NOTICE OF CONVOCATION OF THE 112TH ANNUAL GENERAL MEETING OF SHAREHOLDERS

Transcription

1 These documents are partial translations 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 Bank assumes no responsibility for this translation or for direct, indirect or any other forms of damages arising from the translations. (Securities Code: 8325) June 6, 2017 To Shareholders with Voting Rights: Satoru Araki President The Hokuetsu Bank, Ltd. 2-14, Otedori 2-chome, Nagaoka City, Niigata, Japan NOTICE OF CONVOCATION OF THE 112TH ANNUAL GENERAL MEETING OF SHAREHOLDERS You are cordially invited to attend the 112th Annual General Meeting of Shareholders of The Hokuetsu Bank, Ltd. (the Bank ). The meeting will be held for the purposes as described below. If you are unable to attend the meeting, you can exercise your voting rights in writing by submitting the Voting Rights Exercise Form or via electromagnetic means (the Internet, etc.). Please review the Reference Documents for the General Meeting of Shareholders (described below) and exercise your voting rights such that they arrive by 5:00 p.m. Japan time on Thursday, June 22, Date and Time: Friday, June 23, 2017 at 10:00 a.m. Japan time (Reception begins at 9:00 a.m.) 2. Place: Auditorium, 2F, Head Office of the Bank, 2-14, Otedori 2-chome, Nagaoka City, Niigata, Japan 3. Meeting Agenda: Matters to be reported: 1. The Business Report and Non-consolidated Financial Statements for the Bank s 112th Fiscal Year (from April 1, 2016 to March 31, 2017) 2. Consolidated Financial Statements for the Bank s 112th Fiscal Year (from April 1, 2016 to March 31, 2017) and results of audits of the Consolidated Financial Statements by the Accounting Auditor and the Board of Corporate Auditors Proposals to be resolved: Proposal No. 1: Appropriation of Surplus Proposal No. 2: Election of Thirteen (13) Directors Proposal No. 3: Election of One (1) Substitute Corporate Auditor Proposal No. 4: Payment of Bonuses to Directors and Corporate Auditors 1

2 4. Exercise of Voting Rights: (1) Exercise of Voting Rights by Mail Please indicate your vote for or against the proposals on the enclosed Voting Rights Exercise Form and return it such that it arrives by 5:00 p.m. on Thursday, June 22, 2017 Japan time. When mailing, please use the enclosed privacy sticker. Additionally, if there is no indication of vote for or against a proposal, the vote will be deemed to have approved such proposal. (2) Exercise of Voting Rights via Electromagnetic Means (the Internet, etc.) Please access the Bank s designated voting website ( use the Voting Rights Exercise Code and Password enclosed with the Voting Rights Exercise Form, follow the instructions on the voting website, and indicate your vote for or against the proposals by 5:00 p.m. on Thursday, June 22, (3) Handling of Duplicate Voting If you vote both in writing on the Voting Rights Exercise Form and via electromagnetic means (the Internet, etc.), the vote placed via the Internet, etc. will be valid. In addition, if you submit your vote multiple times via electromagnetic means (the Internet, etc.), the last vote will be valid. End When attending the meeting, please submit the enclosed Voting Rights Exercise Form at the reception desk. Votes may only be exercised via proxy if the proxy is also a shareholder with voting rights of the Bank. Additionally, you may only designate one (1) proxy. If you wish to make a diverse exercise of voting rights, please notify the Bank of your intent and reason for doing so no later than three (3) days before the General Meeting of Shareholders. Pursuant to laws and regulations and Article 17 of the Articles of Incorporation of the Bank, the following items are posted on the Bank s website ( and are not included in this convocation notice. 1) Information on the Bank s Share Options, etc. to the Business Report 2) Statement of Shareholders Equity and Notes to the Non-consolidated Financial Statements 3) Consolidated Statement of Shareholders Equity and Notes to the Consolidated Financial Statements The Business Report, the Non-consolidated Financial Statements and the Consolidated Financial Statements audited by the Corporate Auditors are the Business Report, the Non-consolidated Financial Statements and the Consolidated Financial Statements attached to this Notice of Convocation as well as the aforementioned 1) through 3) posted on the Bank s website. The Non-consolidated Financial Statements and the Consolidated Financial Statements audited by the Accounting Auditor are the Non-consolidated Financial Statements and the Consolidated Financial Statements attached to this Notice of Convocation as well as the aforementioned 2) and 3) posted on the Bank s website. Any updates to the Reference Documents, the Business Report, the Non-consolidated Financial Statements and/or the Consolidated Financial Statements for the General Meeting of Shareholders will be promptly posted on the Bank s website on the Internet ( As in the previous year, air conditioning temperatures will be moderate at the venue. As such, the Bank requests that shareholders attend lightly dressed ( Cool Biz ), and representatives from the Bank will also be lightly dressed. 2

3 Reference Documents for the General Meeting of Shareholders Proposals and References Proposal No. 1: Appropriation of Surplus From the perspective of securing healthy bank management and while considering internal reserves for the purposes of strengthening its management structure, the Bank holds continuous stable dividends as its fundamental dividend policy. Under this policy, the following year-end dividends are proposed, taking into account profit conditions, etc. at the Bank for the fiscal year under review. 1. Type of dividend property Cash 2. Matters concerning the allotment of dividend property to shareholders and the total amount 30 yen per share of common stock, for a total of 718,358,430 yen Effective October 1, 2016, the Bank consolidated its common at a ratio of 10 to 1 share. For the fiscal year under review, the Bank paid the interim dividend of 3 yen per share with a record date of September 30, 2016, prior to the consolidation of. Thus, if converting this to the value after the reverse stock split, dividends to be paid for the full year will be equivalent to 60 yen per share, including the interim dividend of 30 yen and the year-end dividend of 30 yen. 3. Effective date of distribution of surplus June 26,

4 Proposal No. 2: Election of Thirteen (13) Directors The terms of office of all thirteen (13) Directors will expire at the conclusion of this Annual General Meeting of Shareholders. Accordingly, the Bank proposes the election of thirteen (13) Directors including two (2) Outside Directors. The candidates for Directors are as follows: Attendance at Board of No. Name Current position at the Bank Directors meetings 1 Satoru Araki President 12/12 2 Katsuya Sato Senior Managing Director 12/12 3 Kazuyoshi Hirokawa Director and General Manager, General Planning Division 12/12 4 Ichiro Muromoto Managing Director 11/12 5 Hiroyuki Kaizu Director and General Manager, Niigata Branch 12/12 6 Satoru Kumakura Director and General Manager, Head Office 12/12 7 Terasu Sato Director and General Manager, Human Resources Division 12/12 8 New appointment Masami Watanabe General Manager, Loan Division 9 New appointment Ryuji Takahashi General Manager, Minami-niigata Branch 10 New appointment Makoto Takahashi General Manager, Business Supervision Division 11 New appointment Hiroki Hoshi General Manager, Operation Supervision Division Outside Independent Outside Independent Hiroshi Fukuhara Outside Director 11/12 Kiroku Takeuchi Outside Director 11/12 4

5 No. 1 Name (Date of birth) Satoru Araki (Nov. 29, 1951) Experience, positions, responsibilities, and significant concurrent positions 1976 Joined the Bank 1998 General Manager, Kameda Branch 2000 General Manager, Muikamachi Branch 2002 General Manager, Naoetsu Branch 2004 General Manager, Loan Supervision Division 2005 General Manager, Loan Division I 2006 General Manager, Business Supervision Division 2007 Director and General Manager, Business Supervision Division 2008 Managing Director in charge of operations of Market and Capital Division and Human Resources Division 2010 Managing Director and General Manager, Head Office 2011 Managing Director in charge of operations of Operation Supervision Division, General Planning Division, Tokyo Office, Supervision of affiliates 2012 Managing Director in charge of operations of Loan Division, Loan Division II 2013 President Number of of the Bank held 7,200 Mr. Satoru Araki has abundant operational experience and achievements, including working in loan and business supervision divisions, in addition to serving as a General Manager of the Bank s branches. In addition, Mr. Araki has actively contributed to the operation of the Board of Directors as a Director since 2007, and has been responsible for the management of the Bank since his appointment as President in Katsuya Sato ( 8, 1955) 1978 Joined the Bank 2001 General Manager, Koyo Branch 2003 Deputy General Manager, General Planning Division 2006 General Manager, Aramachi Branch, General Manager, Nagaoka-kita Branch 2008 General Manager, Human Resources Division 2010 General Manager, Loan Division 2012 Director and General Manager, Loan Division 2013 Managing Director in charge of operations of Operation Supervision Division, Market and Capital Division 2014 Managing Director in charge of operations of Operation Supervision Division, Operation Support Division, Market and Capital Division 2015 Senior Managing Director in charge of operations of Niigata Office 2016 Senior Managing Director in charge of operations of General Planning Division, Human Resources Division, Secretarial Office, Tokyo Office, Supervision of affiliates 3,600 Mr. Katsuya Sato has abundant operational experience and achievements, including working in human resources and loan divisions, in addition to serving as a General Manager of the Bank s branches. In addition, Mr. Sato has actively contributed to the operation of the Board of Directors as a Director since 2012, and has been responsible for the management of the Bank since his appointment as Senior Managing Director in

6 No. 3 Name (Date of birth) Kazuyoshi Hirokawa (Aug. 19, 1961) Experience, positions, responsibilities, and significant concurrent positions 1985 Joined the Bank 2008 Deputy General Manager, Human Resources Division 2010 General Manager, Miyauchi Branch 2012 General Manager, Operation Supervision Division 2015 Director and General Manager, General Planning Division Number of of the Bank held 900 Mr. Kazuyoshi Hirokawa has abundant experience and achievements, including working in human resources and operation supervision divisions, in addition to serving as a General Manager of the Bank s branches. In addition, Mr. Hirokawa has actively contributed to the operation of the Board of Directors as a Director since 2015, and has been responsible for the management of the Bank. 4 Ichiro Muromoto (May 7, 1958) 1982 Joined the Bank 2005 Deputy General Manager and Section Manager, General Planning Division 2007 Deputy General Manager, General Planning Division 2008 General Manager, Risk Control Division 2009 General Manager, General Planning Division 2013 Director and General Manager, Human Resources Division 2015 Managing Director in charge of operations of Risk Control Division 2016 Managing Director in charge of operations of Loan Division, Loan Division II 1,500 Mr. Ichiro Muromoto has abundant operational experience and achievements, including working in general planning and risk control divisions. In addition, Mr. Muromoto has actively contributed to the operation of the Board of Directors as a Director since 2013, and has been responsible for the management of the Bank since his appointment as Managing Director in Hiroyuki Kaizu (Mar. 8, 1961) Oct Joined the Bank 2006 Deputy General Manager, Niigata-ekimae Branch 2008 General Manager, Shibata-nishi Branch 2009 General Manager, Dekijima Branch 2011 General Manager, Tsubame Branch 2013 General Manager, Niigata-higashi Branch 2014 General Manager, Minami-niigata Branch and General Manager, Niigata Office 2015 Director and General Manager, Niigata Branch 1,415 Mr. Hiroyuki Kaizu has abundant operational experience and achievements, including working in financial services divisions, in addition to serving as a General Manager of the Bank s branches. In addition, Mr. Kaizu has actively contributed to the operation of the Board of Directors as a Director since 2015, and has been responsible for the management of the Bank. 6

7 No. 6 Name (Date of birth) Satoru Kumakura ( 16, 1958) Oct. Experience, positions, responsibilities, and significant concurrent positions 1982 Joined the Bank 2006 General Manager, Oroshishinmachi Branch 2008 General Manager, Toyosaka Branch and General Manager, Hayadori Branch 2009 General Manager, Financial Services Division 2013 General Manager, Niigata-ekimae Branch and General Manager, Niigata Office 2014 General Manager, Niigata-ekimae Branch 2015 Director and General Manager, Head Office Number of of the Bank held 900 Mr. Satoru Kumakura has abundant operational experience and achievements, including working in financial services divisions, in addition to serving as a General Manager of the Bank s branches. In addition, Mr. Kumakura has actively contributed to the operation of the Board of Directors as a Director since 2015, and has been responsible for the management of the Bank. 7 Terasu Sato ( 8, 1957) 1980 Joined the Bank 2005 General Manager, Dekijima Branch 2007 Deputy General Manager, Business Supervision Division 2009 General Manager, Mitsuke Branch 2011 General Manager, Loan Division II 2014 General Manager, Risk Control Division 2015 Director and General Manager, Human Resources Division 3,200 Mr. Terasu Sato has abundant operational experience and achievements, including working in loan and risk control divisions, in addition to serving as a General Manager of the Bank s branches. In addition, Mr. Sato has actively contributed to the operation of the Board of Directors as a Director since 2015, and has been responsible for the management of the Bank. 8 New appointment Masami Watanabe (Jan. 23, 1961) Dec Joined the Bank 2006 General Manager, Audit Division 2008 General Manager, Shirone Branch 2009 Credit Manager, Loan Division II 2010 Deputy General Manager, Loan Division II 2012 General Manager, Naoetsu Branch 2014 General Manager, Loan Division II 2017 General Manager, Loan Division 338 Ms. Masami Watanabe has abundant operational experience and achievements, including working in loan divisions, in addition to serving as a General Manager of the Bank s branches. The Bank has judged that, by utilizing these experiences and knowledge, she will be able to contribute to the management of the Bank, and has thus selected her as a candidate for Director. 7

8 No. 9 Name (Date of birth) New appointment Ryuji Takahashi (Oct. 27, 1961) Oct. Experience, positions, responsibilities, and significant concurrent positions 1984 Joined the Bank 2006 General Manager, Credit Management Office, Loan Division II 2008 General Manager, Nagaoka-shinsan Branch 2009 General Manager, Fujimicho Branch 2011 General Manager, Shibata Branch 2013 General Manager, Takada Branch 2015 General Manager, Minami-niigata Branch and General Manager, Niigata Office Number of of the Bank held 1,378 Mr. Ryuji Takahashi has abundant operational experience and achievements, including working in loan divisions, and serving as a General Manager of the Bank s branches. The Bank has judged that, by utilizing these experiences and knowledge, he will be able to contribute to the management of 10 New appointment Makoto Takahashi (Feb. 23, 1962) 1985 Joined the Bank 2008 Senior Manager, General Planning Division 2009 General Manager, Gosen Branch 2011 Deputy General Manager and Business Promotion Manager, Business Supervision Division 2012 Senior Manager, Loan Division 2013 General Manager, Loan Division 2015 General Manager, Business Supervision Division 1,835 Mr. Makoto Takahashi has abundant operational experience and achievements, including working in loan and business supervision divisions, in addition to serving as a General Manager of the Bank s branches. The Bank has judged that, by utilizing these experiences and knowledge, he will be able to contribute to the management of 11 New appointment Hiroki Hoshi (Nov. 14, 1961) Oct. Jan. Sep. Oct Joined the Bank 2007 Deputy General Manager, Niigata Branch 2009 General Manager, Teradomari Branch 2010 General Manager, Koide Branch 2012 General Manager, Furumachi Branch 2014 General Manager, Aramachi Branch 2016 General Manager, Operation Supervision Division 2016 General Manager, Operation Supervision Division 1,438 Mr. Hiroki Hoshi has abundant operational experience and achievements, including working in operation supervision divisions, in addition to serving as a General Manager of the Bank s branches. The Bank has judged that, by utilizing these experiences and knowledge, he will be able to contribute to the management of 8

9 No. 12 Name (Date of birth) Outside Independent Hiroshi Fukuhara (Jan. 1, 1946) Dec. Experience, positions, responsibilities, and significant concurrent positions 1975 Registered as an attorney (Member of Tokyo Bar Association) 1978 Established law office Head of Toranomon College Law Office (current position) 2005 Corporate Auditor, MARUSHO HOTTA CO., LTD Corporate Auditor, Yamano Holdings Corporation (current position) 2012 Corporate Auditor of the Bank 2012 Corporate Auditor, SYSTEM INFORMATION CO., LTD Director of the Bank (current position) 2016 Retired as Corporate Auditor, MARUSHO HOTTA CO., LTD Retired as Corporate Auditor, SYSTEM INFORMATION CO., LTD. Number of of the Bank held 3,400 Reason for selecting the candidate for an Outside Director Mr. Hiroshi Fukuhara has specialized insights from his experience as a lawyer, and has made statements and provided advice based on these experiences, and has appropriately fulfilled his duties for business execution at the Bank. In addition, through his term of office as an Outside Corporate Auditor and an Outside Director of the Bank, he has sufficiently familiarized himself with the business of the Bank. In order for the Bank to continue to make use of his experience and insights as a lawyer for its management, the Bank has selected him as a candidate for Outside Director. His term of office as an Outside Director will be three (3) years at the close of this General Meeting of Shareholders. Matters relating to independence The Bank has submitted Mr. Hiroshi Fukuhara to the Tokyo Stock Exchange as an Independent Director/Auditor who is unlikely to have any conflict of interests with general shareholders, and if he is reelected as an Outside Director, he is scheduled to continue to serve as an Independent Director/Auditor Joined The Niigata Nippo Co., Ltd. Jan Director Mar Representative Director and Senior Officer 13 Outside Independent Kiroku Takeuchi (Sep. 25, 1947) Mar Advisor (current position) 2014 Director and Chairman, Niigata Social Welfare Council (current position) 2015 Director of the Bank (current position) 2017 Director, Japanese Red Cross Society (current position) 300 Reason for selecting the candidate for an Outside Director Mr. Kiroku Takeuchi has a wealth of experience and a wide range of knowledge as a business manager, including his experience as Director, Representative Director and Senior Officer, and Advisor at The Niigata Nippo Co., Ltd. In order for the Bank to make use of this experience and knowledge, the Bank has selected him as a candidate for Outside Director. His term of office as an Outside Director will be two (2) years at the close of this General Meeting of Shareholders. Matters relating to independence The Bank has transactions with The Niigata Nippo for which Mr. Kiroku Takeuchi serves as an Advisor as well as its group companies. With regard to the transactional relationship with the Bank and its group companies, however, since net sales from transactions with the Bank and its group companies account for less than 1% of The Niigata Nippo s consolidated net sales, and business gross profit from transactions with The Niigata Nippo and its group companies account for less than 1% of the Bank and its group companies consolidated business gross profit, such relationship has no impact on his independence. In addition, the Bank has submitted Mr. Kiroku Takeuchi to the Tokyo Stock Exchange as an Independent Director/Auditor who is unlikely to have any conflict of interests with general shareholders, and if he is reelected as an Outside Director, he is scheduled to continue to serve as an Independent Director/Auditor. 9

10 (Note) 1. There are no special interest relationships between the candidates and the Bank. 2. Candidate 12 Mr. Hiroshi Fukuhara and Candidate 13 Mr. Kiroku Takeuchi are candidates for Outside Directors. 3. In order to ensure independence of outside officers, the Bank has set forth assessment criteria relating to the independence, in addition to the criteria set forth by the Tokyo Stock Exchange (see page 12 Reference below for an overview of the Bank s criteria). 4. Liability limitation agreements with Directors (excluding Directors involved in the execution of business, etc.) To allow Directors to fully perform their duties as expected, the Bank provides in its Articles of Incorporation that it can enter into agreements with Directors (excluding Directors involved in the execution of business, etc.) that limit their liability to the extent permitted by the applicable in laws and regulations. The outline of the relevant agreement is as follows: If a Director (excluding Directors involved in the execution of business, etc.) fails to perform his duties and incurs any liability for damage sustained by the Bank, he shall be liable for the damages up to the Minimum Liability Amount set forth in Article 425, Paragraph 1 of the Companies Act. The above liability limit will be accepted only if such Director has acted in good faith and without gross negligence in performing his duties. 5. The Bank has concluded liability limitation agreements described above with Mr. Hiroshi Fukuhara and Mr. Kiroku Takeuchi, and if they are reelected, the Bank intends to continue such agreement with them. 10

11 Proposal No. 3: Election of One (1) Substitute Corporate Auditor In order to prepare for the contingency of the number of Corporate Auditors falling below the statutorily required number, the Bank proposes the election of one (1) Substitute Outside Corporate Auditor in advance. The Board of Corporate Auditors has given consent to the submitted Proposal. The candidate for Substitute Corporate Auditor is as follows: Name (Date of birth) Yoshiharu Izu (Feb. 10, 1950) Dec. Mar. Experience, positions, and significant concurrent positions 1986 Registered as an attorney (Member of Niigata Bar Association) Joined Akihiko Ban Law Office 1994 Established Yoshiharu Izu Law Office (Niigata City) 1996 Vice Chairman, Niigata Bar Association 2007 Member of Aga Town Bidding Supervision Committee 2009 Member of Niigata Family Court Domestic Relations Conciliation Committee (current position) 2012 Director, Niigata Health Foundation (current position) 2012 Commissioner for the Protection of Human Rights, Legal Affairs Bureau (current position) 2012 Member of Compliance Advisory Committee, Hokuriku Regional Development Bureau (current position) 2017 Retired as Member of Aga Town Bidding Supervision Committee Number of of the Bank held 0 Reason for selecting the candidate for a Substitute Outside Corporate Auditor Although Mr. Yoshiharu Izu has not been directly involved in corporate management, he has specialized insights from his experience as a lawyer. Thus, the Bank has judged that he will be able to appropriately execute duties as an Outside Corporate Auditor, and proposes to elect him as a Substitute Outside Corporate Auditor. Matters relating to independence If Mr. Yoshiharu Izu takes the office of Outside Corporate Auditor, the Bank plans to submit him to the Tokyo Stock Exchange as an Independent Director/Auditor who is unlikely to have any conflict of interests with general shareholders. (Note) 1. There is no special interest relationship between the candidate and the Bank. 2. Mr. Yoshiharu Izu is to be elected as the candidate for a Substitute Outside Corporate Auditor. 3. Liability limitation agreements with Outside Corporate Auditors To allow Outside Corporate Auditors to fully perform their duties as expected, the Bank provides in its Articles of Incorporation that it can enter into agreements with Outside Corporate Auditors that limit their liability to the extent permitted by the applicable in laws and regulations. If Mr. Yoshiharu Izu takes the office of the Corporate Auditor, the Bank plans to conclude a liability limitation agreement with Mr. Yoshiharu Izu as an Outside Corporate Auditor. The outline of the relevant agreement is as follows: If the Outside Corporate Auditor fails to perform his duties and incurs any liability for damage sustained by the Bank, he shall be liable for the damages up to the Minimum Liability Amount set forth in Article 425, Paragraph 1 of the Companies Act. The above liability limit will be accepted only if the Outside Corporate Auditor has acted in good faith and without gross negligence in performing his duties. 11

12 Proposal No. 4: Payment of Bonuses to Directors and Corporate Auditors In consideration, among others, of the business results for the fiscal year under review, the Bank proposes to pay bonuses to thirteen (13) Directors (including two (2) Outside Directors) and five (5) Corporate Auditors who are in the office during such year in the total amount of 25,000,000 yen (or 18,910,000 yen for Directors (including 3,040,000 yen for Outside Directors) and 6,090,000 yen for Corporate Auditors). The Bank requests that amounts to be paid to each Director and each Corporate Auditor be discussed and determined by the Board of Directors and the Board of Corporate Auditors, respectively, at their discretion. (Reference) Assessment criteria set forth by the Bank in relation to the independence of outside officers are as follows. <Assessment Criteria Regarding to the Independence of Outside Officers> Candidates for Outside Director or Outside Corporate Auditor, in principle, must not presently fall under, or must not have recently fallen under, any of the following categories (Note 1). (1) A party whose major business partner is the Bank or, if such party is a corporation etc., an executive thereof; (2) A major business partner of the Bank or, if such partner is a corporation etc., an executive thereof; (3) A consultant, or accounting or legal specialist, etc. who receives a significant amount (Note 2) of money or other property from the Bank, in addition to the compensation that he/she receives from the Bank as an officer; (4) An employee, etc. of a consulting firm, accounting firm, or law firm, etc. whose major business partner is the Bank; (5) A party who receives a significant amount of donation, etc. from the Bank or, if such party is a corporation etc., an executive thereof; (6) A major stockholder of the Bank or, if such stockholder is a corporation, etc., an executive thereof; (7) A close relative (Note 4) of any of the persons listed below (not including persons who are not significant (Note 3)). A. A person falling under any of the above items (1) through (6); B. A Director, Corporate Auditor, or significant employee, etc. of the Bank or its subsidiaries. (Note 1) Refers to the case where it can be regarded that the relevant event in substance occurs at present. This includes, for example, the case where the relevant person falls into any of such categories when the proposal for the selection of Outside Director or Outside Corporate Auditor to be submitted to the General Meeting of Shareholders is determined. (Note 2) An average of 10 million yen or more per year over the last three years. (Note 3) A significant person refers to (i) an officer or an employee at a general manager level of a company, and (ii) a certified public accountant or an attorney, etc. with respect to any person who belongs to an accounting firm or law firm, etc. (Note 4) A relative within the second degree of kinship. 12