News Release

Epson Partially Amends Corporate Governance Policy

- TOKYO, Japan, September 5, 2018 -

Seiko Epson Corporation (TSE: 6724, "Epson") announced that its Board of Directors, at a meeting held on September 4, 2018, approved amendments to the Corporate Governance Policy, a statement of the basic principles and framework for corporate governance within Epson.

Epson, which established the policy in September 2015, strives to continuously enhance and strengthen corporate governance so as to realize transparent, fair, fast, and decisive decision-making to achieve the goals declared in the Management Philosophy, promote sustainable growth, and increase corporate value over the medium and long terms.
Epson recently decided to partially amend the policy after analyzing its compliance with the spirit and content of Japan's revised Corporate Governance Code. The amendments are designed to further enhance and strengthen Epson's corporate governance.
Epson established an Information Disclosure Policy within the Corporate Governance Policy. The Disclosure Policy is intended to further improve Epson's information disclosure to shareholders and investors through investor relations and sustainability reporting in conjunction with Japan's recently introduced Fair Disclosure Rules. The policy is also intended to encourage constructive dialogue that will increase long-term corporate value.
See the amended Corporate Governance Policy at the link below.
global.epson.com/SR/organizational_governance/pdf/corporate_governance_policy.pdf PDF (70KB)

To achieve its aim of realizing effective corporate governance that reflects prevailing social imperatives and the operating environment, Epson will review this policy, and amend it as necessary, on an annual basis.

The amendments to the policy are shown below.

(Amendments are underlined)

Before the revision After the revision
Introduction <Omitted> Introduction <Unchanged>
Article 1, Article 2 <Omitted> Article 1, Article 2 <Unchanged>
Article 3: General Shareholders' Meeting

3.1 Epson shall set appropriate dates for general shareholders' meetings and make other arrangements to ensure that shareholders are able to properly exercise their rights.

3.2 Epson shall issue convening notices for general shareholders' meetings a minimum of three weeks in advance of the date the meetings are held and, moreover, shall disclose information included in the convening notice on the Epson web site, prior to sending the convening notice, in both Japanese and English, to enable shareholders to properly exercise their voting rights.

3.3 <Omitted>

3.4 The Board of Directors shall analyze the results of votes on resolutions proposed by the Company at general shareholders' meetings and shall take necessary action, such as enhancing shareholder dialogue.

Article 3: General Meeting of Shareholders

3.1 Epson shall set appropriate dates for General Meetings of Shareholders and make other arrangements to ensure that shareholders are able to properly exercise their rights.

3.2 Epson shall issue convening notices for General Meetings of Shareholders a minimum of three weeks in advance of the date the meetings are held and, moreover, shall disclose information included in the convening notice on the Epson web site, prior to sending the convening notice, in both Japanese and English, to enable shareholders to properly exercise their voting rights.

3.3 <Omitted>

3.4 The Board of Directors shall analyze the results of votes on resolutions proposed by the Company at General Meetings of Shareholders and shall take necessary action, such as enhancing shareholder dialogue.

Article 4 <Omitted> Article 4 <Unchanged>
Article 5: Policy on Cross-Shareholdings

5.1 If Epson concludes that it would be conducive to increasing Epson corporate value over the mid- to long-term to maintain and strengthen stable, long-term business relationships with suppliers of critical parts and materials, key purchasers of Epson products and services, and important sources of funding or providers of other financial services, Epson shall acquire and hold shares in them after verifying their creditworthiness, stability, and so forth.

5.2 The Board of Directors shall examine the mid- to long-term rationale of major cross-shareholdings such as these on an annual basis, taking into consideration all risks and rewards associated with maintaining and strengthening business relationships.

Article 5: Policy on Cross-Shareholdings

5.1 If Epson concludes that it would be conducive to increasing Epson corporate value over the mid- to long-term to maintain and strengthen stable, long-term business relationships with suppliers of critical parts and materials, key purchasers of Epson products and services, and important sources of funding or providers of other financial services, Epson shall acquire and hold shares in them after verifying their creditworthiness, stability, and so forth. (Such shares are referred to as "cross-shareholdings"below.)

5.2 The Board of Directors shall examine on an annual basis the medium- to long-term rationale for individual cross-shareholdings, taking into consideration all risks and rewards associated with maintaining and strengthening business relationships. If there is not a valid reason for cross-shareholdings, the number of shares shall be reduced.

Article 6 - Article 8 <Omitted> Article 6 - Article 8 <Unchanged>
Article 9: Principles of Corporate Behavior

9.1 Epson shall establish "Principles of Corporate Behavior" to articulate principles of conduct that Officers and employees must follow to ensure that it continues to fulfill its corporate social responsibility, the foundation on which Epson's Management Philosophy is founded, and the Board of Directors shall regularly review whether the code is being widely implemented.

Article 9: Management Philosophy

9.1 Epson's Board of Directors shall periodically conduct a review to ascertain whether the corporate culture reflects a respect for the purpose and spirit of the Management Philosophy.

Article 10 - Article 12 <Omitted> Article 10 - Article 12 <Unchanged>
Article 13: Appropriate Information Disclosure

13.1 Epson shall report financial and business matters fairly, in detail, and in an easy-to-understand manner in accordance with the requirements of the Japanese Companies Act, Financial Instruments and Exchange Act, stock exchange rules, and other applicable laws and regulations.

13.2 Epson shall also ensure the transparency of operations by voluntarily providing information beyond that which is required by law.

13.3 Epson shall disclose information in English, to a reasonable extent, to earn greater recognition in global capital markets.

Article 13: Appropriate Information Disclosure

<Deleted>

13.1 Recognizing that building long-term partnerships with shareholders and investors is essential for achieving growth and increasing medium- and long-term corporate value, Epson established "Policy on Information Disclosure and Dialog," a formal policy on the disclosure of information to shareholders, investors, analysts, capital markets, and other stakeholders. The policy is provided in Appendix 1.

Article 14 - Article 21 <Omitted> Article 14 - Article 21 <Unchanged>
Article 22: Policies and Procedures for Nominating Director Candidates, etc.

22.1 The policies and procedures for nominating Director candidates, and for selecting Executive Officers and Special Audit & Supervisory Officers for discussion at general shareholders' meetings are as follows:

(1) Policies

1) Officers must be impartial and possess high integrity and ethical standards.

2) Outside Directors must satisfy criteria concerning the independence of Outside Directors in order to guarantee their independence. The Board of Directors established "Criteria for Independence of Outside Directors", which is listed in Appendix 1.

(2) Procedures <Omitted>

Article 22: Policies and Procedures for Nominating Director Candidates and for Selecting and Dismissing Officers

The policies and procedures for nominating Director candidates and for selecting and dismissing Executive Officers (including the President) and Special Audit & Supervisory Officers are as follows:

22.1 Policies and procedures for nominating Director Candidates and for selecting Executive Officers (including the President) and Special Audit & Supervisory Officers

(1) Policies

1) Considering the role that Officers are required to fulfill and the nomination criteria that Epson has established, Officers must be able to contribute to an increase in corporate value by demonstrating qualities such as superior insight, accountability, ability to motivate and lead, credibility, character, oversight capability, management insight, professional insight, influence, leadership, creativity, and innovativeness.

2) Outside Directors must satisfy criteria concerning the independence of Outside Directors in order to guarantee their independence. The Board of Directors established "Criteria for Independence of Outside Directors", which is listed in Appendix 2.

(2) Procedures <Omitted>

<Newly established> 22.2 Policies and procedures for dismissing Directors, Executive Officers (including the President), and Special Audit & Supervisory Officers

(1) Policies

1) The Board of Directors shall initiate procedures for dismissing Directors if, in the course of their duties as Directors, they are found to have been involved in a serious violation of laws or the Articles of Incorporation or if a legal action has been brought or an injunction sought by Audit & Supervisory Committee members.

2) The Board of Directors shall initiate procedures for dismissing Executive Officers and Special Audit & Supervisory Officers if, in the course of their duties, they are found to have been involved in a serious violation of laws or the Articles of Incorporation or if they are acknowledged to have deviated markedly from the nomination criteria.

(2) Procedures

1) The proposed dismissal of a Director shall be discussed immediately by the Director Nomination Committee, which shall furnish an opinion to the Board of Directors following a fair, transparent, and rigorous examination. A resolution to dismiss by the Board of Directors is subject to final approval at a General Meeting of Shareholders.

2) The proposed dismissal of an Executive Officer or Special Audit & Supervisory Officer shall be discussed immediately by the Director Nomination Committee, which shall furnish an opinion to the Board of Directors following a fair, transparent, and rigorous examination. Dismissal is subject to final approval by the Board of Directors.

Article 23, Article 24 <Omitted> Article 23, Article 24 <Unchanged>
Article 25: Development of a Successor to the President

25.1 - 25.3 <Omitted>

<Newly established>

Article 25: Development of a Successor to the President

25.1 - 25.3 <Omitted>

25.4 The Board of Directors shall be tangibly involved in and supervise the creation and implementation of a successor development plan and succession plan for the President.

Article 26 - Article 29 <Omitted> Article 26 - Article 29 <Unchanged>
Article 30: Dialogue with Shareholders

30.1 Recognizing that partnerships with shareholders and investors that are based on a long-term view are essential for sustaining growth and increasing corporate value over the mid- to long-term, Epson established a "Policy on Constructive Dialogue with Shareholders." The policy is provided in Appendix 2.

Article 30: Dialogue with Shareholders

30.1 Recognizing that building long-term partnerships with shareholders and investors through honest dialogue with stakeholders is essential for achieving growth and increasing corporate value over the medium and long term, Epson established "Policy on Information Disclosure and Dialogue." The policy is provided in Appendix 1.

Appendix 1

Criteria for Independence of Outside Directors
<Omitted>

Appendix 2

Policy on Constructive Dialogue with Shareholders
<Omitted>

Appendix 1

Policy on Information Disclosure and Dialogue
<Omitted (The current Appendix 2 was revised in full.) >

Appendix 2

Criteria for Independence of Outside Directors
<Unchanged (The contents of Appendix 1
was transferred to Appendix 2.) >

About Epson
Epson is a global technology leader dedicated to connecting people, things and information with its original efficient, compact and precision technologies. With a lineup that ranges from inkjet printers and digital printing systems to 3LCD projectors, watches and industrial robots, the company is focused on driving innovations and exceeding customer expectations in inkjet, visual communications, wearables and robotics.
Led by the Japan-based Seiko Epson Corporation, the Epson Group comprises more than 76,000 employees in 87 companies around the world, and is proud of its contributions to the communities in which it operates and its ongoing efforts to reduce environmental impacts.
global.epson.com/