RIGHTS OF SHAREHOLDERS

1. Voting Right

• Shareholders have the right to elect, remove and replace directors and vote on certain corporate acts in accordance with the Corporation Code.
• Cumulative voting shall be used in the election of directors. Directors shall not be removed without cause if it would deny minority shareholders of representation of the Board. Removal of directors requires an affirmative vote of two-thirds of the outstanding capital of the Company.

2. Power of Inspection

• All shareholders shall be allowed to inspect the corporate books and records of the Company, including minutes of the Board meetings and stock registries in accordance to the Corporate Code, and shall be provided with annual reports, including financial statements without cost or restrictions.

3. Right to Information

• The shareholders shall be provided, upon request, with periodic reports which disclose personal and professional information about the directors and officers of the Company, and certain other matters such as the directors’ and officers’ holdings of the Company’s shares, dealings with the Company, relationships among directors and key officers of the Company, and the aggregate compensation of the directors and officers. The Information Statement/Proxy Statement where these are presented must be distributed to the shareholders before annual general meetings and in the Registration Statement and Prospectus in case of registrations of share for public offering with the Commission.
• The minority shareholders shall be given the right to propose the holding of a meeting, and the right to propose items in the agenda of the meeting, provided the items are for legitimate business purposes.
• The minority shareholders shall be granted access to any and all information relating to matters for which the management is accountable for and to those relating to matters for which the management shall include such information and, if not included, then the minority shareholders shall, be allowed to propose to include such matters in the agenda of the shareholders’ meeting, being with the definition “legitimate purposes”.

4. Right to Dividends

• Shareholders shall have the right to receive dividends subject to the discretion of the Board.
• The Company shall be compelled to declare dividends when its retained earnings is in excess of one hundred percent (100%) of its paid-in capital
  stock, except:

a. When justified by definite corporate expansion projects or programs approved by the Board;
b. When the Company is prohibited under any loan agreement with any financial institution or creditor, whether local or foreign, from declaring dividends without its consent, and such consent has not been secured; or
c. When it can be clearly shown that such retention is necessary under special circumstances obtaining in the Company,such as when there is a need for a special reserve for probable contingencies.

5. Appraisal Right

• Shareholders shall have appraisal right or the right to dissent and demand payment of fair value of their shares in the manner provided for under Section 80 of the Revised Corporation Code of the Philippines, under any of the following circumstances:

a. In case any amendment to the articles of incorporation has the effect of changing or restricting the rights of any stockholders or class of shares, or of authorizing preferences in any respect superior to those of outstanding shares of any class, or of extending or shortening the term of corporate existence;
b. In case of sale, lease, exchange, transfer, mortgage, pledge or other disposition of all or substantially all of the corporate property and assets as provided in the Corporation Code;
c. In case of merger or consolidation; and
d. In case of investment of corporate funds for any purpose other than the primary purpose of the corporation.