| Title： |
Rules and Review Procedures for Director and Supervisor Share Ownership Ratios at Public Companies(2002.11.15) |
| Date： |
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Article 1
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These Regulations are prescribed in accordance with Paragraph 2 of Article 26 of the Securities and Exchange Law.
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Article 2
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The total registered shares owned by the directors and supervisors of a public company shall not be less than the following percentage of total issued shares:
1.Where the paid-in capital of the company is NT$300 million or less, the total registered shares owned by all directors shall not be less than fifteen percent of the total issued shares; the total registered shares owned by all supervisors shall not be less than 1.5 percent of the total issued shares.
2.Where the paid-in capital of the company is more than NT$300 million but NT$1 billion or less, the total registered shares owned by all directors shall not be less than ten percent of the total issued shares; the total registered shares owned by all supervisors shall not be less than one percent of the total issued shares. However, where the total shareholding to be owned by directors and supervisors calculated using such method is less than the maximum prescribed in the preceding Item, the maximum shareholding prescribed in the preceding Item shall be applicable.
3.Where the paid-in capital of the company is more than NT$1 billion but NT$2 billion or less, the total registered shares owned by all directors shall not be less than 7.5 percent of the total issued shares; the total registered shares owned by all supervisors shall not be less than 0.75 percent of the total issued shares. However, where the total shareholding to be owned by directors and supervisors calculated using such method is less than the maximum prescribed in the preceding Item, the maximum shareholding prescribed in the preceding Item shall be applicable.
4.Where the paid-in capital of the company is more than NT$2 billion, the total registered shares owned by all directors shall not be less than five percent of the total issued shares; the total registered shares owned by all supervisors shall not be less than 0.5 percent of the total issued shares. However, where the total shareholding to be owned by directors and supervisors calculated using such method is less than the maximum prescribed in the preceding Item, the maximum shareholding prescribed in the preceding Item shall be applicable.
The shareholdings of independent directors and supervisors elected by a public company shall not be counted in the total referred to in the preceding paragraph; if a public company has simultaneously elected two or more independent directors and one or more independent supervisor, the share ownership figures calculated at the rates set forth in the preceding paragraph for all directors and supervisors other than the independent directors and supervisor(s) shall be decreased by 20 percent.
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Article 3
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The determination of the total registered shares owned by the directors and supervisors of a public company shall be made based on the entries inscribed on the shareholders list or on the proof of shares deposited with a centralized securities depositary. However, shares which have been transferred but the transferee has not completed transfer procedures shall be deducted from the calculation.
Where a governmental or juristic person shareholder is elected as a director or supervisor, registered shares of the public company owned by the representative of such shareholder him/herself and placed in centralized custody in the form of a segregated account with a centralized securities depositary may be counted in the total share ownership referred to in the preceding article.
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Article 4
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Upon their election in the shareholders meeting, if the total number of shares owned by the directors and supervisors of a public company is less than the percentage prescribed in Article 2, the whole of the directors and supervisors other than independent directors and supervisors shall rectify the situation within one month.
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Article 5
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If during their term of office, any directors or supervisors of a public company transfer their shares or leave their office, such that the total shareholding by all the directors and supervisors as a whole is less than the percentage prescribed in Article 2, the whole of the directors and supervisors other than independent directors and supervisors shall rectify the situation within one month.
Where in accordance with the provisions of Paragraph 2 of Article 25 of the Securities and Exchange Law, the report on the changes in the shareholdings of directors, supervisors, managers, and shareholders holding ten percent or more outstanding shares to be input by the company into the website designated by the Securities and Futures Commission of the Ministry of Finance (hereinafter "this Commission") for information reporting before the fifteenth day of each month shows that the directors or supervisors as a whole hold less than the percentage prescribed in Article 2, the company shall immediately notify the whole of the directors or supervisors other than independent directors and supervisors to rectify the situation within the time period specified in the preceding Paragraph, and also notify this Commission.
The time period specified in Paragraph 1 shall commence on the date this Commission or the company provides the notice.
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Article 6
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This Commission may from time to time sends its personnel to examine and audit the records on the change in shareholdings of the directors or supervisors of public companies, and also examine the relevant records and accounts.
Upon instituting the examination and audit referred to in the preceding Paragraph, the company shall in accordance with the notification of this Commission, notify its directors and supervisors to make available for examination the registered shares in his possession at the official premises of the company or at other locations designated by it; the directors or supervisors may not refuse.
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Article 7
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Upon its examination and audit of the records on the change in shareholdings of directors or supervisors of public companies, or in its examination of the relevant records and accounts, if this Commission discovers matters that are not in compliance with the law, in addition to ordering corrections to be made, this Commission may further impose penalties pursuant to the Securities and Exchange Law.
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Article 8
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Where the directors or supervisors as a whole, other than independent directors and supervisors, fail to conform with the provisions of Article 4 and Article 5 by holding the shareholding percentage prescribed in Article 2, the directors or supervisors as a whole, other than independent directors and supervisors, shall be punished in accordance with Item 4 of Paragraph 1 of Article 178 of the Securities and Exchange Law.
Where juristic persons serve as the directors or supervisors, their responsible persons shall be subject to punishment; where the representative of a juristic person serves as a director or supervisor, such representative shall be subject to punishment.
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Article 9
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These Regulations shall come into effect on the date of promulgation.
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