COMPARISON BETWEEN SHARE TRANSFER AND SHARE REPURCHASE

SHARE TRANSFER

SHARE REPURCHASE

SIMILARITIES

Both have the nature of a buying and selling relationship, changing the owner of the shares that are being sold/transferred.

DIFFERENCES

Subject

The seller is a shareholder, the buyer is an organization or individual.

The seller is a shareholder, and the buyer is a company that issues shares.

Conditions

Shareholders are free to transfer shares, except for the following cases:

- Holders of super-voting shares must not transfer these shares to other persons unless it is demanded by an effective court judgment or decision or transferred in accordance with inheritance laws.

Within 03 years from the issuance date of the Certificate of Enterprise Registration, the ordinary shares of founding shareholders may be transferred to other founding shareholders. In case of transfer to a person that is not a founding shareholder if the transfer is accepted by the General Meeting of Shareholders (GMS). These limitations do not apply to the following ordinary shares:

a) Additional shares acquired by founding shareholders after the enterprise is registered;

b) Shares that have been transferred to other persons that are not founding shareholders.

Share repurchase can only be carried out:

- At shareholders’ request: The shareholders have voted against the resolution on reorganization of the company or change of shareholders’ rights and obligations in the company's charter.

The request shall be made in writing and sent to the company within 10 days from the day on which the previously mentioned resolution is ratified by the GMS.

- Under the company’s decision: the company is entitled to repurchase up to 30% the total ordinary shares, all or part of the participating preference shares that have been sold.

Consequence

- Do not change the charter capital;

- Recipients of share transfer will become company shareholders from the time their information is recorded in the register of shareholders.

- Shares repurchased are considered unsold shares;

- The company shall register the charter capital decreases, which is equal to the total face value of repurchased shares, within 10 days from the date of completion of payment for the shares unless otherwise prescribed by securities laws.

Implementation procedure

In case of free transfer:

The parties are free to transfer and agree on the content of the assignment. The transfer shall be made into a contract or carried out on the securities market. In case of transfer under a contract, the documents shall bear the signatures of the transferor and the transferee or their authorized representatives. In case shares are transferred on the securities market, the transfer procedures prescribed by securities laws shall apply.

For the case where the transfer of ordinary shares is restricted within 3 years from the date the company is granted the Certificate of Business Registration:

The ordinary shares of founding shareholders may be transferred to other founding shareholders and may only be transferred to a person that is not a founding shareholder if the transfer is accepted by the GMS. In this case, the transferor does not have the right to vote on this transfer.

In case of share repurchase at the request of shareholders:

A shareholder who requests the company to repurchase shares must have a document clearly stating the name and address of the shareholder, quantity of shares of each type, offered prices, reasons for requesting the repurchase. The request shall be sent to the company within 10 days from the day on which the General Meeting of Shareholders passes a resolution on the reorganization of the company or the change of shareholders' rights and obligations in the company's charter, which the shareholders have voted against.

The company shall repurchase shares at the request of its shareholders at market prices or at the prices calculated in accordance with the rules in the company's charter within 90 days from the receipt of the request. In case an agreement on the prices cannot be reached, the parties may hire a valuation organization to determine the price. The company shall introduce at least 03 valuation organizations for the shareholders to make the final decision.

In case of share repurchase under the decision of the company:

1. The Board of Directors is entitled to decide repurchase of up to 10% of the total shares of each type which are sold within 12 months. Other cases of share repurchase shall be decided by the GMS;

2. The Board of Directors is entitled to impose the repurchase price. The repurchase price for ordinary shares must not exceed their market price at the time, except the cases specified in Clause 3 hereof. Repurchase prices of other types of shares must not be lower than their market prices unless otherwise prescribed by the company's charter or agreed upon by the company and relevant shareholders;

3. The company may repurchase shares of each shareholder in proportion to their holding in the company as follows:

a) The notification on the company’s decision to repurchase shares shall be sent by express mail to all shareholders within 30 days from its ratification date. The notification shall contain the company’s name and headquarters address, total number and types of shares repurchased, repurchase prices or pricing rules; procedures and deadline for paying, procedures and deadline for shareholders to sell their shares to the company;

b) The shareholders that agree to sell back their shares to the company shall send a written agreement to the company by express mail within 30 days from the notification date. The agreement shall contain the full name, mailing address, nationality, legal document number if the shareholder is an individual; name, EID number or legal document number, headquarters address if the shareholder is an organization; the quantity of shares being held, quantity of shares to be sold; method of payment, signature of the shareholder or the shareholder’s legal representative. The company only buys back the shares within this time limit.

Legal regulations

Article 127. Transfer of shares

1. Shares may be transferred freely except the cases specified in Clause 3 Article 120 of this Law and other cases of restriction specified in the company's charter. The restrictions on transfer of shares specified in the company's charter are only applicable if they are written in the certificates of the shares subject to restriction.

2. The transfer shall be made into a contract or carried out on the securities market. In case of transfer under a contract, the documents shall bear the signatures of the transferor and the transferee or their authorized representatives. In case shares are transferred on the securities market, the transfer procedures prescribed by securities laws shall apply.

3. In case of the death of a shareholder that is an individual, his/her heir at law or designated by a will shall become a shareholder of the company.

4. In case a shareholder that is an individual dies without an heir or the heir refuses the inheritance or is disinherited, his/her shares shall be settled in accordance with civil laws.

5. A shareholder may donate all or part of their shares to other organizations and individuals; use the shares to pay debts. The organization or individual that receives the donation or debt payment will become a shareholder of the company.

6. The organizations and individuals that receive shares in the cases specified in this Article will only become shareholders when the information specified in Clause 2 Article 122 of this Law is fully recorded in the shareholder register.

7. The company shall register the changes of shareholders in the shareholder register as requested by relevant shareholders within 24 hours after the request is received.

Clause 3, Article 120 of the Enterprise Law 2020: Within 03 years from the issuance date of the Certificate of Enterprise Registration, the ordinary shares of founding shareholders may be transferred to other founding shareholders and may only be transferred to a person that is not a founding shareholder if the transfer is accepted by the GMS. In this case, the transferor does not have the right to vote on this transfer.

Point d, Clause 1, Article 115 of the Enterprise Law 2020: Transfer their shares to other persons except for the cases specified in Clause 3 Article 120 and Clause 1 Article 127 of this Law and relevant laws

Clause 3, Article 116 of the Enterprise Law 2020: Holders of super-voting shares must not transfer these shares to other persons unless it is demanded by an effective court judgment or decision or transferred in accordance with inheritance laws..

Article 132. Share repurchase at shareholders’ request

1. The shareholders that have voted against the resolution on reorganization of the company or change of shareholders’ rights and obligations in the company's charter are entitled to request the company to repurchase their shares. The request shall be made in writing and specify the shareholder’s name and address, quantity of shares of each type, offered prices, reasons for requesting the repurchase. The request shall be sent to the company within 10 days from the day on which the previously mentioned resolution is ratified by the GMS.

2. The company shall repurchase shares at the request of its shareholders in accordance with Clause 1 of this Article at market prices or at the prices calculated in accordance with the rules in the company's charter within 90 days from the receipt of the request. In case an agreement on the prices cannot be reached, the parties may hire a valuation organization to determine the price. The company shall introduce at least 03 valuation organizations for the shareholders to make the final decision.

Article 133. Share repurchase under the company’s decision

The company is entitled to repurchase up to 30% the total ordinary shares, all or part of the participating preference shares that have been sold. To be specific:

1. The Board of Directors is entitled to decide repurchase of up to 10% of the total shares of each type which are sold within 12 months. Other cases of share repurchase shall be decided by the GMS;

2. The Board of Directors is entitled to impose the repurchase price. The repurchase price for ordinary shares must not exceed their market price at the time, except the cases specified in Clause 3 of this Article. Repurchase prices of other types of shares must not be lower than their market prices unless otherwise prescribed by the company's charter or agreed upon by the company and relevant shareholders;

3. The company may repurchase shares of each shareholder in proportion to their holding in the company as follows:

a) The notification on the company’s decision to repurchase shares shall be sent by express mail to all shareholders within 30 days from its ratification date. The notification shall contain the company’s name and headquarters address, total number and types of shares repurchased, repurchase prices or pricing rules; procedures and deadline for paying, procedures and deadline for shareholders to sell their shares to the company;

b) The shareholders that agree to sell back their shares to the company shall send a written agreement to the company by express mail within 30 days from the notification date. The agreement shall contain the full name, mailing address, nationality, legal document number if the shareholder is an individual; name, EID number or legal document number, headquarters address if the shareholder is an organization; the quantity of shares being held, quantity of shares to be sold; method of payment, signature of the shareholder or the shareholder’s legal representative. The company only buys back the shares within this time limit.

Article 134. Conditions for payment and settlement of repurchased shares

1. The company may only make the payment for the shares repurchased in accordance with Article 132 and Article 133 of this Law if it is still able to fully pay its debts and other liabilities after the shares are fully paid for.

2. The shares repurchased in accordance with Article 132 and Article 133 of this Law shall be considered unsold shares according to Clause 4 Article 112 of this Law. The company shall register the charter capital decreases, which is equal to the total face value of repurchased shares, within 10 days from the date of completion of payment for the shares unless otherwise prescribed by securities laws.

3. The share certificates of the repurchased shares shall be destroyed right after the shares are fully paid for. The President of the Board of Directors and the Director/General Director shall be jointly responsible for the damage caused by the failure to or delay in destroying the share certificates.

4. After all of the repurchased shares are fully paid for, if the total assets in the company’s accounting books is reduced by more than 10%, the company shall send a notification to all of its creditors within 15 days from the payment date.