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Article NO. Content

Title:

Directions for Public Companies Conducting Private Placements of Securities  CH

Amended Date: 2014.12.30 
2     Terms used in these Directions are defined as follows:
  1. Price determination date: The date when the board of directors resolves on the price, conversion price, or subscription price of privately placed straight corporate bonds or securities with equity characteristics; the price of securities with equity characteristics may be determined by the board of directors only after, and on the basis of, a determination of the pricing by a resolution of a shareholders meeting.
  2. Reference price:
    1. For TWSE-listed or GTSM-listed stock, it shall be the higher of the following two calculations:
      1. The simple average closing price of the common shares of the TWSE listed or GTSM listed company for either the 1, 3, or 5 business days before the price determination date, after adjustment for any distribution of stock dividends, cash dividends or capital reduction.
      2. The simple average closing price of the common shares of the TWSE listed or GTSM listed company for the 30 business days before the price determination date, after adjustment for any distribution of stock dividends, cash dividends, or capital reduction.
    2. For emerging stock, it shall be the higher of the following two calculations:
      1. The sum of all transaction amounts of the common shares of such emerging stock in the Emerging Stock Computerized Price Negotiation and Click System in each business day for 30 business days prior to the price determination date, divided by the sum of the number of shares traded in each business day, after adjustment for any distribution of stock dividends, cash dividends or capital reduction.
      2. The net worth per share shown on the financial report audited and certified or reviewed by a certified public accountant (CPA) for the period closest to the price determination date.
    3. For stock that has never been listed on the TWSE or GTSM or traded over-the-counter at securities firms, the reference price is the net worth per share shown on the financial report audited and certified or reviewed by a CPA for the period closest to the price determination date.
    4. Exchangeable corporate bond:
      1. If the exchangeable underlying stocks are TWSE listed (or GTSM listed), the reference price is the higher of either the simple average closing price of the common shares for any of either the 1, 3, or 5 business days before the price determination date, after adjustment for any distribution of stock dividends, cash dividends or capital reduction, or the simple average closing price of the common shares for the 30 business days before the price determination date, after adjustment for any distribution of stock dividends, cash dividends or capital reduction.
      2. If the exchangeable underlying stocks are emerging stocks, the reference price is the higher of the following: [i] the sum of all transaction amounts of the common shares of the exchangeable stock in the Emerging Stock Computerized Price Negotiation and Click System in each business day for 30 business days prior to the price determination date, divided by the sum of the number of shares traded in each business day, after adjustment for any distribution of stock dividends, cash dividends or capital reduction, or [ii] the net worth per share shown on the financial report audited and certified or reviewed by a CPA for the period closest to the price determination date.
      3. If the exchangeable underlying stocks have never been TWSE listed (or GTSM listed) or traded over-the-counter at securities firms, [the company] shall, by the resolution date of the board of directors, request experts to provide opinions on the price per share for the common shares of the exchangeable underlying stocks.
  3. Theoretical price: A securities price calculated based on an appropriate pricing model that is selected in consideration of the various rights under the terms of issuance. The pricing model shall as a whole encompass, and include the concurrent consideration of, the various rights included in the terms of issuance. Any right not included for consideration within the model shall be excluded from the terms of issuance.
  4. Strategic investor: Any individual or juristic person that, for the purpose of increasing the profit of the investee company, provides assistance to the investee company in terms of enhanced skills, improved quality, reduced cost, increased efficiency, enlarged market, or other benefits, achieved through vertical or horizontal integration in the industry or joint effort in product or market development or otherwise, and using the individual's or juristic person's own experience, skills, knowledge, brand, or channels.
  5. Related party: As determined in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.
  6. Insider: A director, supervisor, managerial officer, or a shareholder holding more than 10 percent of the total number of shares of the company, and any spouse, minor child, or nominee holder thereof.
  7. Independent expert: A CPA, lawyer, or securities underwriter, who may not be a related party of the public company or of any placee.