Note: This document is a translation of the Japanese language original for convenience purposes only, and in
the event of any discrepancy, the Japanese language original shall prevail. The Company assumes noresponsibility for this translation or for direct, indirect or any other forms of damages arising from thetranslation.
(Stock Exchange Code 3992)
December 8, 2022
To Shareholders with Voting Rights:
Kozo Funatsu
President and CEO
Needs Well Inc.
4-1 Kioi-cho, Chiyoda-ku, Tokyo, JapanNOTICE OF CONVOCATION OF
THE 36TH ANNUAL SHAREHOLDERS MEETING
Dear Shareholders:
We would like to express our appreciation for your continued support and patronage.
You are hereby notified that the 36th Annual Shareholders Meeting of Needs Well Inc. (the “Company”)
will be held as described below.
If you are not able to attend the meeting, you can exercise your voting rights by either of the following
methods. To avoid the risk of COVID-19 infection, we would like to ask our shareholders to consider notattending the meeting if possible, and to exercise your voting rights after reviewing the attached Reference
Documents for the Shareholders Meeting.
[If exercising voting rights in writing]
Please indicate your votes for or against the proposals on the enclosed Voting Rights Exercise Form andreturn it such that it arrives by 5:30 p.m. on Thursday, December 22, 2022, Japan time.
[If exercising voting rights via the Internet]
Please access the voting rights exercise website designated by the Company (https://evote.tr.mufg.jp/) andenter your approval or disapproval of the proposals in accordance with the instructions onscreen by 5:30 p.m.
on Thursday, December 22, 2022, Japan time.

11. Date and Time:
2. Place:

Friday, December 23, 2022 at 10:00 a.m., Japan time
(Reception begins at 9:30 a.m.)
6F “Hall 6B,” TKP Ichigaya Conference Center located at
8 Ichigayahachiman-cho, Shinjuku-ku, Tokyo, Japan(Please refer to the map in the original Japanese document.)

3. Meeting Agenda:
Matters to be reported: The Business Report and Non-consolidated Financial Statements for theCompany’s 36th Fiscal Year (October 1, 2021 – September 30, 2022)
Proposals to be resolved:
Proposal 1:
Appropriation of Surplus
Proposal 2:
Partial Amendments to the Articles of Incorporation
Proposal 3:
Election of Eight Directors
Proposal 4:
Payment of Remuneration for Allocation of Shares with Restriction on Transfer
to Directors
4. Matters related to disclosure on the Internet
Of the documents to be provided with this Notice of Convocation, the Notes on Non-consolidated
Financial Statements are posted on the Company’s website on the Internet in accordance with thestipulations of laws and regulations as well as Article 13 of the Articles of Incorporation, and are notincluded in the attachment to this Notice. Therefore, the attachment to this Notice is a subset of the
documents audited by the Audit & Supervisory Board and the Accounting Auditor in preparing theiraudit reports.

 When attending the meeting, please submit the enclosed Voting Rights Exercise Form at the reception desk. Furthermore,
please bring this Notice as reference materials for the proceedings.

 Seating will be spaced out as a measure to prevent the spread of infection and the number of seats will be fewer than inprevious years. We request your understanding in case of limitations to entry.

 As concerns over COVID-19 infections are ongoing, if attending the meeting, we request your attendance after checking
your physical condition and taking measures to prevent infection such as wearing a mask.

 Should the Reference Documents for the Shareholders Meeting, Business Report, or Non-consolidated Financial
Statements require revisions, the revised items will be provided on the Company’s website.
The Company’s website (https://www.needswell.com/ir/)2

Reference Documents for the Shareholders Meeting
Proposal 1: Appropriation of Surplus
The Company believes returning profit to shareholders is one of the most important issues. Taking into
consideration future business development while fundamentally maintaining stable dividends, year-end
dividends for the 36th fiscal year are as follows.

Matters concerning the year-end dividend
In consideration of factors including business results for the current fiscal year and future businessdevelopment, the Company proposes the following for year-end dividends for the current fiscal year.
Type of dividend property

CashMatters related to allocation of dividend
property to shareholders and its total amount20.0 yen per share of the Company’s common stock
Total dividends: 197,244,480 yen

Effective date of distribution of surplus

December 26, 2022

3

Proposal 2: Partial Amendments to the Articles of Incorporation
1. Reasons for the proposal
The revised stipulations stipulated in the proviso of Article 1 to the supplementary provisions of the “ActPartially Amending the Companies Act” (Act No. 70 of 2019) have been enforced from September 1, 2022,
and the Company proposes the following amendments to the Company’s Articles of Incorporation for the
implementation of the system for electronic provision of materials for shareholders meetings.
(1) As it became the Company’s obligation to stipulate in the Articles of Incorporation to the effect that
information that is the content of Reference Documents for the Shareholders Meeting, etc., shall be
provided electronically, the Company proposes to newly establish Article 13, Paragraph 1 (Measuresfor electronic provision, etc.) of the proposed amendments.
(2) Among matters to be performed concerning electronic provision measures for information that is thecontent of Reference Documents for the Shareholders Meeting, etc., Article 13, Paragraph 2(Measures for electronic provision, etc.) of the proposed amendments shall be newly established tolimit the scope, as provided for by the Ministry of Justice Order, of matters to be recorded in physicaldocuments that are provided to shareholders who request provision of physical documents.
(3) Upon the implementation of the system for electronic provision of materials for shareholders
meetings, Article 13 (Internet disclosure and deemed provision of Reference Documents for the
Shareholders Meeting, etc.) of the current Articles of Incorporation becomes unnecessary, and thisshall be deleted.
(4) Supplementary provisions shall be established concerning the efficacy of deletion of the stipulation
above. In addition, the supplementary provisions shall be deleted after the passing of the effectivedate.
2. Contents of the amendments
The contents of the amendments are as follows.
(Underlines indicate amended sections)
Current Articles of Incorporation
Proposed amendments(Internet disclosure and deemed provision of Reference
Documents for the Shareholders Meeting, etc.)(Deleted)
Article 13 In the convocation of shareholders
meetings, the Company may deem that it
has provided to shareholders information
concerning matters that must be displayedin the Reference Documents for the
Shareholders Meeting, Business Report,
Non-consolidated Financial Statements,
and Consolidated Financial Statements via
Internet disclosure in conformity withdefinitions provided in the Ministry ofJustice Order.
(Measures for electronic provision, etc.)(Newly established)
Article 13 In the convocation of shareholders
meetings, the Company shallprovide electronically informationthat is the content of Reference
Documents for the Shareholders
Meeting, etc.
2 Of the matters to which electronic
provision measures apply, theCompany may choose not torecord all or part of matters
stipulated in the Ministry of Justice
Order in the physical documents
provided to shareholders who
made requests for provision ofphysical documents by the record
date for voting rights.

4Current Articles of Incorporation(Newly established)

Proposed amendments(Supplementary provisions)(Transitional measures concerning electronic
provision of materials for shareholders
meetings)
Article 1 Article 13 (Internet disclosure anddeemed provision of Reference
Documents for the Shareholders
Meeting, etc.) of the Articles ofIncorporation shall remain valid
for the shareholders meeting to beheld on a day that is within six
months from September 1, 2022.
2 This article shall be deleted on the
day after which three months haveelapsed since the day of theshareholders meeting in theprevious paragraph.

(Newly established)

5

Proposal 3: Election of Eight Directors
The terms of office of all seven Directors will expire at the conclusion of this Annual Shareholders Meeting.
In addition, Mr. Kazuhiro Shinohara retired on November 15 due to resignation. Accordingly, the Company
proposes the election of eight Directors.
The candidates for Director were nominated based on the deliberation of the Nomination and Remuneration
Committee of which the majority members are Outside Directors.
The candidates for Director are as follows.
Candidate
No.

Name

Positions

Responsibilities

1

Kozo Funatsu

President and CEO–

2

Nobumasa
Goto

Director andManaging Executive
Officer

In charge of New Businesses
and Affiliates

Reappointment

3

HajimeMatsuoka

Director andExecutive Officer

In charge of Technology
Division; General Manager ofSystem Business Unit II

Reappointment

4

Shinji Wakano

Managing Executive
Officer

General Manager of System
Business Unit III

New appointment

In charge of Administrative
Division; General Manager ofBusiness Promotion
Management Department;
General Manager of General
Affairs Department

New appointment

Reappointment

5

Koji Tabata

Executive Officer

6

Hiroki
Yanagawa

Director–

Reappointment
Outside Independent

7

MamoruYasuoka

Director–

Reappointment
Outside Independent

8

Nobuo
Terauchi––

New appointment
Outside Independent<Reference> Nomination Policies and Procedures for Candidates for Director
Directors of the Company are expected to perform decision making after evaluating risk from diverse
viewpoints through concrete and lively discussions based on individual knowledge from being well versed intheir areas of responsibility and knowledge of finance, legal affairs, labor, etc. When nominating candidates,emphasis is placed on work experience and leadership in software development, sales, planning, etc., having
knowledge of finance, legal affairs, labor, etc., ability to appropriately manage risk and monitor businessexecution, and being thoroughly ethical. Candidates for Outside Director are nominated from persons who willcontribute to improving the Company’s corporate governance function among persons possessing a high degreeof specialty in law and company finance, etc., and views, etc., concerning international affairs and trends insociety and the economy. As per the Articles of Incorporation, the total number of Directors is to be 13 or less. In
addition, persons well versed in the Company’s business and having excellent personality, views, and ability to
execute and recognized by the Board of Directors as having the ability to fulfill duties are elected as senior
management who execute business based on decisions of the Board of Directors.
The Board of Directors deliberates based on reports from the “Nomination and Remuneration Committee,”comprised of several officers with the majority Independent Outside Officers, on nominations for candidates for
Director based on the aforementioned policies.

6

Candidate No. 1

Career summary and positions and responsibilities at the Company

Kozo Funatsu

April 1970
July 1973

Reelection

June 1991

Date of birth
July 27, 1951

June 1996
June 1998

Number of shares of
the Company held
85,698 shares

April 1999

Terms of office
8 years

May 1999
October 2001

Attendance at meetings May 2004of the Board ofJune 2004
Directors
21 / 21
June 2009
June 2012
June 2013
June 2014
July 2014
December 2014
June 2015
December 2016

Joined Hitachi, Ltd.
Joined FUJI SOFTWARE LABORATORY, Ltd. (current
FUJI SOFT INCORPORATED)
Director of Software Planning Co., Ltd. (current Cyber Com
Co., Ltd.)
Director of FUJI SOFT INCORPORATEDManaging Director of FUJISOFT ABC Incorporated(current FUJI SOFT INCORPORATED)
Representative Director and Vice President of DiamondFujisoft Co., Ltd.
Director of FUJISOFT ABC SERVICE BUREAU
INCORPORATED (current FUJISOFT SERVICE
BUREAU INCORPORATED)
Senior Managing Director of FUJISOFT ABC Incorporated(current FUJI SOFT INCORPORATED)
Joined Cyber Com Co., Ltd.
Chairman and Representative Director of Cyber Com Co.,Ltd.
President and Representative Director of Cyber Com Co.,
Ltd.
Chairman and Director of Cyber Com Co., Ltd.
Advisor of Cyber Com Co., Ltd.
Corporate Auditor of Cyber Com Co., Ltd.
Counselor of the Company
Outside Director
Corporate Auditor of FUJISOFT SERVICE BUREAU
INCORPORATED
President and CEO of the Company (current position)

Significant concurrent positions
Not applicable
Reasons for nomination as a candidate for Director
The candidate, possessing an abundance of experience and accomplishments as
the management executive of the Company, is deemed able to appropriately
monitor the Company as a whole together with making efforts to realize
strategy aimed at business growth and improving company business results,
and the Company therefore proposes his continued election as Director.

7

Candidate No. 2

Career summary and positions and responsibilities at the Company

Nobumasa
Goto

April 1997
July 2003
January 2006
April 2016

Reelection
Date of birth
April 5, 1971
Number of shares of
the Company held
22,566 shares
Terms of office
4 years
Attendance at meetingsof the Board of
Directors
21 / 21

October 2017
July 2018
October 2018
December 2018
October 2019
December 2019
October 2020
December 2020
August 2021
December 2021
July 2022
October 2022
October 2022

Joined Unytite Corporation
Joined CLEAVE Co., Ltd.
Joined the Company
General Manager of System Department III, System
Business Headquarters
General Manager of System Department I, System Business
Unit II
General Manager of System Business Unit II; General
Manager of System Department I, System Business Unit II
Executive Officer and General Manager of System Business
Unit II
Director and General Manager of System Business Unit II
Director in charge of System Business Unit I and System
Business Unit II
Executive Director in charge of Technology & Sales
Division
Executive Director in charge of Technology & Sales
Division; General Manager of Sales Management
Department
Director and Senior Managing Executive Officer in chargeof Technology & Sales Division; General Manager of SalesManagement Department
Director and Senior Managing Executive Officer in chargeof Technology Division
Director and Managing Executive Officer in charge ofTechnology Division
Senior Managing Director of Souken-sys Inc., a subsidiaryof the Company (current position)
Director and Managing Executive Officer in charge of New
Businesses and Affiliates (current position)
President and Representative Director of COMSOFT CO.,LTD., a subsidiary of the Company (current position)

Significant concurrent positions
Senior Managing Director of Souken-sys Inc.
President and Representative Director of COMSOFT CO., LTD.
Reasons for nomination as a candidate for Director
The candidate, possessing an abundance of experience and accomplishments
related to systems as Manager of the Company’s System Division, is deemed
able to appropriately monitor affiliates as a whole together with making efforts
to realize strategy aimed at business growth and improving company businessresults of affiliates, and the Company therefore proposes his continued
election as Director.

8

Candidate No. 3

Career summary and positions and responsibilities at the Company

HajimeMatsuoka

April 2002
April 2006
October 2019

Reelection

June 2021

Date of birthAugust 3, 1979

October 2021

Number of shares of
the Company held
8,222 shares
Terms of office
1 yearOctober 2021
December 2021
October 2022

Joined COMSIS Co., Ltd.
Joined the Company
General Manager of System Department I, System Business
Unit II
Executive Officer and General Manager of System Business
Unit IIManaging Executive Officer and General Manager ofSystem Business Unit II
Senior Managing Director of Zeroichi Production Co., Ltd.,a subsidiary of the Company (current position)
Director and Executive Officer in charge of System
Business Unit II; General Manager of System Business UnitII
Director and Executive Officer in charge of Technology
Division; General Manager of System Business Unit II(current position)
Director of BO STUDIO Inc., a subsidiary of the Company(current position)

Attendance at meetings October 2022of the Board of
Directors
Significant concurrent positions
15 / 15

Senior Managing Director of Zeroichi Production Co., Ltd.
Director of BO STUDIO Inc.
Reasons for nomination as a candidate for Director
The candidate, possessing many years of work experience in the IT industry
and an abundance of experience and accomplishments related to systems as
General Manager of the Company’s System Division, is deemed able toappropriately monitor the Technology Division as a whole together withmaking efforts to realize strategy aimed at business growth and improving
company business results, and the Company therefore proposes his continued
election as Director.

9Candidate No. 4

Career summary and positions and responsibilities at the Company

Shinji Wakano

April 1981

New election

October 2006
April 2016

Date of birthJune 11, 1960

April 2020

Number of shares of
the Company held
887 shares

October 2020
April 2021
October 2021
January 2022

Joined Asahi Business Consultant Co., Ltd. (current FUJI
SOFT INCORPORATED)
Joined Quest Co., Ltd.
General Manager of IT Value-Up Business Division, Quest
Co., Ltd.
Joined the Company as General Manager of System
Department III, System Business Unit III
General Manager of System Department III, System
Business Unit II
Executive Officer and General Manager of System Business
Unit III; General Manager of System Department I
Managing Executive Officer and General Manager ofSystem Business Unit III; General Manager of System
Department I
Managing Executive Officer and General Manager ofSystem Business Unit III; General Manager of System
Department II (current position)

Significant concurrent positions
Not applicable
Reasons for nomination as a candidate for Director
The candidate, possessing many years of work experience in financial systems
and an abundance of experience and accomplishments in the ERP Introduction
Business, is deemed able to appropriately monitor the System Division
together with making efforts to realize strategy aimed at business growth andimproving company business results, and the Company therefore proposes hiselection as Director.

10Candidate No. 5

Career summary and positions and responsibilities at the Company

Koji Tabata

April 1999

New election
Date of birthAugust 31, 1975
Number of shares of
the Company held
22,296 shares

November 2005
September 2006
October 2018
October 2019
October 2021
April 2022
October 2022

Joined Atlux Inc. (current NOC Outsourcing & Consulting
Inc.)
Joined FFC Co., Ltd. (current Fujitsu Limited)
Joined the Company
General Manager of Human Resources Department
General Manager of General Affairs Department
Executive Officer and General Manager of General Affairs
Department
Executive Officer in charge of Business Promotion
Management Department; General Manager of General
Affairs Department
Executive Officer in charge of Administrative Division;
General Manager of Business Promotion Management
Department; General Manager of General Affairs
Department (current position)

Significant concurrent positions
Not applicable
Reasons for nomination as a candidate for Director
The candidate, involved in operations of the General Affairs and Human
Resources Divisions since joining the Company and possessing specialized
knowledge and an abundance of experience, is currently in charge of the
Administrative Division as Executive Officer. He is deemed able to apply said
knowledge and experience to the Company’s Director system, and theCompany therefore proposes his election as Director.

11

Candidate No. 6

Career summary and positions and responsibilities at the Company

Hiroki
Yanagawa

April 1978
June 2002

Reelection
Date of birthJanuary 19, 1954
Number of shares of
the Company held
7,901 shares
Terms of office
6 years
Attendance at meetingsof the Board of
Directors
21 / 21

April 2004
April 2007
June 2007
April 2009
January 2014
February 2014
March 2015
September 2016
December 2016

Joined NEC Corporation
Concurrently served as Member of the Board of NEC’s
overseas subsidiaries, namely Tianjin NEC
Telecommunication Engineering (current NEC (China) Co.,
Ltd.) and VNPT-NEC Telecommunication Systems
Company Limited (current NEC Vietnam Co., Ltd.)
Seconded to NEC Communication Systems, Ltd. as General
Manager of Mobile Communication Business Division
Deputy General Manager of Domestic Network
Development Business Headquarters, NEC Communication
Systems, Ltd.
Returned to NEC Corporation
General Manager of Corporate Network Development
Headquarters, NEC Corporation
Principal of Community Systems, Cross Cat Co., Ltd.
Counselor of Verint Systems Japan K.K.
Counselor of SecuLynx Co., Ltd.
Counselor of SEC Hitech Co., Ltd. (current position)
Outside Director of the Company (current position)

Significant concurrent positions
Counselor of SEC Hitech Co., Ltd.
Reasons for nomination as a candidate for Outside Director and outline of
expected roles
The candidate, possessing an abundance of experience and accomplishments
as a person experienced in technology, is deemed as someone from who advice
on management of the Company from an objective perspective can be
expected in order to make efforts to realize strategy aimed at business growthand improving company business results, and the Company therefore proposes
his continued election as Director. In addition, if elected, he will continue as
Chairperson of the Nomination and Remuneration Committee, and we plan for
him to be involved in nominating officer candidates of the Company anddeciding officer remuneration, etc., from an objective and neutral standpoint.

12Candidate No. 7

Career summary and positions and responsibilities at the Company

MamoruYasuoka

April 1978
December 2003

Reelection
Date of birth
March 18, 1956
Number of shares of
the Company held
560 shares
Terms of office
2 years (including 1
year serving as an Audit& Supervisory Board
Member)Attendance at meetingsof the Board of
Directors
21 / 21 (6 / 6 as an
Audit & Supervisory
Board Member)

April 2004
June 2007
June 2007
June 2009
May 2011
April 2012
June 2016
July 2020
July 2020
July 2020
December 2020
December 2021
April 2022

Joined Fujitsu Limited
General Manager of Financial System Department I,
Financial Solution Division, Fujitsu Limited
General Manager of Project Management Department,
Financial Solution Division, Fujitsu Limited
General Manager of Banking Solution Business Division I,
Fujitsu Limited
Director of The Japan Net Bank, Limited
Director of FUJITSU ADVANCED SOLUTIONSLIMITED
Assistant to Chief of Financial Solution Business Group,
Fujitsu Limited
Director and Managing Executive Officer of FUJITSUADVANCED SOLUTIONS LIMITED
Corporate Auditor of Nissay Information Technology Co.,Ltd.
Senior Advisor of Nissay Information Technology Co., Ltd.
(current position)
Senior Advisor of CLIMB CO., LTD.
Counselor of TRYSERVE Co., Ltd. (current position)
Outside Audit & Supervisory Board Member of theCompany
Outside Director of the Company (current position)
Outside Director (not full-time) of Mizuho Research &Technologies, Ltd. (current position)

Significant concurrent positions
Senior Advisor of Nissay Information Technology Co., Ltd.
Counselor of TRYSERVE Co., Ltd.
Outside Director (not full-time) of Mizuho Research & Technologies, Ltd.
Reasons for nomination as a candidate for Outside Director and outline of
expected roles
The candidate, possessing specialized knowledge and experience related to thearea of financial systems, is deemed able to apply said abundance ofknowledge and experience to the Company’s management, being well versedon the Company’s business matters and as someone from who advice onmanagement of the Company from an objective perspective can be expected inorder to make efforts to realize strategy aimed at business growth andimproving company business results, and the Company therefore proposes his
continued election as Director. In addition, if elected, he will continue as amember of the Nomination and Remuneration Committee, and we plan for
him to be involved in nominating officer candidates of the Company anddeciding officer remuneration, etc., from an objective and neutral standpoint.

13

Candidate No. 8

Career summary and positions at the Company

Nobuo
TerauchiApril 1986
April 1998

New election
Date of birth
March 7, 1958
Number of shares of
the Company held
0 shares

April 2003
December 2004
June 2006
June 2009
April 2015
June 2017
June 2018
July 2020

Joined FUJI SOFT INCORPORATEDGeneral Manager of Sales Department, Tokyo Office, FUJI
SOFT INCORPORATED
Deputy General Manager of IT Business Division, FUJI
SOFT INCORPORATED
Executive Officer and Chief of Department Dept., EM
Systems Co., Ltd.
Director and Chief of Development HQ, EM Systems Co.,Ltd.
Managing Director and Chief of Development HQ, EM
Systems Co., Ltd.
Managing Director and Chief of Medical Information
Alliance Promotion HQ, EM Systems Co., Ltd.
Full-time Auditor of EM Systems Co., Ltd.
Director and Full-time Member of Audit and Supervisory
Committee, EM Systems Co., Ltd.
Representative Director of EM Technology Lab. limitedSignificant concurrent positions
Not applicable
Reasons for nomination as a candidate for Outside Director and outline of
expected roles
The candidate, possessing an abundance of experience as a person experienced
in technology and based on specialized knowledge and experience related tothe area of medical systems, is deemed as someone from who advice onmanagement of the Company from an objective perspective can be expected inorder to make efforts to realize strategy aimed at business growth andimproving company business results, and the Company therefore proposes hiselection as Outside Director. In addition, if elected, he will continue as amember of the Nomination and Remuneration Committee, and we plan for
him to be involved in nominating officer candidates of the Company anddeciding officer remuneration, etc., from an objective and neutral standpoint(Notes)1. There are no special interests between each of the candidates and the Company.
2. Each candidate’s number of shares of the Company held is as of the end of the current fiscal year (September 30,2022). In addition, this includes the candidate’s equity through the shareholder’s association.
3. Mr. Hiroki Yanagawa, Mr. Mamoru Yasuoka, and Mr. Nobuo Terauchi are candidates for Outside Director.
4. Mr. Hiroki Yanagawa currently serves as the Company’s Outside Director. His term of office as Outside Director
will be six years at the conclusion of this Annual Shareholders Meeting.
5. Mr. Mamoru Yasuoka currently serves as the Company’s Outside Director. His term of office as Outside Director
will be one year at the conclusion of this Annual Shareholders Meeting, and his total term of office of two years
includes serving as an Audit & Supervisory Board Member.
6. The Company has entered into agreements with Mr. Hiroki Yanagawa and Mr. Mamoru Yasuoka in accordancewith stipulations of Article 427, Paragraph 1 of the Companies Act, to limit their liability for damages stipulated in
Article 423, Paragraph 1 of the same Act. In the event that the reelections of Mr. Hiroki Yanagawa and Mr.
Mamoru Yasuoka are approved, the Company plans to continue such agreements with them. The maximum
liability amount based on said agreements is the amount stipulated by laws and regulations. However, said liability
limitation is recognized only when performance of the duties that caused the liability have been in good faith andwithout gross negligence by said Directors (excluding Directors executing business, etc.) In addition, if the electionof Mr. Nobuo Terauchi is approved, the Company plans to conclude a similar liability limitation agreement withhim.
7. The Company has submitted a notification of the appointment of Mr. Hiroki Yanagawa and Mr. Mamoru Yasuoka
as Independent Directors in accordance with the stipulations of the Tokyo Stock Exchange. In the event that Mr.
Hiroki Yanagawa and Mr. Mamoru Yasuoka are reappointed, the Company plans to continue to appoint them as
Independent Directors. In addition, Mr. Nobuo Terauchi also satisfies the requirements of Independent Director as
stipulated under the regulations of the Tokyo Stock Exchange, and the Company plans to designate him as an
Independent Director.

148. The Company has entered into a directors and officers liability insurance agreement to insure all officers with aninsurance company as stipulated in Article 430-3, Paragraph 1 of the Companies Act. This insurance agreement
covers compensation for damages and litigation costs to be borne by the insured persons in the event of claims
made against them for actions taken to execute duties of the Company. The Company bears the full amount of all
insurance premiums for the insured persons. If this proposal is approved, each candidate will be insured under the
insurance agreement. The Company plans to renew the insurance agreement with the same content during theirterms of office.

15

(Reference) Skill Matrix of Directors and Audit & Supervisory Board Members
Aiming to realize the Company’s Medium-Term Management Plan, areas of particular expectations aredefined as the areas of (1) Corporate management, (2) Manufacturing, technology, and PMO, (3) Marketingand sales, (4) Finance and accounting, (5) Personnel affairs, labor, and talent development, (6) Legal affairs
and risk management, and (7) ESG and sustainability. If this proposal is approved, the following chart is asummary of the skills of Directors.
Areas
Name

Kozo
Funatsu
Nobumasa
Goto
HajimeMatsuoka
Shinji
Director Wakano
Koji Tabata
Hiroki
Yanagawa
MamoruYasuokaNobuo
TerauchiKazuhiko
Audit &
Kato
Supervisory
Kotaro Niwa
Board
Member Shigeru Sato

Manufacturing,
Corporate
Marketingtechnology,
management
and sales
and PMO
●

●

●

●

●

●
●

Personnel
affairs,
Legal affairs
Finance and
ESG andlabor, andand riskaccounting
sustainability
talentmanagement
development
●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

16

●

●

●

●

●

Proposal 4: Payment of Remuneration for Allocation of Shares with Restriction on Transfer to Directors
The maximum total amount of remuneration, etc., for Directors was approved at the 28th Annual
Shareholders Meeting held on December 16, 2014 to be 300 million yen or less per year (this amount does notinclude employee salaries for Directors concurrently serving as employees), and has not been changed as oftoday.
The Company cordially requests shareholders to introduce a system of remuneration of shares withrestriction on transfer for Directors (hereafter, the “Remuneration System”) and to approve the payment of a
new remuneration for granting shares with restriction to Directors (excluding Outside Directors; hereafter,“Eligible Directors”) separately from the above-mentioned remuneration, in order to give Directors an
incentive to sustainably enhance the corporate value of the Company and promote further shared value
between Directors and shareholders.
Based on this proposal, the total amount of monetary remuneration receivables to be paid to Eligible
Directors will be 50 million yen or less per year, an amount found to be appropriate based on the above
purposes. In addition, concrete payment timing and allocation for each Eligible Director will be decided by the
Board of Directors consulting with the Nomination and Remuneration Committee, based on deliberations andreports by the Nomination and Remuneration Committee.
The number of Directors is currently seven (of which three are Outside Directors). If Proposal 3 is approved
and passed as proposed, the number of Directors will be eight (of which three will be Outside Directors).
The details for the allocation of shares with restriction on transfer to Eligible Directors are as follows.
1. Payment for the issuance of shares with restriction on transfer
Every fiscal year in principle, Eligible Directors will provide to the Company all monetary remuneration
receivables to be paid based on the resolution of the Board of Directors of the Company as property
contributed in kind, and common shares of the Company will be issued or disposed of.
2. The number of shares with restriction on transfer allocated to Eligible Directors
The total number of common shares which the Company may issue or dispose of with regard to the
Eligible Directors under the Remuneration System is to be up to 80,000 shares per year. However, in thecase of division or share merger of common shares of the Company (including gratis allocation of commonshares of the Company) with an effective date after the date of resolution at this Annual Shareholders
Meeting, the total number concerned is to be adjusted within a reasonable scope as necessary after theeffective date.
Note that the amount to be paid per share of common shares that are issued or disposed of with regard to
the Eligible Directors based on the Remuneration System shall be determined by the Board of Directors
within the scope of an amount that is not particularly advantageous to Eligible Directors, based on theclosing price of the common shares on the Tokyo Stock Exchange on the business day immediately prior
to the date of each resolution of the Board of Directors that decides subscription requirements for saidcommon shares (in the case that the transaction has not been concluded on that day, the closing price on
the most recent trading day preceding that day).
3. Shares with restriction on transfer allocated to Eligible Directors
The Company shall enter into contracts for the allocation of shares with restriction on transfer (hereafter
the “Allocation Contracts”) with Eligible Directors including following contents (allocated common shares
received through Allocation Contracts are hereafter, “Allocated Shares.”)(1) Period of restriction on transfer
Eligible Directors shall not transfer, pledge, make an advancement, or otherwise dispose of the AllocatedShares during the period from the dates on which payment is made for the Allocated Shares to the dates
on which Eligible Directors retire or resign from the position of Director or any other positions definedby the Board of Directors of the Company (hereafter, the “Transfer Restriction Period”).
(2) Conditions for cancelling restriction on transfer
Restriction on transfer of all Allocated Shares will be cancelled at the point in time when the Transfer
Restriction Period expires with the condition that Eligible Directors have continued to serve as Directorof the Company or any other positions defined by the Board of Directors of the Company during theperiod from the dates on which payment is made for the Allocated Shares to the conclusion of the first
Annual Shareholders Meeting that is held.
However, if Eligible Directors retire or resign for legitimate reasons or retire or resign due to death fromthe dates on which payment is made for the Allocated Shares to the conclusion of the first Annual

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Shareholders Meeting that is held, the number of the Allocated Shares for which the restriction ontransfer is cancelled and the timing of the cancellation of the restriction on transfer shall be reasonably
adjusted as necessary.
(3) Reasons for gratis acquisition
If Eligible Directors retire or resign for non-legitimate reasons from the dates on which payment is madefor the Allocated Shares to the conclusion of the first Annual Shareholders Meeting that is held, theCompany shall rightfully acquire the Allocated Shares at no cost.
In addition, if there are Allocated Shares from which the restriction on transfer is not removed uponcancellation of restriction on transfer defined by the above (2), the Company shall rightfully acquirethem at no cost.
(4) Handling in the event of organizational restructuring
Notwithstanding what is defined in the above (1), if, during the Transfer Restriction Period, mattersrelating to a merger agreement under which the Company will be the absorbed entity, a share exchange
agreement or share transfer plan under which the Company will become a wholly owned subsidiary, or
any other corporate reorganizations are approved at an Annual Shareholders Meeting of the Company (orat a meeting of the Board of Directors of the Company when an approval at an Annual Shareholders
Meeting is not required for such corporate reorganizations), the number of the Allocated Shares forwhich the restriction on transfer is cancelled and the timing of the cancellation of the restriction ontransfer shall be reasonably adjusted as necessary by the Company through a resolution of the Board of
Directors of the Company. In this case, if there are Allocated Shares from which the restriction ontransfer is not removed at the time immediately after cancellation of the restriction on transfer, theCompany shall rightfully acquire them at no cost.
(5) Other provisions
Other provisions regarding the Allocation Contracts are to be determined by the Board of Directors of
the Company.
4. Reasons for the appropriateness of allocation of shares with restriction on transfer
The Company defined the policy to determine the remuneration, etc., for each individual Director at a
meeting of the Board of Directors held on December 22, 2020, and the outline of the policy is described on
page 38 of the Business Report (in the original Japanese document). The granting of shares with restriction
on transfer under this proposal is in line with this policy, and the Company plans to revise the policy toinclude the Remuneration System if this proposal is approved. The granting of shares with restriction ontransfer is deemed appropriate as the value of the granted shares with restriction on transfer evaluated at
the time of resolution by the Board of Directors has a market value of 50 million yen or less per year, thetotal number of common shares which the Company may issue or dispose of with regard to the Eligible
Directors is up to 80,000 shares per year, and the dilution rate of the total number of issued shares is minor
at an approximate 0.79%.
Furthermore, during the Transfer Restriction Period, so Eligible Directors will not transfer, pledge, makean advancement, or otherwise dispose of the shares that are allocated under the Remuneration System, theCompany plans to manage through a special account established by Eligible Directors at a securities
company defined by the Company during the Transfer Restriction Period.

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