Philippine Aerospace Development Corp. Charter

To establish a reliable aviation and aerospace industry
Activities include design, assembly, manufacture, sale, and research of aircraft and aerospace devices
Develop maintenance, repair, and overhaul capabilities for aerospace equipment
Provide air transport services domestically and internationally, whether cargo or passengers, scheduled or chartered

Govern itself by adopting and amending by-laws and using a corporate seal
Sue and be sued except for certain acts without consent
Conduct lawful businesses related to primary corporate purpose
Enter into contracts within Philippines and internationally
Hold public agricultural and mineral lands beyond private limits for up to 25 years, renewable
Acquire, hold, mortgage, and alienate real and personal property locally and abroad
Purchase and manage shares and bonds of other corporations
Borrow funds domestically or from foreign sources
Invest in and participate in aviation and aerospace firms, and form subsidiaries
Recommend policies to the President to promote the industry
Cooperate with government agencies and private sector for industry development
Coordinate with Department of National Defense for related activities and benefits
Perform all acts necessary to accomplish corporate purposes

Total capital stock of 5 million no-par shares
2 million shares subscribed and paid by the Government at P40 per share, with right of redemption by Corporation
500,000 shares each to Development Bank of the Philippines and Government Service Insurance System
Remaining 2 million shares subscribed by government entities ensuring majority government control maintained
25% payment upon subscription, balance callable by Board
Government representatives hold voting power, each share equals one vote
Transfer or issuance of shares must first offer shares to Government
Schemes impairing government majority control prohibited

Additional funds appropriated from the General Fund as necessary for reissue values, subscriptions, and subsidiaries capital stock

Composed of ex-officio members: Executive Secretary, Secretaries of Finance, Industry, National Defense; Chair of Development Bank; General Manager of GSIS; and 3 presidential appointees
Appointed directors serve staggered terms initially, then 2-year terms
Officials with voting powers per Section 4 are ex-officio members if owning at least 9% of subscribed capital
All Board members enjoy powers and rights for governance
Chairman appointed by the President from among directors

Prescribe and amend by-laws
Appoint and set salaries of officers and employees, may delegate appointment power
Act as incorporators of subsidiaries
Establish internal organizational structure
Constitute committees necessary for effective governance
Submit and publish annual report on Corporation condition by September 15 each year

Power to form and maintain subsidiaries under Corporation law and SEC rules
Subsidiary Boards must have at least five members including one from Corporation’s Board
CEO or representative of Corporation is ex-officio member of each subsidiary Board
Corporation must own at least 51% of subsidiary capital stock
Subsidiaries may have capital subscribed by government, financial institutions, or private sector with government approval
Subsidiaries entitled to benefits and exemptions if 80%+ of capital owned by Corporation and certain government entities
Subsidiaries governed by own Boards must align policies with Corporation’s objectives

Auditor appointed by Chairman of Commission on Audit
Auditor and staff salaries fixed in consultation with Board, costs borne by Corporation
Removal only by Chairman of Commission on Audit
Auditor must be a CPA with at least 10 years of experience
No relative within fourth degree of Consanguinity/Affinity of Board members or Chairman of Commission on Audit may serve

Exempt from all national and local taxes, duties, and fees for seven years from effective date or subsidiary incorporation date
Exempt from tariffs, compensating tax, assessments on importation of machinery, equipment, and supplies
Transactions between Corporation and subsidiaries also exempt
Corporate income tax still applies to subsidiaries
Exemptions are in addition to other existing benefits under laws

Authorized to contract foreign loans, credits, and indebtedness up to $1 billion USD or equivalent
Loans may be negotiated by Corporation President or authorized representative and by the President of the Republic
Republic of the Philippines guarantees payment and performance unconditionally
Loan proceeds and related importations exempt from taxes and restrictions, including withholding tax on interest with conditions
Tax exemptions on foreign loans not limited to Section 10's seven-year exemption period

Positions other than clerical/janitorial deemed confidential or highly technical
Exempt from government wages classification system
Officials and employees entitled to GSIS insurance and benefits
Rehire of retirees subject to applicable laws
Government officers may be detailed to Corporation and receive allowances or emoluments