Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.
For immediate release
May 8, 2026
Company: Nitta Corporation Representative: Seiichi Kitamura, President
Code: 5186; Prime Market, Tokyo Stock Exchange Contact: Koichi Kakegami, Director, Managing Executive Officer,
and General Manager of Corporate Center
Tel: +81-6-6563-1211
Notice Regarding Opinion of the Board of Directors on Shareholder's Proposals
Nitta Corporation (the "Company") hereby announces that it has received shareholder proposals (the "Written Shareholder's Proposals") on the agenda items at the 97th Ordinary General Meeting of Shareholders (the "Shareholder's Proposals") scheduled for June 25, 2026 (the "97th Ordinary General Meeting"). In response, the Board of Directors of the Company resolved at a meeting held on May 8, 2026 its opinion on the Shareholder's Proposals. Details are as follows.
Proposing shareholder
Name of the shareholder: Dalton Kizuna (Master) Fund LP
Description of the Shareholder's Proposals
Agenda items
Election of One Director
Distribution of Surplus
Amendment of the Articles of Incorporation Regarding the Proportion of Outside Directors
Amendment to the Articles of Incorporation Regarding Disclosure of Action to Implement Management that is Conscious of Cost of Capital and Stock Price
Amendment to the Articles of Incorporation regarding the record date for the ordinary general meeting of shareholders
Description of the proposals
As described in the Appendix, "Description of Shareholder's Proposals."
Note that the Appendix, "Description of Shareholder's Proposals," is a faithful translation of the original Written Shareholder's Proposals.
Opinion of the Company's Board of Directors on the Shareholder's Proposals Agenda item (i): Election of One Director
Opinion of the Board of Directors of the Company
The Board of Directors of the Company opposes the Shareholder's Proposal.Reason for opposition
The Company selects candidates for the Board of Directors with the Nomination and Compensation Committee playing a central role, comprehensively considering the candidates' experience and expertise, as well as their independence and suitability in relation to the Company's medium- to long-term management challenges, to ensure impartiality and fairness.
The Company believes that, for Outside Directors to effectively fulfill their roles, independence from management and major shareholders is of critical importance, and therefore places emphasis on such factors in the selection of candidates for Outside Directors. Mr. Toshihito Yamada, the candidate proposed in the Shareholder's Proposal, is affiliated with a group company of the proposing shareholder, and from the perspective of the independence required of an Outside Director, the Board of Directors considers that careful deliberation is necessary with respect to his appointment. In particular, the possibility that an Outside Director may be perceived as being in a position to represent the intentions or interests of a specific shareholder is not desirable from the standpoint of the credibility of the Board's supervisory function and decision-making.
Furthermore, in light of the execution of the Company's future management strategies and its response to medium- to long-term management challenges, the current composition of the Board of Directors proposed by the Company is appropriate and is expected to contribute to sustainable growth and the medium- to long-term enhancement of corporate and shareholder value.
The Company fully recognizes the importance of constructive dialogue with shareholders, including the proposing shareholder, and does not dismiss the views and proposals regarding the enhancement of corporate value and further improvement of corporate governance. At the same time, the Company believes that the selection of director candidates should ultimately be determined by the Board of Directors, which bears responsibility for the Company's sustainable growth and the medium- to long-term enhancement of corporate value, from the perspective of the interests common to all shareholders.
For the above reasons, the Board of Directors of the Company opposes the Shareholder's Proposal.
Agenda item (ii): Distribution of Surplus
Opinion of the Board of Directors of the Company
The Board of Directors of the Company opposes the Shareholder's Proposal.Reason for opposition
Recognizing returns of profits to shareholders to be a key management topic, the Company has established the basic policy of paying appropriate dividends that reflect financial results while continuing to strengthen and enhance its corporate foundations. In addition, as part of the initiatives to implement management that is conscious of cost of capital and stock price, the Company modified its shareholder return policy to further clarify its approach of strengthening shareholder returns and disclosed the modified policy on November 2, 2023.
During the period from FY2023 through the end of Phase 2 (FY2023 through FY2027) of the SHIFT2030 Medium- to Long-Term Business Plan, the Company will follow the above basic policy and continue stable, steadily increases in dividends (of at least 10 yen/share per year during the period), targeting a consolidated payout ratio of at least 30% and a dividend-on-equity (DOE) ratio of at least 2.5%.
Based on this shareholder return policy, the Company plans to increase the ordinary dividend for FY2025 by 25 yen per share to 160 yen, compared with a total dividend of 140 yen per share for FY2024, which consisted of an ordinary dividend of 135 yen per share and a commemorative dividend of 5 yen per share for the 140th anniversary of the Company's founding. As a result, the consolidated payout ratio is expected to be 32.6%, and DOE (dividend on equity) of 2.8%, demonstrating the Company's continued commitment to stable and steady dividend increases.
The Shareholder's Proposal proposes the Company distribute 100% of its net income per share for the current term, effectively achieving a dividend payout ratio of 100%. Although increasing dividends from a short-term perspective like this proposal may contribute to short-term shareholders' interest, it could also hinder the enhancement of the Company's corporate value over the medium to long term. Therefore, we believe that such dividend increases will not lead to the maximization of shareholder value over the medium to long term.
The Board of Directors emphasizes the maximization of shareholder value from a medium- to long-term perspective and believes that, to achieve this, it is important for the Company to secure funds in a stable manner to support future business development and growth. In addition, the external environment, including international affairs, resource and energy prices, and foreign exchange trends, involves inherent uncertainty, as exemplified by the recent rise in geopolitical tensions in the Middle East. The Company also recognizes the importance of securing financial resilience and response capacity to respond to such changes, in order to maintain stability in its medium- to long-term management.
From this perspective, while the increase in dividends based on a 100% dividend payout ratio may contribute to short-term shareholders' interest, it entails risks that could undermine medium- to long-term shareholders' interest and may impede the implementation of future growth investments and business strategies.
Therefore, we have judged that it is vital to retain our existing dividend policy that aims for stable and steady increases in dividends, while maintaining a solid financial foundation.
For the above reasons, the Board of Directors of the Company opposes the Shareholder's Proposal.
Agenda item (iii): Amendment of the Articles of Incorporation Regarding the Proportion of Outside Directors
Opinion of the Board of Directors of the Company
The Board of Directors of the Company opposes the shareholder's proposal.Reason for opposition
The Company established the Nomination and Compensation Committee, chaired by an independent outside director and consisting of a majority of independent outside directors, as an advisory body for the Board of Directors, to assure impartiality and fairness in selecting directors. The selection of candidates for the Board of Directors is determined by the Board of Directors based on the advice and proposals of the Nomination and Compensation Committee. The same procedure has been applied to the selection of the candidates to be presented to the 97th Ordinary General Meeting.
The Company has defined the requisite skills of the members of the Board so that the Board as a whole provides the required skills, knowledge, and experience, while ensuring diversity among its members. The Nomination and Compensation Committee selects candidates for the Board of Directors to strike a satisfactory balance between internal human resources familiar with the Company's duties and outside human resources who provide highly specialized skills and experience. The Committee pays due consideration to the Japan's Corporate Governance Code, as well as the Company's succession plan and skill certification standards and makes recommendations and offers advice to the Board of Directors on such basis.
The composition of our Board of Directors has wide-ranging support among our shareholders. Each proposal for the election of directors at our June 2025 Ordinary General Meeting of Shareholders had an approval rate of 90% or better.
At the 97th Ordinary General Meeting of Shareholders, the number of directors proposed by the Company will be seven, including three independent outside directors, with one fewer internal director than in the previous year. This meets the Corporate Governance Code requirement for prime market listed companies, requiring at least one-third of directors be comprised of independent outside directors. The three candidates for independent outside directors-a corporate executive, an attorney, and a certified public accountant-are highly specialized and experienced professionals who offer deep insights into corporate governance. One is a woman.
Our Board of Directors has confirmed and determined that the Board of Directors composed of the candidates proposed by the Company will maintain adequate independence; is ideally equipped to execute and supervise Company management and to achieve the goals of SHIFT2030, the Company's medium- and long-term management plan, in accordance with the Company's group philosophy; and will contribute to the Company's sustainable growth and enhancement of corporate value over the medium to long term. This is part of efforts to confirm that our governance structure serves the best interests of our shareholders.
We believe the inclusion of a provision in the Articles of Incorporation as proposed by this shareholder may, to the contrary, limit the scope of selection of director candidates and hinder efforts to identify the optimal composition of the Board of Directors.
For these reasons, the Board of Directors opposes this shareholder's proposal.
Agenda item (ⅳ):
Amendment to the Articles of Incorporation Regarding Disclosure of Action to Implement Management that is Conscious of Cost of Capital and Stock Price
Opinion of the Board of Directors of the Company
The Board of Directors of the Company opposes the Shareholder's Proposal.Reason for opposition
The Shareholder's Proposal requests that a chapter be newly added to the Articles of Incorporation concerning initiatives related to the Tokyo Stock Exchange's request for "action to implement management that is conscious of cost of capital and stock price." However, under the Companies Act of Japan, the Articles of Incorporation shall stipulate the fundamental rules on the purpose, organization, activities, and other such matters of a company. Meanwhile, to implement management that is conscious of cost of capital and stock price, it is essential for a company to respond to changes in its market environment and business strategies in a prompt and flexible manner. Therefore, we believe that it is not appropriate to add the provision as proposed in the Shareholder's Proposal to the Articles of Incorporation, which are the fundamental rules of the company.
The Company announced its action to be taken to implement management that is conscious of cost of capital and stock price on November 2, 2023. At the same time, we formulated Phase 2 of the SHIFT2030 Medium-to Long-Term Business Plan and announced it on April 1, 2025.The Company will continue to disclose the progress of these efforts going forward.
According to the Tokyo Stock Exchange's request, a PBR below 1x is one indication that the company has not achieved return on capital that exceeds its cost of capital, or that investors are not seeing enough growth potential. In order to address this issue, we have set forth the following initiative policies to improve PBR: (i) growth strategy, (ii) improving capital efficiency, and (iii) strengthening shareholder returns.
In particular, to improve capital efficiency, the Company will reallocate resources by optimizing its business and product portfolio, improve business ROIC, and reduce cross-shareholdings, among other initiatives.
The Company will maximize corporate value by steadily implementing the growth strategy set forth in Phase of the SHIFT2030 Medium- to Long-Term Business Plan and by promoting management that emphasizes capital efficiency and shareholder returns.
In addition, we have recognized the fact that our profit structure is greatly affected by equity in earnings of affiliates is an important perspective for investors and shareholders. Therefore, the Company will support the growth of equity-method affiliates, while disclosing their returns on capital.
As stated above, the Company has been actively undertaking concreate initiatives for "action to implement management that is conscious of cost of capital and stock price." We will also endeavor to disclose information on our initiatives in a timely and appropriate manner so that shareholders and other stakeholders can understand progress made on such initiatives.
For the above reasons, the Board of Directors of the Company opposes the Shareholder's Proposal.