Mr. Jose G. Cervantes

July 3, 1990 Mr. Jose G. Cervantes General Manager Manila Stock Exchange MSE Building Prensa St.,Corner Muelle De La Industria Binondo, Manila S i r : This refers to your letter dated July 2, 1990 requesting opinion on the query posed therein. You stated that the Notice of Annual Meeting of Stockholders of Sanitary Wares Manufacturing Corporation scheduled on July 10, 1990, published in the daily newspapers on June 28 and 29, 1990 and July 2, 1990 includes a statement that " All Stockholders Entitled to Vote and Who Cannot Personally Attend the Meetings Are Requested to Deliver Their Proxies In Time To Reach The Corporate Secretary Not Later Than July 4, 1990 ".In this regard, you seek opinion on whether the cut-off date specified in the aforesaid notice would bind all stockholders entitled to vote at the annual meeting and whether proxies submitted after July 4, 1990, can be invalidated on the basis of said notice. Section 47 of the Corporation Code of the Philippines (herein to be referred to as the Corporation Code) partly provides that corporations may provide in their by-laws for "the form for proxies of stockholders and members and the manner of voting them".The by-laws of the corporation, therefore, would be controlling insofar as execution of proxies is concerned. Accordingly, in the absence of a provision in the by-laws, the corporation cannot prescribe any restriction in the execution and voting of proxy. The Commission thus previously ruled that if there is no deadline for the submission of proxies provided for in the by-laws, the corporation may not fix a deadline for their submission. Therefore, proxies may be submitted any time before the meeting. ( SEC Opinion dated Nov. 13, 1972 addressed to Neil Reyes and Associates ) A perusal of the By-Laws of Sanitary Wares Manufacturing Corporation disclosed that the same does not provide for the above-mentioned cut-off date for the submission of proxies. The same requires only that the instrument be "in writing, subscribed by such stockholder or by his duly authorized attorney, and delivered to the Secretary at or before the time of such meeting ." (Article III4). Therefore, the proxy should be perceived in relation to its compliance with the above provisions of the by-laws and Section 58 of the Corporation Code, quoted hereunder: "SECTION 58. Proxies . Stockholders and members may vote in person or by proxy in all meetings of stockholders or members. Proxies shall be in writing, signed by the stockholder or member and filed before the scheduled meeting with the corporate secretary. Unless otherwise provided in the proxy, it shall be valid only for the meeting for which it is intended. No proxy shall be valid and effective for a period longer than five (5) years at any one time." (Emphasis supplied) Accordingly, for as long as the proxy is executed in accordance with the aforementioned provisions, the corporation is duty bound to honor the same even if it is submitted after July 4, 1990, but submitted "at or before the time of the stockholders meeting." Very truly yours, (SGD.) ROSARIO N. LOPEZ Chairman