Tierra-Tek International, Inc.

April 7, 1982 Tierra-Tek International, Inc. c/o Servando C. Aromin 46 Visayas Avenue Project 6, Quezon City Gentlemen: This has reference to your letter of March 29, 1982 requesting advice on how to include stock dividends as voting shares if stock dividends are entitled to vote in any stockholders' meeting. In connection therewith, please be informed that stock dividends fall within the purview of "outstanding capital stock" as defined in Section 137 of Batas Pambansa Blg. 68 and are therefore entitled to vote. SECTION 137. Outstanding capital stock defined . The term "outstanding capital stock", as used in this Code, means the total shares of stock issued to subscribers or stockholders, whether or not fully or partially paid (as long as there is a binding subscription agreement), except treasury shares. Finally, please be informed that the stock dividends can be included as voting shares if the provision of Section 43 of Batas Pambansa Blg. 68 are complied with. Section 43 provides in part as follows; "The board of directors of a stock corporation may declare dividends out of the unrestricted retained earnings which shall be payable in cash, property, or in stock to all stockholders on the basis of outstanding stock held by them. Provided, further, That no stock dividend shall be issued without the approval of stockholders representing not less than two-thirds (2/3) of the outstanding capital stock at a regular or special meeting duly called for the purpose." Please be guided accordingly. Very truly yours, (SGD.) JULIO A. SULIT, JR. Associate Commissioner