RIKEN CORPORATION

Investor Relations

Takeover Defense Measures

  1. Basic Policy Regarding Persons Who Control the Decision Makings on the Company's Financial and Business Policies

    Riken Corporation, as a listed company, believes that our shareholders are to be determined as a result of the free transaction of stocks on the exchange market.
    Therefore, we also believe that final decision on how to deal with the proposed large scale purchase of the company's shares which will result in change of control of the company, if occurs, needs to be decided in line with the wishes of our shareholders.

    However, some of the large scale purchase of the company's shares could damage the corporate value of Riken Corporation and the common interests of our shareholders. Some may substantially force the current shareholders to sell their shares. Some may not appropriately provide the shareholders and the board of directors with necessary time and information for making a rational judgment on the proposed purchase.

    We do not believe that a person who makes a large scale purchase of the company's shares in such inappropriate manner is suited to become a person to decide the financial and business policies of Riken Corporation.

  2. Outline of the Takeover Defense Measures

    At the board of directors meeting held on May 24, 2013, Riken Corporation resolved that it continues and maintains the takeover defense measures against large scale purchases of the company's shares (the "Measures") as an effort to prevent the company's decisions on the financial and business policies from being controlled by a person inappropriate according to our basic policy and to protect and improve the corporate value of this company and the common interests of our shareholders. It is also approved at the shareholders meeting held on June 24, 2016 for its continuation of the Measures.

    The Measures apply to any purchase of shares of the company intended to increase the voting rights ratio of specific shareholder group exceeding twenty percent (20%) including indirect or consequent achievement of the same.
    Any person who proposes such large scale purchase of the shares is defined as the "Purchaser".

    The rules of the proposed large scale purchase of the share for securing necessary time and information for consideration (the "Rules") are as follows.

    1. The Purchaser must appropriately provide necessary and sufficient information to the board of directors in advance.
    2. The Purchaser can commence the large scale purchase of the shares only after the expiration of the evaluation period of the board of directors. If it is aiming at acquiring all stocks of the company in cash through the takeover bid, the evaluation period is set for 60 days after the provision of necessary and sufficient information at the maximum. In the other cases, the period is set for 90 days at the maximum.

    In addition, in case that we hold a regular or special shareholders meeting in order to confirm the intention of the shareholders on the exercise of the Measures, the Purchaser is prohibited to commence the large scale purchase of the shares until the confirmation of the intention of the shareholders and the required procedures for the Measures are completed.

    The Measures will not be exercised as long as the Purchaser complies with the Rules, in principle.

    However, in case that the Purchaser does not comply with the Rules, or in case that the Purchaser complies with the Rules but the large scale purchase is judged to cause fatal damage to the corporate value of this company and the common interests of our shareholders, the company may take the Measures, such as allotment of share options without compensation, which is permitted by the corporation law, the other laws and the articles of incorporation and the by-laws of this company.

    Prior to the decision making on the exercise of the Measures by the board of directors and in order to secure the reasonableness and fairness of the judgement, we will consult with the Independent Committee on whether the exercise of the Measures is reasonable or not. The members of the committee consist of outside directors, outside auditors and other outside experts and are independent of the management members who are taking part in the operation of the company.
    The Independent Committee makes a recommendation to the board of directors within the evaluation period of the board of directors.
    The board of directors takes the recommendation of the Independent Committee into account for its decision making on whether to exercise the Measures, as much as possible.

    The Measures are effective by the time of close of the 95th shareholders meeting in June 2019.
    The Measures may be abolished immediately in the case that;

    1. more than specific ratio of shareholders express its desire to abolish the Measures in the shareholders meeting or;
    2. it is resolved at the board of directors that the company abolish the Measures.