These documents have been translated from Japanese originals for reference purposes only.
In the event of any discrepancy between these translated documents and the Japanese originals, the originals
shall prevail. The Company assumes no responsibility for this translation or for direct, indirect or any otherforms of damages arising from the translations.

NOTICE OF THE 196TH ANNUAL GENERAL MEETING OF SHAREHOLDERS

Date and Time:

Friday, June 24, 2016 at 10 a.m. Japan time

Place:

Fourth floor hall in the Chuo-ku NIHONBASHI KOUKAIDO, located at 1-31-1
Nihonbashikakigara-cho, Chuo-ku, Tokyo, Japan(Please see the map to the meeting at the hall at the end of this document for
directions.)

Proposals to be resolved:
Proposal No. 1: Partial Amendments to the Articles of Incorporation (Change in Trade Name andTransition to a Company with Audit and Supervisory Committee)
Proposal No. 2: Election of Four (4) Directors (Excluding Directors Serving as Audit andSupervisory Committee Members)
Proposal No. 3: Determination of Amount of Remuneration for Directors (Excluding Directors
Serving as Audit and Supervisory Committee Members)
Proposal No. 4: Election of Four (4) Directors Serving as Audit and Supervisory Committee
Members
Proposal No. 5: Determination of Amount of Remuneration for Directors Serving as Audit andSupervisory Committee Members
Proposal No. 6: Determination of Amount of Remuneration, etc. and Details of the Stock
Acquisition Rights in the Form of Stock Options to Be Issued to Directors(Excluding Directors Serving as Audit and Supervisory Committee Members
and Outside Directors)
Proposal No. 7: Election of Accounting Auditor
Contents:
Convocation Notice ...................................................................................................................... 3
Consolidated Financial Statements ............................................................................................... 5
Non-Consolidated Financial Statements ....................................................................................... 8
Reference Documents for the General Meeting of Shareholders................................................ 11

Daito Woolen Spinning & Weaving Company, Limited(Securities Code 3202)

1

Dear Shareholders,
We would like to give our utmost gratitude to our shareholders for their daily support.
We present this notice of convocation for our 196th Annual General Meeting of Shareholders for yourperusal.
Performance for the Company Group’s 196th term started with a severe condition with structural reforms in
the textile and apparel business, forcing downward revisions to the mid-term management plan. However,with factors that led to the downward swing in performance greatly improving by the structural reforms, andsupport from robust performance of the commercial facility SUN TO MOON Kakitagawa in Shizuoka
Prefecture, each quarterly cumulative period from the first quarter onwards have recorded a profit, resulting inmostly achieving the results forecasts that were revised upward in the middle of the term, securing final
surplus.
Moving forward, based on our new mid-term management plan on the occasion of the 120th anniversary
milestone, “Bridge to the Future,” we will evolve toward a new growth stage for the Group while expanding
the volume of profit. To achieve this, we will make company-wide efforts to undertake managerial initiatives
and strive to improve corporate value.
We appreciate our shareholders’ further encouragement and support moving forward.
Kazuhiro Yamauchi
President and Representative Director2

(Securities Code 3202)
June 3, 2016
To Shareholders with Voting Rights:
Kazuhiro Yamauchi
President and Representative Director
Daito Woolen Spinning & Weaving
Company, Limited
6-6 Nihonbashikobuna-cho, Chuo-ku,
Tokyo, JapanNOTICE OF
THE 196TH ANNUAL GENERAL MEETING OF SHAREHOLDERS
We would like to express our appreciation for your continued support and patronage.
You are cordially invited to attend the 196th Annual General Meeting of Shareholders of Daito Woolen
Spinning & Weaving Company, Limited (the “Company”) and its subsidiaries (collectively, the “Group”). The
meeting will be held for the purposes as described below.
If you are unable to attend the meeting, you can exercise your voting rights in writing or via theInternet. Please review the Reference Documents for the General Meeting of Shareholders (describedhereinafter), indicate your vote for or against the proposal on the enclosed Voting Rights Exercise Form,and return it so that it is received by 5 p.m. on Thursday, June 23, 2016 Japan time, or, please review
the “Instructions for Exercising Voting Rights via the Internet” (on pages 58 to 59, in Japanese) andvote via the Internet.
1. Date and Time:

Friday, June 24, 2016 at 10 a.m. Japan time

2. Place:

Fourth floor hall in the Chuo-ku NIHONBASHI KOUKAIDO, located at 1-31-1
Nihonbashikakigara-cho, Chuo-ku, Tokyo, Japan(Please see the map to the meeting at the hall at the end of this document for
directions.)

3. Meeting Agenda:
Matters to be reported: The Business Report, Non-Consolidated Financial Statements, and Consolidated
Financial Statements for the Company’s 196th Fiscal Year (April 1, 2015 March 31, 2016) and results of audits by the Accounting Auditor and the Boardof Corporate Auditors of the Consolidated Financial Statements
Proposals to be resolved:
Proposal No. 1: Partial Amendments to the Articles of Incorporation (Change in Trade Name andTransition to a Company with Audit and Supervisory Committee)
Proposal No. 2: Election of Four (4) Directors (Excluding Directors Serving as Audit andSupervisory Committee Members)
Proposal No. 3: Determination of Amount of Remuneration for Directors (Excluding Directors
Serving as Audit and Supervisory Committee Members)
Proposal No. 4: Election of Four (4) Directors Serving as Audit and Supervisory Committee
Members
Proposal No. 5: Determination of Amount of Remuneration for Directors Serving as Audit andSupervisory Committee Members
Proposal No. 6: Determination of Amount of Remuneration, etc. and Details of the Stock
Acquisition Rights in the Form of Stock Options to Be Issued to Directors(Excluding Directors Serving as Audit and Supervisory Committee Members
and Outside Directors)
Proposal No. 7: Election of Accounting Auditor
3

End○ When attending the meeting, please submit the enclosed Voting Rights Exercise Form at the receptiondesk.
○ Of the documents to be provided with this Convocation Notice, Notes to the Consolidated Financial
Statements and Notes to the Non-Consolidated Financial Statements are posted on the Company’s website(http://www.daitobo.co.jp/) pursuant to provisions of laws and regulations as well as Article 16 of the
Articles of Incorporation of the Company.
○ Any updates to the Reference Materials for the General Meeting of Shareholders, the Business Report, theConsolidated Financial Statements, and the Non-Consolidated Financial Statements will be posted on the
Company’s website (http://www.daitobo.co.jp/).

4

Consolidated Balance Sheet(As of March 31, 2016)
Description

AmountDescription(Assets)
Current assets
Cash and deposits
Notes and accounts
receivable-trade
Inventories
Other(Thousands of yen)Amount(Liabilities)
1,856,216

Current liabilities

777,476

Notes and accounts payable-trade

512,836
424,094
141,807

4,561,660
401,870

Short-term loans payable
Current portion of bonds
Income taxes payable

3,168,584
169,000
7,002

Provision for bonuses

31,677

Other783,526

Non-current assets

17,140,028

Non-current liabilities

Property, plant and equipment

16,060,922

Bonds payable

Buildings and structures

6,488,744

Long-term loans payableLand

9,343,758

Lease obligations

10,134,269
696,500
4,495,106
178,542

Leased assets

192,997

Guarantee deposits received

Other

35,422

Deferred tax liabilities

Intangible assets

12,995

Deferred tax liabilities for land
revaluation

2,212,849

1,066,110

Net defined benefit liability

248,096

265,809

Asset retirement obligations

44,132567,601

Other

29,681

Investments and other assets
Investment securities
Investments in capital ofsubsidiaries and associates
Claims provable in bankruptcy, claims
provable in rehabilitation and other

101,243

Total liabilities

Other

228,038(Net assets)

Allowance for doubtful accounts(96,583)

Shareholders’ equity

14,695,929(815,826)
1,500,000

Capital surplus

503,375

Treasury shares
Accumulated other comprehensive
incomeValuation difference on
available-for-sale securities
Deferred gains or losses on hedges
Revaluation reserve for land
Foreign currency translation adjustment
18,996,244

3,194

Capital stock
Retained earnings

Total assets

2,226,166(2,812,168)(7,033)
5,116,141(23,462)(484)
4,990,956
149,131

Total net assets

4,300,315

Total liabilities and net assets

18,996,244

5Consolidated Statement of Income(April 1, 2015 - March 31, 2016)(Thousands of yen)
Description

AmountNet sales

5,407,011

Cost of sales

4,100,505

Gross profit

1,306,506

Selling, general and administrative expenses

927,705

Operating income

378,801

Non-operating income
Interest income

201

Dividend income
Share of profit of entities accounted for using
equity method
Other

7,790
4,572
72,25484,818Non-operating expenses
Interest expenses

249,542

Other

139,280

Ordinary income

388,822
74,797Extraordinary income
Gain on transfer of business

64,814

Profit before income taxes

64,814
139,612

Income taxes-current

15,393

Income taxes-deferred(613)

14,780

Profit124,831

Profit attributable to owners of parent

124,8316

Consolidated Statement of Changes in Equity(April 1, 2015 - March 31, 2016)(Thousands of yen)
Shareholders' equity
Capital stock
Balance at beginning ofcurrent period
Changes of items during
periodProfit attributable toowners of parent
Purchase of treasury
sharesNet changes of items
other thanshareholders' equity
Total changes of items
during period
Balance at end ofcurrent period

Capital surplus

1,500,000

Retained earnings

503,375

Treasury shares(2,937,000)(7,012)

124,831

Total shareholders'equity(940,636)

124,831
(21)

(21)

－

－

124,831(21)

124,8101,500,000

503,375(2,812,168)(7,033)(815,826)

Accumulated other comprehensive income
Valuationdifference on
available-forsale securities
Balance at beginning ofcurrent period
Changes of items during
periodProfit attributable toowners of parent
Purchase of treasury
sharesNet changes of items
other thanshareholders' equity
Total changes of items
during period
Balance at end ofcurrent period

41,034

Deferred gains
Revaluation
or losses onreserve for land
hedges(648)

4,869,546

Foreigncurrencytranslation
adjustment
181,176

Total
accumulated Total net assets
othercomprehensive
income5,091,108

4,150,472

124,831(21)(64,497)

163

121,410(32,044)

25,03225,032(64,497)

163

121,410(32,044)

25,032

149,842(23,462)(484)

4,990,956

149,131

5,116,141

4,300,3157

Non-Consolidated Balance Sheet(As of March 31, 2016)
Description(Assets)
Current assets
Cash and deposits
Notes receivable-trade
Accounts receivable-trade
Inventories
Other

AmountDescription

1,265,970
266,674
104,341374,273413,515
107,165

Non-current assets
Property, plant and equipment
Buildings and structures
Land
Leased assets
Other
Intangible assets
Investments and other assets
Investment securities
Shares and investments in capitalof subsidiaries and associates

17,258,121
16,270,492
6,491,478
9,553,528
196,050
29,435
12,594
975,034
228,257

Long-term loans receivable
Claims provable in bankruptcy,
claims provable inrehabilitation and other
Other
Allowance for doubtful accounts

204,107

Total assets

503,643(Thousands of yen)Amount(Liabilities)
Current liabilities
Notes payable-trade
Accounts payable-other
Short-term loans payable
Current portion of bonds
Income taxes payable
Provision for bonuses
Other
Non-current liabilities
Bonds payable
Long-term loans payable
Lease obligations
Guarantee deposits received
Deferred tax liabilities
Deferred tax liabilities for land
revaluation
Provision for retirement benefits
Asset retirement obligations
Other
Total liabilities

101,243
223,864(286,083)

18,524,091
8

4,141,116
152,917
253,152
3,168,584
169,000
3,379
23,490370,592
10,132,085
696,500
4,495,106
178,5422,247,503
3,194
2,212,849
231,837
36,87029,681
14,273,201(Net assets)
Shareholders’ equity
Capital stock
Capital surplus
Legal capital surplus(716,119)1,500,000
503,375
503,270

Other capital surplus
Retained earnings
Legal retained earnings
Other retained earnings
Retained earnings brought
forwardTreasury shares
Valuation and translation
adjustments
Valuation difference on
available-for-sale securities
Deferred gains or losses onhedges
Revaluation reserve for land
Total net assets
Total liabilities and net assets

104(2,712,462)
375,000(3,087,462)(3,087,462)(7,033)
4,967,009(23,462)(484)
4,990,956
4,250,889
18,524,091

Non-Consolidated Statement of Income(April 1, 2015 - March 31, 2016)(Thousands of yen)
Description

AmountNet sales

4,265,457

Cost of sales

3,081,881

Gross profit

1,183,575

Selling, general and administrative expenses

806,493

Operating income

377,082

Non-operating income
Interest income

5,903

Dividend income

7,737

Other

18,12031,761Non-operating expenses
Interest expenses

248,849

Other

121,462

Ordinary income

370,31138,532Extraordinary income
Reversal of allowance for doubtful accounts

204,067

Profit before income taxes

204,067
242,600

Income taxes-current

4,772

Income taxes-deferred(610)

Profit4,161
238,4389

Non-Consolidated Statement of Changes in Equity(April 1, 2015 - March 31, 2016)(Thousands of yen)
Shareholders' equity

Capitalstock

Balance at beginning ofcurrent period
Changes of items during
periodCapital surplus

Retained earnings

Other
capitalsurplusOtherretainedearnings
Retainedearnings
brought
forwardLegalcapitalsurplus1,500,000

503,270

Total
capitalsurplus104

503,375

Total
retainedearnings

TreasurysharesTotalshareholders'equity375,000 (3,325,900) (2,950,900)(7,012)(954,537)

Legal
retainedearnings

ProfitPurchase of treasury
sharesNet changes of items
other thanshareholders' equity
Total changes of items
during period
Balance at end ofcurrent period

238,438

－

－

－

－

1,500,000

503,270104

503,375

238,438

238,438(21)(21)

238,438(21)

238,417

375,000 (3,087,462) (2,712,462)(7,033)(716,119)－

238,438

Valuation and translation adjustments
Valuationdifference on
available-forsale securities
Balance at beginning ofcurrent period
Changes of items during
period26,078

Total valuation Total net assets
Deferred gains
Revaluationand translation
or losses onreserve for land
adjustments
hedges(648)

4,869,546

4,894,976

ProfitPurchase of treasury
sharesNet changes of items
other thanshareholders' equity
Total changes of items
during period
Balance at end ofcurrent period

3,940,439

238,438(21)(49,541)

163

121,41072,032

72,032(49,541)

163

121,41072,032

310,450(23,462)(484)

4,990,956

4,967,009

4,250,889

10

Reference Documents for the General Meeting of Shareholders
Proposal No. 1:

Partial Amendments to the Articles of Incorporation (Change in Trade Name andTransition to a Company with Audit and Supervisory Committee)

1. Reasons for the proposal(1) Change to the trade nameAs a milestone for the 120th anniversary of the Company’s establishment, based on the present corporate
conditions in which non-textile related business is becoming the majority, the Company has decidedchange its written name to the Japanese Katakana alphabet, and shall make the new name to Daitobo Co.,
Ltd., a name which has become entrenched as the Company’s nominal designation over many years. As aresult, the Company shall change its trade name and carry out amendments to the Articles ofIncorporation where necessary.
The amendments to the Articles of Incorporation shall take effect on September 1, 2016; transitional
measures that stipulate to that effect shall be established as supplemental provisions, and said transitional
measures shall be removed upon the amendments taking effect.
(2) Transition to a company with Audit and Supervisory Committee
1) Due to the “Act for Partial Revision of the Companies Act” (Act No. 90 of 2014; hereinafter the“Revised Companies Act.”) enacted on May 1, 2015, it has become possible to newly transition to a
Company with Audit and Supervisory Committee. With the goal of strengthening the audit andsupervision of the Board of Directors and further improving corporate governance under transparent
and agile corporate management, the Company would like to transition to a Company with Audit
and Supervisory Committee. Accordingly, the Company proposes amendments necessary whentransitioning to a Company with Audit and Supervisory Committee such as establishing newprovisions concerning the Audit and Supervisory Committee Members as well as the Audit andSupervisory Committee, creating new provisions concerning the delegation of important decisions
for business execution, and removing provisions concerning the Corporate Auditors and Board of
Corporate Auditors.
2) Due to the Revised Companies Act, the range of officers that can enter into a limited liability
agreement has changed, so Article 29, Paragraph 2 of the current Articles of Incorporation shall beamended in order to allow Directors that do not conduct business execution to sufficiently performtheir expected roles. Furthermore, consent has been obtained from each Corporate Auditor withregard to these amendments to the Articles of Incorporation.
3) While the Company has already appointed an Accounting Auditor, in light of the fact that the
Revised Companies Act obliges the appointment of an Accounting Auditor in Companies with Audit
and Supervisory Committee, new regulations have been added regarding the Accounting Auditor inorder to clarify its relationship with the Company.
4) In addition to the above, other amendments such as changes to the Article numbers when adding,revising, or removing Articles shall be carried out as necessary.
These amendments to the Articles of Incorporation shall become effective at the time of conclusionof this General Meeting of Shareholders.

112. Content of the amendments
Contents of the amendments are as follows.
Current Articles of Incorporation

Proposed Amendments

CHAPTER 1
CHAPTER 1
GENERAL PROVISIONS
GENERAL PROVISIONS(Trade Name)(Trade Name)
Article 1
Article 1
The name of the Company shall be “Daito The name of the Company shall be “Daitobo
Boshoku Kabushiki Kaisha” and in English it Kabushiki Kaisha” and in English it should beshould be Daito Woolen Spinning & Weaving Daitobo Co., Ltd.
Company，Limited.
Article 2 ~ 3 (Omitted)

Article 2 ~ 3 (Unchanged)(Governing Bodies)(Governing Bodies)
Article 4
Article 4
In addition to the general meeting of shareholders In addition to the general meeting of shareholders
and Directors, the Company shall have the and Directors, the Company shall have thefollowing governing bodies.
following governing bodies.
(1) Board of Directors(1) Board of Directors(2) Corporate Auditors(Deleted)(3) Board of Corporate Auditors(2) Audit and Supervisory Committee(4) Accounting Auditor(3) Accounting Auditor
Article 5 ~ 19 (Omitted)

Article 5 ~ 19 (Unchanged)

CHAPTER 4
CHAPTER 4
DIRECTORS AND BOARD OF DIRECTORSDIRECTORS AND BOARD OF DIRECTORS(Number of Directors)(Number of Directors)
Article 20
Article 20
The number of Directors of the Company shall not 1. The number of Directors (excluding Directors
serving as Audit and Supervisory Committee
exceed eleven (11).
Members) of the Company shall not exceed
eleven (11).
2. The number of Directors serving as Audit and(Newly established)
Supervisory Committee Members of theCompany shall not exceed four (4).
(Election of Directors)(Election of Directors)
Article 21
Article 21
1. Directors shall be elected at a general meeting 1. Directors shall be elected at a general meetingof shareholders.
of shareholders, distinguishedbetweenDirectors serving as Audit and Supervisory
Committee Members and those who are not.
2. (Unchanged)
2. (Omitted)
3. (Unchanged)
3. (Omitted)
12Current Articles of Incorporation

Proposed Amendments(Term of Office of Directors)(Term of Office of Directors)
Article 22
Article 22
The term of office of a Director shall expire upon 1. The term of office of a Director other than
Audit and Supervisory Committee Member
conclusion of the annual general meeting ofshall expire upon conclusion of the annual
shareholders held with respect to the last businessgeneral meeting of shareholders held withyear ending within one (1) year from his/her
respect to the last business year ending withinelection to office.
one (1) year from his/her election to office.
The term of office of a Director serving as
Audit and Supervisory Committee Member
shall expire upon conclusion of the annual
general meeting of shareholders held withrespect to the last business year ending within
two (2) years from his/her election to office.
2. The term of office of a Director who is not(Newly established)
Audit and Supervisory Committee Member
elected to increase the number of Directors or
to fill a vacancy shall expire at the time theterms of office of the other Directors in office
expire.
3. The term of office of a Director serving as(Newly established)
Audit and Supervisory Committee Member
elected to fill a vacancy caused by retirementof a Director serving as Audit and Supervisory
Committee Member prior to the expiry of
his/her term of office shall the same as theremaining term of office of the retired Director
serving as Audit and Supervisory Committee
Member.
(Representative Directors and Directors with (Representative Directors and Directors withTitles)Titles)
Article 23
Article 23
1. Representative Director(s) shall be elected by 1. Representative Director(s) shall be elected byresolution of the Board of Directors.
resolution of the Board of Directors fromamong Directors (excluding Directors serving
as Audit and Supervisory Committee
Members).
2. The Board of Directors may appoint one (1) 2. The Board of Directors may appoint one (1)Chairman and Director, one (1) President andChairman and Director, one (1) President andDirector, and a number of Vice Presidents andDirector, and a number of Vice Presidents andDirectors, Senior Managing Directors, andDirectors, Senior Managing Directors, andManaging Directors from among Directors
Managing Directors by resolution of the Board(excluding Directors serving as Audit andof Directors.
Supervisory
Committee
Members)byresolution of the Board of Directors.
13Current Articles of Incorporation
Article 24 (Omitted)

Proposed Amendments
Article 24 (Unchanged)(Notice of Convocation of the Board of Directors (Notice of Convocation of the Board of Directors
Meetings)
Meetings)
Article 25
Article 25
1. A notice of convocation of a meeting of the 1. A notice of convocation of a meeting of theBoard of Directors shall be sent to each
Board of Directors shall be sent to each
Director and Corporate Auditor at least three
Director and Director serving as Audit and(3) days prior to the meeting; provided,
Supervisory Committee Member at least three(3) days prior to the meeting; provided,
however, that such period may be shortened in
however, that such period may be shortened in
the event of emergency.
the event of emergency.
2. With the consent of all Directors and Corporate 2. With the consent of all Directors, the Board ofAuditors, the Board of Directors may be
Directors may be convened without following
convened without following the procedure forthe procedure for convocation.
convocation.

(Newly established)

Article 26 ~ 27 (Omitted)(Delegation of Determination of Important
Business Execution)
Article 26
The Company may delegate to Directors all or partof determination of important business execution(excluding matters stated in each Item of
Paragraph 5 of Article 399-13 of the CompaniesAct) by resolution of the Board of Directors.
Article 27 ~ 28 (Unchanged)(Remuneration, etc. to Directors)(Remuneration, etc. to Directors)
Article 28
Article 29
The amount of remuneration, bonuses, and any The amount of remuneration, bonuses, and anyother proprietary benefits to be granted to other proprietary benefits to be granted to
Directors by the Company in consideration of Directors by the Company in consideration of
their performance of duty (hereinafter referred to their performance of duty (hereinafter referred toas “Remunerations”) shall be determined by as “Remunerations”) shall be determined byresolution of the general meeting of shareholders.
resolution of the general meeting of shareholders,distinguished between Directors serving as Audit
and Supervisory Committee Members and those
who are not.

14

Current Articles of Incorporation

Proposed Amendments(Exemption of liability of Directors)(Exemption of liability of Directors)
Article 29
Article 30
1. Based on the stipulations of Article 426, 1. (Unchanged)
Paragraph 1 of the Companies Act, theCompany may exempt the liability fordamages due to negligence of duties of
Directors (including those who used to be
Directors) to the extent permitted by laws andregulations by resolution of the Board of
Directors.
2. Based on the stipulations of Article 427, 2. Based on the stipulations of Article 427,
Paragraph 1 of the Companies Act, theParagraph 1 of the Companies Act, theCompany may conclude an agreement with its
Company may conclude an agreement with its
Outside Directors to limit the liability for
Directors (excluding persons who aredamages due to negligence of duties; provided,
Executive Directors) to limit the liability fordamages due to gross negligence of duties;
however, that the limit of liability under suchprovided, however, that the limit of liability
agreement shall be the amount set forth in laws
under such agreement shall be the amount set
and regulations.
forth in laws and regulations.
(Deleted)
CHAPTER 5
CORPORATE AUDITORS AND BOARD OF
CORPORATE AUDITORS(Number of Corporate Auditors)(Deleted)
Article 30
The number of Corporate Auditors of theCompany shall not exceed four (4).
(Election of Corporate Auditors)
Article 31(Deleted)
1. Corporate Auditors shall be elected at a general
meeting of shareholders.
2. The election of Corporate Auditors shall be
adopted by a majority vote of the attending
shareholders who hold one third (1/3) or moreof the voting rights of the shareholders entitled
to exercise voting rights.

15

Current Articles of Incorporation

Proposed Amendments(Term of Office of Corporate Auditors)
Article 32(Deleted)
1. The term of office of a Corporate Auditor shall
expire upon conclusion of the annual general
meeting of shareholders held with respect tothe last business year ending within four (4)years from his/her election to office.
2. The term of office of a Corporate Auditor
elected to fill a vacancy caused by retirementof a Corporate Auditor prior to the expiry of
his/her term of office shall be the same as theremaining term of office of the retired
Corporate Auditor.
(Full-Time Corporate Auditors)
Article 33(Deleted)
The Board of Corporate Auditors shall appoint one(1) or more full-time Corporate Auditors by
resolution of the Board of Corporate Auditors.
(Notice of Convocation of Board of Corporate
Auditors Meetings)
Article 34(Deleted)
1. Notice of convocation of a meeting of theBoard of Corporate Auditors shall be sent toeach Corporate Auditor at least three (3) days
prior to the meeting; provided, however, thatsaid period may be shortened in the event ofemergency.
2. With the consent of all Corporate Auditors, theBoard of Corporate Auditors may be convened
without following the procedure forconvocation.
(Board of Corporate Auditors Regulations)(Deleted)
Article 35
Matters related to the Board of Corporate Auditors
shall be based on the Board of Corporate Auditors
Regulations defined by the Board of Corporate
Auditors, in addition to laws and regulations andthese Articles of Incorporation.

16

Current Articles of Incorporation

Proposed Amendments(Remuneration, etc. to Corporate Auditors)
Article 36(Deleted)
The amount of remuneration, etc. to be granted to
Corporate Auditors by the Company shall be
determined by resolution of the general meeting ofshareholders.
(Exemption of liability of Corporate Auditors)
Article 37(Deleted)
1. Based on the stipulations of Article 426,
Paragraph 1 of the Companies Act, theCompany may exempt the liability fordamages due to negligence of duties ofCorporate Auditors (including those who used
to be Corporate Auditors) to the extent
permitted by laws and regulations byresolution of the Board of Directors.
2. Based on the stipulations of Article 427,
Paragraph 1 of the Companies Act, theCompany may conclude an agreement with its
Outside Corporate Auditors to limit theliability for damages due to negligence of
duties; provided, however, that the limit ofliability under such agreement shall be theamount set forth in laws and regulations.
(Newly established)(Newly established)

CHAPTER 5
AUDIT AND SUPERVISORY COMMITTEE(Authority of Audit and Supervisory Committee)
Article 31
The Audit and Supervisory Committee shalldetermine items as required by laws andregulations, in addition to exercising authority to
execute its duties.

17

Current Articles of Incorporation(Newly established)(Newly established)(Newly established)(Newly established)(Newly established)

Proposed Amendments(Convocation of Audit and Supervisory
Committee)
Article 32
1. Notice of convocation of a meeting of the
Audit and Supervisory Committee shall be sent
to each Audit and Supervisory Committee
Member at least three (3) days prior to themeeting; provided, however, that said period
may be shortened in the event of emergency.
2. With the consent of all Audit and Supervisory
Committee Members, the Audit andSupervisory Committee may be convened
without following the procedure forconvocation.
(Full-Time Audit and Supervisory Committee
Members)
Article 33
The Audit and Supervisory Committee may
appoint one (1) or more full-time Audit andSupervisory Committee Member by resolution of
the Audit and Supervisory Committee.
(Audit and Supervisory Committee Regulations)
Article 34
Matters related to the Audit and Supervisory
Committee shall be based on the Audit andSupervisory Committee Regulations defined by
the Audit and Supervisory Committee, in addition
to laws and regulations and these Articles ofIncorporation.
CHAPTER 6
ACCOUNTING AUDITOR(Election of Accounting Auditor)
Article 35
The Accounting Auditor shall be elected at a
general meeting of shareholders.

18Current Articles of Incorporation(Newly established)(Newly established)

Proposed Amendments(Term of Office of Accounting Auditor)
Article 36
1. The term of office of the Accounting Auditor
shall expire upon conclusion of the annual
general meeting of shareholders held withrespect to the last business year ending withinone (1) year from his/her election to office.
2. Unless otherwise resolved at the annual
general meeting of shareholders referred to in
the previous Paragraph, the Accounting
Auditor shall be deemed to have been
re-elected at said annual general meeting ofshareholders.
(Remuneration to Accounting Auditor)
Article 37
The amount of remuneration, etc. to be granted to
the Accounting Auditor shall be determined by the
Representative Director subject to the consent of
the Audit and Supervisory Committee.
CHAPTER 7
ACCOUNTS

CHAPTER 6
ACCOUNTS
Article 38 ~ 41 (Omitted)(Newly established)

Article 38 ~ 41 (Unchanged)
Supplementary Provisions(Transitional Measures Regarding Exemption of
Liability of Corporate Auditors)
1. The Company may, by resolution of the Boardof Directors, exempt liability for damages tothe extent permitted by laws and regulations,for actions taken by Corporate Auditors(including those who used to be Corporate
Auditors) defined by Article 423, Paragraph 1of the Companies Act before conclusion of the196thAnnualGeneralMeetingof
Shareholders.

19Current Articles of Incorporation

Proposed Amendments(Newly established)

2. Regarding agreements that limit the liability fordamages in Article 423, Paragraph 1 of theCompanies Act concerning actions of Outside
Corporate Auditors (including those who used to
be Outside Corporate Auditors) before theconclusion of the 196th Annual General Meetingof Shareholders, the stipulations of Article 37,
Paragraph 2 (Exemption of liability of Corporate
Auditors) of these Articles of Incorporation
before the revisions from the resolutions of said
Annual General Meeting of Shareholders shallapply.

(Newly established)(Timing of Trade Name Change)
3. Article 1 shall take effect on September 1,
2016, and this Article shall be removed upon
the effective date.

20

Proposal No. 2:

Election of Four (4) Directors (Excluding Directors Serving as Audit and Supervisory
Committee Members)

Subject to the approval of Proposal No. 1: Partial Amendments to the Articles of Incorporation, theCompany will transition to a company with an Audit and Supervisory Committee. In line with this change, in
accordance with the stipulations of Article 332, Paragraph 7, Item 1 of the Companies Act, the terms ofoffice of all six (6) Directors will expire at the conclusion of this year’s General Meeting of Shareholders.
Accordingly, the election of four (4) Directors (excluding Directors serving as Audit and Supervisory
Committee Members) is proposed.
The effectiveness of resolution regarding this Proposal shall be subject to the condition that Proposal No.
1: Partial Amendments to the Articles of Incorporation is approved as proposed, and the amendments to the
Articles of Incorporation by resolution of the same Proposal take effect.
The candidates for Directors (excluding Directors serving as Audit and Supervisory Committee
Members) are as follows:
No.

Name
(Date of birth)

Career summary, positions, responsibilities at the Company
and significant concurrent positions

Number ofshares of theCompany held

April 1979

1

Joined Mitsui Trust and Banking Company, Limited(currently Sumitomo Mitsui Trust Bank, Limited)
February 2002 General Manager, Personnel Planning Dept. of Chuo
Mitsui Trust and Banking Company, Limited (currently
Sumitomo Mitsui Trust Bank, Limited)
January 2004 General Manager, Osaka Branch Business Dept. II
January 2007 General Manager, Shinjuku Nishiguchi Branch
June 2009
Director and General Manager, Corporate Planning
Division of the Company
August 2010
Managing Director and General Manager, Business
Management Headquarters, General Manager, Corporate
Planning Division
Kazuhiro Yamauchi June 2012
Senior Managing Director and General Manager, Business(January 5, 1957)
Management Headquarters, Deputy General Manager, Real
Estate Headquarters, in charge of internal control
July 2013
Director and Senior Managing Executive Officer, General
Manager, Business Management Headquarters, General
Manager, Personnel Division, in charge of businessstrategy and internal control
June 2015
President and Representative Director (current post)
Chairman of DAITOBOSHOKU (SHAGHAI)CORPORATION (current post)
Chairman of NINGBO SHANJING APPAREL CO.
LTD. (current post)(to the present)

21

35,000sharesNo.

Name(Date of birth)

Career summary, positions, responsibilities at the Company
and significant concurrent positions
March 1974
April 2002
April 2004

Number ofshares of theCompany held

Joined the Company
General Manager, Functional Textile Business Division
Deputy General Manager, Textile Business Headquarters

May 2005
May 2007
October 2011

President and Director of Niigata Daitobo Co., Ltd.
President and Director of Daitobo Shinso Co., Ltd.
General Manager, Functional Textile Sales Division, Sales
Headquarters
June 2012
Director and General Manager, Functional Textile Sales
Division,
Sales Headquarters
28,000Toshiyasu Nomura
2
June
2013
Vice
President
and Director
shares(February 27, 1952)
February 2014 Vice President and Director
General Manager, Health Care Business Headquarters
June 2014
Vice President and Representative Director
General Manager, Health Care Business Headquarters
April 2015
Vice President and Representative Director
Supervising health care business, textile and apparelbusiness
June 2015
Vice President and Representative Director (current post)(to the present)
April 1990
Joined the Company
September 2010 Accounting Group Leader, Administration Division
June 2012
General Manager, Corporate Planning Division, Business
Management Headquarters
4,000
Shogo Mieda
3
June 2015
Director and Executive Officer, General Manager,
shares(February 12, 1969)
Business Management Headquarters, General Manager,
Corporate Planning Division, in charge of internal control(current post)(to the present)
April 1976
Joined the Ministry of Labour (currently Ministry of
Health, Labour and Welfare)
January 1989 Joined A.T. Kearney, Inc. (currently A.T. Kearney K.K.),
assigned to Tokyo Office
October 1997 Director of Practice Management
0
Yasunobu Sawada
4
April 2002
Executive Director of Enterprise IG Japan K.K. (currently
shares(January 9, 1953)
Brand Union/WPP Group)
July 2003
Representative Director of VieBrand Consulting Inc.
(current post)
June 2015
Outside Director of the Company (current post)(to the present)(Notes) 1. No special interest exists between the Company and any of the candidates for Directors(excluding Directors serving as Audit and Supervisory Committee Members).
2. The Company has entered into an agreement with Mr. Yasunobu Sawada, to limit his liability fordamages, as stipulated in Article 423, Paragraph 1 of the Companies Act. The limit of liability
under this agreement is the minimum liability amount set forth in Article 425, Paragraph 1 of theCompanies Act. In the event his election is approved, the Company plans to conclude anagreement to limit liability for damages with him.
3. Reasons for selecting the candidates for Directors (excluding Directors serving as Audit andSupervisory Committee Members) are as follows:(1) Candidate No. 1
Mr. Kazuhiro Yamauchi is currently President of the Company, and has sufficiently
demonstrated his abilities to utilize his wealth of financial experience and many years ofexperience in the field of corporate planning at the Company as a leader. Thus, the Company
has determined that he is fit to continue as a manager.
22

(2) Candidate No. 2
Mr. Toshiyasu Nomura is currently Vice President of the Company, and has a wealth ofbusiness experience and depth of knowledge in the Company’s health care business andtextile and apparel business, in addition to possessing a wide network both inside and outsideof the Company. Thus, the Company has determined that he is appropriate to continue as amanager.
(3) Candidate No. 3
Mr. Shogo Mieda is currently a Director of the Company, and has held the role as the core of
the Company’s management as General Manager of the Business Management Headquarters.
In addition to his deep specialized knowledge related to accounting and his wealth ofexperience in business management, he is acquainted with the Company’s overall operations.
Thus, the Company has determined that he is appropriate to continue as a manager.
(4) Candidate No. 4
Mr. Yasunobu Sawada formerly joined the Ministry of Labour, and afterword gained a wealthof experience in a major consulting firm, currently serving as Representative of a consulting
firm. He is expected to utilize his wide range of knowledge and deep insight to provide
checks and advice from various perspectives for the Company’s management. Thus, theCompany has judged him to be an excellent human resource. Mr. Yasunobu Sawada is acandidate for Outside Director. The Company has designated him as an independent director
stipulated by the Tokyo Stock Exchange and Nagoya Stock Exchange, and registered him
with the Exchanges.
Mr. Yasunobu Sawada is currently an Outside Director of the Company and his term of office
as an Outside Director will be one (1) year at the conclusion of this General Meeting of
Shareholders.

23Proposal No. 3:

Determination of Amount of Remuneration for Directors (Excluding Directors
Serving as Audit and Supervisory Committee Members)

Subject to the approval of Proposal No. 1: Partial Amendments to the Articles of Incorporation, theCompany will transition to a company with an Audit and Supervisory Committee. Accordingly, in line withthe stipulations of Article 361, Paragraph 1 and 2 of the Companies Act, the Company proposes the current
remuneration framework for Directors (approved to be within 6 million yen per month at the 162nd Annual
General Meeting of Shareholders, held on July 29, 1982) to be abolished. While there are no changes to theannual amount, the Company proposes an annual amount with an upper limit of 72 million yen as a newscope of remuneration for Directors (excluding Directors serving as Audit and Supervisory Committee
Member) (of which a remuneration scope of 10 million yen for Outside Directors) to replace the current
monthly system. The specific amount for each Director (excluding Directors serving as Audit andSupervisory Committee Members) and the timing of provision is requested to be determined by a resolutionof the Board of Directors. The amounts of remuneration for Directors (excluding Directors serving as Audit
Committee Members) do not include remuneration paid as employees, for those who serve concurrently as
employees.
Subject to the approval of Proposal No. 1 and No. 2, the number of persons elected that will be eligible
for the remuneration scope for Directors (excluding Directors serving as Audit and Supervisory Committee
Members) stated above will be four (4).
The effectiveness of resolution regarding this Proposal shall be subject to the approval of Proposal No. 1:
Partial Amendments to the Articles of Incorporation as proposed, and the effectuation of amendments to the
Articles of Incorporation by resolution of the same Proposal.

24Proposal No. 4: Election of Four (4) Directors Serving as Audit and Supervisory Committee Members
Subject to the approval of Proposal No. 1: Partial Amendments to the Articles of Incorporation, theCompany will transition to a company with an Audit and Supervisory Committee. Accordingly, the electionof four (4) Directors serving as Audit and Supervisory Committee Members is proposed.
This Proposal has been consented by the Board of Corporate Auditors.
The effectiveness of resolution regarding this Proposal shall be subject to the approval of Proposal No. 1:
Partial Amendments to the Articles of Incorporation as proposed, and the effectuation of amendments to the
Articles of Incorporation by resolution of the same Proposal.
The candidates for Directors serving as Audit and Supervisory Committee Members are as follows:
No.

Name
(Date of birth)

Career summary, positions, responsibilities at the Company
and significant concurrent positions
April 1967
July 2006
June 2007
June 2008
August 2010

Number ofshares of theCompany held

Joined the Company
General Manager, Accounting Division
Director and General Manager, Accounting Division
Director and General Manager, Administration Division
67,000
Yuji Kakuma
1shares(July 8, 1948)
Director and General Manager, Administration Division,
Business Management Headquarters
June 2012
Full-time Corporate Auditor (current post)(to the present)
April 1976
Registered as an attorney
April 1978
Established IINUMA LAW OFFICE (current position)
0
Haruki Iinuma
2
April 2000
Registered as a licensed tax accountant
shares(April 19, 1948)
June 2011
Outside Corporate Auditor of the Company (current post)(to the present)
September 2001 Joined Shin Nihon & Co. (currently Ernst & Young
ShinNihon LLC)
July 2005
Registered as a certified public accountant
August 2006
Joined Certified Public Tax Accountants’ Co. Takano
Sogo Accounting Firm and Takano Sogo Consulting Co.
0
Takashi Kagami
3(concurrent)
shares(December 19, 1976)
November 2013 Registered as a licensed tax accountant
Partner of Certified Public Tax Accountants’ Co. Takano
Sogo Accounting Firm and Takano Sogo Consulting Co.
(current post)(to the present)
April 1977
Joined Sumitomo Marine & Fire Insurance Co., Ltd.
(currently Mitsui Sumitomo Insurance Company, Limited)
April 2003
General Manager, Nursing Care & Service Office of Mitsui
Sumitomo Insurance Company, Limited
April 2006
President and Representative Director of American
Appraisal Japan Co., Ltd.
General Manager, Risk Management Division of Mitsui
0
Shusaku Okumura April 2008
4
shares(June 16, 1952)
Sumitomo Insurance Company, Limited
October 2010 General Manager, Corporate Risk Management Dept. of
MS&AD Insurance Group Holdings, Inc.
April 2013
Fixed-term employee, Corporate Risk Management Dept.
of MS&AD Insurance Group Holdings, Inc.
March 2016Retired from MS&AD Insurance Group Holdings, Inc.
(to the present)(Notes) 1. No special interest exists between the Company and any of the candidates for Directors serving
as Audit and Supervisory Committee Members.
2. The Company has entered into an agreement with Mr. Haruki Iinuma, to limit his liability fordamages, as stipulated in Article 423, Paragraph 1 of the Companies Act. The limit of liability
under this agreement is the minimum liability amount set forth in Article 425, Paragraph 1 of the25Companies Act. In the event his election is approved, the Company plans to conclude anagreement to limit liability for damages with him.
3. If election of Messrs. Takashi Kagami and Shusaku Okumura are approved, the Company plansto enter into agreements with them to limit their liability for damages, as stipulated in Article
423, Paragraph 1 of the Companies Act. Based on the stipulation in Article 29, Paragraph 2 ofArticles of Incorporation, the limit of liability under the agreements will be the minimum
liability amount set forth in Article 425, Paragraph 1 of the Companies Act.
4. Messrs. Haruki Iinuma, Takashi Kagami, and Shusaku Okumura are candidates for Outside
Directors.
The Company has designated the above three (3) persons as independent officers stipulated by
the Tokyo Stock Exchange and Nagoya Stock Exchange, and registered them with the
Exchanges.
5. Reasons for selecting the candidates for Directors serving as Audit and Supervisory Committee
Members are as follows:(1) Mr. Yuji Kakuma is currently a full-time Corporate Auditor of the Company, and he haslong presided over the Company’s Accounting Division. In addition to his sufficient
specialized knowledge, he possesses a wealth of experience and a deep insight as a Director
and Corporate Auditor of the Company of many years. Thus, the Company determines that
he is appropriate as an Audit and Supervisory Committee Member.
Mr. Yuji Kakuma is currently a full-time Corporate Auditor of the Company and his term ofoffice as a full-time Corporate Auditor will be four (4) years at the conclusion of this
General Meeting of Shareholders.
(2) Mr. Haruki Iinuma possesses specialized knowledge in legal matters and a deep insightconcerning management from his long years of experience as an attorney, and the Company
expects that he will provide checks and advice from various perspectives with regard to
management. Thus, the Company has determined that he is an excellent candidate for Audit
and Supervisory Committee Member.
Mr. Haruki Iijima is currently an Outside Corporate Auditor of the Company and his termof office as an Outside Corporate Auditor will be five (5) years at the conclusion of this
General Meeting of Shareholders.
(3) Mr. Takashi Kagami gained experience in a major auditing firm and is currently having
success as a partner in taxation and management consulting, so he possesses specialized
knowledge and sufficient insight regarding accounting and taxes. The Company has
determined that he can appropriately execute his duties as an Audit and Supervisory
Committee Member on a high level.
(4) Mr. Shusaku Okumura has experience as a manager in nursing care related business at amajor domestic non-life insurance company and in the Japanese arm of an Americancompany, and also possesses a wealth of business experience relating to internal control at alarge corporation. Thus, the Company has determined that he can appropriately execute his
duties as an Audit and Supervisory Committee Member at a high level.

26

Proposal No. 5:

Determination of Amount of Remuneration for Directors Serving as Audit andSupervisory Committee Members

Subject to the approval of Proposal No. 1: Partial Amendments to the Articles of Incorporation, theCompany will transition to a company with an Audit and Supervisory Committee. Accordingly, in line withthe stipulations of Article 361, Paragraph 1 and 2 of the Companies Act, the Company proposes the current
remuneration framework for Corporate Auditors (approved to be within 3 million yen per month at the 173rd
Annual General Meeting of Shareholders, held on June 29, 1993) to be abolished. While there are nochanges to the annual amount, the Company proposes an annual amount with an upper limit of 36 million
yen as a new scope of remuneration for Directors serving as Audit and Supervisory Committee Members to
replace the current monthly system. The specific amount for each Director serving as Audit and Supervisory
Committee Member and timing of provision is requested to be determined by deliberation of Directors
serving as Audit and Supervisory Committee Members.
Subject to the effectuation of Proposals No. 1 and No. 4, the number of persons elected that will be
eligible for the remuneration scope for Directors serving as Audit and Supervisory Committee Members
stated above will be four (4) (including three (3) Outside Directors).
The effectiveness of resolution regarding this Proposal shall be subject to the approval of Proposal No. 1:
Partial Amendments to the Articles of Incorporation as proposed, and the effectuation of amendments to the
Articles of Incorporation by resolution of the same Proposal.

27

Proposal No. 6:

Determination of Amount of Remuneration, etc. and Details of the Stock Acquisition
Rights in the Form of Stock Options to Be Issued to Directors (Excluding Directors
Serving as Audit and Supervisory Committee Members and Outside Directors)

With regard to the amount of current remuneration, etc. of Directors, at the 162nd Annual General
Meeting of Shareholders held on July 29, 1982, it was approved to be within 6 million yen per month(however, this does not include the amount of remuneration as an employee).
In the event that Proposal No. 1: Partial Amendments to the Articles of Incorporation is approved, theCompany will transition to a company with an Audit and Supervisory Committee. Accordingly, theCompany proposes in Proposal No. 3 that the current remuneration framework for Directors to be abolishedand the amount of remuneration, etc. for Directors (excluding Directors serving as Audit and Supervisory
Committee Members) to be within 72 million yen per year (of which, the upper limit of remuneration for
Outside Directors is 10 million yen. However, this does not include the amount of remuneration as an
employee.).
In the scope of the remuneration, etc., above, in order to share the benefits and risks of stock pricefluctuations with the Company’s shareholders, and also further increase their motivation to contribute toraising share value and the improvement of the Company’s corporate value, we have determined to allocate
the stock acquisition rights in the form of stock options to Directors (excluding Directors serving as Audit
and Supervisory Committee Members and Outside Directors) as follows.
The effectiveness of resolution regarding this Proposal shall be subject to the effectuation of theamendments to the Articles of Incorporation in Proposal No. 1 and approval of Proposal No. 2.
This stock option is a “stock remuneration-type stock option” and the amount of payment upon theexercise of each stock acquisition right is 1 yen for each share.
Regarding the stock acquisition rights in the form of stock options, we plan for payment to be offset
against the compensation claims of Directors (excluding Directors serving as Audit and Supervisory
Committee Members and Outside Directors) based on the compensation etc. as stock acquisition rights in theform of stock options under this Proposal, in place of the payment of an amount defined at fair value at thetime of allocation.
Subject to the approval of Proposal No. 2, the number of Directors (excluding Directors serving as Audit
and Supervisory Committee Members and Outside Directors) eligible for this Proposal will be three (3).

Details and maximum number of the stock acquisition rights in the form of stock options to be issued to
Directors (excluding Directors serving as Audit and Supervisory Committee Members and Outside
Directors) of the Company
1) Class and Number of Shares to be Allocated upon Exercise of the Stock Acquisition Rights
The class of shares to be allocated upon exercise of the stock acquisition rights shall be commonshares in the Company, and the number of shares to be allocated upon exercise of the each stockacquisition right (hereinafter referred to as the “number of shares granted”) shall be 1,000; provided,
however, that in the event that the Company conducts a stock split (including a gratis allotment ofcommon shares; the same applies in descriptions of stock splits hereinafter) or reverse stock split on orafter the date of the resolution of this Proposal (hereinafter referred to as the “resolution date”), thenumber of shares granted shall be adjusted based on the following formula. Fractions less than one share
generated as a result of the adjustment shall be rounded down.
Post-adjustment number ofshares granted=

Pre-adjustment number ofshares granted×

Ratio of stock split orreverse stock split

In addition to the above, in the event the Company conducts a merger or company split on or after the
resolution date, or other equivalent circumstances whereby an adjustment to the number of shares
granted is necessary, the Company may appropriately adjust the number of shares granted, within reason.
Furthermore, in the event that the Company conducts a change in the number of common shares that
constitute one unit (excluding those accompanying stock splits and reverse stock splits; the same applies
in descriptions of changes in the number of shares that constitute one unit hereinafter) on or after the
resolution date, the Company may reasonably adjust the number of shares granted in line with the ratio of
the change in the number of shares that constitute one unit for stock acquisition rights whose issuance isresolved by the Board of Directors on or after the effective date of the change in the number of sharesthat constitute one unit.
282) Total Number of Stock Acquisition Rights
The total number of stock acquisition rights allocated to Directors (excluding Directors serving as
Audit and Supervisory Committee Members and Outside Directors) for each business year shall belimited to 200 units; provided, however, that in the event that the number of shares granted is adjusted inline with a change in the number of common shares that constitute one unit, the Company may
reasonably adjust the total number of stock acquisition rights in line with the ratio of the adjustment.
3) Amount of Payment for Stock Acquisition Rights
The amount of payment for each unit of stock acquisition rights shall be an amount determined by the
Board of Directors, based on the fair value of the stock acquisition rights calculated using fair calculation
methods such as the Black-Scholes model, etc. at the time of allocation of stock acquisition rights.
4) Value of Assets to be Contributed Upon the Exercise of Stock Acquisition Rights
The value of assets to be contributed upon the exercise of each stock acquisition right shall be 1 yenfor each share that may be issued upon the exercise of the stock acquisition rights, multiplied by the
number of shares granted.
5) Exercise Period for Stock Acquisition Rights
The Board of Directors will determine within the range of the day of elapse of three (3) years, to the
day of elapse of five (5) years from the day following the allocation date of the stock acquisition rights.
6) Restrictions on the Acquisition of Stock Acquisition Rights by Transfer
The acquisition of stock acquisition rights by transfer shall require approval by resolution of theBoard of Directors.
7) Conditions for the Exercise of the Stock Acquisition Rights
The conditions for the exercise of the stock acquisition rights shall be determined by the Board of
Directors.

(Reference)
Subject to approval of the Board of Directors, the Company plans to issue stock acquisition rights withthe same details as those described above to Executive Officers of the Company, after the conclusion ofthis General Meeting of Shareholders.

29Proposal No. 7: Election of Accounting Auditor
The term of office of the accounting auditor of the Company, Deloitte Touche Tohmatsu LLC, will expire
at the conclusion of this General Meeting of Shareholders. Accordingly, we ask for approval of newly
electing the Company’s accounting auditor.
This Proposal is submitted based on the determination of the Board of Corporate Auditors.
The candidate for the accounting auditor is as follows:
Name
Location

BDO Toyo & Co.
7 Kandamitoshiro-cho, Chiyoda-ku, Tokyo, Japan
January 1971
Established as Nitto Audit and Accounting officeNovember 1981
Changed its name to Toyo & Co. due to merger with Toranomon Kyodo
OfficeOpened Osaka and Nagoya Offices
History
January 2005
Merged with Nishimura Audit and Accounting Office
October 2006
Merged with Toto Audit Company
January 2011
Concluded a member firm agreement with BDO International
Established BDO Japan Limited as a joint venture with BDO Sanyu &Co.
Capital
391 million yen (as of March 31, 2016)
Personnel(As of March 31, 2016)
Partners
Senior Partners:
65
Partners:
22
Overview
Partners:
236
Junior Accountants:
33
Other specialized staff:
12
Clerical staff:
21
Total:
389(Note) The reason that the Board of Corporate Auditors selected BDO Toyo & Co. as candidate for
Accounting Auditor is that, in addition to their scale as an auditing firm, quality control system,
independence and expertise, the fact that they are a member firm of the international accounting firm
network, BDO International was comprehensively taken into account. Thus, the Company determinesthat they are appropriate as the Company’s Accounting Auditor.

End30