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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
August 28, 1998
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(Date of earliest event reported)
R&G Financial Corporation
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(Exact name of registrant as specified in its charter)
Puerto Rico 0-21137 66-0532217
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
280 Jesus T. Pinero Avenue, Hato Rey, San Juan, Puerto Rico 00918
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(Address of principal executive offices) (Zip Code)
(787) 758-2424
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name, former address and former fiscal year, if changed since last
report)
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Item 5. Other Events
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On August 28, 1998, R&G Financial Corporation ("RGFC"), a Puerto Rico
corporation, filed with the Secretary of State for the Commonwealth of Puerto
Rico, a Certificate ("Certificate") of Resolution Establishing and
Designating the Series and Fixing and Determining the Relative Rights and
Preferences of the Noncumulative Perpetual Monthly Income Preferred Stock,
Series A, $25 Liquidation Preference Per Share (the "Series A Preferred
Stock") of RGFC. The Certificate was filed in connection with the closing
on August 31, 1998 of the sale of 2,000,000 shares of the Series A Preferred
Stock. The Certificate and the Press Release announcing the closing of the
sale of the Series A Preferred Stock are each filed herewith as an Exhibit
to the Form 8-K and are incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
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The following exhibits are filed with this report:
Exhibit Number Description
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3.0 Certificate of Resolution
Establishing and Designating
the Series and Fixing and
Determining the Relative Rights
and Preferences of the
Noncumulative Perpetual Monthly
Income Preferred Stock, Series
A ($25 Liquidation Preference
Per Share) of R&G Financial
Corporation
99.0 Press Release dated August 31,
1998
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
R&G FINANCIAL CORPORATION
Date: August 31, 1998 By: /s/ Victor J. Galan
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Victor J. Galan
President and Chief Executive Officer
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Certificate of Resolution Exhibit 3.0
Establishing and Designating the Series
and Fixing and Determining the
Relative Rights and Preferences of the
Noncumulative Perpetual Monthly Income
Preferred Stock, Series A
($25 Liquidation Preference Per Share) of
R&G Financial Corporation
I, Enrique Umpierre-Suarez, the duly appointed Secretary of R&G Financial
Corporation (the "Corporation"), a corporation organized and existing under
the laws of the Commonwealth of Puerto Rico, hereby certify that the
following resolutions were duly adopted by the Board of Directors of the
Corporation pursuant to authority conferred by the Corporation's Certificate
of Incorporation, as amended (the "Certificate of Incorporation"), at a
meeting thereof duly held on August 4, 1998 and by unanimous consent dated
August 18, 1998, and by the Pricing Committee of the Board of Directors,
pursuant to authority conferred by the Board of Directors, at a meeting
thereof duly held on August 25, 1998:
RESOLVED, that pursuant to the authority expressly vested in the Board
of Directors of the Corporation by Article IV of its Certificate of
Incorporation, the Board of Directors hereby authorizes the issuance of
up to 2,000,000 shares of its preferred stock, par value $0.01,
liquidation preference $25.00 per share to be designated as R&G
Financial Corporation Noncumulative Perpetual Monthly Income Preferred
Stock, Series A (the "Series A Preferred Stock").
The preferences, voting powers, restrictions, limitations as to
dividends, qualifications, and terms and conditions of redemption,
of the shares of the Series A Preferred Stock are as follows:
1. Dividend Rights
(a) Holders of record of Series A Preferred Stock shall be entitled to
receive noncumulative cash dividends payable monthly in arrears for
each month at the Dividend Rate (as hereinafter defined) as applicable,
when and as and if declared by the Board of Directors, or a duly
authorized committee thereof, out of funds legally available therefor.
Dividends on the Series A Preferred Stock will accrue from their date
of issuance and will be payable monthly in arrears in United States
dollars commencing on October 1st 1998, and for each monthly dividend
period commencing on the first day of each month thereafter, and ending
on and including the day next preceding the first day of the next
Dividend Period (each, a "Dividend Period") to the holder of record of
the Series A Preferred Stock as they appear on the books of the
Corporation on the second business day (as defined below),
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immediately preceding the relevant Dividend Payment Date (as defined
below). Dividends so declared will be payable on the first day of each
month commencing on October 1, 1998 (each, a "Dividend Payment Date").
The amount of dividends payable per share of Series A Preferred Stock
for each Dividend Period shall 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 month dividend period will be computed on
the basis of the actual number of days elapsed in such period.
(b) Holders of Series A Preferred Stock will not participate in
dividends, if any, declared and paid on the common stock of the
Corporation (the "Common Stock"). Except as descried herein, holders
of the Series A Preferred Stock will have no other right to participate
in the profits of the Corporation or to receive dividends. The right
of holders of Series A Preferred Stock to receive dividends is
noncumulative.
(c) If the Board of Directors of the Corporation or an authorized
committee thereof does not declare a dividend on the Series A Preferred
Stock for a Dividend Period, then holders of the Series A Preferred
Stock will have no right to receive a dividend for that Dividend
Period, and the Corporation will have no obligations to pay the
dividend accrued for that Dividend Period, whether or not dividends are
declared for any subsequent Dividend Period.
(d) When dividends which are not paid in full on the Series A Preferred
Stock and on any other shares of preferred stock of the Corporation
ranking on a parity as to the payment of dividends with the Series A
Preferred Stock, all dividends declared upon the Series A Preferred
Stock and any such other shares of preferred stock will be declared pro
rata so that the amount of dividends declared per share on the Series A
Preferred Stock and any such other shares of preferred stock will in
all cases bear to each other the same ratio that the liquidation
preference per share of the Series A Preferred Stock and any such other
preferred stock bear to each other.
(e) So long as any shares of the Series A Preferred Stock remain
outstanding, unless the full dividends on all outstanding shares of
Series A Preferred Stock have been declared and paid or set apart for
payment for the current Dividend Period and have been paid for all
Dividend Periods for which dividends were declared and not paid, (i) no
dividend (other than a dividend in Common Stock or in any other stock
of the Corporation ranking junior to the Series A Preferred Stock as to
dividends or distribution of assets upon liquidation, dissolution or
winding up) may be declared and paid, or set apart for payment, or
other distribution declared or made, on the Common Stock or on any
other stock ranking junior to or on a parity with the Series A
Preferred Stock as to dividends or distribution of assets upon
liquidation, dissolution or winding up and (ii) no shares of Common
Stock or shares of any other stock of the Corporation ranking junior to
or on a parity with the Series A Preferred Stock as to dividends or
distribution of assets upon liquidation,
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dissolution or winding up, will be redeemed, purchased or otherwise
acquired for any consideration by the Corporation or any subsidiary of
the Corporation (nor may any moneys be paid to or made available for a
sinking or other fund for the redemption, purchase or other acquisition
of any shares of any such stock), other than by conversion into or
exchange for Common Stock or any other stock of the Corporation ranking
junior to the Series A Preferred Stock as to dividends or distribution
of assets upon liquidation, dissolution or winding up.
(f) When a Dividend Payment Date falls on a day that is not a Business
Day, the dividend will be paid on the next Business Day, without any
interest or accumulation on payment in respect of any such delay. A
"Business Day" is a day on which the Nasdaq National Market is open for
trading and which is not a Saturday, Sunday or other day on which the
banks in the Commonwealth of Puerto Rico or New York City are
authorized or obligated by law to close.
2. Dividend Rate
The annual dividend rate per share for the Series A Preferred Stock
shall be 7.40% of the $25 liquidation preference per share, or
$0.154167 per share per month (the "Dividend Rate").
3. Conversion; Exchange
The Series A Preferred Stock will not be convertible into, or
exchangeable for any other securities of the Corporation.
4. Redemption at the Option of the Corporation
(a) The shares of the Series A Preferred Stock are not redeemable prior
to October 1, 2003. On or after such date, the shares of Series A
Preferred Stock will be redeemable in whole or in part from time to
time at the option of the Corporation, upon not less than 30 nor more
than 60 days' notice, by mail, at the redemption prices set forth in
the table below, during the twelve month periods beginning on October 1
of the years set forth below, subject to the prior approval of the
Board of Governors of the Federal Reserve System, if required by
applicable law, plus an amount equal to dividends declared and unpaid
for the then-current Dividend Period (without accumulation of accrued
and unpaid dividends for prior Dividend Periods and without interest)
to the date fixed for redemption.
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Year Redemption Price
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2003 $26.00
2004 25.75
2005 25.50
2006 and thereafter 25.00
(b) In no event shall the Corporation redeem less than all of the
outstanding Series A Preferred Stock, unless dividends for the then-
current Dividend Period to the date fixed for redemption for such
series shall have been declared and paid or set apart for payment on
all outstanding Series A Preferred Stock, provided however, that the
foregoing provisions will not prevent, if otherwise permitted, the
purchase or acquisition by the Corporation of Series A Preferred Stock
pursuant to a tender or exchange offer made on the same terms to
holders of all the outstanding Series A Preferred Stock and mailed to
the holders of record of all such outstanding shares at such holders'
address as the same appear on the books of the Corporation; and
provided, further, that if some, but less than all, of the Series A
Preferred Stock are to be purchased or otherwise acquired by the
Corporation, the Series A Preferred Stock so tendered will be purchased
or otherwise acquired by the Corporation on a pro rata basis (with
adjustments to eliminate fractions) according to the number of such
shares tendered by each holder so tendering Series A Preferred Stock
for such purchase or exchange.
(c) In the event that less than all of the outstanding shares of the
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
Series A Preferred Stock may at the time be listed or eligible for
quotation.
(d) The Corporation may redeem the Series A Preferred Stock without
ever having declared or paid a dividend on such stock.
(e) 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 A Preferred Stock to be redeemed, at their address of record,
not more than 60 days nor less than 30 days prior to the redemption
date. The notice of redemption to each holder of shares of Series A
Preferred Stock shall specify the number of shares of Series A
Preferred Stock to be redeemed, the redemption date and the redemption
price
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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 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.
Failure to duly 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 A Preferred Stock. Notice having been mailed as aforesaid,
from and after the redemption date (unless default be made in the
payment of the redemption price for any shares to be redeemed), all
dividends on the shares of 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, if requested by such
shareholder.
(f) At its option, the Corporation may, on or prior to the redemption
date, irrevocably deposit with a paying agent (a "Paying Agent"),
having surplus and undivided profits aggregating at least $50 million,
funds necessary for such redemption in trust, with irrevocable
instructions and authorization that such funds be applied to the
redemption of the shares of Series A Preferred Stock called for
redemption upon surrender of certificates for such shares (properly
endorsed or assigned for transfer). If notice of redemption shall have
been mailed and such deposit is made and the funds so deposited are
made immediately available to the holders of the shares of the Series A
Preferred Stock to be redeemed, the Corporation shall thereupon be
released and discharged (subject to the provisions described in the
next paragraph) from any obligation to make payment of the amount
payable upon redemption of the shares of the Series A Preferred Stock
to be redeemed. Notwithstanding that any certificates for such shares
shall not have been surrendered for cancellation, the shares
represented thereby shall no longer be deemed to be outstanding.
Thereupon, the holders of such shares shall look only to the Paying
Agent for such payment. Thereafter, all rights of the holders of such
shares as holders of Series A Preferred Stock (except the right to
receive the redemption price, but without interest) will cease.
(g) 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
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the Corporation forthwith and thereafter the holders of shares of the
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 Paying Agent shall belong to the Corporation
and shall be paid to it from time to time on demand.
(h) Any shares of the 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.
5. Voting Rights
(a) Except as indicated herein, or except as required by applicable
law, the holders of the Series A Preferred Stock will not be entitled
to receive notice of or attend or vote at any meeting of the
stockholders of the Corporation.
(b) If a Voting Event (as defined in the next paragraph) occurs, the
holders of outstanding shares of the Series A Preferred Stock, together
with the holders of shares of any one or more other series of preferred
stock entitled to vote for the election of directors in the event of
any failure to pay dividends, acting as a single class 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
special 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 a Voting Event
occurs, 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
special 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
A Preferred Stock and of any such other securities will be entitled to
convene such meeting. The provisions of the Certificate of
Incorporation and the By-Laws of the Corporation relating to the
convening and conduct of general meetings of stockholders will apply
with respect to any such separate special 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 A Preferred
Stock and each such other series of stock for twelve consecutive
monthly Dividend Periods.
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(c) A "Voting Event" will be deemed to have occurred in the event that
dividends payable on any share or shares of Series A Preferred Shares
shall not be declared and paid at the stated rate for the equivalent of
eighteen full monthly Dividend Periods (whether or not consecutive). A
Voting Event will be deemed to have been terminated when dividends have
been paid regularly for twelve consecutive monthly Dividend Periods.
(d) Any variation or abrogation of the rights, preferences and
privileges of the Series A Preferred Stock by way of amendment of the
Certificate of Incorporation 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 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 shares of the Series A Preferred Stock or
with the sanction of a special resolution passed at a separate special
meeting by the holders of at least two-thirds of the outstanding shares
of the Series A Preferred Stock. Notwithstanding the foregoing, the
Corporation may, without the consent or sanction of the holders of
Series A Preferred Stock, authorize and issue shares of the Corporation
ranking as to dividend rights and rights on liquidation, winding up or
dissolution, on a parity with or junior to the Series A Preferred
Stock.
(e) No vote of the holders of the Series A Preferred Stock will be
required for the Corporation to redeem or purchase and cancel the
Series A Preferred Stock.
(f) The Corporation will cause a notice of any meeting at which holders
of Series A Preferred Stock are entitled to vote to be mailed to each
record holder of the Series A 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.
5. Liquidation Preference
(a) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the holders of shares of
Series A Preferred Stock will be entitled to receive out of assets of
the Corporation available for distribution to stockholders, before any
distribution of the assets is made to the holders of shares of the
Common Stock or on any other class or series of stock of the
Corporation ranking junior to the Series A Preferred Stock as to such a
distribution, an amount equal to $25.00 per share, plus an amount equal
to dividends declared and unpaid for the then current Dividend Period
(without accumulation of accrued and unpaid
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dividends for prior Dividends Periods) to the date fixed for payment of
such distribution.
(b) If, upon any voluntary or involuntary liquidation, dissolution or
winding up the Corporation, the assets of the Corporation are
insufficient to make the full liquidation payment on the Series A
Preferred Stock and liquidating payments or any other class or series
of stock of the Corporation ranking on a parity with the Series A
Preferred Stock as to any such distribution, then such assets will be
distributed among the holders of the Series A Preferred Stock and such
other class or series of parity stock ratably in proportion to the
respective full preferential amounts to which they are entitled.
(c) After any liquidating payments, the holders of the Series A
Preferred Stock will be entitled to no other payments. A
consolidation or merger of the Corporation with or into any other
corporation or corporations or the sale, lease or conveyance, whether
for cash, shares of stock, securities or properties, of all or
substantially all the assets of the Corporation will not be regarded as
a liquidation, dissolution or winding up of the Corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of the
Corporation this 28th day of August, 1998.
/s/ Enrique Umpierre-Suarez
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Enrique Umpierre-Suarez
Secretary
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EXHIBIT 99.0
PRESS RELEASE
FOR RELEASE: Immediately
CONTACT: Victor J. Galan
Chairman and Chief Executive Officer
(787) 766-8301
R&G FINANCIAL CORPORATION CLOSES OFFERING OF
2,000,000 SHARES OF SERIES A PREFERRED STOCK
SAN JUAN, PUERTO RICO -- August 31, 1998 - R&G Financial Corporation
(NASDAQ: RGFC) (the "Company") announced today the closing of the offering of
2.0 million shares of its 7.40% Noncumulative Monthly Income Preferred Stock,
Series A ($25 Liquidation Preference Per Share) (the "Series A Preferred
Stock"), at a per share price of $25.00. The aggregate net offering proceeds
are estimated to be $43.5 million. The Series A Preferred Stock is quoted on
the Nasdaq National Market under the symbol "RGFCP." Santander Securities
Corporation of Puerto Rico, Merrill Lynch, Pierce, Fenner & Smith
Incorporated and Friedman, Billings, Ramsey & Co., Inc. acted as co-managing
underwriters for the offering.
The Company is a bank holding company with assets totaling $1.8 billion
on June 30, 1998. The Company operates R-G Premier Bank of Puerto Rico, a
Puerto Rico-chartered commercial bank, R&G Mortgage Corp., a Puerto Rico-
chartered mortgage banking company, and Champion Mortgage Corporation, a
Puerto Rico-chartered mortgage banking company.
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