We do not have any service contracts with any directors providing for any benefits upon termination of employment. Thirteen directors and three supervisors were elected in 2010 for three-year terms. The MOTC replaced Mr. Mu-Shun Lin  with Mr. Wen-Tsan Lin in July 2011 due to a reallocation of responsibilities for these two individuals at the MOTC. One of the  directors designated by MOTC, Shen-Ching Chen, resigned in July 2011 and MOTC has not designated new director yet. Therefore  we currently have 12 directors and three supervisors. Pursuant to the R.O.C. Company Act, the directors may be removed from office  at any time by a resolution adopted by a resolution at a stockholders’ meeting. The chairman of our board of directors is elected by  our directors. Our chairman presides at all meetings of our board of directors and also has the authority to act as our representative.  We have not entered into any contract with any of our directors and supervisors by which our directors or supervisors are expected to  receive benefits upon termination of their employment.  Our articles of incorporation provide for a board of directors consisting of seven to fifteen members. Pursuant to the R.O.C.  Securities and Exchange Act, as amended in January 2006, the R.O.C. Financial Supervisory Commission on May 28, 2006 published  a rule requiring listed non-financial-institution companies with paid-in capital exceeding NT$50 billion to appoint independent  directors to serve on their board of directors in accordance with the Act. The term “independent director” may have a different  meaning when used in Taiwan than in other jurisdictions. The number of independent directors shall be not less than one-fifth of the  total number of directors and not less than two in number. Pursuant to both the R.O.C. Company Act and the R.O.C. Securities and  Exchange Act, Article 12 Clause 1 of our article of incorporation provides for the election of, starting from the fifth stockholders’  meeting, at least three independent directors out of the 7-to-15-member board. We have used a nominating process, with the  stockholders choosing the independent directors from the list of nominees. Accordingly, we have elected three independent directors  in the annual general meeting on June 18, 2010. With respect to certain material decisions to be made by our company as specified  in the R.O.C. Securities and Exchange Act, including the adoption or amendment to our internal control system, material loans or  guarantees, the issuance of equity-type securities, matters in which directors and supervisors have personal interests, the appointment  and discharge of auditors, approval of financial reports, the appointment and discharge of financial, accounting or internal auditing  officers and other matters prescribed by the R.O.C. Financial Supervisory Commission, the dissenting opinion or qualified opinion of  an independent director is required to be noted in the minutes of the board of directors’ meeting.  In accordance with our articles of incorporation, we are required to have three to five supervisors. We currently have three  supervisors elected during the stockholder’s meeting in 2010. In accordance with the R.O.C. Company Act, our supervisors are  elected by our stockholders and may not concurrently serve as our directors, executive officers or other staff members. The term  of office for our supervisors is three years and their term may be renewed for any number of consecutive terms. Supervisors’  duties and powers include, but are not limited to, supervision of our business operations, investigation of our financial condition,  inspection of corporate records, verification of statements prepared by the board of directors prior to the annual general stockholders’  meeting, calling of and giving reports at stockholders’ meetings, representation of us in negotiations with our directors and giving  notification, when appropriate, to the board of directors to cease acting in contravention of applicable law or regulations, our articles  of incorporation or the resolutions adopted by our stockholders. The supervisors may be also removed from office at any time by a  resolution adopted at a stockholders’ meeting.  Under the R.O.C. Company Act, a person may serve as our director or supervisor in his personal capacity or as the  representative of another legal entity. A director or supervisor who serves as the representative of a legal entity may be removed or  replaced at any time at the discretion of that legal entity, and the replacement director or supervisor may serve the remainder of the  term of office of the replaced director or supervisor. Except for our three independent directors, all of our directors are representatives  of the Ministry of Transportation and Communications. Our current supervisors consist of one representative from the Executive  Yuan’s National Development Foundation and two representatives from Chunghwa Post Co. Ltd. In accordance with the R.O.C.  Securities and Exchange Act, as amended, except with the approval of the Competent Authority (i.e. The Financial Supervisory  Commission), a representative of the government or of a juristic person, as a stockholder of our company, may not be concurrently  98 C. Board Practices P AR T I