Corporate Governance
Latest Update :
Jul.1, 2011
Takeover Defense Measures
Countermeasures to Large-Scale Acquisitions of Minebea Shares (Takeover Defense Measures)
(a) Basic Policy regarding 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 fully understand the details of the Company's financial and business affairs and the source of the Group's corporate value and who will make it possible to continually and persistently ensure and enhance the Group's corporate value and, in turn, the common interests of its shareholders.
The Company believes that ultimately its shareholders as a whole must make the decision on any proposed acquisition that would involve a transfer of corporate control of the Company. Also, the Company would not reject a large-scale acquisition of the shares in the Company if it would contribute to the corporate value of the Group and, in turn, the common interests of its shareholders.
Nonetheless, there are some forms of corporate acquisition that benefit neither the corporate value of the target company nor the common interests of its shareholders including without limitation, 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.
In order for the Group to ensure and enhance the corporate value and, in turn, the common interests of its shareholders, it is necessary for the Group to efficiently and continuously develop new products, cultivate new markets and revolutionize production technology in the mid- to long-term globally based on the Group's original vertically integrated manufacturing system, drive to be a company that leads the competition through manufacturing and technological excellence based on advanced ultra-precision machining technology and mass production techniques for mechatronic products that are the source of the Group's corporate value.
Unless the acquirer in a proposed large-scale acquisition of the shares in the Company understands the source of the corporate value and the characteristics that are indispensable to enhance the corporate value of the Group, as well as the details of the financial and business affairs of the Company, and will ensure and realize these elements over the medium-to-long-term, the corporate value of the Group and the common interests of its shareholders would be harmed.
Therefore, the Company believes that persons who would make a large-scale acquisition of the shares in the Company in a manner that does not contribute to the corporate value of the Group 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 Company believes that it is necessary to ensure the corporate value of the Group and, in turn, the common interests of its shareholders by taking the necessary and reasonable countermeasures for the purpose of deterring acquisitions that are detrimental to the corporate value of the Group and, in turn, the common interests of its shareholders.
(b) Special measures for Realization of Basic Policy
The Group's business objective is to fulfill its social responsibilities to the various stakeholders, such as shareholders, business partners, local communities, the international society and employees, and maximize its corporate value.
Under this basic management policy, the Group proactively makes efforts to develop high value-added products and enhance the quality of its products while concentrating its management resources in fields in which the Group is able to demonstrate its comprehensiveness. The Group also makes it a policy to strengthen its business operations through efforts to enhance its financial standing, and to carry out highly transparent management that is easy for any parties inside or outside the Group to understand.
In addition, the Group fulfills its corporate social responsibilities and aims to further enhance its performance through various efforts, such as to decrease the burden on the environment by its products, promote environmental preservation activities, comply with laws and ordinances, carry out fair and appropriate business operations in accordance with the corporate ethics, and maintain good relationships with its stakeholders.
The Group will make best efforts to realize the direction and vision in the med-term business plan for the fiscal year ending March 31, 2013 and fulfill annual business plans, endeavor to develop organizations that make decisions regarding corporate management and carry out business, and promote the establishment, development and improvement of the internal control system in order to strengthen its corporate governance.
(c) Measures to prevent control over decisions on the Company's financial and business policies by persons deemed as inappropriate under the Basic Policy
Regarding the plan for countermeasures to large-scale acquisitions of the shares in the Company (takeover defense measures) introduced on May 8, 2008, the Board of Directors resolved to partially revise the plan and introduce a renewed plan. The renewed plan (The Plan) was approved by the Company's 65th Ordinary General Shareholders meeting held on June 29, 2011.
Details of the "Measures to prevent control over decisions on the Company's financial and business policies by persons deemed as inappropriate under the Basic Policy" are described below.
- Purpose of Plan
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 Group or the common interests of its shareholders would be inappropriate as 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 that are detrimental to the corporate value of the Group and, in turn, the common interests of its shareholders, and on the occasion that the Company receives a large-scale acquisition proposal regarding the shares in the Company from an acquirer, to enable the Company's board of directors to present an alternative proposal to the shareholders or ensure necessary time and information for the shareholders to decide whether or not to accept the large-scale acquisition proposal, and to enable the board of directors to negotiate for the benefit of the shareholders. - Outline of the Plan
The Plan will be applied in cases where any purchase or other acquisition of share certificates, etc. of the Company that falls under (i) or (ii) below or any similar action (including a proposal 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.- (i) A purchase or other acquisition that would result in the holding ratio of share certificates, etc. of a holder totaling at least 20% of the share certificates, etc. issued by the Company; or
- (ii) A tender offer that would result in the party conducting the tender offer's ownership ratio of share certificates, etc. and the ownership ratio of share certificates, etc. of a person having a special relationship totaling at least 20% of the share certificates, etc. issued by the Company.
The Company will request the Acquirer to submit to the Company an Acquirer's Statement and an Acquisition Document which include a list of information necessary to evaluate the Acquisition before commencing or effecting the Acquisition.
The Independent Committee may request that the Company's board of directors present an opinion on the Acquirer's Acquisition terms and an alternative proposal (if any), and any other information that the Independent Committee considers necessary.
Then, the Independent Committee will conduct its consideration of the Acquisition terms and may directly or indirectly discuss and negotiate with the Acquirer. If the Independent Committee determines that the Acquisition by the Acquirer is not in compliance with the procedures of the Plan, or that it threatens to cause obvious harm to the corporate value of the Group and, in turn, the common interests of its shareholders, and it is reasonable to implement the gratis allotment of Stock Acquisition Rights, and it falls under one of the triggering events set in the Plan, the Independent Committee will recommend the implementation of the gratis allotment of stock acquisition rights to the Company's Board of Directors.
If the Independent Committee determines the Acquisition by the Acquirer does not fall under any of the trigger events set in the Plan, the Independent Committee will recommend the non-implementation of the gratis allotment of Stock Acquisition Rights to the Company's board of directors.
The Company's board of directors, in exercising their role as an organization under the Companies Law, will pass a resolution relating to the implementation or non-implementation of a gratis allotment of Stock Acquisition Rights respecting to the maximum extent any recommendation of the Independent Committee.
If a gratis allotment of stock acquisition rights were to take place in accordance with the Plan and all shareholders other than the acquirer, etc. received one share per stock acquisition right in the Company as a result of those shareholders exercising or the Company acquiring those stock acquisition rights, the ratio of voting rights in the Company held by the acquirer may be diluted by up to 50%.
The effective period of the Plan will be the period until the conclusion of the ordinary general meeting of shareholders relating to the last fiscal year ending within three years after the conclusion of the 65th Ordinary General Meeting of Shareholders held on June 29, 2011.
(d) Decisions and Reasoning by the Company's Board of Directors regarding these Measures
The Company has implemented such measures for enhancing the corporate value as establishing the mid-term business plan and such policies as strengthening its corporate governance practices as specific measures to continually and persistently enhance the Group's corporate value and, in turn, the common interests of the Company's shareholders. These measures will indisputably contribute to the realization of the Basic Policy.
The Plan is a mechanism to maintain the corporate value of the Group and in turn, the common interests of its shareholders when an acquisition is proposed. Therefore, the Plan is in compliance with the Basic Policy.
The Plan satisfies all of the three principles set out in the Guidelines Regarding Takeover Defense for the Purposes of Protection and Enhancement of Corporate Value and Shareholders' Common Interests released by the Ministry of Economy, Trade and Industry and the Ministry of Justice on May 27, 2005, namely, the principles of : Ensuring and enhancing the corporate value and shareholders' common interests ; Prior disclosure and respect for shareholder intent ; and Ensuring necessity and reasonableness.
The Plan is placing high value on the intent of shareholders because it was approved at the 65th Ordinary General Meeting of Shareholders, it is with the Effective Period of approximately three years and if the board of directors or the general meeting of shareholders of the Company resolves to abolish the Plan, the Plan will be abolished at that time.
In addition, the plan has a mechanism to enhance the objectivity and fairness because substantive decisions on triggering of, amendment to or other operation of the Plan will be made by the Independent Committee, which is solely composed of outside directors or other outsiders who are independent from the Company, and the Independent Committee may obtain the advice of independent third parties (financial advisors, certified public accountants, lawyers, tax accountants, consultants and other experts) at the cost of the Company.
Therefore, these measures comply with the Basic Policy and are consistent with the common interests of the Company's shareholders, and are not implemented for the purpose of maintaining the positions of the directors and the corporate auditors of the Company.
