Mr. Tomas G. Cloma, Jr.

July 21, 1994 Mr. Tomas G. Cloma, Jr. 5 Constellation Street, Bel-Air II Makati, Metro Manila S i r : This refers to your letter of July 13, 1994 requesting opinion the following queries which we shall answer in the order they were presented: 1. Can one person be elected as Chairman , President and Vice-Chairman all at the same time? Section 25 of the Corporation Code provides in part: "... Any two (2) or more positions may be held concurrently by the same person, except that no one shall act as president and secretary or as president and treasurer at the same time." (Emphasis supplied) Therefore, the Chairman of the Board may at the same time be the President of the corporation, but obviously, one cannot be Chairman at the same time Vice-Chairman of the Board of Directors. 2. How will said person break a tie in case there is a division of the house specially on controversial issues with conflict of interest involving the Chairman-President/Vice Chairman? A director is entitled to only one vote in any corporate transaction. Thus, in the event of deadlock or tie, he can no longer vote again to break the tie if he has already exercised his voting right, even if he is the Chairman of the Board. Any matter or transaction must necessarily fail if the votes attained is less than what the law requires for the particular transaction. A director who is disqualified by reason of personal interest in the matter before a directors' meeting, loses, pro hoc vice, his capacity as a director and he cannot be counted for the purpose of making a quorum. Nor can the vote of a director who is disqualified for such reason be counted for the purpose of determining whether a resolution has been passed by a majority vote. ( SEC Ltr. to Atty. Roberto Leong dated January 25, 1990 ,citing Ballantine on Corporations, Sec. 45 p. 131) 3. Can the corporate secretary refuse any member of the Board or stockholder, the inspection of the ballots used during the stockholders annual election of the board? The right to inspect the ballots arises and may be allowed only if the election or votation of a particular transaction is being questioned. 4. How long should the ballots used during the election of the board be kept before they can be disposed? Considering that there is no specific provision of law, rules or regulations on the matter, the details pertaining to elections is best left to the sound discretion of the board, provided they are not contrary to existing laws, rules and regulations. llcd 5. Can the board hold a meeting without any agenda? The general rule is, in a "regular meeting" the notice need not specify what is to be considered at the meeting. An exception is made where unusual or extra-ordinary business not ordinarily brought up at a general meeting is to be approved at the meeting. In the case of "special meeting" the notice must state the business to be transacted, and no other business than that stated can be transacted. The notice of the special meeting should state the issues to be voted on at the meeting with sufficient particularity to enable each shareholder to judge whether he would or would not assent to the proposed action. (5 Fletcher, sec. 2009, citing several cases) This general principle may be applied in the case of board meetings. Very truly yours, (SGD.) FE ELOISA C. GLORIA Associate Commissioner