Atty. Roderick R.C. Salazar III

June 4, 1996 Atty. Roderick R.C. Salazar III Fortun and Narvasa Law Offices Suite 407 Cityland 10 Tower 1 6815 Ayala Ave., Makati City S i r : This refers to your letter dated May 30, 1996 requesting opinion relative to the effect of the reclassification of the shares of stock of Asia Amalgamated Holdings Corporation from Class "A" and Class "B" shares into one (1) class of Common stocks . cdll As stated, during the annual stockholders' meeting of Asia Amalgamated Holdings Corporation, a corporation listed in the Philippine Stock Exchange, the stockholders approved the amendment of the Seventh Article of the Corporation's Amended Articles of Incorporation reclassifying Class "A" and Class "B" shares of the corporation to only one (1) class of Common Stocks. The reclassification shall be effected only upon the approval by the SEC of the amendment. However, it may happen that prior to the SEC approval, the existing Class "A" and Class "B" shares may have different prices. Thus, the class having a higher for market price prior to the SEC approval may suffer a loss in value. Your query is, whether or not the Corporation is under legal obligation to pay the price difference to the stockholders owning shares with a higher value prior to the SEC approval. Take note that the usual purpose of classifying COMMON STOCKS into Class "A" and Class "B" is merely to monitor compliance with the required maximum foreign equity participation. Assuming that the previous classification of shares was made only for that purpose and if there was no substantial difference between Class "A" and Class "B" Common Shares in the terms of par value, rights and privileges , both classes of stocks were intended to be placed in equal footing . Thus, it can be inferred that the intention of the reclassification of the existing Class "A" and Class "B" shares to only one (1) class of common stock is to remove the unfair result of the previous classification ( difference in price in the stock market ). The move of the corporation to classify its common stocks to only one (1) class of shares is therefore done in " good faith " as it is designed to achieve a uniform price in the stock market, thereby ensuring fair dealings. Any frustration of an expectation or anticipation of a purchaser of stocks in the stock market should not be blamed on the corporation. The corporation does not guarantee the purchasers of stocks actively traded in the Stock Exchange against losses as the price of stocks fluctuates and is determined by prevailing market forces. Accordingly, the corporation should not be held responsible should the value of Class "B" shares of the company depreciate as a result of the reclassification. cdlex Very truly yours, (SGD.) PERFECTO R. YASAY, JR. Acting Chairman