Mr. Jose A. Mag-Abo

October 3, 1996 Mr. Jose A. Mag-Abo Bukidnon Midland College Corner Rizal Tabios Sts. Malaybalay, Bukidnon S i r : This refers to your letter dated September 9, 1996 requesting clarification/solution on the following corporate issues/situations summarized as follows: (1) Acceptance of resignation and removal of members of the Board of Directors. Generally, a director or other officer, even though elected for a fixed term may resign at any time by definite notice. Unless a future date of acceptance by the corporation is specified, resignation will take effect at once and no acceptance is necessary. This is of course, subject to any express charter or statutory provision to which he has expressly or impliedly assented in accepting the office, and subject to any express contract he may have made with the corporation. (SEC Opinion dated September 3, 1991 citing Agbayani, Commentaries and Jurisprudence on the Commercial Laws of the Phil. citing Ballantine 217 and Sec. 2 Fletcher, 100) A member of the Board of Directors can be removed from Office by following the procedure laid under Section 28 of the Corporation Code, quoted hereunder: "SECTION 28. Removal of directors or trustees . Any director or trustee of a corporation may be removed from office by a vote of the stockholders holding or representing two-thirds (2/3) of the outstanding capital stock, or if the corporation be a non-stock corporation, by a vote of two-thirds (2/3) of the members entitled to vote: Provided; That such removal shall take place either at a regular meeting of the corporation or at a special meeting called for the purpose, and in either case, after previous notice to stockholders or members of the corporation of the intention to propose such removal at the meeting. A special meeting of the stockholders or members of a corporation for the purpose of removal of directors or trustees, or any of them, must be called by the secretary on order of the president on the written demand of the stockholders representing or holding at least a majority of the outstanding capital stock, or, if it be a non-stock corporation on the written demand of a majority of the members entitled to vote. Should the secretary fail or refuse to call the special meeting upon such demand or fail to refuse to give the notice, or if there is no secretary, the call for the meeting may be addressed directly to the stockholders or members by any of the stockholder or member of the corporation signing the demand. Notice of the time and place of such meeting, as well as the intention to propose such removal, must be given by publication or by written notice as prescribed in this Code. The vacancy resulting from the removal pursuant to this Section may be filled by election at the same meeting without further notice, or at any regular or at any special meeting called for the purpose, after giving notice as prescribed in this Code. Removal may be with or without cause: Provided, That removal without cause may not be used to deprive minority stockholders or members of the right of representation to which they may be entitled under Section 24 of this Code." (2) Can an amendment to the Articles of Incorporation be done to solve the situation of always, lack of quorum of the Board of Directors. There is no need to amend the Articles of Incorporation in the event there is always lack of quorum. The stockholders of the corporation may remove such directors who are no longer interested in their post and replace them in accordance with the aforecited provision of the Corporation Code. In the event no existing stockholder is interested to become a director, the remaining directors or stockholders who desire to continue the business operation may transfer qualifying shares to nominees for purposes of qualifying them to sit in the Board of Directors. (3) Plan of converting the corporation into a partnership. In order to legally effect the conversion of a corporation to a partnership, the corporation should first be dissolved in accordance with the provisions of the Corporation Code, and thereafter the interested stockholders of the dissolved corporation may register a new partnership, subject however to the Rules and Regulations of the Department of Education, Culture and Sports (DECS) ,the corporation being an educational institution. LibLex Very truly yours, (SGD.) FE ELOISA C. GLORIA Associate Commissioner