[Translation]

May 11, 2012
Company Name: Tokuyama Corporation
Representative Name: Kazuhisa Kogo,
President and Representative Director(Code No. 4043, First Section TSE)
Contact: Yoshifumi Matsumoto, General Manager
Corporate Communications & Investor Relations Dept.
TEL: +81-3-6205-4832

Renewal of Policy Regarding Large-Scale Purchases ofTokuyama Corporation’s Company Shares (Anti-Takeover Measures)
Tokuyama Corporation (hereinafter “the Company,” “Tokuyama” or “we”) hereby
announces that the Board of Directors of the Company, at its meeting held on May 11,2012, determined to renew a policy (hereinafter “the Policy”) regarding the Large-Scale
Purchase of Tokuyama’s shares, as explained in the following, and make a proposal on theagenda to seek shareholders’ approval of the renewal of the Policy at the 148th Ordinary
General Shareholders’ Meeting (hereinafter “this Ordinary General Shareholders’Meeting”) to be held on June 26, 2012. The renewal of the Policy is based on the “Basic
Policy Regarding Persons Who Control the Company’s Decisions on Financial Matters andBusiness Policies” (hereinafter the “Basic Policy”) as defined in the clause in Paragraph 3
of Article 118 of the Enforcement Regulations of the Companies Act. It is one of ourmeasures to prevent the Company’s decisions on financial matters and business policies
from being controlled by persons deemed inappropriate according to the Basic Policy(Article 118, Paragraph 3, B(2), of the Enforcement Regulations of the Companies Act).
At the meeting of the Board of Directors held on May 12, 2009, Tokuyama determined
to adopt the Policy Regarding Large-Scale Purchases of Tokuyama Corporation’s Shares(Anti-Takeover Measures) (hereinafter the “Former Policy”), which was announced in apress release as of the following day. Later, at the 145th Ordinary General Shareholders’Meeting held on June 25, 2009, the Former Policy was approved by a majority of the voteof shareholders, thereby continuing the Former Policy. The Policy is a renewed version of
the Former Policy.
The Policy will take effect on condition that the above proposal on the agenda is approvedby shareholders at this Ordinary General Shareholders’ Meeting. In case it is not approved1thereat, the Policy shall not be introduced.
In cases where amendments of the Companies Act, the Financial Instruments andExchange Law and the associated regulations, Cabinet Orders, Cabinet Office Ordinances
and/or Ordinances of the Ministry (hereinafter, in general, “laws and regulations”) comeinto effect including the change of the names of laws and regulations and the stipulationof new laws and regulations inheriting the previous content, each Article and Paragraph ofthe laws and regulations referred to in this document shall be read as corresponding Article
and Paragraph to the previous content, unless otherwise stipulated by the Board of
Directors.
The major changes from the Former Policy to the Policy are as follows.
z

We have more clearly defined the Large-Scale Purchase Information required to besubmitted by the Large-Scale Purchaser (3. (1) ⑧ below).

z

We have clarified that the countermeasure against a Large-Scale Purchase when aLarge-Scale Purchaser complies with the Large-Scale Purchase Rules shall be
exclusively activated in cases where the Large-Scale Purchase is judged tosignificantly damage the common interests of Tokuyama’s shareholders andTokuyama’s corporate value.

The status of the major shareholders of the Company as of March 31, 2012 is provided
in the Appendix.
As of May 11, 2012, we have not received any Large-Scale Purchase proposal.

1. Purpose of the Large-Scale Purchase Rules(1) Basic Policy and Its Background
Tokuyama endeavors to improve its corporate value based on the improvement ofcorporate ethics and thorough compliance. At the same time, Tokuyama has formulated its
basic management policies to realize a Tokuyama Group that will always be selected bycustomers and appreciated by stakeholders—shareholders, customers, employees and local
communities—through the policy of “practicing corporate management in harmony withsociety” based on the recognition of its corporate social responsibility (CSR).
Since its founding in 1918, Tokuyama has developed a wide range of businesses with ourgroup companies, including the chemical business; the film business; the cement andbuilding materials business; the silicon business, including silica, polycrystalline silicon andthe like; the advanced materials business, including fine chemicals and the like; and the2medical-related business. These businesses are based on a foundation of uniform devotion
to the production of goods and earning the longstanding trust of our stakeholders, inparticular, our customers.
In each of these businesses, we attempt to anticipate future changes to the business
operating environment, make advance introductions of management resources andcontinuously improve corporate value. This effort involves endeavoring to plan for change;
develop technology; produce equipment; bolster trust and cooperation with our
stakeholders, in particular, our customers; and collect management resources. We believe
that, from this medium- to long-term perspective, the cumulative result of these efforts
and the ongoing advance introduction of management resources are the very source
Tokuyama’s corporate value.
Consequently, in order to raise management efficiency and increase profitability while
being engaged in management from such a medium- to long-term perspective, we believethat persons who have highly professional expertise and/or marketing/technical know-how
being in charge of important duties with regard to the Company’s decisions on financial
matters and business policies in compliance with laws, regulations and the Articles ofIncorporation will contribute to the common interests of Tokuyama’s shareholders andTokuyama’s corporate value.
The above explains Tokuyama’s Basic Policy Regarding Persons Who Control the
Company’s Decisions on Financial Matters and Business Policies.
(2) Centennial Vision and New Three-Year Management Plan
Toward the 100th anniversary of its establishment, which will be celebrated in February
2018, the Tokuyama Group set out a corporate vision. It defines the optimum form of theGroup as “a manufacturing company that exists in harmony with society and creates a
better future with the vitality of its human resources and the creativity of chemistry,” beingon par with globally competitive companies. We have declared that this goal is not simply
an extension of the status quo but rather can be achieved by Venture Spirit & Innovation.
The basic strategies of the Centennial Vision are to strengthen strategically growing
businesses through selection and concentration and to bolster international competitiveness.
We will promote these basic strategies through the foundation of a support structure thatconsists of human resource–based management and the promotion of CSR activities.
i)Strengthen Strategically Growing Businesses
Positioning the electronic materials (polycrystalline silicon) business and the like as
strategically growing businesses, we will proactively expand business and increase
production bases. In addition, we aim to create growth-driving businesses, centering

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on electronic components and environment/energy-related materials, as part of thecreation of new businesses.
ii)
Bolster Our International CompetitivenessWe will establish a highly profitable structure by restructuring the integrated
operations and lowering the unit energy consumption index (promoting
energy-saving) at the Tokuyama Factory. We will also pursue improvements in
productivity and efficiency in back-office divisions.
iii)
Support Structure for Basic Strategies
The Company considers its most important management resource to be humanresources and will address nurturing human resources who can globally work by
maximizing their vitality through enhancing employees’ motivation. The promotionof CSR activities represents our basic policy of “practicing corporate management inharmony with society with a viewpoint focused on future,” which is consistently
pursued by Tokuyama. We thus aim to become a corporation that is recognized andevaluated by our stakeholders in society.
Positioning the new Three-Year Management Plan, of which the starting year is FY2012,
as the second step for Accelerating Our Growth Strategies toward achieving our Centennial
Vision, we will strive to promote growth strategies and establish a support structure forsuch growth strategies. To create a flow that accelerates growth, we will complete the
Malaysia Project, restructure the Group’s businesses and strengthen the organizational
functions.
In addition, in the new Three-Year Management Plan, we will further develop the resultsof our endeavor under the previous Three-Year Management Plan and for FY2011 andaccelerate our initiatives to address remaining issues such as the creation of new businesses,
the nurturing of highly profitable businesses and the full utilization of the new informationline of business (LOB) system.
(3) Corporate GovernanceCorporate governance system is an extremely important structure for every company inrealizing its improvement of corporate value. We therefore believe that routine oversightshould be made and necessary measures be taken so that corporate governance ofTokuyama functions appropriately at all times.
Tokuyama is a company with an Auditor system. To strengthen the supervisorial
function of the Board of Directors, the Company installed an Outside Director in June
2011. Two of the four Auditors are Outside Auditors and we strive to maintain soundmanagement by ensuring the transparency and fairness of Tokuyama’s corporate4management. Meanwhile, the Company implemented an executive officer system in April
2011 for the purpose of separating the supervisorial function from the business executionfunction. We believe that the aforementioned governance system will ensure the objectivity
and neutrality of the management supervisorial function of the Company.
The decision of whether to accept a Large-Scale Purchase is ultimately left to thediscretion of Tokuyama’s shareholders. Consequently, in cases where a Large-Scale
Purchase is being attempted, we believe that the Large-Scale Purchaser’s provision of anadequate amount of information is necessary. In addition, we believe that the appraisal andopinions of Tokuyama’s Board of Directors, as well as the provision of information andthe like based on the business features pertaining to any Large-Scale Purchase, are critical
for the shareholders to make a decision of whether to accept said Large-Scale Purchase,and contribute to the common interests of Tokuyama’s shareholders.
Based on the foregoing philosophy, we hereby designate the rules as set forth in 3. below
regarding Large-Scale Purchases (hereinafter the “Large-Scale Purchase Rules”) so that thenecessary and adequate information can be furnished to the shareholders at the time of a
Large-Scale Purchase.
Tokuyama shall require Large-Scale Purchasers to comply with the Large-Scale Purchase
Rules, and in cases where a Large-Scale Purchaser fails to comply with the same, we may
take certain countermeasures from the perspective of protecting the common interests ofTokuyama’s shareholders and Tokuyama’s corporate value.
2. Purchases of Tokuyama’s Shares to which the Policy Is Applied
The Policy will apply to an action that falls under (i) or (ii) below or similar actions(regardless of the specific purchase method thereof, whether it is through market
transactions or a tender offer, excluding cases where the prior consent of Tokuyama’s
Board of Directors has been obtained regarding either case (hereinafter such a purchaseshall be referred to as a “Large-Scale Purchase”). The party carrying out such Large-Scale
Purchase (hereinafter the “Large-Scale Purchaser”) must comply with the Large-Scale
Purchase Rules that are set forth in the Policy.
(i)
(ii)

With respect to the shares1 issued by the Company, a purchase and other actions
where the holding ratio of the shares2 of a holder3 will be 20% or more.
With respect to the shares4 issued by the Company, a tender offer5 where the totalof the owning ratio of the shares6 owned by a party carrying out the tender offer
and the owning ratio of the shares owned by a party having a special relationship7
with the said party will be 20% or more.

53. Details of the Large-Scale Purchase Rules
The Large-Scale Purchase Rules require that Large-Scale Purchasers furnish thenecessary and adequate information to Tokuyama’s Board of Directors in advance,
whereupon Large-Scale Purchases shall be commenced after the elapse of a certain period
for Tokuyama’s Board of Directors to appraise the same.
A summary of the Large-Scale Purchase Rules is as follows.
(1) Provision of the Large-Scale Purchase Information
Prior to any Large-Scale Purchase, Large-Scale Purchasers shall provide to Tokuyama’s
Board of Directors the required and adequate information (hereinafter the “Large-Scale
Purchase Information”) for decision making by Tokuyama’s shareholders and the appraisaland consideration of Tokuyama’s Board of Directors.
In cases where a Large-Scale Purchaser attempts to carry out a Large-Scale Purchase, a“Statement of Intent” regarding the execution of the Large-Scale Purchase must first be
provided to Tokuyama’s Representative Director in accordance with the Large-Scale
Purchase Rules. The Statement of Intent shall have set forth therein the Large-Scale
Purchaser’s name, address, corporate establishment governing law, representative nameand contact information within Japan; a summary of the proposed Large-Scale Purchase;and covenants that adhere to the Large-Scale Purchase Rules. Tokuyama shall deliver to theLarge-Scale Purchaser a list of the Large-Scale Purchase Information to be initiallysubmitted by the same within 10 business days after receipt of the Statement of Intent.
Upon judging that sufficient Large-Scale Purchase Information has been provided,
Tokuyama’s Board of Directors will publicly announce the fact that it has received
sufficient information at a time and in a manner that it deems appropriate. The principal
items regarding the Large-Scale Purchase Information shall be as follows. In cases where it
is concluded necessary for the shareholders to make a decision, Tokuyama’s Board of
Directors may publicly announce all or part of the facts of the Large-Scale Purchaseproposal and the Large-Scale Purchase Information submitted to Tokuyama’s Board of
Directors at a time that it deems appropriate.
When determining whether or not the Large-Scale Purchaser has complied with theprocedure set forth in the Large-Scale Purchase Rules, Tokuyama’s Board of Directors
shall sufficiently consider to a reasonable extent various facts on the side of the Large-Scale
Purchaser, including the fact that the Large-Scale Purchaser may not necessarily havedetailed information with respect to the Company, and shall not determine that theLarge-Scale Purchaser has not complied with the procedure set forth in the Large-Scale
Purchase Rules solely for the reason that part of the Large-Scale Purchase Information thathas been requested by Tokuyama’s Board of Directors has not been provided by the6Large-Scale Purchaser.
① A Summary of the Large-Scale Purchaser or its group (including specific name, capitaland financial information)② The purpose, method and details of the Large-Scale Purchase (including the price andtype of purchase consideration, the timing of the purchase and the appropriateness ofthe purchase method)③ The existence of any notification of intent to a third party and, if such notification of
intent exists, the details thereof, at the time of the Large-Scale Purchase④ The basis for calculating the purchase consideration and materials that evidence
funding for the purchase (including the specific name and procurement method of theprovider of purchase funds (including substantive providers))⑤ The existing collateral for the shares of Tokuyama that are already owned or theplanned establishment of collateral for the shares of Tokuyama to be purchased in the
future (including the method and details of the planned establishment of collateral)⑥ The intended fundamental management policies and business plans of Tokuyama andthe Tokuyama Group after the completion of the Large-Scale Purchase⑦ Any changes planned after the completion of the Large-Scale Purchase or the details
thereof when making such changes regarding the relationship among the Tokuyama
and Tokuyama Group employees, suppliers, customers, local community and otherstakeholders and Tokuyama and the Tokuyama Group⑧ The probability of acquiring the approvals, licenses and/or permits to be acquired fromany governments or third parties in Japan and overseas, in accordance with the
Antitrust Law, other laws and regulations, and the like.
(2) Appraisal and Consideration by Tokuyama’s Board of Directors
Tokuyama’s Board of Directors believes that, after the Large-Scale Purchaser completes
the provision of the Large-Scale Purchase Information to Tokuyama’s Board of Directors,
a period of 60 days (in cases of purchases of all of Tokuyama’s shares through a tender
offer of the consideration in cash (denominated in Japanese yen) only) or 90 days (in casesof other Large-Scale Purchases) should be secured as a period for Tokuyama’s Board of
Directors to appraise, consider, negotiate, form opinions about or devise alternate
proposals (hereinafter the “Board of Directors Appraisal Period”) in accordance with thedegree of difficulty for appraising and considering the Large-Scale Purchase.
Therefore, Large-Scale Purchases shall commence only after the elapse of the Board of
Directors Appraisal Period.
To confirm the shareholders’ view with regard to whether to implement a
countermeasure against an inappropriate Large-Scale Purchase, the Board of Directors of7

the Company, based on the advice of the Special Committee, can extend the Board of
Directors Appraisal Period for a maximum of thirty (30) days (excluding the first day)within a necessary and reasonable range. In that case, the Board of Directors will quickly
announce the specific period of the extension and the reason for the extension. During theBoard of Directors Appraisal Period, Tokuyama’s Board of Directors shall sufficiently
appraise and consider the provided Large-Scale Purchase Information while accepting theadvice of outside experts and the like as deemed appropriate and necessary, whereupon theopinions and/or alternate proposal of Tokuyama’s Board of Directors shall be carefullysummarized and publicly announced in a timely and appropriate manner.
4. Policy when a Large-Scale Purchase Is Attempted (Please refer to Exhibit 1,“Outline of the Policy,” for a summary of the Policy)(1) When a Large-Scale Purchaser Fails to Comply with the Large-Scale Purchase
Rules
In cases where a Large-Scale Purchaser fails to comply with the Large-Scale Purchase
Rules, Tokuyama’s Board of Directors may, regardless of the specific purchase method
thereof, take measures (hereinafter the “Countermeasures”) deemed within the authority ofTokuyama’s Board of Directors under the Companies Act, other laws and ordinances, andTokuyama’s Articles of Incorporation, such as issuing new shares and/or issuing shareoptions, for the purpose of protecting the common interests of Tokuyama’s shareholders
and Tokuyama’s corporate value, and oppose the Large-Scale Purchase. That which isdeemed appropriate at such point in time shall be selected in regards to the decision ofwhether to implement any specific Countermeasure.
An outline regarding the issuance of the share options by shareholder allotment is set
forth in Exhibit 2 as a specific Countermeasure. However, in cases of actually issuing theshare options, an exercise period and exercise terms may be established in light of the
impact of such Countermeasure. In this case, such share options may not be exercised by
the Large-Scale Purchaser. In addition, there may be cases in which future changes are
made, such as adding a clause (an acquisition clause) in which Tokuyama may acquire theshare options in exchange for its shares or other property regarding the details of said shareoptions. Furthermore, in relation to the Former Policy, the Company registered theissuance of the share options for quick issuance (submitted on June 26, 2009, and June 30,2011). In case shareholders approve the introduction of the Policy at this Ordinary General
Shareholders’ Meeting, Tokuyama plans to register the issuance of the share options again
for quick issuance thereof.

8

(2) When a Large-Scale Purchaser Complies with the Large-Scale Purchase Rules
In cases where a Large-Scale Purchaser complies with the Large-Scale Purchase Rules,
Tokuyama’s Board of Directors will only go so far as to express its opposition or present
an alternate proposal regarding such purchase proposal, even if it is opposed to said
Large-Scale Purchase, and shall not, in principle, take any Countermeasures pertaining tosaid Large-Scale Purchase. The shareholders shall determine whether to accept theLarge-Scale Purchaser’s purchase proposal upon considering the details of said purchaseproposal and the opinions, alternate proposals and the like of Tokuyama’s Board of
Directors pertaining thereto.
However, in cases where it is determined that said Large-Scale Purchase will significantly
damage the common interests of Tokuyama’s shareholders and Tokuyama’s corporate
value, even if the Large-Scale Purchase Rules have been complied with, Tokuyama’s Boardof Directors may implement a Countermeasure (the specific details of the Countermeasure
are as set forth in the foregoing 4. (1)) in order to protect the common interests ofTokuyama’s shareholders and Tokuyama’s corporate value. Specifically, in cases where
there are reasonable grounds for concluding that the Large-Scale Purchase corresponds toany of the scenarios described in c through i below, such a Large-Scale Purchase will, in
principle, be determined to be one that will significantly damage the common interests ofTokuyama’s shareholders and Tokuyama’s corporate value. Meanwhile, a Countermeasureagainst the Large-Scale Purchase shall be exclusively activated in cases where theLarge-Scale Purchase is judged to significantly damage the common interests ofTokuyama’s shareholders and Tokuyama’s corporate value, and shall not necessarily be
activated only due to the fact that the Large-Scale Purchase is determined to formally fallunder any of the categories ① through ⑦ below.
① When it is determined that the purchase of Tokuyama’s shares is being carried out forthe purpose of causing Tokuyama’s related parties to take over Tokuyama’s shares at an
overstated share price, regardless of whether there is genuine intent to participate in the
management of Tokuyama (so-called green mailer).
② When it is determined that the purchase of Tokuyama’s shares is being carried out forthe purpose of temporarily controlling the management of Tokuyama so that the
intellectual property rights, know-how, trade secrets and principal suppliers, customers
and the like required with respect to Tokuyama’s or the Tokuyama Group companies’
business can be transferred to the Large-Scale Purchaser or its group companies andthe like.
③ When it is determined that the purchase of Tokuyama’s shares is being carried out inaccordance with plans to divert the assets of Tokuyama or the Tokuyama Group9

companies to secure or use as a source of funds to repay the obligations of theLarge-Scale Purchaser or its group companies and the like after controlling themanagement of Tokuyama.
④ When it is determined that the purchase of Tokuyama’s shares is being carried out forthe purpose of temporarily controlling the management of Tokuyama so that
Tokuyama’s or the Tokuyama Group companies’ high-value assets, such as real estateand securities, can be disposed of through sales and the like or so that an opportunity isafforded to cause the share price to increase rapidly due to temporarily high dividends
whereupon Tokuyama’s shares can be sold at an inflated price.
⑤ When it is determined that the purchase method of Tokuyama’s shares proposed by theLarge-Scale Purchaser will restrict the shareholders’ opportunity and freedom to makedecisions, such as oppressive two-stage purchases (executing purchases of shares, suchas tender offers, whereby no solicitations for purchasing all the shares are made in theinitial purchase, and disadvantageous purchase terms are set or the purchase terms are
not made explicitly clear in the second stage), whereby shareholders may essentially beforced to sell their Tokuyama shares (provided that incremental tender offers shall notalways correspond hereto).
⑥ When it is foreseen that the acquisition of controlling rights by the Large-Scale
Purchaser could lead to significant damages to the Company’s tangible and/or
intangible management resources, including relationships with Tokuyama shareholders,
employees, suppliers, customers, its local community and other stakeholders, which arenecessary for creating the common interests of Tokuyama’s shareholders andTokuyama’s corporate value, resulting in significant damage to the common interestsof Tokuyama’s shareholders and Tokuyama’s corporate value from the medium- andlong-term perspective, or when it is determined on a reasonable basis that themaintenance or improvement of the common interests of Tokuyama’s shareholders
and Tokuyama’s corporate value will be significantly obstructed.
⑦ When there are persons in the Large-Scale Purchaser’s management or principal
shareholders that are involved in antisocial forces or groups or organizations that are
regarded as antisocial forces.
5. Establishment of a Special Committee(1) Special Committee Members
A Special Committee is an organ that serves as a deterrent against arbitrary decision
making by Tokuyama’s Board of Directors before activating a Countermeasure. The
Special Committee shall remain established upon the renewal of the Policy. The Special

10Committee shall comprise at least three members, who shall be selected from among
Outside Directors, Outside Auditors, attorneys-at-law, Certified Public Accountants, tax
accountants, academic experts and outside knowledgeable persons who have sufficientexperience as Directors or executives to enable fair and neutral decision making. The
current Special Committee comprises one attorney-at-law and two Outside Auditors. The
names and brief work histories of the members who will assume office after the close ofthis Ordinary General Shareholders’ Meeting are set forth in Exhibit 3, “Brief Work
Histories of the Special Committee Attorney-at-Law and Outside Auditor Members(planned to assume office).”(2) Functions of the Special Committee
In cases where Tokuyama’s Board of Directors contemplates activating aCountermeasure, the following procedures must be taken in order to ensure fair decision
making.
First, Tokuyama’s Board of Directors shall inquire of the Special Committee as to thesuitability of activating a Countermeasure, whereupon the Special Committee shall make a
recommendation to Tokuyama’s Board of Directors on the suitability of activating such aCountermeasure while accepting advice from outside experts and the like based on said
inquiries. Resolutions to make a recommendation shall be made by unanimous approval ofthe members of the Special Committee, in principle. Tokuyama’s Board of Directors shallrespect the recommendation of the Special Committee to the utmost when a decision as towhether to activate a Countermeasure has been made.
With regard to the implementation of any countermeasure against an inappropriate
Large-Scale Purchase, the Board of Directors of the Company, accepting the advice of theSpecial Committee, may convene a General Shareholders’ Meeting to confirm theshareholders’ view. As set forth in 3. (2) above, the Board of Directors shall not extend theBoard of Directors Appraisal Period except for an extension for the purpose of confirming
the shareholders’ view concerning whether to implement any countermeasure against an
inappropriate Large-Scale Purchase based on the advice of the Special Committee.
6. Impact on the Shareholders when Activating a Countermeasure
In cases where a Large-Scale Purchaser fails to comply with the Large-Scale Purchase
Rules, Tokuyama’s Board of Directors may implement a Countermeasure allowed under
the Companies Act, other laws or Tokuyama’s Articles of Incorporation for the purpose ofprotecting the common interests of Tokuyama’s shareholders and Tokuyama’s corporate

11

value. Although no circumstances are expected to arise from the implementation of theCountermeasure, in which Tokuyama’s shareholders (excluding the Large-Scale Purchaser
in violation of the Large-Scale Purchase Rules) suffer any especial losses in regards to legal
rights or economic considerations, the Company’s stock price might be affected, to whichshareholders would have to pay attention. If Tokuyama’s Board of Directors decides toimplement a specific Countermeasure, such matter shall be promptly and appropriately
disclosed in accordance with laws, ordinances, and securities and exchange regulations, etc.
In case the Large-Scale Purchaser withdraws the tender offer that it already initiated after
it is determined to implement a gratis allotment of the share options by resolution of theBoard of Directors as a specific Countermeasure or in case the Large-Scale Purchaser has
immediately disposed of Tokuyama’s shares after it purchased them, the purchase itself
ceases to be a Large-Scale Purchase. In these cases, the Company cancels theimplementation of the gratis allotment of the share options or acquires the share options
gratis that were already allotted gratis. In such cases, the Company’s stock price might beaffected, to which shareholders would have to pay attention. In case the Company cancels agratis allotment of the share options or acquires the share options gratis that were alreadyallotted gratis after determination of shareholders to be allotted gratis the share options,the dilution of stock value per share will not occur. Any shareholders who conduct thepurchase and sale of the Company’s shares assuming the dilution of the per share stock
value will suffer a significant loss due to changes in stock prices.
7. Procedures Required of Tokuyama Shareholders Attendant to the Issuance of
the Share Options(1) Allotment of the Share Options
In cases where Tokuyama’s Board of Directors approves a resolution to issue the shareoptions, Tokuyama shall give a public notice of the allotment date of the share options.
Furthermore, because the share options will be allotted to the shareholders by way of a
gratis allotment of the share options as stipulated under Article 277 of the Companies Act,the shareholders entered or registered in the final shareholders’ registry or beneficial
shareholders’ registry as of the allotment date will naturally become the share options
holders on the effective date of the gratis allotment of said share options.
(2) Procedures for Exercising the Share Options
Tokuyama shall send the claim forms for exercising the share options (a prescribed
written instrument by the Company that includes a covenant that the shareholder him or
herself is not the Large-Scale Purchaser) and the other documents required for exercising12the rights of the share options to the shareholders entered or registered in the final
shareholders’ registry or beneficial shareholders’ registry as of the allotment date. After theissuance of the share options, the shareholders shall be issued one ordinary share of theCompany for each share option through submitting the required documents thereof andpaying a payment-handling institution an amount determined by Tokuyama’s Board of
Directors that is at least one Japanese yen for each share option.
However, as set forth in the foregoing 4 (1), in cases where Tokuyama makes a change,such as the addition of a clause (an acquisition clause) that enables the Company to acquire
the share options in exchange for Tokuyama shares or other assets, or, in other words, incases where it has been determined that Tokuyama can obtain the share options in
exchange for the Company’s shares, if Tokuyama completes the acquisition procedures, theshareholders who own the share options determined by Tokuyama’s Board of Directors tobe the subject of the acquisition will receive shares of the Company as consideration for
the acquisition by Tokuyama of the share options without having to pay any sum of money
equivalent to the exercise price thereof. (Note that, in this case, shareholders may be asked
to separately submit a prescribed written instrument of the Company covenanting that they
are not the Large-Scale Purchaser.)
8. Effective Period, and Discontinuation and Change of the Policy
The Policy will be effective until the closing of the Ordinary General Shareholders’Meeting for the last fiscal year that ends within three (3) years after this Ordinary General
Shareholders’ Meeting. Even before the end of the effective period, Tokuyama’s Board of
Directors shall reevaluate the Policy as necessary from the point of view of protecting thecommon interests of Tokuyama’s shareholders and Tokuyama’s corporate value based onrevisions to relevant laws and ordinances, such as the Companies Act, trends in judicial
decisions and measures taken by securities exchanges and other institutions. Note that if it
has been determined to change the Policy, the details thereof shall immediately bedisclosed. In addition, any substantial change or discontinuation of the Policy shall be
brought up as an agenda proposal at the General Shareholders’ Meeting.
The Policy was determined by the unanimous approval of the Directors, including one
Outside Director, in a resolution by Tokuyama’s Board of Directors at a meeting held on
May 11, 2012, whereupon all the Company’s Auditors, including two Outside Auditors,
participated in such meeting and in which every Auditor approved the Policy on thecondition that the specific administration of the Policy be properly carried out.

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9．Reasonableness of the Policy(1) Consistency of the Policy with the Basic Policy without Damaging the Common
Interests of Tokuyama’s Shareholders
As described in the foregoing 3., the Policy will enable Tokuyama’s Board of Directors toappraise, consider, negotiate, form opinions about or devise alternate proposals for theLarge-Scale Purchase by requiring the Large-Scale Purchaser in advance to provide thenecessary information for the Large-Scale Purchase and secure a certain period for
Tokuyama’s Board of Directors to appraise the same. Meanwhile, the shareholders will be,in turn, allowed to make a decision of whether to accept a Large-Scale Purchase, in
accordance with the Policy. In other words, the Policy is renewed to constrain any
purchase that is contrary to the common interests of Tokuyama’s shareholders andtherefore is consistent with the Basic Policy.
(2) Respect for the Shareholders’ Intentions
The Company makes a proposal on the agenda to seek shareholders’ approval of therenewal of the Policy at this Ordinary General Shareholders’ Meeting and shall not renew
the Policy in case the shareholders’ approval cannot be obtained. Thus, the intentions of
the shareholders are reflected.
Even before the end of the effective period, the Company shall review the Policy asnecessary based on revisions to relevant laws and ordinances. However, any substantialchange or discontinuation of the Policy shall be brought up as an agenda proposal at theGeneral Shareholders’ Meeting.
Note that the term of office for Tokuyama’s Directors shall be for one year, whereupon
the intentions of the shareholders regarding the continuation of the Policy shall bereflected, even during the effective period of the Policy, through the exercise of voting
rights regarding the agenda proposal for the appointment of Directors at the Ordinary
General Shareholders’ Meeting held each year.
(3) The Requirements in the Guidelines regarding Anti-Takeover Measures Satisfied
The Policy satisfies all the three basic principles formulated in the “Guidelines Regarding
Takeover Defenses for the Purposes of the Protection and Enhancement of Corporate
Value and Shareholders’ Common Interests” jointly released by the Ministry of Economy,
Trade and Industry and the Ministry of Justice on May 27, 2005: (i) the principle of theprotection and enhancement of corporate value and shareholders’ common interests; (ii)the principle of prior disclosure and shareholders’ intentions; and (iii) the principle ofsecuring necessity and suitability. The substance of the Policy also reflects recent practices

14and discussions, such as “Takeover Defense Measures in Light of Recent Environmental
Changes” released on June 30, 2008, by the Corporate Value Study Group of the Ministryof Economy, Trade and Industry.
(4) Respect for the Judgment of Highly Independent Outsiders
The Company has established a Special Committee as an organ that serves as a deterrent
against arbitrary decision making by Tokuyama’s Board of Directors. The Special
Committee comprises at least three members, who shall be selected from among Outside
Directors, Outside Auditors, attorneys-at-law, Certified Public Accountants, tax
accountants, academic experts and outside knowledgeable persons, all of whom are
independent from the management team of the Company that is engaged in executing
duties. The committee shall give advice to the Board of Directors on the judgment as towhether implementation of a Countermeasure is appropriate, the convocation of a General
Shareholders’ Meeting to confirm the intentions of the shareholders and the extension of
the Board of Directors Appraisal Period when the General Shareholders’ Meeting isconvened. The Board of Directors shall maximally accept the advice of the Special
Committee to adopt resolutions as an organ under the Companies Act.
(5) Reasonable and Objective Requirements for Activating a Countermeasure
The Policy is so formulated that the Countermeasure against a Large-Scale Purchase may
not be activated unless the reasonable and objective requirements for activating acountermeasure, which have been disclosed in advance, are met to prevent Tokuyama’s
Board of Directors from arbitrarily activating the Countermeasure.
(6) Advice from Outside Experts
Tokuyama’s Board of Directors and the Special Committee may, for themselves, seek theadvice of outside professionals (including attorneys-at-law, Certified Public Accountants,
consultants, financial advisors and other specialists). The objectivity and reasonableness ofthe determination of the Board of Directors will thus be ensured.
(7) Not a “Dead-Hand” Type or “Slow-Hand” Type Anti-Takeover Measure
The Policy is not a so-called “dead hand” type anti-takeover measure (a takeover defense
measure in which the triggering of the measure cannot be prevented even though amajority of the members of the Board of Directors are replaced). Neither is the Policy a“slow-hand” anti-takeover measure (a takeover defense measure in which the triggering of
the measure takes more time to prevent due to the inability to replace all of the directors at

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one time) because the Company does not adopt a board system with a different tenure of
office for directors. (The term of office for Tokuyama’s directors is one year.)
Notes:
1. Defined in Article 27-23, Paragraph 1, of the Financial Instruments and Exchange Law,
hereinafter the same applies, unless otherwise stipulated.
2. Defined in Article 27-23, Paragraph 4, of the Financial Instruments and Exchange Law,
hereinafter the same applies.
3. Defined as holders in Article 27-23, Paragraph 3 and any joint holders defined in
Article 27-23, Paragraph 5, including a person deemed to be a joint holder pursuant to
Article 27-23, Paragraph 6, of the Financial Instruments and Exchange Law, hereinafter
the same applies.
4. Defined in Article 27-2, Paragraph 1, of the Financial Instruments and Exchange Law,
the same applies in (ii).
5. Defined in Article 27-2, Paragraph 6, of the Financial Instruments and Exchange Law,
hereinafter the same applies.
6. Defined in Article 27-2, Paragraph 8, of the Financial Instruments and Exchange Law,
hereinafter the same applies.
7. Defined in Article 27-2, Paragraph 7, of the Financial Instruments and Exchange Law,
hereinafter the same applies (including persons who the Board of Directors regards asapplicable). With regard to persons listed in Item 1 of the same Paragraph, persons are
excluded who are set forth in Article 3, Paragraph 2, of the Cabinet Office Ordinanceconcerning the disclosure of tender offer of shares by persons other than the issuer.

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Exhibit 1

Outline of the Policy
Emergence of a Large-Scale Purchaser
Board of Directors of the Company:
Apply the Large-Scale Purchase Rules

Large-Scale Purchaser:
In case the Large-Scale Purchaser
complies with the Large-Scale Purchase
Rules

Large-Scale Purchaser:
In case the Large-Scale Purchaser
does not comply with the Large-Scale
Purchase Rules

Board of Directors of the Company:
Appraisal, consideration, negotiation,
formulation of opinion and planning ofalternative proposals

Advice from the Special Committee

Board of Directors of the Company:
Judgment as to whether implementation of a Countermeasure isappropriate

General Shareholders’ Meeting:Judgment as to whether implementation ofa Countermeasure is appropriate
Approved

Voted down

Board of Directors of the Company:
Implement a Countermeasure such as a gratis
allotment of share options

Board of Directors of the Company:
Do not implement a Countermeasure such as a
gratis allotment of share options

Board of Directors of theCompany:
Express an opinion and make analternate proposal
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Exhibit 2

Outline of the Share Options
1. Shareholders Subject to Grant of the Share Options and Issuance Terms andConditions Thereof
The share options shall be allotted at a 1:1 ratio for each share held (excluding,however, ordinary shares of the Company held by Tokuyama) to shareholders entered orregistered in the final shareholders’ registry or beneficial shareholders’ registry as of theallotment date stipulated by Tokuyama’s Board of Directors.
2. Type and Number of Shares for Purpose of the Share Options
The type of shares for the purpose of the share options shall be ordinary shares of theCompany, and the number of shares corresponding to each share option shall be one
share. However, the requisite changes shall be made in cases where Tokuyama executes ashare split or a reverse share split.
3. Total Number of Issued Share Options
The total number of allotted share options shall be the number stipulated by
Tokuyama’s Board of Directors. Tokuyama’s Board of Directors may execute anallotment of the share options multiple times.
4. Issuance Price of the Share Options
Gratis.
5. Amount to Be Paid upon Exercise of Each Share Option
The amount to be paid upon the exercise of each share option shall be the amountstipulated by Tokuyama’s Board of Directors of at least one Japanese yen.
6. Transfer Restrictions on the Share Options
The transfer of share options must be approved by Tokuyama’s Board of Directors.
7. Exercise Terms and Conditions
Large-Scale Purchasers cannot exercise the share options.
8. Exercise Period, etc., of the Share Options

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The exercise period of the share options, exercise terms and conditions other thanthose set forth in the foregoing 7., grounds for extinguishing shares, shareextinguishment terms and conditions, and other required matters shall be separately
stipulated by Tokuyama’s Board of Directors
9. Share Options with Acquisition Clause
As set forth in 7.(2) of the Policy, Tokuyama may make changes, such as the additionof a clause (an acquisition clause) that enables it to exchange shares or other assets of theCompany for the share options in regards to the details of the share options.

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Exhibit 3

Brief Work Histories of the Special Committee Attorney-at-Law andOutside Auditor Members (planned to assume office)Junya Sato (born May 4, 1953)
April 1982
Registered as attorney-at-law with the bar (Daiichi Tokyo Bar
Association)
April 1982
Joined Furnace, Sato & Ishizawa Legal Office (currently Ishizawa, Kami
& Sato Law Office)Mr. Junya Sato and the Company have not entered into a consultancy agreement and hehas no special interest in or with the Company.
Ryuji Hori (born September 3, 1943)
April 1966
Joined Iwai Sangyo Corporation
June 1996
Director, Nissho Iwai Corporation
June 2000
Managing Director, Nissho Iwai Corporation
June 2002
Executive Director, Nissho Iwai Corporation
April 2003
Professor, Waseda University, School of Law
April 2004
Professor, Graduate School of Law, Waseda University (current position)
June 2005
Auditor, Tokuyama Corporation (current position)
Mr. Ryuji Hori is an outside auditor as set forth in Article 2, Item 16, of the Companies Act.
The Company has notified Tokyo Stock Exchange, Inc., that he is an independent auditorin accordance with its regulations. He has no special interest in or with the Company.
Takeru Ishibashi (born September 29, 1941)
April 1964
Joined Mitsubishi Corporation
July1990
General Manager, Chlor-alkali Division, Mitsubishi Corporation
June 1997
Director, Mitsubishi Corporation
April 2001
Managing Director, Mitsubishi Corporation
June 2001
Member of the Board, Executive Vice President, Mitsubishi
Corporation
April 2004
Member of the Board, Senior Executive Vice President, Mitsubishi
Corporation
June 2007
Adviser, Mitsubishi Corporation
June 2011
Auditor, Tokuyama Corporation (current position)

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Mr. Takeru Ishibashi is an outside auditor as set forth in Article 2, Item 16, of theCompanies Act. The Company has notified Tokyo Stock Exchange, Inc., that he is anindependent auditor in accordance with its regulations. He has no special interest in or with
the Company.

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Appendix
Top 10 Major Shareholders(Percentage of shares held to the total number of shares issued (excluding treasury stock))
Name of Shareholder

Number ofPercentage ofShares Held
Shares Held(in thousands) (%)

Japan Trustee Services Bank, Ltd. (trust account)

24,896

7.16

The Master Trust Bank of Japan, Ltd. (trust account)

17,483

5.02

Nippon Life Insurance Company

15,535

4.46

Japan Trustee Services Bank, Ltd. (trust account 9)

11,972

3.44

The Yamaguchi Bank, Ltd.

8,246

2.37

Meiji Yasuda Life Insurance Company

7,442

2.14

The Nomura Trust and Banking Co., Ltd. (trust account)

7,429

2.14

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

7,095

2.04

Sojitz Corporation

6,484

1.86

Mitsubishi UFJ Trust and Banking Corporation

5,852

1.68

(Note) The Percentage of Shares Held is calculated after deducting the shares held by theCompany as treasury stock (1,729,017 shares).

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