Vanguard International Semiconductor Corporation

Transcription

1 Rules of Procedure of Board of Directors Meetings Article 1 The purpose of the Rules of Meetings of the Board of Directors is to enhance the operation efficiency of the Company's Board of Directors, to strengthen its managerial functions, and to establish a sound governance system for the Company's Board of Directors. Article 2 All matters relating to the Company's Board of Directors meetings, such as agendas, procedures, minutes taking, announcements, and other meeting advices, shall proceed according to these Rules. Any matters that are not addressed in these Rules shall be governed by the relevant regulations. Article 3 The Board of Directors shall meet at least quarterly. A notice of the reasons for convening a board meeting shall be given to each Director 7 days before the meeting is convened. In an emergency, a board meeting may be called at any time. All matters set forth under Article 7, Paragraph 1 of these Rules shall be specified in the notice of the reasons for convening a board meeting. None of those matters may be raised by an extraordinary motion except in the case of an emergency or for other legitimate reason. Article 4 The Board of Directors' meetings shall be held at the business place and within the business hours of the Company. To meet the business requirements and for the purpose of convenient transportation, however, the meeting may be organized at other suitable time and place. Article 5 The designated unit responsible for the board meetings of the Company shall be the Secretariat unit designated by the Board of Directors. The unit responsible shall first inquire about Directors' opinions to plan and draft meeting issues and agenda. All Directors shall be notified to attend at the time specified in the preceding paragraph, and the unit shall prepare sufficient meeting materials and shall deliver them together with the notice of the meeting to facilitate Directors' understanding of the contents of the meeting. The Directors may request for supplemental information from the Secretariat unit should they consider the existing information to be insufficient. The Directors may resolve to postpone certain agendas if they consider the information presented to them to be inadequate. When the board meeting is convened, the Secretariat unit responsible for meeting agenda shall prepare relevant information as reference for Directors. Article 6 The agenda items for the regular Board of Directors' meetings shall include at least the following: 1. Matters to be reported: a) Minutes of the last meeting and action taken. b) Important financial and business reports. c) Internal audit business reports. d) Other important matters to be reported. 2. Matters for discussion: a) Items for continued discussion from the last meeting. b) Items for discussion at this meeting. 3. Extraordinary motions. Article 7 The matters listed below as they relate to the Company shall be raised for discussion 1

2 at a board meeting: 1. The Company's business plans. 2. Annual and semiannual financial statements. This, however, shall not include the semi-annual financial reports that, according to law, do not need to be audited by a CPA. 3. Adoption or amendment of an internal control system and assessment of the effectiveness of the internal control system. 4. Adoption or amendment of procedures for acquisition or disposal of assets, financial derivatives transactions, lending funds to other parties, or providing endorsement or guarantees for other parties. 5. Offering, issuance, or private placement of any equity-type securities. 6. Appointment and discharge of financial, accounting, or internal auditing officer. 7. A donation to a related party or a major donation to a non-related party. However, for public-interest donation of NT$5 million or less for relief of major natural disaster, the Chairperson shall be authorized for decision making, and the donation shall be submitted to the following Board of Directors meeting for ratification. The term "related party" means a related party as defined in the Regulations Governing the Preparation of Financial Reports by Securities Issuers. The term "major donation to a non-related party" means an individual donation at an amount of NT$200,000 or more, or cumulative donations within a 1-year period at an amount of NT$1 million or more, or at an amount equal to or greater than 0.01 percent of net operating revenue or 0.05 percent of paid-in capital as stated in the CPA-attested financial report for the most recent year. The one-year period shall refer to the one year dating back from the current board meeting. Amounts that have already been passed in board meetings may be excluded from calculation. 8. Issues which involve the own interests of the Directors or Supervisors. 9. Major transactions on assets or derivative products. 10. Important lending, endorsement or guarantees provided. 11. Appointment, dismissal or remuneration of the CPAs. 12. Decisions that require a resolution of the shareholders meeting or submitted to the Board of Directors according to other laws or the articles of incorporation or other important matters specified by the competent authorities. Article 8 Attendance books shall be provided during board meetings and signed by all Directors present at the meeting. Attendance by video conference shall be deemed as attendance in person. However, Directors shall fax sign-in documents in lieu of signing in. At least one Independent Director shall attend board meetings in person. A Director appointing another director to attend the board meeting in his or her place shall in each instance issue a written proxy stating the scope of authorization with respect to the reasons for the meeting. Any proxy prescribed in the preceding paragraph shall only represent one Director in the meeting. Regarding matters that require a resolution of the Board of Directors according to Article 7, all of Independent Directors shall attend the meetings, if Independent Directors can t attend the meetings in person shall appoint other Independent Directors to attend on their behalf. Any objections or reservations opinions expressed by Independent Directors shall be recorded in meeting minutes. If an Independent Director is unable to express objections or reservations opinions personally at the board 2

3 meeting, the opinion shall be raised in writing in advance unless there is justifiable reason not to do so. Such opinions shall also be recorded in board meeting minutes. Article 9 The Company's board meetings shall be convened and chaired by the Chairperson. However, the first meeting of each newly elected Board of Directors shall be convened and chaired by the Director who received votes representing the largest portion of voting rights at the shareholders' meeting in which the directors were elected. If there are two or more directors so entitled to call the meeting, they shall choose one person by and from among themselves to do so. When the Chairperson of the board is on leave or for any reason unable to exercise the powers of Chairperson, the Vice Chairperson shall act in place of the Chairperson; if there is no Vice Chairperson or the Vice Chairperson is also on leave or for any reason unable to exercise the powers of Vice Chairperson, the Chairperson shall appoint one of the Directors to act. If no such designation is made by the Chairperson, the directors shall select one person from among themselves to serve as chair. Article 10 The Board of Directors may invite personnel from relevant department or subsidiaries to attend the meeting during which current business overview and answers to Directors' questions are provided. When necessary, the Board of Directors may also invite certified public accountants, attorneys, or other professionals to attend the meeting as non-voting participants and to make explanatory statements, provided that they shall leave the meeting when deliberation or voting takes place. No other personnel may attend the board meeting without the consent of the Board of Directors. Article 11 A Company shall record on audio or video tape the entire proceedings of a board of directors' meeting, and preserve the recordings for at least five years, in electronic form or otherwise. If, before the end of the preservation period referred to in the preceding paragraph, any litigation arises in connection with a resolution of a board of directors' meeting, the relevant audio or video recordings shall continue to be preserved until the litigation is concluded, and the regulation in the preceding paragraph shall be invalid. Where a board meeting is held by video conference, the audio or video documentation of the meeting constitutes a part of the meeting minutes and shall be retained for the duration of the existence of the Company. Article 12 The Chairperson shall announce that the meeting begins when it is time to begin and at least half of the directors are present. If half or more of the Directors are not present when it is time to begin a meeting, the Chairperson may postpone the meeting. A meeting may be postponed twice. If the number of participants remains insufficient after two postponements, the Chairperson may announce that the meeting is postponed. After such announcement is made, a meeting shall be reconvened in accordance with Article 3. Article 13 A board meeting shall follow the agenda given in the meeting notice. However, the agenda may be changed with the approval of a majority of directors in attendance at the board meeting. Without the approval of a majority of the directors in attendance at the meeting, the Chairperson may not declare the meeting closed until all items on the agenda (including extemporaneous motions) have been completed. If at any time during the proceeding of a board of directors' meeting the directors sitting at the meeting are not more than half of the directors present at the meeting, then upon motion by the directors sitting at the meeting, the Chairperson shall declare a suspension of meeting, in which case 3

4 the preceding article shall apply mutatis mutandis. While the meeting is in session, the Chairperson may at his/her discretion allocate and announce time for breaks or negotiations. Article 14 After a director present at the meeting speaks, the Chairperson may respond in person or assign relevant personnel to reply or appoint an attending professional to provide necessary information. The Chairperson may demand a director to discontinue expressing the director's opinions if the director has made repetitive comments on the same proposal or provided irrelevant opinions which have impeded the smooth operation of the meeting or prevented the other directors from expressing their opinions. Article 15 With respect to discussions of a proposal, if the Chairperson deems that a consensus has been reached where a vote may be taken on the proposal, he/she may announce that the discussions shall cease and the proposal be submitted for a vote. When a proposal comes to a vote at a board meeting, if no attending director voices an objection following an inquiry by the Chairperson, the proposal will be deemed approved, which has the same effect as voting by ballot. If there is an objection following an inquiry by the Chairperson, the proposal shall be brought to a vote. Voting method shall be a show of hands. The Chairperson shall appoint monitors and ballot counters. All directors present at the meeting in the preceding paragraph do not include directors prohibited from exercising voting rights pursuant to Article 17, Paragraph 1. Article 16 Unless otherwise provided by the Company Act or the Company's Articles of Incorporation, a proposal shall be approved by the consent of more than half of the votes of directors present at the meeting. Where there is an amendment or an alternative for a proposal, the Chairperson shall determine the order in which they are to be voted on with the original proposal. In case one of these cases has already been resolved, however, the other cases shall be considered rejected. No further voting is required. The results of each vote shall be announced on the spot and made into the minutes. The Company shall transmit the information on matters resolved in the board of directors' meeting to the Market Observation Post System within the deadline specified by law, if such matters involve the material information defined by the Taipei Exchange or other laws. Article 17 A director shall uphold the highest degree of self-discipline. If a director or the judicial person the director represents has a personal interest in the matter under discussion at the meeting, (Where the spouse, a blood relative within the second degree of kinship of a director, or any company which has a controlling or subordinate relation with a director has interests in the matters under discussion in the meeting, such director shall be deemed to have a personal interest in the matter.), the relevant director shall disclose the nature of such personal interest. If such interest may impair the interest of the Company, the relevant director shall not join the discussion and voting of such matter, and shall recusal himself/herself when the matter is being discussed and resolved; nor shall the relevant director exercise voting right on behalf of another director. For directors who are not allowed to exercise the voting rights pursuant to the preceding paragraph, the provisions of Article 180, Paragraph 2 of the Company Act, as applied mutatis mutandis under Article 206, Paragraph 3 of that Act, shall be followed. 4

5 Article 18 Minutes shall be taken for all board of directors' meetings. The meeting minutes shall record the following: 1. The session (or year), time and location of a meeting. 2. The name of the Chairperson. 3. Director attendance, including the names and number of the directors who are present, excused, and absent. 4. The names and titles of those attending the board meeting as nonvoting participants. 5. Name of the minute taker. 6. Items to report. 7. Matters for discussion: Including the resolution method and the outcome of the motion, a summary of the comments made by directors, experts, or other persons. The name of any director that is an interested party as referred to in Paragraph 1 of the preceding article, an explanation of the important aspects of the relationship of interest, the reasons why the director was required or not required to enter recusal, and the status of their recusal. Objections or reservations options expressed at the meeting that were included in records or stated in writing, and any opinion issued in writing by an independent director under Article 8, Paragraph Extraordinary motions: The name of the proposer, the method of resolution and the result for each motion, a summary of the comments made by directors, experts, or other persons. The name of any director that is an interested party as referred to in Paragraph 1 of the preceding article, an explanation of the important aspects of the relationship of interest, the reasons why the director was required or not required to enter recusal, and the status of their recusal. Objections or reservations opinions expressed at the meeting that were included in records or stated in writing. 9. Other necessary information to be kept on file. The attendance book of the Board of Directors meeting shall be regarded as part of the meeting records and shall be kept permanently. The meeting minutes shall be signed or stamped by the Chairperson and the minute taker, and distributed to all directors within 20 days after the meeting. It should be treated as part of the Company's important files and retained as such over the Company's existence. The preparation and distribution of meeting minutes prescribed in the first paragraph may be made in electronic form. Article 19 When the meeting is adjourned, except for the matters discussed in the Company's Board of Directors meeting as stipulated in Article 7 of these Rules, the Company's Board of Directors may authorize the Chairperson to exercise the authority of the Board of Directors in accordance with laws or the Company's Articles of Incorporation. The content of authorization shall be in accordance with the following: 1. Company management rules, systems, and guidelines. 2. Company authorities. 3. Resolutions of the Board of Directors. Article 20 The Company's Board of Directors may establish various functional committees (the "Committee"). If the Company's Board of Director has already setup a Committee, each Committee shall bear responsibility for the Board of Directors and shall submit proposals to the Board of Directors for resolution. Article 21 The Rules are implemented after being approved by the Board of Directors; the same shall apply to all future amendments. 5

6 Article 22 The Rules were formulated on December 16, 2005 and amended on August 21, Article 6 and Article 11 Paragraph 1 were implemented on January 1, 2007, and the remaining were implemented as of the date of amendment. The 2nd amendment was implemented on May 21, The 3rd amendment was implemented on February 26, The 4th amendment was implemented on August 3, The 5th amendment was implemented on October 22, The 6th amendment was implemented on July 28, The 7th amendment was implemented on January 29,