Companies Act

If a stock company delivers shares in relevant stock company to the persons specified in each of those items when any act set forth in the items is carried out, if the number of the shares of relevant stock company that must be delivered to that persons includes a fractional share, the stock company must sell the number of shares equivalent to the total sum of the fractional shares by auction (if the total sum includes a fractional share, that fractional share is to be rounded off) and must deliver the proceeds of that auction to relevant persons in proportion to the fractional shares attributed to them:

the acquisition of shares under the provisions of Article 170, paragraph (1):the shareholders of relevant stock company;

the acquisition of shares under the provisions of Article 173, paragraph (1):the shareholders of relevant stock company;

the allotment of shares without contribution provided for in the provisions of Article 185:the shareholders of relevant stock company;

the acquisition of share options pursuant to the provisions of Article 275, paragraph (1):the holders of the share options provided for in Article 236, paragraph (1), item (vii), (a);

merger (but only if the stock company survives the merger):the shareholders or members of the company disappearing due to the merger;

the issuing of shares to be issued at the time of incorporation under merger contracts:the shareholders or members of the company disappearing due to the merger;

the acquisition of all issued shares of another stock company by share exchange:the shareholders of the stock company that effects the share exchange;

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.

partial share exchange:the person who, in a partial share exchange, transferred the shares or share options, etc. (meaning share options, etc. provided in Article 774-3, paragraph (1), item (vii)) of a subsidiary company resulting from a partial share exchange (meaning a subsidiary company resulting from a partial share exchange provided in Article 774-3, paragraph (1), item (i) ) to a share delivery parent company (meaning a parent company resulting from a partial share exchange provided in that item).

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 Ministry of Justice Order 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 these cases, if there are two or more directors, the petition for relevant permission must be filed with the consent of all directors.

For the purpose of the application of the provisions of the preceding paragraph if the shares under paragraph (1) are sold, the phrase "of that auction" in paragraph (1) is deemed to be replaced with "of that sale".

A stock company may purchase some or all of the shares sold pursuant to the provisions of paragraph (2). In these cases, the following matters must be prescribed:

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

the total amount of the monies to be delivered in exchange for the purchase of the shares under the preceding item.

A company with board of directors must determine the matters set forth in each item of the preceding paragraph by a resolution of the board of directors meeting.

The provisions of paragraphs (1) through (4) apply mutatis mutandis to cases where bonds or share options of relevant stock company are delivered to the persons specified in each of those items of paragraph (1) when any act set forth in relevant items is carried out.

If a share split or consolidation of shares effected by a stock company produces any fractional share in the number of the shares, the stock company must sell the number of shares equivalent to the total sum of the fractional shares by auction (if the total sum includes a fractional share, relevant fractional share is to be rounded off) and must deliver the proceeds of that auction to the shareholders in proportion to the fractional shares attributed to them:

The provisions of paragraphs (2) through (5) of the preceding Article apply mutatis mutandis to the cases provided for in the preceding paragraph.