PROXY PAPER™ GUIDELINES - Glass Lewis

1 2018 PROXY paper GUIDELINESAN OVERVIEW OF THE Glass Lewis APPROACH TO PROXY ADVICEJAPAN IGUIDELINES INTRODUCTION ( ) ..1 Summary of Changes for the 2018 Japan Policy GUIDELINES (2018 ..1A GOVERNANCE STRUCTURE THAT SERVES SHAREHOLDER INTEREST( ..2 Election of Board of Directors and Statutory Auditors ( ..2 Board Independence ( ..2 ..3No Independence Exceptions for Controlled Companies ( ..3 Director and Statutory Auditor Performance ( ..3 ..4 ..4 Director and Statutory Auditor Attendance ( ..4 Experience ( ..4 ..5 Board Commitments ( ..5 ..5 Conflicts of Interest (.))))))))))

2 5 Board Size ( ..6 Declassified Boards ( ..6 Board Composition and Refreshment ( ..6 Gender Diversity on Boards ( ..7 Separation of the Roles of Chair and CEO ( CEO ..7 Board Committees: Applies to One-Tier Board with Three Committees and One-Tier Board with One Committee ( ..7 Audit Committee Independence ( ..7 Compensation Committee Performance( ..8 Nominating Committee Performance ( ..8 Accounts and Reports/Consolidated Accounts and Reports ( ..9 Allocation of Profits/Dividends ( ..9 Appointment of Auditor and Authority to Set Fees ( ..9 ..9 Table of ContentsIITRANSPARENCY AND INTEGRITY IN FINANCIAL REPORTING (.)))))))))))))

3 10 Director and Statutory Auditor Compensation ( ..10 Bonuses ( ..10 Retirement Bonuses ( ..10 Equity-Based Compensation Plans ( ..10 THE LINK BETWEEN COMPENSATION AND PERFORMANCE ( ..11 FINANCIAL STRUCTURE AND THE SHAREHOLDER FRANCHISE ( ..12 Glass Lewis ' Approach on Takeover Defense Plans ( ..12 Adoption, Renewal and Revocation of a Takeover Defense Plan ( ..12 Trigger Threshold ( ..13 Board Independence ( ..13 Independent Third Party Oversight ( ..13 Information Disclosure Requirement ( ..13 Consideration Period ( ..14 Exceptions Clause ( ..14 Provision of Monetary Compensation to the Bidder (.)))))))))))))))

4 14 Excessive Cross-Shareholding ( ..14 Amendments to the Articles of Incorporation ( ..15 Authority to Approve Dividends ( ..15 Supermajority Vote Requirements ( ..15 Board Independence ( ..15 Reduction of Quorum Requirement ( ..15 Increase in Authorized Shares ( ..15 Limit Liability of DIrectors and Statutory Auditors ( ..16 Capital Structure( ..16 Authority to Trade In Company Stock ( ..16 Sale of Broken Lots of Shares ( ..16 Authority to Reduce Capital or Earned Reserve ( ..16 SHAREHOLDER INITIATIVES AND SUSTAINABLE BUSINESS PRACTICES( ..171 SUMMARY OF CHANGES FOR THE 2018 JAPAN POLICY GUIDELINES (2018 2018 BOARD COMMITMENTS POLICY ( 2018 1 BOARD GENDER DIVERSITY ( 2018 2018 1 2019 TOPIXCore30 TOPIX Large70 1))))))))))))))))

5 TAKEOVER DEFENSE PLAN ( AUTHORITY TO DETERMINE DIVIDENDS ( 2018 GUIDELINES Introduction( 2 ELECTION OF BOARD OF DIRECTORS AND STATUTORY AUDITORS ( BOARD INDEPENDENCE ( 10% 1)))))

6 10 10 1 A Governance Structure that Serves Shareholder Interest( 3 5 12 1% 1% 3 1 3 1)

7 20 3 1 3 1 NO INDEPENDENCE EXCEPTIONS FOR CONTROLLED COMPANIES ( DIRECTOR AND STATUTORY AUDITOR PERFORMANCE ( 4))

8 DIRECTOR AND STATUTORY AUDITOR ATTENDANCE ( 75 2 EXPERIENCE ( 1 2 5 BOARD COMMITMENTS ()))

9 CEO 1 CONFLICTS OF INTEREST ( 3 3 12 3 6 4 BOARD SIZE ( 20 5 20 5 DECLASSIFIED BOARDS ()))