Basic Policies and Procedures for Determining Executive Compensation

The Company has established the following "Basic Policy and Procedures for Determining Executive Compensation" for the purpose of clarifying the basic principles, policies, procedures, etc. regarding determination of remuneration for Directors, Executive Officers and Corporate Auditors of the Group.

1. Basic principles and procedures

1. (1)Compensation for individual Directors (excluding those who are Audit & Supervisory Committee Members) of the Company shall be determined by a resolution of the Board of Directors (not delegated to the Company’s President and Representative Director) within the range of amount as resolved at the General Meeting of Shareholders, after deliberation by the Nomination and Compensation Committee.
2. (2)Compensation for individual Directors who are members of the Company's Audit & Supervisory Committee shall be determined through discussion by directors who are members of the Audit & Supervisory Committee, within the range of amount as resolved at the General Meeting of Shareholders. Consultation with the Nomination and Compensation Committee concerning the determination of compensation for Audit & Supervisory Committee Members shall be regarding the adequacy and appropriateness and appropriateness of the total amount level of such remuneration.
3. (3)Compensation for individual Directors of the Company's subsidiaries shall be determined by the Board of Directors of each company within the range of amount as resolved at the General Meeting of Shareholders of each company, after deliberation at the Nomination and Compensation Committee.

2. Policy for Determining Compensation for Executives of the Company and Major Operating Companies

(Note: "Major operating companies" refers to TechnoPro, Inc. and TechnoPro Construction, Inc.; the same shall apply hereinafter.)

1. (1)Directors (Excluding Directors who are Audit & Supervisory Committee Members) of the Company
   • Compensation for the Company’s Directors (excluding directors who are Audit & Supervisory Committee Members) are defined in the Policy for Determining Individual Director Compensation (Excluding Directors who are Audit & Supervisory Committee Members) as per [Appendix 5], in accordance with laws and regulations.
2. (2)Directors of Major Operating Companies and Executive Officers of the Company and Major Operating Companies
   • In order to strongly motivate Directors of major operating companies, as well as Executive Officers of the Company and major operating companies to perform their duties as key management personnel of the Group, compensation shall, like compensation for the Company's Executive Directors as specified in the Policy for Determining Individual Director Compensation (Excluding Directors who are Audit & Supervisory Committee Members) in [Appendix 5], consist of basic fixed base salary (in cash), year-end bonus for a single fiscal year as a short-term incentive (in cash performance-linked compensation), and stock compensation as a medium- to long-term incentive.
   • Fixed base salary shall be determined on an annual basis and paid in equal monthly installments.
   • Method of determining year-end bonuses and stock compensation and the key performance indicators to be used shall be in accordance with those for the Company's Executive Directors.
3. (3)Company Directors who are Audit & Supervisory Committee Members and Corporate Auditors of Major Operating Companies
   • Compensation for the Company’s Directors who are Audit & Supervisory Committee Members and Corporate Auditors of major operating companies shall consist of fixed base salary (in cash) only, considering the position of these individuals to perform their duties without being affected by corporate performance.
   • Individual base salary shall be at a level appropriate to responsibilities, and shall be determined on a case-by-case basis, taking into consideration such factors as status as full-time or part-time.
   • Base salaries shall be determined on an annual basis and paid in equal monthly installments.
4. (4)Executives of Other Subsidiaries
   • In determining compensation for Directors/Executive Officers and Corporate Auditors of the Company's other subsidiaries (meaning subsidiaries other than major operating companies), the Nomination and Compensation Committee shall verify the appropriateness of the level of individual compensation, although a certain degree of autonomy shall be allowed in accordance with the business characteristics of each of these subsidiaries.
   • Base salaries for executives of other subsidiaries shall, in principle, be determined on an annual basis in accordance with their duties and responsibilities and paid in equal monthly installments.
   • Prior consent shall be obtained from the Company when paying end-of-year bonuses to executives of other subsidiaries.
   • The Board of Directors of the Company and the company in question may decide to pay stock compensation as a medium- to long-term incentive to executives of other subsidiaries.

3. Other

There is no retirement allowance system for Directors and Corporate Auditors of the Group.

1. (1)There is no retirement allowance system for Directors and Corporate Auditors of the Group.
2. (2)However, this may not be the case in the event of special circumstances, including when a subsidiary joining the Group via corporate acquisition has an existing retirement allowance system and when such a system is deemed necessary.
3. (3)Executive Officers of the Company and its major operating companies are covered by the Retirement Benefits (Corporate Defined Contribution Pension System) plan based on the TechnoPro Group Corporate Pension Plan Rules in the same manner as employees of the Company and its major operating companies.