May 9, 2006

Notice of the Abolition of the Directors' Retirement Benefit Program

Sanken Electric Co., Ltd. ("the Company") announced today that its Board of Directors resolved, in the meeting held today, to terminate the Directors' Retirement Benefit Program as of the conclusion of the 89th annual general meeting of shareholders, scheduled on June 23, 2006.

1. Reason for Termination
As part of its management reforms, the Company comprehensively reviewed its compensation systems for its directors and statutory auditors. As a result, the Board decided to terminate the directors' and statutory auditors' retirement benefit program in its current form which provides the directors with stable compensation, and instead, decided to establish a new compensation system more closely connected to the Company's financial performance.
2. Payment of Retirement Benefit to Incumbent Directors and Auditors
In response to the termination of the retirement benefit program, the Company proposes to the 89th annual general meeting of shareholders, as part of the agenda, the following plan to settle the retirement benefits to the incumbent directors and statutory auditors corresponding to their tenures from their assumption until the time of the termination of the program, in accordance with the internal standards adopted by the Company. The plan is composed of a total of 250 million yen for such directors and a total of 20 million yen for such statutory auditors.
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