Article 22p. 22

COMMERCIAL LAWS NEGOTIABLE INSTRUMENTS, CORPORATION, INSURANCE, TRANSPORTATION, BANKING

of removal of directors or trustees, or any of them, must

be called by the secretary on order of the president or on

the written demand of the stockholders representing or

holding at least a majority of the outstanding capital

stock, or, if it be a non-stock corporation, on the written

demand of a majority of the members entitled to vote.

Should the secretary fail or refuse to call the special

meeting upon such demand or fail or refuse to give the

notice, or if there is no secretary, the call for the meeting

may

be

addressed

directly

to

the

stockholders

or

members

by

any

stockholder

or

member

of

the

corporation signing the demand. Notice of the time and

place of such meeting, as well as of the intention to

propose such removal, must be given by publication or by

written notice as prescribed in this Code. The vacancy

resulting from removal pursuant to this section may be

filled by election at the same meeting without further

notice, or at any regular or at any special meeting called

for the purpose, after giving notice as prescribed by this

Code. Removal may be with or without cause: Provided ,

That removal without cause may not be used to deprive

minority

stockholders

or

members

of

the

right

of

representation to which they may be entitled under

Section 24 of this Code. (n)

SECTION 29. Vacancies in the Office of Director or

Trustee .

—

Any

vacancy

occurring

in the board of

directors

or

trustees other than by removal by the

stockholders or members or by expiration of term, may

be filled by the vote of at least a majority of the remaining

directors

or

trustees,

if

still

constituting

a

quorum;

otherwise,

said

vacancies

must

be

filled

by

the

stockholders in a regular or special meeting called for

that purpose. A director or trustee so elected to fill a

vacancy shall be elected only for the unexpired term of

his predecessor in office.

Any directorship or trusteeship to be filled by reason

of an increase in the number of directors or trustees shall

be filled only by an election at a regular or at a special

meeting of stockholders or members duly called for the

purpose, or in the same meeting authorizing the increase

of directors or trustees if so stated in the notice of the

meeting. (n)

SECTION 30. Compensation of Directors . — In the

absence

of any provision in the bylaws fixing their

compensation,

the

directors

shall

not

receive

any

compensation, as such directors, except for reasonable

per

diems :

Provided ,

however ,

That

any

such

compensation (other than per diems ) may be granted to

directors by the vote of the stockholders representing at

least a majority of the outstanding capital stock at a

regular or special stockholders' meeting. In no case shall

the

total

yearly

compensation

of

directors, as such

directors, exceed ten (10%) percent of the net income

before

income

tax

of

the

corporation

during

the

preceding year. (n)

SECTION

31.

Liability

of

Directors ,

Trustees

or

Officers .

—

Directors

or

trustees

who

willfully

and

knowingly vote for or assent to patently unlawful acts of

the corporation or who are guilty of gross negligence or

bad faith in directing the affairs of the corporation or

acquire any personal or pecuniary interest in conflict with

their duty as such directors, or trustees shall be liable

jointly and severally for all damages resulting therefrom

suffered by the corporation, its stockholders or members

and other persons.

When

a

director,

trustee

or

officer attempts to

acquire or acquires, in violation of his duty, any interest

adverse to the corporation in respect of any matter which

has been reposed in him in confidence, as to which

equity imposes a disability upon him to deal in his own

behalf, he shall be liable as a trustee for the corporation

and must account for the profits which otherwise would

have accrued to the corporation. (n)

SECTION

32.

Dealings

of

Directors , Trustees or

Officers with the Corporation. — A contract of the

corporation with one or more of its directors or trustees

or officers is voidable, at the option of such corporation,

unless all the following conditions are present:

1. That the presence of such director or trustee in the

board meeting in which the contract was approved was

not necessary to constitute a quorum for such meeting;

2. That the vote of such director or trustee was not

necessary for the approval of the contract;

3. That the contract is fair and reasonable under the

circumstances; and

4. That in the case of an officer, the contract with the

officer has been previously authorized by the Board of

Directors.

Where any of the first two conditions set forth in the

preceding paragraph is absent, in the case of a contract

with a director or trustee, such contract may be ratified

by the vote of the stockholders representing at least

two-thirds (2/3) of the outstanding capital stock or of

two-thirds (2/3) of the members in a meeting called for

the purpose: Provided , That full disclosure of the adverse

interest of the directors or trustees involved is made at

such meeting: Provided , however , That the contract is fair

and reasonable under the circumstances. (n)

SECTION 33. Contracts Between Corporations with

Interlocking Directors . — Except in cases of fraud, and

provided the contract is fair and reasonable under the

circumstances,

a

contract

between

two

or

more

corporations having interlocking directors shall not be

invalidated on that ground alone: Provided , That if the

interest of the interlocking director in one corporation is

substantial and his interest in the other corporation or

corporations is merely nominal, he shall be subject to the

provisions of the preceding section insofar as the latter

corporation or corporations are concerned.

Stockholdings exceeding twenty (20%) percent of the

outstanding capital stock shall be considered substantial

for purposes of interlocking directors. (n)

SECTION 34. Disloyalty of a Director . — Where a

director, by virtue of his office, acquires for himself a

business

opportunity

which

should

belong

to

the

corporation, thereby obtaining profits to the prejudice of

such corporation, he must account to the latter for all

such profits by refunding the same, unless his act has

been ratified by a vote of the stockholders, owning or

representing at least two-thirds (2/3) of the outstanding

capital

stock.

This

provision

shall

be

applicable,

notwithstanding the fact that the director risked his own

funds in the venture. (n)

SECTION 35. Executive Committee . — The bylaws of a

corporation

may

create

an

executive

committee,

composed of not less than three members of the board,

to be appointed by the board. Said committee may act,

by majority vote of all its members, on such specific

matters within the competence of the board, as may be

delegated to it in the bylaws or on a majority vote of the

board, except with respect to: (1) approval of any action for

which shareholders' approval is also required; (2) the

filling of vacancies in the board; (3) the amendment or

repeal of bylaws or the adoption of new bylaws; (4) the

amendment or repeal of any resolution of the board

which by its express terms is not so amendable or

repealable; and (5) a distribution of cash dividends to the

shareholders.

TITLE IV Powers of Corporations

SECTION 36. Corporate Powers and Capacity . —

Every corporation incorporated under this Code has the

power and capacity:

1. To sue and be sued in its corporate name;

2. Of succession by its corporate name for the period

of time stated in the articles of incorporation and the

certificate of incorporation;

3. To adopt and use a corporate seal;

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