Ticker symbol 8830
June 5, 2013
Sumitomo Realty & Development Co.,Ltd.
2-4-1 Nishi-Shinjuku,Shinjuku-ku,Tokyo
Kenichi Onodera
Representative Director and President
To Our Shareholders:
NOTICE OF CONVOCATION OF THE
80th ORDINARY GENERAL MEETING OF SHAREHOLDERS
You are hereby notified that the 80th Ordinary General Meeting of Shareholders will
be held as stated below. Your attendance is respectfully requested.
In the event that you are unable to attend, you can exercise your voting rights withthe appropriate form. You are requested to review the attached reference documents
and indicate your approval or disapproval on the enclosed Form for the Exercise of
Voting Rights and return it to the Company by 5:40 p.m. of Wednesday, June 26,
2013.
Particulars
1. Date and Time: 10:00 a.m. on Thursday, June 27, 2013
2. Place: Sumitomo Hall, Shinjuku Sumitomo Building B1
2-6-1, Nishi-Shinjuku, Shinjuku-ku, Tokyo
3. Purpose of the Meeting:
Matters to be reported:
1. Business Report, Consolidated Financial Statements and Audit Report for
Consolidated Financial Statements by Accounting Auditor and the Board of
Corporate Auditors for the 80th fiscal year (from April 1, 2012 to March 31,
2013)
2. Financial Statements for the 80th fiscal year (from April 1, 2012 to March 31,
2013)
Matters to be resolved:
Agenda 1. Appropriation of Retained Earnings

1Agenda 2. Election of 10 Directors of the Company
Agenda 3. Election of 3 Corporate Auditors
Agenda 4. Renewal of Policy on Large-Scale Purchase of Shares of theCompany (Takeover Defense Measure)

If attending the meeting in person, you are kindly requested to submit the enclosed
Form for the Exercise of Voting Rights to a receptionist.
Any modification on this notice of the 80th ordinary general meeting of shareholders
and/or accompanying reference documents for this ordinary general meeting will be
notified by mail or posted on the Company website.
(http://www/sumitomo-rd.co.jp/).

2

REFERENCE DOCUMENTS
FOR GENERAL MEETING OF SHAREHOLDERS
Agenda and References
Agenda 1.

Appropriation of Retained Earnings

The company’s basic policy of profit distribution ensures continuance of stabledividends first and the repletion of retained earnings required for the long-termand stable growth of business.
For this fiscal year, taking results of this fiscal year and the policy stated above
into consideration synthetically, we would like to propose that the year-end cash
dividends for the 80th fiscal year be 10 yen per share, which is equal to theamount of those paid in the previous fiscal year.
Accordingly, as with the previous fiscal year, the total dividends for this fiscal
year, including the interim dividends of 10 yen per share, will be 20 yen per
share.
Matters concerning year-end dividends(1) Type of dividends
Cash(2) Matters concerning allocation of dividends to shareholders and the aggregate
amountDividends of 10 yen per share of common stock of the Company
The aggregate amount: 4,741,033,340 yen(3) The effective date of the appropriation of retained earnings
June 28, 20133

Agenda 2.

Election of 10 Directors of the Company

The term of office of all 9 directors will expire upon the conclusion of thisshareholders’ meeting. We ask you to approve to add a director to reinforce themanagement system and to make it massive, and vote for the appointment of 10
directors.
Candidates for Directors of the Company:
Candidate

Name

Career summaries, positions, charge at the

Number of

number(Date ofCompany and important concurrent offices

company

Birth)

with other companies

shares
held

1

Junji

April 1954

Takashima(April 11,
1930)

Entered Sumitomo Coal

23,234Mining Co., Ltd.
September1971 Entered the Company
June 1979

Director

June 1983

Managing Director

June 1985

Senior Managing Director

June 1986

Representative Director(present)2

June 1991

Executive Vice President

June 1994

President

June 2007

Chairman (present)

Kenichi

April 1970

Entered the Company

OnoderaAugust 1991

General Manager of(February 4,

20,000Master Leasing

1947)

Department, Building
Development Division
June 1995

General Manager of
Building Development
Department, Building
Development Division

June 1998

Director

June 2001

Managing Director

April 2004

Director,
Senior Executive Officer,
Head of Urban Property

4Management Division
May 2005

Head of Urban Property
Development Division

June 2005

Representative Director(present)3

June 2007

President (present)

Kojun

April 1984

Entered the Company

NishimaApril 2000

General Manager of(March 6,

5,000

Administration &1961)

Accounting Department,
Building Development
Division
April 2004

Executive Officer,
General Manager ofUrban Property
Development
Department, Urban
Property Development
Division

April 2007

Managing Executive
Officer,
Deputy Head of Urban
Property Development
Division

April 2009

Head of Residential
Business Division

June 2009

Director

September 2009 Head of Building
Development Division
June 2010

Representative Director(present)

October 2012

Head of Assets
Development Division

4

NobuakiApril 1981

Entered the Company

Takemura

April 2000

General Manager of(February

15,000Administration &5

13, 1959)

Accounting Department,
Residential Business
Division
June 2000

General Manager of
Accounting Department,
Finance & Accounting
Division

April 2004

Executive Officer

April 2007

Managing Executive Officer,
Deputy Head of Planning &Financing Division

April 2008

General Manager ofManagement Planning
Department

June 2008

Director

October 2008

Head of Finance Division

June 2010

Representative Director(present)

October 2012

Head of Business
Management Division5

MasatoApril 1983

Entered the Company

Kobayashi

April 2000

General Manager of(June 14,

Planning & Research

1960)

Department, Building

8,000

Development Division
April 2004

Executive Officer,
General Manager ofTokyo Site Acquisition
Department, Urban
Property Development
Division

April 2007

Managing Executive
Officer,
Deputy Head of Urban
Property Development
Division

6

April 2009

Head of Site Acquisition
Division

June 2009

Director

June 2010

Representative Director(present)

August 2010

Head of Residential
Business Division

6

Yoshinobu

April 1981

Entered the Company

Sakamoto

August 2000

General Manager of(November

Administration and4, 1958)

Planning Department,

8,000

Housing Business
Division No.2
April 2004

Executive Officer,
Deputy Head of Housing
Business Division

April 2007

Managing Executive
Officer

April 2009

Head of Information
System Division

June 2011

Director (present)

October 2012

General Manager ofInformation System
Department (present)

7

Yoshiyuki
Odai

April 1985

Entered the Company

9,000

September 2004 General Manager of(June 9,Corporate Planning

1961)

Department, Corporate
Planning Division
April 2005

Executive Officer

November 2008 Deputy Head of Finance
Division
April 2010

Head of Residential
Business Division

November 2010 Head of Corporate
Planning Division7June 2011

Director (present)

November 2011 Head of Financial
Division
October 2012

General Manager ofFinancial Department(present)

8

Hiroshi Kato

April 1984

Entered the Company(August 1,

April 2000

General Manager of

1961)

4,000

Related Businesses
Department, Building
Development Division
April 2007

Executive Officer,
General Manager of Site
Acquisition Department,
Urban Property
Development Division

April 2010

Deputy Head of Site
Acquisition Division

August 2010

Deputy Head of Building
Development Division

April 2012Managing Executive
Officer,
Head of New Business
Development Division

April 2103

Head of Assets
Development Division(present)

9

Koji Ito

April 1984

Entered the Company(December

April 2000

General Manager of

13, 1959)

14,568

Jyosai Operation
Department, Building
Management Division
April 2004

Executive Officer,
General Manager ofDevelopment andPlanning Department,

8

Urban Property
Development Division
April 2009Managing Executive
Officer,
Head of Construction
Technology Division

April 2010

Head of Customer
Division

October 2012

Head of Business
Development Division

April 2013

Head of Residential
Business Division(present)

10

Toshikazu

April 1983

Entered the Company

TanakaApril 2000

General Manager of(April 8,

Central Operation

1960)

Department, Building

10,000Development Division
April 2004

Executive Officer,
Deputy Head of Housing
Business Division

April 2007

Managing Executive
Officer

October 2008

Head of General Affairs
Division

April 2010

Head of Related
Businesses Division

September 2011 Head of RemodelingBusiness DivisionDecember 2012 Special Advisor of
Sumitomo Real Estate
Sales Co., Ltd. (present)
Note: There is no conflict of interest between each candidate and the Company.

9Agenda 3.

Election of 3 Corporate Auditors

The term of office of corporate auditors Ryoichi Nomura, Hiroshi Tomoyasu andTadashi Kitamura will expire upon the conclusion of this shareholders’ meeting. We
ask you to vote for the appointment of 3 corporate auditors. The board of corporate
auditors has consented to this agenda.
Candidates for Corporate Auditors:
Candidate

Name

Careersummaries,

positionsattheNumber of

number(Date ofCompany and important concurrent offices

company

Birth)

with other companies

sharesheld

1

Shoichi

April 1963

Abbe

Entered The Sumitomo0Warehouse Co., Ltd.

(September

June 1994

Director

20, 1940)

June 1997

Representative Director,
Managing Director

June 2000

Representative Director President (present)

June 2010

President - Executive
Officer (holding two posts
concurrently) (present)(Important Concurrent)
Representative Director - President of SS,
President - Operating Officer of SS
2

Hiroshi

April 1962

Entered Besshi

Tomoyasu

Construction Co., Ltd(March 19,(currently Sumitomo

1940)

1,000

Mitsui Construction Co.,Ltd.)
June 1994

Director

June 1997

Managing Director

June 1999

Senior Managing Director

June 2001

Vice-President Representative Director,
Vice-President - Executive
Officer10October 2003

President - Representative
Director, President Operating Officer

3

June 2005

AdvisorJune 2009

Designated Friend (present)

Tadashi

April 1971

Entered the Company

Kitamura

April 1996

General Manager of Building(May 25,

Engineering Department,

1943)

Building Development

20,000

Division
October 1998

Deputy Head of Construction& Engineering Division,
Deputy Head of Building
Development Division

June 1999

President of Sumitomo
Fudosan Fitness Co., Ltd.

April 2000

General Manager of Building
Engineering Department,
Construction & Engineering
Division of the Company

November 2001 General Manager of Product
Planning Administration
Department, Engineering
Development Division
June 2002

Fulltime Statutory Auditor(present)

Notes: (1) There are business relations (realty rental transactions etc.) between The
Sumitomo

Warehouse

Co.,

Ltd.,

of

which

Mr.

ShoichiAbbe

isRepresentative Director – President and the Company.
(2) There is no special conflict of interest between Mr. Hiroshi Tomoyasu, Mr.
Tadashi Kitamura and the Company(3) Mr. Shoichi Abbe and Mr. Tadashi Kitamura are candidates for outside
corporate auditors.
(4) You are kindly requested to elect Mr. Shoichi Abbe and Mr. Tadashi
Tomoyasu, based on the judgment that they are appropriate as outside
corporate auditors of the Company since they have rich experience and11wide discernment as managers.
(5)

The term of office of Mr. Hiroshi Tomoyasu as a corporate auditor of theCompany will reach 4 years upon the conclusion of this shareholders’ meeting.
(6) The Company has entered into with Mr. Hiroshi Tomoyasu a liability
limitation agreement in accordance with the applicable laws andregulations and the articles of incorporation. Under the agreement, Mr.
Tomoyasu’s liability is limited to the minimum limit of liability stipulated
by law. In case Mr. Tomoyasu’s reelection is approved, the said agreementwith him will be maintained. Further, in case Mr.Abbe’s election isapproved, the Company will enter into with him the same agreement as the
said.

12

Agenda 4.

Renewal of the Policy on Large-Scale Purchase of Shares of the Company(Takeover Defense Measures)
The Company adopted a policy toward Large-Scale Purchase of the Company sharesbased on the decision of the meeting of its Board of Directors dated May 17, 2007. The
policy was continued based on the resolution of the shareholders’ meeting of the 74th
fiscal year dated June 28, 2007, and was renewed with partial modifications based on
the resolution of the shareholders’ meeting of the 77th fiscal year dated June 29, 2010
(the policy toward purchase after the renewal shall be hereinafter referred to as the“Current Policy”). However, the term of the Current Policy will expire upon the
conclusion of this shareholders’ meeting.
Even after the renewal of the Current Policy, the Company has been continuously
considering over the way the policy towards purchases of the Company should be, aspart of the measures related to the increase of the corporate value and of the common
interests of shareholders. With the resolution of the meeting of the Board of Directors
dated May 14, 2013, it was decided to renew the Current Policy, subject to the approvalof this shareholders’ meeting (the ”Renewal”. The policy after the renewal shall behereinafter referred to as the “Policy”).
Therefore, we would like to kindly ask you to approve the Renewal.
The Policy does not contain any substantive modifications compared to the content of
the Current Policy.
1. Objective of the Proposal
The four business segments of Sumitomo Fudosan Group (the “Group”) are rental ofreal property mainly consisting of office buildings in the center of Tokyo, sales of real
property by developing lotting-out mansion businesses in the main cities of the whole ofJapan and mainly in Greater Tokyo Metropolitan area, housing construction businesswhere we perform services as general contractors of “Shinchiku Sokkurisan” (Newly
Built Look-Alike), of houses built to order and of reforms etc., and brokerage where we
perform services of real property brokerage and of selling agency. Rental and sales areclassified as being “development businesses based on market anticipation” as theyrequire high anticipatory investments since they are based on the existence of land, andtenants and purchasers are collected after commercialization. Housing construction andbrokerage are classified as being “production to order businesses” as they require no
anticipatory investments, but human resources requirements are substantial high, and13

these businesses are based on the existence of clients. The reason why the Group has
managed to improve its performance is that these main business segments withdifferent characteristics have mutually complemented, and balanced growth has thus
been achieved. It can be said that unified administration of the Group has been in fact a
substantial factor of the increase in corporate value.
As mentioned above, of our business segments, the rental business and the sales
business are two “development businesses based on market anticipation” requiring
anticipatory investments. In other words, we need to acquire land and constructbuildings within planned periods before we are allowed to record revenue. The
Company’s main business is to always make appropriate anticipatory investments forthe future. The characteristic of the two businesses mentioned above is thatinvestments contribute to revenues and an increase in corporate value after an interval.
Moreover, as a matter of course, in rental business, in order to enhance earning power
it is necessary not only to simply possess and rent high quality office buildings, but also
to improve services provided to tenants, to make management more efficient and tostrengthen business power. In sales business as well, realizing designs and functions
that capture the needs of clients and taking efficient sales strategies contributes tomaximization of profits. Thus, rental and sales are two business segments in which
overall business performance capacity, in other words corporate strength, largely affects
business profitability. Therefore, the Company attaches importance to performing
building management, collection of tenants, mansion sales etc. directly, thus grasping
the actual condition of clients and sites appropriately and always eagerly working on
the improvement of product planning, making operations more efficient andstrengthening business power. As a result, we have realized high profitability in all
businesses, and have increased the value of the property possessed as well as of thecorporation. The current price of rental properties as disclosed also reflects the
profitability of each office building backed up by our company’s business performancecapacity mentioned above.
In this way, the Group has continuously and actively worked towards an increase of
corporate value and a rise of the common profits of shareholders, and has largely paid
off. However, considering the recent trend of real estate investments by various market
participants, we are cautious about a risk of potential abnormal investment behavior
amid an enormous variety of decisions and speculations. Hence as a company aiming to
improve shareholder value steadily over the medium and long term, we havedetermined that it is in the common interests of shareholders to take certain measures
to avoid disturbance of our business approach, which has brought significant

14

achievements, due to some abnormal speculations.
The Company believes that if a Large-Scale Purchase (to be defined in section 2-(1)below) of the Company shares is initiated, the shareholders, in principle, should decideto accept or reject the Large-Scale Purchase. In order for the shareholders to correctly
recognize the Large-Scale Purchase’s effect on the corporate value and common
interests of shareholders, however, it is necessary that both the party making theLarge-Scale Purchase and the Board of Directors of our company provide to theshareholders necessary and sufficient information, opinions, alternative proposals etc.,
and sufficient time to consider the provided information, opinions, alternative proposals
etc..
Based on the above basic conceptions, we set out rules on Large-Scale Purchase(hereinafter referred to as “Large-Scale Purchase Rules”) and request the Large-Scale
Purchaser to comply with the Large-Scale Purchase Rules. The Board of Directors shalltake certain measures if the Large-Scale Purchaser does not comply with theLarge-Scale Purchase Rules, or even though the Large-Scale Purchaser complies with
the Large-Scale Purchase Rules, if it is clear that the Large-Scale Purchase will cause
unrecoverable damages to the Company or if the Large-Scale Purchase significantly
damages the corporate value and common interests of shareholders.
To ensure the objectivity, fairness and rationality of decisions of the Board of Directors
as to whether the Large-Scale Purchase Information (to be defined in section 2. (2) (II)below) Provision Period should be extended or not, whether the Large-Scale Purchaser
complies with the Large-Scale Purchase Rules, whether it is clear that the Large-Scale
Purchase will cause unrecoverable damages to the Company, whether the Large-Scale
Purchase will significantly damage the corporate value and common interests ofshareholders, whether the Board of Directors should take countermeasures, whether
the Policy should be amended etc., the Board of Directors shall consult the Special
Committee (please refer to Attachment 1 for an outline of the Special Committee)
consisting of external academic experts, lawyers, certified public accountants etc., andits recommendation shall be taken into the fullest account. The names and careersummaries of the Special Committee members upon the Renewal of the Policy aredescribed in Attachment 2.
2. Contents of the Policy(1) Large-Scale Purchase
The Large-Scale Purchase subject to the Policy is (1) a purchase or purchases of sharesof the Company where a specific shareholder group* intends to hold a ratio of voting

15

rights** of not less than 20%, (2) a purchase or purchases of shares where a specificshareholder group will hold a ratio of voting rights of not less than 20% as aconsequence or (3) an agreement etc. with other shareholders of the Company where a
specific shareholder group will hold a ratio of voting rights of not less than 20% as aconsequence***, regardless of whether the specific purchase means is a market
transaction, a takeover bid etc. (the person performing the Large-Scale Purchase shallbe hereinafter referred to as the “Large-Scale Purchaser”) Purchases or agreementsthat the Board of Directors approves in advance are not included.
(2) Large-Scale Purchase Rules
The Large-Scale Purchase Rules stipulate that the Large-Scale Purchase shall begin
after the necessary and sufficient information is provided by the Large-Scale Purchaser
for the Board of Directors in advance, and a certain period for evaluation by the Boardof Directors elapses. The details of the rules are as follows:(I) Submission of a letter of intent
If a Large-Scale Purchaser intends to make a Large-Scale Purchase, the Board of
Directors will request it to submit a letter of intent stating that it will comply with theLarge-Scale Purchase Rules. The Large-Scale Purchaser will be required to write its
name and address, the governing law of incorporation, the name of the representative,
domestic contact information, and an outline of the proposal of the Large-Scale
Purchase.
(II) Provision of information
The Board of Directors will deliver a list of items of requested information to theLarge-Scale Purchaser within ten business days of the receipt of the letter of intent.
Then, the Large-Scale Purchaser will provide to the Board of Directors informationnecessary and sufficient for the shareholders to make a judgment and for the Board of
Directors to form its opinion (“Large-Scale Purchase Information”). The specific content
of the information requested differs depending on the nature of the Large-Scale
Purchaser and the content of the Large-Scale Purchase, but the general items are as
follows:(i) Profile of the Large-Scale Purchaser and its group(ii) Purpose and contents of the Large-Scale Purchase (especially in the case of apurchase of only a part of the Company’s stocks, this item includes the approachconcerning the setting of an upper limit for the number of the stocks planned to bepurchased and the plan related to the modifications of the capital structure after

16

the purchase)(iii) Basis for the purchase price and proof of purchase funds(iv) Management policy to manage the Group after completion of the Large-Scale
Purchase (measures for the specific realization of this management policy, i.e.
business plans (including already existing restructuring plans, new business plans
and equipment investment plans), financial planning, capital policy, allotment
policy, labor policy, plan for efficient use of assets etc., as well as approachconcerning the integration or cooperation of businesses of the Large-Scale
Purchaser with businesses of the Company or of the Group and specific measures so
as to avoid conflicts of interests between the Large-Scale Purchaser and theCompany or the Group)(v) Policy to deal with the Group’s stakeholders including customers, suppliers,
local communities and employees after completion of the Large-Scale Purchase(vi) If the Large-Scale Purchaser is operating business of the same type as theCompany or the Group, approach concerning the legitimacy of the Large-Scale
Purchase under Antimonopoly Law and foreign competition laws.
If it is deemed that the information provided is insufficient for the Large-Scale
Purchase Information, the Large-Scale Purchaser may be requested to provide
additional

information

until

necessaryandsufficient

Large-Scale

Purchaser

Information is received. In principle, the provision of Large-Scale Purchase Information
shall be completed within 60 days from the delivery of the Large-Scale Purchase
Information list by the Board of Directors to the Large-Scale Purchaser (“Large-Scale
Purchase Information Provision Period”). However, since the specific content of theLarge-Scale Purchase Information might differ depending on the content of theLarge-Scale Purchase and its scale, the Board of Directors can extend the Large-Scale
Purchase Information Period for a maximum of 30 days, taking into consideration thecontent of the Large-Scale Purchase, its scale and the condition of the provision of
Large-Scale Purchase Information, based on the recommendation of the Special
Committee. The fact that a letter of intent has been submitted by the Large-Scale
Purchaser shall be disclosed in a timely manner. The Board of Directors will disclose allor part of the Large-Scale Purchase Information provided to the Board of Directors at
the time considered appropriate if the disclosure is considered to be necessary for theshareholders’ decision.
(III) Securing Board Assessment Period17

Depending on the difficulty of the assessment etc. of Large-Scale Purchases, the Boardof Directors will have 60 business days (for a tender offer in cash only, in yen currency,
for all shares of the Company) or 90 business days (for other Large-Scale Purchases)
after the complete provision of Large-Scale Information (“Board Assessment Period”) toassess and examine the Large Scale Purchase Information, negotiate with the Large
Scale Purchaser, form an opinion regarding the Large Scale Purchase, and develop analternative proposal. The fact that the Board Assessment Period has started shall be
disclosed in a timely manner. The Board Assessment Periods are set using businessdays rather than calendar days because the Group’s businesses are diversified, and its
operations expand not only across the nation but also overseas, and it is therefore
necessary for the Board of Directors to assess and examine the Large Scale Purchase
Information, and negotiate with the Large Scale Purchaser purchase, form an opinion
regarding the Large Scale Purchase, and develop an alternative proposal carefully,
considering relations with stakeholders, including shareholders, vendors and customers,
laws and regulations relevant to the Group’s business, the employment of employees,
etc.. Hence a Large-Scale Purchase must be initiated only after the expiration of theBoard Assessment Period. During the Board Assessment Period, the Board of Directors
will assess and examine the provided Large-Scale Purchase Information sufficiently,
taking advice from outside experts into consideration, and will disclose its opinion.
The Board of Directors may negotiate with the Large-Scale Purchaser to improve theconditions of the Large-Scale Purchase and may present its alternative proposal to theshareholders as needed.
(3) Policy for handling Large-Scale Purchase(I) If the Large-Scale Purchaser does not comply with the Large-Scale Purchase Rules
If the Large-Scale Purchaser does not comply with the Large-Scale Purchase Rules,
the Board of Directors may take countermeasures, including the issuance of stock
options, permitted by the Corporate Code and other laws and the Company’s Articles ofIncorporation, to protect the corporate value and common interests of shareholders. The
Board of Directors will decide to take countermeasures, taking the opinions of external
experts including lawyers and financial advisors into consideration and taking therecommendations of the Special Committee into the fullest account. The Board of
Directors will choose specific measures considered to be appropriate at the time. If theissuance of stock options at no cost to subscribers is chosen as a countermeasure, theterms of the stock options will be those outlined in Attachment 3 in principle. If stock
options are issued, the Board of Directors may set a period and conditions to exercise

18the stock options, taking the effect of the countermeasure into consideration.
It is believed that the establishment of the Large-Scale Purchase Rules and thecountermeasures to be taken upon non-compliance by the Large-Scale Purchaser with
the Large-Scale Purchase Rules are suitable and appropriate to protect the corporate
value and common interests of shareholders. The countermeasures may result in losses
including economic damages to a Large-Scale Purchaser that does not comply with theLarge-Scale Purchase Rules. It is reiterated that the Large-Scale Purchaser should not
begin Large-Scale Purchase without complying with the Large-Scale Purchase Rules.
(II) If the Large-Scale Purchaser complies with the Large-Scale Purchase Rules
The objective of the Large-Scale Purchase Rules is to provide the shareholders withinformation necessary to make a decision to accept or reject a proposal to purchase theshares of the Company that could affect the management of the Company, theevaluation and opinion of the Board of Directors which is in charge of management of
the Company, and the opportunities to receive an alternative proposal so that thecorporate value and common interests of shareholders will be protected. If theLarge-Scale Rules are complied with, the Board of Directors will in principle choose not
to take a countermeasure.
However, even if the Large-Scale Purchaser complies with the Large-Scale Purchase
Rules, if the Board of Directors determines that it is clear that the Large-Scale
Purchase will cause unrecoverable damages to the Company or that the Large-Scale
Purchase will significantly damage the corporate value and common interests ofshareholders after considering the opinions of external experts including lawyers andfinancial advisors and taking into the fullest account the recommendations of theSpecial Committee, the Board of Directors may take countermeasures to deter theLarge-Scale Purchase as described in section 2. (3) (I). If the Board of Directors decides
to take countermeasures, it will disclose information appropriately and in a timely
manner. Specifically, if the Large-Scale Purchase is considered to fall under any of thefollowing classifications under (i) to (iv), the Board of Directors considers, in principle,
that it is clear that the purchase will cause unrecoverable damages to the Company orthat the purchase will significantly damage the corporate value and common interestsof shareholders.
Further, if the Board of Directors judges that it is appropriate to confirm the intent of
the shareholders concerning whether to take countermeasures, it can confirm suchintent of the shareholders by convoking a shareholders meeting etc., taking into accountthe time necessary for such confirmation. In this case, the Large-Scale Purchaser shall19be requested to abstain from the Large-Scale Purchase until the completion of theprocedure for the confirmation of the shareholders intention.
(i) The Large-Scale Purchaser clearly damages the corporate value and common
interests of shareholders through activities including the following:･To buy up shares and request the Company to buy them back at a high price･To control the management of the Company temporarily and acquire important
assets of the Company at low prices or realize the interests of the purchaser at thecost of the Company’s interests in other ways
･To divert assets of the Company to collateral for debts of the purchaser or its
group companies etc. or to resources for payments for them･To control the management of the Company temporarily, have the Company
dispose of high-value assets not connected to the Company’s immediate business,and have the Company pay a temporary high dividend based on gains from thedisposal or sell shares at a profit when the shares price surges following atemporary high dividend.
(ii) The Large-Scale Purchaser threatens to purchase shares in the manner by which
the purchaser will effectively force shareholders to sell shares such as a high-handed,
two-step purchase (i.e., the purchase proposal through tender offer etc. in themanner that the purchaser sets the purchase terms for the second step less favorable
to shareholders than those for the first step or that the purchaser does not makeclear the purchase terms for the second step).
(iii) The Large-Scale Purchaser’s acquiring control of the Company will damage theinterests of stakeholders of the Group, including customers, suppliers, local
communities and employees and will consequently damage the corporate value andthe common interests of shareholders in the long run.
(iv) The purchase terms (including the price and type of consideration, timing ofpurchase, legality of purchase method, feasibility of purchase, policy for treatment of
the Company’s customers, suppliers, employees and other stakeholders after
purchase) are extremely insufficient and inappropriate in light of the corporate
value and the common interest of the shareholders of the Company.
(III) Establishment of a Special Committee
A Special Committee independent of the Board of Directors is established to ensure
the objectivity, fairness and rationality of decisions of the Board of Directors. The
Special Committee consists of three members, selected from external academic experts,

20

lawyers, certified public accountants, certified tax accountants, outside corporate
auditors, experienced corporate executives etc..
The Board of Directors of the Company shall consult the Special Committee and shallreceive the recommendations of the Committee when taking important decisions related
to the Policy, i.e. with respect to deciding whether to extend the Large-Scale Purchase
Information Provision Period, whether the Large-Scale Purchaser complies with theLarge-Scale Purchase Rules, whether it is clear that the Large-Scale Purchase willcause unrecoverable damages to the Company, whether the Large-Scale Purchase will
significantly damage the corporate value and common interests of shareholders,
whether countermeasures should be taken, and whether the Policy should be revised.
The Board of Directors of the Company shall take the Special Committee’s
recommendations into the fullest account.
When deliberating and adopting resolutions about the items submitted by the Board of
Directors of the Company, the Special Committee will receive advice from third parties(including experts such as financial advisors, certified public accountants, lawyers andconsultants) independent of the management of the Company and at the expense of theCompany and will request directors, corporate auditors, employees, etc. of the Company
to attend meetings of the Committee and provide necessary information. The Special
Committee will then make a recommendation to the Board of Directors based on thecontent of the resolutions adopted.
(4) Effects on the Company’s shareholders
If the Board of Directors decides to take countermeasures, the Company will disclose
information on the decision appropriately and in a timely manner in accordance withlaws and regulations and the rules of the shares exchanges, although we do not
anticipate a situation where the Company’s shareholders (excluding the Large-Scale
Purchaser and the specific shareholder group) will incur economic losses or damages totheir rights due to such countermeasure taken by the Company. If the countermeasuretaken is an allotment of stock options at no cost, shareholders are required to pay acertain amount of money within a prescribed period so as to exercise the stock options
and to obtain the stocks. Moreover, if the Board of Directors decides to obtain stock
options, new stocks might be delivered to shareholders as equivalent value of theacquisition of stock options by the Company, without the shareholders having to pay anamount equivalent to the exercise price. The details of the procedures will be
communicated separately in accordance with laws and regulations and the rules of thestock exchanges when stock options are issued.

21

The Company may cancel allocation of stock options or acquire stock options at no
cost to the Company in certain cases (e.g., if the Large-Scale Purchaser cancels theLarge-Scale Purchase) before issuing shares of the Company to the stock option holders
until the day immediately before the first day of the period for exercising stock options
even after the record date for allocation of stock options or after the allocation of stock
options is effective. Since dilution of the value of each share does not occur in this case,investors who have sold shares based on the assumption of dilution of the value of eachshare may incur losses depending on the change in the stock price.
(5) Expiration date of the Policy
The Policy shall expire at the closing of the annual shareholders’ meeting for the last
fiscal year ending within three years from the day of this general shareholder’s meeting.
This shall apply subsequently.
When the Board of Directors decides to continue the Policy, it will report the decision
promptly. The Board of Directors will revise the Policy from time to time based on thedevelopment and revisions etc. of relevant laws and regulations including the Corporate
Code and the Financial Instruments and Exchange Act to protect the corporate value
and common interests of shareholders.
If the Shareholders Meeting or the Board of Directors adopts a resolution abolishing
the Policy, the Policy shall be abolished immediately even before its expiration date. The
Board of Directors may revise the Policy, maximally respecting recommendations of theSpecial Committee even before the expiration date.
* The specific shareholder group means either of the following: (i) a holder (holder
stipulated in Article 27-23, paragraph 1 of the Financial Instruments and Exchange Act,
including a person deemed to be a holder under Article 27-23, paragraph 3) of shares etc.
of the Company (shares etc. set out in Article 27-23, paragraph 1) and joint holders of
the holder (joint holders prescribed in Article 27-23, paragraph 5, including holders
regarded as joint holders under Article 27-23, paragraph 6), or (ii) a person carrying out
purchase etc. (purchase etc. specified in Article 27-2, paragraph 1, including a purchasemade in securities markets) of share certificates etc. of the Company (share certificatesetc. stipulated in Article 27-2, paragraph 1) and persons having special relationships
with the person (persons set out in Article 27-2, paragraph 7).
**(i) If the specific shareholder group falls under the first case (i) in the above note, theratio of voting rights means the ratio of share certificates etc. held by a holder of share22certificates etc. of the Company (ratio of share certificates etc. set out in Article 27-23,
paragraph 4; the number of the shares held by the joint holders as specified in the same
paragraph shall be taken into consideration). (ii) If the specific shareholder group falls
under the second case (ii), the ratio of voting rights means the total of the ratio of sharecertificates etc. (ratio of share certificates etc. prescribed in Article 27-2, paragraph 8) ofa person carrying out a purchase etc. of share certificates etc. of the Company and thatof persons having a special relationship with the purchaser. In calculating the ratio ofvoting rights, the number of voting rights (stipulated in Article 27-2, paragraph 8) andthe number of shares issued (set out in Article 27-23, paragraph 4) in the latest
financial statement report, semiannual report or treasury stock purchase report can beused.
*** An agreement etc. with other shareholders of the Company means any agreement
concerning the joint acquisition or transfer of stocks of the Company, or the exertion of
voting rights or any other rights as shareholder of the Company, as well as any otheraction falling under the joint possessor stipulated in Article 27-23, paragraph 5 andparagraph 6.

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Attachment 1
Outline of the Special Committee
1. Establishment
The Special Committee shall be established by resolution of the Board of Directorsof the Company.
2. Members
The Special Committee shall consist of three persons commissioned by the Board of
Directors of the Company. Persons qualified to serve on the Special Committee shall
include academic experts outside the Company, attorneys, certified public
accountants, certified tax accountants, outside corporate auditors and experienced
business executives.
3. Term
The term of office of members of the Special Committee shall be decided byresolution of the Board of Directors of the Company.
4. Requirements for Resolution
In principle, resolutions by the Special Committee shall be adopted by a majority
vote of members present at meetings at which all members are present; provided,
however, that resolutions by the Special Committee shall be adopted by a majority
vote of those present at meetings at which a majority of members are present if
circumstances prevent the attendance of all members.
5. Items for Resolution
If consultation is requested by the Board of Directors of the Company, the Special
Committee shall accept the request, decide on the items stated below in principle,
and submit the details of its decisions to the Board of Directors of the Company
together with the reasons for such decisions. Members of the Special Committee
shall be required to make such decisions from the viewpoint of whether or not they
contribute to corporate value and, by extension, the common interests ofshareholders, and shall refrain from making decisions in their own personal
interests or in the personal interests of the Directors of the Company.
(1) Whether to extend the Large-Scale Purchase Information Provision Period(2) Whether or not a Large-Scale Purchaser complies with the Large-Scale24

Purchase Rules;(3) Whether or not it is clear that the Large-Scale Purchase will cause
unrecoverable damages to the Company or whether or not the Large-Scale
Purchase will significantly damage the corporate value and common interestsof shareholders;(4) Whether or not countermeasures should be taken;(5) Whether or not the Policy should be revised; and(5) Other items pertaining to this Policy for which the Board of Directors of theCompany requested consultation
6. Advice of Experts etc.
In forming decisions stated above under 5., the Special Committee shall make its
efforts to collect necessary and sufficient information to ensure the proper judgment.
The Special Committee may seek, at the expense of the Company, advice from third
parties independent of the management of the Company (including financial
advisors, certified public accountants, attorneys, consultants and other experts).

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Attachment 2
Career Summaries of the Special Committee Members
At the time of the Renewal of this Policy, the Special Committee will consist of thefollowing three members:

Tsuneo Otori<Career summary>
1924

Born in December 1924

May 1964

Professor at the Faculty of Law, Tokyo University

April 1985

Registered as attorney at law (present)

May 1985

Professor Emeritus, Tokyo University (present)

May 1994

Member of the Legislative Council of the Ministry of Justice(until May 1998)

Yukinobu Ozaki<Career summary>
1929

Born in April 1929

April 1955

Registered as an attorney at law of Dai-ichi Tokyo Bar
Association

April 1975

Vice President of Dai-ichi Tokyo Bar Association

April 1989

President of Dai-ichi Tokyo Bar Association, Vice Presidentof the Japan Federation of Bar Associations

February

1994Supreme Court Justice

April 1999

Retired as Supreme Court Justice

April 1999

Registered as an attorney at law (present)

Kozo Uno<Career summary>
1933

Born in July 1933

August 1963

Registered as certified public accountant (present)

July 1969

SeniorPartneroftheauditing

corporation

Asahi

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Accounting Company (Currently KPMG AZSA & Co.)
April 1974

Registered as certified tax accountant (present)

May 1974

Founded Uno Kozo Certified Public Accountant Office(present)

October 1993

Vice President of Asahi Audit Corporation (Currently
KPMG AZSA & Co.)May 1997

President of Asahi Audit Corporation

May 1999

Chairman of Asahi Audit Corporation

May 2001

Retired from Asahi Audit Corporation

There is no special conflict of interests between the persons mentioned above and theCompany.

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Attachment 3
Description of Stock options
1. Shareholders to whom stock options shall be granted and conditions for issue
Stock options shall be allotted to shareholders indicated or recorded in the register ofshareholders or beneficiary shareholders as of the closing of the base date decided by
the Board of Directors of the Company at a ratio of one stock options to one share ofcommon stock of the Company which is held by the shareholders (excluding shares ofcommon stock held by the Company) without requiring any new payment.
2. Type and number of shares to be issued upon exercise of stock options
The type of shares to be issued upon exercise of stock options shall be the common stockof the Company. The upper limit of the total number of shares to be issued upon
exercise of stock options shall be the number of shares obtained by deducting the total
number of outstanding shares of common stock of the Company (excluding shares ofcommon stock held by the Company) from the total number of shares authorized to beissued by the Company as of the base date decided by the Board of Directors of theCompany. The number of shares to be issued upon exercise of one stock option(hereinafter referred to as “the Number of Shares to Be Issued”) shall be separately
decided by the Board of Directors of the Company. However, if the Company conducts ashare split or a reverse share split, proper adjustments shall be made.
3. Total number of stock options to be issued
The total number of stock options to be issued shall be a number separately decided by
the Board of Directors of the Company. The Board of Directors of the Company may
allot stock options more than once.
4. Value of investment at the time of the exercise of each stock option (the amount tobe paid)
The value of the investment at the time of the exercise of each stock option (the amountto be paid) shall be separately decided by the Board of Directors of the Company, whichshall be one yen or more.
5. Restriction on the transfer of stock options
The acquisition of a stock option through the transfer of the stock option shall be subject

28

to the approval of the Board of Directors of the Company.
6. Conditions for the exercise of stock options
In principle, a person who belongs to a specified shareholders’ group with a ratio ofvoting rights of 20% or more may not exercise stock options. A person who is required tofollow a certain procedure to exercise stock options by applicable foreign laws andordinances of certain foreign jurisdiction, in which he/she/it is located, may not exercise
stock options in principle (However, such persons including a person to whom an
exemption from the procedure is available under the applicable laws and ordinances ofthe foreign jurisdiction may exercise stock options, if certain requirements are met. In
addition, the stock options held by the person shall become the object of acquisition by
the Company in exchange for the shares of the Company as compensation as stated in 8
below.). In addition, a person who does not submit a form prescribed by the Company toconfirm, among others, that the person does not belong to any specified shareholders’group may not exercise these stock options (excluding persons who are not required by
the Company to submit such form). The details shall be separately decided by the Boardof Directors of the Company.
7. Period for the exercise of stock options
The period for the exercise of stock options shall be determined at the Board of Directors
meeting resolving the issuance of stock options at no cost to subscribers, which shall be
one to three months, and the first day (hereinafter referred to as “the first day of theexercise period”) of which shall be separately decided at the Board of Directors meeting
resolving the issuance of stock options at no cost to subscribers. If the final day of theperiod for exercise falls on a holiday of the organization handling the payment of money
to be paid at the time of exercise, the final day shall be the preceding business day.
8. Acquisition of stock options by the Company(i) If the Board of Directors of the Company deems that the acquisition of stock options
by the Company is appropriate, the Company may acquire all stock options withoutcompensation on a day separately decided by the Board of Directors of the Company at
any time prior to the day preceding the first day of the exercise period.
(ii) The Company may acquire on a day separately specified by the Board of Directors of
the Company all stock options held by persons other than persons belonging to a
specified shareholders’ group and persons who do not submit a form prescribed by theCompany to confirm that the persons do not belong to any specified shareholders’ group29

by the day of acquisition (excluding, however, persons who are not required by theCompany to submit such form) which have not been exercised as of the day preceding
the day specified by the Board of Directors of the Company, and deliver the Number of
Shares to Be Issued of the Company for one stock options in exchange for all stock
options acquired.
If the Board of Directors of the Company determines on or after the day of acquisition
that there is a person holding stock options who does not belong to a specified
shareholders’ group (however, the Board of Directors of the Company may request thesubmission of a form prescribed by the Company as set out in the first paragraph of thisSection 8. (ii) above for the Board of Directors determination), the Company may
acquire on a day falling after the day of acquisition as specified by the Board of
Directors of the Company all stock options held by the person which have not been
exercised as of the day preceding the day specified by the Board of Directors of theCompany, and deliver the Number of Shares to Be Issued of the Company for one stock
options in exchange for all stock options acquired. This shall apply subsequently.
(iii) The details of the acquisition provision shall be determined separately at a Meetingof the Board of Directors.

30

MEMO

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