Kyocera Corporate Governance Manual

Corporate Governance
Companies listed on the New York Stock Exchange (NYSE) must comply with certain standards regarding corporate
governance under Section 303A of the NYSE Listed Company Manual. However, listed companies that are foreign
private issuers, such as Kyocera Corporation, are permitted to follow home country practice in lieu of certain provisions
of Section 303A.
The following table shows the significant differences between the corporate governance practices followed by U.S. listed
companies under Section 303A of the NYSE Listed Company Manual and those followed by Kyocera Corporation.
Corporate Governance Practices
Followed by NYSE-listed U.S. Companies
Corporate Governance Practices Followed by Kyocera Corporation
1. An NYSE-listed U.S. company
must have a majority of directors
meeting the independence
requirements under Section 303A
of the NYSE Listed Company
Manual.
For large Japanese companies, including Kyocera Corporation, which employ
a corporate governance system based on a board of corporate auditors (the
“board of corporate auditors system”), the Corporation Act of Japan (the
Corporation Act) has no independence requirement with respect to directors.
The task of overseeing management and independent auditors is assigned to
the corporate auditors, who are separate from Kyocera Corporation's
management. All corporate auditors must meet certain independence
requirements under the Corporation Act.
For large Japanese companies with a board of corporate auditors, including
Kyocera Corporation, at least half of the members of such board must be
“outside” corporate auditors. Such “outside” corporate auditors must meet
additional independence requirements under the Corporation Act. An
“outside” corporate auditor means a corporate auditor who has not served as a
director, manager or other employee of Kyocera Corporation or any of its
subsidiaries previously.
As of June 27, 2012, Kyocera Corporation had six corporate auditors, of
whom three were “outside” corporate auditors.
In addition to the independence requirements under the Corporation Act
described above, the rules of the Japanese stock exchanges require that, with
effect from the day following the date of the annual shareholders meeting for
the fiscal year ended on March 31, 2010, at least one of Kyocera
Corporation's outside directors or outside corporate auditors must meet certain
additional independence criteria.

Corporate Governance Practices
Followed by NYSE-listed U.S. Companies
Corporate Governance Practices Followed by Kyocera Corporation
2. An NYSE-listed U.S. company
must have an audit committee
composed entirely of independent
directors, and the audit committee
must have at least three members.
Kyocera Corporation employs the board of corporate auditors system as
described above. Under this system, the board of corporate auditors is a
legally separate and independent body from the board of directors. The main
function of the board of corporate auditors is similar to that of independent
directors, including those who are members of the audit committee of a U.S.
company: to monitor the performance of the directors, and review and express
opinions on the method of auditing by Kyocera Corporation’s independent
auditors and on such independent auditors’ audit reports, for the protection of
Kyocera Corporation’s shareholders.
Kyocera Corporation and other large Japanese companies which employ the
board of corporate auditors system are required to have at least three
corporate auditors. As of June 27, 2012, Kyocera Corporation had six
corporate auditors. Each corporate auditor serves a four-year term of office. In
contrast, the term of office of each director of Kyocera Corporation is two
years.
With respect to the requirements of Rule 10A-3 under the U.S. Securities
Exchange Act of 1934 relating to listed company audit committees, Kyocera
Corporation relies on an exemption under that rule which is available to
foreign private issuers with boards of corporate auditors meeting certain
requirements.
3. An NYSE-listed U.S. company
must have a nominating/corporate
governance committee composed
entirely of independent directors.
Kyocera Corporation’s directors are elected at a general meeting of
shareholders. Its board of directors does not have the power to fill vacancies
thereon. Kyocera Corporation’s corporate auditors are also elected at a
general meeting of shareholders. A proposal by Kyocera Corporation’s board
of directors to elect a corporate auditor must be approved by a resolution of its
board of corporate auditors. The board of corporate auditors is empowered to
adopt a resolution requesting that Kyocera Corporation’s directors submit a
proposal for election of a corporate auditor to a general meeting of
shareholders. The corporate auditors have the right to state their opinions
concerning election of a corporate auditor at the general meeting of
shareholders.

Corporate Governance Practices
Followed by NYSE-listed U.S. Companies
Corporate Governance Practices Followed by Kyocera Corporation
4. An NYSE-listed U.S. company
must have a compensation
committee composed entirely of
independent directors.
The total amount of compensation for Kyocera Corporation directors and the
total amount of compensation for Kyocera Corporation corporate auditors are
proposed to, and voted upon by, a general meeting of shareholders. Once the
proposal for each of such total amount of compensation is approved at the
general meeting of shareholders, each of the board of directors and board of
corporate auditors allocates the respective total amount among its respective
members.
5. An NYSE-listed U.S. company
must generally obtain shareholder
approval with respect to any
equity compensation plan.
Japanese companies, including Kyocera Corporation, often issue “stock
acquisition rights” (granting the holder thereof the right to acquire from the
issuer shares of its common stock at a prescribed price) for the purpose of
granting stock options to their officers, etc. Typically, when stock acquisition
rights are used for such purpose, they are issued under terms and conditions
which are especially favorable to the recipients thereof, and because of that,
such issuance is subject to approval at a general meeting of shareholders
under the Corporation Act. Kyocera Corporation obtains approval at a general
meeting of shareholders with respect to its issuance of stock acquisition rights
for stock option purposes.