PART I Transfer of Common Shares  Acquisition of Our Own Common Shares  Substantial Stockholders and Transfer Restrictions  Liquidation Rights  The transfer of common shares in registered form is effected by endorsement and delivery of the related  share certificates but, in order to assert stockholders’ rights against us, the transferee must have his name and  address registered on our register of stockholders. Stockholders are required to file their respective specimen  seals, also known as chops, with us. Chops are official stamps widely used in Taiwan by individuals and other  entities to authenticate the execution of official and commercial documents.  Under the Republic of China Company Law, with minor exceptions, we cannot acquire our own common  shares. Any common shares acquired by us, under certain of such minor exceptions, must be sold at the market  price within six months after their acquisition.  In addition, under the Republic of China Securities and Exchange Law, a company whose shares are listed  on the Taiwan Stock Exchange or traded on the GreTai Securities Market may, pursuant to a board resolution  adopted by a majority consent at a meeting attended by more than two-thirds of the directors and pursuant to the  procedures prescribed by the Securities and Futures Bureau of the Financial Supervisory Commission, purchase  its shares for the following purposes on the Taiwan Stock Exchange, the GreTai Securities Market or by a tender  offer:  •  for transfers of shares to its employees;  • for conversion into shares from bonds with warrants, preferred shares with warrants, convertible  bonds, convertible preferred shares or certificates of warrants issued by us; and  • for maintaining its credit and its stockholders’ equity, provided that the shares so purchased shall be  cancelled thereafter.  The total shares purchased by us shall not exceed 10% of its total issued and outstanding shares. In addition,  the total amount for purchase of the shares shall not exceed the aggregate amount of the retained earnings, the  premium from shares issues and the realized portion of the capital surplus.  The shares purchased by us pursuant to items (1) and (2) above shall be transferred to the intended  transferees within three years after the purchase; otherwise the same shall be cancelled. For the shares to be  cancelled pursuant to item (3) above, we shall complete amendment registration for such cancellation within six  months after the purchase.  The shares purchased by us shall not be pledged or hypothecated. In addition, we may not exercise any  stockholders’ rights attaching to these shares. Our affiliates (as defined in Article 369-1 of the Republic of  China Company Law), directors, supervisors, managers and their respective spouses and minor children and/or  nominees are prohibited from selling the shares of the company held by them during the purchase period of such  shares reported by the company to the Securities and Futures Bureau.  In the event of our liquidation, the assets remaining after payment of all debts, liquidation expenses and  taxes will be distributed pro rata to the stockholders in accordance with the relevant provisions of the Republic of  China Company Law and our articles of incorporation.  The Republic of China Securities and Exchange Law currently requires (i) each director, supervisor,  manager, as well as their respective spouses, minor children and nominees, and substantial stockholder (i.e., a  stockholder who together with his or her spouse, minor children or nominees, holds more than 10% of the shares  of a public company) to report any change in that person’s shareholding to the issuer of the shares on a monthly  basis and (ii) each director, supervisor, manager or substantial stockholder holding such common shares for more  than a six month period to report his or her intent to transfer any shares listed on the Taiwan Stock Exchange  or traded on the GreTai Securities Market to the Securities and Futures Bureau of the Financial Supervisory  Commission at least three days before the intended transfer, unless the number of shares to be transferred is  less than 10,000 shares. ADS holders holding more than 10% of our common shares, including common shares  represented by ADSs, may be subject to the reporting obligation in above item (i).  108