TITLE V

BYLAWS

SEC. 45. Adoption of Bylaws. – For the adoption of bylaws by the corporation, the affirmative
vote of the stockholders representing at least a majority of the outstanding capital stock, or of at
least a majority of the members in case of nonstock corporations, shall be necessary. The bylaws
shall be signed by the stockholders or members voting for them and shall be kept in the principal
office of the corporation, subject to the inspection of the stockholders or members during office
hours. A copy thereof, duly certified by a majority of the directors or trustees and countersigned
by the secretary of the corporation, shall be filed with the Commission and attached to the original
articles of incorporation.

Notwithstanding the provisions of the preceding paragraph, bylaws may be adopted and filed prior
to incorporation; in such case, such bylaws shall be approved and signed by all the incorporators
and submitted to the Commission, together with the articles of incorporation.

In all cases, bylaws shall be effective only upon the issuance by the Commission of a certification
that the bylaws are in accordance with this Code.

The Commission shall not accept for filing the bylaws or any amendment thereto of any bank,
banking institution, building and loan association, trust company, insurance company, public
utility, educational institution, or other special corporations governed by special laws, unless
accompanied by a certificate of the appropriate government agency to the effect that such bylaws
or amendments are in accordance with law.

SEC. 46. Contents of Bylaws. – A private corporation may provide the following in its bylaws:

a) The time, place and manner of calling and conducting regular or special meetings of the
directors or trustees;
b) The time and manner of calling and conducting regular or special meetings and mode of
notifying the stockholders or members thereof;
c) The required quorum in meetings of stockholders or members and the manner of voting
therein;
d) The modes by which a stockholder, member, director, or trustee may attend meetings and
cast their votes;
e) The form for proxies of stockholders and members and the manner of voting them;
f) The directors’ or trustees’ qualifications, duties and responsibilities, the guidelines for
setting the compensation of directors or trustees and officers, and the maximum number of
other board representations that an independent director or trustee may have which shall,
in no case, be more than the number prescribed by the Commission;
g) The time for holding the annual election of directors or trustees and the mode or manner of
giving notice thereof;
h) The manner of election or appointment and the term of office of all officers other than
directors or trustees;
i) The penalties for violation of the bylaws;
 j) In the case of stock corporations, the manner of issuing stock certificates; and
k) Such other matters as may be necessary for the proper or convenient transaction of its
corporate affairs for the promotion of good governance and anti-graft and corruption
measures.

An arbitration agreement may be provided in the bylaws pursuant to Section 181 of this Code.

SEC. 47. Amendment to Bylaws. – A majority of the board of directors or trustees, and the owners
of at least a majority of the outstanding capital stock, or at least a majority of the members of a
nonstock corporation, at a regular or special meeting duly called for the purpose, may amend or
repeal the bylaws or adopt new bylaws. The owners of two-thirds (2/3) of the outstanding capital
stock or two-thirds (2/3) of the members in a nonstock corporation may delegate to the board of
directors or trustees the power to amend or repeal the bylaws or adopt new bylaws: Provided, That
any power delegated to the board of directors or trustees to amend or repeal the bylaws or adopt
new bylaws shall be considered as revoked whenever stockholders owning or representing a
majority of the outstanding capital stock or majority of the members shall so vote at a regular or
special meeting.

Whenever the bylaws are amended or new bylaws are adopted, the corporation shall file with the
Commission such amended or new bylaws and, if applicable, the stockholders’ or members’
resolution authorizing the delegation of the power to amend and/or adopt new bylaws, duly
certified under oath by the corporate secretary and a majority of the directors or trustees.

The amended or new bylaws shall only be effective upon the issuance by the Commission of a
certification that the same is in accordance with this Code and other relevant laws.
 TITLE VI

MEETINGS

SEC. 48. Kinds of Meetings. – Meetings of directors, trustees, stockholders, or members may be
regular or special.

SEC. 49. Regular and Special Meetings of Stockholders or Members. – Regular meetings of
stockholders or members shall be held annually on a date fixed in the bylaws, or if not so fixed,
on any date after April 15 of every year as determined by the board of directors or trustees:
Provided, That written notice of regular meetings shall be sent to all stockholders or members of
record at least twenty-one (21) days prior to the meeting, unless a different period is required in
the bylaws, law, or regulation: Provided, further, That written notice of regular meetings may be
sent to all stockholders or members of record through electronic mail or such other manner as the
Commission shall allow under its guidelines.

At each regular meeting of stockholders or members, the board of directors or trustees shall
endeavor to present to stockholders or members the following:

a) The minutes of the most recent regular meeting which shall include, among others:

1. A description of the voting and vote tabulation procedures used in the previous
meeting;
2. A description of the opportunity given to stockholders or members to ask questions and
a record of the questions asked and answers given;
3. The matters discussed and resolutions reached;
4. A record of the voting results for each agenda item;
5. A list of the directors or trustees, officers and stockholders or members who attended
the meeting; and
6. Such other items that the Commission may require in the interest of good corporate
governance and the protection of minority stockholders.

b) A members’ list for nonstock corporations and, for stock corporations, material information
on the current stockholders, and their voting rights;
c) A detailed, descriptive, balanced and comprehensible assessment of the corporation’s
performance, which shall include information on any material change in the corporation’s
business, strategy, and other affairs;
d) A financial report for the preceding year, which shall include financial statements duly
signed and certified in accordance with this Code and the rules the Commission may
prescribe, a statement on the adequacy of the corporation’s internal controls or risk
management systems, and a statement of all external audit and non-audit fees;
e) An explanation of the dividend policy and the fact of payment of dividends or the reasons
for nonpayment thereof;
f) Director or trustee profiles which shall include, among others, their qualifications and
relevant experience, length of service in the corporation, trainings and continuing education
attended, and their board representations in other corporations;
 g) A director or trustee attendance report, indicating the attendance of each director or trustee
at each of the meetings of the board and its committees and in regular or special stockholder
meetings;
h) Appraisals and performance reports for the board and the criteria and procedure for
assessment;
i) A director or trustee compensation report prepared in accordance with this Code and the
rules the Commission may prescribe;
j) Director disclosures on self-dealings and related party transactions; and/or k) The profiles
of directors nominated or seeking election or reelection.

A director, trustee, stockholder, or member may propose any other matter for inclusion in the
agenda at any regular meeting of stockholders or members.

Special meetings of stockholders or members shall be held at any time deemed necessary or as
provided in the bylaws: Provided, however, That at least one (1) week written notice shall be sent
to all stockholders or members, unless a different period is provided in the bylaws, law or
regulation.

A stockholder or member may propose the holding of a special meeting and items to be included
in the agenda.

Notice of any meeting may be waived, expressly or impliedly, by any stockholder or member:
Provided, That general waivers of notice in the articles of incorporation or the bylaws shall not be
allowed: Provided, further, That attendance at a meeting shall constitute a waiver of notice of such
meeting, except when the person attends a meeting for the express purpose of objecting to the
transaction of any business because the meeting is not lawfully called or convened.

Whenever for any cause, there is no person authorized or the person authorized unjustly refuses to
call a meeting, the Commission, upon petition of a stockholder or member on a showing of good
cause therefor, may issue an order directing the petitioning stockholder or member to call a meeting
of the corporation by giving proper notice required by this Code or the bylaws. The petitioning
stockholder or member shall preside thereat until at least a majority of the stockholders or members
present have chosen from among themselves, a presiding officer.

Unless the bylaws provide for a longer period, the stock and transfer book or membership book
shall be closed at least twenty (20) days for regular meetings and seven (7) days for special
meetings before the scheduled date of the meeting.

In case of postponement of stockholders’ or members’ regular meetings, written notice thereof and
the reason therefor shall be sent to all stockholders or members of record at least two (2) weeks
prior to the date of the meeting, unless a different period is required under the bylaws, law or
regulation.

The right to vote of stockholders or members may be exercised in person, through a proxy, or
when so authorized in the bylaws, through remote communication or in absentia. The Commission
shall issue the rules and regulations governing participation and voting through remote
communication or in absentia, taking into account the company’s scale, number of shareholders
or members, structure, and other factors consistent with the protection and promotion of
shareholders’ or member’s meetings.

SEC. 50. Place and Time of Meetings of Stockholders or Members. – Stockholders’ or members’
meetings, whether regular or special, shall be held in the principal office of the corporation as set
forth in the articles of incorporation, or, if not practicable, in the city or municipality where the
principal office of the corporation is located: Provided, That any city or municipality in Metro
Manila, Metro Cebu, Metro Davao, and other Metropolitan areas shall, for purposes of this section,
be considered a city or municipality.

Notice of meetings shall be sent through the means of communication provided in the bylaws,
which notice shall state the time, place and purpose of the meetings.

Each notice of meeting shall further be accompanied by the following:

a) The agenda for the meeting;

b) A proxy form which shall be submitted to the corporate secretary within a reasonable time
prior to the meeting;
c) When attendance, participation, and voting are allowed by remote communication or in
absentia, the requirements and procedures to be followed when a stockholder or member
elects either option; and
d) When the meeting is for the election of directors or trustees, the requirements and
procedure for nomination and election.

All proceedings and any business transacted at a meeting of the stockholders or members, if within
the powers or authority of the corporation, shall be valid even if the meeting is improperly held or
called: Provided, That all the stockholders or members of the corporation are present or duly
represented at the meeting and not one of them expressly states at the beginning of the meeting
that the purpose of their attendance is to object to the transaction of any business because the
meeting is not lawfully called or convened.

SEC. 51. Quorum in Meetings. – Unless otherwise provided in this Code or in the bylaws, a
quorum shall consist of the stockholders representing a majority of the outstanding capital stock
or a majority of the members in the case of nonstock corporations.

SEC. 52. Regular and Special Meetings of Directors or Trustees; Quorum. – Unless the articles
of incorporation or the bylaws provides for a greater majority, a majority of the directors or trustees
as stated in the articles of incorporation shall constitute a quorum to transact corporate business,
and every decision reached by at least a majority of the directors or trustees constituting a quorum,
except for the election of officers which shall require the vote of a majority of all the members of
the board, shall be valid as a corporate act.

Regular meetings of the board of directors or trustees of every corporation shall be held monthly,
unless the bylaws provide otherwise.
Special meetings of the board of directors or trustees may be held at any time upon the call of the
president or as provided in the bylaws.

Meetings of directors or trustees of corporations may be held anywhere in or outside of the

Philippines, unless the bylaws provide otherwise. Notice of regular or special meetings stating the
date, time and place of the meeting must be sent to every director or trustee at least two (2) days
prior to the scheduled meeting, unless a longer time is provided in the bylaws. A director or trustee
may waive this requirement, either expressly or impliedly.

Directors or trustees who cannot physically attend or vote at board meetings can participate and
vote through remote communication such as videoconferencing, teleconferencing, or other
alternative modes of communication that allow them reasonable opportunities to participate.
Directors or trustees cannot attend or vote by proxy at board meetings.

A director or trustee who has a potential interest in any related party transaction must recuse from
voting on the approval of the related party transaction without prejudice to compliance with the
requirements of Section 31 of this Code.

SEC. 53. Who Shall Preside at Meetings. – The chairman or, in his absence, the president shall
preside at all meetings of the directors or trustees as well as of the stockholders or members, unless
the bylaws provide otherwise.

SEC. 54. Right to Vote of Secured Creditors and Administrators. – In case a stockholder grants
security interest in his or her shares in stock corporations, the stockholder-grantor shall have the
right to attend and vote at meetings of stockholders, unless the secured creditor is expressly given
by the stockholder-grantor such right in writing which is recorded in the appropriate corporate
books.

Executors, administrators, receivers, and other legal representatives duly appointed by the court
may attend and vote in behalf of the stockholders or members without need of any written proxy.