This document has been translated from the Japanese original for the convenience of non-Japanese shareholders. In the event ofany discrepancy between this translation and the Japanese original, the original shall prevail.

Securities identification code: 6104
June 1, 2016

To our shareholders:
Yukio Iimura
President and Chief Executive Officer

TOSHIBA MACHINE CO., LTD.
2-2 Uchisaiwaicho 2-Chome, Chiyoda-ku, TokyoNOTICE OF THE 93RD ORDINARY GENERAL MEETING OF SHAREHOLDERS
You are cordially invited to attend the 93rd Ordinary General Meeting of Shareholders of TOSHIBAMACHINE CO., LTD. (the “Company”), which will be held as described below.
If you are unable to attend the meeting in person, you may exercise your voting rights by postal mail or
via the Internet. Please exercise your voting rights after reviewing the attached Reference Documents for
the General Meeting of Shareholders no later than 5:30 p.m., Thursday, June 23, 2016 (Japan Standard
Time).

Meeting Details
1.

Date and time:

Friday, June 24, 2016 at 10:00 a.m. (Japan Standard Time)

2.

Venue:

RIVER SIDE HOTEL NUMAZU
SHANGRI-LA on the fourth floor
100-1 Agetsuchi-cho, Numazu City, Shizuoka

3.

Purposes:
Items to be reported:
1. Business Report and Consolidated Financial Statements for the 93rd Term (from April 1,2015 to March 31, 2016), as well as the results of audit of the Consolidated Financial
Statements by the Accounting Auditor and the Audit and Supervisory Board.
2. Non-Consolidated Financial Statements for the 93rd Term (from April 1, 2015 to March 31,
2016)
Items to be resolved:
Proposal 1:
Election of eight (8) Directors
Proposal 2:

Election of one (1) Audit and Supervisory Board Member

Proposal 3:

Election of one (1) substitute Audit and Supervisory Board Member

Proposal 4:

Renewal of policy for responding to large-scale share acquisitions (takeover
defense measures)1

Reference Documents for the General Meeting of Shareholders
Proposal 1:

Election of eight (8) Directors

The term will expire for all ten (10) Directors at the conclusion of this meeting. Thus, the Company
proposes that eight (8) Directors be elected.
The candidates for Directors are as follows:

No.

Name
(Date of birth)

Career summary, position and responsibilities(Significant concurrent positions outside the Company)

April 1980
October 2000
Yukio Iimura(June 17, 1956)[Reelection]1

October 2004
June 2006
June 2008
June 2009
June 2013

Joined the Company
Injection Molding Machine Engineering
Department Senior Manager of the Company
Micro-Pattern Imprinting Device Division
General Manager of the Company
Director of the Company
Headquarters of Engineering Division General
Manager of the Company
President of the Company
President and Chief Executive Officer of theCompany (present position)[Reasons for nomination as candidate for Director]
Yukio Iimura has been involved with the Toshiba Machine Group management as President
since 2009, and possesses extensive work experience and insight into management overall, as
well as achievements in using his strong leadership skills to lead the whole Group and raise
corporate value. We expect him to promote the Group management and strengthen corporate
governance and have thus nominated him as a candidate for Director.
[Attendance at the Board of Directors meetings (from April 1, 2015 to March 31, 2016)]
Attended all of the 16 meetings

2

Number oftheCompany’s
sharesowned

82,000No.

Name(Date of birth)

Career summary, position and responsibilities(Significant concurrent positions outside the Company)
April 1983
June 2006

Shigetomo Sakamoto(May 22, 1958)

June 2009
June 2010
October 2010

[Reelection]
June 2013
2

Joined the Company
Corporate Planning Division General Manager of
the Company
Director of the Company
Tokyo Head Office General Manager of theCompany
Global Corporate Strategy Division General
Manager of the Company
Director and Managing Executive Officer,
Component Business Unit General Manager, andCorporate Planning Division General Manager of
the Company (present position)

Number oftheCompany’s
sharesowned

19,000[Reasons for nomination as candidate for Director]
Since being appointed as Director, Shigetomo Sakamoto has played a central role in the Groupmanagement, including overseas business based on his extensive experience andachievements, particularly in the Corporate Planning Division. We believe that he willcontinue to be an appropriate appointment to strengthen the Group management and global
expansion, and have high expectations for his management decision-making and oversight.
Accordingly, we have nominated him as a candidate for Director.
[Attendance at the Board of Directors meetings (from April 1, 2015 to March 31, 2016)]
Attended all of the 16 meetings
April 1983
June 2002
October 2004
June 2006
Masayuki Yagi
(November 6, 1958)

June 2009
October 2010

[Reelection]
June 2013
June 2014
3

Joined the Company
Extrusion Machine Engineering Department
Senior Manager of the Company
Extrusion Machine Sales Department Senior
Manager of the Company
Extrusion Machine Division General Manager of
the Company
Director of the Company
Advanced Machinery Business Unit General
Manager of the Company
Director and Executive Officer of the Company
Director and Managing Executive Officer,
Machine Tools Business Unit General Manager,
Engineering and Quality Division General
Manager, and Gotemba Plant General Managerof the Company (present position)[Reasons for nomination as candidate for Director]
Since he was appointed as Director, Masayuki Yagi has been involved with management
mainly from the perspective of the Research and Development Division based on his
extensive experience and achievements gained in carrying out operations in the Extrusion
Machine business in the past. We believe that he will continue to be an appropriate
appointment to refine the Group’s technology and raise quality, and have high expectations forhis management decision-making and oversight. Accordingly, we have nominated him as a
candidate for Director.
[Attendance at the Board of Directors meetings (from April 1, 2015 to March 31, 2016)]
Attended all of the 16 meetings

3

56,000No.

Name(Date of birth)

Career summary, position and responsibilities(Significant concurrent positions outside the Company)
April 1982
October 2007
June 2011

Takahiro Mikami(October 13, 1959)[Reelection]

June 2013
June 2014
June 2014

June 2015

4

Joined the Company
Die Casting Machine Sales Department Senior
Manager of the Company
Die Casting Machine Division General Managerof the Company
Executive Officer of the Company
Director and Executive Officer of the Company
Molding Machinery Business Unit General
Manager, and Sagami Plant General Manager of
the Company (present position)
Director and Managing Executive Officer of theCompany (present position)

Number oftheCompany’s
sharesowned

15,000[Reasons for nomination as candidate for Director]
Since being appointed as Director, Takahiro Mikami has been involved with managementfrom the perspective of being responsible for the Molding Machinery Business Unit based on
his extensive experience and achievements gained in carrying out operations in the Die
Casting Machine business in the past. We believe that he will continue to be an appropriate
appointment to help expand the Group’s business, and have high expectations for his
management decision-making and oversight. Accordingly, we have nominated him as a
candidate for Director.
[Attendance at the Board of Directors meetings (from April 1, 2015 to March 31, 2016)]
Attended all of the 16 meetings
April 1981
October 2004
October 2008
Katsuo Ito(November 12, 1958)[Reelection]

March 2010
June 2010
June 2011

June 2013
5

June 2014

Joined the Company
Injection Molding Machine Engineering
Department Senior Manager of the Company
Injection Molding Machine Division General
Manager of the Company
Seconded to SANJO SEIKI CO., LTD.
Headquarters of Sales Division General Managerof the Company
Global Corporate Strategy Division Regional
Operating Headquarter (the Americas) of theCompany
Director and Executive Officer of the Company(present position)
Production Division General Manager of theCompany (present position)[Reasons for nomination as candidate for Director]
Since being appointed as Director, Katsuo Ito has been involved with management from theperspective of the Production Oversight Division based on his extensive experience andachievements gained in carrying out operations in the Injection Molding Machine businessand overseas business in the past. We believe that he will continue to be an appropriate
appointment to expand the Group’s manufacturing activities, and have high expectations forhis management decision-making and oversight. Accordingly, we have nominated him as a
candidate for Director.
[Attendance at the Board of Directors meetings (from April 1, 2015 to March 31, 2016)]
Attended all of the 16 meetings

4

10,000No.

Name(Date of birth)

Career summary, position and responsibilities(Significant concurrent positions outside the Company)
April 1985
October 2004

6

Akiyoshi Kobayashi(November 14, 1960)

June 2013[Reelection]

June 2014
June 2015

Kan Akiyama(July 21, 1943)[Reelection][Candidate for Outside
Director]
7

Joined the Company
Extrusion Machine Engineering Department
Senior Manager of the Company
Extrusion Machine Division General Manager of
the Company (present position)
Executive Officer of the Company
Director and Executive Officer, Advanced
Machinery Business Unit General Manager of
the Company (present position)[Reasons for nomination as candidate for Director]
Since being appointed as Director, Akiyoshi Kobayashi has been involved with managementfrom the perspective of dividing the Advanced Machinery Business Unit based on his
extensive experience and achievements gained in carrying out operations in the Extrusion
Machine business in the past. We believe that he will continue to be an appropriate
appointment to help expand the Group’s business, and have high expectations for his
management decision-making and oversight. Accordingly, we have nominated him as a
candidate for Director.
[Attendance at the Board of Directors meetings (from April 1, 2015 to March 31, 2016)]
Attended all of the 16 meetings
April 1967
June 1999
June 2001
June 2005
October 2005
June 2006
June 2009
June 2010
June 2013

Number oftheCompany’s
sharesowned

Joined Yuasa Battery Co., Ltd. (currently GS
Yuasa Corporation)
Director of Yuasa Battery Co., Ltd.
Managing Director of Yuasa Battery Co., Ltd.
Senior Managing Director of Yuasa Battery Co.,Ltd.
President of GS Yuasa Manufacturing Ltd.
Chairman of GS Yuasa Corporation
Advisor of GS Yuasa Corporation
Member of Independent Committee of theCompany (present position)
Outside Director of the Company (present
position)[Reasons for nomination as candidate for Director]
Kan Akiyama possesses an impressive character and knowledge, and we believe that he will
be able to fulfill his responsibilities as Outside Director by utilizing his extensive experienceand knowledge gained as an officer for other companies. Accordingly, we have nominatedhim as a candidate for Outside Director.
[Attendance at the Board of Directors meetings (from April 1, 2015 to March 31, 2016)]
Attended 15 of the 16 meetings

5

9,000

2,000

No.

Name
(Date of birth)

Career summary, position and responsibilities(Significant concurrent positions outside the Company)
April 1973

April 1982
Yoshihiro Ogura(December 8, 1945)[Reelection][Candidate for Outside
Director]
8

June 1994
June 2009

June 2010
June 2013

Lawyer registration (DAINI TOKYO BAR
ASSOCIATION); Joined Takeshi Niiya Law
OfficeEstablished Ogura Tanaka Law Office (currently
Hibiki Law Office) (present position)
Outside Audit and Supervisory Board Member ofTokyo Aircraft Instrument Co., Ltd.
Outside Audit and Supervisory Board Member of
Nippon Steel Trading Co., Ltd. (currently
NIPPON STEEL & SUMIKIN BUSSAN
CORPORATION) (present position)
Member of Independent Committee of theCompany (present position)
Outside Director of the Company (present
position)

Number oftheCompany’s
shares
owned

1,000

[Reasons for nomination as candidate for Director]
Yoshihiro Ogura possesses an impressive character and knowledge, and we believe that hewill be able to fulfill his responsibilities as Outside Director by utilizing his extensive
experience and knowledge gained as a lawyer and as an Outside Audit and Supervisory Board
Member for other companies. Accordingly, we have nominated him as a candidate for Outside
Director.
[Attendance at the Board of Directors meetings (from April 1, 2015 to March 31, 2016)]
Attended all of the 16 meetings
Notes:
1. There is no special interest between the above candidates for Director and the Company.
2. Both Kan Akiyama and Yoshihiro Ogura are currently Outside Directors of the Company, and at the conclusionof this General Meeting of Shareholders, they will have served as Outside Directors for three years respectively.
3. In accordance with the Articles of Incorporation of the Company and Article 427, Paragraph 1 of the Companies
Act, the Company has concluded limited liability agreements referred to in Article 423, Paragraph 1 of theCompanies Act with Kan Akiyama and Yoshihiro Ogura, which prescribe that the maximum extent of theliability for damages shall be the amount set forth in laws and regulations. If their reelections are approved, theCompany plans to continue these limited liability agreements.
4. The Company has designated both Kan Akiyama and Yoshihiro Ogura as Independent officers based on the
stipulation by the Tokyo Stock Exchange and registered them to the said exchange. If their reelections areapproved, the Company plans to continue their registration as the Independent officers.

6

Proposal 2:

Election of one (1) Audit and Supervisory Board Member

The term will expire for the Audit and Supervisory Board Members, Shinsuke Wataya and Makoto
Tsuji, at the conclusion of this meeting. Thus, the Company proposes that one (1) Audit andSupervisory Board Member be elected.
The Audit and Supervisory Board has given its consent to this proposal.
The candidate for Audit and Supervisory Board Member is as follows:
Name(Date of birth)

Career summary and position(Significant concurrent positions outside the Company)
April 1983
April 2002
April 2006

Makoto Tsuji(August 5, 1956)

July 2006
June 2011[Reelection]
June 2013

June 2014

Joined the Company
Die Casting Machine Engineering Department
Senior Manager of the Company
Die Casting Machine Division Deputy General
Manager of the Company
Die Casting Machine Division General Managerof the Company
Director, Plant Reformation Project Leader of theCompany
Director and Executive Officer, Production
Division General Manager and Sagami Plant
General Manager of the Company
Full-time Audit and Supervisory Board Memberof the Company (present position)

Number oftheCompany’s
shares owned

10,000[Reasons for nomination as candidate for Audit and Supervisory Board Member]
Makoto Tsuji has extensive knowledge and experience built up as a Director of the Company andin carrying out business operations, and we expect him to carry out audits from a neutral andobjective perspective and contribute to the soundness of the Company’s management. Accordingly,
we have nominated him as a candidate for Audit and Supervisory Board Member.
[Attendance at the Board of Directors and Audit and Supervisory Board meetings (from April 1,2015 to March 31, 2016)]
1) Board of Directors: Attended all of the 16 meetings
2) Audit and Supervisory Board: Attended all of the 16 meetings
Note:
There is no special interest between the above candidate for Audit and Supervisory Board Member and the Company.

7

Proposal 3:

Election of one (1) substitute Audit and Supervisory Board Member

The appointment of substitute Audit and Supervisory Board Member Akifumi Imamura, approved at
the 92nd Ordinary General Meeting of Shareholders held on June 26, 2015, will be expired at thestart of this Ordinary General Meeting of Shareholders. Accordingly, as the number of Audit andSupervisory Board Members will no longer meet the number stipulated in laws and regulations, theCompany proposes that one (1) substitute Audit and Supervisory Board Member be elected.
The Audit and Supervisory Board has given its consent to this proposal.
The candidate for substitute Audit and Supervisory Board Member is as follows:
Name(Date of birth)

Career summary(Significant concurrent positions outside the Company)
April 1982
April 1989
May 2003
April 2005

Akifumi Imamura(April 18, 1953)

June 2005
June 2011
April 2016

Lawyer registration (DAIICHI TOKYO BAR
ASSOCIATION)
Partner Lawyer of Atago Law OfficePartner Lawyer of Greenhill Law and Patent
Office (present position)
Vice-president of DAIICHI TOKYO BAR
ASSOCIATION
Outside Audit and Supervisory Board Member of
JBCC Holdings Inc. (present position)
Outside Audit and Supervisory Board Member of
Itoham Foods Inc.
Outside Audit and Supervisory Board Member of
ITOHAM YONEKYU HOLDINGS INC.
(present position)

Number oftheCompany’s
shares owned

0[Reasons for nomination as candidate for substitute Audit and Supervisory Board Member]
Akifumi Imamura has an impressive character and knowledge, and we believe that he will be able
to reflect his extensive experience and knowledge gained as a lawyer and an Outside Audit andSupervisory Board Member for other companies. Accordingly, we have nominated him as a
candidate for substitute Audit and Supervisory Board Member.
Notes:
1. There is no special interest between the above candidate for substitute Outside Audit and Supervisory Board
Member and the Company.
2. Akifumi Imamura meets the requirements for the position of Outside Audit and Supervisory Board Member.
3. In accordance with the Articles of Incorporation of the Company and Article 427, Paragraph 1 of the Companies
Act, if Akifumi Imamura is elected as an Audit and Supervisory Board Member, the Company plans to conclude
limited liability agreement referred to in Article 423, Paragraph 1 of the Companies Act with Akifumi Imamura,which prescribes that the maximum extent of the liability for damages shall be the amount set forth in laws andregulations.

8

Proposal 4:

Renewal of policy for responding to large-scale share acquisitions (takeover
defense measures)

The Company introduced its Policy for Responding to Large-Scale Share Acquisitions (Takeover
Defense Measures) (the “Takeover Defense Measures”) at the 84th Ordinary General Meeting of
Shareholders held on June 26, 2007 in order to protect against large-scale acquisitions that would be
detrimental to the Company’s corporate value and the common interests of the shareholders, andrenewed the Takeover Defense Measures through obtaining the approval of the shareholders at the87th Ordinary General Meeting of Shareholders held on June 25, 2010, and at the 90th Ordinary
General Meeting of Shareholders held on June 26, 2013. Because the three year term of the
Takeover Defense Measures is set to expire at the closing of the 93rd Ordinary General Meeting of
Shareholders to be held on June 24, 2016, we propose that a proposal be made at that shareholders
meeting to obtain the approval of the shareholders for the renewal of the Takeover Defense
Measures.

I.

Necessity of renewing the Takeover Defense Measures

Compared to when the Takeover Defense Measures were last renewed at the 90th Ordinary General
Meeting of Shareholders, overseas institutional investors are gradually increasing their shareholdings
and are now among the Company’s top shareholders, activist shareholders with unclear motives
continue to operate in the market, and the Company’s share price is by no means high. Furthermore,
the ability of the tender offer rules provided for in the Financial Instruments and Exchange Act toprotect against large-scale acquisitions is limited, given that the rules only apply to large-scaleacquisitions where the post-acquisition ownership ratio of share certificates, etc., is greater than one
third, do not ensure a response period before the actual commencement of the large-scale acquisition,and only allow the term of a takeover bid to be extended by a maximum of 30 days.
In light of the above circumstances there remains the possibility that the Company will be the targetof a large-scale acquisition, and given that it is conceivable that some large-scale acquisitions might
be detrimental to the Company’s corporate value and the common interests of the shareholders, we
propose that the Takeover Defense Measures be renewed for another term of three years in order toprotect against such acquisitions.

II.

Changes upon renewal of the Takeover Defense Measures

Upon the renewal of the Takeover Defense Measures, we have made slight changes to the standardsof judgment with respect to triggering countermeasures based on the policies of proxy advisory firms,
the advice of our lawyers, and other reasons; however, no substantial changes have been made.

9

III. Details of the proposals to be made at the Shareholders Meeting (Major changes from thecurrent Takeover Defense Measures are underlined.)
Renewal of Policy for Responding to Large-Scale Share Acquisitions (Takeover Defense Measures)
The Company introduced its Policy for Responding to Large-Scale Share Acquisitions (Takeover
Defense Measures) in 2007 in order to protect against large-scale acquisitions that would be
detrimental to the Company’s corporate value and the common interests of the shareholders, andrenewed the Takeover Defense Measures through obtaining the approval of the shareholders at the87th Ordinary General Meeting of Shareholders held on June 25, 2010, and at the 90th Ordinary
General Meeting of Shareholders held on June 26, 2013. The effective period of the Takeover
Defense Measures will expire at the closing of the ordinary general meeting of shareholders for thefinancial year ending March 31, 2016 (the “Shareholders Meeting”).
Accordingly, the Company has considered the renewal of the Takeover Defense Measures in light ofthe changes in social and economic situation after the expiry of the Takeover Defense Measures andthe further developments of practices and discussions regarding takeover defense measures. It was
resolved at the Board of Directors meeting on May 17, 2016, prior to the expiry of the Takeover
Defense Measures, that the Takeover Defense Measures should be renewed, subject to obtaining theapproval of the shareholders at the Shareholders Meeting, from the perspective of maintaining andenhancing corporate value and the common interests of the shareholders.
As such, the approval of the shareholders is requested with respect to the renewal of the Takeover
Defense Measures.
The renewal of the Takeover Defense Measures includes a change (paragraph (6)(2)B.(VIII) under“Measures to prevent the Company’s financial and business policy from being determined by anentity that is inappropriate from the perspective of the fundamental policy on corporate control”
below) restricting the standards for determining whether countermeasures should be triggered when
the large-scale acquirer adheres to the Rules for Large-Scale Acquisitions (as defined in section 3.(1)below), to the effect that countermeasures should be triggered when the terms and conditions of theacquisition (the amount and type of consideration, the timing of the acquisition, the legality of theacquisition method, the feasibility of executing the acquisition) and other such matters are
significantly insufficient or inappropriate considering the intrinsic corporate value of the Company;
however, no substantial changes have been made.

1.

Fundamental policy on the nature of the entity that controls the determination of the Company’s
financial and business policies
The Company believes that as a listed company, it should leave to the shareholders’ judgment
the ultimate decision as to whether to accept a large-scale acquisition by any entity that would
have a significant effect on the fundamental management policies of the Company.
However, in the actual event of such a large-scale acquisition, unless the large-scale acquirer
provides necessary and sufficient information, it is difficult for the shareholders toappropriately judge the effect that such large-scale acquisition will have on the Company’s
corporate value and the common interests of the shareholders. Moreover, some large-scale
share acquisitions would be detrimental to the corporate value and common interests of theshareholders that the Company has so far maintained and enhanced, such as: acquisitions forthe purpose of temporarily taking control of management in order to transfer the Company’s
important tangible and intangible assets to the large-scale acquirer or its group companies andaffiliates; acquisitions for the purpose of appropriating the Company’s assets to service thelarge-scale acquirer’s debts and obligations; acquisitions with no real intention of taking part in10

the management of the company that are solely for the purpose of forcing the Company or
related persons to buy back the acquired shares at a premium (greenmail); and acquisitions forthe purpose of producing a temporary high dividend yield by selling off the Company’svaluable assets or other means.
The Company believes that the Board of Directors of the Company owes the following
responsibilities: (i) to make a large-scale acquirer provide necessary and sufficient information
for the shareholders to make a decision; (ii) to provide the results of evaluation and examinationby the Board of Directors on the effect that the large-scale acquirer’s proposal would have on
the Company’s corporate value and the common interests of the shareholders, for reference
purposes for the shareholders to make a decision regarding that proposal; and, (iii) whereappropriate, to negotiate or discuss with the large-scale acquirer with respect to the matters suchas the large-scale acquisition and the Company’s management policy or to make an alternative
proposal to the shareholders with respect to the management policy of the Board of Directors.
Furthermore, in the case of a large-scale acquisition that would be detrimental to theCompany’s corporate value and the common interests of the shareholders, the Company
believes it is also the responsibility of the Board of Directors to maintain the processes such as
the provision of information by the large-scale acquirer and evaluation and examination by the
Board of Directors, and to prepare countermeasures against large-scale acquisitions to prevent
obvious harm to the Company’s corporate value and the common interests of the shareholders.
Based on the above, the Board of Directors believes that it is consistent with the purpose ofmaintaining and enhancing the Company’s corporate value and the common interests of theshareholders to ensure that large-scale acquisitions adhere to a set of rational rules thatspecifically implement the views described above, and that the Board of Directors implement
countermeasures to prevent large-scale acquisitions that would be detrimental to the Company’s
corporate value and the common interests of the shareholders.

2.

Special measures contributing to the realization of a fundamental policy on corporate control
such as the effective utilization of the Company’s assets, appropriate formation of the corporategroup.
The Company believes that it contributes to maintaining and enhancing corporate value and thecommon interests of the shareholders to achieve the management policy set out below and the
medium-term management plan for implementation thereof.
(1) Company’s management policies
The Group’s management is based on the three pillars of (i) always be ahead of change, (ii)strengthen product appeal, and (iii) reinforce Corporate Social Responsibility (CSR) andcorporate governance.
(i) Always be ahead of change
The industries that use the Group’s core products (molding machines, machine tools,etc.) operate on a global scale and face major market changes on a daily basis. The
Company provides a lineup of products that epitomize the keywords of “energy andenvironment,” “labor productivity,” “IoT,” and “new materials” – areas that have an
important position in the market. We monitor the domains that demonstrate the mostvitality, such as autos, airplanes, and electronic devices, etc. and proactively expand
our business in these areas.
(ii) Strengthen product appeal

11

The Group develops new technology so that it is always able to provide products that
contribute to its customers’ growth, with a foundation based on the eight coretechnologies that form its technology platform: professional manufacturing, assembling
and measuring technologies; engineering abilities for processing and molding
machines; customized engineering; materials technology; controls, mechatronics andIoT technologies; slide and rotation; molding processing technology starting frommolds; and nano-imprinting technology. In product development, we work to create
appealing products that surpass customer expectations and always take the customer’s
perspective.
(iii) Reinforce CSR and corporate governance
Since 1992, when the Group established the Toshiba Machine Group Code of BusinessConduct, which calls for employees to comply with national and regional laws andregulations and respect social norms and ethics, the Company has regularly provided
education to all employees to familiarize them with this code. Moreover, the Company
has taken a specific stance on corporate governance by adapting to the Tokyo Stock
Exchange principles in the corporate governance code in fiscal 2015. In this way, theCompany strengthens its compliance in business activities and reinforces internal
control functions, thereby earning the trust and praise of its stakeholders and fulfilling
its social responsibilities.
(2) Medium-term management plan to implement management policies
The Group launched a new medium-term management plan in fiscal 2016 called the TM-PΣ
Plan (Toshiba Machine Profit Σ Plan). The TM-PΣ Plan aims to achieve solid and profitable
growth by implementing reforms to create a high-profit system, as well as by focusing
resources on carefully selected areas.
The Company will implement the following measures to realize these basic policies.
(i) Provide cutting-edge and augmented products
The Company develops optimal products tailored to the needs of customers in regions
all over the world. We provide products equipped with functions that other companies
cannot imitate to markets for the industry’s most cutting-edge technology. At the sametime, we focus on providing the products with functions and pricing that best match thecustomer’s needs in markets for products offering cost performance.
Moreover, we incorporate pre- and post-processes as a system for products that comeequipped as standard technology and propose automation and labor conservation
measures on the manufacturing line.
(ii) Develop products tailored to markets
In the global market, the Company will further popularize its brand by concentrating its
management resources in regions and markets in which many customers require theGroup’s products.
(iii) Establishment of globalization
We view our factory in Japan as the mother factory, and seek profit by specializing in
manufacturing in areas with high added value and by improving manufacturing
technology and manufacturing efficiency. At the same time, we operate a “global
procurement network” linking together Japan, China, Thailand, and India, and by
managing overall procurement information in an integrated manner. We have created asystem that is resilient to political, economic, and natural disaster risks, and produce
products that are cost competitive as we expand production scale and pursue highproduction efficiency.

12

3.

Measures to prevent the Company’s financial and business policy being determined by an entitythat is inappropriate from the perspective of the fundamental policy on corporate
control(1) Outline of the rules for large-scale acquisitions
The Board of Directors believes that it is consistent with the common interests of theshareholders that acquisitions of the Company’s shares as provided for in section 3.(2)below (“Large-Scale Acquisitions”) be conducted in accordance with the rules for LargeScale Acquisitions (the “Rules”) set out below.
The Rules clarify the procedures that should be followed by an entity wishing to conduct a
Large-Scale Acquisition of the shares of the Company (a “Large-Scale Acquirer”), andestablish that a Large-Scale Acquisition shall start only after necessary and sufficient
information has been provided to the Board of Directors by the Large-Scale Acquirer and acertain examination period has passed.
The purpose of the Rules is to protect against the financial and managerial policies of theCompany being controlled by an entity that would cause detriment to the Company’s
corporate value and the common interests of the shareholders, by ensuring that theshareholders are provided with necessary and sufficient information and time to make anappropriate judgment and securing opportunities to negotiate with Large-Scale Acquirers,
and by allowing the Company to trigger countermeasures (as provided for in section 3.(6)below, the Board of Directors will determine what specific countermeasures are appropriate
when they are triggered; hereinafter referred to collectively as “Countermeasures”) against
any Large-Scale Acquisition if the Large-Scale Acquirer does not follow the Rules or if theLarge-Scale Acquisition would be detrimental to the Company’s corporate value or thecommon interests of the shareholders.
(2) Large-Scale Acquisitions
The Rules apply to the following types of acquisitions (including acquisitions by purchaseon a securities exchange market, takeover bid, or any other method, but excluding
acquisitions conducted with the prior approval of the Board of Directors and further
purchases by a person whose holding ratio or ownership ratio of the Company’s sharecertificates, etc. (kabuken tou hoyuu wariai or kabuken tou shoyuu wariai) is already 20% or
greater as at the renewal of the Rules at the Ordinary Meeting of Shareholders to be held on
June 24, 2016.):

13

(i)

any acquisition that would increase the combined holding ratio (kabuken tou hoyuu
wariai)1 of a holder2 of the Company’s share certificates, etc.3 and its joint holders4 to
20% or greater; and(ii) the commencement of any takeover bid that would increase the bidder’s postacquisition ownership ratio (kabuken tou shoyuu wariai) 5 of the Company’s sharecertificates, etc.6 to 20% or greater.

(3) Information submission requirement for Large-Scale Acquirers
Prior to a Large-Scale Acquisition, a Large-Scale Acquirer is required to submit to theBoard of Directors, in the format designated by the Company, information on the following
matters (“Acquisition Information”) that are necessary for the shareholders’ judgment andthe formation of opinions of the Board of Directors and a document containing a covenant
to the effect that the Large-Scale Acquirer will adhere to the Rules (a statement of intent).
Information to be submitted:(i) Details about the Large-Scale Acquirer and its group (including its specific name,background, capital structure, management structure, principal business, and major
shareholders, group organization chart, financial information, annual securities reports
for the last three years or equivalent documentation, consolidated financial statements,and experience in the Company’s areas of business);(ii) The purpose, method and details of the Large-Scale Acquisition (such as the amountand type of consideration for the share purchase, the timing of the acquisition, therelated transaction schemes, specific details of the purpose of the Large-Scale
Acquisition disclosed in the statement of intent, and specific details of the acquisition
including the legality of the method and feasibility of the Large-Scale Acquisition);(iii) The basis for calculating the consideration offered for the share certificates, etc., of theCompany in the Large-Scale Acquisition and evidence of the funds for the purchase(specific details and conditions regarding the funding of the purchase, including thespecific name of the persons providing (or substantively providing) funds and themethod of funding);(iv) The management policy, management plan, business plan, financial strategy, capital
strategy and dividend strategy of the Large-Scale Acquirer and its group uponacquiring control of management of the Company through the Large Scale Acquisition,
managerial and financial targets for the three years following the acquisition and theground of its calculation, and a list of officer candidates and their backgrounds;(v) An explanation of whether and how the Large-Scale Acquirer plans to alter the way it
deals with customers, suppliers, employees, regional stakeholders and otherstakeholders in the Company following the Large-Scale Acquisition; and(vi) Other matters judged as reasonably necessary by the Board of Directors.
1

Meaning the holding ratio of share certificates, etc., as provided for in Article 27-23(4) of the Financial
Instruments and Exchange Act.
2 Meaning a holder as provided for in Article 27-23(1) of the Financial Instruments and Exchange Act, and including
all persons included in “holder” pursuant to paragraph (3) of that Article.
3 Meaning share certificates, etc., as provided for in Article 27-23(1) of the Financial Instruments and Exchange Act.
4 Meaning joint holders as provided for in Article 27-23(5) of the Financial Instruments and Exchange Act, andincluding all persons deemed joint holders pursuant to paragraph (6) of that Article.
5 Meaning the ownership ratio of share certificates, etc., as provided for in Article 27-23(8) of the Financial
Instruments and Exchange Act plus the ownership ratio of share certificates, etc., of persons in special relationship(see Article 27-2(7) of the Financial Instruments and Exchange Act).
6 Meaning share certificates, etc., as provided for in Article 27-23(1) of the Financial Instruments and Exchange Act.

14

If the Company believes that the information submitted is not sufficient for theshareholders to make a judgment or for the Board of Directors to form opinions, theCompany may request the submission of further Acquisition Information necessary andsufficient for the shareholders to make a judgment and for the Board of Directors toform opinions, stipulating a reasonable timeframe for that submission. In such case,the Large-Scale Acquirer must submit said information to the Board of Directors
within that timeframe.
When the Board of Directors judges that necessary and sufficient Acquisition
Information has been provided by the Large-Scale Acquirer for the shareholders tomake a judgment and the Board of Directors to form opinions, it shall consult with anindependent committee as provided for in section 3.(5) (“Independent Committee”)
and notify the Large-Scale Acquirer to that effect (the “Information Provision
Completion Notification”) and also promptly disclose that fact to the shareholders.
(4) Examination of Acquisition
The Board of Directors believes that 60 business days7 should be allowed after making an
Information Provision Completion Notification to a Large-Scale Acquirer as a period for the
Board of Directors to evaluate and examine the information provided by the Large-Scale
Acquirer, negotiate with the Large-Scale Acquirer, form opinions with respect to the LargeScale Acquirer, and prepare alternative proposals to the shareholders (the “Board
Deliberation Period”).
However, the Board of Directors may extend the Board Deliberation Period to up to 90
business days if it considers that the evaluation of the purpose, methods and details of theLarge-Scale Acquisition and the Large-Scale Acquirer’s post-acquisition management
policy, business plan, etc., will be especially time-consuming. In such case, the Board of
Directors shall notify the Large-Scale Acquirer of the number of days of extension and
immediately disclose that fact to the shareholders.
As such, a Large-Scale Acquisition may commence only after the Board Deliberation Period
has expired.
The Board of Directors will sufficiently evaluate and examine the submitted information
during the Board Deliberation Period while seeking the opinions of outside experts, anddetermine whether to trigger Countermeasures with respect to the Large-Scale Acquisition
and the management policy, etc., proposed by the Large-Scale Acquirer, respecting therecommendation of the Independent Committee to the maximum extent.
The Board of Directors will also, as necessary, negotiate and discuss with the Large-Scale
Acquirer to improve the terms and conditions of the Large-Scale Acquisition, and may
present alternative proposals for management policies and the like to the shareholders after
consulting with the Independent Committee.
(5) Establishment and recommendations of the Independent Committee
The Company has established an Independent Committee composed of persons independent
from the executive management of the Company in order to ensure objectivity andrationality in the judgments of the Board of Directors when implementing the Rules. (SeeExhibit 1, “Summary of Independent Committee Regulations,” for a summary of theregulations of the Independent Committee.)
The Independent Committee will consist of between three and five members, appointed
from among the outside directors and outside Audit and Supervisory Board members or
7

A business day means any day other than those specified in the items of Article 1(1) of the Act on Holidays of
Administrative Organs.

15

outside experts who are independent from the executive management of the Company inorder to enable fair and neutral judgment. The names and backgrounds of the members of
the Independent Committee are listed in Exhibit 2, “Profiles of Independent Committee
Members.”
The Independent Committee will make recommendations to the Board of Directors on thefollowing matters, with reference to the opinions of outside experts and information
personally obtained from outside third parties with regard to the Large-Scale Acquisition,
and with consideration to the Acquisition Information provided by the Large-Scale Acquirer
and the results of the evaluation and investigation of that Acquisition Information conductedby the Board of Directors; if the Independent Committee determines that it is appropriate toconfirm the intent of the shareholders with respect to triggering of specific Countermeasures,
it may recommend that the Board of Directors convene a shareholders meeting to confirm
the intent of the shareholders as provided for in section 3.(7) below, and propose thatspecific Countermeasures be triggered:(i) whether a Large-Scale Acquirer has complied with the Rules;(ii) the necessity and sufficiency of acquisition information provided by a Large-Scale
Acquirer;(iii) if the Board of Directors has presented alternative proposals regarding management
policies, etc., the reasonableness of the content of those alternative proposals;(iv) whether the triggering conditions for Countermeasures have been satisfied and thereasonableness of the content of specific Countermeasures;(v) suspending or changing triggered Countermeasures; and(vi) any other matters for which the Board of Directors determines that it should consult
with the Independent Committee.
(6) Triggering of Countermeasures(i) Contents of Countermeasures
If a Large-Scale Acquisition by a Large-Scale Acquirer falls under either of the criteria
given in section 3.(6)(ii) below, and the Board of Directors considers it reasonable to
do so, then the Board of Directors may, while respecting to the maximum extent therecommendation of the Independent Committee, trigger Countermeasures provided forin the Companies Act, other laws and ordinances, and the Articles of Incorporation,such as a gratis allotment of share options or the like, in order to resist the Large-Scale
Acquisition for the purpose of protecting the common interests of the shareholders.
The Board of Directors will choose the specific Countermeasures that it finds mostappropriate at that time. As specific Countermeasures, the Company may make agratis allotment of share options with exercise conditions that do not allow exercise by
Large-Scale Acquirers, etc. and with call options enabling the Company to acquire theshare options in exchange for delivering Company shares to all shareholders other thanLarge-Scale Acquirers and their group companies; an overview of such gratis allotment
is as stated in Exhibit 3, “Overview of Gratis Allotment of Share Options.”(ii) Trigger criteria
A. If a Large-Scale Acquirer does not comply with the Rules
If a Large-Scale Acquirer does not comply with the Rules, then regardless of thedetails of the Large-Scale Acquisition, the Board of Directors will in principle
consult with the Independent Committee and decide to trigger Countermeasures.
B. If a Large-Scale Acquirer complies with the Rules
If a Large-Scale Acquirer complies with the Rules, then the Board of Directors will
not, in principle, trigger Countermeasures even if it is opposed to the Large-Scale16

Acquisition, while it may express its opposing opinions to the acquisition, present
alternative proposals, and attempt to persuade the shareholders; instead, thedecision of whether to accept the Large-Scale Acquirer’s acquisition proposal, etc.
will be made by the shareholders after considering the acquisition proposal and theopinions and alternative proposals presented by the Board of Directors.
However, in the following cases, or if the Large-Scale Acquisition will otherwise
obviously cause significant harm to the corporate value of the Company and thecommon interests of the shareholders and it is found reasonable to trigger
Countermeasures, the Board of Directors will decide to trigger Countermeasures
after consulting with the Independent Committee:(I)
The purpose of the Large-Scale Acquisition is, despite the Large-Scale Acquirer
having no intention of truly participating in the management of the Company, topurchase the Company shares and demand that the Company repurchase thoseshares at a high price.
(II) The purpose of the Large-Scale Acquisition is primarily to achieve profit for theLarge-Scale Acquirer at the sacrifice of the Company, such as by acquiring at a
reduced price important assets, etc. of the Company, including real estate, movable
property, intellectual property rights, expertise, trade secrets, major business
partners, and customers.
(III) The purpose of the Large-Scale Acquisition is primarily to divert all or asignificant part of the assets of the Company in order to secure or repay obligationsof the Large-Scale Acquirer, its group companies, or other such parties.
(IV) The purpose of the Large-Scale Acquisition is primarily to sell or otherwise
dispose of the real estate, securities, or other such high-value assets owned by theCompany and to provide temporarily high dividends using the profits therefrom or
to take advantage of the sudden rise in share prices due to those temporarily highdividends to sell the Company’s share certificates, etc. at a high price.
(V) The Large-Scale Acquisition is made by an anti-social organization or a person
or group controlled by or involved with such organization.
(VI) The Large-Scale Acquisition threatens to, in effect, force shareholders to sell
their shares, such as in coercive two-tiered acquisitions where the first step takeoverbid is made with the terms of the second step acquisition being unfavorable orunclear.
(VII) The acquisition of control of the Company by the Large-Scale Acquirer or theLarge-Scale Acquirer’s policies on dealing with Company customers, employees,
and other interested parties after acquiring control threaten to ruin relationships with
Company shareholders as well as the Company employees, business partners,
customers, and other interested parties indispensable in creating the corporate valueof the Company.
(VIII) The terms and conditions of the acquisition (amount and type of consideration,
timing of the acquisition, legality of the acquisition method, feasibility of executing
the acquisition) and other such matters and other such matters are significantly
insufficient or inappropriate in light of the intrinsic corporate value of the Company.
(iii) Decision-making bodies regarding triggering
When making decisions in relation to the triggering of Countermeasures, the Board of
Directors will consult in advance with the Independent Committee regarding whether it
is appropriate to trigger Countermeasures in order to ensure the fairness of thosedecisions.

17

The Independent Committee, based on that consultation from the Board of Directors,
will form its opinion while receiving advice from outside experts as appropriate andwill make a recommendation to the Board of Directors regarding the triggering ofCountermeasures and other such matters. (The Independent Committee may
recommend that it is appropriate to convene a shareholders meeting and confirm theintent of the shareholders.)
The Board of Directors will disclose the content of that recommendation to theshareholders and will decide whether to trigger Countermeasures while respecting thatrecommendation to the maximum extent. The period of time from the Board of
Directors consulting with the Independent Committee to receiving a recommendation is
included in the Board Deliberation Period set forth in section 3.(4) above.
(iv) Triggering procedures
A. If a Large-Scale Acquirer does not comply with the Rules
If a Large-Scale Acquirer has not complied with the Rules, the Board of Directors
will in principle consult with the Independent Committee and decide to trigger
Countermeasures. However, if it is objectively obvious that the Large-Scale
Acquirer has not complied with the Rules, and the Company or the shareholders
would suffer significant disadvantage if the Countermeasures are triggered after the
Independent Committee has made a recommendation, then the Board of Directors
may decide to trigger Countermeasures without a recommendation from the
Independent Committee.
B. If a Large-Scale Acquirer complies with the Rules
If a Large-Scale Acquirer has complied with the Rules, the Board of Directors inprinciple will not trigger Countermeasures, but if the Independent Committee
makes a recommendation to the effect that the Large-Scale Acquisition falls under
the conditions for triggering Countermeasures set forth in section 3.(6)(ii)B above
and that it is appropriate to trigger Countermeasures, then the Board of Directors
will respect that recommendation to the maximum extent and, in principle, decideto trigger Countermeasures. Even in that case, however, if the Board of Directors
determines that it is not appropriate to trigger Countermeasures from perspectivesof maintaining and improving the corporate value of the Company and the common
interests of the shareholders, the Board of Directors may decide not to trigger
Countermeasures.
Moreover, even after deciding to trigger Countermeasures or after such
Countermeasures have been triggered, if the Large-Scale Acquirer withdraws theLarge-Scale Acquisition, or the Board of Directors determines that it is not
appropriate to trigger Countermeasures due to circumstances such as a change inthe facts that formed the premise of the recommendation of the Independent
Committee, then the Board of Directors may suspend or change theCountermeasures after consulting with the Independent Committee. Specifically,for example, in the case of implementing a gratis allotment of share options as aCountermeasure, if after determining the shareholders to receive that allotment, theBoard of Directors determines that it is not appropriate to trigger Countermeasures,such as when the Large-Scale Acquirer withdraws or changes the Large-Scale
Acquisition, then until the effective date of the share options, the Board of Directors
may suspend the gratis allotment thereof, or the Company, after the gratis allotmentof share options has become effective and until the day preceding thecommencement date of the exercise period, may acquire the share options without

18

compensation such as delivering Company shares to the share option holders. If
conducting such suspension or change of Countermeasures, the Board of Directors
will promptly disclose that fact to the shareholders along with any other mattersfound necessary by the Independent Committee.
(7) Shareholders meeting to confirm intent of shareholders
If the Independent Committee has recommended that it is appropriate to convene ashareholders meeting and confirm the intent of the shareholders regarding the triggering ofcountermeasures, and the Board of Directors also finds that it is appropriate to do so, thenthe Board of Directors will decide upon specific Countermeasures, immediately announce
that fact, promptly convene a shareholders meeting to confirm the intent of shareholders,and submit to it a proposal regarding the triggering of countermeasures. (However, if in
consideration of practical procedures and other such matters it is found faster and more
appropriate to submit that proposal to a shareholders meeting already planned to be held,
then the Board of Directors will submit the proposal to that shareholders meeting.)(8) Effective period, abolition, and amendment
Upon receiving approval by the ordinary general meeting of shareholders for the financial
year ending March 31, 2016, the effective period of the Rules will be the three-year period
from the closing of that ordinary general meeting of shareholders until the closing of theordinary general meeting of shareholders for the financial year ending March 31, 2019.
Even prior to the expiration of the effective period of the Rules, they may be abolished by aresolution of the Board of Directors.
In consideration of trends in amendments to laws and ordinances and other such matters, theRules may be amended during their effective period to the extent not contrary to theapproval given by the ordinary general meeting of shareholders.
(9) Impact, etc. on shareholders and investors of the Company
If a Large-Scale Acquirer has not complied with the Rules, the Board of Directors may
implement Countermeasures allowed under the Companies Act, other laws, and the Articles
of Incorporation for the purpose of protecting the interests of the Company and the common
interests of the shareholders. In light of the nature of these Countermeasures, no situation is
expected in which the shareholders (excluding Large-Scale Acquirers and their groupcompanies) would incur damage to their rights or economic interests due toCountermeasures being triggered. If the Board of Directors decides to implement
Countermeasures, the Company will provide timely and appropriate disclosure inaccordance with laws, ordinances, and the regulations established by financial instruments
exchanges.
If a gratis allotment of share options is made, public notice of the record date for that gratis
allotment of share options will be provided, and the share options will automatically beallotted to the shareholders as of that record date without any consideration; therefore,
application procedures and the like are unnecessary. However, for shareholders who havenot completed share transfer registrations, it will be necessary to promptly carry out sharetransfer registration procedures. (Share transfer registration procedures are not necessary
for shareholders who use JASDEC.)
Moreover, as set out in section 3.(6)(iv)B above, the Company may suspend or changeCountermeasures such as a gratis allotment of share options at the judgment of the Board of
Directors; in such cases, the value per share of the Company will not be diluted, so investors
that traded Company shares in the expectation that their value would be diluted may
possibly incur unexpected damage due to changes in share prices.

19

4.

The Rules are in accordance with the fundamental policy on corporate control; they do notharm the common interests of the shareholders, and their purpose is not to maintain the positionof the Company’s officers (with reasons therefor)(1) The takeover defense measures are in accordance with the fundamental policy
As stated in the fundamental policy, the Rules provide a framework for maintaining andimproving the corporate value of the Company and the common interests of theshareholders through allowing for measures such as (a) causing any Large-Scale Acquirer toprovide necessary and sufficient information for the judgment of the shareholders, (b)moreover, the Board of Directors evaluating and examining the impact of a Large-Scale
Acquirer’s proposed management policies, etc. on the corporate value of the Company andproviding the results of that evaluation and examination as reference for the shareholders fortheir judgment, (c) where appropriate, the Board of Directors negotiating or discussing witha Large-Scale Acquirer regarding a Large-Scale Acquisition or the management policies, etc.
of the Company or presenting alternative proposals by the Board of Directors for
management policies, etc. to the shareholders, and (d) additionally, even if the Rules havebeen complied with, implementing appropriate Countermeasures towards a Large-Scale
Acquirer if a Large-Scale Acquisition by the Large-Scale Acquirer will obviously causesignificant harm to the corporate value of the Company and the common interests of theshareholders and it is found appropriate to trigger Countermeasures. Therefore, the Rules
are in accordance with the fundamental policy of the Company.
(2) The Rules do not harm the common interests of the shareholders
The Company believes that the Rules do not harm the common interests of the shareholders
for the following reasons:(i) Purpose of maintaining and improving corporate value and the common interests of theshareholders
The Rules establish in advance the rules to be followed by Large-Scale Acquirers andthe requisite conditions and content of Countermeasures that the Company may trigger
in order to enable shareholders to appropriately judge whether to accept a Large-Scale
Acquisition and in order to prevent obvious harm to the corporate value of theCompany or the common interests of the shareholders. Their purpose, therefore, is tomaintain and improve the corporate value of the Company and the common interests ofthe shareholders.
Additionally, the Company believes that the content of the Rules and the content andtriggering conditions of the Countermeasures are reasonable in light of the purpose ofmaintaining and improving the corporate value of the Company and the common
interests of the shareholders and that the Rules do not unfairly restrict Large-Scale
Acquisitions that would contribute to maintaining and improving the corporate value of
the Company and the common interests of the shareholders.
(ii) Advance disclosure
The Company believes that the content of the Rules and the content and triggering
conditions of the Countermeasures have all been specifically and clearly expressed andtherefore provide shareholders, investors, and Large-Scale Acquirers with adequate
foreseeability.
(iii) Reflection of shareholder intent
As set out in “Effective period, abolition, and amendment” (section 3.(8) above), theCompany has confirmed the intent of the shareholders through the approval of theRules at the ordinary general meeting of shareholders of the Company.

20

Moreover, the Company has set the term of office of all directors to be one year in its
Articles of Incorporation, and the directors are elected at the ordinary general meetingof shareholders in June of each year. Accordingly, if the shareholders so wish, they areable to abolish the Rules by replacing the directors, thereby enabling their intent to bereflected.
Regarding procedures for triggering Countermeasures, the Company will respect to the
maximum extent the recommendation of the Independent Committee, which is
independent from the Board of Directors, and, if it is found appropriate to convene ashareholders meeting to confirm the intent of the shareholders, will convene ashareholders meeting and submit to it a proposal regarding the triggering ofCountermeasures, thereby confirming their intent.
(3) The purpose of the Rules is not to maintain the position of the Company’s officers
The Company believes that the purpose of the Rules is not to maintain the position of theCompany’s officers for the following reasons:(i) Ensuring the objectivity and rationality of the judgment of the Board of Directors
The Rules provide objective and clear conditions for triggering Countermeasures,
thereby eliminating to the maximum possible extent any chance of an arbitrary
judgment by the Board of Directors entering into the determination of whether those
triggering conditions are met.
Additionally, under the Rules, the Board of Directors will consult with and receive
advice from outside experts as appropriate when evaluating and examining an
acquisition proposal from a Large-Scale Acquirer. Regarding procedures for triggering
Countermeasures, the Company will respect to the maximum extent therecommendation of the Independent Committee, which is independent from the Boardof Directors, and as necessary confirm the intent of the shareholders by holding ashareholders meeting for that purpose, thereby eliminating any arbitrary judgments by
the Board of Directors.
Therefore, the Company believes that the Rules ensure sufficient mechanisms forsecuring the objectivity and rationality of the judgment of the Board of Directors when
deciding whether to trigger Countermeasures.
(ii) Fulfilling conditions in the guidelines on takeover defense measures
The Rules completely fulfill the three principles ((a) principle of protecting andenhancing corporate value and shareholders’ common interests, (b) principle of priordisclosure and shareholders’ will, and (c) principle of ensuring necessity andreasonableness) set out in “Guidelines Regarding Takeover Defense Measures for the
Purposes of Protection and Enhancement of Corporate Value and Shareholders’Common Interests,” released May 27, 2005, by the Ministry of Economy, Trade andIndustry and the Ministry of Justice.
Moreover, the Rules are reasonable as they take into account “Takeover Defense
Measures in Light of Recent Environmental Changes,” released June 30, 2008, by the
Corporate Value Study Group established by the Ministry of Economy, Trade andIndustry as well as other practices and discussions regarding takeover defense
measures.
End

21

Exhibit 1
Summary of Independent Committee Regulations
1. The Independent Committee (the “Committee”) is established by a resolution of the Board of
Directors for the purpose of ensuring the objectivity and rationality of the judgments of the Boardof Directors regarding the large-scale acquisition rules established by the Company (the “Rules”).
2. The Committee will consist of three to five members (the “Members”), who will be elected byresolutions of the Board of Directors from among outside directors, outside Audit andSupervisory Board members, or outside experts (corporate managers with proven track records,
former government agency employees, attorneys, certified public accountants, academic experts,
or persons equivalent to any of these), each of whom must be independent from the executive
management of the Company.
The Company will execute delegation agreements with the Members that include provisions on
confidentiality obligations.
3. The term of office of each Member will be until the closing of the ordinary general meeting ofshareholders for the last financial year to end within three years after the appointment of theMember. However, this will not apply if otherwise resolved by the Board of Directors.
4. The Committee will be convened by a representative director of the Company or any Member.
5. The Committee will evaluate, examine, and make decisions regarding the following matters andwill recommend those decisions, including the reasons therefor, to the Board of Directors:(1) whether a Large-Scale Acquirer has complied with the Rules;(2) the necessity and sufficiency of acquisition information provided by a Large-Scale Acquirer;(3) if the Board of Directors has presented alternative proposals regarding management policies,etc., the reasonableness of the content of those alternative proposals;(4) whether the triggering conditions for Countermeasures have been satisfied and thereasonableness of the content of specific Countermeasures;(5) whether it is appropriate to convene a shareholders meeting to confirm shareholder intent
regarding the triggering of Countermeasures;(6) suspending or changing triggered Countermeasures; and(7) any other matters for which the Board of Directors determines that it should consult with the
Independent Committee.
6. The Committee may have the Company’s directors, Audit and Supervisory Board members,
employees, and anyone else it deems necessary attend Committee meetings and may request
them to provide opinions or explanations on any matters requested by the Committee.
7. The Committee may, as necessary in performing its duties and at the expense of the Company,
receive advice from outside experts (including financial advisors, certified public accountants,
attorneys, consultants, and other such experts) who are independent from the executive
management of the Company.
8. The content of recommendations of the Committee will, in principle, be determined by a majorityof the Members when all Members are in attendance. However, if any Member is unable toattend or there are other unavoidable circumstances, the content of recommendations of theCommittee will be determined by a majority of the attending Members when a majority of thetotal Members of the Committee are in attendance.
End

22

Exhibit 2
Profiles of Independent Committee Members
1. Kan Akiyama
Born July 21, 1943
April 1967
Joined Yuasa Battery Co., Ltd. (currently GS Yuasa Corporation).
June 1999
Director of Yuasa Battery Co., Ltd.
June 2001
Managing Director of Yuasa Battery Co., Ltd.
June 2005
Senior Managing Director of Yuasa Battery Co., Ltd.
October 2005
President of GS Yuasa Manufacturing Ltd.
June 2006
Chairman of GS Yuasa Corporation
June 2009
Advisor of GS Yuasa Corporation
June 2010
Member of Independent Committee of the Company (present position)
June 2013
Outside Director of the Company (present position)
2. Yoshihiro Ogura
Born December 8, 1945
April 1973
Lawyer registration (DAINI TOKYO BAR ASSOCIATION); Joined Takeshi
Niiya Law Office.
April 1982
Established Ogura Tanaka Law Office (currently Hibiki Law Office) (present
position)
June 1994
Outside Audit and Supervisory Board Member of Tokyo Aircraft Instrument
Co., Ltd.
June 2009
Outside Audit and Supervisory Board Member of Nippon Steel Trading Co.,
Ltd. (currently NIPPON STEEL & SUMIKIN BUSSAN CORPORATION)(present position)
June 2010
Member of Independent Committee of the Company (present position)
June 2013
Outside Director of the Company (present position)
3. Satoshi Teramoto
Born June 29, 1941
February 1966
Joined Miyasaka C.P.A. Office.
March 1969
Established and joined Audit Corporation Daiichi Audit Office.
January 1986
Assumed office as Representative Partner of Century Audit Corporation
April 2000
Assumed office as Representative Partner of Century Ota Showa & Co.
May 2002
Assumed office as Vice-president of Shin Nihon & Co. (currently Ernst &Young ShinNihon LLC).
May 2006
Retired as Vice-president of Ernst & Young ShinNihon (currently Ernst &Young ShinNihon LLC) due to expiration of his term of office.
June 2007
Retired from Ernst & Young ShinNihon
June 2010
Outside Audit and Supervisory Board Member of Sumitomo Forestry Co., Ltd.
(present position)
June 2010
Member of Independent Committee of the Company (present position)
The Company has registered Kan Akiyama and Yoshihiro Ogura as independent directors/auditorswith the Tokyo Stock Exchange. None of these three committee members have any special interestsin the Company.
End

23

Exhibit 3
Overview of Gratis Allotment of Share Options
1. Shareholders to be granted share options and terms and conditions of issuance
Share options will be allotted to the shareholders recorded in the final shareholder register as of
the record date separately determined by the Board of Directors at a ratio of one share option per
share owned (excluding common shares of the Company held by the Company) without any
consideration.
2. Class and number of shares to be acquired upon exercise of share options
The class of shares to be acquired upon exercise of shares options will be common shares of theCompany, and the number of shares to be acquired upon exercise of each share option (the“Number of Shares”) will be one.
3. Value of assets to be contributed upon exercise of each share option
The value of assets to be contributed upon exercise of each share option will be one yen or more
as determined by the Board of Directors.
4. Restriction on transfer of share options
Approval of the Board of Directors will be required for the acquisition of share options throughtransfer.
5. Exercise conditions of share options
Conditions may be placed upon the exercise of share options, such as provisions that do not allow
exercise by certain persons such as a Large-Scale Acquirer, a joint holder of a Large-Scale
Acquirer, a specially related party of a Large-Scale Acquirer, any person who has obtained orassumed share options from any of the foregoing without the approval of the Board of Directors(excluding persons whose acquisition or holding of share certificates, etc. of the Company isfound by the Board of Directors not to be contrary to the interests of the shareholders as a whole)(the “Non-Qualified Persons”). The Board of Directors will separately determine the details of
any such conditions.
6. Acquisition of share options by the Company
If the Board of Directors finds that it is appropriate for the Company to acquire the share options,such as when the triggering of Countermeasures has been suspended, then the Company may, at
any time until the day immediately preceding the commencement date of the exercise period of
the share options, acquire all of the share options without providing compensation.
The Company may, on the date separately determined by the Board of Directors (the “Specified
Date”), acquire all of the share options, excluding those held by Non-Qualified Persons, thathave not been exercised on or prior to the business day immediately preceding the Specified Dateand in exchange deliver the Number of Shares of Company shares per share option.
7. Exercise period, etc. of share options
The Board of Directors will separately determine the exercise period of the share options, thedetails of call options, and other necessary matters.
End24