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, 31 May 2018, at 2:00 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 2017 Annual Stockholders’ Meeting held on 25 May 2017

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 2017 Annual Stockholders’ Meeting

7. Election of Directors

8. Amendment of Articles of Incorporation

a. Reduce the number of directors from eleven (11) to nine (9)

9. Adjournment

Only stockholders of record, in good standing, as of 23 April 2018, will be entitled to notice of, and to vote at, the meeting. Registration will begin at 1:00 p.m. on 31 May 2018. In order to facilitate registration, shareholders 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 shareholders 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 21 May 2018 at the Office of the Corporate Secretary. All proxies received will be validated on 25 May 2018, 2:00 p.m. at the Office of the Corporate Secretary, 2/F Allied Bank Center, 6754 Ayala Avenue, City.

03 May 2018.

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 : ,

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 : 31 May 2018 Time of meeting : 2:00 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 : 3 May 2018

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 11,610,223,9791

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 : 31 May 2018 Time : 2:00 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 sent out to all qualified stockholders beginning on 3 May 2018.

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 of the Corporation Code of the Philippines grants in favor of a shareholder the right to dissent and demand payment of the fair value of his share in certain instances, to wit: (1) in case an amendment to the articles of incorporation will change or restrict the rights of such stockholder or otherwise extend or shorten the term of the Corporation; (2) in case of the sale, lease, exchange, transfer, mortgage, pledge, or other disposition of all or substantially all of the Corporation’s properties; or (3) in case of merger or consolidation.

Under Section 42 of the Corporation Code, a stockholder is likewise given an appraisal right in case a corporation decides to invest its funds in another corporation or business. The stockholder must have voted against the proposed corporate action in order to avail himself of the appraisal right.

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 2018 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.

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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 31 March 2018 (latest available date) is 11,610,223,979.2

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 23 April 2018 are entitled to notice of, and to vote at, the 2018 Annual Stockholders’ Meeting.

(c) Security ownership of certain record and beneficial owners (more than 5% of voting securities) as of 31 March 2018 (latest available date):

Title of Name, address of Name of No. of Shares Percent class record owner and Beneficial Held relationship with Owner and Citizen- Issuer Relation- Ship ship with Record Owner Common Trustmark Holdings Corporation* SMI Compound, C. N/A Filipino 10,033,776,103 86.42% Raymundo Ave., Maybunga, Pasig City (Shareholder)

* 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.

(d) Security Ownership of Management as of 31 March 2018

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.

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Name of Amount and Percent Title of Class Beneficial Position Nature of Citizenship of Class Owner Beneficial Ownership Common Lucio C. Tan Chairman 450 R 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 Antonino L. Independent 225 R Filipino Nil Alindogan, Jr. Director (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

As of 15 May 2018, the Corporation currently has eight (8) incumbent directors. Under the Corporation’s Articles of Incorporation, the Corporation shall have eleven (11) directors; however during the course of the previous year, three (3) seats were vacated. Mr. Washington Z. Sycip, who was elected as a director at the Annual Shareholders’ Meeting held last 25 May 2017, passed away last 9 October 2017. Mr. Joseph T. Chua resigned, effective 13 February 2018, to focus on foreign business. Mr. Antonino L. Alindogan, Jr., who was elected as a director at the Annual Shareholders’ Meeting held last 25 May 2017, passed away last 06 May 2017.

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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:

Name/ Current Affiliations and Business Term of Office Age Citizenship Position Experience in the last 5 years /Period Served Lucio C. Tan/ 83 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. and Basic Holdings Corp.; Director of Jaime J. Bautista/ 61 Filipino Chairman and President of Basic 1 year/ served as Director, Capital Investments Corp. and Director/ President and President of Cube Factor Holdings, President and Chief Operating Inc. He is also the Vice Chairman of Chief Operating Officer the Board of Trustees of the Officer since . He serves as a 23 Oct 2014 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 President of PNB Forex Inc. Carmen K. Tan/ 76 Filipino Director of Asia Brewery, Inc., The 1 year/ served as Director Charter House, Inc., Foremost Farms, Director since Inc., Philippine Airlines, Inc., LT 23 Oct 2014 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./ 51 Filipino Director/President of Tanduay 1 year/served as Director Distillers, Inc. and Eton Properties Director since Philippines, Inc.; Director/EVP of 26 July 2006 Fortune Tobacco Corp.; Director of AlliedBankers Insurance Corp., Philippine Airlines, Inc., Philippine National Bank, LT Group, Inc.,

6 MacroAsia Corp., Victorias Milling 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. Michael G. Tan/ 51 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., Air served as Philippines Corporation, Eton Treasurer since Properties Philippines, Inc., PMFTC 11 Feb 2015 Inc., Lucky Travel Corp., Philippine National Bank, Absolut Distillers, Inc., Philippine Airlines, Inc., MacroAsia Corp. and Victorias Milling Company, Inc., Tanduay Distillers, Inc.; and Director/Treasurer of Air Philippines Corporation. Johnip G. Cua/ 61 Filipino Chairman of the Board of P&Gers 1 year/ served as Independent Fund, Inc.; Chairman of the Board of Independent Director Trustees of Xavier School Inc.; Director since Chairman of the Board/President of 23 Oct 2014 Taibrews Corporation; Independent Director of BDO Private Bank, PhilPlans First, Inc., STI Education Systems Holdings Inc., MacroAsia Corporation, Century Pacific Food Inc., Philippine Airlines, Inc., MacroAsia Properties Development 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; and Board of Advisor of LT Group, Inc., Asia Brewery Inc. and Tanduay Distillers, Inc.

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John G. Tan/ 49 Filipino Director of Tanduay Distillers, Inc. 1 year/served as Director Independent Director since 02 Dec 2015 Gregorio T. Yu/ 59 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. 65 Filipino Corporate Secretary of LT Group, Served as Pesayco/ Inc., Asia Brewery, Inc., Tanduay Assistant Corporate Distillers, Inc., PNB Savings Bank, Corporate Secretary Trustmark Holdings Corporation, Secretary from Zuma Holdings and Management 20 Apr 2012 to Corporation. She is likewise the Chief 10 Feb 2015/ Counsel of the Tan Yan Kee Served as Foundation and; Former Corporate Corporate Secretary of Allied Banking Secretary since Corporation and Eton Properties 11 Feb 2015 Philippines, Inc. Susan T. Lee/ 47 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 Assistant VP Finance for LT Group, Inc.

8 (*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.)

In accordance with Section III (B) of the Revised Code of Corporate Governance, all of the foregoing were nominated and approved by the Nomination and Compensation Committee for re-election to the Board of Directors for 2018-2019 in its meeting held on 26 March 2018 and in its meeting held on 18 May 2018, the Committee approved the nomination of Mr. Cirilo P. Noel as a regular director in place of Mr. Alindogan. Below is the pertinent information regarding Mr. Noel:

Age Citizenship Current Affiliations and Business Experience in the last 5 years Director of LH Paragon Group, Golden ABC Member; Director Amber Kinetics (Phils.); Senior Adviser of EY Global Delivery Services (Philippines) Inc.; 60 Filipino 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.

All the nominees were confirmed by the Committee to possess all of the qualifications and none of the disqualifications of a director provided for in the Revised Code of Corporate Governance and the adopted Revised Manual of Corporate Governance of the Corporation. The members of the Nomination Committee of the Corporation are:

Dr. Lucio C. Tan (Chairman), Mr. Jaime J. Bautista, Ms. Carmen K. Tan, Mr. Lucio K. Tan, Jr., Mr. Michael G. Tan, Mr. John G. Tan, and Mr. Cirilo P. Noel

Nominated as Independent Directors are:

Mr. Johnip G. Cua, and Mr. Gregorio T. Yu

all of whom 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. Johnip G. Cua, an independent director himself, 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 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 Certificate of Qualification shall be submitted together with the Corporation’s Information Statement and before the election of such Independent Director.

(b) Significant Employees

The Corporation is not dependent on the services of any one key personnel. The Board of Directors considers all employee contributions to be significant to the business of the Corporation.

9 (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

None of the directors nor any of the executive officers of the Corporation has, for a period covering the past five (5) years, been involved in any bankruptcy petition 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; any conviction by final judgment, in a criminal proceeding, domestic or foreign, or being subject to a pending criminal proceeding, domestic or foreign, excluding traffic violations and other minor offenses other than cases which arose out of the ordinary course of business in which they may have been impleaded in their official capacity; being 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 being 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.

Neither is the Corporation nor any of its subsidiaries or affiliates involved in any material legal proceeding. Similarly, neither the Corporation’s nor any of its subsidiaries’ or affiliates’ property 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.

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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 have 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 2018. The Corporation has no contract with any of its executive officers.

(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.

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Summary Compensation Table

Year Salary Bonus Others CEO and Top Four (4) 2018 Management (Estimate) 2,640,000 N/A 1,480,000 2017 2,640,000 N/A 1,410,000 2016 2,640,000 N/A 1,340,000 All other officers and 2018 directors as a group (Estimate) N/A N/A 4,860,000 unnamed 2017 N/A N/A 4,840,000 2016 N/A N/A 5,245,000

The following constitute the Corporation’s Chairman of the Board and Chief Executive Officer and the four most highly compensated executive officers in 2017 (on a consolidated basis):

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 stated salaries and wages and per diem of the Directors, there are no other standard arrangements to which the Directors of the Company 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 Company’s Chief Executive Officer, the named executive officers, and all officers and directors as a group.

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

Item 7. Independent Public Accountants

Election, Approval or Ratification

12 (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. Josephine H. Estomo, was first appointed for the audit period of 31 December 2015. 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.

(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 2017 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 2017.

Year Ended Fee 31 December 2017 P=450,000 audit fee plus out-of- pocket expenses 31 December 2016 P=450,000 audit fee and =P52,600 out- of-pocket expenses 31 December 2015 P=435,000 audit fee and =P35,000 out- of-pocket expenses

b. Tax Fees

The Corporation made no payments to its external auditors in tax fees for the years ending 2015 to 2017.

c. All Other Fees

13 The Corporation made no payment of any other fee to its external auditors for the years ending 2015 to 2017.

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 is to be taken at this year’s Annual Shareholders’ 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

No action will be presented for shareholders’ approval at this year’s Annual Shareholders’ Meeting that involves the authorization or issuance of any securities.

Item 10. Modification or Exchange of Securities

On 18 December 2017, the Securities and Exchange Commission (SEC) approved the Corporation’s application for Confirmation of Valuation of the shares to be issued in connection with the acquisition of the Corporation’s minority interest in its subsidiary, Philippine Airlines, Inc. (“PAL”). The request was made in connection with the share- swap transaction with the remaining shareholders of PAL wherein the Corporation agreed to issue one (1) share for every five (5) PAL shares surrendered to it. As a result of this transaction, the Corporation acquired 617,712,493.28 common shares of PAL, for which it expected to issue 123,542,497 new shares out of its authorized but unissued capital.

On 21 December 2017, the SEC approved the Corporation’s application for Confirmation of Valuation of the shares to be issued in connection with the Corporation’s share-swap transaction with the shareholders of Zuma Holdings and Management Corporation (“Zuma”), where the Corporation agreed to issue nineteen (19) shares for every one (1) Zuma share surrendered. As a result of this transaction, the Corporation acquired 44,234,689 common shares of Zuma, for which it expected to issue 840,459,091 new shares out of its authorized but unissued capital.

On 22 December 2017, the SEC approved the Corporation’s application to decrease its Authorized Capital Stock via a decrease in par value per share from PhP1.00 to PhP0.45 per share and subsequent application to increase the par value from PhP0.45 to PhP1.00 per share. With that, the Corporation issued a total of 433,800,709 common shares in favor of those who participated in the share-swap transactions explained above.

14 The listing application for the new shares of 433,800,709 common shares, which was issued by the Corporation from its authorized but unissued capital stock, has been filed with the Philippine Stock Exchange on 21 March 2018 and is pending approval.

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 2017 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 shareholders’ approval at this year’s Annual Shareholders’ 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 shareholders 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 shareholders’ approval at this year’s Annual Shareholder’s Meeting with respect to acquisition or disposition of property of the Corporation.

Item 14. Restatement of Accounts

No action will be presented for shareholders’ approval at this year’s Annual Shareholders’ 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 2017 Annual Stockholders’ Meeting

The minutes of the previous meeting of the shareholders held on 25 May 2017 will be presented for approval at the 2018 Annual Shareholders’

15 Meeting. The following were the significant matters discussed at the said meetings are to wit:

(i) The Minutes of the Annual Shareholders’ Meeting held on 30 June 2016 was approved;

(ii) The Management Report and the Corporation’s Financial Statements for the year ended 31 December 2016 were approved;

(iii) All the acts and resolutions of the Board of Directors and Management since the 2016 Annual Shareholders’ Meeting were confirmed and ratified;

(iv) Decrease of the Corporation’s Authorized Capital Stock via a reduction of the Corporation’s par value per share from PhP1.00 to Php0.45;

(v) Increase of the Corporation’s par value per share from PhP0.45 to PhP1.00;

(vi) Amendment of Articles of Incorporation to reflect a. The decrease of the Authorized Capital Stock and the decrease of par value from PhP1.00 to PhP0.45, and b. The subsequent increase in the Corporation’s par value per share from PhP0.45 to PhP1.00;

(vii) 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 2017

The President will report on the significant business transactions undertaken and the financial targets and achievements by the Corporation in 2017. The Audited Consolidated Financial Statements for the period ending 31 December 2017 of the Corporation are reflected in the accompanying Annual Report sent to the Shareholders.

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

16 Directors and corporate officers since the 2017 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 23 April 2017 at the Office of the Corporate Secretary during business hours.

Item 17. Amendment of Charter, Bylaws or Other Documents

In its meeting held on 26 March 2018, the Board approved the amendment of Article Sixth of the Articles of Incorporation to reduce the number of directors from eleven (11) to nine (9). The reduction of seats in the Board is intended to improve the efficiency of the Board and to facilitate the quorum requirements. Upon careful deliberation by the Board, it has been determined that the effectivity of the Board in performing its duties and functions will not be impaired by the reduced number of directors.

The amendment will be presented at this year’s Annual Shareholders’ Meeting for consideration of the shareholders.

Item 18. Other Proposed Action

Election of Directors

A Board composed of nine (9) directors will be elected for the year 2018-2019 at the meeting.

Item 19. Voting Procedures

(a) Every shareholder 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. IV Reading and Affirmative vote of majority of the approval of the shareholders present. Minutes of the previous meetings and action therein

V Report of Affirmative vote of majority of the Management and shareholders present. the Board of Directors

VI Ratification of All Affirmative vote of majority of the Acts, shareholders present.

17 Transactions and Resolutions by the Board of Directors and Management

VII Election of The nine (9) nominees garnering the Directors 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; 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

VIII Amendment of Affirmative vote of at least 2/3 of all Articles of outstanding capital stock. Incorporation to reflect the reduction of the number of Directors from eleven (11) to nine (9)

(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.

18 The Corporation shall, upon written request, provide to shareholders, 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 13 April 2018.

PAL HOLDINGS, INC.

By:

MA. CECILIA L. PESAYCO Corporate Secretary

19 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 2017 Annual Stockholders’ Meeting are as follows:

Date/ Type of Subject Matter Disclosed Meeting March 28, 2017 1. Approval of the decrease of the existing par value of the Company at Board of Php1.00 per share to the extent necessary to eliminate the existing deficit Directors’ of the Corporation, without returning any portion of the capital to Meeting stockholders;

2. The resulting reduction surplus from the foregoing transaction shall thereupon be used by the Corporation, together with its existing additional paid-in capital and the additional paid-in capital to be booked upon the completion of the acquisition of Zuma Holdings and Management Corporation (ZUMA), to wipe out its projected deficit;

3. Amendment of the Articles of Incorporation to revert its par value to Php1.00 per share as soon as the Securities and Exchange Commission approves of the equity restructuring;

4. Amendments to the Articles of Incorporation of the Corporation to be submitted to the stockholders for approval in the Annual Stockholders’ Meeting held on May 25, 2017. April 24, 2017 1. Authorization of the Corporate Secretary to sign, execute and deliver the Board of request letter to the Stock and Transfer Agent, Trust and Investment Directors’ Division of PNB, for the issuance of the list of Beneficial Owners under Meeting the PCD which is required to be submitted quarterly to the Philippine Stock Exchange.

2. Approval of the amendments to the Corporate Governance Manual in accordance with the SEC Memorandum Circular No. 6. May 25, 2017 1. Approved the Minutes of the previous meeting held on 30 June Annual 2016; Stockholders’ Meeting 2. Approved the Report of Management and the Board of Directors for the year 2016;

3. Confirmed and ratified all acts and resolutions of the Board of Directors and Management for the year ended December 31, 2016;

4. Election of the directors of the Company for the year 2017-2018;

5. Decrease in Authorized Capital Stock via reduction of par value per share from PhP1.00 to PhP0.45

6. Increase of par value per share from PhP0.45 to PhP1.00

7. Amendment of Articles of Incorporation to reflect the decrease of par

20 value to PhP0.45 and subsequent increase of par value per share from PhP0.45 to Php1.00. May 25, 2017 1. Election of the officers and appointment of members of the Board Organizational to the various committees for the year 2017-2018. Board of Directors’ 2. Appointment of the Auditing Firm SGV & Co. as External Auditor Meeting for the year 2017-2018.

October 23, Authorized the release of the unaudited consolidated financial 2017 statements of the Company for the quarter ending September 30, 2017. Board of Directors’ Meeting March 26, Approved the reduction of the number of directors from eleven (11) to 2018 nine (9). Board of Directors’ Meeting

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