Attached files
file | filename |
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10-Q - FORM 10-Q - POPULAR, INC. | g20716e10vq.htm |
EX-32.1 - EX-32.1 - POPULAR, INC. | g20716exv32w1.htm |
EX-31.1 - EX-31.1 - POPULAR, INC. | g20716exv31w1.htm |
EX-32.2 - EX-32.2 - POPULAR, INC. | g20716exv32w2.htm |
EX-12.1 - EX-12.1 - POPULAR, INC. | g20716exv12w1.htm |
EX-31.2 - EX-31.2 - POPULAR, INC. | g20716exv31w2.htm |
Exhibit 3.1
RESTATED
CERTIFICATE OF INCORPORATION OF
POPULAR, INC.
CERTIFICATE OF INCORPORATION OF
POPULAR, INC.
Popular, Inc., a corporation organized under the laws of the Commonwealth of Puerto Rico, does
hereby certify pursuant to Article 8.05 of the Puerto Rico General Corporation Law, as follows:
FIRST: The name of the Corporation is Popular, Inc. hereinafter (the Corporation). The
Corporation was originally incorporated under the name Ponce Bancorporation, Inc. which name was
subsequently amended to BanPonce Corporation on February 22, 1985 and to Popular, Inc on April 28,
1997.
SECOND: The original Certificate of Incorporation the Corporation was filed in the Office of
the Secretary of State of the Commonwealth of Puerto Rico on December 20, 1984, Reg. No. 59,124.
THIRD: This Restated Certificate of Incorporation has been duly adopted by the Board of
Directors of the Corporation in accordance with Article 8.05 of the Puerto Rico General Corporation
Law. It only restates and integrates and does not further amend the provisions of the
Corporations Certificate of Incorporation as heretofore amended, and there are no discrepancies
between those provisions and of this Restated Certificate of Incorporation.
FOURTH: Pursuant to Article 8.05 of the Puerto Rico General Corporation Law, the text of the
Certificate of Incorporation of Popular, Inc., as amended to date, is hereby amended and restated
to read in full, as follows:
FIRST: The name of the Corporation is Popular, Inc.
SECOND: The principal office of the Corporation shall be at the Popular Center
Building, 209 Muñoz Rivera Avenue, Hato Rey, Puerto Rico 00918 and its resident
agent at such address is Brunilda Santos de Alvarez.
THIRD: The nature of the business and the purposes of the Corporation are to engage
in, carry out and conduct, for profit, to the extent permitted by law, the following
activities:
1. To purchase, subscribe for, or otherwise acquire and own, hold, use, sell,
assign, transfer, mortgage, pledge, exchange, or otherwise dispose of, and deal in
and with the personal or mixed property of every kind and description, including
shares of stock, bonds, debentures, notes, evidences of indebtedness and other
securities, or other interests in debentures, notes, mortgages, or other contracts
or obligations and any certificates, receipts or other instruments representing
options. rights or warrants to receive, purchase or subscribe for the same or
representing any other rights or interests therein or in any property or
assets of or created or issued by any person, or persons, corporation or
corporations, association or associations, domestic or foreign, including agencies,
instrumentalities, authorities, administrations, corporations or other public
governmental bodies or subdivisions thereof, and to pay therefor, in whole or in
part, in cash or by exchanging therefor, stocks, bonds, or other evidences of
indebtedness or securities of this or other corporation, and while the owner or
holder of any such personal or mixed property, stocks, bonds, debentures, notes,
evidences of indebtedness or other securities, contracts or obligations, to receive,
collect and dispose of the interest, dividends, and income arising from such
property and to possess and exercise in respect thereof all the rights, powers and
privileges of ownership, including all voting powers on any stocks so owned to the
same extent as a natural person might or could do.
2. To purchase or otherwise acquire and own, hold, use, sell, assign,
transfer, exchange and convey, pledge, lease, rent, remodel, improve, reconstruct,
mortgage and otherwise encumber or dispose of real estate whether improved or
unimproved, and any right, privilege or interest of any kind whatsoever therein, and
to manage, operate, own, hold, deal in and dispose of all or any part of such
property and assets whether real, personal or mixed, as may be necessary or
desirable for the successful conduct and operation of such business and to possess
and exercise in respect thereof all the rights, powers and privileges of ownership,
to the same extent as a natural person might or could do; provided, however, that
the Corporation shall not he authorized, as respects real property located within
the Commonwealth of Puerto Rico, to conduct the business of buying and selling real
estate, and shall in all other respects be subject to the provisions of Section 14
of Article VI of the Constitution of the Commonwealth of Puerto Rico.
3. To aid either by loans or by guaranty of securities or in any other manner,
any corporation, domestic or foreign, any shares of stock, or any bonds, debentures,
evidences of indebtedness or other securities whereof are held by this corporation
or in which it shall have any interest, and to do any acts designed to protect,
preserve, improve, or enhance the value of any property at any time held or
controlled by this Corporation or in which it at the same time may be interested.
4. To endorse or guarantee the payment of principal, interest, or dividends on
securities and to guarantee the performance of sinking funds or other obligations
of, and to guarantee in any way permitted by law the performance of any contracts or
obligations of every kind and description with or of any person, firm, association,
corporation or of the government or subdivisions thereof.
5. To lend its surplus or uninvested funds from time to time to such extent,
to such persons, firms, associations, corporations or governmental bodies or
subdivisions, agencies or instrumentalities thereof, and on such terms and on such
security, if any, as the Board of Directors of the Corporation may determine.
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6. To borrow money for any of the purposes of the Corporation, from time to
time, and without limit as to amount; from time to time, to issue and sell its own
securities in such amounts, on such terms and conditions, for such purposes and for
such consideration, as may now be or hereafter shall be permitted by the laws of the
Commonwealth of Puerto Rico; and to secure the same by mortgage upon, or the pledge,
or the conveyance or assignment in trust of, the whole or any part of the
properties, assets, business and good will of the Corporation then owned or
thereafter acquired.
7. To merge into or consolidate with, and to enter into agreements and
cooperative relations, not in contravention of law, with any person, firm,
association or corporation; to purchase or otherwise acquire and to hold, cancel,
reissue, sell, exchange, transfer or otherwise deal in its own shares of capital
stock or other securities from time to time to the extent and upon such terms as
shall be permitted by the laws of the Commonwealth of Puerto Rico; provided,
however, that shares of its own capital stock so purchased or held shall not be
directly or indirectly voted, nor shall they be entitled to the payment of dividends
during such period or periods as they shall be held by the Corporation.
8. To manufacture, process, purchase, sell and generally to trade and deal in
and with goods, wares and merchandise of every kind, nature and description, and to
engage and participate in any mercantile, industrial or trading business of any kind
or character whatsoever.
9. To apply for, register, obtain, purchase, lease, take licenses in respect
of or otherwise acquire, and to hold, own, use, operate, develop, enjoy, turn to
account, grant licenses and immunities in respect of, manufacture under and to
introduce, sell, assign, mortgage, pledge, or otherwise dispose of, and, in any
manner deal with and contract with reference to:
(a) inventions, devices, formulas, processes and any improvements and
modifications thereof,
(b) letters patent, patent rights, patented processes, copyrights, designs,
and similar rights, trade-marks, trade symbols and other indications of origin and
ownership granted by or recognized under the laws of the Commonwealth of Puerto
Rico, the Government of the United States of America or of any state or subdivision
thereof, or of any foreign country or subdivision thereof, and all rights connected
therewith or appertaining thereunto;
(c) franchises, licences, grants and concessions.
10. To acquire by purchase, exchange or otherwise, all or any part of, or any
interest in, the properties, assets, business and good will of any one or more
persons, firms, associations, or corporations heretofore or hereafter engaged in any
business for which a corporation may now or hereafter be organized under the
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laws of the Commonwealth of Puerto Rico; to pay for the same in cash, property
or its own or other securities; to hold, operate, reorganize, liquidate, sell or in
any manner dispose of the whole or any part thereof; and in connection therewith, to
assume or guarantee performance of any liabilities, obligations or contracts of such
persons, firms, associations or corporations, and to conduct the whole or any part
of any business thus acquired.
11. To draw, make, accept, endorse, discount, execute, and issue promissory
notes, drafts, bills of exchange, warrants, bonds, debentures, and other negotiable
or transferable instruments and evidences of indebtedness whether secured by
mortgage or otherwise, as well as to secure the same by mortgage or otherwise, so
far as may be permitted by the laws of the Commonwealth of Puerto Rico.
12. To the extent permitted by law, and subject to obtaining the license
required under the provisions of Section 9.060 of the Insurance Code of Puerto Rico
(26 LPRA 906), to act as agent for insurance companies in soliciting and receiving
applications for property, marine and transportation, vehicle, casualty surety and
title insurance, and all other kinds of insurance except life and disability
insurance, the collection of premiums, and doing such other business as may be
delegated to agents by such companies, and to conduct a general insurance agency
business.
13. To organize or cause to be organized under the laws of the Commonwealth of
Puerto Rico, or of any other State of the United States of America, or of the
District of Columbia, or of any territory, dependency, colony or possession of the
United States of America, or of any foreign country, a corporation or corporations
for the purpose of transacting, promoting or carrying on any or all of the objects
or purposes for which the corporation is organized, and to dissolve, wind up,
liquidate, merge or consolidate any such corporation or corporations or to cause the
same to be dissolved, wound up, liquidated, merged or consolidated.
14. To conduct its business in any and all of its branches and maintain
offices both within and without the Commonwealth of Puerto Rico, in any and all
States of the United States of America, in the District of Columbia, in any or all
territories, dependencies, colonies or possessions of the United States of America,
and in foreign countries.
15. To such extent as a corporation organized under the laws of the
Commonwealth of Puerto Rico may now or hereafter lawfully do, to do, either as
principal or agent and either alone or through subsidiaries or in connection with
other persons, firms, associations or corporations, all and everything necessary,
suitable, convenient or proper for, or in connection with or incident to, the
accomplishment of any of the purposes or the attainment of any one or more of the
objects herein enumerated, or designed directly or indirectly to promote the
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interests of the Corporation or to enhance the value of its properties; and in
general to do any and all things and exercise any and all powers, rights, and
privileges which a corporation may now or hereafter be organized to do or to
exercise under the laws of the Commonwealth of Puerto Rico.
The foregoing provisions of this Article THIRD shall be construed both as purposes and powers
and each as an independent purpose and power. The foregoing enumeration of specific purposes and
powers shall not be held to limit or restrict in any manner the purposes and powers of the
Corporation and the purposes and powers herein specified shall, except when otherwise provided in
this Article THIRD, be in no way limited or restricted by reference to, or interference from, the
terms of any provisions of this or any other Article of this Certificate of Incorporation.
FOURTH: The Corporation is to have perpetual existence.
FIFTH: The minimum amount of capital with which the Corporation shall commence business shall
be $1,000.00.
The total number of shares of all classes of capital stock which the Corporation shall have
authority to issue, upon resolutions approved by the Board of Directors from time to time, is seven
hundred thirty million shares (730,000,000), of which seven hundred million shares (700,000,000)
shall be shares of Common Stock of the par value of $0.01 per share (hereinafter called Common
Stock), and thirty million (30,000,000) shall be shares of Preferred Stock without par value
(hereinafter called Preferred Stock).
The amount of the authorized capital stock of any class or classes of stock may be increased
or decreased by the affirmative vote of the holders of a majority of the stock of the Corporation
entitled to vote.
The designations and the powers, preferences and rights, and the qualifications, limitations
or restrictions thereof, of the Preferred Stock shall be as follows:
(1) The Board of Directors is expressly authorized at any time, and from time to time, to
provide for the issuance of shares of Preferred Stock in one or more series, and with such voting
powers, full or limited but not to exceed one vote per share, or without voting powers, and with
such designations, preferences, and relative participating, optional or other special rights, and
qualifications, limitations or restrictions thereof, as shall be expressed in the resolution or
resolutions providing for the issue thereof adopted by the Board of Directors and as are not
otherwise expressed in this Certificate of Incorporation or any amendment thereto, including (but
without limiting the generality of the foregoing) the following:
(a) | the designation of such series; | ||
(b) | the purchase price that the Corporation shall receive for each share of such series: |
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(c) | the dividend rate of such series, the conditions and dates upon which such dividends shall be payable, the preference or relation that such dividends shall bear to the dividends payable on any other class or classes or on any other series of any class or classes of capital stock of the Corporation, and whether such dividends shall be cumulative or non-cumulative; | ||
(d) | whether the shares of such series shall be subject to redemption by the Corporation, and, if made subject to such redemption, the times, prices and other terms and conditions of such redemption; | ||
(e) | the terms and amounts of any sinking fund provided for the purchase or redemption of the shares of such series; | ||
(f) | whether the shares of such series shall be convertible into or exchangeable for shares of any other class of classes or of any other series of any class or classes of capital stock of the Corporation, and, if provision be made for conversion or exchange, the times, prices, rates, adjustments, and other terms and conditions of such conversion or exchange; | ||
(g) | the extent, if any, to which the holders of the shares of such series shall he entitled to vote as a class or otherwise with respect to the election of directors or otherwise; | ||
(h) | the restrictions and conditions, if any, upon the reissue of any additional Preferred Stock ranking on a parity with or prior to such shares as to dividends or upon dissolution; | ||
(i) | the rights of the holders of the shares of such series upon the dissolution of or upon the distribution of assets of, the Corporation, which rights may be different in the case of a voluntary dissolution than in the case of an involuntary dissolution. |
(2) Except as otherwise required by law and except for such voting powers with respect to the
election of directors or other matters as may be stated in the resolutions of the Board of
Directors creating any series of Preferred Stock, the holders of any such series shall have no
voting power whatsoever.
(3) Pursuant to the authority conferred by this Article FIFTH, the Board of Directors or a
duly appointed committee thereof, has created the following series of Preferred Stock, with the
number of shares included in each such series, and the designation, powers, preferences and rights,
qualifications, limitations or restrictions thereof fixed as stated and expressed with respect to
each such series in the respective appendix attached hereto and incorporated herein by reference
and made a part of this Restated Certificate of Incorporation for all purposes:
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Annex A | 6.375% Non-cumulative Monthly Income Preferred Stock, Series A | |||
Annex B | 8.25% Non-cumulative Monthly Income Preferred Stock, Series B |
SIXTH: The Board of Directors shall have the power, whenever it may deem necessary to so act,
from time to time, to authorize the issue of new shares of stock. The common stockholders of record
on any date designated by resolution of the Board of Directors shall preference for the
subscription for common stock on a pro rata basis unless the Board of Directors unanimously
resolves otherwise, but the stockholders shall have no preference to subscribe therefor in the
event of new issues of shares of stock which may be authorized pursuant to any Dividend
Reinvestment and Stock Purchase Plan of the Corporation or which may be authorized in order to
exchange such new shares of stock for property which the Board of Directors may consider convenient
or necessary for the Corporation to acquire, nor shall the stockholders have any right of
preference therefore in the event of new issues of stock in payment of services rendered to the
Corporation, or of shares of stock to be issued for sale to officers or employees, on the basis of
options, as an incentive either to commence or to continue rendering services for the Corporation.
SEVENTH: The name and address of each incorporator is:
Name | Address | |||
1.
|
Socorro Santiago | 1395 San Alfonso Avenue Urb. Altamira Rio Piedras, Puerto Rico |
||
2.
|
Annie Serrano | DH-27 Llanuras Street Rio Hondo IV Bayamón, Puerto Rico |
||
3.
|
Julie Vázquez | 31st Street, AE-22 Villas de Loiza Canóvanas, Puerto Rico |
EIGHTH: (1) The Board shall be composed of such number of directors as are established from
time to time by the Board of Directors and approved by an absolute majority of directors; provided,
however, that the total number of directors shall always be not less than nine (9) nor more than
twenty-five (25). The Board of Directors shall be divided into three classes as nearly equal in
number as possible, with each class having at least three members and with the term of office of
one class expiring each year. Each director shall serve for a term ending on the date of the third
annual meeting of stockholders following the annual meeting at which such director was elected;
provided, however, that each initial director in Class 1 shall hold office until the annual meeting
of stockholders in 1991; each initial director in Class 2 shall hold office until the annual
meeting of stockholders in 1992; and each initial director in Class 3 shall hold office until the
annual meeting of stockholders in 1993. Except as provided in this Article Eighth, a director shall
be elected by the affirmative vote of a majority of the shares of the class of stock represented at
the annual meeting of stockholders for which the director stands for election and entitled to elect
such director.
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(2) Any vacancies in the Board of Directors, by reason of an increase in the number of
directors or otherwise, shall be filled solely by the Board of Directors, by majority vote of the
directors then in office, though less than a quorum, but any such director so elected shall hold
office only until the next succeeding annual meeting of stockholders. At such annual meeting, such
director shall be elected and qualified in the class in which such director is assigned to hold
office for the term or remainder of the term of such class. Directors shall continue in office
until others are chosen and qualified in their stead. When the number of directors is changed, any
newly created directorships or any decrease in directorships shall be so assigned among the classes
by a majority of the directors then in office, though less than a quorum, so as to make all classes
as nearly equal in number as possible. To the extent of any inequality within the limits of the
foregoing, the class of directorships shall be the class or classes then having the last date or
the later dates for the expiration of its or their terms. No decrease in the number of directors
shall shorten the term of any incumbent director.
(3) Any director may be removed from office as a director but only for cause by the
affirmative vote of the holders of two-third (2/3) of the combined voting power of the then
outstanding shares of stock of the Corporation entitled to vote generally in the election of
directors, voting together as a single class.
The Board of Directors may, by resolution passed by a majority of the whole board, designate
one or more committees, each committee to consist of two or more of the directors of the
Corporation, which to the extent provided in the resolution or in the by-laws of the Corporation,
shall have and may exercise the powers of the Board of Directors (other than the power to remove or
elect officers) in the management of the business and affairs of the Corporation, and may authorize
the seal of the Corporation to be affixed to all papers which may require it. Such committee or
committees shall have such name or names as may be stated in the by-laws of the Corporation or as
may be determined from time to time by resolution adopted by the Board of Directors.
The Board of Directors may from time to time, in the manner provided for in the by-laws of the
Corporation, hold its regular or extraordinary meetings outside of Puerto Rico.
NINTH: The Board of Directors may, upon resolution approved by an absolute majority thereof
from time to time (after adoption of the original by-laws of the Corporation) adopt, amend or
repeal the by-laws of the Corporation; provided, that any by-laws adopted, amended or repealed by
the Board of Directors may be amended or repealed, and any by-laws may be adopted, by the
stockholders of the Corporation.
TENTH: The affirmative vote of the holders of not less than seventy-five percent (75%) of
the total number of outstanding shares of the Corporation shall be required (i) to amend this
Article TENTH, (ii) to approve any Business Combination for which stockholder approval is required
by applicable law or (iii) to approve the voluntary dissolution of the Corporation, notwithstanding
that applicable law would otherwise permit any of the above with the approval of fewer shares or
without the approval of any shares.
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For purposes of this Article TENTH, the term Business Combination shall mean:
(a) | a merger, reorganization or consolidation in which the Corporation is a constituent corporation; or | ||
(b) | the sale, lease, or hypothecation of substantially all the assets of the Corporation. |
Other than with respect to this Article TENTH, the affirmative vote of the holders of not less
than two-thirds of the total number of outstanding shares of the Corporation shall be required to
amend these Articles of Incorporation, notwithstanding, that applicable law would otherwise permit
such amendment with the approval of fewer shares or without the approval of any shares.
ELEVENTH: (1) The Corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigate (other than an action by or in the right of
the Corporation) by reason of the fact that he is or was a director, officer, employee or agent of
the Corporation, or is or was serving at the written request of the Corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneyss fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed
to the best interest of the Corporation, and, with respect to any criminal action or proceeding,
had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person did not act in good faith
and in a manner which he reasonably believed to be in or not opposed to the best interests of the
Corporation and, with respect to any criminal action or proceeding, had reasonable cause to believe
that his conduct was unlawful.
(2) The Corporation shall indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action or suit by or in the right of the
Corporation to procure a judgment in its favor by reason of the fact that he is or was a director,
officer, employee or agent of the Corporation, or is or was serving at the written request of the
Corporation as a director, officer, employee or agent of another Corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneyss fees) actually and
reasonably incurred by him in connection with the defense or settlement of such action or suit if
he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the Corporation, except that no indemnification shall be made in respect of any claim,
issue or matter as to which such person shall have been adjudged to be liable for negligence or
misconduct in the performance of his duty to the Corporation unless and only to the extent that the
court in which such action or-suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case, such person is fairly
and reasonably entitled to indemnity for such expenses which such court shall deem proper.
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(3) To the extent that a director, officer, employee or agent of the Corporation has been
successful on the merits or otherwise in defense of any action, suit or proceeding referred to in
paragraph 1 or 2 of this Article ELEVENTH, or in defense of any claim, issue or matter therein, he
shall be indemnified against expenses (including attorneys fees) actually and reasonably incurred
by him in connection therewith.
(4) Any indemnification under paragraph 1 or 2 of this Article ELEVENTH (unless ordered by a
court) shall be made by the Corporation only as authorized in the specific ease upon a
determination that indemnification of the director, officer, employee or agent is proper in the
circumstances because he has met the applicable standard of conduct set forth therein. Such
determination shall be made (a) by the Board of Directors by a majority vote of a quorum consisting
of directors who were not parties to such action, suit or proceeding, or (b) if such a quorum is
not obtainable, or, even if obtainable a quorum of disinterested directors so directs, by
independent legal counsel in a written opinion, or (c) by the stockholders.
(5) Expenses incurred in defending a civil or criminal action, suit or proceeding may be paid
by the Corporation in advance of the final disposition of such action, suit or proceeding as
authorized by the Board of Directors in the specific case upon receipt of an undertaking by or on
behalf of the director, officer, employee or agent to repay such amount unless it shall ultimately
be determined that he is entitled to he indemnified by the Corporation as authorized in this
Article ELEVENTH.
(6) The indemnification provided by this Article ELEVENTH shall not be deemed exclusive of any
other rights to which those seeking indemnification may be entitled under any statute, by-law,
agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his
official capacity as to action in another capacity while holding such office, and shall continue as
to a person who has ceased to be a director, officer, employee or agent and shall inure to the
benefit of the heirs, executors and administrators of such a person.
(7) By action of its Board of Directors, notwithstanding any interest of the directors in the
action, the Corporation may purchase and maintain insurance, in such amounts as the Board of
Directors deems appropriate, on behalf of any person who is or was a director, officer, employee or
agent of the Corporation, or is or was serving at the written request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against any liability asserted against him and incurred by him in any such
capacity, or arising out of this status as such, whether or not the Corporation would have the
power or would be required to indemnify him against such liability under the provisions of this
Article ELEVENTH or of the General Corporation Law of the Commonwealth of Puerto Rico or of any
other State of the United States or foreign country as may be applicable.
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IN WITNESS WHEREOF, the said Popular, Inc., has caused its corporate seal to be hereunto
affixed and this Certificate to be signed by Jorge A. Junquera, its Senior Executive Vice President
and Chief Financial Officer, and Brunilda Santos de Alvarez, its Assistant Secretary, this 30th day
of September, 2009.
/s/ Jorge A. Junquera | ||||
Senior Executive Vice President and | ||||
Chief Financial Officer | ||||
/s/ Brunilda Santos de Alvarez | ||||
Assistant Secretary | ||||
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ANNEX A
CERTIFICATE OF DESIGNATION
OF THE BOARD OF DIRECTORS OF POPULAR, INC.
6.375% NONCUMULATIVE MONTHLY INCOME PREFERRED STOCK, 2003 SERIES A
(Pursuant to Article 5.01 of the General Corporation Law of the Commonwealth of Puerto Rico)
RESOLVED, that pursuant to the authority expressly granted to and vested in the Board of
Directors of the Corporation and delegated to the Funding Committee in accordance with the
provisions of its Certificate of Incorporation, a series of Serial Preferred Stock of the
Corporation be and it hereby is created.
FURTHER RESOLVED, that the Funding Committee designated by the Board of Directors, acting
through Richard L. Carrión, David H. Chafey, Jr. and Jorge A. Junquera, has determined that the
preferences and relative, participating, optional or other special rights of the shares of such
series of Preferred Stock, and the qualifications, limitations or restrictions thereof, as stated
and expressed herein, are under the circumstances prevailing on the date hereof fair and equitable
to all the existing shareholders of the Corporation.
FURTHER RESOLVED, that the designation and amount of such series and the voting powers,
preferences and relative, participating, optional or other special rights of the shares of such
series of Preferred Stock, and the qualifications, limitations or restrictions thereof are as
follows:
A. Designation and Amount
The shares of such series of Preferred Stock shall be designated as the 6.375% Noncumulative
Monthly Income Preferred Stock, 2003 Series A (hereinafter called the 2003 Series A Preferred
Stock), and the number of authorized shares constituting such series shall be 7,475,000.
B. Dividends
1. Holders of record of the 2003 Series A Preferred Stock (Holders) will be entitled to
receive, when, as and if declared by the Board of Directors of the Corporation or an authorized
committee thereof (the Board of Directors), out of funds of the Corporation legally available
therefor, noncumulative cash dividends at the annual rate per share of 6.375% of their liquidation
preferences, or $0.1328125 per share per month, with each aggregate payment made to each record
holder of the 2003 Series A Preferred Stock being rounded to the next lowest cent.
A-1
2. Dividends on the 2003 Series A Preferred Stock will accrue from their date of original
issuance and will be payable (when, as and if declared by the Board of Directors of the Corporation
out of funds of the Corporation legally available therefor) monthly in arrears in United States
dollars commencing on March 31, 2003, and on the last day of each calendar month of each year
thereafter to the holders of record of the 2003 Series A Preferred Stock as they appear on the
books of the Corporation on the fifteenth day of the month for which the dividends are payable,
unless the Board of Directors or a committee thereof shall establish a different record date. In
the case of the dividend payable on March 31, 2003, such dividend shall cover the period from the
date of issuance of the 2003 Series A Preferred Stock to March 31, 2003. In the event that any
date on which dividends are payable is not a Business Day (as defined below), then payment of the
dividend payable on such date will be made on the next succeeding Business Day without any interest
or other payment in respect of any such delay, except that, if such Business Day is in the next
succeeding calendar year, such payment will be made on the Business Day immediately preceding the
relevant date of payment, in each case with the same force and effect as if made on such date. A
Business Day is a day other than a Saturday, Sunday or a general bank holiday in San Juan, Puerto
Rico or New York, New York.
3. Dividends on the 2003 Series A Preferred Stock will be noncumulative. The Corporation is
not obligated or required to declare or pay dividends on the 2003 Series A Preferred Stock, even if
it has funds available for the payment of such dividends. If the Board of Directors of the
Corporation or a committee thereof does not declare a dividend payable on a dividend payment date
in respect of the 2003 Series A Preferred Stock, then the holders of such 2003 Series A Preferred
Stock shall have no right to receive a dividend in respect of the monthly dividend period ending on
such dividend payment date and the Company will have no obligation to pay the dividend accrued for
such monthly dividend period or to pay any interest thereon, whether or not dividends on such 2003
Series A Preferred Stock are declared for any future monthly dividend period.
4. The amount of dividends payable for any monthly dividend period will be computed on the
basis of twelve 30-day months and a 360-day year. The amount of dividends payable for any period
shorter than a full monthly dividend period will be computed on the basis of the actual number of
days elapsed in such period.
5. Subject to any applicable fiscal or other laws and regulations, each dividend payment will
be made by dollar check drawn on a bank in New York, New York or San Juan, Puerto Rico and mailed
to the record holder thereof at such holders address as it appears on the register for such 2003
Series A Preferred Stock.
6. So long as any shares of the 2003 Series A Preferred Stock remain outstanding, the
Corporation shall not declare, set apart or pay any dividend or make any other distribution of
assets (other than dividends paid or other distributions made in stock of the Corporation ranking
junior to the 2003 Series A Preferred Stock as to the payment of dividends and the distribution of
assets upon liquidation, dissolution or winding up of the Corporation) on, or redeem, purchase, set
apart or otherwise acquire (except upon conversion or exchange for stock of the Corporation ranking
junior to the 2003 Series A Preferred Stock as to the payment of
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dividends and the distribution of assets upon liquidation, dissolution or winding up of the
Corporation), shares of common stock or of any other class of stock of the Corporation ranking
junior to the 2003 Series A Preferred Stock as to the payment of dividends or the distribution of
assets upon liquidation, dissolution or winding up of the Corporation, unless (i) all accrued and
unpaid dividends on the 2003 Series A Preferred Stock for the twelve monthly dividend periods
ending on the immediately preceding dividend payment date shall have been paid or are paid
contemporaneously, (ii) the full monthly dividend on the 2003 Series A Preferred Stock for the then
current month has been or is contemporaneously declared and paid or declared and set apart for
payment, and (iii) the Corporation has not defaulted in the payment of the redemption price of
any shares of 2003 Series A Preferred Stock called for redemption.
7. When dividends are not paid in full on the 2003 Series A Preferred Stock and any other
shares of stock of the Corporation ranking on a parity as to the payment of dividends with the 2003
Series A Preferred Stock, all dividends declared upon the 2003 Series A Preferred Stock and any
such other shares of stock of the Corporation will be declared pro rata so that the amount of
dividends declared per share on the 2003 Series A Preferred Stock and any such other shares of
stock will in all cases bear to each other the same ratio that the accrued dividends per share on
the 2003 Series A Preferred Stock for the then current dividend period bears to the accrued
dividends per share on such other shares of stock (which shall not include any accrual in respect
of unpaid dividends for prior dividend periods if such preferred stock does not have a cumulative
dividend).
8. Holders of record of the 2003 Series A Preferred Stock will not be entitled to any
dividend, whether payable in cash, property or stock, in excess of the dividends provided for
herein on the shares of 2003 Series A Preferred Stock.
C. Conversion
1. The 2003 Series A Preferred Stock will not be convertible into or exchangeable for any
other securities of the Corporation.
D. Redemption at the Option of the Corporation
1. The shares of the 2003 Series A Preferred Stock are not redeemable prior to March 31, 2008.
On and after that date, the shares of the 2003 Series A Preferred Stock will be redeemable in
whole or in part from time to time at the option of the Corporation, with the consent of the Board
of Governors of the Federal Reserve System (the Federal Reserve Board) to the extent required by
Section D. 8 below, upon not less than thirty nor more than sixty days notice by mail, at the
redemption prices set forth below, during the periods set forth below, plus accrued and unpaid
dividends from the dividend payment date immediately preceding the redemption date (without any
cumulation for unpaid dividends for prior dividend periods on the 2003 Series A Preferred Stock) to
the date fixed for redemption.
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Period | Redemption Price | |||
March 31, 2008 to March 30, 2009 |
$ | 25.50 | ||
March 31, 2009 to March 30, 2010 |
$ | 25.25 | ||
March 31, 2010 and thereafter |
$ | 25.00 |
2. In the event that less than all of the outstanding shares of the 2003 Series A Preferred
Stock are to be redeemed in any redemption at the option of the Corporation, the total number of
shares to be redeemed in such redemption shall be determined by the Board of Directors and the
shares to be redeemed shall be allocated pro rata or by lot as may be determined by the Board of
Directors or by such other method as the Board of Directors may approve and deem equitable,
including any method to conform to any rule or regulation of any national or regional stock
exchange or automated quotation system upon which the shares of the 2003 Series A Preferred Stock
may at the time be listed or eligible for quotation.
3. Notice of any proposed redemption shall be given by the Corporation by mailing a copy of
such notice to the holders of record of the shares of 2003 Series A Preferred Stock to be redeemed,
at their address of record, not more than sixty nor less than thirty days prior to the redemption
date. The notice of redemption to each holder of shares of 2003 Series A Preferred Stock shall
specify the number of shares of 2003 Series A Preferred Stock to be redeemed, the redemption date
and the redemption price payable to such holder upon redemption, and shall state that from and
after said date dividends thereon will cease to accrue. If less than all the shares owned by a
holder are then to be redeemed at the option of the Corporation, the notice shall also specify the
number of shares of 2003 Series A Preferred Stock which are to be redeemed and the numbers of the
certificates representing such shares. Any notice which is mailed as herein provided shall be
conclusively presumed to have been duly given, whether or not the stockholder receives such notice;
and failure duly to give such notice by mail, or any defect in such notice, to the holders of any
stock designated for redemption shall not affect the validity of the proceedings for the redemption
of any other shares of 2003 Series A Preferred Stock.
4. Notice having been mailed as aforesaid, from and after the redemption date (unless the
Corporation shall default in the payment of the redemption price for any shares to be redeemed),
all dividends on the shares of 2003 Series A Preferred Stock called for redemption shall cease to
accrue and all rights of the holders of such shares as stockholders of the Corporation by reason of
the ownership of such shares (except the right to receive the redemption price, on presentation and
surrender of the respective certificates representing the redeemed shares), shall cease on the
redemption date, and such shares shall not after the redemption date be deemed to be outstanding.
In case less than all the shares represented by any such certificate are redeemed, a new
certificate shall be issued without cost to the holder thereof representing the unredeemed shares.
5. At its option, the Corporation may, on or prior to the redemption date, irrevocably deposit
the aggregate amount payable upon redemption of the shares of the 2003 Series A Preferred Stock to
be redeemed with a bank or trust company designated by the Board of Directors (which may include a
banking subsidiary of the Corporation) having its principal office in New York, New York, San Juan,
Puerto Rico, or any other city in which the Corporation shall at that time maintain a transfer
agency with respect to its capital stock, and having a combined capital and surplus (as shown by
its latest published statement) of at least
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$50,000,000 (hereinafter referred to as the Depositary), to be held in trust by the Depositary
for payment to the holders of the shares of the 2003 Series A Preferred Stock then to be redeemed.
If such deposit is made and the funds so deposited are made immediately available to the holders of
the shares of the 2003 Series A Preferred Stock to be redeemed, the Corporation shall thereupon be
released and discharged (subject to the provisions of Section D.6) from any obligation to make
payment of the amount payable upon redemption of the shares of the 2003 Series A Preferred Stock to
be redeemed, and the holders of such shares shall look only to the Depositary for such payment.
6. Any funds remaining unclaimed at the end of two years from and after the redemption date in
respect of which such funds were deposited shall be returned to the Corporation forthwith and
thereafter the holders of shares of the 2003 Series A Preferred Stock called for redemption with
respect to which such funds were deposited shall look only to the Corporation for the payment of
the redemption price thereof. Any interest accrued on any funds deposited with the Depositary
shall belong to the Corporation and shall be paid to it from time to time on demand.
7. Any shares of the 2003 Series A Preferred Stock which shall at any time have been redeemed
shall, after such redemption, have the status of authorized but unissued shares of Preferred Stock,
without designation as to series, until such shares are once more designated as part of a
particular series by the Board of Directors.
8. To the extent required to have the 2003 Series A Preferred Stock treated as Tier 1 capital
for bank regulatory purposes or otherwise required by applicable regulations of the Federal Reserve
Board, the shares of 2003 Series A Preferred Stock may not be redeemed by the Corporation without
the prior consent of the Federal Reserve Board.
E. Liquidation Preference
1. Upon any voluntary or involuntary liquidation, dissolution, or winding up of the
Corporation, the then record holders of shares of 2003 Series A Preferred Stock will be entitled to
receive, out of the assets of the Corporation available for distribution to shareholders, before
any distribution is made to holders of common stock or any other equity securities of the
Corporation ranking junior upon liquidation to the 2003 Series A Preferred Stock, distributions
upon liquidation in the amount of $25 per share plus an amount equal to any accrued and unpaid
dividends (without any cumulation for unpaid dividends for prior dividend periods on the 2003
Series A Preferred Stock) for the current monthly dividend period to the date of payment. Such
amount shall be paid to the holders of the 2003 Series A Preferred Stock prior to any payment or
distribution to the holders of the common stock of the Corporation or of any other class of stock
or series thereof of the Corporation ranking junior to the 2003 Series A Preferred Stock in respect
of dividends or as to the distribution of assets upon liquidation.
2. If upon any voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, the amounts payable with respect to the 2003 Series A Preferred Stock and any other
shares of stock of the Corporation ranking as to any such distribution on a parity with the 2003
Series A Preferred Stock are not paid in full, the holders of the 2003 Series A Preferred
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Stock and of such other shares will share ratably in any such distribution of assets of the
Corporation in proportion to the full liquidation preferences to which each is entitled. After
payment of the full amount of the liquidation preference to which they would otherwise be entitled,
the holders of shares of 2003 Series A Preferred Stock will not be entitled to any further
participation in any distribution of assets of the Corporation.
3. Neither the consolidation or merger of the Corporation with any other corporation, nor any
sale, lease or conveyance of all or any part of the property or business of the Corporation, shall
be deemed to be a liquidation, dissolution, or winding up of the Corporation.
F. Voting Rights
1. Except as described in this Section F, or except as required by applicable law, holders of
the 2003 Series A Preferred Stock will not be entitled to receive notice of or attend or vote at
any meeting of stockholders of the Corporation on any matter.
2. If the Corporation does not pay dividends in full on the 2003 Series A Preferred Stock for
eighteen monthly dividend periods, whether consecutive or not, the holders of outstanding shares of
the 2003 Series A Preferred Stock, together with the holders of any other shares of stock of the
Corporation having the right to vote for the election of directors solely in the event of any
failure to pay dividends, acting as a single class without regard to series, will be entitled, by
written notice to the Corporation given by the holders of a majority in liquidation preference of
such shares or by ordinary resolution passed by the holders of a majority in liquidation preference
of such shares present in person or by proxy at a separate general meeting of such holders convened
for the purpose, to appoint two additional members of the Board of Directors of the Corporation, to
remove any such member from office and to appoint another person in place of such member. Not later
than 30 days after such entitlement arises, if written notice by a majority of the holders of such
shares has not been given as provided for in the preceding sentence, the Board of Directors or an
authorized committee thereof will convene a separate general meeting for the above purpose. If the
Board of Directors or such authorized committee fails to convene such meeting within such 30-day
period, the holders of 10% of the outstanding shares of the 2003 Series A Preferred Stock and any
such other stock will be entitled to convene such meeting. The provisions of the Restated
Certificate of Incorporation and By-laws of the Corporation relating to the convening and conduct
of general meetings of stockholders will apply with respect to any such separate general meeting.
Any member of the Board of Directors so appointed shall vacate office if, following the event which
gave rise to such appointment, the Corporation shall have resumed the payment of dividends in full
on the 2003 Series A Preferred Stock and each such other series of stock for twelve consecutive
monthly dividend periods. Thereafter, the right to appoint two directors as described above would
only arise if the Corporation does not pay dividends in full on the 2003 Series A Preferred Stock
for eighteen additional monthly dividend periods.
3. Any amendment, alteration or repeal of the terms of the 2003 Series A Preferred Stock by
way of amendment of the Corporations Restated Certificate of Incorporation whether by merger or
otherwise (including, without limitation, the authorization or issuance of any shares of the
Corporation ranking, as to dividend rights or rights on liquidation, winding up
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and dissolution, senior to the 2003 Series A Preferred Stock) which would adversely affect the
powers, preferences or rights of the 2003 Series A Preferred Stock shall not be effective (unless
otherwise required by applicable law) except with the consent in writing of the holders of at least
two thirds of the outstanding aggregate liquidation preference of the outstanding shares of the
2003 Series A Preferred Stock or with the sanction of a special resolution passed at a separate
general meeting by the holders of at least two thirds of the aggregate liquidation preference of
the outstanding shares of the 2003 Series A Preferred Stock. Notwithstanding the foregoing, the
Corporation may, without the consent or sanction of the holders of the 2003 Series A Preferred
Stock, authorize and issue shares of the Corporation ranking, as to dividend rights and rights on
liquidation, winding up and dissolution, on a parity with or junior to the 2003 Series A Preferred
Stock.
The foregoing voting provisions shall not apply if, at or prior to the time when the act with
respect to which such vote would otherwise be required shall be effected, all outstanding shares of
the 2003 Series A Preferred Stock shall have been redeemed or called for redemption upon proper
notice and sufficient funds shall have been deposited in trust to effect such redemption.
4. No vote of the holders of the 2003 Series A Preferred Stock will be required for the
Corporation to redeem or purchase and cancel the 2003 Series A Preferred Stock in accordance with
the Restated Certificate of Incorporation of the Corporation.
5. The Corporation will cause a notice of any meeting at which holders of any series of
Preferred Stock are entitled to vote to be mailed to each record holder of such series of Preferred
Stock. Each such notice will include a statement setting forth (i) the date of such meeting, (ii)
a description of any resolution to be proposed for adoption at such meeting on which such holders
are entitled to vote and (iii) instructions for deliveries of proxies.
6. Except as set forth in this Section F, holders of 2003 Series A Preferred Stock shall have
no special voting rights and their consent shall not be required (except to the extent they are
entitled to vote as set forth herein) for taking any corporate action.
G. Rank
The 2003 Series A Preferred Stock will, with respect to dividend rights and rights on
liquidation, winding up and dissolution, rank (i) senior to all classes of common stock of the
Corporation, to the Corporations Series A Participating Cumulative Preferred Stock and to all
other equity securities issued by the Corporation the terms of which specifically provide that such
equity securities will rank junior to the 2003 Series A Preferred Stock (or to a number of series
of Preferred Stock which includes the 2003 Series A Preferred Stock); (ii) on a parity with all
other equity securities issued by the Corporation the terms of which specifically provide that such
equity securities will rank on a parity with the 2003 Series A Preferred Stock (or with a number of
series of Preferred Stock which includes the 2003 Series A Preferred Stock); and (iii) subject to
the provisions of Section F.3 hereof, junior to all equity securities issued by the Corporation the
terms of which specifically provide that such equity securities will rank senior to the 2003 Series
A Preferred Stock (or to a number of series of Preferred Stock which includes
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the 2003 Series A Preferred Stock). For this purpose, the term equity securities does not
include debt securities convertible into or exchangeable for equity securities.
H. Form of Certificate for 2003 Series A Preferred Stock; Transfer and Registration
1. The 2003 Series A Preferred Stock shall be issued in registered form only. The Corporation
may treat the record holder of a share of 2003 Series A Preferred Stock, including the Depository
Trust Company and its nominee and any other holder that holds such share on behalf of any other
person, as such record holder appears on the books of the registrar for the 2003 Series A Preferred
Stock, as the sole owner of such share for all purposes.
2. The transfer of a share of 2003 Series A Preferred Stock may be registered upon the
surrender of the certificate evidencing the share of 2003 Series A Preferred Stock to be
transferred, together with the form of transfer endorsed on it duly completed and executed, at the
office of the transfer agent and registrar.
3. Registration of transfers of shares of 2003 Series A Preferred Stock will be effected
without charge by or on behalf of the Corporation, but upon payment (or the giving of such
indemnity as the transfer agent and registrar may require) in respect of any tax or other
governmental charges which may be imposed in relation to it.
4. The Corporation will not be required to register the transfer of a share of 2003 Series A
Preferred Stock after such share has been called for redemption.
I. Replacement of Lost Certificates
If any certificate for a share of 2003 Series A Preferred Stock is mutilated or alleged to
have been lost, stolen or destroyed, a new certificate representing the same share shall be issued
to the holder upon request subject to delivery of the old certificate or, if alleged to have been
lost, stolen or destroyed, compliance with such conditions as to evidence, indemnity and the
payment of out-of-pocket expenses of the Corporation in connection with the request as the Board of
Directors of the Corporation may determine.
J. No Preemptive Rights
Holders of the 2003 Series A Preferred Stock will have no preemptive or preferential rights to
purchase any securities of the Corporation.
K. No Repurchase at the Option of Holders; Miscellaneous
Holders of the 2003 Series A Preferred Stock will have no right to require the Corporation to
redeem or repurchase any shares of 2003 Series A Preferred Stock, and the shares of 2003 Series A
Preferred Stock are not subject to any sinking fund or similar obligation. The Corporation may, at
its option, purchase shares of the 2003 Series A Preferred Stock from holders thereof from time to
time, by tender, in privately negotiated transactions or otherwise.
A-8
ANNEX B
CERTIFICATE OF DESIGNATION
OF THE BOARD OF DIRECTORS OF
POPULAR, INC.
OF THE BOARD OF DIRECTORS OF
POPULAR, INC.
8.25% NON-CUMULATIVE MONTHLY INCOME PREFERRED STOCK, SERIES B
RESOLVED, that pursuant to the authority expressly granted to and vested in the Board of
Directors of Popular, Inc. (the Corporation) and delegated to the Pricing Committee consisting of
Richard L. Carrión, Manuel Morales, Jr. and Frederic V. Salerno (the Pricing Committee), in
accordance with the provisions of its Certificate of Incorporation, a series of Serial Preferred
Stock of the Corporation be and it hereby is created.
FURTHER RESOLVED, that the designation and amount of such series and the voting powers,
preferences and relative, participating, optional or other special rights of the shares of such
series of Preferred Stock, and the qualifications, limitations or restrictions thereof are as
follows:
A. Designation and Amount
The shares of such series of Preferred Stock shall be designated as the 8.25% Non-cumulative
Monthly Income Preferred Stock, Series B (hereinafter called the Series B Preferred Stock), and
the number of authorized shares constituting such series shall be 16,000,000.
B. Dividends
1. Holders of record of the Series B Preferred Stock (Holders) will be entitled to receive,
when, as and if declared by the Board of Directors of the Corporation or an authorized committee
thereof (the Board of Directors), out of funds of the Corporation legally available therefor,
non-cumulative cash dividends at the annual rate per share of $2.0625, which is equivalent to
8.25% of their liquidation preference of $25.00 per share, or $0.171875 per share per month, with
each aggregate payment made to each record holder of the Series B Preferred Stock being rounded to
the next lowest cent.
2. Dividends on the Series B Preferred Stock will accrue from their date of original issuance
and will be payable (when, as and if declared by the Board of Directors of the Corporation out of
funds of the Corporation legally available therefor) monthly in arrears in United States dollars
commencing on June 30, 2008, and on the last day of each calendar month of each year thereafter to
the holders of record of the Series B Preferred Stock as they appear on the books of the
Corporation on the fifteenth day of the month, whether or not a Business Day, for which the
dividends are payable, unless the Board of Directors or a committee thereof shall establish a
different record date. In the case of the dividend payable on June 30, 2008, such dividend shall
cover the period from the date of issuance of the Series B Preferred Stock to June 30, 2008. In the
event that any date on which dividends are payable is not a Business Day (as defined below), then
payment of the dividend payable on such date will be made on the next
B-1
succeeding Business Day without any interest or other payment in respect of any such delay, except
that, if such Business Day is in the next succeeding calendar year, such payment will be made on
the Business Day immediately preceding the relevant date of payment, in each case with the same
force and effect as if made on such date. A Business Day is a day other than a Saturday, Sunday
or a general bank holiday in San Juan, Puerto Rico or New York, New York.
3. Dividends on the Series B Preferred Stock will be non-cumulative. The Corporation is not
obligated or required to declare or pay dividends on the Series B Preferred Stock, even if it has
funds available for the payment of such dividends. If the Board of Directors of the Corporation or
a committee thereof does not declare a dividend payable on a dividend payment date in respect of
the Series B Preferred Stock, then the holders of such Series B Preferred Stock shall have no right
to receive a dividend in respect of the monthly dividend period ending on such dividend payment
date and the Company will have no obligation to pay the dividend accrued for such monthly dividend
period or to pay any interest thereon, whether or not dividends on such Series B Preferred Sock are
declared for any future monthly dividend period.
4. The amount of dividends payable for any monthly dividend period will be computed on the
basis of twelve 30-day months and a 360-day year. The amount of dividends payable for any period
shorter than a full monthly dividend period will be computed on the basis of the actual number of
days elapsed in such period.
5. Subject to any applicable fiscal or other laws and regulations, each dividend payment will
be made by dollar check drawn on a bank in New York, New York or San Juan, Puerto Rico and mailed
to the record holder thereof at such holders address as it appears on the register for such Series
B Preferred Stock.
6. So long as any shares of the Series B Preferred Stock remain outstanding, the Corporation
shall not declare, set apart or pay any dividend or make any other distribution of assets (other
than dividends paid or other distributions made in stock of the Corporation ranking junior to the
Series B Preferred Stock as to the payment of dividends and the distribution of assets upon
liquidation, dissolution or winding up of the Corporation) on, or redeem, purchase, set apart or
otherwise acquire (except upon conversion or exchange for stock of the Corporation ranking junior
to the Series B Preferred Stock as to the payment of dividends and the distribution of assets upon
liquidation, dissolution or winding up of the Corporation), shares of common stock or of any other
class of stock of the Corporation ranking junior to the Series B Preferred Stock as to the payment
of dividends or the distribution of assets upon liquidation, dissolution or winding up of the
Corporation, unless (i) all accrued and unpaid dividends on the Series B Preferred Stock for the
twelve monthly dividend periods ending on the immediately preceding dividend payment date shall
have been paid or are paid contemporaneously, (ii) the full monthly dividend on the Series B
Preferred Stock for the then current month has been or is contemporaneously declared and paid or
declared and set apart for payment, and (iii) the Corporation has not defaulted in the payment of
the redemption price of any shares of Series B Preferred Stock called for redemption.
7. When dividends are not paid in full on the Series B Preferred Stock and any other shares
of stock of the Corporation ranking on a parity as to the payment of dividends with the Series B
Preferred Stock, all dividends declared upon the Series B Preferred Stock and any such
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other shares of stock of the Corporation will be declared pro rata so that the amount of dividends
declared per share on the Series B Preferred Stock and any such other shares of stock will in all
cases bear to each other the same ratio that the accrued dividends per share on the Series B
Preferred Stock for the then current dividend period bears to the accrued dividends per share on
such other shares of stock (which shall not include any accrual in respect of unpaid dividends for
prior dividend periods if such preferred stock does not have a cumulative dividend).
8. Holders of record of the Series B Preferred Stock will not be entitled to any dividend,
whether payable in cash, property or stock, in excess of the dividends provided for herein on the
shares of Series B Preferred Stock.
C. Conversion
1. The Series B Preferred Stock will not be convertible into or exchangeable for any other
securities of the Corporation.
D. Redemption at the Option of the Corporation
1. The shares of the Series B Preferred Stock are not redeemable prior to May 28, 2013. On
and after that date, the shares of the Series B Preferred Stock will be redeemable in whole or in
part for cash from time to time at the option of the Corporation, with the consent of the Board of
Governors of the Federal Reserve System (the Federal Reserve Board) to the extent required by
Section D.8 below, upon not less than thirty nor more than sixty days notice by mail, at the
redemption prices set forth below, during the periods set forth below, plus accrued and unpaid
dividends from the dividend payment date immediately preceding the redemption date (without any
cumulation for unpaid dividends for prior dividend periods on the Series B Preferred Stock) to the
date fixed for redemption.
Period | Redemption Price | |||
May 28, 2013 to May 28, 2014 |
$ | 25.50 | ||
March 29, 2014 to May 28, 2015 |
$ | 25.25 | ||
May 29, 2015 and thereafter |
$ | 25.00 |
2. In the event that less than all of the outstanding shares of the Series B Preferred Stock
are to be redeemed in any redemption at the option of the Corporation, the total number of shares
to be redeemed in such redemption shall be determined by the Board of Directors and the shares to
be redeemed shall be allocated pro rata or by lot as may be determined by the Board of Directors or
by such other method as the Board of Directors may approve and deem equitable, including any method
to conform to any rule or regulation of any national or regional stock exchange or automated
quotation system upon which the shares of the Series B Preferred Stock may at the time be listed or
eligible for quotation.
3. Notice of any proposed redemption shall be given by the Corporation by mailing a copy of
such notice to the holders of record of the shares of Series B Preferred Stock to be redeemed, at
their address of record, not more than sixty nor less than thirty days prior to the redemption
date. The notice of redemption to each holder of shares of Series B Preferred Stock shall specify
the number of shares of Series B Preferred Stock to be redeemed, the redemption
B-3
date and the redemption price payable to such holder upon redemption, and shall state that from and
after said date dividends thereon will cease to accrue. If less than all the shares owned by a
holder are then to be redeemed at the option of the Corporation, the notice shall also specify the
number of shares of Series B Preferred Stock which are to be redeemed and the numbers of the
certificates representing such shares. Any notice which is mailed as herein provided shall be
conclusively presumed to have been duly given, whether or not the stockholder receives such notice;
and failure duly to give such notice by mail, or any defect in such notice, to the holders of any
stock designated for redemption shall not affect the validity of the proceedings for the redemption
of any other shares of Series B Preferred Stock.
4. Notice having been mailed as aforesaid, from and after the redemption date (unless the
Corporation shall default in the payment of the redemption price for any shares to be redeemed),
all dividends on the shares of Series B Preferred Stock called for redemption shall cease to accrue
and all rights of the holders of such shares as stockholders of the Corporation by reason of the
ownership of such shares (except the right to receive the redemption price, on presentation and
surrender of the respective certificates representing the redeemed shares), shall cease on the
redemption date, and such shares shall not after the redemption date be deemed to be outstanding.
In case less than all the shares represented by any such certificate are redeemed, a new
certificate shall be issued without cost to the holder thereof representing the unredeemed shares.
5. At its option, the Corporation may, on or prior to the redemption date, irrevocably
deposit the aggregate amount payable upon redemption of the shares of the Series B Preferred Stock
to be redeemed with a bank or trust company designated by the Board of Directors (which may include
a banking subsidiary of the Corporation) having its principal office in New York, New York, San
Juan, Puerto Rico, or any other city in which the Corporation shall at that time maintain a
transfer agency with respect to its capital stock, and having a combined capital and surplus (as
shown by its latest published statement) of at least $50,000,000 (hereinafter referred to as the
Depositary), to be held in trust by the Depositary for payment to the holders of the shares of
the Series B Preferred Stock then to be redeemed. If such deposit is made and the funds so
deposited are made immediately available to the holders of the shares of the Series B Preferred
Stock to be redeemed, the Corporation shall thereupon be released and discharged (subject to the
provisions of Section D.6) from any obligation to make payment of the amount payable upon
redemption of the shares of the Series B Preferred Stock to be redeemed, and the holders of such
shares shall look only to the Depositary for such payment.
6. Any funds remaining unclaimed at the end of two years from and after the redemption date
in respect of which such funds were deposited shall be returned to the Corporation forthwith and
thereafter the holders of shares of the Series B Preferred Stock called for redemption with respect
to which such funds were deposited shall look only to the Corporation for the payment of the
redemption price thereof. Any interest accrued on any funds deposited with the Depositary shall
belong to the Corporation and shall be paid to it from time to time on demand.
7. Any shares of the Series B Preferred Stock which shall at any time have been redeemed
shall, after such redemption, have the status of authorized but unissued shares of Preferred Stock,
without designation as to series, until such shares are once more designated as part of a
particular series by the Board of Directors.
B-4
8. To the extent required to have the Series B Preferred Stock treated as Tier 1 capital for
bank regulatory purposes or otherwise required by applicable regulations of the Federal Reserve
Board, the shares of Series B Preferred Stock may not be redeemed by the Corporation without the
prior consent of the Federal Reserve Board.
E. Liquidation Preference
1. Upon any voluntary or involuntary liquidation, dissolution, or winding up of the
Corporation, the then record holders of shares of Series B Preferred Stock will be entitled to
receive, out of the assets of the Corporation available for distribution to shareholders, before
any distribution is made to holders of common stock or any other equity securities of the
Corporation ranking junior upon liquidation to the Series B Preferred Stock, distributions upon
liquidation in the amount of $25.00 per share plus an amount equal to any accrued and unpaid
dividends (without any cumulation for unpaid dividends for prior dividend periods on the Series B
Preferred Stock) for the current monthly dividend period to the date of payment. Such amount shall
be paid to the holders of the Series B Preferred Stock prior to any payment or distribution to the
holders of the common stock of the Corporation or of any other class of stock or series thereof of
the Corporation ranking junior to the Series B Preferred Stock in respect of dividends or as to the
distribution of assets upon liquidation.
2. If upon any voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, the amounts payable with respect to the Series B Preferred Stock and any other shares
of stock of the Corporation ranking as to any such distribution on a parity with the Series B
Preferred Stock are not paid in full, the holders of the Series B Preferred Stock and of such other
shares will share ratably in any such distribution of assets of the Corporation in proportion to
the full liquidation preferences to which each is entitled. After payment of the full amount of the
liquidation preference to which they would otherwise be entitled, the holders of shares of Series B
Preferred Stock will not be entitled to any further participation in any distribution of assets of
the Corporation.
3. Neither the consolidation or merger of the Corporation with any other corporation, nor any
sale, lease or conveyance of all or any part of the property or business of the Corporation, shall
be deemed to be a liquidation, dissolution, or winding up of the Corporation.
F. Voting Rights
1. Except as described in this Section F, or except as required by applicable law, holders of
the Series B Preferred Stock will not be entitled to receive notice of or attend or vote at any
meeting of stockholders of the Corporation on any matter.
2. If the Corporation does not pay dividends in full on the Series B Preferred Stock for
eighteen monthly dividend periods, whether consecutive or not, the holders of outstanding shares of
the Series B Preferred Stock, together with the holders of any other shares of stock of the
Corporation having the right to vote for the election of directors solely in the event of any
failure to pay dividends, acting as a single class without regard to series, will be entitled, by
written notice to the Corporation given by the holders of a majority in liquidation preference of
such shares or by ordinary resolution passed by the holders of a majority in liquidation preference
of
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such shares present in person or by proxy at a separate general meeting of such holders convened
for the purpose, to appoint two additional members of the Board of Directors of the Corporation, to
remove any such member from office and to appoint another person in place of such member. Not later
than 30 days after such entitlement arises, if written notice by a majority of the holders of such
shares has not been given as provided for in the preceding sentence, the Board of Directors or an
authorized committee thereof will convene a separate general meeting for the above purpose. If the
Board of Directors or such authorized committee fails to convene such meeting within such 30-day
period, the holders of 10% of the outstanding shares of the Series B Preferred Stock and any such
other stock will be entitled to convene such meeting. The provisions of the Restated Certificate of
Incorporation and By-laws of the Corporation relating to the convening and conduct of general
meetings of stockholders will apply with respect to any such separate general meeting. Any member
of the Board of Directors so appointed shall vacate office if, following the event which gave rise
to such appointment, the Corporation shall have resumed the payment of dividends in full on the
Series B Preferred Stock and each such other series of stock for twelve consecutive monthly
dividend periods. Thereafter, the right to appoint two directors as described above would only
arise if the Corporation does not pay dividends in full on the Series B Preferred Stock for
eighteen additional monthly dividend periods.
3. Any amendment, alteration or repeal of the terms of the Series B Preferred Stock by way of
amendment of the Corporations Restated Certificate of Incorporation whether by merger or otherwise
(including, without limitation, the authorization or issuance of any shares of the Corporation
ranking, as to dividend rights or rights on liquidation, winding up and dissolution, senior to the
Series B Preferred Stock) which would adversely affect the powers, preferences or rights of the
Series B Preferred Stock shall not be effective (unless otherwise required by applicable law)
except with the consent in writing of the holders of at least two thirds of the outstanding
aggregate liquidation preference of the outstanding shares of the Series B Preferred Stock or with
the sanction of a special resolution passed at a separate general meeting by the holders of at
least two thirds of the aggregate liquidation preference of the outstanding shares of the Series B
Preferred Stock. Notwithstanding the foregoing, the Corporation may, without the consent or
sanction of the holders of the Series B Preferred Stock, authorize and issue shares of the
Corporation ranking, as to dividend rights and rights on liquidation, winding up and dissolution,
on a parity with or junior to the Series B Preferred Stock.
The foregoing voting provisions shall not apply if, at or prior to the time when the act with
respect to which such vote would otherwise be required shall be effected, all outstanding shares of
the Series B Preferred Stock shall have been redeemed or called for redemption upon proper notice
and sufficient funds shall have been deposited in trust to effect such redemption.
4. No vote of the holders of the Series B Preferred Stock will be required for the
Corporation to redeem or purchase and cancel the Series B Preferred Stock in accordance with the
Restated Certificate of Incorporation of the Corporation.
5. The Corporation will cause a notice of any meeting at which holders of any series of
Preferred Stock are entitled to vote to be mailed to each record holder of such series of Preferred
Stock. Each such notice will include a statement setting forth (i) the date of such meeting, (ii) a
description of any resolution to be proposed for adoption at such meeting on which such holders are
entitled to vote and (iii) instructions for deliveries of proxies.
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6. Except as set forth in this Section F, holders of Series B Preferred Stock shall have no
special voting rights and their consent shall not be required (except to the extent they are
entitled to vote as set forth herein) for taking any corporate action.
G. Rank
1. The Series B Preferred Stock will, with respect to dividend rights and rights on
liquidation, winding up and dissolution, rank (i) senior to all classes of common stock of the
Corporation, to the Corporations Series A Participating Cumulative Preferred Stock and to all
other equity securities issued by the Corporation the terms of which specifically provide that such
equity securities will rank junior to the Series B Preferred Stock (or to a number of series of
Preferred Stock which includes the Series B Preferred Stock); (ii) on a parity with all other
equity securities issued by the Corporation the terms of which specifically provide that such
equity securities will rank on a parity with the Series B Preferred Stock (or with a number of
series of Preferred Stock which includes the Series B Preferred Stock), and, in particular, with
the 6.375% Noncumulative Monthly Income Preferred Stock, 2003 Series A; and (iii) subject to the
provisions of Section F.3 hereof, junior to all equity securities issued by the Corporation the
terms of which specifically provide that such equity securities will rank senior to the Series B
Preferred Stock (or to a number of series of Preferred Stock which includes the Series B Preferred
Stock). For this purpose, the term equity securities does not include debt securities convertible
into or exchangeable for equity securities.
H. Form of Certificate for Series B Preferred Stock; Transfer and Registration
1. The Series B Preferred Stock shall be issued in registered form only. The Corporation may
treat the record holder of a share of Series B Preferred Stock, including the Depository Trust
Company and its nominee and any other holder that holds such share on behalf of any other person,
as such record holder appears on the books of the registrar for the Series B Preferred Stock, as
the sole owner of such share for all purposes.
2. The transfer of a share of Series B Preferred Stock may be registered upon the surrender
of the certificate evidencing the share of Series B Preferred Stock to be transferred, together
with the form of transfer endorsed on it duly completed and executed, at the office of the transfer
agent and registrar.
3. Registration of transfers of shares of Series B Preferred Stock will be effected without
charge by or on behalf of the Corporation, but upon payment (or the giving of such indemnity as the
transfer agent and registrar may require) in respect of any tax or other governmental charges which
may be imposed in relation to it.
4. The Corporation will not be required to register the transfer of a share of Series B
Preferred Stock after such share has been called for redemption.
I. Replacement of Lost Certificates
1. If any certificate for a share of Series B Preferred Stock is mutilated or alleged to have
been lost, stolen or destroyed, a new certificate representing the same share shall be issued to
the holder upon request subject to delivery of the old certificate or, if alleged to have been
lost,
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stolen or destroyed, compliance with such conditions as to evidence, indemnity and the payment of
out-of-pocket expenses of the Corporation in connection with the request as the Board of Directors
of the Corporation may determine.
J. No Preemptive Rights
1. Holders of the Series B Preferred Stock will have no preemptive or preferential rights to
purchase any securities of the Corporation.
K. No Repurchase at the Option of Holders; Miscellaneous
1. Holders of the Series B Preferred Stock will have no right to require the Corporation to
redeem or repurchase any shares of Series B Preferred Stock, and the shares of Series B Preferred
Stock are not subject to any sinking fund or similar obligation. The Corporation may, at its
option, purchase shares of the Series B Preferred Stock from holders thereof from time to time, by
tender, in privately negotiated transactions or otherwise.
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