Mr. Benjamin A. Bautista

August 9, 1991 Mr. Benjamin A. Bautista President Innovative Service Specialist Development, Inc. 2nd Floor Pelaez Building 771 J. P. Rizal Street Makati ,Metro Manila S i r : This refers to your letter dated July 4, 1991 requesting opinion relative to the plan of Innovative Services Specialist, Inc. to reduce the number and composition of its Board of Trustees from ten (10) to seven (7) or even five (5) due to the difficulty of mustering a quorum during trustees meetings . LibLex In connection therewith, please be advised that to effect a change in any provision or matter stated in the articles of incorporation which in your case is the decrease of the number of the members of the board, compliance with Section 16 of the Corporation Code is necessary. The law provides, to wit: "SECTION 16. Amendment of articles of incorporation . Unless otherwise prescribed by this code or by special law, and for legitimate purpose, any provision or matter stated in the articles of incorporation may be amended by a majority vote of the board of directors or trustees and the vote or written assent of the stockholders representing at least "two-third (2/3)" of the outstanding capital stock without prejudice to the appraisal right of dissenting stockholders in accordance with the provision of the of this Code, or the vote or written assent of two thirds (2/3) of the members if it be a non-stock corporation . The original and amended articles together shall contain all provisions required by law to be set out in the articles of incorporation. Such articles, as amended shall be indicated by underscoring the change or changes made and a copy thereof duly certified under oath by the corporate secretary and a majority of the directors or trustees stating the facts that said amendment or amendments have been duly approved by the required vote of the stockholders or members shall be submitted to the Securities and Exchange Commission. The amendments shall take effect upon its approval by the Securities and Exchange Commission or from the date of filing with the said Commission if not acted upon within six (6) months from the date of filing for a cause not attributable to the corporation .(Emphasis supplied) If the amendment of the articles of incorporation is not possible because the required majority of the Board cannot be obtained due to always lack of quorum, the members of the Corporation, as an alternative, may replace the present members of the Board who are no longer interested in their posts pursuant to Section 28 of the Corporation Code which provides: "SECTION 28. Removal of directors and trustees . Any directors or trustee of a corporation may be removed from office by a vote of the stockholders holding or representing two-third (2/3) of the outstanding capital stock, or if the corporation be a non-stock corporation, by a vote two-third (2/3) of the members entitled to vote : Provided, That such removal shall take place either at a regular meeting of the corporation or at a special, meeting called for the purpose, and in either case, after previous notice to stockholders or members of the corporation of the intention to propose such removal at the meeting. A special meeting of the stockholders or members of a corporation for the purpose of removal of directors or trustees ,or any of them, must be called by the secretary on orders of the president or on the written demand of the stockholders representing or holding at least a majority of the outstanding capital stock, or if it be a non-stock corporation, on the written demands of a majority of the members entitled to vote. Should the secretary fail or refuse to call the special meeting upon such demands or fail to give the notice, or if there is no secretary, the call for the meeting may be addressed directly to the stockholders or members by any stockholder or member of the corporation signing the demand. Notice of the time and place of such meeting, as well as the intention to propose such removal, must be given by publication or by written notice as prescribed in this Code. The vacancy resulting from removal pursuant to this section may be filled by election at the same meeting without further notice , or at any regular or at any special meeting called for the purpose, after giving notice as prescribed in this Code. Removal may be with or without cause: Provided, that removal without cause may not be used to deprive minority stockholders or members of the right of representation to which they may be entitled under Section 24 of this Code. Thereafter, the newly elected members of the Board may convene, and by majority vote thereof, proceed with the plan to reduce the number of the Board in accordance with Section 16 of the Corporation Code. Please be advised accordingly. Very truly yours, (SGD.) ROSARIO N. LOPEZ Chairman