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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
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CURRENT REPORT
Pursuant to Section 13
or 15(d) of the Securities
Exchange Act of 1934
Date of Report (Date of earliest event reported): October 19, 1998
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Doral Financial Corporation
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(Exact name of registrant as specified in this charter)
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Puerto Rico 0-17224 66-0312162
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(State or other jurisdiction of (Commission File No.) (IRS Employer Identification No.)
incorporation)
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1159 Franklin D. Roosevelt Avenue, San Juan, Puerto Rico 00920
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (787) 749-7100
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ITEM 5. OTHER EVENTS
Doral Financial Corporation (the "Company"), on October 21, 1998, announced
that it had completed a consent solicitation and had obtained the required
consents for certain amendments to the Indenture pursuant to which the Company's
7.84% Senior Notes due 2006 were issued. The amendments modify certain covenants
and other provisions of the Indenture to (i) eliminate the limitations on the
incurrence of additional indebtedness by the Company or any of its subsidiaries,
(ii) eliminate the covenant restricting the creation of liens on property,
shares of capital stock or indebtedness of the Company or of any of its
subsidiaries, (iii) modify the covenant limiting the issuance of securities by
subsidiaries, (iv) eliminate certain definitions or portions of definitions that
are no longer required as a result of the foregoing modifications, (v) modify
the covenant restricting mergers and similar transactions to eliminate the
reference to compliance with the additional indebtedness test that is being
eliminated, (vi) add an additional covenant that would require the Company to
maintain a minimum consolidated net worth of $185 million, and (vii) modify the
definition of the term "Company" to reflect the change in the Company's name
from First Financial Caribbean Corporation to Doral Financial Corporation. A
Supplemental Indenture incorporating such amendments was executed as of October
19, 1998 and was effective upon execution.
The Company also authorized certain amendments to its bylaws at a regularly
scheduled Board of Directors meeting held on October 19, 1998. A copy of the
bylaws as revised are included as an exhibit to this Form 8-K.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA, FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits
3.2 Bylaws, as amended as of October 19, 1998
10.79 First Supplemental Indenture, dated as of
October 19, 1998, between the Company and Bankers
Trust Company.
99 Press Release dated October 21, 1998
2
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant had duly caused this report to be signed on its behalf of the
undersigned thereunto duly authorized.
DORAL FINANCIAL CORPORATION
By: /s/ Ricardo Melendez
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Ricardo Melendez
Vice President and Chief
Accounting Officer
Date: October 22, 1998
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EXHIBIT INDEX
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EXHIBIT NUMBER DESCRIPTION
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3.2 By-laws, as amended as of October 19, 1998
10.79 First Supplemental Indenture, dated as of October 19, 1998
between the Company and Bankers Trust Company
99 Press Release dated October 21, 1998
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EXHIBIT 3.2
AS AMENDED AS OF OCTOBER 19, 1998
BY-LAWS
OF
DORAL FINANCIAL CORPORATION
ARTICLE I
REGISTERED OFFICES
Section 1. Registered Office and Registered Agent. The location of the
registered office and the name of the registered agent of the Corporation in the
Commonwealth of Puerto Rico shall be such as shall be determined from time to
time by the Board of Directors and on file in the appropriate public offices of
the Commonwealth of Puerto Rico pursuant to applicable provisions of law.
Section 2. Corporate Offices. The Corporation may have such other
corporate offices and places of business anywhere within or without the
Commonwealth of Puerto Rico as the Board of Directors may from time to time
designate or the business of the Corporation may require.
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ARTICLE II
MEETING OF THE SHAREHOLDERS
Section 1. Annual Meeting. The annual meeting of the share holders for
the election of the directors and for such other business as may come before the
meeting shall be held at such place, either within or without of the
Commonwealth of Puerto Rico, and at such time and date as the Board of
Directors, by resolution, shall determine and set forth in the notice of
meeting. In the event the Board of Directors fails so to determine the time,
date and place of the meeting, the annual meeting of shareholders shall be held
on the third Wednesday in April of each year at the place and time fixed by the
Board of Directors.
Section 2. Special Meeting. Special meetings of the share holders, for
any purposes, unless otherwise prescribed by statute, may be called by the
Chairman of the Board, or upon the request of the majority of the Board of
Directors.
Section 3. Place of Meeting. Any meeting of the shareholders may be
held at such place, either within or without the Common wealth of Puerto Rico,
as may be specified in the call and notice thereof or in the waiver of notice
thereof signed by all the shareholders.
Section 4. Notice of Meeting. Written or printed notice of each meeting
of shareholders, whether annual or special, stating the place, date and time of
the meeting and in the case of a special meeting, the purpose or purposes
thereof, shall be given to each shareholder of record entitled to vote at such
meeting either personally or by mail, not less than ten (10) days nor more than
sixty (60) days prior to the meeting. If mailed, such notice shall
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be deemed to be delivered when deposited in the United States Mail, addressed to
the shareholder at his address as it appears on the stock transfer books of the
Corporation, with postage thereon prepaid. Notice of any meeting of shareholders
shall not be required to be given to any shareholder who shall have waived such
notice either before or after the time fixed for holding such meeting, and such
notice shall be deemed waived by any shareholder who shall attend such meeting
in person or by proxy, except a shareholder who shall attend such meeting for
the express purpose of objecting at the beginning of the meeting to the
transaction of any business because the meeting is not lawfully called or
convened. Notice of any adjourned meeting of the shareholders shall not be
required to be given.
Section 5. Voting. Each shareholder entitled to vote in accordance with
the terms of the Certificate of Incorporation and in accordance with the
provisions of these By-Laws shall be entitled to one vote, in person or by
proxy, for each share of stock entitled to vote held by such shareholder, but no
proxy shall be voted after three years from its date unless such proxy provides
for a longer period. At all meetings of shareholders the voting may be viva
voce, except that, unless otherwise provided by the Certificate of
Incorporation, voting for the election of directors will be ballot and except
that any qualified voter may demand a vote by ballot on any other matter, in
which case vote shall be by ballot.
A complete list of the shareholders entitled to vote at the
ensuing election, arranged in alphabetical order, with the address of each, and
the number of shares held by each, shall be open to the examination of any
shareholder, for any purpose germane to the meeting, during ordinary business
hours, for a period of at
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least ten days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the meeting and place of the meeting
during the whole time thereof, and may be inspected by any shareholder who is
present.
Section 6. Quorum. Except as otherwise required by statute, by the
Certificate of Incorporation or by these By-laws, the holders of a majority of
the outstanding shares of the Corporation entitled to vote, present in person or
represented by proxy, shall constitute a quorum at any meeting of the
shareholders. In the absence of a quorum at any meeting, or any adjournment
thereof, a majority in interest of the shareholders present in person or
represented by proxy may adjourn the meeting from time to time without further
notice other than announcement at the meeting, until a quorum is present. At any
such adjourned meeting at which a quorum shall be present, any business may be
transacted which might have been transacted at the meeting as originally
noticed; but only those shareholders entitled to vote at the meeting originally
noticed shall be entitled to vote at any adjournment or adjournments thereof.
The shareholders present at a duly held meeting may continue to transact
business until adjournment, notwithstanding the withdrawal of enough
shareholders to leave less than a quorum. If the adjournment is for more than
thirty (30) days, or if after such adjournment a new record date is fixed for
the adjournment meeting, a notice of the adjourned meeting shall be given to
each shareholder of record entitled to vote at the meeting.
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Section 7. Proxies. At all meetings of shareholders, the vote of any
shareholder may be cast in person or by his proxy or proxies (who need not be
shareholders) appointed by an instrument in writing subscribed by such
shareholder or by his duly authorized attorney-in-fact and delivered to the
secretary of the meeting. No appointment of proxy shall be valid after three
years from the date thereof, unless otherwise provided.
Section 8. Voting of Shares by Certain Holders. Shares outstanding in
the name of another corporation may be voted by such officer, agent or proxy as
the by-laws of such corporation may prescribe, or, in the absence of such
provision, as the Board of Directors of such corporation may determine.
Shares held by an administrator, executor, guardian or conservator may
be voted by him, either in person or by proxy, without a transfer of such shares
into his name. Shares standing in the name of a trustee may be voted by him,
either in person or by proxy, but no trustee shall be entitled to vote shares
held by him without a transfer of such shares to his name or to the name of his
nominee.
Shares standing in the name of a receiver may be voted by such
receiver, and shares held by or under the control of a receiver may be voted by
such receiver without the transfer thereof into his name if authority so to do
be contained in an appropriate order of the court by which such receiver was
appointed.
A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.
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Shares of its own stock belonging to the Corporation or held by it in a
fiduciary capacity shall not be voted, directly or indirectly, at any meeting,
and shall not be counted in determining the total number of outstanding shares
at any given time.
ARTICLE III
BOARD OF DIRECTORS
Section 1. General Powers. The business and affairs of the Corporation
shall be under the direction of its Board of Directors. The Board of Directors
may exercise all such powers of the Corporation, and do all such lawful acts and
things as are not by statute or by the Certificate of Incorporation or these
By-laws directed or required to be exercised by the shareholders.
Section 2. Number, Tenure and Qualifications. The number of directors
shall be not less than five nor more than ten, as determined from time to time
by resolution of the Board of Directors. Each director shall hold office until
the next annual election of directors and until his successor shall be duly
elected and qualified, or until his death, resignation or removal. No director
need be a shareholder of the Corporation.
Section 3. Meetings. The first meeting of each newly elected Board of
Directors shall be held immediately after, and at the same place as the annual
election of directors, if a quorum shall be then present, in which case notice
of such meeting need not be given. The Board of Directors may provide, by
resolution, the time and place, either within or without the Commonwealth of
Puerto Rico, for the holding of other regular meetings without other notice than
such resolution.
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Special meetings of the Board of Directors may be called by or at the
request of the Chairman of the Board or any two directors. The person or persons
authorized to call special meetings of the Board of Directors may fix any place,
either within or without the Commonwealth of Puerto Rico, as the place for
holding any special meeting of the Board of Directors called by them.
Section 4. Participation in Meeting by Telephone or Similar
Communication Equipment. Unless otherwise restricted by the Certificate of
Incorporation or by these By-Laws, members of the Board of Directors, or any
committee designated by the Board of Directors, may participate in a meeting of
the Board of Directors, or any committee, by means of conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other, and such participation in a meeting shall
constitute presence in person at the meeting.
Section 5. Notice. Notice of any special meeting shall be given at
least three (3) days prior thereto by written notice delivered personally or
mailed to each director at his business address, or by telegram, facsimile
transmission or other electronic communication, unless the special meeting is
called for an emergency, in which case such notice shall be given at least one
(1) day prior to the special meeting. If mailed, such notice shall be deemed to
be delivered when deposited in the United States mail so addressed, with postage
thereon prepaid. If notice be given by telegram, such notice shall be deemed to
be delivered when the telegram is delivered to the telegraph company. If notice
is given by facsimile transmission such notice shall be deemed to be delivered
on the date of transmission with confirmed receipt. Each such notice shall state
the time, place and purposes thereof except
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as otherwise in these By-laws expressly provided. Unless required by the laws of
the Commonwealth of Puerto Rico or by these By-laws, such notice shall not be
required to be given to any director who shall be present at such meeting, or
who shall waive such notice in writing or by telegraph, cable or radio, whether
before or after the meeting, and any meeting of the Board of Directors shall be
a legal meeting without any notice thereof having been given if all of the
directors shall be present thereat. Whenever the provisions of the laws of the
Commonwealth of Puerto Rico or the Certificate of Incorporation of the
Corporation or these By-laws require that a meeting of the directors shall be
duly called for a specific purpose, or that a certain notice of the time, place
and purposes of any such meeting shall be given, in order that certain action
may be taken at such meeting, a written waiver of notice of the time, place and
purposes of such meeting, whether regular or special, signed by every director
not present in person, either before or after the time fixed for holding said
meeting, shall be deemed equivalent to such call and notice, and such action if
taken at any such meeting shall be as valid as it call and notice had been duly
given.
Section 6. Quorum. Four directors shall constitute a quorum for the
transaction of business at any meeting of the Board of Directors, but if less
than such a quorum is present at a meeting, a majority of the directors present
may adjourn the meeting from time to time without further notice.
Section 7. Manner of Acting. The act of the majority of the directors
present at a meeting at which a quorum is present shall be the act of the Board
of Directors.
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Section 8. Removal of Directors. Any director may be removed, either
with or without cause, at any time, by the affirmative vote of the holders of a
majority of the outstanding stock entitled to vote for the election of directors
of the Corporation, at a special meeting of the shareholders called and held for
such purpose.
Section 9. Vacancies. Any vacancy or vacancies in the Board of
Directors resulting from death, resignation, removal, an increase in the
authorized number of directors, or any other cause, may be filled by a majority
vote of the remaining directors, though less than a quorum, or by the
shareholders of the Corporation at the next annual meeting or any special
meeting called for such purpose, and each director so elected shall hold office
until the next annual election of directors and until his successor shall be
duly elected and qualified, or until his death, resignation or removal.
Section 10. Compensation. By resolution of the Board of Directors, the
directors may be paid their expenses, if any, of attendance at each meeting of
the Board of Directors or any Committee thereof, and may be paid such fee for
attendance at each meeting of the Board of Directors or such stated salary as
director as shall be fixed by the Board of Directors; provided however, that
directors who are also employees of the Corporation shall not be paid any
additional fees or salary besides what they are entitled to receive as employees
of the Corporation. No such payment shall preclude any director from serving the
Corporation in any other capacity and receiving compensation therefor.
Section 11. Standing and Other Committees. (a) There shall
be an Audit Committee of the Board of Directors elected annually at
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the first meeting of the Board of Directors following the annual meeting of
shareholders. The Audit Committee shall consist of one or more members selected
from the members of the Board of Directors, none of whom shall be officers or
employees of the Corporation or any of its subsidiaries. The Board of Directors
shall designate a Chairman of the Audit Committee from among the members of the
Audit Committee and a Secretary who may, but need not, be a member of the Audit
Committee or of the Board of Directors. The members of the Audit Committee shall
hold office until the next annual meeting of the Board of Directors, or until
their successors are elected. The Audit Committee shall meet with the
Corporation's independent auditors and review the financial statements of the
Corporation, including the notes thereto, contained in the annual report to
shareholders, and the auditors' certificate relating to such financial
statements and notes. Each member of the Audit Committee shall be supplied a
copy of the auditors' comments and suggestions made to management and a copy of
management's reply thereto. The Audit Committee shall report to the Board of
Directors on the matters referred to in the preceding two sentences. The
Secretary of the Corporation shall advise the Corporation's auditors of the
names of the members of the Audit Committee promptly after their election and
the auditors shall have the right to appear before and be heard at any meeting
of the Audit Committee. The Secretary shall advise the Corporation's auditors of
the foregoing.
(b) There shall be a Compensation Committee of the Board of
Directors elected annually at the first meeting of the Board of Directors
following the annual meeting of shareholders. The Compensation Committee shall
consist of one or more members selected from the members of the Board of
Directors. The Board of Directors shall designate a Chairman from among the
members of the
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Compensation Committee and a Secretary who may, but need not, be a member of the
Compensation Committee or of the Board of Directors. The members of the
Compensation Committee shall hold office until the next annual meeting of the
Board of Directors, or until their successors are elected. The Committee shall
on an annual basis review the compensation of the executive officers of the
Corporation, review possible incentive compensation plans for the employees of
the Corporation in general, and make recommendations to the Board of Directors
with respect thereto. The Compensation Committee shall have such
responsibilities in the administration of the Corporation's employee benefit
plans as may be set forth in such plans and as the Board of Directors, pursuant
to such plans, may determine.
(c) The Board of Directors may, by resolution or resolutions
passed by a majority of the whole Board, designate one or more committees to
consist of two or more of the directors of the Corporation. Any such committee,
to the extent provided in the resolution or resolutions or in these By-laws,
shall have and may exercise the powers of the Board of Directors (to the extent
permitted by the laws of the Commonwealth of Puerto Rico) in the management of
the business and the affairs of the corporation and may have power to authorize
the seal of the Corporation to be affixed to all papers which may require it.
Such committee or committees shall have such name or names as may be determined
from time to time by resolution adopted by the Board of Directors.
(d) Procedures; Meetings; Quorum. Committees shall meet at
such times and at such place or places as may be provided by such rules of
procedure as the Committee may adopt, or by resolution of the Board of
Directors. At every meeting of the committee the presence of a majority of all
the members shall be necessary to
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constitute a quorum and the affirmative vote of a majority of the members
present shall be necessary for the adoption by it of any resolution.
Section 12. Action Without a Meeting. Any action required to be taken
at a meeting of the Board of Directors, or any action which may be taken at a
meeting of the Board of Directors or a committee thereof, may be taken without a
meeting if a consent in writing, setting forth the action so to be taken, is
signed by all the directors or all the members of the committee, as the case may
be, and filed in the minutes of the proceedings of the Board or of the
committee. Such consent shall have the same effect as a unanimous vote.
Section 13. Directors Emeritus. The Board of Directors may authorize
one or more persons to serve as a directors emeritus. These positions shall be
honorary positions and persons elected to those positions may be asked to attend
meetings of the Board of Directors and meetings of the shareholders from time to
time. A person holding an emeritus position shall not be an officer or director
of the Corporation, shall have no vote at a director's meeting and shall receive
no fees for service in that position, unless otherwise provided by the Board of
Directors. A person filing an emeritus position shall be requested to do so
because of his or her experience with and contributions to the Corporation.
ARTICLE IV
OFFICERS
Section 1. Officers. The officers of the Corporation shall
be a Chairman of the Board, a President, a Treasurer and a
Secretary. In addition, the Board of Directors may elect a Vice
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Chairman of the Board, one or more Vice Presidents, Assistant Treasurers,
Assistant Secretaries and such other officers, assistant officers and agents as
it may deem advisable. More than two offices may be held by the same person.
Section 2. Election and Term of Office. The officers of the Corporation
to be elected by the Board of Directors shall be elected annually at the first
meeting of the Board of Directors following the annual election of directors. If
the election of officers shall not be held at such meeting, such election shall
be held as soon thereafter as may be convenient. Each officer shall hold office
until his successor shall be duly elected and qualified or until his death or
until he shall resign or shall have been removed in the manner hereinafter
provided.
Section 3. Removal of Officers. Any officer may be removed, either with
or without cause, by the vote of a majority of the whole Board of Directors or,
except in case of any officer elected by the Board of Directors, by any superior
officer upon whom the power of removal may be conferred by the Board of
Directors or by these By-laws.
Section 4. Vacancies. A vacancy in any office resulting from death,
resignation, removal, or any other cause, may be filled by the Board of
Directors for the unexpired portion of the term.
Section 5. The Chairman of the Board. The Chairman of the Board shall
be the chief executive officer of the Corporation and shall have responsibility
for the general and active management and supervision of the business of the
Corporation, and shall see that all orders and resolutions of the Board of
Directors are carried into effect. He shall have authority to execute all
conveyances,
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contracts, or other obligations in the name of the Corporation except where the
signing and execution thereof shall be expressly delegated by the Board of
Directors to some other officer, employee or agent of the Corporation. He shall
preside at all meetings of the shareholders and directors and shall be
ex-officio a member of all standing committees of the Board.
Section 6. The President. The President shall be the chief operating
officer of the Corporation and, in the absence or disability of the Chairman and
Chief Executive Officer, perform the duties and exercise the powers of the
Chairman of the Board. He shall have, as shall the Chairman, power to execute
all conveyances, contracts or other obligations in the name of the
Corporation, except where the signing and execution thereof shall be expressly
delegated by the Board of Directors to some other officer, employee or agent of
the Corporation.
Section 7. The Vice Presidents. Each vice president shall have such
powers and perform such duties as the Board of Directors may determine or as may
be assigned to him by the Chairman of the Board. In the absence of the Chairman
of the Board and the President or in the event of their death, or inability or
refusal to act, the Vice President (or in the event there be more than one vice
president, the vice presidents in the order designated at the time of their
election, or in the absence of any designation, then in the order of their
election) shall perform the duties of the Chairman of the Board and the
President, and when so acting, shall have all the powers and be subject to all
the restrictions upon such officers.
Section 8. The Secretary. The Secretary shall (a) keep the minutes of
the meetings of the shareholders, the Board of Directors,
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all standing committees and all other committees, if any of which a
secretary shall not have been appointed, in one or more books provided for that
purpose; (b) see that all notices are duly given in accordance with the
provisions of these By-laws and as required by law; (c) be custodian of the
corporate records and of the seal of the Corporation and see that the seal of
the Corporation is affixed to all documents, the execution of which on behalf
of the Corporation under its seal is duly authorized; and (d) in general perform
all duties incident to the office of secretary and such other duties as from
time to time may be assigned to him by the Chairman of the Board, the President
or by the Board of Directors.
Section 9. The Treasurer. The Treasurer shall (a) have charge and
custody of and be responsible for all funds and securities of the Corporation
and (b) in general perform all duties incident to the office of treasurer and
such other duties as from time to time may be assigned to him by the Chairman of
the Board, the President or by the Board of Directors. He shall, if required by
the Board of Directors, give a bond for the faithful discharge of his duties in
such sum and with such surety or sureties as the Board of Directors shall
determine.
Section 10. Assistant Secretaries and Assistant Treasurers. At the
request of the Secretary or in his absence or disability, one or more assistant
secretaries designated by him or by the Board of Directors shall have all the
powers of the Secretary. At the request of the Treasurer or in his absence or
disability, one or more assistant treasurers designated by him or by the Board
of Directors shall have all the powers of the treasurer. The assistant
secretaries and assistant treasurers, in general, shall perform such duties as
shall be assigned to them by the Secretary
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or the Treasurer, respectively, or by the Chairman of the Board, the President
or the Board of Directors.
Section 11. Action With Respect to Securities of Other Corporations.
Unless otherwise directed by the Board of Directors, the Chairman of the Board,
the President or their designees shall have power to vote and otherwise act on
behalf of the Corporation, in person or by proxy, at any meeting of shareholders
of or with respect to any action of shareholders of any other corporation in
which this Corporation may hold securities and to otherwise exercise any and all
rights and powers which this Corporation may possess by reason of its ownership
of securities in such other corporation.
ARTICLE V
CONTRACTS, CHECKS AND DEPOSITS
Section 1. Contracts. Except as otherwise provided by law, these
By-laws or resolutions of the Board of Directors, any contract or other
instrument shall be valid and binding on the Corporation if executed and
delivered in its name and on its behalf by the Chairman of the Board, the
President or in the absence or disability of the Chairman or the President by
any vice president. The Board of Directors may, however, authorize any other
officer or officers or other agent or agents to enter into any contract or
execute and deliver any instrument in the name of and on behalf of the
Corporation, and such authority may be general or confined to specific
instances.
Section 2. Checks, Drafts, etc. All checks, drafts or other orders for
the payment of money, notes, or other evidences of indebtedness issued in the
name of the Corporation shall be signed
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by such officer or officers or other agent or agents of the Corporation and in
such manner as shall from time to time be determined by resolution of the Board
of Directors. Each of such officers and agents shall give such bond, if any, as
the Board of Directors may require.
Section 3. Deposits. All funds of the Corporation not otherwise
employed shall be deposited from time to time to the credit of the Corporation
in such banks, trust companies, or other depositaries as the Board of Directors
may select or as may be designated by any officer or officers of the
Corporation.
ARTICLE VI
CERTIFICATES FOR SHARES AND THEIR TRANSFER
Section 1. Certificates for Shares. Every holder of shares of the
Corporation shall be entitled to have a certificate representing all shares to
which he is entitled. The certificates shall be signed by the President or any
Vice President and the Secretary or an Assistant Secretary. Such signatures may
be facsimiles if the certificate is manually signed on behalf of a transfer
agent or registrar other than the Corporation itself or an employee of the
Corporation. In case any officer who signed, or whose facsimile signature has
been placed upon, such certificate shall have ceased to be such officer before
such certificate is issued, it may be issued by the Corporation with the same
effect as if he were such officer at the date of its issuance. No certificate
shall be issued for any share until the share is fully paid. The person in whose
name any shares shall stand on the books of the Corporation shall be deemed by
the Corporation to be the owner thereof for all purposes. All certificates
surrendered to the Corporation for transfer shall be cancelled and no new
certificate
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shall be issued until the former certificate for a like number of shares shall
have been surrendered and cancelled, except as otherwise provided in the
Certificate of Incorporation and except that in case of a lost, destroyed, or
mutilated certificate a new one may be issued therefor upon such terms and
indemnity to the Corporation as the Board of Directors may prescribe.
Section 2. Transfer of Shares. Transfer of shares of the Corporation
shall be made only on the stock transfer books of the Corporation by the holder
of record thereof or by his legal representative who shall furnish proper
evidence of authority to transfer, or by his attorney thereunto authorized by
power of attorney duly executed, and on surrender for cancellation of the
certificate for such shares.
Section 3. Shareholders Record Date. In order that the Corporation may
determine the shareholders entitled to notice of or to vote at any meeting of
shareholders or any adjournment thereof, or to express consent to corporate
action in writing without a meeting, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock or
for the purpose of any other lawful action, the Board of Directors may fix, in
advance, a record date, which shall not be more than sixty nor less than ten
days before the date of such meeting, nor more than sixty days prior to any
other action. A determination of shareholders of record entitled to notice of or
to vote at a meeting of shareholders shall apply to any adjournment of the
meeting; provided, however, that the Board of Directors may fix a new record
date for the adjourned meeting.
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ARTICLE VII
FISCAL YEAR
The fiscal year of the Corporation shall be the calendar year, unless
otherwise determined by the Board of Directors.
ARTICLE VIII
SEAL
The corporate seal of the Corporation shall be in the form of a circle
and shall include the name of the Corporation and reference to the year and
place of its incorporation.
ARTICLE IX
INDEMNIFICATION
Section 1. Actions Other than those by or in the Right of the
Corporation. The Corporation 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 Corporation) by reason of the
fact that he is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, 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 Corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to
<PAGE> 20
20
believe his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction or upon a plea of nolo
contendre or its equivalent, shall not of itself, create a presumption that the
person did not act in good faith and in a manner which he reasonably believed to
be in or not opposed to the best interests of the Corporation, and with respect
to any criminal action or proceeding, has reasonable cause to believe that his
conduct is unlawful.
Section 2. Actions by or in the Right of the Corporation. The
Corporation 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 Corporation to procure a judgment in its favor by reason of the
fact that he is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' fees)
judgments, fines and amount paid in settlement actually and reasonably incurred
by him in connection with the defense or settlement of such action or suit if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation and except that no
indemnification shall be made in respect to any claim, issue or matter as to
which such person shall have been adjudged to be liable to the Corporation
unless and only to the extent that the court in which such action or suit was
brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case such person is fairly
and reasonably entitled to indemnity for such expenses which such court shall
deem proper.
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21
Section 3. Actual Expenses After Success on Merits. To the extent that
a director, officer, employee or agent of the Corporation has been successful
on the merits or otherwise in defense of any action, suit or proceeding referred
to in Sections 1 and 2, or in defense of any claim, issue or matter therein, he
shall be indemnified against expenses (including attorneys' fees) actually
reasonably incurred by him in connection therewith.
Section 4. Authorization. Any indemnification under Sections 1 and 2
(unless ordered by a court) shall be made by the Corporation only as authorized
in the specific case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because he has met the
applicable standard of conduct set forth in Sections 1 and 2. Such determination
shall be made (a) by the Board of Directors by a majority vote of a quorum
consisting of directors who were not parties to such action, suit or
proceedings, or (b) if such a quorum is not obtainable, or even if obtainable a
quorum of disinterested directors so directs, by independent legal counsel (who
may be general counsel to the Corporation) in a written opinion, or (c) by the
shareholders if submitted to them by the Board of Directors.
Section 5. Payment of Expenses in Advance. Expenses incurred in
defending a civil or criminal action, suit or proceeding shall be paid by the
Corporation in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of the director,
officer, employee or agent to repay such amount if, shall ultimately be
determined that he is not entitled to be indemnified by the Corporation as
authorized in this article.
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Section 6. Indemnification Non-Exclusive. The indemnification provided
by this article shall not be deemed exclusive of any other rights to which those
seeking indemnification may be entitled under any law, agreement, vote of
shareholders or disinterested directors or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person. Notwithstanding any other
provisions set forth in this Section, the indemnification authorized and
provided hereby shall be applicable only to the extent that any such
indemnification shall not duplicate indemnity or reimbursement which such person
has received or shall receive otherwise than under this Article.
Section 7. Insurance. The Corporation may purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the Corporation, or is or was serving at the request of the Corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against any liability asserted against
him and incurred by him in any such capacity, or arising out of his status as
such, whether or not the Corporation would have the powers to indemnify him
against such liability under the provisions of this Article or otherwise.
Section 8. Indemnification Rights Deemed to be Agreement. The
indemnification rights provided under this Article IX shall be deemed to be a
binding legal agreement with each officer and director of the Corporation
entitled to indemnification hereunder.
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Section 9. Separability. This Article shall be interpreted to provide
indemnification to the fullest extent permitted by law. If any part of this
Article shall be found to be invalid or ineffective in any action, suit or
proceeding, the validity and the effect of the remaining parts shall not be
affected. The provisions of this Article shall be applicable to all actions,
claims, suits or proceedings, whether made or commenced before or after the
adoption hereof and whether arising from acts or omissions to act occurring
before or after its adoption.
ARTICLE X
AMENDMENTS
These By-Laws may be altered, amended or repealed, and new By-Laws may
be adopted, by the Board of Directors or by the affirmative vote of the
majority of the shares of outstanding capital stock having voting rights.
<PAGE> 1
===============================================================================
DORAL FINANCIAL CORPORATION
TO
BANKERS TRUST COMPANY,
TRUSTEE
------------------
FIRST SUPPLEMENTAL INDENTURE
DATED AS OF OCTOBER 19, 1998
TO INDENTURE DATED AS OF OCTOBER 10, 1996
------------------
===============================================================================
<PAGE> 2
FIRST SUPPLEMENTAL INDENTURE, dated as of October 19, 1998 between
Doral Financial Corporation (formerly First Financial Caribbean Corporation), a
Puerto Rico corporation (the "Company"), and Bankers Trust Company, a New York
banking corporation, as Trustee (the "Trustee").
RECITALS
WHEREAS, the Company and the Trustee are parties to an Indenture,
dated as of October 10, 1996 (the "Original Indenture"), which provided for the
issuance of 7.84% Senior Notes due 2006 of the Company; and
WHEREAS, Section 902 of the Original Indenture provides that with the
consent of the Holders of not less than a majority in principal amount of the
Outstanding Securities, the Company, when authorized by Board Resolution, and
the Trustee may enter into an indenture or indentures supplemental to the
Original Indenture for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of the Original Indenture or of
modifying in any manner the rights of the Holders under the Original Indenture,
provided that no such supplement shall change, reduce or modify certain items,
or impair certain rights, set forth in said Section 902; and
WHEREAS, the Company believes that the Original Indenture should be
amended to (i) eliminate the covenant contained in Section 1008 limiting the
incurrence of Indebtedness or issuance of Disqualified Stock by the Company or
any of its Subsidiaries, (ii) eliminate the covenant contained in Section 1010
limiting the creation of Liens on any Property, shares of Capital Stock or
Indebtedness of the Company or of any Subsidiary; (iii) modify the covenant
limiting the issuance of securities by subsidiaries of the Company; (iv)
eliminate certain definitions that are no longer required as a result of the
foregoing
1
<PAGE> 3
modifications; (v) modify the covenant contained in Section 801 restricting
mergers and similar transactions to eliminate the reference to compliance with
the debt incurrence test contained in Section 1008 that is being eliminated;
(vi) add an additional covenant to the Indenture that would require the Company
to maintain a minimum Consolidated Net Worth; (vii) modify the definition of
the term "Indebtedness" to eliminate the references to Permitted Indebtedness
contained therein and (viii) modify the definition of the term "Company" to
reflect the change in the Company's name from First Financial Caribbean
Corporation to Doral Financial Corporation.
WHEREAS, the Board of Directors of the Company has duly authorized the
execution and delivery by the Company of this First Supplemental Indenture; and
WHEREAS, the holders of more than fifty percent (50%) in aggregate
principal amount of the Outstanding Securities have specifically consented in
writing to and approved the execution hereof;
NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH: For and
in consideration of the premises and the other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the Company and
the Trustee mutually agree as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. DEFINITIONS.
Except as otherwise expressly provided or unless the context otherwise
requires, all terms used in this First Supplemental Indenture
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which are defined in the Original Indenture shall have the meanings ascribed to
them by the Original Indenture.
SECTION 102. EFFECT OF HEADINGS.
The Article and Section headings herein are for convenience only and
shall not affect the construction hereof.
SECTION 103. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this First Supplemental Indenture by
the parties hereto shall bind their respective successors and assigns, whether
so expressed or not.
SECTION 104. SEPARABILITY CLAUSE.
In case any provision in this First Supplemental Indenture shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 105. BENEFITS OF INSTRUMENT.
Nothing in this First Supplemental Indenture, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder and the Holders, any benefit or any legal or equitable right, remedy
or claim under this First Supplemental Indenture or the Original Indenture.
SECTION 106. GOVERNING LAW.
This First Supplemental Indenture shall be governed by and construed
in accordance with the law of the State of New York.
3
<PAGE> 5
ARTICLE TWO
AMENDMENT OF THE ORIGINAL INDENTURE
SECTION 201. AMENDMENT OF SECTION 101 OF THE ORIGINAL INDENTURE.
(a) The definition of the term "Company" contained in Section 101 of
the Indenture is hereby amended to read in its entirety as follows:
"'Company' means Doral Financial Corporation until a successor
Person shall have become such pursuant to the applicable provisions
of this Indenture and thereafter "Company" shall mean such successor
Person."
(b) The following definitions in Section 101 of the Original Indenture
are hereby deleted in their entirety: "Consolidated EBITDA," "Consolidated
Income Tax Expense," "Consolidated Interest Coverage Ratio," "Consolidated
Interest Expense," "Consolidated Non-Cash Charges," "Consolidated Non-cash Net
Income Contributions," "Permitted Indebtedness," "Permitted Liens," and
"Restricted Indebtedness."
(c) Subclause (g) and (h) of clause (i) of the definition of
"Indebtedness" in Section 101 of the Original Indenture are hereby amended and
restated in their entirety as follows:
"(g) for reimbursement in respect of letters of credit but only to the
extent that the letters of credit do not support an obligation of such
Person already included in Indebtedness, or (h) under Interest Rate
Protection Agreements;"
SECTION 202. AMENDMENT OF SECTION 801 OF THE ORIGINAL INDENTURE.
The text of Section 801 of the Original Indenture is hereby amended to
read in its entirety as follows:
"The Company shall not consolidate with or merge into any other
Person or convey, transfer or lease all or substan-
4
<PAGE> 6
tially all of its Property to any Person, and the Company shall not
permit any Person to consolidate with or merge into the Company or
convey, transfer or lease all or substantially all of its Property to
the Company, unless:
(1) in case the Company shall consolidate with or merge into
another Person or convey, transfer or lease all or substantially all
of its Property to any Person, the Person formed by such consolidation
or into which the Company is merged or the Person which acquires by
conveyance or transfer, or which leases, all or substantially all of
the Property of the Company shall be a corporation, partnership or
trust, shall be organized and validly existing under the laws of the
United States of America, any State thereof, the Commonwealth of
Puerto Rico or the District of Columbia and shall expressly assume, by
an indenture supplemental hereto, executed and delivered to the
Trustee, in form satisfactory to the Trustee, the due and punctual
payment of the principal of (and premium, if any) and interest on all
the Securities and the performance of every covenant of this Indenture
on the part of the Company to be performed or observed;
(2) immediately after giving effect to such transaction, no
Event of Default, and no event which, after notice or lapse of time or
both, would become an Event of Default, shall have occurred and be
continuing;
(3) immediately after giving effect to such transaction, the
Company or such surviving entity shall have a Consolidated Net Worth
equal to or greater than the Consolidated Net Worth of the Company
immediately prior to such transaction; and
(4) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is required in connection with such
transaction, such supplemental indenture comply with this Article and
that all conditions precedent herein provided for relating to such
transaction have been complied with."
SECTION 203. AMENDMENT OF SECTION 1008 OF THE ORIGINAL INDENTURE.
Section 1008 of the Original Indenture is hereby amended to read in
its entirety as follows:
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"Section 1008. Maintenance of Consolidated Net Worth.
The Company shall not permit its Consolidated Net Worth as of the end
of each fiscal quarter to be less than $185,000,000."
SECTION 204. AMENDMENT OF SECTION 1010 OF THE ORIGINAL INDENTURE.
Section 1010 of the Original Indenture is hereby deleted in its
entirety and replaced with the caption "[RESERVED]."
SECTION 205. AMENDMENT TO SECTION 1014 OF THE ORIGINAL INDENTURE.
The text of Section 1014 of the Original Indenture is hereby amended
to read in its entirety as follows:
"The Company will not (i) sell, pledge, hypothecate or otherwise
convey or dispose of any Capital Stock of a Subsidiary or (ii)
permit a Subsidiary to issue or sell any Capital Stock or other
equity interest to any person (other than to the Company or to a
Wholly-Owned Subsidiary of the Company); provided that the foregoing
restrictions shall not apply (w) to any such sale, disposition or
issuance which does not exceed $5,000,000 in fair market value (as
determined in good faith by the Company), (x) to the issuance and
sale of nonvoting, nonconvertible preferred stock of any Subsidiary,
provided that the aggregate liquidation or stated value of all such
nonvoting, nonconvertible preferred stock does not exceed 5% of the
Consolidated Net Tangible Assets of the Company, (y) to the issuance
or sale of qualifying shares to a director, and (z) to the issuance
and sale of preferred securities by a business trust or other entity
that qualifies as a Subsidiary for purposes of Section 101 hereof,
to the extent that the proceeds of the sale of such preferred
securities (less related expenses of the offering) are used to
purchase junior subordinated deferred interest securities of the
Company or a Subsidiary thereof that qualify as Tier 1 capital for
bank holding companies."
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<PAGE> 8
SECTION 206. REAFFIRMATION OF ORIGINAL INDENTURE.
Each of the Company and the Trustee hereby confirms, reaffirms and
agrees to the Original Indenture in every particular, as amended by this First
Supplemental Indenture.
SECTION 207. TRUSTEE NOT RESPONSIBLE FOR RECITALS. The recitals herein
contained are made by the Company and not by the Trustee, and the Trustee
assumes no responsibility for the correctness thereof. The Trustee makes no
representation as to the validity or sufficiency of this First Supplemental
Indenture.
SECTION 208. TRUST INDENTURE ACT.
If any provision of this First Supplemental Indenture limits,
qualifies or conflicts with a provision of the Trust Indenture Act of 1939, as
it may be amended from time to time, that is required under such Act to be a
part of and govern this First Supplemental Indenture, the latter provision
shall control. If any provision hereof modifies or excludes any provision of
such Act that may be so modified or excluded, the latter provision shall be
deemed to apply to this First Supplemental Indenture as so modified or
excluded, as the case may be.
* * *
This First Supplemental Indenture may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same
instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed, and their respective corporate
seals to be hereunto affixed and attested, all as of the day and year first
above written.
DORAL FINANCIAL CORPORATION
(formerly First Financial
Caribbean Corporation)
By: /s/ Salomon Levis
---------------------------------
Name: Salomon Levis
Title: Chairman of the Board
Attest:
/s/Richard F. Bonini
- ----------------------------------
Secretary
BANKERS TRUST COMPANY
By: /s/Susan Johnson
---------------------------------
Name: Susan Johnson
Title: Assistant Vice President
Attest:
/s/ Marc J. Parrilla
- -------------------------------
Marc J. Parrilla
8
<PAGE> 10
STATE OF NEW YORK )
) ss.
COUNTY OF NEW YORK )
On the 19th day of October, 1998, before me personally came Salomon
Levis, to me known, who, being by me duly sworn, did depose and say that he is
the Chairman of the Board of Doral Financial Corporation, one of the entities
described in and which executed the foregoing instrument; that he knows the
corporate seal of such corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority of the Board of
Directors of such corporation, and that he signed his name thereto by like
authority.
/s/ Theresa Gordon
-------------------------------
Notary Public, State of New York
No. 01GO5016739
Qualified in New York County
Commission Expires Aug. 23, 1999
STATE OF NEW YORK )
) ss.
COUNTY OF NEW YORK )
On the 19th day of October, 1998, before me personally came Susan
Johnson, to me known, who, being by me duly sworn, did depose and say that he
is an Assistant Vice President of Bankers Trust Company, the banking
corporation described in and which executed the foregoing instrument; that he
knows the seal of said banking corporation; that the seal affixed to said
instrument is such seal; that it was so affixed by authority of the Board of
Directors of said banking corporation, and that he signed his name thereto by
like authority.
/s/ Margaret Bereza
-------------------------------
Margaret Bereza
Notary Public, State of New York
No. 315023900
Qualified in New York County
Commission Expires 2/22/2000
9
<PAGE> 1
EXHIBIT 99
[LOGO]
DORAL FINANCIAL
CORPORATION LETTERHEAD
FOR IMMEDIATE RELEASE: DATE: October 21, 1998
FOR: Doral Financial Corporation
CONTACT: Richard F. Bonini
Senior Executive Vice President
(212) 508-0340
Mario S. Levis
Executive Vice President and Treasurer
(787) 749-7108
Doral Financial Corporation Announces Successful Completion of
Consent Solicitation Related to its
7.84% Senior Notes Due 2006
San Juan, Puerto Rico (October 8, 1998)--Doral Financial Corporation
(NASDAQ:DORL) announced today that it had successfully completed the consent
solicitation and had obtained the required consents for certain amendments to
the Indenture pursuant to which the Company's 7.84% Senior Notes due 2006 (the
"Senior Notes") were issued.
Mr. Levis explained that a Supplemented Indenture incorporating the
previously announced amendments was executed as of October 19, 1998, and that
the Supplemented Indenture was effective upon execution.
Doral Financial Corporation is a bank holding company and a diversified
consumer finance company. Through the HF Mortgage Bankers Division, Doral
Mortgage Corporation, and Centro Hipotecario, Inc., Doral Financial is the
leading mortgage banker in Puerto Rico. The Company has thirty-one retail
offices (twenty-two mortgage offices in Puerto Rico, two mortgage offices in
Florida, and eight bank branches in Puerto Rico, and broker-dealer office in
Puerto Rico) and engages in the origination, sale, and servicing of mortgage
loans, as well as commercial banking through Doral Bank, and broker-dealer
services through Doral Securities, Inc. In addition, during the third quarter
of 1998, the Company inaugurated Doral Money Inc. (USA) which is dedicated
commercial lending (multi-family) in the New York City metropolitan area and a
residential wholesaling operation in Chicago.
