Amendment to PNB Charter on Capital Stock

Preferred "A" shares (1 million shares, for the public):
1. Preferred dividends at 10%.
2. Cumulative dividends.
3. Participating in profits.
4. Non-voting rights.
5. Dividends exempt from income tax.
6. Redeemable after 5 years at book value (no less than par) at Bank's option.
7. Convertible to common shares if dividends unpaid for 2 consecutive years; Bank may redeem early upon holder's conversion intent.
Preferred "B" shares (2 million shares, for Filipino citizens):
1. Preferred, cumulative, participating dividends.
2. Non-voting.
3. Dividends exempt from income tax.
4. Convertible to common shares if dividends unpaid for 2 consecutive years.
Common "A" shares (500,000 shares, for Bank officers and employees):
1. Preferred, cumulative, participating dividends.
2. Voting rights.
3. Dividends exempt from income tax.
4. Non-transferable except to qualified officers or employees.
5. Transfer to any other persons invalid and triggers Bank's right to acquire shares at par.
Remaining authorized capital stock to be common shares.

Board of Directors shall set terms for distribution and reacquisition of Common "A" shares.
Board may increase preferred or Common "A" shares by converting outstanding common shares with President's approval upon Finance Minister's recommendation.
Preferred shares may be listed on a stock exchange.

Existing private stockholders have 90 days to exercise pre-emptive rights on capital increase.
Unsubscribed common shares by private stockholders will be automatically subscribed and paid for by the Government.

The Bank is authorized to purchase its own privately held shares.
Holders of Land Bank bonds may exchange bonds for shares of the Bank offered to the public under terms prescribed by the Board.