Newsletter
TREASURY STOCK
Under the Securities and Exchange Law as amended on 30 June 2000 by the Legislative Yuan, a company whose shares are listed on the TSE or traded on the OTC market may, pursuant to a board resolution adopted by a majority consent at a meeting attended by two-thirds or more of the directors and pursuant to the proce-dures prescribed by the SFC, purchase its shares on the TSE or the OTC market or by a tender offer for any one of the following purposes:
a.for transfer of shares to its employees;
b.for conversion into shares from bonds with warrants, preferred shares with warrants, convertible bonds, convertible preferred shares or certificates of warrants issued by the company; and
c.for maintaining its credit and its sharehold-ers' equity; provided that the shares so pur-chased should be cancelled thereafter.
The total shares purchased by the company should not exceed 10% of its total issued and outstanding shares. In addition, the total amount for purchase of the shares should not exceed the aggregate amount of the retained earnings, the premium from stock issues and the realized por-tion of the capital reserve.
The shares purchased by the company pursuant to items (a) and (b) above should be transferred to the intended transferees within three years after the purchase; otherwise the shares should be cancelled. For the shares purchased pursuant to item (c) above, the company should complete amendment registration for such cancellation within six months after the purchase.
The shares purchased by the company should not be pledged. In addition, the company may not exercise any shareholders' rights attaching to such shares. The company's affiliates (as defined in Article 369 of the ROC Company Law), di-rectors, supervisors, managers and their respec-tive spouses and minor children and/or nominees are prohibited from selling the shares of the company held by them until the company has transferred or cancelled the purchased shares.