Companies Act

Each committee, including the nominating committee, audit committee, or remuneration committee (hereinafter collectively referred to as "each committee" in this Article, the following Article, and Article 911, paragraph (3), item (xxiii), (b)) is composed of three or more committee members.

The committee members of each committee are appointed from among the directors by a resolution at the board of directors meeting.

The majority of the committee members of each committee must be outside directors.

A committee member of the audit committee (hereinafter referred to as "audit committee member") may not concurrently act as an executive officer or executive directors of a company with nominating committee, etc. or its subsidiary company, or as an accounting advisor (if the accounting advisor is a corporation, the member who is to perform the duties of the accounting advisor) or employee, including a manager, of a subsidiary company of a company with nominating committee, etc..

The committee members of each committee may be removed at any time by a resolution at the board of directors meeting.

Where there is a vacancy which results in a shortfall in the number of committee members of each committee provided for in paragraph (1) of the preceding Article (or, if the number of committee members provided for in the articles of incorporation is four or more, that number), a committee member who retired from office due to expiration of the committee member's term of office or resignation continues to have the rights and obligations of a committee member until a newly appointed committee member (including a person who is to temporarily perform the duties of a committee member under the following paragraph) assumes office.

In the case provided for in the preceding paragraph, if the court finds it necessary, it may appoint a person who is to temporarily perform the duties of a committee member in response to a petition by interested persons.

If the court has appointed the person who is to temporarily perform the duties of a committee member under the preceding paragraph, the court may prescribe the amount of the remuneration that the company with nominating committee, etc. pays to that person.

A company with nominating committee, etc. must have one or more executive officers.

An executive officer is elected by a resolution at the board of directors meeting.

The relationship between a company with nominating committee, etc. and its executive officers is governed by the provisions on mandate.

The provisions of Article 331, paragraph (1) and Article 331-2 apply mutatis mutandis to executive officers.

A stock company may not provide in the articles of incorporation that the executive officers must be shareholders; provided, however, that this does not apply to a company with nominating committee, etc. that is not a public company.

An executive officer may act concurrently as a director.

An executive officer's term of office continues until the conclusion of the first board of directors meeting called after the conclusion of the annual shareholders meeting for the last business year ending within one year from the time of their election; provided, however, that this does not preclude the shortening the executive officer's term of office by the articles of incorporation.

Notwithstanding the provisions of the preceding paragraph, if a company with nominating committee, etc. makes any amendment in the articles of incorporation to repeal the provisions of the articles of incorporation to the effect that a nominating committee, etc. is established, the executive officer's term of office expires when the amendment in the articles of incorporation takes effect.

Executive officers may be dismissed at any time by a resolution at the board of directors meeting.

An executive officer dismissed pursuant to the provisions of the preceding paragraph is entitled to demand damages arising from the dismissal from the company with nominating committee, etc., except if there are justifiable grounds for the dismissal.

The provisions of Article 401, paragraph (2) through paragraph (4) apply mutatis mutandis to the cases where there are no executive officers in office, or where there is a vacancy which results in a shortfall in the number of executive officers prescribed in the articles of incorporation.

A nominating committee determines the contents of proposals regarding the election and dismissal of directors (or directors and accounting advisors for a company with accounting advisor) to be submitted to a shareholders meeting.

An audit committee performs the following duties:

auditing the execution of duties by executive officers, etc. (meaning executive officers and directors, or, for a company with accounting advisor, meaning executive officers, directors and accounting advisors; hereinafter the same applies in this Section) and preparing audit reports; and

determining the contents of proposals regarding the election and dismissal of financial auditors and the refusal to reelect financial auditors to be submitted to a shareholders meeting.

Notwithstanding the provisions of Article 361, paragraph (1) and Article 379, paragraphs (1) and (2), a remuneration committee determines the contents of the remunerations for individual executive officers, etc. If an executive officer acts concurrently as an employee, including a manager, of a company with nominating committee, etc., the same applies to the contents of the remunerations for relevant employee, including a manager.

If committee members make the following requests to a company with nominating committee, etc. with respect to the execution of their duties (limited to that regarding the execution of the duties of the nominating committee, etc. to which relevant committee members belong; hereinafter the same applies in this paragraph), relevant company with nominating committee, etc. may not refuse the request except if it proves that the expense or debt relating to the request is not necessary for the execution of the duties of relevant committee members:

requests for advancement of the expenses;

request for the indemnification of the expenses paid and interests thereon from and including the day of the payment; or

requests for the payment (or, if relevant debt is not yet due, the provision of reasonable security) to the creditor of a debt incurred.

Audit committee members appointed by the audit committee may at any time request reports on the execution of their duties from executive officers, etc. and employees including managers, or investigate the status of the operations and financial status of the company with nominating committee, etc.

Audit committee members appointed by the audit committee may, if it is necessary for the purpose of performing duties of the audit committee, request reports on the business from a subsidiary company of the company with nominating committee, etc., or investigate the status of the operations and financial status of its subsidiary company.

The subsidiary company under the preceding paragraph may refuse the report or investigation under that paragraph if there are justifiable grounds.

audit committee members under paragraph (1) and paragraph (2) must comply with resolutions at the audit committee meeting, if any, on matters regarding the collection of the report or investigation under relevant respective paragraphs.

If audit committee members find that executive officers or directors engage in misconduct, or are likely to engage in relevant conduct, or that there are facts in violation of laws and regulations or the articles of incorporation or grossly improper facts, they must report to that effect to the board of directors without delay.

If an executive officer or director engages, or is likely to engage, in any act outside the scope of the purpose of a company with nominating committee, etc., or other acts in violation of laws and regulations or the articles of incorporation, if that act is likely to cause substantial detriment to relevant company with nominating committee, etc., the audit committee members may demand that the executive officer or director cease that act.

In the cases provided for in the preceding paragraph, if the court orders an executive officer or director under the preceding paragraph to cease that act by a provisional disposition, the court is not to require the provision of security.