Dr. Antonio B. De Ocampo, M. D.

October 9, 1990 Dr. Antonio B. De Ocampo, M. D. De Ocampo Memorial Schools, Inc. 2921 Nagtahan St.,Corner Magsaysay Blvd.,Manila S i r : This refers to your letter dated September 18, 1990 requesting information on any restriction, limitation and/or condition to be imposed by the Commission on the contemplated redemption of the outstanding redeemable preferred shares of De Ocampo Memorial Schools, Inc. The SEC Rules Governing Redeemable and Treasury Shares provides that in the case of redeemable shares reacquired, the same shall be considered retired and no longer issuable, unless otherwise provided in the articles of incorporation (Sec. 3-2). A verification of the amended articles of incorporation of subject corporation disclosed that the same is silent on the re-issuable nature of its redeemable preferred shares. Accordingly, once they are redeemed, the same shall be considered retired and no longer re-issuable. However, while they are considered as retired, the same remain in the treasury status by decreasing the authorized capital stock of the corporation in accordance with Section 38 of the Corporation Code (Sec. 4-2). Redeemable shares may be redeemed regardless of the existence of unrestricted retained earnings provided that the corporation has, after such redemption, sufficient assets in its books to cover debts and liabilities inclusive of capital stock. (Sec. 5-5) For your perusal, we are enclosing a copy of the SEC Rules Governing Redeemable and Treasury Shares. (SGD.) RODOLFO L. SAMARISTA Associate Commissioner