Revised Rules Governing Offers of Pre-Emptive and Other Subscription Rights and Declaration of Stock, Cash or Property Dividends of Corporations Whose Securities are Registered under the Revised Securities Act

March 10, 1988 REVISED RULES GOVERNING OFFERS OF PRE-EMPTIVE AND OTHER SUBSCRIPTION RIGHTS AND DECLARATION OF STOCK, CASH OR PROPERTY DIVIDENDS OF CORPORATIONS WHOSE SECURITIES ARE REGISTERED UNDER THE REVISED SECURITIES A C T In order to closely monitor the offering of pre-emptive and other subscription rights; to curb delays in the issuance of rights or the distribution of stock dividends, and in the payment of cash or property dividends, the Securities and Exchange Commission, pursuant to the powers vested in it by existing laws and provisions of the Revised Securities Act, hereby promulgates the following rules: SECTION 1. All corporations whose securities are registered under the Revised Securities Act are required to first register with the Commission any or all offers to subscribe to shares from increases in the authorized capital stock. SECTION 2. All corporations declaring stock or property dividends must secure approval of stockholders within forty-five (45) days from such declaration by the Board of Directors. The Board Resolution shall be specific as to the amount of stock or property dividend. The record date shall not be less than ten (10) days nor more than thirty (30) days from the date of approval by the stockholders. In case no record date is specified, then the same shall ipso facto be deemed fixed at fifteen ( 15) days from such declaration. SECTION 3. All cash dividends declared by corporations shall have a record date which shall be not less than ten (10) days nor more than thirty (30) days from said declaration. In case no record date is specified, then the same shall ipso facto be deemed fixed at fifteen (15) days from such declaration. SECTION 4. No corporations may declare dividends subject to suspensive conditions, except only those with regard to obtaining: a) the approval by the appropriate government agency primarily concerned with the supervision of said corporation e.g. , Central Bank, National Telecommunications Commission; b) the consent of creditors if required by a loan agreement, contract, etc. and c) under other analogous conditions, the prior approval by the Securities and Exchange Commission. In case of declarations of cash dividend, such suspensive condition must be fulfilled within thirty (30) days from said declaration by the Board, and in case of stock or property dividends within thirty (30) days from stockholders' ratification. In the event any suspensive condition is not fulfilled within the period above-described, the dividend so declared shall be deemed cancelled and without further effect. The record date for such declaration shall be not less than ten (10) days nor more than thirty (30) days from the fulfillment of such suspensive condition. SECTION 5. Notwithstanding the provisions of Sec. 2 hereof, in cases where the stock dividend is declared in connection with an increase in authorized capital stock, the following rules shall apply: a) Upon the declaration of the stock dividend by the Board of Directors, approval of the stockholders must be secured within thirty (30) days therefrom; b) Within forty-five (45) days from the date of the approval by the stockholders, the application for increase in authorized capital stock and for the registration of the securities must be filed with the Securities and Exchange Commission together with all requirements necessary for approval; c) No corporation shall file its application for increase in authorized capital stock under this section unless all suspensive conditions, if any shall have been fulfilled; and d) The record date of such declaration shall not be less than ten (10) days nor more than thirty (30) days after all clearances and approvals by the Commission shall have been secured. prcd SECTION 6. All certificates of stocks shall be issued and all cash and property dividends shall be paid within thirty (30) days from record date of corporations having 10,000 stockholders or less and forty-five (45) days from record date for corporations having more than 10,000 stockholders. SECTION 7. All funds received by the corporation from subscribers to an increase-in authorized capital stock shall initially be placed in escrow and shall be released for use by the corporation only after all required clearances and approvals by the Commission shall have been secured. SECTION 8. Corporations whose shares are listed in the stock exchanges shall immediately notify said exchanges simultaneously by telephone and immediately confirmed in writing, of any declaration of dividend, offer of pre-emptive and other subscription rights. Said corporations shall likewise notify thereof the Commission immediately and in writing. SECTION 9. Violation of any of the provisions of these rules shall be subject to any or all of the following sanctions: a) a fine of no less than two hundred (P200.00) pesos nor more than fifty thousand (P50,000.00) pesos plus not more than five hundred (P500.00) pesos for each day of continuing violation; b) suspension or revocation of its certificate of registration/permit to offer securities; and c) other penalties within the power of the Commission. The imposition of the foregoing administrative sanctions shall be without prejudice to the filing of criminal charges against the individuals responsible for the violation. SECTION 10. These Rules shall take effect immediately after the publication in two (2) newspapers of general circulation in the Philippines for two (2) consecutive weeks. (SGD.) JULIO A. SULIT, JR. Chairman