Dizon Copper Silver Mines, Inc.

August 29, 1988 Dizon Copper Silver Mines, Inc. Suite 214-215 State Condominium IV Ortigas Avenue, Greenhills San Juan, Metro Manila Sir : This relates to your letter, dated August 11, 1988, requesting the opinion of this Commission on the following queries: LexLib 1. Whether the corporation may change its by-laws to conform to the form of the by-laws issued by the "EXPRESS LANE UNIT" of the Commission. 2. Whether the corporation may create an executive committee by mere resolution of the board of directors. Your first query is answered in the affirmative in view of the provisions of Section 48 of the Corporation Code which state as follows: " Amendment to by-laws . The board of directors or trustees, by a majority vote thereof, and the owners of at least a majority of the outstanding capital stock, or at least a majority of the members of a non-stock corporation, at a regular or special meeting duly called for the purpose, may amend or repeal any by-laws or adopt new by-laws ... Whenever any amendment or new by-laws is adopted, such amendment or new by-laws shall be attached to the original by-laws in the office of the corporation, and a copy thereof, duly certified under oath by the corporate secretary and a majority of the directors or trustees, shall be filed with the Securities and Exchange Commission, the same to be attached to the original articles of incorporation and original by-laws. The amended or new by-laws shall only be effective upon the issuance by the Securities and Exchange Commission of a certification that the same are not inconsistent with this Code." The filing fee for an amended or new by-laws is P110.00 which should be remitted to this Commission either in cash or manager's/cashier's check payable to this Office. In connection with your second query, Section 35 of the Corporation Code reads thus: "The by-laws of a corporation may create an executive committee, composed of not less than three members of the board, to be appointed by the board. Said committee may act, by majority vote of all its members, on such specific matters within the competence of the board, as may be delegated to it in the by-laws or on a majority vote of the board, except with respect to: (1) approval of any action for which shareholder's approval is also required; (2) the filling of vacancies in the board; (3) the amendment or repeal of by-laws or adoption of new by-laws; (4) the amendment or repeal of any resolution of the board which by its express terms is not so amenable or repealable; and (5) a distribution of cash dividends to the shareholders." Hence, should the by-laws or approved amended by-laws or new by-laws of Dizon Copper Silver Mines, Inc. contain an express provision creating an executive committee, the same may be properly constituted by mere resolution of the board of directors. The Commission, in a previous opinion ruled that subject to statutory limitations which may not be delegated to committees, a properly constituted committee composed of directors has all the authority of the board to the extent provided in the resolution of the board or by-laws. ( SEC letter to Metropolitan Bank and Trust Co., dated September 16, 1986 , citing Ballantine and Sterling, Vol., Chap. 3, sec. 311 at 20). On the other hand, where the executive committee is made up of, or includes persons who are not directors, such delegate committee shall be subject to the normal restrictions and requirements relating to undue abdication of authority by the board. Thus, while the executive committee may manage the day to day operation of the business of the company, the business affairs thereof shall be controlled, and all corporate powers shall be exercised under the ultimate direction of the board. (SEC Opinion, Supra.). Very truly yours, (SGD.) JULIO A. SULIT, JR. Chairman