The book proposes a theory of phrase structure in which structures are built by a simple adjunction operation, and specifiers are solely characterised by agreement. Having introduced some of the basic notions of the principle-and-parameters theory in Chapter 1, Chapter 2 discusses and illustrates the fundamental difference between lexical and functional categories: Lexical categories have Lexical Conceptual Structure in the sense of Hale and Keyser (1986), whereas functional categories lack such intrinsic semantic property. Instead, functional categories possess agreement features which connect two distinct syntactic categories. Based on this fundamental difference, a new system of projection called the relativized X-bar theory is introduced. Chapter 3 explores various consequences of the projection system introduced in Chapter 2. In Chapter 4, the discussion focuses on the phrase structural properties of Japanese.