<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
POPULAR, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
POPULAR, INC.
P.O. BOX 362708
SAN JUAN, PUERTO RICO 00936-2708
--------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON THURSDAY, APRIL 23, 1998
--------------------
To the Stockholders of Popular, Inc.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Popular, Inc. (the "Meeting") for the year 1998 will be held at 10:00 a.m. on
Thursday, April 23, 1998, on the third floor of the Centro Europa Building, in
Santurce, Puerto Rico, to consider and act upon the following matters:
(1) To elect five (5) directors of Popular, Inc. (the "Corporation" )
for a three-year term; and
(2) To transact any and all other business as may be properly brought
before the Meeting or any adjournments thereof. Management at present
knows of no other business to be brought before the Meeting.
Stockholders of record at the close of business on March 4, 1998, are
entitled to notice of and vote at the Meeting.
You are cordially invited to attend the Meeting. Whether you plan to
attend or not, please sign and return the enclosed proxy so that the Corporation
may be assured of the presence of a Quorum at the Meeting. A postage-paid
envelope addressed to the Corporation is enclosed for your convenience.
San Juan, Puerto Rico, March 18, 1998.
By Order of the Board of Directors,
SAMUEL T. CESPEDES
Secretary
<PAGE> 3
POPULAR, INC.
P.O. BOX 362708
SAN JUAN, PUERTO RICO 00936-2708
-----------------
PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON THURSDAY APRIL 23, 1998
-----------------
This Proxy statement is furnished in connection with the solicitation
by the Board of Directors of Popular, Inc. (the "Corporation") of Proxies to be
voted at the Annual Meeting of Stockholders (the "Meeting") to be held at 10:00
a.m. on Thursday, April 23, 1998, on the third floor of the Centro Europa
Building, in Santurce, Puerto Rico, and any adjournments thereof. Enclosed with
this Proxy Statement is the Annual Report, including Form 10-K and the financial
statements for the year ended December 31, 1997, duly certified by Price
Waterhouse as independent public accountants. This Proxy Statement, the enclosed
Annual Report and Form 10-K, the Notice of Annual Meeting of Stockholders and
the form of proxy are being sent to stockholders on or about March 18, 1998.
Properly executed proxies received by the Secretary of the Corporation
will be voted at the Meeting in accordance with the instructions which appear
therein and for the purposes indicated on the Notice of Meeting. The Board of
Directors does not intend to present any business at the Meeting other than
those included in the Notice of Meeting. The Board of Directors at this time
knows of no other matters which may come before the Meeting. However, if any new
matters requiring the vote of the stockholders properly come before the Meeting,
proxies may be voted with respect thereto in accordance with the best judgement
of Proxyholders, under the discretionary power granted by stockholders to their
proxies in connection with general matters.
SOLICITATION OF PROXIES
In addition to solicitation by mail, management may participate in the
solicitation of Proxies by telephone, personal interviews or otherwise. The
Board of Directors has engaged the firm of Georgeson & Company Inc. to aid in
the solicitation of Proxies. The cost of solicitation will be borne by the
Corporation and is estimated at $6,500.
REVOCABILITY OF PROXY
Any stockholder giving a proxy has the power to revoke it before the
proxy is exercised. The grantor may revoke the proxy by claiming at the Meeting
the right to vote by himself the shares of stock registered in his name or by
notice of revocation in writing to the President or Secretary of Popular, Inc.,
P.O. Box 362708, San Juan, Puerto Rico 00936-2708, delivered before the proxy is
exercised.
VOTING SECURITIES
The only outstanding voting securities of the Corporation are its
shares of common stock, each share of which entitles the holder thereof to one
vote. Only common stockholders of record at the close of business on March 4,
1998 (the "Record Date"), will be entitled to vote at the Meeting and any
adjournments thereof. On the Record Date there were 67,717,548 shares of common
stock of Popular, Inc. outstanding. The shares covered by any such proxy that
are properly executed and received by management before 10:00 a.m. on the day of
the Meeting will be voted.
2
<PAGE> 4
The presence, in person or by proxy, of the holders of a majority of
the outstanding shares of common stock of the Corporation is necessary to
constitute a quorum at the Meeting. Votes cast by proxy or in person at the
Meeting will be counted by the persons appointed by the Corporation as members
of the vote-counting committee for the Meeting. For purposes of determining
quorum, the members of the vote-counting committee will treat abstentions and
brokers non-votes as shares that are present and entitled to vote. A broker
non-vote results when a broker or nominee has expressly indicated in the proxy
that it does not have discretionary authority to vote on a particular matter. As
to the election of Directors, the proxy card being provided by the Board of
Directors enables a stockholder to vote for the election of the nominees
proposed by the Board, or to withhold authority to vote for one or more of the
nominees being proposed. Directors will be elected by a majority of the votes
cast. Therefore, abstention and broker non-votes will not have an effect on the
election of directors of the Corporation.
PRINCIPAL STOCKHOLDERS
Following is the information, to the extent known by the persons on
whose behalf this solicitation is made, with respect to any person (including
any "group" as that term is used in Section 13(d)(3) of the Securities and
Exchange Act of 1934, as amended) who is known to the Corporation to be the
beneficial owner of more than 5 percent of the Corporation's voting securities.
<TABLE>
<CAPTION>
Amount and nature Percent
of beneficial of
Title of Class Name and address of beneficial owner ownership (1) Class(2)
- -------------- ------------------------------------ ------------- --------
<S> <C> <C> <C>
Common ............ Banco Popular de Puerto Rico (the "Bank")
As Trustee for Banco Popular de Puerto
Rico Retirement Plan 2,836,430
The Bank as Trustee for the Profit Sharing Plan
for the Employees of Banco Popular de Puerto
Rico 2,660,104
---------
5,496,534 (3) 8.1169
Common ............ State Farm Mutual Automobile Insurance
Company 3,418,262 (4) 5.0478
</TABLE>
- -------------
(1) As of February 27, 1998.
(2) Based on 67,717,548 shares of common stock outstanding.
(3) The Bank, as Trustee, administers both Plans through their
Administrative Committees, with sole voting and investment power.
(4) On January 20, 1998 State Farm Mutual Automobile Insurance Company
("State Farm") and affiliated entities filed a joint statement on
Schedule 13-G with the Securities and Exchange Commission reflecting
its holdings as of December 31, 1997. According to said statement,
State Farm and its affiliates might be deemed to constitute a "group"
within the meaning of Section 13(d)(3) of the Securities Exchange Act
of 1934. State Farm and its affiliates could also be deemed to be the
beneficial owners of 3,418,262 shares of Popular, Inc. However, State
Farm and each such affiliate disclaim beneficial ownership as to all
shares as to which each such person has no right to receive the
proceeds of sale of the shares, and also disclaim that they constitute
a "group".
3
<PAGE> 5
SHARES BENEFICIALLY OWNED BY DIRECTORS,
NOMINEES AND EXECUTIVE OFFICERS OF THE CORPORATION
Following is the information, as of February 27, 1998, as to equity
securities of the Corporation beneficially owned by all current directors,
nominees, the most highly compensated Executive Officers of the Corporation who
are not directors and the total owned by directors, nominees and all Executive
Officers of the Corporation as a group:
COMMON STOCK
<TABLE>
<CAPTION>
Title Amount and Nature Percent of
Name of class of Beneficial Ownership class (1)
---- -------- ----------------------- ---------
<S> <C> <C> <C>
Salustiano Alvarez Mendez .......... Common 70,360 .1039
Alfonso F. Ballester ............... Common 689,522(3) 1.0182
Juan J. Bermudez ................... Common 161,003(4) .2378
Francisco J. Carreras .............. Common 5,964 .0088
Richard L. Carrion ................. Common 517,941(5) .7649
David H. Chafey Jr ................ Common 37,501 .0554
Luis E. Dubon Jr ................... Common 543,672(6) .8029
Antonio Luis Ferre ................. Common 1,436,194(7) 2.1209
Hector R. Gonzalez ................. Common 280,634(8) .4144
Jorge A. Junquera .................. Common 21,170(9) .0313
Manuel Morales Jr .................. Common 359,401(10) .5307
Alberto M. Paracchini .............. Common 56,231(11) .0830
Francisco M. Rexach Jr ............. Common 74,127(12) .1095
J. Adalberto Roig Jr ............... Common 237,865(13) .3513
Felix J. Serralles Jr .............. Common 179,830(14) .2656
Julio E. Vizcarrondo Jr ............ Common 562,971(15) .8314
Maria Isabel P. de Burckhart ....... Common 26,013(16) .0384
Roberto R. Herencia ................ Common 5,966 .0088
Larry B. Kesler .................... Common 19,019 .0281
Humberto Martin .................... Common 32,339 .0478
Emilio E. Pinero ................... Common 14,249 .0210
Carlos Rom Jr ...................... Common 11,119(17) .0164
Carlos J. Vazquez .................. Common 49,704(18) .0734
All Directors and Executive Officers
of the Corporation as a group ..... Common 5,392,795 7.9637
</TABLE>
PREFERRED STOCK
<TABLE>
<CAPTION>
Title Amount and Nature Percent of
Name of class of Beneficial Ownership class (2)
---- -------- ----------------------- ---------
<S> <C> <C> <C>
Salustiano Alvarez Mendez .......... Preferred 7,000 .1750
Luis E. Dubon Jr ................... Preferred 7,825(19) .1956
Alberto M. Paracchini .............. Preferred 7,000 .1750
Carlos J. Vazquez .................. Preferred 4,568(20) .1142
All Directors and Executive Officers
of the Corporation as a group ..... Preferred 26,393 .6598
</TABLE>
4
<PAGE> 6
(1) Based on 67,717,548 shares of common stock outstanding.
(2) Based on 4,000,000 shares of preferred stock outstanding.
(3) Mr. Ballester owns 687,522 shares and has indirect investment power
over 2,000 shares owned by his wife. Excludes 600,964 shares owned by
his sister Mrs. Griselda Ballester, as to all of which shares Mr.
Ballester disclaims indirect voting power.
(4) Excludes 6,151 shares owned by his wife, as to which Mr. Bermudez
disclaims indirect voting power.
(5) Mr. Carrion owns 139,318 shares and also has indirect investment power
over 12,070 shares owned by his children. Junior Investment Corporation
owns 2,103,000 shares of the Corporation. Mr. Carrion owns 17.43% of
the shares of said corporation.
(6) Mr. Dubon owns 41,034 shares and has a power of attorney over 57,608
shares owned by his wife, over 36,430 shares held in trust for his
children and 595,407 shares owned by various corporations and members
of his family in which Mr. Dubon has direct or indirect ownership. Mr.
Dubon disclaims indirect voting power and investment authority over
186,807 shares owned by his brother, nieces and DW Group, Inc.
(7) Mr. Ferre has indirect investment and voting power and claims
beneficial ownership of 1,436,194 shares of the Corporation. Mr. Ferre
owns 803 shares and has indirect investment and voting power over
250,600 shares owned by Alfra Investment Corp., 1,600 shares owned by
South Management, Inc. and 200 shares owned by his wife. Mr. Ferre owns
85.12% of Ferre Investment Fund, Inc., which owns 460,635 shares of the
Corporation. Mr. Ferre also owns 64.39% of the shares of El Dia, Inc.,
and has indirect voting power over Alfra Investment Corp., which owns
19.10% of El Dia, Inc., which owns in turn 722,356 shares of the
Corporation.
(8) Mr. Gonzalez owns 267,958 shares and has voting and investment power
over 12,676 shares of the Corporation owned by TPC Financial Services,
Inc. of which he is President and Chief Executive Officer.
(9) Mr. Junquera owns 20,830 shares and has indirect investment power over
101 shares owned by his wife and over 239 shares owned by his daughter.
(10) Mr. Morales owns 159,347 shares and has voting power over 200,054
shares owned by his parents, as their attorney-in-fact.
(11) Excludes 632 shares owned by his wife, as to which Mr. Paracchini
disclaims beneficial ownership.
(12) Mr. Rexach owns 37,127 shares and has indirect voting power over 30,000
shares owned by his mother, as her attorney-in-fact, and over 7,000
shares held by Capital Assets, Inc. as President and shareholder.
(13) Mr. Roig owns 225,271 shares and has indirect voting power over 12,594
shares owned by his wife.
(14) Mr. Serralles owns 113,376 shares, and has indirect voting power over
5,146 shares owned by his wife. Mr. Serralles owns 100% of the shares
of each of Capitanejo, Inc. and Fao Investments, Inc., which own 58,510
and 2,798 shares, respectively, of the Corporation.
(15) Mr. Vizcarrondo owns 99,868 shares and has indirect voting power over
90,662 shares owned by his wife. Mr. Vizcarrondo's wife owns 17.71% of
the shares of Junior Investment Corporation, which owns 2,103,000
shares of the Corporation. Mr. Vizcarrondo has indirect voting and
investment power over 402 shares held in trust by Vicar Enterprises,
Inc. for the benefit of his children, for which he disclaims beneficial
ownership. Mr. Vizcarrondo also disclaims beneficial ownership over
63,573 shares owned by DMI Pension Trust, where he serves as trustee
and member of the investment committee. Excluded also are 11,649 shares
owned by Mr. Vizcarrondo as trustee of the Suarez Toro Trust, which
owns said shares of the Corporation, of which he disclaims beneficial
ownership.
(16) Mrs. Burckhart owns 24,564 shares and has indirect voting power over
1,449 held by her husband as custodian for her daughters.
(17) Mr. Rom owns 10,816 shares and has indirect voting power over 69 shares
owned by his wife and 234 shares held by him as custodian for various
members of his family.
(18) Mr. Vazquez owns 3,374 shares and has investment authority over 46,330
shares held by various family members.
(19) Mr. Dubon owns 1,450 preferred shares, and has indirect voting power
over 5,875 preferred shares held in trust by Mr. Luis E. Dubon Jr. for
several persons. Mr. Dubon also has indirect ownership over 500
preferred shares owned by Fundacion Gogui, Inc.
(20) Mr. Vazquez has investment authority over 4,568 preferred shares held
by various family members.
5
<PAGE> 7
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based on a review of Forms 3, 4 and 5 and amendments thereto furnished
to the Corporation with respect to its 1997 fiscal year, pursuant to Section
16(a) of the Securities Exchange Act of 1934, the following people, subject to
Section 16(a), failed to file on a timely basis:
<TABLE>
<CAPTION>
Name Number of late reports Number of transactions
- ---- ---------------------- ----------------------
<S> <C> <C>
Salustiano Alvarez Mendez 2 2
Antonio Luis Ferre 1 1
Francisco M. Rexach Jr 1 2
Emilio Jose Venegas 1 5
Julio E. Vizcarrondo Jr 2 2
Maria Isabel P. Burckhart 1 1
David H. Chafey Jr 1 1
Humberto Martin 1 1
</TABLE>
The Corporation has no knowledge of any additional failure to file a
required Form.
BOARD OF DIRECTORS AND COMMITTEES
ELECTION OF DIRECTORS
The Certificate of Incorporation and the By-laws of the Corporation
establish a classified Board of Directors pursuant to which the Board of
Directors is divided into three classes as nearly equal in number as possible,
with each class having at least three members and with the term of office of one
class expiring each year. Each director serves for a term ending on the date of
the third annual meeting of stockholders following the annual meeting at which
such director was elected.
At the Meeting, five (5) directors assigned to "Class 2" are to be
elected until the 2001 Annual Meeting of Stockholders or until their respective
successors shall have been elected and qualified. The directors nominated for
election are: Luis E. Dubon Jr., Hector R. Gonzalez, Manuel Morales Jr.,
Francisco M. Rexach Jr. and Julio E. Vizcarrondo Jr. All of the above will serve
for three (3) years until the 2001 Annual Meeting of Stockholders or until their
respective successors shall have been elected and qualified. The remaining 11
directors of the Corporation will serve as directors, as follows: until the 1999
Annual Meeting of Stockholders of the Corporation, in the case of those seven
directors assigned to "Class 3", and until the 2000 Annual Meeting of
Stockholders, in the case of those four directors assigned to "Class 1", or in
each case until their successors are duly elected and qualified.
The people named as proxies in the accompanying Form of Proxy have
advised the Corporation that, unless otherwise instructed, they intend to vote
at the meeting the shares covered by the proxies FOR the election of the five
nominees named above, and that if any one or more of such nominees should become
unavailable for election they intend to vote such shares FOR the election of
such substitute nominees as the Board of Directors may propose. The Corporation
has no knowledge that any nominee will become unavailable for election.
Information relating to principal occupation and business experience
during the past five (5) years (including position held with the Corporation or
the Bank), age and the period during which each director has served is set forth
below.
6
<PAGE> 8
BOARD OF DIRECTORS
NOMINEES FOR ELECTION AS DIRECTORS
(TERMS EXPIRING IN 2001)
CLASS 2 DIRECTORS
<TABLE>
<CAPTION>
DIRECTOR OF
PRINCIPAL OCCUPATION AND BUSINESS THE CORPORATION
NAME AGE EXPERIENCE DURING THE PAST FIVE YEARS SINCE
---- --- ------------------------------------- -----
<S> <C> <C> <C>
Luis E. Dubon Jr............63 Attorney-at-Law and Investor. Partner of the 1984
law firm Dubon & Dubon. Director and
stockholder of D Group Capital Corporation,
TL Group Corporation, Delta Maintenance
Services Inc. Director and partner of D
Group Equity Holding Associates, S. en C.
por A., S.E., and D Group Commercial
Equities Associates S. en C. por A., S.E.
Director of American Investment Corp.,
Fundacion Gogui, Inc., Carite Resorts
Associates, S. en C. por A., S.E., Carite
Resorts GP, Inc., Carolina Developers
Associates, S. en C. por A., S.E., Contorno
Developers Associates, S. en C. por A.,
S.E., Contorno Developers GP, Inc., D Group
Commercial Equities GP, Inc., D Group
Equities Management Services, Inc., D Group
Equity Holding GP, Inc., D Group Realty
Services, Inc., Delta Engineering Services,
Inc., Delta Parking System Corporation,
Dubon Corporation, Executive Habitats, Inc.,
Galeria del Condado Associates, S. en C. por
A., S.E., Galeria del Condado GP, Inc.,
Imporexco, Inc., Lujoma Corporation, Marina
Developers (Carolina) GP, Inc., Mercantil
Caguax Associates, S. en C. por A., S.E.,
Mercantil Caguax GP, Inc., Mercantil
Mayaguez Associates, S. en C. por A., S.E.,
Mercantil Mayaguez GP, Inc., Mercantil
Pinero Associates, S. en C. por A., S.E.,
Mercantil Pinero GP, Inc., Mercantil San
Patricio Associates, S. en C. por A., S.E.,
Mercantil San Patricio GP, Inc., Metro
Center Associates, S. en C. por A., S.E.,
Metro Center GP Corporation, Plaza Bellas
Artes GP, Inc., Plaza Bellas Artes
Associates Uno S. en C. por A., S.E., Plaza
Bellas Artes GP, Inc. Uno, Plaza Bellas
Artes Associates Dos S. en C. por A., S.E.,
Plaza Bellas Artes Associates Tres S. en C.
por A., S.E., Plaza Bellas Artes Associates
IV, S. en C. por A., S.E., Plaza del Condado
Associates, S. en C. por A., S.E., Plaza del
Condado GP, Inc., Portilla Corporation,
Puerta del Condado Associates, S. en C. por
A., S.E., Puerta del Condado GP Inc., Resort
Equities Developers GP, Inc., San Jose
Building Associates, S. en C. por A., S.E.,
San Jose Building GP, Inc., Title &
Corporate Services Corporation and San Jose
Development, Inc. Director of Banco de Ponce
from 1973 to 1990. Director of the Bank
since 1990.
</TABLE>
7
<PAGE> 9
BOARD OF DIRECTORS
NOMINEES FOR ELECTION AS DIRECTORS
(TERMS EXPIRING IN 2001)
CLASS 2 DIRECTORS
<TABLE>
<CAPTION>
Director of
Principal occupation and business the Corporation
Name Age experience during the past five years since
---- --- ------------------------------------- -----
<S> <C> <C> <C>
Hector R. Gonzalez..........64 President and Chief Executive Officer of TPC 1984
Communications of PR, Inc., owner and
operator of cable television systems.
President and Chief Executive Officer of TPC
Financial Services, Inc., TPC Cable Media,
TelePonce Cable TV and Telecell Systems.
Director of Damas Foundation, Inc. Director
of Popular Finance, Inc. and Popular
Mortgage, Inc. Director of Banco de Ponce
from 1973 to 1990. Director of the Bank
since 1995.
Manuel Morales Jr...........52 President of Selarom Capital Group, Inc. 1990
President of Parkview Realty, Inc., of the
Atrium Office Center, Inc., of HQ Business
Center P.R., Inc., of Executrain of Puerto
Rico and of Office & Home, Inc. Honorary
General Consul of Japan in San Juan. Trustee
of Sacred Heart University, of the Caribbean
Environmental Development Institute and of
Fundacion Angel Ramos, Inc. Member of the
Board of Directors of Better Business
Bureau. Member of the Board of Trustees of
Fundacion Banco Popular, Inc. Chairman of
the Audit Committee of the Corporation and
the Bank. Director of the Bank since 1978.
Francisco M. Rexach Jr......60 President of Ready Mix Concrete, Inc. a 1990
subsidiary of PRCC (a registered public
company) until September 1997. President of
Capital Assets, Inc. since November 1995.
Chairman of Rexach Consulting Services.
Director of Popular Leasing & Rental, Inc.
Chairman of the Human Resources and
Compensation Committee of the Bank. Director
of the Bank since 1984.
Julio E. Vizcarrondo Jr.....63 Civil Engineer. President/Partner and Chief 1990
Executive Officer of Desarrollos
Metropolitanos, S.E., VMV Enterprises Corp.,
Resort Builders, S.E., Metropolitan
Builders, S.E., Institutional Builders,
S.E., corporations engaged in the
development and construction of residential,
commercial, industrial and institutional
projects in Puerto Rico. Director of the
Bank since 1984.
<CAPTION>
CLASS 3 DIRECTORS
(TERMS EXPIRING IN 1999)
<S> <C> <C> <C>
Juan J. Bermudez............60 Electrical Engineer. Partner of Bermudez and 1990
Longo, S.E., Decemcor, S.E., Unicenter,
S.E., Unicourts, S.E., Unieast, S.E.,
Unigardens, S.E., Baldwin Development, S.E.,
Paseo Sereno, S.E., Tivoli, S.E., Clearview,
S.E., Placid Park, S.E. and PCME Commercial,
S.E. Principal Stockholder and Director of
BL Management, Corp., Paseomar Corp., PCME
Development, Inc., G.S.P. Corp.,
Unimanagement Corp., Lab Properties, Inc.
and Homes Unlimited Corp. Chairman of the
Trust Committee of the Bank. Director of the
Bank since 1985.
Francisco J. Carreras.......65 Former professor of the University of Puerto 1990
Rico. Former President of the Catholic
University of P.R. Member of the Board of
Trustees of Fundacion Banco Popular, Inc.
Executive Director of Fundacion Angel Ramos,
Inc. Chairman of the Community Reinvestment
Committee of the Bank. Director of the Bank
since 1979.
</TABLE>
8
<PAGE> 10
CLASS 3 DIRECTORS
(TERMS EXPIRING IN 1999)
<TABLE>
<CAPTION>
Director of
Principal occupation and business the Corporation
Name Age experience during the past five years since
---- --- ------------------------------------- -----
<S> <C> <C> <C>
Richard L. Carrion..........45 Chairman, President and Chief Executive 1990
Officer ("CEO") of the Corporation, and the
Bank. Chairman of Popular International
Bank, Inc., Popular North America, Inc. and
Banco Popular, FSB. Chairman of the Board of
Trustees of Fundacion Banco Popular, Inc.
Director of Equity One, Inc., Popular
Finance, Inc., Popular Leasing & Rental,
Inc., Popular Mortgage, Inc. and Popular
Securities Incorporated. Member of the
International Olympic Committee. President
of the Puerto Rico Olympic Trust and Member
of the Puerto Rico Olympic Committee. Member
of Board of Directors and Compensation
Committee of Pueblo Xtra International, Inc.
until March 31, 1995. Chairman and President
of Puerto Rico Investors Tax-Free Funds,
Inc. I, II, III, IV, V and of Puerto Rico
Tax-Free Target Maturity Fund, Inc. I and
II. Member of the Board of Directors of the
Company for the Development of the Cantera
Peninsula and the Board of Trustees of the
Puerto Rico Committee for Economic
Development.Member of the Board of Directors
and of the Benefits & Human Resources
Committees of Bell Atlantic Corporation
(registered public company). Member of the
Board of the National Museum of American
History since January 1998. Chairman of the
Executive Committee of the Corporation.
Director of the Bank since 1982.
David H. Chafey Jr..........44 Supervisor of Bank's Retail Banking Group 1996
since January 1996. Supervisor of the
Financial Management Group and U.S.
Operations until December 1995. Senior
Executive Vice President since October 1995.
Executive Vice President of the Bank since
January 1990. Chairman of Popular Securities
Incorporated until January 1996. Executive
Vice President and Director of Popular
International Bank, Inc. and Popular North
America, Inc. President of Popular
International Bank, Inc. and Popular North
America, Inc. until December 1995. Director
of Equity One, Inc., Popular Leasing &
Rental, Inc., Popular Securities
Incorporated and Banco Popular, FSB.
Chairman of the Board of Popular Finance,
Inc. Chairman of the Puerto Rico Telephone
Authority from 1993 thru 1997. Executive
Vice President of Puerto Rico Investors
Tax-Free Fund, Inc. I, II, III, IV, V and
Puerto Rico Tax-Free Target Maturity Fund,
Inc. I and II. Chairman of the Board of
Grupo Guayacan, Inc. since 1996. Member of
the Board of San Jorge Children's Research
Foundation since 1996, United Way of Puerto
Rico, Park Conservation Trust of Puerto
Rico, Governor's Economic Council on
Productivity and the Steering Committee of
Private Capital of Puerto Rico since 1994.
Director of the Bank since 1994.
</TABLE>
9
<PAGE> 11
CLASS 3 DIRECTORS
(TERMS EXPIRING IN 1999)
<TABLE>
<CAPTION>
Director of
Principal occupation and business the Corporation
Name Age experience during the past five years since
---- --- ------------------------------------- -----
<S> <C> <C> <C>
Antonio Luis Ferre..........64 Vice Chairman of the Board of Directors of 1984
the Corporation and the Bank. Chairman of
the Board of Puerto Rican Cement Co., Inc.
(a registered public company), manufacturers
of cement and allied products. President and
Editor of El Dia, Inc., a newspaper
publishing company. Director of Metropolitan
Life Insurance Company (a registered company
under the Investment Company Act of 1940)
until December 1995. Member of the
Director's Committee of Metropolitan Life
Insurance Company since January 1, 1996.
Director of Pueblo Xtra International, Inc.
until March 1995. Director of Pueblo Xtra
Supermarkets until 1995. Director of Banco
de Ponce from 1959 to 1990. Director of the
Bank since 1990.
Alberto M. Paracchini.......65 Former Chairman of the Board of Directors of 1984
the Corporation and the Bank. Former
Chairman of Popular North America, Inc.,
Equity One, Inc., Popular Finance, Inc. and
Popular Leasing & Rental, Inc. Member of the
Board of Trustees of Fundacion Banco
Popular, Inc. Chairman of the Board of
Trustees, Sacred Heart University in San
Juan, Puerto Rico. Director of Puerto Rican
Cement Co., Inc. (a registered public
company). Director of HDA Management
Associates since 1993. Director of Equus
Management Co., Inc., Managing General
Partner of Equus Gaming Co., L.P. (listed on
the American Stock Exchange). Director of
Venture Capital Fund, Inc. Executive Officer
of the Corporation from 1984 to April 1993.
Director of Banco de Ponce from 1959 to
1990. Chairman of the Investment Committee
of the Bank. Director of the Bank since
1990.
Felix J. Serralles Jr.......63 President and Chief Executive Officer of 1984
Empresas Serralles, Inc. and of its
subsidiary Destileria Serralles, Inc.,
manufacturers and distributors of distilled
spirits, and of its affiliate Mercedita
Leasing, Inc. Director of Banco de Ponce
from 1966 to 1990. Director of the Bank
since 1990.
<CAPTION>
CLASS 1 DIRECTORS
(TERMS EXPIRING IN 2000)
<S> <C> <C> <C>
Salustiano Alvarez
Mendez....................68 President and Director of Mendez & Company, 1997
Inc., food and liquor importers and
distributors. Director of International
Shipping Agency, Inc., shipping agents.
Director of Menaco Corp., Guaynabo Realty
S.E. and A. & D. Associates, Inc. ALECO
Realty and Bamco Products Corp. until 1995.
Director of Banco de Ponce from 1981 to 1990
and of the Bank from 1991 to April 1997.
Alfonso F. Ballester........68 Vice Chairman of the Board of Directors of 1990
the Corporation and the Bank. President of
Ballester Hermanos, Inc. (Wholesale of
provisions and liquors). Director of Popular
International Bank, Inc., Popular North
America, Inc., Banco Popular, FSB, Equity
One, Inc., Popular Securities Incorporated
and Popular Leasing & Rental, Inc. Chairman
of the Commercial Credit Committee of the
Bank. Director of the Bank since 1975.
</TABLE>
10
<PAGE> 12
CLASS 1 DIRECTORS
(TERMS EXPIRING IN 2000)
<TABLE>
<CAPTION>
Director of
Principal occupation and business the Corporation
Name Age experience during the past five years since
---- --- ------------------------------------- -----
<S> <C> <C> <C>
Jorge A. Junquera...........49 Supervisor of the Financial Management 1990
Group, the U.S. Operations and the Caribbean
and Latin America Expansion Group since
January 1996. Supervisor of the Bank's
Retail Banking Group until December 1995.
Senior Executive Vice President since
October 1995. Executive Vice President of
the Bank since 1980. President and Director
of Popular International Bank, Inc. and
Popular North America, Inc. since January
1996. Director of Equity One, Inc., Popular
Finance, Inc., Banco Popular, Illinois,
Banco Popular, N.A. (California), Banco
Popular, N.A. (Florida), Banco Popular, N.A.
(Texas), Popular Mortgage, Inc. and Popular
Leasing & Rental, Inc. Chairman of the Board
of Popular Securities Incorporated since
January 1996. President of Puerto Rico
Tourism Company until February 1997 and
President of Hotel Development Co. since
1993. Director of YMCA since 1988. Director
of the Bank since 1990.
J. Adalberto Roig Jr........67 Chairman of the Board of Antonio Roig 1997
Sucesores, Inc., Desarrollos Agricolas del
Este, S.E. and Desarrollos Roig, S.E.
President of Jarofe Investment, Inc.,
Ferrocarriles del Este and of East Porto
Rico Sugar Co. Chairman of the Board and
President of Roig Commercial Bank until June
1997.
</TABLE>
STANDING COMMITTEES
The Board of Directors of the Corporation met on a monthly basis during
1997. All directors attended 75% or more of the meetings of the Board of
Directors and the committees of the Board of Directors on which such directors
served.
The Corporation's Board of Directors has a standing Audit and Executive
Committee. The Board of Directors of the Bank, the principal subsidiary of the
Corporation, has a standing Human Resources and Compensation Committee that may
review compensation matters for the Corporation. There is no standing Nominating
Committee but the Executive Committee charter provides that said Executive
Committee may exercise the power to nominate directors. However, in the past the
Executive Committee has not exercised such function and nominations have been
made by the Board of Directors. Information regarding the Audit and Human
Resources Committees follows:
AUDIT COMMITTEE
The functions of the Audit Committee include reviewing the accounting
principles and practices employed by the Corporation, and compliance with
applicable laws and regulations. The Committee meets with the Corporation's
independent external auditors to review their audit procedures, the report on
their examination of the Corporation's financial statements, and their comments
on the system of internal controls. Also, the Committee oversees the internal
audit function and reviews the reports prepared by the Auditing Division on
their examinations of the operating and business units and for any other special
examinations that may be required. The Committee held four meetings during the
fiscal year ended December 31, 1997.
The Committee members during 1997 were: Salustiano Alvarez Mendez, Juan
J. Bermudez, Francisco J. Carreras, Luis E. Dubon Jr., Manuel Morales Jr. and
Julio E. Vizcarrondo Jr. None of the members of the committee are officers or
employees of the Corporation or any of its subsidiaries.
11
<PAGE> 13
HUMAN RESOURCES AND COMPENSATION COMMITTEE
The functions of the Human Resources and Compensation Committee include
reviewing the compensation and benefits of management and employees, reviewing
the policies related to the performance and compensation of management and
employees, and reviewing the long-range planning for executive development and
succession. The Committee held one meeting during the fiscal year ended December
31, 1997.
The Committee members during 1997 were: Salustiano Alvarez Mendez,
Esteban D. Bird, Hector R. Gonzalez, Francisco M. Rexach Jr. and Julio E.
Vizcarrondo Jr. None of the members of the Committee are officers or employees
of the Corporation or any of its subsidiaries.
COMPENSATION OF DIRECTORS
Directors who are not employees of the Corporation and its subsidiaries
were entitled to be reimbursed for certain expenses up to $12,000 annually. The
Board of Directors of the Corporation has a Stock Deferment Plan, pursuant to
which each outside director of the Corporation will be given the option to defer
all or a portion of the $12,000 annual retainer. The deferred portion, plus an
additional amount of $0.25 for each dollar so deferred, being applied toward the
purchase in the open market of shares of the Corporation's common stock on
behalf of the director, with the certificates representing such shares to be
retained by the Corporation until the director's term in every Board terminates.
In addition, each director shall have the right to vote and to receive any
dividends payable on the shares held for said director under the Plan, but no
such shares shall be sold, transferred, assigned, pledged or in any other way
encumbered by the director until the certificates representing such shares are
delivered to the director. In the event that a director is removed for cause
from office by appropriate corporate action or under authority of law, said
director (1) shall be obligated to sell to the Corporation all of the shares
acquired with the deferred retainer amount at a price equal to the lower of (a)
the actual cost of the purchase of said shares and (b) the market price of said
shares on the date the director was discharged, and (2) shall forfeit to the
Corporation all of the shares purchased with any additional contribution.
In addition directors receive $750 for attending each Board of
Directors' meeting, $1,000 for attending each Executive Committee meeting and
$500 for attending each of the others committee meetings. Directors who are
employees do not receive fees for attending Board of Directors and committee
meetings.
EXECUTIVE OFFICERS
The following table sets forth the names of the executive officers (the
"Executive Officers") of the Corporation including their age, business
experience during the past five (5) years and the period during which each such
person has served as an Executive Officer of the Corporation or the Bank.
<TABLE>
<CAPTION>
EXECUTIVE
OFFICER
OF THE
PRINCIPAL OCCUPATION AND BUSINESS CORPORATION
NAME TITLE AGE EXPERIENCE DURING THE PAST FIVE YEARS SINCE
---- ----- --- ------------------------------------- -----
<S> <C> <C> <C> <C>
Richard L. Carrion...........Chairman, President 45 See under "Board of Directors" 1990
and CEO
Jorge A. Junquera............Senior Executive 49 See under "Board of Directors" 1990
Vice President
David H. Chafey Jr...........Senior Executive 44 See under "Board of Directors" 1990
Vice President
</TABLE>
12
<PAGE> 14
<TABLE>
<CAPTION>
EXECUTIVE
OFFICER
OF THE
PRINCIPAL OCCUPATION AND BUSINESS CORPORATION
NAME TITLE AGE EXPERIENCE DURING THE PAST FIVE YEARS SINCE
---- ----- --- ------------------------------------- -----
<S> <C> <C> <C> <C>
Maria Isabel P.
de Burckhart...............Executive Vice 49 Supervisor of the Administration Group. 1990
President Executive Vice President of the Bank since
January 1990. Executive Vice President of
Popular North America, Inc. Member of the
Board of Trustees of Fundacion Banco
Popular, Inc. Member of the Board of
Directors of Fundacion Ana G. Mendez since
1992, of Puerto Rico Community Foundation
and of Puerto Rico Convention Bureau since
1993.
Roberto R. Herencia..........Executive Vice 38 Head of the Corporation's U.S. business 1997
President expansion. Executive Vice President since
January 1997. Director of Popular North
America, Inc., Banco Popular, FSB, Equity
One, Inc., Banco Popular, Illinois, Banco
Popular, N.A. (California ), Banco Popular,
N.A. (Florida) and Banco Popular, N.A.
(Texas). Senior Vice President from December
1991 to December 1996. Vice President and U.
S. Senior Credit Officer from April to
December 1991.
Larry B. Kesler..............Executive Vice 60 Supervisor of the Individual Credit Group 1990
President and the Virgin Islands Region. Executive
Vice President of the Bank since January
1990. Executive Vice President of Popular
North America, Inc. Chairman of the Board
of Directors of Equity One, Inc., Popular
Leasing & Rental, Inc. and Popular Mortgage,
Inc. Director of Popular Finance, Inc.
Humberto Martin..............Executive Vice 52 Supervisor of the Operations Group. 1986
President Executive Vice President of the Bank since
November 1986. Executive Vice President of
Popular North America, Inc.
Emilio E. Pinero.............Executive Vice 49 Supervisor of the Commercial Banking Group. 1990
President Executive Vice President of the Bank since
January 1990. Director of Popular Mortgage,
Inc. and of Popular Leasing & Rental, Inc.
Member of the Board of Trustees of American
Red Cross since 1997. Member of the Board of
Trustees of Fundacion Felisa Rincon de
Gautier and Fundacion Sor Isolina Ferre
since 1995. Member of the Board of Trustees
of Inter American University of Puerto Rico
since 1994. Executive Vice President of
Popular North America, Inc.
</TABLE>
13
<PAGE> 15
<TABLE>
<CAPTION>
EXECUTIVE
OFFICER
OF THE
PRINCIPAL OCCUPATION AND BUSINESS CORPORATION
NAME TITLE AGE EXPERIENCE DURING THE PAST FIVE YEARS SINCE
---- ----- --- ------------------------------------- -----
<S> <C> <C> <C> <C>
Carlos Rom Jr................Executive Vice 41 Head of the Corporation's Caribbean and 1997
President Latin America business expansion. Executive
Vice President since January 1997. Director
of ATH Dominicana, Inc. since December 1995.
Chairman of the Board of Directors of ATH
Costa Rica since June 1996. Senior vice
President from September 1995 to December
1996. Director of Marchand-ICS Group, Inc.
since 1995 and of McConnell Consulting since
1997. Vice President and General Manager of
Pizza Hut, a division of Pepsi Co., Inc.
from July 1994 to September 1995. Senior
Vice President and Manager of the Bank-San
Juan Region from August 1991 to June 1994.
Member of The United Way of PR's Board of
Governors and of its Executive Committee
from 1990 to 1994.
Carlos J. Vazquez............Executive Vice 39 Supervisor of the Corporation's Risk 1997
President Management Group. Executive Vice President
since March 1997. Director of Equity One,
Inc., Popular Securities Incorporated and
Popular North America, Inc. since June 1997.
Vice President of J.P. Morgan & Co.
Incorporated, Morgan Guaranty Trust Co. of
N.Y., J.P. Morgan Securities Ltd., J.P.
Morgan Securities, Inc. and J.P. Morgan
Venezuela, S.A. from 1982 to 1997.
Samuel T. Cespedes Secretary of the 61 Attorney-at-Law. Proprietary partner of the 1991
Board of Director law firm McConnell, Valdes. Secretary of the
Board of Directors of the Bank since 1991.
Secretary of the Board of Directors of
Popular North America, Inc., Equity One,
Inc., Popular Leasing & Rental, Inc. and
Popular Finance, Inc.
</TABLE>
FAMILY RELATIONSHIPS
Mr. Richard L. Carrion, Chairman of the Board, President and CEO of the
Corporation and the Bank, is brother-in-law of Mr. Julio E. Vizcarrondo Jr.,
Director. Mr. Alfonso F. Ballester, Director, is brother-in-law of Mr. Hector R.
Gonzalez, Director. Mr. J. Adalberto Roig Jr., Director, is first cousin of Mr.
Antonio Luis Ferre, Director.
OTHER RELATIONSHIPS AND TRANSACTIONS
During 1997 the Bank engaged the legal services of the law firm of
Dubon & Dubon of which director Luis E. Dubon, Jr. is a partner and of
McConnell, Valdes of which Mr. Samuel T. Cespedes, Secretary of the Board of
Directors of the Corporation and the Bank is a partner. The amount of fees paid
to Dubon & Dubon by the Corporation and its subsidiaries during 1997 fiscal year
was $313,142. The amount of fees paid to McConnell Valdes did not exceed 5% of
the law firm revenues for its last full fiscal year.
14
<PAGE> 16
The Bank has had loan transactions with the Corporation's directors and
officers, and with their associates, and proposes to continue such transactions
in the ordinary course of its business, on substantially the same terms as those
prevailing for comparable loan transactions with other people and subject to the
provisions of the Banking Act of the Commonwealth of Puerto Rico and the
applicable federal laws and regulations. The extensions of credit have not
involved nor presently involve more than normal risks of collectibility or other
unfavorable features.
EXECUTIVE COMPENSATION PROGRAM
REPORT OF THE BANK'S HUMAN RESOURCES AND COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
OVERVIEW
The Bank's Human Resources and Compensation Committee ("The Human
Resources Committee") consists of five non-employee directors. The Committee
endeavors to keep abreast of competitive compensation practices in regard to
salaries, incentives compensation and supplemental programs, that will retain
top quality executive officers who will enhance shareholder value through
sustained growth.
The Human Resources Committee evaluates and recommends to the Board of
Directors the Corporation's compensation policy for the Chairman of the Board,
President and CEO, and Executive Officers. The Human Resources Committee
considers among other factors, competitive pay practices for developing a
stronger relationship between executive compensation and the Bank's long-term
performance. It is kept appraised of such competitive pay practices by an
independent consultant who conducts a periodical analysis of executive
compensation of a peer group of financial institutions similar in size, scope
and business orientation (the "Peer Group"). On an annual basis the banking peer
group used by the Committee for comparison purposes is reviewed in light of
industry developments, and significant mergers/acquisitions, to ensure that it
is consistent with the Corporation's size and focus. The Peer Group currently
consists of eleven regional banking organizations with a retail banking
emphasis.
The Executive Compensation Program for principal officers of the
Corporation's subsidiaries is set according to the industry and geographical
area in which they operate, and is approved by the Board of Directors of each
entity.
CHAIRMAN OF THE BOARD, PRESIDENT AND CEO, MR. RICHARD L. CARRION
On an annual basis Mr. Carrion submits to the Corporation's Executive
Committee a plan setting forth both quantitative and intangible goals applicable
to each year and long-term goals. Evaluations will be made against the goals set
forth in the plan. During 1997 Mr. Carrion's base salary remained the same.
The Executive Committee evaluates Mr. Carrion's performance by taking
into consideration the growth of the organization, implementation of a
diversification strategy, achievement of financial goals, improvements to the
product and service delivery system and development of human resources. The
weight and significance accorded to these factors is subjective in nature and
the weight assigned to each factor in determining compensation adjustments
cannot be quantified.
Mr. Carrion participates in an annual incentive program designed to
enhance achievement of short-term financial goals and to increase shareholder
value. The first incentive component could represent 15% of base salary, if the
net income target is met, and if the net income target is exceeded it could
reach 25%. Although the threshold continues to be 100% of target, the Human
Resources Committee may recommend a discretionary bonus if results obtained are
at least 95% of the pre-established net income target. The second component,
which is based on return on equity (ROE) and is designed to enhance an increase
in shareholder value, could range from 5% to 30% of base salary, depending on
the ROE obtained. Additionally, the bonus award may be increased by 25% when
shareholder return exceeds 20% annually on a consecutive three year period.
Total shareholder return is calculated by taking into account the compounded
annual yield of the stock, considering the market appreciation, dividends
received and dividend reinvestment. This third and last bonus component
recognizes consistent improvement in shareholder value. The maximum total
incentive bonus that may be awarded could be 68.75% of basic salary if all
components of the bonus program are achieved.
15
<PAGE> 17
For 1997, this incentive bonus was 43.21% of base salary. The first
objective of net income after tax was 101% of target net income. The ROE
obtained was 15.83% compared to a minimum of 15% required. Total shareholder
return which was to exceed 20% annually on a consecutive three year period, was
55.34% for the three-year period ended December 31, 1997.
EXECUTIVE OFFICERS
The group of Executive Officers is composed of two Senior Executive
Vice Presidents and seven Executive Vice Presidents, all of whom participate in
the Profit Sharing, Annual Incentive and Long-Term Incentive Plans. The
President and CEO recommends to the Board of Directors of the Bank, for their
approval, the salary increases and the bonuses to be awarded to the Executive
Officers pursuant to the incentive plans.
The salary increase program allows discretionary salary increases based
on individual performance to be twice the team increases. It provides the CEO
the opportunity to recognize changes in individual responsibilities and
performance levels.
Each Executive Officer participates in the Annual Incentive Plan. In
1997 a bonus of 43.21% of base salary was awarded to them. The net income after
tax was 101% of target net income. The ROE obtained was 15.83% compared to a
minimum of 15% required and total shareholder return which was to exceed 20%
annually on a consecutive three year period, was 55.34% for the three-year
period ended December 31, 1997.
HUMAN RESOURCES AND COMPENSATION COMMITTEE
Salustiano Alvarez Mendez Francisco M. Rexach Jr.
Esteban D. Bird Julio E. Vizcarrondo Jr.
Hector R. Gonzalez
EXECUTIVE COMPENSATION
The following table sets forth all cash compensation paid by the
Corporation or its subsidiaries to the ten highest paid Executive Officers of
the Corporation and the two most highly compensated principal officers of the
Corporation's subsidiaries for 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM
FISCAL ------------------- ALL OTHER INCENTIVE PLAN
YEAR SALARY(A) BONUS(B) OTHER(C) COMPENSATION(D) PAYOUTS(E) TOTAL
---- --------- -------- -------- --------------- ---------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Richard L. Carrion .......................... 1997 $500,000 $275,942 -0- $62,181 $91,195 $ 929,318
Chairman, 1996 475,000 399,889 -0- 56,558 55,535 986,982
President and CEO 1995 350,000 75,107 -0- 36,744 -0- 461,851
Jorge A. Junquera ........................... 1997 350,000 197,954 -0- 44,401 64,646 657,001
Senior Executive Vice President 1996 291,351 240,468 -0- 35,305 36,449 603,573
of the Corporation 1995 245,042 53,096 -0- 25,690 -0- 323,828
David H. Chafey Jr. ......................... 1997 350,000 197,909 -0- 44,401 63,240 655,550
Senior Executive Vice President 1996 290,451 240,357 -0- 35,196 35,660 601,664
of the Corporation 1995 239,713 51,897 -0- 25,680 -0- 317,290
Larry B. Kesler ............................. 1997 235,648 132,537 -0- 29,895 51,488 449,568
Executive Vice President 1996 207,488 168,163 -0- 25,143 29,023 429,817
of the Corporation 1995 195,168 42,238 -0- 20,909 -0- 258,315
Humberto Martin ............................. 1997 225,978 127,075 -0- 28,668 48,462 430,183
Executive Vice President 1996 198,391 161,198 -0- 24,039 27,337 410,965
of the Corporation 1995 183,695 39,732 -0- 19,679 -0- 243,106
</TABLE>
16
<PAGE> 18
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM
FISCAL ------------------- ALL OTHER INCENTIVE PLAN
YEAR SALARY(A) BONUS(B) OTHER(C) COMPENSATION(D) PAYOUTS(E) TOTAL
---- --------- -------- -------- --------------- ---------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Maria Isabel P. de Burckhart ................ 1997 $223,187 $125,109 -0- $28,314 $50,349 $ 426,959
Executive Vice President 1996 201,285 162,919 -0- 24,391 28,377 416,972
of the Corporation 1995 190,848 41,309 -0- 20,446 -0- 252,603
Emilio E. Pinero ............................ 1997 205,720 115,125 -0- 25,927 47,576 394,348
Executive Vice President 1996 188,677 152,579 -0- 22,863 26,835 390,954
of the Corporation 1995 180,337 39,118 -0- 18,733 -0- 238,188
Carlos J. Vazquez(f) ........................ 1997 207,308 179,286 -0- 1,770 -0- 388,364
Executive Vice President
of the Corporation
Roberto R. Herencia(f) ...................... 1997 201,667 112,248 -0- 25,584 -0- 339,499
Executive Vice President 1996 180,000 88,366 -0- 21,782 -0- 290,148
of the Corporation
Carlos Rom Jr.(f) ........................... 1997 184,500 104,400 -0- 23,406 -0- 312,306
Executive Vice President 1996 155,100 74,562 -0- 18,794 -0- 248,456
of the Corporation
Thomas J. Fitzpatrick ....................... 1997 300,000 867,500 -0- 79,209 -0- 1,246,709
President of Equity One, Inc. (a wholly- 1996 275,000 156,000 -0- 72,288 -0- 503,288
owned subsidiary of Banco Popular, FSB) 1995 260,000 690,048 153,700 54,934 -0- 1,158,682
Kenneth McGrath ............................. 1997 170,833 194,410 -0- 39,750 -0- 404,993
President of Popular Securities Incorpora- 1996 150,000 188,200 -0- 65,750 -0- 403,950
ted (a wholly-owned subsidiary of 1995 100,000 128,940 -0- 8,750 -0- 237,690
the Corporation)
</TABLE>
- -----------------
(a) Salaries before deductions.
(b) For the Bank's Executive Officers the bonus amount includes Christmas
bonus, the bonus awarded under the Annual Management Incentive
Compensation Plan and the cash portion payable under the Profit Sharing
Plan of the Bank, except for Mr. Vazquez's bonus, which does not
includes a Profit Sharing bonus but rather a special bonus of $49,000
paid with the Corporation's common stock purchased in the open market.
For Mr. Fitzpatrick, the amount includes the annual performance bonus
and a three year long-term incentive bonus payable under his employment
agreement. For Mr. McGrath, the amount includes Christmas and
performance bonus.
(c) Does not include the value of perquisites and other personal benefits
because the aggregate amount of such benefits does not exceed lesser of
$50,000 or 10% of total amount of annual salary and bonus of any named
individual. In the case of Mr. Fitzpatrick includes amounts payable to
compensate him for certain taxes payable by him with respect to the
bonus received in 1995 under his employment agreement.
(d) For the Bank's Executive Officers, except for Mr. Vazquez, amount
includes deferred portion awarded under the Profit Sharing Plan of the
Bank, amounts accrued under the Benefit Restoration Plan, the amount
from the Profit Sharing deferred and allocated to Stock Plan and the
Bank's matching contribution to Stock Plan, which are described on page
19 thru 21. In the case of Mr. Vazquez the amount only includes the
Bank's matching contribution to Stock Plan. For Mr. McGrath, amount
includes matching contribution to 1165(e) plan and a deferred portion
of the performance bonus. For Mr. Fitzpatrick, these amounts represent
the contribution of Equity One, Inc. pursuant to Section 401(k)
matching and deferred compensation under Supplementary Executive
Retirement Plan.
(e) For the Plan Year ended December 31, 1997, the three year average ROE
target was not achieved, nor the Peer Group three year average median
ROE was exceeded. However, since Popular, Inc.'s average ROE
represented an improvement of 41.78% over the base year ROE compared to
Peer's median ROE, the Human Resources and Compensation Committee
approved a discretionary bonus of 25% of the total stock awarded at the
beginning of the Plan Year, including dividends and adjusted for the
stock split. On March 12, 1998, 7,413 common shares were purchased in
the open market at the price of $56.25. All Executive Officers selected
to defer the incentive payment, except Mrs. Maria Isabel P. de
Burckhart, Mr. Humberto Martin and Mr. Larry Kesler. This alternative
is an amendment to the original Plan that was approved by the Board of
Directors in December 1996.
(f) Information presented for 1997, 1996 and 1995, except for Messrs.
Carlos J. Vazquez, Roberto R. Herencia, and Carlos Rom Jr. who were
appointed Executive Officers in 1997. No disclosure is required with
respect to these officers.
17
<PAGE> 19
Long-Term Incentive Plan
The Board of Directors approved in 1994 the Senior Executive Long-Term
Incentive Plan. A set percentage of the base salary of each participant at the
beginning of each Plan Year, is used to determine the dollar amount to be
divided by an average closing price of the Corporation's common stock for the
Incentive Payment. The incentive payment shall be made in common stock of the
Corporation. All common stock to be awarded under this program is purchased in
the open market.
This Long-Term Incentive Plan divides the incentive payment as follows:
75% based on the attainment of a pre-established three-year average ROE
objective for the performance period and 25% based on the achievement of an
average ROE greater than the Peer Group's three-year average median ROE.
In 1998, 1997, 1996 and 1995 awards of performance shares under the
Long-Term Incentive Plan were granted to the Executive Officers as set forth
below:
<TABLE>
<CAPTION>
LONG-TERM INCENTIVE AWARDS
ESTIMATED FUTURE PAYOUTS
NON-STOCK-PRICE BASED PLANS
NUMBER OF SHARES (A)
----------------------------
NUMBER PERFORMANCE
OF PERIOD
NAME YEAR SHARES (A) UNTIL PAYOUT THRESHOLD TARGET MAXIMUM
---- ---- ---------- ------------ --------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Richard L. Carrion..... 1998 5,046.57 1/1/98-12/31/00 -- 5,046.57 10,093.14
1997 7,695.60 1/1/97-12/31/99 -- 7,695.60 15,391.20
1996 6,317.28 1/1/96-12/31/98 -- 6,317.28 12,634.56
1995 5,985.98 1/1/95-12/31/97 -- 5,985.98 11,971.96
Jorge A. Junquera...... 1998 3,924.21 1/1/98-12/31/00 -- 3,924.21 7,848.42
1997 5,540.85 1/1/97-12/31/99 -- 5,540.85 11,081.70
1996 3,790.37 1/1/96-12/31/98 -- 3,790.37 7,580.74
1995 4,243.29 1/1/95-12/31/97 -- 4,243.29 8,486.58
David H. Chafey Jr..... 1998 4,033.22 1/1/98-12/31/00 -- 4,033.22 8,066.44
1997 5,540.85 1/1/97-12/31/99 -- 5,540.85 11,081.70
1996 3,790.37 1/1/96-12/31/98 -- 3,790.37 7,580.74
1995 4,151.00 1/1/95-12/31/97 -- 4,151.00 8,302.00
Roberto R. Herencia.... 1998 2,328.69 1/1/98-12/31/00 -- 2,328.69 4,657.38
1997 3,170.60 1/1/97-12/31/99 -- 3,170.60 6,341.20
Larry B. Kesler........ 1998 2,650.11 1/1/98-12/31/00 -- 2,650.11 5,300.22
1997 3,707.52 1/1/97-12/31/99 -- 3,707.52 7,415.04
1996 2,646.49 1/1/96-12/31/98 -- 2,646.49 5,292.98
1995 3,379.65 1/1/95-12/31/97 -- 3,379.65 6,759.30
Maria Isabel P. 1998 2,500.04 1/1/98-12/31/00 -- 2,500.04 5,000.08
de Burckhart......... 1997 3,497.58 1/1/97-12/31/99 -- 3,497.58 6,995.16
1996 2,563.50 1/1/96-12/31/98 -- 2,563.50 5,127.00
1995 3,304.84 1/1/95-12/31/97 -- 3,304.84 6,609.68
Humberto Martin........ 1998 2,494.72 1/1/98-12/31/00 -- 2,494.72 4,989.44
1997 3,555.38 1/1/97-12/31/99 -- 3,555.38 7,110.76
1996 2,537.92 1/1/96-12/31/98 -- 2,537.92 5,075.84
1995 3,180.96 1/1/95-12/31/97 -- 3,180.96 6,361.92
Emilio E. Pinero....... 1998 2,298.06 1/1/98-12/31/00 -- 2,298.06 4,596.12
1997 3,215.00 1/1/97-12/31/99 -- 3,215.00 6,430.00
1996 2,399.23 1/1/96-12/31/98 -- 2,399.23 4,798.46
1995 3,122.82 1/1/95-12/31/97 -- 3,122.82 6,245.64
Carlos Rom Jr.......... 1998 2,051.94 1/1/98-12/31/00 -- 2,051.94 4,103.88
1997 2,924.34 1/1/97-12/31/99 -- 2,924.34 5,848.68
Carlos J. Vazquez...... 1998 3,025.42 1/1/98-12/31/00 -- 3,025.42 6,050.84
</TABLE>
(a) the number of shares for 1996 and 1995 were adjusted to reflect a stock
split of one share for each share outstanding effected in a form of a dividend,
effective July 1, 1996.
18
<PAGE> 20
The share awards shown above are payable at the end of each three-year
performance period if objectives are attained. Dividends that would be payable
on the shares of stock, if they were held by the Executive Officers, will be
credited and become part of the Incentive Payment. At the option of the
participant, a portion equal to the estimated tax due with respect to the
incentive payments of the awards may be paid in cash.
If the Corporation's target is met or exceeded, the share payments
corresponding to the Corporation's and Peer Group's goals are increased
separately by a leverage factor that cannot exceed two times the target share
amounts.
Even if the ROE for the Corporation does not equal or exceed the Peer
three-year average median ROE, the Human Resources and Compensation Committee,
at its own discretion, may recommend the distribution of 25% of the targeted
bonus if the results attained for the Plan Year average represent an improvement
of no less than 25% over the base year.
For the Plan Year ended December 31, 1997, the three year average ROE
target was not achieved, nor the Peer Group three year average median ROE was
exceeded. However, since Popular, Inc.'s average ROE represented an improvement
of 41.78% over the base year ROE compared to Peer's median ROE, the Human
Resources and Compensation Committee approved a discretionary bonus of 25% of
the total stock awarded at the beginning of the Plan Year, including dividends
and adjusted for the stock split. On March 12, 1998, 7,413 common shares were
purchased in the open market at the price of $56.25. All Executive Officers
selected to defer the incentive payment, except Mrs. Maria Isabel P. de
Burckhart, Mr. Humberto Martin and Mr. Larry Kesler. This alternative is an
amendment to the original Plan that was approved by the Board of Directors in
December 1996.
OTHER INCENTIVE COMPENSATION PLANS
The Bank has an Annual Management Incentive Plan for different
management levels. Under this Plan, incentive bonuses are based on individual
performance as well as the Corporation or Bank's performance, measured by net
income and ROE. The weight assigned to the Corporation or the Bank's performance
objectives varies according to management level, but the weight of individual
performance applies equally to all managers participating.
The Bank also has an Excellence in Performance Program in which all
employees participate. This program rewards employees for extraordinary personal
contributions that are non-recurring in nature, typically not recognizable
through merit or promotional salary action, and clearly recognized as such by
management and peers alike.
Additionally, the Bank has several functional incentive programs that
reward employees' productivity in specific areas.
PROFIT SHARING PLAN OF THE BANK
All officers and regular monthly salaried employees of the Bank as of
January 1, 1976, or hired after that date, are active participants in the Bank's
operating earnings under the yearly Profit Sharing Plan, as of the first day of
the calendar month following completion of one year of service.
Under this plan the Bank's annual contribution is determined by the
Board of Directors based on the profits of the Bank for the year. The amount
allocated to each officer or employee is based on his or her earned salary for
the year. The total amount contributed for the year 1997 was $26,348,027 of
which 50% was contributed to the Profit Sharing Plan, 10% to the Stock Plan and
the remainder was paid in cash.
BENEFIT RESTORATION PLAN OF THE BANK
The Internal Revenue Service (IRS) set a limit of $160,000 as the
amount of compensation that may be considered in calculating future retirement
payments from qualified pension plans. This limit applies to the Bank's
Retirement Plan, Profit Sharing and Stock Plan.
The Board of Directors has approved a "Benefit Restoration Plan" for
those officers whose annual compensation is higher than the established limit.
This non-qualified plan will provide those benefits that cannot be accrued under
the Bank's Retirement and Profit Sharing Plan, which are qualified plans.
Benefits under the Benefit Restoration Plan shall be equal to the account
balance that would be provided under the Profit Sharing Plan and equal to the
benefits that would have been accrued under the Retirement Plan. The Plan is
unfunded.
19
<PAGE> 21
RETIREMENT PLAN OF THE BANK
The Bank has a non-contributory, defined benefit Retirement Plan
covering substantially all regular monthly employees. Monthly salaried employees
are eligible to participate in the Plan following the completion of one year of
service and 21 years of age. Pension costs are funded in accordance with the
minimum funding standards under the Employee Retirement Income Security Act
("ERISA").
The basis for the Retirement Plan formula is Total Compensation, which
includes Christmas Bonus, incentives, overtime, differentials, Profit Sharing
cash bonuses and any other compensation received by the employees. Benefits are
paid on the basis of a straight life annuity plus supplemental death benefits
and are not reduced for Social Security or other payments received by
participants.
Normal retirement age at the Bank is a combination of years of age and
completed years of service totalling 75. Meanwhile, early retirement is at 55
years of age with 10 years of service. Employees with 30 years of service or
more are provided with a retirement benefit of 40% of Total Compensation.
Benefits are reduced only if the employee retires before age 55. Benefits are
subject to the U.S. Internal Revenue Code limits on compensation and benefits.
The following table sets forth the estimated annual benefits that would
become payable under the Retirement Plan and the Benefit Restoration Plan based
upon certain assumptions as to total compensation levels and years of service.
The amounts payable in this table are not necessarily representative of amounts
that may actually become payable under the plans. The amounts represent the
benefits upon retirement on December 31, 1997, of a participant at age 65.
<TABLE>
<CAPTION>
TOTAL
COMPENSATION ESTIMATED ANNUAL BENEFITS / YEARS OF SERVICE
- ------------------------------------------------------------------------------------------------------
15 20 25 30 35
-- -- -- -- --
<S> <C> <C> <C> <C> <C>
$1,000,000 $ 183,000 $255,000 $ 328,000 $400,000 $400,000
900,000 164,000 230,000 295,000 360,000 360,000
800,000 146,000 204,000 262,000 320,000 320,000
700,000 128,000 179,000 229,000 280,000 280,000
600,000 110,000 153,000 197,000 240,000 240,000
500,000 91,000 128,000 164,000 200,000 200,000
400,000 73,000 102,000 131,000 160,000 160,000
300,000 55,000 77,000 98,000 120,000 120,000
</TABLE>
The 1997 total compensation and estimated years of service at age 65 for the
five highest paid key policy-making Executive Officers are as follows.
<TABLE>
<CAPTION>
Estimated
1997 Years of
Total Service
Compensation At Age 65
------------ ---------
<S> <C> <C>
Richard L. Carrion $ 929,000 41.5
Jorge A. Junquera 657,000 42.3
David H. Chafey Jr. 656,000 38.5
Larry B. Kesler 450,000 16.5
Humberto Martin 430,000 42.0
</TABLE>
STOCK PLAN OF THE BANK
The Bank has adopted two Stock Plans, one covering employees of the
Bank in Puerto Rico and another covering employees of the Bank in the U.S., and
the British and U.S. Virgin Islands. All regular monthly salaried employees are
eligible to participate in the Stock Plans following the completion of
three-months of service.
20
<PAGE> 22
The Bank may contribute a discretionary amount based on the profits of
the Bank for the year, which is allocated to each officer or employee based on
his or her basic salary for the year, as determined by the Board of Directors.
The Stock Plans also allow employees to voluntarily elect to defer a
predetermined percentage not to exceed 10% of their pre-tax base compensation
(after tax in the British Virgin Islands) up to a maximum amount as determined
by the applicable tax laws. The Bank will match 50% of the amount contributed by
a participant up to a maximum of 2% of the participant's annual base salary.
All contributions to the Stock Plans will be invested in shares of
common stock of the Corporation which are purchased in the open market.
POPULAR, INC.
PERFORMANCE GRAPHS
On prior years the performance graph was prepared using S & P 500
indexes since the National Association of Securities Dealers Automated Quotation
(NASDAQ) Composite Index was not calculated on a total return basis. However,
this year the Center for Research in Security Prices (CRSP) at the University of
Chicago prepared for NASDAQ the NASDAQ Stock Market Total Return Index for the
past six years to comply with the Securities and Exchange Commission proxy
rules. Graph A, shown below, compares the cumulative total shareholder return
during the measurement period with the cumulative total return, assuming
reinvestment of dividends, of the NASDAQ Stock Market Index and the NASDAQ Bank
Composite Index, while Graph B presents the above comparison using S & P 500
indexes.
For both graphs the cumulative total shareholder return was obtained by
dividing (i) the cumulative amount of dividends per share, assuming dividend
reinvestment, since the measurement point, December 31, 1992 plus (ii) the
change in the per share price since the measurement date, by the share price at
the measurement date.
GRAPH A
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
TOTAL RETURN AS OF DECEMBER 31
(DECEMBER 31, 1992 = 100)
<TABLE>
<CAPTION>
BASE
PERIOD
COMPANY / INDEX 1992 1993 1994 1995 1996 1997
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
POPULAR INC 100 105.69 99.02 140.84 251.89 376.18
NASDAQ BANKS COMPOSITE 100 114.042 113.627 169.222 223.412 377.438
NASDAQ STOCK MARKET 100 114.796 112.214 158.699 195.192 239.527
</TABLE>
21
<PAGE> 23
Graph B
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
TOTAL RETURN AS OF DECEMBER 31
(DECEMBER 31, 1992 = 100)
<TABLE>
<CAPTION>
BASE
PERIOD
COMPANY / INDEX DEC92 DEC93 DEC94 DEC95 DEC96 DEC97
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
POPULAR INC 100 105.69 99.02 140.84 251.89 376.18
BANKS COMPOSITE 100 110.24 104.59 166.66 235.91 340.76
S&P 500 INDEX 100 110.08 111.53 153.45 188.68 251.63
</TABLE>
INDEPENDENT PUBLIC ACCOUNTANTS
In November 1997, the partners of Price Waterhouse and of Coopers &
Lybrand voted to approve the merger of the two organizations. The next step in
the merger effort is obtaining approval from regulatory authorities. This
process is expected to be completed in the summer of 1998.
The Board of Directors intends to retain the services of Price
Waterhouse or the resulting public accountants firm as the independent auditors
of the Corporation for the year 1998. Price Waterhouse has served as independent
auditors of the Bank since 1971 and of the Corporation since May 1991, when it
was appointed by the Board of Directors.
Representatives of Price Waterhouse will attend the Stockholders
Meeting and will be available to answer any questions that may arise; they will
also have the opportunity to make a statement if they so desire.
INCORPORATION BY REFERENCE
The Form 10K, audited financial statements, certain supplemental
financial information and Management Discussion and Analysis of Financial
Condition and Results of Operations included in the Corporation's Annual Report
to Stockholders for the year ended December 31, 1997, which accompany this Proxy
Statement are hereby incorporated by reference herein. In addition, all
documents filed by the Corporation pursuant to Section 13(a) of the Securities
Exchange Act of 1934 subsequent to the date of this Proxy Statement and prior to
the Annual Meeting shall be deemed to be incorporated by reference herein.
22
<PAGE> 24
PROPOSALS OF SECURITY HOLDERS TO BE PRESENTED AT THE 1999
ANNUAL MEETING OF STOCKHOLDERS
Stockholders' proposals intended to be presented at the 1999 Annual
Meeting of Stockholders must be received by the Corporate Secretary, at its
principal executive offices, Popular Center Building, San Juan, Puerto Rico,
00918, not later than November 25, 1998 for inclusion in the Corporation's Proxy
Statement and Form of Proxy relating to the 1999 Annual Meeting of Stockholders.
OTHER MATTERS
Management does not know of any other matters to be brought before the
Meeting other than those described previously. Proxies in the accompanying form
will confer discretionary authority to Management with respect to any such other
matters presented at the meeting.
To avoid delays in ballot taking and counting, and in order to assure
that your Proxy is voted in accordance with your wishes, compliance with the
following instructions is respectfully requested: upon signing a Proxy as
attorney, executor, administrator, trustee, guardian, authorized officer of a
corporation, or on behalf of a minor, please give full title. If shares are in
the name of more than one recordholder, all should sign.
Whether or not you plan to attend the Meeting, it is very important
that your shares be represented and voted in the Meeting. Accordingly, you are
urged to properly complete, sign, date and return your Proxy Card.
San Juan, Puerto Rico, March 18, 1998
RICHARD L. CARRION SAMUEL T. CESPEDES
Chairman of the Board, President Secretary
and Chief Executive Officer
23
<PAGE> 25
[POPULAR, INC. LOGO]
<PAGE> 26
<TABLE>
<S> <C>
APPENDIX
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
PROXY The undersigned hereby appoints Richard L. Carrion, Jorge A. Junquera and David
(POPULAR, INC. LOGO) H. Chafey Jr. as Proxies, each with the power to appoint his substitute, and
P.O. Box 362708 authorizes them to represent and to vote as designated below all the shares of
San Juan, Puerto Rico 00936-2708 common stock of Popular, Inc. held on record by the undersigned on March 4,
1998, at the Annual Meeting of Shareholders to be held at the Centro Europa
Building, 3rd Floor, San Juan, Puerto Rico, on April 23, 1998, at 10:00 a.m. or
at any adjournments thereof, as follows:
1. ELECTION OF DIRECTORS - Nominees:
LUIS E. DUBON JR. HECTOR R. GONZALEZ MANUEL MORALES JR. FRANCISCO M. REXACH JR. JULIO E. VIZCARRONDO JR.
/ / VOTE GRANTED FOR all nominees / / VOTE WITHHELD FOR all nominees
/ / VOTE GRANTED, except for the following nominee(s) (insert in the space provided below the names of those nominees
for whom you do not wish to vote)
2. AT THEIR DISCRETION, the Proxies are authorized to vote upon such other business as may properly come before the Meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION
IS MADE, THIS PROXY WILL BE VOTED "FOR" ITEM 1. Please refer to instructions below.
----------------------------------------
Signature
----------------------------------------
Signature
-----------------------
DATE
(VEA AL DORSO TEXTO EN ESPANOL)
PLEASE SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
No Postage is required if mailed in the United States, Puerto Rico or the U.S. Virgin Islands.
- ----------------------------- INSTRUCTIONS: Please sign exactly as your name appears above. When shares are
Annual Meeting held by joint tenants or by tenants in common, each holder should sign. When
of signing as attorney, executor, administrator, trustee or guardian, please give
(POPULAR, INC. LOGO) full title as such. If a corporation, the president or other authorized officer
should sign under the full corporate name and the position of such authorized
- ----------------------------- officer should appear below the signature. If a partnership, please sign in
partnership name by authorized person.
(MAP)
Thursday, April 23, 1998
10:00 a.m.
Centro Europa Building
San Juan, Puerto Rico
</TABLE>
