MEGAWIDE CONSTRUCTION CORPORATION
The rights of the Company’s shareholders, as provided below, are honoured by Megawide Construction Corporation and recognized in its Articles of Incorporation, By-Laws, New Manual on Corporate Governance, and Code of Business Conduct and Ethics.
A. Voting Right
- Shareholders shall 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.
- A Director shall not be removed without cause if it will deny minority shareholders representation in the Board.
B. Pre-emptive Right
All shareholders shall have pre-emptive right, unless the same is denied in the articles of incorporation or in any amendment thereto, or as may be required by the SEC, and in documents signed by such shareholders. They shall have the right to subscribe to the capital stock of the Company. The Company’s articles of incorporation shall lay down the specific rights and powers of shareholders with respect to the particular shares they hold, all of which shall be protected by law so long as they shall not be in conflict with the Corporation Code, as amended from time to time.
C. Power of Inspection
Subject to reasonable restrictions in accordance with the Corporation Code and jurisprudence, all shareholders shall be allowed to inspect corporate books and records, including minutes of Board meetings and stock registries, in accordance with the Corporation Code and shall be furnished with Annual Reports (SEC Form 17-A), including financial statements, without cost or restrictions.
D. Right to Information
- The shareholders shall be provided, upon request, periodic reports which disclose personal and professional information about the Directors and officers, and certain other matters such as their holdings of the Company’s shares, dealing with the Company, relationships among Directors and key officers, and the aggregate compensation of Directors and officers.
- The minority shareholders shall be granted 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 have 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 shareholders’ meeting, being within the definition of “legitimate purposes”.
E.?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 shall be 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; or (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 yet 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 special reserve for probable contingencies.
The shareholders shall have appraisal right or the right to dissent and demand payment of the fair value of their shares in the manner provided for under Section 82 of the Corporation Code of the Philippines, under any of the following circumstances:
- In case any amendment to the articles of incorporation has the effect of changing or restricting the rights of any shareholders 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;
- 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; and
- In case of merger or consolidation.
G. Promotion and Enhancement of Rights
The Board shall be transparent and fair in the conduct of the annual and special shareholders’ meetings of the Company. The shareholders shall be encouraged to personally attend such meetings. If they cannot attend, they shall be apprised ahead of time of their right to appoint a proxy. Subject to the requirements of the by-laws, the exercise of that right shall not be unduly restricted and any doubt about the validity of a proxy shall be resolved in the shareholder’s favor.
It is the duty of the Board to promote the rights of the shareholders, remove impediments to the exercise of those rights, and provide an adequate avenue for them to seek timely redress for the breach of their rights.
The Board shall take the appropriate steps to remove excessive or unnecessary costs and other administrative impediments to the shareholders’ meaningful participation in meetings, whether in person or by proxy. Accurate and timely information shall be made available to the shareholders to enable them to make a sound judgment on all matters brought to their attention for consideration or approval.
Although all shareholders shall be treated equally or without discrimination, the Board shall give minority shareholders the right to propose the holding of meetings and the items for discussion in the agenda that relate directly to the business of the Company.