RULES OF EMPLOYEES SHAREHOLDING ASSOCIATION
OF INTERNET INITIATIVE JAPAN GROUP
  Article 1.
    
    This association shall be called the Employees
Shareholding Association of Internet Initiative Japan
Group (hereinafter called the Association).
 2
    
    The Association shall be organized as a kumiai (partnership) under
Article 667, Paragraph 1 of the Civil Code of Japan. Investments in the Association
shall consist of contributions under Article 5, Paragraph 2 and 3 (including Article
12), incentives under Article 7, and dividends and interim dividends under Article
11.
  Article 2.
    
    The objectives of the Association are to facilitate the acquisition of the Shares of Internet Initiative Japan
Inc. (hereinafter called the Shares) by contributions mentioned in the preceding Article, Paragraph 2 by the
employees of Internet Initiative Japan Inc., IIJ Technology Inc., IIJ Financial Systems Inc., Net Care, Inc.,
Net Chart Japan Inc. and hi-ho Inc. (hereinafter called collectively the Company) and to assist their asset
formation.
  Article 3.
    
    The membership shall be limited to the employees of the Company.
  Article 4.
    
    Employees of the Company desiring to become members may enter the Association by applying to the Chairman
between July 1 and July 7or between January 1 and January 7 of each year, and shall become members from July or
January of that year, respectively.
  Article 5.
    
    One unit of contribution shall be JPY 1,000.
 2
    
    As investments in the Association, the members shall make contributions
of a fixed number of units, each month within no more than 10% of their monthly
salary, and at the time of the bonuses, a sum of units equal to 3 times the monthly
contributions.3
    
    In the following events, the members may make special contributions, as
investments in the Association, in addition to those under the preceding Paragraph:
 (1)
    
    In the event the members terminate their membership;(2)
    
    In the event the members make special contributions in addition to
regular contributions;(3)
    
    Purchase of Shares in a capital increase by the issuance at the
market price or by the sale of the shares;(4)
    
    Subscription of new Shares in a capital increase by the allotment
of Shares to the shareholders;(5)
    
    Subscription of new Shares in a capital increase by the allotment
of Shares to the third party.
 4
    
    The special contributions under the preceding Paragraph shall, in
principle, be limited to the amount necessary to purchase one unit of the Shares per
each member who make special contributions. The special contributions under the
preceding Paragraph, Items (2) and (3) shall be limited to the amount of JPY
1,000,000 per each member. However, in case of that one unit price of the Share
exceeds more than JPY 1,000,000, it is allowed for the members to make a
contributions up to the amount necessary to purchase one unit of the Shares.
  Article 6.
    
    A member who cannot continue contributions for
unavoidable reasons can suspend contributions by
filing an application with the Chairman and obtaining
the approval from him.
 2
    
    In case the event which causes the suspension has finished, the member
may file a it with the Chairman.3
    
    Any member who desires to change the number of units of contribution
shall file an application to request it with the Chairman by 7 each month, and shall
make a contribution in the number of units changed from month.
  Article 7.
    
    Based on the Agreement between the Association and the Company,
the members shall be contributed as investments to the
Association.
 (1)
    
    The amount of the contribution mentioned in Article 5, Paragraph 2
multiplied by the ration
mentioned in the subsidiary rules.(2)
    
    The amount of the commission for carrying out office work
(including the consumption tax).




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2
    
    Notwithstanding the preceding Paragraph, incentives shall not be paid for
the special contributions mentioned in Article 5, Paragraph 3 (including Article
12).
  Article 8.
    
    The Association shall purchase the Shares at the securities
market at the market price (including entrustment charges and
consumption tax), in principle, on the 25th of each
month for regular contributions, and two days after the date of
the bonuses for special contributions, for the aggregated
amount of the contributions mentioned in Article 5, Paragraph
2, and Article 5, Paragraph 3, Item (3) and (4), and the
Incentives mentioned in the preceding Article, Paragraph 1,
Item (1) (hereinafter called the Shares Purchase Funds).
 2
    
    The part of the Shares Purchase Funds which is less than the purchase
price of the unit of the shares (hereinafter called the Remaining Fund) shall be
carried to the time of next payment.
  Article 9.
    
    The members shall entrust the management of the
Shares purchased pursuant to the preceding Article
and Article 11, the Shares obtained under Article 12,
and the Shares incorporated into Shares held by the
Association under Article 18, with the Chairman and
the Chairman shall accept such entrustment.
  Article 10.
    
    In case the numbers of the entrusted Shares
(hereinafter called the Entrusted Shares) under the
preceding Article will be increased by the split of
the shares, the Shares increased by the split shall
automatically belong to the entrusted assets.
  Article 11.
    
    The members shall contribute dividends for the
Entrusted Shares to this Association as investments
and shall use such contributions for the purchase of
the Shares according to Article 8.
  Article 12.
    
    In case of the allotment of pre-emptive right to the
Entrusted Shares, the Association shall, if the
members so desire, receive such allotment according
to the ratio of the numbers of Shares recorded on the
date of the allotment. The payment for the Shares be
as follows:
 (1)
    
    The member shall make a special contribution to the Association
equal to the amount of the payment for the Shares.(2)
    
    The Chairman shall pay for the New Shares by the aggregated amount
of the special contributions mentioned in the preceding Item.
  Article 13.
    
    The Association shall record the numbers of the Entrusted
Shares calculated by the following calculation method in
the Registry of Shares as the holdings of each member.
 (1)
    
    For the Shares purchased pursuant to Article 8, the number of the
Shares corresponding to the Share Purchase Funds (including carry-over from
previous month) of each member.(2)
    
    For the Shares increased pursuant to Article 10, the number of the
Shares corresponding to the recorded holding ratio of each member of the standard
date.(3)
    
    For the Shares purchased pursuant to Article 11, the number of the
Shares corresponding to the amount equivalent to tax-deducted dividends
(including remaining cash) which each member grants.(4)
    
    For the Shares obtained pursuant to Article 12, the number of
Shares corresponding to the special contributions of each year.
 2
    
    The Remaining Fund provided in Article 8, Paragraph 2 shall be recorded
at the registry of the Shares as the residual belonging to each member in proportion
to the amount of the Share Purchase Fund of each member prior to the purchase of the
Shares.
  Article 14.
    
    The members shall not assign nor establish any security
on the rights of the members recorded Shares. However,
in case the members apply to the designated loan
facilities (hereinafter called the Designated Loan)
for the members that the Association make an agreement
with financial institutions, with a
permission of the Chairman, it is allowed for him to assign or establish securities on the rights of his recorded Shares.




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Article 15.
    
    The Association, in accordance with Article 13, shall keep the Registry of Shares on the Shares and rights of the members
recorded Shares.
  Article 16.
    
    The Association shall notify each member of the details of the balance twice every year.
 2
    
    The member may inquire of his balance at any time he deems that it is necessary.
  Article 17.
    
    The member may withdraw a part of his holdings by a unit
of the Shares. Provided that the member has loan
obligations from the Designated Loan in accordance with
Article 14, it is not allowed for him to withdraw a part
of his holdings without permission of the Chairman and
the creditor of the loan,
 2
    
    The member shall take necessary action to register the Shares when he
withdraws it. Provided in case that the member moves to foreign countries, or makes
payment to loan obligation under the preceding Paragraph of this Article, it is
allowed for him to sell the Shares at the security market at the market price
through the Association every month on the date of the purchase of the Shares.3
    
    The numbers of the Shares withdrawn under Paragraph 1 shall be deducted
from the number of Shares of the members in the Registry.
  Article 18.
    
    The members may terminate their membership at any time by
reporting to the Chairman. Provided that, as a general
principle, once an employee has terminated his membership,
except the case that he has rational reasons, such employee
shall not be entitled to enroll again as a member.
 2
    
    If a member is no longer the employee of the Company, his membership
shall automatically be terminated. However, in case that the employee transfers his
domicile from an IIJ Group company to other IIJ Group company, based on the
agreement between him and both IIJ Group companies, he is entitled to keep his
membership by his request.3
    
    Besides the Paragraph (1) and (2) of this Article, provided that the
creditor of designated loan makes application to retire the Association on behalf of
the member, the Chairman shall approve the application.
  Article 19.
    
    When a member retires and withdraws from the
Association, the Shares corresponding to the
recorded holdings on the date of withdrawal
(hereinafter called the Withdrawal Day). In
case that the member has loan obligation on the
Withdrawal Day, the member shall be paid the
amount which the remaining loan obligation is
deducted.
 2
    
    Besides preceding Paragraph, the member the Remaining Fund mentioned in
preceding Paragraph, shall be returned to the member, provided, however, that member
may choose one of the following option for the portion less than one unit of the
Shares:
 (1)
    
    Sell the portion at the market price and receive the amount equal
to the market price minus the commission fee (including consumption tax) and
share transfer tax.(2)
    
    Purchase several numbers of Shares by special contribution and
receive a unit of the Shares.
 3
    
    The member shall take necessary action to register the Shares in unit
when he retires the Association and withdraws it. Provided that in case of
inheritance or moving to foreign countries, it is allowed to sell the Shares in unit
at the security market at the market price through the Association.4
    
    The sale of the collected Shares under the Paragraph 2, Item (1) and
Paragraph 3 of this Article shall be done at one time on the purchase date every
month.5
    
    In case a part of the dividends shall not be paid on the Withdrawal Day,
it will be disposed of as follow:
 (1)
    
    Dividends shall be paid in cash immediately after the Association
receives such payment.(2)
    
    The Shares obtained by Article 8 Paragraph 2 and the Shares
increased by Article 10 shall be immediately returned to the members according to
Paragraph 1 and Paragraph 2, Item (1) of this Article after the Association
receives the New Shares.
 6
    
    The member who has obtained the allotment of the pre-emptive rights
according to Article 12 shall




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make a special contribution to this Association prior to the date of the special
contribution and prior to the withdrawal of this Association. In this case, this
Association shall return the share certificates to the member according to Paragraph 1
and Paragraph 2, Item (1) of this Article immediately after the Association receives
them.
 7
    
    A member who withdraws from the Association may not request for the
payment of the fractions of Shares accrued by the calculations based on Article 13
on the Withdrawal Day.
  Article 20.
    
    The voting right of the Entrusted Shares shall be
exercised by the Chairman, provided, however, that each
member may give the Chairman individual instructions for
each general meeting of shareholders to exercise the
voting rights corresponding to his holding ratio of the
Shares.
 2
    
    The Chairman shall announce the contents of the notice of convocation for
the general meeting of shareholders.
  Article 21.
    
    As the officers of the Association, the Association shall have several of directors and auditors.
 2
    
    The directors and auditors shall be elected from the members as follows:
 (1)
    
    The Board of Directors shall recommend the nominees of the
directors for the next term at least one month prior to the expiration of the
term and the Chairman shall announce such nominees in writing to the members.(2)
    
    The members who oppose the nominees under the preceding Item shall
notify such objection in writing to the Chairman.(3)
    
    If the number of the objections to the preceding Item is less than
one half of the members after two weeks of the announcement of the notice by Item
(1), the nominees will be deemed to be approved and assume the offices
contemporaneously with the expiration of the terms of the current officers.(4)
    
    If the number of objections under Item (2) is more than one half of
the members, the Board of Directors shall recommend new nominees and shall take
the proceedings mentioned in Item (1) to Item (3).
 3
    
    The terms of office of the officers shall expire at the end of July of
the following year of the appointment. Provided, however, that an officer whose term
has expired shall continue to perform his duty after termination of his term until
his successor is elected, in case the proceedings in the preceding Paragraph, Item
(4) has not been finished or new officers have not been elected for some reasons.
The officers may be reelected.4
    
    The Chairman shall be elected by directors.5
    
    The Chairman shall represent the Association and conduct the
Associations business. In the event of any accident to the Chairman, the directors
shall replace him in the pre-determined order.
  Article 22.
    
    The directors shall constitute the Board of Directors and operate the business of the Association.
 2
    
    The Chairman shall convene a Board of Directors Meeting whenever necessary.3
    
    The Board of Directors shall resolve the following matters:
 (1)
    
    Matters the Board of Directors should decide according to these
Rules and subsidiary rules.(2)
    
    Any other matters that the Chairman deems that are important for
the operation of the Association.
 4
    
    The Board of Directors shall make decisions by a majority of directors present at the meeting.
  Article 23.
    
    Auditors shall audit the operation of the directors of the Association.
 2
    
    Auditors may at any time request the Chairman to prepare a report on the
operation of the Association.3
    
    Auditors shall be allowed to state their opinion at the Board of Directors Meeting.
  Article 24.
    
    The Association shall entrust Nomura Securities Co., with the operation of its business.
  Article 25.
    
    The Association shall pay for its operation costs from the contributions and incentives.




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Article 26.
    
    At the end of March of each year, the Board of Directors shall make a business report relating to the previous
year and shall notify it to the members after the approval of the Auditors.
  Article 27.
    
    The location of the Association shall be at 1-105, Kanda Jinbo-cho, Chiyoda-ku, Tokyo.
  Article 28.
    
    These Rules shall be amended as follows:
 (1)
    
    The Board of Directors shall make a draft of the amendment and
notify it to the members in writing.(2)
    
    The members who are opposed to the above amendment shall make an
objection to the Chairman in writing.(3)
    
    The amendment shall be effective, if the objections to the
amendment are less than one third of the members after two weeks of the date of
public notice which has been made pursuant to Item (1).(4)
    
    If the objection to the amendment shall be more than one third of
the members, the Board of Directors may change the proposal of the amendment and
propose it again.
 2
    
    The term of office of a company auditor elected to fill a vacancy of
his/her predecessor who retired or resigned prior to the expiration of term shall
expire at such time as the term of office of his/her predecessor would otherwise
expire.
  Article 29.
    
    The details of the Rules for the operation of the Association
shall be provided in subsidiary rules stipulated by the Board
of Directors.




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SUPPLEMENT
 Article 1
  Article 2
   1.
    
    Subscription of new shares in a capital increase by the allotment of shares to
shareholders;2.
    
    Subscription of shares in a capital increase of capital by allotments to third parties or
by purchase of shares at the time of the change of shareholders;3.
    
    Subscription of shares in response to the offering for public subscription.
 Article 3
  Article 4
  Article 5
  Article 6
  Article 7
  Articles 8
  Article 9