1. Election of eight Directors
2. Disclosure rules for Board Members (Amendments to the Articles of Incorporation)
This proposal will clarify the confidentiality obligation of board members and require disclosure at a board meeting of the particulars of contacts between any board member and any shareholder holding 10% or more voting rights.
While shareholder engagements are important and encouraged, each director must maintain the transparency of such engagements and no favoritism should play a role in such engagements. By upholding shareholder equality and promoting healthy management practices, the proposal aims to fairly protect the Company's interests as well as all interests of other stakeholders.
3. Requirement for appointing a corporate inspector (Amendments to the Articles of Incorporation)
Currently, any shareholder holding at least three (3) percent voting rights may petition to the court to appoint a corporate inspector when it is reasonably suspected that a certain improper or illegal act has been committed in the operations of the Company. This proposal significantly lowers the three (3) percent threshold to allow a much wider group of shareholders to file such a petition.
4. Compensation for Outside Directors
This proposal is to lower the compensation of outside directors to the total amount of ¥10 million per person per year. The existing compensation regime for outside directors instituted at the February extraordinary shareholder meeting is excessive, incentivizes short-sighted decision-making and far exceeds the market rate of ¥7 million for comparable companies in Japan.
5. Clawback for directors’ compensation (Amendments to the Articles of Incorporation)
If any director violates fiduciary duties or otherwise breach laws or regulations, provides benefits to select shareholders, or shares confidential information to benefit select shareholders, the director may be required to forego up to 50% of the director’s compensation.
The proposal further incentivizes board members to respect their fiduciary duties and otherwise law abiding.
6. Clawback for directors’ compensation (Amendments to the Articles of Incorporation)
This proposal has the same purpose as the proposal 5 above. If any director violates fiduciary duties or otherwise breach laws or regulations, provides benefits to select shareholders, or shares confidential information to benefit select shareholders, the director may be required to return up to 50% of the director’s compensation.
7. Audio recording of Board meetings (Partial amendments to the Articles of Incorporation)
This proposal will require the audio recording of all the meetings of the Board of Directors and the Nomination and Compensation Advisory Committee.
This requirement will make it easier for shareholders to monitor both the board and the Nomination and Compensation committee, which will enhance the transparency of the board and the committee.
8. Dividend distribution proposal - payout of ¥100 per share
Subject to the election of at least six (6) out of the eight (8) director nominees we have proposed, this proposal offers a distribution of dividend of ¥100 for this past fiscal year – we are committed to continue this dividend policy for at least three (3) years.
The Company is well capitalized, and its cash reserves are sufficient to support the increased dividend policy. However, these assumptions may not be appropriate unless a majority of our nominees are elected.
9. Dividend distribution proposal - addendum
If the Company or any other shareholder during the Shareholders Meeting propose a dividend of ¥100 or more per share during the Shareholders Meeting, we propose to add ¥10 per share to the dividend the Company or the other shareholder proposed, provided at least six (6) out of eight (8) candidates we propose are elected as directors.