| Title： |
Rules and Review Procedures for Director and Supervisor Share Ownership Ratios at Public Companies(2007.10.16) |
| 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 Act ("the Act").
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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 subparagraph, the maximum shareholding prescribed in the preceding subparagraph 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 percentage method is less than the maximum prescribed in the preceding subparagraph, the maximum shareholding prescribed in the preceding subparagraph 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 subparagraph, the maximum shareholding prescribed in the preceding subparagraph shall be applicable.
The shareholdings of independent directors elected by a public company shall not be counted in the total referred to in the preceding paragraph; if a public company has elected two or more independent directors, 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 shall be decreased by 20 percent.
If a public company has set up an audit committee in accordance with the Act, the provisions on the minimum percentage requirements for the shareholding of supervisors in the preceding two paragraphs shall not apply.
If the independent directors of a public company other than a financial holding company, a bank regulated under the Banking Act, and an insurance company regulated under the Insurance Act exceed one-half of the total director seats, and an audit committee has been established in accordance with the Act, the provisions on the minimum percentage requirements for the shareholding respectively of all directors and supervisors in paragraphs 1 and 2 shall not apply.
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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 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 shall rectify the situation within one month.
Where in accordance with the provisions of paragraph 2 of Article 25 of the Act , the report on the changes in the shareholdings of directors, supervisors, managers, and shareholders holding ten percent or more outstanding shares to be inputted by the company into the information reporting website designated by the competent authority by 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 to rectify the situation within the time period specified in the preceding paragraph, and also notify the competent authority.
The time period specified in paragraph 1 shall commence on the date the competent authority or the company provides the notice.
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Article 6
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The competent authority may from time to time send 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 the competent authority, 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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Where the directors or supervisors as a whole, other than independent directors, 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, shall be punished in accordance with subparagraph 4 of paragraph 1 of Article 178 of the Act.
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 8
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These Regulations shall come into effect on the date of issuance.
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