Companies Act

If there are sufficient grounds to suspect misconduct or material facts in violation of laws and regulations or the articles of incorporation in connection with the execution of the operations of a stock company, the following shareholders may file a petition for the appointment of an inspector with the court in order to have the inspector investigate the status of the operations and the financial status of relevant stock company:

shareholders who hold not less than three hundredths of the votes (or, if a lesser proportion is prescribed in the articles of incorporation, the proportion) of all shareholders (excluding shareholders who may not vote on all matters which may be resolved at shareholders meetings); or

shareholders who hold not less than three hundredths (or, if a lesser proportion prescribed in the articles of incorporation, the proportion) of the issued shares (excluding treasury shares).

If the petition under the preceding paragraph has been filed, the court must appoint the inspector except in case it dismisses the petition as non-conforming.

If the court has appointed the inspector under the preceding paragraph, it may fix the amount of the remuneration that the stock company pays to relevant inspector.

The inspector referred to in paragraph (2) may investigate the status of the operations and the financial status of subsidiary companies of the stock company if it is necessary in order to perform the inspector's duties.

The inspector referred to in paragraph (2) must conduct the necessary investigation and submit a report to the court by providing it with a document detailing the results of the investigation or with an electronic or magnetic record (limited to one prescribed by Ministry of Justice Order) in which these have been recorded.

If the court finds it necessary for the purpose of clarification of the contents of the report under the preceding paragraph or of confirmation of the grounds supporting that report, it may request the inspector under paragraph (2) a further report under the preceding paragraph.

When the inspector under paragraph (2) reports pursuant to paragraph (5), the inspector must deliver a copy of the document referred to in that paragraph to the stock company and the shareholders who filed the petition for the appointment of an inspector or use a means prescribed by Ministry of Justice Order to provide them with the information recorded in the electronic or magnetic record referred to in that paragraph.

If the report under paragraph (5) of the preceding Article is submitted, if the court finds it necessary, it must order the directors to take some or all of the measures set forth below:

to call a shareholders meeting within a defined period of time; and

to notify shareholders of the result of the investigation under paragraph (5) of the preceding Article.

If the court orders the measures set forth in item (i) of the preceding paragraph, the directors must disclose the content of the report under paragraph (5) of the preceding Article at the shareholders meeting under that paragraph.

In the cases provided for in the preceding paragraph, the directors (or the directors and company auditors for a company with company auditor) must investigate the content of the report under paragraph (5) of the preceding Article and report the result thereof to the shareholders meeting under paragraph (1), item (i).

If a director engages, or is likely to engage, in an act outside the scope of the purpose of a stock company, or other acts in violation of laws and regulations or the articles of incorporation, if the act is likely to cause substantial detriment to relevant stock company, shareholders having the shares consecutively for the preceding six months or more (or, if a shorter period is prescribed in the articles of incorporation, that period or more) may demand that relevant director cease relevant act.

For the purpose of the application of the provisions of the preceding paragraph to a stock company which is not a public company, the phrase "shareholders having the shares consecutively for the preceding six months or more (or, if shorter period is prescribed in the articles of incorporation, that period or more)" in that paragraph is deemed to be replaced with "shareholders".

For the purpose of the application of the provisions of paragraph (1) to a company with company auditor or a company with audit and supervisory committee or a company with nominating committee, etc., the term "substantial detriment" in that paragraph is deemed to be replaced with "irreparable damage".

The following matters with respect to the financial benefits received from a stock company as a consideration for the execution of the duties, such as remunerations and bonuses, (hereinafter in this Chapter referred to as "remunerations") of directors are fixed by a resolution at a shareholders meeting if those matters are not prescribed in the articles of incorporation:

for remunerations in a fixed amount, that amount;

for remunerations the amount of which is not fixed, the specific method for calculating that amount;

for remunerations that are shares for subscription (meaning shares for subscription provided in Article 199, paragraph (1); hereinafter the same applies in this paragraph and Article 409, paragraph (3)) of the stock company, the maximum number of the shares for subscription (or, for a company with class shares, the classes of the shares for subscription and the number of shares for subscription for each class) and other matters prescribed by Ministry of Justice Order.

for remunerations that are share options for subscription (meaning share options for subscription provided in Article 238, paragraph (1); hereinafter the same applies in this paragraph and Article 409, paragraph (3)) of the stock company, the maximum number of the share options for subscription and other matters prescribed by Ministry of Justice Order.

for remunerations that are monies allotted to payments in exchange for what is set forth in (a) or (b) below, the matters specified in the relevant (a) or (b):

shares for subscription of the stock company: the maximum number of shares for subscription subscribed to by the directors (or, for a company with class shares, the classes of the shares for subscription and the number of shares for subscription for each class) and other matters prescribed by Ministry of Justice Order;

share options for subscription of the stock company: the maximum number of share options for subscription subscribed to by the directors and other matters prescribed by Ministry of Justice Order

for remunerations that are not monetary (excluding shares for subscription and share options for subscription of the stock company), the specific contents thereof.

In cases of a company with audit and supervisory committee, the matters set forth in the items of the preceding paragraph must be determined by distinguishing directors who are audit and supervisory committee members and other directors.

If there are no provisions in the articles of incorporation or no resolution at shareholders meeting with regard to remunerations of each director who is an audit and supervisory committee member, the remunerations are determined through discussion among directors who are audit and supervisory committee members within the range of remunerations referred to in paragraph (1).

Directors who prescribed the matters set forth in each item of paragraph (1) or who submitted a proposal to amend these matters to a shareholders meeting must explain the reasons why relevant matters are reasonable at that shareholders meeting.

Directors who are audit and supervisory committee members may state their opinions on the remunerations of directors who are audit and supervisory committee members in the shareholders meeting.

The audit and supervisory committee member appointed by the audit and supervisory committee may state the opinions of the audit and supervisory committee on the remunerations of directors other than directors who are audit and supervisory committee members.

If the articles of incorporation or a resolution of the shareholders meeting contains provisions on the matters set forth in each item of paragraph (1) as the content of the remunerations of directors (excluding directors who are audit and supervisory committee members; hereinafter the same applies in this paragraph), the stock company boards of directors set forth below will determine the matters specified by Ministry of Justice Order as policies relating to the determination of the content of remunerations of individual directors in accordance with the provisions; provided, however, that this does not apply if the content of remunerations of individual directors is specified in the articles of incorporation or a resolution of the shareholders meeting.

a company with board of company auditors (limited to a public company that is a large company) that is required to submit an annual securities report to the Prime Minister with respect to shares that the company issues pursuant to the provisions of Article 24, paragraph (1) of the Financial Instruments and Exchange Act; or

a company with audit and supervisory committee.