Toshiba Nominates Highly-Qualified Slate of Directors, Issues Public Shareholder Letter

Toshiba Corporation (TOKYO:6502) today announced that it has nominated 11 of its current Directors for reelection to the Board of Directors at the Company’s Ordinary General Meeting of Shareholders for the 181^st Fiscal Period, to be held on July 31, 2020.

The Company also announced that it has nominated Osamu Nagayama for Chairperson of the Board of Directors, to succeed current Chairperson Yoshimitsu Kobayashi, who is retiring after serving for Toshiba as an independent outside director since 2015 and with distinction as Chairperson of the Board since 2017. Mr. Nagayama is the Former Chairman and Chief Executive Officer of Chugai Pharmaceutical Co., Ltd., and the Former Chairman of the Board of Directors of Sony Corporation.

Toshiba is committed to maximizing shareholder value through the continued execution of the Toshiba Next Plan (TNP), its five-year company-wide transformation plan announced on November 8, 2018. As part of this commitment, the Company took decisive actions in 2019 to significantly refresh the Board – replacing seven directors – following active and constructive engagement with a number of its largest shareholders.

With the support of shareholders and in response to their input, the Company increased its independent directors to ten, from seven, and added four non-Japanese directors, the first non-Japanese representatives to sit on Toshiba’s Board in almost 80 years.

With a strong majority of independent directors, a three-committee system, all comprised of outside directors, and diversity of experience and skill set, the Toshiba Board is now a corporate governance leader in diversity and structure, and the Company and its shareholders are benefitting from the new and constructive perspectives. Toshiba’s Directors bring diversity of gender, nationality and expertise, which includes experience in international business, business portfolio management, corporate restructuring, M&A, capital markets, capital allocation, accounting and auditing, and legal affairs / compliance.

The Company firmly believes that its recently reconstituted Board is the right one to provide independent oversight of the next phases of the TNP and deliver sustainable long-term growth and value to all shareholders.

“As we enter the second phase of our TNP, our Board and management team remain sharply focused on driving sustainable long-term growth and value for all shareholders and positioning Toshiba for future success,” said Yoshimitsu Kobayashi, Chairperson of the Board of Directors of Toshiba. “We have made significant progress on TNP, including implementing more aggressive capital allocation policies and restructuring our portfolio of businesses and strategic shareholdings, but of course we cannot complete the Plan overnight. Our comprehensive set of reforms and growth investments are multi-year initiatives that we believe will build enduring shareholder value. And importantly, we are aligned with our shareholders in executing on our mission.

“This year, we renew our commitment to ensuring our Board is comprised of highly-engaged Directors with the right mix of skills, experience and new perspectives. We are pleased that Mr. Nagayama has agreed to be the Company’s nominee for Chairperson of the Board, and believe his unparalleled global experience and proven track record of delivering growth at Chugai Pharmaceutical and Sony will be invaluable as we continue to position Toshiba for long-term success. Mr. Nagayama will join a Board of Directors that we believe represents the best interests of our shareholders and all of our stakeholders, and is uniquely qualified to continue to provide independent oversight to management as we build upon the achievements from the past year.”

Nobuaki Kurumatani, President & CEO of Toshiba said, “Mr. Kobayashi’s strong leadership as Toshiba’s Chairperson of the Board is reflected in the solid progress of our TNP and decisive actions we are taking to transform the Company. He has played an important role in setting our path forward and we are deeply appreciative for his tireless commitment and dedicated service to Toshiba and our shareholders.”

Toshiba today also announced updates to its shareholder return policy. The Company intends to maintain an average consolidated dividend payout ratio of at least 30%, and to use excess shareholders’ equity to fund shareholder returns, including through share repurchases. The Board of Directors will review the appropriate level of capital on a regular basis. Once the external environment stabilizes, enabling capital markets and the global pandemic to be more predictable in the Fall, the Company expects to be in a position to undertake more proactive portfolio streamlining and divestitures, including the assessment of highly accretive M&A opportunities, to continuously improve capital allocation in order to further enhance shareholder returns and the long-term value of Toshiba. Toshiba also continues to review options to maximize shareholder value by monetizing its 40.2% stake in KIOXIA, Toshiba's spun-off memory chip business, and in principle, intends to return the majority portion of the net proceeds to shareholders.

The Company’s full slate of 12 Director candidates is as follows:

New Director Candidate

• Osamu Nagayama, Candidate for Chairperson of the Board of Directors of Toshiba Corporation; Former Chairman and Chief Executive Officer of Chugai Pharmaceutical Co., Ltd.; Former Chairman of the Board of Directors of Sony Corporation

Incumbent Director Candidates

• Satoshi Tsunakawa,Director, Chairman of Toshiba Corporation
• Nobuaki Kurumatani,Director, Representative Executive Officer, President and Chief Executive Officer of Toshiba Corporation
• Yuki Furuta,Independent Director of Toshiba Corporation; registered attorney at law; and former Justice of Supreme Court of Japan
• Junji Ota, Independent Director of Toshiba Corporation; former Vice Chairman of Japan Securities Dealers Association; and former Chair (Public Governor) of Self-Regulation Board, Japan Securities Dealers Association, Outside Director of Heiwa Real Estate Co., Ltd.
• Nobuyuki Kobayashi, Independent Director of Toshiba Corporation; Certified Public Accountant, Former Representative Partner and President of Crowe Toyo & Co., Founder and Chief Executive Officer of Eishin Partners Co., Ltd.
• Takashi Yamauchi, Independent Director of Toshiba Corporation; Audit and Supervisory Board Member of Mitsui & Co., Ltd.
• Yoshiaki Fujimori, Independent Director of Toshiba Corporation; Outside Director and Chairman of Oracle Corporation Japan, Outside Director of Takeda Pharmaceutical Company Ltd. and Outside Director of Boston Scientific Corporation, former Senior Vice President of GE (U.S.), former President and Chief Executive Officer of LIXIL Group Corporation (formerly known as Juseikatsu Group Corporation)
• Paul J. Brough, Independent Director of Toshiba Corporation; Independent Non-Executive Director of GL Ltd. and Independent Non-Executive Director of Vitasoy International Holdings Ltd., former Executive Chairman of Noble Group Holdings Ltd.
• Ayako Hirota Weissman, Independent Director of Toshiba Corporation; Senior Vice President, Director of Asia Strategy and Senior Portfolio Manager at Horizon Kinetics LLC (formerly known as Horizon Asset Management LLC), Independent Outside Director at SBI Holdings, Inc.
• Jerry Black, Independent Director of Toshiba Corporation; Advisor of Aeon Co., Ltd.
• George Raymond Zage III, Independent Director of Toshiba Corporation; Founder and Chief Executive Officer of Tiga Investments Pte. Ltd.

In connection with today’s announcement, Toshiba issued a public shareholder letter with additional information on the Company’s Director candidates, TNP’s progress and its ongoing engagement with Toshiba shareholders.

Toshiba shareholders are not required to take any action at this time. Toshiba will present its formal recommendation regarding Director nominees in the Company’s Convocation Notice and related materials, which will be made available on the company’s website at the beginning of July and sent to all shareholders eligible to vote at the Ordinary General Meeting of Shareholders.

The full text of Toshiba’s public shareholder letter can be found here; https://www.toshiba.co.jp/about/press/2020_06/pr2201.htm

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Contact information

Investor Contact
Investor Relations Group, Planning & Investor Relations Office
Strategic Planning Div.
Toshiba Corporation
Phone: +81-3-3457-2096
Email: ir@toshiba.co.jp

Media Contact
Midori Hara
Media Relations Group, Public Relations Office
Corporate Communications Div.
Toshiba Corporation
Phone: +81-3-3457-2100
Email: media.relations@toshiba.co.jp

International Media Contact
Sard Verbinnen & Co. for Toshiba:
John Christiansen/David Millar/Ron Low
Phone: +1-415-618-8750/+1-212-687-8080/+852-3842-2200
Email: Toshiba-SVC@sardverb.com