NOTICE OF THE 105TH ANNUAL GENERAL MEETING OF SHAREHOLDERS

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1 Note: This document has been translated from selected sections of the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. The Company assumes no responsibility for this translation or for direct, indirect or any other forms of damages arising from the translation. (Stock Exchange Code: 3880) June 9, 2016 To Our Shareholders: Masayoshi Sako President and Director Daio Paper Corporation 2-60, Mishimakamiya-cho, Shikokuchuo City, Ehime Prefecture NOTICE OF THE 105TH ANNUAL GENERAL MEETING OF SHAREHOLDERS Dear Shareholders: We would like to express our appreciation for your continued support and patronage. You are cordially invited to attend the 105th Annual General Meeting of Shareholders of Daio Paper Corporation (the Company ). The meeting will be held for the purposes as described below. If you are unable to attend the meeting, you can exercise your voting rights in writing or via the Internet. Please review the attached Reference Documents for the General Meeting of Shareholders and exercise your voting rights no later than 5:30 p.m. on Tuesday, June 28, 2016, Japan time. 1. Date and Time: Wednesday, June 29, 2016 at 10:00 a.m. Japan time (Reception opens at 9:00 a.m. and doors open at 9:30 a.m.) 2. Place: Convention Hall on the 8th floor of Shikoku Headquarters & Production Center(former Research and Development Center) of the Company 2-60, Mishimakamiya-cho, Shikokuchuo City, Ehime Prefecture, Japan 3. Meeting Agenda: Matters to be reported: 1. The Business Report, Consolidated Financial Statements for the Company s 105th Fiscal Year (April 1, March 31, 2016) and results of the audit of the Consolidated Financial Statements by the Accounting Auditor and 2. Non-Consolidated Financial Statements for the Company s 105th Fiscal Year (April 1, March 31, 2016) Proposals to be resolved: Proposal 1: Appropriation of surplus Proposal 2: Partial amendments to the Articles of Incorporation Proposal 3: Election of five (5) Proposal 4: Revision of remuneration for - 1 -

2 If the Reference Documents for the General Meeting of Shareholders, Business Report, Consolidated Financial Statements and Non-Consolidated Financial Statements are amended, the amended items will be announced on the Company s website ( Of the documents to be provided along with this Notice, the Notes to Consolidated Financial Statements of the Consolidated Financial Statements and the Notes to Non-Consolidated Financial Statements of the Non-Consolidated Financial Statements are made available to shareholders by posting them on the Company s website ( pursuant to the provisions of laws, regulations and Article 14 of the Company s Articles of Incorporation, and therefore are not included in this Notice. The Non-Consolidated Financial Statements and the Consolidated Financial Statements attached to this Notice form a part of the documents that were audited by and, as well as the Accounting Auditor for the preparation of the Audit Report and the Accounting Audit Report, respectively

3 Reference Documents for the General Meeting of Shareholders Proposals and References Proposal 1: Appropriation of surplus The Company recognizes that one of the most important management tasks is the return of profits to all our shareholders, and its fundamental dividend policy is to continue making stable payment of dividends, while taking into consideration the state of its business performance and the enhancement of internal reserves. Net sales, operating income, ordinary income and profit attributable to owners of parent for the fiscal year ended March 31, 2016 were all above the financial results forecast. Taking into account such financial results for the fiscal year under review, we propose a year-end dividend of 6.50, an increase of 2.00 per common share of the Company (for the full year, per common share of the Company) for the fiscal year under review, as described below. Matters relating to year-end dividends [1] Dividend type Cash [2] Dividend allocation and total dividend payment [3] Effective date of distributing dividend from surplus We propose a year-end dividend of 6.50 per common share of the Company. The total amount of dividends will be 951,823,334. We propose that the effective date of distributing dividend from surplus be June 30, Proposal 2: Partial amendments to the Articles of Incorporation 1. Reasons for the proposal (1) Additions will be made to Article 3 (Purpose) of the current Articles of Incorporation to provide for the diversification of businesses and future business development of the Group. (2) Upon the enforcement of the Act to Partially Amend the Companies Act (Act. No. 90 of 2014) on May 1, 2015, amendments were made to the scope of Directors and who can enter into agreements for limitation of liability. Accordingly, necessary amendments will be made to Article 25 (Limitation of Liabilities of Directors), Paragraph 2 and Article 33 (Limitation of Liabilities of ), Paragraph 2 of the current Articles of Incorporation so that directors who do not execute business and who are not Outside Corporate Auditors can also sufficiently fulfill the roles expected of them. Each Corporate Auditor has provided his consent to the amendments to Article 25, Paragraph 2 of the current Articles of Incorporation. (3) Other than those above, the numbering of items will be modified to be in line with the establishment of new provisions

4 2. Description of the amendments Details of the amendments are as follows. Current Articles of Incorporation (Underlined portions indicate amendments.) Proposed Amendments Article (Provisions omitted) Article (Unchanged) (Purpose) (Purpose) Article 3. The purpose of the Company shall be to engage in the following businesses: Article 3. The purpose of the Company shall be to engage in the following businesses: (1) (5) (Provisions omitted) (1) (5) (Unchanged) (New) (6) Manufacturing, processing and trading of (6) (20) (Provisions omitted) chemicals (7) (21) (Unchanged) Article (Provisions omitted) Article (Unchanged) (Limitation of Liabilities of Directors) (Limitation of Liabilities of Directors) Article 25. (Provisions omitted) Article 25. (Unchanged) 2. Pursuant to the provisions of Article 427, Paragraph 1 of the Companies Act, the Company may enter into an agreement with each of Outside Directors which limits their liability for damages stipulated in Article 423, Paragraph 1 of the same Act if such Director acts in good faith and without gross negligence; provided, however, the limit of the liability under such agreement shall be a prescribed amount that is 10 million or more or an amount set by laws and regulations, whichever is higher. 2. Pursuant to the provisions of Article 427, Paragraph 1 of the Companies Act, the Company may enter into an agreement with each of Directors (excluding Executive Directors, etc.) which limits their liability for damages stipulated in Article 423, Paragraph 1 of the same Act if such Director acts in good faith and without gross negligence; provided, however, the limit of the liability under such agreement shall be a prescribed amount that is 10 million or more or an amount set by laws and regulations, whichever is higher. Article (Provisions omitted) Article (Unchanged) (Limitation of Liabilities of ) (Limitation of Liabilities of ) Article 33. (Provisions omitted) Article 33. (Provisions omitted) 2. Pursuant to the provisions of Article 427, Paragraph 1 of the Companies Act, the Company may enter into an agreement with each of Outside which limits their liability for damages stipulated in Article 423, Paragraph 1 of the same Act if such Outside Corporate Auditor acts in good faith and without gross negligence; provided, however, the limit of the liability under such agreement shall be a prescribed amount that is 10 million or more or an amount set by laws and regulations, whichever is higher. 2. Pursuant to the provisions of Article 427, Paragraph 1 of the Companies Act, the Company may enter into an agreement with each of which limits their liability for damages stipulated in Article 423, Paragraph 1 of the same Act if such Corporate Auditor acts in good faith and without gross negligence; provided, however, the limit of the liability under such agreement shall be a prescribed amount that is 10 million or more or an amount set by laws and regulations, whichever is higher. Article (Provisions omitted) Article (Unchanged) - 4 -

5 Proposal 3: Election of five (5) The terms of office of all five (5) will expire at the conclusion of this year s Annual General Meeting of Shareholders. Accordingly, the election of five (5) is proposed. The Board of has provided its consent to this proposal. The candidates for Corporate Auditor are as follows: No. 1 2 Name, Date of birth, etc. Yasushi Nishikawa November 26, 1956 (Age 59) meeting: meeting: Corporate Auditor: <New-appointment> Susumu Ishimaru October 11, 1957 (Age 58) (11/11) (10/10) Corporate Auditor: 1 year <Re-appointment> April 1979 February 1998 July 1999 July 2003 January 2007 June 2008 April 2010 June 2012 Career summary and positions at the Company Joined the Company General Manager of Sales Promotion Department, the Company General Manager of Communication Paper Sales Department, the Company President and Representative Director of Japan Communication Paper Chemical Engineering Co., Ltd. General Manager of Communication Paper and Specialty Paper Sales Department, the Company Director, General Manager of Specialty Paper Sales Department, the Company Director, General Manager of Corporate Planning Department, the Company Corporate Officer, General Manager of Corporate Planning Department, the Company (current position) The Company newly nominates Mr. Yasushi Nishikawa as a candidate for Corporate Auditor because it has judged that he will execute his duties appropriately as Corporate Auditor, considering that he has engaged in the manufacturing and development department, sales department, and planning department, and has a wealth of experience in and knowledge of each business field. April 1980 Joined the Company September 1996 Acting General Manager of Household Paper Products Budget Planning Section, Operation Department, Household Paper Products Business Division, the Company October 1998 Director, General Manager of General Affairs Section, Akabira Paper Corporation November 2000 Director, General Manager of General Affairs Section, Elleair Paper Tech. Co., Ltd. (current Elleair Product Co., Ltd.) July 2005 Acting General Manager of Accounting Section, the Company July 2009 Director, General Manager of General Affairs Section, Oumi Daio Paper Package Co., Ltd. (current Daio Package Corporation) July 2011 President and Representative Director of Kyushu Daio Paper Package Co., Ltd. (current Daio Package Corporation) April 2013 Managing Director, General Manager of Administration Department, Daio Package Corporation June 2015 Corporate Auditor of the Company (current position) Mr. Susumu Ishimaru served as General Manager of Budget Planning Section and General Manager of Accounting Section of the Company, and has been in the position of full-time Corporate Auditor since In addition, Mr. Susumu Ishimaru served as representative of subsidiaries and manager of the general affairs department. Thus, Mr. Susumu Ishimaru has a wealth of experience in and knowledge of the overall administration department. Therefore, the Company has judged that he will execute his duties appropriately as Corporate Auditor and continues to nominate him as a candidate for Corporate Auditor. Number of shares of the Company held 4,000 shares 2,000 shares - 5 -

6 No. 3 4 Name, Date of birth, etc. Yoichiro Yamakawa July 21, 1941 (Age 74) (14/14) (15/15) Corporate Auditor: 8 years <Re-appointment> <Outside> <Independent> Yoshinobu Shimizu October 26, 1944 (Age 71) (14/14) (15/15) Corporate Auditor: 4 years <Re-appointment> <Outside> <Independent> Career summary and positions at the Company April 1966 Registered as an Attorney April 1979 Partner of Koga & Partners (current position) September 1991 Visiting Professor of The University of Michigan Law School June 2001 Outside Director of Sumitomo Mitsui Banking Corporation December 2002 Outside Director of Sumitomo Mitsui Financial Group, Inc. July 2005 Outside Director of The Dai-ichi Mutual Life Insurance Company (current The Dai-ichi Life Insurance Company, Limited) June 2006 Outside Corporate Auditor of Nisshin Steel Co., Ltd. (scheduled to resign from the position in June 2016) June 2008 Outside Corporate Auditor of the Company (current position) June 2010 Outside Corporate Auditor of Renesas Electronics Corporation Partner of Koga & Partners The Company continues to nominate Mr. Yoichiro Yamakawa as a candidate for Outside Corporate Auditor because it has judged that he will execute his duties appropriately as Outside Corporate Auditor from an independent standpoint by leveraging his expertise as an attorney and a wealth of experience gained through his career as executive of other companies. March 1973 Registered as a Certified Public Accountant May 2002 Vice President of Shin Nihon & Co. (current Ernst & Young ShinNihon LLC) March 2006 Outside Corporate Auditor of CANON INC. June 2007 Outside Corporate Auditor of Mitsubishi UFJ Trust and Banking Corporation (current position) March 2008 Outside Corporate Auditor of CANON ELECTRONICS INC. March 2010 Member of The Mitsubishi UFJ Trust Scholarship Foundation (current position) June 2010 Outside Corporate Auditor of Renesas Electronics Corporation (current position) June 2012 Outside Corporate Auditor of the Company (current position) Outside Corporate Auditor of Mitsubishi UFJ Trust and Banking Corporation Outside Corporate Auditor of Renesas Electronics Corporation Member of The Mitsubishi UFJ Trust Scholarship Foundation The Company continues to nominate Mr. Yoshinobu Shimizu as a candidate for Outside Corporate Auditor because it has judged that he will execute his duties appropriately as Outside Corporate Auditor from an independent standpoint by leveraging his expertise as a certified public accountant and a wealth of experience gained through his career as executive of other companies. Number of shares of the Company held 0 shares 0 shares - 6 -

7 No. 5 Name, Date of birth, etc. Takemi Nagasaka January 24, 1956 (Age 60) meeting: meeting: Corporate Auditor: <New-appointment> <Outside> <Independent> October 1978 August 1981 June 2004 July 2007 June 2010 October 2013 June 2015 March 2016 March 2016 Career summary and positions at the Company Joined Musashi Audit Corporation (current Ernst & Young ShinNihon LLC) Joined Sony Corporation General Manager of Accounting Department, Sony Corporation Vice President, Senior General Manager of Accounting Division, Sony Corporation Corporate Executive, Senior Vice President, Senior General Manager of Accounting Division, Sony Corporation Corporate Executive, Senior Vice President, in charge of Accounting, Sony Corporation Senior Adviser of Sony Corporation (scheduled to resign from the position in June 2016) Outside Corporate Auditor of Nabtesco Corporation (current position) Outside Corporate Auditor of SOLIZE Corporation (current position) Outside Corporate Auditor of Nabtesco Corporation Outside Corporate Auditor of SOLIZE Corporation Mr. Takemi Nagasaka has business experience in accounting audit, and he served as manager in charge of the finance and accounting department at a company which extensively engages in business development both in Japan and overseas. In light of this background, the Company newly nominates Mr. Takemi Nagasaka as a candidate for Corporate Auditor because it has judged that he will execute his duties appropriately as Outside Corporate Auditor from an independent standpoint by leveraging his deep insight in finance and accounting. Number of shares of the Company held 0 shares - 7 -

8 (Notes) 1. There are no conflicts of interests between each candidate and the Company. 2. Messrs. Yoichiro Yamakawa, Yoshinobu Shimizu and Takemi Nagasaka are candidates for Outside Corporate Auditor. 3. Messrs. Yoichiro Yamakawa and Yoshinobu Shimizu are incumbent Outside of the Company. Mr. Yoichiro Yamakawa will have served in such post for eight (8) years and Mr. Yoshinobu Shimizu for four (4) years as at the conclusion of this year s Annual General Meeting of Shareholders. 4. Article 33, Paragraph 2 of the Articles of Incorporation of the Company prescribes that the Company may enter into an agreement with each Outside Corporate Auditor that limits their liability for damages to the Company within a certain extent, pursuant to Article 427, Paragraph 1 of the Companies Act. The limit of liability for damages set out under such agreement is 10 million or the minimum amount of liability for damages set out under Article 425, Paragraph 1 of the Companies Act, whichever is higher. The Company has entered into agreements to limit liability for damages with each of Messrs. Yoichiro Yamakawa and Yoshinobu Shimizu. Such agreement with each of Messrs. Yoichiro Yamakawa and Yoshinobu Shimizu shall be renewed once their appointments are approved at this year s Annual General Meeting of Shareholders. The Company will enter into the same agreement to limit liability for damages with Mr. Takemi Nagasaka once his appointment is approved at this year s Annual General Meeting of Shareholders. The Company will enter into the same agreement to limit liability for damages with Messrs. Yasushi Nishikawa and Susumu Ishimaru once their appointments are approved, subject to the approval of Proposal 2 Partial Amendments to the Articles of Incorporation. 5. The Company has registered Messrs. Yoichiro Yamakawa and Yoshinobu Shimizu as independent auditors with the Tokyo Stock Exchange pursuant to the rules of the Exchange. The Company shall keep them registered as independent auditors upon the approval of their appointments at this year s Annual General Meeting of Shareholders. Mr. Takemi Nagasaka satisfies the requirements for an independent auditor pursuant to the rules of the Tokyo Stock Exchange. The Company will register him as independent auditor with the Exchange upon the approval of his appointment

9 Proposal 4: Revision of remuneration for The aggregate amount of remuneration to be paid to the Company s has been defined as not exceeding 55 million yen per year by the approval of the 97th Annual General Meeting of Shareholders held on June 27, 2008, and has not changed to this date. However, taking into account various circumstances, such as subsequent changes in economic conditions and levels of remuneration prevailing in the industry, it is proposed that the aggregate amount of remuneration for be revised to not exceeding 65 million yen per year. The number of is currently five (5), and shall remain five (5) if Proposal 3 is approved as originally proposed