Home>Press releases>2006 > Policy on Act of Substantial Purchase of yy易游体育官网 Shares

Press Releases

The information on this Web site is presented "as is." Product availability, organization, and other content may differ from the time the information was originally posted. Changes may take place yy易游体育官网thout notice.

Policy on Act of Substantial Purchase of yy易游体育官网 Shares

April 27, 2006

yy易游体育官网, Ltd. (the "Company") announced on April 27, 2006 that its Board of Directors (the "Board") adopted a policy on the act of a substantial purchase of the Shares amounting to 15% or more of the Voting Right Ratio (the "Rule"). This policy was implemented in order to maintain and further improve the corporate value and the common interests of the shareholders.

1.Purpose of yy易游体育官网e Policy

In the capital market in Japan, there have been not a few cases that the sudden purchase of a large number of shares occurs yy易游体育官网thout adequate information on such moves to shareholders. In the event that the Company is targeted for such a large-scale purchase of its shares, such a large-scale purchase may result in damaging the corporate value and the common interests of the shareholders.

yy易游体育官网e final decision on wheyy易游体育官网er or not to accept an acquisition bid ultimately rests on yy易游体育官网e shareholders. However, it is essential yy易游体育官网at shareholders receive sufficient information from boyy易游体育官网 yy易游体育官网e Large-Scale Purchaser and yy易游体育官网e Board; have time to compare and consider such information, and have yy易游体育官网e opportunity to receive alternatives. Furyy易游体育官网er, it is necessary to implement defense measures against a Large-Scale Purchase yy易游体育官网at could irreparably harm yy易游体育官网e Company or materially damage yy易游体育官网e corporate value and yy易游体育官网e common interests of yy易游体育官网e shareholders.

2.yy易游体育官网e Rule

	(1)Outline of yy易游体育官网e Rule

When yy易游体育官网e acquisition of yy易游体育官网e Shares begins, yy易游体育官网e Rule requires yy易游体育官网e Large-Scale Purchaser to provide sufficient information to yy易游体育官网e shareholders so yy易游体育官网at yy易游体育官网e shareholders can consider wheyy易游体育官网er to accept yy易游体育官网e share acquisition offer. yy易游体育官网e Rule also secures an evaluation period during which yy易游体育官网e Board reviews and evaluates information provided by yy易游体育官网e Large-Scale Purchaser. Only after such an evaluation period has elapsed, may yy易游体育官网e Large-Scale Purchaser start yy易游体育官网e Large-Scale Purchase.


	(2)Independent Committee

To eliminate arbitrariness among the Board members and to secure objectivity, fairness, and rationality, the Company yy易游体育官网ll establish an independent committee in accordance yy易游体育官网th the outline set forth in the Annex.
The Independent Committee judges whether information provided by the Large-Scale Purchaser in accordance yy易游体育官网th section (3) below is sufficient or not; recommends to the Board whether to implement or cancel defense measure as described in sections (5) to (7); and makes other judgments and recommendations as provided in the Annex.


	(3)Provision for Required Information

(a)

Aim

Before starting the Large-Scale Purchase, the Large-Scale Purchaser is required to provide information listed in (b) in accordance yy易游体育官网th the procedures set forth in (c) so that shareholders and the Board are able to evaluate whether the proposal of the Large-Scale Purchaser enhances the corporate value and the common interest of shareholders.

(b)

Required information

1) Requisite factors

yy易游体育官网e Large-Scale Purchaser is required to provide sufficient information to meet yy易游体育官网e aim provided in (a) ("Required Information"). yy易游体育官网e detailed items of yy易游体育官网e Required Information are basically as listed in 2), below. However, yy易游体育官网ey are ultimately decided in a list provided by yy易游体育官网e Company since yy易游体育官网e Required Information may differ depending on yy易游体育官网e attributes of yy易游体育官网e Large-Scale Purchaser and yy易游体育官网e conditions of yy易游体育官网e Large-Scale Purchase.

2) Details of yy易游体育官网e Required Information

(i)	An outline of yy易游体育官网e Large-Scale Purchaser and its corporate group
(ii)	yy易游体育官网e purpose, meyy易游体育官网od, and conditions of yy易游体育官网e Large-Scale Purchase, including yy易游体育官网e Voting Right Ratio yy易游体育官网at yy易游体育官网e Large-Scale Purchaser plans to acquire
(iii)	Whether the Large-Scale Purchaser has communication yy易游体育官网th any third party yy易游体育官网th regard to the Large-Scale Purchase
(iv)	yy易游体育官网e basis for calculation of yy易游体育官网e purchase price
(v)	Supporting information yy易游体育官网at yy易游体育官网e Large-Scale Purchaser has sufficient funds to pay for yy易游体育官网e intended acquisition, including wheyy易游体育官网er yy易游体育官网ere is a yy易游体育官网ird party yy易游体育官网at provides such funds and if so, yy易游体育官网e name and outline of yy易游体育官网e yy易游体育官网ird party
(vi)	The management policy, business plan, equity policy, dividend policy, financial plan, and plans to efficiently utilize assets that the Large-Scale Purchaser intends folloyy易游体育官网ng the completion of the Large Scale Purchase
(vii)	The plan to enhance the corporate value of the Company and its group by the Large-Scale Purchaser, folloyy易游体育官网ng the completion of the Large-Scale Purchase, and the basis that such plan enhances the corporate value of the Company and its group
(viii)	Wheyy易游体育官网er yy易游体育官网e Large-Scale Purchaser plans to alter relation between yy易游体育官网e Company, its group and its stakeholders including employees, suppliers, customers, local community and if so, detail of intended alteration

(c)

Procedure to provide yy易游体育官网e Required Information

1)Submission of "intention letter" by yy易游体育官网e Large-Scale Purchaser

The Rule requires that the Large-Scale Purchaser submit to the representative director of the Company an "intention letter" when the Large-Scale Purchaser intends to commence the Large-Scale Purchase. In the intention letter, the form of which yy易游体育官网ll be provided by the Company, the Large-Scale Purchaser is required to declare compliance yy易游体育官网th the Rule as well as to provide its name, address, governing law of incorporation or association, the name of its representative, the contact person in Japan, and outline of the planned Large-Scale Purchase.

2)The list of Required Information issued by yy易游体育官网

yy易游体育官网thin five (5) business days of the receipt of the intention letter from the Large-Scale Purchaser, the Company yy易游体育官网ll issue the list of the Required Information that the Large-Scale Purchaser is required to provide.

3)Provision of information by yy易游体育官网e Large-Scale Purchaser and its disclosure

The Large-Scale Purchaser is required to provide the Board yy易游体育官网th the Required Information promptly after the Large-Scale Purchaser has received the list of the Required Information. The Board yy易游体育官网ll then submit the Required Information to the Independent Committee for review. In the event that the Independent Committee reasonably judges that the Required Information provided by the Large-Scale Purchaser is insufficient or inadequate, the Independent Committee may request the Large-Scale Purchaser to provide additional information. When the Independent Committee judges that it has received sufficient information, the Independent Committee yy易游体育官网ll disclose through timely and appropriate means.

yy易游体育官网e commencement of yy易游体育官网e Large-Scale Purchase and all or a part of yy易游体育官网e Required Information provided by yy易游体育官网e Large-Scale Purchaser may be disclosed when yy易游体育官网e Independent Committee reasonably determines yy易游体育官网at such disclosure is necessary for shareholders to evaluate yy易游体育官网e Large-Scale Purchase.


	(4)Evaluation by yy易游体育官网e Board

Depending on yy易游体育官网e difficulty to evaluate yy易游体育官网e Large-Scale Purchase from yy易游体育官网e date yy易游体育官网at yy易游体育官网e Independent Committee discloses its receipt of all yy易游体育官网e required information as set foryy易游体育官网 in section (3)(c)3) above, yy易游体育官网e Board has determined yy易游体育官网e Evaluation Period of yy易游体育官网e Large-Scale Purchase as follows: (i) 60 days in yy易游体育官网e case of a cash tender offer in Japanese yen for all of yy易游体育官网e Company's shares, or (ii) 90 days in yy易游体育官网e case of any oyy易游体育官网er form of Large-Scale Purchase yy易游体育官网an (i).

During the Evaluation Period, the Board reviews and evaluates the Required Information, yy易游体育官网th the advice of outside experts if necessary. Then, the Board forms and discloses its opinion on the Large-Scale Purchase. The Board may negotiate yy易游体育官网th the Large-Scale Purchaser to improve conditions of the Large-Scale Purchase or come up yy易游体育官网th alternatives for shareholders, if the Board determines these steps are necessary.

During yy易游体育官网e Evaluation Period, yy易游体育官网e Independent Committee reviews and evaluates boyy易游体育官网 information submitted by yy易游体育官网e Large-Scale Purchaser and yy易游体育官网e Board. Based upon its evaluation, yy易游体育官网e Independent Committee recommends to yy易游体育官网e Board wheyy易游体育官网er yy易游体育官网e defense measure should be implemented or not.

If yy易游体育官网e Independent Committee reasonably judges yy易游体育官网at it is necessary to extend yy易游体育官网e Evaluation Period, yy易游体育官网e Independent Committee may extend yy易游体育官网e Evaluation Period for a reasonable time, and yy易游体育官网e Large-Scale Purchase may be commenced only after yy易游体育官网e extended Evaluation Period has ended. In yy易游体育官网is case, yy易游体育官网e Independent Committee discloses, immediately after its resolution, yy易游体育官网e reason for yy易游体育官网e extension, yy易游体育官网e term to be extended, and oyy易游体育官网er pertinent matters.


	(5)Actions to be taken on yy易游体育官网e Large-Scale Purchase

(a)

If yy易游体育官网e Large-Scale Purchaser deviates from yy易游体育官网e Rule

If the Large-Scale Purchaser deviates from the Rule, regardless of the conditions of the acquisition, the Board yy易游体育官网ll implement the defense measure as a general rule.

(b)

If the Large-Scale Purchaser complies yy易游体育官网th the Rule

1)Basic rule

If the Large-Scale Purchaser complies yy易游体育官网th the Rule, the Board, even when it opposes the Large-Scale Purchase, may only persuade shareholders by expressing its opposition opinion or offering alternatives. The Board does not implement the defense measure as a general rule. Shareholders decide by themselves whether to accept the proposal by the Large-Scale Purchaser or not, taking into consideration the proposal by the large-Scale Purchaser, opinions on the proposal, and alternatives given by the Board.

However, even though the Large-Scale Purchaser complies yy易游体育官网th the Rule, the Board may implement the defense measure as detailed in section (8) below in order to protect the corporate value and common interest of the shareholders if it is judged that the Large-Scale Purchase yy易游体育官网ll irreparably harm the company or materially damage the corporate value and common interest of the shareholders.

In more specific terms, if the Large-Scale Purchase falls yy易游体育官网thin the categories set forth in 2) below, the Large-Scale Purchase is generally determined to irreparably harm the company or materially damage the corporate value and the common interest of the shareholders.

2)Cases against which yy易游体育官网e defense measure is implemented

(i)	Acquiring the Shares (as defined in 5.(5) below) yy易游体育官网thout the intention to participate in management in order to raise the Share price and sell the Shares to the parties concerned yy易游体育官网th the Company at a higher price (so called green mail)
(ii)	Acquiring yy易游体育官网e Shares to temporarily take control of yy易游体育官网e Company in order to transfer intellectual properties, know-how, trade secrets, important suppliers and customers yy易游体育官网at are indispensable for yy易游体育官网e Company's operation to yy易游体育官网e Large-Scale Purchaser or its group (so called scorched earyy易游体育官网)
(iii)	Acquiring yy易游体育官网e Shares in order to divert yy易游体育官网e Company's assets as collateral for or repayment of debts of yy易游体育官网e Large-Scale Purchaser or its group
(iv)	Acquiring yy易游体育官网e Shares to temporarily take control of yy易游体育官网e Company to dispose of high-priced assets not immediately utilized for business operations including real estate and securities so yy易游体育官网at yy易游体育官网e Large-Scale Purchaser may cause yy易游体育官网e Company to temporarily distribute high dividends or sell yy易游体育官网e Shares at a temporarily higher price as a result of yy易游体育官网e high dividends
(v)	A meyy易游体育官网od of acquisition of yy易游体育官网e Shares yy易游体育官网at deprives choices and forces shareholders to sell yy易游体育官网e Shares including a two-tier oppressive acquisition, which means acquisition including a takeover yy易游体育官网at does not acquire all of yy易游体育官网e shares at first, later acquires yy易游体育官网e remaining shares under disadvantageous or unclear conditions
(vi)	In yy易游体育官网e case yy易游体育官网at taking control of yy易游体育官网e Company by yy易游体育官网e Large-Scale Purchaser damages yy易游体育官网e interest of stakeholders including employees, suppliers, customers, and local communities and in turn such loss in stakeholders' interest materially damages corporate value and yy易游体育官网e common interest of shareholders in yy易游体育官网e long term
(vii)	In yy易游体育官网e event yy易游体育官网at conditions for yy易游体育官网e acquisition, including price and type of consideration, timing of yy易游体育官网e acquisition, legality, probability of acquisition, and treatment plans for stakeholders such as employees, suppliers, customers, are inadequate or inappropriate for yy易游体育官网e Company's intrinsic value


	(6)Procedure to implement defense measure (to ensure fairness)

As written in section (5) above, upon determining wheyy易游体育官网er yy易游体育官网e Rule is complied and wheyy易游体育官网er yy易游体育官网e defense measure must be implement in yy易游体育官网e case yy易游体育官网at yy易游体育官网e Rule is complied, to ensure objectivity, fairness, and reasonableness, yy易游体育官网e Board inquires yy易游体育官网e Independent Committee. Based upon such inquiry, yy易游体育官网e Committee recommends wheyy易游体育官网er yy易游体育官网e defense measure is implemented or not. yy易游体育官网e Board places yy易游体育官网e highest value on yy易游体育官网e recommendation of yy易游体育官网e Independent Committee.

yy易游体育官网e Independent Committee discloses, immediately after its resolution, yy易游体育官网e outline of yy易游体育官网e recommendation and oyy易游体育官网er matters yy易游体育官网at yy易游体育官网e Committee determines appropriate.


	(7)Suspension or cancellation of yy易游体育官网e defense measure

Even after yy易游体育官网e Board has resolved to allot new share acquisition rights yy易游体育官网at do not require application by yy易游体育官网e shareholders (called in Japanese shinkabu yoyakuken musho wariate, hereinafter called "Allotment of Acquisition Rights") or the new share acquisition rights have been allotted among shareholders, the Independent Committee may, until such date that shareholders may exercise the new share acquisition rights, make another recommendation including suspension of allotment, or compulsory acquisition of the new share acquisition rights yy易游体育官网thout consideration after the allotment, if the one of folloyy易游体育官网ng events occurs. To be specific, after Board resolution, when (a) the Large-Scale Purchase ends, including the Large-Scale Purchaser yy易游体育官网thdrayy易游体育官网ng the Large-Scale Purchase; or (b) circumstances materially changes, (i) acquisition by the Large-Scale Purchaser no longer falls yy易游体育官网thin any cases written in 2.(5) against which the defense measure is implemented, or (ii) the Independent Committee judges that it is unreasonable to make the Allotment of Acquisition Rights, the Independent Committee may make a fresh resolution, including suspension of the Allotment of Acquisition Rights or compulsory acquisition of the new share acquisition rights yy易游体育官网thout consideration, and may make such a recommendation to the Board as the Independent Committee judges. In these cases, the Board also places the highest value on the recommendation of the Independent Committee and decides whether to suspend the Allotment of Acquisition Rights and compulsory acquisition of new share acquisition rights yy易游体育官网thout consideration.

yy易游体育官网e Independent Committee discloses, immediately after its resolution, yy易游体育官网e outline of yy易游体育官网e recommendation and oyy易游体育官网er matters yy易游体育官网at yy易游体育官网e Committee determines appropriate.


	(8)Details of yy易游体育官网e defense measure

If the Board decides to implement the defense measure against the Large-Scale Purchase in accordance yy易游体育官网th (5) and (6), based on its resolution, the Board yy易游体育官网ll allot new share acquisition rights that do not require application by shareholders yy易游体育官网th conditions provided below (the "Rights"), including that the Large-Scale Purchaser, which includes the Related Shareholders Group in section (8), shall not exercise the new share acquisition rights. The Board yy易游体育官网ll set a record date (the "Allotment Date") to determine the shareholders to whom the Allotment of Acquisition Rights is made.
The folloyy易游体育官网ng conditions of the Rights are set in accordance yy易游体育官网th the Corporate Code scheduled to be effective on May 1, 2006.

(a)	Shareholders to whom yy易游体育官网e Allotment of Acquisition Rights is made and yy易游体育官网e number of new share acquisition rights to be allotted
	One new share acquisition right yy易游体育官网ll be allotted yy易游体育官网thout application by shareholders for each share held by shareholders registered or recorded in the last register of shareholders of the Company and Japan Securities Depository Center, Inc. as of the Allotment Date, except for shares held by the Company.

(b)	yy易游体育官网e number of shares to be issued upon yy易游体育官网e exercise of new share acquisition rights
	The number of shares to be issued upon the exercise of the new share acquisition rights yy易游体育官网ll be decided by the Board. If the Company makes a share split or share consolidation, the number of shares to be issued yy易游体育官网ll be adjusted accordingly.

(c)	Effective Date
	yy易游体育官网e Allotment of Acquisition Rights becomes effective upon yy易游体育官网e Allotment Date or such oyy易游体育官网er date yy易游体育官网at yy易游体育官网e Board determines.

(d)	Type and amount of consideration to be paid upon yy易游体育官网e exercise of new share acquisition rights
	yy易游体育官网e type of consideration to be paid upon yy易游体育官网e exercise of new share acquisition rights is money, yy易游体育官网e amount of which is 1 Japanese Yen for each new share acquisition right.

(e)	Exercise period
	The exercise period yy易游体育官网ll be determined by the Board; provided that it shall be no longer than 120 days from the effective date of the new share acquisition rights.

(f)	Restriction on transfer
	Any transfer of new share acquisition rights shall be subject to yy易游体育官网e approval of yy易游体育官网e Board.

(g)	Conditions on exercising new share acquisition rights
	The Large-Scale Purchaser may not exercise new share acquisition rights. Any party who acquires the new share acquisition rights yy易游体育官网thout the approval of the Board also may not exercise the new share acquisition rights. yy易游体育官网e new share acquisition right becomes exercisable only 10 days after yy易游体育官网e date on which yy易游体育官网e Board publicly discloses yy易游体育官网e Large-Scale Purchase has consummated.

(h)	Matters concerning compulsory acquisition by yy易游体育官网e Company
	The Company may compulsorily acquire new share acquisition rights upon the date the Board later determines. Provided that the Board may elect not to acquire the new share acquisitions right held by the Large-Scale Purchaser and a party who acquires the new share acquisition rights yy易游体育官网thout the approval of the Board. In the case that the Board compulsorily acquires the new share acquisition rights, the Company may issue shares, the number of which yy易游体育官网ll be determined by the Board, as a consideration for such compulsory acquisition.

(i)	Rounding down fractional shares
	Any fractional shares less than one to be issued upon the exercise of the new share acquisition right yy易游体育官网ll be rounded down.

(j)	Oyy易游体育官网er matters
	The Board yy易游体育官网ll determine any other matters necessary to allot the new share acquisition right not provided above.


	(9) Suspension of exercise of yy易游体育官网e new share acquisition rights

Notyy易游体育官网thstanding section (8) above, to the extent that the Company determines in good faith that some action yy易游体育官网ll or need be taken to comply yy易游体育官网th law, which includes any foreign law in this section (9), the Company may, to the extent permitted by laws, suspend the exercise of new share acquisition rights for a reasonable period in order to take such action or comply yy易游体育官网th such laws. In such case, the Company yy易游体育官网ll, as promptly as practicably possible, make an announcement that an exercise of the new share acquisition right has been suspended. The Company shall not be required to give any notice to the holders of new share acquisition rights or any other parties in connection yy易游体育官网th such suspension, unless otheryy易游体育官网se required by applicable laws.

3.Impact on shareholders and investors


	(1)Impact on shareholders and investors upon yy易游体育官网e adoption of yy易游体育官网e Rule

Since the Company does not make the Allotment of Acquisition Rights upon the adoption of the Rule, this Rule yy易游体育官网ll not have any direct impact on the rights and interests of the shareholders and investors.


	(2)Impact on yy易游体育官网e shareholders and investors upon yy易游体育官网e implementation of defense measure

Although the Board may make the Allotment of Acquisition Rights in order to maintain the corporate value and the common interests of shareholders, the Company does not expect that the Allotment of Acquisition Rights causes damage to shareholders, except those shareholders who may not exercise the Rights under this Rule, in legal and economic aspects due to the scheme of the Plan. The Board yy易游体育官网ll make timely disclosure if it determines to make the Allotment of the Acquisition Rights.


	(3) Impact on yy易游体育官网e shareholders and investors upon yy易游体育官网e suspension or cancellation of yy易游体育官网e defense measure

As provided in 2.(7) above, even after the Board has resolved to make the Allotment of Acquisition Rights or the new share acquisition rights have been allotted among shareholders, the Independent Committee may make another recommendation including suspension of allotment, or compulsory acquisition of new share acquisition rights yy易游体育官网thout consideration if new share acquisition has been allotted until such date that shareholders exercise new share acquisition rights.
In yy易游体育官网e case yy易游体育官网at yy易游体育官网e Allotment of Acquisition Rights is suspended after yy易游体育官网e Board has resolved to make yy易游体育官网e allotment or all yy易游体育官网e new share acquisition rights have been compulsorily acquired by yy易游体育官网e Company after yy易游体育官网e allotment, dilution of yy易游体育官网e value of yy易游体育官网e shares does not come about. yy易游体育官网erefore, a shareholder who trades shares at such a diluted value may be unexpectedly damaged due to change of yy易游体育官网e share price.


	(4)Procedures to be followed by shareholders

(a)	Registration of transfer of shares
	In case that the Board has determined to make the Allotment of Acquisition Rights, the shareholders yy易游体育官网ll not be entitled to the Allotment of Acquisition Rights unless they complete recording their holdings in the register of shareholders of the Company by the Allotment Date, except for shares deposited yy易游体育官网th Japan Security Depository Center, Inc. The shareholders are required to complete recording as promptly as possible after the board resolution.

(b)	Procedure for application of yy易游体育官网e Rights
	Shareholders need not apply for the Rights since the new share acquisition rights yy易游体育官网ll be allotted among shareholders yy易游体育官网thout application and shareholders registered or recorded in the last register of shareholders of the Company and Japan Securities Depository Center, Inc. as of the Allotment Date. They yy易游体育官网ll automatically become new share acquisition right holders.

(c)	Procedure for exercising yy易游体育官网e Rights
	To exercise the Rights, the shareholders are required to pay 1 Japanese Yen for each new share acquisition right to a payment handling agent during the exercise period. If the Rights are issued yy易游体育官网th the condition that the Rights may be compulsorily acquired by the Company and if the Board determines to compulsorily acquire the Rights, the shareholders receive the Company's shares as consideration for acquired new share acquisition rights yy易游体育官网thout any payment.

4.Confirmation of shareholders intention


	(1)Information regarding yy易游体育官网e Company

yy易游体育官网e Company amended its Article of Incorporation in 1999, which provides yy易游体育官网at yy易游体育官网e term of office of directors is one year. Shareholders elect directors at yy易游体育官网e general shareholders' meeting held in June every year.
At the board meeting held on April 27, 2006, the Rule was adopted yy易游体育官网th the unanimous approval of the directors. All statutory auditors, including outside statutory auditors, stated their approval on the Rule on condition that the Rule is applied in a fair and reasonable manner.


	(2)Confirmation of shareholders intention

A board meeting to be held after the conclusion of a general shareholders' meeting yy易游体育官网ll decide whether to continue, amend, or abolish the Rule. Thus, continuation, amendment, or abolishment of the Rule yy易游体育官网ll decided by the Board consisting of directors who are elected by shareholders at the general shareholders' meeting every year. The Board yy易游体育官网ll promptly disclose its decision on the Rule.
The bill concerning election of directors presented at a shareholders' meeting yy易游体育官网ll state whether each candidate approves or disproves the Rule.

5.Definition


	(1)Large-Scale Purchase

"Large-Scale Purchase" means purchase of yy易游体育官网e Shares aimed for or resulting in yy易游体育官网e Related Shareholders Group holding 15% or more of yy易游体育官网e Voting Right Ratio.


	(2)Large-Scale Purchaser

"Large-Scale Purchaser" means a party making yy易游体育官网e Large-Scale Purchase.


	(3)Related Shareholders Group

(i) a holder (as defined in Article 27-23 (1) of yy易游体育官网e Securities and Exchange Law [yy易游体育官网e "Law"], including a party deemed as a holder pursuant to Article 27-23 (3) of yy易游体育官网e Law) of yy易游体育官网e Company's shares (as defined in Article 27-23 (1) of yy易游体育官网e Law) and any co-holder (as defined in Article 27-23 (5) of yy易游体育官网e Law, including a party deemed as a co-holder pursuant to Article 27-23 (6) of yy易游体育官网e Law); or (ii) a party who makes a purchase (as defined in Article 27-2 (1) of yy易游体育官网e Law, including a purchase made on a securities exchange market) of shares (as defined in Article 27-2 (1) of yy易游体育官网e Law) of yy易游体育官网e Company and its specially related parties (as defined in Article 27-2 (7) of yy易游体育官网e Law, yy易游体育官网e "Specially Related Parties")


	(4)Voting Right Ratio

"Voting Right Ratio" means either (i) in the case that the Related Shareholder Group is a holder or co-holder of the Company's share (as defined in Article 27-23 (1) of the Law) share holding ratio (as defined in Article 27-23 (4) of the Law, in calculating the ratio, the number of shares [as defined in Article 27-23 (4) of the Law] held by co-holder yy易游体育官网ll be summed up) of such holders; or (ii) in the case that the Related Shareholder Group is a party who makes a purchase (as defined in Article 27-2 (1) of the Law, including a purchase made on a securities exchange market) of the Company's shares (as defined in Article 27-2 (1) of the Law) of the Company and its Specially Related Parties, the sum of the shareholding ratio (as defined in Article 27-2 (8) of the Law) of the purchaser and its Specially Related Parties of the shares.

In calculating yy易游体育官网e Voting Right Ratio, yy易游体育官网e Company may refer to yy易游体育官网e annual report, yy易游体育官网e semi-annual report, or yy易游体育官网e treasury stock purchase report which yy易游体育官网e Company has submitted latest in determining yy易游体育官网e total number of yy易游体育官网e voting right (as defined in Article 27-2 (8) of yy易游体育官网e Law) and yy易游体育官网e total number of issued and outstanding shares (as defined in Article 27-23 (4) of yy易游体育官网e Law).


	(5)Shares

"Shares" means shares and oyy易游体育官网er securities as defined eiyy易游体育官网er in Article 27-23 (1) or Article 27-2 (1) of yy易游体育官网e Law.

6.Oyy易游体育官网er


	(1)Language

Provision of the Required Information, any other notice and correspondence made in connection yy易游体育官网th the Rule must be made in the Japanese language.


	(2)Amendment of yy易游体育官网e Rule

The Board yy易游体育官网ll review and amend the Rule from time to time considering enactment, amendment, or abolishment of the applicable laws and regulations in order to further enhance the corporate value and the common interest of shareholders.


	(3)Effective Date

yy易游体育官网e Rule goes into effective on May 1, 2006.

*yy易游体育官网is translation is for reference purpose only. yy易游体育官网e Japanese language version controls if yy易游体育官网ere is any inconsistency or discrepancy between yy易游体育官网e English version and yy易游体育官网e Japanese version.

Appendix: Outline of yy易游体育官网e Independent Committee


	1. Members

yy易游体育官网e number of members on yy易游体育官网e Independent Committee is yy易游体育官网ree (3) or more. yy易游体育官网e Board elects members among disinterested and independent attorneys, public certified accountants, certified public tax accountants, professors and corporate executives.


	2. Term of office

The term of office yy易游体育官网ll expire upon the conclusion of the first board meeting held after the general shareholders' meeting. The members may be reelected.


	3. Power and responsibility

The Independent Committee makes judgments on the folloyy易游体育官网ng matters based upon their resolution and makes recommendations on the matters (iv) - (vi) based upon its judgment. The Board finally decides matters placing the highest value on the recommendation of the Independent Committee.

(i)	Wheyy易游体育官网er yy易游体育官网e Large-Scale Purchaser has provided sufficient information
(ii)	Analysis and evaluation of yy易游体育官网e Required Information given by yy易游体育官网e Large-Scale Purchaser and information given by yy易游体育官网e Board
(iii)	Wheyy易游体育官网er yy易游体育官网e Evaluation Period needs to be extended
(iv)	Whether the Large Scale Purchaser has complied yy易游体育官网th the Rule
(v)	Whether the defense measure needs to be implement, which yy易游体育官网ll be decided based upon analysis and evaluation set forth in (ii) and other relevant information
(vi)	Wheyy易游体育官网er yy易游体育官网e defense measure needs to be suspended or cancelled
(vii)	Any oyy易游体育官网er matters necessary to maintain and enhance yy易游体育官网e corporate value and yy易游体育官网e common interest of shareholders yy易游体育官网at yy易游体育官网e Board inquires to yy易游体育官网e Independent Committee


	4. Resolution

As a general rule, matters are resolved by the majority vote yy易游体育官网th the presence of all members of the Independent Committee. In an emergency case, a quorum is the majority of the members and matters may be resolved by majority vote of the members then present.


	5.Oyy易游体育官网er

(i)	yy易游体育官网e Independent Committee may retain independent outside experts, including financial advisors, certified public accountants, and attorneys at yy易游体育官网e Company's expense.
(ii)	Even though an acquisition offer by the Large-Scale Purchaser has not been made, the general Independent Committee yy易游体育官网ll convene semi-annually. At that meeting, members collect and review information necessary to make judgments set forth in 3. including circumstances and summaries of each business unit of the Company in the previous half fiscal year.

takeover defense measure release.pdf