<PAGE> 1
As filed with the Securities and Exchange Commission on July 15, 1997
Registration No. 33-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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FIRST FINANCIAL CARIBBEAN CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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COMMONWEALTH OF PUERTO RICO 66-0312162
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification no.)
1159 FRANKLIN D. ROOSEVELT AVENUE
SAN JUAN, PUERTO RICO 00920
(787) 749-7100
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
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1997 EMPLOYEE STOCK OPTION PLAN
(Full title of the plan)
SALOMON LEVIS
CHIEF EXECUTIVE OFFICER
FIRST FINANCIAL CARIBBEAN CORPORATION
1159 FRANKLIN D. ROOSEVELT AVENUE
SAN JUAN, PUERTO RICO 00920
(787) 749-7100
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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COPIES TO:
IGNACIO ALVAREZ
PIETRANTONI MENDEZ & ALVAREZ
SUITE 1901, BANCO POPULAR CENTER
209 MUNOZ RIVERA AVENUE
SAN JUAN, PUERTO RICO 00918
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
========================================================================================================================
Title of securities to Amount to be Proposed maximum offering Proposed maximum Amount of
be registered registered(1) price per unit(2) aggregate registration
offering price(2) fee
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par
value ($1.00 per 500,000 $30 1/8 $15,062,500 $4,565
share) shares
========================================================================================================================
</TABLE>
(1)This Registration Statement also covers an indeterminate number of shares of
Common Stock which may be issued by the Registrant from time to time by virtue
of stock splits, stock dividends or similar transactions involving the
reclassification of the Registrant's Common Stock.
(2)Estimated solely for the purpose of calculating the registration fee on the
basis of the last sales price per share of the Common Stock on July 8, 1997, as
reported by the National Association of Securities Dealers Automated Quotation
National Market System.
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE PROSPECTUS
Pursuant to the Note to Part I of Form S-8, the documents containing
the information specified by Part I of Form S-8 will be sent or given to
employees as specified by Rule 428(b)(1).
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed by the Company with the Commission are
incorporated herein by reference:
1. The Annual Report of the Company on Form 10-K for its
fiscal year ended December 31, 1996.
2. The Quarterly Report of the Company on Form 10-Q for the
quarter ended March 31, 1997.
3. All documents subsequently filed by the Company with the
Commission pursuant to Section 13(a),13(c), 14 or 15(d) of the Securities
Exchange Act of 1934 and prior to the termination of this offering shall be
deemed to be incorporated by reference in this registration statement. Any
statement contained in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this registration statement to the extent that a statement contained herein,
modified or superseded such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this registration statement.
ITEM 4. DESCRIPTION OF SECURITIES.
The Certificate of Incorporation of the Company authorizes a single
class of 20,000,000 shares of Common Stock, par value $1.00 per share (the
"Common Stock") and 2,000,000 shares of Serial Preferred Stock, $1.00 par value
(the "Serial Preferred Stock"). As of March 31, 1997, there were 9,198,730
shares of Common Stock issued and outstanding and there were no shares of Serial
Preferred Stock outstanding.
The Common Stock is traded in the over-the-counter market on the
National Association of Securities Dealers Automated Quotation National Market
Systems. The holders of the Common Stock are entitled to one vote for each share
held of record on all matters submitted to a vote of stockholders. Each share of
Common Stock has the same relative right as, and is identical in all respects
with, each other share of Common Stock. There are no cumulative voting rights
for the election of directors.
Subject to the rights of holders of any outstanding shares of Serial
Preferred Stock, in the event of liquidation, dissolution or distribution of
assets of the Company, the holders of Common Stock are entitled to share ratably
in the assets of the Company legally available for distribution to stockholders.
The Common Stock has no redemption, conversion or sinking fund privileges.
Subject to any dividend preferences which may be established with
respect to Serial Preferred Stock, the holders of Common Stock are entitled to
receive, pro rata, dividends when and as declared by the Board of Directors out
of funds legally available therefor.
Holders of Common Stock do not have preemptive rights to subscribe for
or purchase additional securities of the Company.
Chase Mellon Shareholder Services, L.L.C., New York, New York, is the
transfer agent and registrar for the Common Stock.
The Certificate of Incorporation authorizes the Board of Directors to
fix the designation, voting powers, preferences, limitations and relative rights
of any series of the Company's Serial Preferred Stock at the time of issuance.
The holders of Common Stock may be adversely affected since preferred stock
issued in the future may be designated with special rights or preferences by the
Board of Directors over the holders of the Common Stock as to dividends,
liquidation rights, voting rights (e.g. separate class right to approve a merger
or sale of substantially all the assets of the Company) and other matters. The
issuance of Serial Preferred Stock under certain circumstances may have the
effect of delaying, deferring or preventing a change in control of the Company.
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ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
A. Article 1.02 (B) (6) of the Puerto Rico General Corporation Act (the
"PR GCA") provides that a corporation may include in its certificate of
incorporation a provision eliminating or limiting the personal liability of
members of its board of directors or governing body for breach of a director's
fiduciary duty of care. However, no such provision may eliminate or limit the
liability of a director for breaching his duty of loyalty, failing to act in
good faith, engaging in intentional misconduct or knowingly violating a law,
paying a dividend or approving a stock repurchase which was illegal, or
obtaining an improper personal benefit. A provision of this type has no effect
on the availability of equitable remedies, such as injunction or rescission, for
breach of fiduciary duty. Article Seventh of the Company's Restated Certificate
of Incorporation contains such a provision.
B. Article 4.09 of the PR GCA authorizes Puerto Rico corporations to
indemnify their officers and directors against liabilities arising out of
pending or threatened actions, suits or proceedings to which they are or may be
made parties by reason of being directors or officers. Such rights of
indemnification are not exclusive of any other rights to which such officers or
directors may be entitled under any by-law, agreement, vote of stockholders or
otherwise. The Certificate of Incorporation of the Company provides that the
Company shall indemnify its directors, officers and employees to the fullest
extent permitted by law. The Company also maintains directors' and officers'
liability insurance on behalf of its directors and officers.
C. Section 1 of Article IX of the Company's By-laws provides that the
Company shall indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of the Company) by reason of the fact that he is or was a
director, officer, employee or agent of the Company or is or was serving at the
request of the Company as a director, officer, employer or agent of another
corporation or enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with such action, suit or proceeding if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the Company, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
Section 2 of Article IX of the Company's By-laws provides that the
Company shall indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action or suit by or in the
right of the Company to procure a judgment in its favor by reason of the fact
that such person acted in any of the capacities set forth above, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with the
defense or settlement of such action or suit if he acted under similar standards
set forth in the preceding paragraph, except that no indemnification may be made
in respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the Company unless and only to the extent that the
court in which such action or suit was brought shall determine that despite the
adjudication of liability, such person is fairly and reasonably entitled to be
indemnified for such expenses which the court shall deem proper.
Section 3 of Article IX of the By-laws further provides that to the
extent a director or officer of the Company has been successful on the merits or
otherwise in the defense of any action, suit or proceeding referred to in
Sections 1 and 2 of Article IX of the By-laws or in the defense of any claim,
issue, or matter therein, he shall be indemnified against expenses (including
attorney's fees) actually and reasonably incurred by him in connection
therewith.
Section 6 and 7 of Article IX of the By-laws provide that
indemnification provided for by Sections 1 and 2 of Article IX of the By-laws
shall not be deemed exclusive of any other rights to which the indemnified party
may be entitled; and that the Company may purchase and maintain insurance on
behalf of a director or officer of the Company against any liability asserted
against him or incurred by him in any such capacity or arising out of his status
as such whether or not the Company would have the power to indemnify him against
such liabilities under such Sections 1 and 2 of Article IX of the By-laws.
II-2
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ITEM 7. EXEMPTIONS FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
*3.1 Restated Certificate of Incorporation of the Company, as
amended to date (incorporated herein by reference to Exhibit
3.1 of the Company's Annual Report on Form 10-K for the year
ended December 31, 1996 (File No. 0-17224)).
*3.2 Bylaws of the Company, as amended to date (incorporated herein
by reference to Exhibit 3.2 of the Company's Annual Report on
Form 10-K for the year ended December 31, 1995 (File No.
0-17224)).
*4.1 Common Stock Certificate (incorporated herein by reference to
Exhibit 4.1 of the Company's Annual Report on Form 10-K for
the year ended December 31, 1996 (File No. 0-17224)).
4.2 1997 Employee Stock Option Plan.
5 Opinion regarding legality and consent of Pietrantoni Mendez &
Alvarez.
23.1 Consent of Pietrantoni Mendez & Alvarez (included in the
opinion of counsel filed as Exhibit 5).
23.2 Consent of Price Waterhouse.
24.1 Power of Attorney included on page II-5 through II-6.
ITEM 9. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the registration statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in
the registration statement or any material change to
such information in the registration statement;
Provided however, that paragraphs (i) and (ii) above do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
2. That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
3. To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
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*Previously filed
II-3
<PAGE> 5
4. That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-4
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Municipality of San Juan, Commonwealth of Puerto Rico, on the
14th day of July, 1997.
FIRST FINANCIAL CARIBBEAN CORPORATION
By: /s/ Salomon Levis
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Salomon Levis
Chairman of the Board
and Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and
appoints Salomon Levis and Richard F. Bonini and each of them, each with full
power to act without the other, his true and lawful attorneys-in-fact and
agents, each with full power of substitution and resubstitution, for him and in
his name, place and stead in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this Registration Statement,
and any registration statement relating to the same offering as this
Registration Statement that is to be effective upon filing pursuant to Rule
462(b) under the Securities Act of 1933, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto each of said attorneys-in-fact and agents
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that each of said attorneys-in-fact and agents, or his substitute
or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE Title Date
--------- ----- ----
<S> <C> <C>
/s/ Salomon Levis Chairman of the Board and July 14, 1997
- ------------------------------------------ Chief Executive Officer
Salomon Levis
/s/ Richard F. Bonini Senior Executive Vice President, July 14, 1997
- ------------------------------------------ Chief Financial Officer
Richard F. Bonini and Director
Vice President and Principal July 14, 1997
/s/ Ricardo Melendez Accounting Officer
- ------------------------------------------
Ricardo Melendez
/s/ A. Brean Murray Director July 14, 1997
- ------------------------------------------
A. Brean Murray
Director
- ------------------------------------------
Edgar M. Cullman, Jr.
/s/ Frederick M. Danziger Director July 14, 1997
- ------------------------------------------
Frederick M. Danziger
</TABLE>
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<TABLE>
<CAPTION>
SIGNATURE Title Date
--------- ----- ----
<S> <C> <C>
/s/ John L. Ernst Director July 14, 1997
- ----------------------------------------
John L. Ernst
/s/ Zoila Levis Director July 14, 1997
- ----------------------------------------
Zoila Levis
/s/ Victor M. Pons, Jr. Director July 14, 1997
- ----------------------------------------
Victor M. Pons, Jr.
</TABLE>
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<PAGE> 8
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
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<S> <C> <C>
3.1 -- Restated Certificate of Incorporation of FFCC, as currently in effect.(1)
3.2 -- By-laws of FFCC, as amended.(2)
4.1 -- Common Stock Certificate.(1)
4.2 -- 1997 Employee Stock Option Plan.
5 -- Opinion regarding legality and consent of Pietrantoni Mendez &
Alvarez.
23.1 -- Consent of Pietrantoni Mendez & Alvarez (included in the opinion of
counsel filed as Exhibit 5 thereto).
23.2 -- Consent of Price Waterhouse.
24.1 -- Power of Attorney (included on Page II-5 through
II-6).
</TABLE>
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(1) Incorporated herein by reference to the same exhibit number of the
Company's Annual Report on Form 10-K for the year ended December 31,
1996 (File No. 0-17224).
(2) Incorporated herein by reference to the same exhibit number of the
Company's Annual Report on Form 10-K for the year ended December 31,
1995 (File No. 0-17224).
<PAGE> 1
EXHIBIT 4.2
FIRST FINANCIAL CARIBBEAN CORPORATION
1997 EMPLOYEE STOCK OPTION PLAN
EFFECTIVE MARCH 7, 1997
SECTION 1. Introduction
1.1 Purpose.
The purposes of the First Financial Caribbean Corporation 1997 Employee
Stock Option Plan (the "Plan") is to provide First Financial Caribbean
Corporation (the "Corporation") and its subsidiaries with an effective means to
attract and retain highly qualified personnel as well as to provide additional
incentive to employees who provide services to the Corporation and its
subsidiaries. The Plan is expected to contribute to the attainment of these
objectives by offering selected employees the opportunity to acquire stock
ownership interests in the Corporation.
1.2 Consideration to Corporation for Issuance of Options and Stock
Appreciation Rights: Employment Agreements by Employees.
Each Employee by signing and accepting an Option Contract will, if the
Committee so requires, agree to remain employed by the Corporation or a
Subsidiary for a specified period of time, and the consideration to the
Corporation for the issuance of Options or Stock Appreciation Rights will be any
such employment agreements as well as the benefits to the Corporation from the
added incentive to the Employee of increased proprietorship in the Corporation.
Nothing in the Plan or in any Option Contract shall confer on any individual any
right to continue employed by the Corporation or any of its Subsidiaries or
limit the right of the Corporation or any of its Subsidiaries to terminate
Employment of an Employee at any time, with or without cause.
1.3 Plan Subject to Ratification by Shareholders.
The Plan shall become effective upon adoption by the Board of Directors,
provided that the Plan is approved, within one year following its adoption by
the Board of Directors, by a vote of the holders of a majority of the shares of
Common Stock entitled to vote and present in person or by proxy at a duly held
shareholders' meeting. No Option or Stock Appreciation Right under the Plan may
be granted more than 10 years after the earlier of the date the Plan is adopted
or the date the Plan is approved by the shareholders of the Corporation, without
further approval by the shareholders of the Corporation.
1.4 Limitations on Number of Shares Issuable Under the Plan.
Subject to the following provisions of this Section 1.4, the aggregate
number of shares of Common Stock which may be issued under the Plan shall be
limited to 500,000. The shares of Common Stock for which Options and Stock
Appreciation Rights may be granted may consist of either authorized but unissued
shares of Common Stock or shares of Common Stock which have been issued and
which shall have been heretofore or hereafter reacquired by the Corporation. The
total number of shares subject to Options and Stock Appreciation Rights
authorized under the Plan shall be subject to increase or decrease in order to
give effect to the adjustment provisions of Section 3.2 hereof or any amendment
adopted as provided in Section 4.2 hereof. If any Option or Stock Appreciation
Right granted under the Plan shall expire, terminate or be cancelled for any
reason without having been exercised in full, the corresponding number of
unpurchased shares shall again be available for purposes of the Plan. The number
of shares of Common Stock for which Options and Stock Appreciation Rights
<PAGE> 2
may be granted under this Plan shall be reduced by the number of shares subject
to an Option for which an Employee has exercised a related Stock Appreciation
Right in accordance with Section 2.4, Subsection (d), hereof.
1.5 Definitions.
The following terms shall have the meanings set forth below:
(a) Appreciation Date. The date designated by a grantee of a Stock
Appreciation Right for measurement of the appreciation in the value of the
Common Stock subject to the Stock Appreciation Right, which date shall not
be earlier than the date notice of such designation is received by the
Secretary of the Corporation.
(b) Board or Board of Directors. The Board of Directors of the
Corporation.
(c) Committee. The Compensation Committee or such other committee or
committees as shall be appointed by the Board of Directors to administer
the Plan pursuant to the provisions of Section 4.1 hereof.
(d) Common Stock. The Corporation's presently authorized common
stock, par value $1.00 per share, except as this definition may be modified
pursuant to the provisions of Section 3.2 hereof.
(e) Disability. Complete and permanent inability by reason of illness
or accident to perform the duties of the occupation in which an Employee
was employed when such disability commenced.
(f) Employee. Any salaried officer or common law employee of the
Corporation or any Subsidiary, or both, including any salaried officer or
employee who is a member of the Board of Directors of the Corporation.
(g) Employment. The rendering of services by an Employee for the
Corporation, or for any Subsidiary, or both. Whether military, government
or public service shall constitute termination of employment for purposes
of this Plan or any Option or Stock Appreciation Right granted hereunder
shall be determined in each case by the Committee in its sole discretion.
(h) Fair Market Value. The closing price of the Common Stock reported
on the NASDAQ National Market System on the date as of which such value is
being determined or, if no price is reported on such day, then on the next
preceding day on which such price was reported, or, if at any time the
Common Stock shall not be reported on the NASDAQ National Market System,
the Committee shall determine the fair market value on the basis of
available prices for such Common Stock or in such manner as may be
authorized by applicable regulations under the PRC and the IRC.
(i) Incentive Stock Option. An option to purchase Common Stock
granted by the Corporation to an Employee under the Plan which satisfies
the requirements of Section 422 of the IRC.
(j) IRC. The Internal Revenue Code of 1986, as amended.
(k) Qualified Stock Option. An option to purchase Common Stock
granted by the Corporation to an Employee under the Plan which satisfies
the requirements of Section 1046 of the PRC.
(l) Nonstatutory Stock Option. An option to purchase Common Stock
granted by the Corporation to an Employee under the Plan which does not
satisfy the requirements of Section 1046 of the PRC or Section 422 of the
IRC.
(m) Option. A Qualified Stock Option, an Incentive Stock Option or a
Nonstatutory Stock Option.
<PAGE> 3
(n) Option Expiration Date. The date on which an Option becomes
unexercisable by reason of the lapse of time or when a Nonstatutory Stock
Option otherwise becomes unexercisable.
(o) PRC. The Puerto Rico Internal Revenue Code of 1994, as amended.
(p) Stock Appreciation Right. An Employee's right to earn additional
compensation for the performance of future services, based on appreciation
in the Fair Market Value of the Common Stock pursuant to the formula set
forth in Section 2.4, Subsection (c), hereof.
(q) Stock Appreciation Right Expiration Date. The date on which a
Stock Appreciation Right becomes unexercisable by reason of the lapse of
time or, except in the case of a Stock Appreciation Right attached to a
Qualified Stock Option or Incentive Stock Option, otherwise becomes
unexercisable.
(r) Subsidiary. Any corporation in an unbroken chain of corporations
beginning with the Corporation if, at the time an Option is granted, each
of the corporations other than the Corporation owns stock possessing 50% or
more of the total combined voting power of all classes of stock of one of
the other corporations in such chain.
(s) The use of the singular shall also include within its meaning the
plural or vice versa.
SECTION 2. Stock Options
2.1 Grant and Exercise of Options.
(a) Grant. The Committee on behalf of the Corporation may grant Options to
purchase Common Stock to Employees selected by it in its discretion.
(b) Option Contracts. Options and any Stock Appreciation Rights attached
thereto shall be evidenced by agreements ("Option Contracts") in such form as
the Committee shall approve containing such terms and conditions, including the
period of their exercise, whether in installments or otherwise, as shall be
contained therein, which need not be the same for all Options.
(c) Option Price. The purchase price per share of Common Stock under each
Option shall be not less than 100 percent of the Fair Market Value per share of
such Common Stock on the date the Option is granted, as determined by the
Committee. The purchase price may be subject to adjustment in accordance with
the provisions of Section 3.2 hereof.
(d) Term of Option. The term during which each Option granted under the
Plan may be exercised shall not exceed a period of ten years from the date of
its grant.
(e) Exercise of Options. Unless an Option Contract provides otherwise,
each Option granted to an Employee shall become exercisable, on a cumulative
basis, with respect to 50% of the shares of Common Stock covered thereby on the
first anniversary of the date of its grant and with respect to 100% of the
shares of Common Stock covered thereby on the second anniversary of the date of
its grant. Any part of an Option that has become exercisable shall remain
exercisable until it has been exercised in full or it terminates or expires
pursuant to the terms of the Plan or the applicable Option Contract.
(f) Options Nontransferable. Options granted under the Plan shall by their
terms be nontransferable by the Employee otherwise than by will or the laws of
descent and distribution, and, during the lifetime of the Employee, shall be
exercisable only by the Employee. No transfer of an Option by an Employee by
will or by the laws of descent and distribution shall be effective to bind the
Corporation unless the Corporation shall have been furnished with written notice
thereof and a copy of the will and/or such other evidence as the Committee may
determine necessary to establish the validity of the transfer.
<PAGE> 4
(g) Payment. Each Option shall be exercised by delivery of a written
notice to the Corporation stating the number of whole shares of Common Stock as
to which the Option is being exercised and accompanied by payment therefor. No
shares shall be issued on the exercise of an Option unless paid for in full at
the time of purchase. Payment for shares purchased upon the exercise of an
Option shall be made in cash or, with the approval of the Committee, in Common
Stock valued at the then Fair Market Value thereof as determined by the
Committee, or by a combination of cash and Common Stock. Neither the Corporation
nor any Subsidiary may directly or indirectly lend money to any individual for
the purpose of assisting such individual to acquire or to carry shares issued
upon the exercise of Options granted under the Plan. No Employee shall have any
rights as a shareholder with respect to any share of Common Stock covered by an
Option unless and until such individual shall have become the holder of record
of such share, and except as otherwise permitted by Section 3.2 hereof, no
adjustment shall be made for dividends (ordinary or extraordinary, whether in
cash, securities or other property or distributions or other rights) in respect
of such share for which the record date is prior to the date on which such
individual shall have become the holder of record thereof.
(h) Investment Purpose. At the time of any exercise of any Option, the
Corporation may, if it shall deem it necessary or desirable for any reason,
require the holder of the Option to represent in writing to the Corporation that
it is the intention of such holder to acquire the shares of Common Stock being
acquired for investment only and not with a view to the distribution thereof. In
such event no shares of Common Stock shall be issued to such holder unless and
until the Corporation is satisfied with the correctness of such representation.
2.2 Qualified Stock Options and Incentive Stock Options.
In addition to meeting the requirements of Section 2.1, each Qualified
Stock Option shall be subject to the requirements of (a) and each Incentive
Stock Option shall be subject to the requirements of (a), (b) and (c) of this
Section 2.2.
(a) Annual Limitation of Options Which May Be Considered Qualified Stock
Options and/or Incentive Stock Options. Anything else in the Plan
notwithstanding, if and to the extent that the provisions of Section 1046 of the
PRC and/or Section 422 of the IRC shall so require, the aggregate Fair Market
Value (determined as of the time the Option is granted) of the shares with
respect to which Qualified Stock Options and/or Incentive Stock Options are
exercisable for the first time by any Employee during any calendar year (under
the Plan and any other plans of the Corporation and its Subsidiaries) shall not
exceed $100,000.
(b) Incentive Stock Options Granted to Ten Percent
Shareholders. Notwithstanding anything to the contrary contained in this Plan,
an Incentive Stock Option may not be granted to an Employee who owns, directly
or indirectly, stock possessing more than 10 percent of the total combined
voting power of all classes of stock of the Corporation or any Subsidiary
unless, at the time such Incentive Stock Option is granted, the exercise price
of such Incentive Stock Option is at least 110 percent of the Fair Market Value
of the Common Stock subject to the Incentive Stock Option, and such Incentive
Stock Option, by its terms, is not exercisable after the expiration of five (5)
years from the date of grant of such Incentive Stock Option.
(c) Notice. An Employee shall give prompt notice to the Corporation of any
disposition of shares acquired upon exercise of an Incentive Stock Option if
such disposition occurs within either two years after grant or one year after
the receipt of such shares by the Employee.
2.3 Voluntary Surrender and Cancellation of Nonstatutory Stock Options.
The Committee may grant to one or more holders of Nonstatutory Stock
Options, in exchange for the voluntary surrender and cancellation of such
Nonstatutory Stock Options and any corresponding Stock Appreciation Rights, new
Options having different Option prices than the Nonstatutory Stock Option prices
<PAGE> 5
provided in the Nonstatutory Stock Options so surrendered and cancelled and
containing such other terms and conditions as the Committee may deem
appropriate.
2.4 Stock Appreciation Rights Attached to Options.
(a) Grant. The Committee may grant a Stock Appreciation Right with respect
to any shares of Common Stock covered by any Option granted under the Plan and
such Stock Appreciation Right shall be granted only at the time of grant of the
related Option.
(b) Terms and Conditions. Each Stock Appreciation Right shall be subject
to the same terms and conditions as the related Option with respect to date of
expiration, exercisability, transferability, and eligibility to exercise. When a
Stock Appreciation Right is granted with respect to shares of Common Stock
covered by a Qualified Stock Option, such Stock Appreciation Right may be
exercised only when the Fair Market Value of the shares of Common Stock subject
to the Option exceeds the exercise price of such Option. Any amount payable upon
the exercise of a Stock Appreciation Right shall be payable in the form of cash
only.
(c) Amount of Compensation. The amount of compensation which shall be
payable to an Employee pursuant to the exercise of a Stock Appreciation Right
accompanying an Option is equal to the excess of the Fair Market Value of one
share of Common Stock on the Appreciation Date over the Fair Market Value of
such share on the date the Stock Appreciation Right was granted multiplied by
the number of Option shares with respect to which the Stock Appreciation Right
is exercised (the "spread"). The amount of compensation which shall be payable
pursuant to the exercise of a Stock Appreciation Right shall not exceed 100
percent of the spread. The cash paid upon exercise of Stock Appreciation Right
shall be reduced by such amount as the Corporation is required to withhold for
tax purposes.
(d) Termination of Options. Upon the exercise of a Stock Appreciation
Right, the related Option shall cease to be exercisable as to the shares with
respect to which such Stock Appreciation Right was exercised, and the related
Option shall be considered to have been exercised to that extent. Upon the
exercise in full of the related Option, the Stock Appreciation Right granted
with respect thereto shall terminate.
(e) Automatic Exercise Upon Expiration. Upon the Option Expiration Date of
an Option, an attached Stock Appreciation Right shall automatically be deemed to
be exercised in full by the Employee and cash shall be paid to such Employee for
100% of the spread. There shall be no automatic exercise of an attached Stock
Appreciation Right if the exercise price exceeds the Fair Market Value of the
Corporation's Common Stock on the Option Expiration Date.
SECTION 3. Provisions Relating to Plan Participation
3.1 Termination of Employment and Death.
(a) Options and Stock Appreciation Rights Exercisable within Three Months
Following Termination of Employment, Discharge or Retirement. Unless earlier
terminated in accordance with its terms, an Option or Stock Appreciation Right
shall terminate ninety days after any of the following:
(i) voluntary termination of Employment by the Employee, with or
without the consent of the Corporation, or
(ii) termination of Employment by the Corporation or any of its
Subsidiaries, with or without cause, or
(iii) termination of Employment because of retirement, or because the
employing subsidiary ceased to be a Subsidiary of the Corporation and the
Employee does not, prior thereto or contemporaneously therewith, become an
Employee of the Corporation or of another Subsidiary;
<PAGE> 6
provided, that with regard to terminations of Employment pursuant to clause
(ii), the Option or Stock Appreciation Right shall terminate as of the date of
such discharge if prior to such termination the Committee in its discretion
shall determine that it is not in the best interests of the Corporation that the
Option or Stock Appreciation Right should continue for said ninety-day period.
(b) Options and Stock Appreciations Rights Exercisable within One Year
After Death or Disability. If the holder of an Option or Stock Appreciation
Right shall die or terminate his employment due to Disability during the term of
an Option or Stock Appreciation Right, the holder or the legal representatives
shall be entitled to exercise the Option or Stock Appreciation Right in whole or
in part, to the extent then unexercised, at any time within one year following
the death of the Employee, but in no event after the Option Expiration Date or
the Stock Appreciation Right Expiration Date, and only to the extent that the
Employee was entitled to exercise the Option or Stock Appreciation Right on the
date of his death.
3.2 Adjustments Upon Changes in Capitalization; Change of Control;
Dissolution.
(a) Subject to any required action by the shareholders of the Corporation,
each of (i) the number of shares of Common Stock covered by each outstanding
Option, (ii) the number of shares Common Stock which have been authorized for
issuance under the Plan but as to which no Options have yet been granted or
which have been returned to the Plan upon cancellation or expiration of an
Option, (iii) the price per share of Common Stock covered by each such
outstanding Option, and (iv) the maximum number of shares with respect to which
Options may be granted to any Employee, shall be proportionately adjusted for
any increase or decrease in the number of issued shares of Common Stock
resulting from a stock split or the payment of a stock dividend with respect to
the Common Stock or any other increase or decrease in the number of shares of
Common Stock effected without receipt of consideration by the Corporation;
provided, however, that (a) each such adjustment with respect to an Incentive
Stock Option or Qualified Stock Option shall comply with the rules of Section
424(a) of the IRC (or any successor provision) and an applicable provision of
the PRC and (b) in no event shall any adjustment be made which would render any
Qualified Stock Option granted hereunder other than a "qualified option" under
Section 1046 of the PRC or any Incentive Stock Options other than an "incentive
stock option" as defined in Section 422 of the IRC; and provided further,
however, that conversion of any convertible securities of the Corporation shall
not be deemed to have been "effected without receipt of consideration." Such
adjustment shall be made by the Committee, whose determination in that respect
shall be final, binding and conclusive. Except as expressly provided herein, no
issuance by the Corporation of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of shares
of Common Stock subject to an Option.
(b) If: (1) Any person (as defined for purposes of Section 13(d) and 14(d)
of the Exchange Act, but excluding the Corporation and any of its wholly-owned
subsidiaries) acquires direct or indirect ownership of 50% or more of the
combined voting power of the then outstanding securities of the Corporation as a
result of a tender or exchange offer, open market purchases, privately
negotiated purchases or otherwise; or (2) the shareholders of the Corporation
approve (A) any consolidation or merger of the Corporation in which the
Corporation is not the surviving corporation (other than a merger of the
Corporation in which the holders of Common Stock immediately prior to the merger
have the same or substantially the same proportionate ownership of the surviving
corporation immediately after the merger), or (B) any sale, lease, exchange or
other transfer (in one transaction or a series of related transactions) of all,
or substantially all, of the assets of the Corporation to an entity which is not
a wholly-owned subsidiary of the Corporation, then the exercisability of each
Option outstanding under the Plan shall be automatically accelerated so that
each Option shall, immediately prior to the specified effective date of any of
the foregoing transactions, become fully exercisable with respect to the total
number of shares subject to
<PAGE> 7
such Option and may be exercisable for all or any portion of such Shares. Upon
the consummation of any of such transactions, all outstanding Options under the
Plan shall, to the extent not previously exercised, terminate and cease to be
outstanding.
(c) In the event of the proposed dissolution or liquidation of the
Corporation, all outstanding Options will terminate immediately prior to the
consummation of such proposed action, unless otherwise provided by the
Committee.
SECTION 4. Administration
4.1 Independent Committee to Administer the Plan.
(a) Composition and Functions of Committee. A Committee consisting of at
least two directors (who shall be "Non-Employee Directors" as defined in Rule
16b-3 of the Securities and Exchange Commission) shall be appointed by the Board
of Directors and will have, subject to the express provisions of the Plan,
general authority to administer the Plan, to grant Options and Stock
Appreciation Rights thereunder, subject to the ratification of the Board of
Directors if such limitation is imposed by the Board of Directors, and to
perform such other functions as may be assigned to it by the Board of Directors
in connection with the Plan, including, among other things, determining the form
of Option Contracts to be issued under the Plan and the terms and conditions to
be included in such Option Contracts and adopting from time to time such rules
and regulations as it may deem appropriate for the proper administration of the
Plan. The Committee may also make such determinations under, and such
interpretations of, and take such steps in connection with, the Plan, the rules
and regulations or Options and Stock Appreciation Rights granted thereunder as
it may deem necessary or advisable. The Committee may, in its discretion or in
accordance with a direction from the Board of Directors, waive any provisions of
any Option Contract, provided such waiver is not inconsistent with the terms of
the Plan as then in effect.
(b) Authorization of Actions Taken by the Committee and Board of
Directors. Vacancies in the Committee shall be filled by the Board of
Directors. The Committee may act by a majority of its members either at a
meeting or in writing without a meeting. All questions arising under the Plan or
under the rules and regulations or under the Option Contracts, whether such
questions involve interpretation thereof or otherwise, shall be determined by
the Committee and its determination, unless disapproved by the Board of
Directors, shall be conclusive and binding in all cases. To the extent that any
such action would not adversely affect the status of Qualified Stock Options and
Incentive Stock Options under the PRC and IRC, respectively, all matters
provided in the Plan, in the Option Contracts, or in such rules and regulations
to be determined or performed by the Committee may be determined or performed by
the entire Board of Directors. No member of the Board of Directors or of the
Committee shall be liable for any action taken or any determination made in good
faith with respect to the Plan or any Option Contract.
(c) Findings of the Board of Directors and Committee Are Conclusive. Each
determination, interpretation, or other action made or taken pursuant to the
provisions of this Plan by the Board of Directors or the Committee shall be
final and shall be binding and conclusive for all purposes and upon all persons,
including, without limitation thereto, the Corporation, the shareholders, the
Committee and each of the members thereof, and the Employees of the Corporation,
and their respective successors in interest.
4.2 Amendment and Discontinuance of the Plan.
The Board of Directors may at any time amend, modify, suspend or terminate
the Plan, without shareholder approval, except to the extent such approval is
required by the PRC or the IRC to permit the granting of Qualified Stock Options
or Incentive Stock Options, or by the rules of any securities exchange or
automated
<PAGE> 8
quotation system on which the shares of Common Stock of the Corporation trade at
such time; provided, that no change shall be made which will have a material
adverse effect upon any Option or Stock Appreciation Right previously granted
unless the consent of the affected Employee is obtained.
4.3 Compliance with Law and Other Conditions.
(a) Options and Stock Appreciation Rights. Any exercise by an Employee of
an Option or Stock Appreciation Right shall be made only in compliance with any
applicable rule or regulation of the Securities and Exchange Commission
exempting such exercise from the operation of Section 16(b) of the Securities
Exchange Act of 1934 and any other applicable law, rule, regulation or other
provision that may hereafter relate to the exercise and cash settlement rights
of Stock Appreciation Rights under the Federal securities laws.
(b) Generally. No shares of Common Stock shall be issued pursuant to the
exercise of any Option or Stock Appreciation Right granted under the Plan prior
to the compliance by the Corporation to the satisfaction of its counsel with any
applicable laws and with any applicable regulations of any securities exchange
on which such shares are listed.
4.4 Withholding Taxes.
Whenever shares of Common Stock are to be issued pursuant to the Plan, the
Corporation shall have the right to require that there be remitted to the
Corporation an amount sufficient to satisfy all applicable federal, state,
commonwealth and local withholding tax requirements prior to the delivery of any
certificate or certificates for such shares. The Corporation reserves the right
to satisfy the applicable federal, state, commonwealth and local withholding tax
requirements through the retention of shares of Common Stock otherwise
transferable upon exercise of an Option. Such withheld amounts shall meet the
Federal securities laws requirements set forth in Section 4.3, Subsection (a),
hereof. Whenever payments are to be made in cash, such payments shall be net of
an amount sufficient to satisfy federal, state and local withholding tax
requirements and authorized deductions.
4.5 Tax Offset Payments.
The Committee shall have the authority at the time of any award under this
Plan or anytime thereafter to make Tax Offset Payments to assist Employees in
paying income taxes incurred as a result of their participation in this Plan.
The Tax Offset Payments shall be determined by multiplying a percentage
established by the Committee by all or a portion (as the Committee shall
determine) of the taxable income recognized by an Employee upon (i) the exercise
of a Nonstatutory Stock Option or a Stock Appreciation Right, or (ii) the
disposition of shares received upon exercise of a Qualified Stock Option or
Incentive Stock Option. The percentage shall be established, from time to time,
by the Committee at that rate which the Committee, in its sole discretion,
determines to be appropriate and in the best interests of the Corporation to
assist Employees in paying income taxes incurred as a result of the events
described in the preceding sentence. Tax Offset Payments shall be subject to the
restrictions on transferability applicable to Options set forth in Section
2.1(f).
4.6 Use of Proceeds and Funding.
(a) Use of Proceeds. The proceeds from the sale of Common Stock pursuant
to Options granted under the Plan shall constitute general funds of the
Corporation and may be used for its corporate purposes as the Corporation may
determine.
(b) Funding. No provision of the Plan shall require or permit the
Corporation, for the purpose of satisfying any obligations under the Plan, to
purchase assets or place any assets in a trust or other entity to which
contributions are made or otherwise to segregate any assets, nor shall the
Corporation maintain separate bank
<PAGE> 9
accounts, books, records or other evidence of the existence of a segregated or
separately maintained or administered fund for such purposes. Employees shall
have no rights under the Plan other than as unsecured general creditors of the
Corporation, except that insofar as they may have become entitled to payment of
additional compensation by performance of services, they shall have the same
rights as other employees under general law. This Subsection shall not prevent
the Corporation from purchasing its Common Stock for the purpose of meeting its
requirements to issue Common Stock pursuant to the Plan.
4.7 Other.
To the extent applicable, this Plan is intended to permit the issuance of
Qualified Stock Options in accordance with the provisions of Section 1046 of the
PRC and Incentive Stock Options in accordance with Section 422 of the IRC. This
Plan may be modified or amended at any time, both prospectively and
retroactively, and in such manner as to affect Qualified Stock Options or
Incentive Stock Options previously granted, if such amendment or modification is
necessary for this Plan and the Qualified Stock Options or Incentive Stock
Options granted hereunder to qualify under said provisions of the PRC and the
IRC.
<PAGE> 1
EXHIBIT 5
July 14, 1997
Board of Directors
First Financial Caribbean Corporation
1159 Franklin D. Roosevelt Avenue
San Juan, Puerto Rico 00920
Dear Sirs:
As special counsel to First Financial Caribbean Corporation, a Puerto Rico
corporation (the "Company"), we have been requested to render this opinion for
filing as Exhibit 5 to the Company's registration statement on Form S-8, which
is being filed with the Securities and Exchange Commission (the "Registration
Statement").
The Registration Statement covers 500,000 shares (the "Shares") of Common
Stock, which may be sold by the Company upon the exercise of options to be
granted pursuant to the Company's 1997 Employee Stock Option Plan (the "Plan")
filed as Exhibit 4.2 to the Registration Statement.
We have examined the Company's Restated Certificate of Incorporation, the
Company's By-Laws, as amended, the Plan, and related minutes of action taken by
the Board of Directors and Stockholders of the Company and such other documents
and records as we have deemed appropriate. In the foregoing examination, we
have assumed the genuineness of all signatures, the authenticity of all
documents submitted to us as originals and the conformity to originals of all
documents submitted to us as certified or reproduced copies of originals.
Based upon the foregoing, we are of the opinion that:
1. The Plan and the Shares have been duly authorized by all requisite
corporate action on the part of the Company.
<PAGE> 2
2
2. When the Shares are sold in the manner and for the consideration
described in the Plan, the Shares will be validly issued, fully paid and
non-assessable.
We hereby consent to the filing of this opinion as Exhibit 5 to the
Registration Statement. In giving the foregoing consent, we do not thereby
admit that we are within the category of persons whose consent is required
under Section 7 of the Securities Act of 1933, as amended.
Very truly yours,
/s/ PIETRANTONI MENDEZ & ALVAREZ
Pietrantoni Mendez & Alvarez
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated January 31, 1997, appearing on
page F-3 of First Financial Caribbean Corporation's Annual Report on Form 10-K
for the year ended December 31, 1996.
/s/ PRICE WATERHOUSE
PRICE WATERHOUSE
San Juan, Puerto Rico
July 11, 1997
