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Independence Criteria for Outside Directors

Independence Criteria for Outside Directors

NEC declares that an Outside Director who is not fallen under any of the following description is independent of NEC.

  1. Presently or at any time within the past three years, any of his or her relative within the second degree of relationship was an important executing person at NEC or its subsidiary
  2. Presently or at any time within the past three years, the person is or was a person executing the operations ("executing person") of a major business partner*1, or any of his or her relative within the second degree of relationship is or was an executing person at a major business partner (if such a person holds or held a position equal to an important executing person at NEC)
  3. In any one of the past three fiscal years, the person or any of his or her relative within the second degree of relationship has received financial compensation of 10 million yen or more (excluding remuneration for Directors or A&SBMs) from NEC
  4. Presently or at any time within the past three years, the person or any of his or her relative within the second degree of relationship has belonged to the Accounting Auditors of NEC
  5. Presently or at any time within the past three years, the person or any of his or her relative within the second degree of relationship has been an executing person of an organization that has received a significant amount of donation from NEC*2
  • *1
    Major business partner:
    1. A business partner with the total amount of transactions with NEC (consideration for offering products/services and procurements) exceeding 2% of sales of NEC or such business partner; or,
    2. A business partner to whom NEC owes the average annual amount exceeding 2% of total assets of NEC
  • *2
    Organization that has received a significant amount of donation from NEC:
    An organization that has received from NEC a significant amount of donation exceeding the greater of 10 million yen, or 2% of the gross income of such organization, in any one of the past three fiscal years

Immaterial Criteria for the Judgement that the Relationship with NEC is unlikely to affect Shareholders' Decision concerning the Exercise of Voting Rights

"Immaterial Criteria for the judgement that the Relationship with NEC is unlikely to affect shareholders' decision concerning the exercise of voting rights" is as follows:

NEC omits the description of Relationship with NEC in the event that an Outside Director is an executing person that is fallen under the following categories.

  1. Executing person of a business partner with the total amount of transactions with NEC (sales or procurements of products/services) not exceeding 1% of the sales of NEC nor the sales of such business partner in the previous fiscal years
  2. Executing person of a business partner to whom NEC owes the average annual amount of the previous fiscal year not exceeding 1% of the total assets of NEC
  3. Executing person of an organization that has received from NEC a donation not exceeding 1% of the gross income of such organization in the previous fiscal year