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.
• Outside officers who satisfy the Company's independence criteria

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 (FY2022)

	Name	Reasons for Appointment and Expected Roles	Status of Attendance at meeting of the Board of Directors or the meetings of the Audit & Supervisory Board (FY2022)
Outside Directors	Shigeru Asaba	Mr. Shigeru Asaba is currently a professor of Waseda Business School (Graduate School of Business and Finance). Mr. Asaba has academic expertise in business in general and high ethical standards through his specialist knowledge in the fields of industrial organizations, corporate strategy, competitive strategy, ownership structures, corporate governance and corporate conduct. In addition, he has a high degree of independence from the management team, experience as an outside director of other companies, and serves as the chairman of the Personnel Affairs and Compensation Advisory Committee. Based on the above, and particularly on his academic expertise in all aspects of business, including marketing and innovation, the Company has appointed him as an Outside Director as it is expected that he will contribute to the deepening of deliberations on the progress of Medium-Term Business Plan, oversight of the development plan of successors, and improvement of risk and crisis response at the Board of Directors meetings. Although he has never had experience of being involved in corporate management other than as an outside officer, the Company determined that he will be able to carry out the duties of Outside Director appropriately for the aforementioned reason. The Company believes that he is sufficiently independent and has no risk of conflicts of interest with general shareholders.	Board of Directors 13/13 (100%)
	Tamotsu Saito	As a long-time representative director of IHI Corporation and a business leader not only in the industry but also in Japan, Mr. Tamotsu Saito has a wealth of management experience and high ethical standards in the manufacturing industry. In addition, he has a high degree of independence from the management team, experience as an outside director of other companies, and serves as the member of the Personnel Affairs and Compensation Advisory Committee. Based on the above, and particularly on his manufacturing, development and global management experience, the Company has appointed him as an Outside Director as it is expected that he will contribute to the deepening of deliberations on the progress of Medium-Term Business Plan, oversight of the development plan of successors, and improvement of risk and crisis response at the Board of Directors meetings. The Company believes that he is sufficiently independent and has no risk of conflicts of interest with general shareholders.	Board of Directors 13/13 (100%)
	Izumi Kawashima	Ms. Izumi Kawashima is currently a professor of the Faculty of Social Sciences at Waseda University. She specializes in commercial law (mainly the Companies Act) and the Financial Instruments and Exchange Act, and particularly has academic specialist knowledge relating to the Companies Act and corporate governance as well as high ethical standards. In addition, she has a high degree of independence from the management team, and has devoted her energies to the display of the Board of Directors functions as the chairperson of the Company's Board of Directors since June 2021. Ms. Kawashima also has experience as an outside director of other companies, and serves as a member of the Personnel Affairs and Compensation Advisory Committee. Based on the above, and particularly on her knowledge as a legal expert in the Companies Act and the Financial Instruments and Exchange Act, etc., the Company has appointed her as an Outside Director as it is expected that she will contribute to the deepening of deliberations on the progress of Medium-Term Business Plan, oversight of the development plan of successors, and improvement of risk and crisis response at the Board of Directors meetings. Although she has never had experience of being involved in corporate management other than as an outside officer, the Company determined that she will be able to carry out the duties of Outside Director appropriately for the aforementioned reason. The Company believes that she is sufficiently independent and has no risk of conflicts of interest with general shareholders.	Board of Directors 13/13 (100%)
	Makoto Kigawa	After serving as an officer at a financial institution, Mr. Makoto Kigawa served as Representative Director of Yamato Holdings Co., Ltd. for more than ten years, and has extensive management experience and high ethical standards, mainly in the logistics industry, including the transformation of business models using ICT. In addition, he has a high degree of independence from the management team, experience as an outside director of other companies, and serves as the member of the Personnel Affairs and Compensation Advisory Committee. Based on the above, and particularly on his supply chain management and risk management experience, the Company has appointed him as an Outside Director as it is expected that he will contribute to the deepening of deliberations on the progress of Medium-Term Business Plan, oversight of the development plan of successors, and improvement of risk and crisis responseat the Board of Directors meetings. The Company believes that he is sufficiently independent and has no risk of conflicts of interest with general shareholders.	Board of Directors 12/13 (92%)
Outside Audit & Supervisory Board Members	Hideo Shiwa	He has headed the finance & accounting and planning divisions and presided over a business company and unit of the head office of a manufacturing company before serving as Director and Senior Managing Executive Officer and completing overseas assignments. The Company has appointed him as an Audit & Supervisory Board Member based on its judgement that he can conduct appropriate audits of its management by making use of his extensive experience, global insight, and high ethical standards. Based on his background described above, he has considerable financial, accounting and legal knowledge required for the Company's audits. The Company believes that he is sufficiently independent and has no risk of conflicts of interest with general shareholders.	Board of Directors 13/13(100%) Audit & Supervisory Board 18/18(100%)
	Ryuichi Makino	As a certified public accountant, he has been engaged in accounting audit of manufactures and other businesses in a wide range of industries for many years. He also has extensive knowledge in internal control. The Company has appointed him as an Audit & Supervisory Board Member based on its judgement that he can conduct audits of its management in an objective, neutral manner by making use of his extensive experience, insight, and high ethical standards. Based on his background described above, he has considerable financial, accounting and legal knowledge required for the Company's audits. Although he has never been involved in corporate management, the Company has determined that he is able to carry out the duties of Outside Audit & Supervisory Board Member appropriately for the aforementioned reason. The Company believes that he is sufficiently independent and has no risk of conflicts of interest with general shareholders.	Board of Directors 13/13(100%) Audit & Supervisory Board 18/18(100%)
	Yoshihiro Tsuda	As a certified public accountant, he has been involved in global accounting audits in various industries for many years. The Company has judged that he can conduct objective and neutral audits of the Company's management from a global perspective by utilizing his wealth of experience, knowledge and high ethical standards, and has therefore been appointed him as an Audit & Supervisory Board Member. Although he has no experience of being involved in the management of a company in the past, the Company believes that he will be able to appropriately execute his duties as Outside Audit & Supervisory Board Member for the reasons mentioned above. The Company believes that he is sufficiently independent and has no risk of conflicts of interest with general shareholders.	Board of Directors 13/13(100%) Audit & Supervisory Board 18/18(100%)

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.

The Company has provided notice that outside officers who qualify as independent officers are Independent Officers.
In addition to the above policies, the Company has appointed Outside Directors and Outside Audit & Supervisory Board Members based on the fact that their experience and knowledge in their respective fields of expertise are useful for the Company today.

Compensation for the Board Members and Executive Directors

Compensation, etc. paid to Directors and Audit & Supervisory Board Members in FY2022

1. Policy on determining the content of individual compensation, etc. for Directors

The Company established the policy on determining the content of individual compensation, etc. for Directors, and a summary is as follows.

Basic policy

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 enforcement of the corporate competitiveness while being the compensation structure that can attract excellent human resources.

Structure of compensation

The compensation structure is divided into performance-linked compensation and compensation other than performance-linked compensation, and consists of basic compensation, which is a fixed compensation; and annual incentive compensation and medium- to long-term incentive compensation, which are performance-linked compensation. These compensations have been provided as part of efforts to develop an environment for a shift to the management focused on "more aggressive goal setting" and "growth over medium- to long-term" in order to achieve "continuous growth" of the OKI Group. The compensation for outside directors consists only of basic compensation.

	Basic compensation	Annual incentive	Medium- to long-term incentive
Inside Directors (Concurrently serving as Executive Officer)
Outside Directors		—	—

As medium- to long-term incentive compensation, the Company provided compensation-type stock options until FY2022. No. 4 of 99th Ordinary General Meeting of Shareholders is suggested, performance-linked stock compensation (performance share units) will be provided from FY2023, in which shares will be delivered in proportion to the achievement of the performance of the Medium-Term Business Plan (three years).

Calculation method for performance-linked compensation

・FY2022

For annual incentive compensation, 70% of the amount to be paid is calculated by multiplying the standard compensation amount set for each position in advance multiplied by a performance evaluation factor based on quantitative evaluation, and 30% is calculated by qualitative evaluation in accordance with (iii). The performance indicators used in the quantitative evaluation are those (sales, operating income, and working capital) that have been determined to be appropriate as performance evaluation indicators for achieving the OKI Group's sustainable growth. The quantitative evaluation consists of the OKI Group's consolidated performance-linked portion and the performance-linked portion by the division in charge, and the target and actual results of the performance evaluation indicators for the OKI Group's consolidated performance-linked portion are as follows.

(Unit: Billions of yen)

Performance evaluation indicator	Targets	Actual results
Net sales	425.0	369.1
Operating income	9.0	2.4
Working capital	95.2	103.5

The amount (or quantity) of the medium- to long-term incentive compensation is based on ROE as a performance indicator, which is judged to be an appropriate indicator for improving corporate and shareholder's value over the medium and long term and share with shareholders. To calculate the amount, the Company sets the standard compensation amount for each position in advance, then multiplies it by a performance evaluation factor. The targets and actual results are as follows.

Performance evaluation indicator	Targets	Actual result
ROE	10%	-2.7%

・FY2023

Annual incentive compensation will be changed to 80% quantitative evaluation and 20% qualitative evaluation to increase transparency.
For medium- and long-term incentive compensation, we will place more emphasis on medium- and long-term growth, and add sales and ESG-related indicators to the performance evaluation indexes in order to improve linkage with the Medium-Term Business Plan.

Compensation decision process

As for how to determine the policy on determining individual compensation, etc. for Directors, in order to secure transparency and objectiveness in the decision-making processes concerning compensation for officers, the Company has established the Personnel Affairs and Compensation Advisory Committee, which consists of only Outside Directors. It deliberates, prior to resolutions at a Board of Directors meeting, on the structure and level of compensation for directors and executive officers, and reports the results to the Board of Directors. In addition, the appropriateness of the structure and level of compensation is validated mainly utilizing objective evaluation data from external organizations.
The Personnel Affairs and Compensation Advisory Committee held a total of 12 meetings during the fiscal year under review, discussed the compensation structure for officers in six of these meetings, and reported the results three times.

Since the Board of Directors decided the content of individual compensation, etc. for Directors for the fiscal year under review after confirming the content of the report, it was evaluated that the content of the individual compensation, etc. for Directors for the fiscal year under review complied with the policy above.

Type			Content of compensation
Basic compensation	Fixed compensation	Monetary compensation	When serving as Executive Officer concurrently, monetary compensation shall be determined and paid monthly while being individually tailored to the position, followed by duties.
Annual incentive compensation	Performance-linked compensation		Once a year, monetary compensation shall be paid and determined individually with a linkage with the single year's consolidated business performance of the OKI Group and that of the division each Director is responsible for. Until fiscal 2022, the rate of payment is determined within a scope of 0% to 200%, according to linkage with the quantitative assessment by business performance and qualitative assessment by the President or the Personnel Affairs and Compensation Advisory Committee. The range will be determined between 0 and 250% from FY2023. It is set that the degree of linkage with business performance is higher for a person in a higher position. The amount of payment is set to 35% to 45% of the basic compensation when the rate of payment is 100%.
Medium- to long-term incentive compensation		Non-monetary compensation	The amount of payment linked to the Medium- Term Business Plan is determined. Until fiscal 2022, it is paid as compensation-type stock option once a year. If Proposal No. 4 of this General Meeting of Shareholders is approved, performance-linked stock compensation (performance share units) will be provided from FY2023. The performance share units will be granted for the performance evaluation period of three years, which is the period of the Medium-Term Business Plan, and shares will be delivered after the evaluation period in accordance with the degree of achievement of the Medium-Term Business Plan (however, a portion of the shares to be delivered will be paid in cash). The rate of payment will be determined within the scope of 0 to 200% until FY2022, depending on the degree of achievement of the targets. The range will be determined between 0 and 250% from FY2023. It is set that the degree of linkage with business performance is higher for a person in a higher position. The amount of payment is set to 15% to 20% of the basic compensation when the rate of payment is 100%. In the event that the Board of Directors recognizes that a director, etc. has violated laws or regulations, etc. in a material respect, the right to receive delivery of shares will be forfeited (clawback provision)

2. Matters related to the resolution for the compensation, etc. for Directors and Audit & Supervisory Board Members of the ordinary general meeting of shareholders

As for the amount of monetary compensation for Directors, at the 82nd ordinary general meeting of shareholders held on June 29, 2006, it was resolved that the annual amount for Directors would be ¥600 million or less (not including employee salary for an employee who is serving as Director). The number of Directors at the end of the ordinary general meeting of shareholders was eleven (including one outside director).

Separately from the monetary compensation, at the 92nd ordinary general meeting of shareholders held on June 24, 2016 and the 97th ordinary general meeting of shareholders held on June 29, 2021, it was resolved that the compensation-type stock option for Directors excluding outside directors would be ¥100 million or less per year. The number of Directors at the end of the ordinary general meetings of shareholders was five (excluding outside director), respectively.
The introduction of performance-linked stock compensation (performance share units) has been submitted as Proposal No. 4 of 99th Ordinary General Meeting of Shareholders.

As for the amount of monetary compensation for Audit & Supervisory Board Members, at the 82nd ordinary general meeting of shareholders held on June 29, 2006, it was resolved that it would be ¥100 million or less per year. The number of Audit & Supervisory Board Members at the end of the ordinary general meeting of shareholders was four.

3. Matters related to the commission of the decision on the content of individual compensation, etc. for Directors

The Company commissions the decision on the specific content of individual remuneration related to annual incentive compensation for Directors based on a resolution for the commission of the Board of Directors as below. As for the part commissioned to a Director who is concurrently serving as President and Executive Officer, the Company has taken measures such as deliberating the validation at the Personnel Affairs and Compensation Advisory Committee to ensure that the Director adequately executes his/her authority.

Applicable Directors	Commissioned person	Content of the commissioned authority	Reason for the commission of the authority
Director concurrently serving as the Chairman and Executive Officer or the President and Executive Officer	Members of the Personnel Affairs and Compensation Advisory Committee (Directors Shigeru Asaba, Tamotsu Saito, Izumi Kawashima, and Makoto Kigawa)	Qualitative evaluation for 30% of annual incentive compensation	To secure transparency of the process and objectivity of evaluation
Executive Director other than the above	Director concurrently serving as the President and Executive Officer (Director Takahiro Mori)	Qualitative evaluation for 30% of annual incentive compensation	To focus on aggressive goal-setting for each task assigned to the person

From FY2023, the portion of compensation that is subject to qualitative evaluation will be changed to 20%.

4. Compensation paid to Directors and Audit & Supervisory Board Members, etc.

Officer Title	Amount of payment	Amount of payment by type of compensation			Number of applicable officers
		Fixed compensation	Performance-linked compensation
		Monetary compensation		Non-monetary compensation
		Basic compensation	Annual incentive	Medium- to long-term incentive
Directors (excluding Outside Directors)	¥238 million	¥212 million	¥25 million	—	6
Audit & Supervisory Board Members (excluding Outside Audit & Supervisory Board Members)	¥46 million	¥46 million	—	—	2
Outside officers Outside Directors Outside Audit & Supervisory Board Members	¥55 million ¥27 million	¥55 million ¥27 million	— —	— —	4 3

• *1 The medium- to long-term incentive compensation is non-monetary compensation, etc. Its content is stated in (i) above.
• *2 The numbers of Directors (excluding Outside Directors) as of the end of the fiscal year under review are different from the number shown above, and the above numbers include those who retired at the conclusion of the 98th Ordinary General Meeting of Shareholders held on June 29, 2022.