In furtherance of the Law on Securities, the Ministry of Finance guides the redemption and resale of stocks and some cases of additional issuance of stocks of public companies, as follows:

1. This Circular details the redemption by public companies of their own stocks, or resale by public companies of purchased stocks; public bids for stocks of public companies; issuance of stocks by public companies for payment of dividends, issuance of bonus stocks from own capital sources, issuance of stocks under selective programs to laborers in their companies.

2. Interpretation of terms: In this Circular, the terms below are construed as follows:

2.1. Fund stocks means stocks issued by a public company and subsequently redeemed by the very company with its lawful capital.

2.2. Issued shares means shares already fully paid with information on purchasers already correctly and adequately recorded in the shareholder register; and from that point of time, share purchasers become shareholders of issuing companies.

1. Conditions for redemption of stocks

A public company that redeems its own stocks for use as fund stocks must satisfy the following conditions:

1.1. Having a resolution adopted by the Shareholders General Meeting for redemption of between over 10% and 30% of total issued stocks, or a resolution adopted by the Board of Directors for redemption of 10% or less of total stocks issued every 12 months.

Where a public company redeems its own stocks, thus increasing the amount of its fund stocks to 25% or more of total outstanding stocks, it shall conduct public bids according to the Law on Securities and the guidance in Section III of this Circular.

1.2. Having sufficient capital from the following sources for redemption of fund stocks:

a/ Capital gains;

b/ Retained profits;

c/ Other sources defined by law.

1.3. Having a plan on redemption clearly stating the redemption time and pricing principles.

2. Cases where a company is banned from redeeming its own stocks

2.1. A company is not allowed to redeem its own stocks in the following cases:

a/ It is conducting business operation at a loss or owes overdue debts;

b/ It is conducting offering of stocks to mobilize more capital;

c/ It is splitting up or splitting down stocks;

d/ Its stocks are subject to public bids.

2.2. A company is not allowed to purchase shares from the following entities for use as fund stocks:

a/ Its manager; spouse, parent, adoptive parent, children, adopted children or blood siblings of that individual;

b/ Share owners subject to transfer restrictions according to law and its charter;

c/ Shareholders holding controlling shares, except for cases where the State sells its shares to reduce its ownership percentage.

3. Conditions for sale of fund stocks

3.1. A public company may only sell fund stocks 6 months after the end of the latest redemption, except for distribution thereof to its laborers or use thereof as bonus stocks. When it uses its fund stocks as bonus stocks for its laborers, it shall ensure sufficient money from the welfare and reward fund for payment.

3.2. It has a detailed sale plan clearly stating the sale time and pricing principles.

4. Reporting and information disclosure

4.1. A public company that redeems its own stocks or sells its fund stocks shall report such in writing to the State Securities Commission and concurrently disclose information on the mass media at least seven days before the date of redemption or sale. A report and a written information disclosure must contain the following principal contents:

a/ Purpose of stock redemption or fund stock sale;

b/ Maximum amount of stocks expected to be redeemed or sold;

c/ Capital sources for redemption;

d/ Pricing principles;

e/ Transaction time;

f/ Name of the securities company designated to conduct the transaction;

g/ Price quoted in the written information disclosure (if any).

4.2. If the company announces the redeeming price, that price shall be clearly stated as projected price. The redeeming price shall be determined and announced before the date of redemption.

4.3. When redeeming their own stocks or selling fund stocks, public companies that have their stocks listed at the Stock Exchange/the Securities Trading Center shall concurrently report such to the Stock Exchange/the Securities Trading Center and disclose information on the information disclosure media of the Stock Exchange/the Securities Trading Center. The date and time of reporting and information disclosure is specified at Point 4.1.

5. Transactions:

5.1. When redeeming their own stocks or selling fund stocks, public companies that have their stocks listed at the Stock Exchange/the Securities Trading Center shall comply with the regulations of the Stock Exchange/the Securities Trading Center on redemption of stocks and sale of fund stocks.

5.2. Public companies that do not have their stocks listed at the Stock Exchange/the Securities Trading Center may only redeem their own stocks through securities companies acting as brokers and may not affect their trading prices, and the maximum redemption value must not exceed 10% of total trading value of stocks on the same day.

5.3. Public companies shall complete the redemption of stocks or sale of fund stocks within the time limit stated in their written information disclosures which must not exceed 90 days after the date of starting transactions.

5.4. Within ten days after completing the redemption of stocks or sale of fund stocks, public companies shall report on transaction results to the Stock Securities Commission and disclose information to the public. In case of failure to redeem or sell fully the stock amount expected to be redeemed or sold, companies shall report the failure and its reasons.

Public companies that have their stocks listed at the Stock Exchange/the Securities Trading Center shall concurrently report transaction results to the Stock Exchange/the Securities Trading Center.

6. Changes in transactions

Public companies may not change their intentions or plans on redemption of stocks or sale of fund stocks as reported or disclosed to the public, except in case of force majeure circumstances where they shall report and state reasons for the change.

7. Management and accounting of fund stocks must comply with the Ministry of Finance's guidance.

1. Registration of bids

1.1. Organizations and individuals that conduct public bids for stocks of public companies shall send dossiers of registration of bids to the State Securities Commission, and concurrently to public companies whose stocks are subject to bids.

Within seven days after receiving bid registration dossiers, the State Securities Commission shall reply in writing. In case of disapproval of registration, it shall clearly state the reason for disapproval, including incompleteness of dossiers despite its request for dossier supplementation or untruthful or falsified information contained in dossiers.

1.2. A bid registration dossier comprises:

a/ A written public bid registration, made according to a set form (not printed herein);

b/ Audited financial statement of the preceding year, for legal entities, or bank certification of financial capability, for individuals;

c/ Written prior agreement with members of the Board of Directors and major shareholders of the public company whose stocks are subject to bids, if any;

d/ Name of the securities company acting as the bid broker;

e/ Documents proving that the company satisfies all the conditions for stock redemption specified at Point 1, Section II of this Circular, for a public company that redeems its own stocks through a public bid.

2. Opinions of companies subject to bids

2.1. Within seven days after receiving bid registration dossiers, public companies whose stocks are subject to bids shall send to the State Securities Commission and notify to all their shareholders their consent to or refusal of bids.

2.2. Opinions of companies shall be expressed in writing and accompanied with signatures of at least two thirds of members of the Board of Directors and must clearly state the Board of Directors' evaluation of bids and recommendations for shareholders to give consent to or refusal of bids. In case of refusal, companies shall clearly state the reasons therefor.

3. Public bid transactions

3.1. Public bids shall be conducted only after they are approved by the State Securities Commission and announced by bidding organizations or individuals on a central newspaper and a local newspaper of the locality where the company subject to bid is headquartered for three consecutive issues before the expected date of bid. If companies subject to bids are listing companies, the announcement shall be made on the information disclosure media of the Stock Exchange or the Securities Trading Center where those companies are listed.

3.2. After a public announcement is made, the bidder may not change the bid intention already announced, except in case of force majeure circumstances or when the total amount of stocks registered for sale is smaller than the amount registered for purchase already reported to the State Securities Commission and the bid registration withdrawal is approved.

3.3. The bidder shall designate a securities company to act as a bid broker. Before conducting the bid, the bidder shall deposit a sum of money equal to 100% of the value of stocks registered for bid at the bidding price.

3.4. In the course of public bid, the bidder may not commit the following acts:

a/ Directly or indirectly purchasing or committing to purchase stocks bid outside the bid drive;

b/ Selling or committing to sell stocks it/he/she is currently bidding for;

c/ Unequally treating persons owning the same type of stocks subject to the bid;

d/ Supplying inside information to certain shareholders or supplying information to shareholders at different extents or not at the same time. This provision is also applicable to issuing organizations whose stocks are subject to bids.

3.5. The duration for conducting a public bid drive is between thirty days and sixty days after the date of bid announcement. A bid that covers also an additional bid or an adjustment as compared with the initially registered bid shall be conducted under conditions not less favorable than those of previous bids. The bidder may increase the bidding price at least seven days before the expiration of the bid time limit. Adjustments to the initial bid registration shall be disclosed under the provisions of Point 3.1 of this Section.

3.6. Organizations or individuals that own stocks and have made deposits with their stocks for a public bid drive may withdraw those stocks at any time within the bid time limit.

3.7. When the amount of bid stocks is smaller than the amount of outstanding stocks of a company or the amount of stocks put on sale is larger than the amount of bid stocks, stocks shall be purchased proportionately.

3.8. After conducting a public bid, the bidder that holds 80% or more of outstanding stocks of a public company shall further purchase within thirty days stocks of the same type held by remaining shareholders at the announced bidding price, if so requested by those shareholders.

3.9. Within seven days after the completion of a public bid drive, the securities company designated to act as an agent shall transfer money to shareholders selling stocks and transfer stocks to the bidder.

3.10. Upon the expiration of the ten-day time limit after the completion of a public bid drive, the bidder shall report in writing to the State Securities Commission and disclose to the public the results of the bid.

3.11. The bidder may not sell purchased stocks within six months after the completion of the public bid.

1. Issuance of stocks for payment of dividends

Public companies that wish to issue stocks for payment of dividends to present shareholders or for increase of charter capital must have that issuance adopted by the Shareholders General Meeting and have sufficient sources for issuance from after-tax profits which are reflected on their latest audited financial statements.

2. Issuance of bonus stocks

Public companies that wish to issue bonus stocks to present shareholders for increase of charter capital must have that issuance adopted by the Shareholders General Meeting and have sufficient sources for issuance from the following sources:

2.1. Development investment fund;

2.2. Capital gain fund (the capital proportion enjoyed by joint-stock companies according to regulations);

The capital gain being the difference between the selling price and par value of stocks to be issued for implementation of an investment project may only be used by the issuing company to supplement its charter capital three years after the completion and putting to operation of the project. The capital gain being the difference between the selling price and par value of stocks to be additionally issued may only be used by the issuing company to supplement its charter capital one year after the end of the issuance.

2.3. Accumulated profits:

2.4. Other reserve funds defined by the law on finance and banking (if any).

3. Documents on the issuance of stocks for payment of dividends or issuance of bonus stocks include:

3.1. Decision of the Shareholders General Meeting approving the issuance plan;

3.2. Latest audited financial statement and other necessary documents proving lawful capital sources to be used for additional issuance of stocks.

4. Issuance of stocks under selective programs for laborers in companies

A public company that issues stocks under a selective program to its laborers must satisfy the following conditions:

a/ Its selective program and plan on issuance of stocks has been approved by the Shareholders General Meeting;

b/ Total amount of stocks to be issued under the program does not exceed 5% of its outstanding equity capital.

c/ The Board of Directors discloses the criteria and the list of laborers eligible for participation in the program, the principle for determining the selling price, and the program duration.

5. Documents on the issuance of stocks under a selective program to laborers in companies include:

a/ Decision of the Shareholders General Meeting approving the selective program and plan on issuance to laborers;

b/ Resolution of the Board of Directors approving the criteria and list of laborers eligible for participation in the program, the principle for determining the selling price, and the program duration.

6. Reports on the issuance and disclosure of information

6.1. Issuing organizations shall send documents specified at Point 3 or 5, Section IV, of this Circular to the State Securities Commission and concurrently disclose information on the mass media at least ten days before the issuance. Within ten days after the completion of the issuance, issuing organizations shall report issuance results to the State Securities Commission. For the issuance of stocks under selective programs to laborers, the report on issuance results must be accompanied with the list of laborers eligible for purchase of stocks with their signatures.

6.2. Public companies that have their stocks listed at the Stock Exchange or the Securities Trading Center shall report issuance results to the Stock Exchange or the Securities Trading Center.

1. This Circular takes effect 15 days after its publication in "CONG BAO."

The State Securities Commission, the Stock Exchange and the Securities Trading Center shall, within the ambit of their respective functions and tasks, guide and inspect public companies in implementing this Circular.

2. Any amendments and supplements to this Circular shall be decided by the Minister of Finance.