The Board of Directors of Ayala Corporation approved on February 10 2006, the reclassification of the unissued Preferred shares and redeemed Preferred shares of the Corporation, into 5.8 billion new class of Preferred shares with a par value of P1.00 per share or an aggregate par value of P5,800,000,000.

The new Preferred shares, to be known as Preferred “B shares”, will have the following features :

1. Optional redemption by the Corporation;

2. Issue value, dividend rate and declaration thereof to be determined by the Board of Directors;

3. Cumulative in payment of current dividends as well as any unpaid back dividends, and non-participating in any other further dividends;

4. Non-convertible into common shares;

5. Preference over the holders of common stock in the distribution of corporate assests in the event the dissolution and liquidation of the Corporation and in the payment of the dividend at the rate specified at the time of issuance;

6. Non-voting except in those cases specifically provided by law;

7. No pre-emptive rights to any issue of shares, Common or Preferred; and

8. Reissuable when fully redeemed.

 The Board likewise approved the amendment of Article VII of the Amended Articles of Incorporation of the Corporation to reflect the aforesaid reclassification of preferred shares.

The foregoing acts of the Board will be submitted for the ratification of the stockholders during the annual stockholders’ meeting of the Corporation on 07 April 2006.

The above information was submitted by Ayala managing director for corporate governance and legal affairs Renato O. Marzan in compliance with the disclosure requirements of the Securities and Exchange Commission and the Philippine Stock Exchange.