モリタホールディングス（6455） – Notice of Convocation Annual General Meeting 2022

This document has been translated from 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. To Shareholders with Voting Rights: Securities Code: 6455 June 6, 2022 Masahiro Nakajima Chairman & CEO MORITA HOLDINGS CORPORATION 3-6-1 Dosho-machi, Chuo-ku, Osaka-shi, Osaka, Japan THE 89th ANNUAL GENERAL MEETING OF SHAREHOLDERS NOTICE OF Dear Shareholders: We would like to express our appreciation for your continued support and patronage. We hereby inform you that the 89th Annual General Meeting of Shareholders of MORITA HOLDINGS CORPORATION (the “Company”) will be held as described below. In order to prevent the spread of COVID-19, the Company encourages all shareholders, if at all possible, to exercise their voting rights by mailing the enclosed Voting Rights Exercise Form or via electromagnetic methods (the Internet, etc.) in advance instead of attending the Meeting in person. In that case, please review the attached Reference Documents for the General Meeting of Shareholders, and exercise your vote by no later than 5:40 p.m. Japan time on Monday June 27, 2022. 1. Date and Time: 2. Place: Tuesday, June 28, 2022 at 10:00 a.m. Japan time TKP Garden City PREMIUM Osaka Ekimae ax building 4F, 2-3-21, Sonezakishinchi, Kita-ku, Osaka-shi, Osaka, Japan 3. Meeting Agenda: Matters to be reported: 1. The Business Report and Consolidated Financial Statements for the Company’s 89th Fiscal Year (April 1, 2021 – March 31, 2022) and results of audits by the Accounting Auditor and the Audit & Supervisory Board of the Consolidated Financial Statements 2. Non-consolidated Financial Statements for the Company’s 89th Fiscal Year (April 1, 2021 – March 31, 2022) Proposals to be resolved: Proposal 1: Proposal 2: Proposal 3: 4. Matters to Be Decided at the Time of Convocation: Partial Amendments to the Articles of Incorporation Election of Nine (9) Directors Election of Two (2) Audit & Supervisory Board Members If you exercise your voting rights by proxy, you may attend the meeting with one other shareholder who has voting rights as your proxy. However, please note that you will be required to submit a document certifying the proxy right. When you attend the meeting, please submit the enclosed Voting Rights Exercise Form to the reception. Should revisions arise to the Reference Documents for the General Meeting of Shareholders and the attachments, they will be posted on the Company’s website. – 1 – The following items are posted on the Company’s website in accordance with provisions of laws and regulations and Article 13 of the Company’s Articles of Incorporation and are therefore not provided in this Notice. (1) “Consolidated Statements of Changes in Net Assets” and “Notes to Consolidated Financial Statements” of the Consolidated Financial Statements (2) “Non-consolidated Statements of Changes in Net Assets” and “Notes to Non-consolidated Financial Statements” of the Non-Consolidated Financial Statements The business report audited by the Audit & Supervisory Board Members and the consolidated financial statements and non-consolidated financial statements audited by the Audit & Supervisory Board Members and the Accounting Auditor include each of the documents listed in the attachments to this Notice of Convocation and the above items posted on the Company’s website. Company’s website: https://www.morita119.com – 2 – Reference Documents for the General Meeting of Shareholders Proposal 1: Partial Amendments to the Articles of Incorporation 1. Reasons for the proposal (1) The amended provisions stipulated in the proviso of Article 1 of the supplementary provisions of the “Act Partially Amending the Companies Act” (Act No. 70 of 2019) will be enforced on September 1, 2022. Accordingly, in order to prepare for the introduction of the system for electronic provision of materials for general meetings of shareholders, the Articles of Incorporation of the Company shall be amended. (2) The current Articles of Incorporation stipulate that the term of office of Executive Officers shall be in accordance with the term of office of Directors; however, in order to further clarify the distinction between management and execution, the Company proposes to change the term of office to the fiscal year. (Amended parts are underlined.) Proposed Amendments 2. Details of amendments The details of the amendments are as follows. Current Articles of Incorporation (Internet Disclosure and Deemed Provision of Reference Documents for the General Meeting of Shareholders, Etc.) Article 13 The Company may, when convening a general meeting of shareholders, deem that it has provided information to shareholders pertaining to matters to be described or indicated in the reference documents for the general meeting of shareholders, business report, non-consolidated financial statements, and consolidated financial statements, by disclosing such information through the Internet in accordance with the provisions provided in the Ordinance of the Ministry of Justice. (Measures for Electronic Provision of Reference Documents for the General Meeting of Shareholders, Etc.) Article 13 The Company shall, when convening a general meeting of shareholders, provide information contained in the reference documents for the general meeting of shareholders, etc. electronically. 2. Among the matters to be provided electronically, the Company may choose not to include all or part of the matters stipulated in the Ordinance of the Ministry of Justice in the paper copy to be sent to shareholders who have requested it by the record date for voting rights. – 3 – (Term of Office of Executive Officers) Article 34 The term of office of Executive (Term of Office of Executive Officers) Article 34 The term of office of Executive Officers shall be one year, and shall be the same as that of Directors. 2. The Board of Directors may dismiss an Officers shall expire at the end of the fiscal year ending within one year after their assumption of office. 2. The Board of Directors may dismiss an Executive Officer even in the middle of his/her term of office. Executive Officer even in the middle of his/her term of office. Supplementary Provisions Article 1 The deletion of Article 13 (Internet Disclosure and Deemed Provision of Reference Documents for the General Meeting of Shareholders, Etc.) of the current Articles of Incorporation and the proposed Article 13 (Measures for Electronic Provision, Etc.) shall come into effect on the date of enforcement of the amended provisions stipulated in the proviso of Article 1 of the supplementary provisions of the Act Partially Amending the Companies Act (Act No. 70 of 2019) (the “Effective Date”). 2. Notwithstanding the provisions of the preceding paragraph, Article 13 of the current Articles of Incorporation shall remain in force with respect to a general meeting of shareholders to be held on a date within six months from the Effective Date. 3. This Article shall be deleted after the lapse of six months from the Effective Date or the lapse of three months from the date of the general meeting of shareholders set forth in the preceding paragraph, whichever is later. – 4 – 2 3 4 5 6 7 8 Proposal 2: Election of Nine (9) Directors The terms of office of seven (7) Directors, Masahiro Nakajima, Kazumi Ogata, Kunio Morimoto, Shinichi Kanaoka, Mitsuo Isoda, Takao Kawanishi, and Masaki Hojo, will expire at the closing of this General Meeting of Shareholders. Consequently, in order to further strengthen the management structure, the Company proposes the election of nine (9) Directors. The candidates for Directors are as follows. Candidates for Directors No. Name Current positions and responsibilities at the Company 1 Masahiro Nakajima [Reappointment] Chairman & CEO Kunio Morimoto [Reappointment] Director and Managing Executive Officer Shinichi Kanaoka [Reappointment] Director and Managing Executive Officer Mitsuo Isoda Takao Kawanishi Masaki Hojo [Reappointment] [Outside] [Reappointment] [Outside] [Reappointment] [Outside] Director Director Director Shinya Murai [New appointment] Managing Executive Officer Masayoshi Kato [New appointment] 9 Hiroyuki Fukunishi [New appointment] — — Attendance at the Board of Directors meetings 13/13 (100%) 13/13 (100%) 13/13 (100%) 13/13 (100%) 13/13 (100%) 13/13 (100%) — — — – 5 – No. Name (Date of birth) Career summary, positions, responsibilities, and significant concurrent positions Number of shares of the Company held Masahiro Nakajima (February 3, 1950) [Reappointment] [Attendance at the Board of Directors meetings] 13/13 (100%) 1 March 1972 April 2003 June 2004 June 2006 October 2008 June 2015 June 2015 June 2015 June 2015 February 2016 June 2016 April 2017 June 2017 June 2019 June 2021 Joined the Company Executive Officer, the Company Director, the Company President, the Company President, MORITA CORPORATION Chairman, MORITA ECONOS CORPORATION Chairman, MORITA TECHNOS CORPORATION Chairman, MORITA CORPORATION (current position) Chairman, the Company Chairman of the Board, BRONTO SKYLIFT OY AB (current position) Chairman and CEO, the Company (current position) Chairman, MORITA ENVIRONMENTAL TECH CORPORATION Outside Corporate Auditor, Hino Motors, Ltd. Director, MORITA ENVIRONMENTAL TECH CORPORATION (current position) Outside Director, Hino Motors, Ltd. (current position) [Significant concurrent positions] ・Chairman, MORITA CORPORATION ・Chairman of the Board, BRONTO SKYLIFT OY AB ・Outside Director, Hino Motors, Ltd. 173,829 shares [Reason for nomination as candidate for Director] Mr. Nakajima has held key positions in the fire fighting vehicles business and the recycling machines business, and after assuming office as Director in 2004, he served as President from 2006 to 2015, Chairman from 2015, and as Chairman and CEO from 2016, playing a central role in management for many years at the Company, and domestic and overseas group companies, and possesses abundant experience and broad insight as a manager. Therefore, the Company determines that he can play a sufficient role in the overall management supervision and decision-making functions by utilizing his abundant experience and track record, and proposes his continued appointment as Director. – 6 – No. 2 3 Name (Date of birth) Career summary, positions, responsibilities, and significant concurrent positions Number of shares of the Company held Kunio Morimoto (March 3, 1958) [Reappointment] [Attendance at the Board of Directors meetings] 13/13 (100%) April 1980 April 2002 October 2008 June 2011 June 2015 June 2015 January 2016 April 2019 April 2019 June 2019 Joined the Company General Manager, Procurement Dept., Business Management Division, the Company Executive Officer, Deputy General Manager, Production Division, and General Manager, Engineering Dept., MORITA CORPORATION Director, Deputy General Manager, Production Division, General Manager, Planning and Production Dept., and General Manager, Overseas Business Promotion Dept., MORITA CORPORATION Managing Director, MORITA CORPORATION General Manager, Production Division, and General Manager, Product Development Division, MORITA CORPORATION Executive Director, BRONTO SKYLIFT OY AB Managing Executive Officer, the Company (current position) Head of Division of Corporate Strategy, the Company Head of Division of ATI Center, the Company (current position) Director, the Company (current position) 32,594 shares [Reason for nomination as candidate for Director] Mr. Morimoto has held key positions in the production, engineering, and development departments of the fire fighting vehicles business for many years, and has also been involved in the management of overseas group subsidiaries since 2016. Therefore, the Company determined that he has the experience and broad insight necessary for corporate management, and requests his continued appointment as Director. Shinichi Kanaoka (August 21, 1959) [Reappointment] [Attendance at the Board of Directors meetings] 13/13 (100%) April 1982 April 2007 June 2010 October 2011 April 2017 June 2018 April 2019 June 2020 Joined the Company General Manager, Accounting Dept., Business Management Division, the Company Executive Officer, the Company General Manager, Business Management Division, the Company Managing Executive Officer, the Company Director and Executive Officer, the Company Head of Divison of Finance and Information systems, the Company (current position) Director and Managing Executive Officer, the Company (current position) 21,806 shares [Reason for nomination as candidate for Director] Mr. Kanaoka has been engaged in the accounting operations for many years, and after assuming the position of Executive Officer in 2010, he assumed a key position of overseeing the Business Management Division, which includes the Corporate Planning, Legal, Accounting, and Information Management departments, etc. Therefore, the Company requests his continued appointment as Director because of his abundant business administration experience in the Company and domestic and overseas group companies and wide-ranging insight necessary for corporate management. – 7 – No. 4 5 Name (Date of birth) Career summary, positions, responsibilities, and significant concurrent positions Number of shares of the Company held Mitsuo Isoda (January 7, 1970) [Reappointment] [Outside] [Attendance at the Board of Directors meetings] 13/13 (100%) April 1995 April 1995 June 2001 August 2001 February 2002 July 2002 June 2014 June 2016 May 2019 Registered as an Attorney (Osaka Bar Association) Joined The Miyake Joint Partnership Law Office (currently MIYAKE & PARTNERS) Completed the Harvard Law School’s LL.M. program. Trained at Pillsbury Winthrop Shaw Pittman LLP, New York Office Admitted to the New York State Bar (at that time) Partner, MIYAKE & PARTNERS Outside Corporate Auditor, HASEKO Corporation (current position) Director, the Company (current position) President, MIYAKE & PARTNERS (current position) [Significant concurrent positions] ・President, MIYAKE & PARTNERS ・Outside Corporate Auditor, HASEKO Corporation 2,500 shares [Reason for nomination as candidate for Outside Director and outline of expected roles] Although Mr. Isoda has no direct experience in corporate management, he has been a lawyer for many years and has a high degree of expertise in laws and regulations. He has been an Outside Director of the Company since June 2016 and has provided useful and valuable advice on compliance and governance from an independent standpoint in the deliberations of the Board of Directors and the Nomination and Compensation Advisory Committee, which he chairs, and is expected that he will continue to exercise his independent and highly transparent monitoring and supervisory functions in the management of the Company. Therefore, the Company requests his continued appointment as Director. His term of office as an Outside Director will be six (6) years at the conclusion of this General Meeting of Shareholders. Takao Kawanishi (November 23, 1948) [Reappointment] [Outside] [Attendance at the Board of Directors meetings] 13/13 (100%) April 1972 June 1999 January 2002 May 2004 January 2006 April 2008 June 2010 June 2014 February 2015 June 2017 June 2017 Joined The Sanwa Bank, Ltd. (currently MUFG Bank, Ltd.) Executive Officer, The Sanwa Bank, Ltd. Managing Executive Officer, UFJ Bank Limited (currently MUFG Bank, Ltd.) Representative Director and Senior Managing Executive Officer, UFJ Bank Limited Managing Director, The Bank of Tokyo-Mitsubishi UFJ, Ltd. (currently MUFG Bank, Ltd.) Vice President, The Bank of Tokyo-Mitsubishi UFJ, Ltd. President and CEO, JCB Co., Ltd. Chairman, JCB Co., Ltd. Outside Director, UNIRITA Inc. Director, the Company (current position) Chairman of the Board of Directors, JCB Co., Ltd. 2,400 shares [Reason for nomination as candidate for Outside Director and outline of expected roles] Mr. Kawanishi possesses expert knowledge cultivated over many years at financial institutions and a wealth of experience and broad insight as a corporate manager. He has been an Outside Director of the Company since June 2017 and has provided useful and valuable advice based on his broad experience and deep knowledge of corporate management, from an independent standpoint in the deliberations of the Board of Directors and the Nomination and Compensation Advisory Committee, and is expected that he will continue to exercise his independent and highly transparent monitoring and supervisory functions in the management of the Company. Therefore, the Company requests his continued appointment as Director. His term of office as an Outside Director will be five (5) years at the conclusion of this General Meeting of Shareholders. – 8 – No. 6 Name (Date of birth) Career summary, positions, responsibilities, and significant concurrent positions Number of shares of the Company held Masaki Hojo (October 2, 1948) [Reappointment] [Outside] [Attendance at the Board of Directors meetings] 13/13 (100%) April 1971 June 1998 April 2000 April 2004 Joined Daifuku Machinery Works Co., Ltd. (currently Daifuku Co., Ltd.) Director, Daifuku Machinery Works Co., Ltd. President, Daifuku America Corporation Representative Director and Senior Managing Director, Daifuku Co., Ltd. President, Daifuku Canada Inc. Executive Vice President, Daifuku Co., Ltd. April 2006 December 2007 Chairman, Jervis B.Webb Company April 2008 January 2011 President and CEO, Daifuku Co., Ltd. Chairman, Daifuku Webb Holding Company (currently Daifuku North America Holding Company) Advisor, Daifuku Co., Ltd. Director, the Company (current position) April 2018 June 2020 3,200 shares [Reason for nomination as candidate for Outside Director and outline of expected roles] Mr. Hojo has extensive experience and broad insight as a corporate manager, having served as President and CEO and head of overseas subsidiaries at Daifuku Co., Ltd. He has been an Outside Director of the Company since June 2020 and has provided useful and valuable advice based on his broad experience and deep knowledge of corporate management, from an independent standpoint in the deliberations of the Board of Directors and the Nomination and Compensation Advisory Committee, and is expected that he will continue to exercise his independent and highly transparent monitoring and supervisory functions in the management of the Company. Therefore, the Company requests his continued appointment as Director. His term of office as an Outside Director will be two (2) years at the conclusion of this General Meeting of Shareholders. Shinya Murai (January 23, 1960) [New appointment] [Attendance at the Board of Directors meetings] — 7 April 1982 April 2007 Joined the Company General Manager, General Affairs Dept., Business Management Division, the Company April 2011 Executive Officer, the Company February 2012 Deputy General Manager, Business Management April 2017 July 2018 April 2019 Division, General Manager, General Affairs Dept., and General Manager, Human Resources Dept., the Company Managing Executive Officer, the Company (current position) General Manager, Corporate Communications Dept., the Company Head of Divison of Human Resources Development and General Affairs, the Company (current position) 19,601 shares [Reason for nomination as candidate for Director] Mr. Murai has been engaged in general affairs and personnel affairs for many years, and after assuming the position of Executive Officer in 2011 he assumed a key position in charge of the Business Management Division, overseeing the Company and its domestic group companies. The Company requests his appointment as Director, because of his abundant business experience in the Company and broad insight necessary for corporate management. – 9 – No. Name (Date of birth) Career summary, positions, responsibilities, and significant concurrent positions Number of shares of the Company held Masayoshi Kato (February 18, 1970) [New appointment] [Attendance at the Board of Directors meetings] — 8 April 1992 April 2015 April 2017 June 2017 April 2018 April 2022 Joined the Company General Manager, General Fire Fighting Vehicle Production Dept., Sanda Factory, MORITA CORPORATION Executive Officer, Head of Production Division, and Factory Head, Sanda Factory, MORITA CORPORATION Director, Head of Production Division, and Factory Head, Sanda Factory, MORITA CORPORATION Director, Executive Officer, Head of Production Division, General Manager, Engineering Dept., MORITA CORPORATION Representative Director, President, and Head of Production Division, MORITA CORPORATION (current position) 9,695 shares [Reason for nomination as candidate for Director] Mr. Kato has held key positions in the production and engineering departments for many years in the fire fighting vehicles business, and was involved in management as a Director of MORITA CORPORATION in 2017. He has also served as Representative Director of MORITA CORPORATION since April 2022. The Company expects that he will play a role in the supervisory and decision-making functions of the Board of the Directors of the Company, taking advantage of his abundant experience and broad insight, and therefore requests his appointment as Director. April 1994 April 2016 April 2017 Hiroyuki Fukunishi (January 1, 1970) [New appointment] [Attendance at the Board of Directors meetings] — 9 June 2019 April 2022 Joined the Company General Manager, Sales Dept.(West Japan), MORITA ENVIRONMENTAL TECH CORPORATION Director, Head of Sales Division and General Manager, Sales Dept.(East Japan), MORITA ENVIRONMENTAL TECH CORPORATION Director, Executive Officer, and Head of Sales Division, MORITA ENVIRONMENTAL TECH CORPORATION Representative Director, President, and Head of Sales Division, MORITA ENVIRONMENTAL TECH CORPORATION (current position) 14,395 shares [Reason for nomination as candidate for Director] Mr. Fukunishi has held key positions in the sales department for many years in the recycling machines business, and was involved in the management of MORITA ENVIRONMENTAL TECH CORPORATION as a Director in 2017. He has also served as Representative Director of MORITA ENVIRONMENTAL TECH CORPORATION since April 2022. The Company expects that he will play a role in the supervisory and decision-making functions of the Board of the Directors of the Company, taking advantage of his abundant experience and broad insight, and therefore requests his appointment as Director. Notes: 1. None of the candidates for Directors have any special interests with the Company. 2. Mr. Mitsuo Isoda, Mr. Takao Kawanishi, and Mr. Masaki Hojo, are the candidates for Outside Directors, and also candidates for Independent Officers who have no potential conflicts of interests with general shareholders, as defined by the Tokyo Stock Exchange, Inc. 3. The Company has concluded an agreement with Mr. Mitsuo Isoda, Mr. Takao Kawanishi and Mr. Masaki Hojo, in accordance with Article 427, Paragraph 1 of the Companies Act, which limits Outside Directors’ indemnity liability for damage outlined under Article 423, Paragraph 1 of the Act. The maximum amount of liability under such contracts is the minimum liability amount stipulated by laws and regulations. If their reappointment is approved, then the Company will continue the above agreement with them. – 10 – 4. The Company has entered into a directors and officers (D&O) liability insurance contract with an insurance company to cover legal damages and litigation expenses to be borne by the insured in the event that a claim for damage is made against the insured due to an act committed by the insured in his/her capacity as such (including omission). If the appointment of the candidates as Directors is approved in this proposal, each of them will be insured under the insurance contract, which is to be renewed during their terms of office. – 11 – (Reference) The structure of the Board of Directors and the knowledge and experience each Director has if Proposal 2 is approved as proposed at this Ordinary General Meeting of Shareholders are as follows The knowledge and experience which each Director has Corporate International Legal and Finance and Sales and Technology management experience Governance Accounting Marketing and R&D Production HR and HRD 〇 〇 〇 〇 〇 Name Position at the Company after approval Masahiro Nakajima Chairman & CEO Shinichi Kanaoka Kunio Morimoto Representative Director and President Executive Officer Director and Managing Executive Officer Director and Managing Executive Officer 〇 〇 〇 〇 〇 〇 〇 〇 〇 〇 Masaki Hojo Director*1 〇 〇 〇 〇 〇 〇 Masayoshi Kato Hiroyuki Fukunishi Director Director 〇 〇 〇 〇 *1 Outside Director and Independent Officer *2 Mr. Mitsuo Isoda chairs the Nomination Advisory Committee and the Compensation Advisory Committee. Shinya Murai 〇 Mitsuo Isoda Director*1, *2 〇 〇 Takao Kawanishi Director*1 〇 〇 〇 〇 – 12 – 1 2 Election of Two (2) Audit & Supervisory Board Members Proposal 3: The terms of office of two (2) Audit & Supervisory Board Members, Atsushi Miyazaki and Shozo Nishimura, will expire at the closing of this General Meeting of Shareholders. Consequently, the Company proposes the election of two (2) Audit & Supervisory Board Members. The agreement of the Audit & Supervisory Board has been obtained for the submission of this proposal. The candidates for Audit & Supervisory Board Members are as follows. Candidates for Audit & Supervisory Board Members No. Name (Date of birth) Career summary, positions and significant concurrent positions Number of shares of the Company held 4,800 shares April 1970 April 1970 April 1979 June 2008 June 2018 June 2019 Shozo Nishimura (March 3, 1945) [Reappointment] [Outside] [Attendance at the Board of Directors meetings] 13/13 (100%) Registered as an Attorney (Osaka Bar Association) Joined The Miyake Joint Partnership Law Office (currently MIYAKE & PARTNERS) Established Nishimura Law & Accounting Firm Chief, Nishimura Law & Accounting Firm (current position) Outside Corporate Auditor, Uehara Sei Shoji Co., Ltd. Audit & Supervisory Board Member, the Company (current position) Director, Kyoto Seisakusho Co., Ltd. (current position) [Significant concurrent positions] Chief, Nishimura Law & Accounting Firm [Reason for nomination as candidate for Outside Audit & Supervisory Board Member] Although Mr. Nishimura has no direct experience in corporate management, he is well versed in corporate legal affairs as an attorney and has sufficient insight to govern corporate management. The Company determined that he will be able to fully perform his auditing functions, and therefore requests his continued appointment as Outside Audit & Supervisory Board Member. His term of office as an Outside Audit & Supervisory Board Member will be four (4) years at the conclusion of this General Meeting of Shareholders. Mari Kaneko (August 23, 1962) [New appointment] [Outside] [Attendance at the Board of Directors meetings] — April 1986 August 2006 September 2006 June 2008 February 2014 February 2022 Joined IBM Japan, Ltd. Registered as a USCPA In charge of accounting at Fujita Rashi (USA) Corp. Established Beni LLC, appointed as President Full-time Corporate Auditor, Phil Company, Inc. Director, Full-time Audit and Supervisory Committee Member, Phil Company, Inc. (current position) [Significant concurrent positions] Director, Full-time Audit and Supervisory Committee Member, Phil Company, Inc. 0 shares [Reason for nomination as candidate for Outside Audit & Supervisory Board Member] Ms. Kaneko has extensive knowledge of finance and accounting, and the Company has determined that she can provide appropriate suggestions and advice in auditing and supervising the Company’s important decision-making and business execution, based on her extensive experience and high-level insight, Therefore, the Company requests her appointment as Outside Audit & Supervisory Board Member. Notes: 1. None of the candidates for Audit & Supervisory Board Members have any special interests with the Company. 2. Mr. Shozo Nishimura and Ms. Mari Kaneko are the candidates for Outside Audit & Supervisory Board Members, and also candidates for Independent Officers who have no potential conflicts of interests with general shareholders, as defined by the Tokyo Stock Exchange, Inc. – 13 – 3. The Company has concluded an agreement with Mr. Nishimura, in accordance with Article 427, Paragraph 1 of the Companies Act, which limits Outside Directors’ indemnity liability for damage outlined under Article 423, Paragraph 1 of the Act. The maximum amount of liability under such contracts is the minimum liability amount stipulated by laws and regulations. If his reappointment is approved, then the Company will continue the above agreement with him. In addition, if the election of Ms. Kaneko is approved at this Ordinary General Meeting of Shareholders, then the Company will enter into a similar liability limitation agreement with her. 4. The Company has entered into a directors and officers (D&O) liability insurance contract with an insurance company to cover legal damages and litigation expenses to be borne by the insured in the event that a claim for damage is made against the insured due to an act committed by the insured in his/her capacity as such (including omission). If the appointment of the candidates as Audit & Supervisory Board Members is approved in this proposal, each of them will be insured under the insurance contract, which is to be renewed during their terms of office. (Reference) Criteria for Determining Whether Outside Officers are Sufficiently Independent (4) (3) (1) (2) The Company has established the following criteria for determining the independence of Outside Directors and Outside Audit & Supervisory Board Members (hereinafter referred to as “Outside Officers”), and if, as a result of an investigation to the extent reasonably possible by the Company, it is determined that an Outside Officer does not fall under any of the following items, then such Outside Officer is deemed to be independent from the Company and not likely to cause any conflict of interest with general shareholders. Persons who are business executors of the Company or its affiliates (hereinafter referred to as the “Group”) or persons who were business executors of the Group in the past 10 years (or, if the persons were non-executive Directors, Audit & Supervisory Board Members, or Accounting Advisors of the Group at any time within the past 10 years, then the 10 years prior to assuming such positions) Persons for whom the Group is a major business partner, or persons who are business executors of their parent companies or important subsidiaries. Persons who are business executors of the Group’s major business partners, or persons who are business executors of their parent companies or important subsidiaries Consultants, accounting experts, or legal experts who receive more than a certain amount of money or other assets from the Group (if the persons receiving such assets are corporations, partnerships, or other organizations, then the persons who are business executors of such organizations) Persons who have received donations or grants exceeding a certain amount from the Group (if the donation or grant recipients are corporations, partnerships, or other organizations, then the persons who are business executors of such organizations) Persons who are business executors of the Group’s lead managing brokerage firms, or a certified public accountant, employee, or partner of the audit firm that is the Group’s accounting auditor Persons who are business executors of the principal financial institutions from which the Group borrows, or their parent companies or subsidiaries A major shareholder of the Company (meaning a shareholder, that directly or indirectly holds 10% or more of the voting rights) or, if such a major shareholder is a corporation, the persons who are business executors of such a major shareholder or its parent company or important subsidiary Persons who are business executors of a company in which the Group is a major shareholder (meaning a company in which the Group directly or indirectly holds 10% or more of the voting rights) or its parent company or important subsidiary (8) (9) (7) (6) (5) (10) Directors, Audit & Supervisory Board Members, Accounting Advisors, Executive Officers, of any company or its parent company or subsidiary that accepts Directors (whether full-time or part-time) from the Group Persons who have fallen under (2) through (10) above, in the three years prior to assuming office Close relatives, etc. of persons falling under (1) through (11) above (11) (12) – 14 –