VII. Board Of Directors

Article 19 Composition and term

19.1. The number of members of the Board of Directors will not be less than 5 or more than 11 elected at the Shareholders Meeting by the method of accumulate votes. Each member of the Board of Directors has a maximum term of three years and can be re-elected at the next Shareholders Meeting. At least one third of the members Boards of Directors should be non-executive independent members.

19.2. Shareholders and groups of Shareholders who own at least 10% of the total common shares for at least six consecutive months are entitled to nominate a person to be elected as member of the Board of Directors.

19.3. A member of the Board of Directors will not retain Board membership status in the following cases:

a. The member is no longer eligible to be a member of the Board of Directors under regulations of the Enterprise Law or is banned by the Law from being a member of the Board of Directors.

b. The member sends a request for resignation to the Company’s headquarters.

c. The member is affected by a nervous disorder and other members of the Board of Directors have professional evidence that the member does not have the capacity to act.

d. The member is absent from and does not participate in meetings of the Board of Directors for six consecutive months without the permission of the Board of Directors, and the Board of Directors concludes that the position of the member is left vacant.

e. The member is dismissed from the Board of Directors according to a resolution of the Shareholders Meeting.

19.4. The Board of Directors can appoint a new member to fill in a vacancy that arises unexpectedly in the Board of Directors, and the member must receive approval at the next Shareholders Meeting. After the approval of the Shareholders Meeting is issued, the appointment is seen to take effect on the date when the member was appointed by the Board of Directors. Members of the Board of Directors designated to fill in an unexpected vacancy on the Board must still undergo a vote of confidence at the next Annual Shareholders Meeting.

19.5. The appointment of members of the Board of Directors must be announced in at least two economic newspapers which are widely known in Vietnam within five days of the date of nomination.

19.6. Member of the Board of Directors is not necessary to be a shareholder of the Company.

Article 20 Rights and functions of the Board of Directors

20.1. Business activities and operations of the Company must fall under the management or direction of the Board of Directors. The Board of Directors is the body with complete jurisdiction to execute all rights on behalf of the Company except for the ones under jurisdiction of the Shareholders Meeting.

20.2. Members of the Board of Directors must together hold at least 20% of the total shares with voting rights of the Company.

20.3. The Board of Directors is responsible for supervising the Managing Director and other Managers.

20.4. Rights and obligations of the Board of Directors are stipulated by the Law, this Charter, regulations of the Company and resolutions of the Shareholders Meeting. Specifically, the Board of Directors has the following rights and obligations:

a. To decide on the annual budget, business and development plans;

b. To define the operational and strategic objectives based on strategic goals passed by the Shareholders Meetings;

c. To appoint and dismiss Managers of the Company at the Managing Director’s suggestion, and to decide their salaries;

d. To decide on the organizational structure of the Company;

e. To act on the complaints of the Company about Managers as well as to decide on the selection of representatives of the Company in carrying out legal proceedings against those Managers;

f. To propose share categories to be issued and the total number of shares for each issuance;

g. To issue bonds, convertible bonds and warrants which allow holders to buy shares at a predetermined price;

h. To decide on the selling prices of bonds, shares, convertible and other securities;

i. To dismiss the Managing Director or any Managers or any representatives of the Company if the Board of Directors believes it is for the utmost benefit of the Company. However, the dismissal is not allowed to go against the contractual rights, if any, of the person to be dismissed.

j. To determine the annual and temporary dividend rates; to organize the dividend payment;

k. To propose the restructuring or dissolution of the Company

20.5. The following issues must be approved by the Board of Directors:

a. Establishing branches or representative offices of the Company;

b. Establishing subsidiaries of the Company;

c. The Board of Directors must decide, at each given time, on the implementation, change or cancellation of large contracts of the Company or any branch of the Company (including purchase, sale, merger, companies and joint-ventures’ takeover contracts), except in cases stipulated by article 120 of the Enterprise Law, which must be approved by the Shareholders Meetings;

d. Appointing and dismissing people who are authorized by the Company to be commercial representatives and lawyers of the Company;

e. Anything relating to loans and fulfilling all mortgages, guarantees and compensation of the Company;

f. Any investment out of the business plan and budgets or any investment exceeding 10% of the total value of the annual business plan and budget;

g. Buying or selling shares of other companies established in Vietnam or abroad;

h. Appraising non-cash assets contributed to the Company related to the issue of shares or bonds of the Company, including gold, land-use rights, intellectual property rights, technology and trade secrets;

i. Proposing annual dividend rates and make decision on dividend payments in advance; organizing the payment of dividends;

j. The Company’s purchase or reclamation of less than 10% of the shares of each category;

k. Proposing the restructuring or dissolution of the Company;

l. Any other business or transaction issue which the Board of Directors decides needs approval within the limits of the Board’s authority and obligations; and

m. Deciding on the price to purchase or reclaim shares of the Company.

20.6. The Board of Directors must submit a report to the Shareholders Meeting about its operations, particularly about the Board’s supervision of the Managing Director and other Managers in the fiscal year. If the report is not submitted, the Company’s annual financial report will be deemed invalid and not yet approved by the Board.

20.7. The Board of Directors can authorize junior employees and Managers to represent and act on behalf of the Company, even when dealing with issues which require assessment and conclusion, unless the Law and this Charter include different regulations.

20.8. Members of the Board of Directors (excluding authorized alternate representatives) will be paid for their work as members of the Board of Directors. The total amount of compensation allocated to the Board of Directors will be decided by the Shareholders Meeting. This compensation will be paid to members of the Board of Directors according to an internal agreement of the Board, if such an agreement does not exist, the compensation will be equally distributed to all members of the Board of Directors.

20.9. The total amount of the compensation paid to the members of the Board of Directors and the amount individually received by each member of the Board of Directors should be mentioned in details in the Annual Report of the Company.

20.10. All members holding any position of management (including the position of Chairman or Vice Chairman, regardless of whether those positions are deemed to lie within the scope of management), or members working for committees of the Board, or members executing different work which, in the opinion of the Board, is outside the scope of the normal tasks of a member of the Board of Directors, can get additional compensation in the form of wages, salary, commission, profit-sharing or different forms decided by the Board of Directors.

20.11. Members of the Board of Directors have the right to be paid for all travel and accommodation expenses and other fees which they accrue while fulfilling the responsibilities of a member of the Board, including expenses arising from attending meetings of the Board or committees of the Board, or Shareholders Meetings.

Article 21 Chairman, Vice Chairman and members of the Board of Directors

21.1. The Board of Directors must elect a Chairman and a Vice Chairman from among the members of the Board. Unless the Shareholders Meeting issues a different decision, the Chairman of the Board of Directors will not hold simultaneously the position of Managing Director. If the shareholders accept that the Chairman can hold simultaneously the position of Managing Director of the Company, this resolution must be reconfirmed every single year at the Annual Shareholders Meeting.

21.2. The Chairman of the Board of Directors must convene and preside over Shareholders Meetings and meetings of the Board; and has other rights and responsibilities stipulated by this Charter and the Enterprise Law. The Vice Chairman has acting rights and obligations with Chairman Status if authorized by the Chairman, but only when the Chairman informs the Board of Directors of his absence, or is absent for unavoidable reasons, or loses his ability to execute the functions of the Chairman. If the Chairman does not designate a Vice Chairman to act in this way, then the remaining members of the Board of Directors will designate the Vice Chairman. If both the Chairman and Vice Chairman are temporarily unable to fulfill their tasks for any reason, the Board of Directors can appoint another one of its members to execute the tasks of the Chairman.

21.3. The Chairman of the Board Directors must submit annual financial reports, reports about the Company’s general situation, auditing reports from auditors, and inspection reports from the Board of Directors to Shareholders at the Shareholders Meeting.

21.4. When both the Chairman and Vice Chairman resign or are dismissed for any reason, the Board of Directors must elect new persons to the positions within 10 days.

21.5. The Chairman of Boards of Directors has the rights and responsibilities as follow:

a. To establish the plan of activities for the Board of Directors

b. To prepare the program, contents, documents necessary for the meeting, to convene and preside the meeting of the Board of Directors;

c. To organize the ratification of decision of the Board of Directors;

d. To supervise the process of implementing the decisions of the Board of Directors;

e. To preside the Shareholders Meeting

f. To call for the regular meetings, extraordinary meetings by means of telecommunication, postal mail, process-verbal, telephone… depend on the decision of the Chairman of the Board of Directors;

g. To organize an supporting office;

h. In case of necessity, to make the decision on the appointment, dismissal, to dismiss any titles administrated by the Board of Directors. Later, to report to the Board of Directors in the next coming meeting or directly inform the members of the Board of Directors in writing;

i. Assume other rights and responsibilities stipulated by this Charter and the Enterprise Law.

Article 22 Alternate members of the Board of Directors

22.1. All members of the Board of Directors (but not those authorized to replace them) can appoint any other member of the Board of Directors, or any other person approved by the Board of Directors and ready to assume tasks, to act as their alternates, and retain the rights to dismiss their alternates.

22.2. An alternate member of the Board of Directors will have the right to receive notices about all meetings of the Board of Directors and of committees of the Board of Directors of which the grantor is a member, and is able to participate and vote at any meeting where the grantor is absent, and is authorized to carry out all functions of the grantor as a member of the Board of Directors in case of the absence of the grantor, but the alternate member does not have the right to any compensation from the Company for his work as an alternate member of the Board of Directors. However, it is not compulsory to send notices about the meetings to an alternate member of the Board of Directors who is not present in Vietnam.

22.3. Alternate members must give up their status as a member of the Board of Directors if the grantor is no longer a member of the Board of Directors. But if a member of the Board of Directors finishes his term and is then reappointed or is already seen to be reappointed at the Shareholders Meeting which witnesses the end of his term, the designation of an alternate member before the end of his term will continue to have effect after the member is reappointed.

22.4. The designation or dismissal of an alternate member must be done in a written announcement which the grantor signs and sends to the Company or in another form approved by the Board.

22.5. Apart from other regulations raised in this Charter, an alternate member will be deemed a member of the Board of Directors in all aspects and must take individual responsibility for his behavior and mistakes, and will not be seen as a representative carrying out the authority of the grantor.

Article 23 Meetings of the Board of Directors

23.1. Regular meetings. The Chairman of the Board of Directors must convene meetings of the Board, and set up the meeting’s agenda, time and venue at least seven days ahead of the planned date of the meeting. The Chairman can convene a meeting at any time necessary, but there must be at least one meeting every quarter.

23.2. Extraordinary meetings. The Chairman must convene a meeting of the Board of Directors without unreasonable delay if one of the following subjects proposes the meeting in a written document which mentions the purpose and issues which need to be discussed:

a. The Managing Director or at least five high ranking Managers;

b. Two members of the Board of Directors;

c. The Chairman of the Board of Directors; or

d. A majority of members of the Supervisory Board.

23.3. A meeting of the Board of Directors must be organized within two weeks after the proposal. If the Chairman does not agree to convene a meeting, those desiring to organize a meeting as mentioned in Point 2 of this Article are able to convene a meeting of the Board.

23.4. At the request of independent auditors, the Chairman of the Board of Directors must convene a meeting of the Board to discuss about auditing reports and the situation of the Company.

23.5. Meeting venue. Meetings of the Board of Directors will be held at the registered address of the Company or at other places in Vietnam or abroad as decided by the Chairman and unanimously approved by the Board.

23.6. Notice and meeting agenda. Members of the Board of Directors must be informed of a meeting five days ahead of the planned date, with the condition that members can refuse to attend the meeting in writing and the refusal can have retroactive effect. The notice about the meeting of the Board must be made in writing, in Vietnamese, and include the meeting’s agenda, time and venue, necessary documents about issues to be discussed and voted on at the meeting and voting cards, for members unable to participate, must also be enclosed.

23.7. Minimum number of participants. A meeting can only take place and pass resolutions when at least two-thirds of the total members of the Board of Directors are present or have their authorized representatives in attendance at the meeting.

23.8. Voting.

a. Following the regulations in Point 23.8b of this Article, each Board member or his/her authorized representative with individual status who is present at the meeting will be given one vote.

b. A member of the Board will not be allowed to vote on any contracts or transactions or proposals in which the member or any Concerned Persons has interests could possibly contradict the interests of the Company. A member of the Board will not be counted in the required minimum number of participants present at the meeting regarding the passage of a resolution on which the member does not have the right to vote.

c. According to the regulation in Point 22.8d of this Article, at a meeting of the Board of Directors, if any issues arise related to the level of interests of a member of the Board or related to the voting right of any member, and those issues are not resolved by the member voluntarily abandoning his voting right, then those issues will be passed on to the chairperson of the meeting and the decision of the chairperson concerning all other members of the Board is final, except in cases where the nature or scope of the interests of a concerned member of the Board of Directors has not been announced adequately.

d. Any member of the Board of Directors received benefits from a contract stipulated in Article 120 of the Enterprise Law will be considered having substantial interests in this contract.

23.9. Declaration of interests. A member of the Board who, in one way or another, directly or indirectly, benefits from a contract or transaction which is or will be signed with the Company, must declare the nature and contents of those interests at the meeting in which the Board of Directors first considers signing the contract or transaction, if the member already knows he has related benefits. Or the member can declare this at the first meeting of the Board organized after the member knows he has or will have related benefits.

23.10. Voting by majority. The Board of Directors passes resolutions and issues decisions by the approval of a majority of the members of the Board present at the meeting (more than 50%). If the number of yes and no votes are equal, the Chairman will hold the decisive vote.

23.11. Voting of absent members. Absent members of the Board of Directors can vote on a resolution of the Board by voting in writing. Voting cards will be given to the Chairman, or if not able to be sent to the Chairman, then given to the secretary no later than one hour before the opening of the meeting.

23.12. Telephone meetings or other forms. A meeting of the Board of Directors can be organized in a form in which all or some members are at different locations on the condition that each participating member can:

a. Hear every other participating Board member speaking at the meeting;

b. If desired, be able to speak to other participating members simultaneously.

Communication among members can be implemented directly, through the telephone system or via any other means of communication (whether already in use at the time of the approval of this Charter or coming into use afterward) or in a way combining all the forms. According to this Charter, each member of the Board who participates in such a meeting is deemed “present” at the meeting. A meeting which is held in line with the regulation is deemed to be taking place at the venue where the largest group of members of the Board of Directors gathers, or if there is no such group, the venue where the chairperson of the meeting is present will be seen as the venue of the meeting.

Resolutions passed at a telephone meeting organized in line with regulations will take effect immediately after the meeting concludes, but they must be confirmed by a written document with signatures of all participating members of the Board.

23.13. Resolutions in writing. A Resolution in writing must be signed by all of the following members of the Board:

a. Members with the right to vote on resolutions at meetings of the Board;

b. A number of members present not lower than the minimum number of members needed to organize a Board meeting.

Resolutions of this kind take effect and have value exactly like resolutions which are passed by members of the Board at a meeting which is convened and organized in the normal manner. The resolution can be passed by using multiple copies if each copy bears signatures of one member or more.

23.14. Meeting minutes. The Chairman of the Board of Directors is responsible for passing on the minutes of a meeting to members. The minutes must be viewed as concrete evidence of work completed at the meeting unless there are objections to the contents of the minutes within 10 days after the date the minutes were sent. The minutes must be written in Vietnamese and signed by all participating members of the Board of Directors.

23.15. Persons invited to attend meetings as observers. The Managing Director, other Managers and third-party experts can participate in a meeting of the Board of Directors at the Board’s invitation but cannot vote unless they have voting rights themselves as members of the Board.

23.16. Committees of the Board of Directors. The Board of Directors can grant the rights to act and make decisions to subordinate committees including one or many members of the Board and one or many people from outside the Board if suitable. In the process of executing their delegated authority, all committees have to abide by regulations issued by the Board of Directors at any given time. The regulations are able to adjust or allow admission of people who are not members of the Board to the committees. The newly admitted people have the right to vote as members of the committees but (a) the number of new admissions to a committee must be lower than half of the total members of the committee and (b) resolutions of the committee will not take effect if the majority of the members present at the meeting to pass the resolutions are not members of the Board of Directors.

23.17. Legal value of actions. All actions which are carried out via meetings of the Board of Directors, or of any committee directly under the Board, or by any person with status as a member of that committee, will be seen as having the same legal value as if that person were lawfully appointed, qualified, and will continue as a member of the Board or of the committee with voting rights, although there might be mistakes in the process of appointing the acting person