Corporate Information Officers

Appointment and Dismissal of Directors, Audit & Supervisory Board Members, and Executive Officers

In the nomination and appointment of candidates for Directors, Audit & Supervisory Board Members and executive officers, OKI considers the following matters in addition to meeting legal requirements.

• Nobility of character, wisdom, a high level of ethics, fairness, honesty, and a law-abiding spirit
• The ability to conduct duties in a manner that will help realize the OKI Group's corporate philosophy and enhance corporate value sustainably
• Length of tenure
• Audit & Supervisory Board Members must have the necessary financial, accounting, and legal knowledge.

The criteria for submitting a proposal to dismiss a Director, an Audit & Supervisory Board Member, or an executive officer take into consideration the following: where the person's act violates or infringes on the law and the Articles of Incorporation; whether the person has become unable to properly perform his/her duties. Such proposals are immediately deliberated by the Personnel Affairs and Compensation Advisory Committee, which then submits its proposal to the Board of Directors.

• Management

Outside Officers Election Reasons and Status of Attendance (FY2019)

Independence Criteria

OKI has established independence standards for the appointment of Outside Directors and Outside Audit & Supervisory Board Members (together, "Outside Officers"), and places importance on independence based on these standards when considering candidates.

Independence Standards for Appointment of Outside Officers

The Company appoints Outside Directors and Outside Audit & Supervisory Board Members based on the following criteria.

1. Not an executive(*1) of the OKI Group
2. Not a party whose major client (sales to the OKI Group exceed 2% of total sales of the relevant party's group) is the OKI Group, or an executive thereof
3. Not a party whose major client (sales to the relevant party's group exceed 2% of total sales of the OKI Group) is the OKI Group, or an executive thereof
4. Not a major shareholder of the Company (those who directly or indirectly hold 10% or more of total voting rights) or an executive thereof
5. Not a party whose major shareholder is the OKI Group or an executive thereof
6. Not a consultant, accounting professional such as certified public accountant, or legal professional such as lawyers who receives a large amount of money (over ¥10 million per year) or other assets (over ¥10 million per year) from the OKI Group besides officer compensation. (In the event that the accounting professional or legal professional is an organization such as a corporation or association, people who belong to such organizations are included.)
7. Does not belong to an auditing firm that conducts the Company's statutory audit
8. A person who has not fallen under (1) to (7) above in the past 10 years.
9. A person is not a relative within the second degree of kinship to any the following people.

   a. People listed in (2) to (7) above (limited to important executives(*2) for "executives" in (2) to (5), (2) for "people belonging to associations" in (6), important executives and people whose associations have professional qualifications such as certified public accountants or lawyers in the case of accounting or legal expert associations such as audit firms or legal firms, and people who have professional qualifications such as certified public accountants and certified public accountants for "people belonging to audit firms" in (7).

   b. An important executive of the OKI Group

   c. A person falling under category b above in the past 10 years

• *1 "Executive" refers to a person who performs the business such as a Director (excluding Outside Directors), executive officer, employee, etc.
• *2 "Important executive" refers to a person who performs important business such as a Director (excluding Outside Directors), an executive officer, or a department head. We have provided notice that outside officers who qualify as independent officers are Independent Officers.

Four Outside Directors and two Outside Audit & Supervisory Board Members, appointed based on the above policy, have been judged to have no risk of conflict of interest with general shareholders, and thus have been reported as independent officers to the Tokyo Stock Exchange.

Compensation for the Board Members and Executive Directors

In order to secure transparency and objectiveness in the decision-making processes concerning compensation for officers, the Personnel Affairs and Compensation Advisory Committee deliberates on the structure and level of compensation for directors and executive officers from an objective viewpoint, and reports the results to the Board of Directors.

OKI's basic policy on compensation for directors and executive officers is to serve as incentives for the performance improvement with the aim of the continuous enhancement of the corporate value and the corporate competitiveness while being the compensation structure that can attract excellent human resources.

The compensation system consists of basic compensation, annual incentive compensation linked to the performance of each fiscal year, and medium- to long-term incentive compensation in the form of stock-based compensation linked to medium- to long-term performance. This has been implemented as a part of efforts to develop an environment for a shift to management which supports aggressive management of the OKI Group and　achieves our medium-term business plans.

Compensation for outside directors consists only of basic compensation. In addition, the appropriateness of the structure and level of compensation is validated utilizing objective evaluation data from external organizations and others.

※Revised in FY2020

Compensation for outside directors consists only of basic compensation. In addition, the appropriateness of the structure and level of compensation is validated utilizing objective evaluation data from external organizations and others.

The compensation paid to Directors and Audit & Supervisory Board Members in FY2019 is as follows;