| Title： |
Regulations Governing Share Repurchase by Exchange-Listed and OTC-Listed Companies(2007.03.16) |
| Date： |
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Article 2
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A company repurchasing its own shares at a centralized securities exchange market or at the place of business of a securities firm shall, within two days of the day on which the resolution was made at a meeting of the board of directors, announce the repurchase, and report the below listed items to the Financial Supervisory Commission (FSC), Executive Yuan:
1. Purpose of the repurchase.
2. Types of shares to be repurchased.
3. Ceiling on total monetary amount of the repurchase.
4. Planned period for the repurchase, and number of shares to be repurchased.
5. Price range of the shares to be repurchased.
6. Method for the repurchase.
7. Number of shares held at the time of reporting.
8. Any repurchases within three years prior to the time of reporting.
9. Any repurchases that have been reported but not completed.
10. Record of decision to repurchase shares resolved by the board of directors.
11. Rules for Transfer of Shares provided in Article 10 of these Regulations.
12. Rules for Conversion of Shares or Rules for Subscription of Shares provided in Article 11 of these Regulations.
13. Declaration that the financial state of the company was considered at a meeting of the board of directors and that the maintenance of its capital would not be affected by the repurchase.
14. Appraisal by a certified public accountant or securities firm of the reasonableness of the price of the shares to be repurchased.
15. Other items specified by the FSC.
Within two months of the day of expiration of the reporting period for the planned repurchase, the company may, through a majority vote at a meeting of the board of directors attended by at least a two-thirds quorum, amend the originally reported purpose of the repurchase by filing a report with the FSC.
Reporting documents filed pursuant to these Regulations shall be prepared in the format prescribed by the FSC and submitted in bound form. The same shall apply to any subsequent supplementation.
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Article 9
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Except as otherwise provided for in these Regulations, a company repurchasing its own shares shall execute the repurchase via the automated computer trading system of a centralized securities exchange market or an over-the-counter automated trade matching system, and may not execute the repurchase by means of block trading, odd-lot trading, tender offer, auction, after-market fixed-price trading, or negotiated transaction at the place of business of a securities firm.
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Article 10
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A company which, under the circumstances described in Article 28-2, paragraph 1, subparagraph 1 of the Securities and Exchange Act, repurchases its own shares for the purpose of transferring them to its employees, shall first adopt Rules for Transfer of Shares.
The below listed matters shall be recorded in the Rules for Transfer of Shares:
1. Type of shares to be transferred, a description of the rights attaching thereto, and any restrictions on such rights.
2. Transfer period.
3. Eligibility requirements for transferees.
4. Procedures for transfer of shares.
5. Agreed transfer price per share. The price may not be less than the closing price of the shares on the day that the Rules for Conversion of Shares were adopted unless, prior to transfer, either the number of the company's issued shares increases (in which case a price adjustment commensurate with the ratio of the increase in issued shares is allowed) or the company is allowed under the provisions of Article 10-1 to transfer shares to employees at less than the average actual repurchase price).
6. Rights and obligations subsequent to execution of the transfer.
7. Other rights and obligations related to the company and its employees.
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Article 10-1
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To transfer shares to employees at less than the average actual repurchase price, a company must have obtained the consent of at least two-thirds of the voting rights present at the most recent shareholders meeting attended by shareholders representing a majority of total issued shares, and must have listed the following matters in the notice of reasons for that shareholders meeting; it may not raise the matter by means of an extraordinary motion:
1. The exercise price, the valuation percentage, the bases of calculations, and the reasonableness thereof.
2. The number of shares to be transferred, the purpose, and the reasonableness thereof.
3. Qualification requirements for employees subscribing to shares, and the number of shares they are allowed to subscribe for.
4. Factors affecting shareholders' equity:
(1) The expensable amount, and dilution of the company's earnings per share.
(2) Explain what financial burden will be imposed on the company by transferring shares to employees at less than the average actual repurchase price.
In previous instances where share, as provided for in the preceding paragraph, transfers to employees have been approved by shareholders meetings and the shares have been transferred, the aggregate number of shares thus transferred may not exceed 5 percent of the total issued shares of the company, and the aggregate number of shares subscribed by any single employee may not exceed 0.5 percent of total issued shares.
Matters that a company is required by paragraph 1 to submit for a shareholders meeting resolution shall be set out in its articles of incorporation.
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Article 12
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(deleted)
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Article 13
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These Regulations shall be implemented from the date of issuance.
The amended Article 10-1 of these Regulations shall be implemented from 1 January 2008.
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