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53-6
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Where a TWSE listed or TWSE primary listed company is to conduct a merger pursuant to Article 53-2 or 53-3, and the additional common shares or overseas depositary receipts issued (whether by public offering or private placement) due to the said merger will account for 10 percent or more of the aggregate shares already issued and anticipated to be issued by the TWSE listed or TWSE primary listed company, any directors, supervisors, and shareholders holding more than 10 percent of the issued shares of the non-surviving company shall place in centralized custody in compliance with all of the below-listed provisions any additional common shares (including those publicly offered and issued or privately placed) or overseas depositary receipts issued due to the merger that they hold. However, this requirement shall not apply where a TWSE listed company merges with a subsidiary of which it holds 90 percent or more of the outstanding shares.
- Such persons obtaining common shares publicly offered and issued due to the merger shall place into centralized custody with the central securities depository approved for establishment by the competent authority all of the common shares publicly offered and issued due to the merger that they hold, and in aggregate not less than the number of shares calculated under Article 10, paragraph 2 of the TWSE Rules Governing Review of Securities Listings for the total amount of common shares offered and issued as a result of the merger. In case of shortage, negotiation shall be made with other shareholders holding common shares publicly offered and issued due to the merger to make up the shortfall. Of the shares placed in central custody, one-half may be withdrawn after a full 6 months has elapsed from the date that listed trading thereof commences. The remaining portion of shares may be withdrawn in full only after one full year has elapsed from the date that listed trading commences.
- Such persons obtaining privately placed common shares due to the merger shall issue a written undertaking not to transfer the shares within a certain period. The written undertaking shall furthermore state: "The Taiwan Stock Exchange Corporation may from time to time send personnel to carry out spot checks to ascertain whether I have faithfully abided by my undertaking not to transfer the common shares I have obtained through private placement due to the merger. After expiration of the period in which I have undertaken restricted transfer, for those shares I obtained due to the merger that are still classified as privately placed common shares, I shall continue to abide by the restrictions on transfer under Article 43-8 of the Securities and Exchange Act." The total ratio of privately placed common shares subject to the undertaking regarding restriction of transfer referred to above and the period of the restriction of transfer shall accord with the provisions of the preceding subparagraph.
- Such persons obtaining overseas depositary receipts issued for capital increase due to merger shall provide a written undertaking that for a certain period of time they shall not redeem or transfer the overseas depositary receipts held by them, and the surviving company after the merger shall incorporate provisions restricting redemption into the contract signed and entered into with the custodian institution. The total ratio of overseas depositary receipts subject to restriction of redemption or transfer and the period of the restriction shall accord with the provisions of subparagraph 1.
The provisions regarding the total ratio of shares subject to centralized custody, as referred in the preceding paragraph, need not apply where a TWSE listed company or TWSE primary listed company merges with a subsidiary company of which it holds 50 percent or more of the outstanding shares.
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