Companies Act

Notwithstanding the provisions of Article 349, paragraph (4) applied mutatis mutandis under Article 420, paragraph (3), and the provisions of Article 353 and Article 364, if a company with nominating committee, etc. files an action against its executive officers (including persons who were executive officers; hereinafter the same applies in this Article) or directors (including persons who were directors; hereinafter the same applies in this Article), or the executive officers or directors of a company with nominating committee, etc. files an action against that company with committees, the persons specified in each of those items for the case categories set forth in these items represent the company with nominating committee, etc. in these actions:

if audit committee members are the party to the suit relating to that action:the person designated by the board of directors (or, if the shareholders meeting designates a person to represent the company with nominating committee, etc. with respect to the action, that person); and

in cases other than the case set forth in the preceding item:the audit committee member appointed by the audit committee.

Notwithstanding the provisions of the preceding paragraph, if executive officers or directors file an action against the company with nominating committee, etc., the service of complaint on the audit committee members (excluding those filing that action) is effective on relevant company with nominating committee, etc.

Notwithstanding the provisions of Article 349, paragraph (4) applied mutatis mutandis pursuant to Article 420, paragraph (3), and the provisions of Article 353 and Article 364, if a stock company set forth in the following items is a company with nominating committee, etc., when filing an action prescribed in those items, the audit committee members appointed by the audit committee represent the company with nominating committee, etc.:

a wholly owning parent company resulting from the share exchange, etc. (meaning a wholly owning parent company resulting from the share exchange, etc. as prescribed in Article 849, paragraph (2), item (i); the same applies in item (i) of the following paragraph and paragraph (5), item (iii)):an action to enforce liability (limited to those for which the fact of the cause occurred by the time when the act set forth in items of Article 847-2, paragraph (1) becomes effective) of the directors, executive officers or liquidators (including a person who was a liquidator; hereinafter the same applies in this Article) of its wholly owned subsidiary company resulting from the share exchange, etc. (meaning the wholly owned subsidiary company resulting from the share exchange, etc. as prescribed in Article 847-2, paragraph (1); the same applies in paragraph (5), item (iii));

an ultimate, wholly owning parent company, etc. (meaning an ultimate, wholly owning parent company, etc. as prescribed in Article 847-3, paragraph (1); the same applies in item (ii) of the following paragraph and paragraph (5), item (iv)):an action to enforce specific liability (meaning an action to enforce specific liability as prescribed in paragraph (1) of the same Article) of directors, executive officers, or liquidators of a stock company which is its wholly owned subsidiary company, etc. (meaning a wholly owned subsidiary company, anything that is deemed to be such a wholly owned subsidiary company, etc., pursuant to the provisions of paragraph (3) of the same Article; the same applies in paragraph (5), item (iv)).

Notwithstanding the provisions of Article 349, paragraph (4) as applied mutatis mutandis pursuant to Article 420, paragraph (3), if a stock company set forth in the following items is a company with nominating committee, etc., when making a request specified in those items, an audit and supervisory committee member appointed by the audit and supervisory committee represents the company with nominating committee, etc.:

a wholly owning parent company resulting from a share exchange, etc.:request pursuant to the provisions of Article 847, paragraph (1) (limited to the request of filing an action prescribed in item (i) of the preceding paragraph); and

an ultimate, wholly owning parent company, etc.:request pursuant to the provisions of Article 847, paragraph (1) (limited to the request to file an action to enforce the specific liabilities prescribed in item (ii) of the preceding paragraph).

Notwithstanding the provisions of Article 349, paragraph (4) applied mutatis mutandis under Article 420, paragraph (3), in the following cases, the audit committee members represent the company with nominating committee, etc.:

if a company with nominating committee, etc. receives a request (limited to requests for the filing of actions that enforce the liability of executive officers or directors) pursuant to the provisions of Article 847, paragraph (1), Article 847-2, paragraph (1) or (3) (including cases applied mutatis mutandis in paragraphs (4) and (5) of the same Article), or Article 847-3, paragraph (1) (excluding cases where the audit committee members are the party to the suit relating to the action); or

if a company with nominating committee, etc. receives a notice of suit under Article 849, paragraph (4) (limited to those related to actions that enforce the liability of executive officers or directors) and a notice or demand (limited to those related to the settlement of a suit relating to an action that enforces the liability of executive officers or directors) pursuant to the provisions of Article 850, paragraph (2) (excluding cases where the audit committee members are the party to the suit relating to these actions);

if a company with nominating committee, etc. which is a wholly owning parent company resulting from the share exchange, etc. receives a notice (limited to those related to a claim to enforce liabilities of directors, executive officers, or liquidators of its wholly owned subsidiary company resulting from the share exchange, etc.) pursuant to the provisions of Article 849, paragraph (6); and

if a company with nominating committee, etc. which is an ultimate, wholly owning parent company, etc. receives a notice (limited to those related to a claim to enforce the liability of directors, executive officers, or liquidators of the stock company that constitutes its wholly owned subsidiary company, etc.) pursuant to the provisions of Article 849, paragraph (7).

The remuneration committee must prescribe the policy on decisions on the content of the remunerations for individual executive officers, etc.

The remuneration committee must comply with the policy under the preceding paragraph in order to make decisions under the provisions of Article 404, paragraph (3).

If the remuneration committee uses what is set forth in the following items as the individual remunerations of executive officers, etc., it must decide the matters provided for in each of the item as the contents thereof; provided, however, that the remunerations for individual accounting advisors must be that set forth in item (i):

remunerations in a fixed amount:the amount for each individual person;

remunerations the amount of which is not fixed:the specific method for calculating that amount for each individual person;

remunerations that are shares for subscription of the stock company: the 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;

remunerations that are share options for subscription of the stock company: the number of the share options for subscription and other matters prescribed by Ministry of Justice Order;

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 number of shares for subscription subscribed to by the executive officers, etc. (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 number of share options for subscription subscribed to by the executive officers, etc. and other matters prescribed by Ministry of Justice Order

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

A nominating committee, etc. meeting is called by any committee member of relevant nominating committee, etc.

To call a nominating committee, etc. meeting, a committee member of that nominating committee, etc., must dispatch the notice thereof to each committee member of relevant nominating committee, etc. no later than one week (or if a shorter period of time is prescribed by the board of directors, the shorter period of time) prior to the day of the nominating committee, etc. meeting.

Notwithstanding the provisions of the preceding paragraph, the nominating committee, etc. meeting may be held without the procedures of calling if the consent of all committee members of relevant nominating committee, etc. is obtained.

If requested by the nominating committee, etc., executive officers, etc., must attend relevant nominating committee, etc. meeting and provide explanations on the matters requested by relevant nominating committee, etc.

The resolution at a meeting of a nominating committee, etc. is passed by a majority (if a higher proportion is prescribed by the board of directors, the proportion or more) of the committee members present at the meeting where the majority (if a higher proportion is prescribed by the board of directors, that proportion or more) of the committee members entitled to participate in the vote are present.

Committee members with a special interest in the resolution under the preceding paragraph may not participate in the vote.

With respect to the business of the nominating committee, etc. meeting, minutes must be prepared pursuant to the provisions of Ministry of Justice Order, and if the minutes are prepared in writing, the committee members present at the meeting must sign or affix the names and seals to it.

With respect to the matters recorded in an electronic or magnetic record if the minutes under the preceding paragraph are prepared in that electronic or magnetic record, an action in lieu of the signing or the affixing of names and seals prescribed by Ministry of Justice Order must be taken.

Committee members who participate in resolutions at a meeting of the nominating committee, etc. and do not have their objections recorded in the minutes under paragraph (3) are presumed to have agreed to relevant resolutions.

A company with nominating committee, etc. must keep the minutes referred to in paragraph (3) of the preceding Article at its head office for the period of ten years from the day of the nominating committee, etc. meeting.

The directors of a company with nominating committee, etc. may inspect or copy anything set forth in the following items:

if the minutes under the preceding paragraph are prepared in writing, relevant documents; and

if the minutes under the preceding paragraph are prepared as an electronic or magnetic record, anything that is used in the manner prescribed by Ministry of Justice Order to display the information recorded in that electronic or magnetic record.

If it is necessary for the purpose of exercising the rights of a shareholder of a company with nominating committee, etc., the relevant shareholder may make requests for inspection or copying of the things set forth in each item of the preceding paragraph with respect to the minutes under paragraph (1) with the permission of the court.

The provisions of the preceding paragraph apply mutatis mutandis to the cases where it is necessary for the purpose of enforcing the liability of committee members by a creditor of a company with nominating committee, etc. and where it is necessary for the purpose of exercising the rights of a member of the parent company.

If the court finds that the inspection or copying relating to the requests under paragraph (3) (including cases of the mutatis mutandis application under the preceding paragraph; hereinafter the same applies in this paragraph) is likely to cause substantial detriment to the company with nominating committee, etc. or its parent company or subsidiary company, the court may not grant the permission under paragraph (3).