Companies Act

In a case as set forth in one of the following items, the share option holder exercising the share option is liable to the stock company for payment of the amount provided for in the relevant item:

in the cases provided for in Article 238, paragraph (1), item (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 share option holder subscribed for the share options in collusion with directors (or, directors or executive officers for a company with nominating committee, etc.; the same applies in the following item)):the fair value of relevant share options;

in the cases provided for in Article 238, paragraph (1), item (iii), if the share option holder 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 relevant amount to be paid in and the fair value of relevant share options;

if the value of the property contributed in kind that the share option holder tendered when becoming a shareholder pursuant to the provisions of Article 282, paragraph (1) is extremely short of the value provided for under Article 236, paragraph (1), item (iii) with respect to the property contributed in kind:the amount of relevant shortfall.

In the cases provided for in item (iii) of the preceding paragraph, if the share option holder that tendered the property contributed in kind has acted in good faith and without gross negligence as to the fact that the value of relevant property contributed in kind is extremely short of the value provided for under Article 236, paragraph (1), item (iii) with respect to the property contributed in kind, the share option holder may rescind the manifestation of intention relating to the exercise of the share options.

In the cases set forth in paragraph (1), item (iii) of the preceding Article, the following persons (hereinafter in this Article referred to as "directors, etc.") are liable to the stock company for payment of the amounts set forth in relevant items:

executive directors who carried out duties regarding the solicitation of relevant share option holders (or, for a company with nominating committee, etc., executive officers; hereinafter the same applies in this item) and other persons prescribed by Ministry of Justice Order as persons who were involved, in the performance of their duties, in the execution of the business of relevant executive directors;

if a resolution regarding the determination of the value of the property contributed in kind is passed at a shareholders meeting, the persons prescribed by Ministry of Justice Order as the directors who submitted proposals to relevant shareholders meeting;

if a resolution regarding the determination of the value of property contributed in kind is passed at a board of directors meeting, the persons prescribed by Ministry of Justice Order as the directors (or, for a company with nominating committee, etc., directors or executive officers) who submitted proposals to relevant board of directors meeting.

Notwithstanding the provisions of the preceding paragraph, the directors, etc. are not liable for property contributed in kind under that paragraph in the cases set forth below:

an investigation has been carried out by an inspector under Article 284, paragraph (2) with respect to the value of the property contributed in kind; or

relevant directors, etc. have proven that they did not fail to exercise due care with respect to the performance of their duties.

In the cases provided for in paragraph (1), the person who submitted the verification provided for in Article 284, paragraph (9), item (iv) (hereinafter in this Article referred to as "verifying person") is liable for the payment of the amount provided for in paragraph (1), item (iii) of the preceding Article to the stock company; provided, however, that this does not apply if relevant verifying person has proven that the verifying person did not fail to exercise care with respect to the submission of relevant verification.

If a share option holder bears an obligation to pay an amount provided for in paragraph (1), item (iii) of the preceding Article with respect to property contributed in kind tendered by the share option holder, if the persons set forth as follows bear obligations provided for in each of relevant items with respect to relevant property contributed in kind, those persons will be joint and several obligors:

directors, etc.:the obligations under paragraph (1); and

verifying persons:the obligations under the main clause of the preceding paragraph.

A share option holder that exercises a share option and is as set forth in the following items is liable to perform the acts specified in those items to a stock company:

a person that falsified the payment pursuant to the provisions of Article 246, paragraph (1) (including delivery of property other than money that is made in lieu of the payment pursuant to the provisions of paragraph (2) of the same Article) or a person who accepts transfer of share options for subscription and had knowledge or did not know due to having acted in bad faith or with gross negligence that the payment was falsified:payment of the entire paid amount for which the payment has been falsified (if the delivery of property other than money in lieu of the payment is falsified, the delivery of property (if a stock company demands money equivalent to the value of the property in lieu of the delivery, payment of the entire amount of the money));

a person that falsified the payment pursuant to the provisions of Article 281, paragraph (1) or the second sentence of paragraph (2) of the same Article:payment of the entire amount of money for which payment is falsified; and

a person that falsified the delivery pursuant to the provisions of the first sentence of Article 281, paragraph (2):delivery of property other than money for which the delivery is falsified (if a stock company requests the payment of money equivalent to the value of the property in lieu of the delivery, the payment of the entire amount of the money).

The liabilities of share option holders prescribed in the preceding paragraph pursuant to the provisions of the same paragraph may not be exempted without the consent of all shareholders.

If a share option holder that exercises a share option and is as set forth in the items of paragraph (1) of the preceding Article is liable to perform the actions specified in the relevant item, a person prescribed by Ministry of Justice Order as a director (in cases of a company with nominating committee, etc., including executive officers) involved in falsifying the payment or delivery under those items is liable to a stock company for the payment prescribed in those items; provided, however, that this does not apply to cases where the person (excluding the person who falsified the payment or delivery) proves that the person did not fail to exercise due care with respect to the performance of the person's duties.

If a share option holder that exercises a share options and is as set forth in the items of paragraph (1) of the preceding Article is liable to make the payment prescribed in the relevant item, if the person prescribed in the preceding paragraph assumes the liability set forth in the same paragraph, these persons will be joint and several obligors.

Beyond the cases provided for in Article 276, paragraph (1), if a share option holder can no longer exercise the share options held by the same, relevant share options will be extinguished.

A stock company must, without delay after the day of issue of share options for which certificates are issued, issue share option certificates representing the share options for which certificates are issued.

Notwithstanding the provisions of the preceding paragraph, a stock company may elect to not deliver the share option certificates under that paragraph until the share option holders so request.

A stock company must state the following matters and the serial number on a share option certificates and the representative director of the stock company (or the representative executive officer for a company with nominating committee, etc.) must affix the representative director's signature, or name and seal:

the trade name of the stock company; and

the features and number of share options for which certificates are issued relating to relevant share option certificates.

Holders of share options for which certificates are issued 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 if there is an arrangement that relevant conversion is not possible under the provisions with respect to the matters set forth in Article 236, paragraph (1), item (xi).