Article 427Agreement Limiting Liability

②If non-executive directors, etc. who have entered into agreements under the preceding paragraph assume the office of executive directors, etc. of the stock company, relevant agreements become ineffective from then on.

③The provisions of Article 425, paragraph (3) apply mutatis mutandis to cases where a proposal to amend the articles of incorporation to create provisions of the articles of incorporation under the provisions of paragraph (1) (limited to the provisions of the articles of incorporation to the effect that agreements may be entered into with directors (excluding those who are audit and supervisory committee members or audit committee members) prescribed in that paragraph) is submitted to a shareholders meeting. In this case, the phrase "directors (if such a company has an ultimate, wholly owning parent company, etc., and the liabilities to be exempted pursuant to the provisions of paragraph (1) are specific liabilities, the directors of those companies and the ultimate, wholly owning parent company, etc.)" in paragraph (3) of that Article is deemed to be replaced with "directors".

④If a stock company that entered into agreements under paragraph (1) has come to know that it has suffered damages as a result of non-executive directors, etc. who were the counterparties to relevant agreements neglecting their duties, the stock company must disclose the following matters at the first shareholders meeting (if the stock company has an ultimate, wholly owning parent company, etc., and the damages are related to specific liabilities, shareholders meeting of the stock company and the ultimate, wholly owning parent company, etc.) called thereafter:

⑤The provisions of Article 425, paragraphs (4) and (5) apply mutatis mutandis to cases where it has been arranged pursuant to agreements under paragraph (1) that non-executive directors, etc. are not liable for damages in excess of the limit provided for in that paragraph.