Epson 2015 Annual Report Download - page 46

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3. Basic policy regarding company control
At its meeting on April 30, 2008, Epson’ s board of directors agreed on 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 measures in support of the basic policy
1) Specific actions in support of the basic policy
Under the Updated SE15 Second-Half Mid-Range Business Plan (FY2013–FY2015), the Company remains
firmly committed to the strategies outlined in the SE15 Long-Range Corporate Vision but has adopted new
tactics and a different emphasis. Under the updated basic policy, Epson will pursue a basic strategy of
managing its businesses so that they create steady profit while avoiding any over-emphasis on revenue
growth. The top priority will be steady income and cash flow.
Going forward, Epson will transform itself into a company that once again posts strong growth by focusing
its management resources in areas where it can capitalize on its unique strengths, by expanding its business
segments, and by building stronger new businesses that will support Company growth in the future.
2) Efforts to deter parties who are deemed inappropriate based on Epson’ s basic policy in 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 to prevent large-scale acquisition of Epson shares. The measures were
approved at the June 2008 general meeting of shareholders and updated at the June 2011 general meeting of
shareholders. The old measures were formally reworded and shareholders approved their updating at the
June 24, 2014 general meeting of shareholders. (The updated measures are called “the Plan,” below.)
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 about using anti-takeover measures,
the decision to invoke preventive measures is subject to the assessment of a special committee made up of
highly independent external parties. Actions of the special committee shall include examination of stock
acquisition details, requesting information from the Epson board of directors regarding alternative proposals,
disclosing information to shareholders, and negotiating with parties intending to make acquisitions. The
special committee shall advise the Epson board of directors regarding the necessity of anti-takeover
measures, and the Epson board of directors shall promptly accept or reject a resolution to invoke preventive
measures, paying the utmost consideration to that advice.