On January 10, 2023, Zojirushi Corporation stated in its press release that it had decided to oppose the shareholder proposals submitted by LIM Japan Event Master Fund. The proposals submitted were as follows, (i) Acquisition of Treasury Shares: Under the provisions of Companies Act Article 156 Section 1, within one year from the conclusion of this General Meeting of Shareholders, a total of 6.8 million shares with the total acquisition price limited to 11.5 billion Yen shall be acquired through delivery of money; (ii) Appropriation of Surplus: (a) Type of dividend property: Money, (b) Dividend per share: From 59 Yen to the amount after deduction of surplus dividends per share as approved at the General Meeting of Shareholders, (c) Matters Concerning Allocation of Dividend Property: Dividend amount per share of above stated point (b) per share of common stock, (d) Date on which dividends from surplus become effective: Date of this General Shareholders Meeting; (iii)Partial Amendment to Articles of Incorporation : Addition of Article on Disclosure of Cost of Shareholders’ Equity ; (iv) Partial Amendment to Articles of Incorporation: Addition of article on Individual Disclosure of Director Compensation; (v) Partial Amendment to Articles of Incorporation: Addition of article on Disinvestment of Cross-Shareholdings policy; (vi) Abolition of Countermeasures against Large Acquisition of Company Shares: Abolition of “Countermeasures against Large Acquisition of Company Shares” approved at the 77th General Meeting of Shareholders held on February 17, 2022. The company has opposed the proposals at the Board of Directors’ Meeting for following reasons, (i) The company believes that returning profits to shareholders is an important policy and through its new management plan “SHIFT” it has set a “total return ratio of 100% or more over a 3-year period”.

In addition, the company has also decided on a policy for acquiring treasury shares keeping in mind the need for reserves due to unforeseen circumstances. However, the proposal seeks to acquire treasury shares without providing concrete grounds for the total amount and price of shares and is based on a short-term perspective which, the company believes in not appropriate. (ii) As stated above, the company believes that returning profits to shareholders is an important policy and based on the capital allocation for the period of 2023-2025, the company’s shareholder return policy is to set a “total return ratio of 100% or more over a 3-year period” through “stable dividends targeting a dividend payout ratio of 50% or more” and “consideration of flexible acquisition of treasury stocks”.

Through this policy the company strives to return profits in a stable and continuous manner to its shareholders. On the other hand, the activist’s proposal is based on a premise where the company has not set guidelines for capital allocation. The proposal also does not consider the need to secure cash in hand for long-term investments and is based on a short-term perspective which, the company believes is not appropriate, (iii) The company believes that is it necessary to grasp the cost of capital and to recognize it as an important management indicator and under the new medium term management plan sets the target value of ROE at 7% for 2025 and 8% for 2030 and requires the “Creation of ROE commensurate with capital cost” and “Improvement of ROE by increasing profitability and capital efficiency”.

The Company believes it is not important to disclose the cost of capital or the basis of its calculation. (iv) The individual remuneration is set in accordance with internal regulations and the details are a fundamental norm which are disclosed in the company’s business reports, (v) The company examines each individual shares effects and its financial rationality carefully and carries out the sale of shares it judges to be unreasonable. However, following through with activists proposal on disinvestment could have a narrowing effect and damage the corporate value and the company believes it is appropriate to maintain the current policy, (vi) The policy on Countermeasures against large-scale acquisition of Company’s Shares prevents inappropriate parties from controlling financial and business policy decisions and will not be activated unless the reasonable objective requirements are not met.

The company believes that this policy will be beneficial to all of its stakeholders that make up its business.