NOTICE OF THE 46 th ORDINARY GENERAL MEETING OF SHAREHOLDERS

Transcription

1 This document is a summarized translation of the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. The Company assumes no responsibility for this translation or for direct, indirect or any other forms of damages arising from the translation. (Securities code: 9952) June 6, 2007 To Shareholders with Voting Rights Yutaka Toriba President and Representative Director DOUTOR COFFEE CO., LTD Jinnan, Shibuya-ku, Tokyo, Japan NOTICE OF THE 46 th ORDINARY GENERAL MEETING OF SHAREHOLDERS You are cordially invited to attend the 46 th Ordinary General Meeting of Shareholders. The meeting will be held as described below. If you are unable to attend the meeting, you can exercise your voting rights by paper ballot or by electromagnetic means such as the Internet. Please review the Reference Documents for the General Meeting of Shareholders as described later and exercise your voting rights before 6:00 p.m., Wednesday, June 27, 2007, the day before the General Meeting. 1. Date and Time 10:00 a.m., Thursday June 28, Place Ballroom, basement level 2, Cerulean Tower Tokyu Hotel 26-1, Sakuragaoka-cho, Shibuya-ku, Tokyo 3. Agenda of the Meeting: Matters to be reported: 1. Consolidated Financial Statements for the 46 th Fiscal Term (from April 1, 2006 to March 31, 2007) and the results of audits of the Consolidated Financial Statements by the Accounting Auditor and the Board of Corporate Auditors 2. Business Report and Non-consolidated Financial Statements for the 46 th Fiscal Term (from April 1, 2006 to March 31, 2007) Proposals to be resolved: Proposal No. 1: Appropriation of Surplus Proposal No. 2: Incorporation of a Wholly Owning Parent Company through Share Transfer Proposal No. 3: Payment of Bonuses to Directors and Corporate Auditor - 1 -

2 Proposal No. 4: Proposal No. 5: Payment of Final Retirement Bonuses to Directors and Corporate Auditors due to the Abolishment of the Retirement Bonus System, and the Award of Retirement Bonuses to a Retiring Director and a Retiring Corporate Auditor Continuance of the Policy Regarding Large-scale Purchases of the Company s Shares (Takeover Defense Measures) 4. Guidance on the exercise of voting rights (1) Voting by mail Please indicate your approval or disapproval in the enclosed ballot form, and return the ballot form to the Company. The ballot form must be received by the exercise date of Wednesday, June 27, Ballot forms without indication of approval or disapproval shall be counted as votes of approval. (2) Voting via the Internet Please refer to the guidance 5. Voting via the Internet below. (3) Electronic proxy voting platform In addition to the above voting via the Internet mentioned in (2) above, registered shareholders such as trust banks acting as administrators (including standing proxies) can use the voting platform in order to exercise their voting rights by electromagnetic means at the general meeting of shareholders of the Company, provided that each of them has applied in advance for the use of the Electronic Proxy Voting Platform operated by ICJ, Inc., the joint venture company formed by Tokyo Stock Exchange, Inc. and other entities. 5. Voting via the Internet (1) Matters to note when exercising voting rights via the Internet When exercising voting rights via the Internet, please review and understand the following points. 1) Exercise of voting rights via the Internet is only possible by accessing the website designated by the Company for the exercise of voting rights (please see (2) Specific procedures for the exercise of voting procedures via the Internet on page 3). Please note that the proxy code and password described on your ballot form enclosed in this Notice of General Shareholders Meeting are necessary when exercising voting rights via the Internet. 2) The proxy codes and passwords assigned at this time are only valid for this Ordinary Shareholders Meeting. New proxy codes and passwords will be assigned on the occasion of the next Ordinary Shareholders Meeting. 3) If you exercise your voting rights by two different methods, that is, both via the Internet and by mailing in your ballot form, only your vote via the Internet shall be counted as valid. 4) If you exercise your voting rights via the Internet more than once, only your final vote will be counted be valid

3 5) Internet expenses (e.g., service provider fees and communication charges) are the sole responsibility of shareholders. (2) Specific procedures for the exercise of voting procedures via the Internet 1) Please access or These URLs are not accessible between 3:00 a.m. and 5:00 a.m. during the exercise period. 2) Please enter the proxy code and password and click Log-in. The proxy code and password are shown on the upper-right part of the ballot form enclosed in this Notice. 3) Please follow the on-screen instructions to exercise your voting rights. (3) System requirements The following system environment is required. 1) Personal computers Windows PCs, Macintosh PCs (Not available for PDA or game machines) 2) Internet browser Microsoft Internet Explorer 5.5 or greater, or Netscape Communicator 4.7 or greater 3) Internet environment Agreement with a provider, etc. 4) Monitor 1024 x 768 or higher resolution monitor is recommendable. * Microsoft and Windows are registered trademarks or trademarks of Microsoft Corporation in the U.S., other countries, or both. * Macintosh is a trademark of Apple Inc. * Netscape is a registered trademark of Netscape Communications Corporation in the U.S., other countries, or both. Netscape Communicator is also a trademark, and in some countries a registered trademark, of Netscape Communications Corporation. (4) Security For secure use of the system, encryption technology (SSL128bit) is used to protect the information exercised from falsification or tapping. The proxy code and password shown on your ballot form are important and necessary to authenticate your identity as a shareholder. Please keep them fully confidential. The Company will never ask shareholders for their passwords

4 (5) Inquiries 1) For inquiries concerning the use of a personal computer, etc. with regard to electronic voting, please contact: Internet Help Dial, Stock Transfer Agency Department, Mizuho Trust & Banking Co. Ltd. Telephone: (Toll Free) (Reception hours: 9:00-21:00 except Saturdays, Sundays, and public holidays) 2) For inquiries other than those mentioned in 1) above, such as inquiries on changes of address, etc., please contact: Stock Transfer Agency Department, Mizuho Trust & Banking Co. Ltd. Telephone: (Toll Free) (Reception hours: 9:00-17:00 except Saturdays, Sundays, and public holidays) For those attending, please present the enclosed ballot form at the reception desk upon your arrival at the meeting. Any necessary alterations to the descriptions of the Reference Documents for the General Meeting of the Shareholders, Business Report, Non-consolidated Financial Statements, or Consolidated Financial Statements will be posted on our website (

5 BUSINESS REPORT (from April 1, 2006 to March 31, 2007) 1. Overview of the Consolidated Group (1) Assets and business results (Consolidated basis) Fiscal term 43 rd fiscal term 44 th fiscal term 45 th (Current) fiscal term 46 th fiscal term ended March ended March ended March ended March Item 31, , , , 2007 Net sales (millions of yen) 61,713 62,703 66,312 68,596 Ordinary income (millions of yen) 4,904 5,068 5,392 4,694 Net income (millions of yen) 723 2,743 2,769 2,185 Net income per share (yen) Total assets (millions of yen) 50,580 53,930 56,707 53,429 Net assets (millions of yen) 29,697 32,003 44,430 42,891 Net assets per share (yen) 1, , , , Note: Net income for the fiscal term ended March 31, 2004 decreased because loss on revaluation of land and losses due to the closure of unprofitable shops were recorded in extraordinary losses. (2) Status of main parent company and subsidiaries 1) Relationship with parent company Not applicable. 2) Status of main subsidiaries Company name Capital stock (millions of yen) Percentage of voting rights (%) Principal business Magna Inc Sales of kitchen equipment Madeleine Confectionery Co., Ltd Production and sales of confectioneries Doutor Coffee Co. Hawaii, Inc. 1,604 (US$12,105 thousand) Management and administration of coffee plantations Jamaica Coffee Co., Ltd Sales of coffee beans - 5 -

6 (3) Principal businesses 1) Roasting and sales of coffee 2) Procurement, sales, and imports/exports in food products 3) Restaurant and coffee shop management 4) Development of and consulting to restaurant and coffee shop franchises (4) Principal offices and factories 1) Headquarters Jinnan, Shibuya-ku, Tokyo 2) Factories Kanto Plant (Funabashi-shi, Chiba) Kansai Plant (Kato-shi, Hyogo) 3) Head offices, etc. Sales Head Office (Shibuya-ku, Tokyo) Hokkaido Area Head Office (Chuo-ku, Sapporo-shi) Tohoku Area Head Office (Aoba-ku, Sendai-shi) Kanto Area Head Office (Shibuya-ku, Tokyo) Tokai and Hokuriku Area Head Office (Naka-ku, Nagoya-shi) Kinki Area Head Office (Chuo-ku, Osaka-shi) Chugoku and Shikoku Area Head Office (Naka-ku, Hiroshima-shi) Kyushu Area Head Office (Chuo-ku, Fukuoka-shi) 4) Directly operated shops 303 shops (5) Status of employees (as of March 31, 2007) 1) Status of employees of the consolidated Group Number of employees Change from the previous consolidated fiscal year-end 992 (2,628) +61 (+154) Note: The above "Number of employees" is the number of employees on duty, and figures in the parenthesis indicate the average number of temporarily hired employees in the year under review calculated based on eight hours work per day. 2. Status of the Company (1) Shares 1) Total number of shares authorized to be issued: 50,000,000 shares (Number of shares in one voting: 100 shares) 2) Total number of shares issued: 26,929,485 shares 3) Number of shareholders: 21,

7 4) Principal shareholders Name Investment in the Company Number of shares held (thousands of shares) Percentage of total shares issued (%) Hiromichi Toriba 5, Harbinger Capital Partners Master Fund I Limited 2, Japan Trustee Services Bank, Ltd. (trust account) 1, City Group Principal Investment Japan Corporation Ltd Bank of New York GCM Client Accounts EISG The Master Trust Bank of Japan, Ltd. (trust account) The Bank of New York Europe Limited Morgan Stanley and Company International Limited Japan Tobacco Inc The Bank of New York Jasdique Treaty Account Note: The Company holds 1,624,410 (6.42 %) shares of treasury stock as of March 31, These shares are excluded, however, from the major shareholders listed above. (2) Stock Acquisition Rights 1) Status of Stock Acquisition Rights held by Directors and Corporate Auditors of the Company as of the end of the fiscal term under review First Second Third Date of resolution at the General Meeting of Shareholders June 27, 2002 June 27, 2003 June 29, 2004 Classification Directors Directors Directors Number of persons holding the Stock Acquisition Rights Number of Stock Acquisition Rights Number of Shares to be issued or transferred of the Stock Acquisition Rights 19,000 shares 7,000 shares 8,500 shares - 7 -

8 Class of Shares to be issued or transferred of the Stock Acquisition Rights Issue price of Stock Acquisition Rights Amount per share to be paid at the time of exercise of the Stock Acquisition Rights Exercisable period First Second Third Common stock Common stock Common stock Without charge Without charge Without charge 2,999 yen 1,710 yen 1,996 yen From July 1, 2004 to June 30, 2007 From July 1, 2005 to June 30, 2008 From July 1, 2006 to June 30, ) Status of Stock Acquisition Rights held by employees of the Company and Directors, Corporate Auditors and employees of the subsidiaries as of the end of the fiscal term under review First Second Third Date of resolution at the General Meeting of Shareholders June 27, 2002 June 27, 2003 June 29, 2004 Classification Number of persons holding the Stock Acquisition Rights Number of Stock Acquisition Rights Number of Shares to be issued or transferred upon exercise of Stock Acquisition Rights Class of Shares to be issued or transferred upon exercise of Stock Acquisition Rights Issue price of Stock Acquisition Rights Amount per share to be paid when the Stock Acquisition Rights are exercised Exercisable period Employees of the Company, and Directors and Employees of the Subsidiaries Employees of the Company, and Directors and Employees of the Subsidiaries Employees of the Company, and Directors and Employees of the Subsidiaries , , ,400 shares 92,500 shares 203,800 shares Common stock Common stock Common stock Without charge Without charge Without charge 2,999 yen 1,710 yen 1,996 yen From July 1, 2004 to June 30, 2007 From July 1, 2005 to June 30, 2008 From July 1, 2006 to June 30,

9 (3) Directors and Corporate Auditors 1) Matters related to Directors and Corporate Auditors Position President and Representative Director Executive Vice President and Director Managing Director Name Yutaka Toriba Masanori Hoshino Responsibilities or representation of other companies President and Representative Director, Magna Inc. President and Representative Director, Madeleine Confectionery Co., Ltd. President and Representative Director, Doutor Coffee Co. Hawaii, Inc. President and Representative Director, Jamaica Coffee Co., Ltd. President and Representative Director, Bird Feather Co., Ltd. President and Representative Director, Bird feather Co. Hawaii, Inc. Division Manager, Retail Shops Development Division Toshihiko Division Manager, Design Management Division Kurokawa Director Rokuro Inamori Division Manager, Products Management Division Full-time Corporate Auditor Corporate Auditor Corporate Auditor Tetsuo Miyabayashi Hiroshi Zaizen Hiroshi Kajikawa Corporate Auditor Shigeru Takemoto Chairman and Representative Director, Shin-Nihon Eco System Co., Ltd. Notes: 1. Mr. Hiroshi Zaizen, Mr. Hiroshi Kajikawa, and Mr. Shigeru Takemoto, the Corporate Auditors, satisfy the qualifications for Outside Corporate Auditors provided in Article 2, Paragraph 16 of the Company Law. 2. Changes of Directors and Corporate Auditors during the fiscal year under review. (1) Newly elected as of June 29, 2006 Director, Mr. Rokuro Inamori (2) Retired as of June 29, 2006 Chairman and Representative Director, Mr. Hiromichi Toriba Managing Director, Mr. Takeshi Ohtsubo (3) Retired as of March 31, 2007 Managing Director, Mr. Susao Adachi - 9 -

10 2) Compensation paid to Directors and Corporate Auditors Directors 5 persons 128,655 thousand yen Corporate Auditors 4 persons 19,885 thousand yen (including 7,200 thousand yen to 3 Outside Corporate Auditors) Notes: 1. The total amount of compensations shown above includes the bonuses to Directors and Corporate Auditors, and the increase of the allowance for retirement bonuses to directors and corporate auditors for the fiscal year under review to be resolved at the 46th Ordinary General Meeting of Shareholders to be held on June 28, In addition, a total of 1,012,750 thousand yen was paid in the fiscal year under review for retirement bonuses to two retiring directors in accordance with the resolution of the 45th General Meeting of Shareholders held on June 29, ) Matters related to Outside Directors and Corporate Auditors Executive duties in other companies Executive duties Position Name concurrently performed in other companies Principal activities Assumed office on June 27, During the fiscal year under review, attended about 80 % of the meetings of the Corporate Board of Directors held and Corporate Hiroshi Auditor, JTEC, about 90 % of the meetings of Auditor Zaizen inc. the Board of Corporate Auditors held. Expressed necessary opinions based on his experience as a director of a listed company. Corporate Auditor Hiroshi Kajikawa Not applicable Assumed office on June 29, During the fiscal year under review, attended about 80 % of the meetings of the Board of Directors held and about 90 % of the meetings of the Board of Corporate Auditors held. Expressed necessary opinions based on his experience as a representative director of a beverage company. Liability limitation agreement Agreements pertaining to the liability incurred due to negligence of duties, as stipulated in Article 427, Paragraph 1 of the Company Law, have been concluded with the Outside Corporate Auditors in accordance with the Articles of Incorporation and with the total liability limits stipulated in the items of Article 425, Paragraph 1 of the same Law

11 Position Corporate Auditor Name Shigeru Takemoto Executive duties concurrently performed in other companies Chairman and Representative Director, Shin- Nihon Eco System Co., Ltd. Principal activities Assumed office on June 29, Attended about 80 % of the meetings of the Board of Directors held and all meetings of the Board of Corporate Auditors held. Expressed necessary opinions based on his experience in management and development of retail business. Liability limitation agreement Note: No conflict of interest exists between the Company and Mr. Shigeru Takemoto, the Corporate Auditor of the Company concurrently posted as a Chairman and Representative Director of Shin- Nihon Eco System Co., Ltd. (4) Status of Accounting Auditor 1) Name KPMG & AZSA CO. 2) Compensation paid to the Accounting Auditor Compensation for audit work as stipulated in Article 2, Paragraph 1 of the Certified Public Accountant Law 24 million yen Total amount of monetary and other assets paid by the Company and its subsidiaries to the Accounting Auditor 27 million yen 3) Non-audit work The Company paid compensation to the Accounting Auditor for professional advice provided at the request of the Company in relation to the appraisal work on internal control over financial reporting, which was work other than the work stipulated in Article 2, Paragraph 1 of the Certified Public Accountant Law. Note: The Audit contract between the Company and the Accounting Auditor does not separate the compensation concerning the Audit under the Corporate Law from the compensations, etc. concerning the Audit under the Securities and Exchange Law, and the both compensations cannot be separated practically. Accordingly, the amount of compensation pertaining to the fiscal year under review represents the total amount of these compensations. Note:Amounts and the number of shares in this business report are rounded off to the nearest units

12 CONSOLIDATED BALANCE SHEET (as of March 31, 2007) (thousands of yen) Assets Account item Amount Current assets 18,560,140 Cash and cash equivalents 4,262,457 Trade notes and accounts receivable 5,098,449 Securities 6,598,402 Inventories 1,011,224 Deferred income taxes 415,508 Other 1,219,477 Allowance for doubtful receivables (45,379) Fixed assets 34,869,077 Tangible fixed assets 15,964,010 Buildings and structures 10,358,471 Machinery and transportation equipment 1,665,625 Tools and fixtures 431,750 Land 2,975,053 Construction in progress 533,109 Intangible assets 1,629,257 Software 1,590,694 Other 38,562 Investments and other assets 17,275,809 Investment securities 5,657,136 Deferred income taxes 661,604 Security deposits 10,075,355 Other 881,712 Total assets 53,429,217 Note: Figures less than one thousand are rounded down to the nearest thousand

13 Account item Liabilities (thousands of yen) Amount Current liabilities 7,871,269 Trade notes and accounts payable 4,298,417 Short-term loans payable 612,000 Income taxes payable 389,240 Accrued bonuses 677,000 Accrued bonuses to directors and corporate auditors 33,000 Other 1,861,611 Long-term liabilities 2,666,123 Long-term loans payable 26,600 Liability for retirement benefits 664,322 Allowance for retirement benefits to directors and corporate auditors 93,510 Other 1,881,690 Total liabilities 10,537,392 Net assets Shareholders equity 42,749,863 Common stock 11,141,568 Capital surplus 11,775,851 Retained earnings 22,976,157 Treasury stock (3,143,714) Valuation and translation adjustments 141,961 Unrealized gains on available-for-sale securities 141,961 Total net assets 42,891,824 Total liabilities and net assets 53,429,217 Note: Figures less than one thousand are rounded down to the nearest thousand

14 CONSOLIDATED STATEMENT OF INCOME (from April 1, 2006 to March 31, 2007) (thousands of yen) Account item Amount Net sales 68,596,633 Cost of sales 34,486,399 Gross profit 34,110,234 Selling, general and administrative expenses 29,772,384 Operating income 4,337,849 Non-operating income Interest and dividends income 254,770 Commission income 10,611 Foreign exchange gain 5,213 Rent revenue of real estate 60,509 Other 58, ,323 Non-operating expenses Interest expenses 6,330 Stock issuance expenses 5,059 Expenses of real estate rent 15,761 Treasury stock purchase commission 5,497 Other ,899 Ordinary income 4,694,273 Extraordinary income Compensation for removal 30,571 30,571 Extraordinary losses Loss on disposal of fixed assets 1,500 Loss on retirement of fixed assets 152,359 Loss on closure of coffee shops 225,537 Impairment loss 153,650 Directors retirement benefit 233,710 Loss on insurance cancellation 33, ,077 Net Income before income taxes 3,924,767 Income taxes 1,409,400 Income taxes-deferred 329,749 Net income 2,185,618 Note: Figures less than one thousand are rounded down to the nearest thousand

15 Proposals and references Reference Documents for the General Meeting of Shareholders Proposal No. 1: Appropriation of Surplus The company proposes the appropriation of surplus as below: Based on the Company policy of paying a dividend commensurate with the increase of income, we pay attention to the profit of our shareholders, the forecast of the Company s income, and internal reserve to be used for the further reinforcement of corporate quality and future business development. Given the considerations above, we will positively dispose the profit with the aim of setting the dividend payout ratio at between 20 % and 30 %. (1) Type of dividend property Cash (2) Allocation of dividend property and the total amount of the dividends Payment of 25 yen per share of common stock (Total amount of dividends: 632,626,875 yen) (3) Effective date of dividends from surplus June 29, 2007 Proposal No. 2: Incorporation of a Wholly Owning Parent Company through Share Transfer DOUTOR COFFEE CO., LTD. and NIPPON RESTAURANT SYSTEM INC. signed the Share Transfer Plan on May 22, 2007 in accordance with the basic agreement on management integration concluded on April 26, Based on the Share Transfer Plan, DOUTOR COFFEE CO., LTD. and NIPPON RESTAURANT SYSTEM INC. will incorporate a wholly owning parent company (DOUTOR NICHIRES Holdings Co., Ltd.) through a joint share transfer. Accordingly, we request approval of the change of the Company into a wholly owned subsidiary through the Share Transfer Plan. NIPPON RESTAURANT SYSTEM INC. will submit the same proposal for resolution at its Extraordinary General Meeting of Shareholders to be held on June 28, Contents of the Share Transfer Plan The contents of the Share Transfer Plan are as follows: Joint Share Transfer Plan (Copy) NIPPON RESTAURANT SYSTEM INC. (hereinafter referred to as NRS ) and DOUTOR COFFEE CO., LTD. (hereinafter referred to as DOUTOR have agreed on the share transfer through the joint share transfer method, and therefore have prepared the share transfer plan (hereinafter referred to as the Plan ) jointly as follows: Article 1. (Share transfer) In accordance with the terms and conditions stipulated in the Plan, NRS and DOUTOR shall carry out a share transfer (hereinafter referred to as the Share Transfer ) whereby DOUTOR NICHIRES Holdings Co., Ltd. (hereinafter referred to as DNH ) will be newly incorporated through the joint share transfer

16 method as a wholly owning parent company holding all of the shares issued by NRS and Doutor, effective on the day of incorporation of DNH. Article 2. (Provisions of the Articles of Incorporation of DNH) The purpose, trade name, location of head office, and total number of shares authorized to be issued and other provisions to be stipulated in the Articles of Incorporation of DNH shall be as described in the Appendix Articles of Incorporation of DOUTOR NICHIRES Holdings Co., Ltd. Article 3. (Names of the Directors and others on incorporation of DNH) 1. The names of the Directors, Corporate Auditors, and the Accounting Auditor on the date of the incorporation of DNH shall be as follows: (1) Directors on incorporation Hirofumi Obayashi Yutaka Toriba Minoru Yamauchi Masanori Hoshino Rokuro Inamori Takafumi Kidaka Hiroshi Zaizen (Outside Director) Michiko Inagaki (Outside Director) (2) Corporate Auditors on incorporation Keisuke Takahashi Tetsuo Miyabayashi Hiroshi Kajikawa (Outside Corporate Auditor) Shigekane Yoshijima (Outside Corporate Auditor) (3) Accounting Auditor on incorporation KPMG AZSA & Co. 2. Hiromichi Toriba (currently Honorary Chairman of Doutor) shall be elected as Honorary Chairman upon the incorporation of DNH. Article 4. (Shares to be issued by DNH through the Share Transfer and the allotment thereof) 1. DNH shall, through the Share Transfer, issue shares of the common stock of DNH in the same number as the aggregate of (1) the number obtained by multiplying the last total number of shares NRS issued as of the day before the Incorporation Date of DNH (as defined in Article 8; hereinafter the same interpretation shall apply) by (provided, however, that any fraction of less than one share shall be discarded) and (2) the number obtained by multiplying the last total number of shares DOUTOR issued as of the day before the Incorporation Date of DNH by 1.0, to the shareholders (including the beneficial shareholders; hereinafter the same interpretation shall apply) whose names are listed or recorded in the last register of shareholders (including the register of beneficial shareholders; hereinafter the same interpretation shall apply) of either NRS or DOUTOR or both as of the day before the Incorporation Date of DNH in replacement of the shares of common stock owned by the shareholders of either NRS or DOUTOR or both. 2. DNH shall, on the Share Transfer, allot to the shareholders whose names are listed or recorded in the last register of shareholders of either NRS or DOUTOR or both as of the day before the Incorporation Date of DNH the common stock shares of DNH, the number of which is calculated by

17 a ratio of shares of common stock of DNH for one share of common stock of NRS owned (provided, however, that any fraction of less than one share shall be discarded) and of 1.0 share of common stock of DNH for one share of common stock of DOUTOR owned. Article 5. (Capital, reserve and other amounts) Capital, reserves, and other amounts on incorporation of DNH shall be as follows: (1) Capital 1,000,000,000 yen (2) Capital reserve 1,000,000,000 yen (3) Profit reserve Nil (4) Other capital surplus Amount obtained by subtracting the total of above (1) and (2) from the capital paid in by the shareholders rearranged and newly incorporated as stipulated in Article 83, Item 1 of the Corporation Accounting Regulations Article 6. (Treatment of stock acquisition rights on the Share Transfer) 1. DOUTOR shall, without consideration, acquire and retire all the unexercised stock acquisition rights issued by DOUTOR by the day before the Incorporation Date of DNH, if the Plan is approved at the Ordinary General Meeting of Shareholders as stipulated in Article If the stock acquisition rights are exercised before the acquisition without consideration of the stock acquisition rights as prescribed in the preceding paragraph, DOUTOR shall grant the treasury shares of DOUTOR to such holder of stock acquisition rights who has exercised the said rights, instead of issuing new shares of DOUTOR. Article 7. (Treatment of treasury stock on the Share Transfer) 1. NRS and DOUTOR shall retire the treasury shares, 186 shares of NRS and 1,624,410 shares of Doutor, by the day before the Incorporation Date of DNH, if the Plan is approved at the General Meeting of Shareholders as stipulated in Article Doutor, when granting the treasury shares of DOUTOR to such holder of stock acquisition rights who has exercised the said rights as prescribed in Article 6, Paragraph 2, shall, through the market transaction, etc. by the day before the Incorporation Date of DNH, acquire the shares in a number equal to the number of treasury shares granted or more. 3. If DOUTOR sells the shares of DOUTOR (treasury shares) to a shareholder requesting to purchase shares from DOUTOR in the number which, when added together with the shares constituting less than one unit, will increase the purchasers shareholding in DOUTOR to one unit of stock, in accordance with the Articles of Incorporation of Doutor, DOUTOR shall, through the market transaction, etc. by the day before the Incorporation Date of DNH, acquire the shares in the number not smaller than that of such treasury shares to be sold. 4. NRS shall ensure that the last total number of shares of NRS issued as of the day before the Incorporation Date of DNH will not exceed 14,999,814 shares, by implementing the measure prescribed in Paragraph 1 above. 5. DOUTOR shall ensure that the final total number of shares of DOUTOR issued as of the day before the Incorporation Date of DNH will not exceed 25,305,075 shares, by implementing the measures prescribed in Paragraphs 1, 2 and

18 Article 8. (Incorporation Date of DNH) The incorporation of DNH shall be registered on October 1, 2007 (hereinafter referred to as the Incorporation Date of DNH ), provided, however, that the date may be changed through consultation between NRS and Doutor, as needed, according to the progress of the procedures for the Share Transfer. Article 9. (General Meeting of Shareholders to Resolve the Approval of the Plan) 1. NRS shall convene an Extraordinary General Meeting of Shareholders on June 28, 2007 to request the resolution of the approval of the Plan and necessary matters for the Share Transfer. 2. DOUTOR shall convene an Ordinary General Meeting of Shareholders on June 28, 2007 to request the resolution of the approval of the Plan and necessary matters for the Share Transfer. 3. The date of the General Meetings of Shareholders as stipulated in the preceding two Paragraphs may be changed through consultation between NRS and Doutor, as needed, according to the progress of the procedures for the Share Transfer. Article 10. (Delisting of NRS and DOUTOR and listing of DNH and transfer agent) 1. NRS and DOUTOR are scheduled to delist the shares they have respectively issued (as planned on September 25, 2007) and to list the shares to be issued by DNH on the Tokyo Stock Exchange on the Incorporation Date of DNH. 2. The transfer agent of DNH shall be Mizuho Trust & Banking Co., Ltd. (2-1 Yaesu 1-chome, Chuoku, Tokyo, Japan). Article 11. (Dividend from surplus) 1. NRS may pay dividend from surplus up to the limit of 12 yen per share to the shareholders or registered pledgees whose names are listed or recorded in its last register of shareholders as of May 31, DOUTOR may pay dividend from surplus up to the limit of 25 yen per share to the shareholders or registered pledgees whose names are listed or recorded in its last register of shareholders as of May 31, Except for the cases as stipulated in the preceding two Paragraphs, NRS and DOUTOR shall not make resolutions to pay dividends from surplus based on a record date before the Incorporation Date of DNH during the period between the completion of the Plan and the Incorporation Date of DNH. Article 12. (Control of assets, etc.) NRS and DOUTOR shall respectively control and manage their own businesses and assets under the duty of care after the completion of the Plan until the Incorporation Date of DNH. Any conduct which may have significant effects on the assets or rights and duties of either NRS or DOUTOR shall be performed subject to prior consultation between the two parties. Article 13 (Effect of the Plan) The Plan will lose its effect if it is not approved at the General Meeting of Shareholders of either NRS or DOUTOR as stipulated in Article 9, or if the Share Transfer is not approved by the competent authorities as stipulated in laws and regulations

19 Article 14 (Change of circumstances for the Share Transfer and cancellation) NRS and DOUTOR may change the terms and conditions of the Share Transfer or other contents of the Plan by consultation, if any significant change in the assets or management situation of either NRS or DOUTOR seriously impedes the execution of the Share Transfer, or if the implementation of the Plan becomes difficult for any other reasons, during the period between the completion of the Plan and the Incorporation Date of DNH. Article 15. (Good faith negotiation) Any matters not stipulated in the Plan or doubts arising out of or in relation to provisions of the Plan shall be resolved through good faith negotiation between NRS and Doutor. In witness whereof, NRS and DOUTOR prepare and execute this document in duplicate by causing their representatives to sign and seal hereto and keep one original each. Date: May 22, 2007 Hirofumi Obayashi Chairman and Representative Director NIPPON RESTAURANT SYSTEM INC Sarugakucho, Shibuya-ku, Tokyo Yutaka Toriba President and Representative Director DOUTOR COFFEE CO., LTD Jinnan, Shibuya-ku, Tokyo

20 Articles of Incorporation of DOUTOR NICHIRES Holdings Co., Ltd. Articles of Incorporation CHAPTER I. GENERAL PROVISIONS (Trade Name) Article 1. The name of the Company shall be Kabushiki Kaisha DOUTOR NICHIRES Holdings, or DOUTOR NICHIRES Holdings Co., Ltd. in English. (Purpose) Article 2. The purpose of the Company is to control and manage the business activities of the companies engaged in the following businesses and companies engaged in the businesses equivalent thereto, by owning the shares of the said companies. (1) Restaurant and coffee shop management (2) Roasting and sales of coffee (3) Sales of and collaboration in roasting technology for coffee (4) Development, manufacturing, and sales of beverages and food (5) Sales of alcoholic beverages and tobacco (6) Procurement, marketing, wholesaling, and international trading in food products (7) Wholesaling of flowers and fruits and vegetables (8) Marketing of, consultation for, and training of restaurant and coffee shop franchises (9) Management consulting (10) Sales and international trading in paintings (11). Mail-order sales of flowers, food, clothing, and miscellaneous goods for daily use (12) Dealing, leasing, management, and intermediary business in real estate (13) Environment sanitation management, including disinfection and pest control at restaurants and coffee shops (14) Sales and maintenance of dishware, kitchen instruments, cooking equipments, air-conditioning systems, and the like (15) Production of agricultural products (16) Contracting, subcontracting, and entrustment of farming (17) Research, study, development, and technical guidance pertaining to the production of agricultural products (18) Sales, international trading, and leasing of items related with restaurants and coffee shops (19) Planning, manufacturing, import, and sales of interior decorations and food models (20) Planning, manufacturing, and sales of uniforms (21) Sales of detergents and cleaning equipment (22) Sales of toiletry, health appliances, miscellaneous goods for daily use, and miscellaneous clothing items (23) Promotion and advertisement (24) Life insurance soliciting and non-life insurance agency business (25) Interior finishing service for shops

21 (26) Domestic and overseas tourism service (27) Entertainment, including dramas, variety shows, movies, music, and sports, and ticket agency business and leasing of venues (28) Design, development, maintenance control service, and consultation for IT systems (29) Sales, international trading, and leasing of IT devices, office appliances, communications equipment, printing machines and equipment, and precision equipment (30) Personnel services (31) Financial services (32) Any other undertaking incidental to or connected with the items mentioned above. (Location of Head Office) Article 3. The head office of the Company shall be located in Shibuya-ku, Tokyo. (Method of Public Notice) Article 4. Public notices of the Company shall be electronic public notices. 2. If the Company is unable to issue an electronic public notice due to an accident or any other unavoidable reason, public notice of the Company shall be issued in the Nihon Keizai Shimbun. CHAPTER II. SHARES (Total Number of Shares Authorized to be Issued) Article 5. The total number of shares authorized to be issued by the Company shall be two hundred million (200,000,000). (Acquisition of the Company s Own Shares) Article 6. The Company may, by resolution of the Board of Directors, acquire its own shares thorough market transactions, etc. (Number of Shares Constituting One Unit of Stock) Article 7. The number of shares constituting one unit of stock of the Company shall be one hundred (100). (Issuance of Share Certificates) Article 8. The Company shall issue share certificates representing the Company s shares. 2. Irrespective of the preceding Paragraph, the Company may not issue share certificates representing shares constituting less than one unit of stock. (Rights with Respect to Shares Constituting Less than One Unit) Article 9. A Shareholder (including a beneficial shareholder; hereinafter the same interpretation shall apply) may not exercise rights with respect to shares constituting less than one unit, other than the rights specified in the following sections: (1)The right specified in any item of Article 189, Paragraph 2 of the Company Law; (2)The right to make requests to the Company as set forth in Article 166, Paragraph 1 of the Company

22 Law; (3)The right to receive an allotment of share subscription or to receive an allotment of stock acquisition rights in accordance with the number of shares held by the shareholder; and (4)The right set forth in the following Article. (Request for Sale of Shares Constituting Less than One Unit) Article 10. A shareholder holding shares constituting less than one unit may request to purchase (hereinafter referred to as additional purchase ) from the Company shares in the number which, when added together with the shares constituting less than one unit, will increase his/her shareholding in the Company to one unit of stock. (Transfer Agent) Article 11. The Company shall appoint a transfer agent. 2. The transfer agent and its business office shall be determined by resolution of the Board of Directors of the Company, and the Company shall issue a public notice thereof. 3. The register of shareholders (including the register of beneficial shareholders; hereinafter the same interpretation shall apply), the register of lost share certificates, and the ledger of stock acquisition rights of the Company shall be retained by the transfer agent at its business office, and the operations with respect to the shares and stock acquisition rights, including listing or recording into the said registers and ledger, share purchases, and purchases of additional shares constituting less than one unit, shall be entrusted to the transfer agent and shall not be handled by the Company. (Share Handling Regulations) Article 12. The handling charges and businesses pertaining to shares or stock acquisition rights, including the handling of the kind of share certificates issued by the Company, listing or recording into the register of shareholders, the register of lost share certificates, the ledger of stock acquisition rights, share purchases, and purchases of additional shares constituting less than one unit of the Company, shall be governed by the Share Handling Regulations adopted or amended by resolution of the Board of Directors of the Company as well as laws and regulations and these Articles of Incorporation. (Record Date) Article 13. Shareholders with voting rights whose names are listed or recorded in the last register of shareholders as of the final day of February of each year shall be deemed by the Company to be shareholders entitled to exercise their rights at the Ordinary General Meeting of Shareholders to be held with respect to such business year. CHAPTER III. GENERAL MEETING OF SHAREHOLDERS (Convocation) Article 14. The Ordinary General Meeting of Shareholders of the Company shall be convened in May of each year, and an Extraordinary General Meeting of Shareholders shall be convened whenever necessary

23 (Convener and Chairman) Article 15. The President and Director of the Company shall convene the General Meeting of Shareholders of the Company, by resolution of the Board of Directors, except where otherwise provided for in laws and regulations. Should the President be unable to so act, one of the other Directors shall convene the General Meeting of Shareholders in the order previously set by resolution of the Board of Directors. 2. The President and Director of the Company shall act as the chairman of the General Meeting of Shareholders of the Company. Should the President and Director of the Company be unable to act as the chairman, one of the other Directors shall act in the order previously set by resolution of the Board of Directors. (Disclosure of Reference Documents for the General Meeting of Shareholders, etc. via the Internet) Article 16. When convening a General Meeting of Shareholders, the Company may provide shareholders with the necessary information with respect to the matters to be stated or indicated in the reference documents for the General Meeting of Shareholders, the business reports, the non-consolidated financial statements, and the consolidated financial statements (including audit reports on the consolidated financial statements by the Accounting Auditor and by the Corporate Auditors) by disclosing such information via the Internet in accordance with the ordinance of the Ministry of Justice. (Exercise of Voting Rights by Proxy) Article 17. A shareholder may exercise his or her voting rights by authorizing one (1) other shareholder with voting rights to act as his or her proxy. 2. In the case of the preceding Paragraph, a shareholder or his or her proxy shall submit to the Company a document evidencing the proxy s power of representation for each General Meeting of Shareholders. (Method of Resolutions) Article 18. Except as otherwise provided by laws and regulations or by these Articles of Incorporation, all resolutions of a General Meeting of Shareholders shall be adopted by a majority of votes of the shareholders with voting rights present. 2. Resolutions to be adopted in accordance with Article 309, Paragraph 2 of the Company Law shall be adopted by two-thirds (2/3) or more of the votes of the shareholders present at the General Meeting of Shareholders who hold one-third (1/3) or more of the total number of voting rights of shareholders with voting rights. (Minutes) Article 19. The substance of the proceedings that transpire at a General Meeting of Shareholders, the results thereof, and any matters stipulated by laws and regulations shall be entered or recorded in the minutes of the meeting

24 CHAPTER IV. DIRECTORS AND BOARD OF DIRECTORS (Establishment of the Board of Directors) Article 20. The Company shall have a Board of Directors. (Number of Directors) Article 21. The number of Directors of the Company shall not exceed twelve (12). (Election of Directors) Article 22. Directors shall be elected at the General Meetings of Shareholders. 2. Resolutions for the election of Directors shall be adopted by a majority vote of the shareholders present who hold one-third (1/3) or more of the total number of voting rights of shareholders with voting rights. 3. Resolutions for the election of Directors shall not be made by cumulative voting. (Term of Office of Directors) Article 23. The term of office of a Director shall expire upon the conclusion of the Ordinary General Meeting of Shareholders held with respect to the last business year ending within one (1) year from the Director s election to office. 2. The Term of office of a Director elected to increase the number of Directors or elected as a substitute shall be the same as the remaining term of office of the other Directors in office. (Representative Directors and Executive Directors) Article 24. Representative Directors of the Company shall be appointed by resolution of the Board of Directors. 2. Representative Directors shall represent the Company and execute their duties. 3. The Board of Directors may appoint by its resolution one (1) Chairman and Director, one (1) President and Director, a number of Vice Chairmen of the Board of Directors, a number of Executive Vice Presidents and Directors, a number of Senior Managing Directors, and a number of Managing Directors. (Convener and Chairman of the Board of Directors Meeting) Article 25. Except as otherwise provided by laws and regulations, the President and Director shall convene and chair the meetings of the Board of Directors. When the President is unable to so act, one of the other Directors shall convene and chair the meetings of the Board of Directors in the order previously set by the resolution of the Board of Directors. (Notice of Convocation of the Board of Directors Meeting) Article 26. A notice of convocation of a meeting of the Board of Directors of the Company shall be sent to each Director and Corporate Auditor at least three (3) days prior to the meeting; provided, however, that such period may be shortened in the event of urgency. 2. When the consent of all Directors and Corporate Auditors is obtained in advance, a meeting of the Board of Directors of the Company may be held without following the procedures for convening a meeting

25 (Method of Resolutions of the Board of Directors) Article 27. Resolutions of the Board of Directors shall be adopted by a majority of the Directors present who constitute a majority of the Directors. (Omission of Resolutions at a Meeting of the Board of Directors) Article 28. If all Directors express their consent to a matter to be resolved by the Board of Directors in writing or by electromagnetic means, the matter shall be deemed to be adopted by resolution of the Board of Directors; provided, however, that this provision shall not apply if a Corporate Auditor expresses objections thereto. (Minutes of the Board of Directors Meeting) Article 29. The substance of the proceedings that transpire at a meeting of the Board of Directors, the results thereof, and any other matters stipulated by laws and regulations shall be entered or recorded in the Minutes of the meeting of the Board of Directors, and the Minutes shall bear the names and seals or electronic signatures of all of the Directors and Corporate Auditors present. (Rules of the Board of Directors) Article 30. Matters related to the Board of Directors shall be governed by the rules of the Board of Directors determined by the Board of Directors, in addition to laws, regulations and the Articles of Incorporation. (Compensation, etc.) Article 31. The amount of compensation, bonuses and any other proprietary benefits to be granted to Directors by the Company in consideration of their performance of duty (hereinafter referred to as compensation etc. ) shall be determined by resolution of the General Meeting of Shareholders. (Limitation of Liabilities of Outside Directors) Article 32. In accordance with the provisions of Article 427, Paragraph 1 of the Company Law, the Company may enter into an agreement with each of the Outside Directors to limit any liability of the Outside Directors arising from any acts specified in Article 423, Paragraph 1 of the said Law; provided, however, that the limit of the liability shall be the total of the amounts stipulated in each item of Paragraph 1, Article 425 of the said law. CHAPTER V. CORPORATE AUDITORS AND BOARD OF CORPORATE AUDITORS (Establishment of Corporate Auditors and the Board of Corporate Auditors) Article 33. The Company shall have Corporate Auditors and a Board of Corporate Auditors. (Number of Corporate Auditors) Article 34. The number of Corporate Auditors of the Company shall not exceed six (6)

26 (Election of Corporate Auditors) Article 35. Corporate Auditors shall be elected at the General Meetings of Shareholders. 2. Resolutions for the election of Corporate Auditors shall be adopted by a majority vote of the shareholders present who hold one-third (1/3) or more of the total number of voting rights of shareholders with voting rights. (Term of Office of Corporate Auditors) Article 36. The term of office of a Corporate Auditor shall expire upon conclusion of the Ordinary General Meeting of Shareholders held with respect to the last business year ending within four (4) years from the Corporate Auditor s election to office. 2. The term of office of a Corporate Auditor elected as a substitute shall be the remaining term of office of his or her predecessor. (Full-time Corporate Auditor) Article 37. The Board of Corporate Auditors shall appoint one or more Full-time Corporate Auditors from among the Corporate Auditors. (Notice of Convocation of the Board of Corporate Auditors) Article 38. Notice of convocation of a meeting of the Board of Corporate Auditors of the Company shall be sent to each Corporate Auditor at least three (3) days prior to the meeting; provided, however, that such period may be shortened in the event of urgency. 2. When the consent of all Corporate Auditors is obtained in advance, a meeting of the Board of Corporate Auditors of the Company may be held without following the procedures for convening a meeting. (Method of Resolutions of the Board of Corporate Auditors) Article 39. Except as otherwise provided by laws and regulations, resolutions of the Board of Corporate Auditors of the Company shall be adopted by a majority of the Corporate Auditors. (Minutes of the Board of Corporate Auditors Meeting) Article 40. The substance of proceedings transpiring at a meeting of the Board of Corporate Auditors and the results thereof and any other matters stipulated by laws and regulations shall be entered or recorded in the Minutes of the meeting of the Board of Corporate Auditors, and the Minutes shall bear the names and seals or electronic signatures of all of the Corporate Auditors present. (Rules of the Board of Corporate Auditors) Article 41. Matters related to the Board of Corporate Auditors shall be governed by the rules of the Board of Corporate Auditors determined by the Board of Corporate Auditors, in addition to laws, regulations, and the Articles of Incorporation. (Compensation, etc.) Article 42. The amount of compensation, etc. of the Corporate Auditors shall be determined by resolution of the General Meeting of Shareholders