Avant : Notice of Transition to Company with Audit Committee and Partial Amendments to Articles of Incorporation

PRESS RELEASE

August 17, 2022

AVANT Corporation

Notice of Transition to A Company with Audit Committee and Partial

Amendments to Articles of Incorporation

The Company hereby announces that our Board of Directors has resolved at a meeting on August 17, 2022 to adopt the "Company with Audit Committee" subject to approval at the 26th Ordinary General Meeting of Shareholders to be held on September 27, 2022, and to submit a proposal for "Partial Amendment to the Articles of Incorporation" to the same Ordinary General Meeting of Shareholders.

Note

Transition to a Company with an Audit Committee

(1) Purpose of transition

Our group's vision is to "create a world-class software company," aiming to become an ideal organization that serves society by promoting management information systems useful for the sound development of companies, and we have established materiality to achieve this goal. After discussions by the Group's strategy executive team and discussions by the Board of Directors regarding specific measures to realize this materiality, it was concluded that it would be effective to reorganize the Group into a separate organization to accelerate the growth of existing businesses and create new growth businesses, and on June 22, 2022, the Company On June 22, 2022, the Group reorganized as a holding company, Avant Group Corporation (the "Company." The trade name is scheduled to be changed on October 1, 2022.), the Group will be reorganized into a structure consisting of four operating companies that support the resolution of social issues.

Taking this reorganization as an opportunity, we have come to the conclusion that it is appropriate to transition to a company with an Audit Committee System in order to realize prompt and decisive management decision-making and execution under the appropriate supervision of the Board of Directors by enabling the Board of Directors to broadly delegate its authority to make business execution decisions to the directors.

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(2) Transition period

At the 26th Ordinary General Meeting of Shareholders scheduled to be held on September 27, 2022, the necessary changes to the Articles of Incorporation will be approved, and the Company will transition to a company with an Audit Committee.

(3) Others

The personnel changes of directors and corporate auditors in connection with this matter were separately disclosed in the "Notice of Personnel Changes of Directors and Corporate Auditors after Transition to a Company with Audit Committee" dated August 17, 2022.

Partial Amendment to the Articles of Incorporation of the Company

1. Reason for amendment to the Articles of Incorporation
2. 1. To reorganize the operations in charge among group companies through an absorption- type company split agreement between consolidated subsidiaries of the Company and to change the trade names of each company, the current Article 1 (Trade Name) of the Articles of Incorporation shall be amended to change the trade name of the Company, which is in charge of management and administration of group companies.
   2. As described in "1. Transition to a Company with Audit Committee" above, necessary changes will be made in accordance with the transition to a Company with Audit Committee, including the establishment of new provisions concerning the Audit Committee and Audit Committee members and the deletion of provisions concerning the Audit and Supervisory Board and Corporate Auditors.
   3. The revised provisions stipulated in the proviso of Article 1 of the Supplementary Provisions of the "Companies Act" (Act No. 70 of 2019) will come into effect on September 1 of this year. The law is entitled "Partial Amendment to the Companies Act. And the provisions to take measures to provide information electronically and to limit the scope of matters to be included in the documents to be delivered to shareholders who have made a request for delivery of documents shall be limited. Such information is the contents of the reference documents for the general meeting of shareholders, etc. A provision for this purpose shall be newly established. The provision of provision shall be deleted. Such deletion shall be deemed as Internet disclosure of the Reference Documents for the General Meeting of Shareholders, etc. In addition, a supplemental provision regarding transitional measures is to be established.
   4. In accordance with the changes in (i) through (iii) above, necessary changes, such as the maintenance of the number of articles, etc., are made.

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1. Details of the amendment to the Articles of Incorporation The details of the changes are shown in the Appendix.
2. Schedule

Annual General Meeting of Shareholders September 27, 2022 (tentative)

Effective date of the partial amendment to the Articles of Incorporation: September 27, 2022 (scheduled)

However, the change in Article 1 (trade name) will become effective on October 1, 2022.

Ends

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(Attachment) Details of Amendments to the Articles of Incorporation

								(Underlined parts indicate changes.)
Current Articles of Incorporation				Proposed change
Chapter 1 General Provisions			Chapter 1 General Provisions
(Trade name)						(Trade name)
Article 1 The name of the Company shall be	Article 1 The name of the Company shall be
known	as 株 式 会 社 ア バ ン ト and	in	known as 株式会社アバントグループand
English	as AVANT	CORPORATION.	in English as AVANT GROUP
							CORPORATION.
Articles 2 to 4 (Articles omitted)			Article 2 - Article 4 (unchanged)
Chapter	3	General	Meeting	of	Chapter	3	General	Meeting	of
Shareholders						Shareholders
Article 11 - Article 12 (Articles omitted)		Article 11 - Article 12 (unchanged)
(Internet Disclosure and Deemed Provision of
Reference Documents for the General Meeting
of Shareholders, etc.)
Article 13 The Company may, in connection	(Deleted)
with the convocation of a general
meeting of shareholders, be deemed
to have provided to its shareholders
information concerning matters to be
stated or indicated in the reference
documents for the general meeting of
shareholders,	business	report,
financial statements and consolidated
financial statements, by	disclosing
such information by means of the
Internet in accordance with the
applicable Ordinance of the Ministry
of Justice.

(Electronic provisioning measures, etc.)

(Newly established)Article 13 The Company shall, at the time of convening a general meeting of shareholders, take measures to provide electronically the information that is the contents of the reference documents for the general meeting of

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		shareholders, etc.
(Newly established)		2 The Company may not include all or
		part of the matters for which
		electronic	provision measures are
		taken, which are provided for in the
		applicable Ordinance of the Ministry
		of Justice, in the document to be
		delivered to shareholders who have
		made a request for delivery of
		documents by the Record Date for
		Voting Rights.
Article 14 - Article 15 (Articles omitted)		Article 14 - Article 15 (unchanged)
Chapter 4 Directors and Board of		Chapter 4 Directors and Board of
Directors		Directors
Article 16 (Articles omitted)		Article 16 (unchanged)
(Number of directors)		(Number of directors)
Article 17 The Company shall have no more		Article 17 The Company shall have no more
than nine directors.		than nine directors.
		2 Of the directors set forth in the
(Newly established)		preceding paragraph, the number of
		such directors who are members of
		the Audit and Supervisory Committee
		shall not exceed five.
(Method of Election of Directors)		(Method of Election of Directors)
Article 18 Directors of the Company shall be		Article 18 Directors of the Company,
elected by a resolution of a majority		distinguishing between those who are
of the voting rights of the		members of the Audit Committee and
shareholders present at a general		those who are not, shall be elected by
meeting of shareholders where the		a majority of the votes of
shareholders holding one-third or		shareholders present at a general
more of the voting rights of		meeting	of shareholders where
shareholders entitled to exercise their		shareholders holding one-third or
voting rights are present.		more of the voting rights of
No cumulative voting shall be used		shareholders entitled to exercise their
for the election of directors.		voting rights are present.
		No cumulative voting shall be used
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