Ticker Code: 7762 June 6, 2016 NOTICE OF THE 131st ORDINARY GENERAL MEETING OF SHAREHOLDERS [Disclaimer: Please note that the following purports to be a translation from the original Japanese version prepared for the convenience of our shareholders with voting rights outside Japan for reference. In the case of any discrepancy between the translation and the Japanese original, the latter shall prevail.] Dear shareholders, You are cordially invited to attend the 131st Ordinary General Meeting of Shareholders of Citizen Holdings Co., Ltd. (the “Company”), which will be held as described below. If you cannot attend on that day, you can exercise your voting right in either of the following ways. Please review “Reference Materials for the General Meeting of Shareholders” below and exercise your voting right by no later than 5:45 p.m. on Monday June 27, 2016. [Exercise of voting right by mail] Indicate your approval or disapproval on the enclosed Voting Right Exercise Form and send it to us to arrive by the above deadline. [Exercise of voting right via the Internet] Please carefully access the website (http://www.evote.jp/) designated by the Company, follow the directions on the screen, and indicate your approval or disapproval by the above deadline. Note: Shareholders outside Japan shall not use these voting procedures. Very truly yours, Toshio Tokura President and CEO Citizen Holdings Co., Ltd. 6-1-12 Tanashi-cho, Nishitokyo, Tokyo If you attend in person, please submit the enclosed Voting Right Exercise Form to the reception desk. In case of any revision to the Reference Materials for the General Meeting of Shareholders, the Business Report, or consolidated financial statements and non-consolidated financial statements, we will post the revision on our website. Our website http://www.citizen.co.jp/english/ir/stocks/meeting.html - 1 - 1. Time and Date: 10:00 a.m. on Tuesday, June 28, 2016 *Please come early to the venue as the reception area will be congested as it becomes close to the commencement of the meeting. The reception is scheduled to open at 9:00 a.m. 2. Place: HILTON TOKYO, 4F “Kiku Ballroom” 6-6-2, Nishi-Shinjuku, Shinjuku-ku, Tokyo 3. Agenda: Items to be reported: Item 1: Business Report, consolidated financial statements, and audit report on the consolidated financial statements by the Independent Auditors and Audit & Supervisory Board for the 131st term (April 1, 2015 to March 31, 2016) Item 2: Report on the non-consolidated financial statements for the 131st term (April 1, 2015 to March 31, 2016) Items to be resolved: Item 1: Appropriation of Surplus Item 2: Partial Amendments to the Articles of Incorporation Item 3: Election of Nine (9) Directors Item 4: Election of Two (2) Audit & Supervisory Board Members Item 5: Approval for Renewal of the Policy for a Large-Scale Purchase of Citizen Shares (Anti-Takeover Measures) - 2 - Reference Materials for the General Meeting of Shareholders Item 1: Appropriation of Surplus The Company considers the distribution of profits to shareholders to be an extremely important management issue of the Company. The Company has made it a fundamental policy to keep the average of the “shareholder return ratio” (which is the percentage of total amount of dividends and treasury shares purchased to consolidated profit for the fiscal year under review) at 30% or more on a three year basis. As for the year-end dividend for the current fiscal year, thoroughly considering the above fundamental policy, performance for this fiscal year and future business development, the Company proposes a payment of 8.50 yen per share as shown below. This payment, combined with the interim dividend of 8.50 yen per share, will bring the total annual cash dividend for this fiscal year to 17.00 yen per share, an increase of 1.00 yen per share from the previous fiscal year. 1. Type of dividend Cash 2. Allotment and total amount of dividend 8.50 yen per common share of the Company Total amount of dividends: 2,705,489,812 yen 3. Effective date of dividends from surplus June 29, 2016 - 3 - Item 2: Partial Amendments to the Articles of Incorporation 1. Reasons for amendments (1) To push ahead with the “Citizen Global Plan 2018,” medium-term management plan and realize further growth of the entire Group driven by the core watches and clocks business while strengthening the head office functions, the Company has decided to make the transition to an operating holding company structure as of October 1, 2016 through a merger in which the Company is the surviving entity and Citizen Watch Co., Ltd. and Citizen Business Expert Co., Ltd. will be extinguished (hereinafter the “Merger”). Upon the Merger, the Company’s trade name will be changed from Citizen Holdings Co., Ltd. to Citizen Watch Co., Ltd. Accordingly, some necessary amendments will be made to the Article 1 of the current Articles of Incorporation. (2) The “Act for Partial Revision of the Act for Securing the Proper Operation of Worker Dispatching Undertakings and Protection for Dispatched Workers” (Act No. 73 of 2015), which took effect on September 30, 2015, eliminated the distinction between the “specified worker dispatching undertaking” and the “general worker dispatching undertaking.” In response to this development, the Company proposes to make necessary changes to Article 2 of the current Articles of Incorporation. 2. Contents of amendments The proposed amendments are as follows: The resolution concerning the amendment to Article 1 will take effect on the effective date of the Merger on condition that the Merger has taken effect. (Amendments are indicated below with underlines.) Current Articles Proposed Amendments Article 1 (Trade Name) Article 1 (Trade Name) The Company shall call itself Citizen Holdings The Company shall call itself Citizen Tokei Kabushiki Kaisha and write it as Citizen Kabushiki Kaisha and write it as Citizen Watch Holdings Co., Ltd. in English. Co., Ltd. in English. Article 2 (Purpose) Article 2 (Purpose) The purpose of the Company is to engage in the The purpose of the Company is to engage in the following businesses and to own shares or following businesses and to own shares or interest in companies or foreign companies that interest in companies or foreign companies that engage in the following businesses to control engage in the following businesses to control and manage their business activities: and manage their business activities: 1. Manufacture and sale of watches and 1. (The same as present) clocks and their parts; 2. Manufacture and sale of machine tools and 2. (The same as present) other tools; 3. Manufacture and sale of measuring 3. (The same as present) instruments; 4. Manufacture and sale of cameras and their 4. (The same as present) parts; 5. Manufacture and sale of office appliances 5. (The same as present) and their parts; - 4 - (Amendments are indicated below with underlines.) Current Articles Proposed Amendments 6. Operation and leasing of sports and 6. (The same as present) amusement facilities; 7. Sales, purchases and leasing of real estate 7. (The same as present) such as land and buildings and personal property attached thereto; 8. Manufacture and sale of electronic devices 8. (The same as present) and their parts; 9. Manufacture and sale, and import and 9. (The same as present) export of medical devices and their parts; 10. Manufacture and sale of toys, playing 10. (The same as present) equipment, and sporting and athletic goods; 11. Manufacture and sale of tableware; 11. (The same as present) 12. Manufacture and sale of jewelry, precious 12. (The same as present) metals, and related fashion accessories; 13. Manufacture and sale of glasses, optical 13. (The same as present) equipment, and their parts; 14. Manufacture and sale of plastic containers; 14. (The same as present) 15. Manufacture and sale of automotive parts; 15. (The same as present) 16. Travel agency business under the Travel 16. (The same as present) Agency Act; 17. Non-life insurance agency business and 17. (The same as present) business concerning the solicitation of life insurance; 18. General worker dispatching undertaking; 18. Worker dispatching undertaking; 19. Financial services; and 19. (The same as present) 20. Any businesses that are incidental to the 20. (The same as present) businesses listed in the preceding items. - 5 - Item 3: Election of Nine (9) Directors The terms of office of all of the present seven (7) Directors will expire at the conclusion of this General Meeting of Shareholders. The Company has decided to make the transition to an operating holding company structure as of October 1, 2016 through a merger in which the Company is the surviving entity and Citizen Watch Co., Ltd. and Citizen Business Expert Co., Ltd. will be extinguished (hereinafter the “Merger”). Citizen Watch Co., Ltd. is an operating subsidiary playing a central role in the watches and clocks business of the Group. As of April 1, 2016, its business is executed by nine (9) Directors including four (4) Directors who concurrently serve as Directors of the Company and three (3) Operating Officers. Citizen Business Expert Co., Ltd. is mainly responsible for the operation and management of major places of business of the Group and business efficiency improvement through the provision of shared services. As of April 1, 2016, its business is executed by four (4) Directors including two (2) Directors who concurrently serve as Directors of the Company. Accordingly, in preparation for the transition to an operating holding company structure, the Company proposes to elect a total of nine (9) Directors, increasing the number of Directors by two (2). The candidates for the positions of Director are as follows: Number of the Name Career summaries, position and areas of responsibility in the Company, and No.