NOTICE OF CONVOCATION OF THE 55TH ORDINARY GENERAL MEETING OF SHAREHOLDERS

Transcription

1 These documents have been translated from a part of the 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 other forms of damages arising from the translations. (Securities Code: 8113) March 6, 2015 To Shareholders with Voting Rights: Takahisa Takahara President & CEO UNICHARM CORPORATION 182 Shimobun, Kinsei-cho, Shikokuchuo-City, Ehime, Japan NOTICE OF CONVOCATION OF THE 55TH ORDINARY GENERAL MEETING OF SHAREHOLDERS You are cordially invited to attend the 55th Ordinary General Meeting of Shareholders of UNICHARM CORPORATION (the Company ). The meeting will be held as described below. If you are unable to attend the meeting, you can exercise your voting rights by either of the following methods. Please review the Reference Documents for the General Meeting of Shareholders set forth below and exercise your voting rights. <Vote by mail> Indicate your vote for or against the proposals on the enclosed Voting Rights Exercise Form and return it by mail to reach us by the end of business hours at 4:50 p.m. on Thursday, March 26, 2015 (Japan time). <Vote online> Access the voting site designated by the Company ( enter the Login ID and Temporary Password indicated on the enclosed Voting Rights Exercise Form, and input whether you vote for or against the proposals in accordance with the on-screen instructions. Please input your voting information by the end of business hours at 4:50 p.m. on Thursday, March 26, 2015 (Japan time). If you vote online, please confirm Procedure for Online Exercise of Voting Rights on page Date and Time: Friday, March 27, 2015 at 10:00 a.m. (Japan time) The date of the meeting is not exactly one year after the date of the previous Ordinary General Meeting of Shareholders (June 25, 2014) because the Company s fiscal year end was changed from March 31 to December 31 as of the 55th Fiscal Year. 2. Place: Meeting Room at Technical Center of the Company , Wadahama, Toyohama-cho, Kanonji-city, Kagawa, Japan 1

2 3. Meeting Agenda: Matters to be reported: Matters to be resolved: Proposal No. 1: Proposal No. 2: Proposal No. 3: Proposal No. 4: Proposal No. 5: Proposal No. 6: Proposal No. 7: 1. Business Report, Consolidated Financial Statements for the 55th Fiscal Year (from April 1, 2014 to December 31, 2014) and results of audits by the Accounting Auditors and the Audit & Supervisory Board of the Consolidated Financial Statements 2. Non-consolidated Financial Statements for the 55th Fiscal Year (from April 1, 2014 to December 31, 2014) Partial Amendments to the Articles of Incorporation Election of Eight Directors Election of Eight Directors (excluding Directors who are Members of the Committee on Audit, etc.) Election of Three Directors who are Members of the Committee on Audit, etc. Setting the Amount of Remuneration of Directors (excluding Directors who are Members of the Committee on Audit, etc.) Setting the Amount of Remuneration of Directors who are Members of the Committee on Audit, etc. Issuance of Stock Acquisition Rights as Stock Options ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ When attending the meeting in person, please submit the enclosed Voting Rights Exercise Form at the reception. Of the documents to be provided to our shareholders with this notice of convocation, Notes to Consolidated Financial Statements and Notes to Non-consolidated Financial Statements are deemed to have been provided to our shareholders by posting on the Company s website ( in accordance with applicable laws and regulations and Article 14 of the Articles of Incorporation of the Company. Therefore, the documents attached to this notice of convocation are a part of the Consolidated Financial Statements or the Non-consolidated Financial Statements audited by the Accounting Auditors and the Audit & Supervisory Board in preparing their respective audit reports. In cases where any item in the Reference Documents for the General Meeting of Shareholders, Business Report, Consolidated Financial Statements and Non-consolidated Financial Statements is amended, the Company will announce the updated documents on the Company s website ( 2

3 Procedure for Online Exercise of Voting Rights If you exercise your voting rights online, please confirm the matters set forth below before exercising your voting rights. If you attend the general meeting of shareholders in person, the procedures for exercising voting rights by mail (voting form) and for online voting are not necessary. 1. Voting Site (1) Online exercise of voting rights can be performed only by accessing the voting site designated by the Company ( from a PC, smartphone, or mobile phone (imode, EZweb, Yahoo! Keitai)* (the site is not accessible from 2:00 to 5:00 a.m. each day). * imode is a trademark or registered trademark of NTT DOCOMO, Inc.; EZweb is a trademark or registered trademark of KDDI Corporation; and Yahoo! is a trademark or registered trademark of Yahoo! Inc. of the United States. (2) It may not be possible to exercise voting rights from a PC or smartphone depending on your Internet use environment, such as in the case where a firewall is installed in the Internet connection, antivirus software is installed, or a proxy server is used. (3) When exercising voting rights from a mobile phone, please use an imode, EZweb, or Yahoo! Keitai service. To ensure security, models that do not support encrypted communications (SSL communications) and do not transmit mobile phone data are not compatible with the service. (4) When exercising voting rights online, although votes will be accepted until 4:50 p.m. on Thursday, March 26, 2015, the Company requests early voting. If you have any questions, please contact the helpdesk. 2. How to Exercise Voting Rights Online (1) Access the voting site ( enter the Login ID and Temporary Password indicated on the voting rights exercise form, and input whether you vote for or against the proposed resolutions in accordance with the on-screen instructions. (2) To prevent unauthorized access (identify fraud) by third parties other than shareholders and tampering with the exercise of voting rights, shareholders who access the voting site are requested to change their voting site Temporary Password. (3) Each time a general meeting of shareholders is convened, a new Login ID and Temporary Password will be issued. 3. Handling of Votes if Voting Rights are Exercised Multiple Times (1) Please note that if voting rights are exercised both by mail and online, the content of the voting performed online will be the valid vote. (2) If voting rights are exercised online multiple times, the content of the last vote will be the valid vote. Even if voting rights are exercised multiple times by PC, smartphone, and mobile phone, the content of the last vote will be the valid vote. 3

4 4. Expenses Arising When Accessing the Voting Site You must pay any expenses incurred when accessing the voting site (Internet connection fees and so on). Also, if you use a mobile phone, packet communications charges and other mobile phone usage fees may be necessary, and you must pay those fees as well. Contact Information for Inquiries Relating to the System Corporate Agency Division (Helpdesk) Mitsubishi UFJ Trust and Banking Corporation Telephone: (Hours: 9:00 a.m. 9:00 p.m. Toll-free from Japan) <About the Electronic Voting Rights Exercise Platform> If a prior application is made to use the electronic voting rights exercise platform operated by ICJ, Inc., a joint venture established by the Tokyo Stock Exchange and other companies, nominal shareholders (including permanent proxies) such as managing trust banks can use that platform instead of voting online as a method of electronically exercising their voting rights at the Company s general meeting of shareholders. 4

5 Reference Documents for the General Meeting of Shareholders Proposals and References Proposal No. 1: Partial Amendments to the Articles of Incorporation 1. Reason for the Proposal The Company has continued its efforts to strengthen corporate governance, which includes introduction of the Executive Officer System in 1999 with the aim of separating management oversight from operational execution. This proposal is necessary for the Company to transition to a Company with a Committee on Audit, etc. to further strengthen corporate governance, in compliance with legislation of Company with a Committee on Audit, etc., in accordance with the Act for Partial Revision of the Companies Act (Act No. 90 of June 27, 2014; hereinafter referred to as the Revised Companies Act ). Through these measures, the Company intends to reinforce the function of the Board of Directors concerning oversight on operational execution and improve transparency as well as efficiency of processes through participation of Outside Directors in the management to help meet the expectations of shareholders both in Japan and overseas, from a global point of view. To this end, the Company proposes certain amendments including addition of provisions concerning Committee on Audit, etc., and Directors appointed as Members of the Committee on Audit, etc., deletion of provisions concerning Statutory Auditors and the Board of Statutory Auditors, and amendments of provisions concerning Directors and Board of Directors. These partial amendments to the Articles of Incorporation to be implemented through this proposal shall take effect on the effective date of the Revised Companies Act May 1, 2015, and a supplementary provision to this effect shall be established. 2. Details of the Proposed Amendments Details of the proposed Amendments to the Article of Incorporation are as follows: (Underlined portions are amended) Pre-Amended Articles of Incorporation Post-Amended Articles of Incorporation (Entities) (Entities) Article 4 Article 4 In addition to the General Meeting of Shareholders and Directors, shall have the following entities: (1) Board of Directors; (2) Statutory Auditors; (3) Board of Statutory Auditors; and (4) Accounting Auditors. In addition to the General Meeting of Shareholders and Directors, shall have the following entities: (1) Board of Directors; (2) Committee on Audit, etc.; and (3) Accounting Auditors. Chapter 4 Directors and Board of Directors Chapter 4 Directors and Board of Directors, and Committee on Audit, etc. (Number) (Number) Article 17 Article 17 The number of Directors of the Company shall be 1. The number of Directors of the Company fifteen (15) or less. (excluding those appointed as Members of the Committee on Audit, etc.) shall be fifteen (15) or less. (Newly established) 2. The number of Directors of the Company appointed as Members of the Committee on Audit, etc. shall be three (3) or less. (Method of Election) (Method of Election) Article 18 Article Directors shall be elected at the General Meeting of Shareholders. 2. (Omitted) 2. (Same as existing ones) 3. (Omitted) 3. (Same as existing ones) 5 1. Directors shall be elected at the General Meeting of Shareholders, while making a distinction between Directors to be appointed as Members of the Committee on Audit, etc. and other Directors.

6 Pre-Amended Articles of Incorporation Post-Amended Articles of Incorporation (Term of Office) (Term of Office) Article 19 Article 19 The term of office of each Director shall expire at the 1. The term of office of each Director (excluding close of the Ordinary General Meeting of Shareholders Directors appointed as Members of the Committee held for the last business year ending within one (1) on Audit, etc.) shall expire at the close of the year after the Director s assumption of office Ordinary General Meeting of Shareholders held for the last business year ending within one (1) year after the Director s assumption of office. (Newly established) 2. The term of office of each Director appointed as Member of the Committee on Audit, etc. shall expire at the close of the Ordinary General Meeting of Shareholders held for the last business year ending within two (2) years after the assumption of office of Director appointed as Member of the Committee on Audit, etc. (Newly established) 3. The term of office of a Director appointed as Member of the Committee on Audit, etc. elected to fill a vacancy created by the retirement of a Director appointed as Member of the Committee on Audit, etc. before the expiration of his or her term of office shall expire at the time of expiration of the term of office of the retired Director appointed as Member of the Committee on Audit, etc. (Convocation and Chairman of Meetings of Board of (Convocation and Chairman of Meetings of Board of Directors) Directors) Article 22 Article Unless otherwise provided by laws or regulations, 1. Unless otherwise provided by laws or regulations, the Director, as previously predetermined by the the Director, as previously predetermined by the Board of Directors, shall convene and act as Board of Directors, shall convene and act as chairman of a meeting of the Board of Directors. chairman of a meeting of the Board of Directors. 2. Notice of a meeting of the Board of Directors shall be given to each Director and each Statutory Auditor at least five (5) days prior to the date of the meeting. However, if the convocation of a meeting is urgently needed, this period may be shortened. 3. The Board of Directors may hold a meeting without following the convocation procedure, when all Directors and Statutory Auditors give consent thereto. 2. Notice of a meeting of the Board of Directors shall be given to each Director at least five (5) days prior to the date of the meeting. However, if the convocation of a meeting is urgently needed, this period may be shortened. 3. The Board of Directors may hold a meeting without following the convocation procedure, when all Directors give consent thereto. (Newly established) (Convocation and Chairman of Committee on Audit, etc.) Article Anyone of the Members of the Committee on Audit, etc. shall convene a meeting of the Committee on Audit, etc., and the Director designated in advance by the Committee on Audit, etc. shall act as chairman of the meeting. 2. Notice of a meeting of the Committee on Audit, etc. shall be given to each Member of the Committee on Audit, etc. at least five (5) days prior to the date of the meeting. However, if the convocation of a meeting is urgently needed, this period may be shortened. 6

7 Pre-Amended Articles of Incorporation (Omission of Resolutions of Board of Directors) Post-Amended Articles of Incorporation 3. The Committee on Audit, etc. may hold a meeting without following the convocation procedure, when all Members of the Committee on Audit, etc. give consent thereto. (Omission of Resolutions of Board of Directors) Article 23 Article 24 (Omitted) (Same as existing ones) (Rules of Board of Directors) (Rules of Board of Directors) Article 24 Article 25 (Omitted) (Same as existing ones) (Newly established) (Remuneration, etc.) (Rules of Committee on Audit, etc.) Article 26 Matters concerning the Committee on Audit, etc. shall be subject to the Rules of the Committee on Audit, etc., which shall be determined by the Committee on Audit, etc., in addition to laws and regulations, or these Articles of Incorporation. (Remuneration, etc.) Article 25 Article 27 The remuneration and bonus and other property The remuneration and bonus and other property benefits, which are given by the Company as benefits, which are given by the Company as consideration for the execution of their duties consideration for the execution of their duties to (hereinafter referred to as Remuneration, etc. ) to Directors, shall be determined by resolution of a Directors, shall be determined by resolution of a General Meeting of Shareholders, while making a General Meeting of Shareholders. distinction between Directors appointed as Members of the Committee on Audit, etc. and other Directors. (Executive Officers) (Executive Officers) Article 26 Article (Omitted) 1. (Same as existing ones) 2. (Omitted) 2. (Same as existing ones) (Contracts for Limitation of Liability with Outside Directors) (Contracts for Limitation of Liability with Outside Directors) Article 27 Article 29 (Omitted) (Same as existing ones) Chapter 5 Statutory Auditors and Board of Statutory Auditors (Number) Article 28 The number of Statutory Auditors of shall be four (4) or less. (Deleted) (Deleted) 7

8 Pre-Amended Articles of Incorporation (Method of Election) Article Statutory Auditors shall be elected at the General Meeting of Shareholders. 2. Resolutions for election of Statutory Auditors shall require that shareholders representing at least one-third (1/3) of the voting rights of all shareholders entitled to vote be in attendance, and shall be adopted by a majority of the voting rights of the shareholders present. (Term of Office) Post-Amended Articles of Incorporation (Deleted) (Deleted) Article The term of office of each Statutory Auditor shall expire at the close of the Ordinary General Meeting of Shareholders held for the last business year ending within four (4) years after the Statutory Auditor s assumption of office. 2. The term of office of a Statutory Auditor elected to fill a vacancy created by a Statutory Auditor who retired from office before the expiration of his or her term shall expire at the time the term of office of the retired Statutory Auditor would have expired. (Full-Time Statutory Auditors) (Deleted) Article 31 The Board of Statutory Auditors shall, by resolution, appoint full-time Statutory Auditors. (Notice of Meeting of Board of Statutory Auditors) Article Notice of a meeting of the Board of Statutory Auditors shall be given to each Statutory Auditor at least five (5) days prior to the date of the meeting. However, if the convocation of a meeting is urgently needed, this period may be shortened. 2. The Board of Statutory Auditors may hold a meeting without following the convocation procedure, when all Statutory Auditors give consent thereto. (Rules of Board of Statutory Auditors) (Deleted) (Deleted) Article 33 Matters concerning the Board of Statutory Auditors shall be subject to the Rules of the Board of Statutory Auditors, which shall be determined by the Board of Statutory Auditors, in addition to laws and regulations, or these Articles of Incorporation. (Remuneration, etc.) (Deleted) Article 34 Remuneration, etc., to Statutory Auditors shall be determined by resolution of a General Meeting of Shareholders. 8

9 Pre-Amended Articles of Incorporation (Contracts for Limitation of Liability with Outside Statutory Auditors) Post-Amended Articles of Incorporation (Deleted) Article 35 Pursuant to the provision of Article 427, Paragraph 1 of the Companies Act of Japan, the Company may execute with each Outside Statutory Auditor a contract to limit his or her liability for damages due to failure to carry out his or her duties, provided, however, that the maximum amount of liability under such contract shall be the amount stipulated by the relevant laws and regulations. Chapter 6 Accounting Chapter 5 Accounting Article 36 to 39 Article 30 to 33 (Omitted) (Same as existing ones) (Newly established) Supplementary Provision (Effective date) Article 1 These amendments of the Articles of Incorporation shall take effect on the effective date of the Act for Partial Revision of the Companies Act (Act No. 90 of June 27, 2014). This Supplementary Provision shall be deleted after the above amendments take effect. 9

10 Proposal No. 2: Election of Eight Directors The terms of office of all ten Directors will expire upon the conclusion of this General Meeting of Shareholders. Accordingly, the Company proposes the election of eight Directors. The candidates for Directors are as follows: Candidate No Name (Date of birth) Keiichiro Takahara (March 16, 1931) Takahisa Takahara (July 12, 1961) Gumpei Futagami (January 9, 1945) February 1961 July 1974 June 2001 June 2004 June 2008 February 2011 April 1991 June 1995 April 1996 June 1997 April 1998 October 2000 June 2001 June 2004 April 1968 December 1985 June 1991 June 2001 June 2010 September 2010 January 2014 March 2014 Career summary, position and responsibilities in the Company (Significant concurrent positions) President of Taisei Kako Co., Ltd. President of the Company Chairman & Executive Director Representative Director, Chairman of the Board Director, Chairman of the Board Director, Founder Joined the Company Director Director, General Manager of Procurement Division and Deputy General Manager of International Division Senior Director Senior Director, General Manager of Feminine Hygiene Business Division Senior Director, Responsible for Management Strategy President President & CEO Joined Taisei Kako Co., Ltd. Director of the Company Senior Director President & Representative Director of Unicharm PetCare Corporation Director of the Company Director, Vice President and Managing Executive Officer President of Unicharm PetCare Company Director, Vice President and Managing Executive Officer Chairman of Unicharm PetCare Company Director, Vice President and Managing Executive Officer Chairman of Unicharm PetCare Company President of The Hartz Mountain Corporation Number of shares of the Company held 1,843,317 3,672,351 90,000 10

11 Candidate No. 4 5 Name (Date of birth) Eiji Ishikawa (October 19, 1955) Shinji Mori (June 17, 1956) February 1980 October 1996 April 1998 June 1999 July 2003 July 2004 June 2005 October 2007 April 2010 Career summary, position and responsibilities in the Company (Significant concurrent positions) Joined the Company Department Manager of Production Planning Office, Production Division General Manager of Production Division Executive Officer Senior Executive Officer Senior Executive Officer Chief Quality Officer and General Manager of Global Research & Development Division Director, Managing Executive Officer Chief Quality Officer, General Manager of Global Research & Development Division Representative Director, President & CEO of Unicharm Products Co., Ltd. [Significant concurrent position] Representative Director, President & CEO of Unicharm Products Co., Ltd. April 1979 April 1994 April 1998 June 1999 June 2000 July 2003 July 2004 June 2005 October 2005 April 2010 January 2014 Joined the Company Branch Manager of the Hiroshima Branch, Sales Division Branch Manager of the Osaka Branch, Sales Division Deputy Executive Officer Executive Officer Senior Executive Officer Senior Executive Officer General Manager of Sales Division Director, Managing Executive Officer Director, Managing Executive Officer President of Unicharm PetCare Company Number of shares of the Company held 31,500 52,200 11

12 Candidate No. 6 7 Name (Date of birth) Kennosuke Nakano (April 13, 1956) Masakatsu Takai (May 6, 1956) April 1979 April 1993 April 1999 June 1999 July 2003 July 2004 June 2005 April 2009 April 2010 April 2011 April 2013 January 2014 March 1977 April 1996 April 1998 June 1999 June 2000 June 2007 October 2007 April 2008 April 2010 January 2012 April 2012 Career summary, position and responsibilities in the Company (Significant concurrent positions) Joined the Company Branch Manager of the Yokohama Branch, Sales Division Branch Manager of the Tokyo Branch, Sales Division Executive Officer Senior Executive Officer Senior Executive Officer President of Unicharm Consumer Products (China) Co., Ltd. and Responsible for Asia and Oceania regions Director, Managing Executive Officer Director, Managing Executive Officer President of Unicharm Consumer Products (China) Co., Ltd. and Responsible for Asia, Oceania and MENA regions Director, Managing Executive Officer President of Unicharm (China) Co., Ltd., President of Unicharm Consumer Products (China) Co., Ltd., and Responsible for Asia, Oceania and MENA regions Director, Managing Executive Officer General Manager of Sales Division Joined the Company Plant Manager of the Chuo Plant of Charm Industry Corporation Deputy General Manager of Technology Division and Department Manager of Production Technology Department of the Company Deputy Executive Officer Executive Officer Director, Executive Officer Director, Executive Officer Representative Director, President & CEO of Unicharm Products Co., Ltd. and Department Manager of Corporate Social Responsibility Department of the Company General Manager of Global Human Resources & Administration Division and Department Manager of Corporate Social Responsibility Department General Manager of Global Human Resources & Administration Division and General Manager of Production Division of Unicharm PetCare Company General Manager of Production Division of Unicharm PetCare Company Number of shares of the Company held 49,800 28,800 12

13 Candidate No. 8 Name (Date of birth) Yoshihiro Miyabayashi (April 26, 1955) April 1979 April 1993 April 1999 June 1999 April 2005 April 2010 April 2011 April 2012 June 2012 April 2013 January 2014 Career summary, position and responsibilities in the Company (Significant concurrent positions) Joined the Company Branch Manager of the Chiba Branch, Sales Division Department Manager of National Account Department, Sales Division Executive Officer Executive Officer President Director of PT Uni-Charm Indonesia Senior Executive Officer Senior Executive Officer President Director of PT Uni-Charm Indonesia and Responsible for ASEAN region Senior Executive Officer President Director of PT Uni-Charm Indonesia, President of UniCharm (Philippines) Corp., and Responsible for ASEAN region President Director of PT Uni-Charm Indonesia, Chairman of Unicharm India Private Ltd., President of UniCharm (Philippines) Corp., and Responsible for ASEAN region President of Unicharm (China) Co., Ltd., President of Unicharm Consumer Products (China) Co., Ltd., Chairman of PT Uni-Charm Indonesia, Chairman of Unicharm India Private Ltd., and President of UniCharm (Philippines) Corp. (Note) No special interest exists between any of the above candidates for Director and the Company. Number of shares of the Company held 49,377 13

14 Proposal No. 3: Election of Eight Directors (excluding Directors who are Members of the Committee on Audit, etc.) Conditioned on approval of Proposal No. 1 Partial Amendments to the Articles of Incorporation, the Company will become a company with a Committee on Audit, etc. on the day that the Act for Partial Revision of the Companies Act (Act No. 90 of June 27, 2014) comes into effect, and the terms of office of all eight Directors to be elected conditioned on approval of Proposal No. 2 will expire on the day that the amendments to the Articles of Incorporation come into effect. Accordingly, the Company requests the election of eight Directors (here and hereafter with regard to this proposal, excluding Directors who are Members of the Committee on Audit, etc.). The resolution relating to this proposal will come into effect conditioned on the amendment of the Articles of Incorporation relating to Proposal No. 1 coming into effect. The candidates for Directors are as set forth in Proposal No. 2. Proposal No. 4: Election of Three Directors who are Members of the Committee on Audit, etc. Conditioned on approval of Proposal No. 1 Partial Amendments to the Articles of Incorporation, the Company will become a company with a Committee on Audit, etc. on the day that the Act for Partial Revision of the Companies Act (Act No. 90 of June 27, 2014) comes into effect. Accordingly, the Company requests the election of three Directors who are Members of the Committee on Audit, etc. The resolution relating to this proposal will come into effect conditioned on the amendment of the Articles of Incorporation relating to Proposal No. 1 coming into effect. The candidates for Directors who are Members of the Committee on Audit, etc. are as follows: Candidate No. 1 2 Name (Date of birth) Masahiko Hirata (February 1, 1931) Kimisuke Fujimoto (September 24, 1942) April 1954 June 1980 June 1988 September 1997 November 1997 June 1999 Career summary and position in the Company (Significant concurrent positions) [Significant concurrent positions] Outside Director of H.I.S. Co., Ltd. Outside Director of Integrex Inc. April 1965 June 1993 June 1996 June 1999 April 2001 April 2003 October 2005 June 2006 June 2010 Joined Matsushita Electric Industrial Co., Ltd. Managing Director of Victor Company of Japan, Limited Executive Vice President of Matsushita Electric Industrial Co., Ltd. Visiting Professor of SANNO Graduate School Special Advisor to the Company Audit & Supervisory Board Member Joined the Sanwa Bank, Limited Director, London Branch Manager Managing Director of Sanwa Securities Co., Ltd. Managing Director, Manager of International Market Division of Sanwa Bank Limited Chairman of the Board of Directors of Sanwa Securities Co., Ltd. President of UFJ Tsubasa Securities Co. Ltd. President of Mitsubishi UFJ Securities Co., Ltd. Auditor of Mitsubishi UFJ NICOS Co., Ltd. Audit & Supervisory Board Member of the Company Number of shares of the Company held 27,

15 Candidate No. 3 Name (Date of birth) Shigeki Maruyama (July 25,1939) April 1963 December 1990 June 1991 April 1992 October 1996 January 2002 June 2004 June 2005 Career summary and position in the Company (Significant concurrent positions) Joined the Sanwa Bank, Limited Advisor to President, Manager of General Affairs Division of the Company Managing Director Managing Director, Manager of Sales Division Managing Director, Manager of General Planning Division Managing Director, Chief Quality Officer, Management, Logistics, Sales Officer, Representative Director, President of Unicharm Products Co., Ltd. Audit & Supervisory Board Member (full-time) Number of shares of the Company held 90,000 [Significant concurrent position] Outside Director of Planet Logistics Co., Ltd. (Note) 1. Mr. Masahiko Hirata and Mr. Kimisuke Fujimoto are candidates for outside directors. 2. Notice has been submitted to the Tokyo Stock Exchange concerning Mr. Masahiko Hirata and Mr. Kimisuke Fujimoto as independent directors. 3. Mr. Masahiko Hirata has many years of managerial experience and extensive knowledge concerning finance, accounting, and other matters, and therefore, the Company determined that he will properly carry out his duties as an outside director and requests that he be elected. As of the conclusion of this general meeting of shareholders, Mr. Hirata will have served the Company as an outside Audit & Supervisory Board Member for 15 years and nine months. Mr. Kimisuke Fujimoto has extensive experience and broad knowledge in financial institutions, and therefore, the Company determined that he will properly carry out his duties as an outside Director and requests that he be elected. As of the conclusion of this general shareholders meeting, Mr. Fujimoto will have served the Company as an outside corporate auditor for four years and nine months. 4. There are no special relationships between the candidate Directors who are Members of the Committee on Audit, etc. and the Company. Proposal No. 5: Setting the Amount of Remuneration of Directors (excluding Directors who are Members of the Committee on Audit, etc.) Remuneration paid to the Company s Directors in the amount of no more than 1,000 million yen annually was approved by the 47th Ordinary General Meeting of Shareholders meeting held on June 26, 2007 and has remained at that amount to the present, but conditioned on approval of Proposal No. 1 Partial Amendments to the Articles of Incorporation, the Company will become a company with a Committee on Audit, etc. on the day that the Act for Partial Revision of the Companies Act (Act No. 90 of June 27, 2014) comes into effect. Accordingly, shareholders are requested to revoke the current director remuneration limit and, taking into consideration economic conditions and other factors, to approve remuneration for Directors (excluding Directors who are Members of the Committee on Audit, etc.) of no more than 1,000 million yen annually in accordance with the provision of Article 361, Paragraphs 1 and 2 of the Companies Act. The amount of remuneration for Directors (excluding Directors who are Members of the Committee on Audit, etc.) does not include the portion for salaries paid to those Directors who also serve as employees. The Company currently has ten Directors, but if Proposal No. 1 and Proposal No. 3 are approved as proposed, the number of Directors (excluding Directors who are Members of the Committee on Audit, etc.) will become eight. The resolution relating to this proposal will come into effect conditioned on the amendment of the Articles of Incorporation relating to Proposal No. 1 coming into effect. Proposal No. 6: Setting the Amount of Remuneration of Directors who are Members of the Committee on Audit, etc. Conditioned on approval of Proposal No. 1 Partial Amendments to the Articles of Incorporation, the 15

16 Company will become a company with a Committee on Audit, etc. on the day that the Act for Partial Revision of the Companies Act (Act No. 90 of June 27, 2014) comes into effect. Accordingly, taking into consideration economic conditions and other factors, shareholders are requested to approve remuneration for Directors who are Members of the Committee on Audit, etc. of no more than 100 million yen annually in accordance with the provision of Article 361, Paragraphs 1 and 2 of the Companies Act. If Proposal No. 1 and Proposal No. 4 are approved as proposed, the number of Directors who are Members of the Committee on Audit, etc. will be three (including two outside Directors). The resolution relating to this proposal will come into effect conditioned on the amendment of the Articles of Incorporation relating to Proposal No. 1 coming into effect. Proposal No. 7: Issuance of Stock Acquisition Rights as Stock Option The Company hereby requests the approval of the proposal to issue stock acquisition rights as stock option to Directors (provided, however, that subject to the approval of the Proposal No. 1 Partial Amendments to Articles of Incorporation as proposed, this excludes Directors appointed as Members of the Committee on Audit, etc.; the same shall apply hereinafter when Director is mentioned in this proposal) and employees of the Company, and to Directors and employees of the Company s subsidiaries, as outlined below in accordance with the provisions of Article 236, Article 238 and Article 239 of the Companies Act. The Company also requests to entrust the authority to make decisions on the issuance of stock acquisition rights as stock options and terms and conditions of the offering to the Company s Board of Directors of the Company. In addition, the Company hereby requests the approval of the proposal of calculation method and details of stock acquisition rights to be granted to Directors of the Company as remunerations, etc., separately from the remuneration portion of Directors related to basic remuneration, in accordance with the provisions of Article 361 of the Companies Act. Although the current number of Directors is ten (10), subject to the approval of the Proposal No. 2 as proposed, the number of Directors will be eight (8). Moreover, if the Proposal No. 1 and the Proposal No. 3 are approved as proposed, the number of Directors will be eight (8). 1. Reason for issuing the stock acquisition rights under particularly favorable conditions The Company proposes to issue the stock acquisition rights in the form of stock option program to Directors and employees of the Company and to Directors and employees of the Company s subsidiaries, with the aim of further enhancing their motivation and morale leading to the growth of the business performance and attracting talented personnel that would contribute to improvement in the corporate value across the Group. 2. Outline of issuance of the stock acquisition rights (1) Persons eligible for the allotment of the stock acquisition rights Directors and employees of the Company, and Directors and employees of the Company s subsidiaries. (2) Type and number of shares subject to the stock acquisition rights The type of shares subject to the stock acquisition rights shall be common shares of the Company, and the number thereof shall not exceed 3,500,000 shares. In the event that the Company makes a share split (including allotment of shares of the Company s common stock without contribution. The same applies hereafter) or share consolidation after the allotment date, the number of the subject shares described above shall be adjusted using the following formula. Such adjustment shall be made to the number of those shares to which the stock acquisition rights have not been exercised at the time of such share split or consolidation and any fraction less than one (1) share arising from such adjustment shall be rounded off. Number of shares after adjustment = Number of shares before adjustment Ratio of split/consolidation In addition to the above, if any avoidable event such as a merger or a corporate split of the Company arises where the number of the subject shares described above must be adjusted after the allotment date, the Company may adjust the number of such shares subject to the stock acquisition rights as necessary to a reasonable extent. (3) Total number of the stock acquisition rights to be issued The number of the stock acquisition rights to be issued shall not exceed 35,000 units (of them, the number of the stock acquisition rights to be granted to Directors of the Company shall not exceed 1,200 units). The number of shares to be issued upon exercise of one (1) stock acquisition right (the Number of Granted Shares ) will be 100, provided however, that when the number of shares prescribed in (2) above has been adjusted, the same adjustment shall be made. (4) Cash to be paid in exchange for the stock acquisition rights No cash payment in exchange for the stock acquisition rights shall be required. (5) Value of the property to be contributed at the time of exercise of the stock acquisition rights The value of the property to be contributed at the time of exercise of each stock acquisition rights shall be the amount obtained by multiplying the amount to be paid for one(1) share to be issued upon exercise of each stock acquisition right (hereinafter referred to as the Exercise Price ) by the Number of Granted Shares. The Exercise Price shall be as follows: 16

17 The Exercise Price is the amount obtained by either the average of the closing prices of common stocks of the Company in ordinary transactions at the Tokyo Stock Exchange on each day of the month prior to the month of the allotment day of the stock acquisition rights (excluding any day on which no trade is executed) or the closing price on the allotment day (on the date immediately preceding the allotment day, if no closing price is quoted on the allotment day), whichever is higher, multiplied by 1.05, and any fraction less than one (1) yen shall be rounded up. In the event that the Company makes a share split or share consolidation after the allotment of stock acquisition rights, the Exercise Price shall be adjusted using the following formula and any fraction less than one (1) yen arising from such adjustment shall be rounded up. 1 Exercise Price =Exercise Price after adjustment before adjustment Ratio of split/consolidation If, after the allotment day, the Company issues new stock or disposes of its treasury shares at a price lower than the market value (excluding issuance of the Company s stock or disposition of treasury shares upon exercise of stock acquisition rights), the Exercise Price shall be adjusted using the following formula, with any fraction less than one (1) yen being rounded up. Number of + Number of shares Paid-in amount Exercise price Exercise outstanding shares newly issued per share Price after = price before Current market price per share adjustment adjustment Number of outstanding shares + Number of shares newly issued The Number of outstanding shares in the above formula shall be the total number of the shares issued less treasury shares, and in the case of disposition of treasury shares, the Number of shares newly issued shall read as Number of treasury shares to be disposed of. In addition to the above, if any avoidable event such as a merger or a corporate split of the Company arises after the allotment date where the Exercise Price must be adjusted, the Company may adjust the Exercise Price to a reasonable extent. (6) Exercise period of the stock acquisition rights From June 1, 2017 to May 31, 2022 (7) Conditions to exercise the stock acquisition rights (i) Any person who has been allotted the stock acquisition rights may not exercise such rights unless the closing price for the Company s common stock in ordinary transactions at the Tokyo Stock Exchange is at least 4,030 yen per share for at least once during the period from the allotment day through February 28, 2021 (hereinafter referred to as the Condition Price ), provided however, that when the Exercise Price prescribed in (5) above has been adjusted, the same adjustment to the Condition Price shall be made. (ii) Any person who has been allotted the stock acquisition rights must be, even at the time of exercise of such rights, a Director or an employee of the Company, and a Director or an employee of the Company s subsidiary, except where such Director of the Company or the Company s subsidiary has resigned at the expiration of their terms of office, or such employee of the Company or the Company s subsidiary retired upon reaching the age limit. (iii) Notwithstanding (ii) above, in case any person who has been allotted the stock acquisition rights deceases, such person s heir may exercise their stock acquisition rights. (8) Grounds and conditions for acquisition of the stock acquisition rights In the event that a merger agreement under which the Company will become extinct, an absorption-type company split agreement or an incorporation-type corporate split plan under which the Company will become a split company, or a share exchange agreement or the plan of the share transfer under which the Company will become a wholly-owned subsidiary is approved by the general meeting of shareholders (or approved by the Board of Directors in case that approval of the general meeting of shareholders is not required), the Company may acquire the stock acquisition rights without contribution on a day that will be determined separately by the Company s Board of Directors. (9) Restriction on acquiring the stock acquisition rights by transfer The acquisition of stock acquisition rights by transfer shall require approval by the Company s Board of Directors. (10) Matters concerning to capital stock and legal capital surplus to be increased by issuance of shares at exercise of the stock acquisition rights (i) The amount of the capital stock to be increased by issuance of shares at the time of exercise of the stock acquisition rights shall be half of the maximum amount of increase of the capital stock, etc. which is calculated in accordance with Article 17, Paragraph 1 of the Corporate Accounting Rules, and 17

18 any fraction less than one (1) yen as a result of the said calculation shall be rounded up. (ii) The amount of the legal capital surplus to be increased by issuance of shares at the time of exercise of the stock acquisition rights shall be calculated by subtracting the amount of increase in the capital stock prescribed in (i) above from the maximum amount of increase of the capital stock, etc. prescribed in (i) above. (11) Handling of stock acquisition rights at the time of restructuring action If the Company is to engage in a merger (limited to cases where the Company is to be extinct as a result of such merger), absorption-type corporate split, incorporation-type corporate split, or subject to a share exchange or share transfer (all of which are collectively referred to as a Restructuring Action ), stock subscription rights in the company as listed under Article 236, Paragraph 1, Item 8 (a) through (e) of the Companies Act (such company limited hereafter referred to as the Restructured Company ) shall in each case be issued in accordance with applicable conditions below to holders of the stock subscription rights that remain in effect as of the time of the Restructuring Action (hereinafter referred to as the Remaining Stock Acquisition Rights ). In this case, the Remaining Stock Acquisition Rights shall become extinct, and the Restructured Company shall issue new stock acquisition rights. However, such issuance shall be limited to the cases where issuance of the stock acquisition rights of the Restructured Company under the following conditions is prescribed in the merger agreement, the absorption-type corporate split agreement, the incorporation-type corporate split plan, the share exchange agreement or the plan of the share transfer. (i) Number of stock acquisition rights to be issued by the Restructured Company The same number of stock acquisition rights shall be issued as the number of the remaining stock acquisition rights held by the respective holders. (ii) Type of share of the subject Restructured Company for the stock acquisition rights The type of share of the Restructured Company underlying the stock acquisition rights shall be common shares of the Restructured Company. (iii) Number of shares of the Restructured Company of which stock acquisition rights are to be issued The number of shares of the Restructured Company of which stock acquisition rights are to be issued shall be decided in the same manner as (ii) above taking into account the conditions and other of the Restructuring Action. (iv) Value of the property to be contributed at the time of exercise of the stock acquisition rights The value of the property to be contributed at the time of each of exercise of the stock acquisition rights to be delivered shall be the amount obtained by multiplying the amount to be paid after the restructuring in which the Exercise Price prescribed in (5) above has been adjusted taking into account the conditions and others of the Restructuring Action, by the number of shares of the Restructured Company of which the stock acquisition rights are to be issued that is determined in accordance with (iii) above. (v) Period during which the stock acquisition rights may be exercised The period shall commence on the starting day of the period for exercising the stock acquisition right specified in (6) above, or the day when the Restructuring Action comes into effect, whichever is later, and end on the day of expiration of the period during which the stock acquisition rights may be exercised as prescribed in (6) above. (vi) Matters concerning to capital stock and legal capital surplus to be increased by issuance of shares by the Restructured Company at exercise of the stock acquisition rights They shall be decided in the same manner as (10) above. (vii) Restriction on acquiring the stock acquisition rights by transfer The acquisition of the stock acquisition rights by transfer shall require approval by the Restructured Company s Board of Directors (approval by a majority of Directors in the case that the Restructured Company is not a company with a board of directors). (viii) Grounds and conditions for acquisition of the stock acquisition rights They shall be decided in the same manner as (8) above. (12) Treatment of any fractions less than one (1) share resulting from exercise of the stock acquisition rights Any fractions less than one (1) share to be issued to the stock acquisition right holders who exercised the stock acquisition rights shall be rounded off. (13) Other matters concerning the stock acquisition rights Other matters concerning the stock acquisition rights shall be determined by the Company s Board of Director s Meeting where the details of issuance of the stock acquisition rights shall be resolved. (14) Calculation method and standard for remuneration, etc. to Director The amount of remuneration, etc. to each Director shall be calculated by the fair value of one stock acquisition right determined using such model for stock options valuation as the Black-Scholes model taking into account market price of the stock and Exercise Price on the allotment date of the stock subscription rights and other conditions, multiplied by the number of the stock acquisition rights allotted to each Director. The specific number of the stock acquisition right to be granted to each Director shall be determined, taking into account a balance between such remuneration and fixed rewards, duties of each Director and others. -End- 18