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Policy for Large-scale Purchases of Company Shares
(Defense against acquisition)
NEG believes that as a public company whose shares are traded on the market, the final decision regarding the nature of the entities that control the Company should ultimately be made by the shareholders.
However, some forms of large-scale purchase of the Company’s shares may, in practice, force shareholders to sell their shares or result in a situation in which there is not enough time and information to achieve a solid understanding of the terms of purchase, for example. This could lead to impairment of corporate value and harm the common interest of the shareholders.
It is essential that the board of directors be able to acquire sufficient information for the study and analysis of such large-scale purchases. In order for shareholders to reach a decision, it is important that the board of directors provide shareholders with the results of their investigations and their opinions. With this in mind, NEG introduced a policy for large-scale purchases approved at the annual meeting of shareholders held in June 2006.
The policy addresses the following issues:
- Characteristics of business and improvement of corporate value
- Purpose of large-scale purchase rule
- Details of large-scale purchase rules
- Countermeasures to be taken in the event of large-scale purchase
- Establishment of special committees
- Rationality of countermeasures
- Impact on shareholders and investors and other matters
This policy specifies that priority should be given to the interests of all shareholders, and it eliminates the potential for arbitrary action on the part of the board of directors. Special committees will be established when necessary to make objective decisions regarding the implementation of this policy for the benefit of all shareholders. Respect will be given to the recommendations of the committee, which is made up of highly objective external experts. Based on this policy, NEG shall continue to enhance and protect the interests of all shareholders. In principle, this policy shall remain in effect through the conclusion of the 2009 annual meeting of shareholders.