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(Note) If there are no longer any Company’s shares in the Trust due to the distribution of the Company’s shares or payment of the monetary amounts equivalent to the shares converted for cash to Corporate Officers that meet the Beneficiaries requirements, the Trust will end before the trust period expires.  Furthermore, the Company may entrust additional money to the Trust acquire additional Company shares or trust compensation and to meet Trust expenses.

(1) Outline of the System
After extension, the System allows the Company to annually make Distributions, etc. of the Company’s Shares, etc. to the Corporate Officers as compensation in accordance with the degree of attainment of Company-wide performance objectives set each fiscal year.  The term of the System is for three years from the fiscal year ending on the last day of March 2020 and continuing to the fiscal year ending on the last day of March 2022.

(2) Resolution by the Compensation Committee and Resolution of the Board of Directors relating to the continuation of the System 
Since the Company has adopted a Company with a Nomination Committee, etc. system, the compensation of Directors and Officers is determined through the Compensation Committee. Therefore, for the continuation of the System, the Compensation Committee adopted a resolution to extend the Trust, and, thereafter, the Board of Directors also adopted the necessary resolutions to determine the amount of money to be contributed to the Trust, the number of shares to be acquired by the Trust, and other necessary matters.

(3) Subjects of the System (Beneficiary Requirements)
The subjects of the System are the Corporate Officers of the Company, and by completing the prescribed procedures to confirm their status as Beneficiaries, they are eligible to receive the Company’s Shares, etc. each July during the Trust Period on the condition that the following Beneficiary requirements have been met:

(4) Post-extension Trust Period 
After extension, the Trust Period that will be subject to the System will be three years, from August 1, 2019 (scheduled) to the end of July 2022 (scheduled). 
At the end of the Trust Period, the System can be continued by extending the Trust Period and adding trusts, in accordance with a resolution of the Company's Compensation Committee and Board of Directors.
Further, in the case of adding trusts, any of the Company's shares (excluding shares scheduled to be allotted to Corporate Officers, which have not yet been completely allotted; hereinafter "Residual Shares") and money (hereinafter "Residual Money") remaining in the Trust assets on the final day of the Trust Period prior to extension (such shares and money hereinafter referred to collectively as "Residual Shares, etc.") shall be succeeded by the BIP Trust that is extended.

(5) Number of shares to be distributed to the Corporate Officers (including the number of shares subject to conversion to cash)
The number of shares to be distributed to the Corporate Officers (including the number of shares subject to conversion to cash) is to be determined by the Compensation Committee based on the attainment of Company-wide performance objectives for each fiscal year, ending at the end of March, during the Trust Period, in accordance with the following formula:

(Formula) Number of shares distributed (per year)
Number of shares distributed (per year) = Base number of shares distributed by position (A) x Degree of attainment of Company-wide performance objectives (B)

(A) “Base number of shares distributed by position” shall be calculated by dividing 10% of the total compensation for the particular Corporate Officer’s position as determined by the Compensation Committee by the higher of (i) the average closing price for normal transactions (hereinafter the “Closing Price”) of the Company’s shares on the Tokyo Stock Exchange on each day (except for days on which there were no transactions) belonging to the month of the additional entrustment date of the year the system is extended (May 30, 2019 (scheduled)) (rounded down to the nearest yen), or (ii) the Closing Price on the day of the additional entrustment of the year the System is extended (if there is no Closing Price on such day, the Closing Price on the most recent prior transaction date).

(B) “Degree of attainment of Company-wide performance objectives” shall be evaluated and calculated by the Compensation Committee by looking at the total amount of evaluation points calculated based on the achievement of the Company’s consolidated sales revenue, consolidated operating profit, consolidated profit for the year (attributable to the parent company), and consolidated return on equity (consolidated ROE) each fiscal year.  As a result, the number of shares to be distributed will be determined within the range of 0-150% of the “Base number of shares distributed by position”.

(6) Amount of trust money to be additionally entrusted to the Trust and the number of shares to be additionally acquired by the Trust 
The amount of trust money to be additionally entrusted to the Trust and the number of shares to be additionally acquired by the Trust shall be calculated as follows.

The amount of money to be additionally entrusted to the Trust will be calculated taking into consideration the amount of compensation of the Corporate Officers as well as the Trust compensation and Trust expenses.
The number of shares to be additionally acquired shall be set to the level required for distributions in the event of the highest attainment of Company-wide performance objectives, with reference to the present stock price level and the present composition of the Corporate Officers.

(7) The method of acquiring the Company's shares through the Trust
After extension, the acquisition of the Company's shares by the Trust is scheduled to be conducted by way of the disposal of the Company’s treasury stock, in accordance with the number of additionally acquired shares and amount of money for the share acquisitions stipulated in item (6) above.

(8) The method and period of the Distribution, etc. of the Company's Shares, etc. to the Corporate Officers
“Distribution, etc. of the Company’s Shares, etc.” means to receive the distribution of shares from the Trust for half the number of the Company’s shares distributed to the Corporate Officers (provided that shares representing less than one unit will be converted within the Trust and the payment of the monetary amount equivalent to such shares converted to cash will be received), and, for the remaining half the number of the Company’s shares, to receive payment of the monetary amount equivalent to the shares converted to cash after they are converted within the Trust.
Corporate Officers who fulfill the Beneficiary Requirements shall receive the Distribution, etc. of the Company’s Shares, etc. in July of every year during the Trust Period.  Furthermore, it is provided that the Corporate Officers of the Company cannot sell or purchase the Company’s shares during their term of office and until one year passes after leaving office.  They will continue to hold the Company’s shares they receive by distribution through the System during their term of office and until one year passes after leaving office.
If a Corporate Officer dies during the Trust Period, in principle, with respect to the number of all of the Company’s shares for which the Distribution, etc. was determined at such time, the heirs of such Corporate Officer shall receive payment from the Trust of the monetary amount equivalent to the shares converted to cash after they are converted within the Trust.

(9) Exercise of voting rights with regard to the Company's shares within the Trust
In order to ensure the neutrality of the Trust’s management, the voting rights of the Company's shares in the Trust are not to be exercised during the Trust Period.

(10) Handling of the dividends relating to the Company's shares within the Trust 
The dividends for the Company’s shares in the Trust shall be received by the Trust, and shall be allocated towards the Trust compensation and Trust expenses.

(11) Handling of the Trust at its expiration
If there are any Residual Shares at the expiration of the Trust Period due to Company-wide performance objectives not being attained during the Trust Period or for other reasons, the Trust will continue to be used as the System or an incentive plan similar thereto by extending the trust agreement and making additional trusts.  If the Trust will end due to the expiration of the Trust Period, as a means for sharing and boosting the earnings per share for the shareholders, a gratis transfer of such Residual Shares shall be conducted from the Trust to the Company and the Company is scheduled to cancel the Residual Shares in accordance with a resolution of the Board of Directors. 
Furthermore, the balance of the dividends related to the Company's shares within the Trust that exist at the expiration of the Trust Period will be utilized as share acquisition funds if the Trust will continue to be used, but if the Trust will be terminated due to the expiration of the Trust Period, the amount that exceeds the Trust expense reserves are expected to be donated to organizations which have no conflict of interest with the Company or the Company’s Directors or Corporate Officers.

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