JAPAN

Companies Act (Part I, Part II, Part III and Part IV)

PART I General Provisions

Chapter I Common Provisions

(Definitions)

Article 2 In this Act, the meanings of the terms listed in the following items shall be as prescribed respectively in those items:

(i) "Company" means any Stock Company, General Partnership Company, Limited Partnership Company or Limited Liability Company;

(ii) "Foreign Company" means such any juridical person incorporated under the law of a foreign country or such other foreign organization that is of the same kind as the Company or is similar to a Company;

(iii) "Subsidiary" means any entity which is prescribed by the applicable Ordinance of the Ministry of Justice as the juridical person the management of which is controlled by a Company, including, but not limited to, a Stock Company a majority of all votes in which are owned by the Company;

(iv) "Parent Company" means any entity which is prescribed by the applicable Ordinance of the Ministry of Justice as a juridical person who controls the management of a Stock Company, including, but not limited to, a Company which has a Stock Company as its Subsidiary;

(v) "Public Company" means any Stock Company the articles of incorporation of which do not require, as a feature of all or part of its shares, the approval of the Stock Company for the acquisition of such shares by transfer;

(vi) "Large Company" means any Stock Company which satisfies any of the following requirements:

(a) that the amount of the stated capital in the balance sheet as of the end of its Most Recent Business Year (hereinafter in this (a) and (b) below referring to the balance sheet reported to the annual shareholders' meeting under the provision of Article 439 in cases provided for in the first sentence of such Article, and referring to the balance sheet under Article 435(1) in cases where the first annual shareholders' meeting after the incorporation of the Stock Company has not yet been held) is 500,000,000 yen or more; or

(b) that the total sum of the amounts in the liabilities section of the balance sheet as of the end of its Most Recent Business Year is 20,000,000,000 yen or more;

(vii) "Company with Board of Directors" means any Stock Company which has a board of directors, or any Stock Company which is required to have a board of directors under the provisions of this Act;

(viii) "Company with Accounting Advisors" means any Stock Company which has Accounting Advisor(s);

(ix) "Company with Auditors" means any Stock Company which has auditor(s) (excluding any Stock Company the articles of incorporation of which provide that the scope of the audit by its auditor(s) shall be limited to an audit related to accounting), or any Stock Company which is required to have auditor(s) under the provisions of this Act;

(x) "Company with Board of Auditors" means any Stock Company which has a board of auditors, or any Stock Company which is required to have a board of auditors under the provisions of this Act;

(xi) "Company with Accounting Auditors" means any Stock Company which has accounting auditor(s), or any Stock Company which is required to have accounting auditor(s) under the provisions of this Act;

(xii) "Company with Committees" means any Stock Company which has a nominating committee, an audit committee and a compensation committee (hereinafter referred to as "Committees");

(xiii) "Corporation with Class Shares" means any Business Corporation which issues two or more classes of shares with different features as to the matters listed in the items of Article 108(1), including, but not limited to, the Dividend of Surplus;

(xiv) "Class Meeting" means a meeting of Class Shareholders (hereinafter referring to the shareholders of any class of shares of a Company with Class Shares);

(xv) "Outside Director" means a director of any Stock Company who is neither an Executive Director (hereinafter referring to a director of a Stock Company listed in any item of Article 363(1), and any other director who has executed operation of such Stock Company) nor an executive officer, nor an employee, including a manager, of such Stock Company or any of its Subsidiaries, and who has neither ever served in the past as an executive director nor executive officer, nor as an employee, including a manager, of such Stock Company or any of its Subsidiaries;

(xvi) "Outside Company Auditor" means an auditor of any Stock Company who has neither ever served in the past as a director, Accounting Advisor (or, in cases where the accounting advisor is a juridical person, any member thereof who was in charge of its advisory affairs) or executive officer, nor as an employee, including a manager, of such Stock Company or any of its Subsidiaries;

(xvii) "Shares with Restriction on Transfer" means the shares in cases where a Stock Company provides, as a feature of all or part of its shares, that the approval of the Stock Company is required for the acquisition of such shares by transfer;

(xviii) "Shares with Put Option" means the shares in cases where a Stock Company provides, as a feature of all or part of its shares, that a shareholder may demand the Stock Company to redeem such shares;

(xix) "Shares Subject to Call" means the shares in cases where a Stock Company provides, as a feature of all or part of its shares, that such Stock Company may redeem such shares upon the occurrence of specified event;

(xx) "Share Unit" means such certain number in cases where a Stock Company provides in its articles of incorporation that certain number of shares it issues constitute one unit of shares which entitles a shareholder to cast one vote in a shareholders' meeting or Class Meeting;

(xxi) "Share Option" means any right which entitles the holder to acquire shares in a Stock Company by exercising the right against such Stock Company;

(xxii) "Bond with Share Options" means any Bond with attached Share Options;

(xxiii) "Bond" means any monetary claim owed by a Company by allotment under the provisions of this Act and which will be redeemed in accordance with the provisions on the matters listed in the items of Article 676;

(xxiv) "Most Recent Business Year" means the latest of business years for which approval under Article 438(2) (or any approval under Article 436(3) in cases provided for in Article 439(1)) is obtained with respect to the financial statements provided in Article 435(2) relating to each business year,

(xxv) "Dividend Property" means the property to be distributed in cases where a Stock Company pays the Dividend of Surplus;

(xxvi) "Entity Conversion" means any change, through conversion, from a Company listed in (a) or (b) below, respectively, to another form of Company prescribed immediately thereafter in the said (a) or (b):

(a) from a Stock Company to a General Partnership Company, Limited Partnership Company or Limited Liability Company;

(b) from a General Partnership Company, Limited Partnership Company or Limited Liability Company to a Stock Company.

(xxvii) "Absorption-type Merger" means any merger Company(s) effects with another Company(s) whereby the surviving Company succeeds to any and all rights and obligations of the absorbed Company(s);

(xxviii) "Consolidation-type Merger" means any merger effected by two or more Companies whereby the new Company incorporated by the merger succeeds to any and all rights and obligations of the companies consolidated by the merger;

(xxix) "Absorption-type Company Split" means any Company split whereby succeeding Company(s) succeeds after the Company Split, in whole or in part, to any rights and obligations, in whole or in part, in connection with the business of the Stock Company(s) or the Limited Liability Company(s) which is split;

(xxx) "Incorporation-type Company Split" means any Company split whereby new Company(s) incorporated by the Company Split succeeds to any rights and obligations, in whole or in part, in connection with business of the Stock Company(s) or the Limited Liability Company(s) which is split;

(xxxi) "Share Exchange" means any exchange of shares whereby Stock Company(s) cause all of its issued shares (hereinafter referring to the shares issued by a Stock Company) to be acquired by another Stock Company or Limited Liability Company;

(xxxii) "Share Transfer" means any transfer whereby Stock Company(s) cause all of its issued shares to be acquired by a newly incorporated Stock Company;

(xxxiii) "Method of Public Notice" means the method which a Company (including a Foreign Company) adopts to give public notice (excluding those which are required to be effected by publishing the notice in the Official Gazette pursuant to the provisions of this Act or any other acts);

(xxxiv) "Electronic Public Notice" means a Method of Public Notice prescribed by the applicable ordinance of the Ministry of Justice which, through use of an electronic method (hereinafter referring to the method prescribed by the applicable ordinance of the Ministry of Justice which uses information communication technology including, but not limited to, the method which uses electronic data processing system), enables the general public to access such public notice.

(Juridical Personality)

Article 3 A Company shall be a juridical person.

(Domicile)

Article 4 The domicile of a Company shall be the location of its head office.

(Commercial Transaction)

Article 5 Any act which a Company (hereinafter in this Article, in paragraph (1) of the following Article, in Article 8 and in Article 9, including a Foreign Company) carries out as its business and any act which it carries out for its business shall constitute a commercial transaction.

Chapter II Trade Name of Company

(Trade Name)

Article 6 (1) The name of a Company shall be its trade name.

(2) A Company shall use in its trade name the words "Kabushiki-Kaisha,"

"Gomei-Kaisha," "Goushi-Kaisha" or "Goudou-Kaisha" respectively for Stock Company, General Partnership Company, Limited Partnership Company or Limited Liability Company.

(3) A Company may not use in its trade name any word which makes it likely that the Company may be mistaken for a different form of Company.

(No Use of Name, etc. which is Likely to be Mistaken for a Company)

Article 7 No person who is not a Company may use in its name or trade name any word which makes it likely that the person may be mistaken as a Company.

Article 8 (1) No person may use, with a wrongful purpose, any name or trade name which makes it likely that the person may be mistaken for the other Company.

(2) Any Company the enterprise interests of which have been, or are likely to be, infringed by the use of any name or trade name in violation of the provisions of the preceding paragraph may seek an injunction suspending or preventing the infringement against the person who infringes, or is likely to infringe, those enterprise interests.

(Liability of Company Permitting Others to Use Its Trade Name)

Article 9 Any Company who has permitted others to carry out a business or engage in any enterprise by using the Company's own trade name shall be jointly and severally liable together with such others, vis-a-vis any person who has transacted with such others based on misunderstanding that such Company carries out such business, for the performance of any obligations which may arise from such transaction.

Chapter III Employees of a Company

Section 1 Employees of a Company

(Manager)

Article 10 A Company (hereinafter in this Part including a Foreign Company) may appoint manager(s) and have him/her carry out its business at its head office or branch office.

(Manager's Authority of Representation)

Article 11 (1) A manager shall have authority to do any and all judicial and nonjudicial acts on behalf of a Company in connection with its business.

(2) A manager may elect or dismiss other employee(s).

(3) No limitation on a manager's authority of representation may be asserted against a third party without knowledge of such limitation.

(Non-Competition by Manager)

Article 12 (1) A manager may not commit any of the following acts without the permission of the Company:

(i) engage in his/her own enterprise;

(ii) carry out, for himself/herself or for a third party, any transaction which is in the line of business of the Company;

(iii) become an employee of any other Company or merchant (excluding any Company; the same shall apply in Article 24);

(iv) become a director, executive officer or any member who executes the operation of any other Company.

(2) If a manager commits any act listed in item (ii) of the preceding paragraph in violation of the provisions of that paragraph, the amount of the profit obtained by the manager or any third party as a result of such act shall be presumed to be amount of the damage suffered by the Company.

(Apparent Manager)

Article 13 Any employee with a title which holds him/her out as the chief of the business of the head office or any branch office of a Company shall be deemed to have the authority to do any and all non-judicial acts in connection with the business of such head office or branch office, provided, however, that this shall not apply to the cases where his/her counterparty acts with knowledge of his/her actual authority.

(Employees to Whom the Authority of a Certain Kind of Matter or A Specific Matter is Delegated)

Article 14 (1) Any employee to whom the authority of a certain kind of matter or a specific matter in connection with the business is delegated shall have the authority to do any and all non-judicial acts in connection with such matter.

(2) No limitation on the authority of representation of the employee provided in the preceding paragraph may be asserted against a third party without knowledge of such limitation.

(Employees of Stores for the Purpose of Selling Goods)

Article 15 Any employee of a store the purpose of which is the sale, etc.

(hereinafter in this Article referring to sale, lease or any other act similar to the foregoing) of goods shall be deemed to have authority to conduct the sale, etc. of the goods located in such store, provided, however, that this shall not apply to the cases where his/her counterparty acts with knowledge of his/her actual authority.

Section 2 Commercial Agents of the Companies

(Duty to Give Notice)

Article 16 When any Commercial Agent (hereinafter in this Section referring to a person who acts on behalf of a Company as an agent or intermediary in any transaction in the ordinary line of business of the Company, and is not an employee of the Company) undertakes any transaction as an agent or intermediary, the Commercial Agent shall give notice of that fact to the Company without delay.

(Non-Competition by Commercial Agent)

Article 17 (1) A Commercial Agent may not carry out any of the following acts without the permission of the Company:

(i) carry out, for himself/herself or for a third party, any transaction which is in the line of business of the Company;

(ii) become a director, executive officer or any member who executes operation of any other Company which carries out the same kind of business as the Company.

(2) If a Commercial Agent commits any act listed in item (i) of the preceding paragraph in violation of provisions of that paragraph, the amount of the profit obtained by the Commercial Agent or any third party as a result of such act shall be presumed to be amount of the damage suffered by the Company.

(Authority to Receive Notice)

Article 18 A Commercial Agent to whom the authority of the sale of goods or the role of intermediary in the same is delegated shall have authority to receive the notice regarding the sale and purchase including, but not limited to, the notice under Article 526(2) of the Commercial Code (Act No. 48 of 1899).

(Cancellation of Commercial Agency Contract)

Article 19 (1) A Company or the Commercial Agent may, when they did not define the period of the commercial agency contract, cancel the contract by giving an advance notice more than two months in advance.

(2) Notwithstanding the provisions of the preceding paragraph, if there is any compelling reason, the Company or its Commercial Agent may cancel the commercial agency contract at any time.

(Right of Retention of Commercial Agent)

Article 20 If any claim arising from acting as an agent or intermediary in any transaction is due, the Commercial Agent can retain any property or negotiable instruments of value which it possesses on behalf of the Company until the satisfaction of such claim, provided, however, that this shall not apply to the cases where the parties otherwise manifest their intention.

Chapter IV Non-Competition after Assignment of Business

(Non-competition by Assignor Company)

Article 21 (1) Unless the parties otherwise manifest their intention, a Company which assigned its business (hereinafter in this Chapter referred to as

"Assignor Company") may not carry out the same line of business within the area of the same city, town or village (hereinafter in this Section referring to "ward" for the area in which special wards of Tokyo are located and for the cities designated under Article 252-19(1) of the Local Autonomy Act (Act No. 67 of 1947)), or within the area of any of its neighboring cities, towns or villages for twenty years from the day of the assignment of the business.

(2) In cases where the Assignor Company agreed to a special provision to the effect that it will not carry out the same line of the business, the effectiveness of the special provision shall be limited to the period of thirty years from the day of the assignment of the business.

(3) Notwithstanding the provisions of the preceding two paragraphs, the Assignor Company may not carry out the same line of business with the purpose of unfair competition.

(Liabilities of Assignee Company using the Trade Name of the Assignor Company)

Article 22 (1) In cases where any Company to which any business is assigned (hereinafter in this Chapter referred to as "Assignee Company") continues to use the trade name of the Assignor Company, the Assignee Company shall also be liable for the performance of any obligations having arisen from the business of the Assignor Company.

(2) The provisions of the preceding paragraph shall not apply in cases where the Assignee Company registers, at the location of its head office, without delay after it has accepted the assignment of the business, a statement to the effect that it will not be liable for the performance of the obligations of the Assignor Company. In cases where the Assignee Company and Assignor Company give notice to the above effect to any third party without delay after the assignment of the business, the provisions of the immediately preceding sentence shall apply to the third party who receives such notice.

(3) In cases where the Assignee Company is liable for the performance of the obligations of the Assignor Company pursuant to the provisions of paragraph (1), the liability of the Assignor Company shall be extinguished upon lapse of two years after the day of the assignment of the business vis-a-vis any obligee who does not demand the performance, or does not give an advance notice of his/her demand, within that period.

(4) In cases provided for in paragraph (1), any performance made vis-a-vis the Assignee Company with respect to any claim arising from the business of the Assignor Company shall remain effective if the performing party is without knowledge and is not grossly negligent.

(Assumption of Obligations by Assignee Company)

Article 23 (1) Even in cases where an Assignee Company does not continue to use the trade name of the Assignor Company, if it advertises to the effect that it will assume the obligations that has arisen from the business of the Assignor Company, the obligees of the Assignor Company may demand the performance against the Assignee Company.

(2) In cases where the Assignee Company is liable for the performance of the obligations of the Assignor Company pursuant to the provisions of the preceding paragraph, the liability of the Assignor Company shall be extinguished upon lapse of two years after the day of the advertisement under that paragraph vis-a-vis any obligee who does not demand the performance, or does not give an advance notice of his/her demand, within that period.

(Assignment of Business to or from a Merchant)

Article 24 (1) In cases where a Company assigns its business to a merchant, such Company shall be deemed to be the assignee provided for in paragraph (1) of Article 16 of the Commercial Code, and the provisions of Article 17 and Article 18 of the Code shall apply.

(2) In cases where a Company accepts assignment of the enterprise of any merchant, such merchant shall be deemed to be the Assignor Company, and the provisions of the preceding two articles shall apply.

PART II Stock Company

Chapter I Incorporation

Section 1 General Provisions

Article 25 (1) A Stock Company may be incorporated by either of the following methods:

(i) The method by which incorporator(s) subscribe(s) for all Shares Issued at Incorporation (meaning the shares which are issued at incorporation of a Stock Company. The same shall apply hereinafter) pursuant to the provisions of the next Section to Section 8 inclusive; or

(ii) The method by which, in addition to the subscription by incorporator(s) for the Shares Issued at Incorporation, person(s) who will subscribe for the Shares Issued at Incorporation is/are solicited pursuant to the provisions of the next Section, Section 3, Article 39 and Section 6 to Section 9 inclusive.

(2) Each incorporator shall subscribe for one or more Shares Issued at Incorporation in the incorporation of a Stock Company.

Section 2 Preparation of Articles of Incorporation

(Preparation of Articles of Incorporation)

Article 26 (1) In order to incorporate a Stock Company, incorporator(s) shall prepare articles of incorporation, and all incorporators shall sign or affix the name(s) and seal(s) to it.

(2) Articles of incorporation set forth in the preceding paragraph may be prepared by Electromagnetic Records (meaning records produced by electronic forms, magnetic forms, or any other forms unrecognizable by human senses, which are for computer data-processing use as prescribed by the applicable Ordinance of the Ministry of Justice. The same shall apply hereinafter.). In such cases, actions prescribed by the applicable Ordinance of the Ministry of Justice shall be taken in lieu of the signing or the affixing of the names and seals, with respect to the data recorded in such Electromagnetic Records.

(Matters to be Specified or Recorded in the articles of incorporation)

Article 27 Articles of incorporation of a Stock Company shall specify or record the following matters:

(i) Purpose(s);

(ii) Trade name;

(iii) Location of the head office;

(iv) Value of property to be contributed at the incorporation or the lower limit thereof;

(v) Name(s) and address(es) of the incorporator(s).

Article 28 In cases where a Stock Company is to be incorporated, the following matters shall not become effective unless they are specified or recorded in the articles of incorporation referred to in Article 26(1):

(i) Name(s) of person(s) who contribute(s) by any property other than money, the description of such property and the value thereof, and the number of the Shares Issued at Incorporation that are to be allotted to such person(s) (in cases where the Stock Company to be incorporated is a Company with Class Shares, referring to the class(es) and the number of each class of the Shares Issued at Incorporation; the same shall apply in item (i) of Article 32(1));

(ii) Property that is agreed to be assigned to the Stock Company after the formation thereof, the value thereof, and the name of the assignor;

(iii) Compensation or other special benefit which the incorporator(s) is to obtain by the formation of the Stock Company, and the name(s) of such incorporator(s); and

(iv) Expenses regarding the incorporation that are borne by the Stock Company (excluding the fees for the certification of the articles of incorporation, and other expenses which are prescribed by the applicable Ordinance of the Ministry of Justice as expenses that are unlikely to cause harm to the Stock Company)

Article 29 In addition to the matters listed in each item of Article 27 and each item of the preceding article, articles of incorporation of a Stock Company may specify or record the matters which, pursuant to the provisions of this Act, may not become effective unless provided for in the articles of incorporation, or other matters which do not violate any provision of this Act.

(Certification of Articles of Incorporation)

Article 30 (1) Articles of incorporation set forth in Article 26(1) shall not become effective unless they are certified by a notary public.

(2) Articles of incorporation that are certified by a notary public pursuant to the preceding paragraph may not be amended before the formation of the Stock Company except when they are amended under the provisions of Article 33(7) or (9), or Article 37(1) or (2).

(Keeping and Inspection of Articles of Incorporation)

Article 31 (1) The incorporator(s) (or the Stock Company after the formation of such Stock Company) shall keep articles of incorporation at the place designated by the incorporator(s) (or at the head office or branch office of the Stock Company after the formation of such Stock Company).

(2) The incorporator(s) (or, after the formation of such Stock Company, the shareholder(s) and creditor(s) of such Stock Company) may submit the following request at any time during the hours designated by the incorporator(s) (or, after the formation of such Stock Company, during the business hours of such Stock Company); provided, however, that the fees designated by the incorporator(s) (or, after the formation of such Stock Company, such Stock Company) are required to be paid in order to submit the requests listed in item (ii) or item (iv):

(i) If articles of incorporation are prepared in writing, a request to inspect it;

(ii) A request for a transcript or extract of the articles of incorporation referred to in the preceding item;

(iii) If articles of incorporation are prepared by Electromagnetic Records, a request to inspect anything that displays the data recorded in such Electromagnetic Records in a manner prescribed by the applicable Ordinance of the Ministry of Justice; or

(iv) A request that the matters recorded in the Electromagnetic Records set forth in the preceding item be provided by an Electromagnetic Method designated by the incorporator(s) (or, after the formation of such Stock Company, such Stock Company), or a request for any document that contains such data

(3) If, after the formation of a Stock Company, it is necessary for the purpose of exercising the rights of a Member of the Parent Company (meaning the shareholders and other members of the Parent Companies. The same shall apply hereinafter.) of such Stock Company, such Member of the Parent Company may, with the permission of the court, make the requests listed in each item of the preceding paragraph with respect to the articles of incorporation of such Stock Company; provided, however, that, in order to make the requests listed in item (ii) or item (iv) of that paragraph, the fees designated by such Stock Company is required to be paid.

(4) In cases where articles of incorporation are prepared by Electromagnetic Records, for the purpose of the application of the provisions of paragraph (1) with respect to a Stock Company which adopts the measures prescribed by the applicable Ordinance of the Ministry of Justice as the measures that enable its branch offices to respond to the request listed in item (iii) and item (iv) of paragraph (2), "head office and branch office" in that paragraph shall be deemed to be replaced with "head office."

Section 3 Contributions

(Determination of Matters regarding Shares Issued at Incorporation)

Article 32 (1) When incorporator(s) determine the following matters at the incorporation of the Stock Company (excluding matters provided for in the articles of incorporation), he/she shall obtain the consent of all incorporators:

(i) The number of the Shares Issued at Incorporation that is to be allotted to each incorporator;

(ii) The amount of money to be paid in exchange for the Shares Issued at Incorporation set forth in the preceding item; and

(iii) Matters regarding the amount of the stated capital and capital reserves of the Stock Company after the formation.

(2) In cases where the Stock Company to be incorporated is a Company with Class Shares, if the Shares Issued at Incorporation set forth in item (i) of the preceding paragraph are those which are provided for in the articles of incorporation under the provisions of the first sentence of Article 108(3), the incorporator(s) shall, with the consent of all incorporators, determine the features of such Shares Issued at Incorporation.

(Election of Inspector of Matters Specified or Recorded in the Articles of Incorporation)

Article 33 (1) If articles of incorporation specify or record the matters listed in each item of Article 28, the incorporator(s) shall, without delay after the certification by the notary public under Article 30(1), file a petition for the election of an inspector with the court in order to have the inspector investigate such matters.

(2) In cases where the petition set forth in the preceding paragraph has been filed, the court shall elect the inspector except in case it dismisses such petition as non-conforming.

(3) In cases where the court has elected the inspector set forth in the preceding paragraph, it may fix the amount of the remuneration that the Stock Company after the formation pays to such inspector.

(4) The inspector set forth in paragraph (2) shall conduct necessary investigation and shall report the court by submitting documents or Electromagnetic Records (limited to those prescribed by the applicable Ordinance of the Ministry of Justice) which specifies or records the result of such investigation.

(5) If the court finds it necessary for the purpose of clarification of the contents of the report set forth in the preceding paragraph or of confirmation of the grounds supporting such report, it may request the inspector set forth in paragraph (2) a further report set forth in the preceding paragraph.

(6) When the inspector set forth in paragraph (2) reports pursuant to paragraph (4), he/she shall give the incorporator(s) a copy of the documents set forth in that paragraph, or provide the matters recorded in the Electromagnetic Records set forth in that paragraph by the method prescribed by the applicable Ordinance of the Ministry of Justice.

(7) In cases where the court receives a report under paragraph (4), if it finds the provisions in articles of incorporation relating to matters listed in each item of Article 28 (excluding any matters not subjected to the investigation by the inspector under paragraph (2)) to be improper, it shall make a ruling amending the same.

(8) In cases where some or all of the provisions in articles of incorporation relating to matters listed in each item of Article 28 are amended by a ruling set forth in the preceding paragraph, the incorporator(s) may rescind his/her manifestation of intention relating to subscription for the relevant Shares Issued at Incorporation within one week from the finalization of such ruling.

(9) In the cases prescribed in the preceding paragraph, the incorporator(s) may, with the consent of all incorporators, amend articles of incorporation repealing the provisions which have been amended by such ruling, within one week from the finalization of the ruling set forth in paragraph (7).

(10) The provisions of the preceding nine paragraphs shall not apply to the matters prescribed in following items:

(i) In cases where the total value specified or recorded in the articles of incorporation with respect to the property under item (i) and item (ii) of Article 28 (hereinafter in this Chapter referred to as "Properties Contributed in Kind") does not exceed 5,000,000 yen: Matters listed in item (i) and item (ii) of such Article;

(ii) In cases where the value specified or recorded in the articles of incorporation with respect to the Properties Contributed in Kind that are Securities (meaning the securities provided for in paragraph (1) of Article 2 of the Financial Instruments and Exchange Act (Act No. 25 of 1948), including rights deemed to be securities pursuant to the provisions of paragraph (2) of such Article. The same shall apply hereinafter.) with a market price does not exceed the value calculated by the method prescribed by the applicable Ordinance of the Ministry of Justice as the market price of such Securities: Matters listed in item (i) and item (ii) of Article 28 with respect to such Securities;

(iii) In cases where the verification of an attorney, a legal professional Company, a Certified Public Accountant (including a foreign certified public accountant as defined in Article 16-2(5) of the Certified Public Accountant Act (Act No. 103 of 1948). The same shall apply hereinafter.), an auditing firm, a tax accountant or a tax accountant corporation (in cases where the Properties Contributed in Kind consist of any real estate, referring to such verification and appraisal by a real property appraiser; hereinafter the same shall apply in this item) is obtained with respect to the reasonableness of the value specified or recorded in the articles of incorporation with respect to the Properties Contributed in Kind: Matters listed in item (i) and item (ii) of Article 28 (limited to those relating to the Properties Contributed in Kind so verified).

(11) None of the following persons may provide the verification prescribed in item

(iii) of the preceding paragraph:

(i) An incorporator;

(ii) An assignor of property under item (ii) of Article 28;

(iii) A Director at Incorporation (referring to a Director at Incorporation prescribed in paragraph (1) of Article 38) or an Auditor at Incorporation (referring to an Auditor at Incorporation prescribed for in item (ii), paragraph (2) of such Article);

(iv) A person who is subject to the disciplinary action ordering a suspension of operations and for whom the period of such suspension has not yet elapsed; or

(v) A legal professional Company, an auditing Company or a tax accountant Company more than half of whose members are persons who fall under any of the item (i) to (iii) above inclusive.

(Performance of Contributions)

Article 34 (1) Incorporator(s) shall, without delay after subscription for Shares Issued at Incorporation, contribute fully in money or in kind, with respect to the Shares Issued at Incorporation for which he/she has subscribed; provided, however, that, if the consent of all incorporator(s) is obtained, the foregoing provisions do not preclude him/her from performing registration, recording or other acts necessary to assert the creation or transfer of rights against third parties after the formation of the Stock Company.

(2) The contribution in money pursuant to the provisions of the preceding paragraph shall be paid at the Bank, Etc. (meaning a Bank (meaning a bank as defined in Article 2(1) of the Bank Act (Act No. 59 of 1981). The same shall apply in Article 703(1)), a Trust Company (meaning a trust company as defined in Article 2(2) of the Trust Business Act (Act No. 154 of 2004). The same shall apply hereinafter) and other entities prescribed by the applicable Ordinance of the Ministry of Justice as entities equivalent to the same. The same shall apply hereinafter.) designated for payment by the incorporator.

(Assignment of Right to Become a Shareholder of Shares Issued at Incorporation)

Article 35 The assignment of the right to become a shareholder of the Shares Issued at Incorporation by contribution pursuant to the provisions of paragraph (1) of the preceding article (hereinafter in this Chapter referred to as "Performance of Contributions") may not be asserted against the Stock Company after the formation.

(Forfeiture of Right to Become a Shareholder of Shares Issued at Incorporation)

Article 36 (1) In cases where not all of the incorporators fulfill the Performance of Contributions, the incorporators shall set a date and notify any incorporator who does not fulfill the Performance of Contributions that such incorporator shall fulfill the Performance of Contributions by such date.

(2) The notice set forth in the provisions of the preceding paragraph shall be given no later than two weeks prior to the date provided for in such paragraph.

(3) Incorporator(s) who is notified pursuant to the provisions of paragraph (1) shall forfeit the right to become the shareholder of Shares Issued at Incorporation by fulfilling the Performance of Contributions if the same fail to fulfill the Performance of Contributions by the date provided for in such paragraph.

(Provisions on Total Number of Authorized Shares)

Article 37 (1) In cases where the total number of shares that may be issued by a Stock Company (hereinafter referred to as "Total Number of Authorized Shares") is not provided for in the articles of incorporation, the incorporators shall, with the consent of all incorporators, amend the articles of incorporation and create a provision on the Total Number of Authorized Shares prior to the formation of the Stock Company.

(2) In cases where the Total Number of Authorized Shares is provided for in the articles of incorporation, the incorporators may, with the consent of all incorporators, amend the articles of incorporation with respect to the Total Number of Authorized Shares at any time prior to the formation of the Stock Company.

(3) The total number of Shares Issued at Incorporation may not be less than one quarter of the Total Number of Authorized Shares; provided, however, that this shall not apply in cases where the Stock Company to be incorporated is not a Public Company.

Section 4 Election and Dismissal of Officers at Incorporation

(Election of Officers at Incorporation)

Article 38 (1) The incorporator(s) shall elect the Director(s) at Incorporation (meaning person(s) who becomes director(s) at the incorporation. The same shall apply hereinafter) without delay after the fulfillment of the Performance of Contributions.

(2) In the cases listed in the following items, the incorporator(s) shall elect the persons provided for respectively in those items without delay after the fulfillment of the Performance of Contributions:

(i) In cases where the Stock Company to be incorporated is a Company with Accounting Advisors: Accounting Advisor(s) at Incorporation (meaning a person who becomes an accounting advisor at the incorporation. The same shall apply hereinafter.)

(ii) In cases where the Stock Company to be incorporated is a Company with Auditors (including any Stock Company the articles of incorporation of which provide that the scope of the audit by its auditor(s) is limited to an audit related to accounting): Auditor(s) at Incorporation (meaning a person who becomes an auditor at the incorporation. The same shall apply hereinafter.)

(iii) In cases where the Stock Company to be incorporated is a Company with Accounting Auditors: Accounting Auditor(s) at Incorporation (meaning a person who becomes an accounting auditor at the incorporation. The same shall apply hereinafter.)

(3) Persons who are prescribed in articles of incorporation as Directors at Incorporation, Accounting Advisors at Incorporation, Auditors at Incorporation, and Accounting Auditors at Incorporation shall be deemed to be elected as Directors at Incorporation, Accounting Advisors at Incorporation, Auditors at Incorporation, and Accounting Auditors at Incorporation, respectively, upon the fulfillment of the Performance of Contributions.

Article 39 (1) In cases where a Stock Company to be incorporated is a Company with Board of Directors, there shall be three or more Directors at Incorporation.

(2) In cases where a Stock Company to be incorporated is a Company with Board of Auditors, there shall be three or more Auditors at Incorporation.

(3) A person who may not be a director, accounting advisor, auditor or accounting auditor of a Stock Company after formation pursuant to the provisions of paragraph (1) of Article 331 (including the case where it is applied mutatis mutandis pursuant to Article 335(1)), Article 333(1) or (3), or Article 337(1) or

(3) may not become a Director at Incorporation, an Accounting Advisor at Incorporation, an Auditor at Incorporation, or an Accounting Auditor at Incorporation (hereinafter referred to as "Officers at Incorporation"), respectively.

(Method of Election of Officers at Incorporation)

Article 40 (1) The election of the Officers at Incorporation shall be determined by a majority of the votes of the incorporators.

(2) In the cases provided for in the preceding paragraph, an incorporator shall be entitled to one vote for each one Share Issued at Incorporation for which the Performance of Contributions has been fulfilled; provided, however, that, in cases where the Share Unit is provided for in the articles of incorporation, he/she shall be entitled to one vote for each one unit of the Shares Issued at Incorporation.

(3) Notwithstanding the provisions of the preceding paragraph, in cases where the Stock Company to be incorporated is a Company with Class Shares, if it issues Shares Issued at Incorporation of a class for which it is provided that the voting rights may not be exercised in connection with the election of some or all of the directors, with respect to such class of the Shares Issued at Incorporation, the incorporators may not exercise voting rights in connection with the election of the Directors at Incorporation who are to become such directors.

(4) The provisions of the preceding paragraph shall apply mutatis mutandis to the election of Accounting Advisors at Incorporation, Auditors at Incorporation and Accounting Auditors at Incorporation.

(Special Provisions on the Method of Election of Officers at Incorporation)

Article 41 (1) Notwithstanding the provisions of paragraph (1) of the preceding article, in cases where, at the incorporation of a Stock Company, it issues shares of a class for which the matters listed in item (ix) of Article 108(1) (limited to those relating to directors) are provided, the election of the Directors at Incorporation shall be determined by a majority of the votes (limited to the votes with respect to such class of the Shares Issued at Incorporation) of the incorporators who subscribed for such class of the Shares Issued at Incorporation, consistently with the provisions of articles of incorporation with respect to the matters provided for in item (ix), paragraph (2) of such Article.

(2) In the cases provided for in the preceding paragraph, an incorporator shall be entitled to one vote for each one Share Issued at Incorporation of such class for which the Performance of Contributions is fulfilled; provided, however, that, in cases where the Share Unit is provided for in the articles of incorporation, he/she shall be entitled to one vote for each one unit of the Shares Issued at Incorporation of such class.

(3) The provisions of the preceding two paragraphs shall apply mutatis mutandis to the cases where the shares of a class for which matters listed in item (ix), paragraph (1) of Article 108 (limited to those relating to auditors) are provided are issued at incorporation of the Stock Company.

(Dismissal of Officers at Incorporation)

Article 42 The incorporators may dismiss Officer(s) at Incorporation elected by the incorporators (including those deemed to be elected as Officer(s) at Incorporation pursuant to the provisions of Article 38(3)) at any time prior to the formation of the Stock Company.

(Method of Dismissal of Officers at Incorporation)

Article 43 (1) Dismissal of Officer(s) at Incorporation shall be determined by a majority of the votes of the incorporators (or by a majority of two thirds or more in case of dismissal of Auditor(s) at Incorporation).

(2) In the cases provided for in the preceding paragraph, an incorporator shall be entitled to one vote for each one Share Issued at Incorporation for which the Performance of Contributions has been fulfilled; provided, however, that, in cases where the Share Unit is provided for in the articles of incorporation, he/she shall be entitled to one vote for each one unit of the Shares Issued at Incorporation.

(3) Notwithstanding the provisions of the preceding paragraph, in cases where the Stock Company to be incorporated is a Company with Class Shares, if it issues Shares Issued at Incorporation of a class for which it is provided that the voting rights may not be exercised in connection with the dismissal of some or all of the directors, with respect to such class of the Shares Issued at Incorporation, the incorporators may not exercise voting rights in connection with the dismissal of the Directors at Incorporation who are to become such directors.

(4) The provisions of the preceding paragraph shall apply mutatis mutandis to the dismissal of Accounting Advisors at Incorporation, Auditors at Incorporation and Accounting Auditors at Incorporation.

(Special Provisions on Method of Dismissal of Directors at Incorporation)

Article 44 (1) Notwithstanding the provisions of paragraph (1) of the preceding article, the dismissal of Director(s) at Incorporation who is elected pursuant to the provisions of paragraph (1) of Article 41 shall be determined by a majority of the votes of the incorporators relating to such election.

(2) Notwithstanding the provisions of the preceding paragraph, in cases where there is a provision in the articles of incorporation to the effect that a director who is elected pursuant to the provisions of paragraph (1) of Article 41, or is elected at a Class Organizational Meeting (referring to Class Organizational Meeting provided for in Article 84) or at a Class Meeting may be dismissed by a resolution of the shareholders' meeting, the dismissal of the Director at Incorporation who is elected pursuant to such provisions shall be determined by a majority of the votes of the incorporators.

*(3) In the cases provided for in the preceding paragraph, an incorporator shall be entitled to one vote for each one Share Issued at Incorporation of such class for which the Performance of Contributions is fulfilled; provided, however, that, in cases where the Share Unit is provided for in the articles of incorporation, he/she shall be entitled to one vote for each one unit of the Shares Issued at Incorporation of such class.

(4) Notwithstanding the provisions of the preceding paragraph, in cases where a Director at Incorporation is to be dismissed pursuant to the provisions of paragraph (2) above, if Shares Issued at Incorporation of a class for which it is provided that the voting rights may not be exercised in connection with the dismissal of some or all of the directors are to be issued, with respect to such class of the Shares Issued at Incorporation, the incorporators may not exercise voting rights in connection with the dismissal of the Directors at Incorporation who are to become such directors.

(5) The provisions of the preceding four paragraphs shall apply mutatis mutandis to the dismissal of Auditors at Incorporation who are elected pursuant to the provisions of Article 41(1) which shall be applied mutatis mutandis under paragraph (3) of such Article. In such case, the term "majority" in paragraph

(1) and paragraph (2) shall be deemed to be replaced with "majority of two thirds or more."

(Special Provisions on Effect of Election or Dismissal of Officers as at Incorporation)

Article 45 (1) In cases where, at the incorporation of a Stock Company, it issues shares of a class for which the matters listed in item (viii) of Article 108(1) are provided, if there are provisions in the articles of incorporation to the effect that a resolution of the Class Meeting is required with respect to the matters listed in the following items as the features of the shares of such class, the matters provided for in each of such items shall not become effective unless, in addition to the determination pursuant to the provisions of Article 40(1) or Article 43(1), there is a determination by a majority of the votes (limited to the votes with respect to the Shares Issued at Incorporation of such class) of the incorporators who subscribe for the Shares Issued at Incorporation of such class in accordance with the applicable provisions of the articles of incorporation:

(i) Election or dismissal of some or all of the directors: Election or dismissal of Directors at Incorporation who are to become such directors;

(ii) Election or dismissal of some or all of the accounting advisors: Election or dismissal of Accounting Advisors at Incorporation who are to become such accounting advisors;

(iii) Election or dismissal of some or all of the auditors: Election or dismissal of Auditors at Incorporation who are to become such auditors;

(iv) Election or dismissal of some or all of the accounting auditors: Election or dismissal of Accounting Auditors at Incorporation who are to become such accounting auditors.

(2) In the cases provided for in the preceding paragraph, an incorporator shall be entitled to one vote for each one Share Issued at Incorporation of such class for which the Performance of Contributions is fulfilled; provided, however, that, in cases where the Share Unit is provided for in the articles of incorporation, he/she shall be entitled to one vote for each one unit of the Shares Issued at Incorporation of such class.

Section 5 Investigation by Directors at Incorporation

Article 46 (1) The Directors at Incorporation (referring to the Directors at Incorporation and Auditor at Incorporation in cases where the Stock Company to be incorporated is a Company with Auditors. The same shall apply hereinafter in this Article.) shall investigate the following matters without delay after their election:

(i) That, with respect to the Properties Contributed in Kind in the cases listed in item (i) or item (ii) of Article 33(10) (if listed in such item, limited to the securities under such item), the value specified or recorded in the articles of incorporation is reasonable;

(ii) That the verification provided for in item (iii) of Article 33(10) is appropriate;

(iii) That the Performance of Contributions has been fulfilled; and

(iv) That, in addition to the matters listed in the preceding three items, the procedures for the incorporation of the Stock Company do not violate the applicable laws and regulations or articles of incorporation.

(2) If, as a result of the investigation pursuant to the preceding paragraph, the Directors at Incorporation find that there is any violation of the applicable laws and regulations or articles of incorporation or there is any inappropriate matter in a matter listed in any item of such paragraph, directors shall give notice to such effect to the incorporator;

(3) In cases where the Stock Company to be incorporated is a Company with Committees, the Director at Incorporation shall give the Representative Executive Officer at Incorporation (referring to the Representative Executive Officer at Incorporation provided for in item (iii) of Article 48(1)) notice to the effect that the investigation under paragraph (1) has been completed, or, if the notice under the preceding paragraph has been given, notice that such notice was given and a description of the contents thereof.

Section 6 Appointment etc. of Representative Directors at Incorporation etc.

(Appointment etc. of Representative Directors at Incorporation)

Article 47 (1) In cases where the Stock Company to be incorporated is a Company with Board of Directors (excluding a Company with Committees), the Directors at Incorporation shall appoint among the Directors at Incorporation a person who shall be the Representative Director (meaning the director who represents the Stock Company. The same shall apply hereinafter.) as at incorporation of the Stock Company (hereinafter referred to as "Representative Director at Incorporation").

(2) The Directors at Incorporation may remove the Representative Director at Incorporation at any time prior to the formation of the Stock Company.

(3) The appointment and removal of the Representative Director at Incorporation pursuant to the provisions of the preceding two paragraphs shall be determined by a majority of the Directors at Incorporation.

(Appointment of Committee Members at Incorporation)

Article 48 (1) In cases where the Stock Company to be incorporated is a Company with Committees, the Director at Incorporation shall:

(i) appoint the following persons (in the next paragraph referred to as "Committee Members at Incorporation") among the Directors at Incorporation:

(a) Persons who shall be members of the nominating committee at incorporation of the Stock Company:

(b) Persons who shall be committee members of the audit committee at incorporation of the Stock Company:

(c) Persons who shall be committee members of the compensation committee at incorporation of the Stock Company:

(ii) elect persons who shall be the executive officers at incorporation of the Stock Company (hereinafter referred to as "Executive Officers at Incorporation"); and

(iii) appoint among the Executive Officers at Incorporation the persons who shall be the representative executive officers at incorporation of the Stock Company (hereinafter referred to as "Representative Executive Officers at Incorporation"); provided, however, that, if there is only one Executive Officer at Incorporation, such person shall be deemed to have been appointed as the Representative Executive Officer at Incorporation.

(2) At any time prior to the formation of the Stock Company, the Directors at Incorporation may remove the Committee Members at Incorporation or the Representative Executive Officers at Incorporation, or dismiss the Executive Officers at Incorporation.

(3) The decision pursuant to the provisions of the preceding two paragraphs shall be made by a majority of the Directors at Incorporation.

Section 7 Formation of Stock Companies

(Formation of Stock Companies)

Article 49 A Stock Company shall be formed by the registration of the incorporation at the location of its head office.

(Right of Subscribers of Shares)

Article 50 (1) As at formation of a Stock Company, the incorporator shall be a shareholder for the Shares Issued at Incorporation for which the Performance of Contributions has been fulfilled.

(2) The assignment of the right to become a shareholder pursuant to the provisions of the preceding paragraph may not be asserted against the Stock Company after the formation.

(Restrictions on Invalidation or Rescission of Subscription)

Article 51 (1) The proviso to Article 93 and the provisions of Article 94(1) of the Civil Code (Act No. 89 of 1896) shall not apply to the manifestation of intention relating to the subscription for Shares Issued at Incorporation.

(2) After the formation of the Stock Company, the incorporator(s) may not assert the invalidity of his/her subscription for Shares Issued at Incorporation on the grounds of mistake, nor rescind his/her subscription for Shares Issued at Incorporation on the grounds of fraud or duress.

Section 8 Liability of Incorporators

(Liability for Insufficiency of Value of Properties Contributed)

Article 52 (1) If the value of the Properties Contributed in Kind at formation of a Stock Company is substantially short of the value specified or recorded in the articles of incorporation with respect to such Properties Contributed in Kind (or if there is any amendment of the articles of incorporation, the value so amended), the incorporators and Directors at Incorporation shall be jointly and severally liable to such Stock Company for the payment of the amount of such shortfall.

(2) Notwithstanding the provisions of the preceding paragraph, the incorporators (in this paragraph and in item (ii) excluding those who contributed in kind under item (i) of Article 28 or the assignor of the property under item (ii) of the same Article) and Directors at Incorporation shall not be held liable in accordance with such paragraph with respect to the Properties Contributed in Kind in the following cases:

(i) Where the investigation by the inspector under Article 33(2) has been carried out with respect to the matters listed in item (i) or item (ii) of Article 28; or

(ii) Where such incorporators or Directors at Incorporation prove that they did not fail to exercise due care with respect to the performance of their duties.

(3) In the cases set forth in paragraph (1), the person who carried out the verification provided for in item (iii) of Article 33(10) (hereinafter in this paragraph referred to as "Verifier") shall be jointly and severally liable with the person who assumes the liability under paragraph (1) for the payment of the amount of the shortfall under such paragraph; provided, however, that this shall not apply in cases where such Verifier prove that he/she did not fail to exercise due care with respect to the carrying out such verification.

(Liability for Damages of Incorporators)

Article 53 (1) If an incorporator, Director at Incorporation or Auditor at Incorporation neglects his/her duties with respect to the incorporation of a Stock Company, he/she shall be liable to such Stock Company for damages arising as a result thereof.

(2) If an incorporator, Director at Incorporation or Auditor at Incorporation are with knowledge or grossly negligent in performing his/her duties, such incorporator, Director at Incorporation or Auditor at Incorporation shall be liable to a third party for damages arising as a result thereof.

(Joint and Several Liabilities of Incorporators)

Article 54 In cases where an incorporator, a Director at Incorporation or an Auditor at Incorporation is liable for damages arising in the Stock Company or a third party, if other incorporators, Directors at Incorporation or Auditors at Incorporation are also liable, such persons shall be joint and several obligors.

(Exemption from Liability)

Article 55 An exemption from the obligations assumed by an incorporator or Director at Incorporation pursuant to the provisions of Article 52(1) and the liability assumed by an incorporator, Director at Incorporation or Auditor at Incorporation pursuant to the provisions of Article 53(1) may not be given without the consent of all shareholders.

(Liability in cases of Failure to Form a Stock Company)

Article 56 If the formation of a Stock Company fails, the incorporator(s) shall be jointly and severally liable for any act committed in connection with the incorporation of the Stock Company, and shall bear the costs expended in connection with the incorporation of the Stock Company.

Section 9 Incorporation by Solicitation

Subsection 1 Solicitation of Persons who Subscribe for Shares Issued at Incorporation

(Solicitation of Persons who Subscribe for Shares Issued at Incorporation)

Article 57 (1) Pursuant to the provisions of this Subsection, the incorporators may provide to the effect that subscribers be solicited for the Shares Issued at Incorporation.

(2) Incorporators intending to provide to the effect that the solicitation under the preceding paragraph be carried out shall obtain the consent of all incorporators.

(Provision for Matters regarding Shares Solicited at Incorporation)

Article 58 (1) Whenever the incorporator intends to carry out the solicitation under paragraph (1) of the preceding article, he/she shall decide the following matters with respect to the Shares Solicited at Incorporation (meaning the Shares Issued at Incorporation that are allotted to the persons who accept the solicitation under such paragraph and apply to subscribe for the Shares Issued at Incorporation. The same shall apply hereinafter in this Section.):

(i) The number of the Shares Solicited at Incorporation (in cases where the Stock Company to be incorporated is a Company with Class Shares, referring to the class(es) and the number of each class of Shares Solicited at Incorporation. The same shall apply hereinafter in this Subsection.);

(ii) The Amount to be Paid In for Shares Issued at Incorporation (meaning the amount of money which is to be paid in in exchange for one Share Solicited at Incorporation. The same shall apply hereinafter in this Subsection.);

(iii) The date by or period during which payment is to be made of the money to be paid in in exchange for the Shares Solicited at Incorporation;

(iv) If there is any arrangement that subscriptions for Shares Solicited at Incorporation may be rescinded in cases where the registration of incorporation is not effected by a certain date, a statement of such arrangement and such date.

(2) If the incorporator intends to determine the matters listed in any item of the preceding paragraph, he/she shall obtain the consent of all incorporators.

(3) The conditions for the solicitation under paragraph (1) of the preceding article, such as the Amount to be Paid In for Shares Solicited at Incorporation, shall be decided uniformly for each such solicitation (or, in cases where the Stock Company to be incorporated is a Company with Class Shares, for each such class and solicitation).

(Subscription for Shares Solicited at Incorporation)

Article 59 (1) The incorporator shall notify the person who, in response to the solicitation under paragraph (1) of Article 57, intends to apply to subscribe for the Shares Solicited at Incorporation of the following matters:

(i) The date of the certification of the articles of incorporation and the name of the notary public who effected such certification;

(ii) The matters listed in each item of Article 27, each item of Article 28, each item of Article 32(1) and each item of paragraph (1) of the preceding article;

(iii) The value of the property contributed by the incorporator(s);

(iv) The place designated for payment pursuant to the provisions of Article 63(1);

(v) In addition to the foregoing, any other matters provided by applicable Ordinance of the Ministry of Justice.

(2) In cases where not all of the incorporators fulfill the Performance of Contributions, the incorporators may not give the notice pursuant to the provisions of the preceding paragraph until after the date provided for in Article 36(1).

(3) A person who intends to apply to subscribe for Shares Solicited at Incorporation in response to a solicitation under Article 57(1) shall give the incorporators a document that states the following matters:

(i) The name and address of the person who intends to apply; and

(ii) The number of Shares Solicited at Incorporation that he/she intends to subscribe for.

(4) A person who submits the application referred to in the preceding paragraph may, in lieu of the giving of the document under such paragraph, provide the matters to be stated in the document under such paragraph by an Electromagnetic Method, with the approval of the incorporators, subject to the provisions of the applicable Cabinet Order. In such cases, the person who submitted the application shall be deemed to have given a document under such paragraph.

(5) If there are changes in the matters listed in any item of paragraph (1), the incorporators shall immediately notify persons who submitted applications under paragraph (3) (hereinafter in this Subsection referred to as "Applicants") thereof and of the matters so changed.

(6) It would be sufficient for a notice or demand to an Applicant by the incorporators to be sent to the address under item (i) of paragraph (3) (or, in cases where such Applicant notifies the incorporators of a different place or contact address for the receipt of notices or demand, to such place or contact address).

(7) The notice or demand referred to in the preceding paragraph shall be deemed to have arrived at the time when such notice or demand should normally have arrived.

(Allotment of Shares Solicited at Incorporation)

Article 60 (1) The incorporators shall specify from among the Applicants the persons to whom the Shares Solicited at Incorporation are allotted, and specify the number of the Shares Solicited at Incorporation that are allotted to such persons. In such cases, the incorporators may reduce the number of the Shares Solicited at Incorporation to be allotted to such Applicants to less than the number referred to in item (ii), paragraph (3) of the preceding article.

(2) The incorporator shall notify the Applicant, no later than the day immediately preceding the date referred to in item (iii) of Article 58(1) (or, in case a period is specified under that item, no later than the day immediately preceding the first day of that period), of the number of the Shares Solicited at Incorporation that are allotted to such Applicant.

(Special Provisions on the Subscription for and Allotment of Shares Solicited at Incorporation)

Article 61 The provisions of the preceding two Articles shall not apply in cases where persons who intend to subscribe for Shares Solicited at Incorporation execute contracts for subscriptions for the total number of those shares.

(Subscriptions for Shares Solicited at Incorporation)

Article 62 The persons listed in the following items shall be the subscribers for the number of the Shares Solicited at Incorporation provided for in each such item with respect to the Shares Solicited at Incorporation:

(i) Applicants: The number of the Shares Solicited at Incorporation as allotted by the incorporators; or

(ii) Persons who subscribed for the total number of the Shares Solicited at Incorporation under the contracts referred to in the preceding article: The number of the Shares Solicited at Incorporation for which such persons have subscribed.

(Payment of Amount to be Paid In for Shares Solicited at Incorporation)

Article 63 (1) The subscribers for the Shares Solicited at Incorporation shall pay fully the Amount to be Paid In for Shares Solicited at Incorporation for which the subscribers subscribed, at the Bank Etc. designated for payment by the incorporator(s), no later than the date set forth in item (iii) of Article 58(1) or within the period under that item.

(2) Assignment of the right to become a shareholder of the Shares Issued at Incorporation by effecting payment pursuant to the preceding paragraph may not be asserted against the Stock Company after formation.

(3) If a subscriber for the Shares Solicited at Incorporation fails to make payment pursuant to the provisions of paragraph (1), the subscriber shall forfeit the right to become the shareholder of the Shares Solicited at Incorporation by making such payment.

(Certificate of Deposit of Paid Money)

Article 64 (1) In cases where solicitation under Article 57(1) has been carried out, the incorporators may request the Bank, Etc. that handled the payment pursuant to the provisions of Article 34(1) and paragraph (1) of the preceding article to issue a certificate of deposit of a money amount paid in pursuant to such provisions.

(2) The Bank, Etc. that issued the certificate referred to in the preceding paragraph may not assert against the Stock Company after formation any misstatement in such certificate or the existence of restrictions regarding the return of money paid in pursuant to the provisions of Article 34(1) or paragraph (1) of the preceding article.

Subsection 2 Organizational Meeting

(Calling of Organizational Meetings)

Article 65 (1) In cases where solicitation under Article 57(1) is to be carried out, the incorporator shall call a meeting of the Shareholders at Incorporation (meaning shareholders who shall be the shareholders of the Stock Company pursuant to the provisions of Article 50(1) or Article 102(2). The same shall apply hereinafter.) without delay on and after either the date under item (iii), of Article 58(1) or the last day of the period under such item, whichever comes later. (Such meeting is referred to as "Organizational Meeting" hereinafter.)

(2) In the cases referred to in the preceding paragraph, the incorporators may call an Organizational Meeting at any time when the incorporators find it necessary.

(Authority of Organizational Meetings)

Article 66 An Organizational Meeting may resolve only the matters provided for in this Section, the discontinuation of the incorporation of a Stock Company, the conclusion of an Organizational Meeting and other matters regarding the incorporation of a Stock Company.

(Determinations to Call Organizational Meetings)

Article 67 (1) The incorporators shall decide the following matters in cases where the incorporators call an Organizational Meeting:

(i) The date, time and place of the Organizational Meeting;

(ii) The purpose(s) of the Organizational Meeting;

(iii) That Shareholders at Incorporation who do not attend the Organizational Meeting may exercise their votes in writing, if so arranged;

(iv) That Shareholders at Incorporation who do not attend the Organizational Meeting may exercise their votes by an Electromagnetic Method, if so arranged;

(v) In addition to the matters listed in the preceding items, any matters prescribed by the applicable Ordinance of the Ministry of Justice.

(2) In cases where the number of the Shareholders at Incorporation (excluding Shareholders at Incorporation who may not exercise votes on all matters which may be resolved at Organizational Meetings. The same shall apply in the next Article through Article 71.) is one thousand or more, the incorporators shall decide the matters listed in item (iii) of the preceding paragraph.

(Notices of Calling of Organizational Meetings)

Article 68 (1) In order to call an Organizational Meeting, incorporators shall dispatch notice thereof to the Shareholders at Incorporation no later than two weeks (or one week if the Stock Company to be incorporated is not a Public Company, except in cases where the matters listed in item (iii) or item (iv) of paragraph (1) of the preceding article are decided, (or if a shorter period of time is provided for in the articles of incorporation in cases where the Stock Company to be incorporated is a Stock Company other than a Company with Board of Directors, such shorter period of time)) prior to the day of the Organizational Meeting.

(2) The notice referred to in the preceding paragraph shall be in writing in the following cases:

(i) Where the matters listed in item (iii) or item (iv) of paragraph (1) of the preceding article are decided; or

(ii) Where the Stock Company to be incorporated is a Company with Board of Directors.

(3) In lieu of the dispatch of the written notice referred to in the preceding paragraph, the incorporators may dispatch the notice by an Electromagnetic Method, with the consent of the Shareholders at Incorporation, in accordance with the provisions of the applicable Cabinet Order. In such cases, such incorporators shall be deemed to have dispatched the written notice under such paragraph.

(4) The notice under the preceding two paragraphs shall specify or record the matters listed in each item of paragraph (1) of the preceding article.

(5) It would be sufficient for a notice or demand to a Shareholder at Incorporation by the incorporators to be sent to the address under item (v) of Article 27, or item (i) of Article 59(3) (or, in cases where such Shareholder at Incorporation notifies the incorporator of a different place or contact address for the receipt of notices or letters of demand, to such place or contact address).

(6) The notice or demand referred to in the preceding paragraph shall be deemed to have arrived at the time when such notice or demand should normally have arrived.

(7) The provisions of the preceding two paragraphs shall apply mutatis mutandis to cases where a writing is given to the Shareholders at Incorporation when giving the notice referred to in paragraph (1), or to cases where the matters to be stated in such writing are provided by an Electromagnetic Method. In such case, the term "to have arrived" in the preceding paragraph shall be deemed to be replaced with "to have been given in such writing or to have been provided by an Electromagnetic Method with such matters."

(Omission of Calling Procedures)

Article 69 Notwithstanding the provisions of the preceding article, Organizational Meetings may be held without the procedures of calling if the consent of all Shareholders at Incorporation is obtained; provided, however, that this shall not apply in cases where the matters listed in item (iii) or item

(iv) of Article 67(1) are decided.

(Giving of Organizational Meeting Reference Documents and Voting Forms)

Article 70 (1) In cases where the matters listed in item (iii) of Article 67(1) are decided, the incorporators shall, when dispatching a notice under Article 68(1), give the Shareholders at Incorporation documents stating matters of reference for the exercise of votes (hereinafter in this Subsection referred to as "Organizational Meeting Reference Documents") and documents to be used by the Shareholders at Incorporation to exercise votes (hereinafter in this Subsection referred to as "Voting Forms"), as prescribed by the applicable Ordinance of the Ministry of Justice.

(2) If the incorporators dispatch notices by an Electromagnetic Method referred to in Article 68(3) to Shareholders at Incorporation who have given consent under the same paragraph, the incorporators may provide, in lieu of the giving of Organizational Meeting Reference Documents and Voting Forms pursuant to the provisions of the preceding paragraph, the matters to be specified in such documents by an Electromagnetic Method; provided, however, that, if requested by any Shareholder at Incorporation, the incorporators shall give these documents to such Shareholder at Incorporation.

Article 71 (1) In cases where the matters listed in item (iv) of Article 67(1) are decided, the incorporators shall, when dispatching notice under Article 68(1), give the Shareholders at Incorporation the Organizational Meeting Reference Documents as prescribed by the applicable Ordinance of the Ministry of Justice.

(2) If the incorporators dispatch notices by an Electromagnetic Method referred to in Article 68(3) to Shareholders at Incorporation who have given consent under the same paragraph, the incorporators may provide, in lieu of the giving of Organizational Meeting Reference Documents pursuant to the provisions of the preceding paragraph, the matters to be specified in such documents by an Electromagnetic Method; provided, however, that, if requested by any Shareholder at Incorporation, the incorporators shall give the Organizational Meeting Reference Documents to such Shareholders at Incorporation.

(3) In the cases provided for in paragraph (1), when sending notice to

Shareholders at Incorporation who have given consent under Article 68(3) by an Electromagnetic Method referred to in that paragraph, the incorporators shall provide to the Shareholders at Incorporation the matters to be specified in the Voting Forms by such Electromagnetic Method, as prescribed by the applicable Ordinance of the Ministry of Justice.

(4) In the cases provided for in paragraph (1), if any Shareholder at Incorporation who has not given consent under Article 68(3) requests, no later than one week prior to the day of the Organizational Meeting, for the provision of the matters to be specified in the Voting Form by an Electromagnetic Method, the incorporators shall provide such matters to such Shareholder at Incorporation by an Electromagnetic Method, as prescribed by the applicable Ordinance of the Ministry of Justice.

(Number of Votes)

Article 72 (1) Shareholders at Incorporation (excluding Shareholders at Incorporation prescribed by the applicable Ordinance of the Ministry of Justice as entities in a relationship that may allow the Stock Company after the formation to have substantial control of such entity through the holding of one quarter or more of the votes of all shareholders of such entity or other reasons) shall be entitled to one vote for each one Share Issued at Incorporation for which they subscribed at Organizational Meetings; provided, however, that, in cases where a Share Unit is provided for in the articles of incorporation, he/she shall be entitled to one vote for each one unit of the Shares Issued at Incorporation.

(2) In cases where the Stock Company to be incorporated is a Company with Class Shares, if it issues Shares Issued at Incorporation of a class that has restrictions on matters for which votes may be exercised at the shareholders' meeting, the Shareholders at Incorporation may exercise, at the Organizational Meeting, votes with respect to such Shares Issued at Incorporation only in relation to matters that are equivalent to the matters for which they may exercise the votes at the shareholders' meeting.

(3) Notwithstanding the provisions of the preceding paragraph, Shareholders at Incorporation may exercise votes with respect to the Shares Issued at Incorporation for which they subscribed in relation to the discontinuation of the incorporation of the Stock Company.

(Resolutions of Organizational Meetings)

Article 73 (1) Resolutions of an Organizational Meeting shall be made by a majority of the votes of the Shareholders at Incorporation entitled to exercise their votes at such Organizational Meeting, being a majority of two thirds or more of the votes of such Shareholders at Incorporation who are present at the meeting.

(2) Notwithstanding the provisions of the preceding paragraph, in cases where the articles of incorporation are amended creating a provision to the effect that, as a feature of all shares issued by a Stock Company, the approval of such Stock Company is required for the acquisition of such shares by transfer (excluding cases where the Stock Company to be incorporated is a Company with Class Shares), the resolution of the Organizational Meeting with respect to such amendment in the articles of incorporation shall be made by a majority of the Shareholders at Incorporation entitled to exercise their votes at such Organizational Meeting, being a majority of two thirds or more of the votes of such Shareholders at Incorporation.

(3) In cases where it is intended to create, as a feature of all shares issued by a Stock Company, any provision in articles of incorporation with respect to the matters listed in item (iii) Article 107(1) by amending the articles of incorporation, or to effect any amendment (excluding that which repeals provisions of the articles of incorporation with respect to such matters) in the articles of incorporation with respect to such matters (excluding cases where the Stock Company to be incorporated is a Company with Class Shares), the consent of all Shareholders at Incorporation shall be obtained.

(4) An Organizational Meeting may not resolve matters other than the matters listed in item (ii) of Article 67(1); provided, however, that this shall not apply to amendment in the articles of incorporation or discontinuation of the incorporation of a Stock Company.

(Proxy Voting)

Article 74 (1) Shareholders at Incorporation may exercise their votes by proxy.

In such cases, such Shareholders at Incorporation or proxies shall submit to the incorporators a document evidencing the authority of proxy.

(2) The grant of the authority of proxy under the preceding paragraph shall be made for each Organizational Meeting.

(3) The Shareholders at Incorporation or proxies referred to in paragraph (1) may, in lieu of the submission of a document evidencing the authority of proxy, provide the matters to be stated in such document by an Electromagnetic Method with the approval of the incorporators in accordance with the provisions of the applicable Cabinet Order. In such cases, such Shareholders at Incorporation or proxies shall be deemed to have submitted such document.

(4) In cases where the Shareholders at Incorporation are persons who gave consent under Article 68(3), the incorporators may not refuse to grant the approval under the preceding paragraph without justifiable reasons.

(5) The incorporators may restrict the number of proxies who may attend the Organizational Meeting.

(6) The incorporators (or the Stock Company after the formation of such Stock Company. The same shall apply hereinafter in paragraph (3) of the following Article and Article 76(4).) shall keep the documents evidencing the authority of proxy and the Electromagnetic Records which record the matters provided by an Electromagnetic Method under paragraph (3) at a place designated by the incorporators (or at the head office of the Stock Company after the formation. of such Stock Company. The same shall apply hereinafter in paragraph (3) of the following Article and Article 76(4)) for the period of three months from the day of the Organizational Meeting.

(7) The Shareholders at Incorporation (or the shareholders of the Stock Company after the formation of such Stock Company. The same shall apply hereinafter in paragraph (4) of the following Article and Article 76(5).) may submit the following request at any time during the hours designated by the incorporators (or during the business hours of the Stock Company after the formation of such Stock Company. The same shall apply hereinafter in paragraph (4) of the following Article and Article 76(5).):

(i) Requests for the inspection or copying of the documents evidencing the authority of proxy; and

(ii) Requests for the inspection or copying of anything that displays the data recorded in the Electromagnetic Records under the preceding paragraph in a manner prescribed by the applicable Ordinance of the Ministry of Justice.

(Voting in Writing)

Article 75 (1) If the votes are exercised in writing, it shall be exercised by entering the Voting Form with the necessary matters and submitting it to the incorporators no later than the time prescribed by the applicable Ordinance of the Ministry of Justice.

(2) The number of the votes exercised in writing pursuant to the provisions of the preceding paragraph shall be included in the number of the votes of the Shareholders at Incorporation who are present at the meeting.

(3) The incorporators shall keep the Voting Forms submitted pursuant to the provisions of paragraph (1) at a place designated by the incorporators for the period of three months from the day of the Organizational Meeting.

(4) The Shareholders at Incorporation may make requests for the inspection or copying of the Voting Forms submitted pursuant to the provisions of paragraph (1) at any time during the hours designated by the incorporators.

(Voting by Electromagnetic Method)

Article 76 (1) If the vote are exercised by an Electromagnetic Method, it shall be exercised by providing the matters to be entered on the Voting Form to the incorporators by an Electromagnetic Method, with the approval of such incorporators, no later than the time prescribed by the applicable Ordinance of the Ministry of Justice in accordance with the provisions of the applicable Cabinet Order.

(2) In cases where the Shareholders at Incorporation are persons who have given consent under Article 68(3), the incorporators may not refuse to give the approval under the preceding paragraph without justifiable reasons.

**(3) The number of the votes exercised by an Electromagnetic Method pursuant to the provisions of paragraph (1) shall be included in the number of the votes of the Shareholders at Incorporation who are present at the meeting.

(4) The incorporators shall keep the Electromagnetic Records which record the matters provided pursuant to the provisions of paragraph (1) at a place designated by the incorporators for the period of three months from the day of the Organizational Meeting.

(5) The Shareholders at Incorporation may, at any time during the hours designated by the incorporators, make a request for the inspection or copying of anything that displays the data recorded in the Electromagnetic Record under the preceding paragraph in a manner prescribed by the applicable Ordinance of the Ministry of Justice.

(Diverse Exercise of Votes)

Article 77 (1) Shareholders at Incorporation may diversely exercise the votes they hold. In such cases, the shareholders shall notify the incorporators to such effect and of the reasons for the same no later than three days prior to the day of the Organizational Meeting.

(2) If the Shareholders at Incorporation referred to in the preceding paragraph are not persons who subscribed for the Shares Issued at Incorporation on behalf of others, the incorporators may refuse the diverse exercise of the votes held by such Shareholders at Incorporation pursuant to the provisions of the preceding paragraph.

(Accountability of Incorporators)

Article 78 In cases where incorporators are requested by the Shareholders at Incorporation to provide explanations on certain matters at an Organizational Meeting, the incorporators shall provide necessary explanations with respect to such matters; provided, however, that this shall not apply in cases where such matters are not relevant to the matters that are the purpose of the Organizational Meeting, or in cases where such explanations are to the serious detriment of the common interest of the Shareholders at Incorporation, or in other cases prescribed by the applicable Ordinance of the Ministry of Justice as cases where there are justifiable grounds.

(Authority of Chairperson)

Article 79 (1) The chairperson of an Organizational Meeting shall maintain the order of such Organizational Meeting and organize the business of the meeting.

(2) The chairperson of an Organizational Meeting may require any one who does not comply with his/her orders or who otherwise disturbs the order of such Organizational Meeting to leave the room.

(Resolution for Postponement or Adjournment)

Article 80 In cases where there is a resolution for the postponement or adjournment of an Organizational Meeting, the provisions of Article 67 and Article 68 shall not apply.

(Minutes)

Article 81 (1) Minutes shall be prepared with respect to the business of Organizational Meetings pursuant to the provisions of the applicable Ordinance of the Ministry of Justice.

(2) The incorporators (or the Stock Company after the formation of such Stock Company. The same shall apply hereinafter in paragraph (2) of the following Article.) shall keep the minutes referred to in the preceding paragraph at a place designated by the incorporators (or at the head office of the Stock Company if after the incorporation of such Stock Company. The same shall apply hereinafter in paragraph (2) of the following Article.) for the period of ten years from the day of the Organizational Meeting.

(3) The Shareholders at Incorporation (or the shareholders and creditors of the Stock Company after the formation of such Stock Company. The same shall apply hereinafter in paragraph (3) of the following Article.) may submit the following requests at any time during the hours designated by the incorporators (or during the business hours of such Stock Company if after the incorporation of such Stock Company. The same shall apply hereinafter in such paragraph.):

(i) If the minutes under paragraph (1) are prepared in writing, requests for inspection or copying of such documents; and

(ii) If the minutes under paragraph (1) are prepared by means of Electromagnetic Records, requests for inspection or copying of anything that displays the data recorded in such Electromagnetic Records in a manner prescribed by the applicable Ordinance of the Ministry of Justice.

(4) If, after the formation of a Stock Company, it is necessary for the purpose of exercising the rights of a Member of the Parent Company of such Stock Company, he/she may, with the permission of the court, make the requests listed in each item of the preceding paragraph with respect to the minutes referred to in paragraph (1).

(Omission of Resolutions of Organizational Meetings)

Article 82 (1) In cases where incorporators submit a proposal with respect to any matter that is the purpose of an Organizational Meeting, if all Shareholders at Incorporation (limited to those who may exercise their votes with respect to such matter) manifest their intention to agree to such proposal in writing or by means of Electromagnetic Records, it shall be deemed that a resolution to approve such proposal at an Organizational Meeting has been made.

(2) The incorporators shall keep the documents or Electromagnetic Records under the provisions of the preceding paragraph at a place designated by the incorporators for the period of ten years from the day when the resolution of the Organizational Meeting is deemed to have been made pursuant to the provisions of the preceding paragraph.

(3) The Shareholders at Incorporation may submit the following requests at any time during the hours designated by the incorporators:

(i) Requests for inspection or copying of the documents under the preceding paragraph; and

(ii) Requests for inspection or copying of anything that displays the data recorded in the Electromagnetic Records under the preceding paragraph in a manner prescribed by the applicable Ordinance of the Ministry of Justice.

(4) If, after the formation of a Stock Company, it is necessary for the purpose of exercising the rights of a Member of the Parent Company of such Stock Company, he/she may, with the permission of the court, make the requests listed in each item of the preceding paragraph with respect to the documents or Electromagnetic Records under paragraph (2).

(Omission of Reports to Organizational Meetings)

Article 83 In cases where the incorporators notify all Shareholders at Incorporation of any matter that is to be reported to an Organizational Meeting, if all Shareholders at Incorporation manifest in writing or by means of Electromagnetic Records their intention to agree that it is not necessary to report such matter to the Organizational Meeting, it shall be deemed that such matter has been reported to the Organizational Meeting.

(Cases of Provision Requiring Resolution of Class Meeting)

Article 84 In cases where the Stock Company to be incorporated is a Company with Class Shares, if there is a provision, as a feature of a certain class of shares to be issued as at the incorporation, to the effect that, with respect to the matter that is subject to the resolution of a shareholders' meeting, in addition to such resolution, the resolution of a Class Meeting constituted by the Class Shareholders of such class of shares is required, such matter shall not become effective unless the resolution is made at a Class Organizational Meeting (meaning a meeting of Class Shareholders at Incorporation (as defined below) of a certain class of the Shares Issued at Incorporation. The same shall apply hereinafter.) constituted by the Class Shareholders at Incorporation (meaning the Shareholders at Incorporation of a certain class of Shares Issued at Incorporation. The same shall apply hereinafter in this Section.) of the Shares Issued at Incorporation of such class in addition to the resolution of the Organizational Meeting, consistently with the provisions of articles of incorporation; provided, however, that this shall not apply to the case where there exists no Class Shareholder at Incorporation who may exercise the votes at such Class Organizational Meeting.

(Calling and Resolutions of Class Organizational Meetings)

Article 85 (1) In cases where a resolution of a Class Organizational Meeting is to be made pursuant to the provisions of the preceding article, Article 90(1) (including the case where it is applied mutatis mutandis under paragraph (2) of the same Article), Article 92(1) (including the case where it is applied mutatis mutandis under paragraph (3) of the same Article), Article 100(1) or Article 101(1), the incorporators shall call a Class Organizational Meeting.

(2) Resolutions of a Class Organizational Meeting shall be made by a majority of the votes of the Class Shareholders at Incorporation who are entitled to exercise their votes at such Class Organizational Meeting, being a majority of two thirds or more of the votes of such Class Shareholders at Incorporation who are present at the meeting.

(3) Notwithstanding the provisions of the preceding paragraph, resolutions under Article 100(1) shall be made by a majority of the Class Shareholders at Incorporation who are entitled to exercise their votes at such Class Organizational Meeting, being a majority of two thirds or more of the votes of such Class Shareholders at Incorporation.

(Mutatis Mutandis Application of Provisions regarding Organizational Meetings)

Article 86 The provisions of Article 67 through Article 71, Article 72(1), and Article 74 through Article 82 shall apply mutatis mutandis to Class Organizational Meetings. In such cases, the term "Shareholders at Incorporation" in item (iii) and item (iv) of paragraph (1) and paragraph (2) of Article 67, paragraph (1) and paragraph (3) of Article 68, Article 69 through Article 71, paragraph (1) of Article 72, paragraph (1), paragraph (3) and paragraph (4) of Article 74, paragraph (2) of Article 75, paragraph (2) and paragraph (3) of Article 76, Article 77, the main clause of Article 78 and paragraph (1) of Article 82 shall be deemed to be replaced with as "Class Shareholders at Incorporation (meaning Shareholders at Incorporation for a certain class of Shares Issued at Incorporation)."

Subsection 3 Reporting of Matters regarding Incorporation Article 87 (1) The incorporators shall report matters regarding the incorporation of a Stock Company to an Organizational Meeting.

(2) In the cases listed in the following items, the incorporators shall submit or provide to an Organizational Meeting the documents or Electromagnetic Records that state or record the matters provided for in such items:

(i) In cases where articles of incorporation provide for the matters listed in each item of Article 28 (excluding the matters provided for in each item of Article 33(10) in cases listed in such items): The content of the report referred to of Article 33(4) of the inspector under paragraph (2) thereof; and

(ii) In the case listed in item (iii) of Article 33(10): The content of the verification provided in such item. Subsection 4 Election and Dismissal of Director at Incorporation

(Election of Directors at Incorporation)

Article 88 In cases where the solicitation under Article 57(1) is carried out, the election of the Directors at Incorporation, Accounting Advisors at Incorporation, Auditors at Incorporation and Accounting Auditors at Incorporation shall be made by the resolution of an Organizational Meeting.

(Election of Directors at Incorporation by Cumulative Vote)

Article 89 (1) In cases where the purpose of an Organizational Meeting is the election of two or more Directors at Incorporation, the Shareholders at Incorporation (limited to the Shareholders at Incorporation entitled to exercise their votes with respect to the election of the Directors at Incorporation. The same shall apply hereinafter in this Article) may request the incorporators that the Directors at Incorporation be elected pursuant to the provisions of paragraph (3) through paragraph (5), except as otherwise provided in the articles of incorporation.

(2) The request under the provisions of the preceding paragraph shall be made no later than five days prior to the day of the Organizational Meeting referred to in the same paragraph.

(3) Notwithstanding the provisions of Article 72(1), in cases where a request is made pursuant to the provisions of paragraph (1), a Shareholder at Incorporation shall be entitled to such number of votes as is equal to the number of the Directors at Incorporation to be elected in such Organizational Meeting, for each one Share Issued at Incorporation for which he/she subscribed (or, in cases where the Share Unit is provided for in the articles of incorporation, for each one unit of the Shares Issued at Incorporation for which he/she subscribed) with respect to the resolution of the election of the Directors at Incorporation. In such cases, the Shareholder at Incorporation may exercise his/her votes by casting votes for only one candidate or for two or more candidates.

(4) In the cases set forth in the preceding paragraph, the Directors at Incorporation shall be elected in the order of the votes obtained by respective candidates.

(5) In addition to the matters provided for in the preceding two paragraphs, necessary matters regarding the election of Directors at Incorporation in cases where a request has been made pursuant to the provisions of paragraph (1) shall be prescribed by the applicable Ordinance of the Ministry of Justice.

(Election of Directors at Incorporation by Resolutions of Class Organizational Meetings)

Article 90 (1) Notwithstanding the provisions of Article 88, in cases where, at incorporation of the Stock Company, it issues shares of a class for which the matters listed in item (ix) of Article 108(1) (limited to those relating to directors) are provided, the Directors at Incorporation shall be elected by a resolution of a Class Organizational Meeting constituted by the Class Shareholders at Incorporation of such class of Shares Issued at Incorporation, consistently with the provisions of articles of incorporation with respect to the matters provided for in item (ix), paragraph (2) of such Article.

(2) The provisions of the preceding paragraph shall apply mutatis mutandis to the cases where the shares of a class for which matters listed in item (ix), Article 108(1) (limited to those relating to auditors) are provided are issued at incorporation of the Stock Company.

(Dismissal of Directors at Incorporation)

Article 91 Directors at Incorporation, Accounting Advisors at Incorporation, Auditors at Incorporation or Accounting Auditors at Incorporation who are elected pursuant to the provisions of Article 88 may be dismissed by resolution of an Organizational Meeting at any time prior to the formation of the Stock Company.

Article 92 (1) Directors at Incorporation who are elected pursuant to the provisions of Article 90(1) may be dismissed by a resolution of a Class Meeting constituted by the Class Shareholders at Incorporation of such class of Shares Issued at Incorporation relating to such election at any time prior to the formation of the Stock Company.

(2) Notwithstanding the provisions of the preceding paragraph, in cases where there is a provision in articles of incorporation to the effect that a director who is elected pursuant to the provisions of Article 41(1), or at a Class Organizational Meeting or at a Class Meeting may be dismissed by a resolution of the shareholders' meeting, a Director at Incorporation who is elected pursuant to the provisions of Article 90(1) may be dismissed by a resolution of an Organizational Meeting at any time prior to the formation of the Stock Company.

(3) The provisions of the preceding two paragraphs shall apply mutatis mutandis to the dismissal of an Auditor at Incorporation who is elected pursuant to the provisions of Article 90(1) applied mutatis mutandis under paragraph (2) of such Article.

Subsection 5 Investigation by Directors at Incorporation

(Investigation by Directors at Incorporation)

Article 93 (1) The Directors at Incorporation (referring to the Directors at Incorporation and Auditors at Incorporation in cases where the Stock Company to be incorporated is a Company with Auditors. The same shall apply hereinafter in this Article.) shall investigate the following matters without delay after their election:

(i) That, with respect to the Properties Contributed in Kind in the cases listed in item (i) or item (ii) of Article 33(10) (if listed in such item, limited to the securities under such item), the value specified or recorded in the articles of incorporation is reasonable;

(ii) That the verification provided for in item (iii) of Article 33(10) is appropriate;

(iii) That the Performance of Contributions by the incorporators and the payments pursuant to the provisions of Article 63(1) have been fulfilled; and

(iv) That, in addition to the matters listed in the preceding three items, the procedures for the incorporation of the Stock Company do not violate applicable laws and regulations or the articles of incorporation.

(2) The Directors at Incorporation shall report the outcome of the investigations pursuant to the provisions of the preceding paragraph to an Organizational Meeting.

(3) In cases where incorporators are asked by the Shareholders at Incorporation to provide explanations on the matters regarding the investigation pursuant to the provisions of the paragraph (1) at an Organizational Meeting, the incorporators shall provide necessary explanations with respect to such matters.

(Special Provisions in Case Directors at Incorporation are Incorporators)

Article 94 (1) In cases where some or all of the Directors at Incorporation (or the Directors at Incorporation and Auditors at Incorporation in cases where the Stock Company to be incorporated is a Company with Auditors) are incorporators, an Organizational Meeting may make a resolution to elect a person to investigate the matters listed in each item of paragraph (1) of the preceding article.

(2) A person who is elected pursuant to the provisions of the preceding paragraph shall conduct the necessary investigation and report the outcome of such investigation to an Organizational Meeting.

Subsection 6 Amendment in Articles of Incorporation

(No Amendment in Articles of Incorporation by Incorporators)

Article 95 In cases where the solicitation under Article 57(1) is carried out, the incorporators may not effect any amendment in the articles of incorporation on and after either the date referred to in item (iii) of Article 58(1) or the first day of the period referred to in the same item, whichever comes earlier, the provisions of Article 33(9) and Article 37(1) and (2) notwithstanding.

(Amendment in Articles of Incorporation at Organizational Meetings)

Article 96 Notwithstanding the provisions of Article 30(2), articles of incorporation may be amended by resolution of an Organizational Meeting.

(Rescission of Subscription for Shares Issued at Incorporation)

Article 97 In cases where it is resolved at the Organizational Meeting to effect an amendment in the articles of incorporation to change the matters listed in each item of Article 28, the Shareholders at Incorporation who dissented from such amendment at such Organizational Meeting may rescind the manifestation of their intention relating to the subscription for such Shares Issued at Incorporation only within two weeks after such resolution.

(Provision for Total Number of Authorized Shares by Resolutions of Organizational Meetings)

Article 98 If, in cases where the solicitation under Article 57(1) is carried out, the Total Number of Authorized Shares is not provided for in the articles of incorporation, the provision on the Total Number of Authorized Shares shall be created by amending the articles of incorporation prior to the formation of the Stock Company by resolution of an Organizational Meeting.

(Special Provisions on Procedures for Amendment in Articles of Incorporation)

Article 99 In cases where the Stock Company to be incorporated is a Company with Classes Shares, if the cases listed in any of the following items apply, the consent of all Class Shareholders at Incorporation of such classes of the Shares Issued at Incorporation in each of such items shall be obtained:

(i) If it is intended to create, as a feature of a certain class of shares, any provision in the articles of incorporation with respect to the matters listed in item (vi) of Article 108(1), or to effect any amendment in the articles of incorporation with respect to such matters (excluding any amendment which repeals the provisions of the articles of incorporation with respect to such matters);

(ii) If it is intended to create any provision in the articles of incorporation pursuant to the provisions of Article 322(2) with respect to a certain class of shares.

Article 100 (1) In cases where the Stock Company to be incorporated is a Company with Class Shares, if it is intended to create, as a feature of a certain class of shares, any provision in the articles of incorporation with respect to the matters listed in item (iv) or item (vii) of Article 108(1) by amending the articles of incorporation, such amendment in the articles of incorporation shall not become effective unless a resolution is made at a Class Organizational Meeting constituted by the following Class Shareholders at Incorporation (in cases where there are two or more classes of Shares Issued at Incorporation relating to such Class Shareholders at Incorporation, referring to the respective Class Organizational Meetings constituted by Class Shareholders at Incorporation categorized by the class of such two or more classes of Shares Issued at Incorporation. The same shall apply hereinafter in this Article.);

provided, however, that this shall not apply to cases where there is no Class Shareholder at Incorporation who may exercise his/her votes at such Class Organizational Meeting:

(i) The Class Shareholders at Incorporation of such class of Shares Issued at Incorporation;

(ii) The Class Shareholders at Incorporation of Shares with Put Option for which there is a provision that the "other share" referred to in item (v)(b) of Article 108(2) shall be such class of share; or

(iii) The Class Shareholders at Incorporation of Shares Subject to Call Option for which there is a provision that the "other shares" referred to in item (vi)(b) of Article 108(2) shall be such class of shares;

(2) The Class Shareholders at Incorporation who, at the Class Organizational Meeting referred to in the preceding paragraph, dissented from such amendment in the articles of incorporation may rescind the manifestation of their intention relating to the subscription for such Shares Issued at Incorporation only within two weeks after the resolution made by such Class Organizational Meeting.

Article 101 (1) In cases where the Stock Company to be incorporated is a Company with Class Shares, if effecting any amendment in articles of incorporation with respect to any of the following matters is likely to cause detriment to the Class Shareholders at Incorporation of any class of Shares Issued at Incorporation, such amendment in the articles of incorporation shall not become effective unless a resolution is made at an Class Organizational Meeting constituted by the Class Shareholders at Incorporation of the Shares Issued at Incorporation of such class (in cases where there are two or more classes of Shares Issued at Incorporation relating to such Class Shareholders at Incorporation, referring to the respective Class Organizational Meetings constituted by the Class Shareholders at Incorporation categorized by the class of such two or more classes of Shares Issued at Incorporation); provided, however, that this shall not apply to cases where there is no Class Shareholder at Incorporation who may exercise his/her votes at such Class Organizational Meeting:

(i) Creation of a new class of shares;

(ii) Changes in the features of shares;

(iii) Increase of the Total Number of Authorized Shares, or the Total Number of Authorized Shares in a Class (meaning the total number of shares in one class that the Stock Company is authorized to issue. The same shall apply hereinafter.).

(2) In cases where any amendment in the articles of incorporation with respect to the Share Unit is to be effected and there is a provision in the articles of incorporation pursuant to the provisions of Article 322(2) with respect to such amendment in the articles of incorporation, the provisions of the preceding paragraph shall not apply to the Class Organizational Meeting constituted by the Class Shareholders at Incorporation of such class of the Shares Issued at Incorporation.

Subsection 7 Special Provisions on Incorporation Procedures

(Special Provisions on Incorporation Procedures)

Article 102 (1) A subscriber for the Shares Solicited at Incorporation may submit the requests listed in each item of Article 31(2) at any time during the hours designated by the incorporators; provided, however, that, the fees designated by the incorporators are required to be paid in order to submit the requests listed in item (ii) or item (iv) of such paragraph.

(2) As at formation of a Stock Company, the subscriber for the Shares Solicited at Incorporation shall become a shareholder of the Shares Issued at Incorporation for which he/she have made payment pursuant to the provisions of Article 63(1).

(3) The proviso to Article 93 and the provisions of Article 94(1) of the Civil Code shall apply to neither offer of subscription for nor allotment of the Shares Solicited at Incorporation, nor to manifestation of intention relating to contracts under Article 61.

(4) The subscriber for the Shares Solicited at Incorporation may neither assert the invalidity of the his/her subscription for Shares Issued at Incorporation on the ground of mistake, nor rescind his/her subscription for Shares Issued at Incorporation on the ground of fraud or duress after the formation of a Stock Company, or after exercising his/her votes at an Organizational Meeting or Class Organizational Meeting.

(Liabilities of Incorporators)

Article 103 (1) In cases where the solicitation under of Article 57(1) is carried out, for the purpose of the application of the provisions of Article 52(2), "in the following cases" in such paragraph shall be read as "in the cases of item (i)."

(2) In cases where the solicitation under Article 57(1) is carried out, any person (excluding the incorporators) who consents to specifying or recording his/her name and a statement to the effect that he/she supports the incorporation of the Stock Company in any document or Electromagnetic Record regarding such solicitation, including an advertisement for such solicitation, shall be deemed to be an incorporator and the provisions of the preceding Section and the preceding paragraph shall apply.

Chapter II Share

Section 1 General Provisions

(Shareholders' Liabilities)

Article 104 A shareholder's liability shall be limited to the amount of the subscription price of the shares he/she holds.

(Rights of Shareholders)

Article 105 (1) A shareholder shall have the following rights and other rights recognized pursuant to the provisions of this Act with respect to the shares he/she holds:

(i) The right to receive dividends of surplus;

(ii) The right to receive distribution of residual assets;

(iii) The right to cast a vote at shareholders meeting.

(2) Provisions of articles of incorporation that do not give the entirety of the rights listed in item (i) and item

(ii) of the preceding paragraph to shareholders shall not be effective.

(Exercise of Rights by Co-owners)

Article 106 If any share is co-owned by two or more persons, the co-owners may not exercise their rights in relation to such share unless they specify one person who exercises the rights in relation to such share, and notify the Stock Company of the name of that person; provided, however, that this shall not apply in cases where the Stock Company agrees to the exercise of such rights.

(Special Provision on Features of Shares)

Article 107 (1) A Stock Company may determine the matters listed in the following items as the features of all shares it issues:

(i) That the approval of such Stock Company shall be required for the acquisition of such shares by assignment;

(ii) That shareholders may demand, that such Stock Company acquire such shares held by such shareholders;

(iii) That such Stock Company may acquire such shares on condition of certain grounds arising.

(2) If a Stock Company determines the matters listed in the following items as the features of all shares it issues, it shall provide for the matters prescribed in each such item in the articles of incorporation:

(i) Regarding the fact that the approval of such Stock Company shall be required for the acquisition of such shares by assignment: The matters listed below:

(a) A statement to the effect that the acquisition of such shares by assignment shall require the approval of such Stock Company;

(b) If the Stock Company is deemed to have effected the approval under Article 136 or Article 137 (1) under certain circumstances, a statement to such effect and a description of such circumstances.

(ii) Regarding the fact that shareholders may demand that such Stock Company acquire such shares held by such shareholders: The matters listed below:

(a) A statement to the effect that shareholders may demand that such Stock Company acquire the shares held by such shareholders;

(b) If Bonds of such Stock Company (other than those in relation to Bonds with Share Option) are delivered to such shareholders in exchange for the acquisition of one of the shares referred to in (a), the description of the classes of such Bonds (referring to the classes defined in Article 681 (i).

The same shall apply hereinafter in this Part.) and the total amount for each class of Bonds, or the method for calculating such total amount;

(c) If Share Options of such Stock Company (other than those attached to Bonds with Share Option) are delivered to such shareholders in exchange for the acquisition of one of the shares referred to in (a), the features and number of such Share Options, or the method for calculating such number;

(d) If Bonds with Share Option of such Stock Company are delivered to such shareholders in exchange for the acquisition of one of the shares referred to in (a), the matters prescribed in (b) with respect to such Bonds with Share Option, and the matters prescribed in (c) with respect to the Share Options attached to such Bonds with Share Option;

(e) If any property other than shares, etc. (referring to shares, Bonds and Share Options. This shall apply hereinafter.) of such Stock Company is delivered to such shareholders in exchange for the acquisition of one of the shares referred to in (a), the description of the features and number or amount of such property, or the method for calculating such number or amount;

(f) The period during which the shareholders may demand that such Stock Company acquire such shares held by such shareholders.

(iii) Regarding the fact that such Stock Company may acquire such shares on condition of certain grounds arising: The matters listed below:

(a) A statement to the effect that such Stock Company will acquire its shares on the day when certain grounds arise, and of such grounds;

(b) If the grounds referred to in (a) will arise with the arrival of a day to be separately specified by such Stock Company, a statement to that effect;

(c) If a portion of the shares referred to in (a) will be acquired on the day the grounds referred to in (a) arise, a statement to that effect and of the method for determining the portion of shares to be acquired;

(d) If Bonds of such Stock Company (other than those of Bonds with Share Option) are delivered to such shareholders in exchange for the acquisition of one of the shares referred to in (a), the classes of such Bonds and the total amount for each class of Bonds, or the method for calculating such total amounts;

(e) If Share Options of such Stock Company (other than those attached to Bonds with Share Option) are delivered to such shareholders in exchange for the acquisition of one of the shares referred to in (a), the features and number of such Share Options, or the method for calculating such number;

(f) If Bonds with Share Option of such Stock Company are delivered to such shareholders in exchange for the acquisition of one share of the shares referred to in (a), the matters prescribed in (d) with respect to such Bonds with Share Option, and the matters prescribed in (e) with respect to the Share Options attached to such Bonds with Share Option;

(g) If any property other than shares, etc. of such Stock Company is delivered to such shareholders in exchange for the acquisition of one of the shares referred to in (a), the features and number or amount of such property, or the method for calculating such number or amount.

(Shares of Different Classes)

Article 108 (1) A Stock Company may issue two or more classes of shares with different features which have different provisions on the following matters; provided, however, that a Company with Committees and a Public Company may not issue shares of a class that has provisions in relation to the matters listed in item (ix):

(i) Dividends of surplus;

(ii) Distribution of residual assets;

(iii) Capacity to exercise the right to vote at a shareholders meeting;

(iv) That the approval of such Stock Company shall be required for the acquisition of such class shares by assignment;

(v) That shareholders may demand that such Stock Company acquire such class shares held by such shareholders;

(vi) That such Stock Company may acquire such class shares on condition of certain grounds arising;

(vii) That such Stock Company shall acquire all of such class shares by resolution of the shareholders meeting;

(viii) Such of the matters to be resolved at a shareholders meeting (or at a shareholders meeting or board of directors meeting for a Company with Board of Directors, or at a shareholders meeting or board of liquidators meeting for a Company with Board of Liquidators (referring to the Company with Board of Liquidators as provided for Article 478(6). The same shall apply hereinafter in this Article.)), that require, in addition to such resolution, a resolution of a Class Meeting constituted by the Class Shareholders of such class shares.

(ix) That directors or company auditors shall be elected at a Class Meeting constituted by the Class Shareholders of such class shares.

(2) In cases where a Stock Company issues two or more classes of shares with different features that have different provisions on the following matters, it shall provide for the matters prescribed in each of such items and the Total Number of Authorized Shares in a Class in the articles of incorporation:

(i) Regarding dividends of surplus: The method for determining the Dividend Property to be delivered to the shareholders of such classes, the conditions for dividends of surplus, and other features relating to dividends of surplus;

(ii) Regarding the distribution of residual assets: The method for determining the value of the residual assets to be delivered to the shareholders of such classes, the kinds of such residual assets, and other features of treatment relating to the distribution of residual assets;

(iii) Regarding the matter of capacity to exercise the right to vote at shareholders meetings: The following matters:

(a) The matters in relation to which the voting right may be exercised at a shareholders meeting; and

(b) If any condition on the exercise of the voting right is to be prescribed for such class shares, such condition.

(iv) Regarding the fact that the approval of such Stock Company shall be required for the acquisition of such class shares by assignment: The matters prescribed in item (i), paragraph (2) of the preceding article with respect to such class shares;

(v) Regarding the fact that shareholders may demand that such Stock Company acquire such class shares held by such shareholders: The following matters:

(a) The matters prescribed in item (ii), paragraph (2) of the preceding article with respect to such class shares;

(b) If, in exchange for the acquisition of one share of such class shares, other shares of such Stock Company are delivered to such shareholders, the class of such other shares and the total number of each class, or the method for calculating such number;

(vi) Regarding the fact that such Stock Company may acquire such class shares on condition of certain grounds arising: The following matters:

(a) The matters prescribed in item (iii), paragraph (2) of the preceding article with respect to such class shares;

(b) If, in exchange for the acquisition of one share of such class shares, other shares of such Stock Company are delivered to such shareholders, the class of such other shares and the total number of each class, or the method for calculating such number;

(vii) Regarding the fact that such Stock Company shall acquire all of such class of shares by resolution of a shareholders meeting; The following matters:

(a) The method for determining the value of the acquisition price prescribed in Article 171(1)(i);

(b) If any condition is to be prescribed on whether or not the resolution of such shareholders meeting may be effected, such condition.

(viii) Regarding such of the matters to be resolved at a shareholders meeting (or at a shareholders meeting or board of directors meeting for a Company with Board of Directors, or at a shareholders meeting or board of liquidators meeting for a Company with Board of Liquidators), that require, in addition to such resolution, a resolution of a Class Meeting constituted by the Class Shareholders of such class shares. The following matters:

(a) The matters for which the resolution of such Class Meeting is required; and

(b) If any condition for which the resolution of such Class Meeting is required is to be prescribed, such condition.

(ix) Regarding the fact that directors or company auditors shall be elected at a Class Meeting constituted by the Class Shareholders of such class shares.

The following matters:

(a) The election of directors or company auditors at a Class Meeting constituted by such Class Shareholders and the number of directors or company auditors to be elected;

(b) If some or all of the directors or company auditors who may be elected pursuant to the provisions of (a) shall be elected jointly with other Class Shareholders, the class of the shares held by such other Class Shareholders, and the number of directors or company auditors to be elected jointly;

(c) If there is any condition that alters the matters listed in (a) or (b), such condition, and the matters listed in (a) or (b) after such alternation in cases where such condition is fulfilled; and

(d) In addition to the matters listed in (a) to (c) inclusive, any matter prescribed by the applicable Ordinance of the Ministry of Justice.

(3) Notwithstanding the provisions of the preceding paragraph, with respect to some or all of the matters prescribed in each item of the same paragraph (limited to the amount of dividends which may be received by Class Shareholders of classes with different features with respect to dividends of surplus, and other matters prescribed by the applicable Ordinance of the Ministry of Justice), it may be provided in the articles of incorporation to the effect that such matters shall be determined by resolution of a shareholders meeting (or at a shareholders meeting or board of directors meeting for a Company with Board of Directors, or at a shareholders meeting or board of liquidators meeting for a Company with Board of Liquidators) by the time of the first issue of such class shares. In such cases, an outline of the features thereof shall be provided for in the articles of incorporation.

(Equality of Shareholders)

Article 109 (1) A Stock Company shall treat its shareholders equally in accordance with the features and number of the shares they hold.

(2) Notwithstanding the provisions of the preceding paragraph, a Stock Company that is not a Public Company may provide in its articles of incorporation to the effect that each shareholder shall be treated differently with respect to the matters regarding the rights listed in each item of Article 105 (1).

(3) In cases where there is a provision in the articles of incorporation that is provided for in the preceding paragraph, the shares held by the shareholders under that paragraph shall be deemed to be class shares with different features with respect to the matters regarding the rights under that paragraph, and the provisions of this Part and Part V shall apply.

(Special Provisions on Procedures for Amendments in Articles of Incorporation)

Article 110 In cases where it is intended to create, as a feature of all shares to be issued by a Stock Company, a provision in the articles of incorporation with respect to the matters listed in Article 107(1)(iii) by amending the articles of incorporation, or to effect any amendment (excluding that which abolishes the provisions of the articles of incorporation with respect to such matters) in the articles of incorporation with respect to such matters (excluding the case where the Stock Company is a Company with Class Shares), the consent of all shareholders shall be obtained.

Article 111 (1) If a Company with Class Shares intends, after it has issued a certain class of shares, to create, as a feature of such class shares, a provision in the articles of incorporation with respect to the matters listed in Article 108(1)(vi) by amending the articles of incorporation, or to effect any amendment to the articles of incorporation with respect to such matters (excluding any amendment which abolishes the provisions of the articles of incorporation with respect to such matters), the consent of all Class Shareholders who hold such class shares shall be obtained.

(2) In cases where a Company with Class Shares intends to create, as a feature of a certain class of shares, a provision in the articles of incorporation with respect to the matters listed in Article 108(1)(iv) or (vii), such amendment to the articles of incorporation shall not become effective unless a resolution is passed at a Class Meeting constituted by the following Class Shareholders (in cases where there are two or more classes of shares relating to such Class Shareholders, referring to the respective Class Meetings constituted by Class Shareholders categorized by the class of such two or more classes of shares. This shall apply hereinafter in this Article.); provided, however, that this shall not apply to cases where there is no Class Shareholder who can exercise his/her voting right at such Class Meeting:

(i) The Class Shareholders of shares of such class;

(ii) The Class Shareholders of Shares with Put Option for which there is a provision that the "other shares" referred to in Article 108(2)(v)(b) shall be the shares of such class; or

(iii) The Class Shareholders of Shares subject to Call for which there is a provision that the "other shares" referred to in Article 108(2)(vi)(b) shall be the shares of such class.

(Special Provisions on Abolition of Provisions in Articles of Incorporation on Class Shares in relation to Election of Directors)

Article 112 (1) The provisions in the articles of incorporation on the matters listed in Article 108(2)(ix) (limited to those on directors) shall be deemed to have been abolished if, in cases where the number of directors is less than the number prescribed in this Act or the articles of incorporation, hence it is not possible to elect directors in a number sufficient to satisfy such requirement.

(2) The provisions of the preceding paragraph shall apply mutatis mutandis to the provisions of the articles of incorporation on the matters listed in Article 108(2)(ix) (limited to those on company auditors).

(Total Number of Authorized Shares)

Article 113 (1) A Stock Company may not abolish the provisions on the Total Number of Authorized Shares by amending its articles of incorporation.

(2) If it is intended to reduce the Total Number of Authorized Shares by amending the articles of incorporation, the Total Number of Authorized Shares after the amendment may not be less than the total number of the Issued Shares at the time when such amendment to the articles of incorporation becomes effective.

(3) In cases where it is intended to increase the Total Number of Authorized Shares by amending the articles of incorporation, the Total Number of Authorized Shares after the amendment may not exceed the number four times the total number of the Issued Shares at the time when such amendment to the articles of incorporation becomes effective; provided, however, that this shall not apply in cases where the Stock Company is not a Public Company.

(4) The number of the shares which holders of Share Options (excluding Share Options for which the first day of the period prescribed in Article 236(1)(iv) has not yet arrived) acquire pursuant to the provisions of Article 282 may not exceed the number obtained by subtracting the total number of the Issued Shares (excluding Treasury Shares (meaning shares in a Stock Company owned by that Stock Company itself. The same shall apply hereinafter.)) from the Total Number of Authorized Shares.

(Total Number of Authorized Share in a Class)

Article 114 (1) If it is intended to reduce the Total Number of Authorized Shares in a Class of a certain class of shares by amending the articles of incorporation, the Total Number of Authorized Shares in a Class of such class of shares after the amendment may not be less than the total number of the Issued Shares of such class at the time when such amendment to the articles of incorporationbecomes effective.

(2) The total sum of the numbers set forth below for a certain class of shares may not exceed the number obtained by subtracting the total number of the Issued Shares of such class (excluding Treasury Shares) from the Total Number of Authorized Shares in a Class of such class of shares.

(i) The number of "other shares" prescribed in Article 167(2)(iv) which is to be acquired pursuant to the provisions of Article 167(2) by the shareholders (excluding the relevant Stock Company) of Shares with Put Option (excluding those for which the first day of the period prescribed in Article 107(2)(ii)(f) has not yet arrived);

(ii) The number of "other shares" prescribed in Article 170(2)(iv) which is to be acquired pursuant to the provisions of Article 170(2) by the shareholders (excluding the relevant Stock Company) of Shares subject to Call; and

(iii) The number of the shares which holders of Share Options (excluding those for which the first day of the period prescribed in Article 236(1)(iv) has not yet arrived) acquire pursuant to the provisions of Article 282.

(Number of Issued Shares with Restricted Voting Right)

Article 115 In cases where a Company with Class Shares is a Public Company, if the number of the shares of a certain class with restriction in relation to matters on which voting right can be exercised at a shareholders meeting

(hereinafter in this article referred to as "Shares with Restricted Voting Right") has exceeded one half of the total number of the Issued Shares, the Stock Company shall immediately take measures necessary to reduce the number of the Shares with Restricted Voting Right below one half of the total number of the Issued Shares.

(Dissenting Shareholders' Share Purchase Demand)

Article 116 (1) In the cases listed in the following items, dissenting shareholders may demand that the Stock Company purchase, at a fair price, the shares prescribed in such items held by such shareholders:

(i) In cases where it is intended to effect a amendment to the articles of incorporation to create a provision on matters listed in Article 107(1)(i) as a feature of all shares issued by a Stock Company: All shares;

(ii) In cases where it is intended to effect a amendment to the articles of incorporation to create a provision on matters listed in Article 108(1)(iv) or (vii) as the feature of a certain class of shares: The shares prescribed in each item of Article 111(2);

(iii) In cases where any act listed below is to be performed, if any detriment is likely to be suffered by Class Shareholders who hold a certain class of shares

(limited to those provided for in the articles of incorporation under the provisions of Article 322(2)): The shares of such class

(a) Consolidation of shares or splitting of shares;

(b) Allotment of Shares without Contribution provided for in Article 185;

(c) Amendment to the articles of incorporation on the Share Unit;

(d) Solicitation of persons to subscribe for the shares of such Stock Company (limited to solicitation for which the Stock Company provides for the matters listed in each item of Article 202(1));

(e) Solicitation of persons to subscribe for the Share Options of such Stock Company (limited to solicitation for which the Stock Company provides for the matters listed in each item of Article 241(1));

(f) Allotment of Share Options without Contribution provided for in Article 277.

(2) The "dissenting shareholders" provided for in the preceding paragraph shall mean the shareholders provided for in the following items in the cases listed in the same items:

(i) In cases where a resolution of a shareholders meeting (including a Class Meeting) is required to perform an act in any item of the preceding paragraph: The following shareholders:

(a) Shareholders who gave notice to such Stock Company to the effect that they dissented from such act prior to such shareholders meeting and who dissented from such act at such shareholders meeting (limited to those who can exercise voting right at such shareholders meetings);

(b) Shareholders who cannot exercise voting right at such shareholders meetings.

(ii) In cases other than those prescribed in the preceding item: All shareholders.

(3) A Stock Company that intends to perform an act in any item of paragraph (1) shall give notice to the shareholders of the shares provided for in each item of that paragraph to the effect that it intends to perform such act, no later than twenty days prior to the day when such act becomes effective (hereinafter in this article and in the next article referred to as "Effective Day").

(4) A public notice may be substituted for the notice pursuant to the provisions of the preceding paragraph.

(5) Demands under the provisions of paragraph (1) (hereinafter in this Section referred to as "Share Purchase Demand") shall be made, within the period from the day twenty days prior to the Effective Day to the day immediately preceding the Effective Day, by disclosing the number of shares relating to such Share Purchase Demand (or, for a Company with Class Shares, the classes of the shares and the number of shares for each class).

(6) Shareholders who have made the Share Purchase Demand may withdraw their Share Purchase Demand only in cases where they obtain the approval of the Stock Company.

(7) If a Stock Company suspends the act in any item of paragraph (1), the Share Purchase Demand shall become ineffective.

(Determination of Price of Shares)

Article 117 (1) In cases where a Share Purchase Demand is made, if an agreement is reached between the shareholder and the Stock Company on the determination of the price of the shares, the Stock Company shall make the payment within sixty days from the Effective Day.

(2) If no agreement is reached within thirty days from the Effective Day on the determination of the price of the shares, the shareholders or the Stock Company may file a petition to the court for a determination of the price within thirty days after the expiration of that period.

(3) Notwithstanding the provisions of paragraph (6) of the preceding article, in the cases provided for in the preceding paragraph, if the petition under that paragraph is not made within sixty days after the Effective Day, the shareholders may withdraw their Share Purchase Demand at any time after the expiration of such period.

(4) The Stock Company shall also pay interest on the price determined by the court which shall be calculated at the rate of 6% per annum from and including the day of the expiration of the period referred to in paragraph (1).

(5) The purchase relating to the Share Purchase Demand shall become effective at the time of payment of the price for such shares.

(6) If a Company Issuing Share Certificate (meaning a Stock Company the articles of incorporation of which have provisions to the effect that share certificate representing its shares (or, in case of a Company with Class Shares, shares of all classes) shall be issued), has received a Share Purchase Demand with respect to shares for which share certificates are issued, the Stock Company shall pay the price of the shares relating to such Share Purchase Demand in exchange for the share certificate.

(Demand for Purchase of Share Options)

Article 118 (1) In cases where it is intended to effect any amendment to articles of incorporation listed in the following items, the holders of Share Options provided for in any such item may demand that the Stock Company purchase, at a fair price, the Share Options held by the same:

(i) In cases where it is intended to effect a amendment to the articles of incorporation to create a provision on matters listed in Article 107(1)(i) as a feature of all shares issued by a Stock Company: All Share Options;

(ii) In cases where it is intended to effect a amendment to the articles of incorporation to create a provision on matters listed in Article 108(1)(iv) or

(vii) as a feature of a certain class of shares: The Share Options for which shares of such class are the underlying shares;

(2) If holders of the Share Options attached to Bonds with Share Option intend to make the demand under the preceding paragraph (hereinafter in this Section referred to as "Share Option Purchase Demand"), they shall also make the demand for the purchase of Bonds with respect to Bonds with Share Option; provided, however, that this shall not apply in cases where it is otherwise provided for with respect to the Share Options attached to Bonds with Share Option.

(3) A Stock Company which intends to effect a amendment to the articles of incorporation listed in each item of paragraph (1) shall give notice to the holders of Share Options provided for in each item of that paragraph, no later than twenty days prior to the day when such amendment to the articles of incorporation becomes effective (hereinafter in this article and in the following article referred to as "Day of Amendment to Articles of Incorporation"), to the effect that such amendment to the articles of incorporation is to be effected.

(4) A public notice may be substituted for the notice pursuant to the provisions of the preceding paragraph.

(5) The Share Option Purchase Demand shall be made, within the period form the day twenty days prior to the Day of Amendment to Articles of Incorporation to the day immediately preceding the Day of Amendment to Articles of Incorporation, by disclosing the features and number of Share Options relating to such Share Option Purchase Demand.

(6) Holders of Share Options who have made the Share Option Purchase Demand may withdraw their Share Option Purchase Demand only in cases where they obtain the approval of the Stock Company.

(7) If a Stock Company suspends the amendment to articles of incorporation provided for in any item of paragraph (1), the Share Option Purchase Demand shall become ineffective.

(Determination of Price of Share Options)

Article 119 (1) In cases where a Share Option Purchase Demand is made, if an agreement on the determination of the price of the Share Options is reached between the holder of Share Options (in cases where such Share Options are attached to Bonds with Share Option, if there is a demand for the purchase of Bonds with respect to such Bonds with Share Option, including such Bonds. The same shall apply in this article.) and the Stock Company, the Stock Company shall make payment within sixty days from the Day of the Amendment to the Articles of Incorporation.

(2) If no agreement on the determination of the price of the Share Options is reached within thirty days from the Day of Amendment to Articles of Incorporation, the holders of Share Options or the Stock Company may file a petition to the court for a determination of the price within thirty days after the expiration of that period.

(3) Notwithstanding the provisions of paragraph (6) of the preceding article, in the cases provided for in the preceding paragraph, if the petition under that paragraph is not filed within sixty days after the Day of Amendment to Articles of Incorporation, the holders of Share Options may withdraw their Share Option Purchase Demand at any time after the expiration of such period.

(4) The Stock Company shall also pay interest on the price determined by the court which is calculated at the rate of 6% per annum from and including the day of the expiration of the period referred to in paragraph (1).

(5) The purchase relating to the Share Option Purchase Demand shall become effective at the time of payment of the price for such Share Options.

(6) If a Stock Company has received a Share Option Purchase Demand with respect to any Share Option for which a Share Option certificate is issued, it shall pay the price of the Share Option relating to such Share Option Purchase Demand in exchange for such Share Option certificate.

(7) If a Stock Company has received a Share Option Purchase Demand with respect to a Share Option attached to a Bond with Share Option for which a certificate for Bond with Share Option provided for in Article 249 (ii) is issued, it shall pay the price of the Share Option relating to such Share Option Purchase Demand in exchange for such certificate for Bond with Share Option.

(Giving Benefits on Exercise of Shareholder's Right)

Article 120 (1) A Stock Company may not give property benefits to any person regarding the exercise of shareholders' rights (limited to benefits given for the accounts of such Stock Company or its Subsidiary. The same shall apply hereinafter in this article.).

(2) If a Stock Company gives property benefits to a specific shareholder without charge, it shall be presumed that such Stock Company has given property benefits regarding the exercise of shareholders' rights. The same shall apply in cases where a Stock Company gives property benefits to a specific shareholder for value if the benefit received by such Stock Company or its Subsidiary is insignificant in comparison to such property benefits.

(3) If a Stock Company gives property benefits in violation of the provisions of paragraph (1), the recipient of such benefit shall return the same to such Stock Company or its Subsidiary. In such cases, if the recipient has tendered anything to such Stock Company or its Subsidiary in exchange for such benefit, that person may receive the return of the same.

(4) If a Stock Company gives property benefits in violation of the provisions of paragraph (1), persons prescribed by the applicable Ordinance of the Ministry of Justice as directors (including executive officers for Companies with Committees. The same shall apply hereinafter in this paragraph.) who are involved in giving such benefits shall be jointly and severally liable to such Stock Company for payment of an amount equivalent to the value of the benefit so given; provided, however, that this shall not apply if such persons (excluding the directors who gave such benefit) have proven that they did not fail to exercise due care in discharging their duties.

(5) Exemptions from the obligations set forth in the preceding paragraph may not be given without the consent of all shareholders.

Section 2 Shareholder Registry

(Shareholder Registry)

Article 121 A Stock Company shall prepare a shareholder registry and state or record the following matters (hereinafter referred to as "Matters to be Stated in the Shareholder Registry") in the same:

(i) The names and addresses of shareholders;

(ii) The number of shares held by the shareholders referred to in the preceding item (or the classes of shares and number for each class for a Company with Class Shares);

(iii) The days when the shareholders referred to in item (i) acquired the shares; and

(iv) In cases where the Stock Company is a Company Issuing Share Certificate, the serial numbers of share certificates representing the shares (limited to those for which share certificates are issued) under item (ii).

(Delivery of Documents Stating Matters to be Stated in the Shareholder Registry)

Article 122 (1) The shareholders referred to in item (i) of the preceding article may request that the Stock Company deliver documents stating the matters to be specified in the shareholder registry that are stated or recorded in the shareholder registry with respect to such shareholders, or provide the Electromagnetic Records that record such Matters to be Stated in the Shareholder Registry.

(2) The documents referred to in the preceding paragraph shall be affixed with the signature, or name and seal, of the Representative Director of the Stock Company (referring to the representative executive officer for a Company with Committees. The same shall apply hereinafter in this paragraph and in the following paragraph.).

(3) With respect to the Electromagnetic Records referred to in paragraph (1), the Representative Director of the Stock Company shall implement measures in lieu of the affixing of the signature, or name and seal that is prescribed by the applicable Ordinance of the Ministry of Justice.

(4) The provisions of the preceding three paragraphs shall not apply to a Company Issuing Share Certificate.

(Administrator of Shareholder Registry)

Article 123 A Stock Company may provide in its articles of incorporation to the effect that an Administrator of Shareholder Registry (meaning a person who is responsible on behalf of the Stock Company for the administration of the shareholder registry including preparing and keeping the shareholder registry. The same shall apply hereinafter.) shall be installed, and may entrust such administration to the same.

(Record Date)

Article 124 (1) A Stock Company may, by prescribing a certain date (hereinafter in this Chapter referred to as a "Record Date"), prescribe the shareholders who are stated or recorded in the shareholder registry on the Record Date (hereinafter in this article referred to as "Shareholders as of the Record Date") as the persons who may exercise their rights.

(2) In cases where a Record Date is to be established, the Stock Company shall prescribe the content of the rights which the Shareholders on the Record Date may exercise (limited to those which are exercised within three months from the Record Date).

(3) If a Stock Company has prescribed a Record Date, it shall give public notice of such Record Date and the matters prescribed pursuant to the provisions of the preceding paragraph no later than two weeks prior to such Record Date; provided, however, that this shall not apply if the articles of incorporation provide for such Record Date and such matters.

(4) In cases where the rights that the Shareholders on the Record Date may exercise are voting right at a shareholders meeting or Class Meeting, the Stock Company may prescribe some or all persons who acquire shares on or after such Record Date as persons who may exercise such right; provided, however, that this provision may not prejudice the rights of the Shareholders on the Record Date of such shares.

(5) The provisions of paragraph (1) to paragraph (3) inclusive shall apply mutatis mutandis to the Registered Pledgees of Shares provided for in Article 149 (1).

(Keeping and Making Available for Inspection of Shareholder Registry)

Article 125 (1) A Stock Company shall keep the shareholder registry at its head office (or, in cases where there is an Administrator of Shareholder Registry, at its business office).

(2) Shareholders and creditors may make the following requests at any time during the business hours of the Stock Company. In such cases, the reasons for such requests shall be disclosed.

(i) If the shareholder registry is prepared in writing, a request for the inspection or copying of such document;

(ii) If the shareholder registry is prepared by using Electromagnetic Records, a request for the inspection or copying of anything that indicates the matters recorded in such Electromagnetic Records in a manner prescribed by the applicable Ordinance of the Ministry of Justice.

(3) If a request in the preceding paragraph is made, a Stock Company may not refuse such request, except cases it falls under any of the following:

(i) The shareholder or creditor who made such request (hereinafter in this paragraph referred to as the "Requestor") made the request for a purpose other than for research on securing or exercising his/her rights;

(ii) The Requestor made the request with the purpose of interfering with the execution of the operations of such Stock Company or prejudicing the common benefit of the shareholders;

(iii) The Requestor operates or engages in any business which is, in substance, in competition with the operations of such Stock Company;

(iv) The Requestor made the request in order to report facts to third parties for profit, knowledge of which may be acquired by inspecting or copying the shareholder registry; or

(v) The Requestor is a person who has reported facts, knowledge of which was acquired by inspecting or copying the shareholder registry, to third parties for profit in the immediately preceding two years.

(4) If it is necessary for a member of the Parent Company of a Stock Company to exercise his/her rights, such member of the Parent Company may, with the permission of the court, make the requests in each item of paragraph (2) with respect to the shareholder registry of such Stock Company. In such cases, the reasons for such requests shall be disclosed.

(5) The court may not grant the permission in the preceding paragraph if grounds provided for in any item of paragraph (3) apply to the member of the Parent Company in the preceding paragraph.

(Notice to Shareholders)

Article 126 (1) It shall be sufficient for a notice or demand to shareholders to be sent by a Stock Company to the addresses of such shareholders stated or recorded in the shareholder registry (or, in cases where such shareholders notify such Stock Company of a different place or contact address for the receipt of notices or demands, to such place or contact address).

(2) The notices or demand in the preceding paragraph shall be deemed to have arrived at the time when such notice or demand should normally have arrived.

(3) If a share is co-owned by two or more persons, the co-owners shall specify one person to receive the notices or demand sent by the Stock Company to shareholders and notify such Stock Company of the name of that person. In such cases, that person shall be deemed to be the shareholder and the provisions of the preceding two paragraphs shall apply.

(4) In cases where there is no notice by co-owners under the provisions of the preceding paragraph, it shall be sufficient for a notice or demand sent by a Stock Company to the co-owners of the shareholders if it is sent to one of them.

(5) The provisions of each of the preceding two paragraphs shall apply mutatis mutandis to cases where, when the notice referred to in Article 299 (1) (including the case where it is applied mutatis mutandis in Article 325) is given, a document is delivered to shareholders or matters to be stated in such document are provided to shareholders by Electromagnetic Means. In such cases, the words "to have arrived" in paragraph (2) shall be read as "to have been effected by delivery of such documents or provision of such matters by Electromagnetic Means."

Section 3 Transfer of Share

Subsection 1 Transfer of Share

(Transfer of Share)

Article 127 Shareholders may transfer the shares held by the same.

(Transfer of Shares in Company Issuing Share Certificate)

Article 128 (1) Transfer of shares in a Company Issuing Share Certificate shall not become effective unless the share certificates representing such shares are delivered; provided, however, that this shall not apply to transfer of shares that arise out of the disposition of Treasury Shares.

(2) Transfer effected prior to the issuance of the share certificate shall not be effective vis-a-vis the Company Issuing Share Certificate.

(Special Provisions on Disposition of Treasury Shares)

Article 129 (1) A Company Issuing Share Certificate shall deliver the share certificates to persons who acquire Treasury Shares without delay after the day of the disposition of such Treasury Shares.

(2) Notwithstanding the provisions of the preceding paragraph, a Company Issuing Share Certificate that is not a Public Company may choose to not deliver the share certificates under that paragraph until the persons under that paragraph so request.

(Perfection of Transfer of Shares)

Article 130 (1) Transfer of shares shall not be perfected against the Stock Company and other third parties unless the name and address of the person who acquires those shares is stated or recorded in the shareholder registry.

(2) For the purpose of the application of the provisions of the preceding paragraph with respect to a Company Issuing Share Certificate, "the Stock Company and other third parties" in that paragraph shall be read as "the Stock Company."

(Presumption of Rights)

Article 131 (1) A possessor of share certificates shall be presumed to be the lawful owner of the rights in relation to the shares representing such share certificates.

(2) A person who receives delivery of the share certificates shall acquire the rights in relation to the shares represented by such share certificates; provided, however, that this shall not apply if that person has knowledge or is grossly negligent as to the fact of defective title of the transferor.

(Stating or Recording of Matters to be Stated in Shareholder registry Not Requested by Shareholders)

Article 132 In the cases provided for in the following items, a Stock Company shall state or record the Matters to be Stated in the Shareholder Registry relating to the shareholders of the shares referred to in such items:

(i) In cases where it has Issued Shares;

(ii) In cases where it has acquired shares in such Stock Company;

(iii) In cases where it has disposed of Treasury Shares.

(Stating or Recording of Matters to be Stated in Shareholder Registry at Request of Shareholders)

Article 133 (1) A person who has acquired shares from any person other than the Stock Company that issued such shares (excluding such Stock Company, hereinafter in this Section referred to as "Acquirer of Shares") may request that such Stock Company states or records the Matters to be Stated in the Shareholder Registry relating to such shares in the shareholder registry.

(2) Except for the cases prescribed by the applicable Ordinance of the Ministry of Justice as cases of no likelihood of detriment to interested parties, requests pursuant to the provisions of the preceding paragraph shall be made jointly with the person stated or recorded in the shareholder registry as the shareholder of the shares so acquired, or his/her general successors including his/her heirs.

Article 134 The provisions of the preceding paragraph shall not apply in cases where the shares acquired by the Acquirer of Shares are Shares with Restriction on Transfer; provided, however, that this shall not apply in cases where it falls under any of the following:

(i) Such Acquirer of Shares has obtained approval under Article 136 as to an intended acquisition of such Shares with Restriction on Transfer;

(ii) Such Acquirer of Shares has obtained approval under Article 137 (1) as to a completed acquisition of such Shares with Restriction on Transfer;

(iii) Such Acquirer of Shares is a Designated Purchaser provided for in Article 140 (4);

(iv) Such Acquirer of Shares is a person who has acquired the Shares with Restriction on Transfer by general succession including inheritance.

(Acquisition of Shares of Parent Companies Prohibited)

Article 135 (1) A Subsidiary may not acquire the shares of a Stock Company thatis its Parent Company (hereinafter in this article referred to as "Parent Company's Shares").

(2) The provisions of the preceding paragraph shall not apply to the following cases:

(i) Cases where the Subsidiary accepts the transfer of the Parent Company's Shares held by another Company in cases where the Subsidiary accepts the assignment of the entire business of such other Company (including Foreign Companies);

(ii) Cases where the Subsidiary succeeds to the Parent Company's Shares from a Company that is extinguished after a merger;

(iii) Cases where the Subsidiary succeeds to the Parent Company's Shares from another Company by Absorption-type Company Split;

(iv) Cases where the Subsidiary succeeds to the Parent Company's Shares from another Company by Incorporation-type Company Split; or

(v) In addition to the cases provided for in the preceding items, cases prescribed by the applicable Ordinance of the Ministry of Justice.

(3) The Subsidiary shall dispose of the Parent Company's Shares held by the same at an appropriate time.

Subsection 2 Approval Procedures relating to Transfer of Shares

(Requests for Approval by Shareholders)

Article 136 If shareholders of Shares with Restriction on Transfer intend to transfer the Shares with Restriction on Transfer held by the same to others (excluding the Stock Company which issued such Shares with Restriction on Transfer), they may request that such Stock Company make a determination as to whether or not to approve the acquisition by such others of such Shares with Restriction on Transfer.

(Request for Approval by Acquirers of Shares)

Article 137 (1) Acquirers of Shares who have acquired Shares with Restriction on Transfer may request that the Stock Company make a determination as to whether or not to approve the acquisition of such Shares with Restriction on Transfer.

(2) Except for the cases prescribed by the applicable Ordinance of the Ministry of Justice as cases of no likelihood of detriment to interested parties, requests pursuant to the provisions of the preceding paragraph shall be made jointly with the person stated or recorded in the shareholder registry as the shareholder of the shares so acquired, or his/her general successors including his/her heirs.

(Method for Requests for Approval of Transfer)

Article 138 The requests listed in the following items (hereinafter in this Subsection referred to as "Requests for Approval of Transfer") shall be made by disclosing the matters provided for in such items:

(i) Requests pursuant to the provisions of Article 136: The following matters:

(a) The number of Shares with Restriction on Transfer that the shareholders making such request intend to transfer to others (or, for a Company with Class Shares, the classes of the shares and the number of shares for each class);

(b) The name of the person accepting the transfer of the Shares with Restriction on Transfer referred to in (a);

(c) In cases where a Stock Company determines not to give approval under Article 136, if it is requested that such Stock Company or Designated Purchaser provided for in Article 140 (4) purchase the Shares with Restriction on Transfer referred to in (a), the statement to such effect.

(ii) The request pursuant to the provisions of paragraph (1) of the preceding article: The following matters:

(a) The number of Shares with Restriction on Transfer which the Acquirer of Shares making such request has acquired (or, for a Company with Class Shares, the classes of the shares and the number of shares for each class);

(b) The name of the Acquirer of Shares referred to in (a);

(c) In cases where a Stock Company determines not to effect the approval under paragraph (1) of the preceding article, if it is requested that such Stock Company or the Designated Purchaser provided for in Article 140 (4) purchase the Shares with Restriction on Transfer referred to in (a), a statement to such effect.

(Determination of Approval of transfer)

Article 139 (1) The determination by a Stock Company as to whether or not to grant approval under Article 136 or Article 137 (1) shall be made by resolution of a shareholders meeting (or of a board of directors meeting for a Company with Board of Directors); provided, however, that this shall not apply in cases where it is otherwise provided for in the articles of incorporation.

(2) If a Stock Company has made a determination under the preceding paragraph, it shall notify the person who made the Requests for Approval of Transfer (hereinafter in this Subsection referred to as "Requester for Approval of Transfer") of the content of such determination.

(Purchase by Stock Company or Designated Purchaser)

Article 140 (1) In cases where a Stock Company receives a request under Article 138 (i)(c) or (ii)(c), if it makes a determination to not give approval under Article 136 or Article 137 (1), it shall purchase the Shares with Restriction on Transfer relating to such Requests for Approval of Transfer (hereinafter in this Subsection referred to as "Subject Shares"). In such cases, the following matters shall be prescribed:

(i) A statement to the effect that the Stock Company will purchase the Subject Shares;

(ii) The number of the Subject Shares that will be purchased by the Stock Company (or, for a Company with Class Shares, the classes of the Subject Shares and the number of shares for each class).

(2) The determination of the matters listed in the items of the preceding paragraph shall be made by resolution of a shareholders meeting.

(3) Requesters for Approval of Transfer may not exercise voting right at the shareholders meeting referred to in the preceding paragraph; provided, however, that this shall not apply in cases where all shareholders other than such Requesters for Approval of Transfer may not exercise voting right at the shareholders meeting referred to in that paragraph.

(4) Notwithstanding the provisions of paragraph (1), in the cases provided for in that paragraph, a Stock Company may designate a person to purchase some or all of the Subject Shares (hereinafter in this Subsection referred to as "Designated Purchaser").

(5) The designation pursuant to the provisions of the preceding paragraph shall be made by resolution of the shareholders meeting (or of a board of directors meeting for a Company with Board of Directors); provided, however, that this shall not apply in cases where it is otherwise provided for in the articles of incorporation.

(Notice of Purchases by Stock Company)

Article 141 (1) If a Stock Company has determined the matters listed in any item of paragraph (1) of the preceding article, it shall notify the Requester for Approval of Transfer of such matters.

(2) If a Stock Company intends to give notice pursuant to the provisions of the preceding paragraph, it shall deposit the amount obtained by multiplying the amount of the net assets per share (referring to the amount prescribed by the applicable Ordinance of the Ministry of Justice as the amount of net assets per share. The same shall apply hereinafter.) by the number of the Subject Shares under item (ii), paragraph (1) of the preceding article, with a depository located in the area where its head office is located, and deliver a document certifying such deposit to the Requester for Approval of Transfer.

(3) In cases where the Subject Shares are the shares of a Company Issuing Share Certificate, the Requester for Approval of Transfer who received delivery of the document referred to in the preceding paragraph shall deposit the share certificates representing the Subject Shares referred to in item (ii), paragraph (1) of the preceding article with a depository located in the area where the head office of such Company Issuing Share Certificate is located within one week from the day of receipt of such delivery. In such cases, such Requester for Approval of Transfer shall give notice of such deposit to such Company Issuing Share Certificate without delay.

(4) If the Requester for Approval of Transfer under the preceding paragraph does not effect the deposit pursuant to the provisions of that paragraph within the period under that paragraph, the Company Issuing Share Certificate may cancel the contract for the sale and purchase of the Subject Shares provided for in item (ii), paragraph (1) of the preceding article.

(Designated Purchaser's Notice to Purchase)

Article 142 (1) If a Designated Purchaser is designated pursuant to the provisions of Article 140(4), he/she shall notify the Requester for Approval of Transfer of the following matters:

(i) A statement to the effect that he/she has been designated as a Designated Purchaser; and

(ii) The number of the Subject Shares that the Designated Purchaser will purchase (or, for a Company with Class Shares, the classes of the Subject Shares and the number of shares for each class).

(2) If a Designated Purchaser intends to give notice pursuant to the provisions of the preceding paragraph, the Designated Purchaser shall deposit the amount obtained by multiplying the amount of the net assets per share by the number of the Subject Shares under item (ii) of that paragraph with a depository located in the area where the head office of the Stock Company is located, and deliver a document certifying such deposit to the Requester for Approval of Transfer.

(3) In cases where the Subject Shares are the shares of a Company Issuing Share Certificate, the Requester for Approval of Transfers who received delivery of the document referred to in the preceding paragraph shall deposit the share certificates representing the Subject Shares referred to in item (ii) of paragraph (1) with a depository located in the area where the head office of such Company Issuing Share Certificate is located within one week from the day of receipt of such delivery. In such cases, such Requester for Approval of Transfer shall give notice of such deposit to the Designated Purchaser without delay.

(4) If the Requester for Approval of Transfer under the preceding paragraph does not effect the deposit pursuant to the provisions of that paragraph within the period under that paragraph, the Designated Purchaser may cancel the contract for the sale and purchase of the Subject Shares provided for in item (ii) of paragraph (1).

(Withdrawal of Requests for Approval of Transfer)

Article 143 (1) A Requester for Approval of Transfer who made a request under Article 138(i)(c) or (ii)(c) may, after he/she has received notice pursuant to the provisions of Article 141(1), withdraw his/her request only in cases where he/she obtains the approval of the Stock Company.

(2) A Requester of Approval of Transfer who made a request under Article 138(i)(c) or (ii)(c) may, after he/she has received notice pursuant to the provisions of paragraph (1) of the preceding article, withdraw his/her request only in cases where he/she obtains the approval of the Designated Purchaser.

(Determination of Sale Price)

Article 144 (1) In cases where notice is given pursuant to the provisions of Article 141(1), the sale price of the Subject Shares under Article 140(1)(ii) shall be prescribed through discussion between the Stock Company and the Requester for Approval of Transfer.

(2) The Stock Company or Requester for Approval of Transfers may file a petition to the court for a determination of the sale price within twenty days from the day when notice is given pursuant to the provisions of Article 141(1).

(3) In order to make the determination under the preceding paragraph, the court shall consider the financial conditions of the Stock Company at the time of the Requests for Approval of Transfer and all other circumstances.

(4) Notwithstanding the provisions of paragraph (1), if a petition under paragraph (2) is made within the period provided for in that paragraph, the amount determined by the court in response to such petition shall be the sale price of the Subject Shares under Article 140(1)(ii).

(5) Notwithstanding the provisions of paragraph (1), if no petition under paragraph (2) is made within the period provided for in that paragraph (except in cases where the discussions under paragraph (1) are successfully concluded within such period), the amount obtained by multiplying the amount of the net assets per share by the number of the Subject Shares under Article 140(1)(ii) shall be the sale price of the Subject Shares.

(6) In cases where a deposit is effected pursuant to the provisions of Article 141(2), if the sale price of the Subject Shares under Article 140(1)(ii) has been finalized, the Stock Company shall be deemed to have paid the sale price, in whole or in part, up to an amount equivalent to the value of the money so deposited.

(7) The provisions of the preceding paragraphs shall apply mutatis mutandis in cases where notice is given pursuant to the provisions of Article 142(1). In such cases, in paragraph (1), the term "Article 140(1)(ii)" shall be read as "Article 142(1)(ii)" and the term "Stock Company" shall be read as "Designated Purchaser"; in paragraph (2), the term "Stock Company" shall be read as "Designated Purchaser"; in paragraph (4) and paragraph (5), the term "Article 140(1)(ii)" shall be read as "Article 142(1)(ii)"; and in the preceding paragraph, the term "Article 141(2)" shall be read as "Article 142(2)," the term "Article 140(1)(ii)" shall be read as "item (ii), paragraph (1) of that article," and the term "Stock Company" shall be read as "Designated Purchaser." (Cases where Stock Company is Deemed to have Approved) Article 145 In the cases listed below, the Stock Company shall be deemed to have given the approval under Article 136 or Article 137(1); provided, however, that this shall not apply if otherwise provided for by the agreement between the Stock Company and the Requester for Approval of Transfer:

(i) In cases where the Stock Company has failed to give notice pursuant to the provisions of Article 139(2) within two weeks (or if any shorter period of time is provided for in the articles of incorporation, such shorter period of time) from the day of the request pursuant to the provisions of Article 136 or Article 137(1);

(ii) In cases where the Stock Company has failed to give notice pursuant to the provisions of Article 141(1) within forty days (or if any shorter period of time is provided for in the articles of incorporation, such shorter period of time) from the day of the notice pursuant to the provisions of Article 139(2) (except the cases where the Designated Purchaser gives notice pursuant to the provisions of Article 142(1) within ten days (or if any shorter period of time is provided in the articles of incorporation, such shorter period of time) from the day of the notice pursuant to the provisions of Article 139(2)).

(iii) In addition to the cases provided for in the preceding two items, the cases prescribed by the applicable Ordinance of the Ministry of Justice.

Subsection 3 Pledging Shares

(Pledge of Shares)

Article 146 (1) Shareholders may pledge the shares held by the same.

(2) Pledge of shares of a Company Issuing Share Certificate shall not become effective unless the share certificates for such shares are delivered.

(Perfection of Pledges of Shares)

Article 147 (1) Pledges of shares shall not be perfected against the Stock Company and other third parties unless the names and addresses of the pledgees are stated or recorded in the shareholder registry.

(2) Notwithstanding the provisions of the preceding paragraph, a pledgee of shares of a Company Issuing Share Certificate may not assert his/her pledge against the Stock Company and other third parties unless he/she is in continuous possession of the share certificates for such shares.

(3) The provisions of Article 364 of the Civil Code shall not apply to shares.

(Entries in Shareholder Registry)

Article 148 A person who pledges shares may request that the Stock Company state or record the following matters in the shareholder registry:

(i) The name and address of the pledgee;

(ii) The shares underlying the pledge.

(Delivery of Documents Stating Matters to be Stated in Shareholder Registry)

Article 149 (1) The pledgees for whom the matters listed in the items of the preceding article are stated or recorded in the shareholder registry (hereinafter referred to as "Registered Pledgees of Shares") may request that the Stock Company deliver documents stating the matters listed in the items of that article with respect to such Registered Pledgees of Shares that are stated or recorded in the shareholder registry, or provide the Electromagnetic Records that record such matters.

(2) The documents in the preceding paragraph shall be affixed with the signature, or name and seal, of the Representative Director of the Stock Company (the representative executive officer for a Company with Committees. The same shall apply hereinafter in this paragraph and in the following paragraph.).

(3) With respect to the Electromagnetic Records referred to in paragraph (1), the Representative Director of the Stock Company shall implement measures in lieu of the affixation of signature, or name and seal prescribed by the applicable Ordinance of the Ministry of Justice.

(4) The provisions of the preceding three paragraphs shall not apply to a Company Issuing Share Certificate.

(Notices to Registered Pledgees of Shares)

Article 150 (1) It shall be sufficient for a notice or demand to a Registered Pledgee of Shares to be sent by a Stock Company to the addresses of such Registered Pledgee of Shares stated or recorded in the shareholder registry (or, in cases where such Registered Pledgee of Shares notifies the Stock Company of any different place or contact address for the receipt of notices or demands, to such place or contact address).

(2) The notices or demands referred to in the preceding paragraph shall be deemed to have arrived at the time when such notice or demand should normally have arrived.

(Effect of Pledge of Shares)

Article 151 In cases where a Stock Company carries out any of the acts listed below, the pledge for shares shall be effective with respect to the Monies, etc. (meaning monies and other properties. The same shall apply hereinafter.) which the shareholders of such shares are entitled to receive as a result of such act:

(i) The acquisition of Shares with Put Option pursuant to the provisions Article 167(1);

(ii) The acquisition of Shares subject to Call pursuant to the provisions of paragraph (1) of Article 170(1);

(iii) The acquisition of Class Shares subject to Wholly Call provided for in Article 171(1) pursuant to the provisions of Article 173(1);

(iv) Consolidation of shares;

(v) Share Split;

(vi) Allotment of Shares without Contribution provided for in Article 185;

(vii) Allotment of Share Options without Contribution provided for in Article 277;

(viii) Dividends of surplus;

(ix) Distribution of residual assets;

(x) Entity Conversion;

(xi) Mergers (limited to cases where such Stock Company is to be extinguished as a result of the merger);

(xii) Share Exchange;

(xiii) Share Transfer; or

(xiv) Acquisition of shares (excluding the acts listed in item (i) to item (iii) inclusive).

Article 152 (1) In cases where a Stock Company (excluding a Company Issuing Share Certificate. The same shall apply hereinafter in this article.) carries out the acts listed in item (i) to item (iii) inclusive of the preceding article (limited to the cases where such Stock Company delivers the shares when carrying out such acts), or carries out the act listed in item (vi) of that article, if the pledgees of the pledges under that article are Registered Pledgees of Shares (excluding those for whom the matters listed in each item of Article 148 are stated or recorded in the shareholder registry because of a request pursuant to the provisions of Article 218(5). The same shall apply hereinafter in this Subsection.), the names and addresses of such pledgees shall be stated or recorded in the shareholder registry with respect to the shares under the preceding article that the shareholders are entitled to receive.

(2) In cases where the consolidation of shares has been effected, if the pledgees of the pledge under the preceding article are Registered Pledgees of Shares, the Stock Company shall state or record the names and addresses of such pledgees with respect to the shares that have been consolidated.

(3) In cases where the Share Split has been effected, if the pledgees of the pledge under the preceding article are Registered Pledgees of Shares, the Stock Company shall state or record the names and addresses of such pledgees with respect to the shares that have been split.

Article 153 (1) In the cases provided for in paragraph (1) of the preceding article, the Company Issuing Share Certificate shall deliver the share certificates representing the shares that the shareholders under Article 151 receive to the Registered Pledgees of Shares.

(2) In the cases provided for in paragraph (2) of the preceding article, the Company Issuing Share Certificate shall deliver the share certificates representing the shares that have been consolidated to the Registered Pledgees of Shares.

(3) In the cases provided for in paragraph (3) of the preceding article, the Company Issuing Share Certificate shall deliver the share certificates that will be newly issued with respect to the shares that have been split to the Registered Pledgees of Shares.

Article 154 (1) Registered Pledgees of Shares may receive Monies, etc. (limited to monies) under Article 151, and appropriate them as payment to satisfy their own claims in priority to other creditors.

(2) If the claims under the preceding paragraph have not yet become due and payable, the Registered Pledgees of Shares may have the Stock Company deposit an amount equivalent to the value of the Monies, etc. provided for in that paragraph. In such cases, the pledge shall be effective with respect to the monies so deposited.

Section 4 Acquisition of Own Shares by Stock Company

Subsection 1 General Provisions

Article 155 A Stock Company may acquire shares issued by such Stock Company only in the following cases:

(i) Where the grounds under Article 107(2)(iii)(a) have arisen;

(ii) Where a request has been made under Article 138(i)(c) or (ii)(c);

(iii) Where a resolution has been made under paragraph (1) of the following article;

(iv) Where a request has been made pursuant to the provisions of Article 166(1);

(v) Where a resolution has been made under Article 176(1);

(vi) Where the Stock Company has made a request under the provisions of Article 176(1);

(vii) Where a request has been made pursuant to the provisions of Article 192(1);

(viii) Where the Stock Company has prescribed the matters listed in each item of Article 197(3);

(ix) Where the Stock Company has prescribed the matters listed in each item of Article 234(4);

(x) Where the Stock Company accepts the assignment of the entire business of another Company (including Foreign Companies) in cases where such Stock Company accepts the assignment of own shares held by such other Company;

(xi) Where the Stock Company succeeds to own shares held by a Company that is to be extinguished after merger;

(xii) Where the Stock Company succeeds to own shares held by a Company that is effecting an Absorption-type Company Split; or

(xiii) In addition to the cases listed in the preceding items, in any case prescribed by the applicable Ordinance of the Ministry of Justice.

Subsection 2 Acquisition by Agreement with Shareholders

Division 1 General Provisions

(Determination of Matters regarding Acquisition of Shares)

Article 156 (1) A Stock Company shall prescribe the following matters by resolution of a shareholders meeting in advance in order to acquire for value own shares by agreement with its shareholders; provided, however, that the period under item (iii) cannot exceed one year:

(i) The number of shares to be acquired (or, for a Company with Class Shares, the classes of the shares and the number of shares for each class); and

(ii) The description and total amount of the Monies, etc. (excluding the shares, etc. of such Stock Company. The same shall apply hereinafter in this Subsection.) that will be delivered in exchange for the acquisition of the shares; and

(iii) The period during which the shares can be acquired.

(2) The provisions of the preceding paragraph shall not apply to the cases listed in item (i) and item (ii), and in item (iv) to item (xiii) inclusive of the preceding article.

(Determination of Acquisition Price)

Article 157 (1) Whenever a Stock Company intends to acquire its shares in accordance with a determination pursuant to the provisions of paragraph (1) of the preceding article, it shall prescribe the following matters:

(i) The number of shares to be acquired (or, for a Company with Class Shares, the class of the shares and the number of the shares);

(ii) The description, and the number or amount, or the method for the calculation thereof, of the Monies, etc. that will be delivered in exchange for the acquisition of one share;

(iii) The total amount of Monies, etc. that will be delivered in exchange for the acquisition of the shares; and

(iv) The date on which the offer to transfer the shares will be made.

(2) A Company with Board of Directors shall determine the matters listed in each item of the preceding paragraph by resolution of the board of directors.

(3) The conditions prescribed for the acquisition of shares under paragraph (1) shall be uniform for each determination made under the provisions of that paragraph.

(Notice to Shareholders)

Article 158 (1) A Stock Company shall notify its shareholders (or, for a Company with Class Shares, the Class Shareholders of the classes of the shares it intends to acquire) of the matters listed in each item of paragraph (1) of the preceding article.

(2) A Public Company may substitute a public notice for the notice under the provisions of the preceding paragraph. (Offers to transfer)

Article 159 (1) If a shareholder who receives a notice pursuant to the provisions of paragraph (1) of the preceding article intends to make an offer to transfer the shares he/she holds, he/she shall disclose to the Stock Company the number of shares (or, for a Company with Class Shares, the classes of the shares and the number of the shares for each class) relating to such offer.

(2) A Stock Company shall be deemed to have accepted, on the date provided for in Article 157(1)(iv), the transfer of shares that the shareholders under the preceding paragraph offered; provided, however, that if the total number of shares that the shareholders under that paragraph offered (hereinafter in this paragraph referred to as "Total Number of Shares Offered") exceed the number provided for in item (i), paragraph (1) of that article (hereinafter in this paragraph referred to as "Total Number of Shares to be Acquired"), it shall be deemed that the Stock Company has accepted the transfer of the shares in the number obtained by first dividing the Total Number of Shares to be Acquired by the Total Number of Shares Offered, and then multiplying such product by the number of the shares offered by the shareholders under the preceding paragraph (in cases where the number so obtained includes a fraction of less than one, such fraction shall be rounded off).

Division 2 Acquisition from Specific Shareholders

(Acquisition from Specific Shareholders)

Article 160 (1) In conjunction with the determination of the matters listed in each item of Article 156(1), a Stock Company may, by resolution of a shareholders meeting under that paragraph, make a determination to the effect that notice under the provisions of Article 158(1) shall be given to specific shareholders.

(2) If a Stock Company intends to make a determination under the provisions of the preceding paragraph, it shall give notice to the shareholders (or, for a Company with Class Shares, the Class Shareholders of the classes of the shares to be acquired), by the time prescribed by the applicable Ordinance of the Ministry of Justice, to the effect that the shareholders may make the requests under the provisions of the following paragraph.

(3) The shareholders under the preceding paragraph may, by the time prescribed by the applicable Ordinance of the Ministry of Justice, request that they be added to the specific shareholders provided for in paragraph (1) for the proposal for the shareholders meeting under that paragraph.

(4) The specific shareholders under paragraph (1) may not exercise voting right at the shareholders meeting provided for in Article 156(1); provided, however, that this shall not apply in cases where all shareholders other than the specific shareholders under paragraph (1) may not exercise the voting right at such shareholders meeting.

(5) In cases where specific shareholders are prescribed under paragraph (1), for the purpose of the application of the provisions of Article 158(1), "shareholders (or, for a Company with Class Shares, the Class Shareholder of the classes of the shares it intends to acquire)" in such paragraph shall be read as "specific shareholders under Article 160(1)."

(Special Provision on Acquisition of Shares with Market Price)

Article 161 The provisions of paragraph (2) and paragraph (3) of the preceding article shall not apply if, in cases where the shares to be acquired are shares with a market price, the amount of the Monies, etc. to be delivered in exchange for the acquisition of one such share does not exceed the amount of the market price of one such share calculated by the method prescribed by the applicable Ordinance of the Ministry of Justice.

(Special Provision on Acquisition from Heirs)

Article 162 The provisions of Article 160(2) and (3) shall not apply in cases where a Stock Company acquires, from general successors of the shareholders, including their heirs, the shares of such Stock Company that the same acquired by general succession including inheritance; provided, however, that this shall not apply if it falls under any of the following:

(i) The Stock Company is a Public Company; or

(ii) Such general successors, including heirs exercised the voting right on such shares at a shareholders meeting or Class Meeting.

(Acquisition of Shares from Subsidiaries)

Article 163 In cases where a Stock Company acquires shares in such Stock Company that are held by its Subsidiary, for the purpose of the application of the provisions of Article 156(1), "shareholders meeting" in such paragraph shall be read as "shareholders meeting (or board of directors meeting for a Company with Board of Directors)." In such cases, the provisions of Article 157 to Article 160 inclusive shall not apply.

(Provisions of Articles of Incorporation regarding Acquisition from Specific Shareholders)

Article 164 (1) If a Stock Company intends to make a determination under the provisions of Article 160(1) with respect to the acquisition of shares (or, for a Company with Class Shares, shares of a certain class. The same shall apply in the following paragraph.), it may provide in the articles of incorporation to the effect that the provisions of paragraph (2) and paragraph (3) of that article shall not apply.

(2) If, after the shares are issued, it is intended to create a provision in the articles of incorporation under the provisions of the preceding paragraph with respect to such shares by amending the articles of incorporation, or to effect any amendment (excluding that which abolishes the provisions of the articles of incorporation under that paragraph) in the articles of incorporation with respect to such provisions, the consent of all shareholders who hold such shares shall be obtained.

Division 3 Acquisition of Shares by Market Transactions

Article 165 (1) The provisions of Article 157 to Article 160 inclusive shall not apply in cases where a Stock Company acquires shares in such Stock Company through transactions undertaken by that Stock Company in the market or through a takeover bid provided for in Article 27-2(6) of the Financial Instruments and Exchange Act (hereinafter in this article referred to as "Market Transactions").

(2) A Company with Board of Directors may provide in its articles of incorporation to the effect that the acquisition of own shares by Market Transactions may be prescribed by resolution of a board of directors meeting.

(3) In cases where the provision of the articles of incorporation under the provisions of the preceding paragraph is created, for the purpose of the application of the provisions of Article 156(1), "shareholders meeting" in such paragraph shall be read as "shareholders meeting (or shareholders meeting or board of director's meeting in the cases provided for in Article 165(1))."

Subsection 3 Acquisition of Shares with Put Option and Shares subject to Call

Division 1 Demand for Acquisition of Shares with Put Option

(Demand for Acquisition)

Article 166 (1) Shareholders of Shares with Put Option may demand that the Stock Company acquire the Shares with Put Option held by such shareholders; provided, however, that this shall not apply if, in cases where the properties provided for in item (ii)(b) to item (ii)(e) inclusive of Article 107(2) is delivered in exchange for the acquisition of such Shares with Put Option, the book value of such properties exceeds the Distributable Amount under Article 461(2) on the day when such demand is made.

(2) The demand pursuant to the provisions of the preceding paragraph shall be submitted by disclosing the number of Shares with Put Option relating to such demand (or, for a Company with Class Shares, the classes of the Shares with Put Option and the number of shares for each class).

(3) If shareholders of a Company Issuing Share Certificate intend to submit demand pursuant to the provisions of paragraph (1) with respect to the Shares with Put Option held by the same, they shall submit the share certificates representing such Shares with Put Option to the Company Issuing Share Certificate; provided, however, that this shall not apply in cases where no share certificate representing such Shares with Put Option is issued.

(Effectuation)

Article 167 (1) A Stock Company shall acquire the Shares with Put Option relating to a demand pursuant to the provisions of paragraph (1) of the preceding article on the day of such demand.

(2) In the cases listed in the following items, a shareholders who submits a demand pursuant to the provisions of paragraph (1) of the preceding article shall become a shareholder provided for in each of such items in accordance with the provisions with respect to the matters provided for in Article 107(2)(ii) (or, for a Company with Class Shares, Article 108(2)(v)) on the day of the demand:

(i) In cases where there is a provision on the matters listed in Article 107(2)(ii)(b): Bondholders of the Bonds under that item (ii)(b);

(ii) In cases where there is a provision on the matters listed in Article 107(2)(ii)(c): Holders of Share Options under that item (ii)(c);

(iii) In cases where there is a provision on the matters listed in Article 107(2)(ii)(d): Bondholders of the Bonds with respect to Bonds with Share Option under that item (ii)(d), and holders of Share Options attached to such Bonds with Share Option;

(iv) In cases where there is a provision on the matters listed in Article 108(2)(v)(b): Shareholders of "other shares" under that item (v)(b);

(3) In the cases provided for in item (iv) of the preceding paragraph, if the number of the "other shares" provided for in such item includes a fraction of less than one share, it shall be rounded off. In such cases, unless otherwise provided in the articles of incorporation, the Stock Company shall, in accordance with the categories of the cases listed in the following items, deliver to the shareholders who submitted demands pursuant to the provisions of paragraph (1) of the preceding article the monies in the amount equivalent to the amount obtained by multiplying the amount provided for in each of such items by such fraction:

(i) In cases where such shares are shares with a market price: The amount calculated by the method prescribed by the applicable Ordinance of the Ministry of Justice as the amount of the market price of one such share;

(ii) In cases other than the cases listed in the preceding item: The amount of net assets per share.

(4) The provisions of the preceding paragraph shall apply mutatis mutandis to cases where there is a fraction with respect to the Bonds and Share Options of such Stock Company. In such cases, the term "amount of net assets per share" in item (ii) of that paragraph shall be read as "the amount prescribed by the applicable Ordinance of the Ministry of Justice."

Division 2 Acquisitions of Shares subject to Call

(Determination of Day of Acquisition)

Article 168 (1) In cases where there is a provision with respect to the matters listed in Article 107(2)(iii)(b), the Stock Company shall prescribe the day under that item (iii)(b) by resolution of a shareholders meeting (or of a board of director's meeting for a Company with Board of Directors); provided, however, that this shall not apply in cases where it is otherwise provided for in the articles of incorporation.

(2) If a Stock Company prescribes the day under Article 107(2)(iii)(b), the Stock Company shall notify the shareholders of the Shares subject to Call (or, in cases where there is a provision with respect to the matters listed in item (iii)(c) of that paragraph, the shareholders of Shares subject to Call who are determined under the provisions of paragraph (1) of the following article) and the Registered Pledgees of Shares thereof of such date no later than two weeks prior to such day.

(3) A public notice may be substituted for the notice under the provisions of the preceding paragraph.

(Determination of Shares to be Acquired)

Article 169 (1) In cases where there is a provision with respect to the matters listed in Article 107(2)(iii)(c), if a Stock Company intends to acquire Shares subject to Call, it shall determine the Shares subject to Call that it intends to acquire.

(2) The Shares subject to Call under the preceding paragraph shall be determined by resolution of a shareholders meeting (or of a board of directors meeting for a Company with Board of Directors); provided, however, that this shall not apply in cases where it is otherwise provided for in the articles of incorporation.

(3) If a Stock Company makes the determination pursuant to the provisions of paragraph (1), the Stock Company shall immediately notify the shareholders of the Shares subject to Call who are identified pursuant to the provisions of that paragraph and the Registered Pledgees of Shares thereof to the effect that the Stock Company will acquire such Shares subject to Call.

(4) A public notice may be substituted for the notice pursuant to the provisions of the preceding paragraph.

(Effectuation)

Article 170 (1) A Stock Company shall acquire, on the day when the grounds under Article 107(2)(iii)(a) have arisen (or, in cases where there is a provision with respect to the matters listed in item (iii)(c) thereof, on the day listed in item (i) or the day listed in item (ii) below, whichever comes later. The same shall apply in the following paragraph and paragraph (5).), the Shares subject to Call (or, in cases where there is a provision with respect to the matters listed in item (iii)(c), paragraph (2) of that article, those determined pursuant to the provisions of paragraph (1) of the preceding article. The same shall apply in the following paragraph.):

(i) The day when grounds under Article 107(2)(iii)(a) have arisen; or

(ii) The day of notice pursuant to the provisions of paragraph (3) of the preceding article, or the day when two weeks have lapsed from the day of the public notice under paragraph (4) of that article.

(2) In the cases listed in the following items, the shareholders of the Shares subject to Call (excluding the relevant Stock Company) shall become the status provided for in each of such items in accordance with the provisions with respect to the matters provided for in such item (or, for a Company with Class Shares, Article 108(2)(vi)) on the day when the grounds under Article 107(2)(iii)(a) have arisen:

(i) In cases where there is a provision on the matters listed in Article 107(2)(iii)(d): Bondholders of the Bonds under that item (iii)(d);

(ii) In cases where there is a provision on the matters listed in Article 107(2)(iii)(e): Holders of Share Options under that item (iii)(e);

(iii) In cases where there is a provision on the matters listed in Article 107(2)(iii)(f): Bondholders of the Bonds with respect to Bonds with Share Option under that item (ii)(d), and holders of Share Options attached to such Bonds with Share Option;

(iv) In cases where there is a provision on the matters listed in Article 108(2)(vi)(b): Shareholders of "other shares" under that item (vi)(b);

(3) A Stock Company shall notify the shareholders of Shares subject to Call and Registered Pledgees of Shares thereof without delay after grounds have arisen under Article 107(2)(iii)(a) (in cases where there is a provision with respect to the matters listed in that item (iii)(c), the shareholders of Shares subject to Call determined pursuant to the provisions of paragraph (1) of the preceding article, and Registered Pledgees of Shares thereof) to the effect that such grounds have arisen; provided, however, that this shall not apply if the Stock Company has given notice under the provisions of Article 168(2) or has given public notice under the provisions of paragraph (3) of that article.

(4) A public notice may be substituted for the notice under the provisions of the preceding paragraph.

(5) The provisions of the preceding paragraphs shall not apply if, in cases where the properties provided for in item (iii)(d) to item (iii)(g) inclusive of Article 107(2) is delivered in exchange for the acquisition of the Shares subject to Call, the book value of such properties exceeds the Distributable Amount under Article 461(2) on the day when the grounds under Article 107(2)(iii)(a) arose.

Subsection 4 Acquisition of Class Shares subject to Wholly Call

(Determinations regarding Acquisition of Class Shares subject to Wholly Call)

Article 171 (1) A Company with Class Shares which has issued Class Shares subject to Wholly Call (meaning the Class Shares that have provisions with respect to the matters listed in Article 108(1)(vii) hereof. The same shall apply in this Subsection.) may acquire all of the Class Shares subject to Wholly Call by resolution of a shareholders meeting. In such cases, the following matters shall be prescribed by resolution of such shareholders meeting:

(i) If Monies, etc. will be delivered in exchange for the acquisition of the Class Shares subject to Wholly Call, the following matters with respect to such Monies, etc. (hereinafter in this article referred to as "Consideration for Acquisition"):

(a) If such Consideration for Acquisition consists of the shares in the Stock Company, the classes of such shares and the number of shares for each class, or the method for calculating such numbers;

(b) If such Consideration for Acquisition consists of the Bonds of the Stock Company (excluding those with respect to the Bonds with Share Option), the classes of such Bonds and the total amount of Bonds for each class, or the method for calculating such total amounts;

(c) If such Consideration for Acquisition consists of the Share Options of the Stock Company (excluding those attached to Bonds with Share Option), the features and number of such Share Options, or the method for calculating such number;

(d) If such Consideration for Acquisition consists of the Bonds with Share Option of the Stock Company, the matters prescribed in (b) above with respect to such Bonds with Share Option, and the matters prescribed in (c) above with respect to the Share Options attached to such Bonds with Share Option; and

(e) If such Consideration for Acquisition consists of properties other than the shares, etc. of the Stock Company, the description and number or value of such properties, or the method for calculating such number or value.

(ii) In the cases provided for in the preceding item, the matters regarding the allotment of the Consideration for Acquisition to the shareholders of the Class Shares subject to Wholly Call.

(iii) The day on which the Stock Company will acquire the Class Shares subject to Wholly Call (hereinafter in this Subsection referred to as "Acquisition Day").

(2) The provisions regarding the matters listed in item (ii) of the preceding paragraph shall stipulate that the Consideration for Acquisition will be allotted in proportion to the number of the Class Shares subject to Wholly Call held by the shareholders (excluding the relevant Stock Company).

(3) The directors, at the shareholders meeting under paragraph (1) above, shall explain the reasons for the need to acquire all of the Class Shares subject to Wholly Call.

(Petition to Court for Determination of Price)

Article 172 (1) In cases where the matters listed in each item of paragraph (1) of the preceding article are prescribed, the following shareholders may file a petition to the court, within twenty days from the day of the shareholders meeting under that paragraph, for a determination of the price of the Class Shares subject to Wholly Call for the acquisition by the Stock Company.

(i) Shareholders who give notice to such Stock Company to the effect that they dissent from the acquisition by the Stock Company of the Class Shares subject to Wholly Call act prior to such shareholders meeting and do dissent from such acquisition at such shareholders meeting (limited to those who can exercise voting right at such shareholders meeting);

(ii) Shareholders who cannot exercise voting right at such shareholders meeting.

(2) The Stock Company shall also pay the interest on the price determined by the court which shall be calculated at the rate of 6% per annum from and including the Acquisition Day.

(Effectuation)

Article 173 (1) A Stock Company shall acquire Class Shares subject to Wholly Call on the Acquisition Day.

(2) In the cases listed in the following items, shareholders of the Class Shares subject to Wholly Call other than the Stock Company shall become the person provided for in each of such items in accordance with provisions made by resolution of the shareholders meeting under Article 171(1) on the Acquisition Day:

(i) In cases where there is a provision on the matters listed in Article 171(1)(i)(a): Shareholders of shares under that item (i)(a);

(ii) In cases where there is a provision on the matters listed in Article 171(1)(i)(b): Bondholders of Bonds under that item (i)(b);

(iii) In cases where there is a provision on the matters listed in Article 171(1)(i)(c): Holders of Share Options under that item (i)(c);

(iv) In cases where there is a provision on the matters listed in Article 171(1)(i)(d): Bondholders of the Bonds with respect to Bonds with Share Option under that item (i)(d), and holders of Share Options attached to such

Bonds with Share Option;

Subsection 5 Demand for Sale to Heirs

(Provisions of Articles of Incorporation regarding Demand for Sale to Heirs)

Article 174 A Stock Company may provide in the articles of incorporation to the effect that it may demand that a person who has acquired shares (limited to Shares with Restriction on Transfer) in such Stock Company by general succession, including inheritance, sell such shares to such Stock Company.

(Determinations regarding Demand for Sale)

Article 175 (1) In cases where there is a provision of the articles of incorporation under the provisions of the preceding article, whenever a Stock Company intends to effect a demand pursuant to the provisions of paragraph (1) of the following article, it shall prescribe the following matters by resolution of a shareholders meeting:

(i) The number of shares for which the Stock Company intends to effect the demand pursuant to the provisions of paragraph (1) of the following article (or, for a Company with Class Shares, the classes of the shares and the number of shares for each class); and

(ii) The names of the persons who hold the shares under the preceding item.

(2) The persons under item (ii) of the preceding paragraph may not exercise voting right at the shareholders meeting under that paragraph; provided, however, that this shall not apply in cases where all shareholders other than the persons under that paragraph may not exercise the voting right at such shareholders meeting.

(Demand for Sale)

Article 176 (1) If a Stock Company determines the matters listed in each item of paragraph (1) of the preceding article, it may demand that the persons under item (ii) of that paragraph sell the shares under item (i) of that paragraph to such Stock Company; provided, however, that this shall not apply when one year has lapsed from the day when such Stock Company acquires knowledge of the general succession, including inheritances.

(2) Demands pursuant to the provisions of paragraph (1) shall be made by disclosing the number of shares relating to such demand (or, for a Company with Class Shares, the classes of the shares and the number of shares for each class).

(3) A Stock Company may withdraw a demand under the provisions of paragraph (1) at any time.

(Determination of Sale Price)

Article 177 (1) In cases where notice is given under the provisions of paragraph (1) of the preceding article, the sale price of the shares under Article 175(1)(i) shall be prescribed through discussion between the Stock Company and the persons under item (ii) of that paragraph.

(2) The Stock Company or persons under Article 175(1)(ii) may file a petition to the court for a determination of the sale price within twenty days from the day when a demand is made under the provisions of paragraph (1) of the preceding article.

(3) In order to make the determination under the preceding paragraph, the court shall consider the financial conditions of the Stock Company at the time of the demand pursuant to the provisions of paragraph (1) of the preceding article and all other circumstances.

(4) Notwithstanding the provisions of paragraph (1), if a petition is made under paragraph (2) within the period provided for in that paragraph, the amount determined by the court in response to such petition shall be the sale price of the shares under Article 175(1)(i).

(5) If no petition is made under paragraph (2) within the period provided for in that paragraph (except in cases where the discussions under paragraph (1) are successfully concluded within such period), a demand under the provisions of paragraph (1) of the preceding article shall become ineffective.

Subsection 6 Cancellation of Shares

Article 178 (1) A Stock Company may cancel its Treasury Shares. In such cases, the Stock Company shall determine the number of the Treasury Shares it intends to cancel (or, for a Company with Class Shares, the classes of the shares and the number of Treasury Shares for each class).

(2) For a Company with Board of Directors, the determination under the provisions of the second sentence of the preceding paragraph shall be made by resolution of a board of directors meeting.

Article 179 Deleted

Section 5 Consolidation of Shares

Subsection 1 Consolidation of Shares

(Consolidation of Shares)

Article 180 (1) A Stock Company may consolidate its shares.

(2) Whenever a Stock Company intends to consolidate its shares, it shall determine the following matters by resolution of a shareholders meeting:

(i) The ratio of the consolidation;

(ii) The day when the consolidation of shares will become effective;

(iii) In cases where the Stock Company is a Company with Class Shares, the classes of the shares it will consolidate.

(3) The directors shall, at the shareholders meeting under the preceding paragraph, explain the reasons for the need to consolidate the shares.

(Notices to Shareholders)

Article 181 (1) No later than two weeks prior to the day under item (ii), paragraph (2) of the preceding article, the Stock Company shall notify the shareholders (or, for a Company with Class Shares, referring to the Class Shareholders of the classes of shares under item (iii) of that paragraph. The same shall apply in the following article.) and the Registered Pledgees of the Shares thereof of the matters listed in each item of that paragraph.

(2) A public notice may be substituted for the notice under the provisions of the preceding paragraph.

(Effectuation)

Article 182 On the day provided for in Article 180(2)(ii), the shareholders shall become shareholders of shares in the number obtained by multiplying the number of shares (or, for a Company with Class Shares, shares of the classes provided for in item (iii) of that paragraph. The same shall apply hereinafter in this Article.) they held on the day immediately preceding that day, by the ratio provided for in item (i) of that paragraph.

Subsection 2 Share Split

(Share Split)

Article 183 (1) A Stock Company may split its shares.

(2) Whenever a Stock Company intends to split its shares, it shall prescribe the following matters by resolution of a shareholders meeting (or of a board of directors meeting for a Company with Board of Directors):

(i) The ratio of the total number of shares after the increase as a result of the Share Split to the total number of Issued Shares (or, for a Company with Class Shares, Issued Shares of the classes under item (iii)) immediately before the Share Split, and the Record Date relating to such Share Split;

(ii) The day when the Share Split will become effective;

(iii) In cases where the Stock Company is a Company with Class Shares, the classes of the shares it splits.

(Effectuation)

Article 184 (1) Shareholders stated or recorded in the shareholder registry on the Record Date (or, for a Company with Class Shares, Class Shareholders of the classes provided for in item (iii), paragraph (2) of the preceding article who are stated or recorded in the shareholder registry on the Record Date) shall acquire, on the day provided for in item (ii) of that paragraph, shares in the number obtained by multiplying the number of shares (or, for a Company with Class Shares, shares of the classes provided for in item (iii) of that paragraph. The same shall apply hereinafter in this paragraph.) they hold on the Record Date, by the ratio provided for in item (i), paragraph (2) of that article.

(2) Notwithstanding the provisions of Article 466, a Stock Company (excluding a Stock Company that in fact issues two or more classes of shares) may, without a resolution of a shareholders meeting, effect a amendment to the articles of incorporation that is intended to increase the Total Number of Authorized Shares on the day provided for in item (ii), paragraph (2) of the preceding article to the extent of the number obtained by multiplying the Total Number of Authorized Shares as of the day immediately preceding such day, by the ratio provided for in item (i) of that paragraph.

Subsection 3 Allotment of Shares without Contribution

(Allotment of Shares without Contribution)

Article 185 A Stock Company may allot the shares of such Stock Company to shareholders (or, for a Company with Class Shares, shareholders of certain classes) without requiring them to make additional contribution (hereinafter in this Subsection referred to as "Allotment of Shares without Contribution").

(Determination of Matters concerning Allotment of Shares without Contribution)

Article 186 (1) Whenever a Stock Company intends to effect the Allotment of Shares without Contribution, it shall prescribe the following matters:

(i) The number of shares the Stock Company will allot to shareholders (or, for a Company with Class Shares, the classes of shares and the number of shares for each class), or the method for calculating such number;

(ii) The day when such Allotment of Shares without Contribution becomes effective; and

(iii) In cases where the Stock Company is a Company with Class Shares, the classes of shares held by the shareholders entitled to such Allotment of Shares without Contribution.

(2) The provisions regarding the matters listed in item (i) of the preceding paragraph shall stipulate that the shares under item (i) of that paragraph will be allotted in proportion to the number of shares (or, for a Company with Class Shares, shares of the classes under item (iii) of that paragraph) held by shareholders (or, for a Company with Class Shares, Class Shareholders of shares of the classes under item (iii) of that paragraph) other than such Stock Company.

(3) The determination of the matters listed in each item of paragraph (1) shall be made by resolution of a shareholders meeting (or of a board of directors meeting for a Company with Board of Directors); provided, however, that this shall not apply in cases where it is otherwise provided in the articles of incorporation.

(Effectuation of Allotment of Shares without Contribution)

Article 187 (1) Shareholders to whom the shares under item (i), paragraph (1) of the preceding article have been allotted shall become shareholders of the shares provided for in item (i) of that paragraph on the day provided for in item (ii) of that paragraph.

(2) Without delay after the day provided for in item (ii) of that paragraph, a Stock Company shall notify shareholders (or, for a Company with Class Shares, Class Shareholders of the classes under item (iii) of that paragraph) and the Registered Pledgees of the Shares thereof of the number of the shares (or, for a Company with Class Shares, the classes of the shares and the number of shares for each class) that have been allotted to such shareholders.

Section 6 Share Units

Subsection 1 General Provisions

(Share Unit)

Article 188 (1) A Stock Company may provide in the articles of incorporation, with respect to the shares it issues, to the effect that a fixed number of shares shall constitute one unit of shares, which entitles a shareholder to cast one vote at a shareholders meeting or Class Meeting.

(2) The fixed number in the preceding paragraph may not exceed the number prescribed by the applicable Ordinance of the Ministry of Justice.

(3) A Company with Class Shares shall provide for the Share Unit for each class of its shares.

(Restriction on Rights in relation to Shareholdings less than One Unit)

Article 189 (1) Shareholders who hold shares in a number less than one Share Unit (hereinafter referred to respectively as "Holder of Shares Less than One Unit" and "Shares Less than One Unit") may not exercise voting right at a shareholders meeting or Class Meeting with respect to their Shares Less than One Unit.

(2) A Stock Company may provide in the articles of incorporation to the effect that Holders of Shares Less than One Unit may not exercise some or all rights, other than the following rights, with respect to the relevant Shares Less than One Unit:

(i) The right to take delivery of the Consideration for Acquisition provided for in Article 171(1)(i);

(ii) The right to take delivery of Monies, etc. in exchange for the acquisition by the Stock Company of Shares subject to Call;

(iii) The right to receive the Allotment of Shares without Contribution provided for in Article 185;

(iv) The right to demand the purchase of the Shares Less than One Unit pursuant to the provisions of Article 192(1);

(v) The right to receive the distribution of residual assets;

(vi) In addition to the matters listed in the preceding items, any matters prescribed by the applicable Ordinance of the Ministry of Justice.

(3) A Company Issuing Share Certificate may provide in the articles of incorporation to the effect that it may elect to not issue share certificates representing Shares Less than One Unit.

(Disclosure of Reasons)

Article 190 In cases where the Share Unit is to be prescribed, the directors shall explain the reasons for the need to prescribe such Share Unit at the shareholders meeting at which it is intended to amend the articles of incorporation to prescribe such Share Unit.

(Special Provisions on Procedures)

Article 191 Notwithstanding the provisions of Article 466, a Stock Company may effect a amendment to the articles of incorporation that will increase the size of the Share Unit (or, for a Company with Class Shares, the size of the Share Unit for the shares of each class. The same shall apply hereinafter in this article.) or create a provision in the articles of incorporation with respect to the Share Unit without a resolution of a shareholders meeting, in cases that fall under both of the following items:

(i) That the amendment will increase the size of the Share Unit simultaneously with a Share Split, or create a provision in the articles of incorporation with respect to the Share Unit; and

(ii) That the number provided for in (a) below is not less than the number provided for in (b) below:

(a) The number obtained by dividing the number of the shares held by each shareholder after such amendment to the articles of incorporation by the Share Unit;

(b) The number of the shares held by each shareholder before such amendment to the articles of incorporation (or, in cases where the Share Unit is prescribed, the number obtained by dividing the number of such shares by the Share Unit).

Subsection 2 Demand for Purchase from Holder of Shares Less than One Unit

(Demand for Purchase of Holder of Shares Less than One Unit)

Article 192 (1) Holders of Shares Less than One Unit may demand that the Stock Company purchase their Shares Less than One Unit.

**(2) A demand under the provisions of the preceding paragraph shall be made by disclosing the number of the Shares Less than One Unit relating to that demand (or, for a Company with Class Shares, the classes of the Shares Less than One Unit and the number of shares for each class).

(3) A Holder of Shares Less than One Unit who makes a demand pursuant to the provisions of paragraph (1) may withdraw such demand only if the approval of the Stock Company is obtained.

(Determination of Price of Shares Less than One Unit)

Article 193 (1) In cases where the demand pursuant to the provisions of paragraph (1) of the preceding article is made, the amount provided for in each of the following items in accordance with the categories of the cases listed in such items, shall be the price of the Shares Less than One Unit relating to such demand:

(i) In cases where the Shares Less than One Unit are shares with a market price, the amount calculated by the method prescribed by the applicable Ordinance of the Ministry of Justice as the market price of such Shares Less than One Unit;

(ii) In cases other than the cases listed in the preceding item, the amount prescribed through discussions between the Stock Company and the Holder of Shares Less than One Unit who made the demand under the provisions of paragraph (1) of the preceding article.

(2) In the cases listed in item (ii) of the preceding paragraph, the Holder of Shares Less than One Unit who made the demand pursuant to the provisions of paragraph (1) of the preceding article, or the Stock Company, may file a petition to the court for a determination of the sale price within twenty days from the day when such demand is made.

(3) In order to make the determination under the preceding paragraph, the court shall consider the financial condition of the Stock Company at the time of the demand pursuant to the provisions of paragraph (1) of the preceding article and all other circumstances.

(4) Notwithstanding the provisions of paragraph (1), if petition is filed under paragraph (2) within the period provided for in that paragraph, the amount determined by the court in response to such petition shall be the price of such Shares Less than One Unit.

(5) Notwithstanding the provisions of paragraph (1), in the cases listed in item (ii) of that paragraph, if no petition is filed under paragraph (2) within the period provided for in that paragraph (except in cases where the discussions under item (ii) of paragraph (1) are successfully concluded within such period), the sale price of the Shares Less than One Unit shall be the amount obtained by multiplying the amount of the net assets per share by the number of the Shares Less than One Unit related to the demand pursuant to the provisions of paragraph (1) of the preceding article.

(6) The purchase of the shares related to the demand pursuant to the provisions of paragraph (1) of the preceding article shall become effective as at payment for such shares.

(7) If a Company Issuing Share Certificate is subject to a demand pursuant to the provisions of paragraph (1) of the preceding article with respect to shares for which share certificates have been issued, it shall pay the price of the shares related to such demand in exchange for the share certificates.

Subsection 3 Demand for Sale to Holder of Shares Less than One Unit

Article 194 (1) A Stock Company may provide in the articles of incorporation to the effect that a Holder of Shares Less than One Unit may submit to such Stock Company a Demand for the Sale of Shares Less than One Unit (referring to a demand that the Stock Company sell to a Holder of Shares Less than One Unit such number of shares which, together with the number of Shares Less than One Unit held by such Holder of Shares Less than One Unit, will constitute one Share Unit. The same shall apply hereinafter in this article.).

(2) Demand for the Sale of Shares Less than One Unit shall be made by disclosing the number of the Shares Less than One Unit to be sold to such Holder of Shares Less than One Unit (or, for a Company with Class Shares, the classes of the Shares Less than One Unit and the number of shares for each class).

(3) A Stock Company that is subject to a Demand for the Sale of Shares Less than One Unit shall sell its Treasury Shares to such Holders of Shares Less than One Unit, unless the Stock Company does not hold, at the time of reception of such Demand for the Sale of Shares Less than One Unit, Treasury Shares in a number corresponding to the number of the Shares Less than One Unit provided for in the preceding paragraph.

(4) The provisions of Article 192(3), and paragraph (1) to paragraph (6) inclusive of the preceding article shall apply mutatis mutandis to Demand for the Sale of Shares Less than One Unit.

Subsection 4 Changes in Share Unit

Article 195 (1) Notwithstanding the provisions of Article 466, a Stock Company may decrease the size of the Share Unit or abolish the provision of the articles of incorporation with respect to the Share Unit by effecting a amendment to the articles of incorporation by decision of the directors (or resolution of a board of directors meeting for a Company with Board of Directors).

(2) In cases where a amendment is made in the articles of incorporation pursuant to the provisions of the preceding paragraph, the Stock Company shall, without delay after the day of the effectuation of such amendment to the articles of incorporation, notify its shareholders (or, for a Company with Class Shares, its Class Shareholders of the classes for which the Share Unit has been changed pursuant to the provisions of that paragraph) to the effect that such amendment to the articles of incorporation has been made.

(3) A public notice may be substituted for the notice under the provisions of the preceding paragraph.

Section 7 Omission to Notices to Shareholders

(Omission of Notices to Shareholders)

Article 196 (1) In cases where notices or demands from a Stock Company do not reach a shareholder for five consecutive years or more, the Stock Company shall no longer be required to give notices or issue demands to such shareholder.

(2) In the cases provided for in the preceding paragraph, the domicile of the Stock Company shall be the place where the obligation of the Stock Company with regard to the shareholder under that paragraph is performed.

(3) The provisions of the preceding two paragraphs shall apply mutatis mutandis to Registered Pledgees of Shares.

(Auction of Shares)

Article 197 (1) A Stock Company may sell shares that fall under both of the following items by auction and tender the proceeds thereof to the shareholders of such shares:

(i) That there is no requirement to give notice or issue a demand to the shareholder of such shares pursuant to the provisions of paragraph (1) of the preceding article, or Article 294(2); and

(ii) That the shareholders of such shares have not received dividends of surplus for consecutive five years.

(2) In lieu of sale by auction under the provisions of the preceding paragraph, a Stock Company may sell shares under that paragraph with a market price in an amount calculated by the method prescribed by the applicable Ordinance of the Ministry of Justice as the market price thereof, and shares under that paragraph without a market price using a method other than auction with the permission of the court. In such cases, if there are two or more directors, the petition for such permission shall be filed with the consent of all directors.

(3) The Stock Company may purchase some or all of the shares sold under the provisions of the preceding paragraph. In such cases, the Stock Company shall prescribe the following matters:

(i) The number of shares to be purchased (or, for a Company with Class Shares, the classes of shares and the number of shares for each class);

(ii) The total amount of the monies to be delivered in exchange for the purchase of the shares in the preceding item.

(4) A Company with Board of Directors shall determine the matters listed in each item of the preceding paragraph by resolution of a board of directors meeting.

(5) Notwithstanding the provisions of paragraph (1) and paragraph (2), in cases where there are Registered Pledgees of Shares, the Stock Company may effect the auction under the provisions of paragraph (1), or the sale pursuant to the provisions of paragraph (2), only if such Registered Pledgees of Shares are the persons who fall under both of the following items:

(i) That there is no requirement to give notice or issue a demand to such persons under the provisions of Article 196(1) applied mutatis mutandis under paragraph (3) of that paragraph; and

(ii) That the persons have not received the dividends of surplus to which they are entitled under the provisions of Article 154(1) for consecutive five years.

(Objections of Interested Parties)

Article 198 (1) In cases where a Stock Company effects an auction under the provisions of paragraph (1) of the preceding article, or a sale under the provisions of paragraph (2) of that article, the Stock Company shall give public notice to the effect that interested parties, including the shareholders of the shares provided for in paragraph (1) of that article, may state their objections during a certain period of time, and other matters prescribed by the applicable Ordinance of the Ministry of Justice, and shall issue separate demands seeking such objections, if any, to each shareholder of such shares and each Registered Pledgee of Shares thereof; provided, however, that such period cannot be less than three months.

(2) Notwithstanding the provisions of Article 126(1) and Article 150(1), the demands under the provisions of the preceding paragraph shall be sent to the addresses of such shareholders and Registered Pledgees of Shares stated or recorded in the shareholder registry (or, in cases where such shareholders or Registered Pledgees of Shares notify such Stock Company of a different place or contact address for the receipt of notices or demands, to such place or contact address).

(3) Notwithstanding the provisions of Article 126(3) and (4), if a share is coowned by two or more persons, the demand pursuant to the provisions of paragraph (1) shall be sent to the address of the co-owners specified or recorded in the shareholder registry (or, in cases where such co-owners notify such Stock Company of a different place or contact address for the receipt of notices or demands, to such place or contact address).

(4) The provisions of Article 196(1) (including cases where it is applied mutatis mutandis under paragraph (3) of that paragraph) shall not apply to demands under the provisions of paragraph (1).

(5) In cases where public notice is given under the provisions of paragraph (1) (limited to cases where share certificates representing the shares under paragraph (1) of the preceding article have been issued), if no interested party raises any objection within the period under paragraph (1), the share certificates representing such shares shall become invalid on the last day of such period.

Section 8 Issue of Shares for Subscription

Subsection 1 Determination of Subscription Requirements

(Determination of Subscription Requirements)

Article 199 (1) Whenever a Stock Company intends to solicit persons to subscribe for shares it issues or for Treasury Shares it disposes of, the Stock Company shall prescribe the following matters with respect to the Shares for Subscription (meaning shares the Stock Company allots to persons who subscribed for those shares in response to such solicitation. The same shall apply hereinafter in this Section.):

(i) The number of Shares for Subscription (or, for a Company with Class Shares, the classes and the number of the Shares for Subscription. The same shall apply hereinafter in this Section.);

(ii) The Amount To Be Paid In (meaning the amount of the monies to be paid in in exchange for one of the Shares for Subscription, or the amount of any property other than monies to be contributed. The same shall apply hereinafter in this Section.) for the Shares for Subscription or the method for calculating such amount;

(iii) If property other than monies will be the subject of the contribution, a statement to such effect and the description and value of such property;

(iv) The day or period for the payment of the monies in exchange for the Shares for Subscription, or the contribution of the property under the preceding item;

(v) If shares are issued, matters regarding the capital and capital reserves that is to be increased.

(2) The determination of the matters listed in each item of the preceding paragraph (hereinafter in this Section referred to as "Subscription Requirements") shall be made by resolution of a shareholders meeting.

(3) In cases where the Amount To Be Paid In under item (ii) of paragraph (1) is particularly favorable to subscribers for the Shares for Subscription, the directors shall, at the shareholders meeting under the preceding paragraph, explain the reasons for the need to solicit such persons with such an offer of the Amount To Be Paid In.

(4) For a Company with Class Shares, if the class of the Shares for Subscription under item (i) of paragraph (1) is that of Shares with Restriction on Transfer, the determination of the Subscription Requirements regarding such class of shares shall not become effective without a resolution of the relevant Class Meeting, except in cases where there is a provision in the articles of incorporation to the effect that, with respect to the solicitation of subscribers for such class shares, a resolution of the Class Meeting constituted by the Class Shareholders of such class shares is not required; provided, however, that this shall not apply to cases where there is no Class Shareholder who can exercise his/her voting right at such Class Meeting.

(5) The Subscription Requirements shall be uniform for each solicitation under paragraph (1).

(Delegation of Determination of Subscription Requirements)

Article 200 (1) Notwithstanding the provisions of paragraphs (2) and (4) of the preceding article, a shareholders meeting may, by means of a resolution, delegate the determination of the Subscription Requirements to the directors (or, for a Company with Board of Directors, the board of directors). In such cases, the shareholders meeting shall prescribe the maximum number of the Shares for Subscription for which the Subscription Requirements may be determined under such delegation, and the minimum Amount To Be Paid In.

(2) In cases where the minimum Amount To Be Paid In in the preceding paragraph is particularly favorable to subscribers for the Shares for Subscription, the directors shall, at the shareholders meeting under that paragraph, explain the reason for the need to solicit such persons with such an offer of the Amount To Be Paid In.

(3) The resolution under paragraph (1) shall be effective with respect only to solicitations under paragraph (1) of the preceding article under which the date in item (iv) of that paragraph (in cases where a period is determined under that item, the last day of such period) falls within one year from the day of such resolution.

(4) For a Company with Class Shares, if the class of the Shares for Subscription under paragraph (1) is that of Shares with Restriction on Transfer, the delegation of the determination of the Subscription Requirements regarding such class shares shall not become effective without a resolution of the Class Meeting constituted by the Class Shareholders of such class shares, except in cases where there is a provision in the articles of incorporation under paragraph (4) of the preceding article with respect to such class shares;provided, however, that this shall not apply to cases where there is no Class.

Shareholder who can exercise his/her voting right at such Class Meeting.

(Special Provisions on Determination of Subscription Requirements for Public Company)

Article 201 (1) Except for cases provided for in Article 199(3), for the purpose of the application of the provisions of paragraph (2) of that article to a Public Company, "shareholders meeting" in that paragraph shall be read as "board of directors meeting." In such cases, the provision of the preceding article shall not apply.

(2) In cases where Subscription Requirements are determined by a resolution of the board of directors meeting provided for in Article 199(2) applied by the reading of terms pursuant to the provisions of the preceding paragraph, if a Public Company solicits subscribers for shares with a market price, it may prescribe, in lieu of the matters listed in item (ii), paragraph (1) of that article, the method for determining the Amount To Be Paid In that is appropriate to realize payment in at a fair value.

(3) If a Public Company has determined Subscription Requirements by a resolution of the board of directors meeting provided for in Article 199(2) applied by the reading of terms pursuant to the provisions of the preceding paragraph, that Public Company shall notify the shareholders of such Subscription Requirements (in cases where the method for determining the Amount To Be Paid In has been prescribed, including that method. The same shall apply hereinafter in this Section.) no later than two weeks prior to the day referred to in item (iv), paragraph (1) of that article (or, in cases where a period has been prescribed under that item, no later than two weeks prior to the first day of that period).

(4) A public notice may be substituted for the notice under the provisions of the preceding paragraph.

(5) The provisions of paragraph (3) shall not apply in cases prescribed by the applicable Ordinance of the Ministry of Justice as cases where it is unlikely that the protection of shareholders is compromised, including cases where, with respect to Subscription Requirements, the Stock Company has submitted, no later than two weeks prior to the date provided for in that paragraph, a notice under Article 4(1) or (2) of the Financial Instruments and Exchange Act.

(Cases where Entitlement to Allotment of Shares is Granted to Shareholders)

Article 202 (1) In carrying out solicitation under Article 199(1), the Stock Company may grant entitlement to the allotment of shares to its shareholders. In such cases, the Stock Company shall prescribe the following matters in addition to the Subscription Requirements:

(i) A statement to the effect that the Stock Company will grant entitlement to the allotment of the Shares for Subscription of that Stock Company (or, for a Company with Class Shares, class shares identical to the class shares held by such shareholders) to shareholders, subject to the application provided for in paragraph (2) of the following article;

(ii) The day for the application for subscription for the Shares for Subscription referred to in the preceding item.

(2) In the cases provided for in the preceding paragraph, the shareholders under item (i) of that paragraph (excluding the Stock Company) shall be entitled to the allotment of the Shares for Subscription in accordance with the number of shares they hold; provided, however, that if the number of the Shares for Subscription to be allotted to such shareholders includes a fraction of less than one share, it shall be rounded off.

(3) In cases where the Stock Company prescribes the matters listed in each item of paragraph (1), the Subscription Requirements and the matters listed in each item of that paragraph shall be prescribed in accordance with the categories of the cases listed in the following items, by the methods provided for in each of such items:

(i) In cases where there is a provision in the articles of incorporation to the effect that such Subscription Requirements and the matters listed in each item of paragraph (1) may be prescribed by decision of the directors (excluding the cases where the Stock Company is a Company with Board of Directors): A decision of the directors;

(ii) In cases where there is a provision in the articles of incorporation to the effect that such Subscription Requirements and the matters listed in each item of paragraph (1) may be prescribed by resolution of the board of directors (excluding the cases listed in the following item): A resolution of the board of directors;

(iii) In cases where the Stock Company is a Public Company: A resolution of the board of directors;

(iv) In cases other than those listed in the preceding three items: A resolution of a shareholders meeting;

(4) In cases where a Stock Company prescribes the matters listed in each item of paragraph (1), the Stock Company shall notify the shareholders under item (i) of that paragraph (excluding such Stock Company) of the following matters no later than two weeks prior to the date provided for in item (ii) of that paragraph:

(i) The Subscription Requirements;

(ii) The number of Shares for Subscription to be allotted to such shareholders; and

(iii) The date provided for in item (ii) of paragraph (1).

(5) The provisions of paragraphs (2) to (4) inclusive of Article 199 and the preceding two articles shall not apply in cases where entitlement to the allotment of shares is granted to shareholders under the provisions of paragraphs (1) to (3) inclusive hereof.

Subsection 2 Allotment of Shares for Subscription

(Applications for Shares for Subscription)

Article 203 (1) A Stock Company shall notify persons who intend to subscribe for Shares for Subscription in response to solicitation in Article 199(1) of the matters listed in the following items:

(i) The trade name of the Stock Company;

(ii) The Subscription Requirements;

(iii) If any money payment is to be made, the place where payments are handled;

(iv) In addition to the matters listed in the preceding three paragraphs, matters prescribed by the applicable Ordinance of the Ministry of Justice.

(2) A person who submits an application to subscribe for Shares for Subscription in response to solicitation in Article 199(1) shall deliver a document that specifies the following matters:

(i) The name and address of the person applying;

(ii) The number of Shares for Subscription for which he/she intends to subscribe.

(3) A person who submits an application under the preceding paragraph may, in lieu of the delivery of the document under that paragraph, provide the matters to be stated in the document under that paragraph by Electromagnetic Means, with the approval of the Stock Company, pursuant to the provisions of the applicable Cabinet Order. In such cases, the person who submitted the application shall be deemed to have delivered the document under that paragraph.

(4) The provisions of paragraph (3) shall not apply in cases where the Stock Company has issued a prospectus provided for in Article 2(10) of the Securities and Exchange Act that states the matters listed in each item of that paragraph to a person who intends to submit the application in paragraph (1), and in other cases prescribed by the applicable Ordinance of the Ministry of Justice as cases where it is unlikely that the protection of persons who intend to submit applications for subscription for Shares for Subscription is compromised.

(5) If there are changes in the matters listed in each item of paragraph (1), the Stock Company shall immediately notify persons who have submitted applications in paragraph (2) (hereinafter in this Subsection referred to as "Applicants") thereof and of the matters so changed.

(6) It shall be sufficient for a notice or demand to an Applicant to be sent by the Stock Company to the address under item (i) of paragraph (2) (or, in cases where such Applicant notifies the Stock Company of a different place or contact address for the receipt of notices or demands, to such place or contact address).

(7) The notices or demands referred to in the preceding paragraph shall be deemed to have arrived at the time when such notice or demand should normally have arrived.

(Allotment of Shares for Subscription)

Article 204 (1) A Stock Company shall specify the persons to whom Shares for Subscription will be allotted from among the Applicants and the number of Shares for Subscription to be allotted to those persons. In such cases, the Stock Company may reduce the number of Shares for Subscription the Stock Company allots to such Applicants below the number under item (ii), paragraph (2) of the preceding article.

(2) In cases where Shares for Subscription are Shares with Restriction on Transfer, the determination under the provisions of the preceding paragraph shall be made by resolution of a shareholders meeting (or of a board of directors meeting for a Company with Board of Directors); provided, however, that this shall not apply in cases where it is otherwise prescribed in the articles of incorporation.

(3) The Stock Company shall notify the Applicants, no later than the day immediately preceding the date referred to in item (iv), paragraph (1) of Article 199 (or, in cases where a period is prescribed under that item, no later than the day immediately preceding the first day of that period), of the number of Shares for Subscription that will be allotted to such Applicants.

(4) In cases where the Stock Company has granted entitlement to the allotment of shares to its shareholders pursuant to the provisions of Article 202, if the shareholders do not submit, no later than the date under item (ii), paragraph (1) of that article, applications under paragraph (2) of the preceding article, such shareholders shall lose the entitlement to the allotment of Shares for Subscription.

(Special Provision on Subscription and Allotment of Shares for Subscription)

Article 205 The provisions of the preceding two Articles shall not apply in cases where a person who intends to subscribe for Shares for Subscription executes a contract for subscription for the total number of those shares.

(Subscription for Shares for Subscription)

Article 206 The persons listed in the following items shall be the subscribers for Shares for Subscription with respect to the number of Shares for Subscription prescribed in each of such items:

(i) Applicants: The number of the Shares for Subscription allotted by the Stock Company; or

(ii) A person who subscribed for all of the Shares for Subscription under a contract in the preceding article: The number of Shares for Subscription for which that person has subscribed.

Subsection 3 Contribution of Property other than Monies

Article 207 (1) If a Stock Company has prescribed the matters listed in Article 199(1)(iii), the Stock Company shall file a petition to the court, without delay after the determination of the Subscription Requirements, for the appointment of an inspector in order to have the inspector investigate the value of the property provided for in that item

(hereinafter in this Section referred to as "Properties Contributed in Kind").

(2) In cases where the petition referred to in the preceding paragraph has been filed, the court shall appoint an inspector, except in cases where it dismisses such petition as unlawful.

(3) In cases where the court has appointed the inspector under the preceding paragraph, it may fix the amount of the remuneration that the Stock Company shall pay to such inspector.

(4) The inspector referred to in paragraph (2) shall conduct the necessary investigations and submit a report, either by recording the outcome of such investigations or by providing documents or Electromagnetic Records (limited to those prescribed by the applicable Ordinance of the Ministry of Justice) to the court.

(5) If the court finds it necessary to clarify the contents of the report under the preceding paragraph or to confirm the grounds supporting such report, it may request that the inspector under paragraph (2) submit a further report under the preceding paragraph.

(6) If the inspector under paragraph (2) has submitted the report referred to in paragraph (4), he/she shall deliver to the Stock Company a copy of the documents under such paragraph, or provide the matters recorded in the Electromagnetic Records under such paragraph by the methods prescribed by the applicable Ordinance of the Ministry of Justice.

(7) In cases where the court receives a report under paragraph (4), if it finds the value provided for in Article 199(1)(iii) with respect to Properties Contributed in Kind (excluding a value not subjected to investigation by the inspector under paragraph (2)) to be improper, it shall issue a ruling changing such value.

(8) In cases where the value of Properties Contributed in Kind has been changed, in whole or in part, because of a ruling under the preceding paragraph, the subscriber for Shares for Subscription (limited to a person who tenders Properties Contributed in Kind. The same shall apply hereinafter in this article.) may rescind his/her applications for subscription for Shares for Subscription, or his/her manifestation of intention relating to the contract provided for in Article 205, limited to within one week from the finalization of such ruling.

(9) The provisions of the preceding paragraphs shall not apply in the cases in each of the following items with respect to the matters prescribed respectively in those items:

(i) In cases where the total number of the shares to be allotted to the subscribers for the Shares for Subscription does not exceed one tenth (1/10) of the total number of Issued Shares: The value of the Properties Contributed in Kind that are tendered by the subscribers for such Shares for Subscription;

(ii) In cases where the total sum of the value provided for under Article 199(1)(iii) with respect to the Properties Contributed in Kind does not exceed 5,000,000 yen: The value of such Properties Contributed in Kind;

(iii) In cases where the value of the securities with market price provided for under Article 199(1)(iii) with respect to Properties Contributed in Kind does not exceed the value calculated by the method prescribed by the applicable Ordinance of the Ministry of Justice as the market price of such securities:

The value of the Properties Contributed in Kind with respect to such securities;

(iv) In cases where the verification of an attorney, a legal professional corporation, a certified public accountant, an auditing firm, a tax accountant or a tax accountant corporation (or in cases where the Properties Contributed in Kind consist of real estate, such verification and an appraisal by a real property appraiser. The same shall apply hereinafter in this item.) is obtained with respect to the reasonableness of the value provided for under Article 199(1)(iii) with respect to Properties Contributed in Kind: The value of the Properties Contributed in Kind so verified;

(v) In cases where the Properties Contributed in Kind consist of a money claim (limited to claims that have already fallen due) to the Stock Company, and the value provided for under Article 199(1)(iii) with respect to such money claim does not exceed the book value of the debt representing such monetary claim: The value of the Properties Contributed in Kind with respect to such monetary claim

(10) None of the following persons can provide the verification provided in item (iv) of the preceding paragraph:

(i) A director, an accounting advisor, a company auditor or executive officer, or an employee including a manager;

(ii) A subscriber for Shares for Subscription;

(iii) A person who is subject to a suspension of operations for whom the period of such suspension has not elapsed yet; or

(iv) A legal profession corporation, an auditing firm or a tax accountant corporation with respect to which more than half of its members are persons who fall under either item (i) or item (ii) above.

Subsection 4 Performance of Contributions

(Performance of Contributions)

Article 208 (1) Subscribers for Shares for Subscription (excluding persons who tender Properties Contributed in Kind) shall, on the date or within the period provided for in Article 199(1)(iv), pay in the entire Amount To Be Paid In for the Shares for Subscription for which the subscribers respectively subscribed, at the bank etc. designated by the Stock Company as the place for the handling of payments.

(2) Subscribers for Shares for Subscription (limited to persons who tender Properties Contributed in Kind) shall, on the date or within the period provided for in Article 199(1)(iv), deliver the Properties Contributed in Kind equivalent in value to the entire Amount To Be Paid In of the Shares for Subscription for which the subscribers respectively subscribed.

(3) Subscribers for Shares for Subscription may not set off their obligations to effect payment under the provisions of paragraph (1) or delivery under the provisions of the preceding paragraph (hereinafter in this Subsection referred to as "Performance of Contribution") against claims they have against the Stock Company.

(4) Assignment of the right to become a shareholder of Shares for Subscription by effecting the Performance of Contribution cannot be asserted against the Stock Company.

(5) A subscriber for Shares for Subscription shall lose his/her right to become the shareholder of Shares for Subscription by effecting the Performance of Contribution if he/she fails to effect the Performance of Contribution.

(Timing of Shareholder Status)

Article 209 In the cases listed in the following items, a subscriber for Shares for Subscription shall become the shareholder of the Shares for Subscription for which he/she has effected the Performance of Contribution on the day prescribed in each of such items:

(i) In cases where a date under Article 199(1)(iv) is prescribed: Such date; and

(ii) In cases where a period under Article 199(1)(iv) is prescribed: The day on which the Performance of Contribution is effected.

Subsection 5 Demanding Cessation of Issue of Shares for Subscription

Article 210 In the following cases, if shareholders are likely to suffer disadvantage, shareholders may demand that the Stock Company cease a share issue or disposition of Treasury Shares relating to solicitations under Article 199(1):

(i) In cases where such share issue or disposition of Treasury Shares violates the applicable laws and regulations or articles of incorporation; or

(ii) In cases where such share issue or disposition of Treasury Shares is effected by using a method which is extremely unfair.

Subsection 6 Liabilities relating to Solicitation

(Restrictions on Invalidation or Rescission of Subscription)

Article 211 (1) The proviso to Article 93 and the provisions of Article 94(1) of the Civil Code shall not apply to manifestation of intention relating to applications for subscription for, or the allotment of, Shares for Subscription, or the contract under Article 205.

(2) If one year has elapsed from the day on which a subscriber for Shares for Subscription became a shareholder pursuant to the provisions of Article 209, or if he/she has exercised his/her rights in relation to such shares, he/she may not thereafter assert the invalidity of the subscription for the Shares for Subscription on the grounds of mistake, or rescind the subscription for Shares for Subscription on the grounds of fraud or duress.

(Liabilities of Persons who Subscribed for Shares with Unfair Amount To Be Paid In)

Article 212 (1) In the cases listed in the following items, subscribers for Shares for Subscription shall be liable to a Stock Company for payment of the amount provided for in such items:

(i) In cases where the subscriber subscribed for the Shares for Subscription at an Amount To Be Paid In that is extremely unfair, in collusion with directors (or directors or executive officers for a Company with Committees):

The amount equivalent to the difference between such Amount To Be Paid In and the fair value of such Shares for Subscription;

(ii) In cases where the value of the Properties Contributed in Kind that the subscriber tendered when he/she became a shareholder of the Shares for Subscription pursuant to the provisions of Article 209 is extremely short of the value provided for under Article 199(1)(iii) with respect to the Properties Contributed in Kind: The amount of such shortfall.

(2) In the cases provided for in item (ii) of the preceding paragraph, if the subscriber for Shares for Subscription who tendered the Properties Contributed in Kind is without knowledge and is not grossly negligent as to the fact that the value of such Properties Contributed in Kind is extremely short of the value prescribed under Article 199(1)(iii) with respect to the Properties Contributed in Kind, that subscriber may rescind his/her application for subscription for Shares for Subscription or his/her manifestation of intention relating to the contract provided for in Article 205.

(Liabilities of Directors in case of Shortfall in Value of Property Contributed)

Article 213 (1) In the cases listed in item (ii), paragraph (1) of the preceding article, the following persons (hereinafter in this article referred to as "Directors, etc.") shall be liable to the Stock Company for payment of the amounts listed in such items:

(i) Executive directors who carried out duties regarding the solicitation of subscribers for such Shares for Subscription (or, for a Company with Committees, executive officers. The same shall apply hereinafter in this item.) and other persons prescribed by the applicable Ordinance of the Ministry of Justice as persons who were involved, in the performance of their duties, in the execution of the business of such executive directors;

(ii) If a shareholders meeting has passed a resolution regarding the determination of the value of Properties Contributed in Kind, the persons prescribed by the applicable Ordinance of the Ministry of Justice as the directors who submitted proposals to such shareholders meeting;

(iii) If a board of directors meeting has passed a resolution regarding the determination of the value of Properties Contributed in Kind, the persons prescribed by the applicable Ordinance of the Ministry of Justice as the directors (or, for a Company with Committees, directors or executive officers) who submitted proposals to such board of directors meeting;

(2) Notwithstanding the provisions of the preceding paragraph, the Directors, etc. shall not be liable for Properties Contributed in Kind under that paragraph in the cases listed below:

(i) An investigation has been carried out by an inspector under Article 207(2) with respect to the value of the Properties Contributed in Kind; or

(ii) Such Directors, etc. have proven that they did not fail to exercise care with respect to the performance of their duties.

(3) In the cases provided for in paragraph (1), the person who submitted the verification provided for in Article 207(9)(iv) (hereinafter in this article referred to as "Verifying Person") shall be liable for payment of the amount provided for in item (ii), paragraph (1) of the preceding article to the Stock Company; provided, however, that this shall not apply in cases where such Verifying Person has proven that he/she did not fail to exercise care with respect to the submission of such verification.

(4) In cases where a subscriber for Shares for Subscription bears an obligation to pay an amount provided for in item (ii), paragraph (1) of the preceding article with respect to Properties Contributed in Kind tendered by the subscriber, if the persons listed as follows bear obligations provided for in such items with respect to such Properties Contributed in Kind, such persons shall be joint and several obligors:

(i) Directors, etc. : The obligations under paragraph (1); and

(ii) Verifying persons: The obligations under the main clause of the preceding paragraph.

Section 9 Share Certificate

Subsection 1 General Provisions

(Provisions of Articles of Incorporation to the effect that Share Certificates be Issued)

Article 214 A Stock Company may provide in the articles of incorporation to the effect that it issues share certificates relating to its shares (or, for a Company with Class Shares, the shares of all classes).

(Issuing of Share Certificate)

Article 215 (1) A Company Issuing Share Certificate shall, without delay after the day of a share issue, issue share certificates for such shares.

(2) If a Company Issuing Share Certificate consolidates shares, it shall issue share certificates for the consolidated shares without delay after the day provided for in Article 180(2)(ii).

(3) If a Company Issuing Share Certificate splits shares, it shall issue share certificates for the split shares (excluding those which have been already issued) without delay after the day provided for in Article 183(2)(ii).

(4) Notwithstanding the provisions of the preceding three paragraphs, a Company Issuing Share Certificate that is not a Public Company may elect to not deliver share certificates under those paragraphs until shareholders so request.

(Matters to be Specified on Share Certificates)

Article 216 A Stock Company shall state the following matters and the serial number on a share certificate, and the Representative Director of the Company Issuing Share Certificate (or the representative executive officer for a Company with Committees) shall affix his/her signature, or name and seal:

(i) The trade name of the Company Issuing Share Certificate;

(ii) The number of shares represented by such share certificates;

(iii) If it is provided that the approval of the Stock Company is required for the acquisition of shares which are represented by such share certificates by assignment, a statement to such effect; and

(iv) For a Company with Class Shares, the class and features of the shares represented by such share certificates.

(Offer Not to Possess Share Certificates)

Article 217 (1) Shareholders of a Company Issuing Share Certificate may make an offer to such Company Issuing Share Certificate to the effect that they do not wish to hold share certificates representing shares held by the same.

(2) The offer pursuant to the provisions of the preceding paragraph shall be made by disclosing the number of shares relating to the offer (or, for a Company with Class Shares, the classes of shares and the number of shares for each class). In such cases, if share certificates representing such shares have been issued, such shareholders shall submit such share certificates to the Company Issuing Share Certificate.

(3) A Company Issuing Share Certificate that has received an offer under the provisions of paragraph (1) shall state or record in the shareholder registry, without delay, a statement that it will not issue share certificates for the shares referred to in the first sentence of the preceding paragraph.

(4) If a Company Issuing Share Certificate has stated or recorded the statement pursuant to the provisions of the preceding paragraph, it may not issue share certificates for the shares referred to in the first sentence of paragraph(2).

(5) Share certificates submitted pursuant to the provisions of the second sentence of paragraph (2) shall become ineffective when a statement is stated or recorded pursuant to the provisions of paragraph (3).

(6) A shareholder who has made an offer pursuant to the provisions of paragraph (1) may at any time demand that the Company Issuing Share Certificate issue share certificates for the shares referred to in the first sentence of paragraph

(2). In such cases, if there are any share certificates that have been submitted pursuant to the provisions of the second sentence of paragraph (2), the cost for the issuing of the share certificates shall be borne by such shareholder.

(Abolition of Provisions of Articles of Incorporation that Share Certificates be Issued)

Article 218 (1) If a Company Issuing Share Certificate intends to effect a amendment to the articles of incorporation to abolish provisions of the articles of incorporation to the effect that it issues share certificates for its shares (or, for a Company with Class Shares, shares of all classes), it shall give public notice of the following matters, and give separate notice thereof to each shareholder and each Registered Pledgee of Shares no later than two weeks prior to the day on which such amendment to the articles of incorporation takes effect:

(i) A statement to the effect that the Stock Company abolishes the provisions of the articles of incorporation to the effect that it issues share certificates for its shares (or, for a Company with Class Shares, shares of all classes);

(ii) The day on which the amendment to the articles of incorporation will take effect; and

(iii) A statement to the effect that the share certificates of such Stock Company shall become invalid on the day provided for in the preceding item.

(2) he share certificates for the shares of a Company Issuing Share Certificate shall become invalid on the day provided for in item (ii) of the preceding paragraph.

(3) Notwithstanding the provisions of paragraph (1), in cases where a Company Issuing Share Certificate that does not issue share certificates for any of its shares intends to effect a amendment to the articles of incorporation to abolish provisions of the articles of incorporation to the effect that it issues share certificates for its shares (or, for a Company with Class Shares, shares of all classes), it shall be sufficient to notify the shareholders and Registered Pledgees of Shares of the matters listed in item (i) and item (ii) of that paragraph no later than two weeks prior to the day provided for in item (ii) of that paragraph.

(4) A public notice may be substituted for the notice under the provisions of the preceding paragraph.

(5) In the cases provided for in paragraph (1), pledgees of shares (excluding Registered Pledgees of Shares) may, no later than the day immediately preceding the day provided for in item (ii) of that paragraph, demand that the Company Issuing Share Certificate state or record the matters listed in each item of Article 148 in the shareholder registry.

Subsection 2 Submission of Share Certificate

(Public Notice in relation to Submission of Share Certificate)

Article 219 (1) In cases where a Company Issuing Share Certificate carries out an act listed in the following items, it shall, more than one month prior to the day when such act takes effect, give public notice to the effect that share certificates for the shares provided for in each of such items be submitted to such Company Issuing Share Certificate before such day, and a separate notice to such effect to each shareholder and each Registered Pledgee of Shares thereof; provided, however, that this shall not apply in cases where the Company Issuing Share Certificate does not issue share certificates for any of its shares:

(i) Amendments to the articles of incorporation to create provisions of the articles of incorporation with respect to the matters listed in Article 107(1)(i):

All shares (or, for a Company with Class Shares, the class shares that have provisions with respect to such matters);

(ii) Consolidation of shares: All shares (or, for a Company with Class Shares, the class shares under Article 180(2)(iii));

(iii) Acquisitions of Class Shares subject to Wholly Call provided for in Article 171(1): Such Class Shares subject to Wholly Call;

(iv) Acquisitions of Shares subject to Call: Such Shares subject to Call;

(v) Entity Conversion: All shares;

(vi) Mergers (limited to cases where such Stock Company is to be extinguished as a result of the merger): All shares;

(vii) Share Exchanges: All shares;

(viii) Share Transfers: All shares;

(2) If a person fails to submit the share certificates to a Stock Company no later than the day on which an act listed in any item of the preceding paragraph takes effect, the Stock Company may, until such share certificates are submitted, refuse to deliver Monies, etc. to which the shareholders of the shares represented by such share certificates are entitled as a result of such act.

(3) The share certificates representing the shares provided for in each item of paragraph (1) shall become invalid on the day when the act listed in each such item takes effect.

(Cases where Share Certificates cannot be Submitted)

Article 220 (1) In cases where the acts listed in each item of paragraph (1) of the preceding article are carried out, if a person cannot submit share certificates, the Company Issuing Share Certificate may, at the request of that person, give public notice to interested parties to the effect that they can state their objections, if any, during a certain period of time; provided, however, that such period cannot be less than three months.

(2) In cases where public notice is given under the provisions of the preceding paragraph, if no interested party states an objection during the period of time under that paragraph, the Company Issuing Share Certificate may deliver Monies, etc. under paragraph (2) of the preceding article to the person who made the request under the preceding paragraph.

(3) The costs of the public notice under the provisions of paragraph (1) shall be borne by the person who makes the request under that paragraph.

Subsection 3 Registration of Lost Share Certificate

(Registry of Lost Share Certificates)

Article 221 A Company Issuing Share Certificate (including a Company Issuing Share Certificate in cases where one year has not elapsed from the day immediately following the day on which such Company Issuing Share Certificate effected a amendment to the articles of incorporation to abolish provisions of the articles of incorporation to the effect that it issues share certificates for its shares (or, for a Company with Class Shares, shares of all classes). The same shall apply hereinafter in this Subsection (excluding Article 223, Article 227 and Article 228(2)).) shall prepare a registry of lost share certificates and state or record the following matters (hereinafter in this Subsection referred to as "Matters to be Stated in the Registry of Lost Share Certificates") in the same:

(i) The serial numbers of the share certificates relating to the request under the provisions of Article 223 (including share certificates that have become invalid under the provisions of Article 218(2) or Article 219(3), and share certificates representing shares in cases where a judgment upholding a claim seeking invalidation of the share issue or the disposition of such shares has become final and binding. The same shall apply hereinafter in this Subsection (excluding Article 228).);

(ii) The names and addresses of persons who have lost share certificates under the preceding item;

(iii) The names and addresses of persons who are stated or recorded in the shareholder registry as the shareholders or Registered Pledgees of Shares of the shares represented by the share certificates (hereinafter in this Subsection, referring to as "Registered Holder.") under paragraph (1); and

(iv) The day on which the matters listed in the preceding three paragraphs are stated or recorded for the share certificates provided for in paragraph (1) (hereinafter in this Subsection referred to as "Day of Registration of Loss of Share Certificate").

(Delegation of Administration of Registry of Lost Share Certificates)

Article 222 For the purpose of the application of the provisions of Article 123 to a Company Issuing Share Certificate, in that Article, "of the shareholder registry" shall be read as "of the shareholder registry and the registry of lost share certificates," and "keeping the shareholder registry" shall be read as "keeping the shareholder registry and the registry of lost share certificates."

(Requests for Registration of Lost Share Certificate)

Article 223 A person who has lost share certificates may make a request for the Company Issuing Share Certificate to state or record the Matters to be Stated in the Registry of Lost Share Certificates for such share certificates (hereinafter referred to as the "Registration of Lost Share Certificate").

(Notices to Registered Holders)

Article 224 (1) In cases where a Company Issuing Share Certificate has effected the Registration of Lost Share Certificate in response to a request under the provisions of the preceding article, if the person stated or recorded in the registry of lost share certificates as the person who lost the share certificates relating to such request (hereinafter in this Subsection referred to as "Registrant of Lost Share Certificate") is not the Registered Holder of the shares represented by such share certificates, the Company Issuing Share Certificate shall, without delay, notify such Registered Holder to the effect that the Company Issuing Share Certificate has effected the Registration of Lost Share Certificates for such share certificates, and of the matters listed in items (i), (ii) and (iv) of Article 221.

(2) In cases where share certificates have been submitted to the Company Issuing Share Certificate in order to exercise rights with respect to the shares, if the Registration of Lost Share Certificate has been effected for such share certificates, the Company Issuing Share Certificate shall, without delay, notify the person who submitted such share certificates to the effect that the Registration of Lost Share Certificate has been effected for such share certificates.

(Filing of Application to Cancel by Holders of Share Certificate)

Article 225 (1) A person who holds share certificates subject to the Registration of Lost Share Certificate (excluding the Registrant of Lost Share Certificate for such share certificates) may file an application with the Company Issuing Share Certificate for the cancellation of such Registration of Lost Share Certificate, as prescribed by the applicable Ordinance of the Ministry of Justice; provided, however, that this shall not apply if one year has elapsed from the day immediately following the Day of Registration of the Loss of Share Certificate.

(2) A person who intends to make an application under the provisions of the preceding paragraph shall submit the share certificates referred to in that paragraph to the Company Issuing Share Certificate.

(3) A Company Issuing Share Certificate that has received an application under the provisions of paragraph (1) shall, without delay, notify the Registrant of Lost Share Certificate referred to in that paragraph of the name and address of the person who made the application under the provisions of that paragraph, and of the serial numbers of the share certificates referred to in that paragraph.

(4) On the day on which two weeks have elapsed from the day of the notice under the provisions of the preceding paragraph, the Company Issuing Share Certificate shall cancel the Registration of Lost Share Certificate relating to share certificates submitted pursuant to the provisions of paragraph (2). In such cases, the Company Issuing Share Certificate shall return such share certificates to the person who filed the application under the provisions of paragraph (1).

(Filing of Application to Cancel by Registrant of Lost Share Certificates)

Article 226 (1) A Registrant of Lost Share Certificate may file an application with the Company Issuing Share Certificate, as prescribed by the applicable Ordinance of the Ministry of Justice, to cancel the Registration of Lost Share Certificate (excluding the Registration of Lost Share Certificate for share certificates submitted under the provisions of paragraph (2) of the preceding article in cases where a amendment is effected to the articles of incorporation to abolish provisions of the articles of incorporation to the effect that the Company Issuing Share Certificate issues share certificates for its shares (or, for a Company with Class Shares, shares of all classes)).

(2) A Company Issuing Share Certificate that has received an application under the provisions of the preceding paragraph shall cancel the Registration of Lost Share Certificate relating to such application on the day of the receipt of such application. (Cancellation of Registration of Lost Share Certificate where Provisions of Articles of Incorporation to Issue Share Certificates are Abolished)

Article 227 In cases where a Company Issuing Share Certificate amends the articles of incorporation to abolish provisions of the articles of incorporation to the effect that the Company Issuing Share Certificate issues share certificates for its shares (or, for a Company with Class Shares, shares of all classes), the Company Issuing Share Certificate shall cancel the Registration of Lost Share Certificate (excluding registrations for share certificates submitted under the provisions of Article 225(2) only if the Registrant of Lost Share Certificate is the Registered Holder of the shares relating to the share certificates subject to such Registration of Lost Share Certificate) on the day of the effectuation of such amendment to the articles of incorporation.

(Invalidation of Share Certificate)

Article 228 (1) Share certificates subject to the Registration of Lost Share Certificate (excluding registrations that have been cancelled) shall become invalid on the day on which one year has elapsed from the day immediately following the Day of Registration of Lost Share Certificate.

(2) In cases where share certificates become invalid under the provisions of the preceding paragraph, the Company Issuing Share Certificate shall reissue share certificates to the Registrant of Lost Share Certificate for such share certificates.

(Relationship with Procedures for Notices seeking Objections)

Article 229 (1) In cases where a Registrant of Lost Share Certificate submits a request under Article 220(1), the Company Issuing Share Certificate may give public notice pursuant to the provisions of that paragraph only if the last day of the period under that paragraph arrives before the day on which one year has elapsed from the day immediately following the Day of Registration of Lost Share Certificate.

(2) If a Company Issuing Share Certificate gives public notice under the provisions of Article 220(1), such Company Issuing Share Certificate shall cancel the Registration of Lost Share Certificate for the share certificates relating to such public notice on the day of such public notice.

(Effect of Registration of Lost Share Certificate)

Article 230 (1) A Company Issuing Share Certificate may not state or record the names and addresses of the persons who acquired shares represented by share certificates subject to the Registration of Lost Share Certificate until the earliest of the following days (hereinafter in this article referred to as the "Day of Cancellation of Registration"):

(i) The day on which such Registration of Lost Share Certificate is cancelled; or

(ii) The day on which one year has elapsed from the day immediately following the Day of Registration of Lost Share Certificate.

(2) A Company Issuing Share Certificate may reissue share certificates subject to the Registration of Lost Share Certificate only after the Day of Cancellation of Registration.

(3) If a Registrant of Lost Share Certificate is not the Registered Holder of the shares represented by the share certificates subject to the Registration of Lost

Share Certificate, the shareholders of such shares may not exercise voting right at a shareholders meeting or Class Meeting until the Day of Cancellation of Registration.

(4) An auction pursuant to the provisions of Article 197(1) or a sale pursuant to the provisions of paragraph (2) of that article may not be effected with respect to shares represented by share certificates subject to the Registration of Lost Share Certificate.

(Keeping and Making Available for Inspection of Registry of Lost Share Certificates)

Article 231 (1) A Company Issuing Share Certificate shall keep the registry of lost share certificates at its head office (or, in cases where there is a Administrator of Shareholder Registry, at its sales office).

(2) Any person may submit the following requests at any time during the business hours of a Company Issuing Share Certificate with respect to the registry of lost share certificates (limited to the portion in which such person has an interest). In such cases, the reasons for such request shall be disclosed.

(i) If the registry of lost share certificates is prepared in writing, a request for the review or copying of such document;

(ii) If the registry of lost share certificates is prepared by Electromagnetic Means, a request for the inspection or copying of anything that indicates the matters recorded in such Electromagnetic Records in a manner prescribed by the applicable Ordinance of the Ministry of Justice.

(Notices to Registrants of Lost Share Certificate)

Article 232 (1) It shall be sufficient for a notice or demand to a Registrant of Lost Share Certificate to be sent by a Company Issuing Share Certificate to the address of such Registrant of Lost Share Certificate stated or recorded in the registry of lost share certificates (or, in cases where such Registrant of Lost Share Certificate notifies the Company Issuing Share Certificate of a different place or contact address for the receipt of notices or demands, to such place or contact address).

(2) The notices or demands referred to in the preceding paragraph shall be deemed to have arrived at the time when such notice or demand should normally have arrived.

(Exception to Application)

Article 233 The provisions of Part III of the Non-Contentious Cases Procedures Act (Act No. 14 of 1898) shall not apply to share certificates.

**Section 10 Miscellaneous Provisions **

(Treatment of Fractions)

Article 234 (1) In cases where a Stock Company delivers shares in such Stock Company to the persons listed in the following items when any act listed in such items is carried out, if the number of the shares of such Stock Company that shall be delivered to such persons includes a fraction of less than one share, the Stock Company shall sell the number of shares equivalent to the total sum of the fractions by auction (in cases where the total sum includes a fraction of less than one, such fraction shall be rounded off) and shall deliver the proceeds of that auction to such persons in proportion to the fractions attributed to them:

(i) The acquisition of shares under the provisions of Article 170(1): The shareholders of such Stock Company;

(ii) The acquisition of shares under the provisions of Article 173(1): The shareholders of such Stock Company;

(iii) The Allotment of Shares without Contribution provided for in the provisions of Article 185: The shareholders of such Stock Company;

(iv) The acquisition of Share Options pursuant to the provisions of Article 275(1): The holders of the Share Options provided for in of 236(1)(vii)(a);

(v) Mergers (limited to cases where such Stock Company survives the merger):

The shareholders or members of the Company which is to be extinguished after the merger;

(vi) The issuing of shares to be issued at the time of incorporation under merger contracts: The shareholders or members of the Company which is to be extinguished after the merger;

(vii) The acquisition of all Issued Shares of another Stock Company by Share Exchange: The shareholders of the Stock Company that effects the Share Exchange;

(viii) The issuing of shares to be issued at the time of incorporation under Share Transfer plan: The shareholders of the Stock Company that effects the Share Transfer plan;

(2) In lieu of sale by auction under the provisions of the preceding paragraph, a Stock Company may sell shares under that paragraph with a market price in an amount calculated by the method prescribed by the applicable Ordinance of the Ministry of Justice as the market price thereof, and shares under that paragraph without a market price using a method other than auction with the permission of the court. In such cases, if there are two or more directors, the petition for such permission shall be filed with the consent of all directors.

(3) For the purpose of the application of the provisions of the preceding paragraph in cases where the shares under paragraph (1) are sold, "of that auction" in paragraph (1) shall be read as "of that sale."

(4) A Stock Company may purchase some or all of the shares sold pursuant to the provisions of paragraph (2). In such cases, the following matters shall be prescribed:

(i) The number of shares to be purchased (or, for a Company with Class Shares, the classes of the shares and the number of shares for each class); and

(ii) The total amount of the monies to be delivered in exchange for the purchase of the shares under the preceding item.

(5) A Company with Board of Directors shall determine the matters listed in each item of the preceding paragraph by resolution of the board of directors.

(6) The provisions of paragraphs (1) to (4) inclusive shall apply mutatis mutandis to cases where Bonds or Share Options of such Stock Company are delivered to the persons provided for in each item of paragraph (1) when any act listed in such items is carried out.

Article 235 (1) If a Share Split or consolidation of shares effected by a Stock Company produces any fraction less than one share in the number of the shares, the Stock Company shall sell the number of shares equivalent to the total sum of the fractions by auction (in cases where the total sum includes a fraction of less than one, such fraction shall be rounded off) and shall deliver the proceeds of that auction to the shareholders in proportion to the fractions attributed to them:

(2) The provisions of paragraphs (2) to (5) inclusive of the preceding article shall apply mutatis mutandis to the cases provided for in the preceding paragraph.

Chapter III Share Option

Section 1 General Provisions

(Features of Share Option)

Article 236 (1) If a Stock Company issues Share Options, the features of the Share Options shall consist of the following matters:

(i) The number of the shares underlying the Share Options (or, for a Company with Class Shares, the classes of the shares and the number of shares for each class), or the method for calculating that number;

(ii) The value of the property to be contributed when such Share Options are exercised or the method for calculating that value;

(iii) If property other than monies will be the subject of the contribution when Share Options are exercised, a statement to such effect and the description and value of that property;

(iv) The period during which such Share Options can be exercised;

(v) Matters regarding the capital and capital reserves that will be increased in cases where shares will be issued as a result of the exercise of such Share Options;

(vi) If it is arranged that the approval of such Stock Company will be required for the acquisition of such Share Options by assignment, a statement to such effect;

(vii) If it is arranged that such Stock Company may acquire such Share Options on condition of certain grounds arising, the following matters:

(a) A statement that such Stock Company may acquire its Share Options on the day when certain grounds arise, and of those grounds;

(b) If it is arranged that the grounds referred to in (a) will arise as at the arrival of a day to be separately prescribed by such Stock Company, a statement of such arrangement;

(c) If it is arranged that a portion of the Share Options referred to in (a) may be acquired on the day the grounds referred to in (a) arise, a statement of such arrangement and of the method for determining the portion of the Share Options to be acquired;

(d) If shares in such Stock Company are delivered to the holders of such Share Options in exchange for the acquisition of the Share Options referred to in (a), the number of such shares (or, for a Company with Class Shares, the classes of the shares and the number of shares for each class), or the method for calculating that number;

(e) If Bonds of such Stock Company (other than those on Bonds with Share Option) are delivered to the holders of such Share Options in exchange for the acquisition of the Share Options referred to in (a), the description of the classes of such Bonds and the total amount for each class of Bonds, or the method for calculating that total amount;

(f) If other Share Options of such Stock Company (other than those attached to Bonds with Share Option) are delivered to the holders of such Share Options in exchange for the acquisition of the Share Options referred to in (a), the feature and number of such other Share Options, or the method for calculating that number;

(g) If Bonds with Share Option of such Stock Company are delivered to the holders of such Share Options in exchange for the acquisition of the Share Options referred to in (a), the matters prescribed in (e) for such Bonds with Share Option, and the matters prescribed in (f) for the Share Options attached to such Bonds with Share Option;

(h) If property other than Share Options, etc. of such Stock Company is delivered to the holders of such Share Options in exchange for the acquisition of the Share Options referred to in (a), a description of the features and number or amount of such property, or the method for calculating that number or amount.

(viii) If it is arranged that in cases where such Stock Company carries out acts listed in sub-items (a) to (e) inclusive below, the Share Options of the Stock Company provided for in sub-items (a) to (e) inclusive is to be delivered to the holders of such Share Options, a statement to that effect and of the conditions of the same:

(a) Mergers (limited to cases where such Stock Company is to be extinguished as a result of the merger): The Stock Company that survives the merger or the Stock Company incorporated as a result of the merger;

(b) Absorption-type Company Split: The Stock Company which succeeds, in whole or in part, to any rights and obligations that a Stock Company effecting an Absorption-type Company Split holds in connection with its business;

(c) Incorporation-type Company Split: The Stock Company incorporated as a result of the Incorporation-type Company Split;

(d) Share Exchange: The Stock Company that acquires all of the Issued Shares of the Stock Company effecting the Share Exchange;

(e) Share Transfer: The Stock Company incorporated as a result of the Share Transfer;

(ix) If, in cases where the number of the shares to be issued to the holder of Share Options who has exercised his/her Share Options includes a fraction of less than one share, such fraction shall be rounded off, a statement to that effect.

(x) If it is arranged to issue Share Option certificates representing such Share Options (excluding those attached to Bonds with Share Option), a statement to that effect.

(xi) In the cases provided for in the preceding item, if the holders of Share Options cannot make, in whole or in part, the demand under the provisions of Article 290, a statement to that effect.

(2) The number of the Share Options attached to Bonds with Share Option shall be uniform for each monetary amount for the Bonds with respect to such Bonds with Share Option.

(Exercise of Rights by Co-owners)

Article 237 If any Share Option is co-owned by two or more persons, the coowners may not exercise their rights in relation to such Share Option unless they specify one person to exercise the rights in relation to such Share Option, and notify the Stock Company of the name of that person; provided, however, that this shall not apply in cases where the Stock Company has agreed to the exercise of such rights.

Section 2 Share Option Issue

**Subsection 1 Determination of Subscription Requirements **

(Determination of Subscription Requirements)

Article 238 (1) Whenever a Stock Company intends to solicit subscribers for a Share Option issue, the Stock Company shall prescribe the following matters (hereinafter in this Section referred to as "Subscription Requirements") with respect to the Share Options for Subscription (meaning the Share Options that is to be allotted to persons who subscribed for such Share Options in response to such solicitation. The same shall apply hereinafter in this Chapter.):

(i) The features and number of the Share Options for Subscription;

(ii) In cases where it is arranged that there is no requirement for monies to be paid in in exchange for the Share Options for Subscription, a statement to that effect;

(iii) In cases other than the cases provided for in the preceding item, the Amount To Be Paid In for the Share Options for Subscription (meaning the amount of money to be paid in in exchange for one Share Option for Subscription. The same shall apply hereinafter in this Chapter.) or the method for calculating that amount;

(iv) The day on which the Share Options for Subscription is allotted (hereinafter in this Section referred to as the "Day of Allotment");

(v) If the Stock Company prescribes the date for the payment of monies in exchange for the Share Options for Subscription, that date;

(vi) In cases where Share Options for Subscription are attached to Bonds with Share Option, the matters listed in each item of Article 676;

(vii) In the cases provided for in the preceding item, if the Stock Company otherwise provides for the method for submission of a demand under the provisions of Article 118(1), Article 777(1), Article 787(1), or Article 808(1) with respect to the Share Options for Subscription attached to the Bonds with Share Option under that item, that provision.

(2) The determination of the Subscription Requirements shall be made by resolution of shareholders meeting. (3) In the following cases, the directors shall explain at the shareholders meeting referred to in the preceding paragraph the reasons for the need to solicit subscribers for Share Options for Subscription with the offer of the conditions under item (i) or in the amount under item (ii):

(i) If, in the cases provided for in item (ii) of paragraph (1), the absence of a requirement for the payment in of monies is particularly favorable to relevant persons; or

(ii) If, in the cases provided for in item (iii) of paragraph (1), the Amount To Be Paid In under that paragraph is particularly favorable to relevant persons.

(4) For a Company with Class Shares, if some or all classes of the shares underlying the Share Options for Subscription are Shares with Restriction on Transfer, the determination of the Subscription Requirements regarding such Share Options for Subscription shall not become effective without a resolution of the relevant Class Meeting, except in cases where there is a provision in the articles of incorporation to the effect that, with respect to the solicitation of subscribers for Share Options for Subscription for which the underlying shares are such class shares, a resolution of the Class Meeting constituted by the Class Shareholders of such class is not required; provided, however, that this shall not apply to cases where there is no Class Shareholder who can exercise his/her voting right at such Class Meeting.

(5) The Subscription Requirements shall be uniform for each solicitation under paragraph (1).

(Delegation of Determination of Subscription Requirements)

Article 239 (1) Notwithstanding the provisions of paragraphs (2) and (4) of the preceding article, a shareholders meeting may delegate the determination of the Subscription Requirements to the directors (or, for a Company with Board of Directors, the board of directors) by resolution. In such cases, the shareholders meeting shall prescribe the following matters:

(i) The features and maximum number of Share Options for Subscription for which the Subscription Requirements may be determined under such delegation; and

(ii) In cases where it is arranged that there will be no requirement to pay monies in with respect to the Share Options for Subscription under the preceding item, a statement to that effect;

(iii) In cases other than those prescribed in the preceding item, the minimum Amount To Be Paid In for Share Options for Subscription.

(2) In the following cases, the directors shall explain at the shareholders meeting referred to in the preceding paragraph the reasons for the need to solicit subscribers for Share Options for Subscription with the offer of the conditions under item (i) or in the amount under item (ii):

(i) If, in the cases provided for in item (ii) of the preceding paragraph, the absence of a requirement for the payment in of monies is particularly favorable to relevant persons; or

(ii) If, in the cases provided for in item (iii) of the preceding paragraph, the minimum Amount To Be Paid In under that paragraph is particularly favorable to relevant persons.

(3) Resolutions under paragraph (1) shall be effective with respect only to solicitation under that paragraph under which the date under item (iv), paragraph (1) of the preceding article falls within one year from the day of such resolution.

(4) For a Company with Class Shares, if some or all of the classes of the shares underlying the Share Options for Subscription are Shares with Restriction on Transfer, the determination of the Subscription Requirements regarding such Share Options for Subscription shall not become effective without a resolution of the relevant Class Meeting, except in cases where there is a provision in the articles of incorporation referred to in paragraph (3) of the preceding article; provided, however, that this shall not apply to the case where there is no Class Shareholder who can exercise his/her voting right at such Class Meeting.

(Special Provisions on Determination of Subscription Requirements for Public Company)

Article 240 (1) Except for the cases listed in each item of Article 238(3), for the purpose of the application of the provisions of paragraph (2) of that article to a Public Company, "shareholders meeting" in that paragraph shall be read as "board of directors meeting." In such cases, the provision of the preceding article shall not apply.

(2) In cases where a Public Company has determined Subscription Requirements by a resolution of a board of directors meeting provided for in Article 238(2) applied by the reading of terms pursuant to the provisions of the preceding paragraph, the Public Company shall notify the shareholders of such Subscription Requirements no later than two weeks prior to the Day of Allotment.

(3) A public notice may be substituted for the notice under the provisions of the preceding paragraph.

(4) The provisions of paragraph (2) shall not apply in cases prescribed by the applicable Ordinance of the Ministry of Justice as cases where it is unlikely that the protection of shareholders is compromised, including cases where, with respect to Subscription Requirements, the Stock Company has submitted, no later than two weeks prior to the Day of Allotment, a notice under Article 4(1) or (2) of the Securities and Exchange Act.

(Cases where Entitlement to Allotment of Share Options is Granted to Shareholders)

Article 241 (1) In carrying out solicitation under Article 238(1), the Stock Company may grant entitlement to the allotment of Share Options to its shareholders. In such cases, in addition to the Subscription Requirements, the Stock Company shall prescribe the following matters:

(i) A statement to the effect that the Stock Company will grant entitlement to the allotment of the Share Options for Subscription of that Stock Company (or, for a Company with Class Shares, the Share Options the shares underlying which have the class identical to the class of the shares held by such shareholders) to shareholders subject to the application provided for in paragraph (2) of the following article;

(ii) The day for the application for subscription for the Share Options for Subscription referred to in the preceding item.

(2) In the cases provided for in the preceding paragraph, the shareholders under item (i) of that paragraph (excluding the Stock Company) shall be entitled to the allotment of the Share Options for Subscription in accordance with the number of shares they hold; provided, however, that if the number of the Share Options for Subscription to be allotted to such shareholders includes a fraction of less than one unit, it shall be rounded off.

(3) In cases where the Stock Company prescribes the matters listed in each item of paragraph (1), the Subscription Requirements and the matters listed in each item of that paragraph shall be prescribed in accordance with the categories of the cases listed in the following items, by the methods provided for in each of such items:

(i) In cases where there is a provision in the articles of incorporation to the effect that such Subscription Requirements and the matters listed in each item of paragraph (1) may be prescribed by decision of the directors (excluding the cases where the Stock Company is a Company with Board of Directors): A decision of the directors;

(ii) In cases where there is a provision in the articles of incorporation to the effect that such Subscription Requirements and the matters listed in each item of paragraph (1) may be prescribed by resolution of the board of directors (excluding the cases listed in the following item): A resolution of the board of directors;

(iii) In cases where the Stock Company is a Public Company: A resolution of the board of directors;

(iv) In cases other than those listed in the preceding three items: A resolution of a shareholders meeting;

(4) In cases where a Stock Company determines the matters listed in each item of paragraph (1), the Stock Company shall notify the shareholders under item (i) of that paragraph (excluding such Stock Company) of the following matters no later than two weeks prior to the date provided for in item (ii) of that paragraph:

(i) The Subscription Requirements;

(ii) The features and number of Share Options for Subscription to be allotted to such shareholders; and

(iii) The date provided for in item (ii) of paragraph (1).

(5) The provisions of Article 238(2) to (4) inclusive and the preceding two articles shall not apply in cases where entitlement to the allotment of Share Options is granted to the shareholders under the provisions of paragraph (1) to paragraph (3) inclusive hereof.

Subsection 2 Allotment of Share Options for Subscription

(Application for Share Options for Subscription)

Article 242 (1) A Stock Company shall notify persons who intend to subscribe for Share Options for Subscription in response to solicitation in Article 238(1) of the matters listed in the following items:

(i) The trade name of the Stock Company;

(ii) The Subscription Requirements;

(iii) If any payment is to be made when the Share Options are exercised, the place where payments are handled;

(iv) In addition to the matters listed in the preceding three paragraphs, any matter prescribed by the applicable Ordinance of the Ministry of Justice.

(2) A person who applies to subscribe for the Share Options for Subscription in response to solicitation in paragraph (1) of Article 238 shall deliver a document which specifies the following matters:

(i) The name and address of the person applying;

(ii) The number of Share Options for Subscription for which he/she intends to subscribe.

(3) A person who applies referred to in the preceding paragraph may, in lieu of the delivery of the document under such paragraph, provide the matters to be specified in the document under such paragraph by Electromagnetic Means, with the approval of the Stock Company, subject to the provisions of the applicable Cabinet Order. In such cases, the person applying shall be deemed to have delivered the document under such paragraph.

(4) The provisions of paragraph (3) shall not apply in cases where the Stock Company has issued a prospectus provided for in Article 2(10) of the Financial Instruments and Exchange Act that specifies the matters listed in each item of that paragraph to the person who intends to submit the application under paragraph (1), and in other cases prescribed by the applicable Ordinance of the Ministry of Justice as cases where it is unlikely that the protection of persons who intend to submit applications for subscription for Share Options for Subscription are compromised.

(5) If there are changes in the matters listed in each item of paragraph (1), the Stock Company shall immediately notify persons who have submitted applications under paragraph (2) (hereinafter in this Subsection referred to as "Applicants") thereof and of the matter so changed.

(6) In cases where Share Options for Subscription are attached to Bonds with Share Option, Applicants (limited to those who submitted applications solely for Share Options for Subscription) shall be deemed to have applied for subscription for the Bonds with Share Option to which the Share Options for Subscription relating to such applications are attached.

(7) It shall be sufficient for a notice or demand to an applicant to be sent by the Stock Company to the address under item (i) of paragraph (2) (or, in cases where such applicant notifies the Stock Company of a different place or contact address for the receipt of notices or demands, to such place or contact address).

(8) The notices or demands referred to in the preceding paragraph shall be deemed to have arrived at the time when such notice or demand should normally have arrived.

(Allotment of Share Options for Subscription)

Article 243 (1) A Stock Company shall specify the persons from among the Applicants the persons to whom Share Options for Subscription will be allotted, and determine the number of Share Options for Subscription to be allotted to those persons. In such cases, the Stock Company may reduce the number of Share Options for Subscription the Stock Company allots to such Applicants below the number under item (ii), paragraph (2) of the preceding article.

(2) In the following cases, the determination under the provisions of the preceding paragraph shall be made by resolution of a shareholders meeting (or of a board of directors meeting for a Company with Board of Directors); provided, however, that this shall not apply in cases where it is otherwise provided for in the articles of incorporation.

(i) In cases where some or all of the shares underlying the Share Options for Subscription are Shares with Restriction on Transfer; or

(ii) In cases where the Share Options for Subscription are Share Options with Restriction on Transfer (meaning Share Options for which it is provided that the acquisition of such Share Options by assignment shall require the approval of the Stock Company. The same shall apply hereinafter in this Chapter.).

(3) The Stock Company shall notify the Applicants, no later than the day immediately preceding the Day of Allotment, of the number of the Share Options for Subscription that will be allotted to such Applicants (in cases where such Share Options for Subscription are attached to Bonds with Share Option, including a description of the classes of Bonds with respect to such Bonds with Share Option and the total amount of money for each class of Bonds).

(4) In cases where the Stock Company has granted entitlement to the allotment of Share Options pursuant to the provisions of Article 241 to its shareholders, if the shareholders do not submit, no later than the date under item (ii), paragraph (1) of that article, applications under paragraph (2) of the preceding article, such shareholders shall lose the entitlement to the allotment of Share Options for Subscription.

(Special Provisions on the Subscription for and Allotment of Share Options for Subscription)

Article 244 (1) The provisions of the preceding two Articles shall not apply in cases where a person who intends to subscribe for Share Options for Subscription executes a contract for subscription for the total number of those Share Options.

(2) For the purpose of the application of the preceding paragraph in cases where the Share Options for Subscription are those attached to Bonds with Share Option, "for subscription for the total number of those Share Options" in that paragraph shall be read as "for subscription for the total number of those Share Options and the total amount of the Bonds to which such Share Options for Subscription are attached."

(Status as Holders of Share Options)

Article 245 (1) The persons listed in the following items shall become the holders of the Share Options for Subscription provided for in such items on the Day of Allotment:

(i) Applicants: The Share Options for Subscription allotted by the Stock Company; and

(ii) Persons who subscribed for the total number of the Share Options for Subscription under the provisions of paragraph (1) of the preceding article:

The Share Options for Subscription for which those persons have subscribed.

(2) In cases where Share Options for Subscription are attached to Bonds with Share Option, the persons who become holders of the Share Options under the provisions of the preceding paragraph shall become bondholders of the Bonds with respect to the Bonds with Share Option to which such Share Options for Subscription are attached.

Subsection 3 Payments for Share Options for Subscription

Article 246 (1) In the cases provided for under Article 238(1)(iii), holders of Share Options shall pay the entire Amount To Be Paid In for the Share Options for Subscription for which the holders respectively subscribed, at the place for the handling of bank, etc. payments designated by the Stock Company, no later than the day immediately preceding the first day of the period provided for under Article 236(1)(iv) for Share Options for Subscription (or, in the cases provided for under Article 238(1)(v), no later than the date under that item; in paragraph (3) referred to as the "Payment Date")

(2) Notwithstanding the provisions of the preceding paragraph, holders of Share Options may, with the approval of the Stock Company, tender property other than monies equivalent to the Amount To Be Paid In or set off their claims against such Stock Company, in lieu of payment under the provisions of that paragraph.

(3) In the cases provided for under Article 238(1)(iii), holders of Share Options may not exercise the Share Options for Subscription unless they pay in the entire Amount To Be Paid In for their respective Share Options for Subscription (including tendering property other than monies or setting off claims against such Stock Company in lieu of such payment) no later than the Payment Date with respect to such Share Options for Subscription.

Subsection 4 Demand for Discontinuation of Issue of Share Options for Subscription

Article 247 In the following cases, if shareholders are likely to suffer any disadvantage, shareholders may demand that the Stock Company discontinue an issue of the Share Options relating to solicitation under Article 238(1):

(i) In cases where such Share Option issue violates the applicable laws and regulations or articles of incorporation; or

(ii) In cases where such Share Option issue is effected by using a method that is extremely unfair.

Subsection 5 Miscellaneous Provisions

Article 248 The provisions of Article 676 through Article 680 shall not apply to the solicitation of subscribers for the Bonds with respect to the Bonds with Share Option.

Section 3 Share Option Registry

(Share Option Registry)

Article 249 A Stock Company shall, without delay after the day Share Options are issued, prepare a Share Option registry and state or record, in accordance with the categories of Share Options listed in the following items, the matters listed in such items (hereinafter referred to as "Matters to be Specified in the Share Option Registry"):

(i) Share Options for which bearer form Share Option certificates are issued (hereinafter in this Chapter referred to as "Bearer Share Options"): The serial numbers of such Share Option certificates and the features and number of such Bearer Share Options; and

(ii) Share Options attached to Bonds with Share Option for which bearer form certificates for Bonds with Share Option (referring to Bond certificates for Bond with Share Option with Issued Certificates (meaning a Bond with Share Option for which it is provided that a Bond certificate shall be issued for the Bond for such Bond with Share Option. The same shall apply hereinafter in this Chapter.). The same shall apply hereinafter.) are issued (hereinafter in this Chapter referred to as "Bearer Bonds with Share Option"): The serial numbers of such certificates for Bonds with Share Option and the features and number of such Share Options; and

(iii) Share Options other than the Share Options listed in the preceding two items: The following matters:

(a) The names and addresses of the holders of Share Options;

(b) The features and number of the Share Options held by the holders of Share Options referred to in (a);

(c) The days when the holders of Share Options referred to in (a) acquired the Share Options; and

(d) If the Share Options referred to in (b) are Share Options with Issued Certificates (meaning Share Options (excluding those attached to Bonds with Share Option) for which it is provided that Share Option certificates are issued for such Share Options. The same shall apply hereinafter in this Chapter.), the serial numbers of the Share Option certificates representing such Share Options (limited to those for which Share Option certificates are issued).

(e) If the Share Options referred to in (b) are attached to Bonds with Share Option with Issued Certificates, the serial numbers of the certificates of Bonds with Share Option for the Bonds with Share Option (limited to those for which certificates of Bonds with Share Option are issued) to which such Share Options are attached.

(Delivery of Documents Stating Matters to be Specified in the Share Option Registry)

Article 250 (1) The holders of Share Options referred to in item (iii)(a) of the preceding article may request that the Stock Company deliver documents stating the Matters to be Specified in the Share Option Registry that are stated or recorded in the Share Option registry with respect to such holders of Share Options, or provide the Electromagnetic Records that record such Matters to be Specified in the Share Option Registry.

(2) The documents referred to in the preceding paragraph shall be affixed with the signature, or name and seal, of the Representative Director of the Stock Company (referring to the representative executive officer for a Company with Committees. The same shall apply in the following paragraph.).

(3) With respect to the Electromagnetic Records referred to in paragraph (1), the Representative Director of the Stock Company shall implement measures in lieu of the affixation of signature, or name and seal, prescribed by the applicable Ordinance of the Ministry of Justice.

(4) The provisions of the preceding three paragraphs shall not apply to Share Options with Issued Certificates or Share Options attached to Bonds with Share Option with Issued Certificates.

(Administration of Share Option Registry)

Article 251 For the purpose of the application of Article 123 in cases where a Stock Company issues Share Options, in that article, "Administrator of Shareholder Registry" shall be read as "Administrator of Shareholder Registry and Share Option Registry" and "keeping the shareholder registry" shall be read as "keeping the shareholder registry and Share Option registry."

(Keeping and Making Available for Inspection of Share Option Registry)

Article 252 (1) A Stock Company shall keep the Share Option registry at its head office (or, in cases where there is an Administrator of Shareholder Registry, at its business office).

(2) Shareholders and creditors may submit the following requests at any time during the business hours of the Stock Company. In such cases, the reasons for such requests shall be disclosed.

(i) If the Share Option registry is prepared in writing, a request for the inspection or copying of such document;

(ii) If the Share Option registry is prepared by Electromagnetic Means, a request for the inspection or copying of anything that indicates the matters recorded in such Electromagnetic Records in a manner prescribed by the applicable Ordinance of the Ministry of Justice.

(3) If a request referred to in the preceding paragraph is made, a Stock Company may not refuse such request unless it falls under any of the following:

(i) The shareholder or creditor who made such request (hereinafter in this paragraph referred to as the "Requestor") submitted the request for a purpose other than for research on securing or exercising his/her rights;

(ii) The Requestor made the request with the purpose of interfering with the execution of the operations of such Stock Company or prejudicing the common benefit of the shareholders;

(iii) The Requestor operates or engages in any business which is, in substance, in competition with the operations of such Stock Company;

(iv) The Requestor made the request in order to report facts to third parties for profit, knowledge of which may be acquired by inspecting or copying the Share Option registry; or

(v) The Requestor is a person who has reported facts. Knowledge of which was acquired by reviewing or copying the Share Option registry, to third parties for profit in the immediately preceding two years.

(4) If it is necessary for a member of the Parent Company of a Stock Company to exercise his/her rights, such member of the Parent Company may, with the permission of the court, make the requests set forth in each item of paragraph (2) with respect to the Share Option registry of such Stock Company. In such cases, the reasons for such requests shall be disclosed.

(5) The court may not grant the permission referred to in the preceding paragraph if any circumstance provided for in any item of paragraph (3) applies to the member of the Parent Company referred to in the preceding paragraph.

(Notices to Holders of Share Options)

Article 253 (1) It shall be sufficient for a notice or demand to holders of Share Options to be sent by a Stock Company to the addresses of such holders of Share Options stated or recorded in the Share Options registry (or, in cases where such holders of Share Options notify such Stock Company of a different place or contact address for the receipt of notices or demands, to such place or contact address).

(2) The notices or demands referred to in the preceding paragraph shall be deemed to have arrived at the time when such notice or demand should normally have arrived.

(3) If a Share Option is co-owned by two or more persons, the co-owners shall specify one person who receives the notice or demand sent by the Stock Company to the holders of Share Options and notify such Stock Company of the name of that person. In such case, that person shall be deemed to be the holder of Share Option and the provisions of the preceding two paragraphs shall apply.

(4) In cases where there is no notice by co-owners pursuant to the provisions of the preceding paragraph, it shall be sufficient for a notice or demand sent by a Stock Company to the co-owners of the Share Options if it is sent to one of them.

Section 4 Transfer of Share Option

Subsection 1 Transfer of Share Option

(Transfer of Share Option)

Article 254 (1) Holders of Share Options may transfer the Share Options held by the same.

(2) Notwithstanding the provisions of the preceding paragraph, Share Options attached to Bonds with Share Option may not be transferred on a stand-alone basis; provided, however, that this shall not apply if the Bonds with respect to such Bonds with Share Option are extinguished.

(3) Bonds with respect to Bonds with Share Option may not be transferred on a stand-alone basis; provided, however, that this shall not apply if the Share Options attached to such Bonds with Share Option are extinguished.

(Transfer of Share Options with Issued Certificate)

Article 255 (1) Transfer of Share Options with issued certificates shall not become effective unless the Share Option certificates representing such Share Options with Issued Certificate are delivered; provided, however, that this shall not apply to transfer of Share Options with issued certificates that arise out of the disposition of Own Share Options (meaning Own Share Options that the Stock Company holds. The same shall apply hereinafter in this Chapter.).

(2) Transfer of Share Options attached to Bonds with Share Option with Issued Certificate shall not become effective unless the certificates of Bonds with Share Option for such Bonds with Share Option with Issued Certificate are delivered; provided, however, that this shall not apply to transfer of Share Options attached to Own Bonds with Share Option (meaning Own Bonds with Share Option that the Stock Company holds. The same shall apply hereinafter in this article and in the following article.) that arise out of the disposition of such Own Bonds with Share Option.

(Special Provisions on Disposition of Own Share Option)

Article 256 (1) A Stock Company shall, without delay after the day of the disposition of its Own Share Options (limited to Share Options with Issued Certificate), deliver the Share Option certificates to the persons who acquired such Own Share Options.

(2) Notwithstanding the provisions of the preceding paragraph, a Stock Company may elect to not deliver Share Option certificates under that paragraph until the persons under that paragraph so request.

(3) A Stock Company shall, without delay after the day of the disposition of its Own Bonds with Share Option (limited to Bond with Share Option with Issued Certificate), deliver the certificates of Bonds with Share Option to the persons who acquire such Own Bonds with Share Option.

(4) The provisions of Article 687 shall not apply to the transfer of Bonds with respect to the Own Bonds with Share Option arising from the disposition of such Own Bonds with Share Option.

(Perfection of Transfer of Share Option)

Article 257 (1) Transfer of Share Options shall not be perfected against the Stock Company and other third parties unless the names and addresses of the person who acquire those Share Options is stated or recorded in the Share Options registry.

(2) For the purpose of the application of the provisions of the preceding paragraph with respect to Share Options with Issued Certificates for which registered Share Option certificates are issued, and Share Options attached to the Bond with Share Option with Issued Certificate for which registered certificates of Bonds with Share Option are issued, "the Stock Company and other third parties" in that paragraph shall be read as "the Stock Company."

(3) The provisions of paragraph (1) shall not apply to any Bearer Share Options or Share Options attached to Bearer Bonds with Share Option.

(Presumption of Rights)

A possessor of Share Option certificates shall be presumed to be the lawful owner of the rights in relation to the Share Options with Issued Certificate for such Share Option certificates.

(2) A person who receives delivery of Share Option certificates shall acquire the rights in relation to the Share Options with Issued Certificate for such Share Option certificates; provided, however, that this shall not apply if that person has knowledge or is grossly negligent as to the fact of defective title of the transferor.

(3) A possessor of certificates of Bonds with Share Option shall be presumed to be the lawful owner of the rights in relation to the Share Options attached to Bonds with Share Option with Issued Certificates for such certificates of Bonds with Share Option.

(4) A person who receives delivery of certificates of Bonds with Share Option shall acquire the rights in relation to the Share Options attached to the Bond with Share Option with Issued Certificates for such certificates of Bonds with Share Option; provided, however, that this shall not apply if that person has knowledge or is grossly negligent as to the fact of defective title of the transferor.

(Stating or Recording of Matters to be Specified in the Share Option Registry Not Requested by Holders of Share Options)

Article 259 (1) In the cases provided for in the following items, a Stock Company shall state or record the Matters to be Specified in the Share Option Registry relating to the holders of Share Options referred to in such items:

(i) In cases where it has acquired the Share Options of such Stock Company;

(ii) In cases where it has disposed of Own Share Options.

(2) The provisions of the preceding paragraph shall not apply to Bearer Share Options or Share Options attached to Bearer Bonds with Share Option.

(Stating or Recording of Matters to be Specified in the Share Option Registry at Request of Holders of Share Options)

Article 260 (1) A person who has acquired Share Options from a person other than the Stock Company that issued such Share Options (excluding such Stock Company, hereinafter in this Section referred to as "Acquirer of Share Options") may request that such Stock Company state or record, in the Share Option registry, the Matters to be Specified in the Share Option Registry relating to such Share Options.

(2) Except for cases prescribed by the applicable Ordinance of the Ministry of Justice as cases of no likelihood of detriment to interested parties, requests under the provisions of the preceding paragraph shall be made jointly with the person stated or recorded in the Share Option registry as the holder of the Share Options so acquired, or his/her general successors including his/her heirs.

(3) The provisions of the preceding two paragraphs shall not apply to Bearer Share Options or Share Options attached to Bearer Bonds with Share Option.

Article 261 The provisions of the preceding paragraph shall not apply in cases where the Share Options acquired by the Acquirer of Share Options are Share Options with Restriction on Transfer; provided, however, that this shall not apply in cases where it falls under any of the following:

(i) Such Acquirer of Share Options has obtained approval under the following article as to an intended acquisition of such Share Options with Restriction of Transfer;

(ii) Such Acquirer of Share Options has obtained approval under Article 263(1) as to a completed acquisition of such Share Options with Restriction ofTransfer;

(iii) Such Acquirer of Share Options is a person who acquired the Share Options with Restriction of Transfer by general succession including inheritance.

Subsection 2 Restriction on Transfer of Shares

(Requests for Approval by Holders of Share Option)

Article 262 If holders of Share Options with Restriction on Transfer intend to transfer Share Options with Restriction on Transfer held by the same to others (excluding the Stock Company which issued such Share Options with Restriction on Transfer), they may request that such Stock Company make a determination as to whether or not to approve the acquisition by such others of such Share Options with Restriction on Transfer.

(Request for Approval by Acquirers of Share Options)

Article 263 (1) Acquirers of Share Options who have acquired Share Options with Restriction on Transfer may request that the Stock Company make a determination as to whether or not to approve the acquisition of such Share Options with Restriction on Transfer.

(2) Except for cases prescribed by the applicable Ordinance of the Ministry of Justice as cases of no likelihood of detriment to interested parties, requests pursuant to the provisions of the preceding paragraph shall be submitted jointly with the person stated or recorded in the Share Option registry as the holder of the Share Options so acquired, or his/her general successors including his/her heirs.

(Method for Requests for Approval of Transfer)

Article 264 The requests listed in the following items (hereinafter in this Subsection referred to as "Requests for Approval of Transfer") shall be made by disclosing the matters provided for in such items:

(i) Requests under the provisions of Article 262: The following matters:

(a) The features and number of Share Options with Restriction on Transfer that the holders of Share Options making such request intend to transfer to others;

(b) The names of the person accepting the transfer of the Share Options with Restriction on Transfer referred to in (a);

(ii) Requests under the provisions of paragraph (1) of the preceding article: The following matters:

(a) The features and number of Share Options with Restriction on Transfer that the Acquirer of Share Options making such request has acquired;

(b) The name of the Acquirer of Share Options referred to in (a);

(Determination of Approval of Transfer)

Article 265 (1) The determination by a Stock Company as to whether or not to grant approval under Article 262 or Article 263(1) shall be made by resolution of a shareholders meeting (or of a board of directors meeting for a Company with Board of Directors); provided, however, that this shall not apply in cases where it is otherwise provided for as a feature of the Share Options.

(2) If a Stock Company has made a determination under the preceding paragraph, it shall notify the person who made the Requests for Approval of Transfer of the content of such determination.

(Cases where Stock Company is Deemed to have Approved)

Article 266 In cases where a Stock Company has failed to give notice pursuant to the provisions of paragraph (2) of the preceding article within two weeks (or if any shorter period of time is provided for in the articles of incorporation, such shorter period of time) from the day of the Requests for Approval of Transfer, the Stock Company shall be deemed to have given the approval under Article 262 or Article 263(1); provided, however, that this shall not apply if otherwise provided for by agreement between the Stock Company and the person who made the Requests for Approval of Transfer:

Subsection 3 Pledge of Share Options

(Pledge of Share Options)

Article 267 (1) Holders of Share Options may pledge the Share Options held by the same.

(2) Notwithstanding the provisions of the preceding paragraph, Share Options attached to Bonds with Share Option may not be pledged on a stand-alone basis; provided, however, that this shall not apply if the Bonds with respect to such Bonds with Share Option are extinguished.

(3) Bonds with respect to Bonds with Share Option may not be pledged on a stand-alone basis; provided, however, that this shall not apply if the Share Options attached to such Bonds with Share Option are extinguished.

(4) Pledges of Share Options with Issued Certificate shall not become effective unless the Share Option certificates for such Share Options with Issued Certificates are delivered.

(5) Pledges of Share Options attached to Bonds with Share Option with Issued Certificate shall not become effective unless the certificates of Bonds with Share Option for such Bonds with Share Option with Issued Certificate are delivered.

(Perfection of Pledges of Share Options)

Article 268 (1) Pledges of Share Options shall not be perfected against the Stock Company and other third parties unless the names and addresses of pledgees are stated or recorded in the Share Option registry.

(2) Notwithstanding the provisions of the preceding paragraph, a pledgee of Share Options with Issued Certificate may not assert his/her pledge against the Stock Company and other third parties unless he/she is in continuous possession of the Share Option certificates for such Share Options with Issued Certificate.

(3) Notwithstanding the provisions of paragraph (1), a pledgee of Share Options attached to Bonds with Share Option with Issued Certificates may not assert his/her pledge against the Stock Company and other third parties unless he/she is in continuous possession of the certificates of Bonds with Share Option for such Bonds with Share Option with Issued Certificate.

(Entries in Share Option Registry)

Article 269 (1) A person who pledges Share Options may request that the Stock

Company state or record the following matters in the Share Option registry:

(i) The name and address of the pledgee;

(ii) The Share Options underlying the pledge.

(2) The provisions of the preceding paragraph shall not apply to Bearer Share Options or Share Options attached to Bearer Bonds with Share Option.

(Delivery of Documents Stating Matters to be Specified in the Share Option Registry)

Article 270 (1) The pledgees for whom the matters listed in the items of the preceding article are stated or recorded in the Share Option registry (hereinafter referred to as "Registered Pledgees of Share Options") may request that the Stock Company deliver documents stating the matters listed in the items of that paragraph with respect to such Registered Pledgees of Share Options that are stated or recorded in the Share Option registry, or provide the Electromagnetic Records that record such matters.

(2) The documents referred to in the preceding paragraph shall be affixed with the signature, or name and seal, of the Representative Director of the Stock Company (the representative executive officer for a Company with Committees. The same shall apply in the following paragraph.).

(3) With respect to the Electromagnetic Records referred to in paragraph (1), the Representative Director of the Stock Company shall implement measures in lieu of the affixation of signature, or name and seal prescribed by the applicable Ordinance of the Ministry of Justice.

(4) The provisions of the preceding three paragraphs shall not apply to Share Options with Issued Certificate or Share Options attached to Bonds with Share Option with Issued Certificate.

(Notices to Registered Pledgees of Share Options)

Article 271 (1) It shall be sufficient for a notice or demand to a Registered Pledgees of Share Options to be sent by a Stock Company to the addresses of such Registered Pledgees of Share Options stated or recorded in the Share Option registry (or, in cases where such Registered Pledgees of Share Options notify the Stock Company of any different place or contact address for the receipt of notices or demands, to such place or contact address).

(2) The notices or demands referred to in the preceding paragraph shall be deemed to have arrived at the time when such notice or demand should normally have arrived.

(Effect of Pledge of Share Options)

Article 272 (1) In cases where a Stock Company carries out any of the acts listed below, pledge for Share Options shall be effective with respect to the Monies, etc. which the holders of such Share Options are entitled to receive as a result of such act:

(i) The acquisition of Share Options;

(ii) Entity Conversion;

(iii) Mergers (limited to cases where such Stock Company is to be extinguished as a result of the merger);

(iv) Absorption-type Company Split;

(v) Incorporation-type Company Split;

(vi) Share Exchange; or

(vii) Share Transfer.

(2) Registered Pledgees of Share Options may receive Monies, etc. (limited to monies) under the preceding paragraph, and appropriate them as payment to satisfy their own claims in priority to other creditors.

(3) If the claims under the preceding paragraph have not yet become due and payable, the Registered Pledgees of Share Options may have the Stock Company deposit an amount equivalent to the value of the Monies, etc. provided for in that paragraph. In such cases, the pledge shall be effective with respect to the monies so deposited.

(4) Pledges for Share Options attached to Bonds with Share Option (limited to cases where the property provided for in Article 236(1)(iii) consists of the Bonds with respect to such Bonds with Share Option, and the redemption amount for such Bonds is equal to or more than the value provided for in item

(ii) of that paragraph with respect to such Share Options) shall be effective with respect to the shares that holders of such Share Options receive by exercising such Share Options.

Section 5 Acquisition of Own Share Option by Stock Companies

Subsection 1 Acquisition of Share Option pursuant to Subscription Requirements

(Determination of Day of Acquisition)

Article 273 (1) In cases where there are provision with respect to the matters listed in Article 236(1)(vii)(b) as a feature of Share Options subject to Call (meaning Share Options for which there are provisions with respect to the matters listed in item (vii)(a) of that paragraph. The same shall apply hereinafter in this Chapter.), the Stock Company shall determine the day under the same item (vii)(b) by resolution of a shareholders meeting (or of a board of directors meeting for a Company with Board of Directors); provided, however, that this shall not apply in cases where it is otherwise provided as a feature of such Share Options subject to Call.

(2) If a Stock Company determines the day under Article 236(1)(vii)(b), the Stock Company shall notify the holders of Share Options subject to Call (or, in cases where there are provisions with respect to the matters listed in item (vii)(c) of that paragraph, the holders of Share Options subject to Call determined under the provisions of paragraph (1) of the following article) and the Registered Pledgees of Share Options thereof of such date, no later than two weeks prior to such day.

(3) A public notice may be substituted for the notice under the provisions of the preceding paragraph.

(Determination of Share Options to be Acquired)

Article 274 (1) In cases where there are provisions with respect to the matters listed in Article 236(1)(vii)(c), if a Stock Company intends to acquire Share Options subject to Call, it shall determine the Share Options subject to Call that it intends to acquire.

(2) The Share Options subject to Call under the preceding paragraph shall be determined by resolution of a shareholders meeting (or of a board of directors meeting for a Company with Board of Directors); provided, however, that this shall not apply in cases where it is otherwise provided as a feature of such Share Options subject to Call.

(3) If a Stock Company makes the determination pursuant to the provisions of paragraph (1), the Stock Company shall immediately notify the holders of Share Options subject to Call who are determined under the provisions of that paragraph and the Registered Pledgees of Share Options thereof to the effect that the Stock Company will acquire such Share Options subject to Call.

(4) A public notice may be substituted for the notice under the provisions of the preceding paragraph.

(Effectuation)

Article 275 (1) A Stock Company shall acquire, on the day when the grounds under item (vii)(a), paragraph (1) of Article 236 have arisen (or, in cases where there is a provision with respect to the matters listed in item (vii)(c) thereof, the day listed in item (i) or the day listed in item (ii) below, whichever comes later. The same shall apply in the following paragraph and paragraph (3)), Share Options subject to Call (or, in cases where there are provisions with respect to the matters listed in item (vii)(c), paragraph (1) of that article, the Share Options subject to Call determined pursuant to the provisions of paragraph (1) of the preceding article. The same shall apply in the following paragraph and paragraph (3)):

(i) The day when the grounds under Article 236(1)(vii)(a) have arisen; or

(ii) The day of notice under the provisions of paragraph (3) of the preceding article, or the day when two weeks have lapsed from the day of the public notice under paragraph (4) of that article.

(2) In cases where the Share Options subject to Call that a Stock Company acquires under the provisions of the preceding paragraph are attached to Bonds with Share Option, the Stock Company shall acquire the Bonds with respect to such Bonds with Share Option on the day when the grounds under Article 236(1)(vii)(a) have arisen.

(3) In the cases listed in the following items, the holders of Share Options subject to Call (excluding the relevant Stock Company) shall acquire the status provided for in each of such items in accordance with the provisions with respect to the matters provided for in such item, on the day when the grounds under Article 236(1)(vii)(a) have arisen:

(i) In cases where there are provisions on the matters listed in Article 236(1)(vii)(d): Shareholders of shares under the same item (vii)(d);

(ii) In cases where there are provision on the matters listed in Article 236(1)(vii)(e): Bondholders of Bonds under the same item (vii)(e);

(iii) In cases where there are provisions on the matters listed in Article 236(1)(vii)(f): Holders of "other Share Options" under that item (vii)(f);

(iv) In cases where there are provisions on the matters listed in Article 236(1)(vii)(g): Bondholders of the Bonds with respect to Bonds with Share Option under that item (vii)(g), and holders of Share Options attached to such Bonds with Share Option;

(4) Without delay after the grounds under Article 236(1)(vii)(a) have arisen, a Stock Company shall notify the holders of Share Options subject to Call and Registered Pledgees of Share Options thereof (in cases where there are provisions with respect to the matters listed in the same item (vii)(c) thereof, the holders of Share Options subject to Call determined pursuant to the provisions of paragraph (1) of the preceding article, and Registered Pledgees of Share Options thereof) to the effect that such grounds has occurred; provided, however, that this shall not apply if the Stock Company has given notice under the provisions of Article 273(2) or has given public notice under the provisions of paragraph (3) of the same article.

(5) A public notice may be substituted for the notice under the provisions of the preceding paragraph.

Subsection 2 Cancellation of Share Options

Article 276 (1) A Stock Company may cancel its Own Share Options. In such cases, the Stock Company shall determine the features and number of the Own Share Options it intends to cancel.

(2) For a Company with Board of Directors, the determination under the provisions of the second sentence of the preceding paragraph shall be made by resolution of a board of directors meeting.

Section 6 Allotment of Share Options without Contribution

(Allotment of Share Options without Contribution)

Article 277 A Stock Company may allot the Share Options of such Stock Company to shareholders (or, for a Company with Class Shares, shareholders of a certain class) without requiring them to make additional contribution (hereinafter in this Section referred to as "Allotment of Share Options without Contribution").

(Determination of Matters in relation to Allotment of Share Options without Contribution)

Article 278 (1) Whenever a Stock Company intends to effect the Allotment of Share Options without Contribution, it shall prescribe the following matters:

(i) The features and number of the Share Options the Stock Company will allot to shareholders or the method for calculating such number;

(ii) In cases where the Share Options provided for in the preceding item are attached to Bonds with Share Option, the classes of Bonds with respect to such Bonds with Share Option, and the total of the amounts for each Bond or the method for calculating such amount;

(iii) The day when such Allotment of Share Options without Contribution becomes effective; and

(iv) In cases where the Stock Company is a Company with Class Shares, the classes of shares held by shareholders who are entitled to such Allotment of Share Options without Contribution.

(2) The provisions regarding the matters listed in item (i) and item (ii) of the preceding paragraph shall be that the Share Options under item (i) of that paragraph and the Bonds under item (ii) of that paragraph will be allotted in proportion to the number of shares (or, for a Company with Class Shares, the shares of the classes under item (iv) of that paragraph) held by shareholders (or, for a Company with Class Shares, Class Shareholders of the classes under item (iv) of that paragraph) other than such Stock Company.

(3) The determination of the matters listed in each item of paragraph (1) shall be made by resolution of a shareholders meeting (or of a board of directors meeting for a Company with Board of Directors); provided, however, that this shall not apply in cases where it is otherwise provided for in the articles of incorporation.

(Effectuation of Allotment of Share Options without Contribution)

Article 279 (1) Shareholders to whom the Share Options under item (i), paragraph (1) of the preceding article have been allotted shall become the holders of the Share Options provided for in item (i) of that paragraph on the day provided for in item (iii) of that paragraph (or, in the case provided for in item (ii) of that paragraph, the holders of the Share Options provided for in item (i) of that paragraph and the Bondholders of the Bonds provided for in item (ii) of that paragraph).

(2) No later than the first day of the period provided for in Article 236(1)(iv) with respect to the Share Options provided for in item (i), paragraph (1) of the preceding article, a Stock Company shall notify shareholders (or, for a Company with Class Shares, Class Shareholders of the classes under item (iv), paragraph (1) of the preceding article) and the Registered Pledgees of Shares thereof, of the features and number of the Share Options (in the cases provided for in item (ii), paragraph (1) of the preceding article, including the classes of Bonds that have been allotted to such shareholders and the total of the amounts for each Bond) that have been allotted to such shareholders.

Section 7 Exercising Share Option

Subsection 1 General Provisions

(Exercising Share Option)

Article 280 (1) Share Options shall be exercised by disclosing the following matters:

(i) The features and number of the Share Options to be exercised; and

(ii) The day on which the Share Options will be exercised.

(2) If it is intended to exercise Share Options with Issued Certificate, the holders of such Share Options with Issued Certificate shall submit the Share Option certificates for such Share Options with Issued Certificate to the Stock Company; provided, however, that this shall not apply if no such Share Option certificates have been issued.

(3) If it is intended to exercise Share Options attached to Bonds with Share Option with Issued Certificate, the holders of such Share Options shall submit to the Stock Company the certificates of Bonds with Share Option for Bonds with Share Option to which such Share Options are attached. In such case, such Stock Company shall specify in such certificates of Bonds with Share Option to the effect that those Share Options attached to such Bonds with Share Option with Issued Certificate have been extinguished.

(4) Notwithstanding the provisions of the preceding paragraph, in cases where it is intended to exercise Share Options attached to Bonds with Share Option with Issued Certificate, if the Bonds with respect to such Bonds with Share Option with Issued Certificate are extinguished by the exercise of such Share Options, the holders of such Share Options shall submit the certificates of Bonds with Share Option for the Bonds with Share Option to which such Share Options are attached to the Stock Company.

(5) Notwithstanding the provisions of paragraph (3), in cases where it is intended to exercise the Share Options attached to Bonds with Share Option with Issued Certificate after the redemption of the Bonds with respect to such Bonds with Share Option with Issued Certificate, the holders of such Share Options shall submit the certificates of Bonds with Share Option for the Bonds with Share Option to which such Share Options are attached to the Stock Company.

(6) A Stock Company cannot exercise Own Share Options.

(Payment of Amount to be Paid in on Exercise of Share Option)

Article 281 (1) If monies are the subject of the contribution to be made on the exercise of Share Options, the holders of Share Options shall pay in the entire amount of the value provided for in Article 236(1)(ii) with respect to the Share Options relating to such exercise at the place for the handling of bank etc. payments designated by the Stock Company on the day provided for in item (ii), paragraph (1) of the preceding article.

(2) If any property other than monies is the subject of the contribution to be made on the exercise of Share Options, the holders of Share Options shall deliver the property provided for in Article 236(1)(iii) with respect to the Share Options relating to such exercise on the day provided for in item (ii), paragraph (1) of the preceding article. In such cases, if the value of such property falls short of the value provided for in Article 236(1)(ii), the holders of the Share Options shall pay in monies equivalent to the balance thereof at the place for the handling of payments referred to in the preceding paragraph.

(3) Holders of Share Options may not set off their obligations to effect payment under the provisions of paragraph (1) or delivery under the provisions of the preceding paragraph against claims the Holders of Share Options have against the Stock Company.

(Timing of Shareholder Status)

Article 282 Holders of Share Options who have exercised Share Options shall become shareholders of the shares underlying such Share Options on the day when such Share Options are exercised.

(Treatment of Fraction)

Article 283 In cases where Share Options are exercised, if the number of the shares to be issued to the holders of such Share Options includes a fraction of less than one share, the Stock Company shall, in accordance with the categories of the cases listed in the following items, deliver to the holders of such Share Options monies equivalent to the amount obtained by multiplying the amount provided for in each such item by such fraction; provided, however, that this shall not apply in cases where there are provisions with respect to the matters listed in Article 236(1)(ix):

(i) In cases where such shares are shares with a market price: The amount calculated by the method prescribed by the applicable Ordinance of the Ministry of Justice as the market price of one such share; and

(ii) In cases other than the cases listed in the preceding item: The amount of net assets per share.

Subsection 2 Contribution of Property Other than Monies

Article 284 (1) In cases where Share Options for which there are provisions with respect to the matters listed in Article 236(1)(iii) are exercised, a Stock Company shall petition the court, without delay after a delivery of property under the provisions of Article 281(2), for the appointment of an inspector, in order to have the inspector investigate the value of the property provided for in that item (hereinafter in this Section referred to as "Properties Contributed in Kind").

(2) In cases where the petition referred to in the preceding paragraph has been filed, the court shall appoint an inspector, except in cases where it dismisses such petition as unlawful.

(3) In cases where the court has appointed the inspector under the preceding paragraph, it may fix the amount of the remuneration that the Stock Company shall pay to such inspector.

(4) The inspector referred to in paragraph (2) shall conduct the necessary investigations, and submit a report, either by recording the outcome of such investigations or by providing the documents or Electromagnetic Records (limited to those prescribed by the applicable Ordinance of the Ministry of Justice) to the court.

(5) If the court finds it necessary to clarify the contents of the report under the preceding paragraph or to confirm the grounds supporting such report, it may request that the inspector under paragraph (2) submit a further report under the preceding paragraph.

(6) If the inspector under paragraph (2) has submitted the report referred to in paragraph (4), he/she shall deliver to the Stock Company a copy of the documents under such paragraph, or provide the matters recorded in the Electromagnetic Records under such paragraph by the methods prescribed by the applicable Ordinance of the Ministry of Justice.

(7) In cases where the court receives a report under paragraph (4), if it finds the value provided for in item (iii), paragraph (1) of Article 236 with respect to the Properties Contributed in Kind (excluding a value not subjected to the investigation by the inspector under paragraph (2)) to be improper, it shall issue a ruling changing such value.

(8) In cases where the value of the Properties Contributed in Kind has been changed, in whole or in part, because of a ruling under the preceding paragraph, the holders of the Share Options referred to in paragraph (1) may rescind their manifestation of intention relating to the exercise of their Share Options, limited to within one week from the finalization of such ruling.

(9) The provisions of the preceding paragraphs shall not apply in the cases in each of the following items with respect to the matters prescribed respectively in those items:

(i) In cases where the total number of the shares to be delivered to the holders of Share Options that have been exercised does not exceed one tenth (1/10) of the total number of Issued Shares: The value of the Properties Contributed in Kind that are tendered by the holders of such Share Options;

(ii) In cases where the total sum of the values provided for under Article 236(1)(iii) with respect to the Properties Contributed in Kind does not exceed 5,000,000 yen: The value of such Properties Contributed in Kind;

(iii) In cases where the value provided for under Article 236(1)(iii) with respect to the Properties Contributed in Kind does not exceed the value calculated by the method prescribed by the applicable Ordinance of the Ministry of Justice as the market price of such securities: The value of the Properties Contributed in Kind with respect to such securities;

(iv) In cases where, the verification of an attorney, a legal professional corporation, a certified public accountant, an auditing firm, a tax accountant or a tax accountant corporation (or in cases where the Properties Contributed in Kind consist of real estate, hereinafter in this item referring to such verification and an appraisal by a real property appraiser) is obtained with respect to the reasonableness of the value provided for under Article 236(1)(iii) with respect to Properties Contributed in Kind: The value of the Properties Contributed in Kind so verified;

(v) In cases where the Properties Contributed in Kind consist of a money claim (limited to claims that have already fallen due), and the value provided for under Article 236(1)(iii) with respect to such money claim does not exceed the book value of the debt representing such money claim: The value of the Properties Contributed in Kind with respect to such monetary claim (10) None of the following persons can provide the verification provided in item (iv) of the preceding paragraph:

(i) A director, an accounting advisor, a company auditor or executive officer, or an employee including a manager;

(ii) A holder of Share Options;

(iii) A person who has become subject to a suspension of operations for whom the period of such suspension has not elapsed yet; or

(iv) A legal profession corporation, an auditing firm or a tax accountant corporation with respect to which more than half of its members are the persons who fall under either item (i) or item (ii) above.\

Subsection 3 Liabilities

(Liabilities of Persons who Subscribed for Share Options with Unfair Amount To Be Paid In)

Article 285 (1) In the cases listed in the following items, a holder of Share Options who has exercised Share Options shall be liable to the Stock Company for payment of the amount provided for in such items:

(i) In the cases provided for in Article 238(1)(ii), if the arrangement that there is no requirement for monies to be paid in for Share Options for Subscription is a condition that is extremely unfair (limited to the cases where the holder of the Share Options subscribed for the Share Options in collusion with directors (or, directors or executive officers for a Company with Committees. The same shall apply in the following item.)): The fair value of such Share Options;

(ii) In the cases provided for in Article 238(1)(iii), if the holder of the Share Options subscribed for the Share Options at an Amount To Be Paid In that is extremely unfair, in collusion with directors: The amount equivalent to the difference between such Amount To Be Paid In and the fair value of such Share Options;

(iii) In cases where the value of the Properties Contributed in Kind that the holder of the Share Options tendered when he/she became a shareholder pursuant to the provisions of Article 282 is extremely short of the value provided for under Article 236(1)(iii) with respect to the Properties Contributed in Kind: The amount of such shortfall

(2) In the cases provided for in item (iii) of the preceding paragraph, if the holder of the Share Options who tendered the Properties Contributed in Kind is without knowledge and is not grossly negligent as to the fact that the value of such Properties Contributed in Kind is extremely short of the value provided for under item (iii), paragraph (1) of Article 236 with respect to the Properties Contributed in Kind, the holder of the Share Options may rescind his/her manifestation of intention relating to the exercise of the Share Options.

(Liabilities of Directors in case of Shortfall in Value of Property Contributed)

Article 286 (1) In the cases listed in item (iii), paragraph (1) of the preceding article, the following persons (hereinafter in this article referred to as "Directors, etc.") shall be liable to the Stock Company for payment of the amounts listed in such items:

(i) Executive directors who carried out duties regarding the solicitation of such holders of Share Options (or, for a Company with Committees, executive officers. The same shall apply in this item.) and other persons prescribed by the applicable Ordinance of the Ministry of Justice as persons who were involved, in the performance of their duties, in the execution of the business of such executive directors;

(ii) If a shareholders meeting has passed a resolution regarding the determination of the value of the Properties Contributed in Kind, the persons prescribed by the applicable Ordinance of the Ministry of Justice as the directors who submitted proposals to such shareholders meeting;

(iii) If a board of directors meeting has passed a resolution regarding the determination of the value of Properties Contributed in Kind, the persons prescribed by the applicable Ordinance of the Ministry of Justice as the directors (or, for a Company with Committees, directors or executive officers) who submitted proposals to such board of directors meeting;

(2) Notwithstanding the provisions of the preceding paragraph, the Directors, etc. shall not be liable for Properties Contributed in Kind under that paragraph in the cases listed below:

(i) An investigation has been carried out by an inspector under Article 284(2) with respect to the value of the Properties Contributed in Kind; or

(ii) Such Directors, etc. have proven that they did not fail to exercise care with respect to the performance of their duties.

(3) In the cases provided for in paragraph (1), the person who submitted the verification provided for in Article 284(9)(iv) (hereinafter in this article referred to as "Verifying Person") shall be liable for the payment of the amount provided for in item (iii), paragraph (1) of the preceding article to the Stock Company; provided, however, that this shall not apply in cases where such Verifying Person has proven that he/she did not fail to exercise care with respect to the submission of such verification.

(4) In cases where a holder of Share Options bears an obligation to pay an amount provided for in item (iii), paragraph (1) of the preceding article with respect to Properties Contributed in Kind tendered by the holder of Share Options, if the persons listed as follows bear obligations provided for in such items with respect to such Properties Contributed in Kind, such persons shall be joint and several obligors:

(i) Directors, etc. : The obligations under paragraph (1); and

(ii) Verifying Person: The obligations under the main clause of the preceding paragraph.

**Subsection 4 Miscellaneous Provisions **

Article 287 In addition to the cases provided for in Article 276(1), if a holder of Share Options can no longer exercise the Share Options held by the same, such Share Options shall be extinguished.

Section 8 Certificates for Share Options

Subsection 1 Share Option Certificates

(Issuing of Share Option Certificates)

Article 288 (1) A Stock Company shall, without delay after the day of issue of Share Options with Issued Certificate, issue Share Option certificates for such Share Options with Issued Certificate.

(2) Notwithstanding the provisions of the preceding paragraph, a Stock Company may elect to not deliver the Share Option certificates under that paragraph until the holders of Share Options so request.

(Matters to be Stated on Share Option Certificate)

Article 289 A Stock Company shall state the following matters and the serial number on a Share Option certificate and the Representative Director of the Stock Company (or the representative executive officer for a Company with Committees) shall affix his/her signature, or name and seal:

(i) The trade name of the Stock Company; and

(ii) The features and number of Share Options with Issued Certificate relating to such Share Option certificates;

(Conversion between Registered Share Option and Bearer Share Option)

Article 290 Holders of Share Options with Issued Certificate may demand at any time that the Stock Company convert their registered Share Option certificates into bearer Share Option certificates, or convert their bearer Share Option certificates into registered Share Option certificates, except in cases where there is an arrangement that such conversion is not possible under the provisions with respect to the matters listed in Article 236(1)(xi).

(Loss of Share Option Certificates)

Article 291 (1) Share Option certificates may be invalidated pursuant to the public notification procedures under Article 142 of the Non-Contentious Cases Procedures Act.

(2) A person who has lost Share Option certificates may not request the reissuing of their Share Option certificates until after they obtain the decision for invalidation provided for in Article 148(1) of the Non-Contentious Cases Procedures Act.

Subsection 2 Certificates of Bonds with Share Option

Article 292 (1) The certificates of Bonds with Share Option representing Bonds with Share Option with Issued Certificate shall state the features and number of the Share Options attached to such Bonds with Share Option with Issued Certificate, in addition to the matters to be stated under the provisions of Article 697(1).

(2) In cases where it is intended to redeem Bonds with respect to Bonds with Share Option with Issued Certificate, if the Share Options attached to such Bonds with Share Option with Issued Certificate have not been extinguished, the Stock Company may not demand the redemption of the Bonds in exchange for the certificates of Bonds with Share Option representing such Bonds with Share Option with Issued Certificate. In such cases, the Stock Company may, in exchange for the redemption of the Bonds, seek the presentation of such certificates of Bonds with Share Option and may enter a statement on such certificates of Bonds with Share Option to the effect that the Bonds have been redeemed.

Subsection 3 Submission of Share Option Certificate

(Public Notice in relation to Submission of Share Option Certificate)

Article 293 (1) In cases where a Stock Company carries out an act listed in the following items, if it has issued Share Option certificates representing the Share Options provided for in such items (if such Share Options are attached to Bonds with Share Option, hereinafter in this Subsection referring to the certificates of Bonds with Share Option representing such Bonds with Share Option), such Stock Company shall, more than one month prior to the day when such act takes effect, give public notice to the effect that such Share Option certificates shall be submitted to such Stock Company before such day, and a separate notice to such effect to each holder of such Share Options and each registered pledgee of such Share Options:

(i) Acquisitions of Share Options subject to Call: Such Share Options subject to Call;

(ii) Organizational Changes: All Share Options;

(iii) Mergers (limited to cases where such Stock Company is to be extinguished as a result of the merger): All Share Options;

(iv) Absorption-type Company Split: Share Options under Absorption-type split agreement provided for in Article 758(v)(a);

(v) Incorporation-type Company Split: Share Options under Incorporation-type company split plan provided for in Article 763(x)(a);

(vi) Share Exchange: Share Options under Share Exchange agreement provided for in Article 768(1)(iv)(a); or

(vii) Share Transfer: Share Options under Share Transfer plan provided for in Article 773(1)(ix)(a);

(2) If a person fails to submit Share Option certificates to a Stock Company no later than the day on which the act listed in each item of the preceding paragraph takes effect, the Stock Company may, until such Share Option certificates are submitted, refuse to deliver the Monies, etc. to which the holders of the Share Options representing such Share Option certificates are entitled as a result of such act.

(3) The Share Option certificates representing the Share Options provided for in each item of paragraph (1) shall become invalid on the day when the act listed in each such item takes effect.

(4) The provisions of Article 220 shall apply mutatis mutandis if, in cases where an act listed in any item of paragraph (1) is carried out, a person cannot submit the Share Option certificates.

(Cases Where Bearer Share Option Certificates are not Submitted)

Article 294 (1) Notwithstanding the provisions of Article 132, in cases where the act listed in item (i), paragraph (1) of the preceding article is carried out (limited to cases where, in exchange for the acquisition of Share Options by a Stock Company, shares in such Stock Company are delivered to the holders of such Share Options), if Share Option certificates (hereinafter in this article limited to those in bearer form) are not submitted pursuant to the provisions of that paragraph, the Stock Company is not required to state or record in the shareholder registry the matters listed in Article 121(i) relating to shares that persons who hold such Share Option certificates are entitled to have delivered.

(2) In the cases provided for in the preceding paragraph, a Stock Company is not required to send notices or demands to shareholders of shares that persons who hold Share Option certificates that shall be submitted pursuant to the provisions of paragraph (1) of the preceding article are entitled to have delivered.

(3) Notwithstanding the provisions of Article 249 and Article 259(1), in cases where the act listed in item (i), paragraph (1) of the preceding article is carried out (limited to cases where, in exchange for the acquisition of Share Options by a Stock Company, other Share Options of such Stock Company (excluding those attached to Bonds with Share Option) are delivered to the holders of such Share Options), if no Share Option certificates are submitted pursuant to the provisions of that paragraph, the Stock Company is not required to state or record in the Share Option registry the matters listed in Article 249(iii)(a) relating to such other Share Options (excluding Bearer Share Options) that persons who hold such Share Option certificates are entitled to have delivered.

(4) In the cases provided for in the preceding paragraph, a Stock Company is not required to send notices or demands to holders of Share Options that persons who hold Share Option certificates that shall be submitted pursuant to the provisions of paragraph (1) of the preceding article are entitled to have delivered.

(5) Notwithstanding the provisions of Article 249 and Article 259(1), in cases where the act listed in item (i), paragraph (1) of the preceding article is carried out (limited to cases where, in exchange for the acquisition of Share Options by a Stock Company, Bonds with Share Option of such Stock Company are delivered to the holders of such Share Options), if no Share Option certificates are submitted pursuant to the provisions of that paragraph, the Stock Company is not required to state or record in the Share Option registry the matters listed in Article 249(iii)(a) relating to Share Options attached to the Bonds with Share Option (excluding Bearer Bonds with Share Option) that persons who hold such Share Option certificates are entitled to have delivered.

(6) In the cases provided for in the preceding paragraph, a Stock Company is not required to send notices or demands to holders of Share Options attached to the Bonds with Share Option that persons who hold Share Option certificates that shall be submitted pursuant to the provisions of paragraph (1) of the preceding article are entitled to have delivered.

Chapter IV Organ

Section 1 Shareholders Meeting and Class Meeting

Subsection 1 Shareholders Meeting

(Authority of Shareholders Meeting)

Article 295 (1) Shareholders' meetings may resolve the matters provided for in this Act, the organization, operations and administration of the Stock Company, and any and all other matters regarding the Stock Company.

(2) Notwithstanding the provisions of the preceding paragraph, for a Company with Board of Directors, a shareholders meeting may resolve only the matters provided for in this Act and the matters provided for in the articles of incorporation.

(3) Provisions of the articles of incorporation which provide to the effect that any organization other than the shareholders meeting, such as directors, executive officers and board of directors, may determine any matter which, pursuant to the provisions of this Act, requires the resolution of the shareholders meeting shall not be effective.

(Calling of Shareholders Meeting)

Article 296 (1) Annual shareholders meeting shall be called within a defined period of time after the end of each business year.

(2) A shareholders meeting may be called whenever necessary.

(3) A shareholders meeting shall be called by directors, except in cases where it is called pursuant to the provisions of paragraph (4) of the following Article.

(Demand for Calling of Meeting by Shareholders)

Article 297 (1) Shareholders having consecutively for the preceding six months or more (or, in cases where shorter period is prescribed in the articles of incorporation, such period or more) not less than three hundredths (3/100) (or, in cases where lesser proportion is prescribed in the articles of incorporation, such proportion) of the votes of all shareholders may demand the directors, by showing the matters which shall be the purpose of the shareholders meeting (limited to the matters on which such shareholders may exercise their votes) and the reason of the calling, that they call the shareholders meeting.

(2) For the purpose of the application of the preceding paragraph to a Stock Company which is not a Public Company, "having consecutively for the preceding six months or more (or, in cases where shorter period is prescribed in the articles of incorporation, such period or more)" in that paragraph shall be read as "having."

(3) The number of the votes of the shareholders who may not exercise their votes on the matters that are the purpose of the shareholders meeting referred to in paragraph (1) shall not be included in the number of the votes of all shareholders under that paragraph.

(4) In the following cases, the shareholders who made the demand pursuant to the provisions of paragraph (1) may call the shareholders meeting with the permission of the court.

(i) In cases where the calling procedure is not effected without delay after the demand pursuant to the provisions of paragraph (1); or

(ii) In cases where a notice for the calling of the shareholders meeting which designates, as the day of the shareholders meeting, a day falling within the period of eight weeks (or, in cases where any period less than that is provided for in the articles of incorporation, such period) from the day of the demand pursuant to the provisions of paragraph (1) is not dispatched.

(Determination to Call Shareholders Meeting)

Article 298 (1) Directors (in cases where shareholders call a shareholders meeting pursuant to the provisions of paragraph (4) of the preceding Article, such shareholders. The same shall apply in the main clause of the next paragraph and in the following Article to Article 302 inclusive) shall decide the following matters in cases where they call a shareholders meeting:

(i) The date, time and place of the shareholders meeting;

(ii) If there is any matter which is the purpose of the shareholders meeting, such matter;

(iii) That shareholders who do not attend the shareholders meeting may exercise their votes in writing, if so arranged;

(iv) That shareholders may exercise their votes by an Electromagnetic Method, if so arranged;

(v) In addition to the matters listed in the preceding items, any matters prescribed by the applicable Ordinance of the Ministry of Justice.

(2) In cases where the number of the shareholders (excluding shareholders who may not exercise their votes on all matters which may be resolved at a shareholders meetings. The same shall apply in the next Article to Article 302 inclusive) is one thousand or more, the directors shall decide the matters listed in item (iii) of the preceding paragraph; provided, however, that this shall not apply to the cases where such Stock Company is a Stock Company which issues the shares provided for in Article 2(16) of the Financial Instruments and Exchange Act and is an entity prescribed by the applicable Ordinance of the Ministry of Justice.

(3) For the purpose of the application of the provisions of the preceding paragraph to a Company with Board of Directors, "matters which may be resolved at the shareholders meetings" in that that paragraph shall be read as "matters listed in paragraph (2) of the preceding paragraph."

(4) At a Company with Board of Directors, the decision of the maters listed in each item of paragraph (1) shall be made by the resolution of the board of directors, except for the cases where the shareholders call the Company pursuant to the provisions of paragraph (4) of the preceding Article.

(Notice of Calling of Shareholders' meetings)

Article 299 (1) In order to call the shareholders meeting, the directors shall dispatch the notice thereof to the shareholders no later than two weeks (or one week if the Stock Company is not a Public Company, except in cases where the matters listed in item (iii) or (iv) of paragraph (1) of the preceding Article are decided, (or if a shorter period of time is provided for in the articles of incorporation in cases where the Stock Company is a Stock Company other than the Company with Board of Directors, such shorter period of time)) prior to the day of the shareholders meeting.

(2) The notice referred to in the preceding paragraph shall be in writing in the following cases:

(i) Where the matters listed in item (iii) or (iv) of paragraph (1) of the preceding Article are decided; or

(ii) Where the Stock Company is a Company with Board of Directors.

(3) In lieu of the dispatch of the written notice referred to in the preceding paragraph, the directors may dispatch the notice by an Electromagnetic Method, with the consent of the shareholders, in accordance with the provisions of the applicable Cabinet Order. In such cases, such directors shall be deemed to have dispatched the written notice under such paragraph.

(4) The notice under the preceding two paragraphs shall specify or record the matters listed in each item of paragraph (1) of the preceding article.

(Omission of Calling Procedures)

Article 300 Notwithstanding the provisions of the preceding Article, the shareholders meeting may be held without the procedures of calling if the consent of all shareholders is obtained; provided, however, that this shall not apply in cases where the matters listed in item (iii) or item (iv) of Article 298(1) are decided.

(Giving of Reference Documents for Shareholders Meeting and Voting Forms)

Article 301 (1) In cases where the matters listed in item (iii) of Article 298(1) are decided, the directors shall, when dispatching a notice under Article 299(1), give the shareholder the document stating matters of reference for the exercise of votes (hereinafter in this Subsection referred to as "Reference Document for Shareholders Meeting") and the document to be used by the shareholder to exercise the votes (hereinafter in this Subsection referred to as "Voting Form") pursuant to the provisions of the applicable Ordinance of the Ministry of Justice.

(2) If the directors dispatch notices by an Electromagnetic Method referred to in Article 299(3) to the shareholders who have given consent under the same paragraph, the directors may provide, in lieu of the giving of the Reference Documents for Shareholders Meeting and Voting Forms pursuant to the provisions of the preceding paragraph, the matters to be specified in such document by an Electromagnetic Method; provided, however, that, if requested by any shareholder, they shall give these documents to such shareholder.

Article 302 (1) In cases where the matters listed in item (iv) of Article 298(1) are decided, the directors shall, when dispatching a notice under Article 299(1), give the shareholders the Reference Documents for Shareholders Meeting pursuant to the provisions of the applicable Ordinance of the Ministry of Justice.

(2) If the directors dispatch the notice by an Electromagnetic Method referred to in Article 299(3) to the shareholders who have given consent under the same paragraph, the directors may provide, in lieu of the giving of the Reference Documents for Shareholders Meeting pursuant to the provisions of the preceding paragraph, the matters to be specified in such documents by an Electromagnetic Method; provided, however, that, if requested by any shareholder, the directors shall give the Reference Documents for Shareholders Meeting to such shareholder.

(3) In the case provided for in paragraph (1), when sending notice to the shareholders who have given consent under Article 299(3) by an Electromagnetic Method referred to in the same paragraph, the directors shall provide to the shareholders the matters to be specified in the Voting Forms by such Electromagnetic Method pursuant to the provisions of the applicable Ordinance of the Ministry of Justice.

(4) In the case provided for in paragraph (1), if any shareholder who has not given consent under Article 299(3) requests, no later than one week prior to the day of the shareholders meeting, for the provision of the matters to be specified in the Voting Form by an Electromagnetic Method, the directors shall provide such matters to such shareholder by an Electromagnetic Method pursuant to the provisions of the applicable Ordinance of the Ministry of Justice.

(Shareholders' Right to Propose)

Article 303 (1) Shareholders may demand that the directors include certain matters (limited to the matters on which such shareholders may exercise their votes. The same shall apply in the following paragraph) in the purpose of the shareholders meeting.

(2) Notwithstanding the provisions of the preceding paragraph, at a Company with Board of Directors, only shareholders having consecutively for the preceding six months or more (or, in cases where shorter period is prescribed in the articles of incorporation, such period or more) not less than one hundredth (1/100) (or, in cases where lesser proportion is prescribed in the articles of incorporation, such proportion) of the votes of all shareholders or not less than three hundred (or, in cases where lesser number is prescribed in the articles of incorporation, such number of) votes of all shareholders may demand the directors that the directors include certain matters in the purpose of the shareholders meeting. In such cases, that demand shall be submitted no later than eight weeks (or, in cases where shorter period is prescribed in the articles of incorporation, such period or more) prior to the day of the shareholders meeting.

(3) For the purpose of the application of the preceding paragraph to a Company with Board of Directors which is not a Public Company, "having consecutively for the preceding six months or more (or, in cases where shorter period is prescribed in the articles of incorporation, such period or more)" in that paragraph shall be read as "having."

(4) The number of the votes to which the shareholders who may not exercise their votes on the certain matters referred to in paragraph (2) are entitled shall not be included in the number of the votes of all shareholders under that paragraph.

Article 304 Shareholders may submit proposals at the shareholders meeting with respect to the matters that are the purpose of the shareholders meeting (limited to the matters on which such shareholders may exercise their votes. The same shall apply in paragraph (1) of the following article); provided, however, that this shall not apply in cases where such proposals are in violation of the laws or the articles of incorporation, or in cases where three years have not elapsed from the day on which, with respect to the proposal which is essentially identical to such proposal, affirmative votes not less than one tenths (1/10) (or, in cases where any proportion less than that is provided for in the articles of incorporation, such proportion) of the votes of all shareholders (excluding the shareholders who may not exercise their voting rights on such proposal) were not obtained.

Article 305 (1) Shareholders may demand the directors that, no later than eight weeks (or, in cases where any period less than that is provided for in the articles of incorporation, such period) prior to the day of the shareholders meeting, shareholders be notified of the summary of the proposals which such demanding shareholders intend to submit with respect to the matters that are the purpose of the shareholders meeting (or, in cases where a notice pursuant to paragraph (2) or paragraph (3) of Article 299 is to be given, such summary be specified or recorded in that notice); provided, however, that, for a Company with Board of Directors, only shareholders having consecutively for the preceding six months or more (or, in cases where shorter period is prescribed in the articles of incorporation, such period or more) not less than one hundredth (1/100) (or, in cases where lesser proportion is prescribed in the articles of incorporation, such proportion) of the votes of all shareholders or not less than three hundred (or, in cases where lesser number is prescribed in the articles of incorporation, such number of) votes of all shareholders may make such demand.

(2) For the purpose of the application of the proviso to the preceding paragraph to a Company with Board of Directors which is not a Public Company, "having consecutively for the preceding six months or more (or, in cases where shorter period is prescribed in the articles of incorporation, such period or more)" in that paragraph shall be read as "having."

(3) The number of the votes to which the shareholders who may not exercise their votes on the matters that are the purpose of the shareholders meeting referred to in paragraph (1) are entitled shall not be included in the number of the votes of all shareholders under the proviso to that paragraph.

(4) The provisions of the preceding three paragraphs shall not apply in cases where the proposals under paragraph (1) are in violation of the laws or the articles of incorporation, or in cases where three years have not elapsed from the day on which, with respect to the proposal which is essentially identical to such proposal, affirmative votes not less than one tenths (1/10) (or, in cases where any proportion less than that is provided for in the articles of incorporation, such proportion) of the votes of all shareholders (excluding the shareholders who may not exercise their voting rights on such proposal) were not obtained.

(Election of Inspector on Calling Procedures of Shareholders Meeting)

Article 306 (1) A Stock Company or shareholders who hold not less than one hundredth (1/100) (or, in cases where any proportion less than that is provided for in the articles of incorporation, such proportion) of the votes of all shareholders (excluding the shareholders who may not exercise their votes on all matters which may be resolved at the shareholders meeting) may file a petition with the court, before a shareholders meeting, for the election of an inspector who shall be retained to investigate the calling procedures and method of resolution relating to such shareholders meeting.

(2) For the purpose of the provisions of the preceding paragraph to a Company with Board of Directors which is a Public Company, in that paragraph, "matters which may be resolved at the shareholders meeting" shall be read as "matters listed in item (ii) of Article 298(1)" and "hold" shall be read as "have held, for the consecutive period of six months or more (or, in cases where any period less than that is provided for in the articles of incorporation, such period)"; and for the purpose of the provisions of the preceding paragraph to a Company with Board of Directors which is not a Public Company, "matters which may be resolved at the shareholders meeting" in that paragraph shall be read as "matters listed in item (ii) of Article 298(1)."

(3) In cases where the petition for the election of an inspector pursuant to the provisions of the preceding two paragraphs has been filed, the court shall elect the inspector except in case it dismisses such petition as non-conforming.

(4) In cases where the court has elected the inspector set forth in the preceding paragraph, it may fix the amount of the compensation which the Stock Company shall pay to such inspector.

(5) The inspector set forth in paragraph (3) shall conduct necessary investigation and shall report the court by submitting the document or Electromagnetic Records (limited to those prescribed by the applicable Ordinance of the Ministry of Justice) which specifies or records the result of such investigation.

(6) If the court finds it necessary to for the purpose of clarification of the contents of the report set forth in the preceding paragraph or of confirmation of the grounds supporting such report, it may request the inspector set forth in paragraph (3) a further report set forth in the preceding paragraph.

(7) When the inspector set forth in paragraph (3) reports pursuant to paragraph (5), he/she shall give the Stock Company (in cases where the person who filed a petition for the election of an inspector was not such Stock Company, such Stock Company and that person) a copy of the document set forth in that paragraph, or provide the matters recorded in the Electromagnetic Records set forth in that paragraph by the method prescribed by the applicable Ordinance of the Ministry of Justice.

(Determination by the Court of the Calling of Shareholders Meeting)

Article 307 (1) In cases where the report under paragraph (5) of the preceding Article is submitted, if the court finds it necessary, it shall order the directors to take some or all of the measures listed below:

(i) To call a shareholders meeting within a defined period of time; and

(ii) To notify the shareholders of the result of the investigation under paragraph (5) of the preceding Article.

(2) In cases where the court orders the measures listed in item (i), paragraph (1) of the preceding Article, the directors shall disclose the content of the report under paragraph (5) of the preceding Article at the shareholders meeting under that paragraph.

(3) In the cases provided for in the preceding paragraph, the directors (or the directors and company auditors for a Company with Auditors) shall investigate the content of the report under paragraph (5) of the preceding Article and report the result thereof to the shareholders meeting under item (i) of paragraph (1).

(Number of Votes)

Article 308 (1) Shareholders (excluding the shareholder prescribed by the applicable Ordinance of the Ministry of Justice as the entity in a relationship that may allow the Stock Company to have substantial control of such entity through the holding of one quarter or more of the votes of all shareholders of such entity or other reasons) shall be entitled to one vote for each one share they hold at the shareholders meeting; provided, however, that, in cases where a Share Unit is provided for in the articles of incorporation, they shall be entitled to one vote for each one unit of the shares.

(2) Notwithstanding the provisions of the preceding paragraph, a Stock Company shall not have any votes with respect to its Treasury Shares.

(Resolution of Shareholders Meetings)

Article 309 (1) Unless otherwise provided for in the articles of incorporation, the resolution of a shareholders meeting shall be made by a majority of the votes of the shareholders present at the meeting where the shareholders holding a majority of the votes of the shareholders who are entitled to exercise their votes are present.

(2) Notwithstanding the provisions of the preceding paragraph, the resolutions of the following shareholders meetings shall be made by a majority of two thirds (in cases where a higher proportion is provided for in the articles of incorporation, such proportion) or more of the votes of the shareholders present at the meeting where the shareholders holding a majority (in cases where a proportion of one third or more is provided for in the articles of incorporation, such proportion or more) of the votes of the shareholders entitled to exercise their votes at such shareholders meeting are present. In such cases, it is not precluded from providing in the articles of incorporation, in addition to such requirements for resolution, additional requirements including those providing to the effect that the approval of a certain number or more of the shareholders are required:

(i) Shareholders meeting under Article 140(2) and (5);

(ii) Shareholders meeting under Article 156(1) (limited to the case where the specific shareholders under Article 160(1) are to be identified);

(iii) Shareholders meeting under Article 171(1) and Article 175(1);

(iv) Shareholders meeting under Article 180(2);

(v) Shareholders meeting under Article 199(2), Article 200(1), item (iv) of Article 202(3) and Article 204(2);

(vi) Shareholders meeting under Article 238(2), Article 239(1), item (iv) of Article 241(3) and Article 243(2);

(vii) Shareholders meeting under Article 339(1) (limited to the case where directors elected pursuant to the provisions of item (iii) through (v) of Article 342 are to be dismissed or company auditors are to be dismissed);

(viii) Shareholders meeting under Article 425(1);

(ix) Shareholders meeting under Article 447(1) (excluding the cases which fall under both of the following conditions):

(a) That the matters listed in each item of Article 447(1) shall be determined at the annual shareholders meeting; and

(b) That the amount referred to in item (i) of Article 447(1) shall not exceed the amount which is calculated in a manner prescribed by the applicable Ordinance of the Ministry of Justice as the amount of deficit at the day of the annual shareholders meeting referred to in Sub-item (a) (or, in the case provided for in the first sentence of Article 439, the day when the approval under Article 436(3) is effected).

(x) Shareholders' meeting under Article 454(4) (limited to the cases where it is to be arranged that the Dividend Property shall consist of any property other than cash, and that no Right to Demand Distribution of Monies provided for in item (i) of that paragraph shall be granted to the shareholders);

(xi) Shareholders' meeting in cases where the resolution by such shareholders meeting is required pursuant to the provisions of Chapter VI through Chapter VIII;

(xii) Shareholders' meeting in cases where no resolution by such shareholders meeting is required pursuant to the provisions of Part V.

(3) Notwithstanding the provisions of the preceding two paragraphs, the resolutions of the following shareholders meetings (excluding the shareholders meetings of a Company with Class Shares) shall be made by at least half (in cases where a higher proportion is provided for in the articles of incorporation, such proportion or more) of the shareholders entitled to exercise their votes at such shareholders meeting, being a majority of two thirds (in cases where a higher proportion is provided for in the articles of incorporation, such proportion) or more of the votes of such shareholders:

(i) Shareholders' meetings where the articles of incorporation are amended creating a provision to the effect that, as the features of all shares issued by a Stock Company, the approval of such Stock Company is required for the acquisition of such shares by transfer;

(ii) Shareholders' meetings under Article 783(1) (limited to such shareholders meeting where the Stock Company which will be absorbed by merger or Stock Company which effects Share Exchange is a Public Company, and some or all of the Cash Etc. to be delivered to the shareholders of such Stock Company consist of Shares with Restriction on Transfer, Etc. (meaning the Shares with Restriction on Transfer, Etc. provided for in paragraph (3) of that paragraph. The same shall apply hereinafter in the following item.)); or

(iii) Shareholders' meetings under Article 804(1) (limited to such shareholders meeting where the Stock Company which effects merger or Share Transfer is a Public Company, and some or all of the Monies, Etc. to be distributed to the shareholders of such Stock Company consist of Shares with Restriction on Transfer, Etc.).

(4) Notwithstanding the provisions of the preceding three paragraphs, resolutions of the shareholders meetings which effect any amendment in the articles of incorporation (excluding those which repeal such provisions of the articles of incorporation) with respect to the amendment in the articles of incorporation pursuant to the provisions of Article 109(2) shall be made by the majority (in cases where a higher proportion is provided for in the articles of incorporation, such proportion or more) of all shareholders, being a majority equating three quarters (in cases where a higher proportion is provided for in the articles of incorporation, such proportion) or more of the votes of all shareholders.

(5) At a Company with Board of Directors, the shareholders meeting may not resolve matters other than the matters listed in item (ii) of Article 298(1); provided, however, that this shall not apply to the election of the persons provided for in paragraph (1) or paragraph (2) of Article 316, nor to requests for the presence of an accounting auditor under Article 398(2).

(Proxy Voting)

Article 310 (1) Shareholders may exercise their votes by proxy. In such cases, such shareholders or proxies shall submit to the Stock Company a document evidencing the authority of proxy.

(2) The grant of the authority of proxy under the preceding paragraph shall be made for each shareholders meeting.

(3) Shareholders or proxies referred to in paragraph (1) may, in lieu of the submission of the document evidencing the authority of proxy, provide the matters to be stated in such document by an Electromagnetic Method with the approval of the Stock Company in accordance with the provisions of the applicable Cabinet Order. In such cases, such shareholders or proxies shall be deemed to have submitted such document.

(4) In cases where the shareholders are the persons who gave consent under Article 299(3), the Stock Company may not refuse to grant the approval under the preceding paragraph without justifiable reasons.

(5) The Stock Company may restrict the number of proxies who may attend the shareholders meeting.

(6) The Stock Company shall keep the documents evidencing the authority of proxy and the Electromagnetic Records which records the matters provided by the Electromagnetic Method under paragraph (3) at its head office for the period of three months from the day of the shareholders meeting.

(7) The shareholders (excluding the shareholders who may not exercise their votes on all matters which may be resolved at the shareholders meeting under the preceding paragraph. The same shall apply hereinafter in paragraph (4) of the following Article and in Article 312(5)) may submit the following request at any time during the business hours of the Stock Company:

(i) Request for the inspection or copying of the documents evidencing the authority of proxy; and

(ii) Request for inspection or copying of anything that displays the data recorded in the Electromagnetic Records under the preceding paragraph in a manner prescribed the applicable Ordinance of the Ministry of Justice.

(Voting in Writing)

Article 311 (1) If the votes are exercised in writing, it shall be exercised by entering the Voting Form with necessary matters and submitting it to the Stock Company no later than the time prescribed by the applicable Ordinance of the Ministry of Justice.

(2) The number of the votes exercised in writing pursuant to the provisions of the preceding paragraph shall be included in the number of the votes of the shareholders who are present at the meeting.

(3) The Stock Company shall keep the Voting Forms submitted pursuant to the provisions of paragraph (1) at its head office for the period of three months from the day of the shareholders meeting.

(4) The shareholders may make requests for the inspection or copying of the Voting Forms submitted pursuant to the provisions of paragraph (1) at any time during the business hours of the Stock Company.

(Voting by Electromagnetic Method)

Article 312 (1) If the votes are exercised by an Electromagnetic Method, it shall be exercised by providing the matters to be entered on the Voting Form to the Stock Company by an Electromagnetic Method, with the approval of such Stock Company, no later than the time prescribed by the applicable Ordinance of the Ministry of Justice in accordance with the provisions of the applicable Cabinet Order.

(2) In cases where the shareholders are the persons who have given consent under Article 299(3), the Stock Company may not refuse to give the approval under the preceding paragraph without justifiable reasons.

(3) The number of the votes exercised by an Electromagnetic Method pursuant to the provisions of paragraph (1) shall be included in the number of the votes of the shareholders who are present at the meeting.

(4) The Stock Company shall keep the Electromagnetic Records which record the matters provided pursuant to the provisions of paragraph (1) at its office for the period of three months from the day of the shareholders meeting.

(5) The shareholders may, at any time during the business hours of the Stock Company, make requests for the inspection or copying of anything that displays the data recorded in the Electromagnetic Records under the preceding paragraph in a manner prescribed by the applicable Ordinance of the Ministry of Justice.

(Diverse Exercise of Votes)

Article 313 (1) Shareholders may diversely exercise the votes they hold.

(2) For a Company with Board of Directors, the shareholders under the preceding paragraph shall notify the Stock Company that they will diversely exercise their votes and of the reason thereof no later than three days prior to the day of the shareholders meeting.

(3) If the shareholders referred to in the paragraph (1) are not persons who hold the shares on behalf of others, the Stock Company may refuse the diverse exercise of the votes held by such shareholders pursuant to the provisions of that paragraph.

(Accountability of Directors, etc.)

Article 314 In cases where a director, an accounting advisor, a company auditor or an executive officer is requested by the shareholders to provide explanations on certain matters at the shareholders meeting, they shall provide necessary explanations with respect to such matters; provided, however, that this shall not apply in cases where such matters are not relevant to the matters that are the purpose of the shareholders meeting, or in cases where such explanations are to the serious detriment of the common interest of the shareholders, or in other cases prescribed by the applicable Ordinance of the Ministry of Justice as the cases where there are justifiable grounds.

(Authority of Chairperson)

Article 315 (1) The chairperson of the shareholders meeting shall maintain the order of such shareholders meeting and organize the business of the meeting.

(2) The chairperson of the shareholders meeting may require any one who does not comply with his/her order or who otherwise disturbs the order of such shareholders meeting to leave the room.

(Investigation of Materials Submitted to the Shareholders Meeting)

Article 316 (1) The shareholders meeting may, by its resolution, elect a person to investigate the materials submitted or provided to such shareholders meeting by the directors, accounting advisors, company auditors, board of company auditors and accounting auditors.

(2) The shareholders meeting which is called pursuant to the provisions of Article 297 may, by its resolution, elect a person who will be charged to investigate the status of the operations and property of the Stock Company.

(Resolution for Postponement or Adjournment)

Article 317 In cases where there is a resolution for the postponement or adjournment of the shareholders meeting, the provisions of Article 298 and Article 299 shall not apply.

(Minutes)

Article 318 (1) Minutes shall be prepared with respect to the business of the shareholders meetings pursuant to the provisions of the applicable Ordinance of the Ministry of Justice.

(2) The Stock Company shall keep the minutes referred to in the preceding paragraph at its head office for the period of ten years from the day of the shareholders meeting.

**(3)**The Stock Company shall keep copies of the minutes referred to in paragraph (1) at its branch offices for the period of five years from the day of the shareholders meeting; provided, however, that this shall not apply to the cases where such minutes are prepared by Electromagnetic Records and the Stock Company adopts the measures prescribed by the applicable Ordinance of the Ministry of Justice as measures enabling its branch offices to respond to the request listed in item (ii) of the following paragraph.

(4) The shareholders and creditors may submit the following requests at any time during the business hours of the Stock Company:

(i) If the minutes under paragraph (1) are prepared in writing, requests for inspection or copying of such documents or copies of such documents; and

(ii) If the minutes under paragraph (1) are prepared by Electromagnetic Records, requests for inspection or copying of anything that displays the data recorded in such Electromagnetic Records in a manner prescribed by the applicable Ordinance of the Ministry of Justice.

(5) If it is necessary for the purpose of exercising the rights of a Member of the Parent Company of a Stock Company, he/she may, with the permission of the court, make the requests listed in each item of the preceding paragraph with respect to the minutes referred to in paragraph (1).

(Omission of Resolution of Shareholders Meetings)

Article 319 (1) In cases where directors or shareholders submit a proposal with respect to a matter which is the purpose of the shareholders meeting, if all shareholders (limited to those who may exercise their votes with respect to such matter) manifest their intention to agree to such proposal in writing or by means of Electromagnetic Records, it shall be deemed that the resolution to approve such proposal at the shareholders meeting has been made.

(2) The Stock Company shall keep the documents or Electromagnetic Records under the provisions of the preceding paragraph at its head office for a period of ten years from the day when the resolution of the shareholders meeting is deemed to have been made pursuant to the provisions of the preceding paragraph.

(3) The shareholders may submit the following requests at any time during the business hours of the Stock Company:

(i) Request for inspection or copying of the documents under the preceding paragraph; and

(ii) Request for inspection or copying of anything that displays the data recorded in the Electromagnetic Records under the preceding paragraph in a manner prescribed by the applicable Ordinance of the Ministry of Justice. (4) If it is necessary for the purpose of exercising the rights of a Member of the Parent Company of such Stock Company, he/she may, with the permission of the court, make the requests listed in each item of the preceding paragraph with respect to the documents or Electromagnetic Records under paragraph (2).

(5) In cases where it is deemed that the resolutions to approve proposals on all matters that are the purpose of the annual shareholders meeting have been made at the shareholders meeting pursuant to the provisions of paragraph (1), such annual shareholders meeting shall be deemed concluded at that time.

(Omission of Reports to Shareholders Meetings)

Article 320 In cases where the directors notify all shareholders of any matter that is to be reported to the shareholders meeting, if all shareholders manifest in writing or by means of Electromagnetic Records their intention to agree that it is not necessary to report such matter to the shareholders meeting, it shall be deemed that such matter has been reported to the shareholders meeting.

Subsection 2 Class Meeting

(Authority of Class Meeting)

Article 321 Class Meeting may resolve only the matters provided for in this Act and the matters provided for in the articles of incorporation.

(Class Meeting where Detriment to Class Shareholders of Certain Class Likely)

** Article 322 (1)** In cases where a Company with Class Shares carries out an act listed in the following items, if it is likely to cause detriment to the Class Shareholders of any class of shares, such act shall not become effective unless a resolution is made at a Class Meeting constituted by the Class Shareholders of the shares of such class (in cases where there are two or more classes of shares relating to such Class Shareholders, referring to the respective Class Meetings constituted by the Class Shareholders categorized by the class of such two or more classes of shares. The same shall apply hereinafter in this Article); provided, however, that this shall not apply to the case where there exists no Class Shareholder who may exercise his/her votes at such Class Meeting:

(i) Amendment of the articles of incorporation with respect to the following matters (excluding those provided for in paragraph (1) or paragraph (2) of Article 111);

(a) Creation of a new class of the shares;

(b) Change in the features of the shares;

(c) Increase of the Total Number of Authorized Shares, or Total Number of Authorized Shares in a Class.

(ii) Consolidation of shares or share split;

(iii) Allotment of share without contribution provided for in Article 185;

(iv) Solicitation of persons who subscribe for the shares of such Stock Company

(limited to that which prescribes the matters listed in each item of Article 202(1));

(v) Solicitation of persons who subscribe for the Share Options of such Stock Company (limited to that which prescribes the matters listed in each item of Article 241(1));

(vi) Allotment of Share Option without contribution provided for in Article 277;

(vii) Merger;

(viii) Absorption-type Company Split;

(ix) Succession by Absorption-type Company Split to some or all of the rights and obligations held by another Company with respect to such Company's business;

(x) Incorporation-type Company Split;

(xi) Share Exchange;

(xii) Acquisition of all Issued Shares of another Stock Company by Share Exchange; or

(xiii) Share Transfer.

(2) A Company with Class Shares may provide in the articles of incorporation that, as a feature of a certain class of shares, a resolution of the Class Meeting pursuant to the provisions of the preceding paragraph shall not be required.

(3) The provisions of the paragraph (1) shall not apply to Class Meeting constituted by the Class Shareholders of the class which is subject to the provisions of the articles of incorporation pursuant to the provisions of the preceding paragraph; provided, however, that this shall not apply to the cases where the amendment in the articles of incorporation (excluding the amendment relating to Share Unit) set forth in item (i) of paragraph (1) is carried out.

(4) If, after shares of a certain class are issued, it is intended to create provisions pursuant to the provisions of paragraph (2) with respect to the shares of such class by effecting an amendment in the articles of incorporation, the consent of all Class Shareholders of such class shall be obtained.

(Cases of Provision Requiring Resolution of Class Meeting)

Article 323 If, at a Company with Class Shares, there is a provision, as a feature of a certain class of shares, to the effect that, with respect to the matter that is subject to the resolution of the shareholders meeting (for a Company with Board of Directors, shareholders meeting or board of directors; and for a Company with Board of Liquidators provided for in Article 478(6), shareholders meeting or board of liquidators), in addition to such resolution, the resolution of a Class Meeting constituted by the Class Shareholders of such class of shares is required, such matter shall not become effective unless the resolution is made at a Class Meeting constituted by the Class Shareholders of the shares of such class in addition to the resolution of the shareholders meeting, board of directors or board of liquidators, consistently with the provisions of articles of incorporation; provided, however, that this shall not apply to the case where there exists no Class Shareholder who may exercise the votes at such Class Meeting.

(Resolution of Class Meetings)

Article 324 (1) Unless otherwise provided for in the articles of incorporation, resolutions of a Class Meeting shall be made by a majority of the votes of the shareholders of that class present at the meeting where the shareholders who hold a majority of the votes of all shareholders of the shares of such class are present.

(2) Notwithstanding the provisions of the preceding paragraph, the resolutions of the following Class Meetings shall be made by a majority of two thirds (in cases where any higher proportion is provided for in the articles of incorporation, such proportion) or more of the votes of the shareholders present at the meeting where the shareholders who hold a majority of the votes (in cases where any proportion of one third or more is provided for in the articles of incorporation, such proportion or more) of the shareholders who are entitled to exercise their votes at such Class Meeting are present. In such cases, it is not precluded from providing in the articles of incorporation, in addition to such requirements for resolution, additional requirements including those providing to the effect that the approval of a certain number or more of the shareholders are required:

(i) Class Meeting under Article 111(2) (limited to the cases where, as a feature of a certain class of shares, a provision of the articles of incorporation is to be created with respect to the matters listed in item (vii) of Article 108(1));

(ii) Class Meeting under of Article 199(4) and Article 200(4);

(iii) Class Meeting under Article 238(4) and Article 239(4);

(iv) Class Meeting under Article 322(1);

(v) Class Meeting under Article 339(1) which is applied by the deemed replacement of terms pursuant to the provisions of Article 347(2);

(vi) Class Meeting under Article 795(4);

(3) Notwithstanding the provisions of the preceding two paragraphs, the resolutions of the following Class Meetings shall be made by a majority (in cases where a higher proportion is provided for in the articles of incorporation, such proportion or more) of the shareholders entitled to exercise their votes at such Class Meeting, being a majority of two thirds (in cases where a higher proportion is provided for in the articles of incorporation, such proportion) or more of the votes of such shareholders:

(i) Class Meetings under Article 111(2) (limited to the cases where, as a feature of a certain class of shares, a provision of the articles of incorporation is to be created with respect to the matters listed in item (vii) of Article 108(1));

(ii) Class Meetings under Article 783(3) and Article 804(3).

(Mutatis mutandis Application of Provisions regarding Shareholders Meetings)

Article 325 The provisions of the preceding Subsection (excluding paragraph (1) and paragraph (2) of Article 295, paragraph (1) and paragraph (2) of Article 296, and Article 309) shall apply mutatis mutandis to the Class Meeting. In such cases, in Article 297(1), "all shareholders" shall be deemed to be replaced with "all shareholders (limited to the shareholders of a certain class of shares. The same shall apply hereinafter in this Subsection (excluding Article 308(1))." and "Shareholders" shall be deemed to be replaced with "Shareholders (limited to the shareholders of a certain class of shares. The same shall apply hereinafter in this Subsection (excluding Article 318(4) and Article 319(3))."

Section 2 Establishment of Organs Other Than Shareholders Meeting

(Establishment of Organs Other Than Shareholders Meeting)

Article 326 (1) A Stock Company shall have one or more directors.

(2) A Stock Company may have a board of directors, an accounting advisor, a company auditor, a board of company auditors, an accounting auditor or Committees as prescribed by the articles of incorporation.

(Obligations to Establish Board of Directors and Other Organizations)

Article 327 (1) The following Stock Company shall have a board of directors.

(i) A Public Company;

(ii) A Company with Board of Company Auditors;

(iii) A Company with Committees.

(2) A Company with Board of Directors (excluding Company with Committees) shall have a company auditor; provided, however, that this shall not apply to a Company with Accounting Advisors that is not a Public Company.

(3) A Company with Accounting Auditors (excluding a Company with Committees) shall have a company auditor.

(4) A Company with Committees may not have a company auditor.

(5) A Company with Committees shall have an accounting auditor.

(Obligations of Large Companies to Establish Board of Company Auditors, etc.)

Article 328 (1) A Large Company (excluding a Company which is not a Public Company and a Company with Committees) shall have a board of company auditors and an accounting auditor.

(2) A Large Company which is not a Public Company shall have an accounting auditor.

Section 3 Election and Dismissal of Officers and Accounting Auditors

Subsection 1 Election

(Election)

Article 329 (1) Officers (meaning directors, accounting advisors and company auditors. The same shall apply hereinafter in this Section and in Article 371(4) and Article 394(3)) and accounting auditors shall be elected by resolution of a shareholders meeting.

(2) In case of the resolution under the preceding paragraph, substitute Officers may be elected as prescribed by the applicable Ordinance of the Ministry of Justice by way of precaution against the cases where there are no Officers in office or the cases where there is a vacancy which results in a shortfall in the number of Officers prescribed in this Act or articles of incorporation.

(Relationship between Stock Company and Officers)

Article 330 The relationship between a Stock Company and its Officers or accounting auditors shall be governed by the provisions on mandate.

(Qualifications of Directors)

Article 331 (1) The following persons may not act as directors:

(i) A juridical person;

(ii) An adult ward, a person under curatorship, or a person who is similarly treated under foreign laws and regulations;

(iii) A person who has been sentenced to a penalty for having violated the provisions of this Act or the Act on General Incorporated Association and General Incorporated Foundation (Act No. 48 of 2006), or for having committed: a crime under Article 197, Article 197-2(1)(i) through (x) or (xiii), Article 198(viii), Article 199, Article 200(i) through (xii), (xx) or (xxi), Article 203(3) or Article 205 (i) through (vi), (xix) or (xx) of the Financial Instruments and Exchange Act; a crime under Articles 255, 256, 258 through 260 or 262 of the Civil Rehabilitation Act (Act No. 225 of 1999); a crime under Articles 65, 66, 68 or 69 of the Act on Recognition and Assistance for Foreign Insolvency Procedures (Act No. 129 of 2000); a crime under Articles 266, 267, 269 through Article 271 or 273 of the Corporate Reorganization Act (Act No. 154 of 2002); or a crime under Articles 265, 266, 268 through 272 or 274 of the Bankruptcy Act, for whom two years have not elapsed since the day on which the execution of the sentence was completed or the sentence no longer applied.

(iv) A person who violated the provisions of laws and regulations other than those provided for in the preceding item, was sentenced to imprisonment or severer penalty and who has not completed the execution of the sentence or to whom the sentence still applies (excluding persons for whom the execution of the sentence is suspended).

(2) A Stock Company may not provide in the articles of incorporation that directors shall be shareholders; provided, however, that this shall not apply to a Stock Company that is not a Public Company.

(3) A director of a Company with Committees may not concurrently act as an employee including a manager of such Company with Committees.

(4) A Company with Board of Directors shall have three or more directors.

(Directors' Terms of Office)

Article 332 (1) Directors' terms of office shall continue until the conclusion of the annual shareholders meeting for the last business year which ends within two years from the time of their election; provided, however, that this shall not preclude the shortening the term of the directors by the articles of incorporation or by the resolution of the shareholders meeting.

(2) The provisions of the preceding paragraph shall not preclude a Stock Company which is not a Public Company (excluding a Company with Committees) from extending, by the articles of incorporation, the term of office under that paragraph until the conclusion of the annual shareholders meeting for the last business year which ends within ten years from the time of the election.

(3) For the purpose of the application of the provisions under paragraph (1) to the directors of a Company with Committees, "two years" in that paragraph shall be read as "one year."

(4) Notwithstanding the provisions of the preceding three paragraphs, in cases where any of the following amendments in the articles of incorporation is made, the directors' term of office shall expire when such amendment in the articles of incorporation takes effect:

(i) An amendment in the articles of incorporation to the effect that Committees shall be established;

(ii) An amendment in the articles of incorporation to repeal the provisions of the articles of incorporation to the effect that Committees shall be established; or

(iii) An amendment in the articles of incorporation to repeal the provisions of the articles of incorporation to the effect that, as a feature of all shares the Stock Company issues, the approval of the Stock Company is required for the acquisition of such shares by transfer (excluding an amendment made by a Company with Committees).

(Qualifications of Accounting Advisors)

Article 333 (1) An accounting advisor shall be a Certified Public Accountant or audit firm, or a certified public tax accountant or tax accountant corporation.

(2) An audit firm or tax accountant corporation which has been elected as the accounting advisor shall appoint, from among its members, a person who is in charge of the affairs of an accounting advisor, and notify the Stock Company to that effect. In such cases, the persons listed in each item of following paragraph may not be appointed.

(3) The following persons may not act as accounting advisors:

(i) A director, company auditor or executive officer, or an employee, including a manager, of a Stock Company or its Subsidiary;

(ii) A person who is subject to the disciplinary action ordering a suspension of operations and for whom the period of such suspension has not yet elapsed; or

(iii) A person who, pursuant to the provisions of Article 43 of the Certified Public Tax Accountant Act (Act No. 237 of 1951), may not engage in the business of the certified public tax accountant prescribed in Article 2(2) of that act.

(Accounting Advisors' Terms of Office)

Article 334 (1) The provisions of Article 332 shall apply mutatis mutandis to the accounting advisors' terms of office.

(2) Notwithstanding the provisions of Article 332 applied mutatis mutandis under the preceding paragraph, in cases where a Company with Accounting Advisors effects an amendment in the articles of incorporation to repeal the provisions of the articles of incorporation to the effect that it shall have an accounting advisor, the accounting advisor's term of office shall expire when such amendment in the articles of incorporation takes effect.

(Qualifications of Company auditors)

Article 335 (1) The provisions of paragraph (1) and paragraph (2) of Article 331 shall apply mutatis mutandis to company auditors.

(2) A company auditor of a Stock Company may not concurrently act as a director, employee, including manager, of that Stock Company or its Subsidiary, and may not act as an accounting advisor (if the accounting advisor is a juridical person, the member who is in charge of its affairs) or an executive officer of such Subsidiary.

(3) A Company with Board of Company auditors shall have three or more company auditors, and the half or more of them shall be Outside Company Auditors.

(Company Auditors' Terms of Office)

Article 336 (1) Company auditors' terms of office shall continue until the conclusion of the annual shareholders meeting for the last business year which ends within four years from the time of their election.

(2) The provisions of the preceding paragraph shall not preclude a Stock Company which is not a Public Company from extending, by the articles of incorporation, the terms of office under that paragraph until the conclusion of the annual shareholders meeting for the last business year which ends within ten years from the time of the election.

(3) The provisions of paragraph (1) shall not preclude providing, by the articles of incorporation, that the term of office of a company auditor, who is elected as the substitute for a company auditor who retired from office before the expiration of the term of office, shall continue until the time the term of office of the company auditor who retired from office expires.

(4) Notwithstanding the provisions of the preceding three paragraphs, in cases where any of the following amendments in the articles of incorporation is made, the company auditors' terms of office shall expire when such amendment in the articles of incorporation takes effect:

(i) An amendment in the articles of incorporation to repeal the provisions of the articles of incorporation to the effect that company auditors shall be established;

(ii) An amendment in the articles of incorporation to the effect that Committees shall be established;

(iii) An amendment in the articles of incorporation to repeal the provisions of the articles of incorporation to the effect that the scope of the audit by the company auditors shall be limited to an audit related to accounting;

(iv) An amendment in the articles of incorporation to repeal the provisions of the articles of incorporation to the effect that, as a feature of all shares the Stock Company issues, the approval of the Stock Company is required for the acquisition of such shares by transfer.

(Qualifications of Accounting Auditors)

Article 337 (1) An accounting auditor shall be a Certified Public Accountant or an audit firm.

(2) An audit firm which has been elected as an accounting auditor shall appoint, from among its members, a person who is in charge of the affairs of an accounting auditor, and notify the Stock Company to that effect. In such cases, the person listed in item (ii) of the following paragraph may not be appointed.

(3) The following persons may not act as accounting auditors:

(i) A person who, pursuant to the provisions of the Certified Public Accountant Act, may not audit the financial statement provided for in Article 435(2);

(ii) A person who is in continuous receipt of remuneration from a Subsidiary of the Stock Company, or from a director, accounting advisor, company auditor or executive officer of that Subsidiary, for operations other than the operations of the Certified Public Accountant or audit firm, or the spouse of that person; or

(iii) An audit firm half or more of its members of which are persons listed in the above items.

(Accounting Auditors' Terms of Office)

Article 338 (1) An accounting auditor's term of office shall continue until the conclusion of the annual shareholders meeting for the last business year which ends within one year from the time of their election.

(2) Unless otherwise resolved at the annual shareholders meeting under the preceding paragraph, accounting auditors shall be deemed to have been reelected at such annual shareholders meeting.

(3) Notwithstanding the provisions of the preceding two paragraphs, in cases where a Company with Accounting Auditors makes any amendment in the articles of incorporation to repeal the provisions of the articles of incorporation to the effect that it shall have an accounting auditor, the accounting auditor's term of office shall expire when such amendment in the articles of incorporation takes effect.

Subsection 2 Dismissal

(Dismissal)

Article 339 (1) Officers and accounting auditors may be dismissed at any time by resolution of a shareholders meeting.

(2) A person dismissed pursuant to the provisions of the preceding paragraph shall be entitled to demand damages arising from the dismissal from the Stock Company, except in cases where there are justifiable grounds for such dismissal.

(Dismissal of Accounting Auditors by Company Auditors)

Article 340 (1) The company auditor may dismiss an accounting auditor if that accounting auditor:

(i) has breached his or her duty in the course of his/her duties, or neglected his/her duties;

(ii) has engaged in misconduct inappropriate for an accounting auditor; or

(iii) has difficulty in, or is unable to cope with the execution of his/her duties due to mental or physical disability.

(2) Dismissals pursuant to the provisions of the preceding paragraph shall be effected by the unanimous consent of all company auditors in cases where there are two or more company auditors.

(3) If an accounting auditor is dismissed pursuant to the provisions of paragraph (1), the company auditor (or, in cases where there are two or more company auditors, the company auditor appointed by the company auditors from among themselves) shall report such fact and the reason for dismissal to the first shareholders meeting called after the dismissal.

(4) For the purpose of the application of the provisions of the preceding three paragraphs to a Company with Board of Company Auditors, "company auditor" in paragraph (1) shall be read as "board of company auditors," "company auditors in cases where there are two or more company auditors" in paragraph (2) shall be read as "company auditors," and "company auditor (or, in cases where there are two or more company auditors, the company auditor appointed by the company auditors from among themselves)" in the preceding paragraph shall be read as "the company auditor appointed by the board of company auditors."

(5) For the purpose of the application of the provisions of paragraph (1) through paragraph (3) to a Company with Committees, "a company auditor" in paragraph (1) shall be read as "[an] audit committee," "company auditors in cases where there are two or more company auditors" in paragraph (2) shall be read as "committee members of the audit committee," and "company auditor (or, in cases where there are two or more company auditors, the company auditor appointed by the company auditors from among themselves)" in paragraph (3) shall be read as "committee member appointed by the audit committee."

Subsection 3 Special Provisions on the Procedures for Election and Dismissal

(Resolution at Shareholders Meeting for Election and Dismissal of Officers)

Article 341 Notwithstanding the provisions of Article 309(1), resolutions for the election or dismissal of officers shall be made by the majority (in cases where a higher proportion is provided for in the articles of incorporation, such proportion or more) of the votes of the shareholders present at the meeting where the shareholders holding the majority of the votes (in cases where a proportion of one third or more is provided for in the articles of incorporation, such proportion or more) of the shareholders entitled to exercise their votes are present.

(Election of Directors by Cumulative Vote)

Article 342 (1) In cases where the purpose of the shareholders meeting is the election of two or more directors, the shareholders (limited to the shareholders entitled to exercise their votes with respect to the election of the directors. The same shall apply hereinafter in this article) may request the Stock Company that the directors be elected pursuant to the provisions of paragraph (3) through paragraph (5), except as otherwise provided in the articles of incorporation.

(2) The request under the provisions of the preceding paragraph shall be made no later than five days prior to the day of the shareholders meeting referred to in that paragraph.

(3) Notwithstanding the provisions of Article 308(1), in cases where a request is made pursuant to the provisions of paragraph (1), a shareholder shall be entitled to such number of votes as is equal to the number of the directors to be elected in such shareholders meeting for each one share the shareholder hold (or, in cases where the Share Unit is provided for in the articles of incorporation, for each one unit of the shares the shareholder holds) with respect to the resolution of the election of the directors. In such cases, the shareholder may exercise his/her votes by casting votes for only one candidate or for two or more candidates.

(4) In the case provided for in the preceding paragraph, the directors shall be elected in the order of the votes obtained by respective candidates.

(5) In addition to the matters provided in the preceding two paragraphs, necessary matters regarding the election of directors in cases where a request has been made pursuant to the provisions of paragraph (1) shall be prescribed by the applicable Ordinance of the Ministry of Justice.

(6) The provisions of the preceding article shall not apply to resolutions for the dismissal of the directors elected pursuant to the provisions of the preceding three paragraphs.

(Consent of Company Auditors to Election of Company Auditors)

Article 343 (1) In cases where a company auditor is in office, directors shall obtain the consent of the company auditor (or, in cases where there are two or more company auditors, the majority of the company auditors) in order to submit a proposal for the election of a company auditor to the shareholders meeting.

(2) The company auditor may request the directors that they include the election of the company auditor in the purpose of the shareholders meeting, or they submit a proposal regarding the election of company auditor to the shareholders meeting.

(3) For the purpose of the application of the preceding two paragraphs to a Company with Board of Company Auditors, "company auditor (or, in cases where there are two or more company auditors, the majority of the company auditors)" in paragraph (1) shall be read as "board of company auditors," and "company auditor may" in the preceding paragraph shall be read as "board of company auditors may."

**(4) **The provisions of Article 341 shall not apply to resolutions for the dismissal of company auditors.

(Consent of Company Auditors to the Election of Accounting Auditors)

Article 344 (1) At a Company with Auditors, they shall obtain the consent of the company auditor (or, in cases where there are two or more company auditors, the majority of the company auditors) in order to carry out the following acts:

(i) Submitting a proposal for the election of an accounting auditor to a shareholders meeting;

(ii) Including the dismissal of an accounting auditor in the purpose of the shareholders meeting; or

(iii) Including the refusal to reelect an accounting auditor in the purpose of the shareholders meeting.

(2) A company auditor may request that the directors carry out the following acts:

(i) Submitting a proposal for the election of an accounting auditor to the shareholders meeting;

(ii) Including the election or dismissal of an accounting auditor in the purpose of the shareholders meeting; or

(iii) Including the refusal to reelect an accounting auditor in the purpose of the shareholders meeting.

(3) For the purpose of the application of the preceding two paragraphs to a Company with Board of Company Auditors, "company auditor (or, in cases where there are two or more company auditors, the majority of the company auditors)" in paragraph (1) and "company auditor" in the preceding paragraph shall be read as "board of company auditors."

(Statement of Opinions on Election of Accounting Advisors, etc.)

Article 345 (1) Accounting advisors may state their opinions on the election or dismissal, or resignation of accounting advisors at the shareholders meeting.

(2) A person who has resigned as an accounting advisor may attend the first shareholders meeting called after the resignation and state the fact of the resignation and the reason thereof.

(3) Directors shall notify the person under the preceding paragraph of the fact that the shareholders meeting under that paragraph is to be called, and of the matters listed in item (i) of Article 298(1).

(4) The provisions of paragraph (1) shall apply mutatis mutandis to a company auditor, and the provisions of the preceding two paragraphs shall apply mutatis mutandis to a person who resigned as the company auditor, respectively. In such cases, "accounting advisors" in paragraph (1) shall be read as "company auditors."

(5) The provisions of paragraph (1) shall apply mutatis mutandis to an accounting auditor, and the provisions of paragraph (2) and paragraph (3) shall apply mutatis mutandis to a person who resigned as the accounting auditor and a person dismissed as the accounting auditor pursuant to the provisions of Article 340(1), respectively. In such cases, "on the election or dismissal, or resignation of accounting advisors at the shareholders meeting" in paragraph (1) shall be read as "on the election, dismissal or refusal of reelection, or resignation of accounting auditors, by attending the shareholders meeting," and in paragraph (2), "after the resignation" shall be read with "after the dismissal or resignation," and "the fact of the resignation and the reason thereof" shall be read with "the fact of the resignation and the reason thereof, or opinions on the dismissal."

(Measures when Vacancies arise among Officers)

Article 346 (1) Where there are no Officers in office, or where there is a vacancy which results in a shortfall in the number of Officers prescribed in this Act or articles of incorporation, an Officer who retired from office due to expiration of his/her term of office or resignation shall continue to have the rights and obligations of an Officer until a newly elected officer (including a person who is to temporarily perform the duties of an Officer under the following paragraph) assumes his/her office.

(2) In the case provided for in the preceding paragraph, if the court finds it necessary, it may, in response to a petition by interested persons, elect a person who is to temporarily perform the duties of an Officer.

(3) In cases where the court has elected a person who is to temporarily perform the duties of an Officer under the preceding paragraph, the court may prescribe the amount of the remuneration that the Stock Company shall pay to that person.

(4) Where there are no accounting auditors in office, or where there is a vacancy which results in a shortfall in the number of accounting auditors prescribed inmthe articles of incorporation, if an accounting auditor is not elected without delay, the company auditor shall elect a person who is to temporarily perform the duties of an accounting auditor.

(5) The provisions of Article 337 and Article 340 shall apply mutatis mutandis the person who is to temporarily perform the duties of an accounting auditor under the preceding paragraph.

(6) For the purpose of the application of the provisions of paragraph (4) to a Company with Board of Company Auditors, "company auditor" in that paragraph shall be read as "board of company auditors."

(7) For the purpose of the application of the provisions of paragraph (4) to a Company with Committees, "company auditor" in that paragraph shall be read as "audit committee."

(Election of Directors or Company Auditors at Class Meetings)

Article 347 (1) For the purpose of the application of the provisions of Article 329(1), Article 332(1), Article 339(1) and Article 341 to the cases where it issues shares in a class for which there is the provision with respect to the matters listed in item (ix) of Article 108(1) (limited to those relating to directors), "shareholders meeting" in Article 329(1) shall be read as "shareholders meeting (or, for directors, Class Meeting constituted by the Class Shareholders of each class of shares in accordance with the applicable provisions of the articles of incorporation on the matters prescribed in item (ix) Article 108(2))"; "by resolution of a shareholders meeting" in Article 332(1) and Article 339(1) shall be read as "by resolution of a shareholders meeting (or, for directors elected pursuant to the provisions of Article 41(1), or at a Class Meeting under Article 90(1) or a Class Meeting under Article 329(1) applied by reading of terms pursuant to the provisions of Article 347(1), Class Meeting constituted by the Class Shareholders of shares of the class relating to the election of such director (or shareholders meeting in cases where it is otherwise provided in the articles of incorporation, or in cases where, before the expiration of the term of office of such director, there are no longer any shareholders entitled to exercise his/her votes at such Class Meeting))"; "Article 309(1)" in Article 341 shall be read as "Article 309(1) and Article 324"; and "shareholders meeting" in Article 341 shall be read as "shareholders meeting (including the Class Meeting under Article 329(1) and Article 339(1) applied by the reading of terms pursuant to the provisions of Article 347(1))."

(2) For the purpose of the application of the provisions of Article 329(1), Article 339(1) and Article 341 to the cases where it issues shares in a class for which there is the provision with respect to the matters listed in item (ix) of Article 108(1) (limited to those relating to company auditors), "shareholders meeting" in Article 329(1) shall be read as "shareholders meeting (or, for company auditors, Class Meeting constituted by the Class Shareholders of each class of shares in accordance with the applicable provisions of the articles of incorporation on the matters prescribed in item (ix) Article 108(2))"; "the shareholders meeting" in Article 339(1) shall be read as "shareholders meeting (or, for company auditors elected pursuant to the provisions of Article 41(1) applied mutatis mutandis under paragraph (3) of that article, or at a Class Meeting under Article 90(1) applied mutatis mutandis under paragraph (2) of that article or at a Class Meeting under 329(1) applied by the reading of terms pursuant to the provisions of Article 347(2), Class Meeting constituted by the Class Shareholders of shares of the class relating to the election of such company auditor (or shareholders meeting in cases where it is otherwise provided in the articles of incorporation, or in cases where, before the expiration of the term of office of such company auditor, there are no longer any shareholders entitled to exercise his/her votes at such Class Meeting))"; "Article 309(1)" in Article 341 shall be read as "Article 309(1) and Article 324"; and "shareholders meeting" in Article 341 shall be read as "shareholders meeting (including the Class Meeting under Article 329(1) applied by the reading of terms pursuant to the provisions of Article 347(2))."

Section 4 Directors

(Execution of Operations)

Article 348 (1) The directors shall execute the operations of the Stock Company (excluding a Company with Board of Directors. The same shall apply hereinafter in this article), unless otherwise provided in the articles of incorporation.

(2) In cases where there are two or more directors, the operations of the Stock Company shall be decided by a majority of the directors, unless otherwise provided in the articles of incorporation.

(3) In the case provided for in the preceding paragraph, the directors may not delegate the decisions on the following matters to individual directors:

(i) The election or dismissal of managers;

(ii) The establishment, relocation and abolition of branch offices;

(iii) The matters listed in each item of Article 298(1) (including the cases where such items are applied mutatis mutandis under Article 325);

(iv) The development of systems necessary to ensure that the execution of the duties by the directors complies with the laws and regulations and the articles of incorporation, and other systems prescribed by the applicable Ordinance of the Ministry of Justice as systems necessary to ensure the properness of operations of a Stock Company; or

(v) Exemption from the liability under Article 423(1) pursuant to the provisions of the articles of incorporation under the provisions of Article 426(1).

(4) At a Large Company, the directors shall decide the matters listed in item (iv) of the preceding paragraph.

(Representatives of Companies)

Article 349 (1) The directors shall represent the Stock Company; provided, however, that this shall not apply in cases where Representative Directors or other persons who represent the Company are otherwise designated.

(2) In cases where there are two or more directors referred to in the main clause of the preceding paragraph, each director shall represent the Stock Company individually.

(3) A Stock Company (excluding a Company with Board of Directors) may appoint Representative Directors from among the directors pursuant to the articles of incorporation, or through the appointment by the directors from among themselves pursuant to the provisions of the articles of incorporation, or by resolution of a shareholders meeting.

(4) Representative Directors shall have authority to do any and all judicial and non-judicial acts in connection with the operations of the Stock Company.

(5) No limitation on the authority under the preceding paragraph may be asserted against a third party without knowledge of such limitation.

(Liability for Damages Caused by Acts of Directors)

Article 350 A Stock Company shall be liable for damage caused to third parties by its Representative Directors or other representatives during the course of the performance of their duties.

(Measures when Vacancy arises in Office of Representative Director)

Article 351 (1) Where there are no Representative Directors in office, or where there is a vacancy which results in a shortfall in the number of Representative Directors prescribed in the articles of incorporation, a Representative Director who retired from office due to expiration of his/her term of office or resignation shall continue to have the rights and obligations of a Representative Director until a newly appointed Representative Director (including the person who is to temporarily perform the duties of a Representative Director under the following paragraph) assumes his/her office.

(2) In the case provided for in the preceding paragraph, if the court finds it necessary, it may, in response to the petition by the interested persons, elect a person who is to temporarily perform the duties of a Representative Director.

(3) In cases where the court has elected the person who is to temporarily perform the duties of a Representative Director under the preceding paragraph, the court may prescribe the amount of the remuneration that the Stock Company shall pay to that person.

(Authority of Persons who Perform Duties on Behalf of Directors)

Article 352 (1) A person who is elected by a provisional disposition order provided for in Article 56 of the Civil Provisional Remedies Act (Act No. 91 of 1989) to perform the duties of directors or Representative Directors on behalf of them shall obtain the permission of the court in order to engage in acts that do not belong to the ordinary operations of the Stock Company, unless otherwise provided for in the provisional disposition order.

(2) Any act of the person who performs the duties of directors or Representative Directors on behalf of them that is performed in violation of the provisions of the preceding paragraph shall be void; provided, however, that the Stock Company may not assert that voidness against a third party without knowledge.

(Representation of Companies in Actions between Stock Company and Directors)

Article 353 Notwithstanding the provisions of Article 349(4), in cases where a Stock Company files an action against its directors (including persons who were directors. The same shall apply hereinafter in this article), or the directors of a Stock Company files an action against that Stock Company, a shareholders meeting may designate a person to represent the Stock Company in such action.

(Apparent Representative Directors)

Article 354 In cases where a Stock Company gives the title of president, vice president or other title regarded as having authority to represent the Stock Company to a director who is not a Representative Director, the Stock Company shall be liable to third parties without knowledge for the acts of such director.

(Duty of Loyalty)

Article 355 Directors shall perform their duties for the Stock Company in a loyal manner in compliance with laws and regulations, the articles of incorporation, and resolutions of shareholders meetings.

(Restrictions on Competition and Conflicting Interest Transactions)

Article 356 (1) In the following cases, a director shall disclose the material facts on the relevant transactions at a shareholders meeting and obtain approval of the shareholders meeting:

(i) If a directors intends to carry out, for himself/herself or for a third party, any transactions in the line of business of the Stock Company;

(ii) If the director intends to carry out any transactions with the Stock Company for himself/herself or for a third party; or

(iii) If a Stock Company intends to guarantee debts of a director or otherwise to carry out any transactions with a person other than the director that results in a conflict of interests between the Stock Company and such director.

(2) The provisions of Article 108 of the Civil Code shall not apply to the transactions under item (ii) of the preceding paragraph that are approved under that paragraph.

(Director's Duty to Report)

Article 357 (1) If directors detect any fact likely to cause substantial detriment to the Stock Company, they shall immediately report such fact to the shareholders (or, for a Company with Auditors, the company auditors).

(2) For the purpose of the application of the provisions of the preceding paragraph to a Company with Board of Company Auditors, "shareholders (or, for a Company with Auditors, the company auditors)" in that paragraph shall be read as "board of company auditors."

(Election of Inspector of Execution of Operation)

Article 358 (1) If there are sufficient grounds to suspect misconduct or material facts in violation of laws and regulations or the articles of incorporation in connection with the execution of the operations of a Stock Company, the following shareholders may file a petition for the election of an inspector with the court in order to have the inspector investigate the status of the operations and the financial status of such Stock Company:

(i) Shareholders who hold not less than three hundredths (3/100) of the votes (or, in cases where a lesser proportion is prescribed in the articles of incorporation, such proportion) of all shareholders (excluding shareholders who may not exercise their votes on all matters which may be resolved at shareholders meetings); or

(ii) Shareholders who hold not less than three hundredths (3/100) (or, in cases where a lesser proportion prescribed in the articles of incorporation, such proportion) of the Issued Shares (excluding Treasury Shares).

(2) In cases where the petition under the preceding paragraph has been filed, the court shall elect the inspector except in case it dismisses such petition as nonconforming.

(3) In cases where the court has elected the inspector under the preceding paragraph, it may fix the amount of the remuneration that the Stock Company shall pay to such inspector.

(4) The inspector referred to in paragraph (2) may investigate the status of the operations and the financial status of Subsidiaries of the Stock Company if it is necessary in order to perform his/her duties.

(5) The inspector referred to in paragraph (2) shall conduct necessary investigation and shall report the court by submitting the documents or Electromagnetic Records (limited to those prescribed by the applicable Ordinance of the Ministry of Justice) which specifies or records the result of such investigation.

(6) If the court finds it necessary for the purpose of clarification of the contents of the report under the preceding paragraph or of confirmation of the grounds supporting such report, it may request the inspector under paragraph (2) a further report under the preceding paragraph.

(7) When the inspector under paragraph (2) reports pursuant to paragraph (5), he/she shall give the Stock Company and the shareholders who filed the petition for the election of an inspector a copy of the documents under that paragraph, or provide the matters recorded in the Electromagnetic Records under that paragraph by the method prescribed by the applicable Ordinance of the Ministry of Justice.

(Decision by Court to Call Shareholders Meeting)

Article 359 (1) In cases where the report under paragraph (5) of the preceding Article is submitted, if the court finds it necessary, it shall order the directors to take some or all of the measures listed below:

(i) To call a shareholders meeting within a defined period of time; and

(ii) To notify shareholders of the result of the investigation under paragraph (5) of the preceding Article.

(2) In cases where the court orders the measures listed in item (i), paragraph (1) of the preceding Article, the directors shall disclose the content of the report under paragraph (5) of the preceding Article at the shareholders meeting under that paragraph.

(3) In the cases provided for in the preceding paragraph, the directors (or the directors and company auditors for a Company with Auditors) shall investigate the content of the report under paragraph (5) of the preceding Article and report the result thereof to the shareholders meeting under item (i) of paragraph (1).

(Enjoinment of Acts of Directors by Shareholders)

Article 360 (1) In cases where a director engages, or is likely to engage, in an act outside the scope of the purpose of a Stock Company, or other acts in violation of laws and regulations or the articles of incorporation, if such act is likely to cause substantial detriment to such Stock Company, shareholders having the shares consecutively for the preceding six months or more (or, in cases where a shorter period is prescribed in the articles of incorporation, such period or more) may demand that such director cease such act.

(2) For the purpose of the application of the provisions of the preceding paragraph to a Stock Company which is not a Public Company, "shareholders having the shares consecutively for the preceding six months or more (or, in cases where shorter period is prescribed in the articles of incorporation, such period or more)" in that paragraph shall be read as "shareholders."

(3) For the purpose of the application of the provisions of paragraph (1) to a Company with Auditors or a Company with Committees, "substantial detriment" in that paragraph shall be read as "irreparable detriment."

(Remuneration for Directors)

Article 361 (1) The following matters with respect to the financial benefits received from a Stock Company as a consideration for the execution of the duties, such as remunerations and bonuses, (hereinafter in this Chapter referred to as "Remunerations") of directors shall be fixed by resolution of a shareholders meeting if such matters are not prescribed in the articles of incorporation:

(i) For Remunerations in a fixed amount, that amount;

(ii) For Remunerations the amount of which is not fixed, the specific method for calculating that amount;

(iii) For Remunerations that are not monetary, the specific contents thereof.

(2) Directors who prescribed the matters listed in item (ii) or item (iii) of the preceding paragraph, or who submitted a proposal to amend these matters to a shareholders meeting shall explain the reasons why such matters are reasonable at such shareholders meeting.

Section 5 Board of Directors

Subsection 1 Authority

(Authority of Board of Directors)

Article 362 (1) Board of directors shall be composed of all directors.

(2) Board of directors shall perform the following duties:

(i) Deciding the execution of the operations of the Company with Board of Directors;

(ii) Supervising the execution of the duties by directors; and

(iii) Appointing and removing Representative Directors.

(3) Board of directors shall appoint Representative Directors from among the directors.

(4) Board of directors may not delegate the decision on the execution of important operations such as the following matters to directors:

(i) The disposal of and acceptance of assignment of important assets;

(ii) Borrowing in a significant amount;

(iii) The election and dismissal of a important employee including managers;

(iv) The establishment, changes or abolition of important structures including branch offices;

(v) Matters prescribed by the applicable Ordinance of the Ministry of Justice as important matters regarding the solicitation of persons who subscribe for Bonds such as the matters listed in item (i) of Article 676;

(vi) The development of systems necessary to ensure that the execution of duties by directors complies with laws and regulations and the articles of incorporation, and other systems prescribed by the applicable Ordinance of the Ministry of Justice as systems necessary to ensure the properness of operations of a Stock Company; or

(vii) Exemption from liability under Article 423(1) pursuant to provisions of the articles of incorporation under the provisions of Article 426(1).

(5) A Company with Board of Directors that is a Large Company shall decide the matters listed in item (vi) of the preceding paragraph.

(Authority of Directors of Companies with Board of Directors)

Article 363 (1) The following directors shall execute the operations of a Company with Board of Directors:

(i) A Representative Director; or

(ii) A director other than a Representative Director, who is appointed by resolution of the board of directors as the director who is to execute the operations of a Company with Board of Directors.

(2) The directors listed in each item of the preceding paragraph shall report the status of the execution of his/her duties to the board of directors at least once every three months.

(Representation of Company in Actions between Companies with Board of Directors and Directors)

Article 364 In the case provided for in Article 353, except when there is designation by a shareholders meeting pursuant to the provisions of that article, the board of directors may designate a person to represent the Company with Board of Directors with respect to the actions under that article.

(Restrictions on Competition and Transactions with Companies with Board of Directors)

Article 365 (1) For the purpose of the application of the provisions of Article 356 to a Company with Board of Directors, "shareholders meeting" in paragraph (1) of that article shall be read as "board of directors."

(2) At a Company with Board of Directors, a director who has engaged in transactions under each item of Article 356(1) shall report the material facts with respect to such transaction to the board of directors without delay after such transaction.

Subsection 2 Operations

(Convenor)

Article 366 (1) A board of directors meetings shall be called by any director; provided, however, that, if the director to call the board of directors meetings is designated by the articles of incorporation or the board of directors, such director shall call the meetings.

(2) In the case provided for in the proviso to the preceding paragraph, directors other than the director designated pursuant to the provision of the proviso to that paragraph (referred to as "Convenor." The same shall apply hereinafter in this Chapter) may demand that the Convenor call the board of directors meeting by indicating to the Convenor the matters that are the purpose of the board of directors meeting.

(3) In cases where, within five days from the day of the demand made pursuant to the provisions of preceding paragraph, a notice of calling of the board of directors meeting which designates as the day of the board of directors meeting a day falling within two weeks from the day of the demand is not dispatched, the directors who made the demand may call the board of directors meeting.

(Demand for Calling of Meeting by Shareholders)

Article 367 (1) If shareholders of a Company with Board of Directors (excluding a Company with Auditors and Company with Committees) recognize that a director engages, or is likely to engage, in an act outside the scope of the purpose of the Company with Board of Directors, or other acts in violation of laws and regulations or the articles of incorporation, they may demand the calling of a board of directors meeting.

(2) The demand pursuant to the provisions of the preceding paragraph shall be made to the directors (or to the Convenor in the case provided for in the proviso to paragraph (1) of the preceding article) by indicating the matters that are the purpose of the board of directors meeting.

(3) The provisions of paragraph (3) of the preceding article shall apply mutatis mutandis to the cases where a demand is made pursuant to the provisions of paragraph (1).

(4) Shareholders who made the demand pursuant to the provisions of paragraph (1) may attend the board of directors meeting which is called pursuant to such demand or which they call pursuant to the provisions of paragraph (3) of the preceding article applied mutatis mutandis under the preceding paragraph and state their opinions.

(Calling Procedures)

Article 368 (1) A person who calls a board of directors meeting shall dispatch the notice thereof to each director (or, for a Company with Auditors, to each director and each company auditor) no later than one week (or if a shorter period of time is prescribed in the articles of incorporation, such period of time) prior to the day of the board of directors meeting.

(2) Notwithstanding the provisions of the preceding paragraph, the board of directors meeting may be held without the procedures of calling if the consent of all directors (or, for a Company with Auditors, directors and company auditors) is obtained.

(Resolution of Board of Directors Meetings)

Article 369 (1) The resolution of a board of directors meeting shall be made by a majority (in cases where a higher proportion is provided for in the articles of incorporation, such proportion or more) of the directors present at the meeting where the majority (in cases where a higher proportion is provided for in the articles of incorporation, such proportion or more) of the directors entitled to participate in the vote are present.

(2) Directors who have a special interest in the resolution under the preceding paragraph may not participate in the vote.

(3) With respect to the business of the board of directors meeting, minutes shall be prepared pursuant to the provisions of the applicable Ordinance of the Ministry of Justice, and if the minutes are prepared in writing, the directors and company auditors present at the meeting shall sign or affix the names and seals to it.

(4) With respect to the matters recorded in Electromagnetic Records in cases where the minutes under the preceding paragraph are prepared by such Electromagnetic Records, an action in lieu of the signing or the affixing of names and seals prescribed by the applicable Ordinance of the Ministry of Justice shall be taken.

(5) Directors who participate in resolutions of the board of directors meeting and do not have their objections recorded in the minutes under paragraph (3) shall be presumed to have agreed to such resolutions.

(Omission of Resolution of Board of Directors Meeting)

Article 370 A Company with Board of Directors may provide in the articles of incorporation to the effect that, in cases where directors submit a proposal with respect to a matter which is the purpose of the resolution of board of directors meeting, if all directors (limited to those who are entitled to participate in votes with respect to such matter) manifest their intention to agree to such proposal in writing or by means of Electromagnetic Records (except for the case, at a Company with Auditors, where a company auditor states his/her objections to such proposal), it shall be deemed that the resolution to approve such proposal at the board of directors meeting has been made.

(Minutes)

Article 371 (1) A Company with Board of Directors shall keep the minutes referred to in Article 369(3) or the documents or Electromagnetic Records which specify or record the manifestation of intention under the preceding article (hereinafter in this article referred to as "Minutes") at its head office for the period of ten years from the day of the board of directors meeting (including the day when a resolution of a board of directors meeting is deemed to have been made pursuant to the provisions of the preceding article).

(2) If it is necessary for the purpose of exercising the rights of a shareholder, he/she may make the following requests at any time during the business hours of a Stock Company:

(i) If the Minutes under the preceding paragraph are prepared in writing, requests for inspection or copying of such documents; and

(ii) If the Minutes under the preceding paragraph are prepared in Electromagnetic Records, requests for inspection or copying of anything that displays the data recorded in such Electromagnetic Records in a manner prescribed by the applicable Ordinance of the Ministry of Justice.

(3) For the purpose of the application of the provisions of the preceding paragraph to a Company with Auditors or Company with Committees, "at any time during the business hours of a Stock Company" in that paragraph shall be read as "with the permission of the court."

(4) If it is necessary for the purpose of pursuing the liability of Officers or executive officers by a creditor of a Company with Board of Directors, such creditor may, with the permission of the court, make the request set forth in each item of paragraph (2) with respect to the Minutes of such Company with Board of Directors.

(5) The provision of the preceding paragraph shall apply mutatis mutandis to the cases where it is necessary for the purpose of exercising the rights of a Member of the Parent Company of a Company with Board of Directors.

(6) If the court finds that the inspection or copying relating to the requests listed in each item of paragraph (2) applied by the reading of terms under paragraph (3), or a request under paragraph (4) (including the case of the mutatis mutandis application under the preceding paragraph. The same shall apply hereinafter in this paragraph) is likely to cause substantial detriment to such Company with Board of Directors or its Parent Company or Subsidiary, the court may not grant the permission under paragraph (2) applied by the reading of terms under paragraph (3) or the permission under paragraph (4).

(Omission of Report to Board of Directors)

Article 372 (1) In cases where the directors, accounting advisors, company auditors or accounting auditors have notified all directors (or, for a Company with Auditors, directors and company auditors) of matters that are to be reported to a board of directors meeting, it shall be unnecessary to report such matters to a board of directors meeting.

(2) The provisions of the preceding paragraph shall not apply to reports under the provisions of Article 363(2).

(3) For the purpose of the application of the provisions of the preceding two paragraphs to a Company with Committees, "company auditors or accounting auditors" in paragraph (1) shall be read as "accounting auditors or executive officers"; "directors (or, for a Company with Auditors, directors and company auditors)" in paragraph (1) shall be read as "directors"; and "Article 363(2)" in the preceding paragraph shall be read as "Article 417(4)."

(Resolution of Board of Directors by Special Directors)

Article 373 (1) Notwithstanding the provisions of Article 369(1), in cases where a Company with Board of Directors (excluding a Company with Committees) falls under all of the following requirements, the board of directors may provide to the effect that the resolution of the board of directors on the matters listed in item (i) and item (ii) of Article 362(4) may be made, where the majority (in cases where a higher proportion is determined by the board of directors, such proportion or more) of three or more directors appointed in advance (hereinafter in this Chapter referred to as "Special Directors") who are entitled to participate in the vote are present, by the majority (in cases where a higher proportion is determined by the board of directors, such proportion or more) of such directors present:

(i) That there are six or more directors; and

(ii) That one or more of the directors are Outside Directors.

(2) In cases where there is a provision on the vote by Special Directors pursuant to the provisions of the preceding paragraph, directors other than the Special Directors shall not be required to attend the board of directors meeting that decides the matters listed in item (i) and item (ii) of Article 362(4). For the purpose of the application of the provisions of the main clause of Article 366(1) and Article 368 to such cases, "any director" in the main clause of 366(1) shall be read as "any Special Director (referring to the Special Director provided for in Article 373(1). The same shall apply in Article 368)," "in the articles of incorporation" in Article 368(1) shall be read as "by the board of directors," "each director" in the same paragraph shall be read as "each Special Director," "directors (" in paragraph (2) of that article shall be read as "Special Directors (," and "directors and" in the same paragraph shall be read as "Special Directors and."

(3) The person who is appointed by Special Directors from among themselves shall report without delay after the resolution of the board of directors under the preceding paragraph the content of such resolution to the directors other than the Special Directors.

(4) The provisions of Article 366 (excluding the main clause of paragraph (1)), Article 367, Article 369(1) and Article 370 shall not apply to the board of directors under paragraph (2).

Section 6 Accounting Advisors

(Authority of Accounting Advisors)

Article 374 (1) Accounting advisors shall prepare, jointly with the directors, the Financial Statements (referring to the Financial Statements provided for in Article 435(2). The same shall apply hereinafter in this Chapter) and the supplementary schedules thereof, the Temporary Financial Statements (referring to the Temporary Financial Statements provided for in Article 441(1). The same shall apply hereinafter in this Chapter) as well as the Consolidated Financial Statements (referring to the Consolidated Financial Statements provided for in Article 444(1). The same shall apply in Article 396(1)). In such cases, the accounting advisors shall prepare accounting advisor's report pursuant to the provisions of the applicable Ordinance of the Ministry of Justice.

(2) Accounting advisors may at any time inspect or copy the following things or request reports on accounting from directors and managers or other employees:

(i) If the account books or the materials relating thereto are prepared in writing, such documents; and (ii) If the account books or the materials relating thereto are prepared by Electromagnetic Records, anything that displays the data recorded in such Electromagnetic Records in a manner prescribed by the applicable Ordinance of the Ministry of Justice;

(3) If it is necessary for the purpose of performing duties of an accounting advisor, an accounting advisor may request reports on accounting from a Subsidiary of the Company with Accounting Advisors, or investigate the status of the operations and financial status of the Company with Accounting Advisors or of its Subsidiary.

(4) The Subsidiary under the preceding paragraph may refuse the report or investigation under that paragraph if there are justifiable grounds.

(5) Accounting advisors may not employ a person listed in item (ii) or item (iii) of Article 333(3) in performing their duties.

(6) For the purpose of the application of the provisions of paragraph (1) and paragraph (2) to a Company with Committees, "directors" in paragraph (1) shall be read as "executive officers," and "directors and" in paragraph (2) shall be read as "executive officers and directors, and."

(Accounting Advisor's Duty to Report)

Article 375 (1) If an accounting advisor detect, during the performance of their duties, misconduct or material facts in violation of laws and regulations or the articles of incorporation in connection with the execution of the duties of the directors, they shall report the same to the shareholders (or, for a Company with Auditors, to the company auditors) without delay.

(2) For the purpose of the application of the provisions of the preceding paragraph to a Company with Board of Company Auditors, "shareholders (or, for a Company with Auditors, to the company auditors)" in that paragraph shall be read as "board of company auditors."

(3) For the purpose of the application of the provisions of paragraph (1) to a Company with Committees, "directors" in that paragraph shall be read as "executive officers or directors" and "shareholders (or, for a Company with Auditors, to the company auditors)" in the same paragraph shall be read as "audit committee."

(Attendance at Board of Directors Meetings)

Article 376 (1) Accounting advisors (in cases where accounting advisors are audit firms or tax accountant corporation, referring to the members who are to perform the duties of the accounting advisors. The same shall apply hereinafter in this Article) of a Company with Board of Directors shall attend the board of directors meetings that effect the approval under Article 436(3), Article 441(3) or Article 444(5). In such cases, accounting advisors shall state their opinions if they regard it necessary.

(2) At a Company with Accounting Advisors, a person who is to call the board of directors meetings under the preceding paragraph shall dispatch the notice thereof to each accounting advisor no later than one week (or if a shorter period of time is provided for in the articles of incorporation, such shorter period of time) prior to the day of such board of directors meeting.

(3) In order to hold a board of directors meeting under paragraph (1) without the calling procedures pursuant to the provisions of Article 368(2) at a Company with Accounting Advisors, the consent of all accounting advisors shall be obtained.

(Statement of Opinions at Shareholders Meetings)

Article 377 (1) If an accounting advisor's opinion on matters regarding the preparation of the statements provided for in Article 374(1) differs from those of the directors, the accounting advisor (in cases where the accounting advisors are audit firms or tax accountant corporations, referring to the members who are to perform the duties of the accounting advisors) may state his/her opinion at the shareholders meeting.

(2) For the purpose of the application of the provisions of the preceding paragraph to a Company with Committees, "directors" in that paragraph shall be read as "executive officers."

(Keeping and Inspection of Financial Statements by Accounting Advisors)

Article 378 (1) Accounting advisors shall keep the things listed in the following items at the place designated by the accounting advisors for the period provided for in each such item, pursuant to the applicable Ordinance of the Ministry of Justice:

(i) The Financial Statements and the supplementary schedules thereof, and the accounting advisor's report for each business year: Five years from the day one week (or, for a Company with Board of Directors, two weeks) prior to the day of the annual shareholders meeting (or, in the case provided for in Article 319(1), from the day when the proposal under that paragraph was submitted); and

(ii) The Temporary Financial Statements and the accounting advisor's report: Five years from the day when the Temporary Financial Statement was prepared.

(2) The shareholders and creditors of a Company with Accounting Advisors may submit the following request to the accounting advisors at any time during the business hours of the Company with Accounting Advisors (except for cases prescribed by the applicable Ordinance of the Ministry of Justice as cases where it is difficult for the accounting advisor to response to the request); provided, however, that the fees designated by such accounting advisors are required to be paid in order to submit the requests listed in item (ii) or item (iv):

(i) If the statements listed in each item of the preceding paragraph are prepared in writing, a request to inspect the statements;

(ii) A request for a transcript or extract of the statements referred to in the preceding item;

(iii) If the statements listed in each item of the preceding paragraph are prepared by Electromagnetic Records, a request to inspect anything that displays the data recorded in such Electromagnetic Records in a manner prescribed by the applicable Ordinance of the Ministry of Justice; or

(iv) A request that the matters recorded in the Electromagnetic Records referred to in the preceding item be provided by an Electromagnetic Method designated by the accounting advisor, or a request for any document which contains such data.

(3) If it is necessary for the purpose of exercising the rights of a Member of the Parent Company of a Company with Accounting Advisors, he/she may, with the permission of the court, make the requests listed in each item of the preceding paragraph with respect to the things of such Company with Accounting Auditors listed in each item of paragraph (1); provided, however, that, in order to make the requests listed in item (ii) or item (iv) of the preceding paragraph, the fees designated by such accounting advisor are required to be paid.

(Remunerations for Accounting Advisors)

Article 379 (1) The Remunerations for accounting advisors shall be fixed by resolution of a shareholders meeting if the amount thereof is not prescribed in the articles of incorporation.

(2) In cases where there are two or more accounting advisors, if there is no provision in the articles of incorporation and no resolution by a shareholders meeting with respect to the Remunerations for each accounting advisor, such Remunerations shall be fixed by discussion by the accounting advisors within the extent of the Remunerations referred to in the preceding paragraph.

(3) Accounting advisors (or, in cases where accounting advisors are audit firms or tax accountant corporation, the members who are to perform the duties of accounting advisors) may state their opinions on Remunerations for the accounting advisors at a shareholders meeting.

(Requests for Indemnification of Expenses)

Article 380 If accounting advisors make the following requests to a Company with Accounting Advisors with respect to the execution of their duties, such Company with Accounting Advisors may not refuse such request except in cases where it proves that the expense or debt relating to such request is not necessary for the execution of the duties of such accounting advisors:

(i) Requests for advancement of expenses;

(ii) Requests for indemnification of the expenses paid and interests thereon from and including the day of the payment; or

(iii) Requests for payment (or, in cases where such debt is not yet due, provision of reasonable security) to the creditor of a debt incurred.

Section 7 Company Auditors

(Authority of Company Auditors)

Article 381 (1) Company auditors shall audit the execution of duties by directors (or directors and accounting advisors for a Company with Accounting Advisors). In such cases, company auditors shall prepare audit reports pursuant to the provisions of the applicable Ordinance of the Ministry of Justice.

(2) Company auditors may at any time request reports on the business from the directors and accounting advisors and managers and other employees, or investigate the status of the operations and financial status of the Company with Auditors.

(3) Company auditors may, if it is necessary for the purpose of performing duties of the company auditors, request reports on the business from a Subsidiary of the Company with Auditors, or investigate the status of the operations and financial status of its Subsidiary.

(4) The Subsidiary under the preceding paragraph may refuse the report or investigation under that paragraph if there are justifiable grounds.

(Duty to Report to Directors)

Article 382 If company auditors find that directors engage in misconduct, or are likely to engage in such conduct, or that there are facts in violation of laws and regulations or the articles of incorporation or grossly improper facts, they shall report the same to the directors (or, for a Company with Board of Directors, to the board of directors) without delay.

(Duty to Attend Board of Directors Meetings)

Article 383 (1) Company auditors shall attend the board of directors meeting, and shall state their opinions if they find it necessary; provided, however, that, in cases where there are two or more company auditors, if there is a provision on the vote by Special Directors pursuant to the provisions of Article 373(1), the specific company auditor who shall attend the board of directors meeting under paragraph (2) of that article shall be appointed by the company auditors from among the company auditors.

(2) In the case provided for in the preceding article, if company auditors find it necessary, they may demand that the directors (or a Convenor in case provided for in the proviso to Article 366(1)) call the board of directors meeting.

(3) In cases where, within five days from the day of the demand made pursuant to the provisions of preceding paragraph, a notice of calling of the board of directors meeting which designates as the day of the board of directors meeting a day falling within the period of two weeks from the day of the demand are not dispatched, the company auditors who made that demand may call the board of directors meeting.

(4) The provisions of the preceding two paragraphs shall not apply to the board of directors meeting under Article 373(2).

(Duty to Report to Shareholders Meeting)

Article 384 Company auditors shall investigate proposals, documents and other items prescribed by the applicable Ordinance of the Ministry of Justice that directors intend to submit to the shareholders meeting. In such cases, if company auditors find that there is a violation of laws and regulations or the articles of incorporation or a grossly improper fact, they shall report the results of the investigation to a shareholders meeting.

(Enjoinment of Acts of Directors by Company Auditors)

Article 385 (1) In cases where a director engages, or is likely to engage, in an act outside the scope of the purpose of a Stock Company, or other acts in violation of laws and regulations or the articles of incorporation, if such act is likely to cause substantial detriment to such Company with Auditors, company auditors may demand that such director cease such act.

(2) In the cases provided for in the preceding paragraph, if the court orders a director under the preceding paragraph to cease such act by a provisional disposition, the court shall not require the provision of security.

(Representation of Company in Actions between Company with Auditors and Directors)

Article 386 (1) Notwithstanding the provisions of Article 349(4), Article 353 and Article 364, in cases where a Company with Auditors files an action against its directors (including persons who were directors. The same shall apply hereinafter in this article), or the directors file an action against that Company with Auditors, the company auditors shall represent the Company with Auditors in such action.

(2) Notwithstanding the provisions of Article 349(4), in the following cases, the company auditors shall represent the Company with Auditors:

(i) In cases where a Company with Auditors is requested to file an action under Article 847(1) (limited to requests for the filing of actions that pursue the liability of directors); or

(ii) In cases where a Company with Auditors receives notice of suit under Article 849(3) (limited to those related to actions that pursue the liability of directors) and a notice or demand pursuant to the provisions of Article 850(2) (limited to those related to the settlement of a suit relating to an action that pursues the liability of directors).

(Remunerations for Company Auditors)

Article 387 (1) The Remunerations for company auditors shall be fixed by resolution of a shareholders meeting if the amount thereof is not prescribed in the articles of incorporation.

(2) In cases where there are two or more company auditors, if there is no provision in the articles of incorporation and no resolution by a shareholders meeting with respect to the Remunerations for each company auditor, such Remunerations shall be fixed by discussion by the company auditors within the extent of the Remunerations referred to in the preceding paragraph.

(3) Company auditors may state their opinions on Remunerations for the company auditors at a shareholders meeting.

(Requests for Indemnification of Expenses)

Article 388 If company auditors make the following requests to a Company with Auditors (including a Stock Company the articles of incorporation of which provide that the scope of the audit by its company auditors shall be limited to an audit related to accounting) with respect to the execution of their duties, such Company with Auditors may not refuse such request except in cases where it proves that the expense or debt relating to such request is not necessary for the execution of the duties of such company auditors:

(i) Requests for advancement of expenses;

(ii) Requests for indemnification of the expenses paid and the interests thereon from and including the day of the payment; or

(iii) Requests for the payment (or, in cases where such debt is not yet due, provision of reasonable security) to the creditor of a debt incurred.

(Limitation of Scope of Audit by Provisions of Articles of Incorporation)

Article 389 (1) A Stock Company which is not a Public Company (excluding a Company with Board of Company Auditors and Company with Accounting Auditors) may provide in the articles of incorporation that the scope of the audit by its company auditors shall be limited to an audit related to accounting, notwithstanding the provisions of Article 381(1).

(2) Company auditors of a Stock Company that has the provisions of the articles of incorporation under the provisions of the preceding paragraph shall prepare audit reports pursuant to the applicable Ordinance of the Ministry of Justice.

(3) The company auditors under the preceding paragraph shall investigate the proposals, documents and other items prescribed by the applicable Ordinance of the Ministry of Justice that are related to accounting which the directors intend to submit to a shareholders meeting, and report the results of that investigation to a shareholders meeting.

(4) The company auditors under paragraph (2) may at any time inspect or copy the following things, or request reports on accounting from directors and accounting advisors as well as managers or other employees:

(i) If the account books or the materials relating thereto are prepared in writing, such documents;

(ii) If the account books or the materials relating thereto are prepared by Electromagnetic Records, anything that displays the data recorded in such Electromagnetic Records in a manner prescribed by the applicable Ordinance of the Ministry of Justice; or

(5) If it is necessary for the purpose of performing duties of a company auditor under paragraph (2), a company auditor may request reports on accounting from a Subsidiary of the Stock Company, or investigate the status of the operations and financial status of the Stock Company or of its Subsidiary.

(6) The Subsidiary under the preceding paragraph may refuse the report or investigation under that paragraph if there are justifiable grounds.

(7) The provisions from Article 382 through Article 386 shall not apply to a Stock Company which has provisions of the articles of incorporation pursuant to the provisions of paragraph (1).

Section 8 Board of Company Auditors

Subsection 1 Authority

Article 390 (1) Board of company auditors shall be composed of all company auditors.

(2) Board of company auditors shall perform the following duties; provided, however, that the decision in item (iii) may not preclude company auditors from exercising their authority:

(i) Preparing audit reports;

(ii) Appointing and removing full-time company auditors; and

(iii) Deciding audit policy, methods for investigating the status of the operations and financial status of a Company with Board of Company Auditors and other matters regarding the execution of the duties of company auditors.

(3) Board of company auditors shall appoint full-time company auditors from among the company auditors.

(4) If a board of company auditors requests, company auditors shall report the status of the execution of their duties to the board of company auditors at any time.

Subsection 2 Operations

(Convenor)

Article 391 A board of company auditors meeting shall be called by any company auditor.

(Calling Procedures)

Article 392 (1) To call a board of company auditors meeting, a company auditor shall dispatch the notice thereof to each company auditor no later than one week (or if a shorter period of time is prescribed in the articles ofincorporation, such shorter period of time) prior to the day of the board of company auditors meeting.

(2) Notwithstanding the provisions of the preceding paragraph, the board of company auditors meeting may be held without the procedures of calling if the consent of all company auditors is obtained.

(Resolution of Board of Company Auditors Meetings)

Article 393 (1) The resolution of a board of company auditors meeting shall be made by a majority of the company auditors.

(2) With respect to the business of the board of company auditors meeting, minutes shall be prepared pursuant to the provisions of the applicable Ordinance of the Ministry of Justice, and if the minutes are prepared in writing, the company auditors present at the meeting shall sign or affix the names and seals to it.

(3) With respect to the matters recorded in Electromagnetic Records in cases where the minutes under the preceding paragraph are prepared in such Electromagnetic Records, an action in lieu of the signing or the affixing of names and seals prescribed by the applicable Ordinance of the Ministry of Justice shall be taken.

(4) Company auditors who participate in resolutions of the board of company auditors meeting and do not have their objections recorded in the minutes under paragraph (2) shall be presumed to have agreed to such resolutions.

(Minutes)

Article 394 (1) A Company with Board of Company Auditors shall keep the minutes referred to in paragraph (2) of the preceding article at its head office for the period of ten years from the day of the board of company auditors meeting.

(2) If it is necessary for the purpose of exercising the rights of a shareholder of a Company with Board of Company Auditors, he/she may, with the permission of the court, make the following requests:

(i) If the minutes under the preceding paragraph are prepared in writing, requests for inspection or copying of such documents; and

(ii) If the minutes under the preceding paragraph are prepared by Electromagnetic Records, requests for inspection or copying of anything that displays the data recorded in such Electromagnetic Records in a manner prescribed by the applicable Ordinance of the Ministry of Justice.

(3) The provisions of the preceding paragraph shall apply mutatis mutandis to the cases where it is necessary for the purpose of pursuing the liability of Officers by a creditor of a Company with Auditors and to the cases where it is necessary for the purpose of exercising the rights of a Member of the Parent Company.

(4) If the court finds that the inspection or copying relating to the requests under paragraph (2) (including the case of the mutatis mutandis application under the preceding paragraph. The same shall apply hereinafter in this paragraph) is likely to cause substantial detriment to such Company with Board of Company Auditors or its Parent Company or Subsidiary, the court may not grant the permission under paragraph (2).

(Omission of Report to Board of Company auditors)

Article 395 In cases where the directors, accounting advisors, company auditors or accounting auditors have notified all company auditors of matters that are to be reported to a board of company auditors meeting, it shall be unnecessary to report such matters to a board of company auditors meeting.

Section 9 Accounting Auditors

(Authority of Accounting Auditors)

Article 396 (1) Accounting auditors shall audit the Financial Statements and the supplementary schedules thereof, the Temporary Financial Statements as well as the Consolidated Financial Statements of a Stock Company pursuant to the provisions of the next Chapter. In such cases, accounting auditors shall prepare accounting audit reports pursuant to the provisions of the applicable Ordinance of the Ministry of Justice.

(2) Accounting auditors may at any time inspect and copy the following things or request reports on accounting from directors and accounting advisors as well as managers or other employees:

(i) If account books or materials relating thereto are prepared in writing, such documents; and

(ii) If account books or materials relating thereto are prepared by Electromagnetic Records, anything that displays the data recorded in such Electromagnetic Records in a manner prescribed by the applicable Ordinance of the Ministry of Justice;

(3) Accounting auditors may, if it is necessary for the purpose of performing duties of the accounting auditors, request reports on accounting from a Subsidiary of the Company with Accounting Auditors, or investigate the status of the operations and financial status of the Company with Accounting Auditors or of its Subsidiary.

(4) The Subsidiary under the preceding paragraph may refuse the report or investigation under that paragraph if there are justifiable grounds.

(5) Accounting auditors may not employ a person listed in any of the following items in performing their duties:

(i) A person listed in item (i) or item (ii) of Article 337(3);

(ii) A person who is a director, accounting advisor, company auditor, executive officer or employee, including a manager, of a Company with Accounting Auditors; or

(iii) A person who is in continuous receipt of remuneration from a Company with Accounting Auditors or its Subsidiary for operations other than the operations of the Certified Public Accountant or audit firm.

(6) For the purpose of the application of the provisions of paragraph (2) to a Company with Committees, "directors" in that paragraph shall be read as "executive officers, directors."

(Report to Company Auditors)

Article 397 (1) If accounting auditors detect, during the performance of their duties, misconduct or material facts in violation of laws and regulations or the articles of incorporation in connection with the execution of the duties of the directors, they shall report the same to the company auditors without delay.

(2) If it is necessary for the purpose of performing their duties, company auditors may request reports on the accounting auditors' audits from the accounting auditors.

(3) For the purpose of the application of the provisions of paragraph (1) to a Company with Board of Company Auditors, "company auditors" in that paragraph shall be read as "board of company auditors."

(4) For the purpose of the application of the provisions of paragraph (1) and paragraph (2) to a Company with Committees, "directors" in paragraph (1) shall be read as "executive officers or directors," "company auditors" in the same paragraph shall be read as "audit committee," and "company auditors" in paragraph (2) shall be read as "committee members of the audit committee who are appointed by the audit committee."

(Statement of Opinions at Annual Shareholders Meeting)

Article 398 (1) If an accounting auditor's opinion on whether or not the statements provided for in Article 396(1) comply with laws and regulations or the articles of incorporation differs from those of the company auditors, the accounting auditor (in cases where accounting auditors are audit firms or tax accountant corporations, referring to the members who are to perform their duties. The same shall apply in the following paragraph) may attend the annual shareholders meeting and state their opinion.

(2) If there is a resolution of an annual shareholders meeting that requires the attendance of accounting auditors, the accounting auditors shall attend the shareholders meeting and state their opinions.

(3) For the purpose of the application of the provisions of paragraph (1) to a Company with Board of Company Auditors, "company auditors" in that paragraph shall be read as "board of company auditors or company auditors."

(4) For the purpose of the application of the provisions of paragraph (1) to a Company with Committees, "company auditors" in that paragraph shall be read as "audit committee or its committee members."

(Involvement of Company Auditors in Decision on Remunerations for Accounting Auditors)

Article 399 (1) Directors shall obtain the consent of the company auditor (if there are two or more company auditors, the majority of the company auditors) in cases where the directors fix the Remunerations for accounting auditors or persons who are to temporarily perform the duties of accounting auditors.

(2) For the purpose of the application of the preceding paragraph to a Company with Board of Company Auditors, "company auditor (if there are two or more company auditors, the majority of the company auditors)" in that paragraph shall be read as "board of company auditors."

(3) For the purpose of the application of the provisions of paragraph (1) to a Company with Committees, "company auditor (if there are two or more company auditors, the majority of the company auditors)" in that paragraph shall be read as "audit committee."

Section 10 Committees and Executive Officers

Subsection 1 Appointment of Committee Members and Election of

Executive Officers

(Appointment of Committee Members)

Article 400 (1) Each Committee shall be composed of three or more committee members.

(2) The committee members of each Committee shall be appointed from among the directors by resolution of the board of directors.

(3) The majority of the committee members of each Committee shall be Outside Directors.

(4) A committee member of the audit committee (hereinafter referred to as "Audit Committee Member") may not concurrently act as an executive officer or Executive Director of a Company with Committees or its Subsidiary, or as an accounting advisor (if the accounting advisor is a juridical person, the member who is to perform the duties of the accounting advisor) or employee, including manager, of a Subsidiary of a Company with Committees.

(Removal of Committee Members)

Article 401 (1) The committee members of each Committee may be removed at any time by resolution of the board of directors.

(2) Where there is a vacancy which results in a shortfall in the number of committee members of each Committee provided for in paragraph (1) of the preceding article (or, if the number of committee members provided for in the articles of incorporation is four or more, that number), a committee member who retired from office due to expiration of his/her term of office or resignation shall continue to have the rights and obligations of a committee member until a newly appointed committee member (including a person who is to temporarily perform the duties of a committee member under the following paragraph) assumes his/her office.

(3) In the case provided for in the preceding paragraph, if the court finds it necessary, it may, in response to a petition by interested persons, elect a person who is to temporarily perform the duties of a committee member.

(4) In cases where the court has elected the person who is to temporarily perform the duties of a committee member under the preceding paragraph, the court may prescribe the amount of the remuneration that the Company with Committees shall pay to that person.

(Election of Executive Officers)

Article 402 (1) A Company with Committees shall have one or more executive officers.

(2) Executive officer shall be elected by resolution of the board of directors.

(3) The relationship between a Company with Committees and its executive officers shall be governed by the provisions on mandate.

(4) The provisions of Article 331(1) shall apply mutatis mutandis to executive officers.

(5) A Stock Company may not provide in the articles of incorporation that the executive officers shall be shareholders; provided, however, that this shall not apply to a Company with Committees that is not a Public Company.

(6) An executive officer may act concurrently as a director.

(7) An executive officer's term of office shall continue until the conclusion of the first board of directors meeting called after the conclusion of the annual shareholders meeting for the last business year ending within one year from the time of their election; provided, however, that this does not preclude the shortening the executive officer's term of office by the articles of incorporation.

(8) Notwithstanding the provisions of the preceding paragraph, in cases where a Company with Committees makes any amendment in the articles of incorporation to repeal the provisions of the articles of incorporation to the effect that Committees shall be established, the executive officer's term of office shall expire when such amendment in the articles of incorporation takes effect.

(Dismissal of Executive Officers)

Article 403 (1) Executive officers may be dismissed at any time by resolution of the board of directors.

(2) An executive officer dismissed pursuant to the provisions of the preceding paragraph shall be entitled to demand damages arising from the dismissal from the Company with Committees, except in cases where there are justifiable grounds for such dismissal.

(3) The provisions from paragraph (2) through paragraph (4) of Article 402 shall apply mutatis mutandis to the cases where there are no executive officers in office, or where there is a vacancy which results in a shortfall in the number of executive officers prescribed in the articles of incorporation.

Subsection 2 Authority of Committees

(Authority of Committees)

Article 404 (1) A nominating committee shall determine the contents of proposals regarding the election and dismissal of directors (or directors and accounting advisors for a Company with Accounting Advisors) to be submitted to a shareholders meeting.

(2) An audit committee shall perform the following duties:

(i) Auditing the execution of duties by Executive Officers, Etc. (meaning executive officers and directors, or, for a Company with Accounting Advisors, meaning executive officers, directors and accounting advisors. The same shall apply hereinafter in this Section) and preparing audit reports; and

(ii) Determining the contents of proposals regarding the election and dismissal of accounting auditors and the refusal to reelect accounting auditors to be submitted to a shareholders meeting.

(3) Notwithstanding the provisions of Article 361(1) and Article 379(1) and (2), a compensation committee shall determine the contents of the Remunerations for individual Executive Officers, Etc. If an executive officer acts concurrently as an employee, including manager, of a Company with Committees, the same shall apply to the contents of the Remunerations for such employee, including manager.

(4) If committee members make the following requests to a Company with Committees with respect to the execution of their duties (limited to that regarding the execution of the duties of the Committee to which such committee members belong. The same shall apply hereinafter in this paragraph), such Company with Committees may not refuse such request except in cases where it proves that the expense or debt relating to such request is not necessary for the execution of the duties of such committee members:

(i) Requests for advancement of the expenses;

(ii) Request for the indemnification of the expenses paid and interests thereon from and including the day of the payment; or

(iii) Requests for the payment (or, in cases where such debt is not yet, provision of reasonable security) to the creditor of a debt incurred.

(Investigations by Audit Committees)

Article 405 (1) Audit Committee Members appointed by the audit committee may at any time request reports on the execution of their duties from Executive Officers, Etc. and employees including managers, or investigate the status of the operations and financial status of the Company with Committees.

(2) Audit Committee Members appointed by the audit committee may, if it is necessary for the purpose of performing duties of the audit committee, request reports on the business from a Subsidiary of the Company with, or investigate the status of the operations and financial status of its Subsidiary.

(3) The Subsidiary under the preceding paragraph may refuse the report or investigation under that paragraph if there are justifiable grounds.

(4) Audit Committee Members under paragraph (1) and paragraph (2) shall comply with resolutions of the audit committee, if any, on matters regarding the collection of the report or investigation under such respective paragraphs.

(Duty to Report to Board of Directors)

Article 406 If Audit Committee Members find that executive officers or directors engage in misconduct, or are likely to engage in such conduct, or that there are facts in violation of laws and regulations or the articles of incorporation or grossly improper facts, they shall report the same to the board of directors without delay.

(Enjoinment of Acts of Executive Officers, Etc. by Audit Committee Members)

Article 407 (1) In cases where an executive officer or director engages, or is likely to engage, in any act outside the scope of the purpose of a Company with Committees, or other acts in violation of laws and regulations or the articles of incorporation, if such act is likely to cause substantial detriment to such Company with Committees, the Audit Committee Members may demand that such executive officer or director cease such act.

(2) In the cases provided for in the preceding paragraph, if the court orders a executive officer or director under the preceding paragraph to cease such act by a provisional disposition, the court shall not require the provision of security.

(Representation of Company in Actions between Company with Committees and Executive Officers or Directors)

Article 408 (1) Notwithstanding the provisions of Article 349(4) applied mutatis mutandis under Article 420(3), and the provisions of Article 353 and Article 364, in cases where a Company with Committees files an action against its executive officers (including persons who were executive officers. The same shall apply hereinafter in this article) or directors (including persons who were directors. The same shall apply hereinafter in this article), or the executive officers or director (including persons who were directors. The same shall apply hereinafter in this article), or the executive officers or directors of a Company with Committees files an action against that Company with Committees, the persons provided for in each of the following items for the case categories listed in such items shall represent the Company with Committees in such actions: