NOTICE OF ANNUAL STOCKHOLDERS’ MEETING

To All Stockholders:

Please be informed that the Annual Stockholders’ Meeting of PAL HOLDINGS, INC. will be held on Thursday, 30 May 2019, at 2:30 p.m. at the Kachina Room, , , for the following purposes:

1. Call to order

2. Proof of the required notice of the meeting

3. Proof of the presence of quorum

4. Approval of the Minutes of the 2018 Annual Stockholders’ Meeting held on 31 May 2018

5. Report of Management and the Board of Directors

6. Ratification of All Acts, Transactions and Resolutions by the Board of Directors and Management since the 2018 Annual Stockholders’ Meeting

7. Increase of the Authorized Capital Stock: From Thirteen Billion Five Hundred Million Pesos to Twenty Billion Pesos

8. Election of Directors

9. Ratification of Appointment of External Auditor

10. Adjournment

Only stockholders of record, in good standing, as of 22 April 2019, will be entitled to notice of, and to vote at, the meeting. Registration will begin at 1:30 p.m. on 30 May 2019. In order to facilitate registration, stockholders attending in person or their proxy should bring appropriate identification cards bearing a picture such as driver’s license, company ID, and the like.

All stockholders are cordially invited to attend the meeting in person. However, if you are unable to attend personally, you may designate your authorized representative by submitting a proxy of your choice not later than the close of business on 20 May 2019 at the Office of the Corporate Secretary. All proxies received will be validated on 24 May 2019, 2:00 p.m. at the Office of the Corporate Secretary, 2/F Allied Bank Center, 6754 Ayala Avenue, Makati City.

For your benefit, the Information Statement, Management Report, Audited Financial Statements, and other relevant materials for the meeting are available online and may be accessed and downloaded through this link: https://tinyurl.com/PHI-ASM-2019 . Alternatively, the foregoing documents may also be accessed and downloaded from the Corporation’s page on the Philippine Stock Exchange Website. Should you wish for hard copies of the foregoing documents, please inform the Office of the Corporate Secretary by calling (63)(02)810-2451. A limited number of hard copies will also be available upon request at the registration area prior to the meeting.

26 April 2019.

MA. CECILIA L. PESAYCO Corporate Secretary

SECURITIES AND EXCHANGE COMMISSION SEC FORM 20-IS Information Statement Pursuant to Section 20 of the Securities Regulation Code

1. Check the appropriate box: [ ] Preliminary Information Statement [] Definitive Information Statement

2. Name of Registrant as specified in its charter : PAL HOLDINGS, INC.

3. Province, country or other jurisdiction of incorporation or organization : Metro Manila,

4. SEC Identification Number : PW-94

5. BIR Tax Identification Number : 000-707-922-000

6. Address of principal office : 8th Floor PNB Financial Center, Pres. Diosdado Macapagal Ave., CCP Complex, Pasay City 1307

7. Registrant’s telephone number, including area code : (632) 8163451

8. Date of meeting : 30 May 2019 Time of meeting : 2:30 p.m. Place of meeting : Kachina Room Century Park Hotel Manila

9. Approximate date on which the Information Statement is first to be sent or given to security holders : 02 May 2019

10. Securities registered pursuant to Sections 8 and 12 of the Code or Sections 4 and 8 of the RSA (information on number of shares and amount of debt is applicable only to corporate Registrant):

Title of Each Class Number of Shares of Common Stock Outstanding or Amount of Debt Outstanding Common Stock 11,610,978,2421

11. Are any or all Registrant’s securities listed in a Stock Exchange? Yes [] No [ ]

If yes, disclose the name of such Stock Exchange and the class of securities listed therein: Philippine Stock Exchange / Common Stock

1 Net of treasury shares of 25,015.

2 INFORMATION STATEMENT

A. GENERAL INFORMATION

Item 1. Date, time and place of meeting of stockholders

(a) Date : 30 May 2019 Time : 2:30 p.m. Place : Kachina Room Century Park Hotel Manila Mailing address of the Corporation : 8th Floor PNB Financial Center, Pres. Diosdado Macapagal Ave., CCP Complex, Pasay City 1307

(b) This Information Statement and a copy of the Corporation’s Management Report will be made available to all qualified stockholders beginning on 02 May 2019.

WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY

Item 2. Dissenter’s Right of Appraisal

Title X, Section 80 of the Revised Corporation Code of the Philippines grants in favor of the stockholder the right to dissent and demand payment of the fair value of his shares in certain instances, to wit: (1) in case any amendment to the Articles of Incorporation has the effect of changing or restricting the rights of any stockholder, 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; (2) in case of the sale, lease, exchange, transfer, mortgage, pledge, or other disposition of all or substantially all of the corporate property and assets; (3) in case of merger or consolidation; or (4) in case of investment of corporate funds for any purpose other than the primary purpose of the corporation.

None of the proposed corporate actions to be discussed at the forthcoming Stockholders’ Meeting qualifies as an instance for the exercise of the appraisal right by any stockholder.

Item 3. Interest of Certain Persons in Matters to be Acted Upon

(a) Apart from election to office, none of the incumbent Directors, Officers of the Corporation or any associate of the foregoing have any substantial interest, direct or indirect, by security holding or otherwise, in any matter to be acted upon in the 2019 annual stockholders’ meeting.

(b) The Corporation has not received any information from any Director that he/she intends to oppose any matter to be acted upon in the meeting.

3 B. CONTROL AND COMPENSATION INFORMATION

Item 4. Voting Securities and Principal Holders Thereof

(a) The number of shares outstanding and entitled to vote in the stockholders’ meeting as of 26 March 2019 (latest available date) is 11,610,978,242.2

Pursuant to Section 4, Article I, of the Corporation’s By-Laws, every stockholder shall be entitled to one (1) vote for each share of common stock in his name in the books of the Corporation. With respect to the election of directors, however, the stockholder may vote such number of shares for as many persons as there are directors to be elected, or he may cumulate said shares and give one candidate as many votes as the number of directors to be elected, or he may distribute them on the same principle among as many candidates as he shall see fit; provided the total number of votes cast by him shall not exceed the number of shares owned by him multiplied by the number of directors to be elected.

(b) All stockholders of record as of the close of business on 22 April 2019 are entitled to notice of, and to vote at, the 2019 Annual Stockholders’ Meeting.

(c) Security ownership of certain record and beneficial owners (more than 5% of voting securities) as of 26 March 2019 (latest available date):

Name of Name, address of Beneficial Title of record owner and Owner and Citizen- No. of Shares Percent class relationship with Relation- Ship Held Issuer ship with Record Owner Common Trustmark Holdings Corporation3 SMI Compound, C. N/A Filipino 8,930,733,170 76.92% Raymundo Ave., Maybunga, Pasig City (Stockholder) Common ANA Holdings Inc. Shiodome City Centre, 1-5-2 Higashi-Shimbashi, N/A Japanese 1,103,042,933 9.5% Minato-ku, Tokyo, Japan, 105-7140 (Stockholder)

2 The number of Outstanding Shares is net of the 25,015 treasury shares but inclusive of partially paid subscription to 1,086,750,000 shares which are allowed to vote. 3 Trustmark Holdings Corporation (THC) is 60% owned by Buona Sorte Holdings, Inc. (BSHI) and 40% by Horizon Global Investments, LTD. (HGIL). BSHI is a domestic company while HGIL is a BVI company. The right to vote or direct the voting or disposition of the Corporation’s shares held by THC is lodged in the latter’s Board of Directors, the members of which are Dr. Lucio C. Tan, Mrs. Carmen K. Tan, and Messrs. Lucio K. Tan, Jr., and Michael G. Tan. Dr. Lucio C. Tan is expected to be given the proxy to vote the shares of THC.

4 (d) Security Ownership of Management as of 26 March 2019

Name of Amount and Percent Title of Class Beneficial Position Citizenship Nature of of Class Owner Ownership Common Lucio C. Tan Chairman 450 R4 Filipino Nil (direct) Common Jaime J. Bautista President 225 R Filipino Nil (direct) Common Carmen K. Tan Director 450 R Filipino Nil (direct) Common Lucio K. Tan, Jr. Director 450 R Filipino Nil (direct) Common Michael G. Tan Director 450 R Filipino Nil (direct) Common Cirilo P. Noel Director 225 R Filipino Nil (direct) Common Gregorio T. Yu Independent 225 R Filipino Nil Director (direct)

Common Johnip G. Cua Independent 225 R Filipino Nil Director (direct)

Common John G. Tan Director 450 R Filipino Nil (direct)

(e) Voting Trust Holders of 5% or More

The Corporation has no stockholder of record holding more than 5% of the Corporation’s common stock under a voting trust agreement.

(f) Changes In Control

There are no arrangements which may result in a change in control of the Corporation.

Item 5. Directors & Executive Officers

(a) Directors, Executive Officers, Promoters and Control Persons

The Corporation has nine (9) incumbent directors. Hereunder are the Corporation’s incumbent directors and executive officers, their names, ages, citizenship, positions held, term of office as director/officer, period served as director/officer, business experience for the past five years, and other directorships held in other companies:

4 R = Record owner

5 Name/ urrent Affiliations and Business Term of Office Age Citizenship Position Experience in the last 5 years /Period Served Lucio C. Tan/ 84 Filipino Chairman of , Inc., 1 year/ served as Chairman Inc., Eton Properties Chairman since Philippines, Inc., MacroAsia Corp., 30 Oct 2000 Fortune Tobacco Corp., PMFTC Inc., Grandspan Development Corp., Himmel Industries Inc., Lucky Travel Corp., LT Group, Inc., Air Philippines Corporation, , Inc., The Charter House, Inc., AlliedBankers Insurance Corp., Absolut Distillers, Inc., Progressive Farms, Inc., Foremost Farms, Inc. a, Maranaw Hotels & Resort Corporation, Eton City, Inc., Belton Communities, Inc. FirstHomes, Inc., and Basic Holdings Corp.; Director of Jaime J. Bautista/ 62 Filipino President of Philippine Airlines, Inc.; 1 year/ served as Director, Chairman and President of Basic Director/ President and Capital Investments Corp. and President and Chief Operating President of Cube Factor Holdings, Chief Operating Officer Inc. He is also the Vice Chairman of Officer since the Board of Trustees of the 23 Oct 2014 . He serves as a Director/Treasurer of MacroAsia Corp.; Director of MacroAsia-Eurest Catering Services, Inc. and MacroAsia Menzies Airport Services Corp. He was the President and CEO of Air Philippines and was President of PNB Forex Inc. Carmen K. Tan/ 77 Filipino Director of Asia Brewery, Inc., The 1 year/ served as Director Charter House, Inc., Dominium Director since Realty and Construction Corporation, 23 Oct 2014 Eton City, Inc., Foremost Farms, Inc., Philippine Airlines, Inc., LT Group, Inc., Air Philippines Corporation, Fortune Tobacco Corp., Himmel Industries, Inc., Lucky Travel Corp., Progressive Farms, Inc., Tanduay Distillers, Inc., MacroAsia Corp., Philippine National Bank and PMFTC Inc. Lucio K. Tan Jr./ 52 Filipino Director/President of Tanduay 1 year/served as Director Distillers, Inc., Eton City, Inc., Director since Belton Communities, Inc. and 26 July 2006 FirstHomes, Inc. and Eton Properties Philippines, Inc.; Director/EVP of Fortune Tobacco Corp.; Director of AlliedBankers Insurance Corp., Philippine Airlines, Inc., Philippine National Bank, LT Group, Inc., MacroAsia Corp., Victorias Milling

6 Company Inc., PMFTC Inc., Lucky Travel Corp., Air Philippines Corp., Absolut Distillers, Inc., Asia Brewery, Inc., Foremost Farms, Inc., Himmel Industries, Inc., Progressive Farms, Inc., The Charter House, Inc., Grandspan Development Corporation and Shareholdings, Inc., Maranaw Hotels & Resort Corp. and Shareholdings, Inc. Michael G. Tan/ 52 Filipino Director/Chief Operating Officer of 1 year/ served as Director and Asia Brewery, Inc.; President of LT Director since 26 Treasurer Group, Inc.; Director of Allied July 2006/ Bankers Insurance Corp., Eton served as Properties Philippines, Inc., PMFTC Treasurer since Inc., Lucky Travel Corp., Philippine 11 Feb 2015 National Bank, Philippine Airlines, Inc., MacroAsia Corp. and Victorias Milling Company, Inc., Tanduay Distillers, Inc.; and Director/Treasurer of Air Philippines Corporation. John G. Tan/ 50 Filipino Director of Tanduay Distillers, Inc. 1 year/served as Director Director since 02 Dec 2015 Cirilo P. Noel/ 61 Filipino Director of LH Paragon Group, 1 year/served as Director Golden ABC Member; Director Director since 31 Amber Kinetics (Phils.); Senior May 2018 Adviser of EY Global Delivery Services (Philippines) Inc.; Trustee of St. Luke's Medical Center; Trustee of SGV Foundation; Board Member of US-Philippines Society; Trustee of Makati Business Club; Member of ASEAN Business Club; and Independent Director of Globe Telecom, Inc. Johnip G. Cua/ 62 Filipino Former President of Procter & 1 year/ served as Independent Gamble Philippines Inc., Chairman of Independent Director the Board of P&Gers Fund, Inc.; Director since Chairman of the Board of Trustees of 23 Oct 2014 Xavier School Inc.; Chairman of the Board/President of Taibrews Corporation; Independent Director of LT Group, Inc. ALI-Eton Property Development Corporation, BDO Private Bank, PhilPlans First, Inc., STI Education Systems Holdings Inc., MacroAsia Corporation, MacroAsia Catering Services Inc., MacroAsia Airport Services Corp., Asia Brewery, Inc. and Tanduay Distillers, Inc., and Century Pacific Food Inc., Philippine Airlines, Inc., MacroAsia Properties Development

7 Corporation, and Eton Properties Philippines, Inc.; Director of Interbake Marketing Corporation, Teambake Marketing Corporation, Bakerson Corporation, Lartizan Corporation, Alpha Alleanza Corporation, Allied Botanical Corporation; Member of the Board of Trustees of Xavier School Educational & Trust Fund. Gregorio T. Yu/ 60 Filipino Chairman of the Board and President 1 year/ served as Independent of Philequity Fund, Inc., Lucky Star Independent Director Network Communications Director since Corporation, and Domestic Satellite 23 Oct 2014 Corporation of the Philippines; Chairman of CATS Automobile Corp., American Motorcycles, Inc., and Auto Nation Group, Inc.; Vice Chairman of Sterling Bank of Asia Inc.; Director of ISM Communications Corporation, Unistar Credit and Finance Corporation, CATS Asian Cars, Inc., Nexus Technologies, Inc., Jupiter Systems, Inc., Wordtext Systems, Inc., Prople BPO, Yehey Corporation, National Reinsurance Corp. of the Philippines, e-Ripple Corporation, Philippine Bank of Communications Inc., and WSI Corporation; Director/ Treasurer of CMB Partners Inc.; Independent Director of Philippine Airlines, Inc., iRemit Inc., e-Business Services, Inc., and Vantage Equities, Inc.; Board Member of Ballet Philippines, and Manila Symphony Orchestra. Ma. Cecilia L. 66 Filipino Corporate Secretary of LT Group, Served as Pesayco/ Inc., Asia Brewery, Inc., Tanduay Assistant Corporate Distillers, Inc., Air Philippines Corp., Corporate Secretary PNB Savings Bank, Trustmark Secretary from Holdings Corporation, Zuma 20 Apr 2012 to Holdings and Management 10 Feb 2015/ Corporation. She is likewise the Chief Served as Counsel of the Tan Yan Kee Corporate Foundation and; Former Corporate Secretary since Secretary of Allied Banking 11 Feb 2015 Corporation and Eton Properties Philippines, Inc.

8 Susan T. Lee/ 48 Filipino Chief Finance Officer of Trustmark Served as Chief Chief Finance Holdings Corporation and Zuma Finance Officer Officer Holdings and Management since Corporation; VP-Assistant Chief 11 Feb 2015 Finance Officer of Tanduay Distillers, Inc., and VP Finance for LT Group, Inc.

(*Note: Unless otherwise indicated or qualified, the term “Director” refers to a regular director of the Corporation. Corporations in bold font style are Listed Companies.)

The Nomination and Compensation Committee, in its meeting held on 08 March 2019, recommended the nomination of the following to the Board of Directors in the forthcoming Annual Stockholders’ Meeting upon determination that they possess all of the qualifications and none of the disqualifications of a director provided for in the Code of Corporate Governance for Publicly- Listed Companies and the adopted Revised Manual of Corporate Governance of the Corporation.

1. Dr. Lucio C. Tan 2. Jaime J. Bautista 3. Ms. Carmen K. Tan 4. Mr. Lucio K. Tan, Jr. 5. Michael G. Tan 6. Cirilo P. Noel 7. Mr. Ryuhei Maeda 8. Mr. Johnip G. Cua – Independent Director 9. Mr. Gregorio T. Yu – Independent Director

With the exception of Mr. Ryuhei Maeda, the foregoing nominees to the Board of Directors are also current directors of the Corporation. The business experience / directorship of said nominees for the last five years are listed in pages 6 to 8 hereof. With respect to Mr. Maeda, his business experience / directorship for the last five years are as follows:

Name Age Citizenship Current Affiliations and Business Experience in the last 5 years Ryuhei Senior Adviser of ANA Holdings Inc.; Director of All Nippon 65 Japanese Maeda Airways Co., Ltd.

The nominees for Independent Directors, Mr. Johnip G. Cua and Mr. Gregorio T. Yu, have been duly evaluated by the Nomination and Compensation Committee which has certified that said nominees are duly qualified in accordance with Rule 38 of the Securities Regulation Code, and suffer from no disqualification under Section 6.B of Rule 38. The above-named nominees for Independent Directors were nominated by Mr. Cirilo P. Noel who is not related to any of the two other nominees.

On 16 October 2007, the Securities and Exchange Commission (SEC) approved the amendment of the By Laws of the Corporation to include the requirement of SRC Rule 38 on Independent

9 Directors. The Independent Directors were advised of the Notice issued by the SEC in October 2006 on the requirement of Certificates of Qualifications and Non-Disqualification of Independent Directors. In March 2017, the SEC resolved to update the pro forma Certification required from all Independent Directors. The said Certificates of Qualification of the nominees for Independent Director shall be submitted together with the Corporation’s Information Statement and before the election of such Independent Directors.

(b) Significant Employees

The Corporation is not highly dependent on the services of any particular employee.

(c) Family Relationships

Family relationships exist among the directors and Management of the Corporation in the following instances:

(i) Dr. Lucio C. Tan, the Corporation’s Chairman, is the father of Messrs. Lucio K. Tan, Jr., Michael G. Tan and John G. Tan;

(ii) Mrs. Carmen K. Tan is the wife of Dr. Lucio C. Tan and the mother of Mr. Lucio K. Tan, Jr.

Except for the foregoing, there are no other family relationships among the board members and Management known to the registrant.

(d) Involvement in Certain Legal Proceedings

For a period covering the past five (5) years, none of the directors, nominees for directors, or any of the executive officers of the Corporation has been:

1) Involved in any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

2) Convicted by final judgment in a criminal proceeding, domestic or foreign, or is being subject to a pending criminal proceeding, domestic or foreign, excluding traffic violations and other minor offenses

3) Subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, domestic or foreign, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities, commodities or banking activities; and

4) Found by a domestic or foreign court of competent jurisdiction (in a civil action), the Commission or comparable foreign body, or a domestic or foreign Exchange or other organized trading market or self-regulatory organization, to have violated a securities or commodities law or regulation, and the judgment has not been reversed, suspended, or vacated.

10

Neither the Corporation nor any of its properties is subject to any material legal proceeding.

(e) Certain Relationships and Related Transactions

The Corporation’s cash and cash equivalents are deposited/placed with Philippine National Bank (the “Bank”), an affiliate, at competitive interest rates. The Corporation also has a lease and stock transfer agency agreement with the Bank at prevailing rates. There is no preferential treatment in any of its transactions with the Bank. There are no special risks or contingencies involved since the transactions are done under normal business practice.

a. Business purpose of the arrangements:

The Corporation does business with related parties due to stronger ties based on trust and confidence and easier coordination.

b. Identification of the related parties transaction business and nature of relationship:

Related Party Nature of Relationship

Philippine National Bank Deposits, Rental and Stock transfer services

MacroAsia Corporation Investments

c. Transaction prices are based on prevailing market rates.

d. Transactions have been fairly evaluated since the Corporation adheres to industry standards and practices.

e. There are no ongoing contractual or other commitments as a result of the arrangements.

There are no parties that fall outside the definition of “related parties” with whom the Corporation or its related parties has a relationship that enables the parties to negotiate terms of material transactions that may not be available from other more clearly independent parties on an arm’s length basis.

The Corporation has no transactions with promoters.

Item 6. Compensation of Directors and Executive Officers

(a) CEO and Top Four (4) Compensated Executive Officers

A fixed basic monthly salary is provided for the Corporation’s Chairman and CEO, President and Chief Operating Officer and other officers of the Corporation and shall continue to be given in 2019. The Corporation has no contract with any of its executive officers.

11 (b) Directors and Executive Officers

The directors of the Corporation are entitled to a per diem of P=25,000.00 for their attendance in every board meeting and stockholders’ meeting. Additionally, the Independent Directors are provided monthly transportation and representation allowances of P=30,000.00 while other directors are given the monthly directors’ allowance of P=30,000.00. Moreover, attendance at a Board Committee meeting, of which he is a member, entitles the director to a per diem of =P15,000.00.

Apart from the foregoing, the directors and executive officers of the Corporation receive no other remuneration in cash or in kind. None of the directors and executive officers holds any outstanding warrant or option.

Summary Compensation Table

Year Salary Bonus Others CEO and Top Four (4) 2019 Management (Estimate) 2,640,000 N/A 1,480,000 2018 2,640,000 N/A 1,375,000 2017 2,640,000 N/A 1,410,000

All other officers and directors 2019 as a group unnamed (Estimate) N/A N/A 4,200,000 2018 N/A N/A 3,750,000 2017 N/A N/A 4,840,000

The Corporation’s Chairman of the Board and Chief Executive Officer and the four most highly compensated executive officers in 2018 (on a consolidated basis) are as follows:

1. Dr. Lucio C. Tan is the Chairman of the Board of Directors and Chief Executive Officer of the Corporation. 2. Mr. Jaime J. Bautista is the President and Chief Operating Officer of the Corporation. 3. Mr. Michael G. Tan is the Treasurer of the Corporation. 4. Ms. Susan T. Lee is the Chief Finance Officer of the Corporation. 5. Atty. Ma. Cecilia L. Pesayco is the Corporate Secretary of the Corporation.

(i) Standard Arrangements – Other than the per diems of the Directors, there are no other standard arrangements through which the Directors of the Corporation are compensated, or are to be compensated, directly or indirectly, for any services provided as a director, including any additional amounts payable for committee participation or special assignments, for the last completed fiscal year and the ensuing year.

(ii) Other Arrangements – None

(iii) Employment contract or compensatory plan or arrangement – None

Warrants and Options Outstanding:

a.) There are no outstanding warrants or options held by the Corporation’s Chief Executive Officer, the named executive officers, and all officers and directors as a group.

12

b.) This is not applicable since there are no outstanding warrants or options held by the Corporation’s Chief Executive Officer, executive officers and all officers and directors as a group.

Item 7. Independent Public Accountants

Election, Approval or Ratification

(a) At present, the Corporation’s external auditor is the auditing firm of SyCip Gorres Velayo & Co. (SGV & Co.). The audit partner in charge of the Corporation, Ms. Catherine E. Lopez, was first appointed for the audit period of 31 December 2018. In accordance with the five-year rotation requirement of external auditors pursuant to SRC Rule 68 (3)(b)(iv), there is no need to change the audit partner assigned to the Corporation at this time. Similarly, the two-year cooling off period for the re-engagement of the same audit partner assigned to the Corporation pursuant to the same rule finds no application at this time.

The authority to appoint, remove, and replace the external auditor of the Corporation was delegated by the stockholders to the Board of Directors during the 2007 annual stockholders’ meeting held on 17 September 2007 which delegated authority has not been revoked or withdrawn. In accordance, however, with Recommendation 9.1 of the Code of Corporate Governance for Publicly Listed Corporations, the external auditor was appointed by the Board of Directors upon recommendation of the Audit Committee and is now presented to the stockholders for ratification.

(b) There were no changes in, or disagreements with, the Corporation’s accountants on any accounting and financial disclosure during the past two years ended 31 December 2018 or during any subsequent period.

(c) Representatives from SGV & Co. are expected to be present at the upcoming Annual Stockholders Meeting, where they will have the opportunity to make a statement if they desire to do so and/or respond to appropriate questions raised by stockholders.

Information on Independent Accountant and other Related Matters

External Audit Fees and Services

(1) External Audit Fees and Services

a. Audit and Audit-Related Fees

The audit of the Corporation’s annual financial statements or services is normally provided by the external auditor in connection with statutory and regulatory filings or engagements for 2018.

13

Year Ended Fee 31 December 2018 P=475,000 audit fee plus out-of- pocket expenses 31 December 2017 P=450,000 audit fee and =P52,678 out-of- pocket expenses 31 December 2016 P=450,000 audit fee and =P52,600 out-of- pocket expenses

b. Tax Fees

The Corporation made no payments to its external auditors in tax fees for the years ending 2016 to 2018.

c. All Other Fees

The Corporation made no payment of any other fee to its external auditors for the years ending 2016 to 2018.

d. The Audit Committee’s approval policies and procedures for the above services:

Upon recommendation and approval of the Audit Committee, the appointment of the external auditor is confirmed by the Board of Directors. On the other hand, financial statements should be approved by the Board of Directors before its release.

Item 8. Compensation Plans

No action shall be taken at this year’s Annual Stockholders’ Meeting with respect to any plan pursuant to which cash or non-cash compensation may be paid or distributed.

C. ISSUANCE AND EXCHANGE OF SECURITIES

Item 9. Authorization or Issuance of Securities Other than for Exchange

To be presented for consideration and approval of the shareholders is the proposal to increase the authorized capital stock from Thirteen Billion Five Hundred Million Pesos (PhP13,500,000,000.00) divided into Thirteen Billion Five Hundred Million (13,500,000,000) common shares with a par value of One Peso (PhP1.00) per share to Twenty Billion Pesos (PhP20,000,000,000.00) divided into Twenty Billion (20,000,000,000) common shares with a par value of One Peso (PhP1.00) per share.

In support of the proposed increase of the authorized capital stock, the Company will offer for subscription at least twenty five percent (25%) of the increase, or not less than One Billion Six Hundred Twenty Five Million (1,625,000,000) common shares by way of an equity offering. The Prospectus or other Offering Circular to be hereafter prepared and submitted to the Securities and Exchange Commission and the Philippine Stock Exchange as required by law shall contain, among others, all the commercial terms of such offering as may hereafter be determined by the Board of Directors after due consultation with its financial and investment advisers.

14 All the new common shares to be issued in support of the proposed increase in capital shall have the same dividend, voting, pre-emptive and other shareholder rights as the existing issued common shares.

Item 10. Modification or Exchange of Securities

No action will be presented for stockholders’ approval at this year’s Annual Stockholders’ Meeting with respect to the modification of any class of securities of the Corporation, or the issuance or authorization for issuance of one class of securities of the Corporation in exchange for outstanding securities of another class.

Item 11. Financial and Other Information

The Corporation has incorporated by reference the Audited Financial Statements, Management’s Discussion and Analysis, and other data related to the Corporation’s financial information for the period ending 31 December 2018 in its latest Management Report prepared in accordance with Rule 68 of the Securities Regulation Code.

Item 12. Mergers, Consolidations, Acquisitions and Similar Matters

No action will be presented for stockholders’ approval at this year’s Annual Stockholders’ Meeting with respect to (i) the merger or consolidation of the Corporation with any other person, (ii) acquisition by the Corporation or any of its stockholders of securities of another person, (iii) acquisition by the Corporation of any other going business or of the assets thereof, (iv) the sale or transfer of all or any substantial part of the assets of the Corporation, nor (v) liquidation or dissolution of the Corporation.

Item 13. Acquisition or Disposition of Property

No action will be presented for stockholders’ approval at this year’s Annual Stockholder’s Meeting with respect to acquisition or disposition of property of the Corporation.

Item 14. Restatement of Accounts

No action will be presented for stockholders’ approval at this year’s Annual Stockholders’ Meeting, which involves the restatement of any of the Corporation’s assets, capital or surplus account.

D. OTHER MATTERS

Item 15. Action with Respect to Reports

(a) Reading and Approval of the Minutes of the 2018 Annual Stockholders’ Meeting

15 The minutes of the previous meeting of the stockholders held on 31 May 2018 will be presented for approval at the 2019 Annual Stockholders’ Meeting. The following were the significant matters discussed at the said meetings are to wit:

(i) The Minutes of the Annual Stockholders’ Meeting held on 25 May 2017 was approved;

(ii) The Management Report and the Corporation’s Financial Statements for the year ended 31 December 2017 were approved;

(iii) All the acts and resolutions of the Board of Directors and Management since the 2017 Annual Stockholders’ Meeting were confirmed and ratified;

(iv) The Articles of Incorporation was amended to reflect to reduce the number of directors from eleven (11) to nine (9); and

(v) The members of the Board of Directors were elected.

(b) Approval of the Chairman’s Report on the Results of Operations and Management Reports for the year 2018

The President will report on the significant business transactions undertaken and the financial targets and achievements by the Corporation in 2018. The Audited Consolidated Financial Statements for the period ending 31 December 2018 of the Corporation are reflected in the accompanying Annual Report sent to the stockholders.

Item 16. Matters Not Required to be Submitted

Ratification of Acts, Resolutions and Transactions Entered into by the Board of Directors and Management of the Corporation -

The acts of Management during the fiscal year, although not required to be submitted to the stockholders, are nevertheless presented for good corporate governance. A summary of all legal acts, resolutions and proceedings taken by the Directors and corporate officers since the 2018 Annual Stockholders’ Meeting is attached hereto as Annex “A”. These actions are subjected to the annual review by its external auditor.

Copies of the Minutes of the Meetings of the Board of Directors may be examined by the stockholders of record as of 22 April 2019 at the Office of the Corporate Secretary during business hours.

Item 17. Amendment of Charter, Bylaws or Other Documents

In its meeting held on 25 March 2019, the Board approved the amendment of the Articles of Incorporation in order to reflect the increase in Authorized Capital Stock of the Corporation from Thirteen Billion Five Hundred Million Pesos (PhP13,500,000,000.00) divided into Thirteen Billion Five Hundred Million (13,500,000,000) common shares with a par value of One Peso (PhP1.00) per share

16 to Twenty Billion Pesos (PhP20,000,000,000.00) divided into Twenty Billion (20,000,000,000) common shares with a par value of One Peso (PhP1.00) per share.

Assuming the afore-described proposal to increase the capital of the Corporation is approved by the stockholders, the Articles of Incorporation of the Corporation, specifically Article VII thereof, should be amended to reflect the same.

Item 18. Other Proposed Action

(a) Election of Directors

A Board composed of nine (9) directors will be elected for the year 2019-2020 at the meeting.

Item 19. Voting Procedures

(a) Every stockholder shall be entitled to one (1) vote for each share of stock standing in his name in the books of the Corporation, unless the law provides otherwise. Cumulative voting may be used in the election of the members of the Board of Directors.

(b) Required Voting:

Agenda Subject Matter Vote Required Item No. 4 Reading and approval of the Minutes of the Affirmative vote of majority of the previous meetings and action therein stockholders present.

5 Report of Management and the Board of Affirmative vote of majority of the Directors stockholders present.

6 Ratification of All Acts, Transactions and Affirmative vote of majority of the Resolutions by the Board of Directors and stockholders present. Management

7 Increase of Authorized Capital Stock and Affirmative vote of stockholders Amendment of the Articles of Incorporation representing at least two-thirds to reflect the Increased Authorized Capital (2/3) of the outstanding capital stock.

8 Election of Directors The nine (9) nominees garnering the highest number of votes shall be elected directors. The stockholder may vote such number of shares for as many persons as there are directors to be elected, or he may cumulate said shares and give one candidate as many votes as the number of directors to be elected, or he may distribute them on the same principle among as many candidates as he shall see fit;

17 provided the total number of votes cast by him shall not exceed the number of shares owned by him multiplied by the number of directors to be elected

9 Ratification of Appointment of External Affirmative vote of majority of the Auditor stockholders present.

(c) Voting shall be done orally and, if necessary, counting of votes shall be conducted by the Corporate Secretary (or his duly authorized representative) to be assisted by the Corporation’s independent accountant or by the representatives of SGV & Co.

The Corporation shall, upon written request, provide to stockholders, without charge, the Annual Report prepared pursuant to SEC Form 17-A. Likewise, the Corporation, at the discretion of Management, may charge a fee for exhibits, provided that such fee is limited to reasonable expenses incurred by the registrant in furnishing such exhibits. All such requests for copies of the Annual Report and/or exhibits should be directed to the Office of the Corporate Secretary, Atty. Ma. Cecilia L. Pesayco, at the 2/F Allied Bank Center, 6754 Ayala Avenue, Makati City, Metro Manila, Philippines 1200.

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this report is true, complete and correct. This report is signed in the City of Makati on 14 May 2019.

PAL HOLDINGS, INC.

By:

MA. CECILIA L. PESAYCO Corporate Secretary

18 Annex “A”

PAL Holdings, Inc. is a holding company and, as such, does not engage in any active commercial activity apart from holding an investment in Philippine Airlines, Inc. and Zuma Holdings and Management Corporation. The major resolutions approved by the Board since the 2018 Annual Stockholders’ Meeting are as follows:

Date/ Type of Action/s Taken Meeting June 25, 2018 Authorized Mr. Jaime J. Bautista to act as the Corporation’s proxy and Attorney-In-Fact for the Annual Stockholders’ Meeting of Macroasia Corporation, with full power and authority to vote its shares on all matters that may be taken up in said meeting.

July 30, 2018 Notation of the Corporation’s Financial Statements for the quarter ending June 30, 2018, as presented and endorsed by the Audit Committee.

The Corporation’s unaudited consolidated financial statements were authorized for release to the appropriate regulatory agencies.

October 29, Notation of the Corporation’s Financial Statements for the quarter ending 2018 September 30, 2018, as presented and endorsed by the Audit Committee.

The Corporation’s unaudited consolidated financial statements were authorized for release to the appropriate regulatory agencies.

Notation of the Corporation’s Financial Statements for the year ending December 31, 2018, as presented and endorsed by the Audit Committee.

The Corporation’s audited consolidated financial statements were authorized for release to the appropriate regulatory agencies. February 26, 2019 Appointment of counsel for the Corporation in the case against City Travel and Tours, Corporation, a civil case for damages filed before the Regional Trial Court of Makati City.

The Annual Stockholders’ Meeting was approved to be held on May 30, 2019, Thursday, at 2:30 p.m. at the Kachina Room, Century Park Hotel, Manila;

All Shareholders in good standing at the close of business on April 22, 2019 shall be entitled to receive notice of, and to vote at the meeting and any adjournment thereof.

Authorized the Corporation to register and apply for a license with the Optical Media Business and apply for permit to replicate and distribute optical media in the form of a compact disc (CD) or USB flash drive with the Optical Media Board in connection with the distribution of its 2019 Definitive Information Statement (SEC Form 20-IS) to its stockholders.

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