Mr. Waldo Q. Flores

February 21, 1996 Mr. Waldo Q. Flores Philippine National Bank PNB Financial Center, Roxas Blvd. Pasay City, Manila S i r : This refers to your letter dated February 19, 1996 requesting opinion relative to delegation to the Board of Directors of the power to amend corporate by-laws. llcd As stated, under Article XI of the proposed By-laws of the Philippine National Bank which shall be submitted for approval to the stockholders on March 5, 1996 special meeting, it is provided that: "These by-laws, or any provision thereof, may be amended or repealed, in whole (by the adoption of new By-laws) or in part, by a majority vote of the Board of Directors and by at least a majority vote of the owners of the outstanding capital stock of the Bank at a regular or special meeting duly called for the purpose. These By-laws may likewise be amended or repealed, in whole or in part, by a majority vote of all the members of the Board of Directors, in accordance with law, at a regular or special meeting duly called for the purpose, provided that such power had been delegated to the Board by the affirmative vote of the owners of two-thirds (2/3) of the outstanding capital stock and notice of the intention to amend or repeal the By-laws shall have been given at the next preceding meeting of the Board of Directors. ..." (Emphasis supplied) Your queries are: 1. Can the delegation of the power to amend or repeal the Bank's By-laws to the Board of Directors under the second paragraph of Article XI above be done by the PNB stockholders during the same Special Meeting in which the Bank's By-laws will be submitted for approval? 2. Is it necessary to state such intent in the notice of the March 5, 1996 Special Stockholders Meeting, or can the stockholders take up said matter during said meeting without need of expressly stating such purpose in the notice of the Special Meeting? The delegated power of the Board of Directors to amend or repeal the by-laws under Section 48 of the Corporation Code presupposes that there is already an approved by-laws to be amended. In the present case, the proposed by-laws of PNB still has to be submitted to the stockholders for approval. Hence, there is nothing to amend, as contemplated under Section 48 of the Corporation Code. Thus, while the power to amend or repeal the by-laws may be delegated to the Board of directors, such authority cannot be secured from the PNB stockholders until the corporate by-laws of the corporation is duly approved in accordance with Section 46 of the Corporation Code. Very truly yours, (SGD.) FE ELOISA C. GLORIA Associate Commissioner