Policy Toward Large-Scale Purchases of GMO Internet Group, Inc. Shares (Takeover Defense Measures)

Policy concerning Large-Scale Purchases of GMO Internet Group, Inc. (the “Company”) shares has been adopted by the Board of Directors at a meeting held on March 13, 2006, and all the Directors have been in favor of the countermeasures. Since then, the initial Board of Directors’ meeting, held after the Annual General Shareholders Meeting scheduled for every year, has decided to continue such policy.
After taking into consideration the amendment of the Companies Act of Japan and other relevant laws and regulations, judicial decision, responses from the financial instruments exchange and other public services, recent changes in the social and economic conditions, as well as progress in the debate on takeover defenses measures, our Board of Directors will continue to revise the Policy if necessary in order to maintain and increase the common interests of our shareholders and our corporate value.
The Company has decided at the Board of Directors meeting held on July 19, 2022 to make changes to part of the policy (such policy, after the change, shall be hereinafter referred to as the “Policy”).

There are no proposals for Large-Scale Purchases of the Company shares as of today.

1.Objectives of introducing the Policy

Our Board of Directors believes that because the Company is a public company and its shares are freely traded, trading in the Company shares should be left in the hands of markets, and any decision concerning the acceptability of a Large-Scale Purchase*1 by a Certain Group*2 should ultimately be left to the Company shareholders who own the Company shares.

Should a Large-Scale Purchase be contemplated, we believe that it is indispensable that, in order to allow our shareholders to decide on the acceptability of the Large-Scale Purchase, not only the information provided in a one-sided manner by the Large-Scale Purchaser*3, but also information from our Board of Directors, which is entrusted with the company’s operations and information including assessments and opinions of our Board of Directors with respect to the Large-Scale Purchase should be provided.

The GMO Internet Group focuses its business resources on the Internet market with high growth potential, under the corporate slogan “Internet for Everyone.” The GMO Internet Group has been providing a full range of Internet-related services, chiefly in the following four areas:

(1) Internet Infrastructure business;
(2) Internet Finance business;
(3) Online Advertising & Media business; and
(4) Cryptoassets business.

These operations are not independent, but rather function as one, mutually and organically, and exert synergies that allow for the creation of greater corporate value. Internet-related technologies develop at an extremely rapid pace and, accordingly, industry standards and customer needs also change rapidly. The Company believes that, with respect to our management, it is indispensable for such management to understand: the specialized nature of its operations described above, management know-how based on a high degree of expertise related to its Internet-related services, as well as the relationships among the stakeholders, such as the Company’s personnel who have the techniques and skills necessary to cope with technical innovations, the entities of GMO Internet Group that carry out their business within the company group, united as one, organically, its trading partners and clients.

We believe that without such an understanding of the Company’s operations, it will become difficult to grasp the corporate value of the Company fully, and, it is extremely important that for purposes of our shareholders evaluating a Large-Scale Purchase by a Large-Scale Purchaser, our shareholders not only be given information by the Large-Scale Purchaser, but also the assessments and opinions of our Board of Directors—which fully understands the specialized nature of the Company’s operations—concerning the proposed Large-Scale Purchase.

Operating along the lines of this thinking, our Board of Directors believes that it will contribute to the common interests of our shareholders and our corporate value to draw up a set of rules concerning Large-Scale Purchases of the Company shares (hereinafter referred to as the “Large-Scale Purchase Rules”), to collect and provide information that is necessary and sufficient for our shareholders to assess the Large-Scale Purchase, and thereafter to formulate and disclose the opinion of the Board of Directors after assessing and reviewing such information. Our Board of Directors will require any prospective Large-Scale Purchaser to comply with the Large-Scale Purchase Rules. In a case where a Large-Scale Purchaser does not comply with the Large-Scale Purchase Rules, a case where it is judged that a Large-Scale Purchase carried out pursuant to the Large-Scale Purchase Rules would have the effect of seriously harming the common interests of our shareholders and our corporate value, or a case where invoking the countermeasures is approved by the shareholders at the shareholders' meeting, our Board of Directors will be in a position to take certain countermeasures that it judges to be appropriate at that point.

A policy toward Large-Scale Purchases of the Company shares was decided initially in the Company’s Board of Directors’ meeting held on March 13, 2006, for the purposes described above. Since then, the initial Board of Directors’ meeting, held after the Annual General Shareholders Meeting scheduled for every year, has decided to continue such policy. At the Board of Directors’ meeting held on July 19 , 2022, it was decided to make changes in the Policy, which the Board of Directors’ meeting held on the same day as and after the Annual General Shareholders Meeting held on March 20, 2022, decided to continue (such policy, after the change, shall be hereinafter referred to as the “Policy”).

The effective period of the Policy shall be until the close of the initial Board of Directors’ meeting, held after the Annual General Shareholders Meeting, pertaining to the business year in which the our Board of Directors’ meeting is held. If the abolishment of the Policy is resolved at a meeting of the Board of Directors or shareholders' meeting even if it is before the end of the effective period, the Company shall abolish the Policy at that point. Our Board of Directors will continue to revise the Policy if necessary in order to maintain and increase the common interests of our shareholders and our corporate value. We will notify shareholders promptly of changes to the Policy.

The status of major shareholders of the Company as of December 31, 2022, is provided in Attachment Number One. As of this time, the Company has not received proposals from any certain third party regarding a Large-Scale Purchase that may be subject to the Policy.

The ratio of the number of shares owned by Masatoshi Kumagai Office, Inc., the largest shareholder of the Company, is 33.46% as of December 31, 2022. The ratio of the number of shares owned by Masatoshi Kumagai, one of our large shareholders, is 8.42% as of that the same date. These shareholders are building a good relationship with the Company as stable shareholders. As of now, they are not subject to the Policy. However, there are no contracts, etc., for these shareholders to continue to hold the Company shares, so the possibility cannot be denied that the ratio of the number of shares owned by these shareholders may decline and the liquidity of the Company shares may increase in the future due to circumstances relating to these shareholders or the Company’s capital policy, etc. There are no other significant large shareholders, and the Company shares are widely distributed and held by institutional investors, financial institutions, individuals, etc. We believe that the Policy is necessary because a Large-Scale Purchase may occur in the future that could significantly impair the common interests of our shareholders and our corporate value.

2.Outline of the Large-Scale Purchase Rules

The Large-Scale Purchase Rules require that before carrying out a Large-Scale Purchase, a Large-Scale Purchaser provide necessary and sufficient information to our Board of Directors, that a period is set aside for our Board of Directors to assess and evaluate the Large-Scale Purchase based on the information above, and that a Large-Scale Purchaser cannot commence a Large-Scale Purchase until the end of the above period (until the end of a General Meeting of Shareholders to confirm shareholder opinion (defined in 3. (1) 2) below; the same shall apply hereinafter) if the General Meeting of Shareholders to confirm shareholder opinion is held). The outline of the Large-Scale Purchase Rules is described below. A flow chart summarizing the outline of the Large-Scale Purchase Rules is listed in Attachment Number Two.

（1）The Providing of Information

Before commencing with a Large-Scale Purchase, a Large-Scale Purchaser will be required to provide the Board of Directors with necessary and sufficient information to allow the Company shareholders to judge the Large-Scale Purchase, and to allow the Board of Directors to assess and evaluate the Large-Scale Purchase (hereinafter referred to as the “Large-Scale Purchase Information”).

Because the details of the Large-Scale Purchase Information may vary according to the scope and format of each Large-Scale Purchase, our Board of Directors will first require a Large-Scale Purchaser to submit to the Company a letter of intent to conduct a Large-Scale Purchase in compliance with the Large-Scale Purchase Rules. The letter shall include the following:

1) The name and address of the Large-Scale Purchaser
2) The governing law of the incorporation of the Large-Scale Purchaser
3) The name of the representative of the Large-Scale Purchaser
4) Contact details in Japan for the Large-Scale Purchaser
5) An outline of the proposed Large-Scale Purchase
6) An affirmation of intent to comply with the Large-Scale Purchase Rules

Within five business days after the receipt of the letter of intent (with the first day not being counted) that includes all of the items enumerated in items 1) through 6), the Company will deliver to the Large-Scale Purchaser a list of the Large-Scale Purchase Information to be initially provided by the Large-Scale Purchaser. If the information that has been provided initially is judged to be insufficient to serve as Large-Scale Purchase Information, the Company may require the submission of additional information. Irrespective of the scope and format of the Large-Scale Purchase that is being contemplated, the Large-Scale Purchase Information must include the following:

1) An outline of the Large-Scale Purchaser and its group
2) The purposes, methods, and conditions of the Large-Scale Purchase
3) An indication as to whether the Large-Scale Purchaser has been communicating with third parties with respect to the Large-Scale purchase and, if such communications have been taking place, their content
4) The basis for determining the purchase price and the funds for the purchase
5) An outline of the party or parties that will be providing the funds for the purchase to the Large-Scale Purchaser, including the parties’ names and other defining characteristics
6) Management policies and operating plans for the Company or the GMO Internet Group that the Large-Scale Purchaser intends to adopt after completing the Large-Scale Purchase
7) The measures that the Large-Scale Purchaser intends to adopt after completing the Large-Scale Purchase for sustaining stable increases in the corporate value of the Company and the GMO Internet Group, and the basis of such measures increasing the corporate value of the Company and the GMO Internet Group
8) Changes, if any, that will be made after the Large-Scale Purchase with respect to the relationships between the stakeholders, including staff, trading partners, clients, local society, and the Company and the GMO Internet Group.

Our Board of Directors will disclose all or any part of the fact that the proposal for a Large-Scale Purchase has been made and the Large-Scale Purchase Information provided to the Board of Directors, if such disclosure is considered necessary for the Company shareholders to make decisions.

（2）Assessment and evaluation on the part of our Board of Directors

After completion of the work to provide the Large-Scale Purchase Information, our Board of Directors is granted a period of time to assess, evaluate, negotiate, form opinions, and draft alternatives (hereinafter referred to as the “Assessment Period”), the length of which will vary according to the level of difficulty of the assessment work. In the event of a purchase of all the Company share certificates and other securities to be conducted via a tender offer with cash-only consideration in yen, the Assessment Period shall be 60 days (with the first day not being counted); for all other Large-Scale Purchases, the Assessment Period shall be 90 days (with the first day not being counted). During the Assessment Period, our Board of Directors will thoroughly assess and evaluate the Large-Scale Purchase Information that has been provided, with advice from outside experts and other sources as appropriate, and will formulate and disclose its opinion with respect to the proposed Large-Scale Purchase. Our Board of Directors may negotiate with the Large-Scale Purchaser to improve the terms of the Large-Scale Purchase, or offer alternative plans to our shareholders, as necessary.

A Large-Scale Purchaser cannot commence the Large-Scale Purchase until the end of the Assessment Period (until the end of a General Meeting of Shareholders to confirm shareholder opinion if the General Meeting of Shareholders to confirm shareholder opinion is held).

3.Measures to be taken upon the occurrence of a Large-Scale Purchase

（1）Measures to be taken in the event of non-compliance with the Large-Scale Purchase Rules by a Large-Scale Purchaser

1) If the Board of Directors determines to implement countermeasures

In the event a Large-Scale Purchaser does not comply with the Large-Scale Purchase Rules, our Board of Directors may, irrespective of the actual conditions of the proposed purchase, implement countermeasures to protect the common interests of our shareholders and our corporate value. Such countermeasures may include measures that the Board of Directors is permitted to take under the Companies Act of Japan or other laws and regulations, and our Articles of Incorporation (such countermeasures to be hereinafter referred to as “Countermeasures”). In principle, our Board of Directors will adopt the allotment of share options without contribution as Countermeasures; however, it may adopt any other measures that it deems appropriate at the time in question.

If our Board of Directors chooses allotment of share options without contribution as the Countermeasures, the allotment shall be conducted according to the outline listed in Attachment Number Three. If our Board of Directors chooses allotment of share options without contribution, it may determine the exercise period and the exercise conditions after considering their effectiveness as a Countermeasure, including conditions barring a Certain Group, including the Large-Scale Purchaser, from exercising the share options.

2) In the case of implementing countermeasures in accordance with resolutions of a General Meeting of Shareholders to confirm shareholder opinion

In addition to the 1) above, the Board of Directors of the Company may convene a General Meeting of Shareholders to confirm shareholder opinion and the Company shareholders may make decisions about the appropriateness of invoking Countermeasures if (a) the Board of Directors deems it appropriate to convene a shareholders’ meeting to confirm the intention of the shareholders concerning the appropriateness of invoking the Countermeasures ("General Meeting of Shareholders to confirm shareholder opinion") even if a Large-Scale Purchaser does not comply with the Large-Scale Purchase Rules, or (b) the Board of Directors consults with the Special Committee, which then issues a recommendation to the Board of Directors to convene the General Meeting of Shareholders to confirm shareholder opinion as prescribed in the 4. (2) below.

Summary of the Share Options.

1. Shareholders who are entitled to receive share options, and the conditions of the issuance of such share options:

One share option shall be granted without contribution to a shareholder for one share held by such shareholder (however, excluding common shares held by GMO), whose name is entered of record in the shareholder register as of the allotment day to be specified by GMO’s Board of Directors.

2. Type and number of shares to be acquired upon exercise of the share options:

The type of shares to be acquired upon exercise of share options shall be common shares of GMO, and the number of shares to be acquired upon the exercise of one share option shall be one share. However, if GMO conducts a share split or consolidation of shares, required adjustments shall be made.

3. Total number of share options to be allotted:

The total number of share options to be allotted shall be determined by GMO’s Board of Directors, and the upper limit shall be no more than 130 million. In some cases including the case where a Large-Scale Purchaser purchases GMO shares in stages, GMO’s Board of Directors may allot share options more than once, to the extent that the total number of share options to be issued shall not exceed 130 million.

4. Content and amount of assets to be contributed upon exercise of a share option:

The assets to be contributed upon exercise of a share option shall be cash, and the amount of the assets to be contributed upon exercise of each of the share options shall be one Japanese yen or more, as determined by GMO’s Board of Directors.

5. Restrictions on transfer of share options:

Share options may be transferred only with the approval of GMO’s Board of Directors.

6. Exercise period and other conditions of share options:

The exercise period, conditions of exercise (including provisions barring a Certain Group that includes Large-Scale Purchasers from exercising the share options), acquisition terms, and other necessary matters relating to the share options shall be determined separately by GMO’s Board of Directors. With respect to the acquisition terms, GMO may incorporate a provision stipulating that GMO shall acquire the share options of persons other than those who are not allowed to exercise the share options due to the conditions of exercise, and may grant common shares of GMO in such number as is determined separately by GMO’s Board of Directors in exchange for one share option, and that if GMO’s Board of Directors acknowledge that such persons, other than those who belong to a Certain Group, exist among those who own the share options after such acquisition, GMO may acquire the share options owned by such persons, and grant common shares of GMO in such number as is determined separately by GMO’s Board of Directors in exchange for one share option, and may repeat this process.

（2）Measures to be taken in the event of compliance with the Large-Scale Purchase Rules by a Large-Scale Purchaser

1) If the Board of Directors determines to implement countermeasures

In principle, should a Large-Scale Purchaser comply with the Large-Scale Purchase Rules, our Board of Directors will not implement Countermeasures, even if our Board of Directors is opposed to the proposed Large-Scale Purchase. However, this does not eliminate the possibility that our Board of Directors may choose to carry out acts such as expressing its opposition to the proposed Large-Scale Purchase, proposing alternative plans, or persuading shareholders not to approve the Large-Scale Purchase. Shareholders will determine whether to accept a Large-Scale Purchase that has been proposed by a Large-Scale Purchaser after considering factors such as the conditions of the purchase, the opinions of our Board of Directors with respect to the purchase, and alternative plans that may have been proposed by our Board of Directors.

However, even if a Large-Scale Purchaser complies with the Large-Scale Purchase Rules, if our Board of Directors judges that the proposed Large-Scale Purchase would have the effect of being severely harmful to the common interests of our shareholders and our corporate value, our Board of Directors may choose to implement Countermeasures to protect the interests of our shareholders and our corporate value. (Specifics of the Countermeasures that may be taken are enumerated in the aforementioned 3 (1) of this document.) If the proposed Large-Scale Purchase is judged to qualify under any of the patterns that are enumerated in Attachment Number Four, in principle the purchase will be deemed severely harmful to the common interests of our shareholders and our corporate value.

2) In the case of implementing countermeasures in accordance with resolutions of a General Meeting of Shareholders to confirm shareholder opinion

In addition to the 1) above, the Board of Directors of the Company may convene a General Meeting of Shareholders to confirm shareholder opinion and the Company shareholders may make decisions about the appropriateness of invoking Countermeasures if (a) the Board of Directors deems it appropriate to convene a General Meeting of Shareholders to confirm shareholder opinion concerning the appropriateness of invoking the Countermeasures if the Large-Scale Purchase is deemed severely harmful to the common interests of our shareholders and our corporate value, or (b) the Board of Directors consults with the Special Committee, which then issues a recommendation to the Board of Directors to convene the General Meeting of Shareholders to confirm shareholder opinion as prescribed in the 4. (2) below.

Situations Under Which It Will Be Judged That the Common Interests of GMO Shareholders Will Be Severely Harmed

（1）: Situations wherein it is judged that the Large-Scale Purchaser has no real intent to participate in the management of GMO, and purchases GMO shares for the purpose of pushing up the share price and thereafter having parties related to GMO buy back the shares at a high price (cases involving a so-called “greenmailer”).

（2）: Situations wherein it is judged that the Large-Scale Purchaser purchases GMO shares for the purpose of temporarily controlling GMO’s management and thereafter transferring assets that belong to GMO and are crucial to the GMO’s business management to the Large-Scale Purchaser or its group companies, etc., including real estate, movables, intellectual property, know-how, corporate secrets, key trading partners and customers.

（3）: Situations wherein it is judged that the Large-Scale Purchaser purchases GMO shares planning to control GMO’s management and, thereafter, to divert GMO’s assets as collateral or repayment resources for debts that are owed by the Large-Scale Purchaser or its group companies, etc.

（4）: Situations wherein it is judged that the Large-Scale Purchaser purchases GMO shares for the purpose of temporarily controlling GMO’s management, thereby causing GMO to sell or otherwise dispose of high-priced assets that are not currently related to the business of GMO, such as real estate and securities, and making temporary large dividend payments using the proceeds from such assets, or selling GMO shares at high prices after the shares’ prices have been pushed up on account of the large dividend payments.

（5）: Situations wherein it is judged, on reasonable grounds, that the purchase terms proposed by the Large-Scale Purchaser (including but not limited to the amount and type of consideration for the shares, as well as the content, timing, methodology, legality, and feasibility) are seriously insufficient or inappropriate, when considered in light of GMO’s corporate value.

（6）: Situations wherein it is judged, on reasonable grounds, that the method for purchasing GMO shares proposed by the Large-Scale Purchaser is likely to restrict the judgment opportunities or options of shareholders and to virtually coerce them into selling their GMO shares through a coercive process, such as a two-tiered purchase (meaning a purchase, like a takeover bid, whereby the Large-Scale Purchaser does not offer to purchase all of the GMO shares, but sets unfavorable purchase conditions or does not set clear conditions for the second purchase). (However, a partial takeover bid will not automatically be construed to be a situation that falls into this category.)

（7）: Situations wherein it is judged, on reasonable grounds, that acquisition of control over GMO by the Large-Scale Purchaser, or the Large-Scale Purchaser’s policies for treatment of GMO’s clients, employees or other interested parties will likely cause GMO’s corporate value, including the interests of GMO shareholders, clients, employees, or other interested parties to be impaired, or will likely to prevent the protection and enhancement of GMO’s corporate value.

（8）: Situations wherein it is judged, on reasonable grounds, that the Large-Scale Purchaser is inappropriate as a controlling shareholder from the perspective of public order.

（3）Treatment in the event the General Meeting of Shareholders to confirm shareholder opinion is convened

In the event the Board of Directors of the Company convenes a General Meeting of Shareholders to confirm shareholder opinion following (1) 2) or (2) 2) above, the Board of Directors may follow resolutions of the General Meeting of Shareholders to confirm shareholder opinion concerning the appropriateness of invoking the Countermeasures.

In the event the Board of Directors of the Company convenes a General Meeting of Shareholders to confirm shareholder opinion, the Board of Directors of the Company shall hold a General Meeting of Shareholders to confirm shareholder opinion within 60 days after the last day of the Board of Directors’ Evaluation Period and put forward proposal on approval to implement countermeasures against a large-scale purchase of the Company’s shares. However, in case the Board of Directors of the Company is not able to hold a General Meeting of Shareholders to confirm shareholder opinion within 60 days because of procedures, it shall be held on the earliest date possible in terms of procedures. In the event the Board of Directors of the Company convenes a General Meeting of Shareholders to confirm shareholder opinion, it will explain to the shareholders the reasons for determining that convening a General Meeting of Shareholders to confirm shareholder opinion is appropriate, its opinion toward Large-Scale Purchases, specific countermeasures to be implemented, efficiency and need of implementing countermeasures, or other facts that are considered necessary for the Company shareholders to make decisions.

A Large-Scale Purchaser cannot commence the Large-Scale Purchase until the end of a General Meeting of Shareholders to confirm shareholder opinion if the Board of Directors of the Company has decided to convene a General Meeting of Shareholders to confirm shareholder opinion.

4.Procedures to be taken to ensure the reasonability and fairness of the Countermeasures

（1）: Our Board of Directors may be tasked with making the final decisions on whether or not a Large-Scale Purchaser complies with the Large-Scale Purchase Rules, and whether or not the Large-Scale Purchase is deemed severely harmful to the common interests of our shareholders and our corporate value under circumstances in which a Large-Scale Purchaser complies with the Large-Scale Purchase Rules but it is nonetheless deemed appropriate to implement certain Countermeasures to protect the common interests of our shareholders and our corporate value. To ensure that the decisions undertaken by our Board of Directors are efficient and fair, the Company has decided to establish a Special Committee that is independent of our Board of Directors. The Special Committee shall have three or more, but no more than five, members, who shall be selected from among persons such as our external directors, lawyers, certified public accountants, certified public tax accountants, academics, persons well versed in investment banking activities, and persons with experience as corporate directors or executive directors who have served at companies other than the companies of GMO Internet Group. Name and career histories of the members of the Special Committee at this moment are provided in Attachment Number Five.

（2）

Should our Board of Directors decide to implement Countermeasures, the following procedures shall be followed to ensure the reasonability and fairness of such decision.

Before implementing the Countermeasures, our Board of Directors first will disclose the details of the Countermeasures that will be taken to the Special Committee, and will consult with the Special Committee concerning whether to implement the Countermeasures. The Special Committee will act on the consultation and issue a recommendation on whether to implement the Countermeasures (including a recommendation to the Board of Directors to convene the General Meeting of Shareholders to confirm shareholder opinion). Our Board of Directors will respect the recommendation of the Special Committee to the greatest extent possible.

Should our Board of Directors decide to implement the Countermeasures, it will do so only after first obtaining the approval of all Directors and Audit and Supervisory Committee Members, including the three External Directors. The decision of our Board of Director to implement the Countermeasures will also require the approval of all of the Directors. In addition to consulting with the Special Committee concerning whether to implement the Countermeasures, our Board of Directors will review the Large-Scale Purchaser, the details of the Large-Scale Purchase, and the impact of the Large-Scale Purchase on the common interests of our shareholders and our corporate value, seeking the advice of external experts and other sources, based on the Large-Scale Purchase Information provided by the Large-Scale Purchaser.

If our Board of Directors has reason to doubt whether or not the Large-Scale Purchase Information provided by the Large-Scale Purchaser is adequate and complete, chooses to present an alternative plan to shareholders, or otherwise deems it necessary, our Board of Directors may, at its own discretion, choose to consult with the Special Committee on matters other than whether to implement the Countermeasures described above. The Special Committee will act on the consultation, review the matter in question, and issue a recommendation to the Board of Directors.

（3）

Even if Countermeasures are implemented after carrying out the procedures described in (2) above,: 1) should the Large-Scale Purchaser choose to revoke or withdraw its proposed Large-Scale Purchase, or 2) should the circumstances that formed the basis for making the decision to implement the Countermeasures undergo changes, and if it may be objectively judged that maintaining the Countermeasures is no longer appropriate, from the standpoint of maintaining and increasing the common interests of our shareholders and our corporate value, our Board of Directors may, after indicating the circumstances in question, once again choose to consult with the Special Committee regarding whether or not to maintain the Countermeasures, and to examine whether to halt or repeal the Countermeasures that have been implemented, seeking the advice of external experts and other sources. The Special Committee will act on the consultation and issue a recommendation to our Board of Directors concerning whether or not to maintain the Countermeasures. The Board of Directors will respect the recommendation of the Special Committee to the greatest extent possible when making a decision on whether to maintain the Countermeasures.

After carrying out an assessment that takes into account the recommendation of the Special Committee, should our Board of Directors decide that maintaining the Countermeasures would not be appropriate from the standpoint of maintaining and increasing the common interests of our shareholders and our corporate value, it may decide to halt the Countermeasures, and may halt or revoke the Countermeasures that have been taken.

Should our Board of Directors choose to implement the allotment of share options without contribution, and thereafter choose to halt the allotment of share options without contribution on or after the ex-rights date (hereinafter referred to as the "Ex-Rights Date") pertaining to the allotment day (as stipulated in the Attachment Number Three, Paragraph 1) or if our Board of Directors acquires the allotted share options without contributions to revoke the Countermeasures, the dilution of the value of the the Company shares will not occur, so those who have traded the Company shares assuming that the dilution of the value of the the Company shares will occur may suffer an unexpected loss resulting from fluctuations in share prices.

Summary of the Share Options.

1. Shareholders who are entitled to receive share options, and the conditions of the issuance of such share options:

2. Type and number of shares to be acquired upon exercise of the share options:

3. Total number of share options to be allotted:

4. Content and amount of assets to be contributed upon exercise of a share option:

5. Restrictions on transfer of share options:

Share options may be transferred only with the approval of GMO’s Board of Directors.

6. Exercise period and other conditions of share options:

（4）: In certain cases, as described in the aforementioned 3. (1) 2) and 3. (2) 2) of this document, before implementing the Countermeasures, the Board of Directors of the Company may convene a General Meeting of Shareholders to confirm shareholder opinion concerning the appropriateness of invoking the Countermeasures and the Company shareholders may make decisions about the appropriateness of invoking Countermeasures.

5.Reasonability of the Policy

（1）Fulfillment of the requirements of the Guidelines for Takeover Defense Measures

The Policy satisfies the three principles (the principle of securing and enhancing corporate value and the shareholders’ common interests, the principle of prior disclosure and shareholders’ consent, and the principle of ensuring necessity and suitability) set forth in the Guidelines Regarding Takeover Defense for the Purposes of Security and Enhancement of Corporate Value and Shareholders’ Common Interests published by the Ministry of Economy, Trade and Industry and the Ministry of Justice on May 27, 2005. The Policy also takes into account the substance of the State of Takeover Defenses Measures in Light of Recent Changes in the Environment, released by the Corporate Value Research Group on June 30, 2008.

（2）Contribution to the shareholders’ common interests

As mentioned in 1 above, we believe that collecting and providing shareholders with necessary and sufficient information for them to make an appropriate judgment about Large-Scale Purchases of shares on their own, and disclosing the results of the assessment and examination of such information by the Board of Directors, will contribute to the Company shareholders’ common interests.

（3）Value the shareholder opinion

In certain cases, as described in the aforementioned 3. (1) 2) and 3. (2) 2) of this document, before implementing the Countermeasures, the Board of Directors of the Company may convene a General Meeting of Shareholders to confirm shareholder opinion concerning the appropriateness of invoking the Countermeasures and the Company shareholders may make decisions about the appropriateness of invoking Countermeasures.

（4）Solicitation of opinions from external experts by our Board of Directors

As mentioned in 4(2) above, our Board of Directors will seek the advice of external experts and other sources as appropriate and if necessary for assessment and discussions with respect to a Large-Scale Purchase. The solicitation of opinions from external experts is intended to ensure that the decisions undertaken by our Board of Directors are objective and efficient.

（5）Establishment of the Special Committee

As mentioned in 4(1) described above, to ensure that the decisions undertaken by our Board of Directors concerning whether to implement the Countermeasures are reasonable and fair, the Company has established a Special Committee that is independent of our Board of Directors.

（6）The Policy is neither a dead-hand takeover defense measure nor a slow-hand takeover defense measure

As mentioned in 1 above, our Board of Directors may abolish the Policy. The Policy, therefore, is not a dead-hand takeover defense measure (i.e., a takeover defense measure, the implementation of which cannot be stopped even upon the replacement of the majority of the members of the Board of Directors).

Also, because the Directors’ term of office (excluding Directors who are Audit and Supervisory Committee Members) continues until the end of the Annual General Shareholders Meeting relating to the final accounting period ending within one year from the time of their election, the Policy is not a slow-hand takeover defense measure (i.e., a takeover defense measure which takes longer to stop with the replacement of all members of the board of directors).

6.The impact on shareholders and investors

（1）The impact on shareholders and investors when the Policy is introduced

At the time the Policy is introduced, no allotment of share options without contribution, or other Countermeasures, will be implemented. Accordingly, the Policy will have no direct or specific impact on the legal rights and economic benefits of the Company shares held by shareholders and investors at the time of its introduction.

（2）The impact on shareholders and investors when Countermeasures are implemented

Our Board of Directors may carry out Countermeasures to protect the common interests of our shareholders and our corporate value. If our Board of Directors decides to implement specific Countermeasures, timely and appropriate discloses will be made in accordance with applicable laws and the regulations of financial instruments exchanges.

Because the share options are planned to be provided with discriminatory conditions regarding Large-Scale Purchaser, for their exercise or acquisition, the implementation of Countermeasures may cause Large-Scale Purchaser to incur losses, either from a legal or economic perspective, upon such exercise or acquisition. However, even in such case, the Company does not expect that the policy will have direct or specific impact on the legal rights and economic benefits of the Company shares held by the Company shareholders and investors other than Large-Scale Purchaser.

（3）Procedures that the Company shareholders will be required to carry out in the event Countermeasures are implemented

If an allotment of share options without contribution is implemented as a Countermeasure, the Company shareholders who have not completed entry of a name change will be required to complete the entry of name change before a deadline that will be decided and publicly announced by our Board of Directors. Further, upon allotment of share options without contribution, the Company shareholders will be required to pay a certain amount of funds within a prescribed period of time in order to exercise the share options. Regarding the details of the procedures, we will make timely and appropriate disclosures in accordance with applicable laws and the regulations of financial instruments exchanges, when these procedures are actually required.

(Note 1) Large-Scale Purchase

"Large-Scale Purchase" refers to purchases of share certificates, etc., of the Company for the purpose of making the ratio of voting rights*4 of a Certain Group 20% or higher or purchases of share certificates, etc., of the Company that result in the ratio of voting rights of a Certain Group being 20% or higher (in either case, excluding purchases that our Board of Directors approves in advance).

(Note 2) Certain Group

"Certain Group" refers to (1) 1) a holder (meaning a holder described in Article 27-23, Paragraph 1 of the Financial Instruments and Exchange Act (hereinafter, the “Act"), including those considered holders under Article 27-23, Paragraph 3 of the Act) of share certificates, etc. (meaning the share certificates, etc., described in Article 27-23, Paragraph 1 of the Act), of the Company and 2) its joint holder (meaning the joint holder described in Article 27-23, Paragraph 5 of the Act and including those who are deemed a joint holder under Paragraph 6 thereof), or (2) 1) a person who conducts a purchase, etc. (meaning a purchase, etc., described in Article 27-2, Paragraph 1 of the Act, including purchases conducted on an exchange financial instruments market), of share certificates, etc. (meaning the share certificates, etc., described in Article 27-2, Paragraph 1 of the Act), of the Company and 2) persons in a special relationship (meaning the persons in special relationship described in Article 27-2, Paragraph 7 of the Act) with such person.

(Note 3) Large-Scale Purchaser

"Large-Scale Purchaser" refers to a person who contemplates making a Large-Scale Purchase, as described in Note 1.

(Note 4) Ratio of Voting Rights

"Ratio of Voting Rights", in connection with a pattern of specific purchase(s) by a Certain Group, refers to: 1) the holding ratio of share certificates, etc. (meaning the holding ratio of share certificates, etc., described in Article 27-23, Paragraph 4 of the Act; in this case, the number of share certificates, etc. (meaning the number of share certificates, etc., described in Article 27-23, Paragraph 4 of the Act), owned by a joint holder of the holder shall be considered for purposes of this calculation), owned by a holder, when a Certain Group qualifies as the holder of share certificates, etc. (meaning the share certificates, etc., described in Article 27-23, Paragraph 1 of the Act), of the Company or its joint holder; or 2) the sum of the share certificates, etc., holding rate (meaning the share certificates, etc., holding rate described in Article 27-2, Paragraph 8 of the Act) owned by a Large Scale Purchaser or persons in a special relationship therewith, when the Certain Group qualifies as a Large Scale Purchaser of share certificates, etc. (meaning share certificates, etc., described in Article 27-2, Paragraph 1 of the Act), of the Company or persons in a special relationship therewith. For purposes of calculating the holding ratio of share certificates, etc., or the share certificates, etc., holding rate, with regard to the total number of issued shares (meaning as described in Article 27-23, Paragraph 4 of the Act) and the total number of voting rights (meaning as described in Article 27-2, Paragraph 8 of the Act), reference may be made to the most recently submitted Annual Securities Report, Quarterly Securities Report, or Status Report on Purchase of Company’s Own Shares.

Established on March 13, 2006
Last revised on July 20, 2020