead-hand type nor a slow-hand type of takeover defense measures
The Plan is neither a type of takeover defense measures that cannot be discontinued or deactivated evenafter the replacement of a majority of Directors has been resolved at a General Meeting of Shareholders(so-called dead-hand type), nor a type of takeover defense measures that takes time to stop its
implementation because members of the Board of Directors cannot be replaced at once (so-called slowhand type).

6. Impacts on shareholders and investors(1) Impacts on shareholders and investors at the time of introduction and renewal of the Plan
A gratis allotment of stock acquisition rights shall not be offered at the time of introduction or renewal of
the Plan. Therefore, the introduction or renewal of the Plan will not have any direct and specific impact on
the rights and economic benefits of shareholders and investors.
(2) Impacts on shareholders and investors at the time of implementing the Countermeasures
The Board of Directors of the Company may adopt the Countermeasures described in 4. above for the
purpose of protecting the Company’s corporate value and the common interest of its shareholders. The
appropriate and timely disclosure shall be made in accordance with applicable laws and regulations andfinancial instruments exchange rules, etc., once the Board decided to adopt the specific Countermeasures.
At the time of implementing the Countermeasures, it is not envisaged that shareholders might suffer any
particular loss in terms of their legal rights or economic benefits. However, the Large-scale Purchaser may
end up suffering a loss in terms of their legal rights or economic benefits. The announcement of the Plan
is intended to call attention so that the Large-scale Purchaser would not conduct the Large-scale Purchasein violation of the Large-scale Purchase Rules.
The Company may adopt a resolution for a gratis allotment of stock acquisition rights as part of theCountermeasures. If shareholders who received the allotment of stock acquisition rights decided not toexercise the rights, the ratio of voting rights per share in the Company and the associated economic value
will be diluted as a result of other shareholders’ exercise of their rights.
However, the Company may terminate the gratis allotment of stock acquisition rights in the period up to
the day preceding the effective date of the allotment, or may acquire stock acquisition rights withoutcompensation in the period from the effective date of the gratis allotment of stock acquisition rights to thedate preceding the commencement date of the exercise period of the stock acquisition rights, even after theshareholders receiving the allotment of stock acquisition rights are determined. In these cases, the value
per share in the Company will not be diluted. Thus, please be aware that shareholders and investors who
engaged in trading in anticipation of diluting the value per share in the Company may suffer an unexpected
loss due to share price fluctuations.
(3) Procedures that shareholders will be required to follow in association with the implementation of theCountermeasures
In the case where the Board of Directors of the Company decides to implement the Countermeasures andconducts a gratis allotment of stock acquisition rights, the allotment will be offered to shareholders as of acertain record date determined by the Board. Thus, shareholders wishing to receive the allotment need tobe registered on the final shareholder register on the record date. Furthermore, shareholders exercisingstock acquisition rights will be required to make a certain amount of payment within a predetermined
period in order to acquire shares. However, in the case where the Board of Directors of the Company makes
a decision to acquire stock acquisition rights, the Company may acquire the stock acquisition rights on a
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date set out under such decision and issue the Company’s common stock as consideration thereof, in
accordance with the statutory procedures. In such instance, shareholders (excluding the Large-scale
Purchaser) will receive from the Company its common stock as consideration for the acquisition of thestock acquisition rights without following the payment procedure for exercising the stock acquisition rights(provided, however, that shareholders may be requested to submit a document proving that they do notconstitute the Large-scale Purchaser). Details of these procedures are separately advised in accordance withapplicable laws and regulations and financial instruments exchange rules, when shareholders are actuallyrequired to follow them.
7. Other
The contents of the Plan were decided by the approval of all Directors including two Corporate Auditors(Outside) at the Board of Directors’ meeting of the Company held on May 19, 2022. All Corporate Auditors
including two Corporate Auditors (Outside) were present at the meeting, and each Corporate Auditor stated anaffirmative opinion for the Plan.
The Board of Directors of the Company will remain alert to the external developments, including the trends injudicial decisions, measures taken by financial instruments exchanges and other public institutions, amendments
to the Companies Act, the Financial Instruments and Exchange Act, or listing rules of each financial instruments
exchange, and amendments and abolitions of other laws and regulations. If it is deemed appropriate to reflect
these amendments and abolitions on the Plan, or if it is appropriate to make minor revisions to the wording of
the Plan without making amendments to its contents, the Board of Directors of the Company may make such
amendments or revisions to the Plan based on its resolution subject to the approval of the Independent Committee
from the perspective of ensuring and enhancing the Company’s corporate value and the common interest of its
shareholders. Furthermore, the Company will prepare to take whatever measures as appropriate, including the
introduction of an alternative policy replacing the Plan, if necessary.

Note 1: Definition of a specific shareholder group(i) A specific shareholder group represents a holder (referring to a holder as defined in Article 27-23, Paragraph 1of the Financial Instruments and Exchange Act, including a party recognized to fall into the category of a holder
in accordance with Article 27-23, Paragraph 3 of the said Act; hereinafter the same) of the Company’s sharecertificate, etc. (referring to share certificates, etc. as defined in Article 27-23, Paragraph 1 of the said Act), andits joint holder (referring to a joint holder as defined in Article 27-23, Paragraph 5 of the said Act, including aparty deemed to be a joint holder in accordance with Article 27-23, Paragraph 6 of the said Act; hereinafter thesame); and,(ii) A party conducting purchases, etc. (referring to purchases, etc. as defined in Article 27-2, Paragraph 1 of thesaid Act, including purchases conducted in the financial instruments exchange market) of the Company’s sharecertificates, etc. (referring to share certificates, etc. as defined in Article 27-2, Paragraph 1 of the said Act), andits specially related parties (referring to specially related parties as defined in Article 27-2, Paragraph 7 of thesaid Act).
Note 2: Definition of voting rights ratio
Depending on the specific purchase method adopted by the specific shareholder group, the voting rights ratio
is defined as follows.
(i) In the case where the specific shareholder group comprises holders and their joint holders of the Company’s
share certificate, etc. (referring to share certificates, etc. as defined in Article 27-23, Paragraph 1 of the Financial
Instruments and Exchange Act), the voting rights ratio refers to the holding ratio of share certificates, etc. of
the holders (referring to the holding ratio of share certificates, etc. as defined in Article 27-23, Paragraph 4 ofthe said Act, where the number of share certificates, etc. held by their joint holders (referring to the number ofshare certificates, etc. held as defined in the aforementioned Paragraph 4) is also taken into account for the
purpose of calculation); or,(ii) In the case where the specific shareholder group comprises the Large-scale Purchaser of the Company’s sharecertificate, etc. (referring to share certificates, etc. as defined in Article 27-2, Paragraph 1 of the said Act) andits specially related parties, the voting rights ratio refers to the combined total of the ownership ratio of sharecertificates, etc. of the Large-scale Purchaser and that of its specially related parties (referring to the ownership
ratio of share certificates, etc. as defined in Article 27-2, Paragraph 8 of the said Act).
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For the purpose of calculating the holding ratio of share certificates, etc. and ownership ratio of sharecertificates, etc., the total number of voting rights (referring to the number of voting rights as defined in Article
27-2, Paragraph 8 of the said Act) and the total number of issued shares (referring to the total number of issued
shares as defined in Article 27-23, Paragraph 4 of the said Act) may be referred to from the most recently
submitted securities report, quarterly report or share buyback report.
Note 3: Definition of share certificates, etc.
Share certificates, etc. refer to the share certificates, etc. as defined in Article 27-23, Paragraph 1 of the Financial
Instruments and Exchange Act.

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(Appendix 1)
Major Shareholders
Major shareholders of the Company as of March 31, 2022 are as follows (the number of shares held less than one
thousand is omitted).
Names

1,319
893
477
441

Ratio of the number of shares held
against the total number of issued
shares (%)
15.35
10.40
5.56
5.14

354

4.12

312
300
278
275

3.63
3.49
3.24
3.20

225

2.62

4,876

56.74

Number of shares held
(thousand shares)

The Master Trust Bank of Japan, Ltd. (Trust Account)
HSBC Broking Securities (Asia) Limited
Kabushiki Kaisha Kawai Shadan
Sumitomo Realty & Development Co., Ltd.
Kawai Musical Instruments Business Partners
Shareholding Association
Kawai Employee Shareholding Association
Meiji Yasuda Life Insurance Company
Gakken Holdings Co., Ltd.
Tokio Marine & Nichido Fire Insurance Co., Ltd.
The Kyoei Fire and Marine Insurance Company,
LimitedTotal

The total number of issued shares excludes 416,714 shares of treasury stock.

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(Appendix 2)
Outline of the Independent Committee Regulations
1. The Independent Committee shall be established by the resolution of the Board of Directors of the Company.
2. The Independent Committee shall comprise three members selected by the resolution of the Board of Directorsof the Company for the purpose of making objective and neutral decisions from among Outside Directors andCorporate Auditors (Outside) of the Company who are independent from Directors engaging in businessexecution of the Company or external experts (such as attorneys, certified public accountants, tax accountants,
academics, persons familiar with investment banking business and persons outside the Company with experience
as directors or executive officers of other companies).
3. The term of office of the Independent Committee members shall expire at the conclusion of the first Board of
Directors’ meeting held after the Annual General Meeting of Shareholders for the last fiscal year ending within
one year after their appointment, provided, however, that their reappointment shall not be interfered with. If theBoard of Directors of the Company, etc. resolves to discontinue the Plan, their term of office shall be terminatedat the time of the discontinuation of the Plan.
4. When a member of the Independent Committee, who has been an Outside Director or Corporate Auditor(Outside) of the Company, ceases to be an Outside Director or Corporate Auditor (Outside) respectively, or nolonger meets the qualification requirement set out by the Company, his/her term of office as a member of the
Independent Committee shall be terminated at the same time.
5. The Independent Committee shall make recommendations on the matters consulted by the Board of Directors of
the Company, including whether the Large-scale Purchaser complied with the Large-scale Purchase Rules,
whether the Large-scale Purchase is considered to significantly compromise the Company’s corporate value andthe common interest of its shareholders, whether or not to implement the Countermeasures, whether or not tosuspend the Countermeasures once implemented, by providing, in principle, the contents of the decisions alongwith their reasons and grounds to the Board of Directors of the Company. The Independent Committee may also
make a recommendation with a reservation stating that holding a General Meeting of Shareholders to Confirm
Shareholders’ Intention is suitable. Each member of the Independent Committee is required to make decisions
from the perspective of protecting the Company’s corporate value and the common interest of its shareholders,
not for the purpose of personal gains for himself/herself or for Directors of the Company.
6. The Independent Committee may seek advice in making deliberations or resolutions, as appropriate, from third
parties independent from the Company (including but not limited to specialists such as financial advisors,certified public accountants, attorneys and consultants) at the expense of the Company.
7. Resolutions of the Independent Committee shall be made with all members of the Committee in attendance andby a majority of those in attendance, provided, however, that if any member of the Committee is absent due tosickness or other unavoidable circumstance of similar nature, resolution may be made with a majority of themembers in attendance.

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(Appendix 3)
Names and Career Summaries of the Members of the Independent Committee
The following three persons are scheduled to be the members of the Independent Committee at the time of the renewalof the Plan (as listed in the order of the Japanese syllabary).
Haruo Kato
(March 3, 1954)
July 2010
July 2011
July 2013
Aug. 2014
June 2020
June 2020

District Director, Nakagawa Tax OfficeFirst Deputy Commissioner, Second Taxation Department, Nagoya Regional Taxation
BureauDistrict Director, Shizuoka Tax Office
Established Haruo Kato Tax Accountant Office
Corporate Auditor of the Company (to present)
Independent Committee Member of the Company (to present)

Takahisa Tabata(August 28, 1956)
Apr. 1980
Oct. 1987
Mar. 1991
June 1993
June 2010
June 2010

Joined Tokyo Kaikan Co., Ltd.
Joined Ota & Showa Audit Corporation
Registered as a certified public accountant
Established Tabata Certified Public Accountant Office
Corporate Auditor of the Company (to present)
Independent Committee Member of the Company (to present)

Masao Fujita(January 26, 1953)
Apr. 1975
June 1998
Jan. 2001
Apr. 2003
Jan. 2006
Apr. 2007
Apr. 2013
Oct. 2015

Joined the Ministry of International Trade and Industry
Councilor, Cabinet Councilors’ Office on Internal Affairs, Cabinet Secretariat
Director-General, Policy Planning and Coordination Department, Japan Patent Office,Ministry of Economy, Trade and Industry
Deputy Secretary General, Japan Association for the 2005 World Exposition
General Manager in charge of Projects, Corporate Planning Office, Komatsu Ltd.
Chairman of Komatsu CIS
Senior Executive Officer (Jomu), Komatsu Ltd.
President, Sakhalin Oil and Gas Development Co., Ltd. (to present)*Messrs. Haruo Kato and Takahisa Tabata are currently the Corporate Auditor (Outside) as defined under Article 2,
Item 16 of the Companies Act. The Company has entered into agreements to limit liability for compensation as
stipulated under Article 423, Paragraph 1 of the Companies Act with them. There is no special interest between the
Company and the two Corporate Auditors (Outside). Both of them are independent officers as stipulated in Article
436-2 of the Securities Listing Regulations of the Tokyo Stock Exchange, Inc.

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(Appendix 4)
Outline of a Gratis Allotment of Stock Acquisition Rights
1. Shareholders entitled to the allotment of stock acquisition rights and the method for allotment
One stock acquisition right shall be allotted for each share of the common stock held by shareholders (excluding,however, the Company’s shares held by the Company) to the shareholders registered on the final shareholder
register as of the record date as set out by the Board of Directors of the Company.
2. Class and number of shares to be delivered upon the exercise of stock acquisition rights
One share of the Company’s common stock shall be delivered upon the exercise of one stock acquisition right.
3. Total number of stock acquisition rights to be allotted to shareholders
The total number of stock acquisition rights to be allotted to shareholders shall not exceed the number of issued
shares of the Company as of the record date (excluding, however, the number of the Company’s shares held by
the Company).
4. Type and amount of assets to be contributed upon the exercise of each stock acquisition right
The assets to be contributed upon the exercise of each stock acquisition right shall be cash in the amount no lessthan ¥1 per share as determined by the Board of Directors of the Company.
5. Restrictions on the transfer of the stock acquisition rights
The transfer of the stock acquisition rights shall require the approval of the Board of Directors of the Company.
6. Conditions for exercising the stock acquisition rights
The Large-scale Purchaser, its joint holders, its specially related parties and any third party in a communicative
relationship with the Large-scale Purchaser with respect to the Large-scale Purchase (including joint holders andspecially related parties of such third party) shall not be able to exercise the stock acquisition rights, while anyother conditions for exercising the stock acquisition rights shall be decided separately by the Board of Directorsof the Company.
7. Acquisition terms
On the date set out by the Board of Directors of the Company (hereinafter the “Acquisition Date”), the Company
may acquire all of the stock acquisition rights yet to be exercised as of the day preceding the Acquisition Date(excluding, however, the stock acquisition rights held by a party who cannot exercise the stock acquisition rights
due to the conditions for exercising the stock acquisition rights, exercise period and other acquisition terms as
determined by the Board of Directors), and grant one share of the Company’s common stock in exchange foreach stock acquisition right acquired.
8. Exercise period for the stock acquisition rights
Exercise period for the stock acquisition rights and other matters required to be determined shall be decided
separately by the Board of Directors of the Company.
9. This outline may be subject to a change by the authority of the Board of Directors’ meetings held for making
resolutions for the gratis allotment of stock acquisition rights as the implementation of the Countermeasures.

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