PSE Circular for Brokers No. 2621-99

October 14, 1999 PSE CIRCULAR FOR BROKERS NO. 2621-99 TO: Grace B. De Guia FROM: B.J. Sebastian FAX: 6360809 PAGES: 1 PHONES: 6360122 DATE: 10/13/99 RE: RFM News Article CC: JAC, FNJ, LBR, RBA, ODR Urgent For Review Please Comment Please Reply Please Recycle Dear Ms. De Guia, I write to respond to your fax addressed to the undersigned dated today, October 13, 1999, regarding an article which appeared in some newspapers entitled, "RFM to list real estate unit". We would like to clarify that this article was based on an information statement we submitted to the SEC yesterday, which is part of our notice to Selecta shareholders regarding a proposal we are bringing up for discussion and approval by them in a shareholders meeting we are convening soon. I attach a copy of the said document. The proposal involves the transfer of our property holdings and real estate development business, which is now under our wholly-owned subsidiary Philippine Townships Inc., into Selecta Dairy Products Inc.. Subsequently, we intend to transfer Selecta's ice cream and milk & juice assets, liabilities and business, into a new company that will be a wholly owned subsidiary of RFM. Let me emphasize that it is still a proposal. It is still subject to the approval of Selecta shareholders and the details of the structure might change accordingly. prcd We trust that this explanation settles the matter. (SGD.) B.J. SEBASTIAN Senior Vice President GENERAL INFORMATION Dissenters' Right of Appraisal The appraisal right may be exercised by any stockholder who shall have voted against (1) an amendment to the Article of Incorporation that changes or restricts the rights of any stockholder or class of shares, or authorizes preferences superior to the outstanding shares, or extends or shortens the corporate existence; (2) a sale, lease, transfer, encumbrance or other disposition of all or subsidiary all of the corporate assets; or (3) merger and consolidation, by making a written demand on the Corporation for payment of the fair value of his share(s). The written together with the share certificates of dissenting stockholder must be received by the Corporation within thirty (30) calendar days from the date on which the vote was taken. Failure to make the written demand or to surrender the share certificates shall constitute a waiver on the part of the dissenting stockholders. If within the period of 60 days from the date the corporate action was approved by the stockholders, the withdrawing stockholder and the Corporation fails to agree on the fair value of the shares, it shall be determined and appraised by 3 disinterested persons, one of whom shall be appointed by the stockholder, another by the Corporation and the third by the two thus chosen. The findings of the majority of the appraisers shall be final, and their award shall be paid by the Corporation within 30 days after such award is made. NO PAYMENT SHALL BE MADE TO ANY DISSENTING STOCKHOLDER UNLESS THE CORPORATION HAS UNRESTRICTED RETAINED EARNINGS IN ITS BOOKS TO COVER SUCH PAYMENTS. ISSUANCE AND EXCHANGE OF SECURITIES ACQUISITION OR DISPOSITION OF PROPERTY The following proposal will be presented to the stockholders for their consideration and approval: 1. The transfer of the asset of the Corporation consisting the following: a. Shares of stock in Selecta Wall's Inc. b. Shares of stock in Selecta Wall's Land Corporation c. Shares of stock in WS Holdings, Inc. d. Assets of its MILK and Juice Division consisting of one parcel of land located at Pasig City; leasehold improvement; building and improvement and plant machine and equipment. e. Cash. together with its Long Term - Commercial Paper in the amount of P500,000,000.00, Philippine Currency, to a wholly-owned subsidiary of the Corporation. 2. Transfer of the shares of stock of the Corporation in the wholly-owned subsidiary created under paragraph 1 to RFM Corporation or its assigns, it exchange for the latter's shares of stock in Philippine Townships, Inc. (PTI). The transfer of assets shall be based on Net Book Value. The Net Book Value of the Corporation is estimated at P1.246 Billion and that of PTI is estimated at P1.019 Billion. The assets of PTI primarily consist of land, building and investment. cdlex 3. Merger of the Corporation with PTI, with the Corporation as the surviving entity. 4. Amendment of the Articles of Incorporation of the Corporation by amending its primary purpose from Ice cream manufacturing to real estate business and change of name. Authority of the management of the Corporation to negotiate with RFM Corporation and PTI and approved the final price, terms and conditions of the transfer of assets and the merger. PTI is a corporation duly organized and existing under and by virtue of the laws of the Philippines for the purpose of real estate development with principal office address at the 6/F RFM Corporate Center, Corner Pioneer and Sheridan Streets, Mandaluyong City. cdlex PTI is a wholly-owned subsidiary of RFM Corporation, the majority owner of the Corporation. (SGD.) ATTY. CRISTINA D. REYES Corporate Secretary