Authorized Capital Stock - Par Value - Government Subscription and Payment - Sale of Shares.
Section 4
SECTION 4. Authorized Capital Stock - Par Value - Government Subscription and Payment - Sale of Shares. - The authorized capital stock of the Bank shall be increased to TWO BILLION PESOS to be divided into twenty million shares at par value of one hundred pesos each. The Government shall increase its paid-in subscription of P700 million as of December 31, 1973 to P1 billion. Payment for the P300 million additional capital contribution to the Government shall be made as follows: In the form of cash to be authorized under the corresponding appropriation upon recommendation of the Secretary of Finance; or In the alternative, in exchange for bonds or other government securities which the Secretary of Finance is hereby authorized to issue under such terms and conditions as he may prescribe. The increase in the authorized capital stock shall be divided into the following classes of shares: a. Preferred "A" shares which shall consist of one million shares available for sale to or subscription by the general public. These shares shall have the following features: 1) preferred as to dividends at ten per cent (10%); 2) cumulative; 3) participating; 4) non-voting; 5) dividends thereon shall be exempt from income tax; 6) redeemable at the option of the Bank at the prevailing book value but in no case less than par after five (5) years from issuance thereof; and 7) convertible to Common shares at the option of the holder in case the Bank fails to pay dividends thereon for two consecutive years: PROVIDED, however, that if the holder thereof signifies his intention to convert the Preferred "A" shares to Common shares, the Bank may, at its option, redeem said shares even before the lapse of five (5) years counted from date of their issuance. b. Preferred "B" shares which shall consist of two million shares available for sale to or subscription by citizens of the Philippines only. These shares shall have the following features: 1) preferred as to dividends; 2) cumulative; 3) participating; 4) non-voting; 5) dividends thereon shall be exempt from income tax; and 6) convertible to Common at the option of the holder in case the Bank fails to pay dividends thereon for two consecutive years. c. Common "A" shares which shall consist of five hundred thousand (500,000) shares exclusively available for subscription at par by officers and employees of the Bank. These shares shall have the following features: 1) preferred as to dividends; 2) cumulative; 3) participating; 4) voting; 5) dividends thereon shall be exempt from income tax; and 6) non-transferable except to qualified holders as herein provided. Transfer of any kind, including that by hereditary succession, to any person other than officers or employees of the Bank shall not be valid and shall not be registered in the books of the Bank. Moreover, such transfer shall give rise to the Bank's right to acquire the shares so transferred at part. The Board of Directors of the Bank shall prescribe the terms and conditions for the distribution of Common "A" shares to officers and employees of the Bank as well as for the Bank's re-acquisition of said shares from the holders thereof upon their separation from the Bank or upon the transfer of said shares to any person other than officers or employees of the Bank. d. The balance of the increase in the authorized capital stock shall be in Common shares. The Board of Directors of the Bank may, at its discretion, increase the number of any of the preferred shares as well as the Common "A" shares by converting outstanding Common shares, if there are any available, to such shares desired to be increased. Said increase shall be subject to the approval of the President of the Philippines upon recommendation of the Secretary of Finance. The Bank may take the necessary steps to have its preferred shares listed in any duly registered stock exchange. Existing private stockholders may exercise their pre-emptive right. The Government may at any time, upon recommendation by the Secretary of Finance and the approval of the President of the Philippines, subscribe to the balance of the Common shares: Provided, however, that upon the lapse of five years from the listing of the preferred shares in any duly registered stock exchange, but not later than December 31, 1980, such preferred shares remaining unsold or unsubscribed shall be automatically converted to Common shares and subscribed to by the Government. Payment of these government subscriptions may likewise be in the form of cash to be authorized under the corresponding appropriation that may be made from time to time or in exchange for bonds or other government securities which the Secretary of Finance is hereby authorized to issue under such terms and conditions as he may prescribe. These bonds or other government securities may be retired in the manner provided for in this Decree. The Bank is also authorized to purchase its own shares that are held privately. Holders of Land Bank bonds may, under such terms and conditions as may be prescribed by the Board of Directors of the Bank, exchange such bonds for shares of the Bank offered for sale to the public.