MACAY HOLDINGS, INC. ANNUAL CORPORATE GOVERNANCE Governance...MACAY HOLDINGS, INC. ANNUAL CORPORATE GOVERNANCE REPORT . Macay Holdings, Inc. 2013 Annual Corporate Governance Report

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  • Macay Holdings, Inc. 2013 Annual Corporate Governance Report 1

    MACAY HOLDINGS, INC.

    ANNUAL CORPORATE GOVERNANCE REPORT

  • Macay Holdings, Inc. 2013 Annual Corporate Governance Report 2

    TABLE OF CONTENTS

    A. BOARD MATTERS ........................................................................................................................ 4

    1) Board of Directors ...................................................................................................................... 4

    2) Chairman and CEO.................................................................................................................... 12

    3) Succession Plan for Board of Directors and Senior Management ........................................... 13

    4) Other Executive, Non-Executive and Independent Directors .................................................. 13

    5) Changes in the Board of Directors ........................................................................................... 16

    6) Orientation and Education Program ........................................................................................ 21

    B. CODE OF BUSINESS CONDUCT & ETHICS ................................................................................... 22

    1) Policies ...................................................................................................................................... 22

    2) Dissemination of Code of Ethics or Conduct ............................................................................ 22

    3) Implementation of and Compliance with Code ....................................................................... 22

    4) Related Party Transactions ....................................................................................................... 23

    5) Family, Commercial and Contractual Relations ....................................................................... 24

    6) Alternative Dispute Resolution ................................................................................................ 25

    C. BOARD MEETINGS & ATTENDANCE ...................................................................................... 25

    1) Schedule of Meetings ............................................................................................................ 25

    2) Attendance of Directors ........................................................................................................ 25

    3) Separate Meetings of Non-Executive Directors .................................................................... 25

    4) Quorum Requirement ........................................................................................................... 25

    5) Access to Information ........................................................................................................... 26

    6) External Advice ...................................................................................................................... 27

    7) Change/s in existing policies ................................................................................................. 27

    D. REMUNERATION MATTERS .................................................................................................. 28

    1) Remuneration Process .......................................................................................................... 28

    2) Remuneration Policy and Structure for Executive and Non-Executive Directors ................. 28

    3) Aggregate Remuneration ...................................................................................................... 28

    4) Stock Rights, Options and Warrants ..................................................................................... 29

    5) Remuneration of Management ............................................................................................. 29

    E. BOARD COMMITTEES ........................................................................................................... 29

    1) Number of Members, Functions and Responsibilities .......................................................... 29

    2) Committee Members ............................................................................................................ 32

    3) Changes in Committee Members .......................................................................................... 32

    4) Work Done and Issues Addressed ......................................................................................... 33

    5) Committee Program .............................................................................................................. 33

    F. RISK MANAGEMENT SYSTEM ............................................................................................... 33

    1) Statement on Effectiveness of Risk Management System ....................................................... 33

    2) Risk Policy ................................................................................................................................. 33

  • Macay Holdings, Inc. 2013 Annual Corporate Governance Report 3

    3) Control System Set Up ............................................................................................................. 34

    G. INTERNAL AUDIT AND CONTROL .......................................................................................... 35

    1) Internal Control System ........................................................................................................... 35

    2) Internal Audit ........................................................................................................................... 36

    H. ROLE OF STAKEHOLDERS ..................................................................................................... 38

    1) Policies and Activities ............................................................................................................... 38

    2) Corporate Responsibility .......................................................................................................... 39

    3) Performance-Enhancing Mechanisms for Employee Participation. ........................................ 39

    4) Procedures for Handling Employee Complaint ........................................................................ 39

    I. DISCLOSURE AND TRANSPARENCY....................................................................................... 39

    1) Ownership Structure ................................................................................................................ 39

    2) Does the Annual Report disclose the following: ...................................................................... 39

    3) External Auditors Fee .............................................................................................................. 40

    4) Medium of Communication ..................................................................................................... 40

    5) Date of Release of Audited Financial ....................................................................................... 40

    6) Company Website .................................................................................................................... 40

    7) Disclosure of RPT ...................................................................................................................... 41

    J. RIGHTS OF STOCKHOLDERS .................................................................................................. 41

    1) Right to Participate Effectively in Stockholders Meetings ...................................................... 41

    2) Treatment of Minority Stockholders ........................................................................................ 48

    K. INVESTOR RELATIONS PROGRAM ........................................................................................ 49

    L. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES ............................................................... 49

    M. BOARD, DIRECTOR, COMMITTEE AND CEO APPRAISAL ........................................................ 50

    N. INTERNAL BREACHES AND SANCTIONS ................................................................................ 50

    Signatures ....................................................................................................................................... 51

  • Macay Holdings, Inc. 2013 Annual Corporate Governance Report 4

    A. BOARD MATTERS

    1) Board of Directors

    Number of Directors per Articles of Incorporation 11

    Actual number of Directors for the year 11

    (a) Composition of the Board (As of 25 October 2013)

    Complete the table with information on the Board of Directors.

    Directors Name Type

    [Executive

    (ED), Non-

    Executive

    (NED) or

    Independent

    Director (ID)]

    If nominee,

    identify the

    principal

    Date first

    elected

    Date last elected

    (if ID, state the

    number of years

    served as ID)1

    Elected when

    (Annual/

    Special Meeting)

    No. of

    Years

    served

    as

    Director

    Alfredo M. Yao NED n.a. 25 October 2013 25 October 2013 Special Meeting .42

    Armando M. Yao NED n.a. 25 October 2013 25 October 2013 Special Meeting .42

    Jeffrey S. Yao ED n.a. 25 October 2013 25 October 2013 Special Meeting .42

    Carolyn S. Yao ED n.a 25 October 2013 25 October 2013 Special Meeting .42

    Mary Grace S. Yao NED n.a 25 October 2013 25 Octo