January 27, 2012
To Whom It May Concern
Company Name
: Milbon Co., Ltd.
Title of Representative : Ryuji Sato, Representative Director
and President(Code Number: 4919 – First Section of the Tokyo Stock Exchange)
Contact: Masahiro Murai, Executive Director
TEL: 06-6928-2331
Announcement on the revision and continuation of the policy for handling large-scale sharepurchasing activity in company shares (anti-takeover measures)
The company hereby announces that it determined at the meeting of the Board of Directors held today
to revise and continue, as detailed below based on subsequent revisions to the law and the state of all
discussions on anti-takeover measures, the policy determined at the meeting of the Board of Directors
held on January 29, 2010 and approved by the Ordinary General Meeting of Shareholders held on
March 18 2010 for handling activities to purchase shares, etc., of the company (Note 3) aimed atsecuring a ratio of 20% or more of voting rights (Note 2) for a specific shareholder group (Note 1), or
activities to purchase shares, etc., of the company that will result in securing a ratio of 20% or more of
voting rights for a specific shareholder group (although the specific method of purchase, such as
market transactions or tender bid, etc., does not matter, this excludes purchasing activity to which theBoard of Directors of the company has agreed in advance; hereinafter, related purchasing activity isreferred to as “large-scale share purchasing activity” and a party carrying out related purchasing
activity is referred to as a “large-scale share purchaser”) because the duration of force of said policy
will expire as of the conclusion of the Ordinary General Meeting of Shareholders of the company to beheld on March 16, 2012.
All 3 auditors of the company, including the 2 outside auditors, have expressed their intentions toapprove the revision and continuation of this policy for the handling of large-scale share purchasing
activity on the condition that the specific management of said policy is carried out appropriately.
Moreover, the revision and continuation of this policy shall come into effect on the condition thatapproval is obtained for the revision and continuation of this policy at the Ordinary General Meetingof Shareholders scheduled to be held on March 16, 2012 in order to reflect the will of all of thecompany's shareholders.
Note 1: The term "specific shareholder group" means:(i) The holders (meaning the holders stipulated in Article 27.23.1 of the Financial Instruments
and Exchange Act and including the parties included in the holders based on Article 27.23.3 ofthe same act) of the shares, etc., (meaning the shares, etc., stipulated in Article 27.23.1 of thesame act) of the company, and their co-holders (meaning the co-holders stipulated in Article
27.23.5 of the same act and including the parties deemed to be co-holders based on Article
27.23.6 of the same act), or(ii) The parties who are to carry out a purchase, etc., (meaning a purchase, etc., as stipulated in-1-Article 27.2.1 of the same act and including purchases to be carried out on a financial
instruments exchange market) of shares, etc., (meaning shares, etc., as stipulated in Article
27.2.1 of the same act) of the company and their special related parties (meaning the special
related parties stipulated in Article 27.2.7 of the same act)
Note 2: The term "ratio of voting rights" means:(i) The ratio of shares, etc., held by the holder in question if the specific shareholder group islisted in Note 1 (i) (meaning the held ratio of shares stipulated in Article 27.23.4 of the sameact; in this case, the number (meaning the held number of shares stipulated in Article 27.23.4of the same act) of shares held by the co-holders of the holder in question is also considered in
calculations), or(ii) Means the total ratio of shares, etc., held by the purchaser in question and special relatedparties in question if the specific shareholder group is listed in Note 1 (ii) (meaning the held
ratio of shares stipulated in Article 27.2.8 of the same act)
In each calculation of the ratio of shares, etc., held, it is possible to refer to the most recent
data submitted from among the securities report, quarterly report, and the share buyback
report with regard to total voting rights (meaning the total voting rights stipulated in Article
27.2.8 of the same act) and the total number of shares outstanding (meaning shares
outstanding as stipulated in Article 27.23.4 of the same act).
Note 3: The term "shares, etc.," means the shares, etc., stipulated in Article 27.23.1 of the Financial
Instruments and Exchange Act.
1. The company's business characteristics and the improvement of corporate value(1) Corporate philosophy of the company group
The company group has a basic philosophy of "Developing business that supports beautiful
ways of living through hair designers" and develops business centered on the manufacture andsale to beauty salons through agents of hair cosmetics used at beauty salons.
Life also sparkles when hair is beautiful. The company group thinks "The beauty of hair = thebeauty of life". Women seek identity and live beautiful lives. The company group helps humanbeauty through hair in order to fulfill people's desires to "Be more unique and vivid". We hope
we can color even the most important scenes of their lives by providing products andinformation that lead to beauty and spiritual richness transcending formed beauty and closing inon the true essence of women.
We think that [1] through [3] below, which have been cultivated as we have pursued the above,
are the sources of corporate value for the company group.
[1] Sales power = field person system
The company group has established a unique sales system in order to support beauty salonsand hair designers. This system considers and provides ways to manage the issues thatbeauty salons face rather than mere product sales. Also, we play a role as partners
performing work together. Our system supports the realization of increased revenue andprofits for beauty salons by introductions to the latest beauty techniques and salon
marketing to lead them to prosperity. At the company group, we call the sales personnel
who carry out those kinds of activities field persons.
We implement internal training extending over 9 months in order to cultivate field persons.
In addition to basic beauty techniques such as perms and coloring, etc., field persons
acquire various skills such as wide-ranging knowledge of the beauty industry, management
analysis and plan formulation, etc. This has become a business model unique to Milbon that-2-

cannot be copied by other competing companies.
[2] Product development power = TAC product development system
The system that we use to search for hair designers with the best techniques and know-how
and to advance product development projects in cooperation with such people is Milbon's
unique "TAC (Target Authority Customer) product development system".
New beauty techniques and know-how exist at beauty salons and with designers who havebecome popular with customers in a theme-dependent way, such as beauty salons that havefar and away more hair color customers than other salons or beauty salons that have far andaway more hair care customers than other salons, etc. Our system standardizes suchtechniques and know-how so they can be used at general beauty salons as well and creates
products geared towards them.
[3] Field activity system
Growing beauty salons exist in every kind of market environment. The company group rolls
out marketing that can grow even when the market environment is deteriorating byconcentrating activities on beauty salons that are growing. The selection of beauty salons towhich field persons provide services is particularly important, and we select beauty salonswith a strong desire for growth rather than just on current purchasing results.
(2) Efforts to increase corporate value and the common interests of shareholders
The company group has formulated a "Medium Term 5-Year Business Vision (2010 - 2014) as a
medium-term management vision. The main details of that vision are as follows.
The company group raises as its global vision "Milbon aims to create a global field and to
become a Japanese (Japan's first) world No.1 professional global manufacturer in order torealize the dreams of hair designers through the cultivation and education of human resources"
and is promoting globalization by working on the 3 themes of "Organizational arrangement","Human resource cultivation" and "Market development".
To start with, we will cope with globalization in regard to organizational arrangements by
restructuring our sales organization and head office functions and building a system that
aggregates global information and shares it company-wide. Furthermore, with regard to thecultivation of human resources, we will construct systems to hire and cultivate human resourcesthat can succeed in the global field and work on the nurturing of executives with management
sense and specialists. As for market development, we will establish production bases in Asianmarkets and advance further into new areas, and link up with organic brands in Europe to work
on expansion into the global market.
Through these kinds of activities, the company group would like to recompile the beauty
techniques and products born from Japan's refined and sensitive spirit of entertaining service,and the educational support activities that value designers in accordance with the characteristics
of each region of the world, to contribute to each region's beauty culture.
(3) Corporate governanceThe company group implements corporate governance emphasizing the transparency andfairness of management. Moreover, the company group thinks that making efforts towards
positive information disclosure will lead to increased trust in the company and the improvementof corporate value.
The company has adopted an auditor system and currently has 7 directors and 3 auditors(including 2 outside auditors). The company has appointed no outside directors, but has
prepared a system to incorporate the opinions of outside experts as appropriate based on advisor-3-contracts concluded with outside experts.
2.

Aims and details of this policy for handling large-scale share purchasing activity
The company's Board of Directors does not hold a negative opinion towards all large-scale sharepurchasing activity. However, there also appear to exist examples of large-scale share purchasing
activity that do not necessarily seem to ensure or increase the corporate value of the company
whose shares are to be purchased or the joint profits of shareholders, such as cases that willclearly be detrimental to corporate value and the common interests of shareholders seen from theperspective of the purpose of the share purchase, etc., and cases where shareholders are coerced
into responding to large-scale share purchasing activity and may be disadvantaged, etc. The
company thinks that it needs to establish some kind of countermeasure in advance in regard tothat kind of large-scale share purchasing activity so that these kinds of situations do not occur.
But, the company thinks that the final judgment on whether or not large-scale share purchasing
activity other than that of the kinds described above should be accepted should be consigned tothe company's shareholders rather than the Board of Directors.
However, deep understanding of the company’s unique management know-how based on the field
person system, the TAC product development system and the field activity system that are thesource of Milbon’s corporate value, and the relationships of trust that have been built withstakeholders such as the employees of the company, cooperating companies such as suppliers, etc.,
the agents who are the company’s direct transaction partners, and the beauty salons beyond them,etc., is essential for the management of the company.
Without sufficient knowledge and understanding of these things, shareholders would be unable tojudge the shareholder value realizable in the future appropriately. The company makes efforts sothat shareholders and investors understand the appropriate value of the company’s shares undernormal circumstances, but thinks that when large-scale share purchasing activity takes placesuddenly, the provision of appropriate and sufficient information by both the large-scale sharepurchaser and the company’s Board of Directors is essential for shareholders to judge
appropriately in a short period of time whether or not the acquisition price presented by thelarge-scale share purchaser for the company’s shares is appropriate.
Further, the company thinks that from the perspective of sufficient information provision for thecompany's shareholders to make this kind of judgment, in addition to the information provided by
the large-scale share purchaser, opinions based on the evaluation and investigation by thecompany’s Board of Directors of that information, and, depending on the case, the proposal of
alternative plans by the company’s Board of Directors would be important materials for judgment
for the company’s shareholders. From this kind of perspective, the company’s Board of Directors
shall request the provision of information on large-scale share purchasing activity by thelarge-scale share purchaser, investigate and evaluate such information promptly after it has been
provided, respect as much as possible the advice of the special committee described below, andsummarize and make available to the public its opinions as the company’s Board of Directors sothat the company’s shareholders are able to make an appropriate judgment. Also, if the company's
Board of Directors judges it to be appropriate, the Board of Directors shall conduct negotiations
with regard to the improvement of the large-scale share purchaser's proposal and present
alternatives to the company's shareholders as the company's Board of Directors.
The company's Board of Directors stands by the way of thinking described above and thinks thatlarge-scale share purchasing activity promoted in accordance with certain rational rules thattranslate that way of thinking into reality is in accordance with the interests of the company andits shareholders. The company's Board of Directors shall establish rules on large-scale purchasing-4-

activities related to the company's shares (hereinafter referred to as the "large-scale sharepurchasing rules") as described below and demand that large-scale share purchasers respect said
rules. Also, if a large-scale share purchaser does not respect the large-scale share purchasing rules,
the company's Board of Directors may take certain countermeasures. This is because, in light ofthe basic way of thinking described above, the act of not observing the large-scale sharepurchasing rules on the part of the large-scale share purchaser itself can be considered to obstructappropriate judgment by the company's shareholders and negatively affect the common interestsof shareholders. Furthermore, even if the large-scale share purchasing rules are observed, if it isjudged that the large-scale share purchasing activity in question will significantly damage thecommon interests of the company's shareholders, such as inflicting a loss on the company fromwhich it is difficult to recover, the company may take certain countermeasures.
Moreover, at this point in time, the company has not received notice to the effect that they will
carry out a large-scale share purchase or takeover proposals from any specific third party.
Furthermore, the large shareholders in the company as of December 20, 2011 are as listed on
Attachment 1.
3.

Details of the large-scale share purchasing rules
The large-scale share purchasing rules that the company's Board of Directors will establish shallstate that [1] necessary and sufficient information (hereinafter referred to as the "necessary
information") will be provided by a large-scale share purchaser to the company's Board of
Directors in advance for the judgment of the company's shareholders and the formation of theopinion of the company's Board of Directors, and [2] large-scale share purchasing activity will
start after the passage of a certain period for evaluation of the large-scale share purchasing
activity in question by the company's Board of Directors.
Specifically, the company's Board of Directors shall first of all disclose the fact promptly if there
has been a proposal on large-scale share purchasing activity. Moreover, the large-scale sharepurchaser shall provide the necessary information to the company's Board of Directors.
Because the specific details of the necessary information may differ depending on the details of
the large-scale share purchasing activity, if a large-scale share purchaser intends to carry out
large-scale share purchasing activity, said large-scale share purchaser shall first of all submit to
the company's Board of Directors a statement of intent to the effect that said large-scale sharepurchaser will abide by the large-scale share purchasing rules, also stating the large-scale sharepurchaser's name, address, governing law of establishment, the representative's name, contact
details in Japan and an overview of the large-scale share purchasing activity, and the company's
Board of Directors shall within 10 business days after receipt of said statement of intent deliver tothe large-scale purchaser a list of the necessary information that the large-scale share purchasershould initially provide. Some of those items of information are as follows.
[1] An overview of the large-scale share purchaser and its group (including a businessdescription of the large-scale share purchaser and information on its experience in the same
industry as the company's business, etc.)[2] The purpose and details of the large-scale share purchasing activity (including the types andvalue of compensation, related transaction systems, purchasing methods and the legality ofrelated transactions, etc.)[3] The grounds for calculation of the value of compensation of the large-scale share purchasing
activity (including the facts upon which calculations are based, calculation methods,
numerical information used in calculations and the details of the synergies expected to occur
due to the series of transactions related to the large-scale share purchasing activity)-5-[4] Support for the funding of the large-scale share purchasing activity[5] Assumed managerial candidates (including information on experience in the same industry
as the company's business, etc.), management policies, business plans, financial plans,
capital policies, dividend policies, asset use measures, etc., following participation in the
management of the company (hereinafter referred to as "post-purchase management policies,etc.)[6] Policy on treatment of the company's employees, business partners, customers, and otherstakeholders related to the company after large-scale share purchasing activity has been
carried out.
Further, if as a result of a detailed audit of the information provided initially, it is recognizedrationally that said information alone is insufficient, the company's Board of Directors shallreceive advice from the special committee and demand the provision of information additionallyfrom the large-scale share purchaser until all of the necessary information has been arranged.
However, the company's Board of Directors shall give the utmost respect to the advice of thespecial committee with regard to demands for the provision of additional information and shallnot demand the provision of additional information without limit.
The company's Board of Directors shall disclose publicly all or part of the necessary information
submitted at the time it judges to be appropriate if such disclosure is recognized to be necessary
for the judgment of the company's shareholders. Furthermore, if the large-scale share purchaser
has completed the submission of the necessary information to the company's Board of Directors,
the company's Board of Directors shall make a public disclosure to that effect right away.
Next, the company's Board of Directors thinks that it should be given a period of 60 days (casesof the purchase of all of the company's shares by a takeover bid providing compensation only incash (yen)) or 90 days (other cases of large-scale share purchasing activities) after the large-scale
share purchaser has completed submission of the necessary information to the company's Boardof Directors as a period for evaluation, investigation, negotiation, opinion formation and theformulation of alternative proposals by the company's Board of Directors (hereinafter referred toas the "evaluation period"). However, if the special committee advises an extension of thedeadline for the advice of the special committee described below and the company's Board of
Directors extends the deadline of the special committee by a maximum of 10 days, the evaluation
period shall be extended by a maximum of 10 days in accordance with the number of days said
period for advice is extended by. Furthermore, if the evaluation period is extended, the company
shall announce publicly the number of days extended and the reasons for the extension. During
the evaluation period, the company's Board of Directors shall fully evaluate and investigate thenecessary information submitted while receiving advice from external experts, etc., and shallsummarize and announce publicly its opinions as the company's Board of Directors. Furthermore,during the evaluation period, the company's Board of Directors shall also conduct negotiations
with the large-scale share purchaser with regard to improvements to the conditions related to thelarge-scale share purchase, as well as announce publicly and present to shareholders alternative
proposals as the company's Board of Directors as required. Consequently, the large-scale sharepurchasing activity shall only commence after the passage of the evaluation period (the extended
evaluation period if the period for advice described above has been extended).

-6-

4. Policy for handling cases where large-scale share purchasing activity has been carried out(1) Cases where the large-scale share purchaser has observed the large-scale share purchasing rules
If the large-scale share purchaser has observed the large-scale share purchasing rules, thecompany's Board of Directors shall in principle not take countermeasures against the large-scale
share purchasing activity (hereinafter referred to as the "countermeasures") even supposing that
there was opposition to the large-scale share purchasing activity in question and although thepossibility of expressing an opposing opinion, presenting an alternative proposal or otherwise
persuading shareholders, etc., will not be ruled out. However, even if the large-scale sharepurchasing rules are being observed, if it is judged that the large-scale share purchasing activity
in question will significantly damage the common interests of the company's shareholders, suchas inflicting a loss on the company from which it is difficult to recover, the company's Board of
Directors shall, as an exception, conduct a gratis allocation of share warrants as acountermeasure, the same as in the case where the large-scale share purchaser does not observe
the large-scale share purchasing rules as described in (2) below with the aim of protecting thecorporate value of the company and the common interests of the company's shareholders.
The term "[cases where] the large-scale share purchasing activity in question will significantly
damage the common interests of the company's shareholders" means those cases falling under
one of the definitions given in [1] to [8] below. The company shall not take countermeasures if
the large-scale share purchasing activity in question is not recognized to fall under one of thedescriptions numbered from [1] to [8] below.
[1] Cases where it is judged that despite having no true intention to participate in the
management of the company, the large-scale share purchaser is buying shares in thecompany simply for the purpose of raising the share price and forcing the company or aparty interested in the company to buy shares at a high price (a so-called greenmailer)[2] Cases where it is judged that the large-scale share purchaser is purchasing shares in thecompany for the purpose of taking control of the management of the company temporarily
and transferring the intellectual property, know-how, confidential business information,
major business partners or customers, etc., that are required in the management of thecompany's business to itself or a group company, etc.
[3] Cases where it is judged that the large-scale share purchaser is purchasing shares in thecompany planning to divert the assets of the company for use as collateral for or resources
for the discharge of the debt of the large-scale share purchaser or a group company, etc.,
after taking control of the management of the company, and as a result causing damage tothe company from which it is difficult to recover[4] Cases where it is judged that the large-scale share purchaser is purchasing shares in thecompany for the purpose of taking control of the management of the company temporarily
to force the company to dispose by sale, etc., of high value assets, etc., such as real estate or
marketable securities, etc., that are not related to the business of the company in theimmediate future and make it pay out a temporary high dividend with the income from that
disposal, or aiming at an opportunity for a sudden increase in the share price based on atemporary high dividend to sell its shares in the company at a high price, and as a result
causing damage to the company from which it is difficult to recover[5] Cases where it is judged that the fact of the acquisition of the right to manage the company
by the large-scale share purchaser in itself will disrupt ongoing business relations withcustomers, including important customers, who are the source of the corporate value of thecompany and cause significant damage to the company from which it is difficult to recover[6] Apart from the cases described in [1] to [5] above, cases where it is judged that thelarge-scale share purchaser is not aiming sincerely at rational management and theacquisition of the right to manage the company by the large-scale share purchaser willcause significant damage to the company from which it is difficult to recover-7-[7] Apart from the cases described in [1] to [6] above, cases where it is judged on objective andrational grounds that the large-scale share purchaser is not appropriate as the majority
shareholder of the company from the perspective of public order and morality, such as cases
where the management team or major shareholders of the large-scale share purchaser
include parties related to anti-social forces such as the crime syndicates or members ofcrime syndicates, etc., stipulated in Article 2 of the Act on the Prevention, etc., of Unjust
Acts by Crime Syndicates[8] Cases where it is judged that the method for purchase of the company’s shares that thelarge-scale share purchaser proposes significantly restricts the shareholders’ opportunity or
freedom of judgment such as a coercive two-stage purchase (meaning when the large-scale
share purchaser conducts a share purchase such as a takeover bid, etc., after setting second
stage purchasing conditions more disadvantageous than the first stage purchasing
conditions or not clarifying the second stage purchasing conditions and without inducing
the purchase of all shares in the initial purchase), etc., and it is possible that the large-scale
share purchaser is actually compelling the shareholders to sell their shares in the company(however, cases of partial takeover bids will naturally not fall under this category)(2) Cases where the large-scale share purchaser does not observe the large-scale share purchasing
rules
If the large-scale share purchaser does not observe the large-scale share purchasing rules,
irrespective of the specific method of purchase, the company's Board of Directors shall conduct
a gratis allocation of share warrants and take countermeasures, with the aim of protecting thecorporate value of the company and the common interests of the company's shareholders.
The overview of the gratis allocation of share warrants that the company's Board of Directors
takes as a countermeasure is as follows. Further, in principle, the company shall not acquire
share warrants that have been allocated to a large-scale share purchaser at a price different tothat for other shareholders.
[1] Shareholders subject to gratis allocation and allocation conditions
The company's Board of Directors shall allot share warrants without requiring payment at aratio of 1 share warrant per share held (however, this excludes the common shares in thecompany held by the company) to the shareholders registered on the final shareholder
registry on the separately established date of allocation by the company's Board of
Directors.
[2] Type and number of shares subject to the share warrants
The type of shares subject to the share warrants is common shares and the number of sharessubject to 1 share warrant is 1 share. However, if the company carries out a share split orshare merger, the company shall make the necessary adjustments.
[3] Total number of share warrants to be allocated
The total number of share warrants allocated at one time shall be determined by thecompany's Board of Directors, with the maximum set at the total number of shares in thecompany outstanding on the date of allocation.
[4] Amount that should be paid when exercising each share warrant
The value shall be the value determined by the company's Board of Directors and shall be
at least 1 yen per share warrant.
[5] Restrictions on the transfer of share warrants
The transfer of a share warrant shall require the approval of the company's Board of-8-

Directors.
[6] Period for the exercise of share warrants
The period for the exercise of share warrants shall be the period determined by thecompany's Board of Directors in the resolution on the gratis allocation of share warrants
within the range from 1 to 2 months, taking the date of entry into force of the share warrant
as the first day of the period (however, if the company's Board of Directors determines adate in place of this date separately in the resolution on the gratis allocation of share
warrants, the determined date shall be the first day of the period). However, if the final dateof the period for the exercise of share warrants is not a day of business at the place where
payment is handled, the next business day shall be the final day of the period.
[7] Conditions for the exercise of share warrants
Not being a person belonging to a party that is a specific shareholder group (Note 1) andholds in excess of 20% of voting rights (Note 2) (however, this excludes parties that thecompany's Board of Directors agrees with in advance), etc., shall be a condition for the
exercise of share warrants and the details shall be established at separately a meeting of thecompany's Board of Directors.
[8] Share warrant acquisition provisions
The company may acquire those share warrants excluding the share warrants of thoseparties that are unable to exercise share warrants due to the provisions of [7] above on thedate established separately by the company's Board of Directors. In this case, the company
shall grant 1 common share in the company in exchange for the acquisition of 1 share
warrant.
Furthermore, the company may acquire free of compensation share warrants, including theshare warrants of the parties that are unable to exercise due to the provisions of [7] aboveon the date established separately by the company's Board of Directors if the company's
Board of Directors recognizes that it is appropriate for the company to acquire the share
warrants during the period from the date of entry into force of the share warrants to the dateprior to the date of commencement of the exercise of rights or the date of acquisition above,
whichever is earlier.
(3) In the case where the company takes countermeasures due to (1) or (2) above, action shall be
determined based on a resolution of the company's Board of Directors. However, the company's
Board of Directors shall respect to the utmost the advice of the special committee as described in
5. below.
(4) If the company's Board of Directors has determined whether or not to take countermeasures dueto (1) or (2) above, the company's Board of Directors shall promptly disclose information on thedetails of the determination in question and the reasons for that judgment, an overview of theadvice given by the special committee and the reasons for that judgment and any other mattersthat the company's Board of Directors has judged to be appropriate.
5. Establishment of a special committee (procedures to guarantee the fairness of countermeasures)(1) Establishment of a special committee
The company shall establish a special committee as an organization independent from thecompany's Board of Directors and the company's Board of Directors shall respect to the utmost
the advice and counsel of the special committee in order to operate the large-scale sharepurchasing rules fairly and guarantee the rationality and fairness of the judgments of the-9-company's Board of Directors. The members of the special committee shall number at least 3
people and no more than 5 people and shall be appointed from among the outside directors,
outside auditors, lawyers, tax accountants, certified public accountants, academic experts,
people knowledgeable in investment banking work, or people from outside the company withexperience as directors or operating officers at other companies. The initial members of thespecial committee following the recent amendment numbers 3 people and their names andcareer summaries are as stated in Attachment 2 "Career summaries of members of the special
committee".
(2) Roles of the special committee
The roles of the special committee are as follows.
[1] The company's Board of Directors requests the advice of the special committee in judging
whether the necessary information provided by the large-scale share purchaser is sufficient
or insufficient.
[2] The company's Board of Directors consults with the special committee in regard to therights and wrongs of initiating countermeasures in advance of their initiation and the special
committee gives the company's Board of Directors advice on the rights and wrongs ofinitiating countermeasures by a minimum of 10 days prior to the deadline for the end of theBoard of Directors' evaluation period at the latest based on that consultation. The special
committee advises the Board of Directors with regard to whether or not the large-scale
share purchasing activity in question falls under any of the cases described in [1] to [8] in 4.
(1) above, and whether or not the taking of countermeasures against that large-scale sharepurchasing activity is appropriate. However, if the special committee does not provide
advice with regard to the rights and wrongs of the initiation of countermeasures by thedeadline for advice above, and the special committee has advised the extension of thedeadline for advice above, the company's Board of Directors shall extend the deadline foradvice by a maximum of 10 days.
6.
Impact on shareholders and investors, etc.
(1) Impact on shareholders and investors, etc., at the time of amendment of this policy for handlinglarge-scale share purchasing activity
The gratis allocation of share warrants was not carried out at the time of amendment of thispolicy for handling large-scale share purchasing activity, the same as at the time of introductionof this policy on March 18, 2008. Consequently, there will be no direct specific impact on therights or economic income of shareholders and investors.
(2) Impact on shareholders and investors, etc., at the time of initiation of countermeasures
In cases where a large-scale share purchaser has not observed the large-scale share purchasing
rules, and even in cases where a large-scale share purchaser has observed the large-scale sharepurchasing rules, if it is judged that the large-scale share purchasing activity in question will
significantly damage the common interests of the company's shareholders, such as inflicting aloss on the company from which it is difficult to recover, the company's Board of Directors may
take the above countermeasures with the aim of protecting the corporate value of the company
and the common interests of the company's shareholders, but it is not anticipated that thecompany's shareholders (excluding the large-scale share purchaser who has violated thelarge-scale share purchasing rules, etc.) will incur particular losses in terms of their legal rights
or economically. If the company's Board of Directors decide to take specific countermeasures,the company's Board of Directors shall carry out timely and appropriate disclosure inaccordance with the law and the regulations of financial instrument exchanges. Further, if share
warrants are to be allocated as a countermeasure and registration in the shareholder registry is- 10 -

incomplete, shareholders with transferable shares will need to complete the procedures required
so that the common shares of the company are registered in their account at their securities
company and shareholders with forgotten shares in special accounts will need to complete theprocedures for the redemption of forgotten shares so that both of these types of shareholders areregistered as shareholders in the final shareholder registry of the company on the date ofconfirmation of shareholders subject to the allocation of share warrants (hereinafter referred toas the "allocation reference date") that the company's Board of Directors separately determinesand publicizes by the date of allocation of the share warrants that the company's Board of
Directors separately determines and publicizes in order to acquire the share warrants.
Furthermore, shareholders will need to complete the payment of the exercise price within thedesignated period in order to acquire the shares of the company to be granted due to the exerciseof the share warrants upon exercise of the share warrants. The details of the related procedures
shall be announced separately based on law, etc., when it has actually been decided to issue
share warrants.
Further, even after the date of allocation of share warrants, the company may discontinue thefree gratis allocation of share warrants or acquire the share warrants without compensation andwithout granting shares in the company to the holders of the share warrants in question up to the
day prior to date of commencement of the period for exercise of the share warrants in question
due to circumstances such as the large-scale share purchaser withdrawing from the purchase, etc.
In that case, it is possible that shareholders and investors who traded shares in the company on
the assumption that a dilution in the price per share would occur may receive an impact
commensurate to the fluctuation in the share price. Shareholders and investors are asked toplease be careful with regard to the movements of large-scale share purchasers.
7.

Period of validity of the rules
This recently revised policy for the handling of large-scale share purchasing activity shall bepresented to shareholders at the Ordinary General Meeting of Shareholders scheduled to be heldon March 16, 2012, shall come into effect when the approval of shareholders is obtained andshall not come into effect if the approval of shareholders is not obtained. If this policy isapproved, it shall continue to remain in force until the conclusion of the Ordinary General
Meeting of Shareholders scheduled to be held in March 2014 and the subsequent continuation ofthis policy (including continuation after partial revision) shall require the approval of theOrdinary General Meeting of Shareholders every 2 years. Furthermore, even during its period ofvalidity, this policy shall be revoked immediately [1] if a resolution to the effect that thecompany revokes this policy has been passed at an Ordinary General Meeting of Shareholders of
the company, or [2] if a resolution to the effect that the company revokes this policy has been
passed at a meeting of the company's Board of Directors.
Furthermore, even if this policy is to be continued, the company's Board of Directors would liketo present the situation to shareholders if the company is to carry out an intrinsic review of thispolicy from the perspective of maintaining and increasing the corporate value of the company
and the common interests of the company's shareholders based on the amendment of relatedlaws, trends in future judicial rulings, or the handling of financial instrument exchanges andother public institutions.
Further, the company's Board of Directors may amend or change this policy after obtaining theapproval of the special committee within the range which correction of text is appropriate forreasons such as typographical errors and omissions, etc., if there are changes in the Companies
Act, the Financial Instruments and Exchange Act, other laws or the regulations of financial
instrument exchanges, changes in the interpretation or management of these laws, etc., orchanges in the tax system or courts, etc., within the range not falling under the category of- 11 -

intrinsic changes to this policy.

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8. Rationality of this policy for handling large-scale share purchasing activity(1) This policy satisfies the requirements of guidelines related to anti-takeover measures
This policy for the handling of large-scale share purchasing activity satisfies the three principles
stipulated in the "Guidelines for anti-takeover measures to ensure or enhance corporate value
and the common interests of shareholders" (the principle of ensuring or enhancing corporate
value and the common interests of the company's shareholders, the principle of disclosure inadvance/ shareholder will, and the principle of ensuring necessity/ suitability) published by the
Ministry of Economy, Trade and Industry and the Ministry of Justice on May 27, 2005.
Furthermore, this policy is also in line with the way of thinking displayed in "Takeover defense
measures in light of recent environmental changes" published on June 30, 2008 by the Corporate
Value Study Group.
(2) This policy was introduced with the aim of ensuring and enhancing the common interests ofshareholders
As described above, this policy was introduced with the aim of ensuring or enhancing thecorporate value of the company and the common interests of shareholders by enabling thecompany to ensure the information and time required for shareholders to judge whether or notlarge-scale share purchasing activity involving shares in the company is appropriate and to
conduct negotiations for the sake of shareholders when such activity has occurred.
(3) This policy emphasizes the will of the shareholders
The company shall ask the will of shareholders and reflect the inclinations of shareholders withregard to the rights and wrongs of this recently revised policy for the handling of large-scale
share purchasing activity at the Ordinary General Meeting of Shareholders of the company
scheduled to be held on March 16, 2012. In addition, the period of validity of this policy has
been set to last until the conclusion of the Ordinary General Meeting of Shareholders of thecompany in 2014, but until that time, this policy shall be revoked immediately if a resolution to
the effect that the company revokes this policy has been passed at an Ordinary General Meetingof Shareholders of the company, or a meeting of the company's Board of Directors so theintentions of the shareholders shall be reflected.
(4) This policy emphasizes the judgment of highly independent people outside the company
In the introduction of this policy, the company shall abolish arbitrary initiation ofcountermeasures by the Board of Directors and establish a special committee as an institutionthat makes substantive judgments objectively when operating this policy for the sake ofshareholders.
The special committee shall be made up of outside experts and outside auditors, etc., upon
introduction of this policy.
The special committee shall advise whether the necessary information provided by thelarge-scale share purchaser is sufficient or insufficient.
If large-scale share purchasing activity is actually carried out against the company, the special
committee shall judge whether or not the purchasing in question will significantly damage thecorporate value of the company and the common interests of the company's shareholders, andthe company's Board of Directors shall respect the advice of the special committee to the utmostin accordance with Attachment 3 "Special committee regulations". The company shall disclose
an overview of the advice of the special committee and information on the reasons for its
judgments, etc., to shareholders in timely fashion.
In this way, systems have been ensured for the management of this policy to be carried out
within the range that contributes to the corporate value of the company and the common- 13 -

interests of shareholders as a consequence of strict auditing by the highly independent special
committee so that the company's Board of Directors does not make demands for the provision of
additional information without limit or take countermeasures arbitrarily.
(5) Rational and objective requirements have been set for this policy
As described above, settings have been made in this policy so that countermeasures against
large-scale share purchasing activity are not initiated if said countermeasures fulfill rational anddetailed objective requirements, and systems have been ensured to prevent the arbitrary
initiation of countermeasures by the company's Board of Directors.
(6) The opinions of third party specialists shall be obtained
If a large-scale share purchaser appears, the special committee may receive the advice ofindependent third parties (including specialists such as financial advisors, certified public
accountants, lawyers and consultants, etc.) at the expense of the company. By doing so, thispolicy has established a system whereby the fairness and objectivity of the judgments made by
the special committee are guaranteed strongly.
(7) This policy is not a dead hand-type or slow hand-type anti-takeover measure
As described above, because this policy may be revoked with a resolution of the Ordinary
General Meeting of Shareholders of the company or a meeting of the company's Board of
Directors it is not a so-called dead hand-type anti-takeover measure (an anti-takeover measurethat does not allow the prevention of initiation even if a majority of the members of the Board of
Directors are replaced).
Furthermore, because the company has not adopted a variegated term of office system withregard to the terms of office of Directors, this policy is not a slow hand-type anti-takeovermeasure either (an anti-takeover measure that requires time for the prevention of initiation
because it is not possible to replace the members of the Board of Directors at one time).

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Attachment 1■ Major shareholders (as of December 20, 2011)
Investment in the company
Name of shareholder

Number ofshares held

Ratio ofshareholding

Ichiro Konoike

2,160,708 shares

15.68

STATE STREET BANK AND TRUST COMPANY

1,530,480

11.11

The Sumitomo Trust & Banking Co., Ltd.

556,000

4.03

Sasaki Chemical Co., Ltd.

413,345

3.00

Milbon Cooperative Company Stock Ownership Plan

345,165

2.50

Resona Bank Limited

318,379

2.31

RBC DEXIA INVESTOR SERVICES TRUST,LONDON-CLIENTS ACCOUNT

285,120

2.07

Milbon Employees Stock Ownership Plan

281,125

2.04

STATE STREET BANK AND TRUST COMPANY 505025

276,400

2.01

Kiyoyasu Nakanishi

265,188

1.92%(Note 1) Ichiro Konoike, who was the Chairman of the Board of Directors, passed away on
November 5, 2011, but he remains listed in the shareholder registry because the transfer
of registration has not yet been completed.
(Note 2) Ratios of shareholdings have been calculated after excluding treasury stock (17,728
shares).

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Attachment 2■

Career summaries of members of the special committee
Noboru Imura
February 1983
June 2005
April 2006
June 2007
March 2008
April 2008
June 2008
June 2009
Osamu Tada
April 1971
July 1995
July 2001
July 2005
July 2007
July 2008
September 2008
March 2010
Keisuke Endo
March 1998
April 1998
March 2001
March 2008
April 2008
April 2011

Registered as a certified public accountant
Auditor, Tsutenkakukanko Co., Ltd.
Member of the Civil Affairs Conciliation Committee, Osaka District
Court/ Osaka Summary Court (current)
Director, Katokichi Co., Ltd. (currently TableMark Co., Ltd.)
Member, special committee, Milbon Co., Ltd. (current)
Professor, Institute of Business and Accounting, Professional
Graduate School, Kwansei Gakuin University (current)
Consultant, Katokichi Co., Ltd. (currently TableMark Co., Ltd.)
Director, Tsutenkakukanko Co., Ltd. (current)Entered Osaka Regional Taxation Bureau
Examiner, Osaka District Court
Head, Hikone Taxation Office
Head, Osaka Regional Taxation Bureau Investigation No.1 WideArea Information Management Department
Head, Hirakata Taxation Office
Retired as Head, Hirakata Taxation Office
Registered as a taxation accountant
Member, special committee, Milbon Co., Ltd. (current)

Completed judicial training at the Legal Institute of the JapaneseSupreme Court of JusticeRegistered as a lawyer
Outside Auditor, Milbon Co., Ltd. (current)
Member, special committee, Milbon Co., Ltd. (current)
Vice President, Wakayama Bar Association
Vice President, Wakayama Bar Association (current)- 16 -

Attachment 3
Special committee regulations (Overview)
1. Establishment of the special committee and the appointment and removal of committee
members[1] The special committee shall be established by resolution of the Board of Directors.
[2] The members of the special committee shall number at least 3 people and no more than
5 people and shall be appointed from among the outside directors, outside auditors,
lawyers, tax accountants, certified public accountants, academic experts, people
knowledgeable in investment banking work, or people from outside the company withexperience as directors or operating officers.
[3] The appointment and removal of members of the special committee shall be carried out
by resolution of the Board of Directors. However, a resolution for the removal of amember of the special committee shall be based on the approval of at least two-thirds ofthe Directors in attendance.
2. Term of office of members of the special committee
The term of office of members of the special committee shall be from the date of
appointment to the conclusion of the Ordinary General Meeting of Shareholders scheduled
to be held in March 2014 and if the subsequent continuation of this policy is approved at
the Ordinary General Meeting of Shareholders scheduled to be held in March 2014 themembers shall be re-appointed automatically without requiring a determination and thesame shall apply thereafter. However, this shall not apply if special provisions are madebased on a resolution of the Board of Directors.
3. Compensation for members of the special committee[1] The Board of Directors shall determine separately matters such as the value ofcompensation for members of the special committee and the timing of payments, etc.,with the agreement of all members of the special committee and of all auditors.
[2] When a member of the special committee has used money for the actual expense of
public transport, etc., in order to carry out his duties, the company shall pay the cost of
the actual expenses to the member of the special committee based on a request from themember of the special committee.
4. Resolution requirements
A resolution on the special committee shall be made with a majority of the members of thespecial committee.
5. Advice and counsel for the Board of Directors
The special committee advises the Board of Directors with regard to whether the necessary
information provided by the large-scale share purchaser is sufficient or insufficient,
whether or not large-scale share purchasing activity will significantly damage the corporate
value of the company and the common interests of the company's shareholders, andwhether or not initiating specific countermeasures against that large-scale share purchasing
activity is appropriate.
In giving advice and counsel, the special committee is required to make judgments fromthe perspective of whether or not activities will contribute to the corporate value of thecompany and the common interests of the company's shareholders and must not aim forpersonal profit for themselves or a Director of the company.
6. Third-party advice
The special committee may receive the advice of independent third parties (including
specialists such as financial advisors, certified public accountants, lawyers and consultants,etc.) at the expense of the company.
■- 17 -

Attachment 4■

Overview of the gratis allocation of share warrants

1.

Shareholders subject to gratis allocation and allocation conditions
The company's Board of Directors shall allot share warrants without requiring payment at aratio of 1 share warrant per share held (however, this excludes the common shares in thecompany held by the company) to the shareholders registered on the final shareholder
registry on the date of allocation separately established by the company's Board of Directors.

2.

Type and number of shares subject to the share warrants
The type of shares subject to the share warrants is common shares and the number of sharessubject to 1 share warrant is 1 share. However, if the company carries out a share split orshare merger, the company shall make the necessary adjustments.

3.

Total number of share warrants to be allocated
The total number of share warrants allocated at one time shall be determined by thecompany's Board of Directors, with the maximum set at the total number of shares in thecompany outstanding on the date of allocation.

4.

Amount that should be paid when exercising each share warrant
The value shall be the value determined by the company's Board of Directors and shall be atleast 1 yen per share warrant.

5.

Restrictions on the transfer of share warrants
The transfer of a share warrant shall require the approval of the company's Board of
Directors.

6.

Period for the exercise of share warrants
The period for the exercise of share warrants shall be the period determined by thecompany's Board of Directors in the resolution on the gratis allocation of share warrants
within the range from 1 to 2 months, taking the date of entry into force of the share warrant
as the first day of the period (however, if the company's Board of Directors determines a datein place of this date separately in the resolution on the gratis allocation of share warrants, thedetermined date shall be the first day of the period). However, if the final date of the period
for the exercise of share warrants is not a day of business at the place where payment ishandled, the next business day shall be the final day of the period.

7.

Conditions for the exercise of share warrants
Not being a person belonging to a party that is a specific shareholder group (Note 1) andholds in excess of 20% of voting rights (Note 2) (however, this excludes parties that thecompany's Board of Directors agrees with in advance), etc., shall be a condition for the
exercise of share warrants and the details shall be established separately at a meeting of thecompany's Board of Directors.

8.

Share warrant acquisition provisions
The company may acquire those share warrants excluding the share warrants of those parties
that are unable to exercise share warrants due to the provisions of [7] above on the dateestablished separately by the company's Board of Directors. In this case, the company shall
grant 1 common share in the company in exchange for the acquisition of 1 share warrant.

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Furthermore, the company may acquire free of compensation share warrants, including theshare warrants of the parties that are unable to exercise share warrants due to the provisionsof [7] above on the date established separately by the company's Board of Directors if thecompany's Board of Directors recognizes that it is appropriate for the company to acquire
the share warrants during the period from the date of entry into force of the share warrants tothe date prior to the date of commencement of the exercise of rights or the date ofacquisition above, whichever is earlier.
Note 1: The term "specific shareholder group" means:(i) The holders (meaning the holders stipulated in Article 27.23.1 of the Financial Instruments andExchange Act and including the parties included in the holders based on Article 27.23.3 of the sameact) of the shares, etc., (meaning the shares, etc., stipulated in Article 27.23.1 of the same act) of thecompany, and their co-holders (meaning the co-holders stipulated in Article 27.23.5 of the same act
and including the parties deemed to be co-holders based on Article 27.23.6 of the same act), or(ii) The parties who are to carry out a purchase, etc., (meaning a purchase, etc., as stipulated in Article
27.2.1 of the same act and including purchases to be carried out on a financial instruments exchange
market) of shares, etc., (meaning shares, etc., as stipulated in Article 27.2.1 of the same act) of thecompany and their special related parties (meaning the special related parties stipulated in Article
27.2.7 of the same act)
Note 2: The term "ratio of voting rights" means:(i) The ratio of shares, etc., held by the holder in question if the specific shareholder group is listed in
Note 1 (i) (meaning the held ratio of shares stipulated in Article 27.23.4 of the same act; in this case,the number (meaning the held number of shares stipulated in Article 27.23.4 of the same act) of shares
held by the co-holders of the holder in question is also considered in calculations), or(ii) The total ratio of shares, etc., held by the purchaser in question and special related parties in question
if the specific shareholder group is listed in Note 1 (ii) (meaning the held ratio of shares stipulated in
Article 27.2.8 of the same act)
In each calculation of the ratio of shares, etc., held, it is possible to refer to the most recent datasubmitted from among the securities report, quarterly report, and the share buyback report with regard
to total voting rights (meaning the total voting rights stipulated in Article 27.2.8 of the same act) andthe total number of shares outstanding (meaning shares outstanding as stipulated in Article 27.23.4 ofthe same act).

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Attachment 5(Reference) Details of this policy for handling large-scale share purchasing activity (flowchart ofthe case where large-scale share purchasing activity has started)
Cases where the large-scale sharepurchaser does not observe thispolicySubmission of statement of intent by thelarge-scale share purchaser

Delivery of list of necessary informationby the company's Board of Directors

Submission of the necessary informationby the large-scale share purchaser
Investigation and evaluation of the details of thepurchasing and investigation of alternative
proposals by the company's Board of Directors

Cases where the large-scale share purchaser
no longer observes this policy

Cases where the large-scale sharepurchaser observes this policy

Comparative investigation and evaluation of thedetails of the purchasing and the alternative
proposals formulated by the Board of Directors,
etc., by the special committee

Cases that do not
fall under thecases on the right4. (1) Cases that fall under any of [1]
to [8] among "Cases where thelarge-scale share purchaser has
observed the large-scale sharepurchasing rules"

Special committee advises the Board of Directors toinitiate countermeasures

Resolution by the Board of Directors

Non-initiation of countermeasures

Initiation of countermeasures(Note) This flowchart has been prepared solely as reference material in order forunderstanding of the details of this policy for handling large-scale share purchasing
activity. For details, please refer to the main text of the "Announcement on therevision and continuation of the policy for handling large-scale share purchasing
activity in company shares (anti-takeover measures)".

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