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Article 2
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"Material information" in "press conferences concerning material information" as used in these Procedures means the following particulars provided by a listed company of its own initiative or investigated and verified at the initiative of the Taiwan Stock Exchange:
1. Dishonor of a negotiable instrument due to insufficient deposits, refusal by a financial institution to honor a transaction, or other loss of credit of a listed company or parent company or subsidiary thereof.
2. Any serious effect on company finances or business resulting from any litigious or non-litigious matter, administrative disposition, or contentious administrative procedure with respect to a listed company or a responsible person thereof.
3. Serious decrease in output or complete stoppage of work.
4. Any event set forth in Paragraph 1 of Article 185 of the Company Law.
5. Resolution by the board of directors of a listed company or parent or subsidiary thereof to petition a court for bankruptcy or reorganization, or a petition by a third party to a court for bankruptcy or reorganization; or a court ruling prohibiting transfer of the company's shares pursuant to Subparagraph 5 of Paragraph 1 of Article 287 of the Company Law.
6. Signing or rescission of an important memorandum of understanding or strategic alliance or plan for business cooperation with another company or important contract, or change to important content of a business plan, or completion of development of a new product.
7. Resolution by the board of directors for capital reduction, merger or consolidation, cancellation of merger or consolidation, spin-off, acquisition, acquisition of shares, dissolution, participation in the establishment of or conversion into a financial holding company or investment holding company or subsidiary thereof; or inability to convene a subsequent shareholders' meeting of a company participating in a merger, consolidation, spin-off, acquisition, or acquisition of shares, or veto of the proposal for merger, consolidation, spin-off, acquisition, or acquisition of shares; provided, this shall not apply to mergers and acquisitions conducted in accordance with Article 18, Paragraph 6, and Article 19 of the Business Mergers and Acquisitions Act. "Subsidiary" means a subsidiary as defined in Article 4, Subparagraph 4 of the Financial Holding Company Law.
8. (This subparagraph is deleted.)
9. (This subparagraph is deleted.)
10. (This subparagraph is deleted.)
11. (This subparagraph is deleted.)
12. Transactions between the company and related parties: acquisition or disposal of long and short-term investments in securities, real property, and other fixed assets, where the monetary amount of the individual transaction, or of cumulative transactions with a same trading counterpart within one year, reaches 20 percent of the company's paid-in capital or not less than NT$300 million; acquisition or disposal of real property for operating use by construction enterprises, where the monetary amount of the individual transaction, or of cumulative transactions with a same trading counterpart within one year, reaches 20 percent of the company's paid-in capital or not less than NT$500 million.
13. (This subparagraph is deleted.)
14. Occurrence of a disaster, group protest, strike, environmental pollution event resulting in a disposition by a competent authority, where the anticipated insurance-indemnified loss exceeds 20 percent of the company's paid-in capital or NT$300 million or more.
15. (This subparagraph is deleted.)
16. Any significant effect from mass media reportage or information provided by investors.
17. (This subparagraph is deleted.)
18. (This subparagraph is deleted.)
19. Voidance of the permit of a financial holding company by the competent authority thereof, or penalization of a financial holding company by the competent authority thereof because of a violation of any applicable provision of the Financial Holding Company Law, or loss by a financial holding company of controlling shareholding (as defined in Subparagraph 1 of Article 4 of the Financial Holding Company Law) in a subsidiary thereof, where the competent authority has ordered remediation within a certain time limit.
20. (This subparagraph is deleted.)
21. (This subparagraph is deleted.)
22. Resolution by the board of directors or a shareholders' meeting of a listed company to apply for termination of listing for trading of its securities.
23. (This subparagraph is deleted.)
24. Where a listed company holds more than 70 percent of the total issued shares or total capital of a listed (or OTC) subsidiary thereof; or where 70 percent of the total issued shares or total capital of a listed company is held by another listed (or OTC) company.
25. Any other circumstance with a material effect on shareholders' equity or securities prices, or other major policy resolutions of the board of directors of the company.
Where any circumstance in any subparagraph of Paragraph 1 applies to any unlisted (non-OTC) major subsidiary of a listed company, it shall be deemed material information of the listed company. The term “major subsidiary” means any and all subsidiary(ies) of the listed company as defined according to generally accepted accounting principles to which any of the following circumstances has applied in each of the most recent two fiscal years (with the information being based on the annual financial reports audited and attested by a certified public accountant), or any subsidiary that the certified public accountant deems to have a material effect on the financial report of an audited company:
(1) Where 30 percent or more of the listed company's operating revenue is derived from the single subsidiary.
(2) Where 50 percent or more of the listed company's major materials or major commodities, in terms of its quantities or total dollar purchase amounts thereof, is derived from the single subsidiary.
(3) Where 50 percent or more of the listed company's total output value (including from self-production, contracting, and outsourcing) is derived from the single subsidiary.
(4) Where the listed company's dollar amount of original investment in the single subsidiary reaches 40 percent of the listed company's paid-in capital and also NT$300 million or more.
(5) Where the aggregate dollar amount of the listed company's monetary loans and guarantees and endorsements to the single subsidiary reaches 40 percent of its net worth and also NT$300 million or more.
(6) Where a single subsidiary's profit/(loss) before tax accounts for 50 percent of the listed company's profit/(loss) before tax on its consolidated financial statements and also NT$300 million or more.
The existence of any circumstance set forth in any subparagraph of the preceding paragraph in respect of any held company or subsidiary of a listed company that is an investment holding company or financial holding company, or in respect of a listed company that is a subsidiary of a non-listed domestic parent company, shall be deemed material information of the listed company.
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