Transcosmos : Announcement Regarding the Renewal of Countermeasures to Large-Scale Acquisitions of transcosmos inc. Shares (Takeover Response Policy)

Note: This English translation is for reference purposes only. In the event of any discrepancy between the Japanese original and this English translation, the Japanese original shall prevail.

May 15, 2024

To Whom It May Concern,

Name of Company: transcosmos inc.

Representatives: Masaaki Muta, Representative Director, Co-president Takeshi Kamiya, Representative Director, Co-president (Code No.9715, Tokyo Stock Exchange, Prime Market)

Contact: Hisao Horiishi

Corporate Executive Officer,

Legal & Compliance Division Manager Phone Number: [phone] (main number)

Announcement Regarding the Renewal of Countermeasures to Large-Scale Acquisitions of

transcosmos inc. Shares (Takeover Response Policy)

transcosmos (the Company) hereby notifies that the Company at its board of directors meeting held on May 15, 2024, resolved to renew the plan for countermeasures to large-scale acquisitions of the shares in the Company (the "Former Plan") subject to shareholder approval at the Board of Directors meeting of the Company held on May 14, 2021, and obtained shareholder approval at the 36th ordinary general meeting of shareholders of the Company held on June 23, 2021. The effective period of the Former Plan lasts until the conclusion of the 39th ordinary general meeting of shareholders of the Company to be held on June 25, 2024 (the "39th Ordinary General Meeting of Shareholders").

The Company announces as follows that, before the expiration of the effective period of the Former Plan, the Company's Board of Directors determined at the meeting held on May 15, 2024 to partially revise the content of the Former Plan and renew the Former Plan (the "Renewal"; the renewed plan is hereinafter referred to as the "Plan") as a measure to prevent decisions on the Company's financial and business policies from being controlled by persons deemed inappropriate (Article 118, Item 3(b)(2) of the Enforcement Regulations of the Companies Act) in light of the basic policy regarding the state of the persons who control decisions on the Company's financial and business policies (as provided in Article 118, Item 3 of the Enforcement Regulations of the Companies Act; the basic policy after the revision is hereinafter referred to as the "Basic Policy"), subject to approval by the shareholders at the 39th Ordinary General Meeting of Shareholders. At the Board of Directors meeting described above, all directors, including seven outside directors, were in attendance and unanimously approved the Renewal.

Please note that, upon the Renewal, the overall content of the Former Plan was reviewed based on the recent judicial precedents regarding, and the recent practical trends in, takeover defense measures, and other related circumstances.

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

The Company believes that the persons who control decisions on the Company's financial and business policies need to be persons who understand the source of the Company's corporate value and who will make it possible to continually and persistently ensure and enhance the Company's corporate value and, in turn, the common interests of its shareholders.

The Company believes that, if a proposal for an acquisition that would involve a change of control of the Company is made, the decision thereon must be ultimately made based on the intent of the Company's shareholders as a whole. Also, when a large-scale acquisition of the shares in the Company takes place, the Company will not reject it if it will contribute to ensuring and enhancing the corporate value of the Company and, in turn, the common interests of its shareholders.

Nonetheless, there are some forms of large-scale acquisition of shares that benefit neither the corporate value of the target company of such large-scale acquisition nor the common interests of its shareholders,

including those with a purpose that would obviously harm the corporate value of the target company and the common interests of its shareholders, those with the potential to substantially coerce shareholders into selling their shares, those that do not provide sufficient time or information for the target company's board of directors and shareholders to consider the details of the large-scale acquisition, or for the target company's board of directors to make an alternative proposal and those that require the target company to discuss or negotiate with the acquirer in order to procure more favorable terms for shareholders than those presented by the acquirer.

The Company places value on client satisfaction and strives to ensure and enhance its corporate value. We believe the source of corporate value of the Company is found in (i) the comprehensive "IT utilization capabilities" that the Company has accumulated since its establishment as a pioneer in the outsourcing business of information processing, (ii) the "personnel" who can promptly respond to changes in the environment and combine the latest technology, making use of originality and ingenuity, and (iii) "the stable and long-term relationships of trust with clients" established based on its strength as an independent corporation. Unless the acquirer of the shares in the Company understands the source of the corporate value of the Company and would ensure and enhance these elements over the medium- to-long term, the corporate value of the Company and, in turn, the common interests of its shareholders would be harmed.

The Company believes that it is necessary to ensure the corporate value of the Company and, in turn, the common interests of its shareholders by taking the necessary and reasonable countermeasures against an inappropriate large-scale acquisition by such persons.

1. The Sources of the Company's Corporate Value and Special Measures to Realize the Basic Policy

1. The Sources of the Company's Corporate Value

Since its founding in 1966, the Company has endeavored to enhance the competitiveness of client companies by uniting "people & technology"; namely, outstanding "people" with the latest "technical capabilities," to provide more valuable services under a management philosophy which asserts that "client satisfaction is the true value of our company, and the growth of each of our employees creates the value that shapes our future."

Our Company started out as an information services company specializing in data entry operations, and as a result of continuing tireless efforts to maintain our uniqueness and achieve growth since then, we grew to be known as "Japan's data entry company" within less than 10 years after our founding. Many of the achievements we cultivated here have laid the foundation for us to become an information processing outsourcer. Since then, we have expanded our business domain together with the changing times. In the 1980s, when personal computers (PCs) began to appear in markets around the world, we began PC support services based on the knowledge and application know-how concerning computers that we cultivated through our data entry operations, and we are currently developing contact center services and business process outsourcing services. Additionally, in the 1990s, when Internet usage started becoming widespread, we recognized that the Internet would bring about major changes in the business environment of companies, and based on that, we entered into a new business domain known as digital marketing and made strategic moves for future business development in order to quickly tackle the development of services that would incorporate Internet technology. Furthermore, in order to respond to the globalization of rapidly developing Japanese companies, we have constructed a worldwide service delivery system and established a business base that enables us to provide high value- added and unique outsourcing services developed in Japan to a global audience. Through these efforts, our Company has established outstanding business operations which respond to the diversity of global markets by combining the people and technology that are best suited for each market. Further, with our speedy, cost-effective, and accurate operational capabilities, we have established a top-class position in Asia as a BPO provider that optimizes the business processes of clients and drives their transformation. This has been accomplished through a service philosophy that advances conditions which ensure that clients have highly competitive business processes that ultimately become the sources of their competitive strengths (Operational Excellence).

In order to maintain and improve the corporate value of our Company, it is extremely important to continue refining these sources of our corporate value in the future, to aim for global expansion, and

ultimately to make IT more familiar and easier to use for human beings by connecting people and IT through our business. In addition, for the personnel that support our business, we will continue contributing to the development of the global economy and society through ongoing initiatives for ESG issues, including embracing the promotion of diversity such as supporting the active participation and inclusion of female employees, advancing the employment of people with disabilities, and actively hiring local personnel from overseas. It is efforts such as these which form the foundation for achieving broad customer satisfaction and establishing stable long-term relationships of trust with clients to support the creation of corporate value for our Company.

2. Efforts for increasing our corporate value

Amidst the backdrop of advances in digital technology and a prolonged labor shortage, demand for the outsourcing services offered by the Company group remains firm. In particular, demand is growing for services that help promote digital transformation (DX) and solve issues to improve the customer experience (CX), the need for which was reconfirmed in the wake of the COVID-19 pandemic.

Under these circumstances, the Company is developing our business with a one-of-a-kind service portfolio that has CX services and BPO services as its two key pillars. Specifically, in CX services, we contribute to our client's sales expansions by providing end-to-end services ranging from marketing to customer care, while in BPO services we support our clients in strengthening their business foundations and optimizing costs through digital BPO, which unifies our expertise and digital technology.

In order to support innovative changes for our clients with the above-mentioned "people & technology" at the core of our business, we have worked to achieve a high growth rate and profitability with the aim of becoming a "Global Digital Transformation Partner." In addition, the Company has achieved significant business results from 2020, even in the midst of the global COVID-19 pandemic, by leveraging our large-scale business execution capabilities to proactively develop business support related to infection control policies promoted by governments, municipalities, and private companies. As a result of these efforts, we were able to achieve record-high sales and operating incomes in FY 2021, as well as a significant improvement in overall business profitability.

The Company group's long-term goal is to achieve sales of one trillion yen, and to this end we must further evolve our services and businesses. We must meet the expectations of our clients that are working to make innovations in their front and back office operations and to accelerate expansion into overseas markets, which offer the greatest growth opportunities, by further strengthening our various business expertise and ability to handle multiple communication channels, increasing our abilities to respond to global clients, expanding our geographic area and service coverage, and promoting company- wide personnel development and enhancement.

Based on these ideas, our new Medium-Term Business Plan sets out our vision to "evolve to a technology solutions company from a company with operational excellence," "become an unparalleled leader in Asia and a Top 5 global CX/BPO services player," and "meet all stakeholder expectations including clients, employees and shareholders, and serve society," and in order to realize this vision, we have formulated and been working on the following as our important strategies: platformization of our business model and standardization of our services; reinforcement of our structure and talent development to achieve growth in the global market; development of next-generation services; and improvement of the group's management foundation. Through the initiatives in this new Medium-Term Management Plan, we will continue to evolve to become a "Global Digital Transformation Partner" that brings the best customer experience and productivity innovation to our clients and contributes to the realization of a sustainable society.

3. Reinforcement of Corporate Governance

The Company has adopted the corporate governance system of a company with an audit and supervisory committee in order to make appropriate business decisions and operate our business in a time-efficient manner, and to establish a management system that allows the Company to perform appropriate audit and oversight functions. Being a company with an audit and supervisory committee, the Company continues to ensure the effectiveness of our corporate governance by taking into consideration its operational needs.

In terms of management by the Board of Directors, the directors who comprise the Board of Directors hold active discussions providing opinions based on their individual assessments, and advice is obtained from outside directors, which is given from a standpoint that is independent from the Company's management, objective, and impartial, in order to ensure the adequacy and appropriateness of decision making by the Board of Directors. In addition, the Company has introduced a corporate officer system, in which the responsibilities held by the Board of Directors for "management decision- making and supervisory functions" and "operation execution functions" are separated so that the Board of Directors have responsibility for "management decision-making and supervisory functions," while corporate officers have responsibility for "operation execution functions." By doing this we are able to achieve quick and detailed execution of operations in order to respond flexibly to changes in industry specific business environments. The Audit and Supervisory Committee, which is comprised of three outside directors, attends important meetings, including those of the Board of Directors, and through an internal control department monitors whether internal control systems are being properly constructed and operated. In this way, as well as through other means, the Audit and Supervisory Committee conducts audits of the Company and its domestic and overseas subsidiaries, as well as audits of the execution of duties by the directors.

The Company has established the Nomination Committee and the Remuneration Committee, the majority of whose members are independent outside directors and in which an independent outside director serves as the chairperson, with respect to the nomination of director candidates, remuneration, and other matters related to directors (excluding directors who are members of the Audit and Supervisory Committee). The Nomination Committee and the Remuneration Committee deliberate on the nomination of director candidates, remuneration, and other matters related to directors (excluding directors who are members of the Audit and Supervisory Committee), respectively, and report the results thereof to the Board of Directors. In addition, the Audit and Supervisory Committee oversees the decision-making process for the nomination and remuneration of directors who are not members of the Audit and Supervisory Committee.

Moreover, as part of the training and education for directors, the Company holds events as appropriate, including compliance and legal affairs training as well as director study seminars conducted by invited outside lecturers.

We believe that these actions to strengthen corporate governance will stimulate our efforts to enhance corporate value as mentioned in section II.2 above, and will form the foundation for enhancing our corporate value and the common interests of shareholders. We therefore believe that all of these actions are in line with our basic policies related to corporate governance.

1. Purpose and Details of the Plan

1. Purpose of the Plan

The Plan is in line with the Basic Policy set out in I above for the purpose of ensuring and enhancing the corporate value of the Company and, in turn, the common interests of its shareholders.

As set out in the Basic Policy, the Company's Board of Directors believes that persons who would propose a large-scale acquisition in a manner that does not contribute to the corporate value of the Company or the common interests of its shareholders would be inappropriate to become persons who control decisions on the Company's financial and business policies. The purpose of the Plan is to prevent decisions on the Company's financial and business policies from being controlled by persons deemed inappropriate, to deter large-scale acquisitions of the shares in the Company that are detrimental to the corporate value of the Company and, in turn, the common interests of its shareholders, and on the occasion that a large-scale acquisition of the shares in the Company were to be effected, to enable the Company's Board of Directors to present an alternative proposal to the shareholders or to ensure the necessary time and information for the shareholders to decide whether or not to accept the large-scale acquisition, and to negotiate for the benefit of the shareholders.

The Company has not received any notice or proposal of a large-scale acquisition of the shares in the Company from any specific third parties.

2. Plan Outline

The Plan sets out procedures necessary to achieve the purpose stated above, including requirements for acquirers to provide information in advance in the case that the acquirer intends to make an acquisition of 20% or more of the Company's share certificates or other equity securities.

The acquirer must not effect a large-scale acquisition of the shares and other equity securities in the Company until and unless the Company's Board of Directors determines not to trigger the Plan in accordance with the procedures for the Plan.

In an event such as when an acquirer does not follow the procedures set out in the Plan, or a large- scale acquisition of shares and other equity securities in the Company could harm the corporate value of the Company and the common interests of its shareholders and if the acquisition satisfies the triggering requirements set out in the Plan, the Company will implement a gratis allotment of share options (shinkabu yoyakuken mushou wariate) with (a) an exercise condition that does not, as a general rule, allow the acquirer, etc. to exercise the rights and (b) an acquisition provision to the effect that the Company may acquire the share options in exchange for the Company's shares from persons other than the acquirer, etc. or other reasonable measures that can be taken under laws and ordinances and the Articles of Incorporation of the Company. If a gratis allotment of share options were to take place in accordance with the Plan and all shareholders other than the acquirer received the Company's shares as a result of those shareholders exercising or the Company acquiring those share options, the ratio of voting rights in the Company held by the acquirer may be diluted by up to a maximum of approximately 50%.

In order to eliminate arbitrary decisions by directors regarding decisions on matters such as the implementation or non-implementation of the gratis allotment of share options or the acquisition of share options, the Company has established an Independent Committee, which is solely composed of outside directors and other members who are independent from the management of the Company, and such decisions will be subject to the objective determination of the Independent Committee. In addition, the Company's Board of Directors may, if prescribed in the Plan, convene a general meeting of shareholders and confirm the intent of the Company's shareholders.

Transparency with respect to the course of those procedures will be ensured by timely disclosure to all of the Company's shareholders.

3. Plan Details (Measures to Prevent Decisions on the Company's Financial and Business Policies from being Controlled by Persons Deemed Inappropriate Under the Basic Policy)

3.1 Procedures for Triggering the Plan

1. Targeted Acquisitions

The Plan will be applied in cases where any purchase or other acquisition of share certificates, etc. of the Company that falls under any of (I) through (III) below or any similar action (including a proposal1 for such action) (except for such action as the Company's Board of Directors separately determines not to be subject to the Plan; the "Acquisition") takes place.

1. A purchase or other acquisition that would result in the holding ratio of share certificates, etc. (kabuken tou hoyuu wariai)2 of a holder (hoyuusha)3 totaling 20% or more of the share certificates, etc. (kabuken tou)4 issued by the Company; or

1. A tender offer (koukai kaitsuke)5 that would result in the party conducting the tender offer's ownership ratio of share certificates, etc. (kabuken tou shoyuu wariai)6 and the ownership ratio of share certificates, etc. of a person having a special relationship (tokubetsu kankei-sha)7

1. A "proposal" includes any act that solicits a third party for conducting an Acquisition.
2. Defined in Article 27-23.4 of the Financial Instruments and Exchange Act. The same applies throughout this document.
3. Including persons described as a holder under Article 27-23.3 of the Financial Instruments and Exchange Act (including persons who are deemed to fall under the above by the Board of Directors of the Company). The same applies throughout this document.
4. Defined in Article 27-23.1 of the Financial Instruments and Exchange Act. The same applies throughout this document unless otherwise provided for.
5. Defined in Article 27-2.6 of the Financial Instruments and Exchange Act. The same applies throughout this document.
6. Defined in Article 27-2.8 of the Financial Instruments and Exchange Act. The same applies throughout this document.
7. Defined in Article 27-2.7 of the Financial Instruments and Exchange Act (including persons who are deemed to fall under

totaling 20% or more of the share certificates, etc. (kabuken tou)8 issued by the Company.

1. Regardless of whether or not any one of the acts provided for in items (I) and (II) above is conducted, an act (i) conducted between (a) a person who intends to acquire share certificates, etc. of the Company, or a joint holder (kyoudou hoyuusha)9 or a person having a special relationship with respect to that person (each, an "Acquirer of Share Certificates, Etc." in this item (III)) and (b) another shareholder of the Company (including multiple shareholders; the same applies in (III) below) and that constitutes an agreement or other act as a result of which the other shareholder(s) become(s) a joint holder of the Acquirer of Share Certificates, Etc. or any act that establishes a relationship10 whereby the Acquirer of Share Certificates, Etc. or the other shareholder(s) substantially control(s) the other(s) or they act jointly or in concert with each other11, and (ii) that would result in the total holding ratio of share certificates, etc. issued by the Company of that Acquirer of Share Certificates, Etc. and the other shareholder(s) accounting for 20% or more.

The party intending to make the Acquisition alone or jointly or in concert with other parties (the "Acquirer") shall follow the procedures set out in the Plan, and the Acquirer must not effect the Acquisition until and unless the Company's Board of Directors resolves not to implement the gratis allotment of share options (the principal terms of which are set out in 3.3 'Outline of the Gratis Allotment of Share Options'; such share options are hereinafter referred to as the "Share Options") or other measures in accordance with the Plan.

1. Submission of Acquirer's Statement

The Company will request the Acquirer to submit to the Company in the form separately prescribed by the Company a legally binding document that includes an undertaking that the Acquirer will comply with the procedures set out in the Plan (signed by or affixed with the name and seal of the representative of the Acquirer and to which no conditions or reservations are attached) and a qualification certificate of the person who signed or affixed its name and seal to that document (collectively, "Acquirer's Statement") before commencing or effecting the Acquisition. The Acquirer's Statement must include the name, address or location of headquarters, location of offices, governing law for establishment, name of the representative, contact information in Japan for the Acquirer and the outline of the intended Acquisition. The Acquirer's Statement and the Acquisition Document set out in (c) below and any other materials submitted by the Acquirer to the Company or the Independent Committee must be written in Japanese.

1. Request to the Acquirer for the Provision of Information

The Company will provide the Acquirer the format for the Acquisition Document (defined below), including a list of information that the Acquirer should provide to the Company, no later than 10 business days after receiving the Acquirer's Statement. The Acquirer must provide the Company's Board of Directors with the document in the form provided by the Company (the "Acquisition Document"), which includes the information described in each item of the list below ("Essential Information").

If the Company's Board of Directors receives the Acquisition Document, it will promptly send it to the Independent Committee (standards for appointing members, requirements for resolutions, resolution

the above by the Board of Directors of the Company); provided, however, that persons provided for in Article 3.2 of the Cabinet Office Ordinance on Disclosure Required for Tender Offer for Share Certificates, Etc. by Person other than Issuer are excluded from the persons described in Article 27-2.7(i) of the Financial Instruments and Exchange Act. The same applies throughout this document.

1. Defined in Article 27-2.1 of the Financial Instruments and Exchange Act.
2. Defined in Article 27-23.5 of the Financial Instruments and Exchange Act, including persons regarded as a joint holder under Article 27-23.6 of the Financial Instruments and Exchange Act (including persons who are deemed a joint holder by the Company's Board of Directors). The same applies throughout this document.
3. Judgment regarding whether a "relationship whereby an Acquirer of Share Certificates, Etc. or the other shareholder(s) substantially control(s) the other(s) or they act jointly or in concert with each other" has been established between them will be made based on certain factors such as the current or past capital relationship (including a relationship of joint control), business alliance relationship, business or contractual relationship, relationship of interlocking directorate, financing relationship, and credit granting relationship, and currently or in the past having a beneficial interest in the Company's share certificates, etc. through derivatives, stock lending, and other transactions, and direct or indirect effects on the Company caused by that Acquirer of Share Certificates, Etc. and the other shareholder(s).
4. Judgment regarding whether an act specified in item (III) of the main text has been conducted will be reasonably made by the Company's Board of Directors respecting the determination of the Independent Committee. Please note that the Company's Board of Directors may request the Company's shareholders to provide necessary information to the extent that is required for making a judgment regarding whether the relevant act satisfies the requirements prescribed in (III) of the main text.

matters, and other matters concerning the Independent Committee are as described in Attachment 1 'Outline of the Rules of the Independent Committee' and business backgrounds and other matters regarding members of the Independent Committee at the time of the Renewal will be as described in Attachment 2 'Profiles of the Members of the Independent Committee'). If the Independent Committee determines that the Acquisition Document does not contain sufficient Essential Information, it may set a reply period and request that the Acquirer additionally provide information. In such case, the Acquirer should additionally provide such information within the relevant time limit.

1. Details (including name, capital relationship, financial position, operation results, details of violation of laws or ordinances in the past (if any), terms of previous transactions by the Acquirer similar to the Acquisition) of the Acquirer and its group (including joint holders, persons having a special relationship and persons having a special relationship with a person in relation to whom the Acquirer is the controlled corporation12)13.
2. The purpose, method and specific terms of the Acquisition (including the amount and type of consideration, the timeframe, the scheme of any related transactions, the legality of the Acquisition method, and the feasibility of the Acquisition).
3. The amount and basis for the calculation of the purchase price of the Acquisition.
4. Details of agreements regarding share certificates, etc. of the Company between the Acquirer and a third party and information relating to any previous acquisition or disposal of the share certificates, etc. of the Company by the Acquirer.
5. Financial support for the Acquisition (specifically including the names of providers of funds for the Acquisition (including all indirect providers of funds), financing methods, and the terms of any related transactions).
6. Details of communications regarding the Acquisition with a third party (if any).
7. Post-Acquisitionmanagement policy, administrative organization, business plan, capital and dividend policies for the Company group.
8. Post-Acquisitionpolicies for the Company's shareholders (other than the Acquirer) and the employees, business partners, customers, and any other stakeholders in the Company group.
9. Specific measures to avoid any conflict of interest with other shareholders of the Company.
10. Information on any relationships with an anti-social force.
11. Any other information that the Company's Board of Directors or the Independent Committee reasonably considers necessary.

1. Consideration of Acquisition Terms, Negotiation with the Acquirer, and Consideration of an Alternative Proposal

1. Request to the Company's Board of Directors for the Provision of Information

If the Independent Committee reasonably determines that the Acquirer has submitted the Acquisition Document and any other information (including additional information that is required to be submitted; hereinafter the same), it may set a reply period (the "Board of Directors Consideration Period") as appropriate and request that the Company's Board of Directors present an opinion (including an opinion to refrain from giving such opinion; hereinafter the same) on the Acquirer's Acquisition terms, materials supporting such opinion, an alternative proposal (if any), and any other information, etc. that the Independent Committee considers necessary.

1. Independent Committee Consideration

If the Independent Committee determines that the Acquirer has sufficiently submitted the Acquisition Document and any other information, etc., it will conduct its consideration of the Acquisition terms, collection of information, etc. on the materials such as the management plans and business plans of the Acquirer and the Company's Board of Directors and comparisons thereof, and consideration of any alternative plan presented by the Company's Board of Directors, and the like for a period of 90 days after

1. Defined in Article 9.5 of the Order for Enforcement of the Financial Instruments and Exchange Act.
2. If an Acquirer is a fund, information relating to the matters described in (i) about each partner and other constituent members is required.

the receipt of the information, etc. (including the Board of Directors Consideration Period, the "Independent Committee Consideration Period").

In order to ensure that the determination of the Independent Committee is made in a way that it will contribute to the corporate value of the Company and, in turn, the common interests of its shareholders, the Independent Committee may, at the cost of the Company, obtain advice from financial advisers, certified public accountants, attorneys, certified public tax accountants, consultants, or any other experts.

In addition, if it is necessary to improve the terms of the Acquisition from the standpoint of ensuring and enhancing the corporate value of the Company and, in turn, the common interests of its shareholders, the Independent Committee shall directly or indirectly discuss and negotiate with the Acquirer. If the Independent Committee directly or indirectly requests the Acquirer to provide materials for consideration or any other information, or to discuss and negotiate with the Independent Committee, the Acquirer must promptly respond to such request.

The Independent Committee may, to the reasonable extent that it is considered necessary for actions such as consideration of the terms of the Acquirer's Acquisition, consideration of an alternative proposal and negotiation with the Acquirer, extend the Independent Committee Consideration Period (up to 30 days in total).

1. Recommendation by the Independent Committee

In cases such as where the Independent Committee determines that the Acquisition falls under one of the trigger events set out below in 3.2, 'Requirements for the Gratis Allotment of Share Options, Etc.' (including Quasi Trigger Events set out in 3.2, collectively, "Trigger Events"), the Independent Committee will recommend the implementation of the gratis allotment of the Share Options or other reasonable measures that can be taken under laws and regulations and the Company's Articles of Incorporation14 (collectively, the "Gratis Allotment of Share Options, Etc.") to the Company's Board of Directors except in any specific cases such as where further disclosure of information by the Acquirer or negotiation or discussion with the Acquirer is necessary. The Independent Committee may recommend implementation of the Gratis Allotment of Share Options, Etc. subject to confirming the shareholders' intent in advance or subsequently.

Notwithstanding the foregoing paragraph, even after the Independent Committee has already made a recommendation for the implementation of the gratis allotment of Share Options, if the Independent Committee determines that either of the events in (A) or (B) below applies, it may make a new recommendation that (i) on or before the second business day prior to the ex-rights date with respect to the gratis allotment of Share Options, the Company should suspend the gratis allotment of Share Options, or (ii) from the effective date of the gratis allotment of Share Options and until the day immediately prior to the commencement date of the exercise period of the Share Options, the Company should acquire the Share Options for no consideration.

1. The Acquirer withdraws the Acquisition or the Acquisition otherwise ceases to exist after the recommendation.15
2. There is no longer any Trigger Event due to a change or the like in the facts or other matters on which the recommendation decision was made.

On the other hand, if the Independent Committee does not reach a determination that the Acquisition falls under either Trigger Event, the Independent Committee will not recommend the implementation of the Gratis Allotment of Share Options, Etc. to the Company's Board of Directors.

1. Specifically, measures such as passing a resolution at a general meeting of shareholders to require the Acquirer to cancel the Acquisition are expected to be taken.
2. This would apply, for example, when the Acquirer cancels or withdraws an Acquisition that has already commenced (if the Acquisition is conducted by means of a tender offer, a public notice of the withdrawal of a tender offer (the main text of Article 27-11.2 of the Financial Instruments and Exchange Act) is required) and then a document to the effect that the Acquirer covenants such matters as that (i) the Acquisition will not be effected for a certain period, (ii) the Acquirer will reduce its holding ratio of share certificates, etc. to a certain percentage within a specific period, and (iii) the Acquirer will not exercise its right to demand convocation of an extraordinary general meeting of shareholders for a certain period is submitted and the Acquirer acts in compliance with the written covenant.

Notwithstanding the forgoing, even after such decision, if there is a change in the facts or other matters on which the decision was made and the Acquisition comes to fall under a Trigger Event, the Independent Committee may make a new recommendation that the Company should implement the Gratis Allotment of Share Options, Etc.

In addition, if the Independent Committee determines that there is a possibility that the Acquisition could harm the corporate value of the Company and, in turn, the common interests of its shareholders, the Independent Committee may, by submitting the reasons therefor, make a recommendation such as holding a meeting of shareholders and confirming the shareholders' intent regarding the Acquisition by the Acquirer.

1. Resolutions by the Board of Directors

If the Shareholders Meeting is held in accordance with (g) below, the Company's Board of Directors will pass a resolution in accordance with the resolution at the Shareholders Meeting. In addition, if the Shareholders Meeting is not held, the Company's Board of Directors, in exercising its role under the Companies Act, will pass a resolution relating to the implementation or non-implementation of the Gratis Allotment of Share Options, Etc. respecting the recommendation of the Independent Committee in accordance with (e) above to the maximum extent.

1. Holding of the Shareholders Meeting

The Company's Board of Directors may convene a meeting of shareholders (the "Shareholders Meeting" 16) and confirm the intent of the Company's shareholders if (i) the Independent Committee recommends implementation of the Gratis Allotment of Share Options, Etc. subject to confirming the shareholders' intent in advance or recommends confirmation of the shareholders' intent regarding the Acquisition by the Acquirer in accordance with (e) above, or (ii) the Company's Board of Directors believes that it should implement the Gratis Allotment of Share Options, Etc. and determines it appropriate to confirm the shareholders' intent taking into consideration the time required to hold the Shareholders Meeting or other matters pursuant to the duty of care of a director17.

1. Information Disclosure

When operating the Plan, the Company will disclose, in a timely manner, information on matters that the Independent Committee or the Company's Board of Directors considers appropriate including the progress of each procedure set out in the Plan (including the fact that the Acquirer's Statement and Acquisition Document have been submitted, the Independent Committee Consideration Period has commenced, and the Independent Committee Consideration Period has been extended), or an outline of recommendations made by the Independent Committee and an outline of resolutions by the Board of Directors, in accordance with the applicable laws and ordinances or the regulations of the financial instruments exchange.

3.2 Requirements for the Gratis Allotment of Share Options, Etc.

The requirements to trigger the Plan to implement a gratis allotment of Share Options are as follows. As described above in (e) of 3.1, 'Procedures for Triggering the Plan,' the Company's Board of Directors will make a determination as to whether any of the following requirements applies to an Acquisition for which the recommendation by the Independent Committee has been obtained.

Trigger Event (1)

The Acquisition is not in compliance with the procedures prescribed in the Plan (including cases that time and information necessary to consider the details of the Acquisition is not offered) and it is

1. The "Shareholders Meeting" includes not only a shareholders meeting under the Companies Act where shareholders resolve statutory matters for resolution set out in Article 295 of the Companies Act, but also a meeting where advisory resolutions regarding matters other than the statutory matters for resolution set out in Article 295 of the Companies Act are made. In addition, the Shareholders Meeting includes a meeting of shareholders that is held after a resolution of the Board of Directors to implement the gratis allotment of Share Options and before the effective date of the gratis allotment of Share Options.
2. Although as a general rule the intent of shareholders will be confirmed by an ordinary resolution at the Shareholders Meeting, in some cases a person who is deemed by the Acquirer and the Independent Committee to have a special interest in the Acquirer in relation to the proposal in question by comprehensively taking into account various circumstances, including the purpose, method, and terms of the Acquisition as well as the potential conflicts of interest between the Acquirer and general shareholders (such a person, a "Specially Related Party of the Acquirer"), will be excluded from the calculation of a requirement for passing a resolution to approve the proposal.

reasonable to implement the gratis allotment of Share Options.

Trigger Event (2)

The Acquisition falls under any of the following and it is reasonable to implement the gratis allotment of Share Options.

1. An Acquisition that threatens to cause obvious harm to the corporate value of the Company and, in turn, the common interests of its shareholders through any of the following actions.
2. 1. A buyout of share certificates, etc. to require such share certificates, etc. to be compulsorily purchased by the Company or the Company's affiliates, etc. at a high price.
   2. Management that achieves an advantage for the Acquirer to the detriment of the Company, such as temporary control of the Company's management for the low-cost acquisition of the Company group's material assets.
   3. Diversion of the Company group's assets to secure or repay debts of the Acquirer or its group company.
   4. Temporary control of the Company's management to bring about the disposal of high-value assets that have no current relevance to the Company group's business and declaring temporarily high dividends from the profits of the disposal, or selling the shares at a high price taking advantage of the opportunity afforded by the sudden rise in share prices created by the temporarily high dividends.
3. Certain Acquisitions that threaten to have the effect of coercing shareholders into selling shares, such as coercive two-tiered tender offers (meaning acquisitions of shares including tender offers, in which no offer is made to acquire all shares in the initial acquisition, and acquisition terms for the second stage are set that are unfavorable or unclear).
4. Acquisitions to which the terms (including the amount and type of consideration, timeframe, legality of the Acquisition method, feasibility of the Acquisition being effected, and post-Acquisition policies for the Company's other shareholders, and the employees, customers, business partners and any other stakeholders in the Company group) are inadequate or inappropriate in light of the Company's intrinsic value.
5. Acquisitions that materially threaten to oppose the corporate value of the Company and, in turn, the common interests of shareholders, by destroying the relationships with the Company group's employees, customers, business partners and the like, which are indispensable to the generation of the Company's corporate value.

In addition to the above, the Company may take the reasonable measures that can be taken under laws and ordinances and the Company's Articles of Incorporation as an invocation of the Plan if any requirement similar to a Trigger Event stated above is satisfied and it is reasonable to trigger the Plan (such event is hereinafter referred to as a "Quasi Trigger Event" in the Plan). Even in this case, the decision is always made through the recommendation of the Independent Committee as set out above in

(e) of 2.1, 'Procedures for Triggering the Plan.'

3.3 Outline of the Gratis Allotment of Share Options

The following is an outline of the gratis allotment of Share Options that may be implemented under the Plan.

1. Number of Share Options

The Company will implement a gratis allotment of Share Options in the same number as the most recent total number of issued and outstanding shares in the Company (excluding the number of shares in the Company held by the Company at that time) on a certain date (the "Allotment Date") that is separately determined in a resolution by the Company's Board of Directors or a resolution at a meeting of shareholders relating to the gratis allotment of Share Options (the "Gratis Allotment Resolution").

1. Shareholders Eligible for Allotment

The Company will allot the Share Options to shareholders, other than the Company, who are