Securities Code 2461
March 10, 2017To
Our Shareholders

1-1-8 Shibuya, Shibuya-ku, Tokyo
F@N Communications, Inc.
President Yasuyoshi Yanagisawa

Invitation to Attend the 18th AnnualGeneral Meeting of Shareholders
Thank you for your continued support and for the confidence you have placed in us.
We are pleased to invite you to attend the 18th Annual General Meeting of Shareholders,which has been schedule as follows.
Please note that shareholders who are unable to attend the Annual General Meeting
may exercise their voting rights by correspondence. Please read the aftermentioned information materials for the Annual General Meeting and indicate on theenclosed shareholder voting form your vote for or against the agenda items. Please
return the shareholder voting form in time to arrive no later than Monday, March 27,
2017, at 6:30 pm (JST).

Details
1. Date and time

Tuesday, March 28, 2017, at 10:00 am (The reception desk
opens at 9:30 am)

2. Place

4-4-25 Shibuya, Shibuya-ku, TokyoIVY HALL Aogakukaikan, Basement 2F, "Safran"(Please refer to the venue access map at the end of this notice.)*Please note that the venue has changed from last year.

3. Agenda
Matters for reporting: 1. Business report, consolidated financial statements, andaudit reports of the accounting auditor and the board ofcorporate auditors concerning the consolidated financial
statements for the 18th business year (from January 1,2016 to December 31, 2016)
2. Non-consolidated financial statements for the 18thbusiness year (from January 1, 2016 to December 31,2016)
Matters for resolution:
Proposal No. 1: Appropriation of retained earnings
Proposal No. 2: Election of one substitute corporate auditor
Proposal No. 3: Issuance of stock warrants as stock options for the directors,operating officers, and employees of the Company
Attending shareholders are requested to present the enclosed shareholder voting form on the dayof the Meeting at the reception desk of the venue.
Any amendment to the supplementary materials for the General Meeting of Shareholders, thebusiness report, non-consolidated financial statements, and consolidated financial statements will
be posted on the corporate website (https://www.fancs.com/en) of the Company.

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Information Materials for theGeneral Meeting of Shareholders
Proposal No. 1: Appropriation of retained earnings
The following appropriation of retained earnings is proposed.
Matters concerning the year-end dividendWith regard to the year-end dividend for the 18th business year, the following
appropriation of retained earnings is proposed, with consideration given to thebusiness results of the subject business year, future business development, etc.
(1) Type of dividend funds
Cash(2) Matters concerning the allocation of dividend funds and total amount
It is proposed to pay a dividend of 18 yen per share of common stock of theCompany.
The total dividend amount under this proposal is 1,381,262,976 yen.
(3) Date proposed for the dividend of retained earnings to take effect
March 29, 2017

－ 48 －Proposal No. 2: Election of one substitute corporate auditor
It is proposed to elect one substitute corporate auditor in preparation for the case thatthe number of substitute auditors falls short of statutory requirements.
This proposal has received the approval of the board of corporate auditors.
For the election as substitute corporate auditor the following candidate is proposed.
Name(Date of birth)

Career summary, position held at the Company(Significant concurrent positions held)
April 1982
April 1994
June 1998

Kenji Yamada(born May 3, 1958)

Joined AIU Insurance Company
Established Funtech LLC
KENKO Mayonnaise Co., Ltd.
External Corporate Auditor
December 2001 Funtech Co., Ltd. RepresentativeDirector (current position)[Significant concurrent positions held]
Representative Director, Funtech Co., Ltd.

Number ofshares of theCompany held

NoneNotes 1. Funtech Co., Ltd., where the candidate serves in the position as representative director, isan insurance agency engaged in the part of business of the solicitation and administration
for the property and casualty insurance agreements insured by the Company.
2. In the subject fiscal year, the Company has paid to Funtech Co., Ltd. a total amount of
8,394,640 yen, which is comprised entirely of insurance premiums. Funtech Co., Ltd.
accounts for less than 0.03% of the consolidated sales revenues of the Company group.
3. Mr. Kenji Yamada is a candidate for the position as substitute external corporate auditor.
4. Mr. Kenji Yamada is thoroughly experienced in business management and riskmanagement. It is proposed to appoint Mr. Kenji Yamada as substitute external corporate
auditor in order to strengthen the audit framework of the Company through the applicationof his knowledge and experience.
5. In case Mr. Kenji Yamada is inaugurated as external corporate auditor, it is planned toconclude an agreement between Mr. Kenji Yamada and the Company based on thestipulations of Article 427 (1) of the Companies Act to limit the indemnity liability underArticle 423 (1) of the Companies Act. The limit amount under the indemnity liability basedon the subject agreement will be the statutorily stipulated minimum liability limit amount.
However, the said limitation of liability will be available only if in the execution of the task
giving rise to the subject liability he has no willful misconduct and gross negligence.

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Proposal No. 3: Issuance of stock warrants as stock options for the directors,
operating officers, and employees of the Company
It is proposed based on the stipulations of Articles 236, 238, and 239 of the Companies
Act, to issue in accordance with the summary stated below, stock warrants for noconsideration as stock options for the directors, operating officers, and employees of
the Company, with the determination of matters concerning the subscription to the said
stock warrants to be committed to the discretion of the board of directors.
Additionally, based on the stipulations of Article 361 of the Companies Act, theproposal No.3 is proposed to issue stock warrants within an annual range of 90,000
thousand yen as stock options as stated above as remuneration, etc., for directors of
the Company.

Details
1. Proposal outline(1) Reasons for the necessity to offer stock warrants at preferential conditionsIt is proposed to issue stock warrants for no consideration as stock options for
directors, operating officers, or employees of the Company in order to heighten
motivation and morale with respect to enhancing the business results of theCompany.
(2) The issuance of stock warrants as remuneration, etc., for directors of theCompany
Issuance within an annual range of 300,000 thousand yen (excluding employee
allowances for employees serving as directors) was approved at the 16th Annual
General Meeting of Shareholders held on March 26, 2015. In addition to the said
remunerations, it is proposed to issue stock warrants as stock options within anannual range of 90,000 thousand yen.
The amount of stock warrants proposed for issuance for directors of theCompany corresponds to the fair value per stock warrant calculated on theallotment date of the stock warrants (to be calculated using the Black-Scholesmodel) multiplied by the total number of stock warrants issued for the directors of
the Company incumbent on the allotment date.
Notably, eligible under this proposal will be seven directors.

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2. Outline of the stock warrants(1) Persons eligible to be allotted stock warrants
Directors, operating officers, and employees of the Company(2) Share types and number of shares underlying the stock warrants
Shares of common stock of the Company up to a maximum limit of 100,000
shares. Out of this number, stock warrants for allotment to directors shall belimited to a maximum of 100,000 stock warrants.
Notably, in case of a split or reverse split of the shares of the Company, thenumber of shares under the stock warrants shall be adjusted according to thefollowing formula. However, such adjustment shall be made only with respect tothe number of shares underlying unexercised stock warrants at that time.
Fractions of one share resulting from the adjustment will be truncated.
Number of shares after adjustment= Number of shares before adjustment x Split ratio/Reverse-split ratio
Moreover, in case of a corporate merger of the Company with a different entity,
or in case of a corporate split-off of the Company, or in case the Company ismade a fully-owned subsidiary of a different entity through a share exchange orshare transfer, respectively assuming succession to the stock warrants after suchan event, adjustments to the number of shares will be made as found necessary.
(3) The total number of stock warrants
Limited to 1,000 stock warrants. Out of this number, stock warrants for allotment
to directors shall be limited to a maximum of 1,000 stock warrants.
(The number of shares underlying one stock warrant shall be 100 shares.
However, in case of an adjustment pursuant to item (2), the same adjustment shallapply.)(4) Amount payable for stock warrants
The stock warrants shall be issued for no consideration.
(5) Exercise price of the stock warrants
The amount payable per one stock warrant at exercise shall correspond to theamount to be determined as set out below that is payable per share of stock
underlying the stock warrants ("Exercise Price"), multiplied by the number sharesof stock underlying one stock warrant as determined in item (3).
The Exercise Price shall be the average of the closing prices of shares ofcommon stocks of the Company observed in trading on a financial instruments
exchange on each day (excluding days on which no trading contracts areconcluded) of the month prior to the month that contains the date of issuance ofthe stock warrants, multiplied by 1.05 (fractions of a yen shall be rounded up toone yen).
However, if the said amount is lower than the closing price on the issuance dateof the stock warrants (if no closing price is posted on the subject date, the closing
price on the nearest previous date), the closing price on the issuance date of thestock warrant shall be the Exercise Price.

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Notably, in case of a split or reverse split of the shares of stock of the Company
on or after the issuance date, the Exercise Price will be adjusted according to thefollowing formula. Fractions of one yen resulting from the adjustment will berounded up to one yen.
Exercise Price afteradjustment=

1
Exercise Price before
× Split ratio/Reverse-split ratio
adjustment

Furthermore, if the Company issues new shares of stock or disposes of treasury
stock (excluding disposal due to exercise of stock warrants) at a price below market
price, the exercise price will be adjusted according to the following formula. Fractionsof one yen resulting from the adjustment will be rounded up to one yen.
Exercise Priceafteradjustment=Exercise Pricebefore×adjustment

Number of shares
Subscription pricenewly issued × payable per share
Number of shares
outstanding + Price per share before issuance of new shares
Number of shares
outstanding+Number of shares
newly issued

For the purposes of the above formula, "Number of shares outstanding" shall mean
the number of shares of treasury stock of the Company issued less the number ofshares of common stock of the Company held as common stock by the Company. If
the Company disposes of treasury stock, "Number of shares newly issued" shall beread down to "Number of disposed treasury stock."
Moreover, in case of a corporate merger of the Company with a different entity,
or in case of a corporate split-off of the Company, or in case the Company ismade a fully-owned subsidiary of a different entity through a share exchange orshare transfer, respectively assuming succession to the stock warrants after suchan event, adjustments to the number of shares will be made as found necessary.
(6) Exercise period of the stock warrants
The exercise period of the stock warrants shall continue for four years,
beginning at the start of the month next after the day that marks the passage ofthree years after the allotment date of the stock warrants.
(7) Conditions for exercise of the stock warrants(i) Persons who have stock warrants allotted to them ("Stock Warrant Allottees")must at the time of the stock warrant exercise hold a position as director,
corporate auditor, or employee of the Company or a subsidiary or affiliate of theCompany. However, the above condition is not applicable when there is alegitimate reason in the judgment of the board of directors.
(ii) Other conditions are prescribed in the "Stock Warrant Grant Agreement" to beconcluded between the Company and the Stock Warrant Allottees based on
the resolutions of this General Meeting of Shareholders and the Board ofDirectors.
(8) Reasons and conditions for acquisition of stock warrants
If a Stock Warrant Allottee is rendered unable to exercise stock warrants due tothe loss of position as director, corporate auditor, or employee of the Company ora subsidiary or affiliate of the Company, the Company shall be able to recover freeof charge the subject stock warrants from such Stock Warrant Allottee.

－ 52 －(9) Matters concerning increases in capital and capital reserves in case of shareissuance associated with the exercise of stock warrants(i) The increase in the amount of capital due to the issuance of shares associatedwith the exercise of stock warrants shall correspond to one-half of the capital,etc., increase limit amount calculated in accordance with Article 17, paragraph
1, of the Corporate Accounting Rules. Fractions of one yen resulting from thecalculation shall be rounded up to one yen.
(ii) The increase in the amounts of capital or capital reserves in case of issuanceof shares associated with the exercise of stock warrants shall correspond to thebalance of the capital, etc., increase limit amount stated in item (i) above lessthe capital increase amount stated in item (i) above.
(10) Restrictions on the acquisition of stock warrants by assignment
Acquisition of stock warrants by assignment shall require the approval of theboard of directors of the Company.
(11) Truncation of fractional shares resulting from stock warrant issuance
Fractions of a share associated with the number of shares deliverable to Stock
Warrant Allottees shall be truncated.
(12) Handling in case of reorganization
If the Company undergoes any of corporate merger (limited to the case ofelimination of the Company due to merger), absorption-type split-off or spin-off,
new-incorporation type split-off or spin-off, or exchange or transfer of its shares(collectively, "Reorganization"), the Company shall be able with respect to Stock
Warrant Allottees holding stock warrants remaining at the time of taking effect of theReorganization ("Remaining Stock Warrants"), in accordance with the respective
cases, to deliver stock warrants of the joint stock corporations listed in Article 236(1)(viii)(a) through (e) of the Companies Act ("Reorganized Company") inaccordance with the conditions stated below. In such a case, the Remaining Stock
Warrants shall be cancelled and stock warrants of the Reorganized Company shallbe newly issued. However, the foregoing provision shall be limited to the case thatin the agreement on absorption-type merger, agreement on new-incorporation typemerger, agreement on absorption type split off or spin-off, new-incorporation typesplit off or spin-off plan, agreement on exchange of shares, or share transfer plan,
an indication has been stipulated to the effect that stock warrants of theReorganized Company shall be delivered in accordance with the followingconditions.
(i) Number of stock warrants to be delivered of the Reorganized Company
Numbers shall match the respective numbers of the Remaining Stock Warrants
held by the Stock Warrant Allottees.
(ii) Share types of the Reorganized Company underlying the stock warrants
Shares of common stock of the Reorganized Company.
(iii) Number of shares of the Reorganized Company underlying the stock warrants
To be determined in accordance with item (2) above with consideration of theterms, etc., of Reorganization.

－ 53 －(iv) Value of property to be contributed at exercise of stock warrants
To be determined in accordance with item (5) above with consideration of theterms, etc., of Reorganization.
(v) Exercise period of stock warrants
The period from the later of the start date of the exercise period for Remaining
Stock Warrants prescribed in item (6) above or the effective date of theReorganization, to the last day of the exercise period for Remaining Stock
Warrants prescribed in item (6) above.
(vi) Matters concerning increases in capital and capital reserves in case of shareissuance associated with the exercise of stock warrantsTo be determined in accordance with item (9) above.
(vii) Restrictions on the acquisition of stock warrants by assignment
Acquisition of stock warrants by assignment shall require the approval of theboard of directors of the Company.
(viii) Provisions concerning the acquisition of stock warrants
To be determined in accordance with item (8) above.
(ix) Other conditions concerning the exercise of stock warrants
To be determined in accordance with item (7) above.
(13) Other features of the stock warrants
As to other features of the stock warrants, matters concerning subscription tothe stock warrants are determined by the board of directors.
End of text.

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