OREANDA-NEWS. Cosmo Oil Co., Ltd. announces, as set forth below, that it resolved at the Board of Directors meeting held on May 12, 2015 to introduce the executives remuneration system for stock remuneration in the Cosmo Energy Holdings Co., Ltd. which will be established on October 1, 2015, and decided to submit to the 109th General Shareholders' Meeting to be held on June 23, 2015 the proposal on the establishment of the Holding Company by the Share Transfer, including the introduction of the System within the Articles of Incorporation of the Holding Company.

The Cosmo Oil Group will transform to Holding Company system consisting of the Company, Cosmo Oil Marketing Co., Ltd, and Cosmo Energy Exploration and Production Co., Ltd. (hereinafter "Core Business Companies", the Holding Company and the Core Business Companies shall be collectively referred to as the "Subject Companies") in addition to Holding Company for the purposes of "strengthening of business competitiveness and realization of stable profits of the Holding Company", "acceleration of the enhancement of Group management and shifting of management resources", and "promotion of alliances in each business line." The executive's remuneration system of the Holding Company will have basic policies including incentives to enhance business performance and increase corporate value in the medium- and long-term, sharing profits with shareholders, encouraging a challenging spirit, and ensuring transparency and objectivity in the remuneration determination and evaluation processes, and clarify the linkage between remuneration and performance.

Remuneration for executives of the Holding Company will be composed of basic remuneration, which will be a set amount, and incentive remuneration, which will be linked to performance indicators such as consolidated ordinary income, the net debt-to-equity ratio (hereinafter "net D/E ratio") and Return on Equity (hereinafter "ROE"). The incentive remuneration will be composed of yearly incentive remuneration (bonuses) linked to consolidated performance indicators for each fiscal year and long-term incentive remuneration (stock remuneration) linked to the progress made in achieving targets in the Consolidated Medium-Term Management Plan.

Recipients of these forms of remuneration will be Directors (excluding Outside Directors and Directors who are members of the Supervisory Committee) and Executive Officers (hereinafter collectively referred to as the "Holding Company Directors, etc.").

Furthermore, in addition to the Holding Company, we will introduce the System for the Directors (excluding Outside Directors) of the Group's Core Business Companies (*2) (hereinafter the "Core Business Company Directors"; the Holding Company and the Core Business Companies shall be collectively referred to as the "Subject Companies").

In introducing the System, the Executive Remuneration Board Incentive Plan Trust (hereinafter the "BIP Trust") will be adopted. The BIP Trust is an incentive plan for executives developed by making reference to the performance-linked stock remuneration (performance share) system used in the U.S. Shares of the Holding Company acquired by the BIP Trust will be granted to Holding Company Directors and Core Business Company Directors in accordance with the degree to which performance targets are achieved.