Rules Requiring Definite Dates for the Exercise of Pre-Emptive or Other Rights or for the Issuance of Stock Dividends

April 19, 1974 RULES REQUIRING DEFINITE DATES FOR THE EXERCISE OF PRE-EMPTIVE OR OTHER RIGHTS OR FOR THE ISSUANCE OF STOCK DIVIDENDS In order to avoid delays in the issuance of rights or distribution of stock dividends after an increase of capital stock of any corporation whose securities are listed in any operating stock exchange or registered under the Securities Act, the Commission (SEC), pursuant to the powers vested in it under existing laws, particularly, the Revised Securities Act and Republic Act No. 1143, hereby promulgates the following rules: llcd SECTION 1. No corporation whose securities are listed in any operating stock exchange or registered under the Securities Act, shall make any announcement of an offer of rights to acquire shares or to issue stock dividends to stockholders after an increase of capital stock, without a definite fixed date for the exercise of such rights or issuance of stock dividends. SECTION 2. To enable the corporation to fix such date, the SEC shall first be consulted to determine the length of time it would need to approve the increase of capital stock of registrant, the requirements, except these stated below, that should be met to secure such approval and the date that should be fixed for the exercise of the right or the issuance of the stock dividends. SECTION 3. In increasing the capital stock with an offering of rights or issuance of stock dividends the following documents in duplicate, shall be submitted to the SEC, together with the certificate of increase, to wit: a) Justification or reason for increasing the capital stock and issuance of rights or declaration of stock dividends, which shall include, as background statements, the current status and condition of the corporation of interest to investors. Any project or profitability study about the expansion plan or program of the registrant, shall likewise be submitted as supporting document; b) Financial statements prepared by an independent certified public accountant as of a date not earlier than 90 days from the date of submission of the certificate of increase to the SEC, accompanied by a long form audit report. The audit report shall include an analysis of retained earnings; c) Work program showing how the estimated proceeds from the increase of capital stock shall be utilized, prepared by a qualified person; d) Registration statement pertaining to the increase of capital stock, pursuant to the Securities Act; e) Amended Articles of Incorporation showing the increase of capital stock; f) If the corporation shall acquire any property or rights to mining claims or oil concessions to be explored, developed or exploited out of the proceeds of the increase or capital stock, the proper deed of assignment thereof as approved by, or registered with, the corresponding authorities, together with a report on the potential profitability of the property or right prepared by a qualified person; g) Certificate from the Executive Secretary of the Stock Exchange/s to the effect that the corporation has already filed its listing application, or in lieu thereof a copy of said listing application duly stamped received by said exchange, so that the Commission could take simultaneous action on the increase of capital stock, registration statement and the listing application. SECTION 4. The violation of any provision of these rules shall be punished by fine in such sum as the SEC may impose under Republic Act 1143, or in serious cases, by suspension or revocation of registrant's license or permit to sell securities. llcd SECTION 5. These rules shall take effect immediately after publication in the Official Gazette and in the newspapers of general circulation. (SGD.) ARCADIO E. YABYABIN Securities and Exchange Commissioner APPROVED: April 22, 1973 (SGD.) TROADIO T. QUIAZON, JR. Secretary of Trade