Sacred Heart Memorial Corporation

June 6, 1991 Sacred Heart Memorial Corporation Km. 16, Malanday, Valenzuela Metro Manila Gentlemen : This has reference to your letter dated April 10, 1991 requesting the opinion of this Commission on the query posed therein. prcd You want to know if a stockholder, in opting to vote for only a fraction of the number of directors to be voted upon, can distribute the cumulated vote at his will or is it mandatory that he distribute it evenly or proportionately among the candidates to be voted. Section 24 of the Corporation Code pertinently provides: "SECTION 24. Election of directors or trustees . ....In stock corporations, every stockholder entitled to vote shall have the right to vote in person or by proxy the number of shares of stock standing, at the time fixed in the by laws, in his own name on the stock books of the corporation, or where the by-laws are silent, at the time of the election; and said stockholder may vote such number of shares for as many persons as there are directors to be elected or he may cumulate said shares and give one candidate as many votes as the number of directors to be elected multiplied by the number of his shares shall equal, or he may distribute them on the same principle among as many candidates as he shall see fit : Provided, That the total number of votes cast by him shall not exceed the number of shares owned by him as shown in the books of the corporation multiplied by the whole number of directors to be elected :...." (Emphasis supplied) Nowhere in the aforequoted section, or in any provision of the Code, is it required that the total votes a stockholder is entitled to cast under the cumulative voting be evenly or proportionately distributed among his candidates. He can give such number of votes to each of his candidates at his own discretion without any limitation except that the total votes cast by him shall not exceed the number of shares owned by him multiplied by the whole number of directors to be elected. Thus, in your example, stockholder A, who owns 100 shares in corporation Z with a five (5) man board, can cast any number of votes as he wills for Pedro, Juan and Jose, provided that the total votes cast by him shall not exceed 500 (100 shares multiplied by 5 directors to be elected). LexLib We trust that the foregoing enlightens you on the matter. Very truly yours, (SGD.) ROSARIO N. LOPEZ Chairman