Takeover Defense Measures

Konami Corporation
22 May 2007
                                  (Translation)

Translation: This English translation has been prepared for general reference
purposes. The Company is not responsible for any consequence resulting from the
use of the English translation in place of the original Japanese text. In any
legal matter, readers should refer to and rely upon the original Japanese text
of the press release dated as of May 22, 2007.





                                                                    May 22, 2007



      KONAMI CORPORATION

      Representative:       Kagemasa Kozuki,
                            Representative Director and CEO
      Code Number:          9766 the first section of the Tokyo Stock Exchange
      Media Contact:        Noriaki Yamaguchi,
                            Representative Director and CFO
      Telephone Number:     03-5770-0573



   Introduction of Countermeasures Against Large-Scale Acquisition of KONAMI
                 CORPORATION Shares (Takeover Defense Measures)



KONAMI CORPORATION (the 'Company') hereby announces that its board of directors
has resolved in a meeting held on May 22, 2007 the details of 'Countermeasures
against any large-scale acquisition of shares in the Company (takeover defense
measures)' (the 'Plan'), as the 'Basic policy regarding the persons who control
decisions of the Company's financial and business policies' (as defined in the
main paragraph of Article 127 of the Enforcement Regulations of the Corporate
Law, the 'Basic Policy') and 'An initiative to prevent decisions of the
Company's financial and business policies from being controlled by persons
regarded as inappropriate under the Basic Policy' (Article 127, paragraph 2,
sub-paragraph (ro) of the Enforcement Regulations of the Corporate Law), this
Plan has the purpose of ensuring and enhancing the corporate value of the
Company and, in turn, the common interests of shareholders.  The Plan shall be
introduced subject to approval of shareholders at the 35th Ordinary General
Meeting of Shareholders of the Company scheduled to be held on June 28, 2007.
Introduction of the Plan has been approved by the Company's auditors (all of
whom are outside auditors) on the condition that the specific operation of the
Plan be properly implemented.





1.           Background to the establishment of the Basic Policy and
Introduction of the Plan

(1)          Business Characteristic of the Company (The Source of the Company's
Corporate Value)

We place priority on our following corporate goal: 'We, Konami Group of
Companies(the 'Group'), aim to be a business group from which people all around
the world have high expectations, through creating and providing people with
'Valuable Time'. The principal management policies of the Group are to focus on
shareholders, to maintain a good relationship with stakeholders including
shareholders, and to contribute to society as a good corporate citizen.  The
Group's desire to deliver wonder and excitement to people all over the world
through the creation and provision of 'Valuable Time' built the present-day
basis of the Company and is its enduring corporate philosophy. In the 'Digital
Entertainment Business', 'Health Service Business' and 'Gaming & System
Business', the Group is commercially expanding and, with continued advances in
network environments, various kinds of user information are coming to be shared
and communities are forming globally, accompanied by a diversification of
preferences. The Company moved to a holding company structure on March 31, 2006
for the purpose of maximizing products and services it produces in the areas of
'Entertainment' and 'Health', with management and executive functions clearly
separated. It has endeavored to establish a corporate structure which can
respond quickly to changes in users' demands and improve corporate value.
Intending to further improve efficiency of operations and aiming at integration
o by enhancing communication within the Group, the Company centralized its
offices, which were previously dispersed in various places in Tokyo, in Tokyo
Midtown in April 2007.

Pursuant to the specific management policies of 'International Standards', 'Fair
Competition' and 'Pursuit of High Profits', the Group is endeavoring to ensure
and improve corporate value and the common interests of shareholders by further
aiming to optimize use of the Group's management resources and continuously and
stably growing and expanding the sources of corporate value.



(2)          Basic Policy

The Company believes that, since we have decided to have the shares of the
Company be available to be sold or purchased through public exchanges, the
decision on whether to accept any proposal of a large-scale acquisition of
shares in the Company, and accordingly the method of gaining control over the
Company, should ultimately be made based on the will of the shareholders.  On
the other hand, as stated in (1) above, the Company believes that, in order to
utilize the accumulated management resources at a maximum level, which is the
source of corporate value, construction of the common interests of shareholders
and enhancement of the Group's brand value, it is essential to have stable
management from a mid-to-long term perspective and sufficient understanding of
accumulated management resources.  Therefore, we think that if the one
controlling the decisions of the Company's financial and business policies lacks
sufficient understanding about the Company, the corporate value of the Company
and, in turn, the common interests of its shareholders would be harmed.



We believe that, although the Company engages in IR activity for shareholders
and investors to help their understanding about the proper value of the shares
of the Company, it is very important for shareholders in order to make proper
decisions on whether or not to accept a sudden proposal of a large-scale
acquisition to ensure the provision of necessary and sufficient information, as
well as time enabling them to make a proper decision which will be achieved by
provision of sufficient information by such a large-scale acquirer, and the
evaluation and opinion, etc. thereon by the board of directors of the Company
who have a sufficient understanding of the business characteristics of the
Company.  In addition, we think that information such as the effect of such
large-scale acquisition upon the Company, the management policy and substance of
business plans of the large-scale acquirer in case it participates in the
management of the Company, and the opinion of the board of directors of the
Company regarding such acquisition, is important for the shareholders of the
Company who intend to hold the shares of the Company on a long term basis.  From
these points of view, the Company, for the purpose of ensuring and enhancing
corporate value and the common interest of shareholders, believes it is
necessary for the shareholders of the Company in making a determination that the
large-scale acquirer who proposes a large-scale acquisition provide the board of
directors of the Company with the necessary and sufficient information about
such acquisition beforehand, and that there is a certain evaluation period
during which the board of directors of the Company makes an evaluation before
the proposal passes subject to certain rules set forth and disclosed by the
Company beforehand (Please refer to 3. (4) below for detail, the 'The
Large-scale Acquisition Rule').

Based on the foregoing, we believe that in the event that a large-scale acquirer
does not comply with the Large-scale Acquisition Rule, or in the exceptional
case where there is a possibility that the corporate value or common interest of
shareholders of the Company would be significantly impaired even if the
large-scale acquirer complies with the Large-scale Acquisition Rule, it is
necessary to ensure and enhance corporate value and the common interest of
shareholders of the Company by taking an appropriate measure to the extent
permitted by laws and regulations and the articles of incorporation when it is
inappropriate for such large-scale acquirer to be a  person who controls the
decisions of the Company's financial and business policies.

The Company has decided to make the foregoing matter as part of its e Basic
Policy.

At this point, the Company has not received any notice, approach or suggestion,
etc. of a large-scale acquisition by any particular third party.



2.           Efforts for Ensuring and Enhancing Corporate Value and Common
Interests of Shareholders



(1)          Moving to a Holding Company System

The Group has achieved various reforms in recent years such as restructuring the
Digital Entertainment Business through the merger with game software producing
and sales subsidiaries, and restructuring of the Health Service Business in
response to growing health awareness, aiming at constructing a system to develop
its management strategy for the next ten years.  In completing the group
restructuring, the Company and the Group moved to a holding company structure on
March 31, 2006 and commenced a new style of management under a holding company
structure with three main business segments: 'Digital Entertainment Business',
'Health Service Business' and 'Gaming & System Business'.  The reason for
selecting a holding company structure is that the Company considered it
necessary to develop into a flexible business entity in response to rapidly
changing market circumstances.  While international standardization of
accounting standards requires a shift to full-fledged consolidated management,
the ubiquitous information society has been widespread in the entertainment
industry, with the diffusion of broadband and innovation of digital technology
and communication technology.  In addition, people are increasingly concerned
with the maintenance and control of their own health, based on the continued
ageing of society and medical and welfare system reforms.  Hence we seek to
employ a style of business management that takes on future changes in advance,
while the holding company is tasked with formulation of management strategy of
the Group as a whole and checking the performance of each operating company, and
the operating companies implement management by making timely decisions in their
business fields.  Also, the Company seek to realize 'Further improvement of
transparency of management', 'Structure of expeditious management system' and
'System of thorough responsibility for revenue', which are the merits of a
holding company system, at a maximum level, and fulfill the social
responsibility of the Group as well as enhance the corporate value of the Group
and shareholders' value.

The Company will, through the efforts stated above, try to ensure and enhance
corporate value and the common interest of shareholders.



(2)          Establishment of midterm plan

In the midterm plan for the fiscal year ending March 2009, the Company set a
target of 330 billion yen in consolidated net sales, 45 billion yen in
consolidated operating profit and 26 billion yen in consolidated net profit.  To
achieve this midterm plan, we, in our Digital Entertainment Business, constantly
aim to create new and attractive contents, and at the same time, maximize the
benefits by actively promoting a multifaceted expansion of the contents
supported by users.  In our Health Services Business, in addition to more
effective facility management based on a system with appropriate measures of
profitability, including advance depreciation of expenses, etc.. We will also
focus on new businesses such as distribution of health goods (fitness machines,
care prevention machines, supplements, etc.), services for the elderly and
health promotion business.  In our Game and System Business, together with
providing gaming machines to the expanding global market, we will build a solid
revenue base by securing fixed income sources such as casino management system
and profit-share style sales.  We hope to achieve our midterm plans by strongly
promoting our three businesses.

We believe these efforts based on the midterm plan will reduce the risk of the
appearance of a large-scale acquirer who would seriously undermine the Company's
corporate value and the common interest of shareholders, and are deemed to
conform with the above Basic Policy.



 (3)        Reinforcement of corporate governance

The Company has the basic policy of business management to 'value shareholders'
and 'maintain a good relationship with stakeholders, including shareholders, and
contribute to society as a good citizen'.  We recognize that the reinforcement
of corporate governance is a vital mechanism to maintain and develop such basic
policy, and we constantly work on structural improvements complying with the
strictest standard at the time.  In recent years, while the legal system of
Japan on corporate governance has been rapidly changing, in 2002, shares of the
Company were listed on the New York Stock Exchange, which employs strict listing
standards, and the Company has developed a structure complying with the
Sarbanes-Oxley Act of 2002 of the U.S.A. ('SOX'), which was established to
tighten regulations for audit systems, corporate governance, disclosure, etc.
After that, we steadily proceeded with preparations to comply with the Japanese
version of SOX, or the Financial Instruments and Exchange Law of Japan
('J-SOX'), which will be to similar to SOX.  Also, in making structural
improvements, we stress mostly the establishment of a system with efficiency and
reliability and the development of an organizational environment which can
prevent any fraudulence and illegality through high ethical standards of each
corporate staff member.

We believe such efforts will enhance the Company's corporate value and, as a
result, will reduce the risk of the appearance of a large-scale acquirer who
would seriously undermine the Company's corporate value and the common interest
of shareholders, and are deemed to conform with the above Basic Policy.



3            Purpose of the introduction of the Plan

(1)          Purpose and necessity of the introduction of the Plan

As stated in paragraph 2 above, the Company continues to promote our efforts to
enhance corporate value and to secure the common interests of shareholders on
the basis of mid-to-long term management strategies under a holding company
structure. However, in recent years, due to the unwinding of cross shareholding,
the development of a new legal system and a change in corporate culture, there
has emerged a trend of sudden hostile acquisitions of large quantities of shares
without any process of discussion with the management of the target company or
obtaining the approval thereof, has.

As stated in the Basic Policy in paragraph 1 (2) above, the Company is a public
company and we believe that the decision on whether to accept any proposed
large-scale acquisition of shares of the Company should ultimately be made by
shareholders.  However, the Company considers that in order to enhance its
corporate value continuously and to protect the common interest of shareholders,
it is important for each segment of the Company to create synergy and enhance
the brand of the entire Group.  Also, an understanding of the Company's
corporate value with the expert knowledge/skill/know-how of 'amusement' and
'health', which has been acquired over the years, would be difficult to obtain
without understanding of the Company's business characteristics.

Given this factor, as stated in paragraph 1 (2) above, the Company considers
that anyone who conducts a large-scale acquisition of its shares should, to help
the decision of shareholders, provide the Company's board of directors with
necessary and sufficient information regarding such action complying with the
Large-scale Acquisition Rule which will be established and publicized by the
Company, and should commence such acquisition only after the elapse of a certain
evaluation period during which the evaluation will be made by the Company's
board of directors.

As of March 31, 2007, 25% of the Company's issued and outstanding shares (except
for treasury shares) were held by foundations and financial groups in which the
Company's board members are engaged.  However, since the Company is a public
company, we cannot deny the possibility that such foundations and financial
groups would decide to sell or transfer the Company's shares in the future.
Also, in the process of the Group's growth in the future, there is a possibility
of fund raising from capital markets and, in that event, the shareholding ratio
of the above shareholders would be diluted.

These reasons indicate that transferability of the Company's shares would be
increased further and, accordingly, there is an undeniable possibility of a
large-scale acquisition undermining the Company's corporate value, including the
interests of shareholders, customers, business partners, employees and other
stakeholders, and by extension, undermining the common interests of
shareholders.

Based on the above, the Company's board of directors has decided to introduce
the Plan, conditional to the approval of shareholders at the 35th general
meeting of the shareholders.  The status of the Company's major shareholders as
of March 31, 2007 is as stated in the exhibit 3 'Present Status of Major
Shareholder of the Company' attached hereto.



(2)          Outline of the Plan

The Plan consists of the following:  in case that a large-scale acquisition of
the Company's shares are conducted, in order to ensure information and the time
necessary and sufficient for the shareholders to make an appropriate decision,
the Company's board of directors may apply the 'Large-scale Acquisition Rule'
(see section (4) below for details) which requires submission of  information
with respect to the large-scale acquisition and ensures time for evaluation and
investigation.  In addition, the Large-scale Acquisition Rule requires the
Large-scale Acquirer to comply with the rule, and determines the response policy
for in case of both compliance and non-compliance of the Large-scale Acquisition
Rule by the large-scale acquirer, and if necessary, implements an appropriate
countermeasure to protect the Company's corporate value and the common interests
of shareholders such as gratis allotment of Stock Acquisition Right with
discriminative condition to exercise.  In case of non-implementation of
countermeasures, a decision of shareholders will be sought after the period
stated in the Rule has elapsed.



(3)          Targeted Large-scale Acquisition

The Plan shall be applied if there is an action that falls under (a) or (b)
below, or an action or a proposal similar to it (hereinafter 'Large-scale
Acquisition'), provided, however, that acquisitions to which the Company's board
of directors agree in advance shall not be included in such actions.  One who
conducts a Large-scale Acquisition shall be called a 'Large-scale Acquirer'.

(a)                    An Acquisition that would result in the holding ratio of
share certificates, etc.(kabuken tou hoyuu wariai)(1) of a holder (hoyuusha)(2)
amounting to 20% or more of the share certificates, etc. (kabuken tou)(3) issued
by the Company; or

(b)                   An acquisition(4) that would result in the owning ratio of
share certificates, etc. (kabuken tou shoyuu wariai)(5) of share certificates,
etc.(kabuken tou)(6) relating to the acquisition and the owning ratio of share
certificates, etc. of a person having a special relationship (tokubetsu
kankei-sha)(7) totaling at least 20% of the share certificates, etc. issued by
the Company.






(1) Defined in Article 27-23(4) of the Securities and Exchange Act of Japan.  In
this case, the amount of owned shares (defined in Article 27-23(4) of the
Securities and Exchange Act of Japan) by joint holders of applicable holder
(joint holders defined in Article 27-23(5) therein, including persons who are
treated as joint holders based on the Article 27-23(6) therein (including
persons considered to fall under this provision by the board of directors of the
Company) This definition is applied throughout this document.) shall be added.
This definition is applied throughout this document.


(2) Including persons described as a holder under Article 27-23(3) of the
Securities and Exchange Act of Japan (including persons considered to fall under
this provision by the board of directors of the Company).  This definition is
applied throughout this document.


(3) Defined in Article 27-23(1) of the Securities and Exchange Act of Japan.
Unless otherwise provided for in this document, this definition is applied
throughout this document.


(4) Defined in Article 27-2(1) of the Securities and Exchange Act of Japan.
This definition is applied throughout this document.


(5) Defined in Article 27-2(8) of the Securities and Exchange Act of Japan.
This definition is applied throughout this document.


(6) Defined in Article 27-2(1) of the Securities and Exchange Act of Japan.
This definition is applied in (b).


(7) Defined in Article 27-2(7) of the Securities and Exchange Act of Japan
(including persons considered to fall under this provision by the board of
directors of the Company); provided, however, that persons provided for in
Article 3(1) of the Cabinet Office Regulations concerning Disclosure of a Tender
Offer by an Acquirer other than the Issuing Company are excluded from the
persons described in Article 27-2(7)(i) of the Securities and Exchange Act of
Japan.  This definition is applied throughout this document.





With regard to the total number of voting rights (defined in Article 27-2(8) of
the Securities and Exchange Act of Japan) and the total number of shares issued
(defined in Article 27-23(4) of the Securities and Exchange Act of Japan) used
for the calculation of each stock certificated, etc. owned, those written in an
annual securities report, semi-annual report, status report on purchase of the
Company's own share and other documents which were most recently submitted in
accordance with the Securities and Exchange Act of Japan (including its
successive laws. The same shall apply throughout this document).



(4)          Details of the Large-scale Acquisition Rule

(1) Request for the provision of the Large-scale Acquisition information

The Company will require any Large-scale Acquirer to submit to the Company's
board of directors, in a form prescribed by the Company, before effecting the
Acquisition, a written undertaking that the Large-scale Acquirer will comply
with the procedures established by the Large-scale Acquisition Rule (hereinafter
the 'Statement of Intention').  Within 10 business days from the receipt of such
Statement of Intention, the board of directors delivers to the Large-scale
Acquirer a list of Large-scale Acquisition information which should be provided
initially by the Large-scale Acquirer.  If the Company's board of directors
determines that the information provided is insufficient as  Large-scale
Acquisition information, it may fix an appropriate deadline for response and
request the Large-scale Acquirer to provide additional Large-scale Acquisition
information after consulting with the Independent Committee stated in paragraph
5 (1) below as necessary.  Also, the fact that there is a proposal for a
Large-scale Acquisition, as well as the information provided to the Company's
board of directors, shall be disclosed in whole or in part at a time deemed
appropriate.

Some items of the Large-scale Acquisition information to be provided by the
Large-scale Acquirer shall be as follows.

(a)         Details (specifically including name, capital structure and
financial position) of the Large-scale Acquirer and its group (including joint
holders, persons having a special relationship and, in the case of funds,
partners and other constituent members).

(b)         The purpose, method and terms of the Acquisition (including the
price and type of the consideration for the Acquisition, the timeframe of the
Acquisition, the scheme of any related transactions, the legality of the
Acquisition method, and the probability that the Acquisition will be effected).

(c)         The basis for the calculation of the purchase price of the
Acquisitions (including the underlying facts and assumptions of the calculation,
the calculation method, the numerical data used in the calculation, and the
details and calculation base of any expected synergetic effect from any series
of transactions relating to the Acquisition (including the synergetic effect
that is to be shared with other shareholders) as employed in the calculation).

(d)         Financial support for the Acquisition (specifically including the
name, financing methods and the terms of any related transactions of the funds
providers for the Acquisition (including all indirect funds providers))

(e)         Post-Acquisition management policy, business plan, financial plan,
capital and dividend policies for the Company and the Group.

(f)           Post-Acquisition policies dealing with the Company's and the
Group's employees, trade union, customers, business partners, local community
and any other stakeholders.

(g)         Specific measures to avoid any conflict of interest with other
shareholders in the Company

(h)         Items regarding compliance with the 'Act on Prohibition of Private
Monopolization and Maintenance of Fair Trade' and other laws.

(i)           Any other information that the Company's board of directors or the
Independent Committee reasonably considers necessary

All the provided information, notice/contact and negotiation to and with the
Company's board of directors, including the Statement of Intention, only if in
Japanese, shall be deemed to be valid.



(2) Evaluation and Consideration of Acquisition terms

(i)      Evaluation and Consideration by the Company's board of directors

The Company's board of directors shall be, after the Large-scale Acquirer
completes the provision of the Large-scale Acquisition information to the
Company's board of directors, given the following period of time for evaluation,
consideration, negotiation, opinion making and preparation of an alternative
proposal (hereinafter the 'Evaluation Period of Acquisition') in accordance with
the degree of difficulty for evaluating and considering the Large-scale
Acquisition.  Accordingly, the Large-scale Acquisition shall commence only after
the elapse of the Evaluation Period of Acquisition.

(a)    In case of acquisition of all of the Company's share certificates, etc.
through a tender offer with the consideration being cash (in yen) alone: 60 days

(b)   In cases of other Large-scale Acquisition : 90 days



During the Evaluation Period of Acquisition, the Company's board of directors
will fully evaluate and review the Large-scale Acquisition information provided
while, as deemed necessary, receiving advice from outside experts (including
financial advisors, certified public accountants, lawyers, consultants and other
experts), and shall carefully organize and publish the Company's opinion.
Further, the Company's board of directors may negotiate the terms of the
Acquisition with the Large-scale Acquirer as necessary and may present its own
alternative plan to the shareholders.



(ii)     The Independent Committee consideration and recommendation to the
Company's board of directors

The Company's board of directors, in addition to the evaluation and
consideration described in (i) above, upon taking receipt of the Large-scale
Acquisition information from the Large-scale Acquirer, will consult the
Independent Committee on consideration of the terms of Large-scale Acquisition,
information gathering and comparative investigation regarding business plans of
the Company's board of directors and the Large-scale Acquirer, and the propriety
of taking a countermeasure.

The Independent Committee shall, during the Evaluation Period of Acquisition,
evaluate the terms of the Acquisition from the perspective of securing and
improving the Company's corporate value and common interests of the
shareholders, and, in accordance with 'Countermeasure Policy in Case of a
Large-scale Acquisition' described in chapter (5) below, make recommendations,
including the propriety of taking a countermeasure, to the Company's board of
directors.

The Independent Committee may, as necessary, receive advice from outside experts
upon the consideration of the terms of the Acquisition and make a recommendation
to the board of directors.  Additionally, if the Independent Committee, itself
or through the Company's board of directors, requests the Large-scale Acquirer
to provide materials for consideration or any other information, or to discuss
and negotiate with the Independent Committee, the Large-scale Acquirer shall
promptly respond to such request.

In case the Independent Committee does not reach a recommendation for either the
implementation or non-implementation of countermeasures by the expiry of the
Evaluation Period of Acquisition, the Independent Committee will, to the
reasonable extent that it is necessary for actions such as consideration of the
terms of Large-scale Acquisition, negotiation with the Large-scale Acquirer and
preparation of alternative proposal, pass a resolution to extend the Evaluation
Period of Acquisition.  In that case, the Company shall promptly disclose the
specific period and the reason for such extension.  Also, the same procedure
shall be taken if further extension of period is needed after such extension.



(3) Resolutions of the Company's board of directors

The Company's board of directors will pass a resolution relating to the
implementation or non-implementation of the countermeasures, taking into
consideration any recommendation of the Independent Committee to the maximum
extent.  For the board of directors' resolution to implement countermeasures,
prior approval by the majority of the corporate auditors shall be required.
Promptly after passing such resolution, the Companyfs board of directors will
disclose an outline of its resolution, and any other matters that the board of
directors considers appropriate.



(5)          Countermeasure policy in response to the Large-scale Acquisition



(i)          In the case where a Large-scale Acquirers does not comply with the
Large-scale Acquisition Rule

If a Large-scale Acquirer does not comply with the Large-scale Acquisition Rule,
regardless of the specific acquisition method, the board of directors may take
appropriate measures provided for in the Corporate Law or any other laws and the
Articles of Incorporation of the Company as countermeasures to the Large-scale
Acquisition in order to protect the corporate value of the Company and the
common interests of the shareholders.  As one of such measures, the Company may
implement the gratis allotment of Stock Acquisition Rights asset out below at
section 6, 'Outline of Countermeasures'.  The board of directors will determine
whether or not the Large-scale Acquirer complies with the Large-scale
Acquisition Rule, and the propriety of the countermeasures and its specific
method by referring to advice from outside experts, etc. and respecting the
recommendation of the Independent Committee to the maximum extent possible.



(ii)          In the case where a Large-scale Acquirers complies with the
Large-scale Acquisition Rule

If a Large-scale Acquirer complies with the Large-scale Acquisition Rule, the
board of directors will not, in principle, trigger the countermeasures to the
Large-scale Acquisition even if it opposes such Acquisition.  However, the board
of directors may express opposition to the Large-scale Acquisition, offer
alternative proposals or explain to the shareholders.  The shareholders will be
required to determine whether to accept the acquisition proposal of the
Large-scale Acquirer, taking into consideration details of such proposal and the
opinions of the Company's board of directors with respect to the proposal and
any alternative proposal presented by the Company.

However, even if the Large-scale Acquirer complies with the Large-scale
Acquisition Rule, when the Large-scale Acquisition is deemed to have a material
adverse effect on the corporate value of the Company and the common interests of
the shareholders, the Company's board of directors  may take appropriate
exceptional measures to protect the corporate value of the Company and the
common interests of the shareholders as countermeasures to such Acquisition.  As
one of such appropriate measures, the Company may implement the gratis allotment
of Stock Acquisition Rights as set out below in section 6, 'Outline of
Countermeasures'.  Specifically, if it is considered that the Large-scale
Acquisition falls under any of the items

below, the Company will deem that such Acquisition has a material adverse effect
on the corporate value of the Company and the common interests of the
shareholders.  If it is considered that the Large-scale Acquisition does not
fall under any of the items below, the Company will not trigger the
countermeasures.  The board of directors will determine the propriety of the
countermeasures and the specific method, by referring to advice from outside
experts, etc. and respecting the recommendation of the Independent Committee to
the maximum extent possible.

(a)          A buyout of share certificates that require such share certificates
to be compulsorily purchased by the Company at an inflated price;

(b)          Management that achieves an advantage for the Large-scale Acquirer
to the detriment of the Company, such as temporary control of the Company's
management for the low-cost acquisition of the Company's material assets;

(c)          Diversion of the Company's assets to secure or repay debts of the
Large-scale Acquirer or its group company;

(d)          Temporary control of the Company's management to bring about a
disposal of high-value assets that have no current relevance to the Company's
business, and declaring temporarily high dividends from the profits of the
disposal, or selling the shares at a high price taking advantage of the
opportunity afforded by the sudden rise in share prices created by the
temporarily high dividends;

(e)          Certain acquisitions that threaten to have the effect of forcing
shareholders into selling share certificates, such as coercive two-tiered tender
offers (meaning acquisitions of share certificates, including tender offers that
do not offer to acquire all shares in the initial acquisition, and set
unfavorable acquisition terms for the second stage or do not set clear terms for
the second stage);

(f)          Acquisitions whose terms (including amount and type of
consideration, the acquisition schedule, the legality of the acquisition method,
the probability of the acquisition being effected) are significantly inadequate
or inappropriate in light of the Company's intrinsic value; or

(g)          Acquisitions that materially threaten to harm the corporate value
of the Company and, in turn, the common interests of shareholders by destroying
relations with stakeholders of the Company such as employees, customers,
business partners and creditors, which are indispensable for realization of a
continuous rise in the corporate value.



(iii)                   Suspension of triggering countermeasures

The board of directors may hold discussions or negotiations with the Large-scale
Acquirer as necessary and, even after the board of directors determines the
gratis allotment of Stock Acquisition Rights as countermeasures, if the board of
directors determines that it is not reasonable to trigger the countermeasures,
including  cases where the Large-scale Acquirer offers a material change in the
matters upon which the decision on the acquisition proposal was made, and there
is no Large-scale Acquisition, may suspend the countermeasures such as the
gratis allotment of Stock Acquisition Rights.  With regard to the effects on
shareholders and investors in the case of such suspension of triggering
countermeasures, please see section 6 (2) set out below.



(6)          Outline of countermeasures (gratis allotment of the Stock
Acquisition Rights)



An outline of the gratis allotment of the Stock Acquisition Rights as
countermeasures to the Large-scale Acquisition in the Plan is as follows.



(i)           Shareholders eligible for allotment and number of the Stock
Acquisition Rights

The Company will implement a gratis allotment of the Stock Acquisition Rights to
those shareholders other than the Company who appear or are recorded in the
Company's final register of shareholders or register of beneficial shareholders
on a certain date determined by the Company's board of directors (the 'Record
Date of Allotment'), at a ratio of one Stock Acquisition Right for every one
share held.



(ii)          Effective date of gratis allotment of the Stock Acquisition Rights

The Company's board of directors will determine the effective date of the gratis
allotment of the Stock Acquisition Rights in the gratis allotment resolution.



(iii)         Type and number of shares to be acquired upon exercise of the
Stock Acquisition Rights

The type of shares to be acquired upon exercise of Stock Acquisition Rights
shall be common stock of the Company, and the number of shares of the Company to
be acquired upon exercise of each Stock Acquisition Right shall be a number
determined by the board of directors less than one share per one Stock
Acquisition Right; provided, however, that if the Company conducts a stock split
or reverse stock split, it shall make necessary adjustments.



(iv)         Total number of the Stock Acquisition Rights for allotment

The total number of Stock Acquisition Rights for allotment will be the number
determined by the board of directors up to the issued shares of the Company on
the Record Date of Allotment (excluding the number of shares of the Company held
by itself at the same time).



(v)          The amount to be contributed upon exercise of the Stock Acquisition
Rights

The amount to be contributed upon exercise of each Stock Acquisition Right shall
be an amount determined by the board of directors no less than one (1) Yen.



(vi)         Restriction of assignment of the Stock Acquisition Rights

Any acquisition of Stock Acquisition Rights by assignment requires the approval
of the Company's board of directors.



(vii)        Exercise period of the Stock Acquisition Rights

The commencement date will be a date determined by the board of directors in the
gratis allotment resolution, and the period will be a period from one month to
three months as determined by the Company's board of directors.



(viii)       Conditions for Exercise of Stock Acquisition Rights

Principally, the following parties (a) through (d) below (the 'Nonqualified
Persons') may not exercise the Stock Acquisition Rights:

(a)         the Large-scale Acquirer;

(b)         joint holders of the Large-scale Acquirer;

(c)          persons having a special relationship with the Large-scale
Acquirer; or

(d)         any affiliated party of any party falling under (a) through (d) (a
person to substantially control, be controlled by, or be under common control
with such given party, or a party deemed by the Company's board of directors to
act in concert with such given party).



(ix)         Acquisition of the Stock Acquisition Rights by the Company

With regard to the Stock Acquisition Rights, on a day that falls on a date
determined by the Company's board of directors, the Company may set the
conditions of acquisition which provide that the Company may acquire all of the
Stock Acquisition Rights that have not been exercised before or on the day
immediately prior to the date determined by the Company's board of directors,
that are held by parties other than the Nonqualified Persons and, in exchange,
deliver shares of the Company in the number of the applicable Number of Shares
for every  Stock Acquisition Right.  In this case, if, after the date upon which
the acquisition takes place, the Company's board of directors recognizes the
existence of any party holding the Stock Acquisition Rights other than
Nonqualified Persons, the Company may, on a day falling on a date determined by
the Company's board of directors after the date upon which the acquisition by
the Company takes place, acquire all of the Stock Acquisition Rights held by
that party that have not been exercised by or on the day immediately prior to a
date separately determined by the Company's board of directors (if any) and, in
exchange, deliver shares of the Company in the number of the applicable Number
of Shares for every one Stock Acquisition Right.  The same will apply
thereafter.



4.           Effective period and amendment and abolition of the Plan



The Plan will become effective upon approval by the majority of voting rights of
the shareholders present at the 35th Ordinary General Meeting of Shareholders to
be held on June 28, 2007.  If the Plan is approved at the meeting, its effective
period will be for a period of three (3) years from the end of such meeting to
the end of the ordinary general meeting of shareholders relating to the fiscal
year ending March 2010.

If the board of directors passes a resolution to abolish the Plan, even during
the effective period of the Plan, based on the recommendation of the Independent
Committee or the board of directors' own decision, the Plan will be abolished at
that time.  Even during the effective period of the Plan, if a change in the
Plan is necessary, the Company will review the Plan in accordance with the
recommendation of the Independent Committee from time to time, and seek the
shareholders' judgment as to the change at the nearest ordinary general meeting
of shareholders to be held.  If the Plan is abolished or amended, the Company
will promptly disclose facts including the fact that such abolition or amendment
has taken place, and (in the event of an amendment) the details of the amendment
and any other matters.



5.           Rationale of the Plan



(1)          Establishment of the Independent Committee



In order to eliminate arbitrary triggering by the board of directors of the
Company and ensure the fairness and reasonableness of the procedures and
decisions, the Company will establish the Independent Committee, which will
consist of outside directors, outside auditors or outside experts.  The
Independent Committee, as an advisory body to the board of directors, will check
whether the Large-scale Acquisition Rule is complied with, consider details of
acquisition and countermeasures, and recommend to the board of directors whether
the countermeasures should be triggered.  The Independent Committee will make
decisions with regard to the evaluation and consideration of the matter pursuant
to the 'Countermeasure Policy in Case of the Large-scale Acquisition' set out
above at section 3 (5), and the board of directors of the Company will respect
the recommendation of the Independent Committee to the maximum extent possible.

The number of the Independent Committee members will be no less than three (3)
in principle, and the term of office of the members will be until the end of the
meeting of the board of directors held immediately following the latest Ordinary
General Meeting of Shareholders relating to the fiscal year ended within one (1)
year from election in principle (With regard to outline of the Rules of the
Independent Committee and names and career summaries of initial members of the
Independent Committee, please see Exhibit 1 and Exhibit 2, respectively.).



(2)          Placing value on the intent of Shareholders



The Company will introduce the Plan subject to approval by the shareholders at
the Ordinary General Meetings of Shareholders in order to reflect the intent of
the shareholders on the Plan.  As set out above in section 4, 'Effective period
and amendment and abolition of the Plan,' even before expiration of the
effective period, the Plan may be abolished by a resolution of the Company's
board of directors.



(3)          Advice of outside experts



The board of directors, auditors and the Independent Committee of the Company
may obtain advice from independent experts such as financial advisors, certified
public accountants, lawyers, consultants, etc. at the Company's expense, if
necessary, in order to enhance the fairness and reasonableness of the
consideration and decisions by the Board or Directors, Auditors and the
Independent Committee.



(4)          Establishment of reasonable objective requirements



As set out above in section 3 (5), 'Countermeasure Policy in Case of the
Large-scale Acquisition', the countermeasures of the Plan are established so
that they will not be triggered unless the predetermined reasonable objective
requirements have been satisfied, and maximum value will be placed on
recommendation of the Independent Committee, to ensure a structure to eliminate
arbitrary triggering of countermeasures by the board of directors of the
Company.



(5)        Satisfying the requirements of the Guidelines for Takeover Defense
Measures



The Plan satisfies the three principles set out in the 'Guidelines Regarding
Takeover Defense for the Purposes of Ensuring and Enhancing Corporate Value and
Shareholders' Common Interests' released by the Ministry of Economy, Trade and
Industry and the Ministry of Justice on May 27, 2005.



(6)          No dead-hand takeover defense measures



As stated in section 4, 'Effective period and amendment and abolition of the
Plan', the Plan may be abolished at any time by the board of directors composed
of directors elected by a General Meeting of Shareholders of the Company, and
the Plan is set up so that the Large-scale Acquirer may elect, at a General
Meeting of Shareholders of the Company, directors nominated by that person and,
through a resolution of the board of directors of the Company attended by the
so-elected directors, that person may abolish the Plan.  Therefore, the Plan is
not a dead-hand takeover defense measure (a takeover defense measure in which
even if a majority of the members of the board of directors are replaced, the
triggering of the measure cannot be stopped).



(7)          The Company's decision in respect of the Plan



The Plan provides for the details of the Large-scale Acquisition Rule, and the
action policy and the countermeasure when a Large-scale Acquisition is made.  It
also prescribes that in order to enable the shareholders to make a decision
whether or not to accept the Large-scale Acquisition, the Acquirer who makes the
Large-scale Acquisition shall provide information and launch such Acquisition
only after a certain evaluation period set by the board of directors of the
Company has passed, and that the board of directors of the Company may take
countermeasures against such Acquirer who does not comply with such provisions.
It is also prescribed that even if the Acquirer complies with the Large-scale
Acquisition Rule, when the Large-scale Acquisition is deemed to have a material
adverse effect on the corporate value of the Company or the common interests of
the shareholders, the Company may also take countermeasures against such
Acquisition.  Based on the above, we believe that the Plan is in conformity with
the Basic Policy.  In addition, based on (1) to (6) above, we believe that the
Plan does not adversely affect the common interests of the shareholders nor has
as its aim the protection of offices of the officers of the Company.



6.           Impact on shareholders and investors

(1)          Impact on shareholders at the time of introduction

At the time of the introduction of the Plan, the Plan will have no direct or
specific impact on shareholders, since no actual allotment of Stock Acquisition
Rights without contribution will be made.

The Large-scale Acquisition Rule intends to provide the necessary information
for shareholders to decide whether or not to accept the proposal of the
Large-scale Acquisition and the opinion of the Company's board of directors who
is actually engaging in the management of the Company, and to secure an
opportunity for the shareholders of the Company to be presented an alternative
proposal.  On this point, the shareholders of the Company can make a proper
decision whether or not to accept the proposal of the Large-scale Acquisition
only with sufficient information, which will accordingly contribute to the
protection of the corporate value of the Company and the common interest of
shareholders.  Based on the above, we believe that the establishment of the
Large-scale Acquisition Rule is unavoidable for the shareholders of the Company
and the investors to make a proper investment decision, and contributes to the
interests of the shareholders of the Company and investors.  As stated in 3.(5)
above, since the action policy of the Company may change depending upon whether
the Large-scale Share Acquirer is subject to the Large-scale Acquisition Rule or
not, the shareholders of the Company and investors shall pay attention to the
actions of the Large-scale Share Acquirer.



 (2)        Impact on shareholders and investors at the time of the gratis
allotment of Stock Acquisition Rights

If the board of directors of the Company resolves to implement an allotment of
Stock Acquisition Rights without contribution, the Company will implement an
allotment of Stock Acquisition Rights without contribution to all registered

shareholders of the Company as of the Record Date of Allotment at a ratio of one
Stock Acquisition Right per one share.  If the shareholders do not comply with
any required payment for the allotment and procedures for the exercise of Stock
Acquisition Rights detailed in (3) 'Necessary procedures for shareholders upon
the allotment of Stock Acquisition Rights without contribution' (ii) below
within the rights exercise period, the shares they hold in the Company will be
diluted by the exercise of Stock Acquisition Rights by other shareholders.
However, there may be possibilities that the Company will acquire the Stock
Acquisition Rights of all shareholders other than the Nonqualified Person and,
in exchange, deliver shares in the Company, in accordance with the procedures
set out in (3) 'Necessary procedures for shareholders upon the allotment of
Stock Acquisition Rights without contribution' (iii) below.  If the Company
carries out such acquisition procedures, all shareholders other than the
Nonqualified Person will come to receive shares in the Company without
exercising their Stock Acquisition Rights or paying an amount equivalent to the
exercise price, and no dilution of the value of the aggregate shares in the
Company they hold will result (only dilution of the value per share of shares in
the Company they hold will result).

Furthermore, in certain events such as withdrawal of the Large-scale Acquisition
by the Large-scale Acquirer, the Company may cancel its allotment of Stock
Acquisition Rights without contribution after the Record Date of Allotment or
the effective date of the allotment of Stock Acquisition Rights without
contribution, or acquire Stock Acquisition Rights before commencement date of
the exercise period of the Stock Acquisition Rights without consideration and
without delivering no shares to the holders of Stock Acquisition Rights.  In
such event, those shareholders who sold or purchased the shares in the Company
based on the assumption that dilution of the value per share of the shares in
the Company will occur might suffer damage commensurate with and due to
fluctuations in the value of the shares.



(3)          Necessary procedures for shareholders upon the allotment of Stock
Acquisition Rights without contribution

(i)          Procedures for entry of name change

If implementation of an allotment of Stock Acquisition Rights without
contribution is resolved, it will be necessary for shareholders to arrange for
the procedures for entry of name change as soon as possible, since those who do
not complete the entry of name change by the Record Date of Allotment,
determined separately by the board of directors and publicly notified (No
procedures for entry of name change are required for those share certificates
deposited with the Japan Securities Depositary Center, Inc.).

In connection with this, all shareholders who are registered or recorded in the
last register of shareholders or register of beneficial shareholders of the
Company as of the Record Date of Allotment will become the holders of Stock
Acquisition Rights as a matter of course on the effective date of the allotment
of Stock Acquisition Rights without contribution.



(ii)         Procedures for exercising Stock Acquisition Rights

The Company will deliver, as a general rule, an exercise request form for the
Stock Acquisition Rights (in a form prescribed by the Company) and other
documents necessary for the exercise of the Stock Acquisition Rights to all
shareholders registered or recorded on the last register of shareholders or
register of beneficial shareholders of the Company as of the Record Date of
allotment.  After the allotment of Stock Acquisition Rights without
contribution, the shareholders will be issued such number (not more than one) of
shares in the Company as determined by the Company's board of directors per one
Stock Acquisition Right, by paying to the place handling agent such payments the
amount of property to be paid for the exercise of Stock Acquisition Rights
during the exercise period.



(iii)        Procedures for the acquisition of Stock Acquisition Rights by the
Company

If the Company's board of directors resolves to acquire the Stock Acquisition
Rights, the Company will acquire the Stock Acquisition Rights in accordance with
the statutory procedures, on a date separately resolved by the Company's board
of directors.  When the Company is to deliver shares of the Company to
shareholders in exchange for the acquisition of Stock Acquisition Rights, it
shall do so promptly.  Further, in such case, the shareholders concerned are not
required to take procedures for exercising Stock Acquisition Rights prescribed
in (ii) above, including the payments, but will be separately requested to
submit, in a form prescribed by the Company, representations and warranties
regarding matters such as the fact that they are not a Nonqualified Person, as
well as indemnity clauses and other covenants.  In addition to the above, the
Company will disclose information or notify all of its shareholders with respect
to the particulars of the allotment method, method of procedures for entry of
name change, exercise method and method for acquisition by the Company after any
resolution of the board of directors of the Company in relation to an allotment
of Stock Acquisition Rights without contribution, so we would like to ask
shareholders to check these details at that time.




Exhibit 1



               Outline of the Rules of the Independent Committee



1.        Constitution

•    The Independent Committee shall have a high level of discernment or
sophisticated expertise in business management and consist of outside directors
of the Company, outside statutory auditors of the Company and outside experts
who are independent from the directors and officers which conduct the execution
of the business of the Company; and there shall be no less than three (3)
members of the Independent Committee as a general rule.

E    Members of the Independent Committee shall be elected by a resolution of
the board of directors of the Company.



2.        Term of Office

•    The term of office of members of the Independent Committee shall be until
the end of the term of the board of directors of the Company immediately after
the ordinary general meeting of shareholders relating to the final term of the
fiscal year ending within a year the members have been elected is held, and
re-appointment of such members shall not be precluded.  Unless otherwise
determined by a resolution of the board of directors that the term of office of
members is expired, they shall be deemed to be reappointed by such board of
directors of the Company; provided, however, that if any member who is an
outside director of the Company or outside statutory auditor of the Company
ceases to be an outside director of the Company or outside statutory auditor of
the Company, the term of office of any member of the Independent Committee shall
end at the same time.



3.        Authority and Responsibility

•     The Independent Committee shall comply with an advisory from the board of
directors, consider and resolve mainly the particulars mentioned below, and
submit recommendation to the board of directors of the Company containing the
details of and reasons for the recommendation.

(a)     Determination whether the Large-scale Acquisition Rule is complied with

(b)     Determination whether the Large-scale Acquisition that is subject to the
        Plan seriously undermines the corporate value of the Company or the common
        interest of those shareholders

(c)     Determination whether information that the Large-scale Acquirer
        provides is necessary and adequate

(d)     Determination whether the extension of the Evaluation Period of
        Acquisition is necessary

(e)     Necessity of implementation of countermeasures

(f)     Necessity of cancellation of a countermeasure

(g)     Necessity of abolition or amendment of the Plan.

    In addition to the matters prescribed above, the Independent Committee may
conduct the matters listed below complying with an advisory and a request from
the board of directors.

(a)      Determining the information that the Large-scale Acquirer and board of
directors of the Company should provide to the Independent Committee, and the
deadline for the provision of that information.

(b)     Examination and consideration of the terms of the Large-scale
Acquisition by the Large-scale Acquirer.

(c)      Negotiation and discussion with the Large-scale Acquirer

(d)     Request for an alternative proposal and consideration of the alternative
proposal to the board of directors of the Company.

•    If the Independent Committee decides that the information of the
Large-scale Acquisition is inadequate or insufficient, it shall request the
Large-scale Acquirer to submit additional information.  Further, if the
Independent Committee receives from the Large-scale Acquirer the information of
the Large-scale Acquisition and any additional information that it requests, it
may request the board of directors of the Company to provide within a certain
period an opinion on the terms of the Large-scale Acquisition by the Large-scale
Acquirer and materials supporting that opinion, alternative proposal, and any
other information that the Independent Committee may consider necessary from
time to time.

•    In order to collect the necessary information, the Independent Committee
may request the attendance of a director, statutory auditor or employee of the
Company, or any other party that the Independent Committee considers necessary,
and may require explanation of any matter it requests.

•    The Independent Committee may, at the Companyfs expense, obtain the advice
of an independent outside expert (including financial advisors, certified public
accountants, lawyers, consultants and other experts) and similar actions.

•    The Independent Committee must make decisions with a view to securing and
improving the corporate value of the Company and, in turn, the common interest
of its shareholders, and each member must not serve the purpose of its own
interests or those of third parties, including the management of the Company.

•    Respecting recommendations by the Independent Committee, the board of
directors of the Company shall make a resolution concerning the implementation
of countermeasures and other matters.



4.        Resolution

•    A resolution of a meeting of the Independent Committee shall, as a general
rule, pass with a majority when all the members except for the specially related
parties are in attendance; provided, however, that when members who are involved
in accidents or caught in unavoidable circumstances, a resolution may pass with
a majority of the members present (such present members shall consist of the
majority of all members).




Exhibit 2



        Names and Career Summary of Members of the Independent Committee



Tomokazu Godai       Born on October 6, 1939
June 1975            Appointed as President of Maya Shoji Co.,
                     Ltd. (currently MAYATEC Co., Ltd.)
May 1992             Appointed as Director of the Company (present post)
June 2006            Appointed as Board Chairman and CEO, MAYATEC Co., Ltd. 
                     (present post)


Hiroyuki Mizuno      Born on April 20, 1929
June 1990            Appointed Vice-president of Matsushita Electric Industrial 
                     Co., Ltd.
August 1994          Appointed as Consulting Professor of Stanford University
April 1998           Appointed as Center President of Hiroshima Prefectural 
                     Institute of Industrial Science and Technology (present post)
June 2001            Appointed as Director of the Company (present post)
June 2002            Appointed as Director of MegaChips Corporation (present post)


Noboru Onuma         Born on January 1, 1948
April 1970           Appointed as Mitsui Bank (currently Sumitomo Mitsui Banking 
                     Corporation)
April 1998           Appointed as General Manager, Fukuoka Branch of the said bank
April 1999           Appointed as Administration Officer of said bank
June 1999            Appointed as Standing Corporate Auditor of the Company 
                     (present post)


Exhibit 3

                     Present Status of Major Shareholders of the Company



Major shareholders of the Company as of March 31, 2007 is as follows.


Name of Shareholders                                                      Contribution status to the Company
                                                                          Number of Shares     Controlling
                                                                                      held       Share (%)
                                                                          (thousand shares)
Kozuki Foundation for Sports and Education                                          14,330           10.44
Kozuki Holding B.V.                                                                 13,530            9.86
THE MASTER TRUST BANK OF JAPAN, LTD. (TRUST ACCOUNT)                                 9,238            6.73
JAPAN TRUSTEE SERVICES BANK, LTD. (TRUST ACCOUNT)                                    8,581            6.25
Kozuki Capital Corporation                                                           7,036            5.13
The Chase Manhattan Bank, N.A. London                                                4,963            3.62
Sumitomo Mitsui Banking Corporation                                                  4,135            3.01
BNP PARIBAS Securities (Japan) Limited                                               3,488            2.54
State Street Bank and Trust Company                                                  2,417            1.76
CALYON DMA OTC                                                                       2,312            1.68



(Note) The total number of issued shares is 143,555,786.  Controlling share is
calculated after deduction of its own share (6,300 thousand shares).




Paste the following link into your web browser to download the PDF document 
related to this announcement: 

http://www.rns-pdf.londonstockexchange.com/rns/0366x_-2007-5-22.pdf


                      This information is provided by RNS
            The company news service from the London Stock Exchange