Companies Act

When a stock company makes a decision on the content of an agreement (hereinafter referred to in this Article as an "indemnity agreement") in which the stock company promises to indemnify officers, etc. for all or part of the expenses set forth below, a resolution at the shareholders meeting (or at the board of directors meeting for a company with board of directors) must be adopted.

expenses disbursed by the officers, etc. to address alleged violations of the provisions of laws and regulations concerning the execution of duties or requests received in relation to pursuing liability;

the losses set forth below when an officers, etc. is liable to pay compensation for damage caused to a third party in relation to the execution of duties:

losses arising as a result of paying compensation for the damage by the relevant officers, etc.; or

if a settlement is reached between the parties in relation to a dispute concerning compensation for damage, losses arising as a result of paying monies pursuant to the settlement by the relevant officers, etc.

Even if a stock company has executed an indemnity agreement, the stock company may not indemnify the expenses, etc. set forth below pursuant to the indemnity agreement:

the portion in excess of the amount of expenses that are ordinarily necessary as the expenses set forth in item (i) of the preceding paragraph;

if the officers, etc. for which the stock company seeks to pay indemnification for the damages referred to in item (ii) of the preceding paragraph are liable to the stock company under Article 423, paragraph (1), the portion relating to relevant liability of the expenses set forth in that item; and

if the officers, etc. acted in bad faith or with gross negligence in relation to the performance of their duties and bear liability under item (ii) of the preceding paragraph, all of that the losses set forth in that item.

If a stock company that paid indemnification for the expenses set forth in paragraph (1), item (i) pursuant to an indemnity agreement learns that the relevant officers, etc. sought unlawful gain for the officers or a third party or performed the duties set forth in that item with the intent of causing harm to the stock company, the stock company may make a demand to the relevant officers, etc. for return of monies corresponding to the entire amount of the indemnification.

In a company with board of directors, a director who paid indemnification or received indemnification pursuant to an indemnity agreement will report to the board of directors, without delay, any important facts regarding the indemnification.

The preceding paragraph applies mutatis mutandis to executive officers. In the case, the phrase "in a company with board of directors, a," in that paragraph is deemed to be replaced with "A."

The provisions of Article 356, paragraph (1), Article 365-2, paragraph (2) (including when these provisions are applied mutatis mutandis pursuant to Article 419, paragraph (2)), Article 423, paragraph (3), and Article 428, paragraph (1) do not apply with respect to indemnity agreements between stock companies and directors or executive officers.

The provisions of Article 108 of the Civil Code do not apply with respect to the execution of indemnity agreements set forth in the preceding paragraph whose content is specified by a resolution set forth in paragraph (1).

When a stock company makes a decision on the content of an insurance policy entered into with an insurer under which the insurer promises to pay compensation for damage arising from officer, etc. bearing liability in relation to the execution of duties or the receipt of a demand pursuing relevant liability where officers, etc. are the insureds (excluding policies specified by the applicable Order of the Ministry of Justice as policies where there is no likelihood of substantial impairment of the appropriateness of the execution of duties by officers, etc. who are insured as a result of the execution of the insurance policies; referred to in the proviso of paragraph (3) as "officers, etc. indemnification insurance policy"), a resolution at the shareholders meeting (or at a board of directors meeting for a company with board of directors) must be adopted.

The provisions of Article 356, paragraph (1), Article 365, paragraph (2) (including when these provisions are applied mutatis mutandis pursuant to Article 419, paragraph (2)) and Article 423, paragraph (3) do not apply with respect to execution of insurance policies by a stock company with an insurer under which the insurer promises to pay compensation for damage arising from a director bearing liability in relation to the execution of duties or the receipt of a demand pursuing relevant liability where directors or executive officers are the insureds.

The provisions of Article 108 of the Civil Code do not apply to the execution of insurance policies under the preceding paragraph;provided, however, that if the policy is officers, etc. indemnification insurance policy, this is limited to times where the content of relevant policy is specified by a resolution set forth in paragraph (1).