AKEBONO REPORT 2018

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Name Name Reasons for Election Reasons for ElectionAny Important Representation of Other EntitiesAttendance at Board of Directors (Attended/Convened in Fiscal 2017)Attendance at Board of Directors meetings(a)/ Audit & Supervisory Board meetings(b)(Attended/Convened in Fiscal 2017)Meetings Outside Directors (as of March 31, 2018)Outside Audit & Supervisory Board Members (as of March 31, 2018)Compensation• Basic Policy for Determining Compensation Paid to Directors and Audit & Supervisory Board MembersKunio ItoTakuo TsurushimaKen OkazakiKesao EndoKeizo TannawaTomohiro Katayama33 AKEBONO REPORT 2018Furthermore, the Audit Department and the independent auditor formulate audit plans related to assessments of internal control over financial reporting. Akebono has formulated the basic policy for determining the compensation for Directors and Audit & Supervisory Board Members as follows.1. Acquire and develop talented human resources2. Motivate them to continuously improve corporate performance and value3. Maintain a high level of fairness and rationalityTo maintain an objective and fair compensation system for Directors, we have established a Director Compensation Advisory Committee, which reviews the basic matters relating to Director compensation. Based on the results of this review, the amount of compensation for each Director is allocated within limits approved by the Ordinary General Meeting of Shareholders. Compensation for Directors (excluding Outside Directors) consists of fixed remuneration and performance-based The results of these audit plans are discussed at meetings held from time to time on a regular basis, as necessary. remuneration. The fixed portion is basic compensation for duties and is based on positions. The total amount of fixed remuneration must be approved by the Ordinary General Meeting of Shareholders.The performance-based portion is determined based on the performance of the Company and individual Directors in the preceding fiscal year. The upper limit for performance-based remuneration is set at 100% of the fixed portion. Of this amount 40% (cash) may be provided as short-term performance-based remuneration; 20% (subscription rights to shares) as medium-term performance-based remuneration; and 40% (subscription rights to shares) as long-term performance-based remuneration. The compensation for Outside Directors consists of fixed remuneration only.The compensation for each Audit & Supervisory Board Member is determined through discussion by the Audit & Supervisory Board, within limits approved by the Ordinary General Meeting of Shareholders.Mr. Ito has extensive knowledge and a wealth of experience in corporate management cultivated over his years as a university professor (Accounting & Management) and as an outside director at other companies. He was nominated as an outside director to bring to bear his knowledge and experience when providing advice and recommendations regarding the Company’s business judgments and decision-making processes.Mr. Tsurushima served as a corporate leader at a number of companies, including as President & CEO of Tokyo Stock Exchange, Inc. He was nominated as an outside director to bring to bear his extensive knowledge of and experience in corporate management when providing advice and recommendations regarding the Company’s business judgments and decision-making processes.Mr. Okazaki possesses specialized advanced academic knowledge in the fields of environmental protection, energetics and thermal engineering. Mr. Okazaki was nominated as an outside director to bring to bear his knowledge and capability to provide appropriate supervision and advice in aid of the Company’s business operations.Mr. Endo has extensive knowledge and experience as a certified public accountant. He was nominated as an Outside Audit & Supervisory Board Member based on his specialist perspective and highly independent status from management to bring to bear his knowledge and experience in the performance of audits.Mr. Tannawa has extensive knowledge and experience as a management, organizational and human resources consultant in addition to as a corporate manager. He was nominated as an Outside Audit & Supervisory Board Member based on his specialist perspective and highly independent status from management to bring to bear his knowledge and experience in the performance of audits.A lawyer and certified public accountant, Mr. Katayama has extensive knowledge and experience in the legal and financial audit profession. He was nominated as an Outside Audit & Supervisory Board Member based on his specialist perspective and highly independent status from management to bring to bear his knowledge and experience in the performance of audits.• Adjunct Professor, Graduate School of Commerce and Management, Hitotsubashi University• Outside Director, Sumitomo Chemical Company, Limited• Outside Director, Kobayashi Pharmaceutical Co., Ltd.• Outside Director, Seven & i Holdings Co., Ltd.• Outside Director, Toray Industries, Inc.• Institute Professor, Tokyo Institute of Technology• Visiting Professor, World Premier International Research Center Initiative, Kyushu University 14/1414/1414/14(a) 14/14(b) 13/14(a) 14/14(b) 14/14(a) 14/14(b) 14/14