TOKYO--Toshiba believes that the greatest priority of its management team is the steady and continuous enhancement of corporate value. Everyday Toshiba strives to achieve that goal.

Corporate acquisitions have become notably frequent recently, but not all acquisitions work out in the best interests of companies or their shareholders. In light of this situation, Toshiba's Board of Directors has established the following policy to counter those proposals for acquisitions of Toshiba shares that will result in a certain person holding more than 20% of the total voting rights of Toshiba (this "Policy").

1. Purposes and Details of the Policy

Toshiba believes that it is Toshiba's shareholders who should make the final decision on any proposal for an acquisition that has a material effect on the management of the company. But because the Toshiba Group is one of Japan's largest companies, with consolidated sales for FY 2004 exceeding 5.8 trillion yen, and the scope of the group's businesses is so extremely expansive, extending to digital products, electronic devices, social infrastructure, home appliances and others, it is not always easy for the shareholders to accurately understand the corporate value of the Toshiba Group and to decide appropriately on the reasonableness of acquisition proposals.

Furthermore, the various businesses of the Toshiba Group are all so closely intertwined at all levels - production, sales, and technology - and they are closely combined under the same umbrella of the "Toshiba" brand. And it is that organic, intertwined nature of Toshiba's businesses that enables Toshiba to develop such revolutionary technology and provide such high-quality goods and services. Any acquisition undertaken for the main purpose of acquiring solely a part of the businesses and intellectual property of the Toshiba Group with the intention of selling off the other businesses, thereby dissolving the Toshiba Group, will have seriously adverse consequences for the corporate value of the Toshiba Group.

Toshiba therefore believes that it may be necessary that the Board of Directors exercises appropriate counter measures if such an acquisition is attempted so as to protect the interests of Toshiba and its shareholders.

Specifically, if a proposal is made to undertake an acquisition of Toshiba shares, the Toshiba's Board of Directors will, among other things, consider:

Depending on the result of such considerations, the Board of Directors will, as necessary, request additional information from the acquirer or request the acquirer to sufficiently provide the Board of Directors with the time necessary to suggest an alternative proposal. If consequently the Board of Directors believes that the acquisition will damage the interests of Toshiba or its shareholders, then to protect such interests, the Board of Directors will, while taking care of timely and appropriate disclosures of information, negotiate with the acquirer to get it to improve the terms and conditions of the acquisition, and, if necessary, take reasonable counter measures against the acquisition. Possible counter measures include, but are not limited to, undertaking a share split and issuing stock acquisition rights or new stocks, which will have the effect of reducing, to a certain degree, the voting rights ratio of Toshiba shares held by the acquirer.

To ensure the objectivity and reasonableness of the above considerations and decisions, a special committee, which will be composed of several independent outside directors who have a grasp of Toshiba's actual business status and are in a position to monitor the executive officers, will consider such proposals and formulate opinion with advice from outside and independent experts. The Board of Directors will then make the final decision based on the committee's opinion. Once the Board of Directors decides to take any counter measures against the acquisition, the similar process will be taken to decide whether to rescind such counter measures.

2. Information to be provided by acquirer

The main information to be provided by an acquirer is as follows:

3. Effects on shareholders and investors if counter measures are taken

4. Decision of this Policy

This Policy was unanimously approved by Toshiba's Board of Directors (including 4 outside directors) at its meeting held on May 13, 2005, on the condition that the specific applications of this Policy are properly carried out.

5. Other details

Toshiba's Board of Directors is not at this time aware of any signs of the existence of any specific acquisition proposal of Toshiba shares. This Policy is announced as a general policy for the time being for acquisition proposals of Toshiba shares. It may be amended in the future as necessary, or new policies may be introduced, depending on trends of amendments to laws regarding corporate defenses and others. And Toshiba's Board of Directors will discuss whether this Policy should be revised before or around every ordinary general meeting of shareholders.