SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
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Date of Report (Date of earliest
event reported) August 13, 1998
Popular, Inc.
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(Exact name of registrant as specified in its charter)
Puerto Rico 0-13818 66-0416582
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(State of (Commission File Number) (IRS Employer
incorporation) Identification No.)
209 Munoz Rivera Avenue
Hato Rey, Puerto Rico 00918
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(Address of principal executive offices) (Zip Code)
(787) 765-9800
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(Registrant's telephone number,
including area code)
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(Former name or former address, if changed since last report)
Items 1-4. Not Applicable.
Item 5. Other Events.
On August 13, 1998, the Board of Directors of Popular, Inc., a Puerto
Rico corporation (the "Company"), declared a dividend payable August 28, 1998 of
one right (a "Right") for each outstanding share of common stock, par value
$6.00 per share ("Common Stock"), of the Company held of record at the close of
business on August 28, 1998 (the "Record Time"), or issued thereafter and prior
to the Separation Time (as hereinafter defined) and thereafter pursuant to
options and convertible securities outstanding at the Separation Time. The
Rights will be issued pursuant to a Stockholder Protection Rights Agreement,
dated as of August 13, 1998 (the "Rights Agreement"), between the Company and
Banco Popular de Puerto Rico, as Rights Agent (the "Rights Agent"). Each Right
entitles its registered holder to purchase from the Company, after the
Separation Time, one one-hundredth of a share of Series A Participating
Cumulative Preferred Stock, no par value ("Participating Preferred Stock"), for
$140 (the "Exercise Price"), subject to adjustment.
The Rights will be evidenced by the Common Stock certificates until the
close of business on the earlier of (either, the "Separation Time") (i) the
tenth business day (or such later date as the Board of Directors of the Company
may from time to time fix by resolution adopted prior to the Separation Time
that would otherwise have occurred) after the date on which any Person (as
defined in the Rights Agreement) commences a tender or exchange offer which, if
consummated, would result in such Person's becoming an Acquiring Person, as
defined below, and (ii) the first date, or such later date as the Board of
Directors of Popular, Inc. may from time to time fix (the "Flip-in Date"), of
public announcement by the Company that any Person has become an Acquiring
Person (the date of such public announcement being, the "Stock Acquisition
Date"); provided that if the foregoing results in the Separation Time being
prior to the Record Time, the Separation Time shall be the Record Time; and
provided further that if a tender or exchange offer referred to in clause (i) is
cancelled, terminated or otherwise withdrawn prior to the Separation Time
without the purchase of any shares of stock pursuant thereto, such offer shall
be deemed never to have been made. An Acquiring Person is any Person having
Beneficial Ownership (as defined in the Rights Agreement) of 10% or more of the
outstanding shares of Common Stock, which term
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shall not include (i) the Company, any wholly-owned subsidiary of the Company or
any employee stock ownership or other employee benefit plan of the Company, (ii)
any person who shall become the Beneficial Owner of 10% or more of the
outstanding Common Stock solely as a result of an acquisition of Common Stock by
the Company, until such time as such Person acquires additional Common Stock,
other than through a dividend or stock split, (iii) any Person who becomes the
Beneficial Owner of 10% or more of the outstanding Common Stock without any plan
or intent to seek or affect control of the Company if such Person promptly
divests sufficient securities such that such 10% or greater Beneficial Ownership
ceases or (iv) any Person who Beneficially Owns shares of Common Stock
consisting solely of (A) shares acquired pursuant to the grant or exercise of an
option granted by the Company in connection with an agreement to merge with, or
acquire, the Company entered into prior to a Flip-in Date, (B) shares owned by
such Person and its Affiliates and Associates at the time of such grant and (C)
shares, amounting to less than 1% of the outstanding Common Stock, acquired by
Affiliates and Associates of such Person after the time of such grant. The
Rights Agreement provides that, until the Separation Time, the Rights will be
transferred with and only with the Common Stock. Common Stock certificates
issued after the Record Time but prior to the Separation Time shall evidence one
Right for each share of Common Stock represented thereby and shall contain a
legend incorporating by reference the terms of the Rights Agreement (as such may
be amended from time to time). Notwithstanding the absence of the aforementioned
legend, certificates evidencing shares of Common Stock outstanding at the Record
Time shall also evidence one Right for each share of Common Stock evidenced
thereby. Promptly following the Separation Time, separate certificates
evidencing the Rights ("Rights Certificates") will be mailed to holders of
record of Common Stock at the Separation Time.
The Rights will not be exercisable until the Business Day (as defined
in the Rights Agreement) following the Separation Time; provided, however, that
the Rights shall not be exercisable prior to the earlier of (i) the redemption
of the rights issued pursuant to the Rights Agreement between the Company and
Manufacturers Hanover Trust Company dated August 11, 1988 and (ii) September 1,
1998. The Rights will expire on the earliest of (i) the Exchange Time (as
defined below), (ii) the close of business on August 28, 2008 and (iii) the date
on which the Rights are redeemed as described below (in any such case, the
"Expiration Time").
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The Exercise Price and the number of Rights outstanding, or in certain
circumstances the securities purchasable upon exercise of the Rights, are
subject to adjustment from time to time to prevent dilution in the event of a
Common Stock dividend on, or a subdivision or a combination into a smaller
number of shares of, Common Stock, or the issuance or distribution of any
securities or assets in respect of, in lieu of or in exchange for Common Stock.
In the event that prior to the Expiration Time a Flip-in Date occurs,
the Company shall take such action as shall be necessary to ensure and provide
that each Right (other than Rights Beneficially Owned by the Acquiring Person or
any affiliate or associate thereof, which Rights shall become void) shall
constitute the right to purchase from the Company, upon the exercise thereof in
accordance with the terms of the Rights Agreement, that number of shares of
Common Stock of the Company having an aggregate Market Price (as defined in the
Rights Agreement), on the Stock Acquisition Date that gave rise to the Flip-in
Date, equal to twice the Exercise Price for an amount in cash equal to the then
current Exercise Price. In addition, the Board of Directors of the Company may,
at its option, at any time after a Flip-in Date and prior to the time that an
Acquiring Person becomes the Beneficial Owner of more than 50% of the
outstanding shares of Common Stock, elect to exchange all (but not less than
all) the then outstanding Rights (other than Rights Beneficially Owned by the
Acquiring Person or any affiliate or associate thereof, which Rights become
void) for shares of Common Stock at an exchange ratio of one share of Common
Stock per Right, appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date of the Separation Time
(the "Exchange Ratio"). Immediately upon such action by the Board of Directors
(the "Exchange Time"), the right to exercise the Rights will terminate and each
Right will thereafter represent only the right to receive a number of shares of
Common Stock equal to the Exchange Ratio.
Whenever the Company shall become obligated, as described in the
preceding paragraph, to issue shares of Common Stock upon exercise of or in
exchange for Rights, the Company, at its option, may substitute therefor shares
of Participating Preferred Stock, at a ratio of one one-hundredth of a share of
Participating Preferred Stock for each share of Common Stock so issuable.
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In the event that prior to the Expiration Time the Company enters into,
consummates or permits to occur a transaction or series of transactions after
the time an Acquiring Person has become such in which, directly or indirectly,
(i) the Company shall consolidate or merge or participate in a binding share
exchange with any other Person if, at the time of the consolidation, merger or
share exchange or at the time the Company enters into an agreement with respect
to such consolidation, merger or share exchange, the Acquiring Person controls
the Board of Directors of the Company and either (A) any term of or arrangement
concerning the treatment of shares of capital stock in such merger,
consolidation or share exchange relating to the Acquiring Person is not
identical to the terms or arrangements relating to other holders of Common Stock
or (B) the Person with whom such transaction or series of transactions occurs is
the Acquiring Person or an Affiliate or Associate thereof or (ii) the Company
shall sell or otherwise transfer (or one or more of its subsidiaries shall sell
or otherwise transfer) assets (A) aggregating more than 50% of the assets
(measured by either book value or fair market value) or (B) generating more than
50% of the operating income or cash flow, of the Company and its subsidiaries
(taken as a whole) to any other Person (other than the Company or one or more of
its wholly owned subsidiaries) or to two or more such Persons which are
affiliated or otherwise acting in concert, if, at the time of such sale or
transfer of assets or at the time the Company (or any such subsidiary) enters
into an agreement with respect to such sale or transfer, the Acquiring Person
controls the Board of Directors of the Company (a "Flip-over Transaction or
Event"), the Company shall take such action as shall be necessary to ensure, and
shall not enter into, consummate or permit to occur such Flip-over Transaction
or Event until it shall have entered into a supplemental agreement with the
Person engaging in such Flip-over Transaction or Event or the parent corporation
thereof (the "Flip-over Entity"), for the benefit of the holders of the Rights,
providing, that upon consummation or occurrence of the Flip-over Transaction or
Event (i) each Right shall thereafter constitute the right to purchase from the
Flip-over Entity, upon exercise thereof in accordance with the terms of the
Rights Agreement, that number of shares of common stock of the Flip-over Entity
having an aggregate Market Price on the date of consummation or occurrence of
such Flip-over Trans action or Event equal to twice the Exercise Price for an
amount in cash equal to the then current Exercise Price and (ii) the Flip-over
Entity shall thereafter be liable for, and shall assume, by virtue of such
Flip-over Transaction or
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Event and such supplemental agreement, all the obligations and duties of the
Company pursuant to the Rights Agreement. For purposes of the foregoing
description, the term "Acquiring Person" shall include any Acquiring Person and
its Affiliates and Associates counted together as a single Person.
The Board of Directors of the Company may, at its option, at any time
prior to the Flip-in Date, redeem all (but not less than all) the then
outstanding Rights at a price of $.01 per Right) (the "Redemption Price"), as
provided in the Rights Agreement. Immediately upon the action of the Board of
Directors of the Company electing to redeem the Rights, without any further
action and without any notice, the right to exercise the Rights will terminate
and each Right will thereafter represent only the right to receive the
Redemption Price in cash for each Right so held.
The holders of Rights will, solely by reason of their ownership of
Rights, have no rights as stockholders of the Company, including, without
limitation, the right to vote or to receive dividends.
The Rights will not prevent a takeover of the Company. However, the
Rights may cause substantial dilution to a person or group that acquires 10% or
more of the Common Stock unless the Rights are first redeemed by the Board of
Directors of the Company. Nevertheless, the Rights should not interfere with a
transaction that is in the best interests of the Company and its stockholders
because the Rights can be redeemed on or prior to the Flip-in Date, before the
consummation of such transaction.
As of August 13, 1998 there were 136,544,452 shares of Common Stock
issued (of which 135,555,652 shares were outstanding and 988,800 shares were
held in treasury). As long as the Rights are attached to the Common Stock, the
Company will issue one Right with each new share of Common Stock so that all
such shares will have Rights attached.
The Rights Agreement (which includes as Exhibit A the forms of Rights
Certificate and Election to Exercise and as Exhibit B the form of Certificate of
Designation and Terms of the Series A Participating Cumulative Preferred Stock)
is attached hereto as an exhibit and is incorporated herein by reference. The
foregoing description of the Rights is qualified in its entirety by reference to
the Rights Agreement and such exhibits thereto.
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Item 6. Not Applicable.
Item 7. Exhibits.
4.1 Rights Agreement, which includes as Exhibit A the forms of Rights
Certificate and Election to Exercise and as Exhibit B the form of
Certificate of Designation and Terms of the Series A Participating
Cumulative Preferred Stock.
99.1 Press release, dated August 13, 1998, issued by the Company.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
POPULAR, INC.
By /s/ Jorge A. Junquera
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Name: Jorge A. Junquera
Title: Senior Executive Vice President
Date: August 21, 1998
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EXHIBIT INDEX
Sequentially
Exhibit No. Description Numbered Page
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4.1 Stockholder Protection Rights Agreement,
dated as of August 13, 1998 (the "Rights
Agreement"), between Popular, Inc. (the
"Company") and Banco Popular de Puerto
Rico, as Rights Agent, including as
Exhibit A the forms of Rights
Certificate and of Election to Exercise
and as Exhibit B the form of Certificate
of Designation and Terms of the Series A
Participating Cumulative Preferred Stock
of the Company.
99.1 Press release, dated August 13, 1998,
issued by the Company.