Federal Phoenix Assurance Co., Inc.

October 29, 1987 Federal Phoenix Assurance Co.,Inc. 4th Floor, DCG Building, Legaspi corner Dela Rosa Street, Legaspi Village Makati, Metro Manila Gentlemen : This relates to the increase of capital stock of Federal Phoenix Assurance Company, Inc.,from P10,000,000 to P18,000,000 which was presented to this Commission for approval. It appears that of said increase of P8,000,000, at least 25% or P2,012,500 has been subscribed and fully paid by way of stock dividend. With the concurrence and approval of all the stockholders, the stock dividends are proposed to be declared and payable to the stockholders on the basis of their paid-up stock. In connection therewith, please be informed that the Commission, in an en banc meeting of October 22, 1987, resolved to deny your application for increase of capital stock, applying in relation thereto the following provisions of the Corporation Code: "SECTION 43. Power to declare dividends . The Board of Directors of a stock corporation may declare dividends out of the unrestricted retained earnings which shall be payable in cash, in property, or in stock to all stockholders on the basis of outstanding stock held by them ...." Please be guided accordingly. Very truly yours, (SGD.) JULIO A. SULIT, JR. Chairman