Primary contents from here.
May 17, 2016
OKASAN SECURITIES GROUP INC.
At its April 27, 2007 meeting, the Board of Directors of Okasan Securities Group, Inc. ("the Company") resolved to introduce a policy on responses (i.e., anti-takeover measures) to the potential purchase by specific shareholder groups(Note1) seeking to secure Company's shares(Note3) equivalent to 20% or more of voting rights(Note2) intentionally/unintentionally but as a result. The measures would apply regardless of the actual method of purchase (e.g., market transactions or takeover bids (TOB); the measures would not apply in cases in which the Board of Directors of the Company consents to the purchase. Such purchases hereinafter shall be referred to as "major purchases"; parties seeking to make such a major purchase shall be referred to as "potential major purchasers.") This resolution was later approved by the Company's shareholders at the 69th regular general meeting of shareholders held June 28, 2007 and subsequently renewed at the regular general meetings of shareholders held June 29, 2010 (72nd) and June 27, 2013 (75th). (The phrase "current response policy" hereinafter shall refer to the response policy as formulated following the 2013 renewal.) The current response policy is set to expire at the 78th regular general meeting of shareholders ("general meeting" hereinafter) scheduled for late June 2016.
With the expiration date of the current response policy approaching, at its May 17, 2016 meeting, the Board of Directors of the Company resolved to extend the current response policy with certain modifications, subject to approval by Company shareholders at the general meeting. (The post-modification response policy shall be referred to as the "new response policy" hereinafter.)
All five audit officers of the Company, including three outside directors, expressed agreement with the new response policy, provided the responses are appropriately implemented.
Note that the new response policy clearly establishes that a general meeting of shareholders may be convened in certain cases and that shareholders may be consulted regarding the actual implementation of defensive measures. (For details of the "defensive measures," please refer to 4 below.). However, this does not constitute a substantial change.
1.Basic Philosophy
Since the Company's founding in 1923, it has evolved as a financial group that provides sophisticated and specialized services in the area of asset management. In this capacity, it has sought to strengthen its corporate value by boosting information provision capabilities and expanding its services. Under the Company's medium-term management plan formulated in April 2014 to coincide with the launch of the new management structure, the Company's declared goals are to strengthen corporate value as a team of investment advisory professionals and to improve management practices to deliver stable growth in any environment. These goals are consistent with the Company's philosophy of "customer first."
If the Okasan Securities Group unites to implement the management plan and elevate its presence as an asset management partner for its customers, the Board of Directors believes the Company will enhance corporate value, ultimately benefitting shareholders, customers, business partners, and all other stakeholders.
The Board of Directors believes that contributing to the asset formation, and level of satisfaction, of customers via such initiatives, and thereby increasing the company's presence and competitiveness, and in turn enterprise value, is in the best interests of all shareholders, customers, counterparties and others involved with the company's business.
The Company believes that in the event of a Large-Scale Purchase action, shareholders should be able to make an appropriate decision regarding the acceptability of the action based on an understanding of the Company's management policy outlined above and the corporate value to be realized under the policy.
For shareholders to make an appropriate decision, it is necessary that both the Large-Scale Purchaser and the Board of Directors provide sufficient and appropriate information regarding, for instance, the contents of the Large-Scale Purchase, the impact that the Large-Scale Purchase will have on the Company and each Group company, the management policy and business plan that the Large-Scale Purchaser intends for the Company and Group, the impact that the Large-Scale Purchase will have on stakeholders including the customers and employees of the Company and Group, and whether a proposal exists for an alternative to the Large-Scale Purchase (hereinafter "Alternative Proposal"). In addition, shareholders should be provided with sufficient time and opportunity to fully consider the submitted information.
The Board of Directors believes it to be in the interest of the Company and all shareholders that a Large-Scale Purchase be carried out under certain rules that reflect the above view. The Board of Directors has accordingly established the following rules (hereinafter the "Large-Scale Purchase Rules") concerning prior provision of information.
The Large-Scale Purchase Rules are general rules and have not been formulated in consideration of any specific Large Volume Holder (Note 4); however, the rules will be applied if an existing large shareholder intends to conduct a Large-Scale Purchase. Major shareholders as of March 31, 2016 are listed in Exhibit 1. At this time, the Company has not received a notice or proposal for a Large-Scale Purchase of Share Certificates, etc. of the Company.
2.Large-Scale Purchase Rules
The Board of Directors has established two fundamental elements to the Large-Scale Purchase Rules: 1) A Large-Scale Purchaser must provide necessary and sufficient information to the Board of Directors prior to a Large-Scale Purchase, and 2) A Large-Scale Purchaser may commence a Large-Scale Purchase only after a specified period of time provided for the Board of Directors to examine and consider the provided information. The details of the rules are as follows.
(1) Submission of a Letter of Intention
A Large-Scale Purchaser intending to carry out a Large-Scale Purchase must submit to the Company, in advance, a letter of intention using the form prescribed by the Board of Directors and stating that the Large-Scale Purchaser will comply with the Large-Scale Purchase Rules. In a letter of intention, the Large-Scale Purchaser will be required to write the name and address of the Large-Scale Purchaser, the governing law of incorporation, the name of the representative, domestic contact information, and an outline of the proposal for a Large-Scale Purchase transaction.
(2) Provision of Information
Within five business days of receipt (excluding the day of receipt) of the letter of intention, the Board of Directors will deliver a list of items of information to be provided by the Large-Scale Purchaser so that the Large-Scale Purchaser can provide necessary and sufficient information for shareholders to make a judgment and for the Board of Directors to form its opinion. Below is a list of the basic items of information required. The information content will vary depending on the attributes of the Large-Scale Purchaser and the details of the Large-Scale Purchase.
- A summary profile of the Large-Scale Purchaser and group
- The objective and content of the Large-Scale Purchase
- Calculation basis for the proposed share purchase value and origin of the purchase finances
- The management policy, business plan, financial plan, dividend policy, asset utilization plan, etc. to be activated following completion of the Large-Scale Purchase
- Basic information including the names and addresses of the individuals, corporations and organizations providing funds for the Large-Scale Purchaser and the group that will ultimately derive financial benefit from the Large-Scale Purchase, irrespective of the names of funding (names can be, for example, capital funds or investments)
If, upon examination of the submitted information, the Board of Directors determines that the information is not sufficient, the Large-Scale Purchaser will be requested to provide additional information until sufficient information is obtained. The Board of Directors, if it determines disclosure of the information is necessary for shareholders to make a decision, will disclose all or part of the information of the Large-Scale Purchase proposal and the information provided to the Board of Directors at a time it deems appropriate.
(3) Examination of information and expression of an opinion
Once a major purchaser has provided the necessary information to the Board of Directors of the Company, a period of 60 days in the case of the purchase of all the Company's shares in cash (yen) via a takeover bid or 90 days in the case of other major purchases shall be established to allow the Board of Directors of the Company to evaluate and study the information; negotiate; form an opinion; and draft counterproposals. Major purchases may proceed only after the Board of Directors of the Company has publicly expressed its opinion or after the expiration of the Board of Directors' evaluation period. (However, should the Board of Directors of the Company choose to convene a general meeting of shareholders to confirm shareholder opinion as described below, the evaluation period may be extended by the reasonable period necessary to convene such general meeting. In such cases, shareholders shall be informed of the reasons for the extension and the number of days thereof.).
To prevent arbitrary decision-making by officers, the Board of Directors of the Company shall establish an independent committee comprised of three outside directors or experts. The Board of Directors of the Company shall immediately pass on information it receives from the major purchaser to the independent committee and endeavor to assist the independent committee in studying and evaluating the information.
If the Board of Directors elects to initiate a countermeasure to the Large-Scale Purchase, prior to initiation, the Board of Directors will consult with the Independent Committee on the appropriateness of the proposed countermeasure. The Independent Committee will make a recommendation based on consultation on the appropriateness of the proposed countermeasure.
The Independent Committee, to ensure its decision is reached in an appropriate and efficient manner and is in the best interest of the Company's shareholders and promotes corporate value, will be permitted, at the Company's expense, to seek the advice of independent third parties (including financial advisors, lawyers, certified public accountants and consultants).
If the Independent Committee advises the Board of Directors that it disapproves of the initiation of countermeasures, the Board of Directors will accept the recommendation and will not initiate countermeasures unless special circumstances exist under which not initiating a countermeasure would represent an obvious breach of directors' duty of care.
In addition, the independent committee shall determine whether the information provided by the major purchaser in the above (2) is sufficient, and shall advise the Board of Directors of the Company of its assessment. The independent committee shall also provide to the Board of Directors of the Company recommendations concerning matters on which the Board of Directors of the Company deems necessary to consult. The Board of Directors of the Company shall not demand additional information from the major purchaser if the independent committee advises the Board of Directors of the Company that the information provided by the major purchaser is sufficient.
The Board of Directors will receive recommendations from the Independent Committee, external experts, etc., during the Board of Director Assessment Period, will sufficiently assess and examine the information provided, will carefully form an opinion, and will disclose the opinion to the shareholders in a timely manner. If necessary, the Board of Directors may negotiate with the Large-Scale Purchaser to improve the conditions of the Large-Scale Purchase and may present an Alternative Proposal to the shareholders. The Board of Directors will inform Company shareholders in a timely manner information including report of the commencement of the Independent Committee's assessment period, summaries of the Independent Committee's recommendations, and the reasons for the committee's judgments.
If the Board of Directors of the Company deems it appropriate to confirm shareholder opinion, it may convene a general meeting of shareholders to address the implementation of defensive measures and other matters pertaining to the major purchase ("general meeting of shareholders to confirm shareholder opinion" hereinafter). If consulted by the Board of Directors of the Company, the independent committee may advise the Board of Directors of the Company on whether to convene a general meeting of shareholders to confirm shareholder opinion. In such cases, the Board of Directors of the Company shall abide by the independent committee's recommendation.
3.Policy on Response to Large-Scale Purchases
(1) When the large-scale purchaser complies with the Large-Scale Purchase Rules
When the large-scale purchaser complies with the Large-Scale Purchase Rules, the Board of Directors of the Company will seek to persuade shareholders not to accept the large-scale purchase by expressing a counter opinion and presenting an alternative plan to them, but not take an action in principle against the large-scale purchase, even if the Board of Directors of the Company opposes the conduct. In this case shareholders will be required to decide whether to accept the purchase proposal of the large-scale purchaser, taking into consideration factors like the proposal as well as counter opinions and the alternative plan presented by the Company. However, even if the large-scale purchaser complies with the Large-Scale Purchase Rules, when the Board of Directors of the Company judges the conduct to fall under any of [1] to [6] below and that the large-scale purchase will damage common interests of shareholders and the corporate value of the Company, the Board of Directors of the Company may take action against the conduct by issuing Stock Acquisition Rights to protect them.
The Board of Directors of the Company shall discuss and negotiate with the large-scale purchaser when deemed necessary. Even after the Board of Directors has decided to issue Stock Acquisition Rights as a countermeasure, When an important change is made to the decisive factor in the judgment, for example when the large-scale purchaser proposes changing a matter related to the essential part of the purchase conduct, it may cancel the issuance only in cases where the cancellation is made no later than 2 business days before an ex-rights drop in relation to the issuance of Stock Acquisition Rights and common interests of shareholders are not damaged.
When making an examination and a judgment on whether or not the large-scale purchase significantly damages common interests of shareholders and the corporate value of the Company, to secure objectivity and rationality of them, the Board of Directors of the Company shall in principle follow recommendations of the Independent Committee. In the event the Board of Directors receives recommendations from the Independent Committee that the launch of a countermeasure be stopped, it shall not launch the countermeasure unless there are special circumstances clearly infringing directors' duty of care.
If the large-scale purchase falls under any of [1] to [6] below, the Company may launch the countermeasure against the large-scale purchase, judging the conduct to significantly damage common interests of shareholders and the corporate value of the Company. If the large-scale purchase is judged not to fall under any of [1] to [6] below, the Company shall not launch the countermeasure. The Independent Committee shall make recommendations to the Board of Directors that the issuance of Stock Acquisition Rights as a countermeasure should not be allowed, when the large-scale purchase is judged not to fall under any of [1] to [6] below. If the Board of Directors of the Company deems it necessary and appropriate to implement defensive measures to serve the collective interests of shareholders, it may convene a general meeting of shareholders to confirm shareholder opinion. At such meetings, the Board of Directors will present a resolution concerning the implementation of defensive measures and related issues. The Company shall implement defensive measures if this resolution is passed-i.e., if more than half of the voting rights of the shareholders present are in favor of implementing defensive measures.
- When purchasing share certificates, etc. of the Company solely for the purpose of driving up the share price of the Company, without any intention of participating in the management of the Company, to force the Company or the related parties to purchase the shares at a higher price, or the purchase conduct aimed at making "greenmail."
- When purchasing shares for the purpose of conducting the so-called "scorched-earth management" by temporarily gaining control over the Company to transfer intellectual property, know-how, trade secrets, principal trading partners and customers, etc. necessary for the management of the Company to a large-scale purchaser etc.
- When purchasing shares with the intention of diverting the assets of the Company to make them serve as collateral or a source of the repayment of debt owed by a large-scale purchaser or its group companies, etc., after gaining control over the Company.
- When purchasing shares for the purpose of forcing the Company to pay high dividends for a short period of time with proceeds from the sale of high-priced assets etc. such as know-how and intellectual property that are not presently related to the business of the Company, by temporarily gaining control over the Company, or for the purpose of selling shares at a higher price brought about by a temporary spike in dividends before it drops.
- When the large-scale purchase is, as a case other than [1] to [4] above, judged to potentially cause an unrecoverable damage to the Company by gaining control over it, instead of aiming at the reasonable management of the Company.
- When large-scale purchases might effectively force shareholders to sell their stock certificates, etc. of the Company, which includes a coercive two-tier takeover bid, a method of purchasing shares such as takeover bids that does not solicit the purchase of all stock certificates in the first stage and sets disadvantageous purchase terms or makes the term unclear in the second stage. However, a method of purchasing shares by a takeover bid that solicits only a part of all stock certificates does not necessarily fall under this category.
(2) When a large-scale purchaser does not comply with the Large-Scale Purchase Rules
When a large-scale purchaser does not comply with the Large-Scale Purchase Rules, the Board of Directors of the Company may issue Stock Acquisition Rights as a countermeasure against it, after obtaining its recommendation from the Independent Committee, for the purpose of protecting common interests of shareholders and the corporate value of the Company, irrespective of the specific purchase method. This countermeasure may result in some disadvantage including an economic loss to the large-scale purchaser neglecting the Rules. Therefore this Policy on Response is provided also to dissuade large-scale purchasers from neglecting the Purchase Rules in conducting the large-scale purchase.
4.Outline of Stock Acquisition Rights as a specific countermeasure
(1) Shareholders entitled to receive Stock Acquisition Rights and Conditions for issuance
The Company will allot Stock Acquisition Rights to those shareholders, other than the Company itself, who are entered or recorded in the final list of shareholders on the date determined by the Board of Directors when it takes a vote on a resolution on the issuance of Stock Acquisition Rights in relation to this Policy on Response (hereinafter referred to as "the date of allotment"), or shareholders registered in the list of shareholders on the date of allotment specified by the Act on Book-Entry Transfer of Company Bonds, Shares, etc. under Article 152, paragraph (1), at a ratio of one Stock Acquisition Right for every one share of the Company.
(2) Class and number of shares to be issued upon exercise of Stock Acquisition Rights
The class and number of shares to be issued upon the exercise of the Stock Acquisition Rights shall be common stock, and one share shall be granted for each Stock Acquisition Right unless adjusted otherwise.
(3) Total number of Stock Acquisition Rights to be issued
The total number of Stock Acquisition Rights shall not exceed the total number of issued shares on the date of allotment excluding the number of shares owned by the Company on the same date.
(4) Issuance value
The Stock Acquisition Rights shall be allotted without contribution.
(5) Amount to be paid upon exercise of Stock Acquisition Rights
The amount to be paid for each one share allotted upon the exercise of the Stock Acquisition Right shall be 1 Japanese Yen; provided, however, that if it is the exercise of the share option subject to call specified in (9) below, such a payment is not required.
(6) Conditions for exercising Stock Acquisition Rights
Large-scale purchasers are not entitled to exercise Stock Acquisition Rights.
(7) Restriction on transfer of Stock Acquisition Rights
Any transfer of Stock Acquisition Rights requires approval of the Board of Directors of the Company.
(8) Period for exercising Stock Acquisition Rights
A period for exercising Stock Acquisition Rights shall be determined by the Board of Directors of the Company when it takes a vote on a resolution on the issuance of Stock Acquisition Rights, from a period falling under not less than one month and within two months from the date of issuing Stock Acquisition Rights; provided, however, that if the Board of Directors of the Company specifies another date as the starting point when it takes a vote on a resolution on the issuance of Stock Acquisition Rights, the specified date shall substitute for it. In the event a share option subject to call stipulated in (9) below is issued, a period for exercising Stock Acquisition Rights shall not, in principle, be predetermined.
(9) Other matters
The reason for the Company to acquire Stock Acquisition Rights and other necessary matters shall be separately determined by the Board of Directors of the Company. The Company may issue a stock option subject to call containing a clause to the effect that the Company may acquire Stock Acquisition Rights in exchange for shares of the Company.
5.Policy Rationale
(1) Fulfillment of the Guidelines for Takeover Defense Requirements
The Policy satisfies the three principles (protecting and enhancing corporate value and the general interests of shareholders, prior public disclosure and shareholders' consent, and ensuring the necessity and reasonableness of defensive measures) stipulated in the Guidelines Regarding Takeover Defense for the Purposes of Protection and Enhancement of Corporate Value and Shareholders' Common Interests published by the Ministry of Economy, Trade and Industry and the Ministry of Justice on May 27, 2005. The Policy also takes into account the report on the state of takeover defences in light of recent changes in the environment released by the enterprise value research group on June 30, 2008, as well as other debate on takeover defences.
(2) Objective of protecting the common interest of shareholders
As indicated above, the objective of the Policy is to protect corporate value and the common interest of the Company's shareholders by securing the information and time necessary for shareholders to determine the appropriateness of a Large-Scale Purchase of share certificates etc. of the Company and by permitting the Board of Directors to negotiate on behalf of the shareholders.
(3) Importance attached to shareholders' consent
The Company has determined to adopt the Policy, as a continuation with partial revisions of the Existing Policy, upon the approval of shareholders at the General Meeting.
The Policy to be approved by at the annual shareholders' meeting will remain effective until an expiration date of 2019. If, however, the shareholders resolve to abolish the Policy at any time before the expiration date, the Company will reflect shareholders' consent by immediately abolishing the Policy.
(4) Full consideration of the judgment of highly independent outsiders
With the introduction of the Policy, the Company will maintain an Independent Committee for the purpose of preventing the Board of Directors from making arbitrary decisions and to make effective and objective decisions for shareholders in implementing the Policy. As under the Existing Policy, members of the Independent Committee will include external experts and outside directors.
In the event of an actual action of a Large-Scale Purchase of shares of the Company, the Independent Committee will determine whether the purchase would damage the Company's corporate value and shareholders' common interests, in compliance of the Independent Committee Regulations. In principle, the Board of Directors will abide by the judgment of the Independent Committee.
The Independent Committee thereby serves as a strict monitor for arbitrary actions by the Board of Directors. Summaries of the committee's recommendations, reasons for the committee's decision, and other information will be disclosed to the shareholders in a timely manner. The Company has thereby secured a mechanism to ensure the Policy is implemented to the best interest of the Company's corporate value and the common interest of shareholders.
(5) Establishment of rational and objective requirements
As noted, the Policy has been formulated such that countermeasures against the Large-Scale Purchase will only be activated upon the fulfillment of rational, detailed and objective requirements. This system effectively establishes a mechanism to prevent arbitrary actions of the Board of Directors.
(6) Solicitation of opinions from third-party experts
In the event of a Large-Scale Purchaser appears, the Independent Committee will, at the Company's expense, seek the advice of independent third parties, such as financial advisors, lawyers, certified public accountants, consultants, and other experts. The solicitation of opinions from third-party experts is intended to ensure a high degree of fairness and objectivity in the decisions of the Independent Committee.
(7) The Policy is not a dead-hand takeover defense measure
As outlined above, shareholders may abolish the Policy at the shareholders' meeting. The Policy therefore is not a takeover defense measure the implementation of which cannot be stopped even with the replacement of the majority of the members of the Board of Directors. The Policy therefore is not a "dead-hand" takeover defense measure, in our view.
6.Impact etc. on shareholders and investors
(1) Impact etc. of the Large-Scale Purchase Rules
The purposes of the Large-Scale Purchase Rules are to provide information necessary for shareholders to make a decision as to whether they should accept the purchase proposal of the large-scale purchaser, to provide opinions of the Board of Directors of the Company that is actually responsible for the management of the Company, to secure a period of time necessary for such responses to the proposal and to ensure opportunities for the shareholders to be presented with alternative plans. Such actions we believe will enable the shareholders of the Company to make an appropriate decision on whether they should accept the purchase proposal of the large-scale purchaser with sufficient information and ultimately protect the common interests of the shareholders. We therefore believe that the establishment of the Large-Scale Purchase Rules is proper and contributes to the interests of the shareholders and investors, with the Rules serving as a basis for shareholders and investors to make an appropriate investment decision.
As we mentioned in 3.above, since the Policy on Response of the Company to a large-scale purchase will vary depending on whether the large-scale purchaser complies with the Large-Scale Purchase Rules or not, shareholders and investors are requested to pay attention to the actions of the large-scale purchaser.
(2) Impact etc. when countermeasures are launched
When the large-scale purchaser does not comply with the Large-Scale Purchase Rules, the Board of Directors of the Company may issue Stock Acquisition Rights as a countermeasure, after obtaining the recommendation from the Independent Committee, for the purpose of protecting the common interests of the shareholders and the corporate value of the Company. Judging from the nature of the countermeasure, we do not expect to face a situation where shareholders of the Company other than the large-scale purchaser who did not comply with the Large-Scale Purchase Rules will suffer a significant loss, either legally or financially.
Even after the Board of Directors has decided to issue Stock Acquisition Rights as a countermeasure, when an important change is made to a decisive factor in taking the countermeasure, for example when the large-scale purchaser proposes changing a matter related to the essential part of the purchase conduct, it may cancel the issuance only in cases where the cancellation is made no later than 2 business days before an ex-rights drop in relation to the issuance of Stock Acquisition Rights and common interests of shareholders of the Company are not damaged. In this case, investors, who have traded the Company's shares in anticipation of a dilution of share value in shares owned by the large-scale purchaser not complying with the Large-Scale Purchase Rules, might suffer some loss accordingly due partly to a fluctuation in the share price.
There are cases where shareholders are required to remit for a certain amount to acquire stocks through the exercise of the Stock Acquisition Rights. With regard to the details of the procedures, the Company shall make a separate notification of them based on the laws and regulations, when the Company decides to actually issue the Stock Acquisition Rights. Investors, whose shares are not yet transferred to their names, are required to complete the "name transfer," which corresponds to the application of book-entry transfer specified by the Act on Book-Entry Transfer of Company Bonds, Shares, etc. under Article 140, by the date of allotment separately determined and noticed by the Board of Directors of the Company, to receive an allotment of Stock Acquisition Rights.
7.Effective date and term of validity of the Large-Scale Purchase Rules
This Policy on Response shall come into effect on the day of the General Meeting with the approval of the Meeting, and be effective until the time of conclusion of an ordinary general meeting of shareholders of the Company to be held in 2019. However, even before the expiry date, the Policy on Response shall be abolished, when a resolution on its abolishment is adopted at an ordinary general meeting of shareholders of the Company, on the spot. In the event the Policy is not approved by a majority of the votes held by the shareholders present at the forthcoming general meeting, it shall expire at the time of conclusion of the meeting without coming into effect, with no action taken for the continuation of it.
Even during the term of the Policy on Response, the Company may review the Policy whenever necessary, from the standpoint of the common interests of the shareholders, taking into consideration the preparation, etc. of the related laws and regulations including the Company Act and the Financial Instruments and Exchange Act and the progress in the implementation of the mid-term business plan, and abolish or revise the Policy, when deemed necessary, by a resolution of the Board of Directors. In the event the outline of this Policy on Response is approved by a majority of the votes held by the shareholders present at the forthcoming general meeting, the abolishment or the revision of the Policy shall be decided by the Board of Directors. When the Policy is abolished or revised, the facts of the abolishment or the revision, as well as the contents and other matters of the revision the Board of Directors considers as appropriate, shall be disclosed immediately.
- "Ratio of Voting Rights", in response with the pattern of the purchase, refers to: (i) The ratio of Share Certificates, etc. owned by the holder (meaning the ratio of Share Certificates, etc. owned defined in Article 27-23, Paragraph 4 of the Act. In this case, the number of Share Certificates, etc. owned by joint holders of the holder shall be added.), when Certain Shareholders Group falls under the holder of Share Certificates, etc. (meaning the Share Certificates, etc. defined in Article 27-23, Paragraph 1 of the Act) of the Company or its joint holder(s), or (ii) The sum of the ratios of stock certificates owned by a large scale purchaser or its Persons in Special Relationship (meaning the ratio of stock certificates owned defined in Article 27-2, Paragraph 8 of the Act) when the certain shareholders group falls under Large Scale Purchaser or its Persons in Special Relationship of Share Certificates, etc. (meaning Share Certificates, etc. defined in Article 27-2, Paragraph 1 of the Act). With regard to the total number of voting rights (as defined in Article 27-2, Paragraph 8 of the Act) and the total number of shares issued (as defined in Article 27-23, Paragraph 4 of the Act) used for the calculation of each ratio of Share Certificates, etc. owned, those written in a Annual Securities Report, a Semi-annual Report, or Status Report on Purchase of Company's Own Shares that was mostly recently submitted may be referred to.
- "Certain Shareholders Group" refers to a holder (meaning a holder defined in Article 27-23, Paragraph 1 of the Financial Instruments and Exchange Act ("the Act", hereinafter), including those considered holders under Article 27-23, Paragraph 3 of the Act) of Share Certificates, etc. (meaning the "Share Certificates, etc." defined in Article 27-23, Paragraph 1 of the Act) of the Company and its joint holder(s) (meaning the joint holder provided in Article 27-23, Paragraph 5 of the Act and including those who are deemed joint holders under Paragraph 6 thereof. The same shall apply hereinafter.) or a person who conducts the Purchase, etc. (meaning the Purchase, etc. defined in Article 27-2, Paragraph 1 of the Act and including purchases conducted in a market of a Financial Instruments exchange) of Share Certificates, etc. (meaning the"Share Certificates, etc." defined in Article 27-2, Paragraph 1 of the Act) of the Company and its Persons in Special Relationship (meaning the"Persons in Special Relationship" defined in Article 27-2, Paragraph 7 of the Act).
- "Share Certificates, etc." refers to the Share Certificates, etc. defined in Article 27-23, Paragraph 1 of the Financial Instruments and Exchange Act.
- "Large Volume Holder" refers to large volume holder(s) defined in Article 27-23, Paragraph 1 of the Financial Instruments and Exchange Act.
Exhibit 1
Status of Shares of the Company (as of March 31, 2016)
1.Total Number of Authorized Shares
750,000,000 shares
2.Total Number of Shares Issued
208,214,969 shares
3.Number of Shareholders
22,551
4.Major Shareholders (Top 10)
| Name of Shareholders | Number of Shares Held (In thousands of shares) |
Percentage of Shares Held(%) |
|---|---|---|
| Nippon Life Insurance Company | 9,732 | 4.87 |
| The Norinchukin Bank | 9,700 | 4.85 |
| Sumitomo Mitsui Trust Bank, Limited | 8,726 | 4.37 |
| Daido Life Insurance Company | 5,875 | 2.94 |
| Mitsubishi UFJ Trust and Banking Corporation | 5,822 | 2.91 |
| Tosei | 5,266 | 2.64 |
| Resona Bank, Limited | 4,937 | 2.47 |
| Mizuho Bank, Ltd. | 4,925 | 2.47 |
| Mizuho Trust & Banking Co.,Ltd., Retirement Benefit Trust Mizuho Bank Account |
4,924 | 2.46 |
| The Bank of Tokyo-Mitsubishi UFJ ,Ltd. | 4,848 | 2.43 |
| Total | 64,756 | 32.41 |
- In the calculation of shareholding ratio, all the treasury stocks (8,420,379 shares) are excluded.
Exhibit 2
Brief Personal Record of Members of the Independent Committee
The Independent Committee will be made up of the following three members.
Seishi Higo
(born on December 8, 1950)
| Brief Personal Record and Position (status of major concurrent positions) |
Number of Shares of the Company held | |
|---|---|---|
| April 1973 | Joined Ministry of Finance (MOF) | none |
| July 1978 | Director, Muroran Tax Office | |
| June 1989 | Planning Officer, Banking Bureau | |
| July 1996 | Manager, Finance Bureau State Property Division | |
| July 1997 | Director-General of Hokkaido Local Finance Bureau | |
| October 1998 | Deputy Commissioner of Financial Reconstruction Department, Deposit Insurance Corporation of Japan | |
| July 2001 | Counselor of the Minister's Secretariat, MOF | |
| July 2002 | Director, Environment Agency | |
| April 2004 | Director, Japan Environmental Safety Corporation | |
| January 2005 | Registered attorney (incumbent) | |
| June 2007 | Advisor, Sompo Japan Insurance Inc. | |
| July 2012 | Advisor, Nissay Leasing Co., Ltd. | |
| April 2013 | Professor, Hakuoh University Law School (incumbent) | |
| September 2013 | Accounting Advisor, The Second Association of Regional Banks (incumbent) | |
| June 2014 | Outside Auditor, Okasan Securities Group | |
| June 2015 | Outside Director, Okasan Securities Group (incumbent) | |
| January 2016 | Partner, Blakemore & Mitsuki (incumbent) |
|
| March 2016 | Outside Director, Ipet Insurance Co., Ltd. (incumbent) |
|
- Seishi Higo is an outside director of the Company as specified in Article 2, Item 15 of the Companies Act.
He has no special interest in the Company.
Hirokazu Kono
(born on April 22, 1957)
| Brief Personal Record and Position (status of major concurrent positions) |
Number of Shares of the Company held | |
|---|---|---|
| April 1987 | Research Assistant, Graduate School of Business Administration, Keio University | none |
| April 1991 | Associate Professor, Doctor of Engineering, Keio University | |
| April 1998 | Professor, Keio University (incumbent) | |
| October 2009 | Dean, Graduate School of Business Administration, Keio University (incumbent) Dean, Keio University Business School (incumbent) |
|
| January 2012 | President, Association of Asia-Pacific Business Schools | |
| May 2013 | President, Japan Industrial Management Association (incumbent) | |
| June 2014 | Outside Auditor, Okasan Securities Group | |
| June 2015 | Outside Director, Okasan Securities Group (incumbent) Outside Director, Stanley Electric Co., Ltd. (incumbent) |
|
- Hirokazu Kono is an outside director of the Company as specified in Article 2, Item 15 of the Companies Act.
He has no special interest in the Company.
Haruo Funabashi
(born on September 19, 1946)
| Brief Personal Record and Position (status of major concurrent positions) |
Number of Shares of the Company held | |
|---|---|---|
| July 1969 | Joined Ministry of Finance (MOF) | none |
| March 1995 | Director of Tokyo Customs | |
| July 1997 | Deputy Commissioner of National Tax Agency | |
| June 1998 | Secretary-General of Executive Bureau, Securities and Exchange Surveillance Commission | |
| July 2001 | Vice-Minister for Land and Infrastructure, Ministry of Land, Infrastructure and Transport | |
| February 2003 | Representative Director of the Sirius Institute (incumbent) | |
| March 2005 | Outside Auditor, Kenedix Inc. (incumbent) | |
| June 2006 | Outside Auditor, Konoike Transport Co., Ltd. (incumbent) | |
| December 2007 | Outside Auditor, Pasona Group Inc. (incumbent) | |
| June 2009 | Outside Director, Dai-ichi Life Insurance Co., Ltd. (incumbent) | |
| December 2011 | Outside Auditor, EPS Holdings Inc.(incumbent) | |
| June 2015 | Outside Director, Hitachi Capital Corporation (incumbent) | |
- He has no special interest in the Company.
Exhibit 3
Independent Committee Rules
(Purpose)
- The Company shall set up the Independent Committee as an advisory board, from which the Board of Directors seeks advice and consultation over the determination of whether to take countermeasures against Large-Scale Purchases.
- Matters related to the Independent Committee of the Company shall be subject to and governed by the Independent Committee Rules (the Rules), except as stipulated in laws or regulations or the Articles of Incorporation of the Company, or except as resolved at general meetings of shareholders of the Company.
(Definition)
- In the Rules, terms are defined as follows:
- The "Measures" shall be defined as measures towards Large-Scale Purchases of Share Certificates, etc., which is determined by the Company at its ordinary general meetings of shareholders or meetings of the Board of Directors.
- As for terms that are not defined in the Rules, their definition is subject to the Measures.
(Formation)
- The Independent Committee shall be set up by resolution of the Board of Directors of the Company.
- The Independent Committee shall be made up of three to five members (hereinafter referred to as "Members"), whom the Board of Directors of the Company shall elect from Outside Directors of the Company.
- In addition to what is provided in the preceding paragraph, the Board of Directors of the Company may elect outside knowledgeable persons to be Members; provided, however, that such knowledgeable persons elected are lawyers, certified tax accountants, certified public accountants, academic experts or persons well-versed on investment banking services or equivalents thereof, and must satisfy the criteria stipulated in the "Independent Committee Member Election Standards".
- Each of such knowledgeable persons shall separately conclude with the Company an agreement containing the provision on the duty of care for the Company.
(Term of Office)
- The term of office of a Member shall, after his or her election, expire at the conclusion of the ordinary general meeting of shareholders held with respect to the last business year ending within three years after the end of the ordinary general meeting of shareholders at which the Measures were approved, except as otherwise stipulated by resolution of the Board of Directors of the Company.
- When a Member who was an Outside Director or an Outside Auditor of the Company retires or resigns, his or her term of office as a Member shall expire simultaneously at the retirement or resignation; provided, however, that a person who satisfies the criteria specified in the Independent Committee Member Election Standards as an outside knowledgeable person may be reelected as a Member.
- The term of office of a Member elected to fill a vacancy created by another Member who retires before the completion of his or her term shall terminate at the time when the term of office of the retiring Member expires.
(Person Convening Meetings of the Independent Committee, and Chairperson)
- Each Member may at any time convene a meeting of the Independent Committee when a Large-Scale Purchase is attempted and on other occasions. The members of the Independent Committee shall elect the chairperson from the Members of the Independent Committee.
- In addition to what is provided in the preceding Paragraph, the Board of Directors of the Company may, by its resolution, request convocation of a meeting of the Independent Committee.
(Attendance of Persons Other Than Members)
- The Independent Committee may, in order to collect necessary information, request the Directors, Auditors and employees of the Company, and any other person whose attendance it deems necessary, to attend meetings of the Independent Committee and may seek from them explanations regarding matters that the Independent Committee deems necessary in making recommendations.
- The Independent Committee may, at the expense of the Company, seek advice of independent third parties (financial advisers, lawyers, certified public accountants, or other experts who the Independent Committee deems necessary).
(Authorities of Independent Committee)
- The Independent Committee shall make assessments and decisions on the matters described in each of the items below and make recommendations to the Board of Directors of the Company, attaching reasons to contents of such assessments and decisions:
- whether or not a purchaser of shares of the Company falls under a Large-Scale Purchaser, etc., specified in the Measures,
- whether or not a Large-Scale Purchaser, etc., complies with Large-Scale Purchase Rules,
- information, advice, alternative plans, documents and deadline of replies for which each of Large-Scale Purchasers, etc., and the Board of Directors of the Company should provide the Independent Committee;
- whether or not the conditions on taking countermeasures against Large-Scale Purchase are satisfied;
- whether or not convene a general meeting of shareholders to confirm shareholder opinion to address the implementation of defense measures and other matters pertaining to the major purchase.
- abolition or amendment of the Measures (however, any amendment shall be restricted to the extent not contrary to the basic guidelines of the Measures and to the extent deemed reasonably necessary due to revisions of applicable laws and regulations or rules of financial instrument exchanges, due to changes of the interpretation or operation of such laws and regulations, or due to amendment of tax systems, court precedents, etc.)
- determination of a review period of the Independent Committee (such a review period shall not exceed 60 days in principle; provided that in cases other than Large-Scale Purchases involving consideration of yen-based cash, the Independent Committee shall make any decision within 90 days); and
- matters on which the Board of Directors of the Company has asked the Independent Committee for advice and consultation, so far as such matters are what the Board of Directors of the Company should decide.
- The Independent Committee may direct the Board of Directors of the Company to make announcement of contents of recommendations given to the Board of Directors and other matters that the Independent Committee deems necessary.
- The Independent Committee shall, when making decisions under the preceding two Paragraphs, give such decisions from the standpoint of whether or not such decisions contribute to corporate value and common interests of shareholders of the Company and not for the purpose of seeking particular interests of the Directors of the Company or the Members.
(Resolution)
- Resolutions of the Independent Committee shall be passed, in principle, by a majority of the Members present at a meeting of the Independent Committee, at which all the Members are present; provided, however, that under unavoidable circumstances, resolutions of the Independent Committee may be passed by a majority of the Members present at a meeting of the Independent Committee, at which a majority of the Members are present
- Any Member who has special interests with any matter to be resolved shall not be entitled to participate in the vote on such a matter.
(Minutes)
- The summary of proceedings at each meeting of the Independent Committee and the results thereof shall be recorded in the minutes, which shall bear the names and seal impressions of all the Members present.
- Retention of the minutes, etc., shall be subject to the Document Handling Rules separately stipulated, and the minutes shall be kept by the Company for ten years.
(Secretariat)
- The Secretariat of the Independent Committee shall be set up in the Group General Planning Department.