MODEC : Corporate Governance Guidelines

Attachment

March 18, 2016 Revised on December 21, 2016 Revised on April 19, 2018 Revised on April 18, 2019 Revised on September 17, 2020 Revised on November 18, 2021

MODEC, Inc. Corporate Governance Guidelines

Chapter 1: General Provisions

(Purpose of these Guidelines)

Article 1. The purpose of the Guidelines is to set out the basic framework and philosophy of the Corporate Governance of MODEC, Inc. ("The Company") and to contribute to the furtherance of the sustainable growth and corporate value of the Company and its subsidiaries ("The MODEC Group").

(Management Philosophy)

Article 2. The MODEC Group has established the following business objectives, and strives to promote and instill throughout the MODEC Group.

• Strive to be a company that is internationally trusted in floating production systems markets.
• Promote the stable growth of the MODEC group by optimizing the business portfolio through the diversification of business model, including the construction, lease and operation of floating production systems.
• Expand the business area and provide total solutions to our clients.
• Contribute to society as a company in offshore development markets through the corporate activities described above.

(Basic Policy for Establishment and Enhancement of Corporate Governance System) Article 3. The Company establishes its corporate governance system in accordance with

the fundamental principles of strict compliance, a focus on shareholder returns and securing business transparency. In particular, in order to secure the

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transparency, the Company proactively strives to ensure prompt and accurate information disclosure.

Chapter 2: Securing the Rights and Equal Treatment of Shareholders

(Securing the Rights and Equal Treatment of Shareholders)

Article 4. The Company strives to maintain an environment that enables the proactive and prompt information disclosure and smooth implementation of exercising voting rights in order to ensure the equal treatment of rights of all shareholders, including minority shareholders and non-Japanese shareholders, and to protect shareholders rights and contribute to the appropriate exercise of their rights.

1. When the Company implements a capital policy (including share offering and management buyouts) that results in a change of control or a significant dilution, it promptly discloses the process of reviews and the purpose of implementing the capital policy with reviewing opinions of independent directors and independent external Audit & Supervisory Board Members and seeks to provide an adequate explanation to the shareholders, as necessary, at general shareholders meeting and financial results briefings or by other means.

(Procedures Concerning Transactions that may Harm the Common Interests of Shareholders)

Article 5. Any transactions involving conflict of interest and competitive transactions to be conducted by the Company's directors and executive officers are subject to the prior approval of the Board of Directors ("BOD"), and the directors who have conducted such transactions shall report the transaction to the BOD without delay.

1. In order to supervise transactions with major shareholders properly, the Company conducts appropriate reviews of such transactions in the BOD meetings, the Management Board meetings, and other similar meetings, depending on the importance and characteristics of such transactions.

(Basic Capital Policy)

Article 6. The basic capital policy for the Company is to make investments to ensure a sustainable growth for both the enhancement of the corporate value and shareholder values, to maintain shareholders' equity at a level where risks are controlled, and to conduct business that takes ROE (Return on Equity) into

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account.

1. With regard to shareholder returns, the Company intends to prioritize the stable and continuous distribution of dividends to shareholders by comprehensively considering business results, financial condition and future business developments among others.

(Basic Policy for Cross-Shareholdings and Exercising Voting Rights Associated with Cross- Shareholdings)

Article 7. In light of the stock price fluctuation risk and from the viewpoint of enhancing asset efficiency, the Company does not conduct cross-shareholdings, except in cases where cross-shareholdings are considered necessary for the business relationship or collaboration with investment destinations.

1. As regards exercising voting rights associated with cross-shareholdings, the Company makes individual decisions depending on the specific circumstances of each case from the viewpoint of maintaining and enhancing the corporate value of the MODEC Group, in principle.

(Countermeasures against Large-Scale Acquisitions of the Shares of the Company) Article 8. The Company has not adopted anti-takeover measures. In case that the

Company adopts anti-takeover measures, the BOD and the Audit & Supervisory Board shall examine the necessity and rationality for the adoption and implementation of anti-takeover measures in light of their fiduciary responsibility to shareholders, ensure that anti-takeover measures are not adopted on behalf of the individual interests of the management and the BOD, secure the appropriate procedures, and provide a sufficient explanation to shareholders.

1. In case that the shares of the Company become subject to a takeover bid, the BOD shall disclose its thoughts promptly to shareholders in accordance with the applicable laws and regulations, because such a takeover bid changes the ownership structure of the Company and may affect shareholder benefits. The Company respects the rights of shareholders and does not prevent shareholders from accepting such a takeover bid, in principle.

Chapter 3: Relationships with Stakeholders

(Building Strong and Effective Relationships with Stakeholders)

Article 9. Based on the recognition that cooperation with shareholders and all the other

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stakeholders is indispensable for the furtherance of sustainable growth and corporate value, Chief Executive Officer ("CEO") and managements stand at the forefront in the Company's efforts to foster a corporate culture that respects the rights and positions of stakeholder and corporate ethics.

(Code of Conduct)

Article 10. The Company has formulated the Code of Business Conduct and Ethics as a common code of conduct for the MODEC Group for the purpose of recognizing changes in the business environment and establishing a stronger compliance system with the aim of the further growth of the Company.

1. The code provides the ethical guidelines and expectations for conducting business on behalf of the MODEC Group. This includes the operations of the MODEC Group companies, as well as any joint venture partnerships controlled by the MODEC Group, including special purpose companies ("SPCs") and consortia. The code applies to all employees and managements and where applicable to suppliers, vendors, contractors, dispatched workers, and other personnel of the MODEC Group.
2. The Company strives to promote the dissemination of the code appropriately through online training and by other means. The status of implementation of the code is monitored by the Group Compliance Committee established by the BOD.

Chapter 4: Ensuring Appropriate Information Disclosure and Transparency

(Ensuring Appropriate Information Disclosure and Transparency)

Article 11. The Company recognizes that the implementation of appropriate information disclosure is one of the important management issues for obtaining the understanding of shareholders and other stakeholders. Based on this recognition, the Company discloses information considered to be important for shareholders and other stakeholders (including non-financial information) on the webpage of the Company, in reports and by various other means, in addition to disclosure in accordance with laws and regulations.

1. The Company maintains a keen awareness of the equality of overseas investors and discloses and provides information not only in Japanese but also in English as necessary.
2. The Company has set forth the Regulations for the Prevention of Insider Trading and endeavors to conduct the appropriate management of information
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and prevent the leakage of important and undisclosed insider information.

Chapter 5: Corporate Governance System

Section 1: Board of Directors

(Roles and Responsibilities of the Board of Directors)

Article 12. The BOD secures management fairness and transparency through its function of supervising the Company's overall management, including the exercise of duties by officers. The BOD also makes decisions for the Company by determining the execution of important business and other matters as required by laws and regulations.

1. Matters subject to decision-making by the BOD are set forth in Regulations for the Board of Directors, specifically and in detail. Decision-making about other matters is delegated to the managements. The segregation of duties and the authority of officers and general managers of divisions or departments are explicitly set forth in the internal rules, and are subject to review as necessary.
2. For the furtherance of the sustainable growth and corporate value of the MODEC group, the BOD establishes mid-term business plan and reviews of the status of progress for achieving the goals in the plan and new issues arising, if any, and countermeasures as required.

(Composition of the Board of Directors)

Article 13. The basic policy for the composition of the BOD is that it is composed of a maximum of fifteen persons who are considered competent based on the balance of their knowledge, experience, capabilities, among others, related to each business, and considering diversity, including gender, international experience, work experience and age in accordance with the provisions about directors in the Articles of Incorporation of the Company.

1. The Company aims to reinforce the monitoring and supervising functions of the BOD and increase management transparency by appointing at least one- third of members of the BOD as independent directors.
2. In view of achieving the mid- to long-term enhancement of corporate value, independent directors have the role of stating their opinions from a broad perspective based on their knowledge and supervising the management of the Company from an independent standpoint. In meetings of the BOD to discuss the appointment or dismissal of senior managements, the BOD secures the provision of opportunities for the independent directors to state their opinions
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