[an error occurred while processing this directive]
Skip to Main Contents

Announcement Concerning the Adoption of Takeover Defense Measures Against Attempts of Mass Acquisition of the Company's Shares

February 6, 2007

It is our pleasure to announce that the board of directors of the Company, at its meeting held on February 6, 2007, decided to recommend to the general shareholders' meeting the adoption of takeover defense measures (the "Plan") concerning the attempts to acquire 20% or more of the Company's shares ("Specific Takeover Attempts") in order to protect and increase the corporate value and shareholders' common interests of the Company. The adoption of the Plan is to be submitted for affirmation by a vote of shareholders at the 72nd annual shareholders' meeting of the Company to be held on March 27, 2007 (the "Annual Shareholders' Meeting") .

1.

Why Do We Need the Plan?

Our fields of activities are not only business operations relating to motorcycles, marine products and power products, but also extend as far as social contribution and environmental protection activities, etc. We acknowledge that these activities have a synergistic effect, thereby making corporate brand value and building our brand value and corporate value.

In order to accomplish further increases of our brand value and corporate value, it is necessary to aggressively introduce new models, and specifically, develop products with new added value by introducing new technology. It is also important to promote research and development to generate new technology. Furthermore, in order to make profits in new business fields where high revenue and growth in scale are expected in the future, such as in the life science business and environmental technology, it is necessary to aggressively promote research and development as the basis of such businesses. To that end, we believe that bold corporate management policies should be adopted with a long-term perspective.

We believe that it will lead to the destruction of our corporate value and shareholders’ common interests if the acquirer, who lacks an understanding of the above-mentioned sources contributing to brand value and corporate value of our group companies, succeeds in acquiring the Company, and control of the financial and business decisions of the Company, and proceeds to manage the Company by only focusing on short-term economic efficiency, and destroying the successive and programmed management policies from mid to long-term perspective.

The Company deems it necessary that, in order to protect and increase our corporate value and shareholders’ common interests, the relevant acquirer make sufficient disclosure prior to such takeover attempts. Such disclosure should include: (i) the management policy and business plan intended by such acquirer, (ii) the effects that such takeover proposal will have on the shareholders, the Company’s management, and the many stakeholders surrounding the Company, and (iii) the attitudes toward social responsibilities, including safety of the products. Furthermore, the Company deems it necessary that the board of directors of the Company have sufficient time to examine the takeover proposal, and sufficient negotiation power against the acquirer, and accordingly, opportunity to seek relevant information and favorable acquisition terms, or to explore and develop favorable alternatives for shareholders.

2.

Summary of the Plan

The purpose of the Plan is to secure necessary and sufficient disclosure prior to the Specific Takeover Attempts, and adequate time to explore and discuss the effects of the Specific Takeover Attempts on the Company’s corporate value and the shareholders’ common interests, so as to protect and increase corporate value and the shareholders’ common interests.

The Plan requires the acquirer who intends to engage in Specific Takeover Attempts, prior to commencing such takeover attempts, to submit to the Company a written Proposal on Specific Takeover Attempts (the “Takeover Proposal”), and request for a Confirmation Resolution (a board of directors’ resolution to the effect that a distribution of share purchase warrants will not be made) by the board of directors of the Company. The Takeover Proposal shall be promptly submitted for voting to the Corporate Value Committee comprising of those appointed solely from amongst the outside directors and outside corporate auditors of the Company.

The Corporate Value Committee will discuss whether it will adopt a resolution to advise that the board of directors shall adopt a Confirmation Resolution on such Takeover Proposal (the “Advisory Resolution”). The Corporate Value Committee shall examine and discuss the Takeover Proposal in good faith from the viewpoint of whether it serves the purpose of protection and increases the corporate value and shareholders’ common interests of the Company. In addition, the Corporate Value Committee is required to adopt an Advisory Resolution if the Takeover Proposals satisfy all requirements prescribed in the Plan.

The board of directors shall adopt the Confirmation Resolution based on the Advisory Resolution of the Corporate Value Committee. If the Corporate Value Committee adopts an Advisory Resolution, the board of directors must adopt a confirmation resolution, unless the board finds a special reason not to follow the Advisory Resolution.

3.

What Secures Reasonableness of the Plan?

(1)

Approval of the Shareholders upon Adoption of the Plan

In order to secure an opportunity to appropriately reflect the will of the shareholders, the board of directors of the Company recommends the adoption of the Plan to the Annual Shareholders' Meeting, and obtains approval from the shareholders.

(2)

Possible Termination of the Plan by Shareholders’ Vote at One General Shareholders’ Meeting

As the term of office for directors is set at one year, the Plan can be terminated through the election of directors at one general shareholders’ meeting, if shareholders so desire.

(3)

Binding Advice from Corporate Value Committee Comprised of Outside Directors and Outside Corporate Auditors

In order to secure the neutrality of the board's decision concerning the Takeover Proposal, a Corporate Value Committee comprised solely of outside directors and outside corporate auditors of the Company shall discuss the Takeover Proposal in good faith from the viewpoint of whether it serves the purpose of protection and increase of corporate value and shareholders' common interests. If the Corporate Value Committee adopts an Advisory Resolution recommending that the board of directors adopt a Confirmation Resolution, the board of directors is required to follow it, unless the board finds a special reason not to follow it.

(4)

Means to Enhance Objectiveness of the Board's Decision

Where the Takeover Proposal satisfies all requirements prescribed in the Plan, the Corporate Value Committee is required to adopt an Advisory Resolution.

(5)

Reaffirmation by Shareholders

The effective term of the Plan is three years from the approval by shareholders at the Annual Shareholders' Meeting. The Plan will be resubmitted for a vote of affirmation of the shareholders upon expiration of the current three-year term.

(6)

Compliance with the Governmental Policy Concerning the Legitimacy and Reasonableness of the Plan

The Plan complies with all requirements of legitimacy and reasonableness as set forth by the “Guidelines Regarding Takeover Defense for the Purposes of Protection and Enhancement of Corporate Value and Shareholders’ Common Interests” dated May 27, 2005 and provided by the Ministry of Economy, Trade and Industry and the Ministry of Justice.

Back to
Top