Note: This English document has been translated from the Japanese original for reference purposes only. In theevent of any discrepancy between this translation and the Japanese original, the Japanese original shallprevail.
Tosei Corporation assumes no responsibility for this translation or for direct, indirect or any other formsof damages arising from the translation.

January 25, 2018
To whom it may concern:

Tosei Corporation
Toranomon Tosei Building, 4-2-3 Toranomon, Minato-ku, Tokyo
President and CEO: Seiichiro Yamaguchi
Securities code: 8923 (Tokyo Stock Exchange, First Section)
Securities code: S2D (Singapore Exchange, Mainboard)
Contact: Noboru Hirano, Director
Tel: +81-3-3435-2865

Notice regarding Renewal of Countermeasures to Large-Scale Acquisitions ofTosei Shares (Takeover Defense Measures)
Tosei Corporation (the “Company”) renewed a plan for countermeasures to large-scale acquisitionsof the shares in the Company (the “Former Renewed Plan”) by a resolution of the board of directors on
January 23, 2015 and obtained shareholder approval at the ordinary general meeting of shareholders of theCompany held on February 25, 2015 (the “Former Ordinary General Meeting of Shareholders”).

Theeffective period of the Former Renewed Plan expires at the conclusion of the ordinary general meeting ofshareholders for the last fiscal year ending within three years after the conclusion of the Former Ordinary
General Meeting of Shareholders, and the Former Renewed Plan will become invalid at the conclusion of the65th ordinary general meeting of shareholders of the Company to be held on February 27, 2018 (the “68thOrdinary General Meeting of Shareholders”).

The Company announces that, due to the Former Renewed Plan becoming invalid, the Company’sboard of directors determined at the meeting held on January 25, 2018 to formally revise certain wordings ofthe Former Renewed Plan and introduce a new plan (the introduction is to be referred to as the “Renewal,”and the renewed plan is to be referred to as the “Plan”) as a measure to prevent decisions on the Company’s
financial and business policies from being controlled by persons deemed inappropriate (Article 118, Item
3(b) of the Enforcement Regulations of the Companies Act) under the basic policy regarding the persons who
control decisions on the Company’s financial and business policies (as provided in Article 118, Item 3 of the
Enforcement Regulations of the Companies Act; the “Basic Policy”).

The Renewal will be subject toapproval by the shareholders at the 65th Ordinary General Meeting of Shareholders.

At the board of

directors meeting described above, five directors in total including two outside director were in attendance
and unanimously approved the Renewal and all of the Company’s Audit & Supervisory Board Members,
who are all outside Audit & Supervisory Board Members, were in attendance and did not raise any objections
in respect of the Renewal.
1

I.

Basic Policy Regarding the Persons Who Control Decisions on the Company’s Financial andBusiness Policies

The Company believes that the persons who control decisions on the Company’s financial andbusiness policies need to be persons who fully understand the details of the Company’s financial and businessaffairs and the source of the Company’s corporate value and who will make it possible to continually andpersistently ensure and enhance the Company’s corporate value and, in turn, the common interests of its
shareholders.

The Company believes that ultimately its shareholders as a whole must make the decision on any
proposed acquisition that would involve a change of control of the Company.

Also, the Company will not

reject a large-scale acquisition of the shares in the Company if it will contribute to the corporate value of theCompany and, in turn, the common interests of its shareholders.

Nonetheless, there are some forms of large-scale acquisition of shares that benefit neither the
corporate value of the target company nor the common interests of its shareholders including those with apurpose that would obviously harm the corporate value of the target company and the common interests of
its shareholders, those with the potential to substantially coerce shareholders into selling their shares; thosethat do not provide sufficient time or information for the target company’s board of directors and shareholders
to consider the details of the large-scale acquisition, or for the target company’s board of directors to makean alternative proposal and those that require the target company to discuss or negotiate with the acquirer inorder to procure more favorable terms for shareholders than those presented by the acquirer.

It is particularly necessary and essential for the persons who make decisions on the Company’s
financial and business policies to (i) maintain the system under which the Company group covers with its
comprehensive capability the five business fields and peripheral fields that allow the “integration of realestate and finance,” which leads to maximization of the potential of the Company group, (ii) maintainemployees who support those businesses with knowledge and experience specializing in real estate andfinance, etc., (iii) maintain the Company’s trust in the real estate industry that has been built up over a long
period of time based on the establishment of the ability and information networks supporting various value
creation technologies, and (iv) master knowhow that enables comprehensive business. Unless the acquirer ofa proposed large-scale acquisition of the shares in the Company understands the source of the corporate valueof the Company as well as the details of financial and business affairs of the Company and would ensure andenhance these elements over the medium-to-long term, the corporate value of the Company and, in turn, thecommon interests of its shareholders would be harmed.

The Company believes that persons who would make a large-scale acquisition of the shares in the
Company in a manner that does not contribute to the corporate value of the Company or the common interests2

of its shareholders would be inappropriate as persons that control decisions on the Company’s financial andbusiness policies.

The Company believes that it is necessary to ensure the corporate value of the Company

and, in turn, the common interests of its shareholders by taking necessary and reasonable countermeasuresagainst a large-scale acquisition by such persons.

II.

The Source of the Company’s Corporate Value and Special Measures to Realize the Basic
Policy1.

The Source of the Company’s Corporate Value

Under the corporate philosophy of “creating new value and inspiration in all aspects of real estate asa global-minded group of seasoned professionals,” the Company group holds up the corporate message“Putting heart into the city” and aims to increase its corporate value by contributing to society by developing
and revitalizing real estate for sustainable social development.

The Company group promotes a highly stable business portfolio through the five business fields it
maintains, namely Revitalization, Development, Rental, Fund and Consulting, and Property Management.

The Company expects a high profit from Revitalization and Development Businesses through realestate purchase and sale transactions, while taking advantage of a stable profit from Rental, Fund andConsulting, and Property Management Businesses which are stock-type business models. By mutuallycomplementing these five business fields, the Company has established a business infrastructure whichallows the Company to flexibly respond to changing market trends.

Also, integration of the knowhow obtained through these businesses lead to greater success of manybusiness projects of the Company, making this “five-businesses portfolio” the Company’s distinctive andadvantageous asset.

2.

Measures to Enhance the Corporate Value

The Company group established its three-year medium-term management plan aiming to further
increase the Company group’s corporate value and is pushing ahead with business under the plan.

Under the previous medium-term management plan called “Advancing Together 2017” (the targeted
period of the plan was three years from December 2014 to November 2017), the Company group strived tostrengthen its income base by expanding and developing the five existing businesses, with focus on the
Revitalization and Development Businesses. Specifically, in the Revitalization Business, we further
developed business by expanding value-up plans through acquisition with the use of real estate M&Atransactions and supply of revitalized products featuring specific themes, which have been converted from3

vacant buildings, dormant houses and others into hotels, shared houses, etc. In the Development Business,
we continued to develop the “T’s BRIGHTIA” commercial facility series, while in the development of
detached houses, we made Urban Home Corporation a Group company as a measure to reinforce acquisitionof land and sale, and improved quality and reduced cost by starting in-house construction management. In
the Fund and Consulting Business, assets under management (AUM) as of November 30, 2017 exceeded¥550 billion, an all-time high. In the area of new businesses, we decided to make inroads into the hotelbusiness, and opened the first hotel developed in-house in December 2017.

In the meantime, with regard to internal control, we established the Basic Policy on Corporate
Governance concerning each principle of Japan’s Corporate Governance Code, and have worked on theenhancement of governance of the Company group through such measures as the establishment of theNominating and Compensation Advisory Committee as an advisory body to the Board of Directors.
Furthermore, we positioned the development of next-generation executives as an important task, and havefocused on the establishment of new managerial posts, the enhancement of training for mid-career employees
and other measures.

The Company group newly formulated a medium-term management plan called “Seamless Growth2020” (the targeted period of the plan is three years from December 2017 to November 2020), kicking off inthe fiscal year ending November 30, 2018. The major policy of the plan is “to continue growth as a Group tobuild a firm position as an original comprehensive real estate company,” under which we aim to establish
new income-generating business, while targeting further growth of the five existing businesses and increases
in their operating profit. In addition, we will endeavor to increase profits from the Rental, Fund andConsulting and Property Management Businesses, which are positioned as the stable businesses, to enable a
structural balance between profits from the Revitalization and Development Businesses so as to reinforce ourresilience to changes in the business environment. On the financial front, we will enhance funding capabilities,
through methods such as the extension of borrowing periods to maintain a sound financial structure as theinfrastructure that supports the expansion of business scale, while aiming at effective investments. In addition,
as the composition of the Company group’s trade diversifies in line with the expanding business scale, wewill further enhance the quality of internal control, namely, compliance, risk management, and disclosure, toestablish an optimum corporate governance structure.

Furthermore, we recognize that human resources that are the most important assets of the Company,
and to leverage these assets, we will drive ahead with the development of next-generation executives, allofficers and employees and the fostering of human resources for the improvement of productivity, while
increasing the satisfaction of employees of the entire Group. At the same time, we will strive to establish a
corporate brand befitting the firm position as a group of original comprehensive real estate companies andreinforce the attractiveness of our product brand that will be trusted by the market.

3.

Strengthening of Corporate Governance4

Following the development of Japan’s Corporate Governance Code in March 2015, it is becoming acommon understanding among market stakeholders that effectiveness and proper practice of corporate
governance in companies will lead to sustainable growth and improvement in their corporate value over the
medium to long term.

The Company group has previously appointed multiple Outside Directors (two members) along with
Audit & Supervisory Board Members (four members), all of which satisfy the requirements for outside
officers, and has notified all of the above six Outside Directors and Audit & Supervisory Board Members as“independent directors/auditors” pursuant to the listing regulations, etc. stipulated by the Tokyo Stock
Exchange. Also, the Company group has worked to reinforce the business execution function by the
introduction of the executive officer system, and enhance the effectiveness of the governance function by
establishing the Corporate governance meeting, and will continue to raise the effectiveness of its corporate
governance. Specifically, with a strong sense of group governance including subsidiaries, we will focus on
putting into practice compliance in cooperation with the Group companies, thorough implementation of risk
management by correctly understanding and analyzing risks involved in our group-wide corporate activities,
continuous performance of accountability to various stakeholders including investors by promptly andpublicly disclosing correct corporate information under the spirit of fair disclosure, and other efforts forstrengthening corporate governance. Furthermore, the Company group will actively promote businessdevelopment and social contribution activities in light of the growing interest in ESG (Environment, Society,
Governance), and reinforce the Tosei Group’s corporate brand befitting the firm position as a group oforiginal comprehensive real estate companies and the attractiveness of our product brand that will be trusted
by the market.
In this manner, the Company group works to enhance the value of the corporate group through steadily
achieving the targets set out in the new medium-term management plan and realizing fair corporate
governance in order to ensure and enhance the common interests of its shareholders.

III.

Measures to Prevent Decisions on the Company’s Financial and Business Policies from being
Controlled by Persons Deemed Inappropriate Under the Basic Policy (the Plan)

1.

Purpose of the Plan

The Plan is in line with the Basic Policy set out above in section I ‘Basic Policy Regarding the Persons
Who Control Decisions on the Company’s Financial and Business Policies’ for the purpose of ensuring andenhancing the corporate value of the Company and, in turn, the common interests of its shareholders.

As set out in the Basic Policy, the Company’s board of directors believes that persons who would
propose a large-scale acquisition of the shares in the Company in a manner that does not contribute to the5corporate value of the Company or the common interests of its shareholders would be inappropriate to
become persons who control decisions on the Company’s financial and business policies.

The purpose of

the Plan is to prevent decisions on the Company’s financial and business policies from being controlled bypersons deemed inappropriate, to deter large-scale acquisitions that are detrimental to the corporate value of
the Company and the common interests of its shareholders, and on the occasion that the Company receivesa large-scale acquisition proposal from an acquirer, to enable the Company’s board of directors to present analternative proposal to the shareholders or ensure necessary time and information for the shareholders todecide whether or not to accept the large-scale acquisition, and to enable the board of directors to negotiate
for the benefit of the shareholders.

The status of major shareholders of the Company as of November 30, 2017 is set out in Schedule“Major Shareholders of the Company,” and as of that date, approximately 39.1% of the total number of theCompany’s issued and outstanding shares are held by the representative director of the Company and his
related parties (the “Company Officers”).

The Company recognizes that the significance of listing is that it enables financing from a broader
market than usual, and while the scale of the Company’s business favorably expanded and the stock priceshifted firmly after the public offering in the JASDAQ market in February 2004, the Company implemented
a capital increase through a public offering and the like three times after the listing on JASDAQ. After thefinancial crisis occurred during the latter half of 2008, the real estate industry, in which the Company isengaged, faced a continued severe business environment, but the Company promoted measures to ensure thesoundness of the financial position of the Company such as by furthering replacement of inventory assets. In
addition, in September 2009, the Company resolved the fourth issuance of stock acquisition rights as ameasure to increase capital, and those stock acquisition rights were all exercised. Further, in July 2013, theCompany implemented a capital increase through a public offering outside of Japan upon being listed in the
Singapore Exchange. As a result of the implementation of these capital policies, the ratio of holding of issued
and outstanding shares in the Company by the Company Officers (the “Shareholding Ratio”) has decreased
from approximately 76.5%, which was the percentage immediately after the listing (as of May 31, 2004), byapproximately 37 points in seven and a half years after the listing. In addition, the exercise of the fifth seriesof stock acquisition rights (stock options) has commenced in January 2018, the issuance of which was
resolved in October 2015 with the officers and employees as allottees. Accordingly, the Company rightfullyrecognizes the need for financing from the capital market for investments in new growing business or similar
investments and amplification of equity capital, which would result in the expansion of the business fieldover the medium to long term. At the same time, the Company as a listed company is aware of the importanceof ensuring and enhancing the liquidity of shares on a continuous basis. If financing or measures to enhanceliquidity are attempted from such perspectives, the Shareholding Ratio of the Company Officers will
relatively decrease.

Also, it is not unusual due to each shareholder’s circumstances that shares held by individual investors
6

are dissipated through disposal of shares, including transfer.

With regard to the Company Officers who areindividual investors, it is considered that there is a possibility that the Shareholding Ratio might decrease andshares be dissipated in the future.

In light of these circumstances, it is possible that in the future the Shareholding Ratio of the Company
Officers will gradually decrease while the liquidity of the shares issued by the Company will increase.

The

Company therefore cannot deny the possibility that large-scale acquisitions of the shares in the Company bypersons who are inappropriate will be made in the future.

Furthermore, the Company also cannot deny the possibility that, as characteristics of the real estateindustry, acts of large-scale acquisitions of the shares in the Company will be performed for purposes suchas acquiring assets owned by the Company, especially when the stock price shifts unfavorably compared to
the value of the owned assets and the like.

As of the date of this press release, the Company has not received any proposal of an act of largescale acquisition of the shares in the Company that has not been approved by the Company.

2.

Plan Outline

2.1

Plan Outline(a)PurposeThe purpose of the Plan is, on the occasion that a proposal of large-scale acquisition of the shares in

the Company is made, to ensure necessary and sufficient time and information for the shareholders to makeappropriate decisions and to ensure opportunities to negotiate with the acquirer and the like, and thereby todeter takeovers that are against the corporate value of the Company and, in turn, the common interests of its
shareholders, and to ensure and enhance the corporate value of the Company and the common interests of its
shareholders.

(b)

Establishment of Procedures
The Plan sets out procedures necessary to achieve the purpose stated in (a) above, including

requirements for acquirers to provide information in advance in the case that the acquirer intends to make anacquisition of 20% or more of the Company’s share certificates1 or other equity securities.

In addition, an

acquirer, etc. must not effect an acquisition until and unless the Company’s board of directors resolves not to

1

The Company is no longer a company issuing share certificates since the electronic share certificate systemcame into effect; however, we use the term “share certificate” in the Plan in accordance with the provisionsof the Financial Instruments and Exchange Act from the perspective that using descriptions in the Plan thatare in accordance with the provisions of the Financial Instruments and Exchange Act will contribute to clarityand objectivity.
7

trigger the Plan if the procedures for the Plan has commenced.

(See section 2.2 ‘Procedures for Triggering

the Plan’ below for details.)(c)

Triggering of the Plan by Gratis Allotment of Stock Acquisition Rights
In cases such as where an acquirer does not follow the procedures set out in the Plan, or a large-scaleacquisition of shares and other equity securities in the Company could harm the corporate value of theCompany and, in turn, the common interests of its shareholders (see section 2.3 ‘Requirements for the Gratis
Allotment of Stock Acquisition Rights’ below for the details of the requirements), the Company will allot
stock acquisition rights with (a) an exercise condition that does not allow the acquirer, etc. to exercise therights (except where any exception event occurs) and (b) an acquisition provision to the effect that theCompany may acquire the stock acquisition rights in exchange for shares and other equity securities in the
Company from persons other than the acquirer, etc. (the outline of the stock acquisition rights to be allotted
is set out below in 2.4 ‘Outline of the Gratis Allotment of Stock Acquisition Rights’; the relevant stockacquisition rights are hereinafter referred to as the “Stock Acquisition Rights”), by means of a gratis allotmentof stock acquisition rights (shinkabu yoyakuken mushou wariate) to all shareholders, except the Company, atthat time.

If a gratis allotment of Stock Acquisition Rights were to take place in accordance with the Plan andall shareholders other than the acquirer, etc. received the Company’s shares as a result of those shareholders
exercising or the Company acquiring the Stock Acquisition Rights, the ratio of voting rights in the Company
held by the acquirer, etc. may be diluted by up to a maximum of 50%.

(d)

Establishment of Mechanism Enhancing Rationale of the Plan
For matters such as the implementation or non-implementation of the gratis allotment of Stock

Acquisition Rights or the acquisition of Stock Acquisition Rights, the Company will obtain an objective
determination from the independent committee, which is composed of members who are independent fromthe management of the Company such as outside directors subject to the rules of the independent committee
in order to eliminate arbitrary decisions by directors.

In addition, the Company’s board of directors may, if

prescribed in the Plan, convene a meeting of shareholders and confirm the intent of the Company’s
shareholders regarding the implementation of the gratis allotment of the Stock Acquisition Rights.

Transparency with respect to the course of those procedures will be ensured by timely information
disclosure to all of the Company’s shareholders.

2.2

(a)

Procedures for Triggering the Plan

Targeted Acquisitions
The Plan will be applied in cases where any purchase or other acquisition of share certificates, etc. of

the Company that falls under (i) or (ii) below or any similar action (including a proposal for such action)
8

(except for such action as the Company’s board of directors separately determines not to be subject to thePlan; the “Acquisition”) takes place.

(i)

A purchase or other acquisition that would result in the holding ratio of share certificates, etc.
(kabuken tou hoyuu wariai)2 of a holder (hoyuusha)3 totaling at least 20% of the share certificates,etc. (kabuken tou)4 issued by the Company; or(ii)

A tender offer (koukai kaitsuke) 5 that would result in the party conducting the tender offer’sownership ratio of share certificates, etc. (kabuken tou shoyuu wariai)6 and the ownership ratioof share certificates, etc. of a person having a special relationship (tokubetsu kankei-sha)7 totalingat least 20% of the share certificates, etc. (kabuken tou)8 issued by the Company.

The party intending to make the Acquisition (the “Acquirer”) shall follow the procedures prescribedin the Plan.

(b) Submission of Acquirer’s Statement
The Company will request the Acquirer to submit to the Company in the form separately prescribedby the Company a document that includes an undertaking that the Acquirer will comply with the procedures
set out in the Plan (signed by or affixed with the name and seal of the representative of the Acquirer) and aqualification certificate of the person who signed or affixed its name and seal to that document (collectively,“Acquirer’s Statement”) before commencing or effecting the Acquisition.

The Acquirer’s Statement must

include the name, address or location of headquarters, location of offices, governing law for establishment,
name of the representative, contact information in Japan for the Acquirer and the outline of the intended
Acquisition.

The Acquirer’s Statement and the Acquisition Document set out in (c) below must be written

in Japanese.

(c)Request to the Acquirer for the Provision of Information
The Company will provide the Acquirer the format for the Acquisition Document (defined below),2

Defined in Article 27-23.4 of the Financial Instruments and Exchange Act. The same is applied
throughout this document.
3
Including persons described as a holder under Article 27-23.3 of the Financial Instruments and Exchange
Act (including persons who are deemed to fall under the above by the board of directors of the Company).
The same is applied throughout this document.
4
Defined in Article 27-23.1 of the Financial Instruments and Exchange Act. The same is applied
throughout this document unless otherwise provided for.
5
Defined in Article 27-2.6 of the Financial Instruments and Exchange Act. The same is applied throughout
this document.
6
Defined in Article 27-2.8 of the Financial Instruments and Exchange Act. The same is applied throughout
this document.
7
Defined in Article 27-2.7 of the Financial Instruments and Exchange Act (including persons who are
deemed to fall under the above by the board of directors of the Company); provided, however, that persons
provided for in Article 3.2 of the Cabinet Office Regulations concerning Disclosure of a Tender Offer by an
Acquirer other than the Issuing Company are excluded from the persons described in Article 27-2.7(i) of the
Financial Instruments and Exchange Act. The same is applied throughout this document.
8
Defined in Article 27-2.1 of the Financial Instruments and Exchange Act.
9

including a list of information that the Acquirer should provide to the Company, no later than 10 businessdays after receiving the Acquirer’s Statement.

The Acquirer must provide the Company’s board of directors

with the document in the form provided by the Company (the “Acquisition Document”), which includes theinformation described in each item of the list below (“Essential Information”).

If the Company’s board of directors receives the Acquisition Document, it will promptly send it to the
Independent Committee (standards for appointing members, requirements for resolutions, resolution matters,
and other matters concerning the Independent Committee are as described in Attachment 1 ‘Outline of theRules of the Independent Committee’ and business backgrounds and other matters regarding members of the
Independent Committee at the time of the Renewal will be as described in Attachment 2 ‘Profiles of theMembers of the Independent Committee’).

If the Company’s board of directors and the Independent

Committee determine that the Acquisition Document does not contain sufficient Essential Information, it
may set a reply period and request that the Acquirer additionally provide information.

In such case, theAcquirer should additionally provide such information within the relevant time limit.

(i)

Details (including name, capital structure, financial position, operation results, status ofcompliance with laws or ordinances, terms of previous transactions by the Acquirer similar to theAcquisition and effects on the corporate value of the target companies as a result of thetransactions) of the Acquirer and its group (including Joint Holders9, persons having a special
relationship, members (in the case of a fund) and persons having a special relationship with aperson in relation to whom the Acquirer is the controlled corporation10)11.

(ii)

The purpose, method and specific terms of the Acquisition (including the amount and type of
consideration, the timeframe, the scheme of any related transactions, the legality of the Acquisition
method, terms and conditions and the probability of the Acquisition).

(iii)

The amount and basis for the calculation of the purchase price of the Acquisition (including
assumptions and the like).

(iv)

Financial support for the Acquisition (including the names of providers of funds (including all
indirect providers of funds), financing methods and the terms of any related transactions and thelike).

(v)

Details of communications regarding the Acquisition with a third party (if any).

(vi)

Post-Acquisition management policy, administrative organization, business plan, capital, dividend

9

Defined in Article 27-23.5 of the Financial Instruments and Exchange Act, including persons deemed as a
Joint Holder under Article 27-23.6 of the Financial Instruments and Exchange Act (including persons who
are deemed a Joint Holder by the Company’s board of directors). The same is applied throughout thisdocument.
10
Defined in Article 9.5 of the Order of the Enforcement of the Financial Instruments and Exchange Act.
11
If an Acquirer is a fund, information relating to the matters described in (i) about each partner and otherconstituent members is required.
10

and asset management policies for the Company and the Company group.
(vii) Post-Acquisition policies for the Company’s shareholders (other than the Acquirer), employees,
business partners, customers, and any other parties such as stakeholders in the Company.
(viii) Specific measures to prevent conflicts of interests between the Acquirer and other shareholders in
the Company.
(ix)

(d)

Any other information that the Independent Committee reasonably considers necessary.

Consideration of Acquisition Terms, Negotiation with the Acquirer, and Consideration of an
Alternative Proposal(i)Request to the Company’s Board of Directors for the Provision of Information
If the Acquirer submits the Acquisition Document and any additional information that the Independent

Committee requests (if any), the Independent Committee may set a reply period (up to sixty days as a generalrule) taking into account the necessary time for the Company’s board of directors to collect information andconsider corporate valuation and other matters (including consideration by third-party experts as necessary)and request that the Company’s board of directors present an opinion (including an opinion to refrain fromgiving such opinion; hereinafter the same) on the Acquirer’s Acquisition terms, materials supporting such
opinion, an alternative proposal (if any), and any other information that the Independent Committee considers
necessary.

(ii)

Independent Committee Consideration

The Independent Committee will conduct its consideration of the Acquisition terms, collection of
information on the materials such as the management plans and business plans of the Acquirer and theCompany’s board of directors and comparison thereof, and consideration of any alternative plan presented
by the Company’s board of directors, and the like for a period of time that does not, as a general rule, exceed
sixty days after the date on which the Independent Committee receives the information (including theinformation additionally requested) from the Acquirer and (if the Independent Committee requests theCompany’s board of directors to provide information as set out in (i) above) the Company’s board of directors(the period for information collection and consideration by the Independent Committee is hereinafter referred
to as the “Independent Committee Consideration Period”).

Further, if it is necessary in order to improve

the terms of the Acquisition from the standpoint of ensuring and enhancing the corporate value of theCompany and the common interests of its shareholders, the Independent Committee will directly or indirectlydiscuss and negotiate with the Acquirer.

In order to ensure that the Independent Committee’s decision contributes to the Company’s corporate
value and, in turn, the common interests of its shareholders, the Independent Committee may, at the cost of
the Company, obtain advice from independent third parties (including financial advisers, attorneys, certified
11

public accountants, tax accountants, consultants or any other experts).

If the Independent Committee

directly or indirectly requests the Acquirer to provide materials for consideration or any other information,or to discuss and negotiate with the Independent Committee, the Acquirer must promptly respond to such
request.

(e)

Recommendation by the Independent Committee
The Independent Committee will make recommendations to the Company’s board of directors as

follows based on the abovementioned procedures.

(i)

Recommendation for the Triggering of the Plan
If the Independent Committee determines that the Acquisition falls under any of the trigger events set

out below in 2.3, ‘Requirements for the Gratis Allotment of Stock Acquisition Rights’ (collectively “Trigger
Event”) arises with respect to the Acquisition, the Independent Committee will recommend theimplementation of the gratis allotment of Stock Acquisition Rights (the outline of the stock acquisition rights
to be allotted is set out below in 2.4 ‘Outline of the Gratis Allotment of Stock Acquisition Rights’) to theCompany’s board of directors except in any specific case where further disclosure of information by the
Acquirer or discussion or negotiation with the Acquirer is necessary.

If it is concerned that an Acquisition

may fall under the Trigger Event (2) set out below in 2.3, ‘Requirements for the Gratis Allotment of Stock
Acquisition Rights,’ the Independent Committee may recommend implementation of the gratis allotment ofStock Acquisition Rights subject to confirming the shareholders’ intent in advance.
Notwithstanding the foregoing paragraph, even after the Independent Committee has already made a
recommendation for the implementation of the gratis allotment of Stock Acquisition Rights, if the
Independent Committee determines that either of the events in (A) or (B) below applies, it may make a newrecommendation that (i) on or before the second business day prior to the ex-rights date with respect to thegratis allotment of Stock Acquisition Rights, the Company should suspend the gratis allotment of Stock
Acquisition Rights, or (ii) from the effective date of the gratis allotment of Stock Acquisition Rights and until
the day immediately prior to the commencement date of the exercise period of the Stock Acquisition Rights,
the Company should acquire the Stock Acquisition Rights for no consideration.

(A)

The Acquirer withdraws the Acquisition or the Acquisition otherwise ceases to exist after therecommendation.

(B)

There is no longer any Trigger Event due to a change or the like in the facts or other matters on
which the recommendation decision was made.

If there is a concern that an Acquisition may fall under any of the Trigger Events set out in items (b)through (e) in 2.3, ‘Requirements for the Gratis Allotment of Stock Acquisition Rights’, ‘Trigger Events (2)’below, the Independent Committee may recommend implementation of the gratis allotment of Stock

12

Acquisition Rights subject to obtaining the approval of the general meeting of shareholders in advance12.

(ii)

Recommendation for the Non-Triggering of the Plan
If the Independent Committee determines the Acquisition does not fall under either Trigger Event, theIndependent Committee will recommend the non-implementation of the gratis allotment of Stock Acquisition
Rights to the Company’s board of directors, regardless of whether the Independent Committee Consideration
Period has ended.

Notwithstanding the foregoing paragraph, even after the Independent Committee has already madeone recommendation for the non-implementation of the gratis allotment of Stock Acquisition Rights, if there
is a change in the facts or other matters on which the recommendation decision was made and a Trigger Eventarises, the Independent Committee may make a new recommendation that the Company should implement
the gratis allotment of Stock Acquisition Rights.

(iii)

Extension of the Independent Committee Consideration Period
If the Independent Committee does not reach a recommendation for either the implementation or non-implementation of the gratis allotment of Stock Acquisition Rights during the initial Independent Committee
Consideration Period, the Independent Committee may, to the reasonable extent that it is considerednecessary for actions such as consideration of the terms of the Acquirer’s Acquisition, consideration of analternative proposal and discussion and negotiation with the Acquirer, extend the Independent Committee
Consideration Period (in principle up to 30 days in total).

If the Independent Committee Consideration Period is extended because of the above resolution, theIndependent Committee will continue to collect information, deliberate and perform similar activities, anduse its best efforts to make a recommendation for the implementation or non-implementation of the gratis
allotment of Stock Acquisition Rights within the extended period.

(f)Resolutions by the Board of Directors
If any recommendation of the Independent Committee described above is made, the Company’s boardof directors, in exercising its role under the Companies Act, will pass a resolution relating to theimplementation or non-implementation of a gratis allotment of Stock Acquisition Rights respecting thatrecommendation to the maximum extent.

If a meeting of shareholders is convened in accordance with (g)below, the Company’s board of directors will pass a resolution in accordance with the resolution at the12

Based on the fact, among other things, that it was indicated in the report dated June 30, 2008 (“Takeover
Defense Measures in Light of Recent Environmental Changes”) published by the Corporate Value Study
Group that it is necessary that the decision is made based on the shareholders’ intent if a substantive decision
is necessary as to whether the takeover proposal is detrimental to the common interests of shareholders, thePlan expressly sets out that, if there is a concern that an Acquisition may fall under any of the Trigger Events
set out in items (b) through (e), for which such substantive decision would be necessary, the matter may bebrought up before the general meeting of shareholders again.
13

meeting of shareholders.

(g)Convocation of the Shareholders Meeting
Upon the implementation of the gratis allotment of the Stock Acquisition Rights pursuant to the Plan,

the Company’s board of directors may convene a meeting of shareholders (the “Shareholders Meeting”) andconfirm the intent of the Company’s shareholders regarding the implementation of the gratis allotment of theStock Acquisition Rights, if (i) the Independent Committee recommends implementation of the gratis
allotment of Stock Acquisition Rights subject to confirming the shareholders’ intent in advance in accordancewith (e)(i) above, or (ii) the applicability of Trigger Event (2) becomes an issue in respect of the Acquisition
and the board of directors determines it appropriate to confirm the shareholders’ intent taking into
consideration the time required to convene the Shareholders Meeting or other matters pursuant to the duty ofcare of a director.

(h)Information Disclosure
When operating the Plan, the Company will disclose, in a timely manner, information on matters that

the Company’s board of directors considers appropriate including the progress of each procedure set out in
the Plan (including the fact that the Acquirer’s Statement and Acquisition Document have been submitted
and the Independent Committee Consideration Period has commenced, and the fact that the Independent
Committee Consideration Period has been extended, as well as the extended period and the reason for theextension), or an outline of recommendations made by the Independent Committee, an outline of resolutions
by the Company’s board of directors and an outline of resolutions at the Shareholders Meeting, in accordancewith the applicable laws and ordinances or the regulations of the financial instruments exchange.

2.3

Requirements for the Gratis Allotment of Stock Acquisition Rights

The requirements to trigger the Plan to implement a gratis allotment of Stock Acquisition Rights are
as follows. As described above in (e) of 2.2, ‘Procedures for Triggering the Plan,’ the Company’s board of
directors will make a determination as to whether any of the following requirements applies to an Acquisition
for which the recommendation by the Independent Committee has been obtained.

Trigger Event (1)The Acquisition is not in compliance with the procedures prescribed in the Plan (including cases that timeand information reasonably necessary to consider the details of the Acquisition is not offered) and it isreasonable to implement the gratis allotment of Stock Acquisition Rights.

Trigger Event (2)The Acquisition falls under any of the items below and it is reasonable to implement the gratis allotmentof Stock Acquisition Rights.

14

(a)

An Acquisition that threatens to cause obvious harm to the corporate value of the Company and, inturn, the common interests of its shareholders through any of the following actions.
(i)A buyout of share certificates, etc. to require such share certificates, etc. to be compulsorily
purchased by the Company or the Company’s affiliates at a high price.

(ii) Management that achieves an advantage for the Acquirer to the detriment of the Company,
such as temporary control of the Company’s management for the low-cost acquisition of theCompany’s material assets.
(iii) Diversion of the Company’s assets to secure or repay debts of the Acquirer or its groupcompany.
(iv) Temporary control of the Company’s management to bring about the disposal of high-value
assets that have no current relevance to the Company’s business and declaring temporarily
high dividends from the profits of the disposal, or selling the shares at a high price taking
advantage of the opportunity afforded by the sudden rise in share prices created by the
temporarily high dividends.
(b)

Certain Acquisitions that threaten to have the effect of coercing shareholders into selling shares, suchas coercive two-tiered tender offers (meaning acquisitions of shares including tender offers, in which
no offer is made to acquire all shares in the initial acquisition, and acquisition terms for the second
stage are set that are unfavorable or unclear).

(c)

Acquisitions to which the terms (including the amount and type of consideration, timeframe, legalityof the Acquisition method, probability of the Acquisition being effected, and post-Acquisition
management policies or business plans and policies dealing with the Company’s other shareholders,
employees, customers, business partners and any other stakeholders in the Company) are inadequate
or inappropriate in light of the Company’s intrinsic value.

(d)Acquisitions that materially threaten to oppose the corporate value of the Company and, in turn, thecommon interests of shareholders, by destroying relationships with the Company’s employees,
customers, business partners and the like and the brand strength or the corporate culture of theCompany, which are indispensable to the generation of the Company’s corporate value.

(e)

An Acquisition to be effected by an Acquirer who is extremely inappropriate to acquire the controlof the Company in terms of public order and morals in cases such as where a person related to ananti-social force is included in the management of or the major shareholders in the Acquirer.

2.4

Outline of the Gratis Allotment of Stock Acquisition Rights

The following is an outline of the gratis allotment of Stock Acquisition Rights scheduled to be15

implemented under the Plan.

(a)

Number of Stock Acquisition Rights
The Company will implement a gratis allotment of Stock Acquisition Rights in the same number as

the most recent total number of issued and outstanding shares in the Company (excluding the number ofshares in the Company held by the Company at that time) on a certain date (the “Allotment Date”) that is
separately determined in a resolution by the Company’s board of directors or general meeting of shareholders
relating to the gratis allotment of Stock Acquisition Rights (the “Gratis Allotment Resolution”).

(b)

Shareholders Eligible for Allotment
The Company will allot the Stock Acquisition Rights to shareholders, other than the Company, who

are recorded in the Company’s last register of shareholders on the Allotment Date, at a ratio of one Stock
Acquisition Right for each share in the Company held.

(c)Effective Date of Gratis Allotment of Stock Acquisition Rights
The effective date of the gratis allotment of Stock Acquisition Rights will be separately determined in

the Gratis Allotment Resolution.

(d)Number of Shares to be Acquired upon Exercise of the Stock Acquisition Rights
The number of shares in the Company13 to be acquired upon exercise of each Stock Acquisition Right(the “Applicable Number of Shares”) will, in principle, be one share.

(e)Amount to be Contributed upon Exercise of Stock Acquisition Rights
Contributions upon exercise of the Stock Acquisition Rights are to be in cash, and the amount per

share in the Company to be contributed upon exercise of the Stock Acquisition Rights will be an amountseparately determined in the Gratis Allotment Resolution within the range of a minimum of one yen and amaximum of the amount equivalent to one-half of the fair market value of one share in the Company.

“Fair

market value” means an amount equivalent to the average closing price (including quotations) for regulartransactions of the common stock of the Company on the Tokyo Securities Exchange on each day during thethree-month period prior to the Gratis Allotment Resolution (excluding the days on which trades are notmade), with any fraction of a yen after such calculation to be rounded up to the nearest whole yen.

(f)

Exercise Period of the Stock Acquisition Rights
The commencement date will be a date separately determined in the Gratis Allotment Resolution (this13

Even if the Company becomes a company issuing class shares (Article 2, Item 13 of the Companies Act)in the future, both (i) the shares in the Company to be delivered upon exercise of Stock Acquisition Rightsand (ii) the shares to be delivered in exchange for acquisition of Stock Acquisition Rights are the sameclass of shares of common stock that have been issued at the time of the 65th Ordinary General Meeting of
Shareholders.
16commencement date of the exercise period is referred to as the “Exercise Period Commencement Date”), andthe period will, in principle, be a period from one month to six months long as separately determined in theGratis Allotment Resolution.

(g)

Conditions for Exercise of Stock Acquisition Rights
Except where any exceptional event 14 occurs, the following parties may not exercise the Stock

Acquisition Rights (the parties falling under (I) through (VI) below are collectively be referred to as “NonQualified Parties”):(I)

Specified Large Holders;15(II)

Joint Holders of Specified Large Holders;(III)

Specified Large Purchasers;16(IV)

Persons having a Special Relationship with Specified Large Purchasers;(V)

Any transferee of, or successor to, the Stock Acquisition Rights of any party falling under (I)14Specifically, the Company intends to set out that an “exeptional event” means when (x) the Acquirer
cancels or revokes the Acquisition, or promises that it will not conduct any subsequent Acquisition, after theGratis Allotment Resolution and the Acquirer or other Non-Qualified Parties dispose of their shares in the
Company through a securities firm appointed and authorized by the Company to do so and (y) the Acquirer’s
shareholding ratio determined by the Company’s board of directors (when calculating the shareholding ratio,
Non-Qualified Parties other than the Acquirer and its Joint Holders are deemed to be the Acquirer’s Joint
Holders, and Stock Acquisition Rights held by Non-Qualified Parties, the conditions of which have not beensatisfied, are excluded) (the “Non-Qualified Parties Shareholding Ratio”) falls below the lower of (i) the
Non-Qualified Parties’ Shareholding Ratio before the Acquisition, or (ii) 20%, the Acquirer or other NonQualified Parties making the disposal may exercise Stock Acquisition Rights to the extent that the number ofshares to be issued or delivered upon exercise of the Stock Acquisition Rights is up to the number of sharesdisposed of and to the extent of the ratio under either (i) or (ii) above. Detailed conditions and proceduresfor exercise of Stock Acquisition Rights by Non-Qualified Parties will be determined separately by theCompany’s board of directors.
15“Specified Large Holder” means, in principle, a party who is a holder of share certificates, etc. issued by
the Company and whose holding ratio of share certificates, etc. in respect of such share certificates, etc. is atleast 20% (including any party who is deemed applicable to the above by the Company’s board of directors);
provided, however, that a party that the Company’s board of directors recognizes as a party whose acquisitionor holding of share certificates, etc., of the Company is not contrary to the Company’s corporate value or thecommon interests of shareholders or a certain other party that the board of directors determines in the Gratis
Allotment Resolution is not a Specified Large Holder. The same is applied throughout this document.
16“Specified Large Purchaser” means, in principle, a person who makes a public announcement of purchase,
etc. (as defined in Article 27-2.1 of the Financial Instruments and Exchange Act; the same is applied
throughout this Note 16) of share certificates, etc. (as defined in Article 27-2.1 of the Financial Instruments
and Exchange Act; the same is applied throughout this Note 16) issued by the Company through a tender
offer and whose ratio of ownership of share certificates, etc. in respect of such share certificates, etc. owned
by such person after such purchase, etc. (including similar ownership as prescribed in Article 7.1 of the Orderof the Enforcement of the Financial Instruments and Exchange Act) is at least 20% when combined with theratio of ownership of share certificates, etc. of a person having a special relationship (including any party
who is deemed to fall under the above by the Company’s board of directors); provided, however, that a party
that the Company’s board of directors recognizes as a party whose acquisition or holding of share certificates,etc. of the Company is not contrary to the Company’s corporate value or the common interests of shareholders
or certain other party that the Company’s board of directors determines in the Gratis Allotment Resolution is
not a Specified Large Purchaser. The same is applied throughout this document.
17through (IV) without the approval of the Company’s board of directors; or(VI)

Any Affiliated Party17 of any party falling under (I) through (V).

Further, nonresidents of Japan who are required to follow certain procedures under applicable foreignlaws and ordinances to exercise the Stock Acquisition Rights may not as a general rule exercise the Stock
Acquisition Rights (provided, however, that the Stock Acquisition Rights held by nonresidents will be subject
to acquisition by the Company in exchange for shares in the Company subject to compliance with applicablelaws and ordinances as set out in (ii) of paragraph (i) below, ‘Acquisition of the Stock Acquisition Rights by
the Company’).

In addition, anyone who fails to submit a written undertaking, in the form prescribed by

the Company and containing representations and warranties regarding matters such as the fact that he or shesatisfies the exercise conditions of the Stock Acquisition Rights, indemnity clauses and other covenants, may
not exercise the Stock Acquisition Rights.

(h)Assignment of Stock Acquisition Rights
Any acquisition of the Stock Acquisition Rights by assignment requires the approval of theCompany’s board of directors.

(i)Acquisition of Stock Acquisition Rights by the Company(i)

At any time on or before the date immediately prior to the Exercise Period Commencement
Date, if the Company’s board of directors deems that it is appropriate for the Company toacquire the Stock Acquisition Rights, the Company may, on a day that falls on a dateseparately determined by the Company’s board of directors, acquire all of the Stock
Acquisition Rights for no consideration.

(ii)

On a day that falls on a date separately determined by the Company’s board of directors, theCompany may acquire all of the Stock Acquisition Rights that have not been exercised before
or on the day immediately prior to such date separately determined by the Company’s boardof directors, that are held by parties other than Non-Qualified Parties and, in exchange, deliver
shares in the Company in the number equivalent to the number of the Applicable Number of
Shares for each Stock Acquisition Right.

Further, if, on or after the date upon which the acquisition takes place, the Company’s boardof directors recognizes the existence of any party holding Stock Acquisition Rights other than17

An “Affiliated Party” of a given party means a person who substantially controls, is controlled by, or isunder common control with such given party (including any party who is deemed to fall under the above by
the Company’s board of directors), or a party deemed by the Company’s board of directors to act in concert
with such given party. “Control” means to “control the determination of the financial and business policies”(as defined in Article 3.3 of the Enforcment Regulations of the Companies Act) of other corporations or
entities.
18

Non-Qualified Parties18, the Company may, on a day falling on a date determined by theCompany’s board of directors after the date upon which the acquisition described above takes
place, acquire all of the Stock Acquisition Rights held by that party that have not been
exercised by or on the day immediately prior to such date determined by the Company’s boardof directors (if any) and, in exchange, deliver shares in the Company in the number equivalent
to the number of the Applicable Number of Shares for every one Stock Acquisition Right.
The same will apply thereafter.

(j)

Delivery of Stock Acquisition Rights in Case of Merger (gappei), Absorption-type Demerger(kyushu bunkatsu), Incorporation-type Demerger (shinsetsu bunkatsu), Share Exchange (kabushiki koukan),
and Share Transfer (kabushiki iten)
These matters will be separately determined in the Gratis Allotment Resolution.

(k)Issuance of Certificates Representing the Stock Acquisition Rights
Certificates representing the Stock Acquisition Rights will not be issued.

(l)

Other
In addition to the above, the details of the Stock Acquisition Rights will be separately determined in

the Gratis Allotment Resolution.

2.5

Effective Period, and Abolition, Revision or Amendment of the Plan

The effective period of the Plan (the “Effective Period”) will be the period until the conclusion of theordinary general meeting of shareholders relating to the last fiscal year ending within three years after theconclusion of the 65th Ordinary General Meeting of Shareholders.

However, if, before the expiration of the Effective Period, the Company’s board of directors resolves
to abolish the Plan, the Plan will be abolished at that time.

Further, the Company’s board of directors may revise or amend the Plan even during the Effective
Period of the Plan in cases where any law, ordinance, or regulations or rules of a financial instruments
exchange or the like concerning the Plan is established, amended or abolished and it is appropriate to reflect
such establishment, amendment or abolition, cases where it is appropriate to revise the wording for reasons
such as typographical errors and omissions, or cases where the revision or amendment does not cause any
disadvantage to the Company’s shareholders subject to the approval of the Independent Committee.

18

For example, the case of a person who initially had a Special Relationship with a Specified Large
Purchaser but cancels the relationship with the Specified Large Purchaser after the triggering of the Plan
and thereby is no longer a Non-Qualified Party.
19

If the Plan is abolished, revised, amended or the like, the Company will promptly disclose facts
including the fact that such abolition, revision or amendment has taken place, and (in the event of a revisionor amendment) the details of the revision, amendment and any other matters.

2.6

Revision Due to Amendment to Laws and Ordinances

The provisions of laws and ordinances referred to under the Plan are subject to the prevailingprovisions as of January 25, 2018.

If it becomes necessary after such date to revise the terms and conditions

or definitions of terms set out in the paragraphs above due to the establishment, amendment or abolishmentof laws and ordinances, the terms and conditions or definitions of terms set out in the paragraphs above will
be read accordingly as required to a reasonable extent, taking into consideration the purposes of such
establishment, amendment or abolishment.
Ⅲ.

Impact on Shareholders and Investors

3.1

Impact on Shareholders and Investors Upon the Renewal of the Plan

Upon the Renewal of the Plan, the Plan will have no direct or material impact on shareholders andinvestors because no actual gratis allotment of Stock Acquisition Rights will be implemented.

3.2

Impact on Shareholders and Investors at the Time of the Gratis Allotment of Stock Acquisition
Rights(i)

Procedures for Shareholders upon Gratis Allotment of Stock Acquisition Rights
If the Company’s board of directors or general meeting of shareholders resolves to make a gratis

allotment of Stock Acquisition Rights, it will also decide the Allotment Date in the same resolution and give
public notice of this Allotment Date.

In this case, the Company will make a gratis allotment of Stock

Acquisition Rights to the shareholders who are recorded in the Company’s last register of shareholders as of
the Allotment Date (the “Entitled Shareholders”) for one Stock Acquisition Right per share in the Company
held by the Entitled Shareholders.

All Entitled Shareholders will automatically become Stock Acquisition

Right holders on the effective date of the gratis allotment of Stock Acquisition Rights, and no further
procedures, such as applying for such gratis allotment, will be necessary.

In addition, even if the Company’s board of directors has resolved to make a gratis allotment of Stock
Acquisition Rights, the Company may, by respecting any recommendation of the Independent Committee
described above in section (e)(i) of 2.2, ‘Procedures for Triggering the Plan,’ to the maximum extent, (i) onor before the second business day prior to the ex-rights date with respect to the gratis allotment of Stock
Acquisition Rights, cancel the gratis allotment of Stock Acquisition Rights, or (ii) from the effective date of
the gratis allotment of Stock Acquisition Rights and until the day immediately prior to the commencement
20

date of the exercise period of the Stock Acquisition Rights, acquire the Stock Acquisition Rights for no
consideration.

In such cases, no dilution of the value per share in the Company held by the shareholders

will result, and it is possible that any investors who have sold or bought the shares in the Company expecting
to see such a dilution will suffer unexpected loss as a result of a fluctuation in the share price.

(ii)

Procedures for Exercising Stock Acquisition Rights
The Company will deliver, as a general rule, a document necessary to be submitted for the exercise of

the Stock Acquisition Rights (in the form prescribed by the Company and containing necessary matters suchas the terms and number of the Stock Acquisition Rights for exercise and the exercise date for the Stock
Acquisition Rights, as well as representations and warranties regarding matters such as that the shareholders
themselves satisfy the exercise conditions of the Stock Acquisition Rights, indemnity clauses and othercovenants, and information necessary to allocate shares of the Company to the account of the Entitled
Shareholders) and other documents necessary for the exercise of the Stock Acquisition Rights to the Entitled
Shareholders. After the gratis allotment of Stock Acquisition Rights, the shareholders will be issued, as a
general rule, one share in the Company per Stock Acquisition Right upon submitting these necessary
documents during the exercise period of Stock Acquisition Rights and, as a general rule, by paying in aprescribed manner as the exercise price for the Stock Acquisition Rights an amount equivalent to the exercise
price separately determined in the Gratis Allotment Resolution, which will be an amount within the range of
one yen and one-half of the fair market value of the Company’s stock per Stock Acquisition Right.

If the Company’s shareholders do not exercise their Stock Acquisition Rights or pay the amountequivalent to the exercise price, the shares they hold in the Company will be diluted by the exercise of Stock
Acquisition Rights by other shareholders.

However, it is also possible for the Company to acquire the Stock Acquisition Rights of allshareholders other than Non-Qualified Parties and, in exchange, deliver shares in the Company, in accordancewith the procedures set out in (iii) below.

If the Company carries out such acquisition procedures, allshareholders other than Non-Qualified Parties will, in principle, come to receive shares in the Company
without exercising their Stock Acquisition Rights or paying an amount equivalent to the exercise price and,in principle, there will be no subsequent dilution of the shares in the Company they hold.

(iii)

Procedures for the Acquisition of Stock Acquisition Rights by the Company
If the Company’s board of directors determines to acquire the Stock Acquisition Rights, the Company

will acquire the Stock Acquisition Rights in accordance with the statutory procedures from the shareholders
other than Non-Qualified Parties, on the day that falls on the date separately determined by the Company’sboard of directors and, in principle, deliver shares in the Company in exchange.

In this case, theshareholders concerned will, in principle, come to receive one share in the Company for each Stock
Acquisition Right as consideration for the acquisition by the Company of those Stock Acquisition Rights,
without paying an amount equivalent to the exercise price.
21

However, in such case, the shareholders

concerned will be separately requested to provide information necessary to allocate shares of the Company
to the account of the Entitled Shareholders and submit, in the form prescribed by the Company, a written
undertaking including representations and warranties regarding matters such as the fact that they are not NonQualified Parties, indemnity clauses and other covenants.

In addition to the above, the Company will disclose information to or notify all of its shareholders
with respect to the particulars of the allotment method, exercise method and method for acquisition by theCompany after these matters are determined in the Gratis Allotment Resolution, so we request thatshareholders check these details at that time.

IV.

Decisions by the Company’s Board of Directors Regarding Measures Described Above andReasons for the Decisions

1.

Special Measures to Realize the Basic Policy (Measures Set Out in II Above).

The new medium-term management plan and other measures such as the efforts to enhance thecorporate vale and the strengthening of corporate governance set out in II above were established as specificmeasures to continuously and sustainably enhance the corporate value of the Company and, in turn, thecommon interests of its shareholders, and these are the exact measures to realize the Basic Policy.

These measures, therefore, are in accordance with the Basic Policy and correspond with the corporate
value of the Company and, in turn, the common interests of its shareholders and are not for the purpose ofmaintaining the positions of the corporate officers of the Company.

2.

Measures to Prevent Decisions on the Company’s Financial and Business Policies from being
Controlled by Persons Deemed Inappropriate Under the Basic Policy (Measures Set Out in
III Above)

2.1

The Measures are in Accordance with the Basic Policy

The Plan is in line with the Basic Policy and for the purpose of maintaining the corporate value of theCompany and, in turn, the common interests of its shareholders by ensuring the necessary time andinformation is made available for the shareholders to decide whether or not to accept the Acquisition of sharecertificates, etc. of the Company and for the Company’s board of directors to present an alternative proposal
to the shareholders, and by enabling the Company’s board of directors to negotiate with the Acquirer for the
benefit of the shareholders when the Acquisition is to be effected.

2.2

The Measures are not Detrimental to Common Interests of the Company’s Shareholders and not
for Purpose of Maintaining Positions of the Company’s Corporate Officers
22

The Company believes that the Plan is not detrimental to the common interests of the Company’s
shareholders and not for the purpose of maintaining the positions of the corporate officers of the Company
because of the reasons set out below.

(i)Satisfying the Requirements of the Guidelines Regarding Takeover Defense Measures
The Plan fully satisfies the three principles set out in the Guidelines Regarding Takeover Defense for

the Purposes of Protection and Enhancement of Corporate Value and Shareholders’ Common Interests
released by the Ministry of Economy, Trade and Industry and the Ministry of Justice on May 27, 2005

(ii)

Placing High Value on the Intent of Shareholders
The Renewal of the Plan will be made subject to shareholder approval at the 65th Ordinary General

Meeting of Shareholders.

The Company’s board of directors may, under certain circumstances, confirm the intent of theCompany’s shareholders at the Shareholders Meeting regarding the need to trigger the Plan.

Further, as set out in section III.2.5 ‘Effective Period, and Abolition, Revision or Amendment of thePlan,’ the Plan is subject to a so-called sunset clause setting the Effective Period of approximately three years
and if, even before the expiration of the Effective Period of the Plan, the Company’s board of directors
resolves to abolish the Plan, the Plan will be abolished at that time.

In this regard, the life of the Plan

depends on the intent of the Company’s shareholders.

(iii)

Emphasis on the Decisions of Independent Parties Such As Outside Directors and Information

Disclosure
The Company must obtain a recommendation from the Independent Committee, composed only ofmembers who are independent, such as outside directors, when making decisions for triggering the Plan.

Further, information disclosure must be made to shareholders regarding the outline of the decisions
by the Independent Committee, which ensures a mechanism to carry out transparent operation of the Plan ina manner that is in accordance with the corporate value of the Company and, in turn, the common interestsof its shareholders.

(iv)

Establishment of Reasonable Objective Requirements
As set out above in section III.2.3, ‘Requirements for the Gratis Allotment of Stock Acquisition

Rights,’ the Company believes that the Plan is established so that it will not be triggered unless reasonable
and objective requirements have been satisfied, and ensures a structure to eliminate arbitrary triggering by
the Company’s board of directors.

23

(v)

Obtaining Advice of Third-Party Experts
As set out above in (d)(ii) of section III.2.2 ‘Procedures for Triggering the Plan,” if an Acquirer has

emerged, the Independent Committee may, at the cost of the Company, obtain advice from independent third
parties (including financial advisers, certified public accountants, attorneys, tax accountants, consultants or
any other experts).

This is a mechanism to more firmly secure the fairness and objectivity of the decisions

by the Independent Committee.

(vi)

No Dead-Hand or Slow-Hand Takeover Defense Measures
The Plan may be abolished by a meeting of the board of directors composed of directors who arenominated by a person who acquires a large number of share certificates, etc. and appointed at the Company’s
general meeting of shareholders.

Therefore, the Plan is not a dead-hand takeover defense measure (atakeover defense measure in which even if a majority of the members of the board of directors are replaced,
the triggering of the measure cannot be stopped).

Also, as the Company has not adopted a system ofstaggered terms of office for the directors, the Plan is not a slow-hand takeover defense measure either (atakeover defense measure in which triggering takes more time to stop due to the fact that all members of theboard of directors cannot be replaced at once).

--- End of Document ---24

Attachment 1

Outline of the Rules of the Independent Committee
・

The Independent Committee will be established by resolution of the Company’s board of
directors.

・

There will be no less than three members in the Independent Committee, and the Company’sboard of directors shall elect the members from (i) outside directors of the Company, (ii) outside
Audit & Supervisory Board Members of the Company, or (iii) other outside experts, in each casesomeone who is independent from the management that executes the business of the Company.
However, such experts must be experienced corporate managers, former government employees,
parties with knowledge of the investment banking industry, parties with knowledge of theCompany’s business, lawyers, certified public accountants, researchers whose research focuseson the Companies Act or the like, or parties of similar qualifications, and must have executedwith the Company an agreement separately specified by the Company’s board of directors that
contains a provision obligating the experts to exercise their duty of care to the Company or asimilar provision.

・

Unless otherwise determined by a resolution of the Company’s board of directors, the term ofoffice of members of the Independent Committee will be until the conclusion of the ordinary
general meeting of shareholders relating to the last fiscal year ending within three years after the65th Ordinary General Meeting of Shareholders.

However, the term of office of any memberof the Independent Committee who is an outside director or outside Audit & Supervisory Board
Member of the Company will end at the same time when they cease to be an outside director oroutside Audit & Supervisory Board Member (except in the case of their re-appointment).
The term of office of a member of the Independent Committee who is elected as a substitute fora member of the Independent Committee who retires before the expiration of the term will be
until the expiration of the term of office of the retiring member of the Independent Committee.
・The Independent Committee will make decisions on the matters listed below and makerecommendations to the Company’s board of directors containing the details of and reasons forthe decisions.

Respecting such recommendations by the Independent Committee to the

maximum extent possible, the Company’s board of directors shall make decisions regarding theimplementation or non-implementation of a gratis allotment of Stock Acquisition Rights as anorganization under the Companies Act (or, if the Shareholders Meeting otherwise resolves toimplement the gratis allotment of Stock Acquisition Rights as set out in (a) below, in accordancewith such resolution by the Shareholders Meeting).

Each member of the Independent

Committee and each director of the Company must make such decisions solely from theperspective of whether or not the corporate value of the Company and the common interests of
its shareholders will be enhanced, and they must not serve the purpose of their own interests or
those of the management of the Company.
- 25 -

(a)The implementation or non-implementation of the gratis allotment of Stock Acquisition
Rights.

(b)

The cancellation of the gratis allotment of Stock Acquisition Rights or the gratis
acquisition of Stock Acquisition Rights.

(c)

Any other matters that are for determination by the Company’s board of directors in
respect to which it has consulted the Independent Committee.

・In addition to the matters prescribed above, the Independent Committee may conduct the matterslisted below.
(a)Determination whether the Acquisition should be made subject to the Plan.

(b)

Determination of the information that the Acquirer and the Company’s board of directors
should provide to the Independent Committee, and the deadline for the provision of that
information.

(c)

Examination and consideration of the terms of the Acquirer’s Acquisition.

(d)

Discussion and Negotiation with the Acquirer.

(e)Request for an alternative proposal to, and consideration of the alternative proposal by,
the Company’s board of directors.

(f)

Determination regarding extension of the Independent Committee Consideration Period.

(g)

Determination whether the Shareholders Meeting should be convened regarding theimplementation of the gratis allotment of the Stock Acquisition Rights.

(h)Approval of revision or amendment of the Plan.

(i)

Any other matters prescribed in the Plan that the Independent Committee may conduct.

(j)

Any matters that the Company’s board of directors separately determines that the
Independent Committee may conduct.

・The Independent Committee may, at the Company’s expense, obtain advice from an independent
third party (including financial advisers, attorneys, certified public accountants, tax accountants,
consultants and other experts) or conduct similar actions.

・

Any member of the Independent Committee may convene a meeting of the Independent
Committee when an Acquisition arises, or at any other time.

・As a general rule, resolutions of meetings of the Independent Committee shall pass with amajority when all of the members of the Independent Committee are in attendance (including
attendance via video conference or telephone conference).

However, in unavoidable

circumstances a resolution may pass with a majority of voting rights when a majority of themembers of the Independent Committee are in attendance.

--- End of Document ---- 26 -

Attachment 2

Profiles of the Members of the Independent Committee

The following three persons will be the members of the Independent Committee upon the Renewal.

Kenichi Shohtoku
Business BackgroundOct. 1995

Entered Asahi & Co., Ltd. (the predecessor of KPMG AZSA LLC)

Sep. 1999

Transferred to Arthur Andersen & Co., Kuala Lumpur Office

Sep. 2002

Entered SCS Global Accounting Co., Ltd. (the predecessor of SCS Global
Consulting (S) Pte Ltd)

Nov. 2003

Representative Director of SCS Global Accounting Co., Ltd. (thepredecessor of SCS Global Consulting (S) Pte Ltd) (current position)

Sep. 2005

Appointed as Director of O-RID GLOBAL BPO PTE. LTD.

Dec. 2010

Appointed as Outside Statutory Auditor of ROKI TECHNO CO., LTD

Feb. 2012

Appointed as Director of the Company (current position)

Jan. 2013

Appointed as Outside Audit & Supervisory Board Member of ROKIGROUP HOLDINGS CO., LTD. (current position)*Mr. Kenichi Shohtoku is an outside director as set out in Article 2, Item 15 of the Companies Act.
Mr. Shohtoku does not have any special interest in the Company and there is no business relationship between
Mr. Shohtoku and the Company.

Yutaka Kitamura
Business Background
April, 1972

Entered The Yasuda Trust and Banking Co.,Ltd. (the predecessor of Mizuho
Trust &Banking Co., Ltd.)

May, 1996

Appointed as General Manager of Singapore Branch of The Yasuda Trust &Banking Co., Ltd. (the predecessor of Mizuho Trust & Banking Co., Ltd.)

April. 1999

Appointed as General Manager of Pension Business Promotion Department
III of The Yasuda Trust & Banking Co., Ltd. (the predecessor of Mizuho Trust& Banking Co., Ltd.)

October. 2000

Appointed as General Manager of Niigata Branch of The Mizuho Trust &Banking Co., Ltd.

June,2003

Appointed as General Manager of Osaka Pension Business Promotion
Department of The Mizuho Trust & Banking Co., Ltd.

- 27 -

March, 2005

Appointed as Full-Time Audit & Supervisory Board Member of Nippon
Carbon Co., Ltd.

June, 2010

Appointed as Full-Time Audit & Supervisory Board Member of JCOACH Corporation

February, 2013

Appointed as Full-Time Audit & Supervisory Board Member of Tosei
Corporation (current position)

February, 2013

Appointed as Outside Audit & Supervisory Board Member of Tosei
Community Co., Ltd.

*Mr. Yutaka Kitamura is an outside Audit & Supervisory Board Member as set out in Article 2, Item 16of the Companies Act.
Mr. Kitamura does not have any special interest in the Company and there is no business relationship between
Mr. Kitamura and the Company.

Hiroshi NishinakamaBusiness Background
April. 1978

Entered The Sanwa Bank, Limited (the predecessor of The Bank of TokyoMitsubishi UFJ, Ltd.)

October. 1987

Appointed as Manager of London Branch

May 1992

Appointed as Senior Manager of International Business Promotion
Department, Americas Office

August. 1994

Appointed as General Manager of Kwai-Chung Sub Branch of Hong Kong
BranchAugust. 1996

Appointed as Senior Manager of Credit Administration Department

October. 1999

Appointed as Senior Vice President of Derivative Products
Department

January. 2002

Appointed as UFJ Bank Limited (the predecessor of The Bank of TokyoMitsubishi UFJ, Ltd.)

January. 2006

Appointed as The Bank of Tokyo-Mitsubishi UFJ, Ltd. Senior Manager ofInternal Audit & Credit Examination Division

April. 2007

Joined ORIX Real Estate Corporation as General Manager of Internal Audit
Department

March. 2008

Transferred to ORIX Corporation General Manager of Internal Audit
Department

July. 2008

Appointed as Audit & Supervisory Board Member of ORIX Real Estate
Corporation

March. 2012

Director and General Manager of Internal Audit Department of ORIX Real
Estate Investment Advisors Corporation- 28 -

February. 2015

Audit & Supervisory Board Member of the Company (current position)

February. 2016

Audit & Supervisory Board Member of Tosei Asset Advisors, Inc. (current
position)*Mr. Hiroshi Nishinakama is an outside Audit & Supervisory Board Member as set out in Article 2,
Item 16 of the Companies Act.
Until 2015, Mr. Nishinakama served as the employee of ORIX Real Estate Investment Advisors Corporation
with which the Company has business relations. However, taking into consideration that economic
dependence of the Company on ORIX Real Estate Investment Advisors Corporation is low in light of thesize of business transactions, etc., the Company determines that Mr. Nishinakama’s former position does notaffect his independence as a member of the Independent Committee of the Company.

- 29 -

Schedule
Major Shareholders of the Company

Major shareholders of the Company as of November 30, 2017 are as follows.

Status of shareholding in the Company
Name of Shareholder

Number of shares
held

Shareholding ratio(%)

Seiichiro Yamaguchi

12,885,500

26.68

Zeus Capital Limited

6,000,000

12.42

KBL EPB S.A 107704

5,127,300

10.61

Japan Trustee Services Bank, Ltd. (Trust
Account)

1,659,600

3.43State Street Bank and Trust Company 505001

1,624,369

3.36

Government of NORWAY

1,003,400

2.07

The Master Trust Bank of Japan, Ltd. (Trust
Account)

919,600

1.90

Ueda Yagi Tanshi Co., Ltd.

800,000

1.65

DFA INTL Small CAP Value Portfolio

649,000

1.34

MSCO Customer Securities

553,764

1.14- 30 -