[Translation]

This document has been translated from the Japanese original for the convenience of non-Japanese shareholders.
In the event of any discrepancy between this document and the Japanese original, the original shall prevail.

Securities code: 9058
June 1, 2016
To our shareholders:
Yutaka Tsunekawa
President and COO
TRANCOM CO., LTD.
19-30, 1-chome Aoi, Higashi-ku, Nagoya
NOTICE OF THE 59th ANNUAL MEETING OF SHAREHOLDERS
You are cordially invited to attend the 59th Annual Meeting of Shareholders of TRANCOM CO.,LTD. (the “Company”) on June 16, 2016, which will be held as described below.
Meeting Details
1. Date and Time:Thursday, June 16, 2016 at 10:00 a.m. (Japan Standard Time)

2. Place:

4F Conference Room, Mazak Art Plaza
19-30, 1-chome Aoi, Higashi-ku, Nagoya

3. Purposes:
Items to be reported:
1. Business Report, Consolidated Financial Statements and Audit Reports of theConsolidated Financial Statements by the Financial Auditor and the Audit &Supervisory Board for the 59th Fiscal Year (from April 1, 2015 to March 31, 2016)
2. Non-Consolidated Financial Statements for the 59th Fiscal Year (from April 1,2015 to March 31, 2016)
Items to be resolved:
Appropriation of surplus
Proposal 1:
Partial amendments to the Articles of Incorporation
Proposal 2:
Election of five (5) Directors other than Directors who are Audit andProposal 3:
Supervisory Committee Members
Election of three (3) Directors who are Audit and Supervisory
Proposal 4:
Committee Members
Determination of amounts of remuneration of Directors other than
Proposal 5:
Directors who are Audit and Supervisory Committee Members
Determination of amounts of remuneration of Directors who are
Proposal 6:
Audit and Supervisory Committee Members
Determination of amounts of remunerations, etc. related to stock
Proposal 7:
remuneration system-1-[Translation]

Reference Document for the Annual Meeting of Shareholders
Proposals and Reference Information
Proposal 1:
1.

Appropriation of surplus

Year-end dividend
To determine the amount of dividends payable at the end of the 59th term, the Company
must take account of the continuation of stable dividend with business performance for the59th term. Accordingly, the Company proposes to pay dividends as follows:(1)

Type of dividend assets:

Cash

(2)

Allocation of dividends to shareholders, and total amount
Per share of common stock:¥40
Total dividends:¥389,261,240
Since the interim dividend in the amount of 34 yen has been distributed, the annual dividend for the current
term would be 74 yen per share (dividend increase of 8 yen).

(3)2.

Effective date of dividends of surplus:

June 17, 2016

Appropriation of surplus
Other matters relating to the appropriation of surplus, the Company proposes the followinginternal reserves to prepare for investment to promote further business growth and otheractions.
(1)

Item to be increased and amount of increase
General reserve:¥3,000,000,000(2)Item to be decreased and amount of decrease
Retained earnings brought forward: ¥3,000,000,000-2-[Translation]

Proposal 2:
1.

Partial amendments to the Articles of Incorporation

Reasons for the proposal(1) Companies with Audit and Supervisory Committee, a new organization option for stockcompanies, are receiving recognition based on the “Act for Partial Amendment of theCompanies Act” (Act No. 90 of 2014; hereinafter referred to as “Amended Companies
Act” in this proposal), which came into effect on May 1, 2015.
The Company believes it would be beneficial to transition to a Company with Audit andSupervisory Committee with the aim of further strengthening the supervisory functionof the Board of Directors, achieving quick decision-making through the separation ofsupervision and business execution, enhancing the effectiveness of corporate
governance, and raising enterprise value further by establishing an Audit andSupervisory Committee. Accordingly, the Company will establish provisions concerning
the Audit and Supervisory Committee and Audit and Supervisory Committee Members,
and delete provisions concerning Audit & Supervisory Board Members and the Audit &Supervisory Board.

2.

(2)

In line with changes in the scope of the officers eligible to enter into an agreement
limiting liability based on the Amended Companies Act, to enable Directors not
involved in business execution to adequately fulfill their expected roles based on anagreement limiting liability, the Company will make partial amendment to Article 31,
paragraph 2 (Exemption from liability of Directors) in the existing Articles ofIncorporation. The consent of each Audit & Supervisory Board Member has beenobtained for this amendment.

(3)

In line with the addition, amendment, and deletion of the provisions noted above, theCompany will also change the number of articles, revise wording, clarify existing
provision details, and make other necessary changes.

Details of the proposed amendments
Details of the amendments are as follows.
These amendments to the Articles of Incorporation shall take effect at the conclusion of thisAnnual Meeting of Shareholders.
(Underlined parts are amended.)

Existing Articles of Incorporation

Proposed Amendments

Chapter I General Provisions

Chapter I General Provisions

Articles 1 to 3 (Articles Omitted)

Articles 1 to 3 (Not Amended)(Newly Added)(Organization)
Article 4 The Company has set up the following
organizations, other than the General Meeting of
Shareholders and Directors:(1) Board of Directors(2) Audit and Supervisory Committee(3) Financial Auditor

Article 4 (Article Omitted)

Article 5 (Not Amended)

Chapter II Shares

Chapter II Shares

Articles 5 to 7 (Articles Omitted)

Articles 6 to 8 (Not Amended)-3-

[Translation]

Existing Articles of Incorporation

Proposed Amendments(Request for sale by shareholders who own less than one
share unit)
Article 8 Shareholders who own less than one share unit of
the Company may request from the Company that it sells anumber of shares that will equal one share unit when added
to the number of shares owned less than one share unit
(hereinafter referred to as “additional purchase”), based onprovisions in the Share Handling Rules.

(Additional purchase by shareholders who own less than one
share unit)
Article 9 Shareholders of the Company may request from theCompany that it sells a number of shares that will equal one
share unit when added to the number of shares owned lessthan one share unit (hereinafter referred to as “additionalpurchase”), based on provisions in the Share Handling Rules.

(Rights restrictions for shareholders who own less than one (Rights for shares less than one share unit）
share unit)
Article 9 Shareholders who own less than one share unit of
Article 10 Shareholders of the Company are unable to
the Company are unable to exercise rights other than theexercise rights other than the rights listed below with respect
to shares owned less than one share unit.
rights listed below.
(1) Rights listed in items in Article 189, paragraph 2 of the(1) Rights listed in items in Article 189, paragraph 2 of theCompanies Act
Companies Act(2) Right to request the acquisition of shares with put option (2) Right to make a request based on provisions in Article(3) Right to receive an allotment of shares for subscription or 166, paragraph 1 of the Companies Act
share options for subscription(3) Right to receive an allotment of shares for subscription(4) Right to request an additional purchase of shares lessand an allotment of share options for subscription according
than one share unit as provided in the previous article
to the number of shares owned by the shareholder(4) Right to make a request as provided in the previous
article(Shareholder register administrator)
Article 10
The Company shall appoint a shareholder register
administrator.
2. The Company shall select a shareholder register
administrator and a location for performing these duties
based on a resolution by the Board of Directors, and shallgive public notification of this information.
(Newly Added)(Shareholder register administrator)
Article 11
The Company shall appoint a shareholder register
administrator.
2. The Company shall provide a shareholder register
administrator and a location for performing these duties
based on a resolution by the Board of Directors, and shallgive public notification of this information.
3. The preparation and keeping of the Company’s
shareholder register and share option register and othermatters related to the shareholder register and share option
register shall be entrusted to the shareholder register
administrator and not handled at the Company.

(Share Handling Rules)(Share Handling Rules)
Article 11 Entries and recordings in the shareholder register Article 12 Procedures and fees related to the Company’s
and share option register, purchases and additional purchases shares shall be based on the Share Handling Rulesof shares less than one share unit, other procedures related to established by the Board of Directors, in addition to laws andshares or share options, and procedures when shareholders
regulations and these Articles of Incorporation.
exercise rights shall be based on the Share Handling Rules
established by the Board of Directors, in addition to laws andregulations and the Articles of Incorporation.
(Record date)
Article 12
The Company regards shareholders who own voting rightsthat are entered or recorded in the final shareholder register
as of March 31 each year as shareholders who are able toexercise rights at the Annual Meeting of Shareholders forthat fiscal year.

-4-(Deleted)[Translation]

Existing Articles of Incorporation

Proposed Amendments

2. Notwithstanding the preceding paragraph, whennecessary, the Company can, based on a Board of Directors
resolution and with advance public notification, regard
shareholders or registered pledgees of shares who are enteredor recorded in the final shareholder register at a certain dateas shareholders or registered pledgees of shares who are able
to exercise these rights.
Chapter III General Meetings of Shareholders

Chapter III(Newly Added)

General Meetings of Shareholders(Record date for Annual Meeting of Shareholders)
Article 13 The Company’s record date for voting rights for
the Annual Meeting of Shareholders shall be March 31 eachyear.

Article 13 (Article Omitted)

Article 14 (Not Amended)(Convener and chairperson)
Article 14
A General Meeting of Shareholders, unless otherwise
provided by laws and regulations, shall be convened by the
President, based on a resolution by the Board of Directors. If
the President is not available, the meeting shall be convened
by another Director, based on an order determined inadvance by the Board of Directors.
2. (Article Omitted)(Convener and chairperson)
Article 15
A General Meeting of Shareholders, unless otherwise
provided by laws and regulations, shall be convened by the
President. If the President is not available, the meeting shallbe convened by another Director, based on an order
determined in advance by the Board of Directors.

Articles 15 to 16 (Articles Omitted)

Articles 16 to 17 (Not Amended)(Method of resolution)
Article 17
A resolution at a General Meeting of Shareholders, unlessotherwise provided by laws and regulations or the Articles ofIncorporation, shall be adopted by majority vote of present
shareholders with exercisable voting rights.
2. A resolution based on Article 309, paragraph 2 of theCompanies Act, unless otherwise provided by the Articles ofIncorporation, requires the presence of shareholders owninga minimum of one-third (1/3) of the voting rights ofshareholders with exercisable voting rights, and shall be
adopted by a minimum two-thirds (2/3) vote by present
shareholders.

(Method of resolution)
Article 18
A resolution at a General Meeting of Shareholders, unlessotherwise provided by laws and regulations or these Articles
of Incorporation, shall be adopted by majority vote ofpresent shareholders with exercisable voting rights.
2. A resolution based on Article 309, paragraph 2 of theCompanies Act requires the presence of shareholders owninga minimum of one-third (1/3) of the voting rights ofshareholders with exercisable voting rights, and shall be
adopted by a minimum two-thirds (2/3) vote by present
shareholders.

Article 18 (Article Omitted)

Article 19 (Not Amended)

2. (Not Amended)

Chapter IV Directors and Board of Directors

Chapter IV Directors and Board of Directors(Establishment of Board of Directors)
Article 19 The Company shall establish a Board of Directors.

(Deleted)(Number of Directors)
Article 20 The number of the Company’s Directors shall be
up to 10 persons.

(Number of Directors)
Article 20
The number of the Company’s Directors (excluding Audit
and Supervisory Committee Members) shall be up to 10
persons.

-5-

[Translation]

Existing Articles of Incorporation

Proposed Amendments(Newly Added)

2. The number of the Company’s Directors who are Audit
and Supervisory Committee Members shall be up to four (4)persons.

(Method of election of Directors)
Article 21
Directors shall be elected at the General Meeting of
Shareholders.

(Method of election of Directors)
Article 21
Directors shall be elected at the General Meeting of
Shareholders, distinguishing between Directors who are
Audit and Supervisory Committee Members and other
Directors.
2. to 3. (Not Amended)
4. The election of a substitute for a Director who is an Audit
and Supervisory Committee Member shall be in effect until
the start of the Annual Meeting of Shareholders pertaining to
the final year of the fiscal years ending within two (2) years
from said resolution.

2. to 3. (Articles Omitted)(Newly Added)(Term of office of Directors)(Term of office of Directors)
Article 22 The term of office of Directors shall expire at the Article 22
conclusion of the Annual Meeting of Shareholders pertaining The term of office of Directors (excluding Audit andto the final year of the fiscal years ending within one (1) year Supervisory Committee Members) shall expire at theconclusion of the Annual Meeting of Shareholders pertaining
after their appointment.
to the final year of the fiscal years ending within one (1) year
after their appointment.
(Newly Added)
2. The term of office of Directors who are Audit andSupervisory Committee Members shall expire at theconclusion of the Annual Meeting of Shareholders pertaining
to the final year of the fiscal years ending within two (2)years after their appointment.
(Newly Added)
3. The term of office of a Director who is an Audit andSupervisory Committee Member elected to fill a vacancy for
an Audit and Supervisory Committee Member who retired
during his or her tenure shall be the same as the remaining
term of office of the retiring Audit and Supervisory
Committee Member.
(Representative Directors and Directors with titles)
Article 23
Representative Directors shall be appointed by resolution of
the Board of Directors.

(Representative Directors and Directors with titles)
Article 23
Representative Directors shall be appointed from among
Directors (excluding Audit and Supervisory Committee
Members) by resolution of the Board of Directors.
2. Representative Directors shall represent the Company and(Deleted)
execute the business of the Company.
3. The Board of Directors, based on its resolution, shall
2. The Board of Directors, based on its resolution, shallappoint one (1) President, and when necessary, may appoint appoint from among Directors (excluding Audit andone (1) Chairman, and one or more Senior Executive Vice
Supervisory Committee Members) one (1) President, andPresidents, Executive Vice Presidents, Executive Directors, when necessary, may appoint one (1) Chairman, and one ormore Senior Executive Vice Presidents, Executive Viceand Executive Advisors.
Presidents, Executive Directors, and Executive Advisors.
(Convener and chairperson of Board of Directors’ meetings)
Article 24 A meeting of the Board of Directors, unlessotherwise provided by laws and regulations, shall be
convened and chaired by the President. If the President is notavailable, the meeting shall be convened and chaired byanother Director, based on an order determined in advanceby the Board of Directors.

-6-(Convener and chairperson of Board of Directors’ meetings)
Article 24
A meeting of the Board of Directors, unless otherwise
provided by laws and regulations, shall be convened andchaired by a Director determined in advance by the Board of
Directors. If said Director is not available, the meeting shallbe convened and chaired by another Director, based on anorder determined in advance by the Board of Directors.

[Translation]

Existing Articles of Incorporation

Proposed Amendments(Newly Added)

2. Notwithstanding the preceding paragraph, a meeting of theBoard of Directors may be convened by an Audit andSupervisory Committee Member appointed by the Audit andSupervisory Committee.

(Notice to convene a meeting of the Board of Directors)
Article 25
A notice to convene a meeting of the Board of Directors
shall be issued to each Director and each Audit &Supervisory Board Member at least three (3) days before themeeting date. However, this timeframe may be shortened in
the event of urgency.
2. The notice to convene a meeting in the preceding
paragraph may be omitted with the agreement of all
Directors and Audit & Supervisory Board Members.

(Notice to convene a meeting of the Board of Directors)
Article 25
A notice to convene a meeting of the Board of Directors
shall be issued to each Director at least three (3) days before
the meeting date. However, this timeframe may be shortenedin the event of urgency.
2. The notice to convene a meeting in the preceding
paragraph may be omitted with the agreement of all
Directors.

(Method of resolution by the Board of Directors)(Method of resolution by the Board of Directors)
Article 26 A resolution by the Board of Directors requires the Article 26
presence of a majority of Directors, and shall be adopted by A resolution by the Board of Directors requires the presencea majority vote of present Directors.
of a majority of Directors who are able to vote, and shall be
adopted by a majority vote thereof.
(Newly Added)
2. Directors with special interests related to a resolution in
the preceding paragraph are not able to vote.
(Omission of resolutions of the Board of Directors)(Omission of resolutions of the Board of Directors)
Article 27 In cases where all Directors agree to a matter to be Article 27 In cases where Directors submit a proposal withresolved at the Board of Directors in writing or by means of respect to a matter which is the purpose of the resolution of
the Board of Directors, if all Directors (who are entitled toelectromagnetic records, the Company shall deem that theresolution to approve such matter to be resolved at the Board participate in votes with respect to such matter) manifestof Directors meeting has been made, except for the casetheir intention to agree to such proposal in writing or bywhere an Audit & Supervisory Board Member states his ormeans of electromagnetic records, the Company shall deem
her objections to such matter.
that the resolution to approve such proposal at the Board of
Directors meeting has been made.
(Newly Added)(Delegation to Directors of decisions for execution ofimportant business)
Article 28 The Company can, based on Article 399-13,
paragraph 6 of the Companies Act, delegate to Directors allor part of decisions for the execution of important business(excluding matters listed in items in Article 399-13,
paragraph 5 of the Companies Act), based on a resolution by
the Board of Directors.

(Board of Directors meeting minutes)
Article 28 An outline of the proceedings of a Board of
Directors meeting, the final outcome, and other mattersprescribed by laws and regulations shall be entered orrecorded in the meeting minutes, and the Directors and Audit& Supervisory Board Members present shall affix their nameand seal or electronic signature to these minutes.

(Board of Directors meeting minutes)
Article 29 An outline of the proceedings of a Board of
Directors meeting, the final outcome, and other mattersprescribed by laws and regulations shall be entered orrecorded in the meeting minutes, and the Directors present
shall affix their name and seal or electronic signature to theseminutes.

(Rules of the Board of Directors)(Rules of the Board of Directors)
Article 29 Matters related to the Board of Directors shall be Article 30 Matters related to the Board of Directors shall begoverned by the Rules of the Board of Directors as
governed by the Rules of the Board of Directors asestablished by the Board of Directors, in addition to laws and established by the Board of Directors, in addition to laws andregulations and the Articles of Incorporation.
regulations and these Articles of Incorporation.

-7-

[Translation]

Existing Articles of Incorporation

Proposed Amendments(Remuneration, etc. for Directors)
Article 30 Remuneration, bonus and other financial rewards
paid by the Company to Directors as compensation for their
execution of duties (hereinafter referred to as “remuneration,etc.”) shall be decided by resolution of the General Meetingof Shareholders.

(Remuneration, etc. for Directors)
Article 31 Remuneration, bonus and other financial rewards
paid by the Company to Directors as compensation for their
execution of duties (hereinafter referred to as “remuneration,etc.”) shall be decided by resolution of the General Meetingof Shareholders, distinguishing between remuneration, etc.
for Directors who are Audit and Supervisory Committee
Members and remuneration, etc. for other Directors.

(Exemption from liability of Directors)(Exemption from liability of Directors)
Article 32
Article 31(Article Omitted)(Not Amended)
2. The Company may conclude with an Outside Director an 2. The Company may conclude with a Director (excluding
agreement to limit their liability for damage under Article
executive Directors, etc.) an agreement to limit their liability
for damage under Article 423, paragraph 1 of the Companies
423, paragraph 1 of the Companies Act, if they meet theAct, if they meet the requirements prescribed by laws andrequirements prescribed by laws and regulations; provided,
however, that the maximum amount of liability based on said regulations; provided, however, that the maximum amount ofliability based on said agreement is the greater of aagreement is the greater of a predetermined amount, which
predetermined amount, which shall be ¥2 million or higher,
shall be ¥2 million or higher, or the minimum amount ofor the minimum amount of liability prescribed by laws andliability prescribed by laws and regulations.
regulations.
Chapter V

Audit & Supervisory Board Members and the
Audit & Supervisory Board(Deleted)(Election of Audit & Supervisory Board Members andestablishment of the Audit & Supervisory Board)
Article 32 The Company shall have Audit & Supervisory
Board Members and establish the Audit & Supervisory
Board.

(Deleted)(Number of Audit & Supervisory Board Members)
Article 33 The number of the Company’s Audit &Supervisory Board Members shall be up to four (4) persons.

(Deleted)(Method of election of Audit & Supervisory Board
Members)
Article 34
Audit & Supervisory Board Members shall be elected at theGeneral Meeting of Shareholders.
2. The resolution for electing Audit & Supervisory Board
Members requires the presence of shareholders owning aminimum of one-third (1/3) of the voting rights ofshareholders with exercisable voting rights, and shall be
adopted by the majority of the voting rights of the present
shareholders.

(Deleted)(Term of office of Audit & Supervisory Board Members)
Article 35
The term of office of Audit & Supervisory Board Members
shall expire at the conclusion of the Annual Meeting of
Shareholders pertaining to the final year of the fiscal years
ending within four (4) years after their appointment.

(Deleted)-8-

[Translation]

Existing Articles of Incorporation

Proposed Amendments

2. The term of office of an Audit & Supervisory Board
Member elected to fill a vacancy for an Audit & Supervisory
Board Member shall be the same as the remaining term ofoffice of the retiring Audit & Supervisory Board Member.
(Full-time Audit & Supervisory Board Members)
Article 36 Full-time Audit & Supervisory Board Members
shall be appointed among Audit & Supervisory Board
Members by the Audit & Supervisory Board.

(Deleted)(Notice to convene a meeting of the Audit & Supervisory
Board)
Article 37 A notice to convene a meeting of the Audit &Supervisory Board shall be issued to each Audit &Supervisory Board Member at least three (3) days before themeeting date. However, this timeframe may be shortened in
the event of urgency.

(Deleted)(Method of resolution by the Audit & Supervisory Board)
Article 38 A resolution by the Audit & Supervisory Board
shall be adopted by a majority vote of Audit & Supervisory
Board Members, unless otherwise provided by laws andregulations.

(Deleted)(Audit & Supervisory Board minutes)
Article 39 An outline of the proceedings of a meeting of the
Audit & Supervisory Board, the final outcome, and othermatters prescribed by laws and regulations shall be enteredor recorded in the meeting minutes, and the Audit &Supervisory Board Members present shall affix their nameand seal or electronic signature to these minutes.

(Deleted)(Rules of the Audit & Supervisory Board)
Article 40 Matters related to the Audit & Supervisory Board
shall be governed by the Rules of the Audit & Supervisory
Board, as established by the Audit & Supervisory Board, in
addition to laws and regulations and the Articles ofIncorporation.

(Deleted)(Remuneration, etc. for Audit & Supervisory Board
Members)
Article 41 Remuneration, etc. for Audit & Supervisory Board
Members shall be decided by resolution of the General
Meeting of Shareholders.

(Deleted)(Exemption from liability of Audit & Supervisory Board
Members)
Article 42
The Company may, by resolution of the Board of Directors,
exempt Audit & Supervisory Board Members (including
former Audit & Supervisory Board Members) from liability
for damage under Article 423, paragraph 1 of the Companies
Act, up to an amount obtained by deducting the statutory
minimum amount of liability from the amount of their
liability, if they meet the requirements prescribed by laws
and regulations.

(Deleted)-9-

[Translation]

Existing Articles of Incorporation

Proposed Amendments

2. The Company may conclude with an Outside Audit &Supervisory Board Member an agreement to limit their
liability for damage under Article 423, paragraph 1 of theCompanies Act, if they meet the requirements prescribed bylaws and regulations; provided, however, that the maximum
amount of liability based on said agreement is the greater ofa predetermined amount, which shall be ¥2 million or higher,or the minimum amount of liability prescribed by laws andregulations.

(Newly Added)

Chapter V Audit and Supervisory Committee(Newly Added)(Full-time Audit and Supervisory Committee Members)
Article 33 The Audit and Supervisory Committee may, by its
resolution, appoint full-time members from among thecommittee members.

(Newly Added)(Notice to convene a meeting of the Audit and Supervisory
Committee)
Article 34
A notice to convene a meeting of the Audit and Supervisory
Committee shall be issued to each Audit and Supervisory
Committee Member at least three (3) days before themeeting date. However, this timeframe may be shortened in
the event of urgency.
2. The notice to convene a meeting in the preceding
paragraph may be omitted with the agreement of all Audit
and Supervisory Committee Members.

(Newly Added)(Method of resolution by the Audit and Supervisory
Committee)
Article 35
A resolution by the Audit and Supervisory Committee
requires the presence of a majority of committee members
who are able to vote, and shall be adopted by a majority votethereof.
2. Audit and Supervisory Committee Members with special
interests related to a resolution in the preceding paragraphare not able to vote.

(Newly Added)(Audit and Supervisory Committee minutes)
Article 36 An outline of the proceedings of a meeting of the
Audit and Supervisory Committee, the final outcome, andother matters prescribed by laws and regulations shall beentered or recorded in the meeting minutes, and thecommittee members present shall affix their name and seal
or electronic signature to these minutes.

(Newly Added)(Rules of the Audit and Supervisory Committee)
Article 37 Matters related to the Audit and Supervisory
Committee shall be governed by the Rules of the Audit andSupervisory Committee, as established by the Audit andSupervisory Committee, in addition to laws and regulations
and these Articles of Incorporation.

- 10 -

[Translation]

Existing Articles of Incorporation

Proposed Amendments

Chapter VI Financial Auditor

Chapter VI Financial Auditor(Appointment of Financial Auditor)
Article 43 The Company shall appoint a Financial Auditor.

(Deleted)

Articles 44 to 45 (Articles Omitted)

Articles 38 to 39 (Not Amended)(Remuneration, etc. of Financial Auditor)
Article 46 Remuneration, etc. of the Financial Auditor shallbe determined by the Representative Director, subject toapproval by the Audit & Supervisory Board.

(Remuneration, etc. of Financial Auditor)
Article 40 Remuneration, etc. of the Financial Auditor shallbe determined by the President, subject to approval by the
Audit and Supervisory Committee.

Chapter VII Accounts

Chapter VII Accounts

Article 47 (Article Omitted)

Article 41 (Not Amended)(Year-end dividends)
Article 48 The Company, based on a resolution by theGeneral Meeting of Shareholders, shall pay cash dividendsof surplus to shareholders or registered pledgees of shares
who are entered or recorded in the final shareholder register
as of March 31 each year (hereinafter referred to as “yearend dividends”).

(Year-end dividends)
Article 42 The Company, based on a resolution by theGeneral Meeting of Shareholders, may provide cash
dividends of surplus to shareholders or registered pledgees ofshares who are entered or recorded in the final shareholder
register as of March 31 each year (hereinafter referred to as“year-end dividends”).

(Interim dividends)(Interim dividends)
Article 49 The Company, based on a resolution by the Board Article 43 The Company, based on a resolution by the Boardof Directors, may provide dividends of surplus pursuant toof Directors, may provide dividends of surplus pursuant to
Article 454, paragraph 5 of the Companies Act to
Article 454, paragraph 5 of the Companies Act toshareholders or registered pledgees of shares who are entered shareholders or registered pledgees of shares who are enteredor recorded in the final shareholder register as of September or recorded in the final shareholder register as of September
30 each year (hereinafter referred to as “interim dividends”). 30 each year (hereinafter referred to as “interim dividends”).
(Limitation on claim for year-end dividends, etc.)
Article 50
The Company shall be released from the obligation to pay
year-end dividends and interim dividends if said dividends
are left unclaimed for a period of three (3) years from thedate that payment starts.

(Limitation on claim, etc. for dividends)
Article 44
The Company shall be released from the obligation to pay
cash for year-end dividends and interim dividends(hereinafter referred to as “dividends”) if said dividends areleft unclaimed for a period of three (3) years from the datethat payment starts.
2. Unpaid year-end dividends and interim dividends shall not 2. Unpaid dividends shall not accrue interest.
accrue interest.
Chapter VII Other(Deleted)(Enactment and amendment or repeal)
Article 51 The enactment and amendment or repeal of these
Articles of Incorporation shall be proposed by the Board of
Directors and adopted by resolution by the General Meetingof Shareholders.

(Deleted)- 11 -

[Translation]

Existing Articles of Incorporation

Proposed Amendments(Newly Added)

Supplementary Provisions(Transitional measures related to the exemption fromliability of Audit & Supervisory Board Members)
Article 1 The Company may, by resolution of the Board of
Directors, exempt former Audit & Supervisory Board
Members from liability for damage under Article 423,
paragraph 1 of the Companies Act, up to an amount obtainedby deducting the statutory minimum amount of liability fromthe amount of their liability, if they meet the requirements
prescribed by laws and regulations.

- 12 -

[Translation]

Proposal 3:

Election of five (5) Directors other than Directors who are Audit andSupervisory Committee Members

The Company will transition to a Company with Audit and Supervisory Committee, subject tothe approval of Proposal 2, “Partial amendments to the Articles of Incorporation.” In accordancewith the provision of Article 332, paragraph 7, item 1 of the Companies Act, all of six (6)Directors’ term of office will expire at the conclusion of this Annual Meeting of Shareholders.
Therefore, the Company proposes the election of five (5) Directors other than Directors who are
Audit and Supervisory Committee Members.
A resolution for this proposal shall only take effect on condition that Proposal 2, “Partial
amendments to the Articles of Incorporation,” is approved as originally proposed, and that theamendments to the Articles of Incorporation take effect based on the resolution for Proposal 2.
The candidates for Directors other than Directors who are Audit and Supervisory Committee
Members are as follows:
No.

Name
(Date of birth)

Career summary, positions and areas of responsibility in the Company,
and important concurrent positionsJul.

1

Masahisa Shimizu(Jun. 23, 1950)

1976

Joined Aichi Kogata Unyu Co., Ltd. (currently RANET
CO., LTD.)

Jun.

1989

Board Director of the Company

Jun.

1994

Executive Vice President

Jun.

President and CEO

Yutaka Tsunekawa(Apr. 29, 1961)

2005

Chairman and CEO (current position)

Reasons for Nomination as Director
Masahisa Shimizu has led the Company by demonstrating excellent
foresight and strong leadership and grown it into a unique logistics firm. On
the basis of his track record, the Company appointed him Chairman and
CEO in April 2016 to continue his management leadership. The Company
has selected him as a candidate for Director, because he can be expected toperform the duties of top management such as decision-making inmanagement policy and corporate strategy and oversight of business
operations.
Jan.

2

Executive Director

Apr. 2000
Apr. 2016

2008

30,300Joined the Company

Aug. 2009

Executive Officer, Manager of Corporate Planning Groupand in charge of General & Human Resources Group

Jun.

2010

Executive Officer in charge of Administration Group

Jun.

2011

Board Director and Executive Officer in charge of
Administration Group

Apr. 2012

Board Director and Managing Executive Officer incharge of Administration Group

Mar. 2015

Board Director and Managing Executive Officer incharge of Administration & System Group

Apr. 2016

Number of theCompany’s
shares held

President and COO (current position)

Reasons for Nomination as Director
Since joining the Company, Yutaka Tsunekawa has acquired broad
experience in the Corporate Planning Group, Administration Group andSystem Group, contributing toward the Company’s growth andspearheading qualitative management reforms. Appointed President and
COO in April 2016, he has led the effort to realize the medium-termbusiness plan “TRANCOM VISION 2020”. The Company has selected him
as a candidate for Director, because he can be expected to continue
performing his duties as President and COO.

- 13 -

2,900

[Translation]

No.

Name
(Date of birth)

Career summary, positions and areas of responsibility in the Company,
and important concurrent positions
Jul.
Jun.

1997
2005

Jun.

2011

Dec. 2011
Apr. 2012
Apr. 2016
3

Takashi Osawa(Jul. 23, 1972)

Joined the Company
Executive Officer, General Manager of Logistics
Information Service Group
Board Director and Executive Officer, General Manager
of Logistics Information Service Group
President of MSK CO., LTD. (currently TRANCOM ITSCO., LTD.) (current position)
Board Director and Managing Executive Officer incharge of Logistics Information Service Group
Board Director and Senior Managing Executive Officer,
controlling operations (current position)[Important Concurrent Positions]
President of TRANCOM ITS CO., LTD.

Number of theCompany’s
shares held

4,000

Reasons for Nomination as Director
Since joining the Company, Takashi Osawa has demonstrated strong
leadership to grow the logistics information service business into a corebusiness of the Company. He was appointed Board Director and Senior
Managing Executive Officer, controlling operations in April 2016 on thebasis of his track record and has been progressing management reforms to
expand the Group’s overall business further. The Company has selected him
as a candidate for Director, because he can be expected to continue
performing his duties of optimal execution and oversight of the Company’s
overall business.

4

Yasuhiro Jinno(Mar. 8, 1971)

Mar. 1995

Joined the Company

Jun.

Executive Officer, General Manager of Transportation
Group

2005

Feb. 2012

Executive Officer, controlling operation of Logistics
Management Group

Jan.

2014

Executive Officer in charge of Logistics Management
Group

Jun.

2014

Board Director and Executive Officer in charge of
Logistics Management Group

Apr. 2016

Board Director and Senior Executive Officer in charge of
Logistics Management Group I and Logistics Information
Service Group (current position)

Reasons for Nomination as Director
Yasuhiro Jinno has engaged in the Transportation business and Logistics
Management business since joining the Company and held positions ofresponsibility in diverse business areas. He was appointed Board Director
and Senior Executive Officer in April 2016 on the basis of his extensive
business experience and track record to lead the initiative to grow the
Logistics Management business further and expand the scope of thebusiness by greater collaboration with the Logistics Information Service
business. The Company has selected him as a candidate for Director,
because he can be expected to continue to promoting the Company’sbusiness.

- 14 -

1,300

[Translation]

No.

Name
(Date of birth)

Career summary, positions and areas of responsibility in the Company,
and important concurrent positions
Jul.

1999

Feb. 2003

5

Atsunori Takebe(Jul. 30, 1974)
New candidate

Number of theCompany’s
shares held

Joined the Company
Block Manager of Block I of Logistics Management
Group

Feb. 2010

Manager of Corporate Planning Group

Apr. 2014

Seconded to Transfreight China Logistics Ltd. as Vice
President

Nov. 2015

General Manager of Overseas Business Group

Apr. 2016

Executive Officer in charge of Overseas Business Groupand President of Transfreight China Logistics Ltd.
(current position)［Important Concurrent Positions］
President of Transfreight China Logistics Ltd.
Reasons for Nomination as Director
Since joining the Company, Atsunori Takebe has gained extensive
experience in the Logistics Management business, Corporate Planning, andbusiness expansion in overseas. On the basis of his track record, he has beenin head of the overseas business as Executive Officer since April 2016. The
Company has selected him as a candidate for Director, because he can be
expected to utilize his broad business experience and knowledge formanagement.

(Note) There is no special interest between the candidates and the Company.

- 15 -

76,600[Translation]

Proposal 4:

Election of three (3) Directors who are Audit and Supervisory Committee
Members

The Company will transition to a Company with Audit and Supervisory Committee, subject tothe approval of Proposal 2, “Partial amendments to the Articles of Incorporation.” Accordingly,
the Company proposes the election of three (3) Directors who are Audit and Supervisory
Committee Members.
A resolution for this proposal shall only take effect on condition that Proposal 2, “Partial
amendments to the Articles of Incorporation,” is approved as originally proposed, and that theamendments to the Articles of Incorporation take effect based on the resolution for Proposal 2.
Additionally, the submission of this proposal has been approved by the Audit & Supervisory
Board.
The candidates for Directors who are Audit and Supervisory Committee Members are as
follows:
No.

1

Name
(Date of birth)

Hisatoshi Nagamine(Mar. 30, 1948)
New candidate

Career summary, positions and areas of responsibility in the Company,
and important concurrent positions
Jan.

1967

Joined Aichi Kogata Unyu Co., Ltd. (currently RANET
CO., LTD.)

Jun.

1994

Board Director and Manager of Business Division of theCompany

Oct.

2006

Board Director and Executive Officer controlling Sales
and in charge of Public Relations

Jun.

2009

Board Director and Executive Officer, stationed in Tokyo

Jun.

2012

Standing Audit & Supervisory Board Member (current
position)

Reasons for Nomination as Director
Hisatoshi Nagamine has mainly gained experience in the Business Division.
He has also involved in management for many years as Director of theCompany, contributing to the Company’s growth as a member of the
management team. He was appointed Standing Audit & Supervisory Board
Member in June 2012 and has been helping to improve management
governance by actively offering comments and advice on the management.
The Company has selected him as a candidate for Director and Audit &Supervisory Board Member, because he can be expected to utilize his
experience etc. in the oversight of management after the Company
transitions to a Company with Audit and Other Required Committees.

- 16 -

Number of theCompany’s
shares held

3,300

[Translation]

No.

Name
(Date of birth)

Career summary, positions and areas of responsibility in the Company,
and important concurrent positions
Apr. 1978

Registered as a lawyer (Nagoya Bar Association)

Apr. 1983

President of Kawamura Law Office (current position)

Jun.

Outside Audit & Supervisory Board Member of theCompany (current position)

2012

Number of theCompany’s
shares held

[Important Concurrent Positions]
President of Kawamura Law OfficeKazuo Kawamura(Feb. 13, 1953)
2

New candidate
Outside Director

Yasuhisa Hayakawa(Feb. 10, 1951)
3

New candidate
Outside Director

Reasons for Nomination as Outside Director
Kazuo Kawamura has professional knowledge and abundant experience as alawyer. He was appointed Outside Audit & Supervisory Board Member of
the Company in June 2012 and has been helping to improve management
governance by actively offering comments and advice from a legal
perspective. The Company has selected him as a candidate for Director and
Audit & Supervisory Board Member, because he can be expected to utilize
his experience etc. in management audits, etc., after the Company
transitions to a Company with Audit and Other Required Committees.
Although he has no experience in corporate management other than as
Outside Audit & Supervisory Board Member, he can be expected toperform the duties of Outside Director and Audit & Supervisory Board
Member for the reasons stated above, and also because he has contributed toensuring sound management of the Company as Outside Audit &Supervisory Board Member of the Company in the past four years.
Apr. 1969

Joined Nagoya Regional Taxation Bureau

Jul.

2004

District Director of Tosu Tax Office (Fukuoka Regional
Taxation Bureau)

Jul.

2006

Chief Internal Inspector dispatched to Nagoya,Commissioner’s Secretariat of National Tax Agency

Jul.

2009

Deputy Commissioner of Taxation Department No.2,
Nagoya Regional Taxation Bureau

Aug. 2011

Registered as a certified public tax accountant (Nagoya
Certified Tax Accountants’ Association Gifu Kita
Branch)Sep. 2011

President of Hayakawa Tax Accountant Office (current
position)

Jun.

Outside Audit & Supervisory Board Member of theCompany (current position)

2012[Important Concurrent Positions]
President of Hayakawa Tax Accountant Office
Reasons for Nomination as Outside Director
Yasuhisa Hayakawa has professional knowledge and abundant experience
as a tax accountant. Since his appointment as Outside Audit & Supervisory
Board Member of the Company in June 2012, he has been helping to
improve management governance by actively offering comments and advice
to the management team from tax and accounting perspectives. The
Company has selected him as a candidate for Director and Audit &Supervisory Board Member, because he can be expected to utilize his
experience etc. in management audits, etc., after the Company transitions to
a Company with Audit and Other Required Committees. Although he has
no experience in corporate management other than as Outside Audit &Supervisory Board Member, he can be expected to perform the duties of
Outside Director and Audit & Supervisory Board Member for the reasonsstated above, and also because he has contributed to ensuring soundmanagement of the Company as Outside Audit & Supervisory Board
Member in the past four years.

- 17 -––

[Translation](Notes)1 There is no special interest between the candidates and the Company.
2 Kazuo Kawamura and Yasuhisa Hayakawa are candidates for Outside Director.
3 Matters to be noted in relation to the candidates for Outside Director are as follows:(1) Limited Liability Agreements
The Company has entered into an agreement with Kazuo Kawamura and Yasuhisa
Hayakawa to limit their liability for damages as prescribed in Article 423, Paragraph 1of the Companies Act pursuant to Article 427, Paragraph 1 of the same law. The
limited amount of liabilities for damages under the Agreement was set as the higher of
either two million yen or the minimum amount calculated based on the provision of
Article 425, Paragraph 1. Upon the approval of appointment of Kazuo Kawamura andYasuhisa Hayakawa as Outside Director and Supervisory Board Member, theCompany plans to enter into such agreements to limit their liability again.
(2) Registration as Independent Director
The Company has no special relationship with Kawamura Law Office, of which
Kazuo Kawamura is Director, or with Hayakawa Tax Accountant Office, of which
Yasuhisa Hayakawa is Director.
The Company has registered Mr. Kawamura and Mr. Hayakawa as Independent
Directors, pursuant to the provisions of the Tokyo Stock Exchange and Nagoya Stock
Exchange, with the said exchanges. If Mr. Kawamura and Mr. Hayakawa are elected,
the Company will continue to register them as Independent Directors.
4 The Company has established “Independence Criteria for Outside Directors” as follows toensure the independence of candidates when selecting candidates for Outside Director.

- 18 -

[Translation](Independence Criteria for Outside Directors)<Criteria for judging independence>
The Company judges that a person serving as an Outside Director or an Outside Audit & Supervisory Board Member
has independence when none of the conditions listed below apply now or within the previous three (3) years (or the
directly preceding three (3) fiscal years), in addition to satisfying the requirements for an Outside Director or an
Outside Audit & Supervisory Board Member prescribed in the Companies Act and the independence criteriaprescribed by the Tokyo Stock Exchange, Inc. and the Nagoya Stock Exchange, Inc.
1. Major business partners or related parties(1) An executive at a company at which an executive of the Company or the Company’s Group serves as an
officer(2) A person or an executive of a company or organization for which the Company or the Company’s Group area major business partner (Note 1)(Note 1) A person for which the Company or the Company’s group companies are a major business partner,
and for which total sales to the Company or the Company’s group companies accounted for morethan 20% of the said person’s consolidated sales in any of the most recent three (3) fiscal years.
(3) A major business partner (Note 2) or an executive of a company or organization that is a major business
partner for the Company or the Company’s Group(Note 2) Business partner for which sales to said partner accounted for more than 10% of the Company’s
consolidated sales in any of the most recent three (3) fiscal years.
(4) An executive of a major lender to the Company (lender of an amount in excess of 2% of total consolidated
assets)2. Professionals(1) A certified public accountant or a partner or employee of an auditing firm (however, excluding ancillarystaff) that serves as the Company’s Financial Auditor(2) An attorney, certified public accountant, tax accountant, or other consultant that belongs to a law firm,
auditing firm, tax accountant firm, consulting firm, or other professional advisory firm (however, excluding
persons cited in (1) and ancillary staff) who has received monies or other financial benefits of ¥10 million ormore within the previous three (3) years other than officers’ compensation from the Company or theCompany’s Group
3. Donations
A person or an executive of a company or organization that has received a donation of ¥10 million or more within
the previous three (3) years from the Company or the Company’s Group4. Major shareholders(1) A major shareholder of the Company (a shareholder or an executive of a company or organization who owns
voting rights directly or indirectly at 10% or higher)(2) A major shareholder or an executive thereof at the present time or during the directly preceding three (3)fiscal years
5. A person who has served as an Outside Director or an Outside Audit & Supervisory Board Member at theCompany in excess of eight (8) years in total
6. Close relatives
A close relative (spouse or relative within the second degree of kinship) or cohabitant of a person for which oneof the following applies(1) A person for which one of the above 1.–5. applies.
(2) A director, audit & supervisory board member, executive officer, advisor, or important employee (manager
level or higher) of the Company or the Company’s Group
7. Other
A person for which one of the above 1.–6. applies now or within the previous three (3) years
The rational basis for judging independence shall be specifically disclosed if the Board of Directors deems
independence despite not satisfying the above-stated requirements.

- 19 -

[Translation]

Proposal 5:

Determination of amounts of remuneration for Directors other than Directors
who are Audit and Supervisory Committee Members

Remuneration paid to the Company’s Directors in the amount of no more than ¥400 million
annually was approved by the 50th Annual Meeting of Shareholders held on June 15, 2007 andhas remained at that amount to the present. However, subject to the approval of Proposal 2,“Partial amendments to the Articles of Incorporation,” the Company will make the transition toa Company with Audit and Supervisory Committee.
The Company proposes that the current amount of remuneration for Directors be revoked, andthat amount of remuneration for Directors other than Directors who are Audit and Supervisory
Committee Members be set at no more than ¥400 million annually taking into consideration
economic conditions and other factors in accordance with the provisions of Article 361,
paragraph 1 and paragraph 2 of the Companies Act.
The amount of remuneration for Directors other than Directors who are Audit and Supervisory
Committee Members does not include the portion for salaries paid to those Directors who also
serve as employees.
The Company currently has six (6) Directors (including one (1) Outside Director), and if
Proposal 2 and Proposal 3 are approved as originally proposed, the number of Directors who are
not Audit and Supervisory Committee Members will be five (5) (including zero (0) Outside
Directors) .
The resolution related to this proposal may only take effect on the condition that Proposal 2“Partial amendments to the Articles of Incorporation” are approved as originally proposed andthe amendments become effective.

Proposal 6:

Determination of amounts of remuneration for Directors who are Audit andSupervisory Committee Members

Provided Proposal 2 “Partial amendments to the Articles of Incorporation” is approved, theCompany plans to make the transition to a Company with Audit and Supervisory Committee.
Accordingly, the Company proposes that the amount of remuneration for Directors who are
Audit and Supervisory Committee Members be set at no more than ¥40 million annually taking
into consideration the economic conditions and other factors in accordance with the provisionsof Article 361, paragraph 1 and paragraph 2 of the Companies Act.
If Proposal 2 and Proposal 4 are approved as originally proposed, the number of Directors who
are Audit and Supervisory Committee Members will be three (3).
The resolution related to this proposal may only take effect on the condition that Proposal 2“Partial amendments to the Articles of Incorporation” are approved as originally proposed andthe amendments become effective.

- 20 -

[Translation]

Proposal 7:
1.

Determination of amounts of remunerations, etc. related to stock
remuneration system

Reasons for the proposal
The Company will transition to a Company with Audit and Supervisory Committee, subject
to the approval of Proposal 2, “Partial amendments to the Articles of Incorporation.”
Concerning the remuneration of the Company’s Directors (excluding Directors who are
Audit and Supervisory Committee Members and Outside Directors) and Executive Officers(hereinafter referred to as “Directors, etc.”), the Company proposes to introduce a Board
Benefit Trust (BBT) as a new stock remuneration system (hereinafter referred to as“System”), and requests approval of the amounts of remuneration for Directors.
The introduction of this System is intended to increase awareness about improving earnings
over the medium to long term and contributing to raising enterprise value by more clearly
linking the remuneration of Directors, etc. with the Company’s stock price and having
Directors, etc. share with shareholders not only the benefits of a higher stock price, but also
the risk of a lower stock price.
This proposal is separate from the requested approval of Proposal 5, “Determination ofamounts of remuneration of Directors other than Directors who are Audit and Supervisory
Committee Members,” and approval of the amounts of remuneration is requested in orderto pay new stock remuneration to the Company’s Directors (excluding Directors who are
Audit and Supervisory Committee Members and Outside Directors). The details of this
System shall be left to the discretion of the Company’s Board of Directors, within theframework provided below in 2.
A resolution for this proposal shall only take effect on condition that Proposal 2, “Partial
amendments to the Articles of Incorporation,” is approved as originally proposed, and thatthe amendments to the Articles of Incorporation take effect based on the resolution for
Proposal 2.
Additionally, if Proposal 2, “Partial amendments to the Articles of Incorporation,” andProposal 3, “Election of five (5) Directors other than Directors who are Audit andSupervisory Committee Members,” are approved as originally proposed, then the numberof the Company’s Directors (excluding Directors who are Audit and Supervisory
Committee Members and Outside Directors) eligible for this System shall be five (5).
The 56th Annual Meeting of Shareholders held in June 21, 2013 approved of a stock option
remuneration framework for Directors that was separate from the remuneration limit for
Directors (annual amount within ¥400 million) approved at the 50th Annual Meeting of
Shareholders held in June 15, 2007, and established an annual limit of ¥90 million.
However, this stock option remuneration framework for Directors shall be a repealed with
the introduction of this System.

2.

Remuneration amounts in this System and reference information(1) Outline of this System
This System is a stock remuneration system that will acquire Company stock funded byfunds contributed by the Company through a trust (the trust established based on this
System will hereinafter be referred to as “Trust”), and deliver Company stock throughthe trust to Directors, etc., according to the Rules for Delivering Stock to Officers
prescribed by the Company.
Directors, etc. shall receive Company stock, in principle, at the time of their retirement
as a Director, etc.
(2)

Persons eligible in this System
Directors (excluding Outside Directors) who are not Audit and Supervisory Committee- 21 -

[Translation]

Members, and Executive Officers of the Company(3)

Calculation and limit of the number of shares of Company stock to be delivered to
Directors, etc.
Directors, etc. shall be awarded points at a number determined by the procedure set
forth in the Rules for Delivering Stock to Officers in each fiscal year.
The total number of points that can be awarded to Directors, etc. in one fiscal year shallhave an upper limit of 30,000 points for Directors (excluding Outside Directors) who
are not Audit and Supervisory Committee Members, and 7,500 points for Executive
Officers. The Company believes these limits are reasonable, as they were determinedwhile taking full account of the current level of officer remuneration, trends in thenumber of Directors, etc., future outlook, and other considerations. Points will beawarded to Directors starting with those for the fiscal year that ended on March 31,
2016.
The points awarded to Directors, etc. shall be converted to Company stock at one (1)common share per one (1) point at the time Company stock is delivered as prescribed
below in (6) (however, in the event of a stock split, gratis allotment of stock, or reverse
stock split after approval of this proposal, the conversion ratio shall be reasonably
adjusted according to the relevant ratio).
The number of points for Directors, etc. that will serve as the basis for delivering
Company stock as prescribed below in (6) shall be determined based on the total
number of points that have been awarded to Directors, etc. by the time of theirretirement (hereinafter referred to as “Final Number of Points”).

(4)

Method for acquiring Company stock
The Trust shall acquire Company stock via the stock market or by receipt in a disposalof treasury stock by the Company, funded by funds contributed as prescribed below in(5).
For the Initial Applicable Period (defined below in (5)), up to 37,500 shares shall becurrently acquired without delay after the Trust is established (scheduled for August,2016) in order to deliver stock to Directors, etc. After such an acquisition, in the eventthat additional contributions are made as prescribed below in (5), the Trust may acquireCompany stock. Details about the Trust’s method of acquiring Company stock andother matters shall be disclosed on all such occasions in a timely and appropriatemanner.

(5)

Amount of trust funds (remuneration amount)On condition that this proposal is approved, the Company shall establish the Trust andcontribute the funds required for the Trust to acquire the number of shares of Company
stock that can be reasonably expected to be needed to deliver Company stock asprescribed above in (3) and below in (6). The Trust, as prescribed above in (4), shallacquire Company stock funded by funds contributed by the Company.
Specifically, the Company shall currently establish the Trust and contribute funds up toa maximum of ¥150 million (of which, ¥120 million for Directors (excluding Outside
Directors) who are not Audit and Supervisory Committee Members, and ¥30 million for
Executive Officers) as the funds needed for three (3) fiscal years, from the fiscal year
ended on March 31, 2016, to the fiscal year ending on March 31, 2018, (hereinafterreferred to as “Initial Applicable Period”). When the Trust is established (scheduled forAugust 2016), the Company shall contribute funds up to ¥150 million as stated above.
Thereafter, the Company can make additional contributions of up to ¥300 million (ofwhich ¥240 million is for Directors (excluding Outside Directors) who are not Audit &Supervisory Committee Members and ¥60 million is for Executive Officers) as required,- 22 -

[Translation]

depending on its financial condition, points awarded, and other matters during theInitial Applicable Period.
Furthermore, after the Initial Applicable Period, the Company shall, in principle, makeadditional contributions to the Trust, up to a maximum of ¥450 million (of which, ¥360
million for Directors (excluding Outside Directors) who are not Audit and Supervisory
Committee Members, and ¥90 million for Executive Officers), for the next three (3)fiscal years (hereinafter referred to as “Next Applicable Period”), in every three (3)fiscal years until the termination of this System. However, in making an additional
contribution, if the trust assets have any remaining Company stock (excluding
Company stock equal to the number of points awarded to Directors, etc. but not yet
delivered to Directors, etc.) and monies (hereinafter referred to as “Remaining Stock,etc.”) on the date just prior to the start of the Next Applicable Period for which said
additional contribution is to be made, then the Remaining Stock, etc. shall be allocatedto the funds for delivering stock based on this System for the Next Applicable Period,
and the maximum amount that the Company can additionally contribute for the Next
Applicable Period shall be calculated by subtracting the monetary amount of theRemaining Stock, etc. (stock is converted to a monetary amount based on its market
value on the date just prior to the start of the Next Applicable Period) from ¥450 million(of which, ¥360 million for Directors (excluding Outside Directors) who are not Audit
and Supervisory Committee Members, and ¥90 million for Executive Officers). The
Company shall make timely and appropriate disclosure after deciding to make an
additional contribution.
(6)

Timing for delivering Company stock
Directors, etc. of the Company who retire and satisfy the beneficiary requirements
prescribed in the Rules for Delivering Stock to Officers are eligible, based onprescribed beneficiary confirmation procedures, to receive Company stock from theTrust after their retirement in a number based on their Final Number of Points.

- 23 -

[Translation]<Structure of the System>(i) Rules for Delivering
Stock to Officers[Settlor]
The Company(ii) Entrustment ofmoney(iii) Stockacquisition(v) Non-exercise
of voting rights

Instruction on nonexercise of voting
rights[Trustee]Mizuho Trust & Banking Co., Ltd.
(Master trust: Trust & Custody Services
Bank, Ltd.)

Company stock

Directors, etc.

(iv) Awarding of points(vi) Delivery ofCompany stock

Trust Administrator

Acquirethe right[Beneficiary]
Directors, etc. who have retired andsatisfy beneficiary requirements(i)

The Company shall prepare Rules for Delivering Stock to Officers within a framework to beapproved in this proposal.

(ii)

The Company shall entrust monies within the scope to be approved in this proposal.

(iii) The Trust shall acquire Company stock funded by monies entrusted under (ii) via the stock
market or by receipt in a disposal of treasury stock by the Company.
(iv)

The company shall award points to Directors, etc. based on the Rules for Delivering Stock to
Officers(v)

The Trust shall not exercise voting rights for Company stock held in the Trust account inaccordance with instructions by a trust administrator that is independent from the Company.

(vi)

For Directors, etc. who have retired and satisfy the beneficiary requirements prescribed in theRules for Delivering Stock to Officers (hereinafter referred to as “Beneficiaries”), the Trustshall deliver Company stock based on the number of points awarded to said Beneficiaries.

- 24 -