Subscription Rules for QUEDANCOR Capital Stock

The circular governs subscription by private investors to the capital stock of QUEDANCOR.
QUEDANCOR’s authorized capital stock is Two Billion Pesos (P2,000,000,000.00).
The authorized capital stock consists of two billion common and voting shares.
Each share has a par value of One Peso (P1.00) per share.

Sixty (60%) percent of the authorized capital stock (equivalent to 1.2 billion shares) is reserved for subscription solely by the National Government and/or government-owned or controlled corporations.
The National Government is deemed to have subscribed shares equivalent in par value to and considered paid for by the net assets of the Quedan Guarantee Fund Board, as determined and certified by the Commission on Audit within three (3) months from the effectivity of R.A. 7393.
The following government entities are authorized to invest in QUEDANCOR’s capital stock: the Department of Agriculture, the Department of Agrarian Reform, the Technology and Livelihood Resource Center, the Philippine Amusement and Gaming Corporation, the Philippine National Bank, the Development Bank of the Philippines, the Land Bank of the Philippines, the Government Service Insurance System, the Social Security System, other government agencies, and government-owned or controlled corporations.
The shares subscribed by the National Government and government-owned or controlled corporations may be sold to one another but not to private investors.

Forty (40%) percent of the authorized capital stock (equivalent to 0.8 billion shares) is reserved for subscription solely by small farmers, fisherfolks, their cooperatives and other private investors, whether individual, partnership or corporation.
Private subscription is limited by a maximum ownership cap: no private person, natural or juridical, by interlocking directorate, trust, subscription, purchase, lease, mortgage, pledge, or other forms of acquisition or encumbrance, shall own at any one time more than ten percent (10%) of the portion of QUEDANCOR’s authorized capital stock that is subscribable solely by small farmers, fisherfolk, their cooperatives and other private investors.
The ownership limit applies directly or indirectly.

Minimum subscription is set as follows:
- Individuals: 500 shares.
- Cooperatives/partnerships: 5,000 shares.
- Corporations: 50,000 shares.

Subscription requires a duly accomplished Application for Subscription submitted together with required documents and corresponding payment.
Each application is subject to final approval of QUEDANCOR’s Corporate Secretary/President.
Applications must be submitted to the office of the Corporate Secretary/President directly or through QUEDANCOR Field Officers, specifically: Chief Quedan Operations Officer, Supervising Quedan Operations Officer, Senior Quedan Operations Officer, or Operations Officer.
Venue of any action arising out of or in connection with the subscription to QUEDANCOR’s capital stock is in the appropriate courts of Quezon City.

For subscription by corporations, cooperatives or partnerships, the subscriber must include:
- Certificate of Registration with the SEC or CDA, as the case may be.
- Articles of incorporation/cooperation/partnership.
- List of current officers and members/directors of the board.
- Board Resolution certified by the corporation’s/cooperative’s/partnership’s Secretary authorizing the subscription and specifying the person/s authorized to sign.
For partnerships, a partnership subscription application also requires an affidavit of undertaking of the managing partner to subscribe the shares applied for.

Subscription may be paid in full or on deferred payment basis using cash or check.
Payment through QUEDANCOR Field Officers must be in check form only.
Payments for applications not approved in whole or in part are refunded without interest within a reasonable period of time.
For check payments, the check is value-dated on the day of receipt of cleared funds, and the corresponding application is considered for approval as of that date.
For deferred payment:
- A 25% down payment is required upon filing the application.
- The balance must be paid in not more than six (6) equal monthly installments.
- Each installment must be paid on or before its scheduled due date.
- If an installment is delayed, the amount due is subject to 1% interest per month of delay or fraction thereof.

An applicant may withdraw the subscription application in writing before it is approved by the Corporate Secretary/President.
Upon withdrawal, QUEDANCOR refunds the corresponding payment without interest within a reasonable period of time.
An investor may be allowed to sell the unpaid subscribed shares, but QUEDANCOR shall not register the sale unless the total outstanding obligation has been fully paid.
If a subscriber under deferred payment fails to pay three consecutive installments, the whole balance becomes due and payable automatically.
If full payment is not made within 30 days from the due date of the last unpaid installment, all shares covered by the subscription become delinquent and QUEDANCOR may:
- sell the shares, and
- apply the proceeds, including the down payment and any accrued dividends, against the unpaid subscribed shares,
- pursuant to the Corporation Code of the Philippines.

After approval of subscription, QUEDANCOR enters the subscriber/s’ name/s on the Stock and Transfer Book showing the subscribed stocks and corresponding payment.
After full payment, QUEDANCOR issues a stock certificate signed by the President, countersigned by the Corporate Secretary, stamped with the Corporate Seal.
Certificates are issued in numerical order from the stock certificate book and must contain:
- the number,
- the date of issue,
- the number of shares,
- the name of the person in whose favor it is issued.
Each certificate bears at the back a form of assignment of the certificate of stock and the features of the restriction on the share.
Transfer of shares is made on QUEDANCOR’s books only upon surrender of the original certificate, which is:
- dated and marked “CANCELLED” by the Corporate Secretary, and
- pasted or attached to the original stub of the Stock Certificate Book,
- after which a new certificate is issued accordingly.
Lost or destroyed certificates are replaced only after the claimant submits an affidavit in triplicate showing ownership and facts supporting the loss or destruction, and only after complying with the requirements of the Corporation Code of the Philippines.

When a private investor owns or holds directly or indirectly more than 10% of QUEDANCOR’s authorized capital stock that is subscribable solely by private investors, that private person is:
- not allowed to exercise voting privilege for shares beyond the 10% limit.
QUEDANCOR must direct the disposition of the excess shares in favor of other private investors.

The circular is adopted on June 11, 1992.
QUEDANCOR’s President signs the circular, indicating authority to prescribe subscription rules under the required statutory and regulatory concurrence.