<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>
[X] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
First Financial Caribbean Corporation
- --------------------------------------------------------------------------------
(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
FIRST FINANCIAL CARIBBEAN CORPORATION
August , 1997
Dear Stockholder:
You are cordially invited to attend a special meeting of stockholders of
First Financial Caribbean Corporation. The meeting will be held at the Fifth
Floor of The Doral Building, 650 Munoz Rivera Avenue, San Juan, Puerto Rico on
Monday, September 22, 1997. The meeting will begin promptly at 11:00 a.m., local
time.
At the meeting, shareholders will be asked to consider and approve (i) a
proposal to change the name of First Financial Caribbean Corporation to "Doral
Financial Corporation", (ii) a proposal to increase the number of authorized
shares of Common Stock from 20,000,000 to 50,000,000, and (iii) such other
business as may properly come before the meeting or any adjournment thereof.
We urge you to review the Proxy Statement and complete, sign and return
your proxy card in the envelope provided, even if you plan to attend the
meeting. Your vote is important, and the prompt return of your proxy card will
ensure that your vote is counted. The participation of the owners of the
business in its affairs is an essential ingredient of First Financial Caribbean
Corporation's vitality. Please note that sending us your proxy will not prevent
you from voting in person at the meeting should you so desire.
We appreciate your interest and investment in First Financial Caribbean
Corporation, and hope to see you at the meeting.
Sincerely,
/s/ Salomon Levis
Salomon Levis
Chairman of the Board and
Chief Executive Officer
<PAGE> 3
FIRST FINANCIAL CARIBBEAN CORPORATION
1159 F.D. Roosevelt Avenue
San Juan, Puerto Rico 00920
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To Be Held On Monday, September 22, 1997
NOTICE IS HEREBY GIVEN that a special meeting of stockholders of First
Financial Caribbean Corporation (the "Corporation") will be held at the Fifth
Floor of The Doral Building, 650 Munoz Rivera Avenue, San Juan, Puerto Rico on
Monday, September 22, 1997, at 11:00 a.m., local time, to consider and act upon
the following proposals:
1. An amendment to the Restated Certificate of Incorporation to change
the name of the Corporation to "Doral Financial Corporation;"
2. An amendment to the Restated Certificate of Incorporation to
increase the number of authorized shares of Common Stock from 20,000,000 to
50,000,000; and
3. Such other business as may properly come before the meeting or any
adjournment thereof.
Only stockholders of record as of the close of business on August 19, 1997
are entitled to notice of, and to vote at, the meeting and any and all
adjournments thereof. A list of these stockholders will be available for
inspection for a period of 10 days prior to the meeting at the office of the
Corporation at 1159 F.D. Roosevelt Avenue, San Juan, Puerto Rico, and will also
be available for inspection at the meeting itself.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING. WHETHER OR
NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, PLEASE SIGN AND DATE THE
ACCOMPANYING PROXY AND RETURN IT AS PROMPTLY AS POSSIBLE IN THE ENCLOSED STAMPED
ENVELOPE.
By order of the Board of Directors,
/s/ Richard F. Bonini
Richard F. Bonini
Senior Executive Vice President
and Secretary
Dated: August , 1997
<PAGE> 4
FIRST FINANCIAL CARIBBEAN CORPORATION
1159 F.D. Roosevelt Avenue
San Juan, Puerto Rico 00920
-------------------------
PROXY STATEMENT
This Proxy Statement is furnished to the holders of the Common Stock, $1.00
par value (the "Common Stock") of First Financial Caribbean Corporation, a
Puerto Rico corporation (the "Corporation") in connection with the solicitation
by and on behalf of the Board of Directors of proxies for a special meeting of
stockholders (the "Special Meeting") to be held on Monday, September 22, 1997
and at any adjournment thereof, for the purposes set forth in the accompanying
notice of meeting. It is anticipated that this Proxy Statement and the
accompanying form of proxy will be mailed to stockholders commencing on or about
August , 1997.
GENERAL
Each holder of a share of Common Stock of the Corporation will be entitled
to one vote for each share held of record by such person as of the close of
business on August 19, 1997, which is the record date fixed by the Board of
Directors for the determination of stockholders entitled to notice of, and to
vote at, the Special Meeting or any adjournment thereof. 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. On
the record date, the Corporation had 9,198,730 shares of Common Stock
outstanding and eligible to vote. The shares represented by each properly
executed proxy in the accompanying form received by the Board of Directors will
be voted at the Special Meeting or any adjournment thereof in accordance with
the instructions specified therein. If no instructions are made, such shares
will, except as otherwise provided in the next succeeding paragraph, be voted
(i) for the amendment to the Restated Certificate of Incorporation increasing
the number of authorized shares of Common Stock from 20,000,000 to 50,000,000,
(ii) for the amendment to the Restated Certificate of Incorporation changing the
name of the Corporation to "Doral Financial Corporation", and (iii) in the
proxyholders' discretion on any other matters that may properly come before the
Special Meeting. Each of the above proposals is an independent proposal and is
not contingent on the adoption of another proposal. The Board of Directors knows
of no additional matters that will be presented for consideration at the Special
Meeting except for procedural matters incident to the conduct of the meeting.
Execution of a proxy, however, confers on the designated proxyholder
discretionary authority to vote the shares in accordance with his or her best
judgment on such other business, if any, that may properly come before the
Special Meeting or any adjournment thereof. Any proxy received in the
accompanying form may be revoked by the person executing it at any time before
the authority thereby granted is exercised by giving written notice of
revocation to the Secretary of the Corporation, by giving a later-dated proxy at
any time before the voting or by voting by ballot in person at the Special
Meeting. However, if you are a stockholder whose shares are not registered in
your own name, you will need appropriate documentation from your record holder
to vote personally at the Special Meeting.
Votes cast by proxy or in person at the Special Meeting will be counted by
the persons appointed by the Corporation to act as inspectors of election for
the meeting. The inspectors of election will treat abstentions, including for
purposes of determining the presence of a quorum, as shares that are present and
entitled to vote at the Special Meeting. Shares with respect to which a broker
or nominee has expressly indicated on the proxy that it does not have
discretionary authority to vote on a particular matter ("broker non-votes"),
will not be considered as present and entitled to vote with respect to that
matter but will be considered as present and
<PAGE> 5
entitled to vote for purposes of determining the presence of a quorum. The
proposals to amend the Restated Certificate of Incorporation to increase the
number of authorized shares of Common Stock and to change the Corporation's name
must be approved by the affirmative vote of the holders of a majority of the
outstanding shares of Common Stock. Therefore, with respect to the two proposals
to be voted on by the stockholders at the Special Meeting abstentions and broker
non-votes will have the same effect as a vote against such proposals.
The cost of soliciting proxies for the Special Meeting will be borne by the
Corporation. In addition to the use of the mails, proxies may be solicited
personally or by telephone, by officers and employees of the Corporation who
will not receive any additional compensation for their services. Proxies and
proxy material will also be distributed at the expense of the Corporation by
brokers, nominees, custodians and other similar parties.
SECURITY OWNERSHIP OF MANAGEMENT AND PRINCIPAL HOLDERS
The following table sets forth as of August 15, 1997, certain information
with respect to the beneficial ownership of the Corporation's Common Stock for
each director, the Chief Executive Officer and each of the four other most
highly compensated executive officers of the Corporation, and each 5%
shareholder of the Corporation, for all directors and executive officers of the
Corporation as a group and for certain other investors.
<TABLE>
<CAPTION>
AMOUNT AND NATURE PERCENT
NAME OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP(1) OF CLASS
------------------------ -------------------------- --------
<S> <C> <C>
Management
- ----------
Salomon Levis(2)(3)......................................... 284,342 3.09%
Richard F. Bonini........................................... 110,710 1.20%
Mario S. Levis.............................................. 47,000 (9)
Zoila Levis(2).............................................. 85,736 0.93%
Edison Velez................................................ -- --
Edgar M. Cullman, Jr.(4)(5)................................. 1,490,715 16.21%
Frederick M. Danziger(4)(5)................................. 1,490,715 16.21%
John L. Ernst(4)(5)......................................... 1,490,715 16.21%
A. Brean Murray............................................. -- --%
Victor M. Pons, Jr.......................................... -- --
All directors and executive officers as a group, consisting
of 15 persons, including those named above................ 2,059,647 22.39%
Other Principal Holders
- -----------------------
Edgar M. Cullman(5)(6)...................................... 1,490,715 16.21%
387 Park Avenue South
New York, N.Y. 10016
Louise B. Cullman(5)(6)..................................... 1,490,715 16.21%
387 Park Avenue South
New York, N.Y. 10016
Susan B. Cullman(5)(6)...................................... 1,490,715 16.21%
387 Park Avenue South
New York, N.Y. 10016
Lucy C. Danziger(5)(6)...................................... 1,490,715 16.21%
2 East 73rd Street
New York, N.Y. 10021
Cullman and Ernst Group(7).................................. 1,490,715 16.21%
387 Park Avenue South
New York, N.Y. 10016
David Levis(2).............................................. 206,906 2.25%
1159 F.D. Roosevelt Avenue
San Juan, PR 00920
Levis Family(2)............................................. 623,984 6.78%
1159 F.D. Roosevelt Avenue
San Juan, PR 00920
</TABLE>
2
<PAGE> 6
<TABLE>
<CAPTION>
AMOUNT AND NATURE PERCENT
NAME OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP(1) OF CLASS
------------------------ -------------------------- --------
<S> <C> <C>
Wellington Management Company(8)............................ 697,500 7.58%
75 State Street
Boston, MA 02109
</TABLE>
- ---------------------
(1) The information contained in the table is based on share ownership as
of August 15, 1997. This information has been obtained from filings made with
the Securities and Exchange Commission (the "Commission") and information
provided by the persons named above and reflects the definition of beneficial
ownership adopted by the Commission except as noted below. Beneficial ownership
and percent of class shown is sole investment and voting power, except as
reflected in other footnotes hereto and except that (i) shares shown for Messrs.
Cullman, Jr.; Danziger and Ernst under "Management" and-for Edgar M. Cullman,
Louise B. Cullman, Susan R. Cullman and Lucy C. Danziger under "Other Principal
Holders" include all shares owned by the Cullman and Ernst Group, including
shares with respect to which the named person has no investment or voting power
other than the informal understanding referred to in the final sentence under
footnote (7) below and (ii) shares shown as owned by the Levis Family under
"Other Principal Holders" include all shares owned by Salomon Levis, Zoila
Levis, David Levis, and Mario S. Levis even though as stated in footnote (2)
below each of such persons disclaims any beneficial interest in the shares of
Common Stock owned by the others. Where more than one person shares investment
and voting power in the same shares or if such shares are owned by any member of
the Cullman and Ernst Group such shares are shown more than once. Such shares
are reflected only once, however, in the total for all directors and officers as
a group.
(2) Salomon Levis, the current Chairman of the Board and Chief Executive
Officer of the Corporation, Zoila Levis, the President of the Corporation and
David Levis, a director emeritus of the Corporation and the former Chairman of
the Board and Chief Executive Officer of the Corporation, are siblings. Mario S.
Levis, Executive Vice President and Treasurer of the Corporation, is the son of
David Levis and the nephew of Salomon Levis and Zoila Levis. As of August 15,
1997, Salomon Levis, Zoila Levis, David Levis and Mario S. Levis owned an
aggregate of 623,984 shares of Common Stock or approximately 6.78% of the
outstanding Common Stock of the Corporation. On October 5, 1995, Salomon Levis,
Zoila Levis, Mario S. Levis and David Levis filed a Schedule 13D with the
Commission stating that there is no agreement or understanding among the members
of the Levis family regarding the holding or voting of the shares of Common
Stock held by them other than an informal understanding to consult with each
other regarding the voting and disposition of the shares of Common Stock owned
by each of them. The Schedule 13D disclaims that the persons filing the Schedule
13D constitute a group for purposes of the Securities Exchange Act of 1934 and
states that each such person has sole voting and investment power with respect
to the respective shares of Common Stock owned by them and each disclaims any
beneficial interest in the shares of Common Stock owned by the others.
(3) Includes 12,702 shares of Common Stock owned by Nancy Hernandez, the
wife of Salomon Levis.
(4) Included in the shares of Common Stock shown as beneficially owned by
Mr. Danziger are 103,068 shares in which he holds shared investment and/or
voting power; included in the shares of Common Stock shown as beneficially owned
by Mr. Cullman, Jr. are 620,196 shares in which he holds shared investment
and/or voting power and; included in the shares of Common Stock shown as
beneficially owned by Mr. Ernst are 100,583 shares in which he holds shared
investment and/or voting power. Also included in the case of Messrs. Cullman,
Jr., Danziger and Ernst, respectively, are 812,499, 1,371,105 and 1,377,568
shares of Common Stock held by the Cullman and Ernst Group with respect to which
such person holds no investment or voting power other than the informal
understanding referred to in the final sentence under footnote (7) below. Voting
and investment power over certain of such shares is held by more than one such
person. Messrs. Ernst, Danziger
3
<PAGE> 7
and Cullman, Jr. disclaim beneficial ownership of all shares over which there is
shared investment and/or voting power and Cullman and Ernst Group shares not
owned by such person directly.
(5) Member of the Cullman and Ernst Group. Edgar M. Cullman is the father
of Edgar M. Cullman, Jr., Susan R. Cullman and Lucy C. Danziger, the husband of
Louise B. Cullman, and the uncle of John L. Ernst. Lucy C. Danziger is the wife
of Frederick M. Danziger.
(6) Included within the shares of Common Stock shown as beneficially owned
by Mr. Edgar M. Cullman, Mrs. Louise B. Cullman, Ms. Susan R. Cullman and Mrs.
Lucy C. Danziger are, respectively, 687,418, 547,022, 602,664, and 642,292
shares in which such person holds shared voting and/or investment power. Also
included in the shares of Common Stock as to each such person, respectively, are
742,649, 870,283, 859,196 and 778,161 shares held by the Cullman and Ernst Group
with respect to which such person holds no investment or voting power other than
the informal understanding referred to in the final sentence under footnote (7)
below. Each such person disclaims beneficial ownership of all shares not owned
by such person directly.
(7) As of August 15, 1997, a group consisting of Edgar M. Cullman, his son
Edgar M. Cullman, Jr., a director of the corporation, direct members of their
families and trusts for their benefit, Mr. John L. Ernst, also a director of the
Corporation, his sister and direct members of their families and trusts for
their benefit own an aggregate of 1,490,715 shares of Common Stock or
approximately 16.36% of the outstanding Common Stock. Among others, Messrs.
Cullman and Cullman, Jr. and their wives, Mr. Ernst and to a lesser extent Mr.
Danziger (who is a member of the Cullman and Ernst Group and a director of the
Corporation), hold investment and voting power or shared investment and voting
power over such shares. Mr. Danziger is the brother-in-law of Mr. Edgar M.
Cullman, Jr. A Schedule 13D filed with the Commission on behalf of the Cullman
and Ernst Group states that there is no formal agreement governing the group's
holding and voting of such shares, but that there is an informal understanding
that the persons and entities included in the group will hold and vote together
the shares owned by each of them in each case subject to any applicable
fiduciary responsibilities.
(8) The number of shares reported is based on information furnished to the
Corporation by Wellington-Management Company ("WMC"). According to a Schedule
13G filed with the Commission, WMC, in its capacity as investment adviser, may
be deemed the beneficial owner of the shares reported, which are owned by
investment advisory clients of WMC. According to the Schedule 13G, no such
client was known to beneficially own more than 5% of the outstanding shares of
the Corporation's Common Stock.
(9) Represents less than 1%.
AMENDMENT TO THE RESTATED CERTIFICATE OF INCORPORATION
TO CHANGE THE NAME OF THE CORPORATION
The Board of Directors of the Corporation has declared advisable and
directed that there be submitted to the stockholders at the Special Meeting a
proposed amendment to Article First of the Restated Certificate of Incorporation
to change the name of the Corporation to "Doral Financial Corporation." The text
of the proposed amendment to Article First of the Corporation's Restated
Certificate of Incorporation is set forth in Exhibit A attached hereto.
PURPOSE AND EFFECT OF THE PROPOSED AMENDMENT
The Board of Directors believes that the change of the Corporation's name
is advisable in order to provide a cohesive identity throughout the
organization. The proposed name would capitalize on the strength and tradition
of the Corporation's principal subsidiary Doral Mortgage Corporation, Puerto
Rico's premier retail mortgage banking institution. At the same time, it
recognizes that the Corporation is a diverse, multifaceted organization
4
<PAGE> 8
encompassing a broad range of financial services including: mortgage banking,
thrift, and securities brokerage services.
The name change will not affect in any way the validity of currently
outstanding stock certificates, the capital structure of the Corporation or the
listing of any of its securities on the National Association of Securities
Dealers Automated Quotation National Market System. Shareholders will not be
required to surrender or exchange any share certificates currently held by them.
VOTE REQUIRED AND RECOMMENDATION
The affirmative vote of the holders of a majority of the outstanding shares
of Common Stock is required for the adoption of the amendment to Article First.
Therefore, abstentions and broker non-votes will have the same effect as a vote
against the proposal.
THE BOARD OR DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE ADOPTION
OF THE PROPOSED AMENDMENT TO THE RESTATED CERTIFICATE OF INCORPORATION TO CHANGE
THE NAME OF THE CORPORATION TO "DORAL FINANCIAL CORPORATION."
AMENDMENT TO THE RESTATED CERTIFICATE OF INCORPORATION TO AUTHORIZE
AN INCREASE IN THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
The Board of Directors has declared advisable and directed that there be
submitted to the stockholders at the Special Meeting a proposed amendment to
Article Fourth of the Corporation's Restated Certificate of Incorporation that
would increase the number of authorized shares of Common Stock of the
Corporation from 20,000,000 shares to 50,000,000 shares. The text of the
proposed amendment to Article Fourth of the Corporation's Restated Certificate
of Incorporation is set forth in Exhibit B attached hereto.
PURPOSE AND EFFECTS OF THE PROPOSED AMENDMENT
As of the close of business on August 19, 1997, there were 9,198,730 shares
of the Company's Common Stock issued and outstanding. As of such date, there
were 483,428 shares of authorized and unissued shares of Common Stock reserved
for issuance upon conversion of the Corporation's outstanding 8.25% Convertible
Subordinated Debentures due January 1, 2006 (the "Convertible Debentures") and
an additional 200,000 shares reserved for issuance upon the exercise of certain
rights to acquire up to 200,000 additional shares of Common Stock (the "Rights")
granted to Popular, Inc. under a certain Restated Debenture Purchase Agreement,
dated as of December 15, 1995, between the Corporation and Popular, Inc. On July
19, 1997, the Corporation entered into an exchange agreement with Popular, Inc.
whereas Popular, Inc. has agreed to accept shares of the Corporation's 8%
Convertible Cumulative Preferred Stock (the "8% Serial Preferred Stock") in
exchange for the outstanding Convertible Debentures. The 8% Serial Preferred
Stock would be convertible into the same number of shares of Common Stock as the
Convertible Debentures. The exchange is expected to occur on or about September
30, 1997.
On July 10, 1997, the Company declared a two-for-one stock split in the
form of a stock dividend of one additional share of common stock to be issued on
August 28, 1997 for each share of common stock held of record as of August 19,
1997. Accordingly, after giving effect to the stock split there will only remain
235,684 shares of authorized and unissued shares and 14,000 shares of treasury
stock available to the Corporation, which is not even sufficient to cover the
1,000,000 shares and 144,388 shares (in both cases after adjustment for the
stock split referred to above) previously authorized for issuance under the
Corporation's 1997 Employee Stock Option Plan (the "1997 Option Plan") and
Restricted Stock Plan, respectively. No options have been granted under the 1997
5
<PAGE> 9
Option Plan and the Board of Directors has revoked the reservation of shares for
use in connection with the 1997 Option Plan and the Restricted Stock Plan until
such time as stockholders of the Corporation vote on the proposal to increase
the number of authorized shares of Common Stock. Based on the foregoing,
management believes that there is insufficient number of shares of authorized
Common Stock available to meet the Corporation's future needs. Approval of this
proposal should provide the Corporation with sufficient Common Stock to meet its
needs for the foreseeable future.
The principal purpose of the proposed amendment is to increase the number
of shares of Common Stock available for possible future financing and
acquisition transactions, stock dividends or distributions, stock splits in the
form of stock dividends, employee and officer compensation plans (including the
1997 Option Plan and Restricted Stock Plan) and other general corporate
purposes. The Corporation intends to reinstate the reservation of 1,000,000
shares and 144,388 shares for issuance in connection with the 1997 Option Plan
and the Restricted Stock Plan, respectively, if the proposed amendment is
approved. In addition, from time to time, the Corporation engages in discussions
concerning possible acquisitions which could involve the issuance of securities
by the Corporation. There are, however, no currently existing agreements or
agreements in principle which call for the issuance by the Corporation of shares
of Common Stock in connection with any proposed acquisition. The Corporation has
no present plans to issue shares of Common Stock in connection with any
acquisition or financing transaction other than upon conversion of the
outstanding shares of the Corporation's Convertible Debentures (or the 8% Serial
Preferred Stock for which such Convertible Debentures will be exchanged).
Favorable market conditions, changes in the Corporation's financial condition or
other circumstances could, however, result in a determination by the Corporation
to issue additional equity or other securities convertible into shares of Common
Stock.
In addition, if approved, the increased number of authorized shares of
Common Stock will be available for issuance from time to time for such purposes
and considerations as the Board of Directors may approve, and no further vote of
shareholders of the Corporation will be required, except as provided under the
law of the Commonwealth of Puerto Rico or the rules of any national securities
exchange on which securities of the Corporation may be listed. The Corporation
does not intend to solicit stockholders for any further authorization concerning
the issuance of the additionally authorized shares of Common Stock. The
availability of additional shares for issuance, without the delay and expense of
obtaining the approval of stockholders at a special meeting, will afford the
Corporation greater flexibility in acting upon proposed transactions. The
additional shares of Common Stock would be identical in terms to the shares of
Common Stock of the Corporation currently authorized under the Restated
Certificate of Incorporation. Holders of Common Stock do not have preemptive
rights to purchase shares of Common Stock.
The sale of any additional authorized shares will reduce the percentage of
the total number of outstanding shares held by any stockholder, although such a
sale should not have a dilutive effect on the market price of the Common Stock
unless the additional shares are sold for less than the then fair market value
of the Common Stock. The Board of Directors does not anticipate issuing shares
of Common Stock for less than fair market value except upon the conversion of
the currently outstanding Convertible Debentures (or the 8% Serial Preferred
Stock for which such Convertible Debentures will be exchanged) or the exercise
of the outstanding Rights held by Popular, Inc.
Substantial amounts of the additional authorized Common Stock could be
issued to delay or defeat a change in control of the Corporation and,
accordingly, under certain circumstances, could discourage transactions that
might otherwise have a favorable effect on the price of the Common Stock. The
Corporation does not currently expect to use unissued Common Stock for this
purpose. The Board of Directors is not aware of any proposal to effect a change
in control or takeover of the Corporation.
6
<PAGE> 10
VOTE REQUIRED AND RECOMMENDATION
The affirmative vote of the holders of a majority of the outstanding shares
of Common Stock is required to authorize the proposed increase in the number of
authorized shares of Common Stock. Therefore, abstentions and broker non-votes
will have the same effect as a vote against the proposal.
THE BOARD OR DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE ADOPTION
OF THE PROPOSED AMENDMENT TO THE RESTATED CERTIFICATE OF INCORPORATION TO
INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK.
OTHER MATTERS
Management knows of no matters which may be brought before the Special
Meeting or any adjournment thereof other than those described in the
accompanying notice of meeting and routine matters incidental to the conduct of
the meeting. If any other matter should come before the Special Meeting or any
adjournment thereof, it is the intention of the persons named in the
accompanying form of proxy or their substitutes to vote the proxies in
accordance with their judgment on such matters.
The above Notice of Meeting and Proxy Statement are sent by order of the
Board of Directors of First Financial Caribbean Corporation.
/s/ Richard F. Bonini
Richard F. Bonini
Senior Executive Vice President
and Secretary
Dated: August , 1997
7
<PAGE> 11
EXHIBIT A
PROPOSED AMENDMENT TO RESTATED CERTIFICATE OF INCORPORATION
TO CHANGE THE CORPORATE NAME
Article FIRST of the Corporation's Restated Certificate of Incorporation
shall be amended to read as follows:
"FIRST: The name of the corporation (hereinafter called the
"Corporation") is DORAL FINANCIAL CORPORATION."
<PAGE> 12
EXHIBIT B
PROPOSED AMENDMENT TO RESTATED CERTIFICATE OF INCORPORATION
TO INCREASE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
The first paragraph of Article FOURTH of the Corporation's Restated
Certificate of Incorporation shall be amended to read as follows:
"FOURTH: The total number of shares of all classes of stock which the
Corporation is authorized to issue is 52,000,000 shares, consisting of
50,000,000 shares of Common Stock, $1.00 par value, and 2,000,000 shares of
Serial Preferred Stock, $1.00 par value."
<PAGE> 13
APPENDIX
FIRST FINANCIAL CARIBBEAN CORPORATION
1159 F.D. ROOSEVELT AVE.
SAN JUAN, PUERTO RICO 00920
PROXY
SOLICITED BY THE BOARD OF DIRECTORS FOR SPECIAL MEETING OF SHAREHOLDERS
The undersigned holder of Common Stock of First Financial Caribbean
Corporation (the "Corporation") hereby authorizes and appoints Salomon Levis,
Zoila Levis and Richard F. Bonini, or any one or more of them, as proxies with
full power of substitution in each, to represent the undersigned at the special
meeting of shareholders of the Corporation to be held at The Doral Building,
Fifth Floor, 650 Munoz Rivera Avenue, San Juan, Puerto Rico at 11:00 a.m.,
local time, on Monday, September 22, 1997 and any adjournment or adjournments of
said meeting and thereat to vote and act with respect to all the shares of
Common Stock of the Corporation that the undersigned would be entitled to vote
if then personally present in accordance with the instructions listed on the
reverse hereof.
Such proxies may vote in their discretion upon such other business as may
properly be brought before the meeting or any adjournment thereof.
Receipt of the Notice of Meeting and the related Proxy Statement in hereby
acknowledged.
(Continues and to be signed on other side)
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<S> <C>
If no direction is given, this proxy will be voted FOR items 1 and 2. Please mark [X]
your votes as
indicated in
this example
The Board of Directors recommends a vote FOR Items 1 and 2.
No. 1 - Adoption of amendment to the Corporation's No. 2 - Adoption of amendment to the
Restated Certificate of Incorporation to Corporation's Restated Certificate
change the name of the Corporation to of Incorporation to increase the
"Doral Financial Corporation." number of authorized shares of
Common Stock from 20,000,000 to
50,000,000.
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
[ ] [ ] [ ] [ ] [ ] [ ] To vote in accordance with the
Board of Director's recommendation,
just sign below. No boxes need to
be checked.
Dated: ,1997
----------------------
Signature:
-------------------------
Signature:
-------------------------
Please mark, date and sign as your
name appears to the left and return
in the enclosed envelope. If
acting as executor, administrator,
trustee, guardian, etc., you should
so indicate when signing. If the
signer is a corporation, please
sign the full corporate name by a
duly authorized officer. If shares
are held jointly, each shareholder
named should sign.
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