Companies Act

In the following cases, if shareholders of the surviving stock company, etc. are likely to suffer disadvantages, shareholders of the surviving stock company, etc. may demand the surviving stock company, etc. to cease an absorption-type merger, etc.;provided, however, that this does not apply to cases prescribed in the main clause of paragraph (2) of the preceding Article (excluding the cases set forth in the items of Article 795, paragraph (2) and the cases prescribed in the proviso to paragraph (1) or paragraph (3) of the preceding Article):

if the absorption-type merger, etc. violates laws and regulations or the articles of incorporation; or

if prescribed in the main clause of paragraph (1) of the preceding Article, when the matters set forth in Article 749, paragraph (1), item (ii) or (iii), Article 758, item (iv), or Article 768, paragraph (1), item (ii) or (iii) are extremely improper in light of the financial status of the surviving stock company, etc. or disappearing company, etc.

In cases of effecting an absorption-type merger, etc., dissenting shareholders may demand that the surviving stock company, etc. purchase, at a fair price, the shares that they hold; provided, however, that this does not apply to the cases prescribed in the main clause of Article 796, paragraph (2) (excluding the cases set forth in the items of Article 795, paragraph (2) and the cases prescribed in the proviso to Article 796, paragraph (1), or (3)).

The "dissenting shareholders" provided for in the preceding paragraph means the shareholders provided for in the following items in the cases set forth in the same items:

if a resolution at a shareholders meeting (including a general meeting of class shareholders) is required to effect the absorption-type merger, etc.: the following shareholders:

shareholders who gave notice to relevant surviving stock company, etc. to the effect that they dissented from relevant absorption-type merger, etc. prior to relevant shareholders meeting and who dissented from relevant absorption-type merger, etc. at relevant shareholders meeting (limited to those who can exercise voting rights at relevant shareholders meeting);

shareholders who are unable to exercise voting rights at relevant shareholders meeting; and

in cases other than those prescribed in the preceding item:all shareholders (excluding the special controlling company in the cases prescribed in the main clause of Article 796, paragraph (1)).

A surviving stock company, etc. must notify its shareholders (excluding the special controlling company in the cases prescribed in the main clause of Article 796, paragraph (1)) that it will effect an absorption-type merger, etc. and the trade name and address of the disappearing company, etc. (or, in the cases prescribed in Article 795, paragraph (3), the fact that it will effect an absorption-type merger, etc., the trade name and address of the disappearing company, etc. and the matters concerning shares set forth in that paragraph), by twenty days prior to the effective day.

In the following cases, a public notice may be substituted for the notice under the provisions of the preceding paragraph:

if the surviving stock company, etc. is a public company; or

if the surviving stock company, etc. obtains the approval of the absorption-type merger agreement, etc. by the resolution at a shareholders meeting set forth in Article 795, paragraph (1).

To make a demand under the provisions of paragraph (1) (hereinafter referred to as the "exercise of appraisal rights" in this Division) a dissenting shareholder must indicate the number of shares with regard to which the shareholder is exercising those appraisal rights (or, for a company with classes shares, the classes of the shares and the number of shares for each class), between twenty days prior to the effective day and the day immediately preceding the effective day.

When intending to exercise appraisal rights on shares for which share certificates have been issued, shareholders of those shares must submit the share certificates representing those shares to the surviving company, etc.;provided, however, that this does not apply to a person who makes a demand pursuant to the provisions of Article 223 with respect to those share certificates.

Shareholders exercising appraisal rights may withdraw their demands for appraisal only with the approval of the surviving stock company, etc.

The demands of the shareholders exercising appraisal rights lose effect if the absorption-type merger, etc. is cancelled.

The provisions of Article 133 do not apply to shares for the exercise of appraisal rights.

If a shareholder exercises appraisal rights and an agreement determining the price of the shares is reached between the shareholder and the surviving stock company, etc., the surviving stock company, etc. must pay that price within sixty days from the effective day.

If no agreement on the determination of the price of the shares is reached within thirty days from the effective day, shareholders or the surviving stock company, etc. may file a petition for the court to determine the price within thirty days after the expiration of that period.

Notwithstanding the provisions of paragraph (7) of the preceding Article, in the cases prescribed in the preceding paragraph, if the petition under that paragraph is not filed within sixty days from the effective day, shareholders exercising appraisal rights may withdraw their demands for appraisal at any time after the expiration of the period.

The surviving stock company, etc. must also pay interest on the price determined by the court at the statutory rate from and including the day of the expiration of the period referred to in paragraph (1).

The surviving stock company, etc. may pay the amount that the surviving company, etc. considers as fair price to shareholders until the determination of the price of shares.

A share purchase connected with the exercise of appraisal rights becomes effective on the effective day.

If a shareholder exercises appraisal rights with respect to shares for which share certificates are issued, the share certificate-issuing company must pay the price of the shares relating to the exercise of the appraisal rights in exchange for the share certificates.

In the cases set forth in the following items, the creditors provided for in those items may state their objections to the absorption-type merger, etc. to the surviving stock company, etc.:

in cases of effecting an absorption-type merger:creditors of the stock company surviving the absorption-type merger;

in cases of effecting an absorption-type company split:creditors of the stock company succeeding in the absorption-type split; or

in cases of effecting a share exchange other than where the monies, etc. to be delivered to shareholders of the wholly owned subsidiary company resulting from the share exchange are only shares in the wholly owning parent stock company resulting from the share exchange or those prescribed by Ministry of Justice Order as being equivalent thereto, or in the cases prescribed in Article 768, paragraph (1), item (iv), (c):creditors of the wholly owning parent stock company resulting from the share exchange.

If the creditors of the surviving stock company, etc. are able to state their objection pursuant to the provisions of the preceding paragraph, the surviving stock company, etc. must give public notice of the matters set forth below in Official Gazette and must give notices separately to each known creditor, if any; provided, however, that the period under item (iv) may not be less than one month:

a statement that an absorption-type merger, etc. will be effected;

the trade name and address of the disappearing company, etc.;

the matters prescribed by Ministry of Justice Order as the matters regarding the financial statements of the surviving stock company, etc. and the disappearing company, etc. (limited to a stock company); and

a statement to the effect that creditors may state their objections within a certain period of time.

Notwithstanding the provisions of the preceding paragraph, if the surviving stock company, etc. gives public notice under that paragraph by method of public notice set forth in Article 939, paragraph (1), item (ii) or item (iii) in accordance with the provisions of the articles of incorporation under the provisions of that paragraph beyond Official Gazette, the surviving stock company, etc. is not required to give separate notices under the provisions of the preceding paragraph.

If creditors do not raise any objections within the period under paragraph (2), item (iv), relevant creditors are deemed to have approved the absorption-type merger, etc.

If creditors raise objections within the period under paragraph (2), item (iv), the surviving stock company, etc. must make payment or provide reasonable security to relevant creditors, or entrust equivalent property to a trust company, etc. for the purpose of having relevant creditors receive the payment; provided, however, that this does not apply if there is no risk of harm to relevant creditors by relevant absorption-type merger, etc.

Notwithstanding the provisions of Article 135, paragraph (1), if all or part of the monies, etc. to be delivered to shareholders of the stock company disappearing in an absorption-type merger or the wholly owned subsidiary company resulting from a share exchange, to members of the membership company disappearing in the absorption-type merger or to the company splitting in the absorption-type split (hereinafter referred to as "shareholders, etc. of the disappearing company, etc." in this paragraph) are the parent company's shares (meaning the parent company's shares prescribed in paragraph (1) of that Article; hereinafter the same applies in this Article) of the surviving stock company, etc., the surviving stock company, etc. may acquire relevant parent company's shares in a number not exceeding the total number of relevant parent company's shares to be delivered to the shareholders, etc. of the disappearing company, etc. at the time of the absorption-type merger, etc.

Notwithstanding the provisions of Article 135, paragraph (3), the surviving stock company, etc. referred to in the preceding paragraph may hold the parent company's shares of the surviving stock company, etc. until the effective day; provided, however, that this does not apply when the absorption-type merger, etc. is cancelled.

A stock company surviving an absorption-type merger must, without delay after the effective day, prepare documents detailing the rights and obligations that the stock company surviving the absorption-type merger succeeded to by transfer from the company disappearing in the absorption-type merger through the absorption-type merger and any other information prescribed by Ministry of Justice Order as concerning an absorption-type merger, or electronic or magnetic records in which the information has been recorded.

The stock company succeeding in an absorption-type split (limited to the stock company succeeding in the absorption-type split where the limited liability company effects the absorption-type company split) must, without delay after the effective day, prepare, jointly with the limited liability company splitting in the absorption-type split, documents detailing the rights and obligations that the stock company succeeding in the absorption-type split succeeded to by transfer from the limited liability company splitting in the absorption-type split through the absorption-type company split and any other information prescribed by Ministry of Justice Order as concerning an absorption-type company split, or electronic or magnetic records in which the information has been recorded.

Each of the surviving stock companies, etc. set forth in the following items must, for a period of six months from the effective day, keep what are specified respectively in those items at its head office:

stock company surviving an absorption-type merger:documents or electronic or magnetic records referred to in paragraph (1);

stock company succeeding in an absorption-type split:documents or electronic or magnetic records referred to in the preceding paragraph or Article 791, paragraph (1), item (i); and

wholly owning parent stock company resulting from a share exchange:documents or electronic or magnetic records referred to in Article 791, paragraph (1), item (ii).

Shareholders and creditors of the stock company surviving an absorption-type merger may make the following requests to the stock company surviving the absorption-type merger at any time during its business hours; provided, however, that the fees designated by the stock company surviving the absorption-type merger are required to be paid in order to make the requests referred to in item (ii) or item (iv):

requests for inspection of the documents referred to in item (i) of the preceding paragraph;

requests for delivery of a transcript or extract of the documents referred to in item (i) of the preceding paragraph;

a request to inspect anything that is used in a manner prescribed by Ministry of Justice Order to display the information recorded in an electronic or magnetic record as referred to in item (i) of the preceding paragraph; and

a request to be provided with the information recorded in an electronic or magnetic record as referred to in item (i) of the preceding paragraph by an electronic or magnetic means that the stock company surviving the absorption-type merger, or requests has designated, or a request to be issued a document showing that information.

The provisions of the preceding paragraph apply mutatis mutandis to the stock company succeeding in an absorption-type split. In these cases, the phrase "shareholders and creditors" in that paragraph is deemed to be replaced with "shareholders, creditors and any other interested parties", and the term "item (i) of the preceding paragraph" in the items of that paragraph is deemed to be replaced with "item (ii) of the preceding paragraph".

The provisions of paragraph (4) apply mutatis mutandis to the wholly owning parent stock company resulting from a share exchange. In these cases, the phrase "shareholders and creditors" in that paragraph is deemed to be replaced with "shareholders and creditors (or, if monies, etc. to be delivered to shareholders of the wholly owned subsidiary company resulting from a share exchange are limited to shares in the wholly owning parent stock company resulting from the share exchange or those prescribed by Ministry of Justice Order as being equivalent thereto (excluding the case prescribed in Article 768, paragraph (1), item (iv), (c)), shareholders of the wholly owning parent stock company resulting from the share exchange)", and the term "item (i) of the preceding paragraph" in the items of that paragraph is deemed to be replaced with "item (iii) of the preceding paragraph".