Davao Union Cement Corporation

September 15, 1999 PSE CIRCULAR FOR BROKERS NO. 2313-99 SUBJECT : Davao Union Cement Corporation Davao Union Cement Corporation ("DUC") informed the Exchange, that its Board of Directors, at a regular meeting held on September 14, 1999, adopted a Plan of Merger among DUC, Bacnotan Cement Corporation ("BCC") and Hi Cement Corporation ("HCC"), subject to approval by the shareholders at their annual meeting to be held on November 24, 1999. In view thereof, the Exchange has granted the company's request for suspension of trading of its shares today, September 15, 1999. For your information. (SGD.) JOSE LUIS U. YULO, JR. President and CEO PLAN OF MERGER This Plan of Merger, made and executed this ___ day of September 1999 at Makati City, Metro Manila, by and between: BACNOTAN CEMENT CORPORATION, a corporation duly organized and existing under the laws of the Philippines, with principal offices at 4/F Phinma Bldg., 166 Salcedo St., Legaspi Village, Makati City, Metro Manila, represented herein by its _______, hereinafter referred to as BCC; prcd DAVAO UNION CEMENT CORPORATION, a corporation duly organized and existing under the laws of the Philippines, with principal offices at 2/F Phinma Bldg., 166 Salcedo St. Legaspi Village, Makati City, Metro Manila, represented herein by its _______, hereinafter referred to as DUCC; and HI-CEMENT CORPORATION, a corporation duly organized and existing under the laws of the Philippines, with principal offices at 5/F Kalayaan Bldg., 164 Salcedo St., Makati City, Metro Manila, represented herein by ________, hereinafter referred to as HCC; WITNESSETH: That BCC, DUCC and HCC have agreed that a merger among themselves will achieve mutually advantageous and beneficial business purposes. ACCORDINGLY, the parties hereby set forth and agree on the following plan of merger, to wit: 1. On January 1, 2000 (the "Effective Merger Date"), following the approval by the Securities and Exchange Commission of the parties' Articles of Merger and its issuance of the Certificate of Filing of the Articles of Merger, and subject to the issuance by the Bureau of Internal Revenue of a ruling that the merger complies with Section 34 (c)(2) of the Tax Code, BCC and DUCC shall be merged into HCC which shall be the surviving corporation. 2. Upon the Effective Merger Date, all the legal effects of merger under Section 80 of the Corporation Code shall take place, viz, the corporate existence of BCC and DUCC shall cease, and thereupon, all rights, privileges, powers and franchises of BCC and DUCC and all property, real, personal, or mixed, and all debts due to BCC and DUCC on whatever account, and all other things in action belonging to BCC and DUCC as of the Effective Merger Date, shall be vested in HCC without further act or deed, and all such property, rights, privileges, power and franchises, and all and every interest of BCC and DUCC shall thereafter be as effectually the property of HCC as they were of BCC and DUCC and title to any real estate, whether by deed of otherwise, vested in BCC and DUCC shall not revert or be in any way impaired by reason hereof; provided, however, that all rights of creditors and all liens upon any property of BCC and DUCC shall be preserved unimpaired, and all debts, liabilities, obligations and duties of BCC and DUCC shall thenceforth attach to HCC, which shall be responsible therefor, and may be enforced against HCC to the same extent as if said debts, liabilities, obligations and duties had originally been incurred or contracted by it. cdlex 3. Upon the Effective Merger Date, and subject to the surrender by the registered owners of BCC and DUCC of their corresponding certificates of stock to HCC, one thousand (1,000) outstanding shares of BCC shall be surrendered and exchanged with the three thousand eight hundred fifteen (3,815) shares of stock of HCC, one thousand (1,000) outstanding shares of DUCC shall be surrendered and exchanged with the five hundred seventy one (571) shares of stock of HCC. The HCC shares to be issued to BCC and DUCC's shareholders shall, upon compliance with regulatory requirements, rank pari passu with the outstanding shares of HCC as of the Effective Merger Date. 4. BCC and DUCC and their proper officers shall, from time to time, execute such documents and do such other or further acts and things and take or cause to be taken such actions as may be necessary to fully effect the merger, or which HCC may deem reasonably necessary or desirable in order to vest in and confirm to HCC title to and possession of the rights, privileges, property, assets and business of BCC and DUCC and otherwise to carry out the full intent and purposes of the merger. 5. BCC, DUCC and HCC shall share in the expenses of the merger at a ratio of 16 percent (BCC), 39 percent (DUCC) and 45 percent (HCC). cdlex 6. The parties, by the action of a majority of their respective Board of Directors, may amend, modify or supplement this Plan of Merger in such manner as may be agreed upon by them in writing at any time before or after approval hereof by the stockholders of all parties; provided, however, that no such amendment, modification or supplement after approval of this Plan of Merger by the stockholders of all parties shall substantially change the terms of the merger. 7. The parties shall immediately take all necessary corporate acts to implement their merger, and shall cooperate with each other in obtaining all necessary regulatory filing consents and approvals, as well as in complying with all applicable regulatory rules and regulations. IN ATTESTATION OF THE ABOVE, the parties hereto have signed this Plan of Merger at the place and on the date above written. BACNOTAN CEMENT CORP. DAVAO UNION CEMENT CORP. By: By: _______________ _______________ Name & Position Name & Position HI-CEMENT CORPORATION By: ______________ Name & Position SIGNED IN THE PRESENCE OF: _____________________ _____________________