[Translation]

April 30, 2015
Company Name: Tokuyama Corporation
Representative Name: Kazuhisa Kogo,
Representative Director(Code No. 4043, First Section TSE)
Contact: Taro Kobayashi, General Manager
Corporate Communications & Investor Relations Dept.
TEL: +81-3-6205-4832

Renewal of Policy Regarding Large-Scale Purchases ofTokuyama Corporation’s Company Shares (Anti-Takeover Measures)
Tokuyama Corporation (hereinafter “the Company,” “Tokuyama” or “we”) hereby
announces that the Board of Directors of the Company, at its meeting held on April 30,
2015, determined to renew a policy (hereinafter “the Policy”) regarding the Large-Scale
Purchase of Tokuyama’s shares, as explained in the following, and make a proposal on theagenda to seek shareholders’ approval of the renewal of the Policy at the 151st Ordinary
General Shareholders’ Meeting (hereinafter “this Ordinary General Shareholders’Meeting”) to be held on June 24, 2015. The renewal of the Policy is based on the “Basic
Policy Regarding Persons Who Control the Company’s Decisions on Financial Matters andBusiness Policies” (hereinafter the “Basic Policy”) as defined in the clause in Paragraph 3
of Article 118 of the Enforcement Regulations of the Companies Act. It is one of ourmeasures to prevent the Company’s decisions on financial matters and business policies
from being controlled by persons deemed inappropriate according to the Basic Policy(Article 118, Paragraph 3, B(2), of the Enforcement Regulations of the Companies Act).
At the meeting of the Board of Directors held on May 11, 2012, Tokuyama determined
to adopt the Policy Regarding Large-Scale Purchases of Tokuyama Corporation’s Shares(Anti-Takeover Measures) (hereinafter the “Former Policy”), which was announced in apress release as of the aforementioned day. Later, at the 148th Ordinary General
Shareholders’ Meeting held on June 26, 2012, the Former Policy was approved by amajority of the vote of shareholders, thereby continuing the Former Policy. The Former
Policy has been effective until the closing of this Ordinary General Shareholders’ Meeting.
The Policy is a renewed version of the Former Policy.
The Policy will take effect on condition that the above proposal on the agenda is approved1

by shareholders at this Ordinary General Shareholders’ Meeting. In case it is not approved
thereat, the Policy shall not be introduced.
In cases where amendments of the Companies Act, the Financial Instruments andExchange Act and the associated regulations, Cabinet Orders, Cabinet Office Ordinances
and/or Ordinances of the Ministry (hereinafter, in general, “laws and regulations”) comeinto effect including the change of the names of laws and regulations and theestablishment of new laws and regulations inheriting the previous content, each Article andParagraph of the laws and regulations referred to in this document shall be read ascorresponding Article and Paragraph to the previous content, unless otherwise stipulatedby the Board of Directors.
The major changes from the Former Policy to the Policy are as follows.
z

Scenarios where it is determined that said Large-Scale Purchase will significantly
damage the common interests of Tokuyama’s shareholders and Tokuyama’s
corporate value have been narrowed to abusive takeovers including green mailers (4.
(2) (i) through (iv) below) and coercive two-tiered takeovers (4. (2) (v) below); andzCountermeasures to be taken by Tokuyama’s Board of Directors for the purpose ofprotecting the common interests of Tokuyama’s shareholders and Tokuyama’s
corporate value have been narrowed to the gratis allotment of share options definedin Article 277 and following of the Companies Act (4. (1) below).

The status of the major shareholders of the Company as of March 31, 2015 is provided
in the Appendix.
As of April 30, 2015, we have not received any Large-Scale Purchase proposal.

1. Purpose of the Large-Scale Purchase Rules(1) Basic Policy and Its Background
Tokuyama endeavors to improve its corporate value based on the improvement ofcorporate ethics and thorough compliance. At the same time, Tokuyama has formulated its
basic management policies to realize a Tokuyama Group that will always be selected bycustomers and appreciated by stakeholders—shareholders, customers, business partners,
employees and local communities—through the policy of “practicing corporate
management in harmony with society” based on the recognition of its corporate social
responsibility (CSR).
Since our founding in 1918, Tokuyama and our group companies have developed a wide2

range of businesses organized into five segments: Chemicals Segment, including soda ash,chlorine and alkali, and vinyl chloride; Cement Segment, including cement and recycling;Specialty Products Segment, including polycrystalline silicon, fumed silica, aluminum
nitride, and high-purity chemicals for electronics manufacturing; Life & Amenity Segment,
including fine chemicals, microporous film, dental materials, and ion exchange membranes;
and Others Segment. These businesses are based on a foundation of uniform devotion to
the production of goods and earning the longstanding trust of our stakeholders, inparticular, our customers.
In each of these businesses, we attempt to anticipate future changes to the business
operating environment, make advance introductions of management resources andcontinuously improve corporate value. This effort involves endeavoring to create business;develop technology; produce equipment; bolster trust and cooperation with our
stakeholders, in particular, our customers; and collect management resources. We believe
that, from this medium- to long-term perspective, the cumulative result of these efforts
and the ongoing advance introduction of management resources are the very source
Tokuyama’s corporate value.
Consequently, in order to raise management efficiency and increase profitability while
being engaged in management from such a medium- to long-term perspective, we believethat persons who have highly professional expertise and/or marketing/technical know-how
being in charge of important duties with regard to the Company’s decisions on financial
matters and business policies in compliance with laws, regulations and the Articles ofIncorporation will contribute to the common interests of Tokuyama’s shareholders andTokuyama’s corporate value.
The above explains Tokuyama’s Basic Policy Regarding Persons Who Control the
Company’s Decisions on Financial Matters and Business Policies.
(2) Medium- to Long-Term Management Strategies
February 16, 2008 marked Tokuyama’s 90th founding anniversary. Toward the centennial
anniversary of its founding, which will be celebrated in February 2018, the TokuyamaGroup set out its Centennial Vision. It defines the optimum form of the Group as “aprominent manufacturer that is responsive to society and creates a better future throughthe vitality of its human resources and the creativity of chemistry.”
As a second step toward achieving its Centennial Vision, Tokuyama embarked on athree-year management plan from April 2012. Despite this endeavor, the polycrystalline
silicon business, a core earnings pillar, witnessed a rapid deterioration in market conditions.
As a result, the Company put in place its Profit Improvement Plan in February 2013.

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Regrettably, Tokuyama was unable to achieve the initially projected quality and stableproduction of polycrystalline silicon at the PS-1 plant of its consolidated subsidiary,
Tokuyama Malaysia Sdn. Bhd. With little chance of generating future cash flow, theCompany decided to post a substantial impairment loss, which has had a major negative
impact on net assets.
In order to break free from this negative spiral and rebuild a profitable platform, we areworking to improve the profitability of not only business divisions, but also back-office
and functional divisions. We will also push forward drastic structural reforms in a bid tostrengthen our financial position by increasing productivity. In this manner, we will work
well beyond the scope of emergency measures and endeavor to secure enduing profits as apart of efforts to regain the trust of stakeholders. Moving forward, the Tokuyama Groupis in the process of formulating a new medium-term management plan in order to realize
its Centennial Vision.
(3) Corporate GovernanceA corporate governance system is an extremely important structure for every company
in realizing improvement in its corporate value. We therefore believe that routine oversightand periodic reviews should be made so that the corporate governance of Tokuyama isoperated appropriately at all times.
Tokuyama is a company with Audit & Supervisory Board Members system.
To strengthen the supervisory function of the Board of Directors, the number ofelected Outside Directors has been increased from one in June 2011 to two in June 2013.
Two of the four Audit & Supervisory Board Members are Outside Audit & Supervisory
Board Members and we strive to maintain sound management by ensuring the transparency
and fairness of Tokuyama’s corporate management.
Meanwhile, the Company implemented an executive officer system in April 2011 for the
purpose of separating the supervisory function from the business execution function.
We believe that we have maintained sound management by selecting the aforementioned
governance system.
The decision of whether to accept a Large-Scale Purchase is ultimately left to thediscretion of Tokuyama’s shareholders. Consequently, in cases where a Large-Scale
Purchase is being attempted, we believe that the Large-Scale Purchaser’s provision of anadequate amount of information is necessary. In addition, we believe that the appraisal andopinions of Tokuyama’s Board of Directors, as well as the provision of information andthe like based on the business features pertaining to any Large-Scale Purchase, are critical
for the shareholders to make a decision of whether to accept said Large-Scale Purchase,4and contribute to the common interests of Tokuyama’s shareholders.
Based on the foregoing philosophy, we hereby designate the rules as set forth in 3. below
regarding Large-Scale Purchases so that the necessary and adequate information can be
furnished to the shareholders at the time of a Large-Scale Purchase.
Tokuyama shall require Large-Scale Purchasers to comply with the Large-Scale Purchase
Rules, and in cases where a Large-Scale Purchaser fails to comply with the same, we may
take certain countermeasures from the perspective of protecting the common interests ofTokuyama’s shareholders and Tokuyama’s corporate value.
2. Purchases of Tokuyama’s Shares to which the Policy Is Applied
The Policy will apply to an action that falls under (i) or (ii) below or similar actions(regardless of the specific purchase method thereof, whether it is through market
transactions or a tender offer, excluding cases where the prior consent of Tokuyama’s
Board of Directors has been obtained regarding either case (hereinafter such a purchaseshall be referred to as a “Large-Scale Purchase”). The party carrying out such Large-Scale
Purchase (hereinafter the “Large-Scale Purchaser”) must comply with the Large-Scale
Purchase Rules that are set forth in the Policy.
(i)
(ii)

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

3. Details of the Large-Scale Purchase Rules
The Large-Scale Purchase Rules require that Large-Scale Purchasers furnish thenecessary and adequate information to Tokuyama’s Board of Directors in advance,
whereupon Large-Scale Purchases shall be commenced after the elapse of a certain period
for Tokuyama’s Board of Directors to appraise the same (hereinafter the “Large-Scale
Purchase Rules”).
A summary of the Large-Scale Purchase Rules is as follows.
(1) Provision of the Large-Scale Purchase Information
Prior to any Large-Scale Purchase, Large-Scale Purchasers shall provide to Tokuyama’s
Board of Directors the required and adequate information (hereinafter the “Large-Scale

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Purchase Information”) for decision making by Tokuyama’s shareholders and the appraisaland consideration of Tokuyama’s Board of Directors.
In cases where a Large-Scale Purchaser attempts to carry out a Large-Scale Purchase, a“Statement of Intent” regarding the execution of the Large-Scale Purchase must first be
provided to Tokuyama’s Representative Director in accordance with the Large-Scale
Purchase Rules. The Statement of Intent shall have set forth therein the Large-Scale
Purchaser’s name, address, corporate establishment governing law, representative nameand contact information within Japan; a summary of the proposed Large-Scale Purchase;and covenants that adhere to the Large-Scale Purchase Rules. Tokuyama shall deliver to theLarge-Scale Purchaser a list of the Large-Scale Purchase Information to be initiallysubmitted by the same within 10 business days after receipt of the Statement of Intent.
Upon judging that sufficient Large-Scale Purchase Information has been provided,
Tokuyama’s Board of Directors will publicly announce the fact that it has received
sufficient information at a time and in a manner that it deems appropriate. The principal
items regarding the Large-Scale Purchase Information shall be as follows. In cases where it
is concluded necessary for the shareholders to make a decision, Tokuyama’s Board of
Directors may publicly announce all or part of the facts of the Large-Scale Purchaseproposal and the Large-Scale Purchase Information submitted to Tokuyama’s Board of
Directors at a time that it deems appropriate.
When determining whether or not the Large-Scale Purchaser has complied with theprocedure set forth in the Large-Scale Purchase Rules, Tokuyama’s Board of Directors
shall sufficiently consider to a reasonable extent various facts on the side of the Large-Scale
Purchaser, including the fact that the Large-Scale Purchaser may not necessarily havedetailed information with respect to the Company, and shall not determine that theLarge-Scale Purchaser has not complied with the procedure set forth in the Large-Scale
Purchase Rules solely for the reason that part of the Large-Scale Purchase Information thathas been requested by Tokuyama’s Board of Directors has not been provided by theLarge-Scale Purchaser.
(i)
(ii)

(iii)

A Summary of the Large-Scale Purchaser or its group (including specific name,
capital and financial information).
The purpose, method and details of the Large-Scale Purchase (including the typeand value of purchase consideration, the timing of the purchase and theappropriateness of the purchase method).
The existence of any notification of intent to a third party and, if such
notification of intent exists, the details thereof, at the time of the Large-Scale

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(iv)

(v)

(vi)
(vii)

(viii)

Purchase
The basis for calculating the purchase consideration and materials that evidence
funding for the purchase (including the specific name and procurement methodof the provider of purchase funds (including substantive providers).
The existing collateral for the shares of Tokuyama that are already owned or theplanned establishment of collateral for the shares of Tokuyama to be purchasedin the future (including the method and details of the planned establishment ofcollateral).
The intended fundamental management policies and business plans of Tokuyama
and the Tokuyama Group after the completion of the Large-Scale Purchase.
Any changes planned after the completion of the Large-Scale Purchase or thedetails thereof when making such changes regarding the relationship among our
stakeholders, including customers, business partners, employees and local
community, and Tokuyama and the Tokuyama Group.
The probability of acquiring the approvals, licenses and/or permits to beacquired from any governments or third parties in Japan and overseas, inaccordance with the Antitrust Law, other laws and regulations, and the like.

(2) Appraisal and Consideration by Tokuyama’s Board of Directors
Tokuyama’s Board of Directors believes that, after the Large-Scale Purchaser completes
the provision of the Large-Scale Purchase Information to Tokuyama’s Board of Directors,
a period of 60 days (in cases of purchases of all of Tokuyama’s shares through a tender
offer of the consideration in cash (denominated in Japanese yen) only) or 90 days (in casesof other Large-Scale Purchases) should be secured as a period for Tokuyama’s Board of
Directors to appraise, consider, negotiate, form opinions about or devise alternate
proposals (hereinafter the “Board of Directors Appraisal Period”) in accordance with thedegree of difficulty for appraising and considering the Large-Scale Purchase.
Therefore, Large-Scale Purchases shall commence only after the elapse of the Board of
Directors Appraisal Period.
To confirm the shareholders’ view with regard to whether to implement a
countermeasure against an inappropriate Large-Scale Purchase, the Board of Directors of
the Company, based on the advice of the Special Committee, can extend the Board of
Directors Appraisal Period for a maximum of thirty (30) days (excluding the first day)within a necessary and reasonable range. In that case, the Board of Directors will quickly
announce the specific period of the extension and the reason for the extension. During theBoard of Directors Appraisal Period, Tokuyama’s Board of Directors shall sufficiently

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appraise and consider the provided Large-Scale Purchase Information while accepting theadvice of outside experts and the like as deemed appropriate and necessary, whereupon theopinions and/or alternate proposal of Tokuyama’s Board of Directors shall be carefullysummarized and publicly announced in a timely and appropriate manner.
4. Policy when a Large-Scale Purchase Is Attempted (Please refer to Exhibit 1,“Outline of the Policy,” for a summary of the Policy)(1) When a Large-Scale Purchaser Fails to Comply with the Large-Scale Purchase
Rules
In cases where a Large-Scale Purchaser fails to comply with the Large-Scale Purchase
Rules, Tokuyama’s Board of Directors may, regardless of the specific purchase method
thereof, take measures (hereinafter the “Countermeasures”), that is “Allotment of Share
Options without Contribution” defined in Article 277 and following of the Companies Act,for the purpose of protecting the common interests of Tokuyama’s shareholders andTokuyama’s corporate value, and oppose the Large-Scale Purchase.
A detailed outline of the Countermeasures is as set forth in Exhibit 2. However, in casesof actually implementing the Allotment of Share Options without Contribution, an exercise
period and exercise terms may be established in light of their effect as Countermeasures. In
this case, such share options may not be exercised by the Large-Scale Purchaser. In
addition, there may be cases in which future changes are made, such as adding a clause (anacquisition clause) in which Tokuyama may acquire the share options in exchange for its
shares or other property regarding the details of said share options. Furthermore, in
relation to the Former Policy, the Company registered the issuance of the share options forquick issuance (submitted on June 28, 2013, and June 27, 2014). In case shareholders
approve the introduction of the Policy at this Ordinary General Shareholders’ Meeting,Tokuyama plans to register the issuance of the share options again for quick issuancethereof.
(2) When a Large-Scale Purchaser Complies with the Large-Scale Purchase Rules
In cases where a Large-Scale Purchaser complies with the Large-Scale Purchase Rules,
Tokuyama’s Board of Directors will only go so far as to express its opposition or present
an alternate proposal regarding such purchase proposal, even if it is opposed to said
Large-Scale Purchase, and shall not, in principle, take any Countermeasures pertaining tosaid Large-Scale Purchase. The shareholders shall determine whether to accept theLarge-Scale Purchaser’s purchase proposal upon considering the details of said purchaseproposal and the opinions, alternate proposals and the like of Tokuyama’s Board of8

Directors pertaining thereto.
However, in cases where it is determined that said Large-Scale Purchase will significantly
damage the common interests of Tokuyama’s shareholders and Tokuyama’s corporate
value, even if the Large-Scale Purchase Rules have been complied with, Tokuyama’s Boardof Directors may implement a Countermeasure (the specific details of the Countermeasure
are as set forth in the foregoing 4. (1)) in order to protect the common interests ofTokuyama’s shareholders and Tokuyama’s corporate value. Specifically, in cases where
there are reasonable grounds for concluding that the Large-Scale Purchase corresponds toany of the scenarios described in (i) through (v) below, such a Large-Scale Purchase will, in
principle, be determined to be one that will significantly damage the common interests ofTokuyama’s shareholders and Tokuyama’s corporate value. Meanwhile, a Countermeasureagainst the Large-Scale Purchase shall be exclusively activated in cases where theLarge-Scale Purchase is judged to significantly damage the common interests ofTokuyama’s shareholders and Tokuyama’s corporate value, and shall not necessarily be
activated only due to the fact that the Large-Scale Purchase is determined to formally fallunder any of the categories (i) through (v) below.
(i)

(ii)

(iii)

(iv)

When it is determined that the purchase of Tokuyama’s shares is being carriedout for the purpose of causing Tokuyama’s related parties to take overTokuyama’s shares at an overstated share price, regardless of whether there isgenuine intent to participate in the management of Tokuyama (so-called green
mailer).
When it is determined that the purchase of Tokuyama’s shares is being carriedout for the purpose of temporarily controlling the management of Tokuyama sothat the intellectual property rights, know-how, trade secrets and principal
suppliers, customers and the like required with respect to Tokuyama’s or the
Tokuyama Group companies’ business can be transferred to the Large-Scale
Purchaser or its group companies and the like.
When it is determined that the purchase of Tokuyama’s shares is being carriedout in accordance with plans to divert the assets of Tokuyama or the TokuyamaGroup companies to secure or use as a source of funds to repay the obligationsof the Large-Scale Purchaser or its group companies and the like after controllingthe management of Tokuyama.
When it is determined that the purchase of Tokuyama’s shares is being carriedout for the purpose of temporarily controlling the management of Tokuyama sothat Tokuyama’s or the Tokuyama Group companies’ high-value assets, such as

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(v)

real estate and securities, can be disposed of through sales and the like or so thatan opportunity is afforded to cause the share price to increase rapidly due totemporarily high dividends whereupon Tokuyama’s shares can be sold at an
inflated price.
When it is determined that the purchase method of Tokuyama’s shares proposedby the Large-Scale Purchaser will restrict the shareholders’ opportunity andfreedom to make decisions, such as oppressive two-stage purchases (executing
purchases of shares, such as tender offers, whereby no solicitations forpurchasing all the shares are made in the initial purchase, and disadvantageouspurchase terms are set or the purchase terms are not made explicitly clear in thesecond stage), whereby shareholders may essentially be forced to sell their
Tokuyama shares (provided that incremental tender offers shall not always
correspond hereto).

5. Establishment of a Special Committee(1) Special Committee Members
A Special Committee is an organ in the Former Policy that serves as a deterrent against
arbitrary decision making by Tokuyama’s Board of Directors before activating aCountermeasure. The Special Committee shall remain established upon the renewal of the
Policy. The Special Committee shall comprise at least three members, who shall be selectedfrom among Outside Audit & Supervisory Board Members, Outside Directors,
attorneys-at-law, Certified Public Accountants, Certified Public Tax Accountants, academic
experts and outside knowledgeable persons who have sufficient experience as Directors or
executives to enable fair and neutral decision making. The current Special Committee
comprises one attorney-at-law and two Outside Audit & Supervisory Board Members. The
names and brief work histories of the members who will assume office after the close ofthis Ordinary General Shareholders’ Meeting are set forth in Exhibit 3, “Brief Work
Histories of the Attorney-at-Law and Outside Audit & Supervisory Board Members as
Special Committee Members (planned to assume office).”(2) Functions of the Special Committee
In cases where Tokuyama’s Board of Directors contemplates activating aCountermeasure, the following procedures must be taken in order to ensure fair decision
making.
First, Tokuyama’s Board of Directors shall inquire of the Special Committee as to thesuitability of activating a Countermeasure, whereupon the Special Committee shall make a10

recommendation to Tokuyama’s Board of Directors on the suitability of activating such aCountermeasure while accepting advice from outside experts and the like based on said
inquiries. Resolutions to make a recommendation shall be made by unanimous approval ofthe members of the Special Committee, in principle. Tokuyama’s Board of Directors shallrespect the recommendation of the Special Committee to the utmost when a decision as towhether to activate a Countermeasure has been made.
With regard to the implementation of any countermeasure against an inappropriate
Large-Scale Purchase, the Board of Directors of the Company, accepting the advice of theSpecial Committee, may convene a General Shareholders’ Meeting to confirm theshareholders’ view. As set forth in 3. (2) above, the Board of Directors shall not extend theBoard of Directors Appraisal Period except for an extension for the purpose of confirming
the shareholders’ view concerning whether to implement any countermeasure against an
inappropriate Large-Scale Purchase based on the advice of the Special Committee.
6. Impact on the Shareholders when Activating a Countermeasure
Although no circumstances are expected to arise from the implementation of theCountermeasure, in which Tokuyama’s shareholders (excluding the Large-Scale Purchaser
in violation of the Large-Scale Purchase Rules) suffer any especial losses in regards to legal
rights or economic considerations, the Company’s stock price might be affected, to whichshareholders would have to pay attention. If Tokuyama’s Board of Directors decides toimplement a Countermeasure, such matter shall be timely and appropriately disclosed inaccordance with laws and ordinances and securities exchange regulations, etc.
If the Large-Scale Purchaser withdraws the tender offer that it has already initiated after
Tokuyama’s Board of Directors approves a resolution to implement an Allotment of Share
Options without Contribution as a specific Countermeasure, or if the Large-Scale
Purchaser immediately disposes of Tokuyama’s shares after purchasing them, or if General
Shareholders’ Meeting approves a resolution to accept a Large-Scale Purchase, the purchaseitself ceases to be a Large-Scale Purchase. In these cases, Tokuyama may cancel theimplementation of the Allotment of Share Options without Contribution or acquire theshare options gratis that were already allotted gratis. In such cases, Tokuyama’s stock pricemight be affected, to which shareholders would have to pay attention. If Tokuyama cancels
the Allotment of Share Options without Contribution or acquires the share options gratis
that were already allotted gratis after determination of shareholders to be allotted gratis theshare options, the dilution of stock value per share will not occur. Any shareholders who
conduct the purchase and sale of the Company’s shares assuming the dilution of the per

11

share stock value will suffer a significant loss due to changes in stock prices.
7. Procedures Required of Tokuyama Shareholders Attendant to the Issuance of
the Share Options(1) Allotment of the Share Options
In cases where Tokuyama’s Board of Directors approves a resolution to implement an
Allotment of Share Options without Contribution, Tokuyama shall set the allotment dateof the share options and give a public notice of this date. Furthermore, because the shareoptions will be allotted to the shareholders by way of “Allotment of Share Options without
Contribution” as stipulated under Article 277 of the Companies Act, the shareholders
entered or registered in the final shareholders’ register or beneficial shareholders’ register asof the allotment date will naturally become the holders of share options on the day whensuch Allotment of Share Options without Contribution becomes effective.
(2) Procedures for Exercising the Share Options
Tokuyama shall send the claim forms for exercising the share options (a prescribed
written instrument by the Company that includes a covenant that the shareholder him or
herself is not the Large-Scale Purchaser) and the other documents required for exercising
the rights of the share options to the shareholders entered or registered in the final
shareholders’ register or beneficial shareholders’ register as of the allotment date. After theissuance of the share options, the shareholders shall be issued one ordinary share of theCompany for each share option through submitting the required documents thereof andpaying a payment-handling institution an amount determined by Tokuyama’s Board of
Directors that is at least one Japanese yen for each share option.
However, as set forth in the foregoing 4 (1), in cases where Tokuyama makes a change,such as the addition of a clause (an acquisition clause) that enables the Company to acquire
the share options in exchange for Tokuyama shares or other assets, or, in other words, incases where it has been determined that Tokuyama can obtain the share options in
exchange for the Company’s shares, if Tokuyama completes the acquisition procedures, theshareholders who own the share options determined by Tokuyama’s Board of Directors tobe the subject of the acquisition will receive shares of the Company as consideration for
the acquisition by Tokuyama of the share options without having to pay any sum of money
equivalent to the exercise price thereof. (Note that, in this case, shareholders may be asked
to separately submit a prescribed written instrument of the Company covenanting that they
are not the Large-Scale Purchaser.)12

8. Effective Period, and Discontinuation and Change of the Policy
The Policy will be effective until the closing of the Ordinary General Shareholders’Meeting for the last fiscal year that ends within three (3) years after this Ordinary General
Shareholders’ Meeting. Even before the end of the effective period, Tokuyama’s Board of
Directors shall review the Policy as necessary from the point of view of protecting thecommon interests of Tokuyama’s shareholders and Tokuyama’s corporate value based onrevisions to relevant laws and ordinances, such as the Companies Act, trends in judicial
decisions and measures taken by securities exchanges and other institutions. Note that if it
has been determined to change the Policy, the details thereof shall immediately bedisclosed. In addition, any substantial change or discontinuation of the Policy shall be
brought up as an agenda proposal at the General Shareholders’ Meeting.
The Policy was determined by the unanimous approval of the Directors, including two
Outside Directors, in a resolution by Tokuyama’s Board of Directors at a meeting held on
April 30, 2015, whereupon all the Company’s Audit & Supervisory Board Members,
including two Outside Audit & Supervisory Board Members, participated in such meetingand in which every Audit & Supervisory Board Member approved the Policy on thecondition that the specific administration of the Policy be properly carried out.
9．Reasonableness of the Policy(1) Consistency of the Policy with the Basic Policy without Damaging the Common
Interests of Tokuyama’s Shareholders
As described in the foregoing 3., the Policy will enable Tokuyama’s Board of Directors toappraise, consider, negotiate, form opinions about or devise alternate proposals for theLarge-Scale Purchase by requiring the Large-Scale Purchaser in advance to provide thenecessary information for the Large-Scale Purchase and secure a certain period for
Tokuyama’s Board of Directors to appraise the same. Meanwhile, the shareholders will be,in turn, allowed to make a decision of whether to accept a Large-Scale Purchase, in
accordance with the Policy. In other words, the Policy is renewed to constrain any
purchase that is contrary to the common interests of Tokuyama’s shareholders andtherefore is consistent with the Basic Policy.
(2) Respect for the Shareholders’ Intentions
The Company makes a proposal on the agenda to seek shareholders’ approval of therenewal of the Policy at this Ordinary General Shareholders’ Meeting and shall not renew
the Policy in case the shareholders’ approval cannot be obtained. Thus, the intentions of
the shareholders are reflected.

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Even before the end of the effective period, the Company shall review the Policy asnecessary based on revisions to relevant laws and ordinances. However, any substantialchange or discontinuation of the Policy shall be brought up as an agenda proposal at theGeneral Shareholders’ Meeting.
Note that the term of office for Tokuyama’s Directors shall be for one year, whereupon
the intentions of the shareholders regarding the continuation of the Policy shall bereflected, even during the effective period of the Policy, through the exercise of voting
rights regarding the agenda proposal for the appointment of Directors at the Ordinary
General Shareholders’ Meeting held each year.
(3) The Requirements in the Guidelines regarding Anti-Takeover Measures Satisfied
The Policy satisfies all the three basic principles formulated in the “Guidelines Regarding
Takeover Defenses for the Purposes of the Protection and Enhancement of Corporate
Value and Shareholders’ Common Interests” jointly released by the Ministry of Economy,
Trade and Industry and the Ministry of Justice on May 27, 2005: (i) the principle of theprotection and enhancement of corporate value and shareholders’ common interests; (ii)the principle of prior disclosure and shareholders’ intentions; and (iii) the principle ofsecuring necessity and suitability. The substance of the Policy also reflects recent practices
and discussions, such as “Takeover Defense Measures in Light of Recent Environmental
Changes” released on June 30, 2008, by the Corporate Value Study Group of the Ministryof Economy, Trade and Industry.
(4) Respect for the Judgment of Highly Independent Outsiders
The Company has established a Special Committee as an organ that serves as a deterrent
against arbitrary decision making by Tokuyama’s Board of Directors. The Special
Committee comprises at least three members, who shall be selected from among Outside
Directors, Outside Audit & Supervisory Board Members, attorneys-at-law, Certified Public
Accountants, Certified Public Tax Accountants, academic experts and outside
knowledgeable persons, all of whom are independent from the management team of theCompany that is engaged in executing duties. The committee shall give advice to the Boardof Directors on the judgment as to whether implementation of a Countermeasure isappropriate, the convocation of a General Shareholders’ Meeting to confirm the intentionsof the shareholders and the extension of the Board of Directors Appraisal Period when the
General Shareholders’ Meeting is convened. The Board of Directors shall maximally accept
the advice of the Special Committee to adopt resolutions as an organ under the Companies
Act.

14

(5) Reasonable and Objective Requirements for Activating a Countermeasure
The Policy is so formulated that the Countermeasure against a Large-Scale Purchase may
not be activated unless the reasonable and objective requirements for activating acountermeasure, which have been disclosed in advance, are met to prevent Tokuyama’s
Board of Directors from arbitrarily activating the Countermeasure.
(6) Advice from Outside Experts
Tokuyama’s Board of Directors and the Special Committee may, for themselves, seek theadvice of outside professionals (including attorneys-at-law, Certified Public Accountants,
consultants, financial advisors and other specialists). The objectivity and reasonableness ofthe determination of the Board of Directors will thus be ensured.
(7) Not a “Dead-Hand” Type or “Slow-Hand” Type Anti-Takeover Measure
The Policy is not a so-called “dead hand” type anti-takeover measure (a takeover defense
measure in which the triggering of the measure cannot be prevented even though amajority of the members of the Board of Directors are replaced). Neither is the Policy a“slow-hand” anti-takeover measure (a takeover defense measure in which the triggering of
the measure takes more time to prevent due to the inability to replace all of the directors at
one time) because the Company does not adopt a board system with a different tenure of
office for directors. (The term of office for Tokuyama’s directors is one year.)
Notes:
1. Defined in Article 27-23, Paragraph 1, of the Financial Instruments and Exchange Act,
hereinafter the same applies, unless otherwise stipulated.
2. Defined in Article 27-23, Paragraph 4, of the Financial Instruments and Exchange Act,
hereinafter the same applies.
3. Defined as holders in Article 27-23, Paragraph 3 and any joint holders defined in
Article 27-23, Paragraph 5, including a person deemed to be a joint holder pursuant to
Article 27-23, Paragraph 6, of the Financial Instruments and Exchange Act, hereinafter
the same applies.
4. Defined in Article 27-2, Paragraph 1, of the Financial Instruments and Exchange Act,the same applies in (ii).
5. Defined in Article 27-2, Paragraph 6, of the Financial Instruments and Exchange Act,
hereinafter the same applies.
6. Defined in Article 27-2, Paragraph 8, of the Financial Instruments and Exchange Act,15

hereinafter the same applies.
7. Defined in Article 27-2, Paragraph 7, of the Financial Instruments and Exchange Act,
hereinafter the same applies (including persons who the Board of Directors regards asapplicable). With regard to persons listed in Item 1 of the same Paragraph, persons are
excluded who are set forth in Article 3, Paragraph 2, of the Cabinet Office Ordinanceconcerning the disclosure of tender offer of shares by persons other than the issuer.

16

Exhibit 1

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

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

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

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

Advice from the Special Committee

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

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

Voted down

Board of Directors of the Company:
Implement a Countermeasure (Allotment of
Share Options without Contribution)

Board of Directors of the Company:
Do not implement a Countermeasure(Allotment of Share Options without
Contribution)

Board of Directors of theCompany:
Express an opinion and make analternate proposal
17

Exhibit 2

Outline of the Allotment of Share Options without Contribution
1. Shareholders Subject to Allotment of Share Options without Contribution and Terms
and Conditions Thereof
The share options shall be allotted at a 1:1 ratio for each share held (excluding,however, ordinary shares of the Company held by Tokuyama) to shareholders entered orregistered in the final shareholders’ register or beneficial shareholders’ register as of theallotment date stipulated by Tokuyama’s Board of Directors.
2. Type and Number of Shares for Purpose of the Share Options
The type of shares for the purpose of the share options shall be ordinary shares of theCompany, and the number of shares corresponding to each share option shall be one
share. However, the requisite changes shall be made in cases where Tokuyama executes ashare split or a reverse share split.
3. Total Number of Issued Share Options
The total number of allotted share options shall be the number stipulated by
Tokuyama’s Board of Directors. Tokuyama’s Board of Directors may execute
Allotments of Share Options without Contribution multiple times.
4. Issuance Price of the Share Options
Gratis.
5. Amount to Be Paid upon Exercise of Each Share Option
The amount to be paid upon the exercise of each share option shall be the amountstipulated by Tokuyama’s Board of Directors of at least one Japanese yen per share.
6. Transfer Restrictions on the Share Options
The transfer of share options must be approved by Tokuyama’s Board of Directors.
7. Exercise Terms and Conditions
Large-Scale Purchasers cannot exercise the share options.
8. Exercise Period, etc., of the Share Options
The exercise period of the share options, exercise terms and conditions other than18

those set forth in the foregoing 7., grounds for extinguishing shares, shareextinguishment terms and conditions, and other required matters shall be separately
stipulated by Tokuyama’s Board of Directors
9. Share Options with Acquisition Clause
As set forth in 7.(2) of the Policy, Tokuyama may make changes, such as the additionof a clause (an acquisition clause) that enables it to exchange shares or other assets of theCompany for the share options in regards to the details of the share options.
10. Cancelation of the Allotment of Share Options without Contribution or Acquisitionof the Allotted Share Options Gratis
If the Large-Scale Purchaser withdraws the tender offer that it has already initiatedafter Tokuyama’s Board of Directors approves a resolution to implement an Allotment of
Share Options without Contribution as a specific Countermeasure, or if the Large-Scale
Purchaser immediately disposes of Tokuyama’s shares after purchasing them, or if
General Shareholders’ Meeting approves a resolution to accept a Large-Scale Purchase,the purchase itself ceases to be a Large-Scale Purchase. In these cases, Tokuyama may
cancel the implementation of the Allotment of Share Options without Contribution or
acquire the share options gratis that were already allotted gratis.

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Exhibit 3

Brief Work Histories of the Attorney-at-Law and Outside Audit & Supervisory Board
Members as Special Committee Members (planned to assume office)Junya Sato (born May 4, 1953)
Apr. 1982
Registered as Lawyer,
Apr. 1982
Joined Law Offices of Furness, Sato & Ishizawa(currently Law Offices of Ishizawa, Ko & Sato)
Mr. Junya Sato and the Company have not entered into a consultancy agreement and hehas no special interest in or with the Company.
Ryuji Hori (born September 3, 1943)
Apr. 1966
Joined Iwai Sangyo Corporation
Jun. 1996
Director, Nissho Iwai Corporation
Jun. 2000
Managing Director
Jun. 2002
Executive Director
Apr. 2003
Professor, School of Law, Waseda University
Apr. 2004
Professor, Graduate School of Law, Waseda University
Jun. 2005
Audit & Supervisory Board Member of the Company (To present)
Mr. Ryuji Hori is Outside Audit & Supervisory Board Member as set forth in Item 16 of
Article 2 of the Companies Act. The Company has notified Tokyo Stock Exchange, Inc.,
that he is an independent officer in accordance with its regulations. He has no special
interest in or with the Company.
Shin Kato (born June 27, 1961)
Apr. 1990
Registered as Lawyer,
Hiranuma Law Offices

Apr. 1995
Aoyama Central Law Offices
Sept. 2001 South Toranomon Law Offices
Jun. 2013
Audit & Supervisory Board Member of the Company (To present)
Jan. 2014
Kato Law Offices (To present)
Mr. Shin Kato is Outside Audit & Supervisory Board Member as set forth in Item 16 of
Article 2 of the Companies Act. The Company has notified Tokyo Stock Exchange, Inc.,
that he is an independent officer in accordance with its regulations. He has no special
interest in or with the Company.

20Appendix
Top 10 Major Shareholders(Percentage of shares held to the total number of shares issued (excluding treasury stock))(As of March 31, 2015)
Name of Shareholder

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

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

20,011

5.75

Nippon Life Insurance Company

10,874

3.13

Japan Trustee Services Bank, Ltd. (trust account)

10,784

3.10

CBNY FDA INTL SMALL CAP VALUE PORTFOLIO

9,778

2.81

The Yamaguchi Bank, Ltd.

8,246

2.37

STATE STREET BANK AND TRUST COMPANY 505041

7,442

2.14

Meiji Yasuda Life Insurance Company

7,429

2.14

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

7,095

2.04

Sojitz Corporation

6,484

1.86

CHASE MANHATTAN BANK GTS CLIENTS ACCOUNTESCROW

6,322

1.82

(Note) The Percentage of Shares Held is calculated after deducting the shares held by theCompany as treasury stock (1,805,814 shares).

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