A stock company may effect a partial share exchange. In these cases, the stock company must prepare a partial share exchange plan.

If a stock company effects a partial share exchange, the partial share exchange plan must provide for the following matters:

In the cases prescribed in the preceding paragraph, the provisions on the matters set forth in item (ii) of that paragraph must be provisions in which that the number of shares of the subsidiary company resulting from a partial share exchange is causes that the subsidiary company resulting from a partial share exchange to become a subsidiary of the parent company resulting from a partial share exchange on the effective day.

In the cases prescribed in paragraph (1), if a subsidiary company resulting from a partial share exchange is a company with class shares, the parent company resulting from a partial share exchange may decide the following matters as the matters set forth in item (iv) of that paragraph in accordance with the features of the classes of shares issued by the subsidiary company resulting from a partial share exchange:

In the cases prescribed in paragraph (1), the provisions regarding the matters set forth in item (iv) of that paragraph must stipulate that the shares of the parent company resulting from a partial share exchange will be delivered in proportion to the number of the shares of the subsidiary company resulting from a partial share exchange (or, if there are provisions with respect to the matters set forth in item (ii) of the preceding paragraph, the number of the shares of each class) transferred by the transferors of the shares of the subsidiary company resulting from a partial share exchange (excluding the relevant transferors of the class of shares referred to in item (i) of the preceding paragraph) to the parent company resulting from a partial share exchange.

The provisions of the preceding two paragraphs apply mutatis mutandis to the matters set forth in paragraph (1), item (vi). In those cases, the term "shares of the parent company resulting from a partial share exchange" in the preceding two paragraphs is deemed to be replaced with "monies, etc. (excluding the shares of the parent company resulting from a partial share exchange)."

A parent company resulting from a partial share exchange must notify persons who intend to offer to deliver shares issued by the subsidiary company resulting from the partial share exchange of the matters set forth in the following items:

A person who submits an offer to deliver shares of the subsidiary company resulting from a partial share exchange must deliver a document giving the following information to the parent company resulting from a partial share exchange by the date provided in paragraph (1), item (x) of the preceding Article:

A person who makes an offer referred to in the preceding paragraph may, in lieu of delivering a document as referred to in that paragraph, provide the information that is required to be detailed in the document referred to in that paragraph by electronic or magnetic means, with the approval of the parent company resulting from a partial share exchange and pursuant to the provisions of cabinet order. In those cases, the person offering is deemed to have delivered the document under that paragraph.

The provisions of paragraph (1) do not apply if the parent company resulting from a partial share exchange has issued a prospectus provided for in Article 2, paragraph (10) of the Financial Instruments and Exchange Act that states the matters set forth in each item of that paragraph to a person who intends to submit the application in paragraph (1), and in other cases prescribed by Ministry of Justice Order as cases where it is unlikely that the protection of persons who intend to submit offers to deliver shares of the subsidiary company resulting from a partial share exchange is compromised.

If there are changes in the matters set forth in any item of paragraph (1) (including change of the effective day pursuant to the provisions of Article 816 -9, paragraph (1) and change of the day provided in paragraph (1), item (x) of the preceding Article pursuant to the provisions of Article 816, paragraph (5)), the parent company resulting from a partial share exchange must immediately notify persons who have submitted offers provided in paragraph (2) (hereinafter in this Chapter referred to as "offerors") thereof and of the matters so changed.

It is sufficient for a notice or demand to an offeror to be sent by the parent company resulting from a partial share exchange to the address under paragraph (2), item (i) (or, if the offeror notifies the parent company resulting from a partial share exchange of a different place or contact address for the receipt of notices or demands, to the place or contact address).

The notice or demand referred to in the preceding paragraph is deemed to have reached the addressee at the time when the notice or demand must have normally arrived.

The parent company resulting from a partial share exchange must designate from which offerors it will acquire shares of the subsidiary company resulting from a partial share exchange and the number of shares of the subsidiary company resulting from a partial share exchange that it will acquire from those offerors (if the subsidiary company resulting from a partial share exchange is a company with class shares, the classes of shares and the number of each class; the same applies hereinafter in this Article). In those cases, the parent company resulting from a partial share exchange may acquire a number of the shares less than the number provided in paragraph (2), item (ii) of the preceding Article to the extent that the aggregate number of the shares allocated among the offerors is not less than the minimum number provided in Article 774-3, paragraph (1), item (ii).

The parent company resulting from a partial share exchange must notify offerors regarding the number of shares of the subsidiary company resulting from a partial share exchange that it will acquire from the offerors by the day before the effective day.

The provisions of the preceding two paragraphs do not apply if a person who intends to transfer shares of the subsidiary company resulting from a partial share exchange concludes an agreement to transfer all of their shares of the subsidiary company resulting from a partial share exchange to be acquired when the parent company resulting from a partial share exchange effects the partial share exchange.

The persons set forth in the following items are the transferors of the shares issued by the subsidiary company resulting from the partial share exchange of the partial share exchange with respect to the number of shares of the subsidiary company resulting from a partial share exchange provided in those items:

Persons who became transferors of the shares of the subsidiary company resulting from a partial share exchange pursuant to the provisions of each item of the preceding paragraph must deliver the number of shares of the subsidiary company resulting from a partial share exchange provided in each item to the parent company resulting from a partial share exchange on the effective day.

The provisions of the proviso to Article 93, paragraph (1) and the provisions of Article 94, paragraph (1) of the Civil Code do not apply to offers under Article 774-4, paragraph (2), allotments under Article 774-5, paragraph (1), and the manifestation of intention relating to agreements under Article 774-6.

If one year has elapsed from the day on which a transferor of the shares issued by the subsidiary company resulting from the partial share exchange of the partial share exchange became a shareholder of the parent company resulting from a partial share exchange pursuant to the provisions of Article 774-11, paragraph (2) or if the transferor has exercised rights in relation to the shares, the transferor may not thereafter rescind the transfer of the shares of the subsidiary company resulting from a partial share exchange on the grounds of mistake, fraud, or duress.

In the case provided in Article 774-3, paragraph (1), item (vii), the provisions of Article 774-4 through the preceding Article apply mutatis mutandis to the transfer of the share options, etc. of the subsidiary company resulting from a partial share exchange. In those cases, the phrase "number of shares of the subsidiary company resulting from a partial share exchange to be delivered (in the case of a company with class shares, the classes of the shares and the number of shares for each class)" in Article 774-4, paragraph (2), item (ii) is deemed to be replaced with "features and number of the subsidiary company resulting from a partial share exchange to be delivered," the phrase "number of shares of the subsidiary company resulting from a partial share exchange that it will acquire from those offerors (if the subsidiary company resulting from a partial share exchange is a company with class shares, the classes of shares and the number of each class; the same applies hereinafter in this Article)" in Article 774-5, paragraph (1) is deemed to be replaced with "number of shares of the subsidiary company resulting from a partial share exchange that it will acquire from those offerors," the phrase "the shares less than the number provided in paragraph (2), item (ii) of the preceding Article to the extent that the aggregate number of the shares allocated among the offerors is not less than the minimum number provided in Article 774-3, paragraph (1), item (ii)" in the same paragraph is deemed to be replaced with "the share options, etc., less than the number provided in paragraph (2), item (ii) of the preceding Article" and the phrase "Article 774-11, paragraph (2)" in paragraph (2) of the preceding Article is deemed to be replaced with "Article 774-11, paragraph (4), item (i)."

The provisions of Article 774-5 and Article 774-7 (excluding the part related to paragraph (1), item (ii)) (including cases where these provisions apply mutatis mutandis pursuant to the preceding Article) do not apply if, on the day provided in Article 774-3, paragraph (1), item (x), the aggregate number of shares issued by the subsidiary company resulting from the partial share exchange offered to be transferred by offerors is less than the minimum provided in item (ii) of that paragraph. In these cases, the parent company resulting from a partial share exchange must without delay notify offerors to the effect that it does not effect the partial share exchange.

The parent company resulting from a partial share exchange acquires the shares and share options, etc. of the subsidiary company resulting from a partial share exchange delivered pursuant to the provisions of Article 774-7, paragraph (2) (including application mutatis mutandis pursuant to Article 774-9) on the effective day.

The transferors of the shares of the subsidiary company resulting from a partial share exchange delivered pursuant to the provisions of Article 774-7, paragraph (2), in accordance with the provisions on the matters referred to in Article 774-3, paragraph (1), item (iv), becomes shareholders of the shares of the parent company resulting from a partial share exchange provided in item (iii) of that paragraph on the effective day.

In the cases set forth in the following items, the transferors of the shares of the subsidiary company resulting from a partial share exchange delivered pursuant to the provisions of Article 774-7, paragraph (2), in accordance with the provisions on the matters referred to in Article 774-3, paragraph (1), item (vi), becomes the persons specified in each of those items.

In the cases set forth in the following items, the transferors of the share options, etc. of the subsidiary company resulting from a partial share exchange delivered pursuant to the provisions of Article 774-7, paragraph (2) applied mutatis mutandis pursuant to Article 774-9, in accordance with the provisions on the matters set forth in Article 774-3, paragraph (1), item (ix), becomes the persons specified in each of those items.

The provisions of the preceding paragraph do not apply in the cases set forth below:

In the cases set forth in the items of the preceding paragraph, the parent company resulting from a partial share exchange must without delay provide notice to the persons set forth in each item of Article 774-7, paragraph (1) (including cases were applied mutatis mutandis pursuant to Article 774-9) that it will not effect the partial share exchange. In these cases, if there are shares or share options, etc. of the subsidiary company resulting from a partial share exchange that were delivered pursuant to the provisions of Article 774-7, paragraph (2) (including where applied mutatis mutandis pursuant to Article 774-9), the parent company resulting from a partial share exchange must without delay return the shares or share options, etc. to the transferors.