PSE Circular for Brokers No. 2824-98

December 28, 1998 PSE CIRCULAR FOR BROKERS NO. 2824-98 PHILIPPINE STOCK EXCHANGE, INC. Disclosure Department Listings and Disclosure Group Philippine Stock Exchange Center Exchange Road, Ortigas Center Pasig City Fax No. 637-8811; 636-0809 Attention: Ms . Grace De Guia Compliance Supervisor SUBJECT : RFM Corporation RFM-SLT Swap Gentlemen : Pertinent to the above subject, please receive the attached procedures to be followed by brokerage firms in connection with the swapping of Selecta Common Shares lodged under the Philippine Central Depository (PCD) for RFM Common Stock. For inquiries regarding the said procedures, please contact Mr. Jay Nacino, PCIB Securities, Inc., Tel. Nos. 891-2083 to 84. Thank you very much. Very truly yours, (SGD.) RAYMOND B. AZCARATE Vice President Finance Division RFM-SELECTA SWAP In connection with the ongoing tender offer of RFM Corp . to swap RFM Corp. for the shares of Selecta Dairy Products, Inc . owned by minority shareholders, herewith are the stock transfer guidelines for brokers whose clients are participating in the said swap. I. Transfer of Selecta Shares All participating Selecta shares held by brokers under their respective Philippine Central Depository (PCD) accounts are to be electronically transferred to PCIB Securities, Inc. (PCIBSI) PCD Account B131. PCIBSI will act as custodian for the Selecta minority shareholders. The transfer period shall begin on January 4, 1999 and shall end on the last day of the offer period, January 15, 1999. PCIBSI will reimburse each participating broker for the PCD charges pertaining to one transfer per broker. However, all charges for subsequent retrievals and or transfers will be for the participating broker's account. Therefore each participating broker is encouraged to effect only one transfer for all his clients. The swap ratio is one RFM share for two Selecta shares. For participating brokers whose clients wish to include their fractional shares (defined as a lot consisting of a single Selecta share) in the tender offer, the broker may, at his own initiative and for his own account, consolidate the fractional SLT shares to form exchangeable blocks, and receive RFM shares in return. In the event that after combining the fractional SLT shares under their position, the participating broker continues to submit a fractional SLT share, RFM will purchase these shares at PhP 3.00 per share and will distribute payment on settlement date of the cross transaction (T 4). aisadc For orderly transfer and accurate tracking, the participating broker should fax then deliver in original a letter to PCIBSI (see attached sample) for the attention of Ms. Gretel Orejudos citing the exact number of shares being transferred and thus committed to the swap. Please fax to numbers 750-6287 or 891-2044. PCIBSI will fax back receipt and conforme. All other shareholders who wish to participate but whose securities are still in physical scrip outside the PCD should surrender them to Securities Transfer Services Inc. (STSI). Any fractional shares will be reimbursed at Php 3.00 per share. II. Transfer of RFM Shares The RFM shares will be made available for trading on the date of the cross transaction, which shall be within fifteen (15) trading days from the end of the offer period. PCIBSI will electronically transfer the shares due to each of the participating brokers on T or not later than T 3 into their respective PCD accounts. For shareholders who submitted their SLT certificates to STSI, FEB Stock Transfer, Inc. as agents for RFM Corp. will have the corresponding RFM shares ready for the swap participants to pick up on the cross date. cd _____________ Date PCIB SECURITIES, INC. 20/F PCIB Tower I. Makati Ave., Makati City Attention : MR. RAMON VICENTE T. KABIGTING Vice-President and General Manager MS. GRETEL D. OREJUDOS Operations Manager Gentlemen, __________________________ is delivering _____________ shares of Selecta Dairy Products, Inc. (Selecta) representing the holdings of our clients who wish to participate in the RFM-Selecta share swap. Our clients commit to sell and authorize PCIB Securities, Inc. (PCIBSI) to sell these Selecta shares to RFM Corp. in exchange for RFM shares under the terms of the swap. These Selecta shares will be held in custodianship by PCIBSI until such time that the exchange for RFM Corp. (RFM) shares has been effected by PCIBSI. Thank you very much. Very truly yours, _____________________ Authorized signatory/(ies) PCIBSI hereby accepts _______________ Selecta shares from _________________ and shall hold these shares in custody for purposes of selling them to RFM Corp. and settling the same sale under the terms and conditions of the RFM-Selecta share swap to be executed within fifteen trading days after January 15, 1998. Acceptance and Conforme: ______________________ PCIBSI authorized signatory