NOTICE OF THE 69TH ANNUAL GENERAL MEETING OF SHAREHOLDERS

Transcription

1 These documents have been translated from Japanese originals for reference purposes only. In the event of any discrepancy between these translated documents and the Japanese originals, the originals shall prevail. The Company assumes no responsibility for this translation or for direct, indirect or any other forms of damages arising from the translations. To Shareholders with Voting Rights: (Securities Code 8014) May 30, 2016 Kazuo Sakihama President, CEO & COO Chori Co., Ltd , Awajimachi, Chuo-ku, Osaka, Japan NOTICE OF THE 69TH ANNUAL GENERAL MEETING OF SHAREHOLDERS Dear Shareholders: You are cordially invited to attend the 69th Annual General Meeting of Shareholders of Chori Co., Ltd. (the Company ). The meeting will be held for the purposes as described below. If you are unable to attend the Annual General Meeting of Shareholders, you can exercise your voting rights either in writing or via the Internet. Please review the information in the Reference Documents for the General Meeting of Shareholders provided later in this Notice and submit your vote by no later than 5:30 p.m. on Tuesday, June 14, 2016, with reference to Guidance for Exercising Your Voting Rights described on pages 2 and Date and Time: Wednesday, June 15, 2016 at 10:00 a.m. Japan time 2. Place: Shinagawa Intercity Hall, located at , Konan, Minato-ku, Tokyo, Japan Please refer to the Location Map of the General Meeting of Shareholders at the end of this Notice. 3. Meeting Agenda: Matters to be reported: 1. The Business Report, Consolidated Financial Statements for the Company s 69th Fiscal Year (April 1, March 31, 2016) and results of audits of the Consolidated Financial Statements by the Accounting Auditor and the Audit & Supervisory Board 2. Non-Consolidated Financial Statements for the Company s 69th Fiscal Year (April 1, March 31, 2016) Proposals to be resolved: <Company Proposals (from Proposal No. 1 to Proposal No. 6)> Proposal No. 1: Partial Amendment to the Articles of Incorporation Proposal No. 2: Election of Seven (7) Directors (Excluding Directors Who Are Audit & Supervisory Committee Members) Proposal No. 3: Election of Three (3) Directors who are Audit & Supervisory Committee Members Proposal No. 4: Election of One (1) Substitute Audit & Supervisory Board Members Proposal No. 5: Determination of Amount of Compensation to Directors (Excluding Directors Who Are Audit & Supervisory Committee Members) Proposal No. 6: Determination of Amount of Compensation to Directors Who Are Audit & Supervisory Committee Members <Shareholder Proposals (from Proposal No. 7 to Proposal No. 8)> Proposal No. 7: Amendment to the Articles of Incorporation Proposal No. 8: Appropriation of Surplus When attending the meeting, please submit the enclosed Voting Rights Exercise Form at the reception desk of the venue on the day of the meeting for confirmation. Any updates to the Reference Documents for the General Meeting of Shareholders, Business Report, Consolidated Financial Statements and Non-Consolidated Financial Statements will be posted on the Company s website ( 1

2 Guidance for Exercising Your Voting Rights Please review the information provided in the Reference Documents for the General Meeting of Shareholders (from page 5 to 24) and exercise your voting rights. You can exercise your voting rights through any of the three methods set out below. Exercising of Voting Rights by attending the General Meeting of Shareholders Date and Time: Wednesday, June 15, 2016 at 10:00 a.m. Japan time Please submit the enclosed Voting Rights Exercise Form at the reception desk of the venue. In addition, attendees are requested to bring the Notice of the 69th Annual General Meeting of Shareholders (this document) with them. Exercise of Voting Rights in Writing Deadline for the exercise of voting rights: Tuesday, June 14, 2016 at 5:30 p.m. Japan time Please indicate your vote for or against the proposals on the enclosed Voting Rights Exercise Form and return it to us by the deadline. Exercise of Voting Right via the Internet Deadline for the exercise of voting rights: Tuesday, June 14, 2016 at 5:30 p.m. Japan time Please access the designated voting website of the Company ( to exercise your voting rights. For more information, please read the instructions on the following page. 2

3 1. How to Exercise your Voting Rights via the Internet (1) Instead of exercising your voting rights in writing, you can exercise your voting rights on the Company s designated Website for Exercising Voting Rights (see URL below). If you want to use this method, please log in the website with your voting rights exercise code and password provided on the right-hand side of the enclosed Voting Rights Exercise Form, and follow the instructions on the screen to enter your vote for or against each of the proposals. For security purposes, you will be prompted to change your password at the first time when you log in the website. Address of Website for Exercising Voting Rights : (2) The deadline for the exercise of voting rights is at 5:30 p.m. on Tuesday, June 14, 2016, and therefore you have to enter your vote before this deadline. Please be advised to exercise your voting rights as early as possible. (3) If you exercise your voting rights both in writing and via the Internet, the vote via the Internet will be recognized as the valid one. In addition, if you exercise your voting rights several times, only the final vote will be deemed as the valid one. (4) The password provided (including the one you have changed) is valid only for this General Meeting of Shareholders. A new password will be provided for the next Meeting. (5) Please understand that shareholder is solely responsible for any expenses incurred to connect to the Internet. (Attention) The password serves as a tool to verify the voter s identity. The Company will never ask you for your password. If you enter the wrong password for a specified number of times in succession, the web page will be locked and become unusable. In this case, you need to follow the instructions on the screen to try again. The Company has tested and confirmed the operation of the Website for Exercising Voting Rights, using general internet access devices, but certain types of devices may not be able to access the website. 2. Inquiries For inquiries concerning the exercise of voting rights, please contact the Company s shareholder registration administrator, the Stock Transfer Agency Department, Mizuho Trust & Banking Co., Ltd. (please refer to the details listed below). (1) Dedicated contact for inquiries concerning the Website for Exercising Voting Rights, including those for its operation method Telephone (toll-free): (Weekdays from 9:00 a.m. to 9:00 p.m.) (2) Contact for other inquiries for stock-related administrative work Telephone (toll-free): (Weekdays from 9:00 a.m. to 5:00 p.m.) 3

4 Note to Exercising Your Voting Rights 1. Voting Rights Exercise Form without indication of your vote for or against the proposals If there is no indication of your vote for or against any proposal in Voting Rights Exercise Form, we will deem that you have voted for the proposal by the Company and against the proposal by shareholders. 2. Exercise of Voting Rights by Proxy When exercising your voting rights by proxy, (1) a letter of attorney signed by the shareholder, the grantor, or with his/her signature and seal and (2) Voting Rights Exercise Form of the shareholder, the grantor, or other documents to confirm the identification of the shareholder, need to be submitted. A proxy is limited to one shareholder who owns the Company s Voting Rights as stipulated in the Articles of Incorporation of the Company. 4

5 Reference Documents for the General Meeting of Shareholders Proposals and References Proposal No. 1 Partial Amendment to the Articles of Incorporation 1. Reasons for the Proposal The Company has decided to transit to company with audit & supervisory committee with Audit & Supervisory Committee where the majority of the members are Outside Directors. We will further strengthen the supervisory function of the Board of Directors and transparency of the management to enhance our corporate governance and internal control in order to improve the corporate value through Directors who are Audit & Supervisory Committee Members exercising their voting rights in the Board of Directors. Accordingly, we will newly establish provisions regarding the Audit & Supervisory Committee and Audit & Supervisory Committee Members, delete provisions regarding Audit & Supervisory Board and Audit & Supervisory Board Members and make other adjustments to partially amend the Articles of Incorporation. 2. Description of Proposal Detailed amendments are described in the table below. (The underlined parts indicate amendments to the original statement.) Current Articles of Incorporation Proposed amendments CHAPTER I. GENERAL PROVISIONS Articles 1 to 2 [Omitted] [New] Articles 3 to 4 [Omitted] Articles 1 to 2 Article 3 (Bodies) CHAPTER I. GENERAL PROVISIONS [Unchanged] The Company shall have the following bodies in addition to General Meeting of Shareholders and Directors: 1. Board of Directors 2. Audit & Supervisory Committee 3. Accounting Auditor Articles 4 to 5 [Unchanged] CHAPTER II. SHARES CHAPTER II. SHARES Articles 5 to 12 [Omitted] Articles 6 to 13 [Unchanged] CHAPTER III. GENERAL MEETING OF SHAREHOLDERS Articles 13 to 18 [Omitted] CHAPTER III. GENERAL MEETING OF SHAREHOLDERS Articles 14 to 19 [Unchanged] CHAPTER IV. DIRECTORS AND BOARD OF DIRECTORS Article 19 (Establishment of Board of Directors) The Company shall establish Board of Directors. Article 20 (Number of Directors) The number of Directors of the Company shall be 10 (ten) or less. [New] CHAPTER IV. DIRECTORS AND BOARD OF DIRECTORS [Deleted] Article 20 (Number of Directors) 1. The number of Directors of the Company (excluding Directors who are Audit & Supervisory Committee Members) shall be 10 (ten) or less. 2. The number of Directors who are Audit & Supervisory Committee Members of the Company shall be five (5) or less. 5

6 Current Articles of Incorporation Article 21 (Election of Directors) 1. Directors shall be elected by a resolution of a general meeting of shareholders. 2. [Omitted] 3. [Omitted] Article 22 (Term of office of Directors) The term of office of a Director shall continue until the conclusion of the Annual General Meeting of Shareholders for the last fiscal year ending within one (1) year from his/her election. [New] [New] Article 23(Representative Directors and Executive Directors) 1. The Board of Directors shall elect Representative Directors by its resolution. 2. [Omitted] 3. The Board of Directors shall elect, by its resolution, one (1) President and Director and may elect one (1) Chairman of the Board of Directors and a few for each of Vice Chairman of the Board of Directors, Executive Vice President and Director, Senior Executive Director, and Executive Director. Article 24 (Compensation to Directors) The compensation, bonuses and other financial benefit that the Directors receives from the Company as consideration for execution of duties (hereinafter referred to as Compensation ) shall be determined by a resolution of a general meeting of shareholders. Proposed amendments Article 21 (Election of Directors) 1. Directors shall be elected by a resolution of a general meeting of shareholders, by separating Directors who are Audit & Supervisory Committee Members and other Directors. 2. [Unchanged] 3. [Unchanged] Article 22 (Term of office of Directors) 1. The term of office of a Director (excluding Directors who are Audit & Supervisory Committee Members) shall continue until the conclusion of the Annual General Meeting of Shareholders for the last fiscal year which ends within one (1) year from his/her election. 2. The term of office of a Director who is Audit & Supervisory Committee Member shall continue until the conclusion of the Annual General Meeting of Shareholders for the last fiscal year ending within two (2) years from his/her election. 3. The term of office of a Director who is Audit & Supervisory Committee Member and is elected as the substitute for a Director who is Audit & Supervisory Committee Member and retired from office before the expiration of the term of office, shall continue until the time of expiration of the term of office of the retired Director who is Audit & Supervisory Committee Member. Article 23 (Representative Directors and Executive Directors) 1. The Board of Directors shall elect Representative Directors from among Directors (excluding Directors who are Audit & Supervisory Committee Members) by its resolution. 2. [Unchanged] 3. The Board of Directors shall elect, by its resolution, one (1) President and Director and may elect one (1) Chairman of the Board of Directors and a few for each of Vice Chairman of the Board of Directors, Executive Vice President and Director, Senior Executive Director, and Executive Director from among Directors (excluding Directors who are Audit & Supervisory Committee Members). Article 24 (Compensation to Directors) The compensation, bonuses and other financial benefit that the Directors receives from the Company as consideration for execution of duties (hereinafter referred to as Compensation ) shall be determined by a resolution of a general meeting of shareholders, separately for Directors who are Audit & Supervisory Committee Members and the other Directors. 6

7 Article 25 Current Articles of Incorporation [Omitted] Article 26 (Notice of a Board of Directors Meeting) 1. A notice of a Board of Directors meeting shall be sent to Directors and Audit & Supervisory Board Members three (3) days or more prior to the date of the meeting. However, if urgently required, this period may be shortened. 2. A Board of Directors meeting may be held without convening procedure if all Directors and Audit & Supervisory Board Members agree. Article 27 [Omitted] Article 28 (Omission of Resolution of the Board of Directors) If all of Directors indicate their consent to the proposal to be resolved either in writing or by electromagnetic medium, the Company shall deem such proposal as having been approved by the Board of Directors; provided, however, this shall not apply when the Audit & Supervisory Board Members have stated their objection. Article 29 [Omitted] Article 30 (Minutes of Board of Directors Meeting) With respect to the proceedings and results of Board of Directors meeting as well as other items stipulated by laws and regulations, minutes of meetings shall be prepared, and Directors and Audit & Supervisory Board Members present at the meeting shall sign or affix the names and seals to it. Article 31 [New] [Omitted] Article 25 Proposed amendments [Unchanged] Article 26 (Notice of a Board of Directors Meeting) 1. A notice of a Board of Directors meeting shall be sent to Directors three (3) days or more prior to the date of the meeting. However, if urgently required, this period may be shortened. 2. A Board of Directors meeting maybe held without convening procedure if all Directors agree. Article 27 [Unchanged] Article 28 (Omission of Resolution of the Board of Directors) If all of Directors indicate their consent to the proposal to be resolved either in writing or by electromagnetic medium, the Company shall deem such proposal as having been approved by the Board of Directors. Article 29 [Unchanged] Article 30 (Minutes of Board of Directors Meeting) With respect to the proceedings and results of Board of Directors meeting as well as other items stipulated by laws and regulations, minutes of meetings shall be prepared, and Directors present at the meeting shall sign or affix the names and seals to it. Article 31 (Delegation of Decision on Important Business Execution to Directors) The Company may delegate to Directors decision on the execution of important business (excluding the matters listed in each item of Paragraph 5, Article of the Companies Act) by a resolution of the Board of Directors, pursuant to the provisions of Paragraph 6, Article of the Act. Article 32 [Unchanged] CHAPTER V. AUDIT & SUPERVISORY BOARD MEMBERS AND AUDIT & SUPERVISORY BOARD Article 32 (Establishment of Audit & Supervisory Board Members and Audit & Supervisory Board) CHAPTER V. AUDIT & SUPERVISORY COMMITTEE [Deleted] The Company shall have Audit & Supervisory Board Members and Audit & Supervisory Board Article 33 (Number of Audit & Supervisory Board Members) The number of Audit & Supervisory Board Members shall be three (3) or more. [Deleted] 7

8 Current Articles of Incorporation Article 34 (Election of Audit & Supervisory Board Members) 1. Audit & Supervisory Board Members shall be elected at a general meeting of shareholders. 2. Resolutions for election of Audit & Supervisory Board Members shall be adopted by a majority of the votes of the shareholders present when shareholders holding one-third of the voting rights of shareholders who are entitled to exercise voting rights are present. Article 35 (Term of Office of Audit & Supervisory Board Members) 1. The term of office of an Audit & Supervisory Board Member shall continue until the conclusion of the annual general meeting of shareholders for the last fiscal year ending within four (4) years from his/her election. 2. The term of office of an Audit & Supervisory Board Member who is elected as the substitute for an Audit & Supervisory Board Member who retired from office before the expiration of the term of office, shall continue until the time of expiration of the term of office of the retired Audit & Supervisory Board Member. Article 36 (Full-time Audit & Supervisory Board Members) The Audit & Supervisory Board shall elect a full-time Audit & Supervisory Board Member by its resolution. Article 37 (Compensation to Audit & Supervisory Board Members) The Compensation to be granted to Audit & Supervisory Board Members shall be determined by a resolution of a general meeting of shareholders. Article 38 (Notice of an Audit & Supervisory Board Meeting) 1. A notice of an Audit & Supervisory Board meeting shall be sent to Audit & Supervisory Board Members three (3) days or more prior to the date of the meeting. However, if urgently required, this period may be shortened. 2. An Audit & Supervisory Board meeting may be held without convening procedure if all Audit & Supervisory Board Members agree. Article 39 (Resolution of the Audit & Supervisory Board) A resolution of the Audit & Supervisory Board shall be adopted by a majority of Audit & Supervisory Board Members. Proposed amendments [Deleted] [Deleted] [Deleted] [Deleted] Article 33 (Notice of an Audit & Supervisory Committee Meeting) 1. A notice of an Audit & Supervisory Committee meeting shall be sent to Audit & Supervisory Committee Members three (3) days or more prior to the date of the meeting. However, if urgently required, this period may be shortened. 2. An Audit & Supervisory Committee meeting may be held without convening procedure if all Audit & Supervisory Committee Members agree. Article 34 (Resolution of the Audit & Supervisory Committee) A resolution of Audit & Supervisory Committee shall be adopted by a majority of Audit & Supervisory Committee Members when the majority of Audit & Supervisory Committee Members are present. 8

9 Current Articles of Incorporation Article 40 (Minutes of Audit & Supervisory Board Meeting) With respect to the proceedings and results of Audit & Supervisory Board meeting as well as other items stipulated by laws and regulations, minutes of meetings shall be prepared, and Audit & Supervisory Board Members present at the meeting shall sign or affix the names and seals to it. Article 41 (Exemption of Audit & Supervisory Board Members from Liabilities) 1. Pursuant to the provisions prescribed in Paragraph 1, Article 426 of the Companies Act, the Company may exempt Audit & Supervisory Board Members (including former Audit & Supervisory Board Members) from their liability for damages by resolution of the Board of Directors due to their negligence of duties, to the extent permitted by laws and regulations. 2. Pursuant to the provisions prescribed in Paragraph 1, Article 427 of the Companies Act, the Company may enter into an agreement with Audit & Supervisory Board Members to limit their liability for damages due to their negligence of duties. Under the agreement, however, the amount limit of liability for damages shall be the minimum liability amount prescribed by laws and regulations. Article 42 (Audit & Supervisory Board Regulations) Matters concerning the Audit & Supervisory Board are subject to laws and regulations and this Articles of Incorporation as well as the Audit & Supervisory Board Regulations stipulated by the Audit & Supervisory Board. Proposed amendments [Deleted] [Deleted] Article 35 (Audit & Supervisory Committee Regulations) Matters concerning the Audit & Supervisory Committee are subject to laws and regulations and this Articles of Incorporation as well as the Audit & Supervisory Committee Regulations stipulated by the Audit & Supervisory Committee. CHAPTER VI. ACCOUNTING AUDITOR Article 43 (Establishment of Accounting Auditor) The Company shall have an Accounting Auditor Articles 44 to 45 [Omitted] Article 46 (Compensation to an Accounting Auditor) Compensation to an Accounting Auditor is defined after Representative Directors obtain consent of Audit & Supervisory Board. Articles 47 to 50 CHAPTER VII. ACCOUNTING [Omitted] [New] [New] Articles 36 to 37 CHAPTER VI. ACCOUNTING AUDITOR [Deleted] [Unchanged] Articles 38 (Compensation to an Accounting Auditor) Compensation to an Accounting Auditor is defined after Representative Directors obtain consent of Audit & Supervisory Committee. Articles 39 to 42 CHAPTER VII. ACCOUNTING [Unchanged] SUPPLEMENTARY PROVISIONS Article 1 (Transitional Measures for Exemption of Audit & Supervisory Board Members from Liability) Pursuant to the provisions prescribed in Paragraph 1, Article 426 of the Companies Act, the Company may exempt former Audit & Supervisory Board Members from their liability for damages by resolution of the Board of Directors due to their negligence of duties, to the extent permitted by laws and regulations. 9

10 Proposal No. 2 Election of Seven (7) Directors (Excluding Directors Who Are Audit & Supervisory Committee Members) Upon the approval and passage of Proposal No. 1 Partial Amendment to the Articles of Incorporation in its original form, the Company will transit to a Company with Audit & Supervisory Committee. All of eight (8) Directors of the Company will complete their terms of office at the conclusion of this General Meeting of Shareholders. Accordingly, the Company proposes the election of seven (7) Directors (excluding Directors who are Audit & Supervisory Committee Members). The resolution of this Proposal shall become effective when Proposal No. 1 Partial Amendment to the Articles of Incorporation becomes effective. The candidates for Directors (excluding Directors who are Audit & Supervisory Committee Members) are as follows: No. 1 Name (Date of birth) Kazuo Sakihama (May 2, 1956) [Reappointment] Past experience (positions, responsibilities, and significant concurrent positions) Apr Oct Oct Aug Sep Apr Jun Apr Jun Joined the Company Supervisor of Section 4, Chemicals Department 1 of the Company General Manager of Electronics BU of the Company Department Manager of Performance Materials & Devices Department of the Company Department Manager of Performance Materials & Devices Department of the Company Deputy General Manager of Chori (China) Co., Ltd. Executive Officer, Deputy General Manager of Chemical & Life Science, Machinery, Electronics Operations (China Business) of the Company, Deputy General Manager of Chori (China) Co., Ltd. and General Manager of Chori (Tianjin) Co., Ltd. Executive Officer, Deputy General Manager of Chemical & Life Science, Machinery, Electronics Operations (Performance Chemicals and Industrial Chemicals) of the Company Director, Deputy General Manager of Chemical & Life Science, Machinery, Electronics Operations (Performance Chemicals, Industrial Chemicals, Fine Chemicals and Life Science) of the Company Number of shares of the Company held 3,400 shares Jun Director, General Manager of Chemical & Life Science, Machinery, Electronics Operations Jan President, CEO & COO (to present) Reasons for nominating the candidate for Director Since joining the Company in 1980, Mr. Kazuo Sakihama has worked mainly in chemicals and machinery businesses. After serving as Deputy General Manager of Chori (China) Co., Ltd., Director, General Manager of Chemical & Life Science, Machinery, Electronics Operations, and in other positions, he has been the President, CEO & COO since 2015 (current position). He has abundant business experiences in the Company and knowledge in all the areas of management of trading company, global business management, as well as general management and operations. Based on those qualifications, we have continuously nominated him as a candidate for Director. 10

11 No. 2 Name (Date of birth) Masayuki Hatsuya (September 20, 1951) [Reappointment] Past experience (positions, responsibilities, and significant concurrent positions) Apr Apr Jul Apr Jul Jan Jun Jun Jun Jun Jan Joined the Company Manager of Business Group related to Tokyo Credit Control Department of the Company Assigned to Beneka Co., Ltd. as Director of the company Acting General Manager of Business Development Office and General Manager of Overseas Cooperation Office of the Company Department Manager of Apparel Business and Planning Department of the Company Department Manager of Corporate Accounting Department of the Company Executive Officer, General Manager and Department Manager of Corporate Accounting Department of the Company Director, General Manager of Corporate Accounting Department and General Manager of Pharmacovigilance & Quality Assurance Office of the Company Executive Director, General Manager of Corporate Planning Division, and General Manager of Pharmacovigilance & Quality Assurance Office of the Company Executive Director, General Manager of Corporate Planning Division, General Manager of Pharmacovigilance & Quality Assurance Office and Chairman of Executive Committee of the Company Senior Executive Director, General Manager of Corporate Planning Division and Chairman of Executive Committee of the Company (to present) Number of shares of the Company held 4,100 shares Reasons for nominating the candidate for Director Since joining the Company in 1974, Mr. Masayuki Hatsuya has worked in the areas of examination, finance, and business management and served such as Executive Officer and Department Manager of Corporate Accounting Department. He currently serves as Senior Executive Director and General Manager of Corporate Planning Division. He has abundant business experiences in the Company and knowledge in all the areas of management of trading company as well as general management and operations. Based on those qualifications, we have continuously nominated him as a candidate for Director. 11

12 No. 3 Name (Date of birth) Toshihiko Ando (July 20, 1952) [Reappointment] Past experience (positions, responsibilities, and significant concurrent positions) Apr Jun Jun Dec Jun Jun Apr Jun Joined TORAY INDUSTRIES, INC. Director of Luckytex (Thailand) Public Co., Ltd. General Manager of Staple Fiber Business Division of TORAY INDUSTRIES, INC. Member of the Board of Toray Industries (China) Co., Ltd. Member of the Board of Toray Industries (South China) Co., Ltd. President of Toray Industries (H.K.) Ltd. Senior Director of TORAY INDUSTRIES, INC. Member of the Board of Toray Industries (China) Co., Ltd. President of Toray Industries (South China) Co., Ltd. (to present) President of TAL Knits Ltd. Senior Director of TORAY INDUSTRIES, INC. Vice Chairman of Toray Industries (China) Co., Ltd. Executive Director, General Manager of Corporate Administration Division and Department Manager of Overseas Business Development Department (to present) Number of shares of the Company held 500 shares Reasons for nominating the candidate for Director Since joining TORAY INDUSTRIES, INC. in 1975, Mr. Toshihiko Ando mainly worked in the area of overseas sales operations of fiber raw material. He served such as Senior Director of TORAY INDUSTRIES, INC. and Member of the Board of Toray Industries (China) Co., Ltd. before his retirement. Currently serving as Executive Director and General Manager of Corporate Administration Division of the Company, he has abundant overseas business experiences and knowledge in all the areas of business management, global business management as well as general management and operations. Based on those qualifications, we have continuously nominated him as a candidate for Director. 12

13 No. 4 Name (Date of birth) Nagao Iseda (June 22, 1951) [Reappointment] Past experience (positions, responsibilities, and significant concurrent positions) Apr Jul Sep Jun Jun Jun Jan Jul Joined the Company General Manager of Hokuriku Raw Materials BU of the Company Department Manager of Fiber Raw Materials Department and Branch Manager of Hokuriku Branch of the Company Executive Officer and Deputy General Manager of Textile Material of the Company Director, General Manager of Textile Material and General Manager of Business and Planning Department (Textile Material) of the Company Executive Director, General Manager of Textile Material Operations and General Manager of Business and Planning Department (Textile Material) of the Company Executive Director, General Manager of General Textile Business, General Manager of Textile Material Operations, General Manager of Business and Planning Department (Textile Material) and General Manager of Osaka Head Office of the Company Executive Director, General Manager of General Textile Business, General Manager of Textile Material Operations, General Manager of Business and Planning Department (Textile Material), General Manager of Synthetic Fiber and Automotive Interiors Department and General Manager of Osaka Head Office of the Company (to present) Number of shares of the Company held 3,000 shares Reasons for nominating the candidate for Director Since joining the Company in 1975, Mr. Nagao Iseda mainly worked in textile material business and served such as Branch Manager of Hokuriku Branch and Executive Officer and Deputy General Manager of Textile Material. Currently serving as Executive Director and General Manager of General Textile Business, he has abundant business experience in the Company and knowledge in all the areas of management of trading company, global business management, as well as general management and operations. Based on those qualifications, we have continuously nominated him as a candidate for Director. 13

14 No. 5 Name (Date of birth) Shigemasa Yabu (April 7, 1961) [Reappointment] Past experience (positions, responsibilities, and significant concurrent positions) Apr Jan May 2004 Jul Jun Jun Jun Jun Jul Joined the Company Comprehensive Planning Office of the Company Section Manager of Corporate Planning Department of the Company Section Manager of Public Relations Section of General Affairs Department of the Company Department Manager of Corporate Accounting Department of the Company Department Manager of Corporate Planning Department of the Company Executive Officer, General Manager of Corporate Planning Department of Corporate Planning Division of the Company Director, General Manager of Corporate Planning Department of Corporate Planning Division, General Manager of Corporate Accounting Department and Logistics Management Department of Corporate Administration Division, and General Manager of Pharmacovigilance & Quality Assurance Office of the Company Director, General Manager of Corporate Planning Department of Corporate Planning Division, General Manager of Corporate Accounting Department of Corporate Administration Division, and General Manager of Pharmacovigilance & Quality Assurance Office of the Company (to present) Number of shares of the Company held 6,235 shares Reasons for nominating the candidate for Director Since joining the Company in 1985, Mr. Shigemasa Yabu worked mainly in business management, examination and legal work, and public relations and IR operations. After serving as Executive Officer and General Manager of Corporate Planning Department and other positions, he currently serves as Director, General Manager of Corporate Planning Department and General Manager of Corporate Accounting Department. He has abundant business experience in the Company and knowledge in all the areas of management of trading company as well as general management and operations. Based on those qualifications, we have continuously nominated him as a candidate for Director. 14

15 No. 6 Name (Date of birth) Hiroyuki Watanabe (July 4, 1962) [Reappointment] Past experience (positions, responsibilities, and significant concurrent positions) Apr Jul Apr Oct Jun Apr Jun Apr Jun Apr Jun Joined the Company Beijing Representative Office and General Manager of Tianjin Representative Office of the Company No. 2 Group Leader of Petroleum Materials Department of Chemicals and Merchandise Division of the Company Section 1 Manager of Urethane Raw Materials Department of the Company Department Manager of Urethane Raw Materials Department of the Company Deputy General Manager of Chori (China) Co., Ltd. and General Manager of Chori (Tianjin) Co., Ltd. of the Company Officer, Deputy General Manager of Chemical & Life Science, Machinery, Electronics Operations (China Business), Deputy General Manager of Chori (China) Co., Ltd. and General Manager of Chori (Tianjin) Co., Ltd. of the Company Officer, Deputy General Manager of Chemical & Life Science, Machinery, Electronics Operations (China Business), Deputy General Manager of Chori (China) Co., Ltd., General Manager of Chori (Tianjin) Co., Ltd. and General Manager of Chori (Guangzhou) Trading Co., Ltd. of the Company Executive Officer, Deputy General Manager of Chemical & Life Science, Machinery, Electronics Operations (China Business), Deputy General Manager of Chori (China) Co., Ltd., General Manager of Chori (Tianjin) Co., Ltd. and General Manager of Chori (Guangzhou) Trading Co., Ltd. of the Company Executive Officer, General Manager of Chemical & Life Science, Machinery, Electronics Operations, General Manager of Business and Planning Department (Chemical & Machinery) and General Manager of Logistics Department (Chemical & Machinery) of the Company Director, General Manager of Chemical & Life Science, Machinery, Electronics Operations, General Manager of Business and Planning Department (Chemical & Machinery) and General Manager of Logistics Department (Chemical & Machinery) of the Company (to present) Number of shares of the Company held 700 shares Reasons for nominating the candidate for Director Since joining the Company in 1985, Mr. Hiroyuki Watanabe mainly worked in chemicals and machinery businesses and served as Executive Officer, Deputy General Manager of Chemical & Life Science, Machinery, Electronics Operations, and in other positions. Currently serving as Director and General Manager of Chemical & Life Science, Machinery, Electronics Operations, he has abundant business experience in the Company and knowledge in all the areas of management of trading company, global business management, as well as general management and operations. Based on those qualifications, we have continuously nominated him as a candidate for Director. 15

16 No. Name (Date of birth) Shogo Masuda (August 15, 1951) Past experience (positions, responsibilities, and significant concurrent positions) Apr Jan Jun Jun Joined TORAY INDUSTRIES, INC. Member of the Board of Penfabric Sdn. Berhad, General Manager of Finance & Controller s Division and Chief in charge of Finance & Controller of Malaysia Region General Manager of Controller s Department of TORAY INDUSTRIES, INC. Deputy General Manager of Affiliated Companies Division, General Manager of Affiliated Companies Administration Department and General Manager on Special Assignment of Corporate Strategic Planning Division of TORAY INDUSTRIES, INC. Number of shares of the Company held 0 shares Jun Vice President (Member of the Board) and Assistant 7 General Manager of Affiliated Companies Division of [New appointment] TORAY INDUSTRIES, INC. Jun Outside Audit & Supervisory Board Member of the Company (to present) Jun Senior Vice President (Member of the Board) and General Manager of Affiliated Companies Division of TORAY INDUSTRIES, INC. (to present) Reasons for nominating the candidate for Director Mr. Shogo Masuda has extensive experience of and deep expertise in accounting, management and planning related businesses gained at TORAY INDUSTRIES, INC. He also served as Outside Audit & Supervisory Board Member of the Company for many years. Based on those qualifications, we have nominated him as a candidate for Director. (Notes) 1. No material conflict of interest exists between the Company and any of the candidates for Directors. 2. Mr. Shogo Masuda will take his office as non-executive Director, thereby the Company intends to enter into an agreement with Mr. Masuda to limit the liability for damage based on the Articles of Incorporation. Under this agreement, the amount limit of liability for damages shall be the minimum liability amount prescribed in Paragraph 1, Article 427 of the Companies Act only when he conducts his duties in good faith and without gross negligence. 16

17 Proposal No. 3 Election of Three (3) Directors Who Are Audit & Supervisory Committee Members Upon the approval and passage of Proposal No. 1 Partial Amendment to the Articles of Incorporation in its original form, the Company will transit to a Company with Audit & Supervisory Committee. Accordingly, the Company proposes the election of three (3) Directors who are Audit & Supervisory Committee Members. The resolution of this Proposal shall become effective when Proposal No. 1 Partial Amendment to the Articles of Incorporation becomes effective. The Audit & Supervisory Board has consented to the submission of the Proposal. The candidates for Directors who are Audit & Supervisory Committee Members are as follows: No. 1 Name (Date of birth) Masashi Aoyama (October 11, 1957) [New appointment] Past experience (positions, responsibilities, and significant concurrent positions) Number of shares of the Company held Apr Joined the Company Nov Jakarta Representative Office of the Company Feb Supervisor of Section 2, Industrial Chemicals Department of Chemicals and Merchandise Division of 600 the Company shares Feb Deputy General Manager of Chori (China) Co., Ltd. Apr Department Manager of Logistics Department (Chemical & Machinery) of the Company Jun Audit & Supervisory Board Member (to present) Reasons for nominating the candidate for Director Since joining the Company in 1980, Mr. Masashi Aoyama worked mainly in chemicals and machinery businesses and served as Deputy General Manager of Chori (China) Co., Ltd. and other positions. Currently serving as Full-time Audit & Supervisory Board Member, he has abundant business experience in the Company and knowledge in all the areas of management of trading company, global business management, as well as general management and operations. Based on those qualifications, we have nominated him as a candidate for Director. 17

18 No. 2 Name (Date of birth) Kazuhiko Shimokobe (December 12, 1947) [Outside Director] [Independent Officer] [Reappointment] Past experience (positions, responsibilities, and significant concurrent positions) Number of shares of the Company held Apr Registered as a lawyer Oct Outside Director and Industrial Revitalization Committee Member of Industrial Revitalization Corporation of Japan Apr President of The Tokyo Bar Association Apr Vice President of Japan Federation of Bar Associations Oct Outside Director and Audit Committee Member of JAPAN POST HOLDINGS Co., Ltd. Apr President of Fujiwara Natural History Public Interest Incorporated Foundation (to present) 0 Jun Outside Audit & Supervisory Board Member of the Company shares Jul Outside Auditor of Frontier Management Inc. (to present) Oct Chairperson of the Management Committee of Nuclear Damage Compensation Facilitation Corporation Jun Chairman of the Board of Directors of Tokyo Electric Power Company, Incorporated Dec Outside Auditor of Industrial Growth Platform, Inc. (to present) Jun Outside Director of the Company (to present) Reasons for nominating the candidate for Director Mr. Kazuhiko Shimokobe has extensive experience and broad insight as a lawyer and has served as Outside Audit & Supervisory Board Member of the Company since Accordingly, he has knowledge of the Company s business operations and currently provides accurate advice concerning the Company s management based on his deep insight as Outside Director. Based on those qualifications, we have continuously nominated him as a candidate for Outside Director. 18

19 No. 3 Name (Date of birth) Michihiro Nara (May 17, 1946) [Outside Director] [Independent Officer] [New appointment] Apr Jun Apr Apr Apr Mar Jun Jul Jun Jun Jun Jun Past experience (positions and significant concurrent positions) Registered as a lawyer Outside Auditor of Nihon Tokushu Toryo Co., Ltd. President of Dai-Ichi Tokyo Bar Association Vice President of Japan Federation of Bar Associations Chairman of the Board of Japan Attorneys National Pension Fund Member of Legislative Council of the Ministry of Justice Substitute Audit & Supervisory Board Member of the Company Deputy Chairman of Central Third-Party Committee to check pension records of Ministry of Internal Affairs and Communications Outside Statutory Auditor of SEIKO EPSON CORPORATION (to present) Outside Director of Oji Holdings Corporation (to present) Outside Director of Nihon Tokushu Toryo Co., Ltd. (to present) Outside Audit & Supervisory Board Member of the Company (to present) Number of shares of the Company held 0 shares Reasons for nominating the candidate for Director Although Mr. Michihiro Nara has not engaged in corporate management other than as Outside Director and Outside Audit & Supervisory Board Member, he has extensive experience and broad insight as a lawyer and has served as Outside Audit & Supervisory Board Member of the Company since Based on those qualifications, we have nominated him as a candidate for Outside Director. (Notes) 1. No material conflict of interest exists between the Company and any of the candidates for Directors. 2. Messrs. Kazuhiko Shimokobe and Michihiro Nara are candidates for Outside Directors and satisfy the requirements of an Independent Officer as prescribed by the Tokyo Stock Exchange. 3. The Company intends to enter into an agreement with Messrs. Kazuhiko Shimokobe and Michihiro Nara to limit their liability for damage based on the Articles of Incorporation. Under this agreement, the amount limit of liability for damages shall be the minimum liability amount prescribed in Paragraph 1, Article 427 of the Companies Act only when they conduct their duties in good faith and without gross negligence. 4. Mr. Kazuhiko Shimokobe is currently Outside Audit & Supervisory Board Member of the Company. His term of office as Audit & Supervisory Board Member will have been one year at the conclusion of this Annual General Meeting of Shareholders. 5. It was revealed in August 2015 that the former employee of Nihon Tokushu Toryo Co., Ltd., where Mr. Michihiro Nara has served as Outside Director since June 2015 (Outside Audit & Supervisory Board Member from June 2004 to June 2014), illegally acquired transfer payments to the clients. Mr. Nara had not recognized the fact; however, he has been regularly providing various opinions and advises on the importance of compliance and has continued to provide his proposals for prevention of reoccurrence including thorough compliance and enhanced management system after said revelation. 19

20 Proposal No. 4 Election of One (1) Substitute Director Who Is an Audit & Supervisory Committee Member Upon the approval and passage of Proposal No. 1 Partial Amendment to the Articles of Incorporation in its original form, the Company will transit to a Company with Audit & Supervisory Committee. Therefore, in order to prepare for cases where the number of Directors who are Audit & Supervisory Committee Members falls short of the number stipulated by laws and regulations, the Company proposes the election of one (1) Substitute Director who is Audit & Supervisory Committee Member. The resolution of this Proposal shall become effective when Proposal No. 1 Partial Amendment to the Articles of Incorporation becomes effective. The Audit & Supervisory Board has consented to the submission of the Proposal. The candidate for Substitute Director who is Audit & Supervisory Committee Member is as follows: No. Name (Date of birth) Past experience (positions and significant concurrent positions) Number of shares of the Company held Apr Registered as a lawyer Apr Executive Governor of Japan Federation of Bar Associations Apr Vice-president of Dai-Ichi Tokyo Bar Association May 2012 Chairman of Judicial System Research Board of Japan Federation of Bar Associations Sep Outside Audit & Supervisory Board Member of 0 Homemade Cooking Co., Ltd. (to present) shares May 2013 Chairman of the Back-up Team for Civil Code Masaaki Sawano (claims-related) Subcommittee, Legislative Council of (March 2, 1954) the Ministry of Justice, Judicial System Research Board 1 of Japan Federation of Bar Associations (to present) [Outside Director] Apr Member of Advisory Council on Fundamental Issues in [Independent Officer] Corporate Management of Urban Renaissance Agency [New appointment] (to present) Jun Substitute Audit & Supervisory Board Member of the Company (to present) Reasons for nominating the candidate for Substitute Director Although Mr. Masaaki Sawano has not engaged in corporate management other than as Outside Audit & Supervisory Board Member, the Company believes that he will appropriately fulfill his duties as Audit & Supervisory Committee Member, on the grounds that he is deeply familiar with corporate legal work as a lawyer and he has sufficient insight to supervise corporate management. Accordingly, the Company proposes his election as Substitute Outside Director. (Notes) 1. No material conflict of interest exists between the Company and the candidate for Substitute Director. 2. Mr. Masaaki Sawano is a candidate for Substitute Outside Director. He satisfies the requirements of an Independent Officer as prescribed by the Tokyo Stock Exchange. 3. The Company intends to enter into an agreement with Mr. Masaaki Sawano to limit their liability for damage based on the Articles of Incorporation. Under this agreement, the amount limit of liability for damages shall be the minimum liability amount prescribed in Paragraph 1, Article 427 of the Companies Act only when he conducts his duties in good faith and without gross negligence. 20

21 Proposal No. 5 Determination of Amount of Compensation to Directors (excluding Directors who are Audit & Supervisory Committee Members) At the 59th Annual General Meeting of Shareholders held on June 29, 2006, it was approved that total amount of compensation for Directors shall be 300 million or less per year, and this has continued to the present. Upon the approval and passage of Proposal No. 1 Partial Amendment to the Articles of Incorporation in its original form, the Company will transit to a Company with Audit & Supervisory Committee. Accordingly, based on the provisions of Paragraph 1 and Paragraph 2, Article 361 of the Companies Act, we propose setting the amount of compensation paid to Directors (excluding Directors who are Audit & Supervisory Committee Members) at 300 million or less per year, with consideration of various conditions including economic trends, substituting the current provision for the amount of compensation to Directors, as well as propose setting the actual amount and the time of compensation paid to each Director (excluding Directors who are Audit & Supervisory Committee Members) to be determined by resolution of the Board of Directors. In addition, we propose that the amount of compensation to Directors (excluding Directors who are Audit & Supervisory Committee members) will not include the portion of employee s salary for Directors who concurrently serve as employees, as has been the case until now. Currently there are eight (8) Directors (including one (1) Outside Director), but when Proposal No. 1 Partial Amendment to the Articles of Incorporation and Proposal No. 2 Election of Seven (7) Directors (Excluding Directors Who Are Audit & Supervisory Committee Members) become effective, there will be seven (7) Directors (excluding Directors who are Audit & Supervisory Committee Members). The resolution of this Proposal shall become effective when Proposal No. 1 Partial Amendment to the Articles of Incorporation becomes effective. Proposal No. 6 Determination of Amount of Compensation to Directors Who Are Audit & Supervisory Committee Members Upon the approval and passage of Proposal No. 1 Partial Amendment to the Articles of Incorporation in its original form, the Company will transit to a Company with Audit & Supervisory Committee. Accordingly, based on the provisions of Paragraph 1 and Paragraph 2, Article 361 of the Companies Act, we propose setting the amount of compensation paid to Directors who are Audit & Supervisory Committee members at 100 million or less per year, with consideration of various conditions including economic trends, as well as propose setting the actual amount and the time of compensation paid to each Audit & Supervisory Committee Member to be based on the discussion by the Directors who are Audit & Supervisory Committee Members. When Proposal No. 1 Partial Amendment to the Articles of Incorporation and Proposal No. 3 Election of Three (3) Directors Who Are Audit & Supervisory Committee Members become effective, there will be three (3) Directors who are Audit & Supervisory Committee Members. The resolution of this Proposal shall become effective when Proposal No. 1 Partial Amendment to the Articles of Incorporation becomes effective. 21