The directors execute the operations of the stock company (excluding a company with board of directors; hereinafter the same applies in this Article), unless otherwise provided in the articles of incorporation.

If there are two or more directors, the operations of the stock company are decided by a majority of the directors, unless otherwise provided in the articles of incorporation.

In the case provided for in the preceding paragraph, the directors may not delegate the decisions on the following matters to individual directors:

At a large company, the directors must decide the matters set forth in item (iv) of the preceding paragraph.

If a stock company (excluding a company with nominating committee, etc.) has outside directors, if there is a conflict of interests between the stock company and its directors or there is otherwise a likelihood that the interests of shareholders will be prejudiced by the execution of the operations of the stock company by the directors, the stock company may whenever necessary, by a decision of the directors (or a resolution at a board of directors meeting for a company with board of directors) delegate the execution of operations of the stock company to the outside directors.

If there is a conflict of interests between a company with nominating committee, etc. and its executive officers or there is otherwise a likelihood that the interests of shareholders will be prejudiced by the execution of the operations of the company with nominating committee, etc. by the executive officers, the company with nominating committee, etc. may whenever necessary, by a resolution at the board of directors meeting delegate the execution of operations of the company with nominating committee, etc. to the outside directors.

The execution of operations delegated pursuant to the provisions of the preceding two paragraphs does not be deemed the execution of operations of a stock company provided in Article 2, item (xv), (a);provided, however, that this does not apply if an outside director executes relevant delegated operations pursuant to the direction and orders of an executive directors (or, for a company with nominating committee, etc., executive officer).

The directors represent the stock company;provided, however, that this does not apply if representative directors or other persons who represent the company are otherwise designated.

If there are two or more directors referred to in the main clause of the preceding paragraph, each director represents the stock company individually.

A stock company (excluding a company with board of directors) may appoint representative directors from among the directors pursuant to the articles of incorporation, or through the appointment by the directors from among themselves pursuant to the provisions of the articles of incorporation, or by a resolution at a shareholders meeting.

Representative directors have authority to do any and all judicial and non-judicial acts in connection with the operations of the stock company.

No limitation on the authority under the preceding paragraph may be asserted against a third party in good faith.

A stock company is liable for damage caused to third parties by its representative directors or other representatives during the course of the performance of their duties.

Where there are no representative directors in office, or where there is a vacancy which results in a shortfall in the number of representative directors prescribed in the articles of incorporation, a representative director who retired from office due to expiration of the representative director's term of office or resignation continues to have the rights and obligations of a representative director until a newly appointed representative director (including the person who is to temporarily perform the duties of a representative director under the following paragraph) assumes office.

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

If the court has appointed the person who is to temporarily perform the duties of a representative director under the preceding paragraph, the court may prescribe the amount of the remuneration that the stock company pays to that person.

A person who is appointed by a provisional disposition order provided for in Article 56 of the Civil Provisional Remedies Act (Act No. 91 of 1989) to perform the duties of directors or representative directors on behalf of them must obtain the permission of the court in order to engage in acts that do not belong to the ordinary operations of the stock company, unless otherwise provided for in the provisional disposition order.

Any act of the person who performs the duties of directors or representative directors on behalf of them that is performed in violation of the provisions of the preceding paragraph is void;provided, however, that the stock company may not assert this against a third party in good faith.

Notwithstanding the provisions of Article 349, paragraph (4), if a stock company files an action against its directors (including persons who were directors; hereinafter the same applies in this Article), or the directors of a stock company files an action against that stock company, a person to represent the stock company in relevant action may be designated at a shareholders meeting.

If a stock company gives the title of president, vice president or other title regarded as having authority to represent the stock company to a director who is not a representative director, the stock company is liable to third parties in good faith for the acts of relevant director.

Directors must perform their duties for the stock company in a loyal manner in compliance with laws and regulations, the articles of incorporation, and resolutions at shareholders meetings.

In the following cases, a director must disclose the material facts on the relevant transactions at a shareholders meeting and obtain approval of the shareholders meeting:

The provisions of Article 108 of the Civil Code do not apply to the transactions under item (ii) or item (iii) of the preceding paragraph that are approved under that paragraph.

If directors detect any fact likely to cause substantial detriment to the stock company, they must immediately report the fact to the shareholders (or, for a company with company auditor, the company auditors).

For the purpose of the application of the provisions of the preceding paragraph to a company with board of company auditors, the phrase "shareholders (or, for a company with company auditor, the company auditors)" in that paragraph is deemed to be replaced with "board of company auditors".

For the purpose of the application of the provisions of paragraph (1) to a company with audit and supervisory committee, the phrase "shareholders (or, for a company with company auditor, the company auditors)" is deemed to be replaced with "audit and supervisory committee".

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:

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:

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:

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.