Amended Rules Governing Pre-Emptive and Other Subscription Rights and Declaration of Stock or Cash Dividends of Corporations Whose Securities are Registered under the Revised Securities Act or Listed in the Stock Exchanges

April 12, 1991 AMENDED RULES GOVERNING PRE-EMPTIVE AND OTHER SUBSCRIPTION RIGHTS AND DECLARATION OF STOCK OR CASH DIVIDENDS OF CORPORATIONS WHOSE SECURITIES ARE REGISTERED UNDER THE REVISED SECURITIESACT OR LISTED IN THE STOCK EXCHANGES 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 stocks dividends, and in the payment of cash dividends, the Securities and Exchange Commission, pursuant to the powers vested in it by the Revised Securities Act, and other existing laws, hereby promulgates and the following rules: cdll SECTION 1. All corporations whose securities are registered under the Revised Act and listed in the stock exchanges 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 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 dividends. 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. Provided, however that the record date set shall not be less than ten (10) trading days from receipt of notice by the Exchanges. Immediately after such declaration, notice thereof shall be made to the SEC and the Exchanges. Thereafter, the application for listing of shares to cover the dividend declaration shall be simultaneously filed with the Commission and the Exchanges. SECTION 3. All cash dividends declared by corporations, shall have a record date which shall not be less than ten (10) 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 corporation may be declared 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, requiring the prior approval by the Commission. In case of declaration of cash dividends, such suspensive condition must be fulfilled within thirty (30) days from said declaration by the Board, and in case of stock dividends, within thirty (30) days from stockholders ratification. cdlex In the event any suspensive condition is not fulfilled within the period above-prescribed, the dividends so declared shall be deemed cancelled and without further effect. The record date for such declaration shall not be less than ten (10) days nor more than thirty (30) days from the fulfillment of such suspensive condition. SECTION 5. Notwithstanding the provision 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, notice thereof shall be sent to the Commission and 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 Commission together with all requirements necessary for approval; within the same period the application for listing of shares to cover the dividend declaration shall be filed with the Exchanges. 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 be fixed by the Commission and shall be indicated in the Order which 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. SECTION 6. All certificates of stocks shall be issued and all cash dividends shall be paid within thirty (30) days from record date by corporations having 10,000 stockholders or less and forty-five (45) days from record date for corporations having more than 10,000 stockholders. If the stock dividends shall come from an increase in capital stock, all certificates of stock covering such stock dividends shall be issued within thirty (30) days from date of approval by the Commission of the registration/licensing of the increase in capital stock. SECTION 7. No corporation shall be allowed to offer new rights if any portion of its previous rights remain unpaid. In such case, the corresponding call of payment shall instead be made by the Board of Directors. SECTION 8. No application for registration/licensing of increase in authorized capital stock shall be approved unless a detailed updated prospectus and work program showing viability of proposed project which should be related to the principal business of the corporation is submitted. Provided, that this may be dispensed with if the increase in authorized capital stock is by way of stock dividends. SECTION 9. All funds received by the corporation from subscribers to and increase in authorized capital stock shall be properly receipted, deposited in a banking institution and shall be utilized exclusively in accordance with the work program submitted in relation to its application for increase or registration or for the purposes for which the increase of registration was made. Provided that the proposed project shall be related to the corporation's principal business. No amount shall be granted as loans or advances to subscribers, officers/directors of the Corporation or any of its affiliated companies, and provided further that in case of listed issues, the shares shall be listed in the Exchanges, otherwise, the corporation shall, within ninety (90) days from date of approval of the registration of securities, return to the subscribers their subscription deposits. In all cases, the Commission shall be duly informed in writing. SECTION 10. 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 corporation shall likewise notify thereof the Commission immediately and in writing. SECTION 11. 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 certificates of registration/permit to offer securities; and c) other penalties within the power of the Commission to impose. 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 12. These Rules shall take effect fifteen (15) days after its publication in two (2) newspapers of general circulation in the Philippines. LibLex (SGD.) ROSARIO N. LOPEZ Chairman