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| (ii) | Independent Committee |
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The Company has established the Independent Committee to objectively judge whether a Purchaser is appropriate in view of the DSR Policy in advancing the procedure under the DSR Rules. The Independent Committee consists of external Directors and other members who are independent from the Company's Board of Directors. The Committee shall request that the Purchaser supply information in advance to the Committee, as well as study and judge the content of the Purchase and express its opinion regarding the Purchase to increase objectivity, rationality and transparency of the procedure toward large-scale Purchases of the Company's shares. Refer to Attachment (1), "Independent Committee Details," for details about the Independent Committee. The Committee shall be convened immediately after a Purchase provided for in Item (i) is identified.
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| (iii) | Content of the DSR Rules |
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| a) |
Supply of Required Information |
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The Independent Committee will request that a Purchaser who proposes a Purchase stated in Item (i) above without the prior accord of the Board of Directors provide the Company with sufficient information (hereinafter the "Required Information") as set forth in Attachment (2) before the Purchase is actually made. The Independent Committee will incrementally request that the Purchaser provide information by setting a period within a rational scope. The period, however, may not exceed a maximum of 60 days, counting from the day of actions or proposals for the purchase or similar acts of the Company's shares and other securities, which are subject to the application of the DSR Rules.
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| b) |
Review of the content of the Purchase, negotiation with the Purchaser and proposal of alternative plans
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If all the Required Information is provided by the Purchaser, the Independent Committee may also request that the Company's Board of Directors present its opinion (which might include some restrictions) regarding the content of the Purchase, supporting materials to show its reasoning, alternative plans (if any) and other information deemed necessary by the Committee within the predetermined period set by the Committee. In addition, the Independent Committee may even request some opinions of the Company's stakeholders such as employees, the labor union, suppliers, and customers as necessary.
During a maximum 60-day period (of which, however, the Committee may extend this period a maximum 30-day limit according to the provision set forth in Item c) below; hereinafter the "Assessment Period") after such information is provided by the Purchaser and the Company's Board of Directors (in case the Committee had requested that the Board of Directors supply sufficient information therewith as described above), the Independent Committee will review the content of the Purchase, examine the alternative plans submitted by the Board of Directors, collect information and then make comparisons with regard to the business plans between those proposed by the Purchaser and those by the Board of Directors.
To ensure the contribution of its judgment to the corporate value and the common interests of the shareholders, the Independent Committee, at the expense of the Company, may seek advice from independent third parties (including financial advisers, certified public accountants, lawyers, consultants and other experts).
The Independent Committee shall, at a time that it judges appropriate, disclose the fact that the Required Information was submitted to the Company and the matters it considers appropriate to disclose of the Required Information and other information previously obtained.
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| c) |
Disclosure of opinion by the Independent Committee |
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The Independent Committee shall, after the elapse of the Assessment Period stated as (iii) b), judge whether the Purchase falls under any of the conditions stipulated in Attachment (3). The Independent Committee shall inform the results of the assessment, its opinion, the reasons therefore and other information that may help shareholders make their own judgment on such purchase.
In case the Independent Committee cannot reach a judgment as outlined above by the end of the initial Assessment Period, it may extend the period a maximum 30-day limit within the scope deemed necessary to review the content of the Purchase.
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| (iv) | Abolition or modification of the DSR Rules |
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The DSR Rules shall come into force on July 1, 2012, and its effective period shall be three years from that date, provided, however, that the Company may review and modify the DSR Rules, from time to time, as necessary within this period.
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| Attachment (1) |
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Independent Committee Details |
| 1. | Outline of the Independent Committee Regulations
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The Independent Committee shall be established by a resolution of the Company's Board of Directors.
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The Committee shall consist of three or more members, and the members shall be elected and appointed by the Company's Board of Directors from among the qualified candidates who are either (i) external Directors of the Company, (ii) external Corporate Auditors of the Company, both of whom are independent from management executives who are engaged in the execution of the Company's business affairs, or (iii) intellectual key figures. Such intellectual key figures shall be either experienced corporate managers, experts familiar with the investment banking business, lawyers, certified public accountants, researchers in the field of the Corporation Act, etc., or those deemed to be engaged in any of the enumerated occupations, and who must have concluded several relevant agreements, which would otherwise be specified by the Company's Board of Directors, represented by the contract that includes a mandatory provision regarding the care of a good manager.
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The term of office of the Committee members shall be three years. However, this shall not apply to cases where any other clause is stipulated by a resolution of the Board of Directors.
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The Independent Committee shall be capable of determining matters as listed below. Each Committee member must conduct his/her decision making from the viewpoint of whether his/her judgment would contribute to raising the corporate value and the common interests of the shareholders but not on behalf of an individual's or management's interests.
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1) |
Decision on the Purchase to which the DSR Rules apply;
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2) |
Decision on the information to be supplied to the Independent Committee by the Purchaser and the Company's Board of Directors;
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3) |
Careful review and study of the content of the Purchase; |
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4) |
Study of the actual plans if any alternative plans regarding the Purchase are presented by the Board of Directors;
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5) |
Elongation of the Assessment Period |
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6) |
Disclosure of opinions concerning the Purchase
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7) |
Any other matters that can be taken up by the Independent Committee as provided for in the DSR Rules; and
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8) |
Any other matters that can be taken up by the Independent Committee that have been otherwise provided for by the Board of Directors.
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In case the Independent Committee judges the information supplied by the Purchaser insufficient as to the Required Information, it will request that the Purchaser submit additional information. Furthermore, if the relevant additional information is provided by the Purchaser, the Independent Committee may request that the Company's Board of Directors present its opinion regarding the content of the Purchase, supporting information and materials to prove the reasoning, alternative plans (if any) and other information deemed necessary by the Committee within the predetermined period.
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The Independent Committee, at the expense of the Company, may seek advice from independent third parties (including financial advisers, certified public accountants, lawyers, consultants and other experts).
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A representative director of the Company may convene the Independent Committee when a Purchase is proposed or whenever he deems necessary. A representative director must convene a Committee meeting if any other director requests such a meeting.
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Resolutions of the Independent Committee shall be, in principle, adopted by an affirmative vote of the majority of all the members present. However, a quorum for a resolution may be a majority of all members in case of unavoidable circumstances and the resolution may be adopted by a majority of the members present in such a case.
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