Nifco : Notice of Convocation Annual General Meeting 2020

Securities Code: 7988

3rd June, 2020

To our shareholders

5-3 Hikarinooka, Yokosuka-shi, Kanagawa

Nifco Inc.

Toshiyuki Yamamoto, President & Representative Director

NOTICE OF THE 68th ANNUAL GENERAL MEETING OF SHAREHOLDERS

We would like to announce that the 68th Annual General Meeting of Shareholders will be held as stated below.

Due to the recent novel coronavirus outbreak, the national government and prefectural governors have urged people to stay home in order to prevent the spread of the virus. In light of these circumstances and after careful consideration, we have decided to implement thorough infection-control measures at the upcoming General Meeting of Shareholders.

Since people are strongly encouraged not to go outside and in order to prevent the spread of infection, we strongly urge you to, if possible, exercise your voting rights either by mail or online prior to the General Meeting of Shareholders and refrain from attending the meeting in person regardless of your health condition.

Anyone who is not well (has flu-like symptoms, fatigue, shortness of breath or difficulty breathing, and/or a fever) on the day of the meeting will be refused entry into the venue.

Please exercise your voting rights using either of the following methods after reviewing the attached Reference Documents.

[Exercising Voting Rights by Mail]

Please indicate your vote for or against the resolutions on the enclosed proxy form which should be returned to the company to reach us no later than 5:30 p.m. on June 17, 2020.

[Exercising Voting Rights Online]

To exercise your voting rights online, please either scan the login QR code or access the Company's designated voting website (https://soukai.mizuho-tb.co.jp/). You can input your vote for or against the resolutions by following the on-screen guidance. Please be sure to vote by no later than 5:30 p.m. on June 17, 2020.

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If you exercise your voting rights online, please confirm "Instructions for voting online" on page 4.

If there is no indication of approval or disapproval for particular resolutions, the shareholder will be construed as having approved the resolution in question.

-----------------------------------------------------		Details of the Meeting	----------------------------------------------------
1	Date and Time:	10 a.m. on Thursday, June 18, 2020 (doors open at 9:30 a.m.)
2	Location:	Mita NN Hall, B1 floor (1st basement), Mita NN Building, 4-1-23 Shiba, Minato-
		ku, Tokyo
	This year there will be a lot fewer seats than usual and greater space between seats in order to prevent the
	spread of infection. Please note that you may be refused admission to the venue upon arrival due to
	limited seat availability.
2	Location:	Mita NN Hall, B1 floor (1st basement), Mita NN Building, 4-1-23 Shiba, Minato-
		ku, Tokyo
3	Agenda:	Reports:	1. The business report (1st April, 2019 - 31st March, 2020),
			and the consolidated accounts together with the report of
			the Statutory Auditors and the Public Accountants thereon.
			2. The accounts (1st April, 2019 - 31st March, 2020)
		Resolutions:	Resolution 1	Appropriation of retained earnings
			Resolution 2	Election of seven candidates as Director
			Resolution 3	Election of one candidate as Statutory
				Auditor to fill vacancy
4	How to exercise	Please see "How to Exercise Your Voting Rights" on page 3.
	your voting rights

• If you attend the Annual General Meeting of Shareholders, please present the enclosed voting form to the receptionist at the meeting.
• Also, should there be any amendments to the Reference Documents, the business report, the accounts, or the consolidated accounts, they will be published on the Company's website.

Company's website (https://www.nifco.com/)

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How to exercise your voting rights

Your ability to vote at the Annual General Meeting of Shareholders is an important right. Please read the attached Reference Documents before exercising your voting rights. You can use one of the following three methods to exercise your voting rights.

	Online		By mail
	Follow the instructions on the next		Fill out the enclosed proxy form to
	page to vote on each resolution.		vote on each resolution and return it
			by mail.
	Exercise your voting rights by		Exercise your voting rights by
	Wednesday, 17th June, 2020		Wednesday, 17th June, 2020
	5:30 p.m. (Online voting must		5:30 p.m. (The form must be
	be completed by this time.)		returned by this time.)

In person

Submit the enclosed proxy form at the reception desk when attending the meeting.

Date and Time:

Thursday, 18th June, 2020

10:00 a.m.

(Doors open at 9:30 a.m.)

How to fill out the proxy form

	Indicate your votes here.
	Resolution 2
	 If you are voting for
	the					Enter a circle in the "For"
	appointment/reappoi	>>
	ntment	of	all		box
	candidates
	 If you are voting
	against		the		Enter	a	circle	in	the
	appointment/reappoi	>>
	"Against" box
	ntment	of	all
	candidates
	 If you are voting		Enter a circle in the box for
	against		the		"For" and write the
	appointment/reappoi	>>	number(s) associated with
	ntment of some of the		the candidate(s)	you	are
	candidates					voting against.
* The above image is for illustration purposes only. The actual form may vary.	Resolutions	1 and 3
	 If you are voting for	>>	Enter a circle in the "For"
	the resolution				box
	 If you are voting	>>	Enter	a	circle	in	the
	against the resolution	"Against" box

If you exercise your voting rights both by mail and online, only the votes cast online will be considered valid. If you exercise your voting rights online more than once, only your last vote will be counted.

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Instructions for voting online

Scanning your login QR code

(Smart Vote)

You can log in to the Voting Website without entering your voting rights exercise code and password.

• Scan the QR code shown at the right bottom corner of the proxy form.

* QR code is a registered trademark of Denso Wave Incorporated.

• Follow the on-screen instructions to cast your votes.

When using Smart Vote, you can exercise your voting rights only

once.

If you wish to change your vote after excising your voting rights, access the PC site, log in using the voting rights exercise code and passwordshown on the proxy form, and vote again.

* You can access the PC site by scanning the QR code again.

Entering your voting rights exercise code

and password

Voting Website

https://soukai.mizuho-tb.co.jp/

• Access
  the Voting Website.

Click "Proceed"

• Enter the voting rights exercise code shown on the proxy form.

Enter the voting rights exercise code

Click "Next"

• Enter the password shown on the proxy form.

Enter the initial password

Set a new password for yourself

Click "Register"

• Follow the on-screen instructions to cast your votes.
  * The above images are for illustration purposes only. Actual screens may vary.

If you have any questions about how to operate a PC, smartphone, or cell phone when voting online, please contact:

Internet Help Dial, Stock Transfer Agency Department,

Mizuho Trust & Banking Co., Ltd.

0120-768-524

(Hours: 9:00 a.m. - 9:00 p.m. on weekdays)

Institutional investors may use the Electronic Voting Platform for institutional investors operated by ICJ, Inc.

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Reference Documents for the General Meeting of Shareholders

Resolution 1	Appropriation of retained earnings

Retained earnings will be appropriated as described below.

Matters concerning year-end dividend

With respect to the year-end dividend for the 68th fiscal year, the Company hereby proposes the following in consideration of the operating results for the year under review and future business development.

Form of dividend	Cash

Matters concerning allocation of dividend and total amount thereof

We propose to pay 31 yen per share as the year-end ordinary dividend (an ordinary dividend of 31 yen).

Total dividend will be 3,179,007,778 yen.

This will bring the annual dividend to 62 yen per share, including the interim dividend.

	Effective date of dividends		19th June, 2020

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Resolution 2	Election of seven candidates as Director

The terms of office of the current six Directors will expire at the close of this General Meeting of Shareholders. We propose the re-election of Toshiyuki Yamamoto, Masaharu Shibao, Fukuo Iwasaki, Toshiki Yauchi, Keiji Tachikawa, and Yoshiko Nonogaki and the election of Brian K. Heywood.

Accordingly, we propose the election of seven candidates for Director. The candidates for Director are as follows.

No.	Name	Position at the Company

• Toshiyuki Yamamoto

President & Representative Director, CEO	Reappoint-
& COO
ment

• Masaharu Shibao

Director, Senior Executive Managing

OfficerReappoint-

CMOment

• Fukuo Iwasaki

Director, Senior Executive Managing	Reappoint-
Officer
ment

• Toshiki Yauchi

Director, Senior Executive Managing	Reappoint-
Officer
ment

• Keiji Tachikawa

Director	Reappoint-		External		Independ-
ment			ent

• Yoshiko Nonogaki

Director	Reappoint-		External		Independ-
ment			ent

• Brian K. Heywood

Director	New				Independ-
appoint-		External
		ent
	ment

New

Independent

Director

Reappoint-

Reappointed Director

External

Director

Independ-

pursuant

to

the

appoint-

New Director candidate

External

ment

candidate

candidate

ent

regulations of the stock

ment

exchange

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No.

• Toshiyuki Yamamoto

(11th October,

1949)

Number of shares of the Company held

(Number of the Company's shares to be granted based on the share-based compensation plan)

Number of years of service

Number of Board of Directors meetings attended

29,656

(18,456)

8

13 out of 13

[Career summary, position and assignment at the Company]

Reappoint-

ment

April 1973	Joined the Company			June 2012
January 1995	Head of Sagamihara Plant of the	June 2016
	Company
June 2002	Executive	Officer	of	the
	Company				June 2017
April 2008	Executive	Officer	of	the
	Company
	President	of Nifco	America
	Corp.

President & Representative

Director, COO of the Company

Chairman, President & Representative Director, CEO & COO of the Company President & Representative Director, CEO & COO of the Company (to present)

[Significant concurrent positions] None

Reasons for proposing the candidate for Director

Mr. Yamamoto is once again proposed as a candidate for Director due to his ability to execute business strategies with strong leadership in a timely and appropriate manner, as well as his broad experience of global management gained as the President & Representative Director of the Company from 2012, after obtaining experience as the Head of majordomestic plants and the President of the Company's overseas subsidiary.

No.

2

Masaharu Shibao	(14th December,
1961)

Number of shares of the Company held

(Number of the Company's shares to be granted based on the share-based compensation plan)

Number of years of service

Number of Board of Directors meetings attended

14,769

(10,169)

4

13 out of 13

[Career summary, position and assignment at the Company]

Reappoint-

ment

April 1985	Joined the Company			January 2018
April 2010	President of Nifco Deutschland
	GMBH
June 2015	Executive	Officer	of	the
	Company,	President	of	Nifco	June 2018
	America Corp.
June 2016	Director	and	Executive
	Managing Officer, CMO, Head
	of Sales of the Company
April 2017	Director	and	Executive	June 2019
	Managing Officer, CMO, Head
	of Sales,	Divisional	General
	Manager	of FCS	Business
	Control	Division	of	the
	Company

Director and Executive Managing Officer, CMO, Head of Sales, In charge of Platform Business Division of the Company

Director and Executive Managing Officer, CMO, Head of Sales, In charge of Technology & Platform Business Division (Sales) of the Company Director and Senior Executive Managing Officer, CMO, Head of Sales, In charge of Technology & Platform Business Division of the Company (to present)

[Significant concurrent positions] None

Reasons for proposing the candidate for Director

Mr. Shibao is once again proposed as a candidate for Director due to his global and diverse experience, insights and expertise cultivated through his long career in sales and as the President of the Company's subsidiaries in Europe and theU.S.

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No.

• Fukuo Iwasaki

	Number of shares of the Company
	held
	(Number of the Company's shares to
(26th October 1957)	be granted based on the share-based
compensation plan)
	Number of years of service
	Number of Board of Directors
	meetings attended

25,257

(10,257)

4

13 out of 13

[Career summary, position and assignment at the Company]

Reappoint-

ment

April 1980	Joined the Company		June 2016
April 2010	Executive	Officer,	Head of
	Nagoya Plant of the Company	June 2018
April 2013	Executive Officer, Deputy Head
	of Global Sales & Manufacturing
	Division of the Company
June 2014	Executive	Managing	Officer,
	Head of Manufacturing of the
	Company

Director and Executive Managing Officer, Head of Manufacturing of the Company Director and Senior Executive Managing Officer, Head of Manufacturing, In charge of Quality Assurance & Purchasing of the Company (to present)

No.

4

[Significant concurrent positions] None

Reasons for proposing the candidate for Director

Mr. Iwasaki is once again proposed as a candidate for Director due to his global and diverse experience, insights and expertise cultivated through his long career mainly in manufacturing functions such as in the position of the Head of major domestic plants and the Deputy Head of the Global Sales & Manufacturing Division, under which he is responsible

for the production structure across the Group, including overseas bases.

		Number of shares of the Company	9,319
		held
Toshiki Yauchi	(16th July 1961)	(Number of the Company's shares to
compensation plan)
		be granted based on the share-based	(7,619)
		Number of years of service	2
		Number of Board of Directors	13 out of 13
		meetings attended

[Career summary, position and assignment at the Company]

Reappoint-

ment

April 1985 July 2007

June 2015

June 2018

Joined the Company

Divisional General Manager of Corporate Strategy Division of the Company

Executive Officer, Divisional General Manager of Corporate Strategy Division of the Company

Director and Executive Managing Officer, Divisional General Manager of Corporate Strategy Division, In charge of Administration & Finance of the Company

June 2019

April 2020

Director and Senior Executive Managing Officer, Divisional General Manager of Corporate Strategy Division, In charge of Administration & Finance of the Company

Director and Senior Executive Managing Officer, Divisional General Manager of Corporate Strategy Division, Head of

Administration, Chief Information Officer (CIO) In charge of Finance of the Company (to present)

[Significant concurrent positions] None

Reasons for proposing the candidate for Director

Mr. Yauchi is once again proposed as a candidate for Director due to his diverse experience, insights and expertise cultivated through his long career mainly in corporate strategy, and developing management strategies as the DivisionalGeneral Manager of the Corporate Strategy Division and being in charge of overall IR activities of the Company.

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No.

• Keiji Tachikawa

	Number of shares of the Company
	held
	(Number of the Company's shares to
(27th May 1939)	be granted based on the share-based
compensation plan)
	Number of years of service
	Number of Board of Directors
	meetings attended

- shares

(- shares)

5

12 out of 13

Reappoint-

ment

External

Independent

No.

6

[Career summary, position and assignment at the Company]
April 1962	Joined Nippon Telegraph	and	November 2004	President	of Japan	Aerospace
	Telephone Public Corporation		Exploration Agency (JAXA)
June 1998	President & CEO of NTT Mobile	March 2013	Retired from President of Japan
	Communications Network, Inc.		Aerospace	Exploration Agency
	(current NTT DOCOMO, Inc.)		(JAXA)
June 2004	Corporate Advisor of	NTT	June 2015	External	Director	of the
	DOCOMO, Inc.			Company (to present)

[Significant concurrent positions] None

Reasons for proposing the candidate for Director

Mr. Tachikawa is once again proposed as a candidate for External Director because he contributes to the enhancement of the Company's corporate governance as External Director based on the experience and insight in corporatemanagement he gained serving as the top management of large corporations.

		Number of shares of the Company	- shares
		held
Yoshiko Nonogaki	(31st July 1957)	(Number of the Company's shares to
compensation plan)
		be granted based on the share-based	(- shares)
		Number of years of service	1
		Number of Board of Directors	10 out of 10
		meetings attended

Reappoint-

ment

External

Independent

[Career summary, position and assignment at the Company]
April 1980	Joined Sony Corporation	April 2013	Director	of Global	Diversity,
September 1992	President	&	Representative		Personnel	HQ	of	Sony
	Director of Sony Poland		Corporation
April 2009	Manager	of	Planning &	June 2015	External Director of Jolly-Pasta
	Marketing Department, Business		Co., Ltd. (to present)
	& Professional Enterprise HQ of	June 2019	External	Director	of	the
	Sony Corporation			Company (to present)

[Significant concurrent positions] External Director of Jolly-PastaCo., Ltd.

Reasons for proposing the candidate for Director

Ms. Nonogaki is once again proposed as a candidate for External Director because she contributes to the enhancement of the Company's risk management and corporate governance using her broad experience in the marketing field cultivatedthrough her career in a large corporation.

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No.

• Brian K. Heywood

	Number of shares of the Company
	held
	(Number of the Company's shares to
(9th January 1967)	be granted based on the share-based
compensation plan)
	Number of years of service
	Number of Board of Directors
	meetings attended

- shares

(- shares)

-

-

New

appointment

External

Independent

[Career summary, position and assignment at the Company]
September 1991	Joined	J.D.	Power	and	December 2009	External	Director	of Ohizumi
	Associates					Mfg. Co., Ltd.
September 1997	Belron International Director		November 2011	Director	of SEIRYU	Asset
August 1999	Vice President, Citibank, N.A.		Management Ltd.
January 2001	Managing Partner and CEO of	March 2014	External	Director	of	Roland
	Taiyo Pacific Partners, L.P. (to		Corporation (to present)
	present)				March 2020	External Director of Roland DG
						Corporation (to present)

[Significant concurrent positions]

Managing Partner and CEO of Taiyo Pacific Partners, L.P. External Director of Roland Corporation

External Director of Roland DG Corporation

Reasons for proposing the candidate for Director

Mr. Heywood is proposed as a candidate for External Director because he has extensive experience and knowledge as a corporate management and investment expert, and the Company expects him to leverage his expertise in corporatemanagement and perspective as a shareholder/investor with an eye to enhancing its corporate value.

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(Notes) 1. Brian K. Heywood is a candidate as new Director.

1. There are no special interests between each candidate and the Company.
2. Keiji Tachikawa, Yoshiko Nonogaki, and Brian K. Heywood are candidates as External Directors.
3. The Company designated and filed Keiji Tachikawa and Yoshiko Nonogaki as independent officers pursuant to the regulations of Tokyo Stock Exchange, Inc. If this Resolution is passed and their re-election is approved, they will continue to be independent officers. Brian K. Heywood satisfies the requirements for an independent officer pursuant to the regulations of Tokyo Stock Exchange, Inc. The Company plans to designate and file him as an independent officer with the said Stock Exchange.
4. Keiji Tachikawa will have served as External Director for five years at the close of this General Meeting of Shareholders. Yoshiko Nonogaki will have served as External Director for one year at the close of this General Meeting of Shareholders.
5. The Company has concluded an agreement with Keiji Tachikawa and Yoshiko Nonogaki to limit their liabilities for damages referred to in Article 423 (1) of the Companies Act pursuant to the provision of the Articles of Incorporation. The limit of liabilities for damages under this agreement is the greater of either 20 million yen or the minimum total liability stipulated by laws and regulations. The Company plans to extend the aforementioned limited liability agreement if they are reappointed. In addition, if Brian K. Heywood is appointed, the Company plans to conclude an agreement with him to limit his liabilities for damages referred to in Article 423 (1) of the Companies Act pursuant to the provision of the Articles of Incorporation. The limit of liabilities for damages under this agreement is the greater of either 20 million yen or the minimum total liability stipulated by laws and regulations.
6. The number of shares of the Company held by each candidate includes the number of the Company's shares to be granted based on the share-based compensation plan (as of June 1, 2020).
   [Particulars of the Company's shares to be granted based on the share-based compensation plan]
   The Company introduced a performance-linkedshare-based compensation plan (hereinafter, referred to as the "Plan"), which grants the Company's shares to Company Directors (excluding External Directors and those who live abroad; hereinafter, the same shall apply) in FY2016. The Company's shares to be granted to each candidate based on the Plan shall consist of (a) the portion that is not linked to business performance and (b) the portion that is linked to business performance achieved over a certain time period. The number of shares to be granted to each candidate based on the Plan provided in this document only refers to the number of points granted based on the business performance which has become finalized at the moment. Specifically, the number of the Company's shares to be granted shows the total number of (a) points for the non-performance-linked compensation granted on or before June 1, 2020 and (b) points for the performance-linked compensation granted on June 1, 2019. The voting rights pertaining to the Company's shares to be granted based on the Plan shall not be exercised until the granting of the Company's shares to each candidate in the future. The Company's shares corresponding to 30% of the said shares to be granted will be sold on the market and proceeds from the sale of such shares will be granted to each candidate to secure funds for tax payment purposes.

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Resolution 3	Election of one candidate as Statutory Auditor to fill vacancy

To prepare for a contingency in which the Company does not have the number of Statutory Auditors required by laws and regulations, the Company proposes to elect one candidate as Statutory Auditor to fill a vacancy.

The Board of Statutory Auditors' consent has been obtained for this Resolution.

The candidate for Statutory Auditor to fill a vacancy is as follows and is proposed to fill a vacancy for any one of the Statutory Auditors. The term of office of a Statutory Auditor assumed by a Statutory Auditor to fill a vacancy shall be the remaining term of office of the retiring Statutory Auditor.

Masakazu Wakabayashi

(30th January 1963)	Number of shares of the Company	- shares
held

[Career summary]
October 1988	Joined	Century	Audit	May 2008	Representative	Partner	of
	Corporation			Yasumori Audit Corporation (to
December 1997	Partner	of Century	Audit		present)
	Corporation
April 2007	Joined	Yasumori	Audit
	Corporation

[Significant concurrent positions] None

Reasons for proposing the candidate for Director

Mr. Wakabayashi is proposed as candidate for External Statutory Auditor to fill a vacancy because he has extensive insights required to audit corporate management as a Certified Public Accountant, and the Company expects him to use his broad knowledge and experience for the Company's audit structure if he is appointed, even though he has never beendirectly involved in corporate management.

(Notes) 1. Masakazu Wakabayashi is a candidate for External Statutory Auditor to fill a vacancy. If the candidate becomes Statutory Auditor, the Company will designate and file him as an independent officer pursuant to the regulations of Tokyo Stock Exchange, Inc.

2. The Company has concluded an agreement with External Statutory Auditors to limit their respective liabilities for damages referred to in Article 423 (1) of the Companies Act pursuant to the provision of the Articles of Incorporation. The limit of liabilities for damages based on this agreement is the greater of either 10 million yen or the minimum total liability stipulated by laws and regulations.

The Company also plans to conclude a limited liability agreement with Masakazu Wakabayashi as an External Statutory Auditor if he is elected as a Statutory Auditor.

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