English Translation of News Release
May 21, 2008, TokyoJapan Petroleum Exploration Co., Ltd.

Introduction of the Measures to Prevent Large-scale Acquisition of Our Company Shares(Takeover Defense Measures)Japan Petroleum Exploration Co., Ltd. (JAPEX) has, in our Board of Directors Meeting, held on May 21,
2008, set forth the basic policy (refers to the policies in the provision in Article 127 of the Ordinance for
Enforcement of the Companies Act, hereinafter as “Basic Policy”) for the person controlling financial andbusiness policy decisions. In addition to the establishment of the Basic Policy, as an approach to prevent
controlling of the decision of the policies for our finances and business by an inappropriate person (Article
127 Clause 2(2) of the Ordinance for Enforcement of the Companies Act) according to the Basic Policy,
JAPEX has decided to introduce measures to prevent large-scale acquisition of our company shares (takeover
defense measures) (hereinafter as the “Plan”) on subject to the approval of our shareholders in the ordinary
general meeting of shareholders for the 38th financial year to be held on June 25, 2008, and therefore notifies
the aforementioned introduction as follows.

I.

Basic Policy of How the Person Controlling the Decision of the Policies for Our Finances and Business

JAPEX considers that the person controlling our financial and business policy decisions should fully
understand the content of our finances and business and the source of our corporate value, and is eligible
to ensure and improve the corporate value and consequently, the common interest of the shareholders in
a continuing, sustainable manner.
JAPEX believes the decision on an acquisition proposal with which is associated the transfer ofcorporate control should ultimately be made based on the general decision of our shareholders.
Furthermore, JAPEX does not disapprove of large-scale share acquisition that contributes to our
corporate value and consequently the common interest of the shareholders.
Nevertheless, among large-scale share acquisitions, there are many that do not contribute to thecorporate value and the common interest of the shareholders, in the light of their purpose, including suchthat cause a clear infringement on the corporate value and the common interest of the shareholders, suchthat has the risk of a de facto coercion against the shareholders to sell their shares, such that does notprovide sufficient time and/or information for the Board of Directors and the shareholders considerationof the content of the large-scale share acquisition or for the Board of Directors to propose an alternativeplan, and such that require consultation and negotiation with the acquirer to draw out a more favorable
condition than the conditions presented from the acquirer.

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The large-scale share acquirer should understand the source of our corporate value as described in thefollowing II 1., not to mention the content of JAPEX’s finances and business, and unless he or she
ensures and improves them for the medium-and-long term, our corporate value, and consequently thecommon interest of the shareholders will be damaged.
JAPEX considers such a large-scale acquirer that does not contribute to our corporate value and thecommon interest of our shareholders inappropriate as the controlling person to determine the policies ofour finances and business, and thus consider necessary to protect our corporate value and consequently
the common interest of our shareholders by taking essential and substantial measures against suchattempts.

II.

Special Undertakings that Contribute to the Source of Our Corporate Value and to the Realization of the
Basic Policy

1. Source of Our Corporate ValueJAPEX has developed its business focusing on the improvement of the self-sufficiency of oil and natural
gas since its foundation in 1955. Starting out with zero reserves, JAPEX has established its current
business base in the compounding discoveries of new oil and gas fields one after another, and is operating
the businesses of exploration, development, and distribution of oil and natural gas resources as its corebusiness.
The source of our corporate value lies in our business model where we conduct exploration,
development, and distributing in continuity, upon our ownership of oil and natural gas interests. Moreover,
JAPEX conducts a business with a highly public nature, as well as taking on a crucially important
responsibility in terms of maintaining and ensuring stable supply and safe operation as an enterprise
involved in the supply of energy, which is the bloodstream of industrial activity and civic life.
This business model is backed with JAPEX’s 1) advanced exploration technology for oil and natural gas,2) oil/gas field development technology and operation know how in and out of Japan, and 3) constructionof a natural gas pipeline network in Japan, as well as trust relationships with customer, stockholder andcommunity stakeholders, based on the buildup of a stable, long-term supply record due to theaforementioned network.
It is not uncommon for it to take more than 10 years to reach the production stage from the discovery ofa new oil or gas field. A social contribution with considerations given to environmental conservation as
well as business deployment with a long-term perspective, are needed. Also, in the view of today’s
international energy situation, in which the global competition with regard to the securement of energy
resources is expected to intensify, improvement of corporate technology and know how, securing humanresources, and efforts for the further enrichment of trust relationships with each stakeholder are essential
for the continuing growth of the business and enhancement of our corporate value. This, we believe, is still2

what brings the future maintenance and improvement of our corporate value and thus of the common
interest of our stockholders.

2. Undertakings for the Improvement of Corporate ValueJAPEX is working on the exploration of oil and gas fields in and out of Japan and acquiring newinterests in order to compensate for and expand on reserves that are decreasing due to production, as wellas aiming to increase production and sales from the existing oil and gas fields for the maximization of ourcorporate value.
Oil and natural gas are expected to continue to play the role of primary energy source in the future, butwith the recent progress of regulatory flexibility associated with the revision of the Electricity BusinessAct and the Gas Business Act, price surges in natural resources including crude oil, and changes in social
conditions such as the increasing importance of global warming prevention, the management environment
surrounding JAPEX is rapidly changing. Therefore, in order to clarify the working policies for achieving
priority business challenges in the long-term perspective, we have recently created a mid-term businessplan. (Please refer to the press release dated as of today “JAPEX Group Mid-term Business Plan” fordetails.)
Under the Mid-term Business Plan, JAPEX aims to increase our group’s currently owned recoverable
reserves of approximately 170 million barrels of oil equivalent (BOE) to its double, approximately 350
million barrels, in the next five years, as well as increase the sales of domestic natural gas (including LNG
satellite) from 1.7 billion m3 as of Fiscal 2007 to sales performance of 2.0 billion m3, a 0.3 billion m3
increase, by Fiscal 2012.

3. Fortification of Corporate Governance

JAPEX plans to implement the above measures, and intends to acquire and improve our corporate value
and consequently the common interest of our shareholders. Furthermore, we recognize the importance ofcorporate governance in order to earn profits from efficient management and to stay, as an enterprise,socially accepted as a valuable entity. Thus we aim to develop and enhance the relevant system as
described hereinafter.
First of all, in June 2005, JAPEX introduced a system of non-statutory executive officers forclarification of the business execution system. Then in June 2007, by appointing one outside director who
is uninvolved in business operations in addition to the two existing outside auditors, we intend tostrengthen the supervision function for the Board of Directors.
Currently, the Board of Directors hold a monthly general meeting, where decisions on importantbusiness executions are made, and reports on the business execution situation is given by the directors or
executive officers, redeeming the supervision function. Auditors attend the Board of Directors Meeting3and the full-time statutory auditors also attend the other important meetings as well as exchange opinionswith directors who execute business operations or executive officers as appropriate, thus serving in the
supervision function. Furthermore, as an internal audit, the Auditing Dept. under the control of the
President supervises compliance with the laws and corporate regulations and conducts audits on whether
business operations are properly conducted, including the verification of effectiveness of internal control
in the departments.
On the other hand, concerning the internal control, JAPEX developed the framework necessary toensure due business operation as set forth in the Companies Act and the Ordinance for Enforcement of theCompanies Act in May 2006, and the Internal Control Committee and the Internal Control Dept.,
established in April 2006 as main actors, are continuing their inspection and development of theframework to ensure due business operation.
Furthermore, in addition to such corporate governance in management mechanism, we anticipate toattain the optimal business execution appropriately, through improved transparency of management
brought by IR activities such as results briefings and enrichment of the website.

III. Undertakings Based on the Basic Policy to Prevent the Controlling of Decision of Policies of Our
Finances and Business by Inappropriate Persons

1. The Purpose of the Plan

The Plan aims to ensure and improve our corporate value and the common interest of our shareholders,and shall be introduced according to the Basic Policy described above I.
The Board of Directors, as set forth in the Basic Policy, considers a person who performs large-scaleacquisition that do not contribute to our corporate value and/or the common interest of our shareholders
inappropriate as a person controlling our financial and business policy decisions. Furthermore, it has been
decided that, in order to prevent the control of our financial and business policies decisions by such
impropriate persons and deter large-scale acquisition that is detrimental to our corporate value and/or thecommon interest of our shareholders, information and time required for the proposal of an alternative planfrom our Board of Directors to our shareholders or for the judgment by our shareholders whether to accept
the large-scale acquisition must be ensured upon the large-scale share acquisition. We also consider aframework that enables negotiation and other measures to be taken on behalf of our shareholders to be
essential for such prevention.
Therefore, the Board of Directors has decided on the introduction of the Plan under the condition that itshall be approved by our shareholders in this ordinary general meeting of the shareholders.
Meanwhile, the state of major shareholders as of March 31, 2008 is as shown in the separate document
Number 4, “The Overview of the Shareholding State of JAPEX Shares”. As of today, we have received no
proposals concerning the act of large-scale acquisition of JAPEX shares.

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JAPEX was listed on the first section of the Tokyo Stock Exchange market due to the partially sell-out ofshares owned by then-Japan National Oil Corporation (JNOC) in December 2003, but as a result, the ratioof share owned by JNOC was reduced from 66.74% to 49.94%.
Furthermore, JAPEX shares owned by JNOC were succeeded by the state (Minister of Economy, Tradeand Industry) as of April 1, 2005, upon the abolition of JNOC. These shares were then sold to be delivered
as of June 15, 2007, and as a result of the sale of shares valued at 15.94% of relevant owned shares, theratio of share ownership of the Minister has decreased to 34.00% and remains so up to this date.1

2. Content of the Plan

(1) Overview of the Plan(a) Objective
The Plan aims to deter takeovers that run counter to our corporate value and the common interest of
our shareholders, ensure and improve our corporate value and the common interest of ourshareholders, through securing sufficient information and time necessary for the appropriate
decision-making of shareholders alongside securing the opportunity to negotiate with the acquirers, inthe event of large-scale acquisition of our company shares.

(b) Procedural Setup
The Plan determines the necessary procedure for achieving the objective described in the above (a),such as demanding the prior provision of information from the acquirer, upon the emergence of aperson who intends to acquire 20% or more of the company’s share (Please refer to the following (2)“Procedure for the Implementation of the Plan” for details.). Meanwhile, in case the procedures of thePlan commence, the acquirer is prohibited from pursuing the takeover of JAPEX shares, until thedecision not to implement the Plan has been made in the Board of Directors or at the General Meetingof the Shareholders.

(c) Implementation of the Plan by Allotment of Share Options without Contribution
In case the acquirer pursues the takeover of JAPEX share without conforming to the procedure set
forth in the Plan, or in case there is a risk of clear infringement on our corporate value and/or thecommon interest of our shareholders (please refer to the following (3) “Requirements for the
Allotment of Share Options without Contribution” for details of the requirements), JAPEX shall allot
share options with restrictive conditions in which the exercise of rights by the acquirer is1

After the endorsement of the “Reorganization and Rationalization Plan for Special Public Corporations” by the Cabinet in
December 2001, the assets related with the development of oil and natural gas (Assets) (including JAPEX shares) of JNOC
went through due handling, including reorganization or sale, upon impartial asset evaluation, under this Plan, alongside withthe enactment of the Abolishment Act of JNOC in July 2002. Under such policies, the Ministry of Economy, Trade andIndustry designed the “Policy for the Handling of Assets held by the JNOC” at the Advisory Committee on Energy and Natural
Resources in March 2003. As described in the body of this document, the sale of JAPEX shares has been proceeded due to the
public listing (December 2003) of JAPEX shares and the sell out that followed (June 2007).

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impermissible or with acquisition clauses where JAPEX may acquire share options from persons otherthan the acquirer in exchange for the company shares (the main details will be described in thefollowing (4) “Overview of the Allotment of Share Options without Contribution”, and it shall bereferred to as “Share Option” hereinafter), to all shareholders excluding JAPEX at that point of time,
without contribution.
In the event that the allotment of share options without contribution is executed according to thePlan, and associated by its execution or acquisition by JAPEX, when JAPEX shares are issued to allshareholders except for the acquirer, the percentage of voting rights the acquirer has held may bediluted by, at most, approximately 50%.

(d) Setup of the Mechanism that Enhances the Rationality of the Plan
With regard to the decision whether to implement or not implement the allotment of share options
without contribution, or to acquire, according to the Plan, in order to eliminate the arbitrary decisionof directors, it shall undergo the objective decision of the independent committee (please refer to thefollowing (6) “Establishment of the Independent Committee” for the details) constituted byindependent outside directors and other persons of an independent nature.
Moreover, in case the independent committee suspends the implementation of the allotment ofshare options without contribution by reason of undergoing the decision at the general meeting of theshareholders, the Board of Directors is to convoke a general meeting of shareholders and confirm theintention of the shareholders concerning the implementation of the allotment of share options without
contribution (please refer to the following (2) “Procedure for the Implementation of the Plan” for its
details). Furthermore, we aim to ensure transparency of the process of these procedures throughinformation disclosure to our shareholders.

(2) Procedure for the Implementation of the Plan (please refer to the separate document 1 “Flow of Procedure
Concerning the Plan” for the overview)(a) Share purchase that are the Subject of the Plan’s Application
The Plan shall be applied when an act that falls under 1) or 2) described subsequently or a similar
act is pursued, or when such acts are suggested2 (excluding those that have been otherwise approvedby the Board of Directors; hereinafter shall be referred to as “Acquisitions”). Persons pursing shareacquisition (hereinafter as “Acquirers”) shall act in compliance with the procedures predefined in thePlan.
1) Share purchase or other acquisition with an ownership ratio3 of 20% or more of the holder4, with

2

“Suggested acts” shall include solicitation acts.
Defined in Article 27-23-4 of Financial Instruments and Exchange Act. The term herein is subject to its definition.
4
Includes persons included in holders, based on Article 27-23-3 of Financial Instruments and Exchange Act (includes persons
the Board of Directors deemed that they will fall under the definition). The term herein is subject to its definition.
3

6

regard to share certificates, etc5 issued by JAPEX.
2) Tender offers6 with a total ownership ratio7 of 20% or more of the persons pursuing tender offers
and their special associated persons8, with regard to share certificates, etc9 issued by JAPEX.

(b) Demand for Information Provision towards Acquirers
Acquirers who perform Acquisitions shall, prior to the relevant Acquisition, submit a document
written in Japanese, in a format specified by JAPEX, that includes the information stipulated in thefollowing (hereinafter as “Required Information”) and covenant wordings, etc that express theintention to comply with the procedure set forth in the Plan upon the Acquisition of the relevant
Acquirers, to JAPEX (Board of Directors and the Independent Committee).
When the Independent Committee has decided that the description on the relevant acquisition
statement falls short as Required Information, JAPEX may request additional information from theAcquirers, with an appropriate reply deadline. In this case, the Acquirers shall additionally submit
such information to JAPEX by the relevant deadline.

1) Details (includes specific names, capital structure, financial content, compliance with laws andother regulations, details of previous trade similar to the Acquisition of the relevant Acquirers, andthe resulting influence on corporate value of the target company) of the Acquirers, and their group(includes joint shareholders10, special associated persons, and (in case of funds) each union
member or other members)
2) Purpose, method, and content of the acquisition (includes value and type in consideration of theacquisition, time of acquisition, mechanism of related trade, legality of the method of acquisition,and the possibility of the execution of acquisition)3) Basis of the valuation of the acquisition price (includes facts and presumptions the valuation isbased on, valuation methods, numerical information used for the valuation, the content of synergy
expected to emerge from the series of trade in connection with the acquisition (including thecontent of synergy allocated to minority shareholders) and its basis for valuation)4) Proof of funds for the acquisition (includes the specific names of providers of the funds for theacquisition (including the beneficial providers), procurement methods, and content of relatedtrade)
5
Defined in Article 27-23-1 of Financial Instruments and Exchange Act. The term herein is subject to its definition, unlessotherwise specified.
6
Defined in Article 27-2-6 of Financial Instruments and Exchange Act. The term herein is subject to its definition.
7
Defined in Article 27-2-8 of Financial Instruments and Exchange Act. The term herein is subject to its definition.
8
Defined in Article 27-2-7 of Financial Instruments and Exchange Act (includes persons the Board of Directors deemed thatthey will fall under the definition). However, with regard to the persons stipulated in Article 27-2-7 (1), those who fall under
Article 3-2 of the Cabinet Office order concerning the disclosure of tender offers of share certificates by persons other than theissuer, shall be excluded. The term herein is subject to its definition.
9
Defined in Article 27-2-1 of Financial Instruments and Exchange Act.
10
Refers to the joint holders stipulated in Article 27-23-5 of Financial Instruments and Exchange Act, and includes persons
deemed joint holder based on Article 27-23-6 (includes persons the Board of Directors deemed that they will fall under thedefinition). The term herein is subject to its definition.

75) Management policy, business plans, capital policy, and distribution policy, for JAPEX group after
the acquisition
6) Details of the previous acquisition condition of JAPEX shares, etc, and the details on theagreements with a third party concerning JAPEX shares (includes the other party, time, andcontent)7) Post-acquisition policy regarding our shareholders, employees, labor union, business partners,
customers, and other stakeholders related to JAPEX group8) Specific information regarding the risk of infringement by the acquirer to the laws and regulationsin and out of Japan (includes the Act of Prohibition of Private Monopolization and Maintenance ofFair Trade and foreign competition law)9) Specific measures to prevent conflicts of interest with other shareholders of JAPEX shares
10) Other information reasonably decided by the Independent Committee as necessary

The Independent Committee shall, when it deems that the acquirer has commenced the acquisition
without conforming to the procedure set forth in the Plan, in principle, advise the Board of Directors to
implement the allotment of share options without contribution as prescribed in the following 1) of d),unless there is a particular reason to consult and/or negotiate with the acquirer to continue requesting
the submission of the acquisition statement (including additional information).

(c) Consideration of the Content of Acquisition / Consideration of Negotiation with the Acquirer or of an
Alternative Plan
1) Request to the Board of Directors for the submission of information
The Independent Committee may, when the acquisition statement and (if applicable) the
additional information are submitted by the Acquirer, also request the Board of Directors to present
its opinion (includes suspension of opinion; hereinafter the same applies) on the content of theAcquisition of the Acquirer and the supporting materials, (if available) alternative plans, and otherinformation deemed necessary by the Independent Committee, as appropriate, with an appropriate
reply deadline (in principle, 60 days maximum).
2) Reviews and other considerations by the Independent Committee
The Independent Committee shall, in principle, within a maximum of 60 days (hereinafter as“Reviewing Period of the Independent Committee”) after the receipt of the information from theAcquirer and the Board of Directors, review the content of the Acquisition, collect information on
and comparatively investigate the management and business plans of the Acquirer and the Board of
Directors, and review the alternative plan presented by the Board of Directors. Furthermore, theIndependent Committee shall, directly or indirectly, consult and/or negotiate with the Acquirer, orpresent or otherwise inform our shareholders of the alternative plan submitted by the Board of
Directors, if necessary to improve the content of the relevant Acquisition in view of ensuring and8

improving our corporate value and the common interest of our shareholders.
In order to ensure that the Independent Committee makes the decision to the benefit of thecorporate value and the common interest of our shareholders, the Independent Committee may seek
advice from an independent third party (includes financial advisors, certified public accountants,
lawyers, consultants, and other experts) at the expense of the company. The Acquirer shallpromptly respond to the direct or indirect request of the Independent Committee to provide
reviewing materials or other information, or for consultation, negotiation, or other communication.
3) Information Disclosure
JAPEX shall disclose information at the point of time the Independent Committee decides
appropriate, with regard to the fact that the submission of the acquisition statement has been madeby the Acquirer, the fact that the Reviewing Period of the Independent Committee has begun, andinformation included and not included in the Required Information that the Independent
Committee deems appropriate to disclose.

(d) Advisory of the Independent Committee
The Independent Committee shall advise the Board of Directors as follows in case of an emergenceof an Acquirer. Furthermore, in case the Independent Committee issues an advisory or holds othercommunication with according to the following 1) or 3) to the Board of Directors, or otherwise deems
appropriate, the Independent Committee shall promptly disclose information with regard to theoverview of the relevant advice and other matters (if the Reviewing Period of the Independent
Committee is extended, includes the period and reason for extension) deemed appropriate by the
Independent Committee.
1) When advising the implementation of the Plan
The Independent Committee shall advise the implementation of the allotment of share options
without contribution to the Board of Directors, irrespective of whether the Reviewing Period of the
Independent Committee has commenced or has finished, when the Acquisition by the Acquirer
falls under any of the requirements set forth in the following (3) “Requirements for the allotment ofshare options without contribution” and has been deemed suitable to implement the allotment ofshare options without contribution.
However, even after the implementation of the allotment of share options without contribution
has been advised, if the Independent Committee deems that any of the conditions specified below
applies, the Independent Committee may pause the allotment of share options without contribution
by two business days before the ex-rights day of the allotment of share options without contribution,
or, may issue a new advisory to acquire all share options without contribution by one day before thecommencing of the execution period after the effective date of the allotment of share options
without contribution (defined in (4) under the following (4) “Overview of the allotment of shareoptions without contribution”).

9(i) When the Acquisition is withdrawn by the Acquirer after the advisory or when the Acquisitionis otherwise no longer existent; or(ii) When a change occurs in the facts the decision of the advisory was based on, and thus the
Acquisition by the Acquirer no longer falls under any of the requirements set forth in thefollowing (3) “Requirements of the allotment of share options without contribution”, or even if
it remains applicable, the implementation or execution of the allotment of share options
without contribution are no longer appropriate.
Furthermore, the Independent Committee may, upon the issuance of an advisory for the
implementation of allotment of share options without contribution, issue a suspension/reservation fora prior approval of the relevant implementation at the general meeting of the shareholders, withconsideration to whether the Acquisition conforms to the procedure set forth in the Plan, the degree of
detriment to the corporate value or the common interest of our shareholders caused by the Acquisition,and the circumstances including the time allowed for the holding of the general meeting ofshareholders.
2) When advising not to implement the Plan
The Independent Committee shall advise not to implement the allotment of share options
without contribution to the Board of Directors, irrespective of whether the Reviewing Period of the
Independent Committee has commenced or has finished, when it has been deemed that theAcquisition by the Acquirer does not fall under any of the requirements set forth in the following(3) “Requirements for the allotment of share options without contribution” or even if any applied, it
has been deemed unsuitable to implement the allotment of share options without contribution, as aresult of the review on the content of the Acquisition of the Acquirer or of the consultation and/or
negotiation with the Acquirer.
However, even after not implementing the allotment of share options without contribution has
been advised, if a change occurs in the facts the decision of the advisory was based on, and thus therequirement in above 1) is appropriated, the Independent Committee may issue a new advisory to
implement the allotment of share options without contribution.
3) When extending the Reviewing Period of the Independent Committee
When the Independent Committee deems that there is a reasonable reason for not reaching thepoint of issuing an advisory of implementation of non-implementation of the allotment of shareoptions without contribution before the expiration of the initial Reviewing Period of the
Independent Committee (if already has been extended, includes the term after the extension; same
applies hereinafter), the Independent Committee shall execute a resolution for an extension of the
Reviewing Period of the Independent Committee, within the reasonable range (in principle, shallnot exceed 30 days) required for the reviewing of the content of the Acquisition by the Acquirer
and/or for the negotiation or other communication with the Acquirer.
In case the Reviewing Period of the Independent Committee is extended due to the above10

resolution, the Independent Committee shall continue on with the collection of information,
reviewing and other activities, and shall exert its upmost effort to issue the advisory of
implementation or non-implementation of the allotment of share options without contribution
within the extended period.

(e) Resolution of Board of Directors / Convocation of General Meeting of Shareholders for Decision
Hearing
The Board of Directors shall make a resolution as a body under the Companies Act regarding theimplementation or non-implementation of the allotment of share options without contribution, in
utmost deference to the above advisory of the Independent Committee.
However, in the case the Independent Committee issued a reservation for the approval at the general
meeting of shareholders, the Board of Directors shall, upon the implementation of the allotment ofshare options without contribution according to the Plan, convoke a general meeting of shareholders(hereinafter as “General Meeting of Shareholders for Decision Hearing”) and hear the shareholders’decision regarding the implementation of the allotment of share options without contribution, unlessthe holding of the general meeting of shareholders is practically difficult (in this case, the Board of
Directors shall make the above resolution regarding the implementation or non-implementation of theallotment of share options without contribution, in the light of the intention of the advisory issued
from the Independent Committee).
The Acquirer, and its joint shareholders and special associated persons shall not pursue theAcquisition until the Board of Directors has made its resolution to not implement the allotment ofshare options without contribution, or until the agenda to implement the allotment of share options
without contribution is voted down at the General Meeting of Shareholders for Decision Hearing.

(f) Information disclosure regarding the resolution and other decisions of the Board of Directors
The Board of Directors shall promptly disclose information regarding the outline of the resolution
and other matters deemed appropriate by the Board of Directors (in case of proviso in the above (e),when the holding of the general meeting of shareholders is practically difficult, the reason shall be
provided as such), when the Board of Directors has made a resolution to implement or not implement
the allotment of share options without contribution, or when it has made a resolution to convoke theGeneral Meeting of Shareholders for Decision Hearing.

(3) Requirements of the allotment of share options without contribution
JAPEX plans to implement the allotment of share options without contribution upon the resolution of
the Board of Directors or at the General Meeting of Shareholders for Decision Hearing prescribed in (e)under (2) “Procedure for the Implementation of the Plan”, when the Acquisition by the Acquirer falls
under any of the following and deemed suitable to implement the allotment of share options without

11

contribution. Furthermore, as set forth in (d) under (2) “Procedure for the Implementation of the Plan”,
whether the Acquisition falls under the following requirements and whether the implementation of theallotment of share options without contribution is appropriate or not will always be decided with and after
the advisory of the Independent Committee.

(a) When the Acquisition is not in conformity with the procedures prescribed in the Plan;(b) When the Acquisition clearly risks infringing on our corporate value and consequently to the common
interest of our shareholders, by reason of the acts listed below:
1) Act in which the Acquirer corners the share certificates and such, and demands that JAPEX
purchase such share certificates for a high price;2) Act in which the Acquirer temporarily controls the management of JAPEX to perform management
for the benefit of the Acquirer that is based on the sacrifice of JAPEX, such as acquiring JAPEX’s
important assets and other properties at low cost;3) Act in which the Acquirer appropriates the assets of JAPEX group as collateral for debt and/or as aresource to perform obligations of the Acquirer or its group companies, etc.; or
4) Act in which the Acquirer temporarily controls the management of JAPEX to dispose of expensive
assets and/or other properties that are not active in the business of JAPEX group for the foreseeable
future, and with the disposal income, perform temporary high dividend payouts or sell-out ofshares on the occasion of sharp rises in share prices due to such temporary high dividend payouts.
(c) When the Acquisition has a risk of a de facto coercion towards the shareholders to sell their shares,
such as coercive two-tiered tender offers (refers to an act in which shares are purchased in tender
offers and such, without soliciting/offering the purchase of all shares in the initial purchase, but set thesecond tier purchase condition disadvantageously or without clarifying the second tier purchasecondition);(d) When the Acquisition is such that does not provide the reasonable period of time required for the
Board of Directors to present an alternative plan for the Acquisition;(e) When the Acquisition is such that does not sufficiently provide the Required Information or otherinformation reasonably required to make judgments on the content of the Acquisition;(f) When the Acquisition is such that the condition of the Acquisition (includes value and type inconsideration of the acquisition, time of acquisition, legality of the method of acquisition, and thepossibility of the execution of acquisition, post-Acquisition management policy and business plans,post-Acquisition shareholders other than JAPEX, and policy regarding the employees, customers,
business partners, and other stakeholders related to JAPEX group) is insufficient or inadequate withconsideration to JAPEX’s intrinsic value; or(g) When the Acquisition has a risk of causing a serious hindrance in ensuring a stable supply of energy or
ensuring customer convenience, due to the insufficiency or inadequacy of the content of
post-Acquisition management policy or business plans.

12(4) Overview of the Allotment of Share Options without Contribution
The overview of the allotment of share options without contribution planned to be implemented basedon the Plan is as follows:(a) Number of share options
The number of share options shall be equal to the final total number of shares (provided, however,that the number of JAPEX shares held by JAPEX at point of certain date is deducted) issued as of acertain date (hereinafter as “Allotment Date”) otherwise decided by resolution of the Board of
Directors or by resolution at the general meeting of shareholders concerning the allotment of shareoptions without contribution (hereinafter as “Resolution for the Allotment of Share Options without
Contribution”).

(b) Shareholders eligible for allotment
The share options shall be allotted to shareholders other than JAPEX who are listed or registered on
the final shareholder registry or practical shareholder registry as of the Allotment Date, in proportionof one share option per one JAPEX share held by the shareholder.

(c) Effective date of allotment of share options without contribution
The effective date shall be otherwise decided by the Resolution for the Allotment of Share Options
without Contribution.

(d) Number of shares as object of the share option
The number of JAPEX shares as object of each share option (hereinafter as “Target Share Number”)
is, in principle, one share.

(e) Value of assets contributed upon the exercise of share option
The object of contribution upon the exercise of share option shall be money. The value per JAPEX
share of the property to be contributed upon the exercise of the share option shall be otherwise decided
in the Resolution for the Allotment of Share Options without Contribution, within the value range of
one yen as lower limit and one half of the market value of one JAPEX share as higher limit.
Furthermore, “market value” is equivalent to the value corresponding to the average closing price(includes quotations) for 90 days (excludes dates without contracted trade) of ordinary exchange dates
for ordinary JAPEX shares at the Tokyo Stock Exchange, prior to the Resolution for the Allotment of
Share Options without Contribution, and fractions shall be rounded up.

(f) Exercising period of the share options

13

The date otherwise prescribed in the Resolution for the Allotment of Share Options without
Contribution shall be the initial date (hereinafter the initial date of such period of exercise will bereferred to as the “Commencing Date of the Period of Exercise”) of the exercising period, and theperiod otherwise prescribed in the Resolution for the Allotment of Share Options without
Contribution within the range of one to three months shall be the exercising period. However, in case
JAPEX acquires the share options based on the provision of the following clause (i), the exercising
period of the share options for such acquisition shall be until the day before such acquisition date.
Furthermore, if the final date of the exercising period falls on a non-business day of the payment
handling institution where the money shall be paid upon the exercise, the last business day before suchdate shall be the final date of the exercising period.

(g) Condition of exercise of share options( I ) Specific large-scale holders11, ( II ) joint holders of specific large-scale holders, ( III ) specificlarge-scale acquirers12, ( IV ) special associated persons of specific large-scale acquirers, or ( V )persons who was assigned or succeeded the share options from persons that fall under ( I ) or ( IV )without the approval of the Board of Directors, or ( VI ) persons who are in relation13 to persons thatfall under ( I ) or ( V ) (hereinafter collectively referred to persons that fall under ( I ) or ( VI ) as
“Unqualified persons”) may not, in principle, exercise the share options. Furthermore, under theapplicable foreign law, non-residents, as they require prescribed procedures for the exercise of theshare options, may not, in principle, exercise the share options. (However, on the condition that theshare options held by the non-resident shall also comply with the applicable law, they may become theobject of acquisition by JAPEX in consideration of JAPEX shares as described in the following (i) 2).)
In addition, persons who do not submit a covenant in a form prescribed by JAPEX containing a
representation warrant clause with regard to that the person satisfies the requirements for exercise of
the share options, compensation clause and other covenant wordings, may not exercise the share11

In principle, refers to holders of share certificates issued by JAPEX and the ratio of whose ownership of such shares is 20% ormore (includes persons the Board of Directors deemed that they will fall under the definition). However, persons whose
acquisition or holding of the shares are deemed harmless to our corporate value or the common interest of our shareholders by
the Board of Directors, and other persons who are otherwise designated by the Board of Directors in the Resolution for the
Allotment of Share Options without Contribution, shall not fall under specific large-scale holders. The term herein is subject toits definition.
12
In principle, refers to persons who made a public notice to purchase (Defined in Article 27-2-1 of Financial Instruments andExchange Act. The term herein is subject to its definition.) shares issued by JAPEX (Defined in Article 27-2-1 of Financial
Instruments and Exchange Act. The term herein is subject to its definition.) by tender offer and whose ratio of share ownership(as pursuant to this, shall include cases stipulated in Article 7-1 of Enforcement Order of Financial Instruments and ExchangeAct) combined that of the person’s special associated person become 20% or more after such purchase (includes persons theBoard of Directors deemed that they will fall under the definition). However, persons whose acquisition or holding of the sharesare deemed harmless to our corporate value or the common interest of our shareholders by the Board of Directors, and otherpersons who are otherwise designated by the Board of Directors in the Resolution for the Allotment of Share Options without
Contribution, shall not fall under specific large-scale acquirers. The term herein is subject to its definition.
13“Those who are in relation” to refers to a person who substantially control the other person, or is controlled by the otherperson, or under the same control as the other person (includes persons the Board of Directors deemed that they will fall under
the definition), or a person approved by the Board of Directors as acting substantially in cooperation with the other person.
Furthermore, “control” refers to “the case where controlling the determination of financial and business policies” of anotherorganization (defined in Article 3-3 of Regulation for Enforcement of Companies Act).

14

options.

(h) Assignment of share options
The acquisition of share options through assignment requires the approval of our Board of
Directors.

(i) Acquisition of share options by JAPEX
1) In case the Board of Directors deem it appropriate for JAPEX to acquire share options, JAPEX may
acquire all share options without contribution upon the coming of the date otherwise prescribed by
the Board of Directors, until the day before the Commencing Date of the Exercising Period.
2) JAPEX may, upon the coming of the date otherwise prescribed by the Board of Directors, acquire
all share options held by persons other than unqualified persons, which are not exercised by the day
before the date prescribed by the Board of Directors, and in exchange of such share options, maydelivery the number of JAPEX shares equivalent to the Target Share Number per one share option.
Furthermore, in the event that the Board of Directors acknowledges the presence of persons otherthan the unqualified persons among the holders of the share options after the date of such anacquisition, upon the coming of the date prescribed by the Board of Directors that is after the dateof the above acquisition, all share options held by such persons that remained unexercised as of thedate before the date assigned by the Board of Directors shall be acquired by JAPEX and in
exchange for this, JAPEX may deliver shares equivalent to the Target Share Number per one shareoption, and the same principle shall apply hereafter.

(j) Delivery of share options in case of merger, demerger, incorporation-type company split, shareexchange, and share transfer
They shall be otherwise prescribed in the Resolution for the Allotment of Share Options without
Contribution.

(k) Issuance of share option certificate
Share option certificates will not be issued for the share options.

(l) Other
Details on the content of the share option (includes matters concerning the handling of the shareoptions held by unqualified persons) other than prescribed above shall be otherwise stipulated in the
Resolution for the Allotment of Share Options without Contribution.

(5) Introductory procedure of the Plan
The introduction of the Plan is subject to the approval of our shareholders at this ordinary general

15

meeting of shareholders as describing in the following.
According to the proviso in Article 278 Clause 3 of the Companies Act, we submit an agenda ofamendment to the Articles of Incorporation, which includes the integration of the following provision to
Article 13 of the Articles of Incorporation, to this ordinary general meeting of shareholders.

(Takeover defense measure)
Article 13

The Company may introduce a takeover defense measure based on the resolution of a general
meeting of shareholders. “Takeover defense measure” refers to a measure which serves the
purpose of ensuring and improving the corporate value of the Company and consequently thecommon interest of the shareholders, among those which interfere with the realization of
takeovers against the Company, including issue or allotment of share options executed by theCompany that does not have business purposes such as financing as its main purpose.
2 The Company may decide on matters concerning the allotment of share options without
contribution as a part of the takeover defense measure, by the resolution of the Board of
Directors based on the resolution of a general meeting of shareholders or the delegation by the
resolution of a general meeting of shareholders, or by the resolution of the Board of Directors.
3 In case of determining the matters regarding the allotment of share options without
contribution bases on the preceding clause, the Company may stipulate the following matters
as a content of the share options:
1. That certain persons specified in the takeover defense measure (hereinafter as“Unqualified Persons”) may not exercise the share options; and2. That, upon the acquisition of such share options by the Company, the presence andcontent of the consideration delivered in exchange for such share options may be treatedseparately and differently between Unqualified Persons and persons other than the
Unqualified Persons.

Based on the provision of the revised Article 13 of the Articles of Incorporation, the Plan
shall be introduced by the resolution of the ordinary general meeting of shareholders andthe authority to decide on the matters regarding the allotment of share options without
contribution according to the conditions set forth in the Plan shall be delegated to theBoard of Directors.

(6) Establishment of the Independent Committee
JAPEX establishes the Independent Committee as a body to objectively make practical judgments forour shareholders upon the operation of the implementation of the Plan, eliminating the arbitrary decisionof the Board of Directors. The members of the Independent Committee at the point of the introduction of
the Plan consist of one outside director, one outside auditor, and one outside expert, whom are16

independent from the management of JAPEX. (The appointment criteria of the Independent Committee
members, requirements for resolution, matters of resolution, and other details of the Independent
Committee are as described in the separate document 2 “Overview of the Articles of Independent
Committee” and the Independent Committee members at the point of the introduction of the Plan are as
described in the separate document 3 “Brief History of the Independent Committee Members”.)(7) Effective period, abolition, and modification of the Plan
The effective period of the Plan shall be until the end of the ordinary general meeting of shareholders
regarding the latest fiscal year ending within three years after the end of the ordinary general meeting ofshareholders, the same as the delegation period of the authority to decide the matters concerning theallotment of share options without contribution in the Plan based on the resolution of the ordinary general
meeting of shareholders.
However, even when before the expiration of the effective period, 1) if a resolution withdrawing theabove delegation to the Board of Directors with regard to the decision on matters concerning theallotment of share options without contribution in the Plan is made at the general meeting of shareholders,or 2) if a resolution to abolish the Plan is made by the Board of Directors, the Plan shall be abolished atthat point in time.
Furthermore, even during the effective period of the Plan, when an addition, revision, and/or
abolishment of laws, financial instruments, or stock exchange rules concerning the Plan are appropriate toreflect on the Plan, when appropriate to correct the wordings by reason of typographical errors, or when
the change of the Plan does not act against the intention to delegate based on the resolution of an ordinary
general meeting of shareholders, such as when such changes are not detrimental to our shareholders, theBoard of Directors may revise or modify the Plan upon the approval of the Independent Committee.
JAPEX shall promptly disclose information regarding the fact of the abolition, revision or modificationof the Plan, (in case of a revision and/or a modification) the content of such revision and/or modification,and other matters.

(8) Revision due to amendments in law
The provision of law referenced in the Plan is assumed as the provision in effect as of May 21, 2008,
and should any addition, revision, or abolition of the law occur after the date and thus necessitates arevision to the clauses prescribed above or meaning of terms, such clauses or meaning of terms shall beappropriately interpreted within a reasonable range, upon consideration of the intention of the addition,
revision, or abolition.

3. Impact on the Shareholders(1) Impact on Our Shareholders and Investors upon the Introduction of the Plan

17

With regard to the introduction of the Plan, we have our shareholders only delegate thedecision-making authority concerning the allotment of share options without contribution to the Board of
Directors based on a resolution of a general meeting of shareholders and the allotment of share options
without contribution itself will not be executed. Hence there is no direct and specific impact on ourshareholders and investors.

(2) Impact on Our Shareholders and Investors upon the Allotment of Share Options without Contribution(i) Procedure for the allotment of share options without contribution and procedure for share transfer
In case a resolution to allot share options without contribution is made by the Board of Directors
or at the general meeting of shareholders, the allotment date shall be decided in the relevant
resolution and publicly notified. In this case, one share option shall be allotted without contribution
for each JAPEX share our respective shareholder holds, to the shareholder (hereinafter as“Shareholders Eligible for Allotment”) stated or recorded in the latest shareholder registry or thepractical shareholder registry as of the allotment date. Therefore, we ask our shareholders to transfer
their shares at their earliest and in time for the allotment date. (Transfer of shares is not required ofdepositary share certificates at the Japan Securities Depository Center.) Furthermore, as the
Shareholders Eligible for Allotment will consequently become holders of the share options on theeffective date of the allotment of share options without contribution, no application procedure isnecessary.
Even after the resolution of the allotment of share options without contribution has been made,JAPEX may, with utmost respect to the advisory of the Independent Committee described in (d) 1)
under 2. (2) “Procedure for the Implementation of the Plan”, pause the allotment of share options
without contribution until two business days before the ex-rights day of the allotment of shareoptions without contribution, or may acquire all share options without contribution by theCommencing Date of the Period of Exercise after the effective date of the allotment of share options
without contribution. In such cases, the dilution of value per one share shall not occur and thus
shareholders purchasing and selling upon the assumption of such dilution may be affected by thecorresponding fluctuations of share value.

(ii) Procedure for exercise of share options
JAPEX shall, in principle, send the request for the exercise of share options (prescribed form
including the content and number of share options to be exercised, required information such as thedate of such exercise, clauses for the representation warrant concerning the eligibility of theshareholder to exercise the share options, compensation clause and other covenant wordings) andother documents necessary for the exercise of the rights of share options to the Shareholders Eligible
for Allotment. After the allotment of share options without contribution, we ask our shareholders to
submit these necessary documents during the exercising period of the share options. In principle,

18

JAPEX shares shall be issued, one share per one share option, by paying the money value equivalent
to one half of the exercising value decided in the Resolution for the Allotment of Share Options
without Contribution within the range of one yen per one share option as the lower limit and one halfof the market value of one JAPEX share as the higher limit, to the payment handling institution.
If the shareholders do not exercise the share options, or pay the money equivalent to the exercisingvalue, the JAPEX shares held by such shareholders will be diluted from the exercising of shareoptions by the other shareholders.
Nevertheless, JAPEX may deliver JAPEX shares in exchange for the share options acquired fromthe shareholders other than the unqualified persons, according to the description in the following (iii).
In case JAPEX takes procedures for such acquisition, the shareholders other than the unqualified
persons shall receive JAPEX shares without the exercise of the share options or the payment ofmoney equivalent to the exercising value of the share options, and thus the dilution of share held will
not, as a rule, occur.

(iii) Procedure for the acquisition of share options by JAPEX
In case the Board of Directors makes a decision to acquire the share options, JAPEX may,according to the statutory procedures, upon the coming of the date otherwise determined by the
Board of Directors, acquire the share options from the shareholders other than the unqualified
persons and deliver JAPEX shares in exchange of the share options. In this case, such shareholders
shall receive, in principle, one JAPEX share for each share option as consideration of the acquisitionof the share options by JAPEX, without the payment of money equivalent to the exercising value.
However, in this case, such shareholders may be asked otherwise to submit a covenant in a form
prescribed by JAPEX containing a representation warrant clause with regard to that the shareholder
is not an unqualified person, compensation clause and other covenant wordings.
Furthermore, in a case where the handling of the share options held by unqualified shareholders isprescribed in the Resolution for the Allotment of Share Options without Contribution, JAPEX may
take measures according to such provision.

With regard to the details concerning the method of allotment, method of share transfer, method of
exercise, and method of acquisition by JAPEX, please review the content of such details in theinformation disclosures or notifications released to the shareholders after their decision in the
Resolution of the Allotment of Share Options without Contribution.

IV. Decision and its Reason of the Board of Directors Concerning the Above Undertakings

1. Special undertakings contributing to the implementation of the Basic Policy (undertakings described underII)

19

The measures including the Mid-term Business Plans described in II. and other measures such as efforts
to improve corporate value and enhance corporate governance, are designed as specific measures toimprove JAPEX’s corporate value and the common interest of the shareholders continuously andsustainably, and that contributes to the implementation of the Basic Policy.
Therefore, these respective measures are in accordance with the Basic Policy, conforming to thecommon interest of our shareholders, and do not serve the purpose of retaining the position of JAPEX’s
corporate officers.

2. Undertakings in the light of the Basic Policy to prevent the controlling of the determination of our financial
and business policy by an inappropriate person (undertakings described under III)

(1) The undertaking must be in accordance with the Basic Policy.
The Plan is a framework in accord with the Basic Policy that ensures our corporate value andconsequently the common interest of our shareholders, by enabling the decision-making of shareholders
concerning the acceptance of the Acquisition, or ensuring the information and time necessary for the
proposal of an alternative plan by the Board of Directors, and/or enabling negotiation or othercommunication with the Acquirer on behalf of the shareholders, in the event of Acquisition of ourcompany share certificates.

(2) The undertaking must not be such that is detrimental to the common interest of our shareholders and does
not serve the purpose of retaining the position of our corporate officers.
JAPEX considers the Plan to be not detrimental to the common interest of our shareholders and that it
does not serve the purpose of retaining the position of our corporate officers for the following reasons:1) That the Plan satisfies the guiding requirements of the takeover defense measure:
The Plan satisfies the three principles set forth in the guidance regarding the takeover defense
measure for the maintenance and improvement of corporate value and the common interest ofshareholders announced by the Ministry of Economy, Trade and Industry and the Ministry ofJustice on May 27, 2005.

2) That the Plan respects the intention of the shareholders:
As described in III 1. “Purpose of the Plan”, the introduction of the Plan is planned to be subject
to the resolution of a general meeting of shareholders, to determine the intention of theshareholders.
Furthermore, as described in (e) under III 2. (2) “Procedure for the implementation of the Plan”,
the Board of Directors shall refer to the intention of the shareholders by way of obtaining a
resolution of a general meeting of shareholders concerning the implementation of the Plan under20

certain conditions prescribed in the Plan, to respect the intention of the shareholders.
In addition, as described in III 2. (7) “Effective period, abolition, and modification of the Plan”,
the Plan contains a sunset provision that stipulates an effective period of approximately three years.
Alongside, even before the expiration of the effective period, if a resolution withdrawing the above
delegation resolution is made at the general meeting of shareholders or if a resolution abolishing
the Plan is made by the Board of Directors, the Plan shall be abolished at that point of time. In that
context, the intention of our shareholders will be reflected on the prevalence of the Plan.

3) Respect for the decision of the outsider directors and Information disclosure
As described in III 2. (6) “Establishment of Independent Committee”, the practical decisions on
the operations of the Plan including its implementation, is executed by the Independent Committee
which only consists of outside directors who are independent.
Furthermore, the overview of the decision is to be disclosed to our shareholders, ensuring theframework for a transparent operation of the Plan to serve the corporate value and the common
interest of our shareholders.

4) Establishment of reasonable objective requirements
The Plan, as described in (d) under III 2. (2) “Procedure for the implementation of the Plan” andin III 2. (3) “Requirements for the allotment of share options without contribution”, the Plan shallnot be implemented if it does not meet the reasonable objective requirements, ensuring theframework to prevent the arbitrary implementation by the Board of Directors.

5) Hearing of opinions from third party experts
As described in (c) 2) under III 2. (2) “Procedure for the implementation of the Plan”, when an
Acquirer emerges, the Independent Committee may receive advice from an independent third party(includes financial advisors, certified public accountants, lawyers, consultants, and other experts)
at the expense of JAPEX. This creates a mechanism for securing fairness and objectivity of thedecisions given by the Independent Committee to a stronger degree.

6) That the takeover defense measure is not a dead-hand or slow-hand type measure
As described in III 2. (7) “Effective period, abolition, and modification of the Plan”, alarge-scale purchaser of our shares can appoint directors of their own designation in the general
meeting of shareholders and abolish this Plan through the Board of Directors constituted of suchdirectors.
Therefore, the Plan is not a dead-hand type takeover defense measure (a takeover defense
measure of which implementation cannot be deterred even with the replacement of over half of theconstituting members of the Board of Directors). Furthermore, the assumption of directors at

21

JAPEX does not employ the classified term system, which does not make the Plan a slow-hand typetakeover defense measure (a takeover measure of which implementation takes time to deter due tothe impossibility of an all-together replacement of the constituting members of the Board of
Directors).
Meanwhile, the Articles of Incorporation stipulates that the directors’ term of office is to expire
at the close of the ordinary general meeting of shareholders for the last fiscal year which ends
within two years after their assumption of office. The term of office for the directors as of today is
up to the close of the ordinary general meeting of shareholders for the 39th fiscal year (to be held in
June 2009).

END

22

Separate Document 1
Flow of Procedures in the Plan
Non-conformity to the procedure of the Plan

Emergence of Acquirer

Submission of Acquisition Statement(if necessary) Submission of additional information
Reviewing Period

Review by Board of Directors(60 days, in principle)

Review by Independent Committee

Review by Independent
Committee(60 days, in principle)

Invocation,in principle
Advisory of
non-implementation*When other

Advisory of
implementation*When reserved for the approval of ageneral meeting of shareholders
Board of Directors’
Resolution of
non-implementation

Board of Directors’
Delegated Resolution of
non-implementation

General Meeting of Shareholders
for Decision Hearing

Veto

Non-implementation

Pass

Implementation(Note 1) In case of *, where it is practically difficult to hold the general meeting of shareholders, theBoard of Directors shall make the resolution regarding the implementation or non-implementation of
the allotment of share options without contribution, in the light of the intention of the advisory issued
from the Independent Committee.
(Note 2) This flowchart was created for easy understanding of the flow of procedures in the Plan.
Please refer to the body of the press release for details of the Plan.

Separate Document 2
Overview of the Independent Committee Provision
・The Independent Committee shall be established by the resolution of the Board of Directors.
・The members of the Independent Committee shall be three or more, whom are appointed by the
Board of Directors from persons who are independent of management involved in business
operations of JAPEX and are any of the following: (i) Outside director (includes persons planned tobe elected), (ii) Outside auditor (includes persons planned to be elected), or (iii) outside expert.
However, an expert must be a proven business administrator, post-bureaucrat, expert in investmentbanking, lawyer, certified public accountant, or a researcher with his or her main field of research as
corporate law or such, or must be pursuant to the aforementioned. Furthermore, the members of the
Independent Committee must enter into an agreement with JAPEX that includes provisions for the
duty of care of a good manager, otherwise designated by the Board of Director.
・The term of office for Independent Committee members shall be to the close of the ordinary general
meeting of shareholders for the last fiscal year which ends within three years after this ordinary
general meeting of shareholders, provided that there is no resolution by the Board of Directors
otherwise determining the term. Furthermore, in case a Independent Committee member who was aoutsider director or outside auditor is no longer an outsider director or outside auditor (excludes
cases where he or she is re-elected as one), the term of office as an Independent Committee member
shall terminate at the same time.
・The Independent Committee shall decide on the matters described in the following, and issueadvisory to the Board of Directors with the content of the decision and its reasoning. The Board of
Directors shall pay utmost respect to the advisory of the Independent Committee described andmake decision as a body under the Companies Act. (However, for the implementation of theallotment of share options without contribution set forth in 1), if a resolution is made at the general
meeting of shareholders that otherwise decided, then the Independent Committee shall abide bysuch resolution.) Furthermore, each member of the Independent Committee and each director of
JAPEX is required to make such decisions from the exclusive perspective of whether it willcontribute to the corporate value of JAPEX and the common interest of our shareholders, and shallnot consider the personal benefits of the member or the management.
1) Implementation or non-implementation of the allotment of share options without contribution2) Pause of allotment of share options without contribution or Acquisition of share options without
contribution3) Other matters to be decided by the Board of Directors, which the Board of Directors seek theadvice of the Independent Committee
・In addition to the above, the Independent Committee shall perform the matters listed below:
1) Judgment of whether the Acquisition falls under the object of the Plan

2) Decision on the information to be submitted to the Independent Committee by the Acquirer andthe Board of Directors and its reply deadline
3) Investigation and review on the content of the Acquisition by the Acquirer
4) Direct or indirect negotiation and/or consultation with the Acquirer5) Request of submission of an alternative plan / Review of alternative plan
6) Extension of the Reviewing Period of the Independent Committee
7) Information disclosure concerning the overview of the advisory to the Board of Directors
8) Approval of the revision of or modifications to the Plan
9) Other matters prescribed in the Plan as executable by the Independent Committee10) Matters otherwise prescribed by the Board of Directors as executable by the Independent
Committee
・When the Independent Committee has decided that the description on the relevant acquisition
statement falls short as Required Information, JAPEX may request additional information from theAcquirers. Furthermore, when the Acquirer has submitted the acquisition statement and the
additional information requested, the Independent Committee may also request as appropriate fromthe Board of Directors the submission of opinion on the content of the Acquisition by the Acquirer
and its supporting materials, (if available) alternative plans, and other information deemednecessary, within the prescribed period.
・The Independent Committee may disclose information received from the Acquirer to the Board of
Directors.
・The Independent Committee shall directly or indirectly hold consultations and/or negotiations with
the Acquirer and/or present the alternative plan of the Board of Directors to the shareholders, when
it is necessary to improve the content of the Acquisition by the Acquirer from the perspective ofensuring and improving our corporate value and the common interest of our shareholders.
・The Independent Committee may request the attendance of directors, auditors, executive officers,
employees, and other persons the Independent Committee deem necessary for the collection ofnecessary information, and may request explanation regarding matters requested by the
Independent Committee.
・The Independent Committee may seek advice from an independent third party (includes financial
advisors, certified public accountants, lawyers, consultants, and other experts) at the expense of thecompany.
・Each member of the Independent Committee may convene the Independent Committee when an
Acquisition has taken place or at any other time.
・The resolution of the Independent Committee shall, in principle, be made upon the full attendance(includes attendance by TV conferences and telephone conferences; same applies hereinafter) of themembers of the Independent Committee and with a majority vote. However, under unavoidable
circumstances, a majority of the voting rights of a majority attendance shall produce a resolution.

Separate Document 3
Brief History of Independent Committee Members

The initial members of the Independent Committee as of the introduction of the Plan are planned to be
the following three persons:Kazuo Kawakami(Born April 26, 1933)
CAREER
April 1958

Appointed prosecutor

January 1983

Head of Special Investigation Force, The Tokyo District Public
Prosecutors Office

September 1989

Chief of Trial Proceedings, Supreme Public Prosecutors’ Office

May 1991

Recorded attorney at the Daiichi Tokyo Bar Association (up to thepresent date)June 2007

Director at JAPEX (up to the present date)*Mr. Kazuo Kawakami is JAPEX’s outside director as stipulated in Number 15 of Article 2 under theCompanies Act.
*No particular relationship is existent between Mr. Kawakami and JAPEX.

Masahiko Kadotani(Born February 14, 1936)

CAREER
April 1958

Joined the Ministry of Finance

June 1990

Director-General of the National Tax Agency

December 1994

President of the Japan Finance Corporation for Small Business

April 2002

Advisor at Mizuho Corporate Bank, Ltd.

June 2003

Auditor at JAPEX (up to the present date)June 2004

Auditor at Mizuho Financial Group, Inc. (up to the present date)*Mr. Masahiko Kadotani is JAPEX’s outside auditor as stipulated in Number 16 of Article 2 under theCompanies Act.
*No particular relationship is existent between Mr. Kadotani and JAPEX.

Keizo Sakata(Born January 4, 1940)

CAREER
April 1966

Appointed prosecutor

April 1969

Full-time instructor at College of Law, Nihon University

June 1969

Recorded attorney at Tokyo Bar Association (up to the present date)July 1974

Assistant professor at College of Law, Nihon University

April 1980

Professor at College of Law, Nihon University (up to the present date)July 2006

Dean of College of Law at Nihon University (up to the present date)July 2006

Trustee of Nihon University (up to the present date)*No particular relationship is existent between Mr. Sakata and JAPEX.

Separate Document 4
Overview of Shareholding of JAPEX Shares (as of March 31, 2008)

1. Total number of authorized shares:

120,000,000

2. Total number of shares issued:

57,154,776 (including treasury shares: 1,407)

3. Number of shareholders:

19,5714. Major shareholders (Top 10)
Rank

Stock ownership(shares)Name of shareholder

Ratio of voting right1

Ministry of Economy, Trade and Industry

19,432,724

34.00%

2

State Street Bank and Trust Company

2,855,359

5.00%

3

Teikoku Oil Co., Ltd.

2,847,612

4.98%

4

JFE Engineering Corporation

1,848,012

3.23%

5

The Master Trust Bank of Japan, Ltd. (Trust)

1,499,700

2.62%

6

Morgan Stanley & Co. Incorporated

1,031,750

1.81%

7

Mizuho Corporate Bank, Ltd.

920,152

1.61%

8

Nippon Petroleum Refining Co., Ltd.

872,456

1.53%

9Japan Trustee Services Bank, Ltd. (Trust)

772,500

1.35%

10

Nippon Oil Corporation

763,400

1.34%(Note 1) Ratio of voting right is rounded to the nearest second decimal place.
(Note 2) We have received a copy of modification report of a large-scale holding report fromSoutheastern Asset Management Inc. as of August 3, 2007 and have received a report on the holdingof the share as described below, as of the same date by Southeastern Asset Management Inc., but since
JAPEX was unable to confirm the actually owned number of shares as of March 31, 2008, it was notincluded in the major shareholders (Top 10).
Name
Southeastern Asset Management Inc.

Number of owned shares
Ratio of share holding(share)5,872,800
10.28%