Atty. Luis A. Vera Cruz, Jr.

June 14, 1982 Atty. Luis A. Vera Cruz, Jr. Angara Concepcion Regala and Cruz 51F ACCRA Bldg., 122 Gamboa St. Legaspi Village, Makati Metro Manila Dear Atty. Cruz: This refers to your letter dated June 8, 1982 requesting approval, confirmation or affirmance of the decision of the Board of Directors of Philex Mining Corporation to hold the postponed annual meeting of stockholders on June 29, 1982 and to notify the stockholders merely by publication. It appears from your letter that the SEC approved the decision of the Philex Board of Directors to postpone the annual meeting of the stockholders for the reasons and under the conditions stated in the letter of May 4, 1982; that one of the conditions is that "the specific day of June 8, 1982 for the postponed annual meeting will be determined with the approval of the Honorable Commission and the appropriate notices will be published and/or issued to stockholders;" that at the meeting of the Philex Board on June 17, 1982, it was decided that the annual meeting of stockholders be held on June 29, 1982 at Valle Verde and that notices therefor be published in national newspapers of general circulation; subject to approval of the Commission; that under its By-laws, the notice, time and place of holding of any meeting of stockholders shall be made by mail only, that Philex has 40,000 stockholders and the Board feels that notice by publication may be more practical and effective under the circumstances. This is to inform you that the SEC grants your request for the holding of the postponed annual stockholders' meeting on June 29, 1982 at 4:00 P.M. at the Valle Verde Clubhouse, Pasig, Metro Manila. However the Commission cannot allow you to notify the stockholders by mere publication because the same would constitute a violation of a specific provision of the By-laws of your corporation that notices shall be sent by ordinary mail or by delivering the same to the stockholders in person, at least seven days before the date set for such meeting. It is well settled that corporate by-laws must be observed by directors and officers of the corporation as well as by the stockholders: "Corporate by-laws are said to have the same force and effect as provisions of the charter or articles of incorporation. The by-laws of a corporation, when not in contravention of any statutory provisions, have all the force of contracts as between the corporation and its members and as between the members themselves. When duly enacted, they are binding upon all the members of a corporation, who are presumed to know them and to contract as members in reference to them. . . . (18 Am Jur 2d pp. 699-700)." The Commission feels that the stockholders of Philex can be sufficiently informed considering that there are still 16 more days within which to notify them by mail or by delivering the notice to the stockholders in person and considering further that it is more expensive to publish thrice in national newspapers of general circulation, the notice of such also sufficient to be seen or recognized by all the stockholders. Please be advised accordingly. Very truly yours, (SGD.) JULIO A. SULIT, JR. Associate Commissioner