Independence Criteria for Outside Directors

JACCS believes that it is desirable for outside directors and outside Audit & Supervisory Board members (hereinafter, “outside directors”) to possess the greatest level of independence possible in order to ensure the objectivity and transparency necessary for the Company’s proper governance. Hence, the Company has established and makes public “Independence Criteria for Outside Directors” applicable to its outside directors.

Pursuant to the Companies Act and requirements, etc., stipulated by the stock exchange on which the Company is listed regarding the independence of outside directors and outside Audit & Supervisory Board members, the Company has established the following as its Independence Criteria for Outside Directors. The outside director is judged to have independence if none of the following stipulations apply.

• 1.
  Major client or supplier of the Company or an executive of said client or supplier
• 2.
  Person affiliated with an organization that receives a large amount of accounting or legal consultation fees, in addition to officer’s compensation, from the Company.
• 3.
  Major shareholder with 5% or more of the voting rights, or an executive of such a shareholding company
• 4.
  Close relative, up to the second degree of kinship, of a Director, Audit & Supervisory Board Member, executive officer, etc. of the JACCS Group, or a close relative that falls under 1 through 3 above.
• 5.
  Outside officer who has been in office for a long time