Remuneration of Directors andAudit & Supervisory Board Member

In order to ensure an objective and highly transparent remuneration system, the Companyhas decided on the following policy regarding the content of individual remuneration for directors of thethe Company(hereinafter referred to as“決定方針”) based on the deliberations of theBoard of DirectorsPersonnel & Remuneration Advisory Committeeand the advice of external experts. We have decided.

1. The monthly remuneration of directors is determined according to their responsibilities at thethe Company, of which 70% is paid on a fixed basis, and 30% is paid after increasing or decreasing according to the degree of achievement of the medium-term managementPlan.
   The standard amount is determined using external objective survey data and taking into account thethe Companybusiness performance, business scale, business environment, etc. Performance indicators are set to function effectively as motivations for achieving performance targets, and are reviewed as appropriate in response to changes in the environment.
   In addition, a certain amount of monthly remuneration will be used to acquirethe Companyby contributing to the Board of Directors.
   There are no bonuses or retirement benefits.

2. For directors, stockStock remunerationis paid through stockBoard Benefit Trustin order to make the linkage between directors' remuneration and the value of thethe Companyshares clearer, and to share with shareholders not only the benefits of rising stock prices but also the risk of stock price decline, thereby raising awareness that they will contribute to improving thethe Companymedium- to long-term business performance and increasing corporate value.
   Stock remunerationis a payment to directors through the trust in the amount equivalent tothe Companyshares and the amount converted tothe Companyvalue of the Company's shares, which are acquired through a trust with money contributed by thethe Company.
   The number of shares to be paid is calculated based on the number of points according to the responsibility. In principle, Stock remunerationpayment shall be at the time of retirement of the director. The composition ratio ofFixed remuneration,Performance-based remuneration, andStock remunerationfor directors will be appropriately set based on the purpose of each remuneration.

3. Outside Directors andAudit & Supervisory Board Memberwill receive fixed monthly remuneration. In view of its responsibilities, contributions to the board of directors are voluntary.

Note: Outside Directors andAudit & Supervisory Board Memberare paid a fixed monthly remuneration.  

the CompanyPersonnel & Remuneration Advisory Committeethe contents of individual remuneration, etc. for each director for the current fiscal year are in accordance with the decision policy. The procedure for determining remuneration is as follows.

1. In order to further enhance corporateGovernance, the Companyhas established thePersonnel & Remuneration Advisory Committee, which is mainly composed of independent outside directors, as an advisory body to theBoard of Directorsof Directors.  

2. The Personnel & Remuneration Advisory Committeereceives advice from theBoard of Directorsof Directors regardingthe Companyofficer remuneration system, etc., examines its appropriateness, etc., and makes a report based on the evaluation of the Company's performance, etc.  

3. The Personnel & Remuneration Advisory Committeeshall consist of thePresident and Representative Director, the Director ofPersonnel & General Affairs Division, and independent outside directors, and the secretariat shall be the Director of thePersonnel Department .  

4. The Personnel & Remuneration Advisory Committeewill proceed with its deliberations with the appropriate involvement and advice of independent outside directors who are members of the committee.

5. The Board of Directors shall determine the remuneration of Directors with the report of thePersonnel & Remuneration Advisory Committee.  

1. Less than one million yen is rounded down.  

2. At the 95th Ordinarygeneral meeting of shareholdersheld on June 27, 2019, it was resolved that the annual amount of remuneration for directors should not exceed 700 million yen (including 60 million yen per year for outside directors), and in addition to the relevant monetary remuneration, the stock remuneration system for directors (excluding outside directors)“Board Benefit Trust（BBT：Board Benefit Trust）”We have resolved to introduce it. The maximum number of points awarded to directors under this system is 25,000 points per fiscal year (equivalent to one share ofthe Companycommon stock per point). The number of directors at the end of the Ordinarygeneral meeting of shareholdersis 9 (including 3 outside directors).

3. At the 83rd Ordinarygeneral meeting of shareholdersheld on June 22, 2007, it was resolved that the maximum amount of remuneration for Audit & Supervisory Board Membershould be within 120 million yen per year. The number ofAudit & Supervisory Board Memberat the end of the Ordinarygeneral meeting of shareholdersis four.  

4. Among the performance evaluation criteria, sales were selected as performance indicators to promote the expansion of the top line, and operating income was selected as performance indicators to aim to improve profitability.

5. Consolidated netPerformance-based remunerationwere 1,167.3 billion yen, standalone net sales of 598.3 billion yen, consolidated operating income of 17.2 billion yen, and standalone operating income of 12.3 billion yen for the current fiscal year.  

6. The stock compensation plan“Board Benefit Trust”was approved at the 95th Ordinarygeneral meeting of shareholdersheld on June 27, 2019, and thethe Companyshares were acquired through a trust through the trading market using the money contributed by the Company as a source of funds. This is a system in which directors (excluding outside directors) and executive officers, etc. excluding directors receive money equivalent to thethe Companyshares and thethe Companyshares converted at market value through the Trust in accordance with thethe Company'Board Benefit TrustRegulations established by the Company. In principle, the time when Directors, etc. receive benefits forthe Companyshares, etc. will be at the time of retirement of the Directors, etc., and the Trust will not exercise voting rights related tothe Companyshares in the Trust Account in accordance with the instructions of the Trust Manager, which is independent of thethe Company.