NOTICE OF THE 48TH ORDINARY GENERAL MEETING OF SHAREHOLDERS

Transcription

1 Note: This English translation is for reference purposes only. In the event of any discrepancy between the Japanese original and this English translation, the Japanese original shall prevail. We assume no responsibility for this translation or for direct, indirect or any other forms of damage arising from the translation. (Securities code: 7211) June 7, 2017 To our shareholders , Shiba, Minato-ku, Tokyo MITSUBISHI MOTORS CORPORATION Chairman of the Board Carlos Ghosn NOTICE OF THE 48TH ORDINARY GENERAL MEETING OF SHAREHOLDERS You are cordially invited to attend the 48th Ordinary General Meeting of Shareholders of Mitsubishi Motors Corporation ( MMC ) to be held as described as below. If you are unable to attend, as described in the Notice on Exercising Voting Rights (P. 3 and P. 4), you may exercise your voting right(s) in writing or via the Internet. To do so, please review the Reference Materials for the Ordinary General Meeting of Shareholders contained in this notice, and exercise your voting right(s) either by posting your voting form so that it arrives before 5:45 p.m. on Thursday, June 22, 2017 or inputting your vote on the website for exercising voting right(s) before the aforementioned date and time. 1. Date and time Friday, June 23, 2017 at 10:00 a.m. (Japan time) 2. Place Takanawa, Minato-ku, Tokyo Prince Hall, 5th floor, Annex Tower, Shinagawa Prince Hotel (Please note that the place for this Ordinary General Meeting of Shareholders differs from the one for the previous meeting.) 3. Purposes Matters to report 1. Contents of Fiscal 2016 (from April 1, 2016 to March 31, 2017) Business Report, contents of Consolidated Financial Statements and Audit Reports of Accounting Auditors and Audit & Supervisory Board on the Consolidated Financial Statements 2. Report on the Fiscal 2016 (from April 1, 2016 to March 31, 2017) Financial Statements Matters for resolution Proposal No. 1 Appropriation of surplus Proposal No. 2 Partial amendments to the Articles of Incorporation Proposal No. 3 Election of 11 Members of the Board 4. Notice on Exercising Voting Rights Please refer to the Notice on Exercising Voting Rights described on P. 3 and P. 4. 1

2 Requests No souvenirs will be provided to shareholders attending the General Meeting of Shareholders, for which we would appreciate your understanding. If you attend the meeting, please present the enclosed voting form to the reception desk. If you exercise your voting rights by proxy, one other shareholder who possesses voting rights may attend the General Meeting of Shareholders as your proxy. Please note that the shareholder acting as your proxy must submit a document evidencing his or her right of representation. Notes If it becomes necessary to amend any items contained in the reference materials for the Ordinary General Meeting of Shareholders, the Business Report, the Consolidated Financial Statements or the Financial Statements, the amended material will be posted on MMC s website at: ( ) The below-mentioned documents are not included in this Notice of Ordinary General Meeting of Shareholders, but are posted on MMC s website pursuant to laws and regulations and Article 13 of MMC s Articles of Incorporation. Consequently, the documents attached to this notice are part of the documents that were audited by the Audit & Supervisory Board Member and the Accounting Auditors in preparing the Audit Reports. (a) Accounting Auditors and System to ensure appropriate business activities and outline of the operating status of such systems of Business Report (b) Consolidated Statement of Changes in Net Assets and Notes to Consolidated Financial Statements (c) Statement of Changes in Net Assets and Notes to Financial Statements ( ) Internet Broadcast MMC will broadcast the General Meeting of Shareholders live on the Internet. Please view the broadcast by accessing MMC s website at the following link. ( Date and time of availability: Friday, June 23, 2017, from 10:00 a.m. (Japan time) - The live broadcast will end just before the session of questions from shareholders and answers. - You may not be able to view the broadcast depending on your equipment or network environment. - The meeting will be filmed from the back of the meeting venue. As such, shareholders attending the meeting may unavoidably come into the picture at times. We ask for your kind understanding in this matter. Viewing the Meeting After the Broadcast The General Meeting of Shareholders will be available to view as a recorded video. Please view the video by accessing MMC s website at the following link. ( Period of availability: Approximately one month starting on Friday, June 23,

3 Notice on Exercising Voting Rights The following three methods are available for exercising voting rights. Shareholders Attending the General Meeting of Shareholders Please present the enclosed voting form to the reception desk. Date and time: Place: Friday, June 23, 2017 at 10:00 a.m. (Japan time) , Takanawa, Minato-ku, Tokyo Prince Hall, 5th floor, Annex Tower, Shinagawa Prince Hotel Exercising Voting Rights in Writing Please indicate either for or against for each proposal using the enclosed voting form, and return it to MMC to arrive by the voting deadline (no postage is necessary). In case any voting forms indicating neither for or against for each proposal are submitted, MMC will treat such voting forms as indicating for. Voting deadline: To be received no later than 5:45 p.m. on Thursday, June 22, 2017 (Japan time) Exercising Voting Rights via the Internet Please access the website for exercising voting right(s) ( via PCs, smartphones, or cell phones, enter login ID and tentative password stated on the enclosed voting form, and enter for or against in accordance with the indication on the display. Voting deadline: No later than 5:45 p.m. on Thursday, June 22, 2017 (Japan time) 3

4 Exercising Voting Rights via the Internet If you exercise your voting right(s) via the Internet, you are kindly requested to ascertain the following items and exercise your voting right(s): (1) Website for Exercising Voting Rights (i) To exercise your voting right(s) via the Internet, you are kindly requested to visit the website for exercising voting right(s) ( via PCs, smartphones, or cell phones and use that site in accordance with indication on the display. (Please note, however, that the website will not be available from 2:00 a.m. to 5:00 a.m. on each day.) (ii) The website for exercising voting right(s) may not be available depending on usage environment of the Internet, services to which you subscribe, or device model you use. (iii) If you have any questions about the website for exercising voting right(s) ( please make inquiries to the helpdesk shown below. (2) How to Exercise Voting Right(s) via the Internet (i) On the website for exercising voting right(s) ( you are kindly requested to use login ID and tentative password stated on your voting form to enter for or against in accordance with the indication on the display. (ii) To prevent unauthorized access or falsification of the content for exercising voting right(s) by a person other than a shareholder, shareholders who exercise voting rights via the Internet are kindly requested to change the tentative password on the website for exercising voting right(s). (3) Expenses Incurred to Visit the Website for Exercising Voting Right(s) Any Internet connection costs, communication charges, etc., incurred to access the website for exercising voting right(s) via PCs, smartphones or cell phones will be borne by shareholders. Handling of Duplicate Exercising of Voting Rights in Writing and/or via the Internet (1) In case a voting right is exercised in duplicate in writing and via the Internet, exercising of voting rights over the Internet shall be regarded as valid. (2) Except in case (1) above, in case a voting right is exercised in duplicate, the last exercising of the voting right shall be regarded as valid. <For institutional investors> Institutional investors may use the Electronic Proxy Voting Platform for Institutional Investors managed by ICJ, Inc. Inquiries about the system, etc. Stock Transfer Agency Department of Mitsubishi UFJ Trust & Banking Corporation (Helpdesk) Telephone: (toll free) Operating hours: 9:00 21:00 4

5 Notice Regarding Q&A during the General Meeting of Shareholders Q&A during the General Meeting of Shareholders will be changed from previous Q&A as described below; please follow the instructions given. Asking a question during the General Meeting of Shareholders If you wish to ask a question, you are kindly requested to use the Question Ticket that is part of the attendance slip you will be received from the reception desk on the day. Please tear off the Question Ticket and insert it inside the Questions Box before 10:00 a.m. The order in which questions are asked will be decided by drawing lots from among those who inserted the Question Ticket into the box. Also, please be aware that no questions will be taken from those who raise their hand at the meeting. If a matter has been thoroughly discussed, you may be asked to refrain from further questioning, even if you insert the Question Ticket inside the box. Reception of questions in advance If there are matters you want to ask MMC about, you can either ask on the day of the meeting, or send your question in advance using the Questionnaire Form or via the Internet. We intend to answer the questions received in advance that we consider to be of high interest to shareholders separately from the questions asked during the meeting. Please be advised, however, that we will not provide individual replies. (1) If you ask a question on the Questionnaire Form (sent by postal service) Please complete the required information on the enclosed Questionnaire Form and post it. Deadline: To be received no later than 5:00 p.m. on Tuesday, June 20, 2017 (Japan time) (2) If you ask a question via the Internet (PCs/smartphones) Please access the dedicated website by entering the following URL in your web browser or by scanning the QR code. Once at the website, please input the required information as prompted. URL of website for questions in advance: Deadline: No later than 5:00 p.m. on Tuesday, June 20, 2017 (Japan time) 5

6 NOTICE OF THE 48TH ORDINARY GENERAL MEETING OF SHAREHOLDERS Reference Materials Proposal No. 1 Appropriation of surplus Mitsubishi Motors Corporation ( MMC ) considers returning profits to its shareholders one of the most important tasks of management. In the automobile industry, there is great demand for capital in order for companies to achieve sustainable growth, such as through further promotion of technological innovations and environmental efforts; therefore, it is our basic policy to maintain the stable distribution of profits to shareholders after comprehensively considering cash flows and business performance. Having comprehensively considered the state of business performance for the full term and other such factors, MMC would like to set the end-of-term dividend at 5 yen per share, as stated in the most recent dividend forecast. Including the interim dividend of 5 yen, this will make the dividend for the term 10 yen per share. (1) Type of dividend Cash (2) Dividend allocation to shareholders and total amount of dividends 5 yen per common stock of MMC Total amount of dividends: 7,450,301,800 yen (3) Effective date of dividend June 26,

7 Proposal No. 2 Partial amendments to Articles of Incorporation 1. Reason for proposal MMC proposes to make necessary amendments to the current Articles of Incorporation for the following reasons. (1) In order to segregate the supervisory functions and business execution functions and to clarify the duties and responsibilities of the management, as well as to enhance agility in business execution and to respond rapidly and flexibly to changes in the economic environment, MMC has introduced an Executive Officer system, and now, in order to clarify the positioning of such system and the method for electing Executive Officers, MMC would like to newly establish Article 27, Paragraph 1 of the Articles of Incorporation (numbering as after proposed amendments). In addition, MMC would like to newly establish Article 27, Paragraph 2 (numbering as after proposed amendment) in order to enable the election of a President from among Executive Officers so as to enable the agile building of governance and management structure. Furthermore, in order to clarify the status of the Chairman of the Board as the chairman of the Board of Directors, MMC would like to clarify that a Chairman of the Board shall be elected from among the Directors and delete provisions relating to other Directors with Titles (Article 20, Paragraph 3 (numbering as after proposed amendment)). MMC would also like to make other necessary amendments in connection with such new establishment and amendment. (2) In order to enable the building of a flexible management structure that takes into account the balance between enhancing speed and efficiency in managerial decision making and strengthening governance through auditing and supervision, MMC would like to delete the provisions relating to the limits on the number of Directors and Audit & Supervisory Board Members in Article 18 (Number of Directors) and Article 29 (Number of Audit & Supervisory Board Members) of the current Articles of Incorporation. (3) MMC would like to amend the numbering of Articles in connection with the new establishment and deletion of the above provisions. 2. Details of amendments The details of the amendments are as follows. (Amendments shown by underlines.) Current Articles of Incorporation Article 1 to Article 10 (Provisions omitted.) CHAPTER 3. SHAREHOLDERS MEETING Article 11. (Provisions omitted.) Proposed Amendments Article 1 to Article 10 (The same as the current provisions.) CHAPTER 3. SHAREHOLDERS MEETING Article 11. (The same as the current provisions.) (Person Entitled to Convene and Preside at Meetings) Article 12. (1) Any Shareholders Meeting shall be held by a resolution of the Board of Directors, and either the Chairman of the Board or the President, as the Board of Directors may designate in advance, shall convene such Meetings. (2) Either the Chairman of the Board or the President, as the Board of Directors may 7 (Person Entitled to Convene and Preside at Meetings) Article 12. (1) Any Shareholders Meeting shall be held by a resolution of the Board of Directors, and the Chairman of the Board shall convene such Meetings. (2) Either the Chairman of the Board or one of Directors as the Board of Directors designates

8 designate in advance, shall preside as Chairman at Shareholders Meetings. (3) (Provisions omitted.) Article 13 to Article 16 (Provisions omitted.) CHAPTER 4. DIRECTORS AND BOARD OF DIRECTORS Article 17. (Provisions omitted.) (Number of Directors) Article 18. The Directors of the Corporation shall be fifteen (15) or fewer in number. Article 19 to Article 20 (Provisions omitted.) (Representative Directors and Directors with Titles) Article 21. (1) (Provisions omitted.) (2) (Provisions omitted.) (3) The Board of Directors shall elect a President and may elect a Chairman of the Board and a certain number of Vice Chairmen of the Board, Executive Vice Presidents, Senior Managing Directors and Managing Directors by a resolution of the Board of Directors. (Convocation of Meetings of the Board of Directors) Article 22. (1) The Chairman of the Board shall call the Meeting of the Board of Directors, at which he shall preside, except as otherwise provided for by laws or ordinances. If the Chairman of the Board is absent or prevented from so acting, the President or one of the other Directors shall call and preside at the Meeting. (2) (Provisions omitted.) Article 23 to Article 27 (Provisions omitted.) (New) in advance, shall preside as Chairman at Shareholders Meetings. (3) (The same as the current provisions.) Article 13 to Article 16 (The same as the current provisions.) CHAPTER 4. DIRECTORS, BOARD OF DIRECTORS AND EXECUTIVE OFFICERS Article 17. (The same as the current provisions.) (Deletion) Article 18 to Article 19 (The same as the current provisions.) (Representative Directors and Chairman of the Board) Article 20. (1) (The same as the current provisions.) (2) (The same as the current provisions.) (3) The Board of Directors shall elect a Chairman of the Board. (Convocation of Meetings of the Board of Directors) Article 21. (1) The Chairman of the Board shall call the Meeting of the Board of Directors, at which he shall preside, except as otherwise provided for by laws or ordinances. If the Chairman of the Board is absent or prevented from so acting, one of the other Directors shall call and preside at the Meeting. (2) (The same as the current provisions.) Article 22 to Article 26 (The same as the current provisions.) (Executive Officers) Article 27. (1) The Board of Directors shall elect Executive Officers who execute operation of the Corporation. (2) The Board of Directors may elect President, Chief Executive Officer (CEO) and other Executive Officers with title from among the Executive Officers. 8

9 CHAPTER 5. AUDIT & SUPERVISORY BOARD MEMBERS AND AUDIT & SUPERVISORY BOARD Article 28. (Provisions omitted.) CHAPTER 5. AUDIT & SUPERVISORY BOARD MEMBERS AND AUDIT & SUPERVISORY BOARD Article 28. (The same as the current provisions.) (Number of Audit & Supervisory Board Members) Article 29. The Audit & Supervisory Board Members of the Corporation shall be five (5) or fewer in number. Article 30 to Article 45 (Provisions omitted.) (Deletion) Article 29 to Article 44 (The same as the current provisions.) 9

10 Proposal No. 3 Election of 11 Members of the Board As the terms of office of all 11 current Members of the Board will expire at the conclusion of this Ordinary General Meeting of Shareholders, MMC proposes the election of 11 Members of the Board. The candidates for election are as follows. No. 1 2 Name (Date of birth) Carlos Ghosn (March 9, 1954) Reappointment History, position and responsibility in MMC and important concurrent positions Number of MMC shares owned October 1996 Joined Renault 437 December 1996 Executive Vice President, Renault June 1999 Director and COO, Nissan Motor Co., Ltd. June 2000 President and COO, Nissan Motor Co., Ltd. June 2001 President and CEO, Nissan Motor Co., Ltd. June 2003 Co-Chairman, President and CEO, Nissan Motor Co., Ltd. April 2005 President and CEO, Renault Chairman and President, Renault-Nissan B.V. (to the present) June 2008 Chairman, President and CEO, Nissan Motor Co., Ltd. May 2009 Chairman, President and CEO, Renault (to the present) December 2016 Chairman of the Board, MMC (to the present) April 2017 Chairman, Nissan Motor Co., Ltd. (to the present) <Important concurrent positions> Chairman, Nissan Motor Co., Ltd. Chairman, President and CEO, Renault Chairman and President, Renault-Nissan B.V. [Reasons for nomination] Mr. Carlos Ghosn has considerable insight and experience concerning the automotive business. As such, MMC continuously proposes him as a candidate for Member of the Board with the expectation that these qualities may benefit MMC s management. Osamu Masuko (February 19, 1949) Reappointment April 1972 Joined Mitsubishi Corporation 19,048 April 2003 June 2004 January 2005 October 2007 June 2014 June 2016 Senior Vice President, Division COO of Motor Vehicle Business Div., Mitsubishi Corporation Managing Director, in charge of Overseas Operations Group Headquarters, MMC President, Chief Business Ethics Officer, MMC President, MMC Chairman of the Board and CEO, MMC Chairman of the Board, President and CEO, MMC December 2016 President and CEO, MMC (to the present) [Reasons for nomination] Having long been in charge of the management of MMC, Mr. Osamu Masuko has considerable insight and business experience concerning corporate management. As such, MMC continuously proposes him as a candidate for Member of the Board with the expectation that he will play an important role in the decisions in significant matters and business execution of MMC. 10

11 No. 3 4 Name (Date of birth) Mitsuhiko Yamashita (April 17, 1953) Reappointment History, position and responsibility in MMC and important concurrent positions Number of MMC shares owned April 1979 Joined Nissan Motor Co., Ltd. 1,582 April 2004 April 2005 June 2005 April 2014 June 2015 July 2015 June 2016 January 2017 Senior Vice President (Officer) in charge of Research and Development, Nissan Motor Co., Ltd. Executive Vice President (Officer) in charge of Research and Development, Nissan Motor Co., Ltd. Member of the Board of Directors and Executive Vice President (Officer), Nissan Motor Co., Ltd. Member of the Board of Directors, Nissan Motor Co., Ltd. Retired from Member of the Board of Directors, Nissan Motor Co., Ltd. Technical Advisor to Board, Nissan Motor Co., Ltd. Member of the Board, Executive Vice President (Development, Quality), MMC Member of the Board, Executive Vice President (Development, Quality), CPLO, MMC (to the present) [Reasons for nomination] Mr. Mitsuhiko Yamashita has considerable experience and achievements in the corporate management in the field of automobile development. As such, MMC continuously proposes him as a candidate for Member of the Board with the expectation that he will play an important role in the promotion of reform as well as management and supervision of the business execution in development division as the person in charge of the division. Kozo Shiraji (April 22, 1954) Reappointment April 1977 Joined Mitsubishi Corporation 2,125 April 2009 April 2013 April 2016 June 2016 January 2017 Senior Vice President, Division COO of Motor Vehicle Business Div., Mitsubishi Corporation Executive Vice President, Group CEO of Machinery Group, Mitsubishi Corporation Senior Executive Officer, Assistant to President, MMC Member of the Board, Executive Vice President (Overseas Operations, Global After Sales), MMC Member of the Board, Executive Vice President (Overseas Operations, Global After Sales), CPO, MMC (to the present) [Reasons for nomination] Mr. Kozo Shiraji has considerable experience, achievements and insight on global business management nurtured through his long-standing career in the automotive business at a general trading company that operates worldwide. As such, MMC continuously proposes him as a candidate for Member of the Board with the expectation that these qualities may benefit MMC s management. 11

12 No. 5 Name (Date of birth) Koji Ikeya (September 27, 1957) Reappointment History, position and responsibility in MMC and important concurrent positions Number of MMC shares owned April 1981 Joined The Mitsubishi Bank, Ltd. 1,582 April 2008 May 2011 May 2012 May 2014 May 2015 June 2016 Executive Officer and General Manager of Corporate Banking Credit Division, The Bank of Tokyo-Mitsubishi UFJ, Ltd. Managing Executive Officer and Group Head of Osaka Corporate Banking Group, The Bank of Tokyo-Mitsubishi UFJ, Ltd. Managing Executive Officer in charge of Corporate Banking Credit Division, Credit Division, Credit Supervision Division and CIB Credit Division, The Bank of Tokyo-Mitsubishi UFJ, Ltd. Managing Executive Officer and Group Head of Corporate Banking Group No. 1, The Bank of Tokyo-Mitsubishi UFJ, Ltd. Senior Managing Executive Officer and Group Head of Corporate Banking Group No. 1, The Bank of Tokyo-Mitsubishi UFJ, Ltd. Member of the Board, Executive Vice President (Finance, Controlling & Accounting), CFO, MMC (to the present) [Reasons for nomination] Having served in a number of senior positions at a financial institution, Mr. Koji Ikeya has considerable business experience and abundant insight on finance and accounting. As such, MMC continuously proposes him as a candidate for Member of the Board with the expectation that these qualities may benefit MMC s management. 12

13 No. 6 Name (Date of birth) Harumi Sakamoto (April 10, 1938) Reappointment Outside Director Independent Director History, position and responsibility in MMC and important concurrent positions Number of MMC shares owned April 1962 Joined Ministry of International Trade and Industry 5,253 July 1984 Head of Policy Planning Office of Minister s Secretariat, Ministry of International Trade and Industry June 1986 Chief of Sapporo Trade and Industry Bureau, Ministry of International Trade and Industry August 1987 Advisor, The Dai-Ichi Kangyo Bank, Ltd. May 1990 Managing Director, The Seiyu, Ltd. May 1993 Senior Managing Director, The Seiyu, Ltd. May 1997 Executive Vice President, The Seiyu, Ltd. May 1997 Director, The Seibu Department Stores, Ltd. September 1997 Executive Vice President, The Seibu Department Stores, Ltd. October 2000 Secretary General, Japan Association for the 2005 World Exposition October 2003 Vice Chairperson, Japan Association for the 2005 World Exposition June 2006 President, The Distribution Systems Research Institute June 2010 Chairman, Japan Facility Management Promotion Association January 2012 Chairperson, Japan Facility Management Association June 2013 Member of the Board, MMC (to the present) <Important concurrent positions> Outside Director, TechnoPro Holdings, Inc. [Reasons for nomination] Ms. Harumi Sakamoto has considerable experience and insight as an administrative officer and a corporate manager. As such, MMC continuously proposes her as a candidate for Outside Director so that her experience and insight may be reflected in MMC s management. 13

14 No. 7 Name (Date of birth) Shunichi Miyanaga (April 27, 1948) Reappointment History, position and responsibility in MMC and important concurrent positions Number of MMC shares owned April 1972 Joined Mitsubishi Heavy Industries, Ltd. 4,165 June 2008 Member of the Board, Executive Vice President, Mitsubishi Heavy Industries, Ltd. April 2011 Member of the Board, Senior Executive Vice President, Mitsubishi Heavy Industries, Ltd. April 2013 Member of the Board, President, Mitsubishi Heavy Industries, Ltd. (to the present) June 2014 Member of the Board, MMC (to the present) <Important concurrent positions> Member of the Board, President, Mitsubishi Heavy Industries, Ltd. Outside Director [Reasons for nomination] Mr. Shunichi Miyanaga has considerable experience, achievements and insight nurtured through his long-standing career in corporate management at the manufacturing company that operates worldwide. As such, MMC continuously proposes him as a candidate for Outside Director so that these qualities may be reflected in MMC s management. 14

15 No. 8 Name (Date of birth) Ken Kobayashi (February 14, 1949) Reappointment Outside Director History, position and responsibility in MMC and important concurrent positions Number of MMC shares owned July 1971 Joined Mitsubishi Corporation 437 April 2003 Senior Vice President, General Manager of Singapore Branch, Mitsubishi Corporation June 2004 Senior Vice President, Division COO of Plant Project Div., Mitsubishi Corporation April 2006 Senior Vice President, Division COO of Ship, Aerospace & Transportation Systems Div., Mitsubishi Corporation April 2007 Executive Vice President, Group CEO of Industrial Finance, Logistics & Development Group, Mitsubishi Corporation June 2007 Member of the Board, Executive Vice President, Group CEO of Industrial Finance, Logistics & Development Group, Mitsubishi Corporation June 2008 Executive Vice President, Group CEO of Industrial Finance, Logistics & Development Group, Mitsubishi Corporation April 2010 Senior Executive Vice President, Executive Assistant to President, Mitsubishi Corporation June 2010 Member of the Board, President & CEO, Mitsubishi Corporation April 2016 Chairman of the Board, Mitsubishi Corporation (to the present) June 2016 Member of the Board, MMC (to the present) <Important concurrent positions> Chairman of the Board, Mitsubishi Corporation Outside Director, NISSIN FOODS HOLDINGS CO., LTD. Outside Director (Member of the Board), Mitsubishi Heavy Industries, Ltd. [Reasons for nomination] Mr. Ken Kobayashi has considerable experience, achievements and insight on global business management nurtured through his career as a corporate manager at a general trading company that operates worldwide. As such, MMC continuously proposes him as a candidate for Outside Director so that these qualities may be reflected in MMC s management. 15

16 No. 9 Name (Date of birth) Takeshi Isayama (March 8, 1943) Reappointment Outside Director History, position and responsibility in MMC and important concurrent positions Number of MMC shares owned April 1967 Joined Ministry of International Trade and Industry 437 August 1996 Director-General, International Trade Administration Bureau, Ministry of International Trade and Industry July 1997 Director-General, International Trade Policy Bureau, Ministry of International Trade and Industry June 1998 Commissioner, Japan Patent Office September 2001 Vice Chairman, Nissan Motor Co., Ltd. October 2007 Chairman, Carlyle Group Japan May 2009 Independent Director, Renault April 2013 Retired from Independent Director, Renault December 2016 Member of the Board, MMC (to the present) Independent Director 10 [Reasons for nomination] Mr. Takeshi Isayama has considerable insight and experience concerning the automotive business. As such, MMC continuously proposes him as a candidate for Outside Director with the expectation that these qualities may benefit MMC s management. Hitoshi Kawaguchi (August 23, 1953) Reappointment Outside Director April 1976 Joined Nissan Motor Co., Ltd. 437 April 2005 Senior Vice President in charge of Human Resources, Diversity Development Office, Nissan Motor Co., Ltd. April 2009 Senior Vice President in charge of External and Government Affairs, Intellectual Asset Management, Nissan Motor Co., Ltd. April 2016 Senior Vice President, CSO (Chief Sustainability Officer) in charge of Global External and Government Affairs, Japan Communication, Corporate Service Management Department, CSR Department, Nissan Motor Co., Ltd. (to the present) December 2016 Member of the Board, MMC (to the present) <Important concurrent positions> Senior Vice President, CSO (Chief Sustainability Officer), Nissan Motor Co., Ltd. [Reasons for nomination] Mr. Hitoshi Kawaguchi has considerable insight and experience concerning the automotive business. As such, MMC continuously proposes him as a candidate for Outside Director with the expectation that these qualities may benefit MMC s management. 16

17 No. 11 Name (Date of birth) Hiroshi Karube (April 23, 1956) History, position and responsibility in MMC and important concurrent positions Number of MMC shares owned April 1980 Joined Nissan Motor Co., Ltd. 437 April 2010 Corporate Vice President, in charge of Global Controller, Budget and Accounting Dept., Global Asset Management Dept., Nissan Motor Co., Ltd. (to the present) December 2016 Member of the Board, MMC (to the present) <Important concurrent positions> Corporate Vice President, Nissan Motor Co., Ltd. Reappointment Outside Director [Reasons for nomination] Mr. Hiroshi Karube has considerable insight and experience concerning the automotive business. As such, MMC continuously proposes him as a candidate for Outside Director with the expectation that these qualities may benefit MMC s management. (Notes) 1. Mr. Carlos Ghosn is Chairman of the Board of Directors of Renault, President and Chief Executive Officer of Renault, and Chairman of the Board of Directors of Nissan Motor Co., Ltd. ( Nissan ). There is a broad automotive business alliance, including capital alliance, between MMC and Nissan. There are no special conflicts of interests between MMC and the other director candidates. 2. Ms. Harumi Sakamoto, Mr. Shunichi Miyanaga, Mr. Ken Kobayashi, Mr. Takeshi Isayama, Mr. Hitoshi Kawaguchi and Mr. Hiroshi Karube are candidates for Outside Directors. 3. Ms. Harumi Sakamoto s term of office as Outside Director will be four years as of the conclusion of this Ordinary General Meeting of Shareholders. 4. Mr. Shunichi Miyanaga s term of office as Outside Director will be three years as of the conclusion of this Ordinary General Meeting of Shareholders. 5. Mr. Ken Kobayashi s term of office as Outside Director will be one year as of the conclusion of this Ordinary General Meeting of Shareholders. 6. Mr. Takeshi Isayama, Mr. Hitoshi Kawaguchi and Mr. Hiroshi Karube s terms of office as Outside Director will be six months as of the conclusion of this Ordinary General Meeting of Shareholders. 7. MMC has concluded agreements with Ms. Harumi Sakamoto, Mr. Shunichi Miyanaga, Mr. Ken Kobayashi, Mr. Takeshi Isayama, Mr. Hitoshi Kawaguchi and Mr. Hiroshi Karube limiting their liability for damages to the higher of 7 million yen or the minimum amount of liability stipulated in Article 425, Paragraph 1 of the Companies Act for the liability stipulated in Article 423, Paragraph 1 of the same Act. MMC intends to continue the above-mentioned limitation of liability agreements with the candidates if their reelections are approved. 8. MMC has provided notification of the status of Ms. Harumi Sakamoto and Mr. Takeshi Isayama as independent directors pursuant to the regulations of the Tokyo Stock Exchange. 9. After the Extraordinary Shareholders Meeting held on December 14, 2016 at which Ms. Harumi Sakamoto, Mr. Shunichi Miyanaga, Mr. Ken Kobayashi, Mr. Takeshi Isayama, Mr. Hitoshi Kawaguchi, and Mr. Hiroshi Karube were elected, MMC received, in January 2017, an order for 17

18 action and an order for payment of surcharge from the Consumer Affairs Agency on the grounds of committing an act in violation of the Act against Unjustifiable Premiums and Misleading Representations in the representation in catalogs and other promotional materials of vehicles manufactured by MMC in relation to which there has been improper conduct in fuel consumption testing. Those Directors did not recognize this problem in advance. However, they regularly made suggestions for internal reforms at meetings of the Board of Directors, etc., from the standpoint of legal compliance. Since the problem was pointed out, they have fulfilled their responsibilities by giving directions regarding comprehensive investigations of the said conduct, recurrence prevention measures, etc. 10. Mr. Ken Kobayashi currently serves as a Director at Mitsubishi Corporation, a specified affiliated business operator (major trading partner) and has served as such in the past five years. 18

19 (Attached documents) Business Report (From April 1, 2016 to March 31, 2017) 1. Matters regarding the current state of the corporate group (1) Progress and results of the business The consolidated results of the MMC group in this fiscal year are as follows. Sales volume (retail) fell by 122,000 (12%) year on year to 926,000 units. By region, sales volume (retail) breaks down as follows. In Japan, although sales recovered in the second half of the fiscal year, there was a large drop in sales in the first half of the fiscal year immediately after the fuel-consumption testing controversy. As a result, Japanese sales volume (retail) fell by 22,000 (22%) year on year to 80,000 units. In North America, brisk sales of the Outlander led sales volume (retail) to grow by 3,000 (2%) year on year to 138,000 units. In Europe, on top of the continuing slide in sales volume (retail) in Russia owing to difficult economic conditions, the steep drop in sales of the Outlander PHEV in markets such as the Netherlands due to the impact of changes in tax benefits caused overall sales volume (retail) to fall by 27,000 (13%) year on year to 179,000 units. In Asia, sales volume (retail) climbed year on year in China where there were strong sales of the Outlander, where output was transferred to local production. But sales volume (retail) in Asia as a whole (including the ASEAN region) fell by 7,000 (2%) year on year to 315,000 units. In the others region, sales volume (retail) fell in the Middle East and in South and Central America amid the continuing impact of low natural resource prices, which contributed to a decline of 69,000 (24%) year on year to 214,000 units. Consolidated net sales fell by billion yen (16%) year on year to 1,906.6 billion yen. Consolidated operating profit fell by billion yen (96%) owing to worsening exchange rates and increased expenses for market quality measures on top of the impact of the decline in sales volume. But cost cutting efforts helped deliver a year-end consolidated operating profit of 5.1 billion yen. Consolidated ordinary profit fell by billion yen (94%) year on year to 8.9 billion yen. Due to factors including the company posting an extraordinary loss of billion yen related to the fuel-consumption testing controversy, consolidated profit (profit attributable to owners of parent) fell by billion yen year on year. This resulted in a loss of billion yen. The following policies were implemented by the MMC group in this fiscal year. <Outline> In this fiscal year, improper conduct was uncovered in the fuel consumption testing of vehicles made by the 19

20 company. The company identified the underlying causes of this improper conduct and has begun to work towards restoring public trust in our vehicles and the brand. During the fiscal year, MMC also announced and completed a capital and business alliance with Nissan Motor Co., Ltd. ( Nissan ), which saw the company become a full member of the Renault-Nissan Alliance promising greater competitiveness in future. As part of the fuel-testing controversy, the company received the following orders during 2016 from the Ministry of Land, Infrastructure, Transport and Tourism in Japan (MLITT) regarding improper conduct testing vehicles made by the company: - April 20, the company was ordered to perform a full investigation. - June 21, the company was ordered to submit revised fuel consumption figures for the four affected mini-car models and to take measures to prevent recurrence. - August 30, the company was ordered to submit revised fuel consumption figures for eight models of automobiles currently on sale. - September 15, the company was ordered to revise and implement measures to prevent recurrence. In accordance with these orders, the company undertook an investigation; it revised fuel consumption figures for the affected vehicles and submitted them to MLITT. It also formulated and implemented the measures to prevent recurrence, as detailed below. In addition, on January 27, 2017, the Consumer Affairs Agency ordered the company to take measures regarding the representation of fuel consumption performance, and to pay a penalty pursuant to the Act against Unjustifiable Premiums and Misleading Representations. The company has responded to those orders appropriately. The company also compensated owners of the affected vehicles for damage pertaining to the changes in fuel consumption figures, including from the difference in fuel costs and increased taxes. MMC considers its efforts to address this issue to be its foremost concern. Immediately after discovering the improper conduct, the company established a special investigation committee made up of outside experts who objectively and thoroughly investigated the facts of the matter. The measures to prevent recurrence were formulated based on guidelines presented by the special investigation committee. The content of those measures included 31 items, including revising the development process, systematizing legal education for engineers, reorganizing the development departments, and automating the processing of running resistance measurement data. The company implemented all of those measures by April 1, In the future, the company intends to continually reaffirm the effect of those implemented measures, to take additional measures as necessary, and to continue increasing the effectiveness of those measures through internal reforms, thereby working to restore the public s trust. Separately, on October 20, 2016 the company completed its capital and business alliance with Nissan, and became a full member of the Renault-Nissan Alliance. This alliance is intended to secure and further expand the 20

21 company s competitiveness through cost-cutting, investment optimization, and technology-sharing benefits. This will enable MMC to adapt to the changing business environment in the globalizing automobile industry typified by increasingly sophisticated and time-consuming research and development and intensifying development competition. As part of the Alliance, MMC has already identified the six following synergy areas, where we have begun specific reviews and efforts: joint purchasing, joint production bases, joint vehicle platform development, sharing the development of new technologies, sales financing and after-sales services, and expansion of presence in mature and developing markets. For example, the company has already begun joint transportation of vehicles in Thailand, and we have also achieved more than three billion yen in cost savings through procurement activities. The company will continue to accelerate the review of each synergy area and to contribute to the alliance, for example through the expansion of its presence in the ASEAN region and in the plug-in hybrid technology field. The company will place a high priority on implementing measures to maintain its competitiveness in the ASEAN region, one of its strengths, and to increase its presence in Asia. In October 2016, the company began local production of the Outlander in China. This increases the model s cost competitiveness and will stimulate sales expansion as the company s strategic model. In February 2017, the company also began local production of the Mirage G4 at its Philippines plant. Additionally, the company began operations at a new plant in Indonesia from April 2017, where we commenced production of the Pajero Sport, one of our main models. This increased the company s production capacity in the ASEAN region to over 600,000 units, accounting for 40% or more of global production capacity. A growth strategy through new products is essential, alongside measures taken to strengthen the company s existing business. In the previous fiscal year, the company renewed the Outlander PHEV in Japan to deliver greater performance and to continue to strengthen its position as the global leader in plug-in hybrids. The Eclipse Cross made its global debut at the Geneva Motor Show in March 2017, where it was the highlight of the company s SUV product strategy. During its global unveiling at the Geneva Motor Show, the Eclipse Cross was praised for its stylish coupe form. Production of the Eclipse Cross will begin in October 2017, and will be launched in Europe before rolling out in other regions. The company plans to launch the compact MPV in Indonesia from September 2017 following the start of Pajero Sport production. It will play a role as a high-quality strategic model, primarily in the ASEAN region. (2) State of capital expenditure The MMC group invested a total of 58.1 billion yen as capital expenditure in fiscal year 2016, mainly as a result of investment in development equipment and production equipment for new products and technologies. (3) State of financing The company issued 506,620,577 new shares to Nissan by means of a capital increase through third-party 21

22 allotment with a payment date of October 20, 2016, and thereby raised a total amount of billion yen (issuance price of yen per share). The company plans to use the funds raised from the issuance of new shares to invest in strengthening research and development on strategic products, updating research and development equipment to their newest versions, and to renew IT systems. In addition, the necessary funds for this fiscal year, including expenses relating to the improper conduct in fuel-consumption testing of MMC-made vehicles, were covered with cash reserves. As a result, the balance of loans payable at the end of fiscal 2016 is now 15.6 billion yen. (4) Issues to be addressed (i) Efforts to recover trust On top of past quality issues, the company recognizes the improper conduct in fuel consumption testing as a serious matter, and we have undertaken major reforms as well as strengthening our internal controls and governance. In order to facilitate communications and accelerate decision-making, the company s formerly pyramid-shaped organization has been restructured along functional lines. This has flattened the company s organization and simplified our hierarchy. In addition, with the purpose of making decision-making more efficient and clarifying responsibilities, the company has changed the party delegated with authority by the Board of Directors from the Executive Committee to the CEO. It has positioned the Executive Committee as an advisory body for the CEO, and enacted detailed rules for the delegation of authority at each level of the corporate hierarchy. The company also appointed an officer in charge of Global Risk Control to manage compliance and operational risk and to report periodically to the Board of Directors on measures to improve governance. To strengthen and improve the efficiency of the handling of various internal controls pursuant to laws and regulations, the company created a system under which internal controls for financial reporting under the Financial Instruments and Exchange Act will be handled by the J-SOX Promotion Committee directly under the Chief Financial Officer. Internal controls pursuant to the Companies Act will be promoted through the newly created Internal Control Committee chaired by the CEO. A Structural Reform Promotion Office established on July 1, 2016 has enabled the company to ensure that its revised development process was implemented effectively, along with other measures among the 31 outlined above to prevent recurrence of the fuel-testing controversy. The company is also implementing major structural reforms as part of Performance Revolution (PRev) activities. PRev activities are focused mainly in the product development sections where the improper conduct was uncovered, and they create a framework for internal organizational, structural, cultural, and technological reforms. These activities are now being expanded outside of the product development sections. In future, the company will place the highest priority on compliance, and we will make continued efforts to recover the trust of customers and society by strengthening our governance further, and by improving and perfecting the appropriateness and efficiency of our legal compliance and business execution. (ii) Towards a V-shaped recovery The company intends to achieve a V-shaped recovery in fiscal year 2017, which will be a crucial moment as 22

23 MMC embarks on the first fiscal year of its next mid-term management plan. There are two main management issues that need to be addressed to achieve corporate growth: 1) MMC will strive to deliver grow sales together with increasing business efficiency. This requires setting appropriate pricing, optimizing grade mixes, improving the brand through strengthening marketing strategies, and strengthening the performance of sales companies based on clear performance criteria. 2) It is important to ensure the launch quality of new models on both the development and production sides. The company is making progress on improving its management of profit. This will involve a move towards a model that will generate profits by measuring our monthly profit and loss thoroughly against these two criteria increased sales and improved quality under our new senior management, which was put in place during the current fiscal year. Finally, together with Nissan, the company is accelerating the delivery of short-term and mid-term synergies, primarily by reducing and avoiding costs. The company has gained access to significant opportunities for synergies by joining the Renault-Nissan Alliance, the world s third-largest automotive alliance with 10 million unit sales per year. To date, Mitsubishi Motors has pursued a strategy of market and product focus and selective market expansion. This required investment of limited resources in areas where the company could compete with other companies independently. In the future, the company will be able to realize opportunities in product development, purchasing, technology, manufacturing, market expansion and services by using the strength of the Alliance. We have a chance to fulfill our potential by utilizing new technological assets such as autonomous cars, connected cars, and further electrification to provide even more attractive products and technology for our customers. Given this outlook and the reforms underway, we hope to continue receiving shareholders support and guidance. 23

24 (5) Financial position and operating results Net sales (In millions of yen) Operating profit (In millions of yen) Ordinary profit (In millions of yen) Profit attributable to owners of parent (In millions of yen) Earnings per share (In yen) Net assets (In millions of yen) Stockholders equity per share (In yen) Total assets (In millions of yen) Fiscal 2013 Fiscal 2014 Fiscal 2015 Fiscal ,093,409 2,180,728 2,267,849 1,906, , , ,377 5, , , ,027 8, , ,170 72,575 (198,524) (164.11) 550, , , , ,543,890 1,582,802 1,433,725 1,484,413 (Notes) 1. Earnings per share is calculated using the number of shares after deduction of the average number of treasury stock during each fiscal year from the average number of issued shares during each fiscal year. 2. Stockholders equity per share is calculated using the number of shares after deduction of the number of treasury stock at each fiscal year end from the total number of issued shares at each fiscal year end. 3. Ten shares of common stock were consolidated into one share on August 1, 2013, and calculated Earnings per share and stockholders equity per share on the assumption that the share consolidation was conducted at the beginning of the fiscal