Chapter  III Organization

Article 9
The EPPI shall set up board of directors of 9 members to be selected/ appointed by the FTC as follows:
1. 2 representatives from MLM enterprises filed for report with the FTC;
2. 2 representatives from the participants;
3. 3 or 4 specialists or scholars;
4. 1 or 2 representative(s) from the FTC.
Each director shall serve a 3-year term and may be re-selected/ re-appointed for a second term. The number of directors to serve a second term may not exceed 2/3 of the total number of directors.
The chairperson of the board of directors shall be elected from among the directors, exclusive of the FTC’s representative(s), with a majority vote at a meeting attended by a quorum of over 2/3 of the directors. The result shall become effective upon approval of the FTC.

Article 10
The responsibilities of the board of directors are as follows:
1. Fund raising, administration and management;
2. Election and dismissal of chairperson of the board;
3. Selection of members of the mediation committee;
4. Stipulation and revision of operating regulations;
5. Establishment and administration of internal organization;
6. Development and promotion of work plans;
7. Review of annual budget and final accounting accounts
8. Proposal of amendments to the charter for endowment;
9. Proposal of property purchases and disposal or creation of encumbrance;
10. Proposal of upper limits of advancing liable damages, litigation expenses and attorney’s fees from the protection fund;
11. Other proposals or decisions to be made according to the charter for endowment.

Article 11
The chairperson of the board of directors shall convene and preside over board meetings. In case the chairperson is unable to convene or preside over a meeting, he or she shall designate a director to act on his or her behalf. If the chairperson fails to or is unable to designate one, the other directors shall elect one among themselves to convene and preside over the meeting.
The board meetings shall be held at least once every three months. Ad hoc meetings may be convened when necessary.

Article 12
Decisions of board meetings shall require the attendance of a quorum of over 1/2 of the directors as well as a majority vote at a meeting.
The directors shall attend the aforementioned meetings in person. In any circumstance that the director is unable to attend in person may entrust another director with the power of attorney, which clearly indicated the scope of authorization, to attend on his or her behalf. Each director may only deputize for one director only.

Article 13
Decisions of the EPPI regarding the following matters shall require the attendance of a quorum of over 2/3 of the directors as well as the consent of at least 2/3 of the attending directors:
1. Revision of the charter;
2. Stipulation and revision of organizational regulations;
3. Dissolution or revision of objectives of the EPPI;
4. Property purchases and disposal or creation of encumbrance;
5. Application for loans;
6. Revision of fund custody and management.
If the revision made to the charter as specified in subparagraph 1 of the preceding paragraph involves any of the circumstances described in Article 62 or 63 of the Civil Code, the FTC may apply to the court for necessary disposition.
The matters stated in subparagraphs 1 to 3 and 6 of paragraph 1 shall acquire the prior approval of the FTC.
The agenda for discussion regarding the matters stated in paragraph 1 shall be provided to all the directors as well as filed with the FTC for future reference ten days before the meeting takes place and the FTC may also send staff members to attend the meeting as observers.

Article 14
The EPPI shall have 1 to 3 supervisors to be selected by the FTC from scholars, specialists and impartial persons.
Each supervisor shall serve a 3-year term and may be reselected. The number of reselected supervisors serving for a new term may not exceed 2/3 of the total number of supervisors.
The supervisors may investigate the operations and finances of the EPPI, inspect account books or documents, and may also request the board of directors to make reports thereon.
The supervisor may exercise his or her supervision power individually. Once discovering that the board of directors is acting in violation of the laws, charter for endowment, or operating regulations during execution of its duties, the supervisor shall immediately notify the board to cease its conduct while at the same time inform the FTC, and provide the FTC with a written statement of the finding facts within three days.

Article 15
The EPPI shall establish a mediation committee to handle disputes between MLM enterprises and participants. The committee shall comprise 11 to 21 members, with one of them being the chairperson of the committee. The board of directors shall select all these members from scholars, experts and impartial persons with related professional backgrounds or practical experiences. The appointment shall acquire the prior approval of the FTC.
Each mediation committee member shall serve a 3-year term and may be reselected upon expiration of each term.
Decisions made by the mediation committee shall require the attendance of a quorum of over 1/2 the members as well as a majority vote of the attending members.
The members of the mediation committee shall exercise their duties independently in an impartial manner.

Article 16
The person falls within any of the following categories shall not serve as EPPI’s director, supervisor or mediation committee member. He or she already serving in any of these capacities shall be ipso facto discharged:
1. The representative of an MLM enterprise who have been placed on the FTC watch list;
2. Any person who has engaged in inappropriate MLM activities and indicted by a prosecuting agency or transferred to a prosecuting agency by the FTC;
3. Any person who has received a final and unappeasable conviction for violation of the provisions of the Organized Crime Prevention Act;
4. Any person who has received a final and unappeasable conviction for committing the offence of fraud, breach of trust or misappropriation;
5. Any person who has been declared bankrupt and rights and privileges have not been reinstated;
6. Any person has no capacity or a limited capacity to make juridical acts;
7. Any MLM enterprise representative or participant who has not paid endowment for the protection fund or annual fee.

Article 17
The directors, supervisors, mediation committee members and staff members of the EPPI shall recuse themselves when conflict of interests occurs in the execution of duties, but election of the chairperson of board directors and reselection of directors are excluded.
The conflict of interests stated in the preceding paragraph refers to situations when directors, supervisors, mediation committee members or staff members of the EPPI gain profits or reduce loss either directly or indirectly through any act or omission in execution of their duties.

Article 18
The directors, supervisors, mediation committee members and staff members of the EPPI shall not engage in the following conduct:
1. Making inquiries that transgress the laws or disclosing confidential information accessed through work;
2. Demanding, agreeing to accept or receiving bribes or unjustifiable benefits during execution of their duties or for practices that transgress their duties.

Article 19
The directors, supervisors and mediation committee members of the EPPI may receive part-time fees, attendance fees and transportation expenses. The standards for payment shall be established by the EPPI and implemented after reported to the FTC for approval.
The staff members of the EPPI may receive salaries. The standards for payment shall be established by the EPPI and implemented after reported to the FTC for approval.