Nippon Paper Group, Inc. (President: Masatomo Nakamura) is pleased to announce that, at a meeting of the Board of Directors held on May 24, 2007, the Company decided to review the Remuneration System for Directors as part of its management reforms.

 

The Company has hitherto sought to bolster corporate governance for the purpose of increasing shareholder value. With this review, the Company will clarify the responsibilities of its Directors and Corporate Auditors and ensure objectivity in remuneration for Directors. At the same time, it will link remuneration more closely to its results to facilitate further growth in corporate value.

 

(1) Abolition of the Retirement Benefit System for Directors

The Company will abolish the Retirement Benefit System for Directors and Corporate Auditors at the close of the 7th ordinary general meeting of shareholders to be held in June 2007.

For retirement benefits corresponding to the term of office until the date of the ordinary general meeting of shareholders, the Company will supply benefits with the date of the meeting as the cutoff point. After obtaining approval at the ordinary general meeting of shareholders, the Company will pay the benefits to qualified Directors and Corporate Auditors when they retire from office.

 

In line with the abolition of the Retirement Benefit System for Directors, the Company will review the Remuneration System for Directors and Corporate Auditors. For Directors, the Company will adopt a remuneration system that is linked more closely to the consolidated business results of the Group. For Corporate Auditors, in view of their responsibilities, it will introduce a system that limits remuneration to fixed amounts.

Application of the new Remuneration System for Directors will start at the close of the 7th ordinary general meeting of shareholders to be held in June 2007.

 

(2) Establishment of the Guidelines for Treasury Stock Ownership

To increase shareholder value through a management approach that aims to achieve sustained improvement in corporate value, the Company will set up guidelines for the purchase and ownership of treasury stocks. Based on these guidelines, Directors will purchase a fixed amount of shares in the Company every month through a stock ownership group they form, and will continue to own the acquired shares during their term of office.