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 shallprevail. The Company assumes no responsibility for this translation or for direct, indirect or any other formsof damages arising from the translation.
(Stock Exchange Code 1961)
June 3, 2022
To Shareholders with Voting Rights:
Hirokazu Ishida
Representative Director and President
SANKI ENGINEERING CO., LTD.
8-1, Akashicho, Chuo-ku, TokyoNOTICE OF CONVOCATION OF
THE 98th ANNUAL GENERAL MEETING OF SHAREHOLDERS
Dear Shareholders:
We would like to express our appreciation for your continued support and patronage.
We wish to express our sincerest condolences for all of those affected by the COVID-19 outbreak and those
who lost their lives.
Please be informed that the 98th Annual General Meeting of Shareholders of SANKI ENGINEERING CO.,LTD. (the “Company”) will be held for the purposes as described below.
Carefully considering this situation in response to the spread of COVID-19, we have decided to takeappropriate measures to prevent infections and hold the General Meeting of Shareholders.
From the perspective of infection prevention, we consider the safety of our shareholders to be the utmost
importance, and strongly urge all shareholders to exercise their voting rights in writing or via the Internet
beforehand and refrain from visiting the venue on the day of the General Meeting of Shareholders.
You may exercise your voting rights by either of the methods below. Please review the attached Reference
Documents for the General Meeting of Shareholders, and exercise your voting rights by no later than 5:00 p.m.
Japan time on Wednesday, June 22, 2022.
[Exercising Voting Rights in Writing]
Please indicate your proposals on the enclosed Voting Rights Exercise Form, and return it such that it
arrives by the above deadline for exercise.
[Exercising Voting Rights via the Internet]
Please review the “Guide to Exercising Voting Rights via the Internet” on page 5 (Japanese version only),
access the voting rights exercise website designated by the Company (https://www.web54.net), and enter yourproposals by the above deadline for exercise, in accordance with the on-screen instructions.
Please note that we will not provide souvenirs to shareholders attending the meeting.

-1-1. Date and Time:Thursday, June 23, 2022 at 10:00 a.m. Japan time
(Reception opens: 9:00 a.m.)

2. Place:

Sakura Room, 4th Floor, Main Building, Imperial Hotel Tokyo
1-1, Uchisaiwai-cho 1-chome, Chiyoda-ku, Tokyo

3. Meeting Agenda:
Matters to be reported: 1. The Business Report, Consolidated Financial Statements for the Company’s
98th Fiscal Year (April 1, 2021 - March 31, 2022) and results of audits by the
Accounting Auditor and the Audit & Supervisory Board of the Consolidated
Financial Statements
2. Non-consolidated Financial Statements for the Company’s 98th Fiscal Year
(April 1, 2021 - March 31, 2022)
Proposals to be resolved:
Appropriation of Surplus
Proposal 1:
Partial Amendments to the Articles of Incorporation
Proposal 2:
Election of 12 Directors
Proposal 3:
Election of 2 Audit & Supervisory Board Members
Proposal 4:
Election of 1 Substitute Audit & Supervisory Board Member
Proposal 5:
Determination of Restricted Stock Compensation for Directors
Proposal 6:
Determination of Restricted Stock Compensation for Audit & Supervisory
Proposal 7:
Board Members
1.
2.

3.
4.

English versions of this Notice of Annual General Meeting of Shareholders and the Reference Documents for the General
Meeting of Shareholders will be posted on the Company’s website (https://www.sanki.co.jp/).
Of the documents to be included in this notice of the General Meeting of Shareholders, “Matters relating to the Company's
Stock Acquisition Rights,” “Matters relating to Accounting Auditor” and “Company's Structure and Policy” of the Business
Report and “Consolidated Statement of Changes in Equity” and “Notes to the Consolidated Financial Statements” of theConsolidated Financial Statements as well as “Statement of Changes in Equity” and “Notes to the Non-consolidated
Financial Statements” of the Non-consolidated Financial Statements are posted on the Company’s website(https://www.sanki.co.jp/) pursuant to laws and regulations as well as Article 16 of the Articles of Incorporation of theCompany, and are therefore not provided in the Appendix of this notice of the General Meeting of Shareholders. The
Business Report, Consolidated Financial Statements and Non-consolidated Financial Statements described in the Appendix
of this notice of the General Meeting of Shareholders are excerpt of the Consolidated Financial Statements andNon-consolidated Financial Statements audited by the Accounting Auditor in preparing the accounting audit report, and theBusiness Report, Consolidated Financial Statements and Non-consolidated Financial Statements audited by the Audit &Supervisory Board Members in preparing the audit report.
Should the Appendix and the Reference Documents for the General Meeting of Shareholders require revisions, the revised
versions will be posted on the Company’s website (https://www.sanki.co.jp/).
When attending the meeting, please submit the enclosed Voting Rights Exercise Form at the reception desk.

-2-

Response to Prevent the Spread of COVID-19
1. Request all shareholders to exercise their voting rights in writing or via the Internet beforehand
We request our shareholders to exercise their voting rights in writing or via the Internet in advance whenpossible.
2. Announcement regarding video streaming before and after the meeting
Streaming video of the Business Report for the fiscal year ended March 31, 2022 and the Issues to be
Addressed will be posted on the Company’s website (https://www.sanki.co.jp/) around Thursday, June 16,
2022 before the day of the meeting.
In addition, the on-demand video of this General Meeting of Shareholders will be delivered through theCompany’s website (https://www.sanki.co.jp/).
3. Guidance on the call for questions before the meeting
We will accept questions about the Matters to be Reported and Proposals to be Resolved in this General
Meeting of Shareholders on the Company’s website (https://www.sanki.co.jp/).
<Deadline> Monday, June 20, 2022 at 5:00 p.m.
4. Announcement regarding online live streaming of the meeting
This General Meeting of Shareholders will be broadcast live on the day on the Internet so that you canwatch the proceedings from your own home or other places. For further details, please see pages 6 and 7(Japanese version only). After the live streaming, we will accept questions or comments you may haveabout the live streaming on the Company’s website (https://www.sanki.co.jp/).
<Deadline> Friday, June 24, 2022 at 5:00 p.m.
5. Request to shareholders attending in person• Please note that the number of shareholders to enter the venue may be limited, depending on the numberof attendees in order to provide sufficient space between attendees. We would like to ask for your kindunderstanding in advance.
• We will prepare alcohol disinfectant for shareholders near the reception at the venue.
If you will be attending the meeting, please bring and wear a face mask on the day.
• We shall be measuring the temperatures of all attendees near the reception at the venue. If you have afever or are feeling unwell, you may be refused entry to the meeting and we may request for you to leave.
• The operating staff shall be wearing masks as they measure temperatures and check whether shareholders
are feeling unwell.
• From the standpoint of shortening the duration of this General Meeting of Shareholders in order toprevent infections, the explanation of the matters to be reported (including the audit report) and the
proposals at the meeting hall may be abbreviated. We hereby request all shareholders to read this Noticeof Convocation of the General Meeting of Shareholders beforehand.
• Depending on the developments of the COVID-19 outbreak and announcements, etc. to be made by thegovernment, etc. by the day of the General Meeting of Shareholders, the response method might bealtered. Please be sure to check the Company’s website (https://www.sanki.co.jp/) for the latest
information.

-3-

Reference Documents for the General Meeting of Shareholders
Proposals and References
Proposal 1:

Appropriation of Surplus

The Company considers the return of profits to shareholders an important management policy.
In fiscal year 2019 as the first year of Phase 2 of the medium-term management plan “Century 2025,”
among the Group’s management goals for Phase 2, a total payout ratio of 70% or higher has been set as atarget, with a basic policy of paying a stable dividend of 60 yen or more per share each year and flexibly
acquiring the Company’s treasury stock of approximately 5 million shares during the period of Phase 2.
Fiscal year 2021 ended March 31, 2022 marked the final year of Phase 3, and we were almost able toachieve the targets projected under the plan, and recorded results exceeding those of the previous year.
Accordingly, the Company proposes a year-end dividend for the fiscal year under review as follows, inaddition to a special dividend.
1. Items Related to the Year-end Dividend(1) Items related to the allocation of dividend property to shareholders and its total amount
50 yen per common share of the Company(Including an ordinary dividend of 35 yen and a special dividend of 15 yen)
Total of 2,788,034,900 yen(2) Effective date of the appropriation of surplus
June 24, 2022
Furthermore, the Company paid an interim dividend of 35 yen per share, and therefore the total
dividend for the fiscal year under review will be 85 yen per share.

-4-

Proposal 2:

Partial Amendments to the Articles of Incorporation

1. Reasons for the proposal(1) Introduction of a system for electronic provision of materials for general meetings of shareholders
The revised stipulations stipulated in the proviso of Article 1 of the supplementary provisions of the“Act Partially Amending the Companies Act” (Act No. 70 of 2019) will come into effect on September
1, 2022. In order to prepare for the introduction of the system for electronic provision of materials forgeneral meetings of shareholders, the Company proposes the following amendments to the Company’s
Articles of Incorporation.
1) Article 16, Paragraph 1 of the proposed amendments stipulates that information that is the content
of Reference Documents for the General Meeting of Shareholders, etc., shall be provided
electronically.
2) Article 16, Paragraph 2 of the proposed amendments establishes stipulations to limit the scope ofmatters to be recorded in physical documents that are provided to shareholders who request
provision of physical documents.
3) As stipulations concerning Internet disclosure and deemed provision of reference documents forgeneral meetings of shareholders (Article 16 of the current Articles of Incorporation) will nolonger be necessary, these shall be deleted.
4) Supplementary provisions shall be established concerning the effective date, etc., in line with the
new establishments and deletions above.
(2) Introduction of a general meeting of shareholders without a designated location
The "Act Partially Amending the Act on Strengthening Industrial Competitiveness" (Act No. 70 ofMarch 2021) and other acts came into effect on June 16, 2021. This Act stipulates that a listedcompany may hold a general meeting of shareholders without a designated location (the so-called“virtual-only meeting of shareholders”), provided that the company provides to that effect in its
Articles of Incorporation.
The Company believes that additional options in selecting the methods for holding general meetingsof shareholders would benefit our shareholders, taking into consideration the spread of infectious
diseases, large-scale disasters such as natural disasters, and the advancement of digitalization in theentire society. Accordingly, in order to allow the Company to hold a general meeting of shareholders
without a designated location, the Company proposes to amend Article 13 of the current Articles ofIncorporation.
The Company has given confirmation of both the Minister of Economy, Trade and Industry and theMinister of Justice, in accordance with ordinances of the Ministry of Economy, Trade and Industry andthe Ministry of Justice, that the Company fulfills their requirements, and have made contributions tostrengthening industrial competitiveness while giving consideration to securing shareholders' interests.
(3) Changes of the person authorized to convene the Board of Directors meetings
To provide flexibility in the convocation and operation of the Board of Directors meetings, theCompany proposes to delete the provision relating to the person who are authorized to convene a
Board of Directors meeting (Article 24 of the current Articles of Incorporation) and to set forth aprovision to authorize such person in accordance with the Rules for the Board of Directors of theCompany (Article 27 of the proposed amendment to the Articles of Incorporation).
2. Contents of the amendments
The contents of the amendments are as follows.

-5-

(Underlines indicate amended sections)
Proposed amendments

Current Articles of Incorporation
Chapter 3: General Meeting of Shareholders

Chapter 3: General Meeting of Shareholders

Article 13
The Annual General Meeting of Shareholders
shall be convened in June of each year.
An Extraordinary General Meeting of
Shareholders may be convened from time totime as necessary.
(Newly established)

Article 13
1. The Annual General Meeting of Shareholders
shall be convened in June of each year.
An Extraordinary General Meeting of
Shareholders may be convened from time totime as necessary.
2. The Company may hold a General Meeting of
Shareholders without a designated location.

Articles 14-15 (Omitted)
Article 16
In convening the General Meeting of
Shareholders, the Company may deem to haveprovided to shareholders information regarding
matters that shall be stated or presented in the
Reference Materials for the General Meeting ofshareholders, the Business Report,
Non-Consolidated Financial Statements, andConsolidated Financial Statements, bydisclosing them via the Internet in accordancewith ordinances of the Ministry of Justice.
(Newly established)

Articles 14-15 (Unchanged)(Deleted)

Articles 17-18 (Omitted)
Chapter 4: Directors and Board of Directors
Articles 19-23 (Omitted)
Article 24
A Board of Directors meeting shall be
convened by the President.
If the President is unable to act, a Board of
Directors meeting shall be convened by another
Director in an order predetermined by aresolution of the Board of Directors.

-6-

Article 16
1. In the convocation of general meetings ofshareholders, the Company shall provide
electronically information that is the content ofReference Documents for the General Meetingof Shareholders, etc.
2. Of the matters to which electronic provision
measures apply, the Company may choose notto record all or part of matters stipulated in the
Ordinance of the Ministry of Justice in thephysical documents provided to shareholders
who made requests for provision of physicaldocuments by the record date for voting rights.
Articles 17-18 (Unchanged)
Chapter 4: Directors and Board of Directors
Article 19-23 (Unchanged)(Deleted)

Current Articles of Incorporation

Proposed amendments

Articles 25-27 (Omitted)(Newly established)

Articles 24-26 (Renumbered)
Article 27
Unless otherwise provided by law or these
Articles of Incorporation, matters concerning theBoard of Directors shall be governed by the Rules
for the Board of Directors.

(Newly established)(Supplementary provisions)
Article 1
The amendments of Article 16 shall take effecton September 1, 2022, the date of enforcementof the revised stipulations stipulated in theproviso of Article 1 of the supplementaryprovisions of the Act Partially Amending theCompanies Act (Act No. 70 of 2019; the“Enforcement Date”).
Article 2
Notwithstanding the provisions of the previous
paragraph, Article 16 of the Articles ofIncorporation prior to the amendments shallremain valid for general meetings ofshareholders held on a day that is within six
months of the Enforcement Date.
Article 3
These supplementary provisions shall be deleted
on the day after which six months have elapsed
since the Enforcement Date or the day after
which three months have elapsed since the dayof the general meeting of shareholders in theprevious paragraph, whichever is later.

-7-

Proposal 3:

Election of 12 Directors

The terms of office of all Directors (11 Directors) will expire at the conclusion of this year’s Annual
General Meeting of Shareholders. Accordingly, the addition of one (1) Director in order to further strengthen
the corporate governance structure and the election of 12 Directors is proposed.
The candidates for Director are as follows:

No.

Current positions andresponsibilities

Name

1

Reappointed

Tsutomu
Hasegawa

2

Reappointed

Hirokazu Ishida

3

Reappointed

Eiji Mitsuishi

4

Reappointed

Masayuki Kudo

5

Reappointed

Kazuaki Iijima

6

Reappointed

Hirotoshi Fukui

7

Reappointed

Yoshio Kawabe

8

Reappointed

9

Reappointed

10

Reappointed

Keiji Kono

11

Reappointed

Akihiko Matsuda

12

Newly

Tamami Umeda

appointed

Yukiteru
Yamamoto
Kazuhiko
Kashikura

External
Independent
External
Independent
External
Independent
External
Independent

Representative Director andChairman (of the Board)
Representative Director andPresident
Director; Senior Executive Officer;
General Manager, Mechanical &Electrical Contracting Headquarters
Director; Senior Executive Officer;
General Manager, Sustainability
Promotion Division
Director; Managing Executive
Officer; General Manager, Plants &Machinery Systems Headquarters
Director; Managing Executive
Officer; General Manager, General
Affairs and Human Resources
Division
Director; Managing Executive
Officer; General Manager,
Accounting Division; Chief
Financial Officer
External Director; Chair of theBoard of Directors
External Director
External Director
External Director

External-

Independent-8-

Attendance at
the Board of
Directors’
meetings
100%(13/13)100%(13/13)100%(13/13)100%(13/13)100%(11/11)100%(13/13)100%(13/13)100%(13/13)100%(13/13)100%(11/11)100%(11/11)
-

No.

Name
(Date of birth)

Past experience, positions, responsibilities,
and significant concurrent positions
April 1975
June 2008
April 2009
April 2010

Tsutomu Hasegawa(March 4, 1953)
Reappointed

1

April 2011
April 2012
June 2012
April 2013
April 2015
April 2020

Joined the Company
Executive Officer; Deputy General Manager, Tokyo Branch,
Mechanical & Electrical Contracting Headquarters
Executive Officer; General Manager, Business Strategy
Division, Mechanical & Electrical Contracting Headquarters
Superior Executive Officer; General Manager, Tokyo Branch,
Mechanical & Electrical Contracting Headquarters
Managing Executive Officer; General Manager, Tokyo Branch
Senior Executive Officer; General Manager, Sales
Administration Division
Director; Senior Executive Officer; General Manager, Sales
Administration Division
Representative Director; Senior Executive Officer; General
Manager, Mechanical & Electrical Contracting Headquarters
Representative Director and President
Representative Director and Chairman (of the Board)
To present

Number ofshares of theCompany held

36,300<Responsibilities>
Secretarial Office2

Reason for nomination
Since April 2015, as Representative Director and President, Mr. Tsutomu Hasegawa has continually demonstrated hisleadership in a myriad of situations and engaged in business operations. Since April 2020, he has displayed his managerial
abilities, insight and capabilities cultivated over the years in the position of Representative Director and Chairman. The
Company has judged that he is essential for the Group to enhance its corporate value, and has therefore nominated him as a
candidate for Director.
April 1983
Joined the Company
April 2012
Executive Officer; Deputy General Manager, Sales
Administration Division
April 2013
Executive Officer; General Manager, Hokkaido Branch Office
April 2016
Managing Executive Officer; General Manager, Sales
Administration Division, Mechanical & Electrical Contracting
Hirokazu Ishida
Headquarters(January 22, 1959) June 2017
Director; Managing Executive Officer; General Manager, Sales
31,400Administration Division, Mechanical & Electrical Contracting
Reappointed
Headquarters
Director; Senior Executive Officer; General Manager,
April 2018
Management Planning Office
April 2020
Representative Director and President
To present<Responsibilities>
Internal Audit Office, Management Planning Office and Legal Affairs Office
Reason for nomination
Since joining the Company, Mr. Hirokazu Ishida engaged in the facilities construction business for many years, andpossesses abundant experience, knowledge and achievements related to the Company’s business. He also has served inpositions including General Manager of the Management Planning Office, and has been doing his utmost to promotestrengthening of the management foundation and the long-term vision “Century 2025” since April 2020, as Representative
Director and President. The Company has judged that he is essential for the Group to enhance its corporate value, and has
therefore nominated him as a candidate for Director.

-9-

No.

Name
(Date of birth)

Past experience, positions, responsibilities,
and significant concurrent positions
April 1972
April 2011
April 2013
April 2017

Eiji Mitsuishi(February 24, 1952)
Reappointed

3

4June 2017

Joined the Company
Executive Officer; Deputy General Manager, Chubu BranchManaging Executive Officer; General Manager, Chubu Branch
Senior Executive Officer; General Manager, Mechanical &Electrical Contracting Headquarters
Director; Senior Executive Officer; General Manager,
Mechanical & Electrical Contracting Headquarters
To present

Number ofshares of theCompany held

33,500<Responsibilities>
Mechanical & Electrical Contracting Headquarters (excluding International
Business Administration Division), Labor Safety, Health & Environment Promotion
OfficeReason for nomination
Mr. Eiji Mitsuishi has many years of experience in operation and division management of the facilities construction
business. Currently, he serves as General Manager of the Mechanical & Electrical Contracting Headquarters, and is making
efforts in the promotion of workstyle reforms at construction sites and the prevention of work accidents. The Company has
judged that his above experience and achievements are essential for the Group to further enhance its corporate value, andhas therefore nominated him as a candidate for Director.
April 1985
Joined the Company
June 2014
Executive Officer; General Manager, Facility Systems Division
April 2017Managing Executive Officer; Deputy General Manager,
Mechanical & Electrical Contracting Headquarters
April 2018
Managing Executive Officer
June 2018
Director; Managing Executive Officer
Masayuki Kudo
April 2021
Director; Senior Executive Officer; General Manager, CSR(June 27, 1959)
Promotion Division
21,300April 2022
Director; Senior Executive Officer; General Manager,
Reappointed
Sustainability Promotion Division
To present<Responsibilities>
Sustainability Promotion Division, Chief Cost Inspector Office, Information
Systems Office, International Business Administration Division of the Mechanical& Electrical Contracting Headquarters, Facility Systems Division
Reason for nomination
After getting abundant operational experience, including experience overseas, as an engineer in the facilities construction
business, Mr. Masayuki Kudo served as General Manager of the Facility Systems Division. Currently, as General Managerof the Sustainability Promotion Division, he is demonstrating his outstanding skills to promote sustainability and raiseawareness of compliance in the workplace. The Company has judged that his above achievements and insights are essential
for the Group to enhance its corporate value, and has therefore nominated him as a candidate for Director.

- 10 -

No.

Name(Date of birth)

Past experience, positions, responsibilities,
and significant concurrent positions
April 1984
April 2016
October 2018

Kazuaki Iijima(August 12, 1958)
Reappointed

5

April 2021
June 2021

Joined the Company
Executive Officer; General Manager, Technology ResearchInstituteExecutive Officer; General Manager, Technical Research &Development Center
Managing Executive Officer; General Manager, Plants &Machinery Systems Headquarters
Director; Managing Executive Officer; General Manager, Plants& Machinery Systems Headquarters
To present

Number ofshares of theCompany held

12,100<Responsibilities>
Plants & Machinery Systems Headquarters, Technical Research & Development
Center6

Reason for nomination
Since joining the Company, Mr. Kazuaki Iijima has achievements as an engineer and experience as a manager in the
research and development and the energy saving business. Currently, as General Manager of the Plants & Machinery
Systems Headquarters, he contributes to the development of the machinery systems business and the environmental
systems business. The Company has judged that his above experience and achievements are essential for the Company tofurther enhance corporate value, and has therefore nominated him as a candidate for Director.
April 1982
Joined the Company
April 2012
Executive Officer; General Manager, Technology Development
Division
April 2013
Executive Officer; General Manager, Technology ResearchInstitute
April 2016
Executive Officer
Hirotoshi Fukui
June 2016
Full-time Audit & Supervisory Board Member(May 12, 1958)
19,900June 2020
Director; Executive Officer; General Manager, General Affairs
Reappointed
and Human Resources Division
April 2022
Director; Managing Executive Officer; General Manager,
General Affairs and Human Resources Division
To present<Responsibilities>
General Affairs and Human Resources Division, Sanki Techno Center
Reason for nomination
Since joining the Company, Mr. Hirotoshi Fukui has amassed a wide range of operational experience as an engineer in thefacilities construction business. Thereafter, he served as the manager responsible for the technology development
departments, and currently contributes to the enhancement of human resource development and working environment as
General Manager of the General Affairs and Human Resources Division. The Company has judged that his above
experience and insights are essential for the Group to enhance its corporate value, and has therefore nominated him as a
candidate for Director.

- 11 -

No.

Name(Date of birth)

Past experience, positions, responsibilities,
and significant concurrent positions
April 1984
April 2015
June 2015
April 2017

Yoshio Kawabe(October 31, 1960)

June 2017
June 2020

Reappointed

7

April 2022

Joined the Company
Executive Officer; General Manager, Administration Division
Director; Executive Officer; General Manager, Administration
Division
Director; Executive Officer; General Manager, Accounting
Division
Executive Officer; General Manager, Accounting Division
Director; Executive Officer; General Manager, Accounting
Division; Chief Financial Officer
Director; Managing Executive Officer; General Manager,
Accounting Division; Chief Financial Officer
To present

Number ofshares of theCompany held

9,900

<Responsibilities>
Accounting Division8

Reason for nomination
Since joining the Company, Mr. Yoshio Kawabe has engaged mainly in accounting and finance-related operations and thepromotion of internal control. After serving as a manager responsible for the administration departments including generalaffairs and human resources, he currently serves as General Manager of the Accounting Division and focuses on capital andfinance policies. The Company has judged that his above experience and insights are essential for the Group to enhance its
corporate value, and has therefore nominated him as a candidate for Director.
April 1977
Joined MITSUI LIFE INSURANCE MUTUAL COMPANY
June 2008
Director; Managing Executive Officer, MITSUI LIFE
INSURANCE COMPANY LIMITED
April 2009
Representative Director and President; Chief Operating Officer;
Yukiteru Yamamoto
General Manager, Operational Improvement Promotion Division(June 3, 1953)
April 2012
Representative Director and President; Chief Operating Officer
June 2013
Special Advisor
12,100External
June 2014
External Director, the Company
Independent Officer
April 2015
Advisor, MITSUI LIFE INSURANCE COMPANY LIMITED
Reappointed
March 2017Retired from MITSUI LIFE INSURANCE COMPANY
LIMITED
June 2020
External Director; Chair of the Board of Directors, the Company
To present
Reason for nomination
Mr. Yukiteru Yamamoto has served in positions including Representative Director and President of MITSUI LIFE
INSURANCE COMPANY LIMITED (currently TAIJU LIFE INSURANCE COMPANY LIMITED) and Executive
Member of the Policy Board of the Japan Business Federation, and he thus possesses abundant operational experience andwide-ranging knowledge regarding corporate management. He currently contributes to the enhancement of corporate
governance as Chair of the Board of Directors of the Company. His advice and supervision based on the experience andinsights developed through this background will lead to sustainable enhancement of the corporate value, and the Company
has therefore nominated him again as a candidate for External Director.

- 12 -

No.

Name(Date of birth)

Past experience, positions, responsibilities,
and significant concurrent positions
April 1977
June 2005

Kazuhiko Kashikura(April 13, 1954)

9

External
Independent Officer
Reappointed

April 2008
April 2008
May 2008
May 2013
June 2013
June 2017
June 2018

Joined Mitsui Bank Co., Ltd.
Executive Officer; General Manager, Operations Audit Division,
Sumitomo Mitsui Banking Corporation
Executive Officer
Retired from Sumitomo Mitsui Banking Corporation
Representative Director and President, SMBC Staff Service Co.,Ltd.
Retired from SMBC Staff Service Co., LTD.
Representative Director and President, SMBC Finance Service
Co., Ltd.
Representative Director and Chairman
External Director, the Company
To present
Retired from the position of Representative Director andChairman, SMBC Finance Service Co., Ltd.

Number ofshares of theCompany held

4,400

Reason for nomination
Mr. Kazuhiko Kashikura has served as Executive Officer of Sumitomo Mitsui Banking Corporation and a top executive at
the same group companies and he thus has abundant experience and broad insight in corporate management. His advice andsupervision based on the experience and insights developed through this background will lead to sustainable enhancementof the corporate value, and the Company has therefore nominated him again as a candidate for External Director.

- 13 -

No.

Name(Date of birth)

Past experience, positions, responsibilities,
and significant concurrent positions

Joined The Bank of Japan
Manager, Price Statistics Section, Research and Statistics
Department
February 2001
Manager, Economic Statistics Section, Research and Statistics
Department
November 2002 Deputy General Manager, Nagoya Branch
March 2004
General Manager, Matsue Branch
July 2006
Associate Director-General, Financial Markets Department
November 2007 General Manager, Fukuoka Branch
May 2009
Director-General, Information System Services Department
April 2010Retired from The Bank of JapanMay 2010
Full-time Advisor, Chugai Pharmaceutical Co., Ltd.
Keiji Kono
October 2010
Executive Officer; Deputy Head, Lifecycle Management(September 18, 1957)
Marketing Unit
November 2010 Executive Officer; Head, Lifecycle Management Unit 2,
500
External
Lifecycle Management Marketing Unit
Independent Officer
April 2012
Executive Officer; Deputy Head, Marketing & Sales Division
Reappointed
January 2013
Executive Officer; Head, IT Supervisory Division
October 2015
Executive Officer in charge of Global Health Policy; Head, IT
Supervisory Division
January 2017
Executive Officer in charge of External Affairs Department andGlobal Health Policy
April 2017
Senior Vice President in charge of External Affairs Department
and Global Health Policy
April 2021
Part-time Advisor
To present
June 2021
External Director, the Company
To present<Significant concurrent position>
Part-time Advisor, Chugai Pharmaceutical Co., Ltd.
Reason for nomination
Mr. Keiji Kono has served in managerial positions in key departments of The Bank of Japan as a financial specialist. In
Chugai Pharmaceutical Co., Ltd., he has held the office of Executive Officer serving as Head of the IT Supervisory
Division and fulfilled roles including promoting overseas activities that contribute to society, and he thus has abundant
experience and broad insight in corporate management. His advice and supervision based on the experience and insights
developed through this background will lead to sustainable enhancement of the corporate value, and the Company has
therefore nominated him again has a candidate for External Director.
April 1980
May 1999

10

Number ofshares of theCompany held

- 14 -

No.

Name(Date of birth)

Past experience, positions, responsibilities,
and significant concurrent positions
April 1985
April 2013

Akihiko Matsuda(January 7, 1960)

11

External
Independent Officer
Reappointed

March 2015
April 2015
April 2017

March 2020
April 2020
June 2021
March 2022

Joined Tokyo Gas Co., Ltd.
Technical Solution Department
Managing Director, Energy Advance Co., Ltd.
Retired from Energy Advance Co., Ltd.
General Manager, Energy Proposal Promotion Department,
Tokyo Gas Co., Ltd.
Executive Officer
President and Representative Director, Tokyo Gas Living
Engineering Co., Ltd.
Retired from Tokyo Gas Living Engineering Co., Ltd.
Advisor, Tokyo Gas Co., Ltd.
External Director, the Company
To present
Retired from Tokyo Gas Co., Ltd.

Number ofshares of theCompany held

500

Reason for nomination
Mr. Akihiko Matsuda has served as Executive Officer in Tokyo Gas Co., Ltd. and a top executive at the same groupcompanies and he thus has abundant experience and broad insight in the overall energy business. His advice andsupervision based on the experience and insights developed through this background will lead to sustainable enhancementof the corporate value, and the Company has therefore nominated him again as a candidate for External Director.

- 15 -

No.

Past experience, positions, responsibilities,
and significant concurrent positions

Number ofshares of theCompany held

Joined the Ministry of Health and Welfare
Director, Disease Control Division, Health Service Bureau,
Ministry of Health, Labour and Welfare
July 2008
Director, Tuberculosis and Infectious Diseases Control Division,
Health Service Bureau
July 2009
Director, Medical Care Division, National Hospital Organization
April 2012
Planning Officer
October 2013
Director in charge of Medical Affairs
October 2015
Director-General Counsellor for medical policy and mental
health care, Ministry of Health, Labour and Welfare
June 2016
Director-General, Environmental Health Department, Ministryof the Environment
July 2019
Director General, Bureau of International Health Cooperation
National Center for Global Health and Medicine
Retired from Ministry of Health, Labour and Welfare
March 2021
Visiting Researcher, National Center for Global Health andApril 2021
Medicine
To present<Significant concurrent position>
Visiting Researcher, National Center for Global Health and Medicine

None

Name
(Date of birth)
April 1985
September 2006

Tamami Umeda(April 26, 1960)
External
Independent Officer
Newly appointed

12

Reason for nomination
Ms. Tamami Umeda is a licensed physician and has held positions such as the Director-General Counsellor, the Ministry of
Health, Labour and Welfare and the Director-General, Environmental Health Department, the Ministry of the Environment,
and she thus has abundant experience and broad insight regarding the health and hygiene and organizational management.
Her advice and supervision based on the experience and insights developed through this background will lead to sustainableenhancement of the corporate value, and the Company has therefore nominated her as a candidate for External Director.
Although she does not have experience of being directly involved in corporate management, for the reasons stated above,
the Company believes that she will be able to execute the duties as an External Director of the Company properly.
(Notes) 1. There are no special interests between the candidates and the Company.
2. (1) Mr. Yukiteru Yamamoto, Mr. Kazuhiko Kashikura, Mr. Keiji Kono, Mr. Akihiko Matsuda, and Ms. Tamami Umeda
are candidates for External Director.
(2) The Company has registered Mr. Yukiteru Yamamoto, Mr. Kazuhiko Kashikura, Mr. Keiji Kono, and Mr. AkihikoMatsuda with the Tokyo Stock Exchange as Independent Officers with no possibility of a conflict of interest
occurring with general shareholders, whose designation is required by the Exchange. If they are reappointed andassume office as Directors, they will continue to be Independent Officers.
(3) If Ms. Tamami Umeda is appointed and assume office as Director, the Company intends to register her with theTokyo Stock Exchange as an Independent Officer with no possibility of a conflict of interest occurring with generalshareholders, whose designation is required by the Exchange.
3. Number of years since candidates for External Director were appointed External Director(1) Mr. Yukiteru Yamamoto’s term in office as External Director will be eight years at the conclusion of this General
Meeting of Shareholders.
(2) Mr. Kazuhiko Kashikura’s term in office as External Director will be four years at the conclusion of this General
Meeting of Shareholders.
(3) Mr. Keiji Kono’s term in office as External Director will be one year at the conclusion of this General Meeting of
Shareholders.
(4) Mr. Akihiko Matsuda’s term in office as External Director will be one year at the conclusion of this General Meetingof Shareholders.
4. Liability limitation agreements with candidates for Director
The Company has entered into agreements with Mr. Yukiteru Yamamoto, Mr. Kazuhiko Kashikura, Mr. Keiji Kono, and
Mr. Akihiko Matsuda to limit their liabilities as provided for in Article 423, Paragraph 1, of the Companies Act, and the
maximum amount of liability under this agreement shall be the greater of 10 million yen or the minimum amountstipulated in laws and regulations. If Ms. Tamami Umeda is appointed and assume office as Director, the Company
intends to enter into the same agreements with her.
5. Outline of the directors’ and officers’ liability insurance insuring candidates for Director
The Company has entered into a directors’ and officers’ liability insurance agreement with an insurance company. The- 16 -

policy covers damages, which are to be borne by the insured, that may arise from those insured persons assuming
liability in connection with the execution of their duties or through receiving claims pertaining to the pursuit of suchliability. All candidates for Director will be insured under said agreement. The Company will renew said agreement
under the same terms and conditions at the time of the next renewal.

- 17 -

Proposal 4:

Election of 2 Audit & Supervisory Board Members

The term of office of Audit & Supervisory Board Members Etsuji Hitomi and Shozo Fujita will expire at
the conclusion of this year’s Annual General Meeting of Shareholders. Accordingly, the election of 2 Audit& Supervisory Board Members is proposed.
Furthermore, the Audit & Supervisory Board has given its approval to this proposal.
The candidates for Audit & Supervisory Board Members are as follows:
No.

Name
(Date of birth)

Past experience, positions
and significant concurrent positions
April 1983
April 2006
April 2010
April 2013

Kunihiko Tachi(May 13, 1956)

April 2016

Newly appointed

1

April 2019
April 2022

Joined the Company
General Manager; Accounting Department, Accounting Division
General Manager; Administration Department, Sanki Techno
Support Co., Ltd.
General Manager; Internal Audit Department, CSR Promotion
Division, the Company
Senior General Manager
General Manager; Internal Audit Department, CSR Promotion
Division
General Manager; Internal Audit Department, CSR Promotion
DivisionInternal Audit Office
To present

Number ofshares of theCompany held

None

Reason for nomination
Mr. Kunihiko Tachi had worked at the accounting and finance departments of the Company for many years and has athorough knowledge regarding finance and accounting. He has also been involved in areas such as strict compliance withlaws and regulations at the Group as the General Manager of the Internal Audit Department. In order to utilize his abundant
operational experience and insight, the Company has nominated him as a candidate for Audit & Supervisory Board Member.

- 18 -

No.

Past experience, positions
and significant concurrent positions

Number ofshares of theCompany held

Appointed as a public prosecutor
Director-General of the Rehabilitation Bureau, The Ministry ofJustice
Director-General of the Public Security Division, Supreme
January 2008
Public Prosecutors Office
July 2008
Director-General of Citizen Judge Trial Division
Superintending Prosecutor, Hiroshima High Public Prosecutors
June 2010
OfficeDecember 2010 Superintending Prosecutor, Nagoya High Public Prosecutors
OfficeAugust 2011Retired from Nagoya High Public Prosecutors Office
September 2011 Registered as an attorney-at-law
Representative Director and President, The Resolution andJune 2012
Collection Corporation
Retired from The Resolution and Collection Corporation
October 2015
Joined OKUNO & PARTNERS
External Audit & Supervisory Board Member, the Company
June 2018
To present
Retired from OKUNO & PARTNERS
October 2018
Established Fujita Shozo Law OfficeFebruary 2019
To present<Significant concurrent position>
Attorney-at-law (Fujita Shozo Law Office)Outside Director, Member of Audit and Supervisory Committee, AssetManagement One Co., Ltd.
Outside Director, Eco’s Co, Ltd
Outside Director-Audit and Supervisory Committee Member, Bunka Shutter Co.,
Ltd.

2,100

Name
(Date of birth)
April 1976
June 2006

Shozo Fujita(August 1, 1948)

2

External
Independent Officer
Reappointed

Reason for nomination
Mr. Shozo Fujita has expertise as a public prosecutor and attorney-at-law, and abundant experience and wide-ranging
insights through experience including as Representative Director and President of The Resolution and Collection
Corporation and as a director who serves as an audit and supervisory committee member at other companies. In order toutilize his experience and insight developed through this background to audit the Company, the Company has nominatedhim again as a candidate for External Audit & Supervisory Board Member.
(Notes) 1. There are no special interests between the candidates and the Company.
2. (1) Mr. Shozo Fujita is a candidate for External Audit & Supervisory Board Member.
(2) The Company has registered Mr. Shozo Fujita with the Tokyo Stock Exchange as an Independent Officer with nopossibility of a conflict of interest occurring with general shareholders, whose designation is required by the
Exchange. If he is reappointed and assume office as External Audit & Supervisory Board Member, he will continue
to be an Independent Officer.
3. Number of years since the candidate for External Audit & Supervisory Board Member was appointed External Audit &Supervisory Board Member
Mr. Shozo Fujitaʼs term in office as External Audit & Supervisory Board Member will be four years at the conclusion ofthis General Meeting of Shareholders.
4. Liability limitation agreement with the candidate for External Audit & Supervisory Board Member
The Company has entered into an agreement with Mr. Shozo Fujita to limit his liability as provided for in Article 423,
Paragraph 1, of the Companies Act, and the maximum amount of liability under this agreement shall be the greater of 10
million yen or the minimum amount stipulated in laws and regulations. If Mr. Shozo Fujita is appointed and assumes
office as External Audit & Supervisory Board Member, the Company intends to enter into the same agreement with him.
5. Outline of the directors’ and officers’ liability insurance insuring candidates for Audit & Supervisory Board Member
The Company has entered into a directors’ and officers’ liability insurance agreement with an insurance company. The
policy covers damages, which are to be borne by the insured, that may arise from those insured persons assuming
liability in connection with the execution of their duties or through receiving claims pertaining to the pursuit of suchliability. All candidates for Audit & Supervisory Board Member will be insured under said agreement. The Company will
renew said agreement under the same terms and conditions at the time of the next renewal.

- 19 -

Proposal 5:

Election of 1 Substitute Audit & Supervisory Board Member

In order to prepare for cases where the number of Audit & Supervisory Board Members falls below
prescribed by laws and regulations, the Company proposes the election of one substitute Audit &Supervisory Board Member.
Furthermore, the Audit & Supervisory Board has given its approval to this proposal.
The candidate for substitute Audit & Supervisory Board Member is as follows:
Past experience, positions
and significant concurrent positions

Number ofshares of theCompany held

Joined Asahi Shinwa Audit Corporation
Registered as certified public accountant
Partner, Asahi Audit Corporation
Senior Partner, KPMG AZSA LLC
Retired from KPMG AZSA LLC
Established Suzuki Toshio Certified Public Accountant Office
To present<Significant concurrent position>
Certified public accountant (Suzuki Toshio Certified Public Accountant Office)

None

Name
(Date of birth)

Toshio Suzuki(April 18, 1957)
External
Independent Officer
Newly appointed

September 1985
August 1988
May 2000
May 2005
June 2019
July 2019

Reason for nomination
In order to utilize Mr. Toshio Suzuki’s expertise and experience, etc. developed as a certified public accountant to strengthen theaudit systems of the Company, the Company has nominated him as a candidate for substitute External Audit & Supervisory Board
Member. Although he does not have experience of being directly involved in corporate management, for the reasons stated above,
the Company believes that he will be able to execute the duties as an External Audit & Supervisory Board Member of theCompany properly.
(Notes) 1. There are no special interests between the candidate and the Company.
2. (1) The candidate is a candidate for substitute External Audit & Supervisory Board Member.
(2) If Mr. Toshio Suzuki assumes office as Audit & Supervisory Board Member, the Company intends to register him
with the Tokyo Stock Exchange as Independent Officer with no possibility of a conflict of interest occurring withgeneral shareholders, whose designation is required by the Exchange.
3. Liability limitation agreement with the candidate for substitute External Audit & Supervisory Board Member
If Mr. Toshio Suzuki is appointed as Audit & Supervisory Board Member, the Company intends to enter into anagreement with him to limit his liability as provided for in Article 423, Paragraph 1 of the Companies Act, and the
maximum amount of liability under this agreement shall be the greater of 10 million yen or the minimum amountstipulated in laws and regulations.
4. Outline of the directors’ and officers’ liability insurance insuring the candidate for substitute Audit & Supervisory Board
Member
The Company has entered into a directors’ and officers’ liability insurance agreement with an insurance company. The
policy covers damages, which are to be borne by the insured, that may arise from those insured persons assuming
liability in connection with the execution of their duties or through receiving claims pertaining to the pursuit of suchliability. The candidate for substitute Audit & Supervisory Board Member will be insured under said agreement. The
Company will renew said agreement under the same terms and conditions at the time of the next renewal.

- 20 -

Proposal 6:

Determination of Restricted Stock Compensation for Directors

With regard to the amount of compensation to the Directors, the resolution adopted at the 94th Annual
General Meeting of Shareholders held on June 27, 2018 instituted an amount to be paid of up to a maximumof 650 million yen per year (including a portion of up to 100 million yen for the External Directors as
approved at the 96th Annual Meeting of Shareholders held on June 25, 2020). In addition, since theshareholders’ approval at the 89th Annual General Meeting of Shareholders held on June 26, 2013, stockacquisition rights, not exceeding 500 (100 shares per stock acquisition right) to be allotted a year, have been
granted to the Directors (excluding the External Directors) as stock-based compensation stock options.
Furthermore, in line with recent revisions to the Companies Act, the 97th Annual General Meeting of
Shareholders held on June 23, 2021 approved the specific matters to grant stock acquisition rights to
Directors under the same terms and conditions as in the past.
As a part of revisions to the executive compensation plan, the Company hereby requests approval to pay
compensation in the form of restricted stock to Directors (excluding the External Directors; hereinafter the“Eligible Directors”) in addition to and separately from the current Director compensation as describedabove, with objectives of providing incentives to the Eligible Directors to achieve sustainable improvement
in corporate value of the Company and further creating shared value with our shareholders.
In light of the objectives of this plan, the Company reached a decision that the compensation in the formof restricted stock is to be paid based on the number of shares that does not fluctuate depending on businessperformance and is determined in line with their positions and responsibilities.
Upon approval of the resolution of this proposal, the Company will pay monetary compensation claims in
the form of restricted stock to the Eligible Directors, totaling not more than 170 million yen per year(including a portion up to 20 million yen for the External Directors, but excluding the employee salaries for
Directors who are also employees of the Company). The specific timing of payment and allocation to each
Eligible Director shall be delegated to the Board of Directors of the Company.
Should this proposal be approved, the Company will abolish the stock-based compensation stock options,
except for those previously granted, and thereafter will not issue new stock acquisition rights to Directors(excluding the External Directors) as stock-based compensation stock options.
There are currently 11 Directors (including 4 External Directors). If Proposal 3 “Election of 12 Directors”
is approved as originally proposed, there will be 12 Directors (including 5 External Directors).
In addition, the Eligible Directors shall pay all of the monetary claims under this proposal through amethod of in-kind contribution, and receive the issuance or disposition of shares of the Company’s common
stock pursuant to a resolution of the Board of Directors of the Company. The total number of shares of thecommon stock to be issued or disposed of in this manner will not exceed 85,000 shares (including the
portion of 10,000 shares for the External Directors); provided, however, that the total number of the shares
will be reasonably adjusted in the event of a stock split (including a gratis allotment of the common stock),
reverse stock split of the common stock on or after the date of this resolution, or other circumstances
requiring adjustment to the total number of the shares to be issued or disposed of as restricted stock.
The amount to be paid per share will be determined by the Board of Directors based on the closing priceof the common stock on the Tokyo Stock Exchange on the business day prior to the resolution of each Boardof Directors meeting (if there was no trading on that date, the closing price on the most recent trading dayprior to that date) to the extent not particularly favorable to an Eligible Director who will subscribe for suchcommon stock. In addition, the issuance or disposal of shares of common stock of the Company and thepayment of monetary claims as assets contribution in kind shall be subject to the execution of a restricted
stock allotment agreement (the "Allotment Agreement") between the Company and the Eligible Directors,
which shall include the following. Furthermore, the maximum amount of compensation, the total number ofshares of the Company's common stock to be issued or disposed of, and other terms and conditions ofgranting the restricted shares to the Eligible Directors under this proposal will be determined, in line with theaforementioned objectives, the Company's business conditions, and the “Decision policy regarding thedetails of compensation, etc., for individual Directors” (to be changed to the contents as described in the[Reference] below in order to ensure alignment with the approval by the Board of Directors, provided that
this proposal is approved and adopted). The Company considers it appropriate to change the decision policy,
because such change reflects the circumstances and other factors.
If the proposal regarding the restricted stock compensation policy is approved at this General Meeting of
Shareholders as originally proposed, the Company plans to apply said policy to all Executive Officers who
are not Directors of the Company under the same terms and conditions.

- 21 -

[Outline of the Allotment Agreement](1) Transfer restriction period
From the allotment date of the restricted stock until the time immediately following the retirementfrom the position of an officer or employee of the Company or its subsidiary that is predetermined by the
Board of Directors of the Company (the “Restricted Transfer Period”), an Eligible Director may nottransfer, create a security interest on, or otherwise dispose of common stock of the Company allotted
under the Allotment Agreement (the “Allotted Shares”) to any third party (the “Transfer Restrictions”).
However, if the time immediately following such retirement or resignation is before the date when threemonths have elapsed since the end of the fiscal year that includes the date on which the allotment of theallotted shares is to be received, the end of the transfer restriction period may be adjusted withinreasonable limits.
(2) Treatment upon retirement of the Company
In the event that an Eligible Director resigns from his/her position as an officer or employee of theCompany or its subsidiary before the expiration of the term of office (the "Service Period"), as previously
determined by the Board of Directors of the Company, the Company shall automatically acquire the
Allotted Shares without consideration, excluding cases when there are reasonable grounds for resignation,such as expiration of term of office or death of the Eligible Director.
(3) Cancellation of transfer restrictions
The Company shall cancel the Transfer Restrictions on all of the Allotted Shares when the RestrictedTransfer Period expires, provided that an Eligible Director has continuously held a position as an officer
or employee of the Company or its subsidiary as previously determined by the Board of Directors of theCompany during the Service Period. However, the number of the Allotted Shares and the timing of thecancellation of Transfer Restrictions shall be reasonably adjusted as necessary in cases when the Eligible
Director (i) resigns his/her position as an officer or employee of the Company or its subsidiary before theexpiration of the Service Period for justifiable reasons as predetermined by the Board of Directors of theCompany, or (ii) resigns his position as an officer or employee of the Company or its subsidiary as
predetermined by the Board of Directors the Company for reasons other than justifiable reasons before
the expiration of Restricted Transfer Period, even after the expiration of the Service Period. Pursuant to
the provisions above, the Company shall automatically acquire the Allotted Shares for which theTransfer Restriction has not been cancelled without consideration immediately after the Transfer
Restriction is cancelled.
(4) Treatment in the event of organizational restructuring, etc.
Notwithstanding the provisions (1) above, if, during the Transfer Restriction Period, a merger
agreement with the Company to be dissolved, a share exchange agreement or share transfer plan in which
the Company becomes a wholly-owned subsidiary, or any other matter relating to organizational
restructuring, etc., is approved at a General Meeting of Shareholders (or by the Board of Directors of theCompany for organizational restructuring, etc., that does not require approval by the General Meeting of
Shareholders of the Company), the Transfer Restrictions on a number of the Allotted Shares will becanceled ahead of the effective date of the organizational restructuring, etc., by resolution of the Board of
Directors of the Company based on the period from the commencement date of the Transfer Restriction
Period to the effective date of the organizational reorganization, etc. In this case, the Company shall
automatically acquire without consideration any of the Allotted Shares whose Transfer Restrictions havenot been cancelled immediately after the removal of Transfer Restrictions pursuant to the preceding
provisions. In such case provided in the preceding provisions, the Company shall automatically acquire
the Allotted Shares for which the Transfer Restriction have not been cancelled without consideration
immediately after the Transfer Restriction is cancelled.
(5) Matters other than above
Other matters relating to the Allotment Agreement shall be determined by the Board of Directors of
the Company.

- 22 -

[Reference] Outline of the decision policy regarding the details of compensation, etc., for individual Directors
ⅰ．Basic policy on compensation, etc., for Directors
 The Director compensation is designed to provide incentives toward the sustainable enhancement of theCompany's corporate value, in order to meet the expectations of all stakeholders.
ⅱ．Decision policy regarding the basic compensation for individual Directors (including the policy on thetiming of the payment) The compensation is paid in a fixed amount to Directors on a monthly basis.
 The compensation for individual Directors is paid according to their rank, responsibilities, whether the
Director has been granted the right to represent or served as Director on a full-time or part-time basis.
ⅲ．Decision policy regarding indicators of performance-linked compensation (Directors' bonuses) among
compensation, etc., for individual Directors and calculation methods of the performance-linked
compensation (including the policy on the timing of payment) Directors' bonuses are paid to the executive Directors as an incentive compensation to reward theperformance improvement each year after the end of the fiscal year. The Directors' bonuses are paid onan ad hoc basis in cases where it is appropriate to pay out during the fiscal year.
 The amounts of Directors' bonuses are determined after taking into consideration all the factors based on
the indictors such as the achievement ratio of the management goals for the medium-term management
plan and other guidelines, as well as both quantitative and qualitative performance evaluation of eachindividual Director. In the event of a significant deterioration in business performance, serious
noncompliance, or other factors, the bonuses are paid out at a lower level or not to be provided.
ⅳ．Decision policy regarding the details and number of non-monetary compensation, etc., for individual
Directors (including the policy on the timing of granting compensation, etc.)
 The Company grants stock compensation to Directors as an incentive to enhance the corporate value of
the Company over the medium to long term at a specific time each year according to their rank andresponsibilities.
ⅴ．Decision policy regarding the payout ratio of compensation (for individual Director’s compensations, etc.)
in ii, iii, and iv above
 The payout ratio per type of the compensation is determined after taking into all the factors such as theirrank, the achievement ratio of the management goals, and the performance evaluation of each individual
Director.
ⅵ．Decision policy regarding the details of compensation, etc., for individual Directors
 The Company shall delegate the responsibility for determining the fixed compensation and bonuses foreach individual Directors to the President and Representative Director of the Company.
 The President and Representative Director shall determine the fixed compensation and bonuses forindividual Directors through the consultation with the Advisory Committee on Nomination andRemuneration, with due respect to the Advisory Committee’s recommendations.
 The Board of Directors shall determine the stock compensation for individual Directors throughconsultation with the Advisory Committee on Nomination and Remuneration.

- 23 -

Proposal 7: Determination of Restricted Stock Compensation for Audit & Supervisory Board Members
With regard to the amount of compensation to the Audit & Supervisory Board Members, the resolution
adopted at the 94th Annual General Meeting of Shareholders held on June 27, 2018 instituted an amount tobe paid of up to a maximum of 120 million yen per year.
The Company hereby requests approval to pay compensation in the form of restricted stock to the Audit& Supervisory Board Members (including the External Audit & Supervisory Board Members; hereinafter the“Eligible Members”) in addition to and separately from the current Director compensation as describedabove, with objectives of providing incentives to the Eligible Members to achieve sustainable improvement
in corporate value of the Company and further creating shared value with our shareholders.
In light of the objectives of this plan, the Company reached a decision that the compensation in the formof restricted stock is to be paid based on the number of shares that does not fluctuate depending on businessperformance and is determined in line with their positions and responsibilities.
Upon approval of the resolution of this proposal, the Company will pay monetary compensation claims in
the form of restricted stock to the Eligible Members, totaling not more than 20 million yen per year. The
specific timing of payment and allocation to each Eligible Member shall be delegated to the Board of
Directors of the Company.
There are currently 5 Audit & Supervisory Board Members (including 3 External Audit & Supervisory
Board Members). If Proposal 4 “Election of 2 Audit & Supervisory Board Members” is approved asoriginally proposed, there will be 5 Audit & Supervisory Board Members (including 3 External Audit &Supervisory Board Members).
In addition, the Eligible Members shall pay all of the monetary claims under this proposal through amethod of in-kind contribution, and receive the issuance or disposition of shares of the Company’s common
stock pursuant to a resolution of the Board of Directors of the Company. The total number of shares of thecommon stock to be issued or disposed of in this manner will not exceed 10,000 shares; provided, however,that the total number of the shares will be reasonably adjusted in the event of a stock split (including a gratis
allotment of the common stock), reverse stock split of the common stock on or after the date of thisresolution, or other circumstances requiring adjustment to the total number of the shares to be issued or
disposed of as restricted stock.
The amount to be paid per share will be determined by the Board of Directors based on the closing priceof the common stock on the Tokyo Stock Exchange on the business day prior to the resolution of each Boardof Directors meeting (if there was no trading on that date, the closing price on the most recent trading dayprior to that date) to the extent not particularly favorable to an Eligible Member who will subscribe for suchcommon stock. In addition, the issuance or disposal of shares of common stock of the Company and thepayment of monetary claims as assets contribution in kind shall be subject to the execution of a restricted
stock allotment agreement (the "Allotment Agreement") between the Company and the Eligible Members,
which shall include the following.
[Outline of the Allotment Agreement](1) Transfer restriction period
From the allotment date of the restricted stock until the time immediately following the retirementfrom the position of an officer or employee of the Company or its subsidiary that is predetermined by the
Board of Directors of the Company (the "Restricted Transfer Period"), an Eligible Member may nottransfer, create a security interest on, or otherwise dispose of common stock of the Company allotted
under the Allotment Agreement (the “Allotted Shares”) to any third party (the “Transfer Restrictions”).
However, if the time immediately following such retirement or resignation is before the date when threemonths have elapsed since the end of the fiscal year that includes the date on which the allotment of theallotted shares is to be received, the end of the transfer restriction period may be adjusted withinreasonable limits.
(2) Treatment at the retirement of the Company
In the event that an Eligible Member resigns from his/her position as an officer or employee of theCompany or its subsidiary before the expiration of the term of office (the "Service Period"), as previously
determined by the Board of Directors of the Company, the Company shall automatically acquire the
Allotted Shares without consideration, excluding cases when there are reasonable grounds for resignation,such as expiration of term of office or death of the Eligible Member.

- 24 -

(3) Cancellation of transfer restrictions
The Company shall cancel the Transfer Restrictions on all of the Allotted Shares when the RestrictedTransfer Period expires, provided that an Eligible Member has continuously held a position as an officer
or employee of the Company or its subsidiary as previously determined by the Board of Directors of theCompany during the Service Period. However, the number of the Allotted Shares and the timing of thecancellation of Transfer Restrictions shall be reasonably adjusted as necessary in cases when the Eligible
Member (i) resigns his/her position as an officer or employee of the Company or its subsidiary before theexpiration of the Service Period for justifiable reasons as predetermined by the Board of Directors of theCompany, or (ii) resigns his position as an officer or employee of the Company or its subsidiary as
predetermined by the Board of Directors the Company for reasons other than justifiable reasons before
the expiration of Restricted Transfer Period, even after the expiration of the Service Period. Pursuant to
the provisions above, the Company shall automatically acquire the Allotted Shares for which theTransfer Restriction has not been cancelled without consideration immediately after the Transfer
Restriction is cancelled.
(4) Treatment in the event of organizational restructuring, etc.
Notwithstanding the provisions (1) above, if, during the Transfer Restriction Period, a merger
agreement with the Company to be dissolved, a share exchange agreement or share transfer plan in which
the Company becomes a wholly-owned subsidiary, or any other matter relating to organizational
restructuring, etc., is approved at a General Meeting of Shareholders (or by the Board of Directors of theCompany for organizational restructuring, etc., that does not require approval by the General Meeting of
Shareholders of the Company), the Transfer Restrictions on a number of the Allotted Shares will becanceled ahead of the effective date of the organizational restructuring, etc., by resolution of the Board of
Directors of the Company based on the period from the commencement date of the Transfer Restriction
Period to the effective date of the organizational reorganization, etc. In this case, the Company shall
automatically acquire without consideration any of the Allotted Shares whose Transfer Restrictions havenot been cancelled immediately after the removal of Transfer Restrictions pursuant to the preceding
provisions. In such case provided in the preceding provisions, the Company shall automatically acquire
the Allotted Shares for which the Transfer Restriction have not been cancelled without consideration
immediately after the Transfer Restriction is cancelled.
(5) Matters other than above
Other matters relating to the Allotment Agreement shall be determined by the Board of Directors of
the Company.

- 25 -

<Reference>[Policy on nomination of a candidate for Director and Audit & Supervisory Board Member]
The Company established the “Sanki Engineering Corporate Governance Guidelines” and stipulated apolicy about nomination of a candidate for Director and Audit & Supervisory Board Member as follows.
1. Candidates for Director(Policy on nomination of candidates for Director)(1) The Board of Directors shall nominate as a candidate for Director a person who is expected to fulfill the role of a
Director and the Board of Directors based on the skills that he/she should possess.
(2) The Board of Directors shall nominate as a candidate for External Director a person who is expected to provide
advice from an independent and objective standpoint, and appoint at least one independent Outside Director who
has management experience as a top executive at another company.
(3) If any Director becomes unable to fulfill his/her duties as the Director of the Company for health or medical
reasons or causes any damage to the corporate value of the Company due to nonfulfillment of his/her duties, anagenda regarding the dismissal of the Director shall be deliberated by the Board of Directors through examinationby the Advisory Committee on Nomination and Remuneration.
(Roles of Directors and the Board of Directors)(1) Directors and the Board of Directors shall make effort to realize sustainable growth and enhance corporate value
over the medium to long term as entrusted by the shareholders by realizing efficient and effective corporate
governance, conducting important decision-making of the Company, and supervising execution of duties.
(2) Directors and the Board of Directors shall make effort to properly build internal control systems, establish risk
management systems and compliance structures, monitor the operation status utilizing the Internal Audit
Department throughout all Group companies, and make information disclosure in a timely and appropriate manner.
(3) The Board of Directors shall supervise the state of progress regarding election of a successor to the chief executive
officer whenever necessary.
(4) The Board of Directors shall establish procedures on transactions with conflicts of interest and deliberate andapprove transactions.
2. Candidates for Audit & Supervisory Board Member(Policy on nomination of candidates for Audit & Supervisory Board Member)(1) The Board of Directors shall nominate as a candidate for Audit & Supervisory Board Member a person who has
excellent insight and high ethics and is expected to fulfill the role of an Audit & Supervisory Board Member as
listed below, subject to prior consent from the Audit & Supervisory Board.
(2) The Board of Directors shall nominate as a candidate for External Audit & Supervisory Board Member a person
who is expected to provide advice from an independent and objective standpoint in addition to qualifications listed
in the preceding paragraph.
(3) The Board of Directors shall make effort to nominate as a candidate for Audit & Supervisory Board Member at
least one person who has appropriate knowledge regarding finance and accounting.
(Roles of Audit & Supervisory Board Members)
Audit & Supervisory Board Members who shall play a part of supervision functions in cooperation with the Board of
Directors shall make efforts to realize sound and sustainable growth and enhancement of corporate value over the medium
to long term, and establish a superior corporate governance structure that can respond to social trust, while maintaining
appropriate cooperation with stakeholders by auditing the execution of duties of Directors as an independent organization
entrusted by the shareholders.

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[Independence Standards for External Officers]
The Company established the “Independence Standards for External Officers” and designates those notapplicable to all of categories listed below as an Independent Officer.
1. A person whose major business partner (Note 1) is the Company or an executive person (Note 2) of the same if such
person is a juridical person, etc. (Note 3).
2. A major business partner (Note 1) of the Company or a major lender (Note 4) of the Company or an executive person(Note 2) of the same if such person is a juridical person, etc. (Note 3).
3. A consultant, accounting professional, or legal professional who receives a significant amount of money or other assets(Note 5) from the Company other than Officer remuneration.
4. A person who has fallen under any of items 1 to 3 above in a recent period (Note 6)
5. A relative within the second degree of relationship of a person who falls under any of items (a) to (d) below (excluding
a person with whom relationship was dissolved due to a divorce, dissolution, etc.).
(a) A person who falls under any of items 1 to 4.
(b) An executive person (Note 3) of the Company’s subsidiary(c) A Non-executive Director of the Company’s subsidiary (in the case that an External Audit & Supervisory
Board Member is nominated as an Independent Officer)(d) A person who has fallen under the preceding (b) or (c) or an executive person (Note 3) of the Company in a
recent period (Note 6)
6. A major shareholder of the Company holding 10% or more of the Company’s total shares for three or moreconsecutive years in a recent period (Note 6) or an executive person (Note 2) of the same if such person is a juridical
person, etc. (Note 3).
(Note 1) A “Major business partner” refers to a business partner with which the Company has transactions
corresponding to, in principle, 3% or more of annual consolidated sales of the Company for three or moreconsecutive years (3% of annual consolidated sales is approximately 5,795 million yen in fiscal 2021)(Note 2) An “executive person” refers to an Executive Director or employee in the General Manager position orequivalent managerial position and other equally important position(Note 3) A “juridical person, etc.” refers to a juridical person or any organization other than a juridical person (including
agricultural cooperatives and management associations)(Note 4) A “major lender” refers to a lender from which the balance of loans as of the end of each fiscal year is, inprinciple, 2% or more of the consolidated total assets of the Company on the same day for three or moreconsecutive years (2% of the consolidated total asset is approximately 3,672 million yen in fiscal 2021)(Note 5) A “significant amount of money or other assets” refers to that with a value equivalent to a cash amount of 10
million yen or more per annum(Note 6) A “recent period” refers to a five-year period before the time point in which the election proposal to besubmitted to the shareholder’s meeting is determined- 27 -