May 9, 2011
To Whom It May Concern:

Company Name:
Representative:
Stock Code:Inquiries:

Sumitomo Heavy Industries, Ltd.
Yoshinobu Nakamura, President
6302
Hideo Ohshima
General Manager – Corporate
Communication Department
Tel: +81-3-6737-2333

Notice Regarding Partial Change and Continuance of Countermeasures
to Large-Scale Acquisition Actions of the Company’s Shares (Takeover Defense Measures)
At the meeting of the Board of Directors held on May 13, 2008, it was resolved that the Company
should adopt countermeasures to the Large-Scale Acquisition Actions of the Company’s shares(hereinafter referred to as the “Current Plan”) as part of the Basic Policy on control over decisions
on financial and business policies of the Company (as defined in the main paragraph of Article 118,
item 3 of the Enforcement Regulations for Corporation Law; hereinafter referred to as the “Basic
Policy”), and as part of the measures to prevent inappropriate parties from controlling theCompany’s decisions on financial and business policies (as defined in Article 118, item 3, ro, (2), of
the Enforcement Regulations for Corporation Law) in view of the Basic Policy, and the Company
obtained the approval of shareholders for the adoption of the Current Plan at the 112th Ordinary
General Meeting of Shareholders of the Company held on June 27, 2008.

The Company hereby notifies you that while the Current Plan shall remain effective until the closingof the ordinary general meeting of shareholders for the last of the fiscal years ending within three (3)years from the closing of the 112th Ordinary General Meeting of Shareholders of the Company, it
was resolved at the meeting of the Board of Directors held on May 9, 2011 that the Company shall,
after confirming that the Company will continue to maintain the Basic Policy, make necessarychanges (hereinafter referred to as the “Revision”) to the Current Plan as follows (The plan after
changes shall be hereinafter referred to as the “Plan”) based on revisions of the Laws andRegulations made after the adoption of the Current Plan and the recent trends of discussions of
takeover defense measures held by organizations including the Corporate Value Study Groupestablished in the Ministry of Economy, Trade and Industry and continue to adopt countermeasures
to the Large-Scale Acquisition Actions of the Company’s shares (takeover defense measures) as partof the measures to prevent inappropriate parties from controlling the Company’s decisions on
financial and business policies in view of the Basic Policy.
Furthermore, the Company also notifies you that it was resolved with the approval of all directors at
the meeting of the Board of Directors mentioned above that a proposal for the approval of thecontinuing of takeover defense measures under the Plan shall be submitted to the 115th Ordinary
General Meeting of Shareholders of the Company to be held on June 29, 2011 (hereinafter referred
to as the “Ordinary General Meeting of Shareholders”). In addition, all of the auditors of theCompany including Outside Statutory Auditors were present at the meeting of the Board of Directorsof the Company at which the takeover defense measures under the Plan were resolved to becontinued and all of the auditors approved the continuance of the takeover defense measures under
the Plan on condition that the practical operation of the Plan was to be properly carried out.
The Revision shall become effective on condition that the approval of the shareholders is obtained
for the proposal mentioned above at the Ordinary General Meeting of Shareholders and the Current
Plan shall be changed to the Plan on the same condition.

-1-

In the Plan, the main changes made to the Current Plan are as follows:(i) An upper limit (60 business days) was set for the period for requesting that the Large-Scale
Acquirers provide information;(ii) The requirements for the initiation of countermeasures were revised; and(iii) Necessary amendments and other changes to terms were made in association with theestablishment and revisions of related Laws and Regulations concerning electronic sharecertificate system, etc.
In the event that the Corporation Law, the Financial Instruments and Exchange Law, or related rules,
government ordinances, cabinet office ordinances, ministerial ordinances, etc. (hereinafter referred
to as “Laws and Regulations”) are amended (amendment includes changes in the names of Laws andRegulations and the enactment of new Laws and Regulations that succeed the previous Laws andRegulations) or brought into force, the provisions referred to in the Plan shall be replaced with theprovisions of the Laws and Regulations that substantially succeed the provisions of the prior Laws
and Regulations, as amended, except as otherwise provided by the Board of Directors of theCompany.

***
1.

Basic Policy(1) Contents of the Basic Policy
The Company thinks that the issue of by whom and how decisions on the financial andbusiness policies of the Company should be controlled should be finally decided byshareholders from the standpoint of improving corporate value and eventually ensuring
shareholders’ common interests. Therefore, the Company thinks that the issue of whether
to accept a Large-Scale Acquisition Action resulting in change in controlling of theCompany, etc. should be finally determined by the intention of the shareholders.
However, it is expected that Large-Scale Acquisition Actions (as defined in 3. (2) (a) below;
the same shall apply hereinafter) of the Company’s stock may include (i) those threatened tocause an obvious infringement on the corporate value and eventually the shareholders’common interests in view of the purpose of acquisition, the management policy after the
proposed acquisition, etc., (ii) those threatened to effectively coerce the Company’s
shareholders into selling their shares, (iii) those to be carried out without giving theCompany a period reasonably necessary to present an alternative business plan,etc.,(hereinafter referred to as the “Alternative Proposal”) to replace the acquisition
proposal, the business plan, etc., presented by the relevant Large-Scale Acquirer (as definedin 3. (1) below), (iv) those to be carried out without providing sufficient information
reasonably necessary for the Company’s shareholders to assess the terms of the takeoverbid, (v) those with inadequate or inappropriate terms of acquisition (such as the value andtype of consideration, timing of the acquisition, and legality of the manner of acquisition)and feasibility of acquisition in light of the Company’s primary value, and (vi) those likely
to destroy the trustful relationships with interested parties such as employees, business
partners including customers, and local communities where the Company has plants andproduction facilities, which are all indispensable to the Company’s continuously increasing
corporate value, and threatened to cause a serious affect on the corporate value andeventually the shareholders’ common interests. With a view to maximizing the Company’s
corporate value and the shareholders’ common interests, and as an exceptional case, theCompany considers the parties engaging in such Large-Scale Acquisition Actions to beinappropriate as parties controlling the Company’s decisions on financial and business
policies.

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The Company’s corporate value derives from the sources of offering first class products;
synergy generated by the value chain through the business segments and the global network;and the relationship of trust with shareholders, customers, business partners, employees andthe society maintained and enhanced by management in conformity with the Sumitomo
Business Spirit. These sources function in an organically integrated manner in order togenerate more value.
The Company, which manages operations in accordance with the Sumitomo Business Spirit
described later, has adopted the following Basic Policy: Our duty is to increase the corporate
value and maximize the shareholders’ common interests through sharing generated profits
with shareholders. Although the Company accepts in principle the fact that the Company issupported by shareholders who obtained shares of the Company through free trading in themarket, when a party who intends to obtain more than 20% of all the voting rights of theCompany (hereinafter referred to as the “Controlling Shares”) or any member of the groupto which such party belongs (hereinafter referred to as the “Acquirer(s)”) whereby throughsuch acquisition infringes upon the corporate value and eventually shareholders’ common
interests, the Company will consider such Acquirers who intend to acquire shares of theCompany to be not appropriate for holding control over decisions regarding financial andbusiness policies of the Company and shall take measures to ensure and increase thecorporate value and the shareholders’ common interests to whatever necessary andreasonable extent.
(2) Background to Establishment of the Basic Policy
Sumitomo launched the businesses of copper refining, copper trade, and copper mining
about 400 years ago, and developed the businesses as the Besshi Copper Mine in Shikoku
began to operate, and among such businesses, the “Sumitomo Besshi Tool Making
Workshop” was formed in 1888 for the purpose of producing and repairing machines andtools used at the Besshi Copper Mine. The division was subsequently split to establish
Sumitomo Machinery Co., Ltd. in 1934. In 1969, the Company and Uraga Heavy Industries,
a shipbuilder, merged into Sumitomo Heavy Industries, Ltd., laying a foundation as acomprehensive heavy machinery manufacturer.
Furthermore, in recent years, theCompany has promoted its research and development primarily on precision, mechatronics,
and system technologies, and focused on the development of businesses in areas such as
medical devices, LCD and semiconductor manufacturing equipment, digital appliances
related machinery, and precision control and machinery components.
Since its foundation, the Company has continuously made efforts toward technologicalinnovation and application of advanced technologies. As a result, the Company’s businessdomains have extended widely to cover social and industrial infrastructures and cuttingedge technologies. In addition, the product mix is not a mere collection of machinery
products, but is characterized as a business model which provides products at each layer,
including systems, devices, and components, systematically, and produces the synergetic
effect from the organic value chains among its product businesses. In particular, focused
efforts have been made to develop and enhance the component business, which has
established a competitive superiority, thoroughly reflecting the expertise as a manufacturer
and seller of devices, in which such components are used, and customer needs. As a result,
the Company’s devices and products with such internally produced key components arerecognized for their outstanding performance and quality, creating a positive growth cycle.
This business model has been realized through the combination of constantly focusing on
the market trends and customer needs and developing technology and products from a longterm perspective rather than discussing whether to continue or discontinue a certain businessbased on short-term shifts in demand. There have been countless cases where theCompany launched into the market products meeting the customers’ expectations before any
rivals in the industries, as illustrated by a compact proton cancer treatment equipment that-3-

uses a cyclotron particle accelerator, whose application has established an excellent trackrecord, an electric injection molding machine that enables precision high-speed molding, ahydraulic excavator and tanker that realized the world’s top-class energy saving efficiency,
and a fluidized-bed boiler that contributes to CO2 reduction by burning a broad range ofbiomass wastes.
Moreover, the Company has established a global sale and service network in order to deliver
these excellent products to global customers and support the use of such products. All the
Company’s products are essential to the customers’ manufacturing systems, and theCompany believes that maintaining optimal operations of such systems is the key to them insurviving. Providing the same service worldwide as in Japan cannot be achieved without
well-trained local staff and an excellent component supply system, nor can it be achieved ina short time. Hence, to maintain such a structure, the Company needs to continuously
make investments from a long-term perspective.
Underlying the customer value provided by the Company are the following five principles
of “Sumitomo Business Spirit” and the actual practice thereof: (i) the value of “trust”, (ii)the prime importance placed on integrity, (iii) the contribution to society, (iv) consideration
for the environment, and (v) coexistence with the community. The Company is confident
that managing the businesses in compliance with these principles will lead to theenhancement of our corporate value and eventually the realization of the shareholders’common value.
As described above, the Company’s corporate value derives from (i) the provision of firstclass products backed by continuous R&D activities, (ii) vertically integrated businessmodel which provides systems, devices, and components, (iii) global network of production,
sales and services, and (iv) management rooted in the Sumitomo Business Spirit, and fromthe relationship of trust with the shareholders, customers, business partners, employees andthe society, and as they function in an organically integrated manner, greater values havebeen created.
However, as a consequence of the recent circumstances such as development of new legal
systems, conditions in the capital market, and changes in the economic structure andcorporate culture, there have been occasional instances where, without obtaining approval ofthe management of the target company, an acquisition of a large number of shares is forced
through unilaterally, and the Company can no longer deny the possibility that, in certain
circumstances, the continuous enhancement of the Company’s corporate value with theaforementioned management resources could be interrupted.
The Company thinks that, given such trends, it is necessary to constantly anticipate asituation where an Acquirer might emerge.
The Company stresses that it does not have a negative view on acquisition of controllingshares per se.
It is in these circumstances that the Basic Policy has been established as described in (1)above.

2.

Special Measures to Pursue the Basic Policy
The Company Group has taken and will take following measures in order to pursue the abovestated Basic Policy.
(1) New Medium-Term Management Plan and Implementation thereof-4-

Under the previous medium-term management plan “Global 21”, the Company Groupdeveloped world-class technologies and created highly profitable business structures, and at
the same time focused on capturing the overseas markets where the Company Group can
expect large business opportunities, and thereby achieved sustainable growth anddevelopment, with the aim of leaping to the status of “Global Sumitomo Heavy Industries.”
The key issues of “Global 21” were: (i) acceleration of global developments, (ii) promotionof innovations, and (iii) pursuit of value chain between business operations. Furthermore, in
accordance with the plan, the Company Group actively implemented measures including the
expansion of its production systems in China, Indonesia and Brazil, the acquisition ofHansen Industrial Transmissions NV, a Belgian manufacturer of industrial gear box, and theenhancement of development, design, and production processes and sales to generate “firstclass products”.
In fiscal year 2011, the Company Group has launched its new medium-term management
plan “Innovation 21.” The Company Group aims to achieve a long-term sales target of ¥1
trillion in order to help implement new business strategies. Moreover, the Company Groupwill live up to its vision of “Strong and Powerful Sumitomo Heavy Industries,” which will
enable the Company Group to achieve sustainable growth and improved profitability under
any circumstances through the innovation of products and processes and enhancing its
competitiveness, as well as through becoming “Global Sumitomo Heavy Industries,” a goal
set forth in “Global 21,” the previous medium-term management plan.
The Company Group will aim to achieve the following numerical targets in 2013, the final
year of “Innovation 21.”(i) Fiscal year 2013 sales:¥730 billion(ii) Fiscal year 2013 operating income: ¥73 billion
In addition, the Company Group will continue to set ROIC as a management benchmark of
the Company Group and to maintain ROIC>WACC (cost of capital) and will constantly
ensure 10% or higher of ROIC.
In order to achieve these targets, the Company Group will implement the following
managerial measures in response to the changing situation after creating the new mediumterm management plan above: (i) expand and utilize its global network; (ii) develop andrelease innovative products (“product innovation”); and (iii) innovate its production, sales
and business operation (“process innovation”). In the process of implementing thesemeasures, the Company Group will continue to actively promote growth through investment
by taking advantage of its strengthened financial structure while maintaining its welldisciplined financial control. Specifically, it will put approximately ¥150 billion toward
capital investment and product development in the coming three years.
(2) Enhanced Corporate Governance
The Company has been promoting enhancement of the corporate governance. Specifically,
the Company made an effort to activate the Board of Directors and maintain thetransparency of management, for instance, the adoption of the system of executive officers
in 1999, the election of Outside Directors since 2002, the adoption of shortened term of
Directors from two years to one year in 2007, etc.
In order to enhance auditing functions across the Company Group, the auditors of theCompany hold group auditor meetings on a regular basis. In addition, the auditors conduct
on-site audits annually at overseas subsidiaries in response to the increasingly globalizedbusiness conditions within the Company Group.
The Company has also notified the financial instruments exchanges on which it is listed of
all outside officers as Independent Officers, judging that they are unlikely to have conflictsof interest with general shareholders. These Independent Officers are required to conduct
activities taking into account the protection of general shareholders’ interests, for example,-5-

by attending Board of Directors meetings and giving necessary opinions, when the meetings
make decisions with respect to the execution of duties, to give consideration to generalshareholders’ interests.
(3) Measures to Share Profits with Shareholders
The Company is committed to making further efforts through implementation of the abovestated measures and strategies in order to improve corporate value by the further growth of
the businesses and to share profits with shareholders by continuously increasing dividends,
thus increasing the shareholders’ common interests.
3.

Contents of the Plan (Measures to Prevent Inappropriate Parties from Controlling theCompany’s Decisions on Financial and Business Policies in View of the Basic Policy)(1) Purpose of Continuance of Takeover Defense Measures under the Plan
As stated in 1. above, while the Company finds it necessary to take certain measures against
Acquirers in certain circumstances, the Company thinks that, because it is a listed
corporation, the determination of whether to sell shares to a certain Acquirer or the ultimate
determination of whether to entrust such Acquirer with the company’s management should
be basically left up to individual shareholders.
However, in order that the shareholders can make appropriate determinations, it is necessary
as a premise to give sufficient consideration to the Company’s business features and theGroup’s history and properly understand the Company’s corporate value and the sources
generating such value. Further, it can be easily envisaged that information to be provided
only by the Acquirer would be insufficient to grasp what effects the acquisition by the
Acquirer of the Company’s Controlling Shares might have on the Company’s corporate
value and the sources of such value, and in order that the shareholders make an appropriate
assessment, it seems necessary for them to give consideration to information provided by
the Board of Directors, which fully understands the Company’s business features, and to theviews and opinions of the Board of Directors with regard to such Acquirer’s action aimed atacquisition of the Controlling Shares, and in certain cases, a new proposal of the Board of
Directors addressing such action.
Accordingly, the Company finds it very important for the shareholders to secure sufficient
time to analyze and review such multifaceted information.
From the standpoint stated above, the Company has come to the conclusion that it isnecessary to continue the takeover defense measures under the Plan as part of the measures
whereby the Company can ensure, in light of the aforementioned Basic Policy, that theshareholders make an appropriate assessment as to whether to accept a Large-Scale
Acquisition Action by seeking necessary information on such a Large-Scale Acquisition
Action from the party who will attempt or has attempted to take such a Large-Scale
Acquisition Action (hereinafter referred to as the “Large-Scale Acquirer”), as well as
securing a period to consider and review such information; that the Board of Directors
presents to the shareholders its opinion or Alternative Proposal in connection with such a
Large-Scale Acquisition Action as recommended by the Corporate Value Committee (asdefined in (2) (e) below; the same shall apply hereinafter), and that the Company negotiateswith the Large-Scale Acquirer for the benefit of the shareholders, and thereby, in light of the
Basic Policy, the Company can prevent the Company’s decisions on financial and business
policies from being controlled by any inappropriate party (which specifically refers tocertain Large-Scale Acquirers set forth in accordance with the procedures established by the
Board of Directors, and also refers to such Large-Scale Acquirer’s co-holder or special
interested party (tokubetsu kankeisha) as well as such party as recognized by the Board of
Directors as the party which any of the foregoing parties substantially controls or which
operates in collaboration with or in coordination with any of the foregoing parties; each of-6-the aforementioned parties shall be hereinafter referred to as an “Excluded Party”).
Obviously, in continuing the takeover defense measures under the Plan, it is desirable toascertain the shareholders’ intention. To this end, the Board of Directors of the Company
intends to ascertain the shareholders’ intention by submitting a proposal for the approval of
the continuing of the takeover defense measures under the Plan at the Ordinary General
Meeting of Shareholders. It was resolved as of today that the Revision shall be made andthe takeover defense measures through the Revision shall be continued on condition that the
Revision shall not become effective and the Current Plan shall terminate at the closing of
the Ordinary General Meeting of Shareholders if the approval of the shareholders is not
obtained.
Incidentally, at present, there exists no proposal for a specific Large-Scale Acquisition
Action in respect of the Company’s shares.
In addition, the status of the Company’s large shareholders as of March 31, 2011 is asindicated in Annex 1, “Information of Large Shareholders.”(2) Outline of the Plan
The flowchart of the procedures under the Plan is as summarized in Annex 2, and thespecific contents of the Plan are as outlined below.
(a) Definitions of Large-Scale Acquisition Actions which may invoke the countermeasure
The countermeasure under the Plan may be initiated if any of the actions which fall or
could fall under (i) through (iii) below (except those approved in advance by the Boardof Directors, collectively, hereinafter referred to as the “Large-Scale Acquisition
Actions”) occurs or is likely to occur.
(i)

Takeover bid or other acquisition (note 3) in respect of the shares, etc., issued by
the Company (note 1), as a result of which the percentage (note 2) of suchshares, etc., held by a specified shareholder of the Company would become 20%
or more.

(ii)

Takeover bid or other acquisition (note 7) in respect of the shares, etc., issued by
the Company (note 4), as a result of which the percentage (note 5) of suchshares, etc., owned by a specified shareholder of the Company and thepercentage of such shares, etc., owned by any special interested party (note 6) ofsuch specified shareholder would become 20% or more.

(iii)

Irrespective of whether either of the actions set out in (i) or (ii) above is carriedout, an agreement or other action by and between a specified shareholder of theCompany and any other shareholder(s) of the Company (including the casewhere more than one other shareholder is involved; the same shall apply
hereinafter in this (iii)) whereby such other shareholder(s) fall under the status ofco-holder (note 8) of such specified shareholder, or an action (note 10) which
establishes a relationship between such specified shareholder and such othershareholder(s) wherein either one substantially controls the other, or they
operate in collaboration or coordination (note 9) (provided that this shall apply
only if, in respect of the shares, etc., issued by the Company, the aggregate
percentage of the shares, etc., held by such specified shareholder and such othershareholder(s) of the Company would become 20% or more).

(note 1)

Refers to shares, etc., as defined in Article 27-23, paragraph 1, of the
Financial Instruments and Exchange Law. The same shall apply
hereinafter unless otherwise provided.

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(note 2)

Refers to the share holding percentage as defined in Article 27-23,
paragraph 4, of the Financial Instruments and Exchange Law. The same
shall apply hereinafter except that, for the purpose of calculating suchshare holding percentage, (i) any special interested party as defined in
Article 27-2, paragraph 7, of said Law, and (ii) any investment bank,securities company, or other financial institution which has executed afinancial advisory agreement with a specified shareholder of theCompany, as well as the takeover bid agent or the lead managing
securities company (hereinafter referred to as the “Contracting Financial
Institution(s)”) for a specified shareholder of the Company shall bedeemed as a co-holder in terms of a specified shareholder of theCompany. Additionally, for the purpose of calculating such shareholding percentage, the most recent information publicly announced by
the Company may be used for the aggregate number of the Company’s
issued shares.

(note 3)

Includes ownership of the right to claim delivery of shares, etc., under asale/purchase or other agreement and execution of the respective
transactions set forth in Article 14-6 of the Enforcement Ordinance forFinancial Instruments and Exchange Law.

(note 4)

Refers to shares, etc., as defined in Article 27-2, paragraph 1, of the
Financial Instruments and Exchange Law. The same shall apply in this(ii).

(note 5)

Refers to the share ownership percentage as defined in Article 27-2,
paragraph 8, of the Financial Instruments and Exchange Law. The same
shall apply hereinafter. Additionally, for the purpose of calculating suchshare ownership percentage, the most recent information publicly
announced by the Company may be used for the aggregate number of theCompany’s voting rights.

(note 6)

Refers to a special interested party as defined in Article 27-2, paragraph
7, of the Financial Instruments and Exchange Law; provided that, withrespect to the parties indicated in item 1 of said paragraph, the party
specified in Article 3, paragraph 2, of the Cabinet Ordinance Concerning
Disclosure of Takeover Bid of Shares, etc., by Parties Other than Issuer
shall be excluded. Additionally, (i) co-holders and (ii) Contracting
Financial Institutions shall be deemed as special interested parties inrespect of the relevant specified shareholder. The same shall apply
hereinafter unless otherwise provided.

(note 7)

Includes an acquisition or other assignment for value as well as thosesimilar to assignment for value as provided in Article 6, paragraph 3, of
the Enforcement Ordinance for Financial Instruments and Exchange Law.

(note 8)Refers to the co-holder as defined in Article 27-23, paragraph 5, of the
Financial Instruments and Exchange Law. The same shall apply
hereinafter.

(note 9)The determination of whether “a relationship ... wherein either one
substantially controls the other, or they operate in collaboration or
coordination” has been established shall be made on the basis of theformation of a new capital relationship, business alliance, transactional or-8-contractual relationship, relationships concerning interlocking directors
and officers, funds provision relationship, credit offering relationship,
substantial interest concerning the share certificates, etc. of the Company
through derivatives or stock lending, etc., or other relationships, as wellas the impact, etc., directly or indirectly brought upon the Company bysuch specified shareholder or such other shareholder(s).
(note 10) The determination of whether an action specified in (iii) above has beentaken shall be reasonably made by the Board of Directors based onrecommendations by the Corporate Value Committee. In addition, theBoard of Directors may request the Company’s shareholders to provide
information to the extent found necessary for the determination ofwhether the requirements under (iii) apply.
(b) Submission of Intention Letter
Prior to the commencement or execution of a Large-Scale Acquisition Action, therelevant Large-Scale Acquirer shall be requested to submit to the Company’s President
and Chief Executive Officer a document, in the form to be separately prescribed by theCompany, evidencing the Large-Scale Acquirer’s undertaking to the Board of
Directors that such Large-Scale Acquirer shall comply with the procedures set out in
the Plan (hereinafter referred to as the “Large-Scale Acquisition Rules”), and bearing
the signature or the name and seal of the Large-Scale Acquirer’s representative, as well
as a certificate of qualification with regard to the representative who affixes suchsignature or name and seal (together, hereinafter referred to as the “Intention Letter”).
Upon receipt of such Intention Letter, the Board of Directors shall forthwith present thesame to the Corporate Value Committee.
In addition to the undertaking to comply with Laws and Regulations and the LargeScale Acquisition Rules, the Intention Letter shall clearly set forth the Large-Scale
Acquirer’s name or appellation, address or location of its principal office, businessoffice, etc., the governing law of its establishment, its representative’s name, contact
information in Japan, the outline of the contemplated Large-Scale Acquisition Action,and other matters. Additionally, only Japanese shall be used in the Intention Letter.
When the Intention Letter is submitted by the Large-Scale Acquirer, the Company
shall, in accordance with applicable Laws and Regulations as well as the Financial
Instruments Exchange Regulations, make appropriate and timely disclosure of suchmatters as the Board of Directors or the Corporate Value Committee finds appropriate.
(c) Request to the Large-Scale Acquirer for Provision of Information
Within five (5) business days from the day on which the Board of Directors receives
the Intention Letter (The first day of the period shall not be counted. The same shallapply in this item (c).) (except in respect of (xiv), within five (5) business days, as a
general rule, from the day on which the Board of Directors or the Corporate Value
Committee requests submission of information), the Large-Scale Acquirer shall be
required to submit to the Board of Directors the information set out in (i) through (xiv)
below (hereinafter referred to as the “Large-Scale Acquisition Information”). Upon
receipt of the Large-Scale Acquisition Information, the Board of Directors shallforthwith submit the same to the Corporate Value Committee.
Furthermore, if the Board of Directors determines that, solely on the basis of theinformation initially provided by the Large-Scale Acquirer, it would be difficult for theshareholders to appropriately determine whether to accept the Large-Scale Acquisition
Action, or for the Board of Directors or the Corporate Value Committee to form an
opinion as to the acceptability of such Large-Scale Acquisition Action (hereinafter-9-referred to as the “Opinion Formation”) or for the Board of Directors to devise analternative proposal (hereinafter referred to as the “Alternative Proposal Formulation”)
and present the same to the shareholders in an appropriate manner, then the Board of
Directors may, upon fixing a reasonable period (up to sixty (60) business days from theday on which the Board of Directors receives the Intention Letter) (hereinafter referred
to as the “Necessary Information Provision Period”) before the submission deadline,
disclose the period so fixed and the reasons for requiring such reasonable period to theshareholders, and request that the Large-Scale Acquirer at any time provide additional
information necessary for the shareholders’ appropriate assessment and for the Opinion
Formation by the Board of Directors or the Corporate Value Committee or for theAlternative Proposal Formulation by the Board of Directors. However, in such event,the Board of Directors shall place the maximum value on the Corporate Value
Committee’s opinion. Additionally, when the Board of Directors determines that theprovision of information by the Large-Scale Acquirer is complete, the Company shallmake appropriate and timely disclosure to that effect in accordance with applicable
Laws and Regulations as well as the Financial Instruments Exchange Regulations.
Further, in accordance with the decision of the Board of Directors, the Company shall,
as a general rule, make appropriate and timely disclosure of such part of the LargeScale Acquisition Information as deemed necessary for the shareholders to make anappropriate decision on whether to accept such Large-Scale Acquisition Action, in
accordance with applicable Laws and Regulations as well as the Financial Instruments
Exchange Regulations at an appropriate time after receiving the Large-Scale
Acquisition Information. However, in making such assessment or determination, theBoard of Directors shall place the maximum value on the Corporate Value
Committee’s opinion.
Incidentally, provision of the Large-Scale Acquisition Information in accordance with
the Large-Scale Acquisition Rules and other notifications and communications to theCompany shall be made only in Japanese.
(i)

Outline of the Large-Scale Acquirer and its group companies (which shall
include major shareholders or investors and significant subsidiaries andaffiliates, and if the Large-Scale Acquirer is a fund or an entity investing in suchfund, its major partners, investors (whether direct or indirect), and othermembers as well as general partners (gyomu shikko kumiaiin) and persons who
continuously provide investment advice shall also be included; this shall apply
hereinafter) (such outline shall include each party’s specific name, capital
structure, investment ratio, financial matters, and names, brief backgrounddescription, and records of previous law violations in respect of directors andofficers (and if there are such records, an outline thereof) as well as experiencein trade similar to that of the Company or the Group, possibility of futurecompetition, and other such details);(ii)

Detailed description of the internal control system of the Large-Scale Acquirer
and its group as well as the effectiveness and status of such system;(iii)

With respect to the relevant Large-Scale Acquisition Action, its purpose (if whatis planned or otherwise intended is an acquisition of control or participation in
management, pure investment or strategic investment, transfer of the Company’s
shares, etc., to a third party after the execution of such Large-Scale Acquisition
Action, or any Material Proposal Action, etc., (which refers to the material
proposal action, etc., as defined in Article 27-26, paragraph 1, of the Financial
Instruments and Exchange Law), then a statement to that effect and the outline
thereof are to be indicated; and if there are more than one purposes, all of them
are to be indicated), method, and terms (including type and number of the- 10 -

Company’s shares, etc., which are intended to be acquired through the LargeScale Acquisition Action, type and amount of consideration in respect of theLarge-Scale Acquisition Action, timing of such action, structure of the relatedtransactions, legality of the method of such action, feasibility of such action andthe related transactions, and if further acquisition of the Company’s shares isintended upon the completion of such Large-Scale Acquisition Action, astatement to that effect and the reasons therefor, and if delisting of theCompany’s shares, etc., is expected upon the completion of such Large-Scale
Acquisition Action, a statement to that effect and the reasons therefor;
additionally, a legal opinion by a qualified attorney shall be required with regard
to the legality of the method of such Large-Scale Acquisition Action);(iv)

If the purpose of the relevant Large-Scale Acquisition Action is to take aMaterial Proposal Action, etc., or if there is a possibility that a Material Proposal
Action, etc., may be taken after the relevant Large-Scale Acquisition Action,then the purpose, terms, necessity, and timing of such Material Proposal Action,etc., as well as information as to the circumstances under which such Material
Proposal Action, etc., could be taken;(v)

Number of the Company’s shares, etc., currently held by the Large-Scale
Acquirer or its group, and the status of transactions executed by the Large-Scale
Acquirer in respect of the Company’s shares, etc., for a period of sixty (60) days
preceding the submission of the Intention Letter (if such shares have beenacquired in a bilateral transaction, the name of the counterparty in suchtransaction shall be included);(vi)

Whether there has been any communication with third parties in connection withthe relevant Large-Scale Acquisition Action (including communication to theCompany with respect to the intention to take a Material Proposal Action, etc.;
the same shall apply hereinafter), and if there has been such communication, thespecific manner and contents thereof;(vii) Basis for the calculation of the price, etc., for the Large-Scale Acquisition
Action as well as the calculation process (including facts and assumptions as the
suppositions for calculation, calculation method, calculation agent andinformation regarding such calculation agent, numerical values used for
calculation, and the amount of synergy and dis-synergy expected to arise as aresult of a series of transactions relating to the Large-Scale Acquisition Action
and the calculation basis therefor);(viii) Financial support for the acquisition, etc., in connection with the Large-Scale
Acquisition Action (including specific names of the relevant fund providers(including substantial providers (whether direct or indirect)), financing methods,
conditions for financing, existence and terms of collateral and covenants after
the financing (if the Large-Scale Acquirer intends to execute a collateralagreement or any other agreement with a third party in respect of the Company’s
shares, etc., expected to be acquired through the Large-Scale Acquisition
Action, then the type of, the name of counterparty to, and the number of shares,
etc., involved in, such agreement, and other important matters shall also be
specifically indicated), and specific terms of the related transactions);(ix)

Expected management policies for the Company and its group after thecompletion of the Large-Scale Acquisition Action (including policies relating to
the position of the Company within the so-called “Sumitomo Group” to which
the Company belongs, as well as policies relating to treatment of the Company’s- 11 -

trade name (including treatment of the “Sumitomo” part of the corporate name),names of nominees for directors and statutory auditors expected to be dispatched
after the completion of the Large-Scale Acquisition Action, as well as their briefbackground and such other information (including information relating toexperience, etc., in the business of the Company and its group or in any similar
trade), business plan, financial plan, financing plan, investment plan, capital
policy, dividend policy, etc., (including plans to sell, offer as collateral, orotherwise dispose of the Company’s assets after the completion of the LargeScale Acquisition Action), and other policies of how, after the completion of theLarge-Scale Acquisition Action, the directors and officers, employees, business
partners, and customers of the Company and its group, and the local government
bodies in the areas where the Company’s factories, production facilities, etc., aresituated, and other interested parties will be treated);(x)

Policies for recouping funds invested for the purpose of the Large-Scale
Acquisition Action;(xi)

Regulated matters under domestic and foreign Laws and Regulations which may
be applicable to the Large-Scale Acquisition Action, and the feasibility ofobtaining necessary approvals, permissions, licenses, etc., from domestic andforeign governments or third parties under the Anti-Monopoly Law, the Foreign
Exchange and Foreign Trade Law, and other Laws and Regulations(additionally, an opinion of a qualified attorney shall be required with regard tothese matters);(xii) Possibility of maintaining domestic and foreign permissions, licenses, etc.,
required for the operation of the Group and possibility of complying withvarious domestic and foreign Laws and Regulations after the completion of theLarge-Scale Acquisition Action;(xiii) Whether there is any association with any antisocial forces or terrorist
organizations (whether directly or indirectly) and if there is deemed to be any
association, the details of the association as well as the policy to deal with theforegoing;(xiv) Such other information as the Board of Directors or the Corporate Value
Committee finds reasonably necessary where a written request for suchinformation is made to the Large-Scale Acquirer within five (5) business days,
as a general rule, from the day on which the Board of Directors receives thecomplete Intention Letter in the appropriate form.
(d) Setting of Assessment Period for the Board of Directors
The Board of Directors shall set a period for its assessment, review, Opinion
Formation, Alternative Proposal Formulation, and negotiation with the Large-Scale
Acquirer (hereinafter referred to as the “Board Assessment Period”) for the number ofdays set out in (i) or (ii) below (in either case, such period shall be calculated from theday on which the Company discloses that the Board of Directors has determined thatthe provision of the Large-Scale Acquisition Information is completed, but the first dayof such period shall not be counted for the purpose of such calculation), depending on
the contents of the Large-Scale Acquisition Action disclosed by the Large-Scale
Acquirer.
Unless otherwise provided in the Plan, the Large-Scale Acquisition Action shallcommence only after the expiration of the Board Assessment Period. It is noted thatsuch Board Assessment Period has been established in light of the difficulty in- 12 -

assessing and reviewing the Company’s business and the level of difficulty in Opinion
Formation, Alternative Proposal Formulation, etc.
(i)

In the event that all the shares, etc., of the Company are covered by the takeoverbid for consideration in cash (in Japanese yen) only: sixty (60) days or less;(ii)

In the event of the Large-Scale Acquisition Action except in the case of (i):ninety (90) days or less.

During the Board Assessment Period, the Board of Directors shall, based on the LargeScale Acquisition Information provided by the Large-Scale Acquirer, conduct theevaluation, review, Opinion Formation, Alternative Proposal Formulation, andnegotiation with the Large-Scale Acquirer in connection with the contemplated LargeScale Acquisition Action with a view to ensuring and enhancing the Company’s
corporate value and the shareholders’ common interests.
In conducting theevaluation, review, Opinion Formation, Alternative Proposal Formulation, andnegotiation with the Large-Scale Acquirer, the Board of Directors shall obtain advice,
as needed, from professional advisors (such as financial advisors, attorneys, andcertified public accountants) who are in the third party position and independent fromthe Board of Directors. Any and all expenses incurred therefor shall be borne by theCompany except in an exceptional case where it is found unreasonable.
Additionally, if there is an unavoidable situation where the Board of Directors is
unable to adopt a resolution on whether to initiate the countermeasure within the Board
Assessment Period because, for instance, the Corporate Value Committee is unable toprovide the recommendation specified in (f) below within the Board Assessment
Period, then the Board of Directors may extend the Board Assessment Period to theextent necessary up to thirty (30) days (The first day of the period shall not becounted.) based on a recommendation of the Corporate Value Committee. If theBoard of Directors decides to extend the Board Assessment Period, the specific numberof days so extended and the reason for such extension shall be disclosed in an
appropriate and timely manner in accordance with applicable Laws and Regulations aswell as the Financial Instruments Exchange Regulations.
(e) Establishment of the Corporate Value Committee
In the Current Plan, for the purpose of eliminating arbitrary decisions on the part of theBoard of Directors in respect of the invocation of the Plan, the Company has
established the Corporate Value Committee (hereinafter referred to as the “Corporate
Value Committee”), which shall consist of at least three (3) members from among
Outside Directors and Outside Statutory Auditors (including alternates thereof) as well
as experts, who shall be independent from the management operating the Company’sbusiness, and the Company will also continue to establish the Corporate Value
Committee under the Plan.
The Corporate Value Committee may obtain advice, as needed, from professional
advisors (such as financial advisors, attorneys, and certified public accountants) who
are in the third party position and independent from the Board of Directors and the
Corporate Value Committee. Any and all expenses incurred in obtaining such advice
shall be borne by the Company except in an exceptional case where it is foundunreasonable.
As a general rule, resolutions of the Corporate Value Committee shall be adopted by
the majority of all the members at a meeting where all the incumbent committee
members are present. However, in the disability of any member, or if there is anyother justifiable reason, such resolutions may be adopted by the majority of the- 13 -

members present at a meeting where the majority of the independent members arepresent.
(f) Procedures for Recommendations of the Corporate Value Committee and Resolutions
by the Board of Directorsa.

Recommendations of the Corporate Value Committee
During the Board Assessment Period, the Corporate Value Committee shall makerecommendations to the Board of Directors with regard to the relevant LargeScale Acquisition Action as set forth in (i) through (iii) below.
(i)When any of the Large-Scale Acquisition Rules is not complied with:
If the Large-Scale Acquirer breaches any of the Large-Scale Acquisition
Rules in a material respect, and such breach is not cured within five (5)business days after the Board of Directors gives such Large-Scale Acquirer
a written request to cure such breach (The first day of the period shall not becounted.), then as a general rule, the Corporate Value Committee shallrecommend that the Board of Directors take the countermeasure against theLarge-Scale Acquisition Action except where it is clearly necessary to
refrain from initiating the countermeasure or when any other particular
circumstances exist in order to ensure and enhance the Company’s corporate
value and eventually the shareholders’ common interests.
If suchrecommendation is made, the Company shall disclose the Corporate Value
Committee’s opinion, reasons therefor, and such other information as foundappropriate, in an appropriate and timely manner in accordance withapplicable Laws and Regulations as well as the Financial Instruments
Exchange Regulations.
Additionally, even after the Corporate Value Committee has recommended
that the Board of Directors initiate the countermeasure, if the Large-Scale
Acquisition Action is withdrawn, or if otherwise the facts and othercircumstances that formed the basis for such recommendation are altered,then the Corporate Value Committee may recommend that the Board of
Directors discontinue the countermeasure, or make other recommendations.
If such further recommendation is made, the Company shall also disclose
the Corporate Value Committee’s opinion, reasons therefor, and such otherinformation as found appropriate, in an appropriate and timely manner inaccordance with applicable Laws and Regulations as well as the Financial
Instruments Exchange Regulations.

(ii) When the Large-Scale Acquisition Rules are complied with:
When the Large-Scale Acquirer complies with the Large-Scale Acquisition
Rules, the Corporate Value Committee shall, as a general rule, recommendthat the Board of Directors refrain from initiating the countermeasure.
However, even if the Large-Scale Acquisition Rules are complied with, theCorporate Value Committee shall recommend that the Board of Directors
initiate the countermeasure against such Large-Scale Acquisition Action ifsuch Large-Scale Acquirer is recognized as having any of the circumstances
set out in (A) through (J) below, and if it is found reasonable to initiate suchcountermeasure.
(A) When the Large-Scale Acquirer does not have a true intention ofparticipating in the management of the Company, but acquires theCompany’s shares, etc., for the purpose of making parties concerned- 14 -

with the Company buy back the shares at an inflated stock price (socalled “green mailer”), or when the main purpose of acquiring theCompany’s shares, etc., is to earn a short-term margin;(B) When the main purpose of participating in the management of theCompany is to temporarily control the management of the Company
and cause it to transfer to the Large-Scale Acquirer, its groupcompanies, etc., the Company’s intellectual property, know-how, trade
secrets, major business partners and customers, which are essential to
the Company’s business operation;(C) When the Large-Scale Acquirer is acquiring the Company’s shares with
the intention of inappropriately utilizing the Company’s assets as
collateral or funds for repayment of obligations of such Large-Scale
Acquirer, its group companies, etc., after taking control over the
management of the Company (Provided, however, that the initiation of
the countermeasures shall be determined based on whether the fact
exists that the Company’s corporate value and eventually theshareholders’ common interests would be impaired. The Company
shall not initiate the countermeasures merely because this item (C)formally applies.);(D) When the main purpose of participating in the management of theCompany is to temporarily control the management of the Company
and sell or otherwise dispose of its real properties, securities, and otherhigh-priced assets, which are irrelevant to the Company’s business forthe time being, and then distribute high dividends temporarily withgains from such disposition or sell the shares at a high price, seizing thetiming of a sharp rise of the stock price due to temporary high dividend
payments (Provided, however, that the initiation of the countermeasures
shall be determined based on whether the fact exists that the Company’s
corporate value and eventually the shareholders’ common interests
would be impaired.
The Company shall not initiate thecountermeasures merely because this item (D) formally applies.);(E) When, upon acquiring the Company’s shares, the Large-Scale Acquirer,
who shows no particular interest or intention to be involved in the
Company’s management, uses every possible means to achieve the sole
purpose of making capital gains on a short to medium term basis
through resale of the Company’s shares back to the Company or to athird party, just in pursuit of the Large-Scale Acquirer’s own profit andeven to the point of considering an option to dispose of the Company’s
assets;(F) When it is determined on reasonable grounds that the conditions
proposed by the Large-Scale Acquirer for acquisition of the Company’s
shares, etc., (including, but not limited to, type of consideration for
acquisition, price, calculation basis therefor, contents, timing, method,illegality, and feasibility) are insufficient or inappropriate in light of theCompany’s corporate value;(G) When the method of acquisition proposed by the Large-Scale Acquirer
is such an oppressive method that the shareholders’ opportunity forassessment or freedom may be restricted due to the structure of suchmethod, as exemplified by two-tiered acquisition (acquisition of shares,- 15 -

etc., in a manner wherein the terms for the second-stage acquisition are
set more disadvantageous or are unclear if all of the Company’s sharesare not acquired at the first-stage of acquisition, or otherwise concernsof the future liquidity of the Company’s shares, etc., are raised bysuggesting delisting, etc., and thereby the shareholders are effectively
coerced into accepting the acquisition);(H) When, as a result of the Large-Scale Acquirer’s acquisition of control
over the Company, it is likely that the interests of the shareholders,customers, employees, and other interested parties of the Company may
be impaired, and consequently, the Company’s corporate value may
substantially deteriorate, or it would become extremely difficult toensure and enhance the Company’s corporate value, or it is determinedin a reasonable manner that the Company’s trustful relationship withcustomers, employees, and other interested parties or the Company’s
brand value may be ruined where they are essential for creating theCompany’s value, or when it is determined that, in the mid- and longterm, the Company’s corporate value resulting from the Large-Scale
Acquirer’s taking of control over the Company would be apparently
inferior to the Company’s corporate value where the Large-Scale
Acquirer does not take control over the Company;(I) When it is determined on reasonable grounds that the Large-Scale
Acquirer would be unsuitable as the Company’s controlling shareholder
in light of public order and good morals; for instance, where the LargeScale Acquirer’s management or any of its major shareholders orinvestors is a party associated with antisocial forces or terrorist
organizations;(J) When it is otherwise determined that the Company’s corporate value
and eventually the shareholders’ common interests would besignificantly harmed under circumstances similar to those set out in (A)through (I).
Additionally, the procedures set out in (i) above shall apply mutatis
mutandis to the disclosure procedures relating to such recommendation or
the procedures relating to the subsequent further recommendation.
(iii) Other recommendations, etc., by the Corporate Value Committee
In addition to the above, the Corporate Value Committee may give theBoard of Directors recommendations, as necessary, on any matterappropriate in view of the maximization of the shareholders’ common
interests, or make determinations, etc., on abandonment of thecountermeasure where permitted by certain Laws and Regulations.
Additionally, the procedures set out in (i) above shall apply mutatis
mutandis to the disclosure procedures relating to such recommendation or
the procedures relating to the subsequent further recommendation.
b.

Resolutions by the Board of Directors
In the event that the Board of Directors determines, upon placing the maximum
value on the Corporate Value Committee’s recommendation, that certain criteria
set out in the “Guideline Concerning Large-Scale Acquisitions” (hereinafterreferred to as the “Guideline”; such Guideline is outlined in Annex 3) are met,then the Board of Directors shall adopt a resolution for initiating or not initiating- 16 -

the countermeasure, suspending the countermeasure, or any other necessary
resolution. Additionally, even when the Corporate Value Committee makes arecommendation of not initiating the countermeasure, the Board of Directors may,upon placing the maximum value on the Corporate Value Committee’s
recommendation, adopt a resolution to initiate the countermeasure if the Board of
Directors finds that there are circumstances due to which the directors’ fiduciary
duty (zenkan chui gimu) is likely to be violated by complying with such
recommendation, or choose not to adopt a resolution to initiate thecountermeasure and then convene a general meeting of shareholders to present
before the shareholders the question of whether to initiate the countermeasure.
Upon adopting such resolution, the Company shall disclose the opinion of theBoard of Directors, reasons therefor, and such other information as foundappropriate, in an appropriate and timely manner in accordance with applicable
Laws and Regulations as well as the Financial Instruments Exchange Regulations.

c.

Convening of a general meeting of shareholders
If the Board of Directors determines, in its own judgment, that a general meetingof shareholders should be held in order to present to the shareholders the questionof whether to initiate the countermeasure under the Plan, then the Board of
Directors shall convene the general meeting of shareholders. In such event, therelevant Large-Scale Acquisition Action shall be carried out after the motion for
initiating the countermeasure is rejected at the general meeting of shareholders,and such general meeting of shareholders is closed. If the motion for initiating
the countermeasure under the Plan is rejected at such general meeting ofshareholders, the countermeasure under the Plan shall not be initiated against therelevant Large-Scale Acquisition Action.
Additionally, even after the convocation procedures for such general meeting ofshareholders are taken, if the Board of Directors subsequently adopts a resolution
not to initiate the countermeasure, or the Board of Directors comes to find it
reasonable to adopt a resolution to initiate the countermeasure, then the Company
may cancel the procedures for convening the general meeting of shareholders.
In the event of the adoption of such resolution, the Company shall also disclose
the opinion of the Board of Directors, reasons therefor, and such other information
as found appropriate, in an appropriate and timely manner in accordance withapplicable Laws and Regulations as well as the Financial Instruments Exchange
Regulations.

(g) Modification of Large-Scale Acquisition Information
After the Company discloses its determination that the provision of the Large-Scale
Acquisition Information under the provisions in (c) above has been completed, if theBoard of Directors determines that any material modification has been made by theLarge-Scale Acquirer to the Large-Scale Acquisition Information, then the Company
shall disclose to that effect, together with reasons therefor, and such other information
as found appropriate, in an appropriate and timely manner in accordance withapplicable Laws and Regulations as well as the Financial Instruments Exchange
Regulations, and thereupon the procedures under the Plan in connection with theLarge-Scale Acquisition Action based on the previous Large-Scale Acquisition
Information (hereinafter referred to as the “Earlier Large-Scale Acquisition Action”)
shall be discontinued, and the Large-Scale Acquisition Action based on the modified
Large-Scale Acquisition Information shall be treated as another Large-Scale
Acquisition Action, separate from the Earlier Large-Scale Acquisition Action, and theprocedures under the Plan shall apply anew to such action. However, in making suchdetermination, the Board of Directors shall place the maximum value on the Corporate- 17 -

Value Committee’s opinion.
(h) Specific contents of the countermeasure
The countermeasure to be initiated by the Company against the Large-Scale
Acquisition Action under the Plan shall be either gratuitous allotment of stockacquisition rights as set forth in Article 277 and subsequent provisions, of the
Corporation Law (stock acquisition rights so allotted shall be referred to as “Stock
Acquisition Rights” hereinafter) or such other measure as determined most appropriate
at that time by the Board of Directors in light of the Corporate Value Committee’sviews, where such countermeasure shall be found necessary and reasonable to ensure
the maximization of the Group’s corporate value and eventually the shareholders’common interests or otherwise to protect the foregoing.
The outline of gratuitous allotment of Stock Acquisition Rights as the countermeasureagainst the Large-Scale Acquisition Action is as set out in Annex 4, but when the Stock
Acquisition Rights are actually distributed as gratuitous allotment, the exercise period,
conditions for exercise, terms for acquisition, etc., including an exercise condition to
the effect that the right may not be exercised by any Excluded Parties, shall be
provided, as needed, by taking into consideration their effectiveness andreasonableness as the countermeasure against the Large-Scale Acquisition Action.

4.

Continuance of Takeover Defense Measures under the Plan and Duration, Continuance,
Abolishment, Amendment, etc., of the Plan
In continuing the takeover defense measures under the Plan, the Company shall submit a
proposal for approval of the continuance of takeover defense measures under the Plan to theOrdinary General Meeting of Shareholders in order to provide the opportunity to appropriatelyreflect the intentions of shareholders.
The Plan shall remain effective from the time when the proposal for approval of the continuingof takeover defense measures under the Plan is adopted at the Ordinary General Meeting of
Shareholders until the closing of the ordinary general meeting of shareholders for the last of the
fiscal years ending within three (3) years from the closing of the Ordinary General Meeting of
Shareholders. However, if prior to the expiration of such effective period, (i) a proposal for
abolishing the Plan is approved at a general meeting of shareholders of the Company, or (ii) the
Board of Directors adopts a resolution to abolish the Plan, then the Plan shall be abolished atsuch time. This means that the Plan may be abolished at any time in accordance with theshareholders’ intention. In addition, if the proposal for approval of the continuing of takeover
defense measures under the Plan is not adopted at the Ordinary General Meeting of
Shareholders, the Revision shall not become effective and the Current Plan shall be terminatedat the closing of the Ordinary General Meeting of Shareholders.
At the meeting of the Board of Directors to be held promptly after the closing of the ordinary
general meeting of shareholders of the Company after the Ordinary General Meeting of
Shareholders, the Plan shall be reviewed to determine whether to continue, abolish, or amend
the Plan, and if necessary, a resolution shall be adopted as required.
Furthermore, from the viewpoint of securing and enhancing the corporate value and eventually
the shareholders’ common interests, the Board of Directors may, upon obtaining approval of
the Corporate Value Committee, reexamine or amend the Plan as needed, to the extent notcontravening the Plan, or to the extent considered reasonably necessary due to an amendment
to Laws and Regulations as well as the Financial Instruments Exchange Regulations, or achange in the interpretation or operation of the foregoing, or a change in the taxation system orcourt cases.

- 18 -

In the event that a resolution is adopted to abolish or otherwise amend the Plan, the Company
shall disclose such matters as the Board of Directors or the Corporate Value Committee finds
appropriate, in an appropriate and timely manner in accordance with applicable Laws andRegulations as well as the Financial Instruments Exchange Regulations.
Incidentally, at present, there exists no proposal for a specific Large-Scale Acquisition Action
in respect of the Company’s shares.

5.

Impact on Shareholders and Investors(1) Impact on Shareholders and Investors upon Changing the Current Plan to the Plan throughthe Revision
At the time of changing the Current Plan to the Plan through the Revision, gratuitous
allotment of Stock Acquisition Rights will not be made. Accordingly, there will be no
direct, concrete impact on the rights and economic interests of the shareholders andinvestors when the Plan or the Revision becomes effective.
(2) Impact on Shareholders and Investors upon Making Gratuitous Allotment of Stock
Acquisition Rights
The Board of Directors may initiate the countermeasure under the Plan against a LargeScale Acquisition Action for the purpose of securing and enhancing the corporate value andeventually the shareholders’ common interests, and given the structure of thecountermeasure currently anticipated, the per share value of the Company’s shares held is
expected to be diluted at the time of gratuitous allotment of Stock Acquisition Rights, but
because the value of the whole shares of the Company would not be diluted, it is not
anticipated that this would bring any direct, concrete impact on the legal rights andeconomic interests of the shareholders and investors.
However, with respect to the Excluded Parties, if the countermeasure is initiated, there may
be some impact as a result on the legal rights and economic interests of such party.
In addition, if a resolution of gratuitous allotment of Stock Acquisition Rights is adopted inconnection with the countermeasure, and after the shareholders to receive gratuitous
allotment of Stock Acquisition Rights are fixed, if the Company suspends gratuitous
allotment of Stock Acquisition Rights, or acquires, without value, Stock Acquisition Rights
once allotted gratuitous, then because the per share value of the Company’s stock will not be
diluted as a result, any investor who has sold or purchased the Company’s shares on theassumption that the per share value of the Company’s shares would be diluted may suffer afair amount of loss due to stock price fluctuations.
The procedures to be taken by the shareholders for exercise and acquisition of Stock
Acquisition Rights gratuitously allotted are as set forth below.
(i)

Procedures for gratuitous allotment of Stock Acquisition Rights:
In the event that the Board of Directors adopts a resolution to make gratuitous
allotment of Stock Acquisition Rights, the Company shall fix the record date forallotment of Stock Acquisition Rights and publicly announce the same in accordancewith Laws and Regulations and the Company’s Articles of Incorporation. In such acase, the Stock Acquisition Rights shall be allotted to the shareholders registered on thelast register of shareholders on the relevant record date in proportion to the number ofshares held by them respectively.
If Stock Acquisition Rights are to be gratuitously allotted, the shareholders who are- 19 -

registered on the last register of shareholders on the record date shall all become
holders of the Stock Acquisition Rights as a matter of course on the effective date ofgratuitous allotment of the Stock Acquisition Rights.
(ii) Procedures for Exercise or Acquisition of Stock Acquisition Rights
The Company shall send to the shareholders registered on the last register ofshareholders on the record date a request form for exercise of Stock Acquisition Rights(such form shall be prescribed by the Company, and may include the statement
declaring that the shareholder is not an Excluded Party) and other documents required
for the exercise of such Stock Acquisition Rights. If the terms of acquisition of Stock
Acquisition Rights are not provided and the Company does not intend to acquire theStock Acquisition Rights, when any of the shareholders pays one (1) yen for each
Stock Acquisition Right at the place designated for such payment and also submits thenecessary documents within the exercise period for Stock Acquisition Rights to be
separately prescribed by the Board of Directors, the Company’s common shares shallbe issued to such shareholder in the number to be separately prescribed by the Board of
Directors, which number shall be 0.5 or more but not more than 1 share for each Stock
Acquisition Right. However, no Excluded Party may be allowed to exercise such
Stock Acquisition Rights.
On the other hand, if the terms of acquisition of Stock Acquisition Rights are provided
and the Company intends to acquire Stock Acquisition Rights, the shareholders may
receive the Company’s common shares as consideration for the Company’s acquisitionof such Stock Acquisition Rights without paying the amount otherwise payable as theexercise price (additionally, in such event, the shareholders may be required toseparately present a document for identity verification and documents containing
information concerning the account for book-entry transfer of the Company’s commonshares as well as a document wherein the relevant shareholder declares, among otherthings, that such shareholder is not an Excluded Party, and that such shareholder shallimmediately return the Company’s shares so issued if such declaration turns out to befalse). However, as stated above, with regard to the Excluded Parties, their Stock
Acquisition Rights may not be eligible for acquisition, or may be otherwise treateddifferently from those of the other shareholders.
Details for these procedures shall be disclosed in an appropriate and timely manner inaccordance with applicable Laws and Regulations as well as the Financial Instruments
Exchange Regulations when an actual situation occurs to require such procedures, andthe contents of such disclosure are to be reviewed.

6.

Reasonableness of the Plan
The Plan meets three principles as stipulated in the “Guidelines Regarding Takeover Defense
for the Purpose of Protection and Enhancement of Corporate Value and Shareholders’Common Interests” released by the Ministry of Economy, Trade and Industry and the Ministryof Justice on May 27, 2005: (i) principle of protection and enhancement of corporate value andthe interests of shareholders as a whole, (ii) principle of prior disclosure and shareholders’ will,and (iii) principle of ensuring necessity and reasonableness; and the details of the Plan are
based on the practical affairs and discussions regarding the takeover defense measures such as
the “Takeover Defense Measures in Light of Recent Environmental Changes” released on June30, 2008 by the Corporate Value Study Group established within the Ministry of Economy,
Trade and Industry, and thus the Plan is highly reasonable.
(1) Ensuring and Enhancing of Corporate Value and eventually Shareholders’ Common
Interests- 20 -

As indicated in 3. (1) above, the purpose of the Plan is to ensure and enhance theCompany’s corporate value and eventually the shareholders’ common interests by ensuring,
through requesting the Large-Scale Acquirer to provide necessary information relating to
the relevant Large-Scale Acquisition Action in advance and to allow a period fordeliberation and negotiation, that the shareholders make appropriate assessment as towhether to accept such Large-Scale Acquisition Action, and that the Board of Directors,
upon receiving recommendations of the Corporate Value Committee, presents its view
toward such Large-Scale Acquisition Action or the Alternative Proposal to the shareholders,or negotiates with the Large-Scale Acquirer for the benefit of the shareholders.
(2) Prior Disclosure
The Company makes prior disclosure of the Plan in order to increase the predictability forthe shareholders and investors as well as the Large-Scale Acquirer and secure a fair
opportunity for the shareholders to make a choice.
Also in the future, the Company intends to make appropriate and timely disclosure asneeded in accordance with applicable Laws and Regulations as well as the Financial
Instruments Exchange Regulations.
(3) Emphasis on Shareholders’ Intention
The Company intends to ascertain the shareholders’ intention by submitting the proposal ofcontinuance of takeover defense measures under the Plan for approval at the Ordinary
General Meeting of Shareholders. As stated above, if a proposal for abolishing the Plan isapproved at the general meeting of shareholders of the Company, the Plan shall be
discontinued at such time, and as such, the continuance of the Plan is up to the shareholders.
(4) Procurement of Outside Experts’ Opinion
As indicated in 3. (2) (d) above, in taking the countermeasure, the Board of Directors willconduct a deliberation upon obtaining advice of outside professional advisors (such as
financial advisors, attorneys, and certified public accountants) as needed. In this way, theobjectivity and reasonableness will be secured with respect to determinations of the Boardof Directors.
(5) Establishment of the Corporate Value Committee
As indicated in 3. (2) (e) above, the Company will establish the Corporate Value Committee
in order to ensure the necessity and reasonableness of the Plan and prevent the managementfrom abusing the Plan for their own protection, and in the event that the Board of Directors
initiates the countermeasure, the Board of Directors shall place the maximum value on the
Corporate Value Committee’s recommendation in order to ensure fairness in decisions of
the Board of Directors and eliminate arbitrary decisions on the part of the Board of
Directors.
(6) Establishment of the Guideline
In order to prevent the Board of Directors from making arbitrary decisions and treatment invarious procedures under the Plan and to ensure procedural transparency, the Company has
established the Guideline as an internal policy incorporating objective requirements. The
establishment of the Guideline will increase the objectivity and transparency of the policy to
be relied upon in making decisions to initiate, not to initiate, or to suspend thecountermeasure, and provide sufficient predictability with respect to the Plan (see Annex 3for the outline of the Guideline).
(7) No Dead-Hand or Slow-Hand Takeover Defense Measures
As stated in 4. above, because the Plan may be abolished at any time at the general meetingof shareholders of the Company or by the Board of Directors comprising the directors
appointed at the general meeting of shareholders, it is neither the so-called “dead-hand” type- 21 -

takeover defense measure (a takeover defense measure which cannot be prevented frombeing initiated even if the majority of members on the board of directors is replaced) nor theso-called “slow-hand” type takeover defense measure (a takeover defense measure which
requires more time before being blocked because the members on the board of directors
cannot be replaced all at once).
END- 22 -

(Annex 1)
Information of Large Shareholders

Names of Shareholders(as of March 31, 2011)
Shareholding in the Company
Number of shares held
Shareholding ratio (%)(In thousands of shares)
95,17415.5
43,421
7.1
37,1706.0
22,976
3.7
18,763
3.1
15,531
2.5
13,831
2.3
11,383
1.9
10,8591.8
10,443
1.7

Japan Trustee Services Bank, Ltd.
The Master Trust Bank of Japan, Ltd.
State Street Bank and Trust Company
Sumitomo Life Insurance Company
Trust & Custody Services Bank, Ltd.
Sumitomo Mitsui Banking Corporation
JP Morgan Chase BankThe Chase Manhattan Bank
Sumitomo Heavy Industries, Ltd. Kyoei-kai
Mellon Bank.
(Notes)1. The shareholding ratios are calculated excluding the Company’s treasury stock (123,181
shares).
2. The number of shares held by each trust bank includes the number of shares pertaining to its
trust business.
3. Shares (as of March 31, 2011)(1) Total number of authorized shares: 1,800,000,000 shares(2) Total number of issued shares:
614,527,405 shares(3) Number of shareholders:
60,453- 23 -

(Annex 2)
FLOW OF PROCEDURES UNDER THE PLAN
[Outline of Large-Scale Acquisition Rules]

Large-Scale
Acquisition
Action may becommenced

Completion ofsubmission of LargeScale Acquisition
Information

Provision of LargeScale Acquisition
Information

Submission ofIntention Letter

Large-Scale
Acquirer

Board Assessment Period
60 days or less / 90 days or less
Extendable for up to 30 days

Within 5 business days
*2

*1

Public announcementof the opinion by the
Board of Directors

Board of Directors

Necessary Information
Provision Period
Up to 60 business days

*1: If the Board of Directors determines that, solely on the basis of the information provided initially, it would
be difficult for the shareholders to appropriately determine whether to accept the Large-Scale Acquisition
Action, or for the Board of Directors or the Corporate Value Committee to form an opinion as to theacceptability of such Large-Scale Acquisition Action (hereinafter referred to as the “Opinion Formation”)
or for the Board of Directors to devise an alternative proposal (hereinafter referred to as the “Alternative
Proposal Formulation”) and present the same to the shareholders in an appropriate manner, then the Boardof Directors may, upon fixing a reasonable period (up to sixty (60) business days from the day on which
the Board of Directors receives the Intention Letter (The first day of the period shall not be counted)(hereinafter referred to as the “Necessary Information Provision Period”) before the submission deadline,
disclose the period so fixed and the reasons for requiring such reasonable period to the shareholders, andrequest that the Large-Scale Acquirer at any time provide additional information necessary for theshareholders’ appropriate assessment and for the Opinion Formation by the Board of Directors or the
Corporate Value Committee or for the Alternative Proposal Formulation by the Board of Directors.
However, in such event, the Board of Directors shall place the maximum value on the Corporate Value
Committee’s opinion.
*2: In the event that all the shares, etc., of the Company are covered by the takeover bid for consideration in
cash (in Japanese yen) only: sixty (60) days or less (The first day of the period shall not be counted.); or in
the event of any other Large-Scale Acquisition Action: ninety (90) days or less (The first day of the period
shall not be counted.). Additionally, if there is an unavoidable situation where the Board of Directors is
unable to adopt a resolution on whether to initiate the countermeasure within the Board Assessment Period
because, for instance, the Corporate Value Committee is unable to provide the prescribed recommendation
within the Board Assessment Period, then the Board of Directors may extend the Board Assessment Period
to the extent necessary up to thirty (30) days (The first day of the period shall not be counted.) based on arecommendation of the Corporate Value Committee.
*3: The Corporate Value Committee shall make recommendations to the Board of Directors as needed.
*4: The Board of Directors shall, as needed, present to the shareholders an alternative business plan to replace
the acquisition proposal, the business plan, etc., presented by the relevant Large-Scale Acquirer, or shallnegotiate with the Large-Scale Acquirer for the benefit of the shareholders.
*5: If the Board of Directors determines, in its own judgment, that a general meeting of shareholders should beheld in order to present to the shareholders the question of whether to initiate the countermeasure under the- 24 -

Plan, then the Board of Directors shall convene the general meeting of shareholders.

- 25 -

[Outline Relating to Initiation of Countermeasure]

Emergence of Large-Scale Acquirer

Compliance with

Non-Compliance with

Large-Scale Acquisition Rules

Large-Scale Acquisition Rules

Corporate Value Committee

Corporate Value Committee

As a general rule, theCommittee shallrecommend that thecountermeasure not be
initiated, but in the case ofan abusive acquirer, theCommittee shallrecommend initiating thecountermeasure.

As a general rule, theCommittee shallrecommend initiating thecountermeasure.

Board of Directors

Board of Directors*1*2

General Meeting of
Shareholders

General Meeting of
Shareholders

Countermeasure to be blocked,
suspended, etc.

*1:
*2:

Countermeasure to be initiatedCountermeasure to be initiated if determined that it is the case of an Abusive Acquirer.
Countermeasure to be blocked, suspended, etc., if determined that it is not the case of an
Abusive Acquirer.

Note: (Annex 2) summarizes the flow of the procedures under the Plan. Please refer to the main
text of this release for more details.

- 26 -

(Annex 3)
GUIDELINE CONCERNING LARGE-SCALE ACQUISITION ACTIONS (OUTLINE)
1.

PurposeIn connection with the countermeasures to be taken with regard to the Large-Scale Acquisition
Actions of the Company’s shares (hereinafter referred to as the “Plan”), the Guideline
Concerning the Large-Scale Acquisition Actions (hereinafter referred to as the “Guideline”) isintended to provide the procedures and principles in advance so that, when any Large-Scale
Acquirer (as defined immediately below) emerges, the Board of Directors and the Corporate
Value Committee (as defined below in 6.) may adopt resolutions to initiate or refrain frominitiating the countermeasure of gratuitous allotment of stock acquisition rights, and take othernecessary actions, with a view to ensuring and enhancing the Company’s corporate value andeventually the shareholders’ common interests.
For purposes of the Guideline, a “Large-Scale Acquisition Action” refers to any of the actions
which fall or could fall under (i) through (iii) below (except those approved in advance by the
Board of Directors), and a “Large-Scale Acquirer” refers to the party who will attempt or has
attempted to take such Large-Scale Acquisition Action.
(i) Takeover bid or other acquisition3 in respect of the shares, etc., issued by the Company1,
as a result of which the percentage2 of such shares, etc., held by a specified shareholder of
the Company would become 20% or more.
(ii) Takeover bid or other acquisition7 in respect of the shares, etc., issued by the Company4,
as a result of which the percentage5 of such shares, etc., owned by a specified shareholderof the Company and the percentage of such shares, etc., owned by any special interested
party6 of such specified shareholder would become 20% or more.
(iii) Irrespective of whether either of the actions set out in (i) or (ii) above is carried out, anagreement or other action by and between a specified shareholder of the Company and anyother shareholder(s) of the Company (including the case where more than one othershareholder is involved; the same shall apply hereinafter in this (iii)) whereby such othershareholder(s) fall under the status of co-holder8 of such specified shareholder, or an
action10 which establishes a relationship between such specified shareholder and suchother shareholder(s) wherein either one substantially controls the other, or they operate incollaboration or coordination9 (provided that this shall apply only if, in respect of theshares, etc., issued by the Company, the aggregate percentage of the shares, etc., held bysuch specified shareholder and such other shareholder(s) of the Company would become
20% or more).
————————————
1

Refers to shares, etc., as defined in Article 27-23, paragraph 1, of the Financial Instruments and Exchange
Law. The same shall apply hereinafter unless otherwise provided.

2

Refers to the share holding percentage as defined in Article 27-23, paragraph 4, of the Financial
Instruments and Exchange Law. The same shall apply hereinafter except that, for the purpose of
calculating such share holding percentage, (i) any special interested party as defined in Article 27-2,
paragraph 7, of said Law, and (ii) any investment bank, securities company, or other financial institution
which has executed a financial advisory agreement with a specified shareholder of the Company, as well as
the takeover bid agent or the lead managing securities company (hereinafter referred to as the “Contracting
Financial Institution(s)”) for a specified shareholder of the Company shall be deemed as a co-holder (asdefined in Article 27-23, paragraph 5, of the Financial Instruments and Exchange Law; the same shall apply
hereinafter) of the relevant Large-Scale Acquirer for purposes of the Plan. Additionally, for the purposeof calculating such share holding percentage, the most recent information publicly announced by theCompany may be used for the aggregate number of the Company’s issued shares.

- 27 -

3

Includes ownership of the right to claim delivery of shares, etc., under a sale/purchase or other agreement
and execution of the respective transactions set forth in Article 14-6 of the Enforcement Ordinance forFinancial Instruments and Exchange Law.

4

Refers to shares, etc., as defined in Article 27-2, paragraph 1, of the Financial Instruments and Exchange
Law. The same shall apply in this (ii).

5Refers to the share ownership percentage as defined in Article 27-2, paragraph 8, of the Financial
Instruments and Exchange Law. The same shall apply hereinafter. Additionally, for the purpose of
calculating such share ownership percentage, the most recent information publicly announced by theCompany may be used for the aggregate number of the Company’s voting rights.

6

Refers to a special interested party as defined in Article 27-2, paragraph 7, of the Financial Instruments andExchange Law; provided that, with respect to the parties indicated in item 1 of said paragraph, the party
specified in Article 3, paragraph 2, of the Cabinet Ordinance Concerning Disclosure of Takeover Bid of
Shares, etc., by Parties Other than Issuer shall be excluded. Additionally, (i) co-holders and (ii)Contracting Financial Institutions shall be deemed as special interested parties of such Large-Scale
Acquirer for purposes of the Plan. The same shall apply hereinafter.

7

Includes an acquisition or other assignment for value as well as those similar to assignment for value asprovided in Article 6, paragraph 3, of the Enforcement Ordinance for Financial Instruments and Exchange
Law.

8

Refers to the co-holder as defined in Article 27-23, paragraph 5, of the Financial Instruments and Exchange
Law. The same shall apply hereinafter.

9

The determination of whether “a relationship ... wherein either one substantially controls the other, or they
operate in collaboration or coordination” has been established shall be made on the basis of the formation ofa new capital relationship, business alliance, transactional or contractual relationship, relationships
concerning interlocking directors and officers, funds provision relationship, credit offering relationship,
substantial interest concerning the share certificates, etc., of the Company through derivatives or stock
lending, etc., or other relationships, as well as the impact, etc., directly or indirectly brought upon the
Company by such specified shareholder or such other shareholder(s).

10 The determination of whether an action specified in (iii) above has been taken shall be reasonably made by
the Board of Directors based on recommendations by the Corporate Value Committee. In addition, theBoard of Directors may request the Company’s shareholders to provide necessary information to the extent
found necessary for the determination of whether the requirements under (iii) apply.

- 28 -

2.

Initiation of Countermeasure(1) If the Large-Scale Acquirer breaches any of the procedures set out in the Plan (hereinafterreferred to as the “Large-Scale Acquisition Rules”) in a material respect (including the cases
where the Large-Scale Acquirer fails to provide additional, necessary information within areasonable period prescribed by the Board of Directors (up to sixty (60) business days from theday on which the Board of Directors receives the Intention Letter (The first day of the period
shall not be counted.), and where the Large-Scale Acquirer refuses to have discussions or
negotiations with the Board of Directors), and such breach is not cured within five (5) businessdays after the Board of Directors gives such Large-Scale Acquirer a written request to curesuch breach (The first day of the period shall not be counted.), then as a general rule, theCorporate Value Committee shall recommend that the Board of Directors take thecountermeasure, or (2) even if the Large-Scale Acquirer complies with the Large-Scale
Acquisition Rules, the Corporate Value Committee shall recommend that the Board of
Directors initiate the countermeasure if such Large-Scale Acquirer is recognized as having anyof the circumstances set out in (A) through (J) below (hereinafter referred to as the “Abusive
Acquirer”), and if it is found reasonable to initiate such countermeasure, and the Board of
Directors shall, upon placing the maximum value on the Corporate Value Committee’s
recommendation, adopt a resolution to initiate the countermeasure.
However, even after the Corporate Value Committee has recommended that the Board of
Directors initiate the countermeasure, if the Large-Scale Acquisition Action is withdrawn, or if
otherwise the facts and other circumstances that formed the basis for such recommendation arealtered, then the Corporate Value Committee may recommend that the Board of Directors
discontinue the countermeasure, or make other recommendations, and if the Board of Directors
finds that the directors’ fiduciary duty (zenkan chui gimu) is likely to be violated by placing the
maximum value on the Corporate Value Committee’s recommendation and complying withsuch recommendation, then the Board of Directors may choose to adopt or not to adopt a
resolution to initiate the countermeasure, and then convene a general meeting of shareholders
to present before the shareholders the question of whether to initiate the countermeasure.
(A) When the Large-Scale Acquirer does not have a true intention of participating in the
management of the Company, but acquires the Company’s shares, etc., for the purpose of
making parties concerned with the Company buy back the shares at an inflated stock price(so-called “green mailer”), or when the main purpose of acquiring the Company’s shares,
etc., is to earn a short-term margin;(B) When the main purpose of participating in the management of the Company is totemporarily control the management of the Company and cause it to transfer to the LargeScale Acquirer, its group companies, etc., the Company’s intellectual property, knowhow, trade secrets, major business partners and customers, which are essential to theCompany’s business operation;(C) When the Large-Scale Acquirer is acquiring the Company’s shares with the intention of
inappropriately utilizing the Company’s assets as collateral or funds for repayment of
obligations of such Large-Scale Acquirer, its group companies, etc., after taking control
over the management of the Company (Provided, however, that the initiation of thecountermeasures shall be determined based on whether the fact exists that the Company’s
corporate value and eventually the shareholders’ common interests would be impaired.
The Company shall not initiate the countermeasures merely because this item (C)formally applies.);(D) When the main purpose of participating in the management of the Company is totemporarily control the management of the Company and sell or otherwise dispose of its
real properties, securities, and other high-priced assets, which are irrelevant to the- 29 -

Company’s business for the time being, and then distribute high dividends temporarily
with gains from such disposition or sell the shares at a high price, seizing the timing of a
sharp rise of the stock price due to temporary high dividend payments (Provided,
however, that the initiation of the countermeasures shall be determined based on whether
the fact exists that the Company’s corporate value and eventually the shareholders’common interests would be impaired.
The Company shall not initiate thecountermeasures merely because this item (D) formally applies.);(E) When, upon acquiring the Company’s shares, the Large-Scale Acquirer, who shows noparticular interest or intention to be involved in the Company’s management, uses every
possible means to achieve the sole purpose of making capital gains on a short to medium
term basis through resale of the Company’s shares back to the Company or to a third
party, just in pursuit of the Large-Scale Acquirer’s own profit and even to the point ofconsidering an option to dispose of the Company’s assets;(F) When it is determined on reasonable grounds that the conditions proposed by the LargeScale Acquirer for acquisition of the Company’s shares, etc., (including, but not limited
to, type of consideration for acquisition, price, calculation basis therefor, contents, timing,
method, illegality, and feasibility) are insufficient or inappropriate in light of theCompany’s corporate value;(G) When the method of acquisition proposed by the Large-Scale Acquirer is such an
oppressive method that the shareholders’ opportunity for assessment or freedom may be
restricted due to the structure of such method, as exemplified by two-tiered acquisition(acquisition of shares, etc., in a manner wherein the terms for the second-stage acquisition
are set more disadvantageous or are unclear if all of the Company’s shares are notacquired at the first stage of acquisition, or otherwise concerns of the future liquidity of
the Company’s shares, etc., are raised by suggesting delisting, etc., and thereby theshareholders are effectively coerced into accepting the acquisition);(H) When, as a result of the Large-Scale Acquirer’s acquisition of control over the Company,
it is likely that the interests of the shareholders, customers, employees, and otherinterested parties of the Company may be impaired, and consequently, the Company’s
corporate value may substantially deteriorate, or it would become extremely difficult toensure and enhance the Company’s corporate value, or it is determined in a reasonable
manner that the Company’s trustful relationship with customers, employees, and otherinterested parties or the Company’s brand value may be ruined where they are essential
for creating the Company’s value, or when it is determined that, in the mid- and longterm, the Company’s corporate value resulting from the Large-Scale Acquirer’s taking ofcontrol over the Company would be apparently inferior to the Company’s corporate value
where the Large-Scale Acquirer does not take control over the Company;(I)

When it is determined on reasonable grounds that the Large-Scale Acquirer would be
unsuitable as the Company’s controlling shareholder in light of public order and good
morals; for instance, where the Large-Scale Acquirer’s management or any of its major
shareholders or investors is a party associated with antisocial forces or terrorist
organizations;(J)

When it is otherwise determined that the Company’s corporate value and eventually theshareholders’ common interests would be significantly harmed under circumstances
similar to those set out in (A) through (I).

- 30 -

3.

No Initiation of Countermeasure
The Board of Directors shall not initiate the countermeasure in the following cases:(1) when the shareholders (other than the relevant Large-Scale Acquirer) holding one-half ormore of the voting rights of all the shareholders of the Company express their intention toaccept the takeover bid;(2) when the Board of Directors determines, as a result of having sufficient discussions andnegotiations with the Large-Scale Acquirer, that such Large-Scale Acquirer is not an
Abusive Acquirer;(3) when the proposal for initiating the countermeasure under the Plan is rejected at thegeneral meeting of shareholders of the Company held to determine whether to initiate thecountermeasure under the Plan;(4) when the Corporate Value Committee recommends that the Board of Directors not initiate
the countermeasure against the Large-Scale Acquisition Action, and the Board of
Directors finds that there are no circumstances under which the directors’ fiduciary duty
(zenkan chui gimu) is likely to be violated by placing the maximum value on the
Corporate Value Committee’s recommendation and complying with such
recommendation;(5) when the Corporate Value Committee recommends that the Board of Directors initiate thecountermeasure against the Large-Scale Acquisition Action, and the Board of Directors
finds that there are circumstances under which the directors’ fiduciary duty (zenkan chuigimu) is likely to be violated by placing the maximum value on the Corporate Value
Committee’s recommendation and complying with such recommendation; or(6) in such other event as the Board of Directors separately provides.

4.

Abandonment of Countermeasure
The Board of Directors shall abandon the countermeasure in the following cases:(1) when an ordinary resolution to agree to the Large-Scale Acquirer’s proposal ofacquisition is passed at the general meeting of shareholders of the Company;(2) upon the unanimous agreement of all the members of the Corporate Value Committee; or(3) in such other event as the Board of Directors separately provides.

5.

Contents of Countermeasure
The countermeasure shall be either gratuitous allotment of stock acquisition rights as set forthin Article 277 and subsequent provisions of Corporation Law (stock acquisition rights soallotted shall be referred to as “Stock Acquisition Rights” hereinafter) or such other measure as
determined most appropriate at that time by the Board of Directors in light of the Corporate
Value Committee’s views, where such countermeasure shall be found necessary and reasonable
to ensure the maximization of the Group’s corporate value and eventually the shareholders’common interests or otherwise to protect the foregoing.
Additionally, the outline of gratuitous allotment of Stock Acquisition Rights as thecountermeasure against the Large-Scale Acquisition Action is as set out in Annex 4, and the- 31 -

exercise period, conditions for exercise, terms for acquisition, etc., including an exercise
condition to the effect that the right may not be exercised by certain Large-Scale Acquirers set
forth in accordance with the procedures established by the Board of Directors, and such LargeScale Acquirer’s co-holder or special interested party (tokubetsu kankeisha) as well as suchparty as recognized by the Board of Directors as the party which any of the foregoing parties
substantially controls or which operates in collaboration with or in coordination with any of theforegoing parties (each of the aforementioned parties shall be hereinafter referred to as an“Excluded Party”), shall be provided, as needed, by taking into consideration theireffectiveness and reasonableness as the countermeasure against the Large-Scale Acquisition
Action.

6.

Corporate Value Committee
The Corporate Value Committee shall consist of at least three (3) members, and such members
shall be appointed by the Board of Directors from among Outside Directors and Outside
Statutory Auditors (including alternates thereof) as well as experts, who shall be independent
from the management operating the Company’s business. Additionally, each of such experts
shall execute, with the Company, an agreement which shall include, among others, a clause toimpose the fiduciary duty (zenkan chui gimu) toward the Company.
As a general rule, resolutions of the Corporate Value Committee shall be adopted by the
majority of all the members at a meeting where all the incumbent committee members arepresent. However, in the disability of any member of the Corporate Value Committee, or if
there is any other justifiable reason, such resolutions may be adopted by the majority of the
independent members present at a meeting where the majority of the independent members arepresent.

7.

Timely Disclosure
The Board of Directors shall, in accordance with applicable Laws and Regulations as well as
the Financial Instruments Exchange Regulations, make appropriate and timely disclosure to theshareholders and investors of such matters as deemed necessary under the Plan.

8.

Continuance of Takeover Defense Measures under the Plan and Duration, Continuance,
Abolishment, Amendment, etc., of the Plan
The Plan shall remain effective until the closing of the ordinary general meeting ofshareholders for the last of the fiscal years ending within three (3) years from the closing of the115th Ordinary General Meeting of Shareholders of the Company to be held on June 29, 2011
(hereafter referred to as the “Ordinary General Meeting of Shareholders”). However, if prior
to the expiration of such effective period, (i) the proposal for approval of the continuance of
takeover defense measures under the Plan is not adopted at the Ordinary General Meeting of
Shareholders, (ii) a proposal for abolishing the Plan is approved at a general meeting ofshareholders of the Company, or (iii) the Board of Directors adopts a resolution to abolish thePlan, then the Plan shall be abolished at such time.
Additionally, at the meeting of the Board of Directors to be held promptly after the closing of
the ordinary general meeting of shareholders of the Company after the Ordinary General
Meeting of Shareholders, the Board of Directors shall review the Plan to determine whether tocontinue, abolish, or amend the Plan, and if necessary, a resolution shall be adopted as
required.

- 32 -

Furthermore, from the viewpoint of securing and enhancing the corporate value and eventually
the shareholders’ common interests, the Board of Directors shall reexamine or amend the Plan
as needed.
END- 33 -

(Annex 4)
OUTLINE OF GRATUITOUS ALLOTMENT OF STOCK ACQUISITION RIGHTS
1.

Shareholders to whom allotment may be made:One (1) stock acquisition right shall be gratuitously allotted for each one (1) of the shares(other than the Company’s common shares held by the Company) held by the shareholders
registered on the last register of shareholders on the record date to be separately determined by
the Board of Directors.

2.

Type and Number of shares to be acquired upon exercise of stock acquisition rights:
The type of shares to be acquired upon exercise of stock acquisition rights shall be commonshares of the Company, and the number of common shares to be so acquired shall be 0.5 ormore but not more than one (1) share for each stock acquisition right as the Board of Directors
shall separately determine.

3.

Effective date of gratuitous allotment of stock acquisition rights:
To be separately determined by the Board of Directors.

4.

Value of property to be invested upon exercise of each stock acquisition right:
The form of investment to be made upon exercise of stock acquisition rights shall be cash, andthe amount to be invested upon exercise of one(1) stock acquisition right shall be one (1) yen
for each common share of the Company.

5.

Restriction on transfer of stock acquisition rights:
Stock acquisition rights shall only be transferred with the approval of the Board of Directors.

6.

Conditions for exercise of stock acquisition rights:
Conditions for exercise of stock acquisition rights shall be separately determined by the Boardof Directors (it is noted that an exercise condition may be attached to the effect that the rightmay not be exercised by certain Large-Scale Acquirers set forth in accordance with theprocedures established by the Board of Directors, or such Large-Scale Acquirer’s co-holder or
special interested party (tokubetsu kankeisha), or such party as recognized by the Board of
Directors as the party which any of the foregoing parties substantially controls or which
operates in collaboration with or in coordination with any of the foregoing parties (each of theaforementioned parties shall be hereinafter referred to as an “Excluded Party”).

7.

Acquisition by the Company of stock acquisition rights:
The Board of Directors may attach an acquisition clause setting forth, among others, that theCompany may, pursuant to the resolution of the Board of Directors, acquire only the stockacquisition rights held by the holders other than the Excluded Parties, on condition that any of
the following occurs: when the Large-Scale Acquirer violates any of the Large-Scale- 34 -

Acquisition Rules; when any of the other prescribed events occurs; or when any date separately
specified by the Board of Directors occurs.

8.

Reasons for acquisition of stock acquisition rights without value (reasons for abandonment of
the countermeasures):
The Company may acquire all of the stock acquisition rights without value upon the occurrenceof any of the following events:(a)when an ordinary resolution to agree to the Large-Scale Acquirer’s proposal ofacquisition is passed at the general meeting of shareholders of the Company;(b) upon the unanimous agreement of all the members of the Corporate Value Committee; or(c)

9.

in such other event as the Board of Directors separately provides.

Exercise period and other matters in respect of stock acquisition rights:
The exercise period and other necessary matters in respect of the stock acquisition rights shallbe separately determined by the Board of Directors.

- 35 -

(Reference)Names and Brief Background Descriptions ofMembers of the Corporate Value Committee[Name]
Toshiaki Kakimoto[Brief Background Descriptions]
Director, The Sumitomo Bank, Limited (retired in Jun. 1993),
Jun. 1989
Jun. 1993
Executive Managing Director, The Japan Research Institute, Limited(“JRI”) (retired in Nov.1994)
Nov. 1994 Executive Vice President, Sumitomo Capital Securities Co., Ltd.(retired
in Jun. 1996)
Jun. 1996
Executive Managing Director, JRI
Jan. 1998
Executive Vice President, JRI
Jun. 2000
Chairman, JRI (retired in Jun. 2004)
Jun. 2005
Outside Director of the Company, to date
[Name]
Seishiro Tsukada[Brief Background Descriptions]Apr. 1981
Registered as attorney at law, to date
Apr. 1992 Member of the Civil Affairs Conciliation Board, Shibuya Summary
Court (currently Tokyo Summary Court), to date
Apr. 1997 Vice Chairman, The Daiichi Tokyo Bar Association (fiscal year 1997)
Jun. 2008
Outside Statutory Auditor of the Company, to date
Apr. 2009 Director, The Japan Federation of Bar Association (fiscal year 2009)[Name]
Hideo Kojima[Brief Background Descriptions]Mar. 1980 Registered as chartered accountant, to date
May 1995 Representative Partner, Ota-Showa Auditors Office (currently Ernst &Young ShinNihon LLC)
May 2000 Vice Chairman, Century Ota Showa & Co. (currently Ernst & Young
ShinNihon LLC)
May 2004 General Manager, International Division, Tokyo Office, Shin-nihon
Auditors Office (currently Ernst & Young ShinNihon LLC)
May 2006 Executive Vice Chairman, Shin-nihon Auditors Office (currently Ernst& Young ShinNihon LLC)
Jun. 2010
Senior Advisor, Ernst & Young ShinNihon LLC, to date
The Company notified Tokyo Stock Exchange, Inc. and Osaka Securities Exchange Co., Ltd. that
Messrs. Toshiaki Kakimoto and Seishiro Tsukada are Independent Officers.
With respect to Mr. Hideo Kojima, on his election as an Outside Statutory Auditor, the Company
will notify them that he is an Independent Officer.

- 36 -