Ms. Helen G. Tiu

March 20, 2000 Ms. Helen G. Tiu H. G. Tiu Law Offices 2123 Severino Reyes St. Sta. Cruz, Manila Madam: This refers to your letter dated March 7, 2000 requesting opinion on whether the stock option plan of Psi Technologies Holdings, Inc. in favor of 58 qualified employees of its principal operating subsidiary, PSI Technologies, Inc. may be considered exempt from registration under the Revised Securities Act. TSIDEa As a general rule , selling or offering of shares of stock in the Philippines is subject to registration under the Revised Securities Act (Sec. 4). However, the same Act allows exemptions if the Commission finds that the registration of the transaction is not necessary for the protection of the investors by reason of the small amount or limited character of the offering . (Sec. 6-b). Thus, on the basis of said allowable exemption, the Commission, on several occasions, had treated "stock option plans" granted by corporations in favor their qualified employees or that of their subsidiaries/affiliates, as an exempt transaction. Accordingly, if the stock option plan referred to in your letter is limited only to 58 qualified employees of the subsidiary of the parent corporation who are in a position to know the present affairs of the issuer corporation and the risk of investing therein such that the registration of the shares to be offered is not necessary in the public interest and for the protection of the investors, the proposed transaction may be exempted from the registration requirement under the Revised Securities Act subject to the following requirements which should be filed prior to its implementation : 1. Filing of a request for exemption from the registration requirements stating the reason why it should be exempted from registration under the Revised Securities Act; 2. Payment of exemption fee amounting to one tenth of one per centum of the maximum aggregate price or issued value of the securities as required under section 6 (c) of the Revised Securities Act. Further, the grant of exemption shall be subject to the conditions that the issuance of shares shall be limited only to the 58 qualified employees and that the issued shares shall not be subsequently sold/transferred in the course of repeated and successive transactions without having them first registered under the Revised Securities Act. ICacDE Very truly yours, (SGD.) SONIA M. BALLO Director Corporate and Legal Department