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Article 11
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(Instructions on information disclosure)
When a director of the Company has a personal interest in the merger and acquisition transaction, he or she should provide the following particulars to the board of directors that submits information about merger and acquisition to the audit committee for review, and to the audit committee that reviews the merger plan and fairness and reasonableness of the transaction, and specify the following in the reason to convene that board of directors’ meeting and the audit committee’s meeting:
- Names of the director
- Essential contents of the stakes of the director or the juristic person he or she represents, including, without limitation, forms of any actual or contemplated investment in other companies participating in the merger and acquisition, shareholding, transaction price, whether said director participates in the operation of the companies participating in the merger and acquisition, and other conditions of investment, etc.
- Reasons for recusal or non-recusal by the director when the board of directors makes the resolution, including, without limitation, potential profits and losses of the merger and acquisition transaction
When disclosing merger and acquisition information, the Company shall also disclose information described in each subparagraph of the preceding paragraph and the following particulars of any director with a personal stake in the merger and acquisition transaction:
- Circumstances concerning the recusal when the board of directors makes the resolution
- Reasons for consent or dissent to the board resolution of the merger or acquisition
The Company shall report the contents described in the various subparagraphs of the preceding paragraph at a shareholders’ meeting unless pursuant to the Business Mergers and Acquisitions Act, no such meeting is required to be held.
When carrying out a merger and acquisition activity with another company through a public tender offer, the Company shall publish information in accordance with the Regulations Governing Tender Offers for Purchase of the Securities of a Public Company and the provisions of Article 2 herein relating to disclosure of relevant information. The Company may not release information on any equity interest under its control unless and until such publication of information has been made, so as to avoid unusual fluctuation in the price of the stock of the company concerned.
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Article 12
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(Disclosure of merger and acquisition information)
Other than those required under the Business Mergers and Acquisitions Act or relevant laws and regulations, the Company shall also disclose the following particulars when making the merger and acquisition information publicly available:
- Purpose and conditions of the merger and acquisition, including the reason, consideration conditions and payment schedule of the merger and acquisition
- Types and sources of funds of the consideration
- An opinion by an independent expert on the reasonableness of the share exchange ratio and cash or other assets distributed to the shareholders in the merger and acquisition
- The audit committee’s information about appointment of independent experts, including the reason of the appointment, compensation to be paid and schedule of payment
- Number of meetings held by the audit committee to review this merger and acquisition, verification measures that have been taken, relevant procedures and review outcome
- The audit committee’s determination of reason and basis as to whether the merger and acquisition transaction plan or terms are reasonable and fair
- Number of meetings held by the board of directors to review this merger and acquisition, verification measures that have been taken, relevant procedures and review outcome
- Procedures for a shareholder to exercise their right to request purchase of shares
- Post-merger and acquisition plan:
- Willingness to continue operating the business of the company, and the contents of plans to that effect
- Dissolution; delisting from an exchange (or OTC market); material changes in organization, capital, business plan, financial operations and production; accommodation or utilization of staff and assets critical to the Company; or any other matter of material significance that would affect the company's shareholder equity
- Opinions by external individuals about the merger and acquisition transaction received during the most recent two years, if any, including identity of the external individual, summary of contents, and amount of compensation.
- Other material matters pertaining to the merger and acquisition
The items to be disclosed in the opinion on reasonableness in subparagraphs 2 and 3 of the preceding paragraph are governed by Article 7 and Article 13, paragraph 2 of the Regulations Governing Information to be Published in Public Tender Offer Prospectuses.
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