Tokai Carbon Co., Ltd. at meeting of its Board of Directors on February 14, 2006 resolved to abolish the system of paying Directors’ Retirement Benefit Program.

1. Purpose

As a component of management reform, review of the system of pay of directors was performed. As a result of the review, the system of paying retirement benefit to directors, which had elements of rewarding merely the length of service, and of deferred payment, is being abolished. In addition, by paying a part of the Board Directors’ remuneration in the form of shares of our company, we aim to align directors’ compensation with the return generated for shareholders, and make clear the responsibility of management for corporate results, and at the same time try to enhance the value of the company.

2. Contents

Abolition of Directors’ Retirement Benefit Program Directors’ Retirement Benefit Program, applicable to directors and auditors, will be abolished at the end of the annual meeting of shareholders scheduled on March 30, 2006, and an equivalent amount will be added to their regular compensation thereafter.