Compensation For DIRECTORs

Policy and procedure to decide the amount and the calculation method of compensations for Directors

・Compensation for Directors(excluding Directors who are Audit and Supervisory Committee Members)

The total amount of compensation, etc. for Directors of the Company (excluding Directors who are Audit and Supervisory Committee Members) shall be not more than 800 million yen per year (not more than 100 million yen per year for Outside Directors). The Company has established a compensation system with incentives to facilitate the sustainable growth of the Company and to enhance corporate value, within the above-mentioned range of compensation, etc. for Directors (excluding Directors who are Audit and Supervisory Committee Members), while adhering to a basic policy of respecting the opinions of the Nominating and Compensation Committee in order to ensure fairness and transparency. In accordance with this policy, the following provisions have been made with regard to basic compensation, performance-linked bonuses, and restricted share compensation.

(1)Basic Compensation(single fiscal year)

Determined based on the range of compensation amounts set according to grades, considering the market standard and inflation rate


(2)Performance-linked Bonus(single fiscal year)

・Purpose: To enhance the category-based management system, which is an important target under the AGP2020 Action Plan

・Outline:

①Evaluation of the quantitative targets:Use the achievement rate and year-on-year growth rate of net sales and operating income ratio of the division in charge

②Evaluation of the qualitative targets:Use the achievement rate of the targets set for each individual


(3)Restricted Share Compensation(medium to long term)

・Purpose: To share interest with shareholders, incentives for the Company’s sustainable growth and the enhancement of its corporate value

・Outline:

①Restricted period: 3 years

②Allocate annual compensation upfront

③Evaluation procedure:Determine the number of shares for which transfer restrictions are to be released according to the target achievement rate of net sales and operating income ratio


・Compensation for Directors who are Audit & Supervisory Board Members

Within the compensation-range( totally 80 million yen per year) resolved at 52nd Ordinary General Meeting of Shareholders held on June 23, 2006, we decide each member’s compensation based on the Compensation Payment Standard for Audit & Supervisory Board Members.


Total Compensation for DIRECTORs

Total
(Million Yen)
Total Figure per Classification(Million Yen) Number of Persons
Fixed Performance-Based Share Remunaration-Type Share Options Restricted Share Compensation
Directors
(excluding Outside Directors)
464 292 64 106 8
Outside Directors 38 38 5
Audit & Supervisory Board Members (Inside) 31 31 2
Audit & Supervisory Board Members (Outside) 17 17 3

Director whose Total Amount of Compensation is 100 million yen or more

Name Position Total
(Million Yen)
Total Figure per Classification(Million Yen)
Fixed Performance-Based Share Remunaration
-Type Share Options
Restricted Share Compensation
Motoi Oyama Chairman and CEO, Representative Director 114 63 37 31