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elected, a director must receive the vote of 80 percent of the
shareholders. Thus, Furukawa or Sumitomo could block board
membership for anyone Burndy-US nominated to serve as a director.
The Burndy-Japan shareholders agreed in 1973 that Burndy-US
could nominate four directors and the president. The president
of a Japanese corporation must be a director. Sh�h� (the
Commercial Code of Japan), Law No. 48, March 9, 1899, as amended,
at Book II, chap. 4, sec. 261-1, reprinted from Kitagawa, Doing
Business in Japan, app. 5A (1994). Thus, Burndy-US could not
nominate a fifth member of the board of directors to serve as
president unless Furukawa and Sumitomo agreed.
ii. Breaking Tie Votes
Petitioners contend that Burndy-US had the power to break a
tie vote of the Burndy-Japan board of directors because Burndy-US
could name the chairman or president, who could cast a second
vote to break a tie. We disagree. First, Burndy-US could not
unilaterally choose Burndy-Japan’s president for reasons stated
in the previous paragraph. The articles of incorporation provide
that the board of directors could elect a chairman. Thus,
Burndy-US could not unilaterally choose the chairman. Second,
the second vote to break a tie is invalid under Japanese law for
reasons discussed next.
Hideki Kanda (Kanda), petitioners’ witness who is a
professor of law at Tokyo University, cited an article, Horiguchi
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