Companies Act

Shareholders may demand the directors that, no later than eight weeks (or, if any period less than that is provided for in the articles of incorporation, the period) prior to the day of the shareholders meeting, shareholders be notified of the summary of the proposals which relevant demanding shareholders intend to submit with respect to the matters that are the purpose of the shareholders meeting (or, if a notice pursuant to Article 299, paragraph (2) or paragraph (3) is to be given, the 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, if shorter period is prescribed in the articles of incorporation, the period or more) not less than one hundredth (or, if lesser proportion is prescribed in the articles of incorporation, the proportion) of the votes of all shareholders or not less than three hundred (or, if lesser number is prescribed in the articles of incorporation, the number of) votes of all shareholders may make relevant demand.

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, the phrase "having consecutively for the preceding six months or more (or, if shorter period is prescribed in the articles of incorporation, the period or more)" in that paragraph is deemed to be replaced with "having".

The number of the votes to which the shareholders who may not vote on the matters that are the purpose of the shareholders meeting referred to in paragraph (1) are entitled is not included in the number of the votes of all shareholders under the proviso to that paragraph.

If shareholders of a company with board of directors make a demand pursuant to the provisions of paragraph (1), if the number of proposals that the shareholders intend to submit exceeds ten, the provisions of the preceding three paragraphs does not apply to the number of proposals corresponding to the number in excess of ten. In this case, the number of the proposals that these shareholders intend to submit set forth in the following items are governed by the corresponding items.

proposals concerning the election of directors, accounting advisors, company auditors, or financial auditors (referred to in the following items as "officers, etc."): regardless of the number of the proposals, they are deemed one proposal.

proposals concerning the dismissal of officers, etc.: regardless of the number of the proposals, they are deemed one proposal.

proposals concerning the refusal to reelect the financial auditor: regardless of the number of the proposals, they are deemed as one proposal.

two or more proposals concerning amendment of the articles of incorporation: if different resolutions were adopted concerning these two or more proposals, the content of the resolutions may contradict one another, they are deemed one proposal.

The proposals corresponding to those which are in excess of the ten provided in the first sentence of the preceding paragraph are specified by the directors; provided, however, that if the shareholders who made requests pursuant to the provisions of paragraph (1) set the order of priority among the proposals for all or part of the two or more proposals that the shareholders intend to submit the request, the directors will the proposals in accordance with the order of priority.

The provisions of paragraph (1) to paragraph (3) do not apply if the proposals under paragraph (1) are in violation of the laws or the articles of incorporation, or if three years have not elapsed from the day on which, with respect to the proposal which is essentially identical to the proposal, affirmative votes not less than one tenths (or, if any proportion less than that is provided for in the articles of incorporation, the proportion) of the votes of all shareholders (excluding the shareholders who may not exercise their voting rights on the proposal) were not obtained.

A stock company or shareholders who hold not less than one hundredth (or, if any proportion less than that is provided for in the articles of incorporation, the proportion) of the votes of all shareholders (excluding the shareholders who may not vote on all matters which may be resolved at the shareholders meeting) may file a petition with the court, before a shareholders meeting, for the appointment of an inspector who is to be retained to investigate the calling procedures and method of resolutions relating to relevant shareholders meeting.

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, the phrase "matters which may be resolved at the shareholders meeting" is deemed to be replaced with "matters set forth in Article 298, paragraph (1), item (ii)" and "hold" is deemed to be replaced with "have held, for the consecutive period of six months or more (or, if any period less than that is provided for in the articles of incorporation, the 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, and the phrase "matters which may be resolved at the shareholders meeting" in that paragraph is deemed to be replaced with "matters set forth in Article 298, paragraph (1), item (ii)".

If the petition for the appointment of an inspector pursuant to the provisions of the preceding two paragraphs has been filed, the court must appoint the inspector except in case it dismisses relevant petition as non-conforming.

If the court has appointed the inspector set forth in the preceding paragraph, it may fix the amount of the compensation which the stock company pays to relevant inspector.

The inspector set forth in paragraph (3) must conduct the necessary investigation and submit a report to the court by providing it with a document detailing the results of the investigation or with an electronic or magnetic record (limited to one prescribed by Ministry of Justice Order) in which these have been recorded.

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 the report, it may request the inspector set forth in paragraph (3) a further report set forth in the preceding paragraph.

When the inspector set forth in paragraph (3) reports pursuant to paragraph (5), the inspector must deliver a copy of the document referred to in that paragraph to the stock company (in cases where the person who filed a petition for the appointment of an inspector was not relevant stock company, relevant stock company and that person) or use a means prescribed by Ministry of Justice Order to provide it with the information recorded in the electronic or magnetic record referred to in that paragraph.

If the report under paragraph (5) of the preceding Article is submitted, if the court finds it necessary, it must order the directors to take some or all of the measures set forth below:

to call a shareholders meeting within a defined period of time; and

to notify the shareholders of the result of the investigation under paragraph (5) of the preceding Article.

If the court orders the measures set forth in item (i) of the preceding paragraph, the directors must disclose the content of the report under paragraph (5) of the preceding Article at the shareholders meeting under that paragraph.

In the cases provided for in the preceding paragraph, the directors (or the directors and company auditors for a company with company auditor) must investigate the content of the report under paragraph (5) of the preceding Article and report the result thereof to the shareholders meeting under paragraph (1), item (i).

Shareholders (excluding the shareholder prescribed by Ministry of Justice Order as the entity in a relationship that may allow the stock company to have substantial control of the entity through the holding of one quarter or more of the votes of all shareholders of the entity or other reasons) are 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 are entitled to one vote for each one unit of the shares.

Notwithstanding the provisions of the preceding paragraph, a stock company does not have any votes with respect to its treasury shares.

Unless otherwise provided for in the articles of incorporation, the resolution at a shareholders meeting is passed 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 vote are present.

Notwithstanding the provisions of the preceding paragraph, the resolutions at the following shareholders meetings must be passed by a majority of two thirds (if a higher proportion is provided for in the articles of incorporation, the proportion) or more of the votes of the shareholders present at the meeting where the shareholders holding a majority (if a proportion of one third or more is provided for in the articles of incorporation, the proportion or more) of the votes of the shareholders entitled to vote at relevant shareholders meeting are present. In these cases, it is not precluded from providing in the articles of incorporation, in addition to relevant requirements for the resolutions, additional requirements including those providing to the effect that the approval of a certain number or more of the shareholders are required:

shareholders meeting under Article 140, paragraphs (2) and (5);

shareholders meeting under Article 156, paragraph (1) (limited to the case where the specific shareholders under Article 160, paragraph (1) are to be identified);

shareholders meeting under Article 171, paragraph (1) and Article 175, paragraph (1);

shareholders meeting under Article 180, paragraph (2);

shareholders meeting under Article 199, paragraph (2), Article 200, paragraph (1), Article 202, paragraph (3), item (iv), Article 204, paragraph (2), and Article 205, paragraph (2);

shareholders meeting under Article 238, paragraph (2), Article 239, paragraph (1), Article 241, paragraph (3), item (iv), Article 243, paragraph (2), and Article 244, paragraph (3);

shareholders meeting under Article 339, paragraph (1) (limited to the case where directors (excluding a director who is an audit and supervisory committee member) elected pursuant to the provisions of Article 342, paragraphs (3) through (5) are to be dismissed or where directors who are audit and supervisory committee members or company auditors are to be dismissed);

shareholders meeting under Article 425, paragraph (1);

shareholders meeting under Article 447, paragraph (1) (excluding the cases which fall under both of the following conditions):

that the matters set forth in each item of Article 447, paragraph (1) are determined at the annual shareholders meeting; and

that the amount referred to in Article 447, paragraph (1), item (i) does not exceed the amount which is calculated in a manner prescribed by Ministry of Justice Order as the amount of deficit at the day of the annual shareholders meeting referred to in (a) (or, in the case provided for in the first sentence of Article 439, the day when the approval under Article 436, paragraph (3) is effected);

shareholders meeting under Article 454, paragraph (4) (limited to the cases where it is to be arranged that the dividend property consists of any property other than cash, and that no right to demand distribution of monies provided for in item (i) of that paragraph is to be granted to the shareholders);

shareholders meeting if the resolution at relevant shareholders meeting is required pursuant to the provisions of Chapter VI through Chapter VIII;

shareholders meeting if the resolution at relevant shareholders meeting is required pursuant to the provisions of Part V.

Notwithstanding the provisions of the preceding two paragraphs, the resolutions at the following shareholders meetings (excluding the shareholders meetings of a company with class shares) must be passed by at least half (if a higher proportion is provided for in the articles of incorporation, the proportion or more) of the shareholders entitled to vote at relevant shareholders meeting, being a majority of two thirds (if a higher proportion is provided for in the articles of incorporation, the proportion) or more of the votes of relevant shareholders:

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 relevant stock company is required for the acquisition of shares by transfer;

shareholders meetings under Article 783, paragraph (1) (limited to the shareholders meeting held if the stock company disappearing in the merger or the stock company effecting the share exchange is a public company, and some or all of the monies, etc. to be delivered to the shareholders of relevant 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 applies in the following item)); or

shareholders meetings under Article 804, paragraph (1) (limited to relevant 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 relevant stock company consist of shares with restriction on transfer, etc.).

Notwithstanding the provisions of the preceding three paragraphs, resolutions at the shareholders meetings which effect any amendment in the articles of incorporation (excluding those which repeal relevant provisions of the articles of incorporation) with respect to the amendment in the articles of incorporation pursuant to the provisions of Article 109, paragraph (2) must be passed by the majority (if a higher proportion is provided for in the articles of incorporation, the proportion or more) of all shareholders, being a majority equating three quarters (if a higher proportion is provided for in the articles of incorporation, the proportion) or more of the votes of all shareholders.

For a company with board of directors, matters other than the matters set forth in Article 298, paragraph (1), item (ii) may not be resolved at the shareholders meeting; provided, however, that this does not apply to the election of the persons provided for in Article 316, paragraph (1) or paragraph (2), nor to requests for the presence of a financial auditor under Article 398, paragraph (2).