As filed with the Securities and Exchange Commission on January 24, 2000
Registration No. 333- ________
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
R&G FINANCIAL CORPORATION
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(Exact name of Registrant as specified in its charter)
Puerto Rico 6799 66-0532217
--------------- -------- ------------
(State or other juris- (Primary Standard (I.R.S. Employer
diction of incorporation Industrial Classification Identification No.)
or organization) Code No.)
280 Jesus T. Pinero Avenue
Hato Rey, San Juan, Puerto Rico 00918
(787) 758-2424
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(Address, including zip code and telephone number, including area code,
of Registrant's principal executive offices)
Victor J. Galan
Chairman of the Board and Chief Executive Officer
R&G Financial Corporation
280 Jesus T. Pinero Avenue
Hato Rey, San Juan, Puerto Rico 00918
(787) 758-2424
--------------
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
with a copy to:
Norman B. Antin, Esq.
Elias, Matz, Tiernan & Herrick L.L.P.
734 15th Street, N.W.
Washington, D.C. 20005
(202) 347-0300
Approximate date of commencement of proposed sale to the public: As
soon as practicable after this registration statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ x ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(b) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
<TABLE>
<CAPTION>
Calculation of Registration Fee
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Amount to Proposed Maximum Proposed Maximum
Title of Each Class of be Offering Price Aggregate Offering Amount of
Securities to be Registered Registered Per Share Price(1) Registration Fee
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class B Common Stock,
par value $.01 per share 500,000 $10.25(2) $5,125,000 $1,353.00
=========================================================================================================================
</TABLE>
(1) Estimated solely for purposes of calculating the registration fee.
(2) Based upon the average of the bid and ask prices of a share of Common
Stock as reported by the Nasdaq Stock Market on January 19, 2000
pursuant to Rule 457(c) of the Securities Act of 1933.
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PROSPECTUS
R&G FINANCIAL CORPORATION
DIVIDEND REINVESTMENT PLAN
500,000 shares of Class B Common Stock
(par value, $.01 per share)
This Prospectus relates to 500,000 shares of Class B common stock, par
value $.01 per share (the "Common Stock") of R&G Financial Corporation (the
"Company") registered for purchase under the R&G Financial Corporation Dividend
Reinvestment Plan (the "Plan"). The Company is registering these shares of
Common Stock for issuance pursuant to the Plan. The Plan provides each holder of
Common Stock with a method of purchasing additional shares of Common Stock
through the reinvestment of all or a portion of dividends without payment of any
brokerage commissions or other administrative fees of any kind.
Shares of Common Stock available under the Plan will be obtained from
the legally authorized, but unissued shares of Common Stock held by the Company.
The purchase price for shares obtained under the Plan will be based upon the
market price of the Common Stock.
Each participant in the Plan should recognize that neither the Company
nor American Stock Transfer & Trust Company, the transfer agent administering
the Plan for the Company, can provide any assurance that shares of Common Stock
purchased under the Plan will, at any time, be worth more or less than their
purchase price.
The Plan does not represent a change in the dividend policy of the
Company, which will continue to depend upon earnings, financial requirements and
other factors, and which will be determined by the Company's Board of Directors
from time to time. Stockholders who do not wish to participate in the Plan will
continue to receive cash dividends as declared. It is suggested that this
Prospectus be retained for future reference.
These securities have not been approved or disapproved by the Securities and
Exchange Commission or any state securities commission. None of these regulatory
agencies passed upon the accuracy or adequacy of this prospectus. It is illegal
for anyone to tell you otherwise.
The date of this Prospectus is January 24, 2000.
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AVAILABLE INFORMATION
The Company is subject to the information requirements of the
Securities Exchange Act of 1934. The Company files reports, proxy statements and
other information with the SEC. These materials will be available for
inspection, without charge, at the SEC's principal office at 450 Fifth Street,
NW., Washington, DC 20549, and its regional offices located at 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661, and at 7 World Trade Center, Suite
1300, New York, New York 10048. Copies may also be obtained from the SEC's
Public Reference Section at Judiciary Plaza, 450 Fifth Street, NW., Washington,
DC 20549, at prescribed rates. Some information about the Company will also be
available on the SEC' s website at www.sec.gov.
The Company has filed its S-3 Registration Statement with the SEC. This
Prospectus does not contain all of the information set forth in the registration
statement. You will find additional information about the Company in the
registration statement. The registration statement, including its exhibits and
schedules, is available for inspection, without charge, at the SEC's principal
office at 450 Fifth Street, NW., Washington, DC 20549. Copies may also be
obtained from that office at prescribed rates. The registration statement,
including its exhibits and schedules, is also available on the SEC' s website at
www.sec.gov.
This Prospectus incorporates by reference documents relating to the
Company which are not presented in this Prospectus. These documents are
available without charge, upon written or oral request directed to:
Mr. Joseph R. Sandoval
R&G Financial Corporation
280 Jesus T. Pinero Avenue
Hato Rey, San Juan, Puerto Rico 00918
(787) 758-2424
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THE COMPANY
The Company is the holding company for R&G Mortgage Corp., a Puerto
Rico mortgage banking company ("R&G Mortgage"), and R-G Premier Bank of Puerto
Rico, a Puerto Rico- chartered commercial bank (the "Bank"). The Company was
organized under Puerto Rico law in March 1996. R&G Mortgage was organized in
1972 and the predecessor of the Bank was organized in 1983. In July 1996, the
Company acquired an 88.1% ownership interest in the common stock of the Bank and
100% ownership interest in the common stock of R&G Mortgage held by the
Company's Chairman of the Board and Chief Executive Officer, Mr. Victor J.
Galan, in exchange for shares of our Class A common stock. In August 1996, the
Company conducted an underwritten initial public offering of its Class B common
stock. In December 1996, the Company acquired the remaining 11.9% ownership
interest in the common stock of the Bank.
The offices of the Company are located at 280 Jesus T. Pinero Avenue,
Hato Rey, San Juan, Puerto Rico 00918. The telephone number of the Company is
(787) 758-2424.
The provisions of the Plan are presented in this Prospectus in a
question and answer format. Those stockholders who do not participate in the
Plan will continue to receive cash dividends, if and when declared.
THE PLAN
The Plan provides stockholders with a simple method of obtaining
additional shares of Common Stock by reinvesting all or a portion of their cash
dividends without payment of any brokerage commission or administrative
commissions or fees. The Plan will be administered by the Company's stock
transfer agent, American Stock Transfer & Trust Company, having an office at 40
Wall Street, New York, New York 10005.
INVESTMENT CONSIDERATIONS
Purchase Price
The purchase price of the Common Stock purchased under the Plan is
based upon the market price of the Common Stock as listed on The Nasdaq Stock
Market.
Shares Not Deposits; No Change in Dividend Policy
Potential investors should be aware that shares of the Common Stock
purchased under the Plan are not deposit accounts of the Company or the Bank and
are not insured by the FDIC or any other governmental organization. An
investment in the Common Stock is subject to market risk and possible loss of
investment.
Stockholders are cautioned that the Plan does not represent a change in
the Company's dividend policy or a guarantee of future dividends. Payments of
future dividends will continue to depend on the Company's earnings, financial
and regulatory requirements and other factors.
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DESCRIPTION OF THE PLAN
The following provides a description of the Plan in question and answer
format.
PURPOSE
1. What is the purpose of the Plan?
The purpose of the Plan is to provide participants with a simple and
convenient method of reinvesting cash dividends paid on shares of Common Stock
of the Company without payment of any brokerage commission or service charge.
The Plan is intended to benefit long-term investors who wish to increase their
investment in Common Stock. The price of shares acquired by participants through
the Plan will be determined in the manner set forth in Question 13.
2. What are the advantages of the Plan?
Participants can increase their holdings of Company Common Stock
without incurring any commissions or service charges in connection with
purchases under the Plan. Regular statements of account will provide each
participant with a record of each transaction. The Plan is entirely voluntary.
You may join or terminate your participation at any time by notice in writing to
the Plan Administrator (see Questions 3 and 20).
ADMINISTRATION
3. How will the Plan be administered?
The Plan Administrator administers the Plan for participants by
maintaining records, sending statements of account to participants and
performing other duties relating to the Plan. Shares of Common Stock purchased
under the Plan are registered in the name of the Plan Administrator's nominee as
agent for participants in the Plan.
PARTICIPATION
4. How much may be invested under the Plan?
Participants in the Plan may have the cash dividends on their shares of
Common Stock automatically reinvested in Common Stock of the Company. A
stockholder's participation in the Plan will be prohibited to the extent such
participation would cause his or her beneficial ownership of the Company's
Common Stock to exceed 10% of the issued and outstanding shares, unless such
stockholder has previously received regulatory approval to exceed such limit of
stock ownership.
5. Who is eligible to participate?
Only holders of record of Common Stock of the Company are eligible to
participate in the Plan. Beneficial owners of Common Stock whose shares are held
for them in registered names other
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than their own, such as in the names of brokers, bank nominees or trustees,
must, if they wish such shares to participate in the Plan, arrange to have the
shares transferred into a separate account in their names in order to
participate, by contacting such broker, bank nominee, trustee or as the case may
be.
6. How does an eligible stockholder participate?
To participate in the Plan, a stockholder of record (i.e., holders in
"streetname" generally would not be able to participate) must complete an
Authorization Form and return it to the Plan Administrator. An Authorization
Form is attached hereto. Additional copies of the Authorization Form will be
provided from time to time to the holders of the Company's Common Stock, and may
be obtained at any time by written request to the Plan Administrator.
7. When may an eligible stockholder join the Plan?
A stockholder of record may join the Plan at any time. If the
Authorization Form is received by the Plan Administrator before the record date
for a particular dividend payment, and the participant elects to reinvest the
dividends in shares of Common Stock, such reinvestment of dividends will begin
with that dividend payment.
8. What does the Authorization Form provide?
The Authorization Form directs the Company to pay to the Plan
Administrator for the account of the participating stockholder of record the
cash dividends on the shares registered in his or her name which are included in
the Plan, as well as on the shares credited to his or her account under the
Plan. It also appoints the Plan Administrator as agent for the stockholder and
directs such agent to apply such dividends, to the purchase of additional shares
of Common Stock in accordance with the terms and conditions of the Plan.
9. May a stockholder have dividends reinvested under the Plan
with respect to less than all of the shares of Common Stock
registered in that stockholder's name?
Yes. Participants in the Plan may include either the total number or a
specified portion of the shares registered in that particular name. A
stockholder who has shares of Common Stock registered in more than one name, for
example, some registered in the name of "John Smith" and others registered in
the name of "J. Smith," must enroll in the Plan for each registration in order
to reinvest cash dividends paid on all of his shares of Common Stock.
PURCHASES
10. What is the source of shares purchased under the Plan?
Shares of Common Stock purchased for Plan participants with the
reinvested dividends on their Common Stock will be purchased from the Company.
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11. When will purchases be made?
The Plan Administrator will make every effort to invest all dividends
promptly after the date of payment of such dividends by the Company ("Dividend
Payment Date") and in no event later than thirty (30) days from such date,
except where necessary under any applicable federal or state securities laws.
Dividend Payment Dates ordinarily are the last Friday of May, August,
November and February and the corresponding record dates generally are eight
days prior to such Dividend Payment Dates.
12. How many shares of Common Stock will be purchased for
participants?
The number of shares purchased for a participant shall be determined by
dividing the amount of dividends in the account of each participant available
for investment on the Dividend Payment Date by the purchase price per share as
determined under the procedure set forth in Question 13 below. If the funds
available from participants are not sufficient to purchase an exact number of
shares, participants' plan accounts will be credited with fractional shares
computed to three decimal places, which will earn proportionate dividends as
declared. Participants may not specify the number of shares to be purchased on a
given date.
13. What will be the price of shares of Common Stock purchased
under the Plan?
The price per share of shares of Common Stock purchased for Plan
participants with the reinvested dividends on their Common Stock will be the
average of the daily high and low sales prices of the Common Stock on the NASDAQ
National Market System, as reported in the Wall Street Journal, for the period
of the last five reported trading days immediately preceding the relevant
Dividend Payment Date. If there is no trading in the Common Stock for a
substantial amount of time immediately preceding a Dividend Payment Date, the
price per share will be determined by the Plan Administrator on the basis of
such market quotations as it deems appropriate. The Company will bear all costs
of administering the Plan. See Question 21, below, for certain tax consequences
of Plan participation.
14. May dividends on shares purchased through the Plan be sent
directly to the beneficial owner?
No. The purpose of the Plan is to provide the participant with a
convenient method of purchasing shares of Common Stock and to have the dividends
on those shares reinvested. Accordingly, cash dividends paid on shares held in
the Plan will be automatically reinvested in additional shares of Common Stock
unless and until the participant elects to terminate participation in the Plan.
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COSTS
15. Are there any expenses to participants in connection with
purchases of Common Stock from the Company under the Plan?
No. All costs or expenses arising out of the purchase of shares
pursuant to the Plan, including the Plan Administrator's fees and any brokerage
costs, will be paid by the Company.
REPORTS TO PARTICIPANTS
16. How will participants be advised of their purchases of stock?
As soon as practicable after each purchase for his or her account, a
participant will receive a statement of account from the Plan Administrator.
These statements are a participant's continuing record of the cost of shares
purchased and the number of shares acquired, and should be retained for tax
purposes.
CASH DIVIDENDS
17. Will participants be credited with dividends on shares held in
their account under the Plan?
Yes. A participant's account will be credited with dividends on shares
held in his or her account. The Plan Administrator will reinvest the dividends
in additional shares of Common Stock as authorized by the participant on the
Authorization Form.
STOCK SPLITS, STOCK DIVIDENDS, AND RIGHTS OFFERINGS
18. What is the effect of a stock split, stock dividend or rights
offering by the Company under the Plan?
Any stock dividend or stock split declared by the Company on shares
held by the Plan Administrator for participants will be credited to a
participant's account without charge. In the event that the Company makes
available to its stockholders the right to purchase additional shares,
debentures or other securities, such rights accruing on the shares held by the
Plan Administrator for a participant will be sold to the extent possible and the
proceeds of the sale will be promptly applied to the purchase of additional
shares of Common Stock of the Company for the participant's account. If,
however, a participant wishes to exercise such rights, he may, by written
request received by the Plan Administrator prior to the record date for such
rights, obtain a certificate for the full shares in the participant's account so
that such rights to purchase additional shares accruing to those certificates
will flow directly to the participant.
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STOCK CERTIFICATES
19. Will stock certificates be issued for shares of Common Stock
purchased?
Normally, certificates of Common Stock purchased under the Plan will
not be issued to participants. The number of shares credited to an account under
the Plan will be shown on the participant's statement of account.
A participant may receive certificates for full shares accumulated in
his or her account under the Plan by sending a written request to the Plan
Administrator. Participants may request periodic issuance of certificates for
all full shares in the account. When certificates are issued to the participant,
future dividends on such shares will be treated in accordance with the
participant's instructions as indicated on the Authorization Form. Any remaining
shares will continue to be reflected in the participant's account.
A participant's rights under the Plan and shares credited to the
account of a participant under the Plan may not be pledged. A participant who
wishes to pledge such shares must request that certificates for such shares be
issued in his or her name.
Accounts under the Plan are maintained in the names in which the
certificates of participants were registered at the time they entered the Plan.
Consequently, certificates for whole shares will be similarly registered when
issued.
WITHDRAWAL FROM THE PLAN AND AMENDING PARTICIPATION IN THE PLAN
20. The Plan is entirely voluntary and a participant may withdraw
or amend his or her investment election at any time.
In order to withdraw his or her shares from the Plan or change his or
her investment election, a participant must notify the Plan Administrator in
writing that he or she wishes to make such a withdrawal or such a change. When a
participant withdraws his or her shares from the Plan or upon termination of the
Plan by the Company, certificates for whole shares credited to each
participant's account under the Plan will be issued. Upon withdrawal from the
Plan, a participant will receive a cash payment equivalent to the value of any
fractional Plan share.
The cash to be paid in lieu of a fractional Plan share will be based
upon the closing market price of the Company's Common Stock on the day that the
participant's account is terminated by the Plan Administrator. The Plan
Administrator will mail the cash payment for the fractional Plan share within
ten business days of the participant's withdrawal, or as soon as practicable
thereafter.
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If a written request from a participant to withdraw and stop dividend
reinvestment is received by the Plan Administrator prior to the record date for
a cash dividend, reinvestment of such participant's dividends will be terminated
on the date of receipt of such notice by the Plan Administrator. Such dividend
and all subsequent cash dividends will be paid to the participant by check.
If a withdrawal request is received on or after the record date for a
dividend, such dividend will be invested for the participant's account under the
Plan and the withdrawal or change effected thereafter. A participant who
terminates the reinvestment of dividends paid on shares registered in his or her
name is considered to have terminated his or her participation in the Plan. In
such case, a certificate will be issued for all shares held in the Plan and a
check issued for any fractional shares as stated above.
Notices to withdraw from the Plan or to amend one's investment election
should be made in writing to the Plan Administrator, 40 Wall Street, New York,
New York 10005.
CERTAIN TAX CONSEQUENCES OF PARTICIPATION IN THE PLAN
21. What are the Puerto Rico and federal income tax consequences
of participation in the Plan?
The following statements, which are based upon existing tax laws,
regulations and rulings on the date of adoption of the Plan, are intended to be
a general outline of the likely Puerto Rico and federal income tax consequences
to an individual or corporate participant in the Plan. The Company has been
advised with regard to such statements by McConnell Valdes, San Juan, Puerto
Rico.
The information herein provided is a summary and does not purport to be
a complete description of the income tax consequences to any participant in the
Plan. In particular, it does not address the income tax consequences to an
individual participant who is a non-resident alien. Participants are strongly
urged to consult their own tax advisors for further information concerning the
tax consequences of participation in the Plan.
General Tax Consequences
(a) The fair market value on the Dividend Payment Date of shares of
Common Stock purchased from the Company with cash dividends, plus the amount of
any tax withheld, will constitute dividend income to the participant. The
participant's tax basis in such shares will be the fair market value of the
shares on the Dividend Payment Date.
(b) A participant's holding period for shares of Common Stock acquired
pursuant to the Plan will begin on the day following the date the shares of
Common Stock are credited to the participant's account.
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(c) A participant will not realize taxable income when he or she
receives certificates for whole shares of Common Stock credited to the
participant's account, either upon the participant's request for such
certificates or upon termination of the Plan or termination of his or her
participation in the Plan.
(d) A participant will realize gain or loss when the shares of Common
Stock are sold or exchanged, and in the case of a fractional share, when the
participant receives a cash payment for a fraction of a share credited to the
participant's account upon termination of participation in or termination of the
Plan. The amount of such gain or loss will be the difference between the amount
which the participant receives for the shares or fraction of a share and the tax
basis thereof.
(e) In the case of holders of Common Stock whose dividends are subject
to Puerto Rico income tax withholding, the Company will withhold the tax from
the cash dividends and invest the balance in shares of Common Stock. In
addition, the Company will send participants a letter advising them of their
legal obligation to file Puerto Rico income tax returns. The statements
confirming purchases made for such participants will indicate the amount of tax
withheld.
Puerto Rico Income Tax Consequences
Individuals
(a) An individual participant in the Plan, whether a resident of Puerto
Rico or a U.S. citizen who is not a resident of Puerto Rico (a "non-resident
U.S. citizen"), will be subject to a special tax equal to ten percent (10%) of
the total amount of each cash dividend distribution. This special tax will be
automatically deducted and withheld by the Company unless the participant has in
effect on the date of the distribution an election not to have the special
dividend tax withheld. If such election is made the dividend will be subject to
ordinary tax rates, currently up to a maximum thirty- three percent (33%).
(b) An individual participant who is a non-resident U.S. citizen will
be subject to a ten percent (10%) income tax withholding at source on the gross
amount of cash dividends, unless, in addition to the election not to have the
special dividend tax withheld, he has filed with the Plan Administrator a
Withholding Exemption Certificate for exemption from the ten percent (10%)
withholding tax. In this case, the maximum amount of Puerto Rico source gross
income (including the dividends distributed by the Company and any gain from the
sale in Puerto Rico of Common Stock) that the non-resident U.S. citizen will
receive exempt from withholding is $1,300 if single or married not living with
spouse, or $3,000 if married and living with a spouse, or $1,500 if married
filing separately. The Company will withhold a ten percent (10%) income tax on
the non-resident U.S. citizen's dividend distribution in excess of the above
specified amounts.
Furthermore, a non-resident U.S. citizen will be required to file a
Puerto Rico income tax return and will be subject to tax at the same tax rates
as Puerto Rico residents if his Puerto Rico source gross income exceeds the
$1,300, $3,000 or $1,500 limits referred above. The tax withheld
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by the Company may be credited in the return against the resulting Puerto Rico
tax liability, if any, or refunded to the individual as the case may be. Even
though the non-resident U.S. citizen may be required to file a Puerto Rico
income tax return, he will not be subject to any Puerto Rico income tax
liability if his gross income from Puerto Rico sources is $3,300 or less, if
single or married not living with spouse, or $6,000 or less, if married and
living with a spouse. However, a non-resident U.S. citizen will not be required
to file a Puerto Rico income tax return if such participant's gross income from
sources within Puerto Rico consists only of cash dividends on Common Stock and
such dividends are subject to the special 10% tax to be withheld at source.
(c) In the case of the sale or exchange of Common Stock held as a
capital asset for more than six months, an individual who is Puerto Rico
resident has the option to have his net long term capital gain taxed at a twenty
percent (20%) rate or to include it in his gross income and be subject to the
normal tax rates, currently up to a maximum thirty-three percent (33%).
(d) An individual participant who is a non-resident U.S. citizen will
not be subject to Puerto Rico income tax on the sale or exchange of Common Stock
if the sale or exchange is effected outside Puerto Rico. If the sale takes place
in Puerto Rico, the gain will be subject to the same capital gain provisions
applicable to a Puerto Rico resident and the buyer is required to withhold
twenty percent (20%) from the sales price.
Corporations
(a) In the case of participant corporations, the special ten percent
(10%) tax on dividends and 20% tax on capital gains discussed above will not
apply.
(b) In the case of participant corporations organized in Puerto Rico
("domestic corporations") and participant corporations organized outside Puerto
Rico but that are engaged in trade or business in Puerto Rico ("resident foreign
corporations"), the full amount of dividend income will be eligible for the
eighty-five percent (85%) dividends received deduction provided the dividend
deduction does not exceed eighty-five (85%) of the corporate taxpayer's net
taxable income reported in Puerto Rico.
(c) In the case of participant corporations organized outside Puerto
Rico and not engaged in trade or business in Puerto Rico ("non-resident foreign
corporations"), the full amount of dividend income will be subject to a ten
percent (10%) withholding tax at source. On the sale or exchange of Common
Stock, these non-resident foreign corporations will be subject to a twenty-five
percent (25%) income tax withholding on the gross amount received to the extent
said amount constitutes income from sources within Puerto Rico. However, the tax
withheld will be credited against the Puerto Rico income tax liability reported
by the corporation on its Puerto Rico return, which would be twenty-nine percent
(29%) of the excess capital gains over capital losses from Puerto Rico sources.
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(d) For Puerto Rico tax purposes, the gain from the sale of stock is
considered derived from the place where all right, title and interest on the
stock pass from seller to purchaser. In the case of foreign corporations,
whether resident or nonresident, if the sale is effected outside Puerto Rico,
the gain will not be subject to Puerto Rico income taxes except for certain
resident foreign corporations engaged in a financial business or in the business
of trading in securities.
(e) In the case of a domestic corporation holding the Common Stock as a
capital asset for more than six months, gain from the sale or exchange of Common
Stock will be subject to twenty- five percent (25%) maximum tax on the capital
gain irrespective of where the sale is effected. To the extent the gain
constitutes income from sources within Puerto Rico or otherwise constitutes
income effectively connected with a Puerto Rico business, a resident foreign
corporation holding the Common Stock as a capital asset for more than six months
will also be subject to this maximum twenty-five percent (25%) tax rate.
Institutional Investors
Dividends paid to certain institutional investors such as life
insurance companies may or may not be subject to Puerto Rico income tax.
Participants should contact their own tax advisors as to the applicability of
this exemption.
Federal Income Tax Consequences
(a) In the case of a participant who is a U.S. citizen but not a
resident of Puerto Rico, dividend distributions from the Company and gain from
the sale of Common Stock will have to be included in full in his or her federal
income tax return. However, Puerto Rico taxes paid may generally be taken as a
foreign tax credit against the United States income tax liability, or in the
alternative, as an itemized deduction.
(b) In the case of a participant who is a U.S. citizen and a bona fide
resident of Puerto Rico for the entire taxable year, dividend distributions from
the Company and gain from the sale of Common Stock are excludable from the
federal return.
(c) In the case of a participant which is a United States corporation,
the full amount of dividends distributed will be included in gross income, but
will not be eligible for the dividends received deduction. However, taxes paid
in Puerto Rico may generally be taken as a foreign tax credit or as a deduction
in the federal income tax return.
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OTHER INFORMATION
22. What happens when a participant sells or transfers all of the
shares registered in his or her name?
If a participant disposes of all shares of Common Stock registered in
his or her name, the Plan Administrator will consider the Plan terminated for
the said participant. A certificate will be issued for the full shares in the
participant's account, any fractional shares in the account will be sold and the
proceeds paid to the participants, and the account will be terminated as soon as
practicable thereafter.
23. How will a participant's shares held under the Plan be voted
at meetings of stockholders?
Shares credited to the account of a participant under the Plan (other
than fractional shares) will be automatically added to the shares covered by the
proxy sent to the stockholder with respect to his or her other shares in the
Company and may be voted by such holder pursuant to such proxy.
24. What are the responsibilities of the Company and the Plan
Administrator under the Plan?
The Company and the Plan Administrator in administering the Plan will
not be liable for any act done in good faith or for the good faith omission to
act, including, without limitation, any claim of liability arising out of
failure to terminate a participant's account upon such participant's death or
judicially declared incompetency prior to receipt by the Plan Administrator of
notice in writing of such death or incompetency or with respect to the prices at
which shares are purchased for the participant's account, and the times when
such purchases are made, or with respect to any loss or fluctuation in the
market value after purchase of shares. The Company and the Plan Administrator
and their agents will not have any responsibility beyond the exercise of
ordinary care for any action taken or omitted to be taken in connection with the
Plan, nor do they have any duties, responsibilities or liabilities other than
those expressly set forth in the Plan.
25. Who bears the risk of market price fluctuations in the Common
Stock?
A participant's investment in shares acquired under the Plan is no
different in this regard from direct investment in shares of Common Stock of the
Company. The participant bears the risk of loss and realizes the benefits of any
gain from market price changes with respect to all such shares held by him or
her in the Plan, or otherwise. Participants should recognize that the Company
and the Plan Administrator cannot provide any assurance of a profit or
protection against a loss on the shares of Common Stock purchased or held under
the plan.
13
<PAGE>
26. May the Plan be changed or discontinued?
Yes. The Plan may be amended, suspended, modified or terminated at any
time by the Board of Directors of the Company without the approval of the
participants. Notice of any such suspension or termination or material amendment
or modification will be sent to all participants, who shall at all times have
the right to withdraw from the Plan.
The Company or the Plan Administrator may terminate a stockholder's
individual participation in the Plan at any time by written notice to the
stockholder. In such event, the Plan Administrator will request instructions
from the participant for disposition of the shares in the account. If the Plan
Administrator does not receive instructions from the participant, it will send
the participant a certificate for the number of full shares held for the
participant under the Plan and a check for any fractional share.
27. How is the Plan to be interpreted and what law governs?
Any questions of interpretation arising under the Plan will be
determined by the Company under the laws of the Commonwealth of Puerto Rico, and
any such determination will be final.
USE OF PROCEEDS
The Company does not know precisely the number of shares of its Common
Stock that it will ultimately sell under the Plan or the prices at which those
shares will be sold. The net proceeds from the sale of Common Stock offered
pursuant to the Plan will be used for general corporate purposes, including
without limitation, investments in and advances to the Bank and any other
subsidiaries which the Company may form or acquire.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which the Company filed with the SEC, are
incorporated in this Prospectus by reference:
(i) The Company's Annual Report on Form 10-K, as amended, for the year
ended December 31, 1998;
(ii) The Company's Quarterly Reports on Form 10-Q for the three months ended
March 31, 1999, as amended, June 30, 1999, as amended, and September
30, 1999;
(iii) The Company's Current Report on Form 8-K filed with the SEC on November
19, 1999.
(iv) The description of the Company's Common Stock which is contained in the
Company's Registration Statement on Form 8-A filed with the SEC on
August 5, 1996.
14
<PAGE>
In addition, all documents subsequently filed by the Company with the
SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange
Act of 1934 after the date of this Prospectus and prior to the termination of
this offering will be deemed incorporated by reference.
The Company will provide without charge to each person to whom a copy
of this Prospectus is delivered, on written or oral request, a copy of the
documents which are incorporated by reference (other than exhibits to such
documents are not specifically incorporated by reference into such documents).
Requests should be directed to Mr. Joseph R. Sandoval, R&G Financial
Corporation, 280 Jesus T. Pinero Avenue, Hato Rey, San Juan, Puerto Rico 00918,
telephone: (787) 758-2424.
LEGAL OPINION
The validity of the shares of Common Stock offered hereby is being
passed upon for the Company by Elias, Matz, Tiernan & Herrick L.L.P.,
Washington, D.C.
INDEPENDENT ACCOUNTANTS
The consolidated financial statements of the Company incorporated in
this Prospectus by reference from the Company's Annual Report on Form 10-K/A for
the year ended December 31, 1998, have been audited by PricewaterhouseCoopers
LLP, independent accountants, as stated in their report which is incorporated
herein by reference, and have been so incorporated in reliance upon the report
of such firm given upon their authority as experts in accounting and auditing.
INDEMNIFICATION
The Company's bylaws provide that it 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 of the Company, whether civil, criminal,
administrative or investigative, by reason of the fact that such person is or
was a director, officer, employee or agent of the Company, or is or was serving
at our written request as a director, officer, employee or agent of another
corporation or other enterprise, against expenses (including attorneys' fees),
judgements, fines and amounts paid in settlement actually and reasonably
incurred by such person in connection with such action, suit or proceeding to
the fullest extent authorized by Puerto Rico Corporate Law, provided that the
Company shall not be liable for any amounts which may be due to any person in
connection with a settlement of any action, suit or proceeding effected without
the Company's prior written consent. The Company's bylaws also provide that
reasonable expenses incurred by a director, officer, employee or agent of the
Company in defending any civil, criminal, suit or proceeding described above may
be paid by us in advance of the final disposition of such action, suit or
proceeding. Article 4.08 of the General Corporation Law of 1996 of the
Commonwealth of Puerto Rico also governs the circumstances under which
directors, officers and employers may be insured or indemnified against
liability which they may incur in their capacity as such.
15
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
SEC Registration Fee.................................. $1,353
Legal Fees and Expenses............................... 2,000
Accounting Fees and Expenses.......................... 2,000
Printing Fees and Expenses............................ 2,000
Miscellaneous......................................... 647
------
TOTAL: ....................................... $8,000
======
Item 15. Indemnification of Directors and Officers.
Article VI of the Registrant's Bylaws provide as follows:
6.1 Indemnification.
(a) The Company shall indemnify, to the fullest extent authorized by
the General Corporation Law of the Commonwealth of Puerto Rico, 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 investigative (other than an action by or in the right of the Company) by
reason of the fact that he is or was a director, officer, employee, or agent of
the Company, or is or was serving at the written request of the Company as a
director, officer, employer or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
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 matter he reasonably believed to be in or not opposed to
the best interests of the Company, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful,
provided that the Company shall not be liable for any amounts which may be due
to any person in connection with a settlement of any action, suit or proceeding
effected without its prior written consent or any action, suit or proceeding
initiated by any person seeking indemnification hereunder without its prior
written consent. 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 Company and, with respect to any criminal
action or proceeding, that such person had reasonable cause to believe that his
conduct was unlawful.
II-1
<PAGE>
(b) The Company 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 Company 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 Company, or is or was serving at the written request of the Company as a
director, officer, employee, or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' 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
Company, 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 Company
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 expense which such court
shall deem proper.
(c) To the extent that a director, officer, employee, or agent of the
Company has been successful on the merits or otherwise in defense of any action,
suit or proceeding referred to in Section 6.1(a) or Section 6.1(b) of this
Article VI, 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.
(d) Any indemnification under Section 6.1(a) or Section 6.1(b) of this
Article VI (unless ordered by a court) shall be made by the Company only as
authorized in the specific case 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.
(e) The Company shall not be liable for any amounts which may be due to
any person in connection with a settlement of any action, suit or proceeding
initiated by any person seeking indemnification under this Article VI without
its prior written consent.
6.2 Advancement of Expenses. Reasonable expenses (including attorneys'
fees) incurred in defending a civil or criminal action, suit or proceeding
described in Section 6.1 may be paid by the Company 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 or officer to repay such amount unless it shall ultimately be
determined that he is entitled to be indemnified by the Company as authorized in
this Article VI.
6.3 Other Rights and Remedies. The indemnification and advancement of
expenses provided by, or granted pursuant to, this Article VI shall not be
deemed exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under any
II-2
<PAGE>
statute, by-law, agreement, vote of stockholders or disinterested directors or
otherwise, both as to actions in their official capacity and as to actions 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.
6.4 Insurance. By action of its Board of Directors, notwithstanding any
interest of the directors in the action, the Company 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
Company, or is or was serving at the written request of the Company 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 his status as such,
whether or not the Company would have the power or would be required to
indemnify him against such liability under the provisions of this Article VI or
of the General Corporation Law of the Commonwealth of Puerto Rico, or of the
laws of any other State or political dependency of the United States or foreign
country as may be applicable.
6.5 Modification. The duties of the Company to indemnify and to advance
expenses to a director, officer, employee or agent provided in this Article VI
shall be in the nature of a contract between the Company and each such person,
and no amendment or repeal of any provision of this Article VI shall alter, to
the detriment of such person, the right of such person to the advance of
expenses or indemnification related to a claim based on an act or failure to act
which took place prior to such amendment or repeal.
An unofficial English translation of Article 4.08 of the General
Corporation Law of 1996 of the Commonwealth of Puerto Rico provides:
A. A corporation may indemnify any person who is or was 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 investigative
(other than an action by or in the right of the corporation) by reason of the
fact that said person was or is a director, officer employee, or agent of the
corporation, or was or is serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise. The indemnification may include expenses
reasonably incurred, including attorneys' fees, awards or judgments, fines and
amounts paid in settlement of 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 interests 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 legal 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 or 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, that the person did not have reasonable cause to believe that his
conduct was unlawful.
II-3
<PAGE>
B. A corporation may indemnify any person who is or was 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 protect the interests 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 request of the corporation as a director, officer, employee, or
agent of another corporation, partnership, joint venture, trust or other
enterprise. The indemnification may include expenses reasonably incurred,
including attorneys' fees, 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, and not opposed to, the best interests of the corporation. No
indemnification shall be made in respect of any claim, matter or issue as to
which such person shall have been adjudged to be liable to the corporation
unless, upon application therefor, the court in which such action or suit was
brought shall determine that, despite the adjudication of liability and in view
of all the circumstances of the case, such person is fairly and reasonably
entitled to be indemnified for such expenses which such court shall deem proper,
and only to the extent to which said court shall determine.
C. 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 subsections A and B or in defense of
any claim, matter or issue related thereto, he shall be indemnified against
expenses reasonably incurred by him (including attorneys' fees) by reason of
such action, suit or proceeding.
D. Any indemnification under subsections A and B (except that ordered
by a court) shall be made by the corporation, only as authorized in the specific
case, 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 in subsections A and B of this article.
Such determination shall be made:
1. 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, even if said directors constitute less than a quorum; or
2. if there shall not be any such directors, or if such
directors shall so determine by an independent legal counsel in a
written opinion to such effect; or
3. by the stockholders.
E. Prior to the final disposition of such action, suit or proceeding,
the corporation may pay in advance expenses incurred by an officer or director
defending a civil or criminal action, suit or proceeding. Upon receipt of an
undertaking by or on behalf of such director or officer to repay such amount if
it shall ultimately be determined that he is not entitled to such
indemnification by the corporation, as authorized in this Article. Such expenses
incurred by other employees and agents may be so paid upon such terms and
conditions, if any, as the board of directors deems convenient.
II-4
<PAGE>
F. The indemnification and advancement of expenses provided by this
Article shall not be deemed exclusive of any other rights to which those seeking
indemnification or advancement (of expenses) may be entitled under any by-law,
agreement, vote of stockholders or disinterested directors or otherwise, both as
to actions in their official capacity and as to actions in another capacity
while holding such office.
G. Every corporation shall have power to purchase and maintain
insurance 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 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 or incurred by him in any such capacity, or arising out of
his status as such, whether or not the corporation would have the power to
indemnify him against such liability under the provisions of this Article.
H. For purposes of this Article, "the corporation" shall be deemed to
include, in addition to the resulting corporations, any corporation which is a
party to any consolidation or merger that is absorbed in a consolidation or
merger which, if its separate legal existence had continued, would have had the
power and authority to indemnify its directors, officers, and employees or
agents. So that any person who is or was a director, officer, employee or agent
of such constituent corporation, or is or was serving at the request of such
constituent corporation as a director, officer or employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, shall stand
in the same position under the provisions of this Article with respect to the
resulting or surviving corporation as he would have with respect to such
constituent corporation if its separate legal existence had continued.
I. For purposes of this Article, the term "other enterprises" shall
include employee benefit plans. The term "fines" shall include any taxes
assessed on a person with respect to any benefit or employee plan. The term
"serving at the request of the corporation" shall include any service as a
director, officer, employee, or agent of the corporation which imposes duties
on, or involves services by, such director, officer, employee, or agent with
respect to an employee pension plan, its participants, or beneficiaries. A
person who acted in good faith and in a manner he reasonably believed to be in
the interest of the participants and beneficiaries of an employee pension plan
shall further be deemed to have acted in a manner "not opposed to the best
interests of the corporation" as referred to in this Article.
II-5
<PAGE>
Item 16. Exhibits.
Exhibit No. Description
- ----------- -----------
5 Opinion of Elias, Matz, Tiernan & Herrick L.L.P.
23.1 Consent of PricewaterhouseCoopers LLP
23.2 The consent of Elias, Matz, Tiernan & Herrick L.L.P. is
contained in their opinion filed as Exhibit 5 to this
Registration Statement
99 Authorization Card for Participation in the Dividend
Reinvestment Plan
Item 17. Undertakings.
The undersigned Registrant hereby undertakes to file during any period
in which offers or sales are being made, a post-effective amendment to this
Registration Statement to include any material information with respect to the
plan of distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement.
The undersigned Registrant hereby undertakes that, for the purpose of
determining any liability under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
The undersigned Registrant hereby undertakes to remove from
registration by means of a post-effective amendment any of the securities being
registered which remain unsold at the termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of San Juan, Commonwealth of Puerto Rico on the 21st day
of January 2000.
R&G FINANCIAL CORPORATION
By: /s/ Victor J. Galan
-------------------------
Victor J. Galan
Chairman, President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated. Each of the directors and/or officers of
Community Bank Shares of Indiana, Inc. whose signature appears below hereby
appoints Victor J. Galan and Joseph R. Sandoval, and each of them severally, as
his or her attorney-in-fact to sign in his or her name and behalf, in any and
all capacities stated below and to file with the Securities and Exchange
Commission any and all amendments, including post-effective amendments, to this
Registration Statement on Form S-3, making such changes in the Registration
Statement as appropriate, and generally to do all such things in their behalf in
their capacities as directors and/or officers to enable R&G Financial
Corporation to comply with the provisions of the Securities Act of 1933, and all
requirements of the Securities and Exchange Commission.
<TABLE>
<CAPTION>
Name Title Date
- ---- ----- ----
<S> <C> <C>
/s/ Victor J. Galan Chairman of the Board, January 21, 2000
- --------------------------------------- President and Chief
Victor J. Galan Executive Officer (principal
executive officer)
/s/ Joseph R. Sandoval Senior Vice President and January 21, 2000
- ---------------------------------------- Chief Financial Officer
Joseph R. Sandoval (Principal financial and
accounting officer)
</TABLE>
II-7
<PAGE>
<TABLE>
<CAPTION>
Name Title Date
- ---- ----- ----
<S> <C> <C>
/s/ Ana M. Armendariz Director and Treasurer January 21, 2000
- --------------------------------------
Ana M. Armendariz
/s/ Ramon Prats Executive Vice President January 21, 2000
- -------------------------------------- and Director
Ramon Prats
/s/ Enrique Umpierre-Suarez Director and Secretary January 21, 2000
- --------------------------------------
Enrique Umpierre-Suarez
/s/ Victor L. Galan Fundora Director January 21, 2000
- --------------------------------------
Victor L. Galan Fundora
/s/ Juan J. Diaz Director January 21, 2000
- --------------------------------------
Juan J. Diaz
/s/ Pedro Ramirez Director January 21, 2000
- --------------------------------------
Pedro Ramirez
/s/ Laureno Carus Abarca Director January 21, 2000
- --------------------------------------
Laureno Carus Abarca
/s/ Eduardo McCormack Director January 21, 2000
- --------------------------------------
Eduardo McCormack
/s/ Gilberto Rivera-Arreaga Director January 21, 2000
- --------------------------------------
Gilberto Rivera-Arreaga
/s/ Benigno R. Fernandez Director January 21, 2000
- --------------------------------------
Benigno R. Fernandez
/s/ Ileana M. Colon Director January 21, 2000
- --------------------------------------
Ileana M. Colon
/s/ Roberto Gorbea Director January 21, 2000
- --------------------------------------
Roberto Gorbea
</TABLE>
II-8
<PAGE>
<TABLE>
<CAPTION>
Exhibit Index
Exhibit No. Description
- ----------- -----------
<S> <C>
5 Opinion of Elias, Matz, Tiernan & Herrick L.L.P.
23.1 Consent of PricewaterhouseCoopers LLP
23.2 The consent of Elias, Matz, Tiernan & Herrick L.L.P. is contained
in their opinion filed as Exhibit 5 to this Registration Statement
99 Authorization Card for Participation in the Dividend Reinvestment
Plan
</TABLE>
II-9
Exhibit 5
Opinion of Elias, Matz, Tiernan & Herrick L.L.P.
<PAGE>
EXHIBIT 5
Law Offices
ELIAS, MATZ, TIERNAN & HERRICK L.L.P.
12th Floor 734 15th Street, N.W.
Washington, D.C. 20005
-----
TIMOTHY B. MATZ Telephone: (202) 347-0300 JEFFREY D. HAAS
STEPHEN M. EGE Facsimile: (202) 347-2172 KEVIN M. HOULIHAN
RAYMOND A. TIERNAN KENNETH B. TABACH
W. MICHAEL HERRICK PATRICIA J. WOHL
GERARD L. HAWKINS FIORELLO J. VICENCIO*
NORMAN B. ANTIN DANIEL R. KLEINMAN*
JOHN P. SOUKENIK* DAVID TEEPLES
GERALD F. HEUPEL, JR. ERIC M. MARION*
JEFFREY A. KOEPPEL TODD CAVALUZZI
DANIEL P. WEITZEL
PHILIP ROSS BEVAN
HUGH T. WILKINSON January 24, 2000 OF COUNSEL
ALLIN P. BAXTER
JACK I. ELIAS
SHERYL JONES ALU
*NOT ADMITTED IN D.C. VIA EDGAR
Board of Directors
R&G Financial Corporation
280 Jesus T. Pinero Avenue
Hato Rey, San Juan, Puerto Rico 00918
Re: Registration Statement on Form S-3
500,000 Shares of Class B Common Stock
Gentlemen:
We are special counsel to R&G Financial Corporation, a Puerto Rico
corporation (the "Corporation"), in connection with the preparation and filing
with the Securities and Exchange Commission pursuant to the Securities Act of
1933, as amended, of a Registration Statement on Form S-3 (the "Registration
Statement"), relating to the registration of up to 500,000 shares of Class B
common stock, $.01 par value per share ("Common Stock"), to be issued pursuant
to the Corporation's Dividend Reinvestment Plan (the "Plan"). We have been
requested by the Corporation to furnish an opinion to be included as an exhibit
to the Registration Statement.
For this purpose, we have reviewed the Registration Statement and
related Prospectus, the Certificate of Incorporation, as amended, the Bylaws of
the Corporation, the Plan, a specimen stock certificate evidencing the Common
Stock of the Corporation and such other corporate records and
<PAGE>
Board of Directors
R&G Financial Corporation
January 24, 2000
Page 2
documents as we have deemed appropriate. We are relying upon the originals, or
copies certified or otherwise identified to our satisfaction, of the corporate
records of the Corporation and such other instruments, certificates and
representations of public officials, officers and representatives of the
Corporation as we have deemed relevant as a basis for this opinion. In addition,
we have assumed, without independent verification, the genuineness of all
signatures and the authenticity of all documents furnished to us and the
conformance in all respects of copies to originals. Furthermore, we have made
such factual inquiries and reviewed such laws as we determined to be relevant
for this opinion.
For purposes of this opinion, we have also assumed that (i) the shares
of Common Stock issuable pursuant to the Plan will continue to be validly
authorized and available for issuance on the dates the Common Stock is issued
pursuant to the Plan; (ii) no change occurs in applicable law or the pertinent
facts; and (iii) the provisions of "blue sky" and other securities laws as may
be applicable have been complied with to the extent necessary.
Based on the foregoing, and subject to the assumptions set forth
herein, we are of the opinion as of the date hereof that the shares of Common
Stock to be issued pursuant to the Plan, when issued and sold pursuant to the
Plan and upon receipt of the consideration required thereby, will be legally
issued, fully paid and non-assessable shares of Common Stock of the Corporation.
We hereby consent to the reference to this firm under the caption
"Legal Opinion" in the Prospectus of the Plan and to the filing of this opinion
as an exhibit to the Registration Statement. In giving such consent, we do not
hereby admit that we are in the category of persons whose consent is required
under Section 7 of the Securities Act of 1933.
Very truly yours,
ELIAS, MATZ, TIERNAN & HERRICK L.L.P.
By: /s/Norman B. Antin
------------------------------------
Norman B. Antin, a Partner
Exhibit 23.1
Consent of PricewaterhouseCoopers, LLP
<PAGE>
Exhibit 23.1
[PricewaterhouseCoopers LLP Letterhead]
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-3 of our report dated February 10, 1999
relating to the financial statements, which appears in the 1998 Annual Report to
Shareholders of R&G Financial Corporation, which is incorporated by reference in
R&G Financial Corporation's Annual Report on Form 10-K/A for the year ended
December 31, 1998. We also consent to the reference to us under the heading
"Independent Accountants" in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
San Juan, Puerto Rico
January 21, 2000
Exhibit 99
Authorization Card for Participation in the
Dividend Reinvestment Plan
<PAGE>
Exhibit 99
R&G FINANCIAL CORPORATION
AUTHORIZATION FOR DIVIDEND REINVESTMENT PLAN
By completing and returning this form, I hereby appoint American Stock
Transfer & Trust Company, New York, New York as my agent ("Agent") and I hereby
authorize my enrollment in the R&G Financial Corporation Dividend Reinvestment
Plan ("Plan"). I understand that my participation is subject to the terms and
conditions as set forth in the Plan, and I hereby acknowledge receipt of a copy
of the Plan.
Please enroll me in the Plan as indicated below. (Check only one of the two
boxes.)
[ ] FULL DIVIDEND REINVESTMENT - Check this box if you authorize the
Agent to purchase additional shares with the dividends on all
shares registered in your name as well as on the shares held in
your reinvestment account by the Agent.
[ ] PARTIAL DIVIDEND REINVESTMENT - Check this box if you authorize
the Agent to purchase additional shares with the dividends on
only part of the shares registered in your name as well as shares
held in your reinvestment account. Indicate in this space
_____________ the number of whole shares registered in your name
that you authorize for reinvestment. The dividends on shares not
authorized for reinvestment will continue to be paid to you in
cash.
<PAGE>
I further understand that I can change my reinvestment options or
withdraw from the Plan at any time as set forth in the Plan by notifying the
Agent in writing as follows:
American Stock Transfer & Trust Company
40 Wall Street
New York, New York 10005
Note: THIS IS NOT A PROXY
(Please sign exactly as the name(s) _________________________________
appear(s) on the reverse side of this Shareholder Signature
form. If shares are held jointly, each
shareholder must sign.)
_________________________________
Shareholder Signature
_________________________________
Dated
