Notice of Annual Stockholders’ Meeting

NOTICE OF ANNUAL STOCKHOLDERS’ MEETING

Dear Shareholder:

Notice is hereby given that the Annual Stockholders’ Meeting of PAL HOLDINGS, INC. will be held on 23 July 2020, Thursday, at 2:00 pm via Zoom application. The meeting ID and password will be sent to the successful registrants of the Meeting through electronic mail.

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 2019 Annual Stockholders’ Meeting held on 30 May 2019 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 2019 Annual Stockholders’ Meeting 7. Amendment of the Articles of Incorporation to increase the number of directors from nine (9) to eleven (11) 8. Election of Directors 9. Ratification of Appointment of External Auditor 10. Adjournment

Only stockholders of record and in good standing as of 16 June 2020 will be entitled to notice of, and to vote at, the meeting.

Guidelines for registration and participation in the Meeting, as well as the contact details of persons to whom you may send your inquiries, are attached to this Notice. Registration will run until 09 July 2020. Stockholders are encouraged to register online at least 45 minutes before the Meeting.

For your convenience, a copy of the Definitive Information Statement, Management Report, and Audited Financial Statements will be available for viewing and download at PSE Edge (https://edge.pse.com.ph/companyDisclosures/form.do?cmpy_id=20).

All shareholders are cordially invited to attend the Meeting. However, if you are unable to attend, you may designate your authorized representative by submitting a scanned copy of your proxy form to [email protected] not later than 13 July 2020. All proxies received will be validated on 17 July 2020.

Lastly, a visual and audio recording of the Meeting will be secured for future reference

01 July 2020.

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, Philippines

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) 8810-2451

8. Date of meeting : 23 July 2020 Time of meeting : 2:00 p.m. Place of meeting : Virtual meeting via Zoom app.

9. Approximate date on which the Information Statement is first to be sent or given to security holders : 1 July 2020

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. INFORMATION STATEMENT

A. GENERAL INFORMATION

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

(a) Date : 23 July 2020 Time : 2:00 p.m. Place : Virtual meeting via Zoom application Mailing address of the Corporation : 8th Floor PNB Financial Center, Pres. Diosdado Macapagal Ave., CCP Complex, Pasay City 1307

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 2020 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.

2 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 30 April 2020 (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 16 June 2020 are entitled to notice of, and to vote at, the 2020 Annual Stockholders’ Meeting.

(c) Security ownership of certain record and beneficial owners (more than 5% of voting securities) as of 30 April 2020 (latest available date):

Title of Name, address of record Name of No. of Shares Percent class owner and relationship with Beneficial Held Issuer Owner and Citizenship Relationship 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, Minato- N/A Japanese 1,103,042,933 9.5% 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, Ms. Shiela T. Pascual and Michael G. Tan. Dr. Lucio C. Tan is expected to be given the proxy to vote the shares of THC.

3 (d) Security Ownership of Management as of 30 April 2020

Name of Amount and Percent Title of Class Beneficial Position Nature of Citizenship of Class Owner Beneficial Ownership Common Lucio C. Tan Chairman, 450 Filipino Nil President and R (direct) Chief Executive Officer Common Carmen K. Tan Director 450 Filipino Nil R (direct) Common Lucio C. Tan, III Director 450 Filipino Nil R (direct) Common Vivienne K. Tan Director 1,000 Filipino Nil R (direct) Common John G. Tan Director 450 Filipino Nil R (direct) Common Joseph T. Chua Director 225 Filipino Nil R (direct) Common Ryuhei Maeda Director 1 Filipino Nil R (direct) Common Gregorio T. Yu Independent 225 Filipino Nil Director R (direct) Common Johnip G. Cua Independent 225 Filipino Nil Director R (direct) Total 3,476

(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.

4 Item 5. Directors and 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:

Name/ Current Affiliations and Business Term of Office Age Citizenship Position Experience in the last 5 years /Period Served Lucio C. Tan/ 85 Filipino Chairman of Absolut Distillers, Inc., 1 year/ Served Chairman, Alliedbankers Insurance as Chairman President and Corporation, Allianz PNB Life since 30 CEO Insurance, Air Philippines October 2000 Corporation, Asia Brewery, Inc., Asian Alcohol Corporation, Basic Holdings Corporation, BuonaSorte Holdings, Inc., Eton Properties Philippines, Inc., Fortune Tobacco Corporation, Foremost Farms, Inc., Grandspan Development Corporation, Himmel Industries, Inc., Lucky Travel Corporation, Mabuhay Maritime Express Transport, Inc., MacroAsia Corporation, Philippine Airlines, Inc., PMFTC Inc., Progressive Farms, Inc., LT Group, Inc., Tanduay Distillers, Inc., Tanduay Brands International, Tangent Holdings Corporation, TheCharterHouse, Inc., Trustmark Holdings Corporation, University of the East, Zuma Holdings and Management Corporation. He is also a Director of Philippine National Bank. Carmen K. Tan/ 78 Filipino Vice Chairman of Philippine 1 year/ Served Director Airlines, Inc. and Director of Air as Director Philippines Corporation, Asia since Brewery, Inc., BuonaSorte 23 October Holdings, Inc., Foremost Farms, 2014 Inc., Dynamic Holdings, Ltd, Eton City, Inc., Fortune Tobacco Corporation, Himmel Industries,

5 Inc., Lucky Travel Corporation, MacroAsia Corporation, LT Group, Inc., Philippine National Bank, PMFTC, Inc., Progressive Farms, Inc., Tanduay Distillers, Inc., Manufacturing Services and Trade Corporation, Sipalay Trading Corporation, Saturn Holdings, Inc., Tangent Holdings Corporation, Trustmark Holdings Corporation and Zuma Holdings and Management Corporation. Lucio C. Tan III 27 Filipino Director, President and Chief Served as /Director Operating Officer of Tanduay Director since Distillers, Inc., and Director of Air 17 December Philippines Corporation, 2019 MacroAsia Corporation, LT Group, Inc., and Philippine Airlines, Inc. Vivienne K. Tan 51 Filipino Director of Philippine National Served as /Director Bank; Member of the Board of Director since Trustees of University of the East 04 October and University of the East Ramon 2019 Magsaysay Memorial Medical Center; Executive Vice President of Philippine Airlines, Inc.; Founding Chairperson of Entrepreneurs School of Asia; Founding Trustee of Philippines Center for Entrepreneurship (Go Negosyo), Phils. John G. Tan/ 51 Filipino Director of Tanduay Distillers, Inc. Served as Director from 2015 to 2018 Director since 17 December 2019 Joseph T. Chua 63 Filipino Chairman of J.F. Rubber Served as /Director Philippines, Watergy Business Director since Solutions, Inc., and Cavite Business 28 October Resources, Inc.; Director/President 2019 and Chief Operating Officer of MacroAsia Corp.; Managing Director of Goodwind Development Corporation (Guam); Director/President of MacroAsia Airport Services Corporation, MacroAsia Air Taxi Services, MacroAsia Catering Services, Inc., MacroAsia Properties Development Corp. and MacroAsia Mining Corporation.

6 Ryuhei 66 Japanese Senior Adviser of ANA Holdings 1 year/ served Maeda/Director Inc.; Director of All Nippon as Director Airways Co., Ltd. since 30 May 2019 Johnip G. Cua/ 62 Filipino Former President of Procter & 1 year/ served Independent Gamble Philippines, Inc., currently as Independent Director the Chairman of the Board of the Director since P&Gers Fund, Inc. and Xavier 23 Oct 2014 School, Inc., and the Chairman & President of Taibrews Corporation. He is an Independent Director of BDO Private Bank, PhilPlans First, Inc., Eton Properties Philippines, Inc., Asia Brewery, Inc., Tanduay Distillers, Inc., MacroAsia Corporation, MacroAsia Catering Services, Inc., MacroAsia Airport Services Corporation, LT Group, Inc. and Philippine Airlines, Inc. He is also a member of the Board of Directors of Interbake Marketing Corporation, Teambake Marketing Corporation, Bakerson Corporation, Lartizan Corporation, Alpha Alleanza Manufacturing, Inc., and Allied Botanical Corporation, and a member of the Board of Trustees of Xavier School Educational & Trust Fund. Gregorio T. Yu/ 61 Filipino Chairman of the Board and 1 year/ served Independent President of Philequity Fund, Inc., as Independent Director Lucky Star Network Director since Communications Corporation, and 23 Oct 2014 Domestic Satellite 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

7 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. 67 Filipino Corporate Secretary of LT Group, Served as Pesayco/ Inc., Asia Brewery, Inc., Air Assistant Corporate Philippines Corporation, PNB Corporate Secretary Savings Bank, Trustmark Holdings Secretary from Corporation, Zuma Holdings and 20 Apr 2012 to Management Corporation. She is 10 Feb 2015/ likewise the Chief Legal Counsel of Served as the Tan Yan Kee Foundation. Corporate Secretary since 11 Feb 2015 Susan T. Lee/ 49 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.

(*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 05 June 2020, 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. Ms. Carmen K. Tan 3. Mr. Gilbert Gabriel F. Santa Maria 4. Mr. Lucio C. Tan, III 5. Ms. Vivienne K. Tan 6. Mr. John G. Tan 7. Mr. Joseph T. Chua 8. Mr. Ryuhei Maeda 9. Mr. Johnip G. Cua – Independent Director 10. Mr. Mark M. Chen – Independent Director 11. Mr. Gregorio T. Yu – Independent Director

8 In its meeting held on 18 February 2020, the Board approved the amendment of the Articles of Incorporation to increase the number of directors from nine (9) to eleven (11). The amendment will be presented at this year’s Annual Shareholders’ Meeting for consideration of the shareholders.

Pursuant to Sec. 28 of the Revised Corporation Code of the Philippines, directorships to be filled by reason of an increase in the number of directors shall be filled only by an election at a regular or at a special meeting of stockholders duly called for the purpose, or in the same meeting authorizing the increase of directors if so stated in the notice of the meeting.

The election and qualification of the eleven (11) nominees to the Board is subject to (a) the affirmative vote of stockholders representing at least two-thirds (2/3) of the outstanding capital stock approving the amendment to increase the number of directors and (b) the nominees’ registration as holders of stocks in the Corporation’s books.

In the event that the amendment to increase the number of directors is not approved, the nominees for directors and independent directors receiving the highest number of votes, respectively, shall be declared elected.

The foregoing nominees to the Board of Directors are also current directors of the Corporation except for Mr. Gilbert Gabriel F. Santa Maria and Mr. Mark M. Chen. The business experience/directorship of said nominees for the last five years are listed in pages 5 to 8 hereof.

The nominees for Independent Directors, Mr. Johnip G. Cua, Mr. Mark M. Chen 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. Lucio C. Tan who is not related to any of the three other nominees.

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.

9 (b) Significant Employees

The Corporation values all its employees and acknowledges the contribution of the entire Management team to the business, but the Corporation is not unduly dependent on any single employee or executive for his/her services.

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

The Corporation’s Chairman, President and CEO, Dr. Lucio C. Tan, married to Mrs. Carmen K. Tan, is the father of Ms. Vivienne K. Tan and Mr. John G. Tan; the grandfather of Mr. Lucio C. Tan, III; and the father-in-law of Mr. Joseph T. Chua.

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,

10 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. 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.

The Company’s significant transactions with related parties are

11 described in detail in Note 18 of the Notes to Consolidated Financial Statements.

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 2020. 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 receive a 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 P=15,000.00.

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) 2020 1,920,000 N/A 2,140,000 Management (Estimate) 2019 2,280,000 N/A 1,685,000 2018 2,640,000 N/A 1,375,000

All other officers and 2020 N/A N/A 4,140,000 directors as a group (Estimate) unnamed 2019 N/A N/A 3,527,500 2018 N/A N/A 3,750,000

The Corporation’s Chairman of the Board and Chief Executive Officer and the four most highly compensated executive officers in 2019 (on a consolidated basis) are the following:

1. Dr. Lucio C. Tan is the Chairman of the Board of Directors and the President/CEO of the Corporation. 2. Ms. Carmen K. Tan is the Director of the Corporation. 3. Ms. Susan T. Lee is the Chief Finance Officer of the Corporation. 3. Atty. Ma. Cecilia L. Pesayco is the Corporate Secretary of the Corporation.

12 5. Mr. Michael G. Tan served as Treasurer and Director of the Corporation until August 27, 2019 and December 17, 2019, respectively.

(i) Standard Arrangements – Other than the per diems of the Directors, there are no other standard arrangements to 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.

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.

13 (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 2019 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 to 2019.

Year Ended Fee 31 December 2019 P=475,000 audit fee plus out-of- pocket expenses 31 December 2018 P=475,000 audit fee plus P=46,875 out- of- pocket expenses 31 December 2017 P=450,000 audit fee and P=52,600 out- of-pocket expenses

b. Tax Fees

The Corporation made no payments to its external auditors in tax fees for the years ending 2017 to 2019.

c. All Other Fees

The Corporation made no payment of any other fee to its external auditors for the years ending 2017 to 2019.

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.

14 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

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

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 2019 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.

15 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 2019 Annual Stockholders’ Meeting

The minutes of the previous meeting of the stockholders held on 30 May 2019 will be presented for approval at the 2020 Annual Stockholders’ Meeting. The following were the significant matters discussed at the said meetings, to wit:

(i) The Minutes of the Annual Stockholders’ Meeting held on 30 May 2018 were approved;

(ii) The Management Report and the Corporation’s Financial Statements for the year ended 31 December 2018 were approved;

(iii) All the acts and resolutions of the Board of Directors and Management since the 2018 Annual Stockholders’ Meeting were confirmed and ratified;

(iv) Amendment of Articles of Incorporation to Incorporation to increase the Authorized Capital Stock from PhP13.5 billion to PhP20 billion; 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 2019

The President will report on the significant business transactions undertaken and the financial targets and achievements by the Corporation in 2019. The Audited Consolidated Financial Statements for the period ending 31 December 2019 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 2019 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 20 April 2020 at the Office of the Corporate Secretary during business hours.

Item 17. Amendment of Charter, Bylaws or Other Documents

In its meeting held on 18 February 2020, the Board approved the amendment of the Articles of Incorporation to increase the number of directors from nine (9) to eleven (11). The increase of seats in the Board is intended to allow diversity in the management of the Corporation given the aggressive changes in the industry and in support of its pursuit of good corporate governance.

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 eleven (11) directors will be elected for the year 2020- 2021 at the meeting, subject to approval of the amendment of the Corporation’s Articles of Incorporation to increase the number of directors in the Board to eleven (11).

The Revised Corporation Code of the Philippines allows a company to call for the election of additional directors at a regular meeting of stockholders duly called for the purpose should the vacancy arise by reason of an increase in the number of directors.

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.

17 (b) Required Voting:

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

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

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

7 Amendment of Articles of Affirmative vote of Incorporation to reflect the stockholders representing at increase of the number of least two-thirds (2/3) of the Directors from nine (9) to outstanding capital stock. eleven (11)

8 Election of Directors The eleven (11) 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; 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 Affirmative vote of majority of of External Auditor the 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

18 representative) to be assisted by the Corporation’s independent accountant or by the representatives of SGV & Co.

The Company undertakes to provide without charge to each shareholder, upon written request by the shareholder, a copy of the Company’s Annual Report on SEC Form 17-A and SEC Form 17-Q. Please direct all such requests to the Corporate Secretary, Atty. Ma. Cecilia L. Pesayco, 2/F PNB Makati Center, 6754 Ayala Avenue, Makati City, Philippines.

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 24 June 2020.

PAL HOLDINGS, INC.

By:

MA. CECILIA L. PESAYCO Corporate Secretary

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 in 2019 from the last Annual Stockholders’ Meeting to the present are as follows:

Date/ Type of Action/s Taken Meeting 28 October 2019 Mr. Lucio K. Tan, Jr. (Deceased) was appointed as President and Chief Operating Officer, and Mr. Joseph T. Chua was elected as Director.

The Corporation likewise approved its Related Party Transactions Policy.

17 December 2019 Mr. Lucio C. Tan, III and Mr. John G. Tan were elected as Directors of the Corporation in lieu of Mr. Lucio K. Tan, Jr. and Mr. Michael G. Tan.

CERTIFICATION OF INDEPENDENT DIRECTOR

I, GREGORIO T. YU, Filipino, of legal age and a resident of Quezon City after having been duly sworn to in accordance with law, do hereby declare that:

1. I am a nominee for Independent Director of PAL Holdings, Inc., and have been its Independent Director since 23 October 2014.

2. I am currently affiliated with the following corporations or organizations, including Government-Owned and Controlled Corporations:

Company/Organization Position/Relationship Period of Service Auto Nation Group, Inc. Chairman Nov. 10, 2011 to present CATS Automobile Corp. Chairman June 8, 2004 to present CATS Asian Cars, Inc. Director June 25, 2004 to present American Motorcycles,Inc. Chairman Nov. 28, 2012 to present Sterling Bank of Asia Vice-Chairman and Director June 28, 2005 to present Philippine Bank of Director July 1, 2011 to present Communications Lucky Star Network Chairman and President Jan. 1, 1994 to present Communications Inc. Philippine Airlines Director Dec. 1, 2011 to present Glyph Studios, Inc. Director Dec. 1, 2011 to present Unistar Credit and Finance Director Jan. 1, 2012 to present Corporation Alphaland Corporation Director May 2018 to present ISM Communications Corporation Director Dec. 1, 2016 to present APO Agua Infrustructura, Inc. Director 2014 to present Vantage Financial Corporation ( Director Aug. 1, 2015 to present formerly E-Business Services Inc .) PhilEquity Management Inc. Director August 1, 2013 to present Vantage Equities Inc. Director Aug. 1, 2013 to present Prople BPO Inc. Director Aug. 1, 2006 to present CMB Partners Inc. Director Jan. 1, 2003 to present Nexus Technologies, Inc. Director May 1, 2012 to present Jupiter Systems Inc. Director Oct. 1, 2001 to present Wordtext Systems Inc. Director Sept. 1, 2001 to present Domestic Satellite Corp. President Feb. 1, 2001 to present Ballet Philippines Board Member Jan. 1, 2009 to present Manila Symphony Orchestra Board Member Sept. 1, 2009 to present

3. I possess all the qualifications and none of the disqualifications to serve as an Independent Director of PAL Holdings, Inc., as provided for in Section 38 of the Securities Regulation Code, its Implementing Rules and Regulations and other SEC issuances.

4. I am not related to any director, officer, or substantial shareholder of PAL Holdings, Inc., its subsidiaries, and affiliates.

5. To the best of my knowledge, I am not the subject of any pending criminal or administrative investigation or proceeding. 6. I shall faithfully and diligently comply with my duties and responsibilities as independent director under the Securities Regulation Code and its Implementing Rules and Regulations, Code of Corporate Governance and other SEC issuances.

7. I shall inform the Corporate Secretary of PAL Holdings, Inc. of any changes in the abovementioned information within five (5) days from its occurrence.

Done, this ______2020 in Makati City.

GREGORIO T. YU

SUBSCRIBED AND SWORN to before me this ______2020 in Makati City, affiant personally appeared before me and exhibited to me his Passport No. P4663180B issued at DFA, Manila on February 3, 2020.

Doc. No. _____; Page No. _____; Book No. _____; Series of 2020. CERTIFICATION OF INDEPENDENT DIRECTOR

I, MARK M. CHEN, American, of legal age and a resident of 19824 Beverly Park Road, Estero, FL 33928, USA after having been duly sworn to in accordance with law, do hereby declare that:

1. I am a nominee for Independent Director of PAL Holdings, Inc.

2. I am currently affiliated with the following corporations or organizations, including Government-Owned and Controlled Corporations:

PERIOD OF COMPANY/ORGANIZATION POSITION/RELATIONSHIP SERVICE Philippine Airlines, Inc. Independent Director 2019 to present Cobalt Equity Partners CEO and Managing Partner 2015 to present GE Equity Asia Pacific CEO 2000 to 2015

4. I am not related to any director, officer, or substantial shareholder of PAL Holdings, Inc., its subsidiaries, and affiliates.

5. To the best of my knowledge, I am not the subject of any pending criminal or administrative investigation or proceeding.

6. I shall faithfully and diligently comply with my duties and responsibilities as independent director under the Securities Regulation Code and its Implementing Rules and Regulations, Code of Corporate Governance and other SEC issuances.

7. I shall inform the Corporate Secretary of PAL Holdings, Inc. of any changes in the abovementioned information within five (5) days from its occurrence.

Done, this ______2020 in Makati City.

MARK M. CHEN

SUBSCRIBED AND SWORN to before me this ______2020 in Makati City, affiant personally appeared before me and exhibited to me his Passport No. ______issued at ______on ______.

Doc. No. _____; Page No. _____; Book No. _____; Series of 2020.