Epson 2013 Annual Report Download - page 43

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3. Basic policy regarding company control
At its meeting on April 30, 2008, Epson's board of directors agreed to a basic policy governing persons
who control our financial and business policy decisions (hereinafter the “basic policy”).
(1) Overview
Epson believes that its shareholders should be determined through free trade on the market. Therefore, the
decision as to whether to accept a takeover offer that would allow another party to acquire a controlling
share of Epson and thus gain power over the Company's financial and business decisions should ultimately
be put before the shareholders.
To ensure and enhance the corporate value and common interests of shareholders, Epson believes it is
essential for Epson's directors, managers, and employees to work as a team to create value, to pursue the
Epson tradition of creativity and challenge, and to earn and keep the trust of its customers.
Not all large-scale acquisitions of shares enhance the value of the company whose shares are being
acquired, nor do they always serve the common interests of shareholders. Epson recognizes the need to use
all necessary and appropriate means to protect the Company's corporate value and the common interests of
its shareholders against persons seeking to improperly acquire large numbers of shares in an attempt to gain
control over decisions concerning the Company's financial and business policies.
(2) Summary of initiatives to help achieve the basic policy
1) Specific actions supporting actualization of the basic policy
Epson has executed a variety of actions designed to achieve the vision set forth in "SE15," a strategic
corporate vision established in March 2009 that describes what the Company wants to be like in the
2015 fiscal year. In the 2012 fiscal year, facing a business environment that was even harsher than
predicted, the Company decided to re-examine and adjust some of the strategies and financial targets in
the original plan. The result is the Updated SE15 Second-Half Mid-Range Business Plan (FY2013-15),
a three-year plan established in March 2013.
Under this plan the Company will readjust its product mixes and adopt new business models in existing
segments and aggressively develop markets in new business segments. Epson will move steadily
forward to transform itself from being primarily a provider of consumer imaging products into a
company that once again posts strong growth by creating and providing new information solutions and
equipment for businesses and professionals, as well as consumers.
2) Efforts in preventing parties who are deemed inappropriate based on Epson’s basic policy from gaining
control over the Company’s financial and business policy decision-making
Aiming to ensure and enhance corporate value and the common interests of its shareholders, Epson
introduced a series of measures ("the Original Plan") to prevent large-scale acquisition of Epson shares
after shareholders approved the Original Plan at their general meeting held on June 25, 2008. The
Original Plan, which was approaching the end of its effective period, was subsequently revised in part,
and the updated plan ("the Plan") was approved by shareholders at the June 20, 2011, general
shareholders' meeting.
The purpose of the Plan is to prevent large-scale acquisitions of Epson stock certificates that do not
enhance corporate value or that are not in the common interests of shareholders by having shareholders
decide whether to allow such acquisitions and by giving the Epson board of directors the time and
information they need to present shareholders with an alternative proposal and enable the board to
discuss and negotiate with the acquirer on behalf of shareholders. Specifically, a party that intends to
acquire 20% or more of stock certificates outstanding or to stage a takeover bid shall be required to
submit in advance to the Epson board of directors a statement of intent as well as sufficient and
necessary information for decision-making on the part of shareholders and for evaluation and
consideration by a special committee. The party shall also be required to comply with the procedures
defined in the Plan. Furthermore, the Plan allows for the activation of provisions to halt the acquisition
in question if, for example, it is not conducted in line with the Plan or it is deemed contrary to Epson’s
value as a company or the common interest of its shareholders.
To prevent the Epson board of directors from making arbitrary decisions on the activation of provisions,
the question of whether to invoke preventive provisions is subject to the assessment of a special