1
    These Operation Directions ("Directions") are established to regulate the implementation procedures of a listed company's undertaking to purchase the shares of its TWSE listed (or GreTai Securities Market ("GTSM") listed) subsidiaries in accordance with Article 50-1, Paragraph 6 of the Operating Rules of the Taiwan Stock Exchange Corporation ("TWSE").

2
    The TWSE shall periodically examine information which a listed company files each month on changes in the shareholding of its insiders in accordance with Article 3, Paragraph 1, Subparagraph 13 of the "Rules Governing Information Filing by Companies with TWSE Listed Securities, to ascertain if any events specified in Article 50-1, Paragraph 1, Subparagraph 15 of the Operating Rules of the TWSE have arisen.
    If after examination it is revealed that 70 percent or more of the total issued shares or paid-in capital of a listed company is held by another TWSE listed (or GTSM listed) company, the first-mentioned listed company shall be delisted and reported to the competent authority for recordation in accordance with Article 50-1, Paragraph 1 of the Operating Rules of the TWSE, and also reported by letter to the GTSM if the parent company of said first-mentioned listed company is a GTSM listed company.

3
    A listed company that holds 70 percent or more of the total issued shares or paid-in capital of a TWSE listed (or GTSM listed) subsidiary thereof shall undertake to unconditionally purchase the remaining outstanding shares of said TWSE listed (or GTSM listed) subsidiary in accordance with Article 50-1, Paragraph 5 of the Operating Rules of the TWSE.
    If the abovementioned purchase satisfies the situation stipulated in Article 11, Paragraph 1 of the
    "Regulations Governing Public Tender Offers for Securities of Public Companies" ("Public Tender Offer Regulations") of the competent authority, said purchase shall comply with the requirements set forth in the Public Tender Offer Regulations.

4
    If a listed company falls within the situations referred to in the preceding Article, it shall report to the TWSE for recordation with the Public Tender Offer Plan, Undertaking and other supporting documents submitted within 10 days after the securities of the TWSE listed (or GTSM listed) company are delisted.
    The following matters, unless otherwise regulated, shall be included in the Public Tender Offer Plan referenced in the preceding Paragraph:

1. Proposed public tender offer period.
2. Proposed number of outstanding shares to be acquired through the public tender offer and the percentage of the acquired shares in that subsidiary.
3. Public tender offer price and calculation method.
4. Method of the receipt and payment of funds or securities.
5. Name and address of the unit or institution that is in charge of the receipt and payment of funds or securities.
6. Methods of handling public tender offer requests made after the expiration of the public tender offer period.
7. Others.

    The proposed public tender offer period referred to in the preceding Paragraph shall commence within one month after the securities of the TWSE listed (or GTSM listed) subsidiary are delisted be 50 days, and the securities shall all be delivered in the settlement procedure after the expiration of the public tender offer period. The public tender offer price shall not be lower than either the simple arithmetic mean of the closing securities price three months prior to the date on which the securities of the TWSE listed (or GTSM listed) subsidiary are delisted, or the book value per share of the securities of the TWSE listed (or GTSM listed) subsidiary as stated in its CPA audited or reviewed financial report for the most recent period.

5
    After the TWSE handling officer reviews the Public Tender Offer Plan referred to in the preceding Paragraph, drafts his/her review opinion and submits the same for written approval, the TWSE will issue a written reply to said listed company and make a market announcement, and shall further report to the competent authority if any of the situations stipulated in Article 11, Paragraph 1 of the Public Tender Offer Regulations is found.
    Said listed company shall make an indication of intent to the remaining shareholders of its TWSE listed (or GTSM listed) subsidiary to purchase the remaining outstanding shares of said subsidiary pursuant to the Public Tender Offer Plan within two days after receiving the TWSE reply, and shall proceed with the purchase accordingly.

6
    After the listed company completes the purchase of the remaining outstanding shares of said TWSE listed (or GTSM listed) subsidiary pursuant to the Undertaking and the Public Tender Offer Plan, it shall report to the TWSE in writing for recordation attaching a Public Tender Offer Plan Implementation Report and supporting documents.

7
    These Directions shall take effect after having been submitted to and approved by the competent authority. Subsequent amendments thereto shall be effected in the same manner.