Regulations Governing the Qualifications and Election/Appointment of Membership Representatives, Directors, Supervisors and Managerial Officers of Credit Cooperatives Article 40

Before an elected director or supervisor takes office, the amount of share capital subscribed by respective director or supervisor shall not be less than the average of 15% of total paid-in capital of the credit cooperative at the end of year prior to taking office divided by the number of directors and supervisors elected in accordance with the forgoing article to ensure that every director and supervisor will undertake the responsibilities of a director or a supervisor under the Act.Up to one half of the required share capital subscribed by a director or supervisor may be pledged to the credit cooperative in the form of certificate of deposit, government bonds, bank debentures or secured corporate bonds of equivalent value.The amount of share capital referred to in the preceding two paragraphs may not be refunded or have pledge released until a director or supervisor has been relieved from office for at least one year and after the information has been reported to the Department of Finance of municipal government or the county (city) government for reference. Notwithstanding the foregoing, a director or supervisor is not subject to the one-year restriction, provided, that the credit cooperative confirms that the director or supervisor concerned is free of any liability during the term of office and the director provides an affidavit, which is passed by a resolution of the board of directors whereby the consenting directors agree to assume joint responsibility for the amount refunded or the amount of pledge released for the remaining part of the one-year period.The application for refund of share capital or release of pledge shall be submitted no later than six months after the director or supervisor has been relieved from office for one year. The per share capital to be refunded will be determined by book value per share according to the latest examination report or the latest CPA-audited financial statement, whichever is lower, and passed by the general meeting of membership representative, which however shall not exceed the par value of share.If a director or supervisor fails to apply for refund of share capital within the time period as provided in the preceding paragraph, the refund will be handled according to the share capital refund procedure for general members.