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: 6369
June 6, 2022
To our shareholders:
Takashi Owada, President and Representative Director
TOYO KANETSU K.K.
11-1 Minamisuna 2-chome, Koto-ku, Tokyo

Notice of the 114th Annual General Meeting of Shareholders
The 114th Annual General Meeting of Shareholders of TOYO KANETSU K.K. (the “Company”) will be held as
indicated below.
Due to the continuous effects of novel coronavirus disease (COVID-19), the Company requests shareholders not toattend the General Meeting of Shareholders in person this year unless absolutely necessary regardless of your healthcondition.
Instead, the Company requests you to exercise your voting rights in writing or by electronic methods (the Internet,etc.). Please review the attached Reference Documents for General Meeting of Shareholders, and exercise your voting
rights.
Instructions for the Exercise of Voting Rights
Exercising voting rights by mail (in writing)
Please indicate your approval or disapproval of the proposals in the enclosed voting form and then return the form to
the Company by postal mail so that your vote is received by 5:30 p.m. on Monday, June 27, 2022 (JST).
Exercising voting rights via the Internet, etc.
Please access the website specified by the Company for exercising your voting rights (https://evote.tr.mufg.jp/) andexercise your voting rights by 5:30 p.m. on Monday, June 27, 2022 (JST).
Exercising voting rights by attending the General Meeting of Shareholders
Please submit the enclosed voting form to the reception on the day of the meeting.
* The Company participates in the electronic voting platform.

1. Date and Time: Tuesday, June 28, 2022, 10:00 a.m. (JST) (Reception will open at 9:00 a.m.)
2. Venue:
Large Hall, 3F, The Industry Club of Japan
4-6 Marunouchi 1-chome, Chiyoda-ku, Tokyo
3. Purpose of the Meeting
Matters to be reported:
1. The Business Report and the Consolidated Financial Statements for the 114th fiscal year (from April 1, 2021
to March 31, 2022), and the results of audits of the Consolidated Financial Statements by the Financial
Auditor and the Audit and Supervisory Committee
2. The Non-consolidated Financial Statements for the 114th fiscal year (from April 1, 2021 to March 31, 2022)
Matters to be resolved:
Proposal No. 1
Appropriation of Surplus
Proposal No. 2
Partial Amendments to the Articles of Incorporation
Proposal No. 3
Election of Six Directors (Excluding Audit and Supervisory Committee Members)
Proposal No. 4
Revision of Remuneration Amount for Directors (Excluding Audit and Supervisory
Committee Members)
Proposal No. 5
Partial Revision of Remuneration Details and Amounts Associated with the Continuationof a Performance-Linked Share-Based Remuneration Plan for Directors and Executive
Officers-1-

- If you attend the meeting in person, please submit the enclosed voting form to the reception. In addition, please bring this notice withyou for reference during the meeting.
- If there are any modifications to the Reference Documents for General Meeting of Shareholders, the Business Report, theConsolidated Financial Statements, and the Non-consolidated Financial Statements, such modifications will be published on the
Company’s website.

The Company’s website (https://www.toyokanetsu.co.jp/)-2-Reference Documents for General Meeting of Shareholders
Proposal No. 1

Appropriation of Surplus

The Company recognizes the return of profit to its shareholders as a key management priority, and has been
maintaining a basic policy for the return of profit to shareholders to optimize the balance between financial soundness
and the return of profit to its shareholders.
In accordance with the policy for the return of profit to shareholders, the Company proposes to pay year-end
dividends for the 114th fiscal year as follows:
Year-end dividends(1) Type of dividend property
To be paid in cash.
(2) Allotment of dividend property and their aggregate amountThe Company proposes to pay a dividend of ¥145 per common share of the Company.
In this event, the total dividends will be ¥1,197,459,445.
(3) Effective date of dividends of surplus
June 29, 2022
<Reference>
Policy for return of profit to shareholders (fiscal year ended March 31, 2022)- Consolidated dividend payout ratio: set at 50% or more.
(However, the lower limit will be set at ¥100 per share annually.)- Consolidated total return ratio: not set, but to be flexibly adjusted according to the performance.
- Effective period of the policy: For three fiscal years, from the fiscal year ended March 31, 2020, to the fiscal year ending March 31,
2022. A review will be made at the expiry of the period.

-3-

Proposal No. 2
1.
(1)

(2)

2.

Partial Amendments to the Articles of Incorporation

Reasons for the proposal
The Company proposes to amend Article 22 of the Articles of Incorporation of the Company (Convening a
Board of Directors Meeting) in order to enable the selection of a convocation authority holder and chair forboard of directors meetings from among members of the Board of Directors without limitation to theRepresentative Director for the purpose of separating the supervision function of the Board of Directors fromexecution and bolstering the function.
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.
(i) Article 14, paragraph 1 in “Proposed amendment” 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.
(ii) Article 14, paragraph 2 in “Proposed amendment” 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.
(iii) Since the provisions for Internet Disclosure and Deemed Provision of Reference Documents for the
General Meeting of Shareholders, Etc. (Article 14 of the current Articles of Incorporation) will no longer
be required, they will be deleted.
(iv) Accompanying the aforementioned establishment and deletion of provisions, supplementary provisions
regarding the effective date, etc. will be established.
Details of the amendments
The details of the amendments are as follows:(Underlined portions indicate amendments.)
Current Articles of Incorporation

Proposed amendment

Article 1 to Article 13. (Omitted)

Article 1 to Article 13. (Unchanged)(Internet disclosure and deemed provision of reference(Deleted)

documents for general shareholders meeting)
Article 14.
The Company, by disclosing through the internet in conformity
with legal acts and decrees the information to be stated orregistered in the reference documents, operating reports,financial statements and consolidated financial statements, may
deem these to have been provided for the shareholders inconjunction with the convening of the general shareholders
meeting.
(Newly established)(Measures, etc. for Providing Information in Electronic Format)
Article 14.
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.

-4-Current Articles of Incorporation

Proposed amendment
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 from statementsin the paper-based documents to be delivered toshareholders who requested the delivery of paper-based
documents by the record date of voting rights.

Article 15 to Article 21. (Omitted)

Article 15 to Article 21. (Unchanged)(Convening a Board of Directors Meeting)
Article 22.

(Convening a Board of Directors Meeting)
Article 22.

1. The meeting of the Board of Directors shall be convened
and chaired by the Representative Director. If the

1. The meeting of the Board of Directors shall be convened
and chaired by a person selected from among directors byRepresentative Director is unable to act, such meeting shallbe convened and chaired by another director in the orderresolution of the Board of Directors. If a director selected isunable to act, such meeting shall be convened and chaired

previously determined by the Board of Directors.

by another director in the order previously determined by
the Board of Directors.

2. The notice for convening a meeting of the meeting of theBoard of Directors shall be dispatched to each director no

2. The notice for convening a meeting of the meeting of theBoard of Directors shall be dispatched to each director nolater than three (3) days prior to the date of the meeting,provided, however, that such period of notice may belater than three (3) days prior to the date of the meeting,provided, however, that such period of notice may be

shortened in case of urgent business.
3. The meeting of the Board of Directors may be held without

shortened in case of urgent business.
3. The meeting of the Board of Directors may be held without

the convening procedures with the consent of all the
directors.

the convening procedures with the consent of all the
directors.

Article 23 to Article 41. (Omitted)

Article 23 to Article 41. (Unchanged)

Supplementary Provisions

Supplementary Provisions(Transitional Measures for Immunity for Statutory Auditors)(Transitional Measures for Immunity for Statutory Auditors)
Article 1.

1. The Company may relieve the statutory auditors (including
former statutory auditors) of the liability for damage as

1. The Company may relieve the statutory auditors (including
former statutory auditors) of the liability for damage asprovided for under Article 423 Paragraph 1 of the Corporate
Law regarding acts undertaken before the close of the 107th

provided for under Article 423 Paragraph 1 of the Corporate
Law regarding acts undertaken before the close of the 107th

ordinary general shareholders meeting to the extent
specified by laws upon resolution of the Board of Directors.

ordinary general shareholders meeting to the extent
specified by laws upon resolution of the Board of Directors.

2. Agreements limiting the liability as provided for under
Article 423 Paragraph 1 of the Corporate Law regarding

2. Agreements limiting the liability as provided for under
Article 423 Paragraph 1 of the Corporate Law regarding

acts undertaken by the external statutory auditors (including
the former external statutory auditors) before the close ofacts undertaken by the external statutory auditors (including
the former external statutory auditors) before the close of

the 107th ordinary general shareholders meeting shall begoverned by the provisions of Article 34 of the Articles of

the 107th ordinary general shareholders meeting shall begoverned by the provisions of Article 34 of the Articles ofIncorporation before their revision by resolution of the said
ordinary general shareholders meeting.

Incorporation before their revision by resolution of the said
ordinary general shareholders meeting.

(Newly established)(Transitional Measures for Providing Informational Materials
for the General Meeting of Shareholders in Electronic Format)
Article 2.

-5-

Current Articles of Incorporation

Proposed amendment
2. The deletion of Article 14 (Internet disclosure and deemed
provision of reference documents for general shareholders
meeting) in the pre-amended Articles of Incorporation andthe establishment of the new Article 14 (Measures, etc. for
Providing Information in Electronic Format) in theamended Articles of Incorporation shall be effective fromthe 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) (hereinafter referred to as the“Date of Enforcement”).
2. Notwithstanding the provision(s) of the preceding
paragraph, Article 14 of the pre-amended Articles ofIncorporation shall remain effective regarding any general
meeting of shareholders held on a date within six months
from the Date of Enforcement.
3. This article shall be deleted on the date when six months
have elapsed from the Date of Enforcement or three months
have elapsed from the date of the general meeting ofshareholders in the preceding paragraph, whichever is later.

Note: Some underlining does not coincide with the Japanese version because of translation adjustments.

-6-

Proposal No. 3

Election of Six Directors (Excluding Audit and Supervisory Committee Members)

The terms of office of all four Directors (excluding Audit and Supervisory Committee Members) will expire at theconclusion of this meeting. Therefore, the Company proposes to add two outside Directors this time and elect six
Directors.
Furthermore, as members of the “Nomination and Compensation Committee” (the majority of which are outside
Directors), which was established voluntarily, all members of the Audit and Supervisory Committee madedeliberations according to the criteria and procedures stipulated in the Company’s “Corporate Governance
Guidelines,” participated in processes to report and make decisions in the meeting of the Board of Directors, andreexamined the above in the Audit and Supervisory Committee. As a result, the Audit and Supervisory Committee
has determined that the procedures for nominating candidates for Director who are not Audit and Supervisory
Committee Members are appropriate and each candidate is eligible to be a Director of the Company.
The candidates for Director (excluding Audit and Supervisory Committee Members) are as follows:
Candidate
No.
1

Name

Current position

Toru Yanagawa

2

Takashi Owada

Chairman and Director
President and Representative
Director

3

Keisuke Kodama

Director

4

Akira Kakihara―

5

Yukari Sakai

―

―

6

Makiko Sato――

Responsibility, etc.
―

Reelection―

Reelection

Executive Vice President and
Deputy President
Senior Executive Officer,
Deputy President and Division
Manager of Business
Innovation Division

Reelection: Candidate for Director to be reelected
New election: Candidate for Director to be newly elected
Outside: Candidate for Outside Director to be elected
Independent: Independent officer as defined by the securities exchange-7-

Attribute

Reelection

New election
New election
OutsideIndependent
New election
OutsideIndependent

Candidate
No.

Name
(Date of birth)

Career summary, position and responsibility in the Company
Apr. 1975
Apr. 1998

1

2

Number of theCompany’s shares
ownedJoined the Company
General Manager of Machinery & Plant Sales
Department of Sales Division
July 2000
Executive Officer and General Manager ofMachinery & Plant Sales Department of Sales
Toru Yanagawa
Division(February 26, 1953)
July 2003
Senior Executive Officer and Deputy Division
Manager of Plant & Machinery Division
Reelection
June 2005
Director, Senior Executive Officer, and Deputy
Division Manager of Plant & Machinery
Tenure as Director (at the20,113 shares
Divisionconclusion of this meeting)17 years
Apr. 2008
Director
Apr. 2008
President & Representative Director of TOYO
Attendance to the Board of
KANETSU SOLUTIONS K.K. (currently the
Directors meetings
Company)
13/13
Apr. 2014
President and Representative Director of theCompany
Apr. 2022
Chairman and Director (current position)(Significant concurrent positions outside the Company)–
Reasons for nomination as candidate for Director
He has superior discernment and performance not only in his pursuits in the plant & machinery business that he has
mainly engaged in since joining the Company, but also in the logistics solutions business. Moreover, given his excellent
management skills, cultivated through his experience as President of the Company and as Chairman since taking officein April 2022, the Company proposes his reelection as Director.
Apr. 1985
Joined the Company
Oct. 2002
Transferred to TOYO KANETSU
SOLUTIONS K.K. (currently the Company),and General Manager of System Sales No. 1
Department, Marketing Division
July 2006
General Manager of SI Department, System
DivisionTakashi Owada
Apr. 2008
Executive Officer and General Manager of(June 19, 1962)
System Division
Apr. 2015
Senior Executive Officer
Reelection
Apr. 2018
Transferred to the Company, and Executive
Officer
Tenure as Director (at the
1,987 shares
Seconded to TOYO KANETSU SOLUTIONS
conclusion of this meeting)
K.K. (currently the Company), and Director
3 years
and Senior Executive Officer
Apr. 2019
Managing Officer and Division Manager ofAttendance to the Board of
Logistics Solutions Division of the Company
Directors meetings
June 2019
Director, Managing Officer and Division
13/13
Manager of Logistics Solutions Division
Apr. 2021
Director, Executive Vice President and Division
Manager of Logistics Solutions Division
Apr. 2022
President and Representative Director (current
position)(Significant concurrent positions outside the Company)–
Reasons for nomination as candidate for Director
He has superior discernment and performance in his pursuits in the logistics solutions business that he has mainly
engaged in since joining the Company. Moreover, given his excellent management skills, cultivated through his
experience as Division Manager of the Logistics Solutions Division and as President since taking office in April 2022,
the Company proposes his reelection as Director.

-8-

Candidate
No.

Name
(Date of birth)

Career summary, position and responsibility in the Company
Apr. 1982
July 2006

3

Number of theCompany’s shares
ownedJoined the Company
General Manager of Domestic Sales
Department of Plant & Machinery Division
Apr. 2009
General Manager of Corporate Management
Department of Corporate Management Division
Apr. 2010
Executive Officer and General Manager ofCorporate Management Department ofCorporate Management Division
Apr. 2012
Seconded to TOYO KANETSU SOLUTIONS
K.K. (currently the Company), and Executive
Keisuke Kodama
Officer(December 26, 1958)
Apr. 2013
Transferred to TOYO KANETSU
SOLUTIONS K.K., and Senior Executive
Reelection
Officer
Apr. 2015
Transferred to the Company, Senior Executive
Tenure as Director (at the
5,994 shares
Officer and Deputy Division Manager ofconclusion of this meeting)Corporate Management Division
7 years
June 2015
Director and Deputy Division Manager ofAttendance to the Board of
Corporate Management Division
Directors meetings
Apr. 2016
Director and General Manager of Corporate
13/13
Management Division
Apr. 2018
Director and General Manager of Corporate
Management Division
Apr. 2019
Director, Senior Managing Officer and Division
Manager of Corporate Division
Apr. 2020
Director and Executive Vice President
Apr. 2022
Director, Executive Vice President and Deputy
President (current position)(Significant concurrent positions outside the Company)–
Reasons for nomination as candidate for Director
He has superior discernment and performance not only in his pursuits in the plant & machinery business that he has
mainly engaged in since joining the Company, but also in the Corporate Division and the logistics solutions business.
Moreover, given his excellent management skills, cultivated through his experience as General Manager of theDomestic Sales Department of the plant & machinery business, Division Manager of Corporate Division, and as an
officer, etc., in charge of our businesses, the Company proposes his reelection as Director.

-9-Candidate
No.

Name
(Date of birth)

Career summary, position and responsibility in the Company
Apr. 1983

4

Number of theCompany’s shares
ownedJoined The Saitama Bank, Limited (currently
Resona Bank, Limited)
Apr. 2003
General Manager of Department No. 1 of
Saitama Head Office Branch, Saitama Resona
Bank, Limited
July 2005
General Manager of Shiki Branch
June 2007
General Manager of Muromachi Branch of
Resona Bank, Limited
Apr. 2013
General Manager of International Business
Department
Oct. 2015
Seconded to the Company
Oct. 2016
Transferred to the Company, and Executive
Officer and General Manager of Corporate
Akira Kakihara
Management Department of Corporate
Sept. 27, 1958
Management Division
New election
Mar. 2018
Director of Kankyo Research Institute Inc.
(current position)
Tenure as Director (at theApr. 2018
Managing Officer and Deputy General Manager
0 sharesconclusion of this meeting)of Corporate Management Division of the- yearCompany
Apr. 2020
Managing Officer, Division Manager of Life &Attendance to the Board ofWork Environmental Business Division and
Directors meetings
Deputy Division Manager of Corporate
Division
Apr. 2021
Senior Managing Officer, Division Manager ofLife & Work Environmental Business Division
and Deputy Division Manager of Corporate
Division
Apr. 2021
Director of Eco Analysis Corporation (current
position)
Apr. 2022
Senior Executive Officer, Deputy President andDivision Manager of Business Innovation
Division of the Company (current position)(Significant concurrent positions outside the Company)
Director of Kankyo Research Institute Inc.
Director of Eco Analysis Corporation
Reasons for nomination as candidate for Director
Given his rich experience working at financial institutions, and his excellent management skills, cultivated through his
experience as Deputy Division Manager of Corporate Division and Division Manager at Business Innovation Divisionetc., that he has mainly engaged in since Joining the Company, the Company proposes his election as Director.

- 10 -

Candidate
No.

Name
(Date of birth)

Career summary, position and responsibility in the Company
Apr. 1991
Jan. 2005
June 2005

5

Number of theCompany’s shares
ownedJoined Nomura Securities Co.,Ltd.
Director of Corporate Tune Co., Ltd.
Standing Outside Audit and Supervisory Board
Yukari Sakai
Member of UNITED ARROWS LTD.
(June 23, 1968)
June 2008
Outside Auditor of REPROCELL Inc.
Sept. 2013
Outside Auditor of Beauty Kadan Co., Ltd.
New election
June 2016
Outside Director (Standing Audit andOutsideSupervisory Committee Member) of UNITED
Independent
ARROWS LTD. (current position)
0 sharesOct. 2017
Outside Director (Audit and Supervisory
Tenure as Director (at theCommittee Member) of Tea Life Co., Ltd.
conclusion of this meeting)Mar. 2019
External Director (Audit & Supervisory Board- years
Member) of Uzabase, Inc.
June 2021
Outside Director of PACIFIC METALS CO.,Attendance to the Board ofLTD. (current position)
Directors meetings(Significant
concurrent
positions outside the Company)
Outside Director (Standing Audit and Supervisory Committee
Member) of UNITED ARROWS LTD.
Outside Director of PACIFIC METALS CO., LTD.
Reasons for nomination as candidate for outside Director and summary of expected roles
She has broad knowledge of corporate management overall, as well as finance and accounting, cultivated through her
operations experience at a securities company and her career as an outside officer in a wide range of fields, and she isexpected to provide suggestions on the Group’s medium- to long-term growth strategies and improvement of corporate
value. Moreover, having judged that she will contribute to enhanced supervisory potential across the overallmanagement, the Company proposes her election as outside Director. If her appointment is approved, she will also be
involved in the selection of candidates for the Board of Directors and in the process of determining the remuneration for
officers and other matters from an objective and neutral viewpoint as a member of voluntary advisory committees.

- 11 -

Candidate
No.

Name
(Date of birth)

Career summary, position and responsibility in the Company
Apr. 2000
Oct. 2005
Oct. 2006

6

Notes:

1.
2.
3.
4.

5.

6.

Number of theCompany’s shares
ownedJoined CyberAgent, Inc.
Seconded to WEDDING PARK CO., LTD.
Seconded to CyberAgent Ventures, Inc.
(currently CyberAgent Capital,Inc.)
June 2016
Established iSGS Investment Works Inc., andDirector and Representative Partner (current
position)
Makiko Sato
(November 6, 1977)
Dec. 2018
Outside Director of LiB, Inc. (current position)
June 2021
Member of the Promotion Committee of Tokyo
New election
Data Platform Council (current position)
OutsideMay 2022
Member of the Committee for Evaluating theIndependent
Conclusion of the “Exploration andDevelopment of Global Entrepreneurship for
0 shares
Tenure as Director (at theNEXT generation” Project at Ministry ofconclusion of this meeting)
Education, Culture, Sports, Science and- years
Technology (current position)(Significant concurrent positions outside the Company)
Attendance to the Board of
Director and Representative Partner of iSGS Investment Works
Directors meetings
Inc.
Outside Director of LiB, Inc.
Member of the Promotion Committee of Tokyo Data Platform
CouncilMember of the Committee for Evaluating the Conclusion of the“Exploration and Development of Global Entrepreneurship forNEXT generation” Project at Ministry of Education, Culture,
Sports, Science and Technology
Reasons for nomination as candidate for outside Director and summary of expected roles
She has rich experience and knowledge regarding corporate management overall, cultivated through her investment
activities at a venture capital company, etc. and her role as a corporate manager at such companies, and she is expected
to provide suggestions on the Group’s medium- to long-term growth strategies and improvement of corporate value.
Moreover, having judged that she will contribute to enhanced supervisory potential across the overall management, theCompany proposes her election as outside Director. If her appointment is approved, she will also be involved in theselection of candidates for the Board of Directors and in the process of determining the remuneration for officers andother matters from an objective and neutral viewpoint as a member of voluntary advisory committees.
There is no special interest between any of the candidates for Director and the Company.
Yukari Sakai and Makiko Sato are candidates for outside Director.
If the election of Yukari Sakai and Makiko Sato is approved, the Company plans to enter into agreements with them tolimit their liability to the amount stipulated by laws and regulations.
The Company has entered into a directors and officers liability insurance policy as provided for in Article 430-3, Paragraph
1 of the Companies Act with an insurance company. This policy insures Directors (including those who are Audit andSupervisory Committee Members), Corporate Auditors, and Executive Officers of the Company and its subsidiaries.
Insurance premiums are borne by the Company. The policy will cover losses, such as indemnification and court costs,
incurred in cases where an insured receives a claim for damages arising from the performance of duties as an officer andassumes legal liability for the damages. If the candidates are appointed and assume the office as Director, they will be
included as insureds in the policy. In addition, when the insurance policy is renewed, the Company plans to renew thepolicy with the same terms.
Yukari Sakai and Makiko Sato satisfy the requirements for an independent officer as provided by Tokyo Stock Exchange,
Inc., and if their election is approved, the Company plans to submit notification for their appointment as independent
officers.
The name of Makiko Sato on the family register is Makiko Shigematsu.

- 12 -

Main expected areas of expertise
Corporate
management /Organizationmanageme
nt

1
2
3
4
5

Toru
Yanagawa(Male) (69)
TakashiOwada (Male)(60)
Keisuke
Kodama(Male) (63)
Akira
Kakihara(Male) (63)Yukari Sakai(Female) (54)6

Makiko Sato
(Female) (44)7Kazuto Abe(Male) (69)8910

Toshiaki
Hiwatari(Male) (76)
Shigeharu
Nakamura(Male) (68)Kazuo Ushida(Male) (69)

Legal, risk
management

Finance,accounting

Internationalexperience

IT /Innovation,
ESG, SDGs
newbusiness

●

●

●
●
●

●

●
●
●

Audit andSupervisory
Committee
MemberIndepend
ent
Outside●●Audit andSupervisory
Committee
MemberIndepend
ent
Outside●●Audit andSupervisory
Committee
MemberIndepend
ent
Outside

●

●

●

●

●

●
●
●
●

●

●

●
●

- 13 -●●●

Audit andSupervisory
Committee
MemberProduction,engineering
/ R&D

●
●

●

Independ
ent
OutsideIndepend
ent
OutsideIndustry
experience/ Sales●Proposal No. 4

Revision of Remuneration Amount for Directors (Excluding Audit and Supervisory Committee
Members)

The remuneration amount for Directors of the Company (excluding Audit and Supervisory Committee Members)
was set at ¥15 million or less per month (however, excluding employee salaries) at the 107th Annual General Meetingof Shareholders held on June 26, 2015. However, as part of our efforts to further strengthen corporate governance,
and to diversify the Board of Directors, we have decided to propose to increase the number of Outside Directors who
are not Audit and Supervisory Committee Members by two at this General Meeting in Proposal No. 3. In addition,in consideration of the incentive to achieve the major growth targets in the new medium-term management plan
(2022-2024) announced on May 13 of this year, we propose to change the remuneration amount for Directors(excluding Audit and Supervisory Committee Members) to ¥20 million or less per month (of which ¥1.7 million orless for Outside Directors). In addition, the remuneration amount for Directors (excluding Audit and Supervisory
Committee Members) shall not include the portion of employee salaries of Directors concurrently serving as
employees.
We believe that this proposal is appropriate because it will increase the number of Outside Directors whose
compensation is a fixed amount in cash, which will contribute to increasing the diversity of the Company’s Board of
Directors and raising their awareness of the need to contribute to improving the Company’s performance andincreasing its corporate value over the medium to long term; because the method of determining compensation will
not change, and increases in compensation will only occur when the Company’s performance improves; and because
the cash compensation amount under this revision is appropriate given the Company’s performance trends, position
structure and stock price level.
In addition, at the Board of Directors meeting held on February 26, 2021, the Company established a policy andprocedures for determining the remuneration of Directors (excluding Outside Directors and Directors who are Audit
and Supervisory Committee Members). If this proposal is approved as originally proposed, the Company plans topartially revise this policy as described in [Reference] (see Page 18). This proposal is necessary and reasonable forthe granting of remuneration to Directors in accordance with the policy after the relevant revisions, and we believethat it is appropriate from that perspective.
The number of Directors (excluding Audit and Supervisory Committee Members) is currently four (including no
Outside Directors), but if Proposal No. 3, “Election of Six Directors (Excluding Audit and Supervisory Committee
Members),” is approved and passed as proposed, the number of Directors (excluding Audit and Supervisory
Committee Members) will be six (including two Outside Directors).
With respect to the revision of the monthly remuneration amount for Directors other than Audit and Supervisory
Committee Members, as in the case of the procedures for the election of Directors, all Audit and Supervisory
Committee Members, as members of the “Nomination and Compensation Committee,” participated in the
deliberation and reporting process in accordance with the “Corporate Governance Guidelines” of the Company, and
the Audit and Supervisory Committee has also reviewed the matter again and has determined that the decisionmaking procedures are appropriate and the amount and other details of remuneration are appropriate.

- 14 -

Proposal No. 5

Partial Revision of Remuneration Details and Amounts Associated with the Continuation of a
Performance-Linked Share-Based Remuneration Plan for Directors and Executive Officers

1. Reasons for the Proposal and Reasons Justifying such Remuneration, Etc.
This proposal requests the approval of the remuneration amount, etc. and the maximum number of shares, etc., for
the Performance-Linked Share-Based Remuneration Plan (hereinafter referred to as “Plan”) for the Company’s
Directors (excluding Outside Directors and Directors who are Audit and Supervisory Committee Members. The same
shall apply hereinafter unless otherwise noted.) and Executive Officers who are not Directors but have a rank of atleast Managing Executive Officer (hereinafter collectively referred to as “Directors, etc.”), which was approved at
the 111th Annual General Meeting of Shareholders held on June 27, 2019, in order to partially revise the content of
the Plan in accordance with the continuation of the Plan. Moreover, the resolution of details regarding the Plan shallbe entrusted to the Board of Directors, within the amount shown in section 3 of this proposal, below.
The revision of the Plan is intended to clarify the link between the remuneration of Directors, etc. and the Company’sbusiness performance and stock value, and to make Directors, etc. share the benefits and risks associated with stock
price fluctuations with shareholders, which will further increase their awareness of their contribution to improving
the Company’s business performance and increasing its corporate value over the medium to long term more than
before. Based on such purpose, the maximum remuneration amount will be increased for the equivalent increase in
the Company’s stock price at the time of the continuation of the Plan from the stock price at the time of theestablishment of the Plan in 2019. In light of this purpose and reason, we believe that the content of this proposal isappropriate. The decision-making policy regarding the content of individual remuneration, etc. for Directors after theapproval of this proposal is as described in [Reference] below.
If Proposal No. 3, “Election of Six Directors (Excluding Audit and Supervisory Committee Members),” is approved
and passed as originally proposed, the number of Directors of the Company applicable to the Plan will be four at theconclusion of this General Meeting of Shareholders. As stated above, the Plan is also applicable to Executive Officers
who are not Directors but have a rank of at least Managing Executive Officer, and together with Directors, shall beapplicable to ten individuals.
Moreover, as per the procedures for revising the remuneration amount for Directors, regarding the partial revision of
the remuneration details and amounts associated with the continuation of a performance-linked share-based
remuneration plan for Directors and Executive Officers, all members of the Audit and Supervisory Committee
participated in the deliberation and reporting processes as members of the “Nomination and Compensation
Committee,” pursuant to the Company’s “Corporate Governance Guidelines.” In addition, the Audit and Supervisory
Committee reexamined the above and has determined that the procedures for determining the remuneration for
Directors, etc. are appropriate and that the revisions are reasonable.
2. Revised Details of the Plan
The details of the Plan are revised as follows in 3 below. The main revised details are as follows.
Item

Before Revision

After Revision

Upper Limit on the Amountof Trust Money to be¥150 million (of which ¥111 million is forContributed by theCompany

the Directors) for each of the Plan Periods¥167 million (of which ¥120 million is forthe Directors) for each of the Plan Periods

3. Remuneration Amount and Details, etc. of the Plan after the Revision(1) Overview of the Plan
The Plan is a performance-linked share-based remuneration plan that will use money contributed by theCompany as capital to acquire the Company’s shares via a trust (hereinafter, the trust established based on thePlan shall be referred to as the “Trust”) and, based on the Regulations for the Provision of Shares for the
Performance-linked Share-based Remuneration Plan stipulated by the Company, each of the Directors, etc. will
be provided with shares of the Company that are in proportion to the number of points assigned to each of the
Directors, etc., and cash that is in proportion to the market price of the shares of the Company (hereinaftercollectively referred to as the “Shares of the Company, etc.”) through the Trust. The Directors, etc. shall receive
Shares of the Company, etc. after the finalization of results for the final business year of each Plan Period (asdefined in (3) below), in principle.
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(2)Individuals Eligible for the Plan
Individuals eligible for the Plan shall be Directors, etc.

(3)

Plan Periods for the Plan
The period shall be the three fiscal years (hereinafter referred to as “Eligible Period”) from the fiscal year
ending on the last day of March 2023 to the fiscal year ending on the last day of March 2025 and each of thethree fiscal years (if the period of a medium-term management plan to be established after the elapse of the
Eligible Period differs from a three fiscal year period, the fiscal year period corresponding to the medium-term
management plan shall apply.) beginning after the elapse of the Eligible Period (each of these periods, together
with the Eligible Period, is hereinafter referred to as “Plan Period”).

(4)

Trust Period
The period shall be from August 26, 2019 until the termination of the Trust. (No specific termination date has
been set, and the Trust shall continue as long as the Plan continues.) Moreover, the Plan will be terminatedupon delisting of the Company’s shares, abolition of the Regulations for the Provision of Shares for the
Performance-linked Share-based Remuneration Plan, etc.

(5)Upper Limit on the Amount of Trust Money to be Contributed by the Company to the Trust as Capital for
Acquiring Shares
Subject to the approval of the partial revision of the Plan at this General Meeting of Shareholders, the Company
will contribute up to ¥167 million (of which, ¥120 million is for Directors) to the Trust as funds for theacquisition of the Company’s shares (hereinafter referred to as “Share Acquisition Funds”) in order to provide
the Company’s shares to the Directors, etc. under the Plan for the Eligible Period (Note). During the Eligible
Period, the Company may make additional contributions to the Trust to fund the acquisition of shares to theextent that the total contribution amount, including the initial contribution amount, is ¥167 million (of which,¥120 million is for Directors).
In addition, after the Eligible Period and until the termination of the Plan, the Company shall contribute to theTrust within the upper limit of ¥167 million (of which ¥120 million is for Directors) for each of the Plan Periods.
However, in the case of such additional contribution, if there are shares (hereinafter referred to as “Remaining
Shares.” However, this excludes shares of the Company equivalent to the number of points (refer to (7) below
for information about points) granted to Directors, etc. for each of the immediately preceding Plan Periods forwhich the granting of shares to Directors, etc. has not yet been completed.) and money (hereinafter collectively
referred to as “Remaining Shares, etc.”) remaining in the trust assets at the end of the Plan Period immediately
preceding the Plan Period for which such additional contribution is to be made, the total amount of such
Remaining Shares, etc. and the trust money to be additionally contributed shall be within the respective
maximum amounts. The Company may additionally entrust funds for the acquisition of shares during the Plan
Period, including during the Eligible Period, to the extent that the total amount of contributions during the Plan
Period is equal to the respective maximum amounts mentioned above.
Note: In addition to the aforementioned capital to acquire shares of the Company, the actual money entrusted
to the Trust by the Company includes the expected amount of expenses required for managing the Trustand trust administrator remuneration, etc.

(6)

Method of Acquisition of the Company’s Shares by the Trust and the Maximum Number of Shares to be
Acquired
It is planned for the Trust to acquire the Company’s shares through the stock market or subscribing to theCompany’s disposal of treasury shares by using the funds contributed by the Company as in (5). The Company
shall not issue new shares. Consequently, the acquisition of shares of the Company by the Trust will not increase
the total number of issued shares of the Company and dilution of the shares will not occur. Details regarding
the method of acquisition will be determined and disclosed by the Company after this General Meeting of
Shareholders.
Moreover, following the establishment of the Trust, a maximum of 123,000 shares will be promptly acquiredin the Eligible Period. In addition, the aforementioned number of shares will be the maximum number of shares
to be acquired in each of the Plan Periods after the end of the Eligible Period.
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(7)Method of Calculating the Shares of the Company to be Conferred to Each of the Directors, etc. and Upper
Limits Thereof
The Company shall grant each of the Directors, etc., points every fiscal year according to their position and thedegree of attainment of performance goals, in accordance with the Regulations for the Provision of Shares for
the Performance-linked Share-based Remuneration Plan stipulated by the Board of Directors of the Company.
For each Plan Period, the points conferred to Directors, etc., for one fiscal year shall be at most 41,000 points(corresponding to 41,000 shares; of which 30,340 points are for the Directors [corresponding to 30,340 shares]),and the points conferred to Directors, etc., in the three fiscal years of the Eligible Period shall be at most 123,000
points (corresponding to 123,000 shares; of which 91,020 points are for the Directors [corresponding to 91,020
shares]).
Moreover, one point shall correspond to one share of the Company (fractions below one point will be discarded)
in relation to the shares provided to the Directors. However, if stock splits, allotment without consideration,
share consolidation, or the like, are implemented for the shares of the Company following approval by thegeneral meeting of this proposed program, reasonable adjustments will be made to the conversion rate of theshares of the Company per point according to such rate.
(Calculation of Points)
Directors, etc., who are not responsible for business divisions or are responsible for corporate divisions:
Conferred points = base points for position × performance-linkage coefficient ((1) × 1.0)*
Directors, etc., responsible for business divisions:
Conferred points = base points for position × performance-linkage coefficient ((1) × 0.5 + (2) × 0.5)**
The performance linkage coefficients (1) and (2) vary between 0% and 144% according to theachievements in ROE and the operating profits of each division (the segment profits).

(8)

Provision of Shares of the Company to Each of the Directors, etc.
In principle, following the determination of the performance of the final fiscal year of each of the Plan Periods,
if the Directors, etc., fulfill the conditions for beneficiaries stipulated in the Regulations for the Provision of
Shares for the Performance-linked Share-based Remuneration Plan, and on the condition that the Directors,
etc., follow specified beneficiary determination procedures, the Trust will provide the Directors, etc., shares of
the Company in accordance with the cumulative total of points conferred in each of the Plan Periods. However,from the perspective of ensuring capital for the payment of taxes, a number of shares of the Company
corresponding to 50% of the cumulative points shall be converted into cash by the Trust, and the cash amountequal to the amount of the converted shares shall be paid to the Directors, etc.

(9)

Exercise of Voting Rights of Shares of the Company in the Trust
To ensure neutrality to management, the voting rights of the shares of the Company in the Trust (that is, theshares of the Company prior to their provision to Directors, etc., as noted in (8)) shall not be exercised during
the trust period.

(10) Treatment of Dividends for Shares of the Company in the Trust
Dividends of the shares of the Company in the Trust shall be received by the Trust for the acquisition of sharesof the Company and for trust fees payable for the Trust.
(11) Treatment upon Termination of the Trust
With regard to target shares among the residual assets of the Trust at the time of termination of the Trust, theCompany plans to acquire all such shares without consideration and cancel them by resolution of the Board of
Directors. In addition, of the residual assets of the Trust at the time of termination of the Trust, the Company
plans to provide the balance of money to the Directors, etc., currently serving in proportion to the number ofpoints they have each accumulated as of that time.

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[Reference] Policy and procedures for determining remuneration for Directors (excluding Outside Directors andDirectors who are Audit and Supervisory Committee Members) after conclusion of the general meeting.
In determining remuneration for individual Directors (excluding Outside Directors and Directors who are Audit andSupervisory Committee Members; “Executive Directors”), the Company will do so in accordance with the policy
and procedures, etc., that are set forth below.
(a) Basic policy・ Our basic policy on remuneration for executive Directors is to: 1) use a remuneration structure in which
remuneration, earnings, and stock value are linked to each other in order to: i) make executive Directors moreeager to contribute to improving the Company’s earnings and enhancing its corporate value in the medium tolong term; and ii) ensure that remuneration fully functions as incentive to share profit and risk from stock pricefluctuations with shareholders; and 2) set remuneration for each of individual executive Director at fair levels
reflecting their responsibilities at the time of determination. Remuneration for Directors (excluding Directors
who are Audit and Supervisory Committee Members) consists of base pay (monetary and fixed), performancelinked monetary remuneration, and performance-linked share-based remuneration.
・ The Company pays solely base pay (monetary and fixed) to Directors who are Audit and Supervisory
Committee Members serving a supervision function and to non-executive Directors who are not Audit andSupervisory Committee Members in light of their duties.
・ Regarding matters for a remuneration determination method for individual non-executive Directors who are
not Audit and Supervisory Committee Members, we ensure the transparency of our remuneration determination
processes using a method identical to the remuneration determination method described in item (e) below for
individual executive Directors.
(b)

Determination policy for individual base pay (monetary), etc. (including policy for determining remuneration
payment timing and conditions)・ Base pay for Directors of the Company (excluding Directors who are Audit and Supervisory Committee
Members), being fixed monthly pay, is determined in accordance with title-by-title remuneration tables
prepared beforehand in comprehensive consideration of the levels of base pay for directors at peers, theCompany’s business performance, and its employee salary levels, etc.
・ Such base pay is paid monthly as fixed monthly pay over next fiscal year, coupled with performance-linked
monetary remuneration as described in item “(c) 1” below.

(c)

Determination policy for the description of performance-linked monetary remuneration, etc., and non-monetary
remuneration, etc. (“Performance-Linked Share-Based Remuneration”), and the calculation methods foramounts or numbers for them (including policy for determining remuneration payment timing and conditions).
1. Determination policy for the description of performance-linked monetary remuneration, etc., and thecalculation method for amounts or numbers for it
・ Performance-linked monetary remuneration comes in the form of cash remuneration reflecting key
performance indicators (KPIs) in order to raise personnel’s enthusiasm to enhance business performancefor each fiscal year, and is an amount calculated based on the amount of consolidated net income before
taxes and other adjustments for a given fiscal year while also considering the projected amount ofconsolidated net income before taxes and other adjustments for the next fiscal year.
・ By resolution of the General Meeting of Shareholders, Directors’ bonuses could potentially be paid out inan amount constituting a portion of profit only if the amount of consolidated net income before taxes andother adjustments and the amount of stock dividends are at or above certain levels.
2. Determination policy for the description of Performance-Linked Share-Based Remuneration, etc., and thecalculation method for amounts or numbers for it(i) Description of Performance-Linked Share-Based Remuneration, etc., and amount and calculation
method・ Each fiscal year, the Company grants points described below for Performance-Linked Share-BasedRemuneration to executive Directors and non-director Executive Officers at or above Managing
Executive Officer level (“Directors, etc.”) in accordance with title and the achievement rates forbusiness performance targets under the medium-term management plan, etc. in conformity to: i)- 18 -

Regulations for the Provision of Shares for the Performance-Linked Share-Based Remuneration Plan
for Directors as resolved at a Board of Directors meeting on May 14, 2019; ii) Determination of
Remuneration Details and Amounts Associated with the Introduction of a Performance-Linked ShareBased Remuneration Plan for Directors and Executive Officers as resolved at the 111th Annual
General Meeting of Shareholders on June 27, 2019; and iii) Proposal No. 5 resolved at the 114th
Annual General Meeting of Shareholders on June 28, 2022, namely, “Partial Revision of
Remuneration Details and Amounts Associated with the Continuation of a Performance-Linked
Share-Based Remuneration Plan for Directors and Executive Officers.”
Directors, etc., who are not responsible for business units or are responsible for corporate divisions:
Conferred points = base points for position × performance-linkage coefficient ((1) × 1.0)*
Directors, etc., responsible for business divisions:
Conferred points = base points for position × performance-linkage coefficient ((1) × 0.5 + (2) × 0.5)*(*)
The performance linkage coefficients (1) and (2) vary between 0% and 144% according to
the target achievements in ROE and the operating profits of each division.
・ In the three-year period from the fiscal year ending March 31, 2023, to the fiscal year ending March
31, 2025 (“Initial Eligible Period”; an expected medium-term management plan period), points to be
conferred to Directors, etc., shall be 41,000 points a year at most (corresponding to 41,000 shares; ofwhich 30,340 points will be for executive Directors [corresponding to 30,340 shares]), and points tobe conferred to Directors, etc., for the three fiscal years of the Initial Eligible Period shall be 123,000
points at most (corresponding to 123,000 shares; of which 91,020 points will be for executive
Directors [corresponding to 91,020 shares]). Moreover, one point shall correspond to one share of theCompany in relation to the shares provided to the Directors, etc.
(ii)

Determination policy for the payment timing and conditions for Performance-Linked Share-BasedRemuneration, etc.
・ Eligible periods of the Performance-Linked Share-Based Remuneration Plan for officers shall be theInitial Eligible Period, as well as each of three fiscal year periods commencing after the elapse of it(if the period of a medium-term management plan to be established after the elapse of the Initial
Eligible Period differs from a three fiscal year period, the fiscal year period corresponding to themedium-term management plan shall apply.)
・ Shares of the Company shall be granted to Directors, etc., after a finalization of the financial results
for the final year of each eligible period, in principle, and in accordance with the number of cumulative
points conferred during the period. However, from the perspective of ensuring capital for the paymentof taxes, a number of shares of the Company corresponding to 50% of the cumulative points shall be
converted into cash by the Trust, and the cash amount equal to the amount of the converted sharesshall be paid to the Directors, etc.

(d)

Determination policy for the percentage for the amount of remuneration, etc. of individual Directors for basepay (monetary), performance-linked monetary remuneration, etc., and Performance-Linked Share-BasedRemuneration, etc.
・ The percentage of remuneration categories for executive Directors have yet to be determined due to being
decided in accordance with the financial results for a given fiscal year and next fiscal year, as well as each
executive Director’s achievement rates for ROE and unit operating profit targets for an Initial Eligible Period
and subsequent three fiscal years. This is because: i) performance-linked monetary remuneration is intended to
be in an amount calculated in accordance with previous-year and next-year financial results; and ii)
Performance-Linked Share-Based Remuneration is intended to constitute a number of shares computed inaccordance with ROE, a target KPI of a medium-term management plan for an Initial Eligible Period, and withthe operating profit of a unit each executive Director is responsible for. However, considering the purpose of
the introduction of performance-linked remuneration, the system is structured so as to ensure that the higher anofficer is in position, the more weighting of performance-linked remuneration applies.

(e)

Information on the determination method for the description of remuneration, etc., for individual executive
Directors- 19 -

As for amounts of remuneration for individual executive Directors, the Company’s Corporate Governance
Guidelines specifies the policy and procedures for determining the remuneration of Directors (excluding
Outside Directors and Directors who are Audit and Supervisory Committee Members). The Company securestransparency of its remuneration determination processes by ensuring that amounts of remuneration for
individual executive Directors are decided by resolution of a Board of Directors meeting through deliberations
and recommendation by the Nomination and Compensation Committee, the majority of which are independent
outside Directors.

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