Securities Investor and Futures Trader Protection Act Article 10-1

When the protection institution discovers on the part of a director or supervisor of an exchange-listed, OTC-listed, or emerging stock company any violation of Article 20, paragraph 1 or 2, Article 155, paragraph 1 or 2, or Article 157-1, paragraph 1 or 2 of the Securities and Exchange Act or Article 106 to Article 108, paragraph 1 of the Futures Trading Act, or any circumstances under Securities and Exchange Act Article 32, paragraph 1 and there is no grounds of exemption from liability under paragraph 2 of the same article, or any circumstances under Securities and Exchange Act Article 171, paragraph 1, subparagraph 2 or 3, or any conduct in the course of performing duties that is materially injurious to the company or is in violation of laws, regulations, or provisions of the company's articles of incorporation, it may handle the matter in accordance with the following provisions:1. The protection institution may, in writing, request the supervisors of the company to institute an action against the director on behalf of the company, or request the board of directors of the company to institute an action against the supervisor on behalf of the company or request the company to institute an action against a former director or supervisor. If the supervisors, the board of directors, or the company fail to institute an action within 30 days after receiving the request made by the protection institution, then the protection institution may institute the action on behalf of the company without regard to the restrictions of Article 214, or of Article 214 as applied mutatis mutandis under Article 227, of the Company Act.2. The protection institution may institute an action petitioning a court for a judgment or ruling discharging the given director or supervisor without regard to the restrictions of Article 200, or of Article 200 as applied mutatis mutandis under Article 227, of the Company Act, and the causes for such discharge shall not be limited to causes occurring during the term of office coinciding with the time the action is instituted.The right to institute an action petitioning a court for discharge of a director or supervisor under subparagraph 2 of the preceding paragraph shall be extinguished if not exercised within 2 years from the time the protection institution learns there is cause for discharge, or when 10 years have elapsed from the time of occurrence of the cause for discharge.The provisions of Articles 34 through 36 apply mutatis mutandis when the protection institution, pursuant to paragraph 1, institutes an action or an appeal or moves for an injunctive or executory proceeding.When the company's exchange listing, OTC listing, or emerging stock registration is terminated for any reason, the protection institution may still apply the provisions of the preceding three paragraphs to any circumstance of paragraph 1 that occurred during the company's period of listing or emerging stock registration.When the protection institution institutes an action under paragraph 1, subparagraph 1, any person who should bear liability for compensation for the same basic facts and who has or had the authority to manage affairs of the company or to sign on behalf of the company may be joined or added to the action. The same shall apply even if the person's professional relationship with the company no longer exists.When a company supervisor, the board of directors, or the company institutes an action under paragraph 1, subparagraph 1, the protection institution, to defend the rights and interests of the company and the shareholders, may intervene in the action while it is pending, and the provisions of Article 56, paragraph 1 of the Code of Civil Procedure shall apply mutatis mutandis.When a director or supervisor is discharged by a final and binding court judgment or ruling under paragraph 1, subparagraph 2, the person may not, within 3 years from the date that the judgment or ruling becomes final and binding, serve as a director or supervisor of an exchange-listed, OTC-listed, or emerging stock company or as a designated natural person representing such a director or supervisor in the exercise of duties under Article 27, paragraph 1 of the Company Act. If already serving in such a capacity, he or she shall ipso facto be discharged.After a judgment or ruling for discharge under paragraph 1, subparagraph 2 has become final and unappealable, the competent authority shall issue an official letter requesting the competent authority in charge of company registration to carry out registration of the discharge.If the company has duly established an audit committee, the term "supervisor" as used in paragraph 1 and paragraph 6 shall be taken to mean the audit committee or its independent director members.