NOTICE OF ANNUAL STOCKHOLDERS' MEETING NOTICE IS HEREBY GIVEN that the annual ...

323 Pages·2017·8.07 MB·English

SEC Reg. No. 34218

Ayala Corporation
34F Tower One Ayala Triangle
Ayala Avenue Makati City 1226
Philippines

Tel [phone]

Fax [phone]

www.ayala.com.ph

NOTICE OF ANNUAL STOCKHOLDERS’ MEETING

NOTICE IS HEREBY GIVEN that the annual meeting of stockholders of AYALA
CORPORATION will be held at the Ballroom 2 of the Fairmont Makati, 1 Raffles Drive, Makati Ave.,
Makati City, on Friday, April 20, 2018 at 9:00 o’clock in the morning with the following

A G E N D A1

1. Proof of Notice and Determination of Quorum

2. Approval of Minutes of Previous Meeting

3. Annual Report

4. Election of Directors (including the Independent Directors)

5. Election of External Auditor and Fixing of its Remuneration

6. Consideration of Such Other Business as May Properly Come Before the Meeting

7. Adjournment

Only stockholders of record at the close of business on March 6, 2018 are entitled to notice
of, and to vote at, this meeting.

Makati City, February 20, 2018.

SOLOMON M. HERMOSURA
Corporate Secretary and
Chief Legal Officer

We are not soliciting your proxy. However, if you would be unable to attend the meeting but would like to be represented
thereat, you may accomplish the herein proxy form and submit the same on or before April 11, 2018 to the Office of the
Corporate Secretary at 3/F Tower One & Exchange Plaza, Ayala Triangle, Ayala Avenue, Makati City. Validation of proxies
shall be held on April 13, 2018 at 9:00 a.m. at the Office of the Corporate Secretary. Thank you.

1 See next page for the explanation for each agenda item.
EXPLANATION OF AGENDA ITEMS

Proof of notice and determination of quorum
The Corporate Secretary will certify the date the notice of the meeting was sent to all stockholders and the date
of publication of the notice in newspapers of general circulation.

The Corporate Secretary will further certify the existence of a quorum. The stockholders present, in person or
by proxy, representing a majority of the outstanding capital stock shall constitute a quorum for the transaction
of business.

Approval of minutes of previous meeting
The minutes of the meeting held on April 21, 2017 are posted at the company website, www.ayala.com.ph.
Copies of the minutes will also be distributed to the stockholders before the meeting.

A resolution approving the minutes will be presented to the stockholders for approval by the vote of the
stockholders representing at least a majority of the outstanding voting stock present at the meeting.

Annual report
The Chairman, Mr. Jaime Augusto Zobel de Ayala, and the President and Chief Operating Officer, Mr. Fernando
Zobel de Ayala, will deliver a report to the stockholders on the performance of the company in 2017 and the
outlook for 2018. The financial statements as of December 31, 2017 (FS) will be embodied in the Information
Statement to be sent to the stockholders at least 15 business days prior to the meeting.

A resolution noting the report and approving the audited financial statements will be presented to the
stockholders for approval by the affirmative vote of the stockholders representing at least a majority of the
outstanding voting stock present at the meeting.

Election of directors (including the independent directors)
Any stockholder may submit to the Nomination Committee nominations to the Board not later than March 6,
2018. The Nomination Committee will determine whether the nominees for directors, including the nominees
for independent directors, have all the qualifications and none of the disqualifications to serve as members of
the Board before submitting the nominees for election by the stockholders. The profiles of the nominees to the
Board will be provided in the Information Statement and in the company website for examination by the
stockholders.

Each stockholder entitled to vote may cast the votes to which the number of shares he owns entitles him, for
as many persons as there are to be elected as directors, or he may give one candidate as many votes as the
number of directors to be elected multiplied by the number of his shares shall equal, or he may distribute them
on the same principle among as many candidates as he may see fit, provided that the whole 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. The seven nominees receiving the highest number of votes will be declared elected as directors of the
company.

Election of external auditor and fixing of its remuneration
The Audit Committee will endorse to the stockholders the election of an external auditor for the current fiscal
year. The profile of the external auditor will be provided in the Information Statement and in the company
website for examination by the stockholders.

A resolution for the election of the external auditor and its remuneration will be presented to the stockholders
for adoption by the affirmative vote of stockholders representing a majority of the voting stock present at the
meeting.

Consideration of such other business as may properly come before the meeting
The Chairman will open the floor for comments and questions by the stockholders. Stockholders may raise
other matters or issues that may be properly taken up at the meeting.
PROXY

The undersigned stockholder of AYALA CORPORATION (the “Company”) hereby appoints
____________________________ or in his absence, the Chairman of the meeting, as attorney-in-fact and
proxy, to represent and vote all shares registered in his/her/its name at the annual meeting of stockholders
of the Company on April 20, 2018 and at any of the adjournments thereof for the purpose of acting on the
following matters:

1. Approval of minutes of previous meeting. 4. Election of SyCip Gorres Velayo & Co. as the
Yes No Abstain external auditor and fixing of its remuneration.
Yes No Abstain

2. Annual Report. 5. At his/her discretion, the proxy named above is
Yes No Abstain authorized to vote upon such other matters as
may properly come before the meeting.
Yes No

3. Election of Directors
No. of Votes

Jaime Augusto Zobel de Ayala

Fernando Zobel de Ayala PRINTED NAME OF STOCKHOLDER

Delfin L. Lazaro
Keiichi Matsunaga
Independent Directors: SIGNATURE OF STOCKHOLDER /
AUTHORIZED SIGNATORY
Ramon R. del Rosario, Jr.

Xavier P. Loinaz
Antonio Jose U. Periquet DATE

THIS PROXY SHOULD BE RECEIVED BY THE CORPORATE SECRETARY ON OR BEFORE APRIL 11, 2018,
THE DEADLINE FOR SUBMISSION OF PROXIES. FOR CORPORATE STOCKHOLDERS, PLEASE ATTACH
TO THIS PROXY FORM THE SECRETARY’S CERTIFICATE ON THE AUTHORITY OF THE SIGNATORY TO
APPOINT THE PROXY AND SIGN THIS FORM.

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER AS DIRECTED HEREIN
BY THE STOCKHOLDER(S). IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE
ELECTION OF ALL NOMINEES AND FOR THE APPROVAL OF THE MATTERS STATED ABOVE AND FOR
SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING IN THE MANNER
DESCRIBED IN THE INFORMATION STATEMENT AND/OR AS RECOMMENDED BY MANAGEMENT OR
THE BOARD OF DIRECTORS.

A STOCKHOLDER GIVING A PROXY HAS THE POWER TO REVOKE IT AT ANY TIME BEFORE THE RIGHT
GRANTED IS EXERCISED. A PROXY IS ALSO CONSIDERED REVOKED IF THE STOCKHOLDER ATTENDS
THE MEETING IN PERSON AND EXPRESSES HIS INTENTION TO VOTE IN PERSON.

NOTARIZATION OF THIS PROXY IS NOT REQUIRED.
SECURITIES AND EXCHANGE COMMISSION

SEC FORM 20-IS

Information Statement
of
AYALA CORPORATION
Pursuant to Section 20 of the Securities Regulation Code (the “Code” or “SRC”)

1. Check the appropriate box:

Preliminary Information Sheet

Definitive Information Sheet

2. Name of registrant as specified in its charter: AYALA CORPORATION (the “Company” or “Ayala”)

3. Province, country or other jurisdiction of incorporation or organization: REPUBLIC OF THE PHILIPPINES

4. SEC Identification Number: 34218

5. BIR Tax Identification Code: 000-153-610-000

6. Address of principal office: 32F to 35F, Tower One and Exchange Plaza
Ayala Triangle, Ayala Avenue
Makati City
1226

7. Registrant’s telephone number: [phone] / 908-3357

8. Date, time and place of the meeting of stockholders:

Date - April 20, 2018
Time - 9:00 A.M.
Place - Ballroom 2, Fairmont Makati
1 Raffles Drive
Makati Ave., Makati City

9. Approximate date on which the Information Statement is first to be sent or given to stockholders:

March 27, 2018

10. Securities registered pursuant to Sections 8 and 12 of the Code or Sections 4 and 8 of the RSA:

a. Shares of stock as of February 28, 2018

Title of each class Par value No. of shares Amount
Common P 50.00 621,298,801 P31,064,940,050.00
Preferred B Series 1 100.00 20,000,000 2,000,000,000.00
Preferred B Series 2 100.00 27,000,000 2,700,000,000.00
Voting Preferred 1.00 200,000,000 200,000,000.00
Total 868,298,801 P35,964,940,050.00

b. Debt securities as of February 28, 2018 - P40 Billion Bonds

x________________________________________________________________________ 1
11. Are any or all of registrant’s securities listed in a stock exchange?


Yes _____ No

A total of 616,784,515 common shares, 12,000,000 preferred A (“ACPA”) shares, 28,000,000 preferred B series
1 (“ACPB1”) shares, and 30,000,000 preferred B series 2 (“ACPB2”) shares and are listed in the Philippine Stock
Exchange (“PSE”). A total of 12,000,000 ACPA shares, 8,000,000 ACPB1 shares, and 3,000,000 ACPB2 shares
are held in Treasury by the Company.

* * *
x________________________________________________________________________ 2
INFORMATION REQUIRED IN INFORMATION STATEMENT

A. GENERAL INFORMATION

Item 1. Date, time and place of meeting of stockholders (hereafter, the “annual stockholders’ meeting” or
“meeting”)

a. Date - April 20, 2018
Time - 9:00 A.M.
Place - Ballroom 2, Fairmont Makati
1 Raffles Drive
Makati Ave., Makati City

b. Approximate date when the Information Statement is first to be sent to stockholders: March 27, 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

Under Sections 42 and 81, Title X of the Corporation Code of the Philippines (“Corporation Code”), a stockholder
shall have the right to dissent and demand payment of the fair value of his shares in the following instances:

(a) In case any amendment to the Articles of Incorporation has the effect of changing or restricting the rights of
any stockholders or class of shares, 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;

(b) In case of sale, lease, exchange, transfer, mortgage, pledge or other disposition of all or substantially all of
the corporate property and assets as provided in the Corporation Code;

(c) In case of merger or consolidation; and

(d) Investment of funds in any other corporation or business or for any purpose other than the primary purpose
for which the Corporation was organized.

There are no matters or actions to be taken up at the meeting which may give rise to a possible exercise by
stockholders of their appraisal rights.

Item 3. Interest of certain persons in or opposition to matters to be acted upon

There is no matter to be acted upon in which any director or officer is involved or had a direct, indirect or
substantial interest.

No director has informed the Company of his opposition to any matter to be acted upon at the annual stockholders
meeting.

B. CONTROL AND COMPENSATION INFORMATION

Item 4. Voting securities and principal holders thereof

a. Number of shares outstanding as of February 28, 2018: 621,298,801 common shares

20,000,000 preferred B series 1 shares

27,000,000 preferred B series 2 shares

200,000,000 voting preferred shares

x________________________________________________________________________ 3
Number of votes per share: One (1) vote per share for common and
voting preferred shares

One (1) vote per share for preferred B shares
on matters where holders of non-voting
shares are entitled to vote under Section 6 of
the Corporation Code

b. All stockholders of record as of March 6, 2018 (the “Record Date”) are entitled to notice and to vote at the
annual stockholders’ meeting.

c. Manner of voting

Sections 7 and 8 of Article III of the By-laws of the Company (the “By-laws”) provide:

Section 7 - Each share of stock entitles the person in whose name it is registered in the
books of the Corporation to one vote, provided the share has not been declared delinquent. (As
amended on December 4, 2014).

Section 8 - The election of Directors shall be by ballot and each stockholder entitled
to vote may cast the vote to which the number of shares he owns entitles him, for as many
persons as are Directors to be elected, or he may give to one candidate as many votes as the
number of Directors to be elected multiplied by the number of his shares shall equal, or he may
distribute them on the same principle among as many candidates he may see fit, provided that
the whole number of votes cast by him shall not exceed the number of shares owned by him
multiplied by the whole number of Directors to be elected. x x x

d. Security ownership of certain record and beneficial owners and management

i. Security ownership of certain record and beneficial owners (of more than 5%) as of February 28,
2018

Title of Name and address of record owner Name of beneficial Citizenship No. of Percent of
class and relationship with Issuer owner and shares held outstanding
of voting relationship with voting
shares record owner shares
Common Mermac, Inc.1 Mermac, Inc.2 Filipino 296,625,706 36.1167%
Voting 3/F Makati Stock Exchange Building, 159,683,946 19.4429%
Preferred Ayala Triangle,
Ayala Avenue, Makati City
Common PCD Nominee Corporation PCD participants Various 166,229,892 20.2399%
(Non-Filipino)3 acting for Non-
G/F MSE Bldg. themselves or for Filipino
Ayala Ave., Makati City their customers4

1 The Co-Vice Chairmen of Mermac, Inc. (“Mermac”), Jaime Augusto Zobel de Ayala and Fernando Zobel de Ayala, are the
Chairman and Chief Executive Officer and President and Chief Operating Officer of the Company, respectively. Mr. Jaime
Augusto Zobel de Ayala has been named and appointed to exercise the voting power of Mermac.
2 The Board of Directors of Mermac has the power to decide how Ayala shares held by Mermac are to be voted.
3 PCD is not related to the Company.
4 Each beneficial owner of shares through a PCD participant is the beneficial owner to the extent of the number of shares in his
account with the PCD participant. Out of the 239,612,795 common shares registered in the name of PCD Nominee Corporation,
64,835,357 (7.8942% of the voting stock) and 62,712,820 (7.6358% of the voting stock) are for the accounts of Deutsche Bank
Manila (DB) and The Hongkong and Shanghai Banking Corporation (HSBC), respectively. The Company has no record relating
to the power to decide how the shares held by PCD are to be voted. As advised to the Company, none of DB and HSBC or any of
their customers beneficially owns more than 5% of the Company’s common shares.
x________________________________________________________________________ 4
Common Mitsubishi Corporation5 Mitsubishi Japanese 63,077,540 7.6802%
Voting 3-1, Marunouchi 2- Chome, Chiyoda- Corporation6 32,640,492 3.9743%
Preferred ku, Tokyo 100-8086
Common PCD Nominee Corporation PCD participants Filipino 73,382,903 8.9350%
(Filipino)3 acting for
G/F MSE Bldg. themselves or for
Ayala Ave., Makati City their customers4

ii. Security ownership of directors and management as of February 28, 2018

Title of class Name of beneficial owner Amount and nature of Citizenship Percent of
of beneficial ownership total
outstanding outstanding
shares shares
Directors
Common 222,006 (direct & indirect) 0.0256%
Preferred B 20,000 (indirect)
Series 1 Jaime Augusto Zobel de Ayala Filipino 0.0023%
Voting 543,802 (direct) 0.0626%
Preferred
Common 228,136 (direct & indirect) 0.0263%
Voting Fernando Zobel de Ayala 554,983 (direct) Filipino 0.0639%
Preferred
Common 27,836 (indirect) 0.0032%
Voting Delfin L. Lazaro 258,297 (direct) Filipino 0.0297%
Preferred
Common Keiichi Matsunaga 1 (direct) Japanese 0.0000%
Common 126,614 (direct) 0.0146%
Voting Xavier P. Loinaz 65,517 (direct) Filipino 0.0075%
Preferred
Common 1,200 (direct) 0.0001%
Preferred B Antonio Jose U. Periquet 400,000 (direct) Filipino
Series 2 0.0461%
Common Ramon R. Del Rosario, Jr. 1 (direct) Filipino 0.0000%
CEO and most highly compensated officers
Common 222,006 (direct & indirect) 0.0256%
Preferred B 20,000 (indirect)
Series 1 Jaime Augusto Zobel de Ayala Filipino 0.0023%
Voting 543,802 (direct) 0.0626%
Preferred
Common 228,136 (direct & indirect) 0.0263%
Voting Fernando Zobel de Ayala 554,983 (direct) Filipino 0.0639%
Preferred
Common 122,341 (indirect) 0.0141%
Voting Solomon M. Hermosura 53,583 (direct) Filipino 0.0062%
Preferred
Common Jose Teodoro K. Limcaoco 226,677 (indirect) Filipino 0.0261%
Common John Philip S. Orbeta 532,837 (indirect) Filipino 0.0614%
Other executive officers (Ayala group ManCom members/Senior Leadership Team)
Common Cezar P. Consing 77,044 (indirect) Filipino 0.0089%
Common Bernard Vincent O. Dy 9,567 Filipino 0.0011%
Common Arthur R. Tan 288,291 (direct & indirect) Filipino 0.0332%

5 Mitsubishi Corporation (“Mitsubishi”) is not related to the Company.
6 The Board of Directors of Mitsubishi has the power to decide how Mitsubishi’s shares in Ayala are to be voted. Mr. Yoshio
Amano has been named and appointed to exercise the voting power.
x________________________________________________________________________ 5
Common Jose Rene Gregory D. 39,345 (direct & indirect) Filipino 0.0045%
Almendras
Common Alfredo I. Ayala 172,546 (direct & indirect) Filipino 0.0199%
Common Paolo Maximo F. Borromeo 38,974 (indirect) Filipino 0.0045%
Common Ferdinand M. Dela Cruz 39,755 (indirect) Filipino 0.0046%
Common John Eric T. Francia 133,767 (direct & indirect) Filipino 0.0154%
Common Ernest Lawrence L. Cu 107,774 (indirect) Filipino 0.0124%
Common Ruel T. Maranan 13,039 (indirect) Filipino 0.0015%
Common Ma. Cecilia T. Cruzabra 17,454 (direct & indirect) Filipino 0.0020%
Common Josephine G. De Asis 16,530 (indirect) Filipino 0.0019%
Common 16,196 (indirect) 0.0019%
Voting Catherine H. Ang 5,290 (direct) Filipino 0.0006%
Preferred
Common Dodjie D. Lagazo 0 Filipino 0.0000%
Common Joanne M. Lim 0 Filipino 0.0000%
All Directors and Officers as a group 4,359,403 0.5021%

None of the Company’s directors and officers owns 2.0% or more of the outstanding capital stock of the
Company.

iii. Voting trust holders of 5% or more

The Company knows of no person holding more than 5% of common shares under a voting trust or
similar agreement.

iv. Changes in control

No change of control in the Company has occurred since the beginning of its last fiscal year.

Item 5. Directors and executive officers

Article III, Section 9, of the By-laws provides:

Section 9 - At the regular meetings, the Board of seven (7) Directors shall be elected who
shall hold office for a term of one (1) year or until their successors shall have been elected and
qualified.

The attendance of the directors at the meetings of the Board of Directors (“Board”) and of stockholders held in
2017 is as follows:

No. of Meetings
Directors Percent Present
Attended/Held7
Jaime Augusto Zobel de Ayala 7/7 100%
Fernando Zobel de Ayala 7/7 100%
Delfin L. Lazaro 7/7 100%
Xavier P. Loinaz 7/7 100%
Ramon R. Del Rosario, Jr. 7/7 100%
Antonio Jose U. Periquet 7/7 100%
Yoshio Amano8 3/3 100%
Keiichi Matsunaga8 4/4 100%

7 In 2017 and during the incumbency of the director.
8 Mr. Amano was replaced by Mr. Matsunaga on April 21, 2017.
x________________________________________________________________________ 6
The Board has established committees to assist in exercising its authority in monitoring the performance of the
business of the Company. The committees, as mentioned below, provide organized and focused means for the
Board to achieve specific goals and address issues, including those related to corporate governance.

Executive Personnel and Corporate Audit Finance Risk Committee of
Committee Compensation Governance Committee Committee Management Inspectors of
Committee and and Related Proxies and
Nomination Party Ballots***
Committee Transactions
Committee

Jaime Augusto Zobel de C M
Ayala
Fernando Zobel de Ayala M M
Keiichi Matsunaga* M M M M
Ramon R. del Rosario, Jr.** C C M M
Delfin L. Lazaro* M C
Xavier P. Loinaz** M C
Antonio Jose U. Periquet** M M C
Solomon M. Hermosura C
Catherine H. Ang M
Josephine G. De Asis M
C - Chairman *Non-executive Director
M - Member **Independent Director
***May not be members of the Board of Directors

Information required of directors and executive officers

i. Directors and executive officers

The following persons have been nominated to the Board for election at the annual stockholders’ meeting
and have accepted their respective nominations:

JAIME AUGUSTO ZOBEL DE AYALA FERNANDO ZOBEL DE AYALA
KEIICHI MATSUNAGA XAVIER P. LOINAZ
RAMON R. DEL ROSARIO, JR. ANTONIO JOSE U. PERIQUET
DELFIN L. LAZARO

The nominees were formally nominated to the Corporate Governance and Nomination Committee of the
Board by a minority shareholder of the Company, Ms. Maria Angelica B. Rapadas, who holds 15,818
voting preferred shares, or 0.0019% of the total outstanding voting shares of the Company, and who is
not related to any of the nominees. Messrs. Ramon R. del Rosario, Jr., Xavier P. Loinaz and Antonio
Jose U. Periquet, all incumbent directors, are being nominated as independent directors in accordance
with SRC Rule 38 (Requirements on Nomination and Election of Independent Directors). The Corporate
Governance and Nomination Committee evaluated the qualifications of all the nominees and prepared
the final list of nominees in accordance with the By-Laws and the Charter of the Board of Directors of
the Company.

Only nominees whose names appear on the final list of candidates are eligible for election as
directors. No nominations will be entertained or allowed on the floor during the annual stockholders’
meeting.

All nominees, except for Mr. Matsunaga, have served as directors of the Company for more than five
years. Mr. Matsunaga has served for one year.

A summary of the qualifications of the incumbent directors, who are all nominees for directors for
election at the stockholders’ meeting, and incumbent officers is set forth in Annex A.

The officers of the Company are elected annually by the Board during its organizational meeting.

x________________________________________________________________________ 7