Companies Act

A stock company may effect a share exchange. In these cases, the stock company must conclude a stock exchange agreement with the company acquiring all of its issued shares (limited to a stock company or a limited liability company; hereinafter referred to as the "wholly owning parent company resulting from the share exchange" in this Part).

If a stock company effects a share exchange, and the wholly owning parent company resulting from the share exchange is a stock company, it must prescribe the following matters in the share exchange agreement:

the trade name and address of the stock company effecting the share exchange (hereinafter referred to as the "wholly owned subsidiary company resulting from the share exchange" in this Part) and the stock company that constitutes the wholly owning parent company resulting from the share exchange (hereinafter referred to as the "wholly owning parent stock company resulting from the share exchange" in this Part);

if the wholly owning parent stock company resulting from the share exchange is to deliver to shareholders of the wholly owned subsidiary company resulting from the share exchange monies, etc. in lieu of the shares thereof when effecting the share exchange, the following matters concerning relevant monies, etc.:

if the relevant monies, etc. are shares in the wholly owning parent stock company resulting from the share exchange, the description of the number of the relevant shares (or, for a company with class shares, the classes of the shares and the number of the shares for each class) or the method for calculating the numbers, and matters concerning the amount of the stated capital and capital reserves of the wholly owning parent stock company resulting from the share exchange;

if relevant monies, etc. are bonds of the wholly owning parent stock company resulting from the share exchange (excluding those concerning bonds with share options), the description of the classes of relevant bonds and the total amount for each class of bonds, or the method for calculating that total amount;

if relevant monies, etc. are stock options of the wholly owning parent stock company resulting from the share exchange (excluding those attached to bonds with share options), the description of the features and number of relevant share options, or the method for calculating the number;

if relevant monies, etc. are bonds with share options of the wholly owning parent stock company resulting from the share exchange, the matters prescribed in (b) concerning relevant bonds with share options and the matters prescribed in (c) concerning the share options attached to relevant bonds with hare options; or

if relevant monies, etc. are property other than shares, etc. in the wholly owning parent stock company resulting from the share exchange, the description of the features and number or amount of relevant property, or the method for calculating the number or amount;

in the case prescribed in the preceding item, matters concerning the allotment of monies, etc. set forth in that item to shareholders of the wholly owned subsidiary company resulting from the share exchange (excluding the wholly owning parent stock company resulting from the share exchange);

if the wholly owning parent stock company resulting from the share exchange is to deliver to holders of share options in the wholly owned subsidiary company resulting from the share exchange share options in the wholly owning parent stock company resulting from the share exchange in lieu of the relevant share options at the time of the share exchange, the following matters concerning relevant share options:

the description of the features of the share options (hereinafter referred to as "share options under share exchange agreement" in this Part) held by holders of share options in the wholly owned subsidiary company resulting from the share exchange who will receive delivery of share options in the wholly owning parent stock company resulting from the share exchange;

the description of the features and number of share options in the wholly owning parent stock company resulting from the share exchange to be delivered to holders of share options under share exchange agreement, or the method for calculating the number; and

if share options under share exchange agreement are share options attached to bonds with share options, a statement to the effect that the wholly owning parent stock company resulting from the share exchange will succeed to the obligations relating to bonds regarding to the bonds with share options and the description of the classes of the bonds subject to relevant succession and the total amount for each class of bonds, or the method for calculating that total amount;

in the case prescribed in the preceding item, matters concerning the allotment of the share options of the wholly owning parent stock company resulting from the share exchange set forth in that item to holders of share options under share exchange agreement; and

the day on which the share exchange becomes effective (hereinafter referred to as the "effective day" in this section).

In the case prescribed in the preceding paragraph, if the wholly owned subsidiary company resulting from the share exchange is a company with class shares, the wholly owned subsidiary company resulting from the share exchange and the wholly owning parent stock company resulting from the share exchange may provide for the following matters in prescribing the matters set forth in item (iii) of that paragraph in accordance with the features of the classes of shares issued by the wholly owned subsidiary company resulting from the share exchange:

if there is any arrangement that no monies, etc. are allotted to shareholders of a certain class of shares, a statement to that effect and relevant class of shares; and

beyond the matters set forth in the preceding item, if there is any arrangement that each class of shares is to be treated differently with respect to allotment of monies, etc., a statement to that effect and the details of relevant different treatment.

In the case prescribed in paragraph (1), the provisions on the matters set forth in item (iii) of that paragraph must be provisions in which the monies, etc. are delivered in proportion to the number of the shares (or, if there are provisions on the matters set forth in item (ii) of the preceding paragraph, the number of the shares of each class) held by shareholders of the wholly owned subsidiary company resulting from the share exchange (excluding the wholly owning parent stock company resulting from the share exchange and shareholders of the class of shares referred to in item (i) of the preceding paragraph).

The wholly owning parent stock company resulting from a share exchange acquires all of the issued shares of the wholly owned subsidiary company resulting from the share exchange (excluding shares of the wholly owned subsidiary company resulting from the share exchange already held by the wholly owning parent stock company resulting from the share exchange) on the effective day.

In the case set forth in the preceding paragraph, the wholly owned subsidiary company resulting from the share exchange is deemed to have given the approval set forth in Article 137, paragraph (1) with regard to the acquisition of shares of the wholly owned subsidiary company resulting from the share exchange (limited to shares with a restriction on transfer, and excluding those already held by the wholly owning parent stock company resulting from the share exchange prior to the effective day) by the wholly owning parent stock company resulting from the share exchange.

In the cases set forth in the following items, shareholders of the wholly owned subsidiary company resulting from a share exchange become the persons specified in each of those items, in accordance with the provisions on the matters set forth in paragraph (1), item (iii) of the preceding Article, on the effective day:

if there are provisions on the matters set forth in paragraph (1), item (ii), (a) of the preceding Article:the holders of shares referred to in (a) of that item;

if there are provisions on the matters set forth in paragraph (1), item (ii), (b) of the preceding Article:the holders of bonds referred to in (b) of that item;

if there are provisions on the matters set forth in paragraph (1), item (ii), (c) of the preceding Article:the holders of share options referred to in (c) of that item; or

if there are provisions on the matters set forth in paragraph (1), item (ii), (d) of the preceding Article:the holders of bonds constituting bonds with share options referred to in (d) of that item, and holders of the share options attached to those bonds.

In the case prescribed in paragraph (1), item (iv) of the preceding Article, the share options under share exchange agreement are extinguished and holders of the share options under share exchange agreement become holders of the share options of the wholly owning parent stock company resulting from the share exchange set forth in item (iv), (b) of that paragraph, in accordance with the provisions on the matters set forth in item (v) of that Article, on the effective day.

In the case prescribed in paragraph (1), item (iv), (c) of the preceding Article, the wholly owning parent stock company resulting from the share exchange succeeds to the obligations relating to bonds regarding the bonds with share options set forth in (c) of that item on the effective day.

The provisions of the preceding paragraphs do not apply if procedures under the provisions of Article 789 or Article 799 are not completed yet or where the share exchange is cancelled.

If a stock company effects a share exchange, if the wholly owning parent company resulting from the share exchange is a limited liability company, it must prescribe the following matters in the share exchange agreement:

the trade name and address of the wholly owned subsidiary company resulting from the share exchange and the limited liability company that constitutes the wholly owning parent company resulting from the share exchange (hereinafter referred to as the "wholly owning parent limited liability company resulting from the share exchange" in this Part);

if shareholders of the wholly owned subsidiary company resulting from the share exchange are to become members of the wholly owning parent limited liability company resulting from the share exchange when effecting the share exchange, the names and addresses of the members and the value of contributions by the members;

if the wholly owning parent limited liability company resulting from the share exchange is to deliver to shareholders of the wholly owned subsidiary company resulting from the share exchange monies, etc. (excluding the equity interests of the wholly owning parent limited liability company resulting from the share exchange) in lieu of the shares thereof when effecting the share exchange, the following matters concerning relevant monies, etc.:

if relevant monies, etc. are bonds of the wholly owning parent limited liability company resulting from the share exchange, the description of the classes of relevant bonds and the total amount for each class of bonds, or the method for calculating that total amount; or

if relevant monies, etc. are property other than bonds of the wholly owning parent limited liability company resulting from the share exchange, the description of the features and number or amount of relevant property, or the method for calculating the number or amount;

in the case prescribed in the preceding item, matters concerning the allotment of monies, etc. set forth in that item to shareholders of the wholly owned subsidiary company resulting from the share exchange (excluding the wholly owning parent limited liability company resulting from the share exchange); and

the effective day.

In the case prescribed in the preceding paragraph, if the wholly owned subsidiary company resulting from the share exchange is a company with class shares, the wholly owned subsidiary company resulting from the share exchange and the wholly owning parent limited liability company resulting from the share exchange may provide for the following matters in prescribing the matters set forth in item (iv) of that paragraph in accordance with the features of the classes of shares issued by the wholly owned subsidiary company resulting from the share exchange:

if there is any arrangement that no monies, etc. are allotted to shareholders of a certain class of shares, a statement to that effect and relevant class of shares; and

beyond the matters set forth in the preceding item, if there is any arrangement that each class of shares is to be treated differently with respect to allotment of monies, etc., a statement to that effect and the details of relevant different treatment.

In the case prescribed in paragraph (1), the provisions on the matters set forth in item (iv) of that paragraph must be provisions in which the monies, etc. are delivered in proportion to the number of the shares (or, if there are provisions on the matters set forth in item (ii) of the preceding paragraph, the number of the shares of each class) held by shareholders of the wholly owned subsidiary company resulting from the share exchange (excluding the wholly owning parent limited liability company resulting from the share exchange and shareholders of the class of shares referred to in item (i) of the preceding paragraph).