EXHIBIT 3.1
This is a fair and accurate English translation of the original
By-laws of Triple-S Management Corporation which are in Spanish
BY-LAWS
OF
TRIPLE-S MANAGEMENT CORPORATION
CHAPTER 1
1-1 The Incorporators of "Triple-S Management Corporation" adopt these By-laws
which will regulate the Corporation's proceedings and will rule the
administration of its business.
1-2 The By-laws approved herein shall be submitted to the shareholders, who
may adopt, amend or repeal them.
CHAPTER 2 - BOARD OF DIRECTORS
2-1 The Board of Directors is made up of nineteen (19) members.
CHAPTER 3 - CAPITAL IN STOCKS
3-1 The Corporation may issue up to twelve thousand five hundred (12,500)
shares of common stock with a par value of Forty Dollars ($40).
3-2 The Corporation will use a circular seal measuring 1-7/8 in diameter with
the name "Triple-S Management Corporation" around its circumference.
CHAPTER 4 - ON THE SHARES
The Incorporators declare and agree, and is established in these By-laws, that,
the following provisions are established with the purpose of creating, defining,
limiting and managing the rights and privileges of the shareholders:
4-1 SALE OF SHARES
A. No person may own more than twenty-one (21) shares, or five percent
(5%) or more, of the Corporation's voting shares issued and
outstanding.
By-laws of
Triple-S Management Corporation
Page 2
B. The sales of shares will be exclusively limited to physicians and
dentists. However, organizations such as hospitals, laboratories,
and the College of Dental Surgeons of Puerto Rico, who had
originally acquired shares of Triple-S, Inc., may continue as
stockholders of Triple-S Management Corporation, with all the
rights. In addition, the members of the Board of Directors who
represent the community will be Shareholders as long as they remain
on the Board.
C. The members of the Board of Directors who represent the community,
as long as they remain as members of the Board, will receive one
share of the Corporation, free of charge, with the single purpose of
qualifying them for the position of Director of the Corporation.
Said community representatives shall return the qualifying share
that had received when their duties as Directors of the Corporation
end.
4-2 The Corporation will have the right of first refusal in the event of a
sale, donation, or any other sale or cession of the shares of the
Corporation. Any Shareholder who wishes to sell, donate, or in any other
way sell or cede his/her shares of the Corporation, must first offer
his/her shares to the Corporation in writing. The Corporation shall then
purchase said shares from the Shareholder for the same price he/she paid
for them. However, in the event that the shares were donated or inherited
through a will, or in any other way, to a person who is (1) a descendant
of the Shareholder and (2) a physician or a dentist, then said person
shall have the right to hold up to a maximum 21 shares.
4-3 SHAREHOLDER LISTING
The Secretary of the Corporation shall keep, or ensure the keeping of, a
complete and exact register, in alphabetical order, of all the
shareholders, including their address and, the number of votes each
Shareholder holds, in the offices of the Corporation. Said register shall
be readily available and during working hours, and shall be available for
inspection by any Shareholder, particularly, ten (10) days before a
Shareholders Meeting, and when any other shareholder meeting is being
held.
The Corporation's register will constitute the only acceptable evidence to
determine which Shareholders have the right to inspect the Corporation's
Shareholders Register, the books of the Corporation, and to determine
which Shareholders have the right to vote in person or by proxy during any
meeting or shareholders meeting.
By-laws of
Triple-S Management Corporation
Page 3
CHAPTER 5 - SHAREHOLDER MEETINGS
5.1 ANNUAL MEETING
The Annual Meeting of Shareholders of Triple-S Management Corporation will
be held at the Corporation's main office or at any other place in Puerto
Rico as determined by the Board of Directors from time to time, at the
place indicated in the Notice of Meeting, at 9:00 am, on the last Sunday
in April of each year or, as an exception, at such other date which is
closest to the last Sunday of the month of April as determined by the
Board due to any legal requirement applicable to the Corporation. The
purpose of the Meeting will be to fill any vacancies of the Board of
Directors, receive and consider reports from officials regarding the
business of the Corporation, and resolve any other matters that are
properly submitted for consideration. However, neither the Articles of
Incorporation nor the By-laws may be amended unless the shareholders, who
have the right to vote at the meeting, have been previously notified that
among the matters that are being considered at the meeting are amendments
to the Articles of Incorporation and By-laws.
5-2 SPECIAL MEETINGS
The Chairman of the Board of Directors, a majority of the Board of
Directors, or Shareholders who hold 25% of the registered voting shares
can call special shareholders meetings to be held at the place and time
established by the notice of meeting, and for the purposes expressed
therein. The meetings (special shareholders meetings) should be notified
no less than ten (10) days or more than thirty (30) days before said
meeting. The special meetings must be notified in the same manner as
annual meetings.
5-3 NOTICE OF MEETINGS
The notices for every annual meeting of the Shareholders shall be given to
each Shareholder entitled to vote, by delivering the same personally, or
by mailing such notice to him, at the address which appears on the records
of the Corporation during a period of no less than twenty (20) and no more
than sixty (60) days prior to the meeting. Along with this notice, all
Shareholders will receive copies of the Corporation and its subsidiaries'
consolidated financial statements. The notice shall indicate the place and
the date the meeting will be held, and the matter or matters to be
considered during the Meeting.
By-laws of
Triple-S Management Corporation
Page 4
5-4 NOTICE - SUBSTITUTE
If the directors and officers of the Corporation should refrain from
calling and celebrating, at its designated time, an Annual Meeting, five
Shareholders may call for and celebrate said Meeting as required in these
By-laws. In case an officer does not attend said Meeting, one of the
Shareholders present may be elected to substitute, provisionally, said
officer. Decisions made at the Meeting will be valid, as if made at an
Annual Meeting, and will be registered in the corporate books of the
Corporation.
5-5 QUORUM
Notice to attend annual and special meetings will be sent to all
shareholders whose names appear in the Corporate Registry, twenty (20)
days prior to the meeting date. At the annual or special meetings, a
majority of the voting shares issued and outstanding shall constitute a
quorum; and if at the appointed time quorum is not reached, the meeting
will be postponed for a half hour, after which one third (1/3) of the
voting shares issued and outstanding will constitute a quorum. If quorum
is not reached, a new Meeting shall be scheduled thirty (30) days hence,
where one-third (1/3) of the voting shares issued and outstanding will
constitute a quorum. If a quorum is not reached pursuant to the
regulation, as many new Meetings as necessary may be scheduled, with the
same one-third (1/3) requirement.
CHAPTER 6 - VOTING RIGHT
6-1 Each shareholder shall, at every Meeting, be entitled to as many votes as
shares are registered in his name in the books of the Corporation. The
shareholder may vote in person or, if absent, by proxy or by certified
mail. No vote sent by mail or by proxy will be valid unless issued with
the shareholder's signature, and it is received before the Meeting, for
which it is destined, begins. No proxy will be valid after its expiration
date.
6-2 ACCUMULATED VOTE - PROHIBITION
The accumulative vote, as states in the Puerto Rico Corporate General Law
or any other law, regulation or provision, is expressly prohibited.
6-3 Any proxy designated by a registered shareholder must be a shareholder or
a participating physician or dentist.
By-laws of
Triple-S Management Corporation
Page 5
CHAPTER 7 - ELECTIONS
7-1 BOARD OF DIRECTORS - ELECTION
A. The election of members to the Board of Directors will take place at
the duly notified Annual Meeting of Shareholders by ballot. The
members elected each year will be those necessary to complete the
nineteen (19) Directors.
The directors will be elected by a majority of votes of the shares
issued and outstanding with the right to vote and who are
represented in person or by proxy at the Meeting.
B. The Board of Directors is divided into three groups, plus the
President of the Corporation. The first is made up of five (5)
directors, the second group is composed of six (6) directors, and
the third group is made up of seven (7) directors. The terms of the
groups will be placed at intervals, therefore, the term of the first
group of directors will end in the Shareholders Annual Meeting in
the year 2005; the term of the second group of directors will end in
the Shareholders Annual Meeting in the year 2006 and the term of the
third group of directors will end in the Shareholders Annual Meeting
in the year 2007.
C. The term each group member, subsequently elected at the Shareholders
Annual Assembly, will occupy at his elected hold office will be
three (3) years. Every director will continue with his duties until
his/her heir is duly elected and in possession of his office. No
Director, except the Corporation's President, while fulfilling his
duties, may be elected for more than three (3) terms or serve for
more than nine (9) years. The President of the Corporation, who is
also a member of the Board of Directors, is excluded from the before
mentioned groups.
D. In order to achieve uniformity in the composition of the number of
directors for each group, as stated herein, in April 2001 a director
will be elected for a one year term only, from April 2001 to April
2002. With the sole purpose of following the group intervals, the
requirement of three (3) terms or nine (9) years may be obviated in
order for a person to serve this single one-year term. In the case
of the first members of the Board of Directors, the time computation
will take into account the period in which the director fulfilled
his duties in Triple-S, Inc. until the fusion with Triple-S Salud.
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Triple-S Management Corporation
Page 6
7-2 DIRECTORS' REQUIREMENTS
In order to be a Director in the Corporation, every person must at least
meet the following requirements:
A. Never have declared fraudulent bankruptcy, voluntary or involuntary,
nor granted a fraudulent general cession in benefit of creditors.
B. Should never have been convicted of a crime of moral deprivation.
C. Should not be a director or officer of a bank, a savings and loans
association, an institution engaged in the business of receiving
deposits and lending money in Puerto Rico or any entity or
corporation in which any of the institutions referred to herein have
a direct or indirect substantial economic interest or the
relationship of owner, subsidiary or affiliate or any entity or
corporation which owns, directly or indirectly, substantial economic
interest in any of the said institutions, except that the person can
fulfill his duties as director or officer of a financial holding
company or a depository institution with whom an insurance company
affiliated to the corporation has a relationship, directly or
indirectly, as owner, subsidiary or affiliate.
D. In the case of directors who are physicians or dentists, they should
be active participants in the Subsidiary of Triple-S, Inc., and have
been so for at least two (2) years prior to their nomination as
directors in the Corporation.
CHAPTER 8 - DIRECTORS
8-1 BOARD OF DIRECTORS - POWERS
A. The Board of Directors will be composed of nineteen (19) members
elected by the Shareholders at the meeting, or by the Board of
Directors in case of vacancies, and will exercise the corporation's
powers and the management of its business in accordance with the
Puerto Rico General Corporations Law, the Articles of Incorporation
and By-laws of the Corporation, as well as the guidelines issued by
the Shareholders of the Corporation.
B. The power to manage the Corporation's affairs may only be exercised
when the Directors of the Corporation act as a Board, duly
constituted, as a Committee of the Board or by express delegation
from the Board.
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Triple-S Management Corporation
Page 7
C. In order to become a Director of the Corporation, you must be a
Shareholder of the Corporation.
D. The decisions taken by a majority of the Directors present at a
meeting of the Board of Directors, where a quorum is constituted,
will be considered as acts of the Board of Directors as if those
decisions were considered and accepted by all of the Directors of
the Board.
E. Of the nineteen (19) members of the Board of Directors, ten (10)
must be representatives of the community and/or subscribers and not
medical doctors or dentists.
F. Board Meetings
1. The Board must celebrate at least one annual meeting before
the Annual Meeting of Shareholders and any regular and special
meetings the Board determines to be necessary.
2. The Board will meet each month, unless special circumstances
force the Chairperson of the Board to change it. The Secretary
will notify the Directors in writing the date of said
meetings.
3. The Chairperson of the Board of Directors may convene
extraordinary meetings of the Board to be held at the place,
date, and time established in the notice to the meeting and
for the purposes expressed therein.
4. In addition, the Chairperson of the Board of Directors will
have the obligation to convene the Board of Directors when
requested by five (5) members of the Board, ten (10) days
after such request is made.
G. A majority of the total number of Directors will constitute a
quorum.
8-2 VACANCIES IN THE BOARD - PROCEDURE TO FILL THE VACANCIES
The vacancies of the Board due to resignation, death, disability which
impedes the execution of their functions, or destitution of any director
before the expiration of their term, will be filled by the vote of the
majority of the Directors present in a Board meeting, convened for these
purposes, after the quorum is constituted. The person elected to fill the
vacancy will serve the rest of the term of the person who is being
substituted and may be reelected for two (2) additional successive terms.
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Triple-S Management Corporation
Page 8
8-3 ACTS OF THE BOARD OF DIRECTORS - REFERENDUM
Except for a provision stating the contrary in the Articles of
Incorporation or the General Corporations Law, any action or agreement
required or permitted to be taken in any meeting of the Board of Directors
or any of its committees, may be executed without the need of a meeting if
all of the members of the Board of Directors or the Committee, as the case
may be, approve of it in writing and said written approval or approvals
are submitted and incorporated in the minutes of the meetings of the Board
of Directors or the Committee.
8-4 OFFICERS
The officers will be a Chairperson, a Vice Chairman, a Treasurer, an
Assistant Treasurer, a Secretary and an Assistant Secretary. The Board of
Directors will elect these officers, which will meet the requirements,
will have the powers and duties and will serve during the terms
established herein.
8-5 THE CHAIRPERSON OF THE BOARD OF DIRECTORS
The Chairperson of the Board of Directors will preside over the
Shareholders Meetings, the meeting of the Board of Directors, and will
assume the duties and responsibilities conferred by the Board of
Directors. Among the main duties and responsibilities of the Chairperson
are the following:
A. Represent the Corporation in the name of the Board of Directors in
those official acts which he/she will have to attend and will
maintain the relationships with the Shareholders of the Corporation
and the governmental authorities as part of his/her duties.
B. Appoint the Directors who are to be members of the Finance
Committee, except for its Committee Chair, and the Resolutions and
Regulations Committee of the Board of Directors, unless otherwise
provided in these By-laws.
C. Be a member of all of the Committees of the Board of Directors, if
he/she complies with the independence criteria adopted and approved
by the Board of Directors.
D. Represent the Corporation at the Shareholders Meetings of the
Subsidiary Corporations.
E. Recommend to the Board of Directors for their consideration, the
creation of committees which are not expressly recognized in the
By-laws and Regulations, according to the needs of the Corporation.
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Triple-S Management Corporation
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F. Inform the Board of Directors about his/her official affairs by
virtue of his/her duties and responsibilities.
G. Assume all other duties and responsibilities that from time to time
are conferred by the Board of Directors.
H. Convene any extraordinary meetings of the Board of Directors that
he/she may deem necessary.
8-6 THE VICE CHAIRMAN
In the absence of the Chairman, or if the Chairman is unable to act as
such, the Vice Chairman will assume the duties and faculties of the
Chairman.
8-7 THE SECRETARY
The Secretary will take an oath to loyally carry out the duties of his/her
office and will make sure that the minute books of the Corporation are
duly maintained and will note or cause to be noted the actions of the
Board of Directors and the Shareholders Assemblies and the voting therein.
He/she will issue the necessary certificates and will be responsible for
the corporate seal. He/she will be responsible for making sure that the
registry of all of the shareholders and the Articles of Incorporation, the
By-laws and the certified Regulations are safely kept at the principal
offices of the Corporation. In addition, he/she will certify the official
acts of the Board of Directors.
8-8 THE ASSISTANT SECRETARY
The Assistant Secretary will assume, in the absence or if the Secretary is
unable to perform his/her duties, all of the duties and faculties
conferred upon the Secretary.
8-9 THE TREASURER
The Treasurer will make sure that the securities and the money of the
Corporation is duly received and guarded, and that the disbursements are
only made according to duly approved and certified resolutions of the
Board of Directors. He/she will make sure that the investment policies of
the Corporation observe the security, liquidity and yield criteria, in
that order. He/she will preside over the Finance Committee of the Board.
In addition, the Treasurer will make sure that the accounting books and
registers are located in the principal offices of the Corporation. The
Corporation's accounting will follow general accepted accounting
principles.
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Triple-S Management Corporation
Page 10
8-10 THE ASSISTANT TREASURER
The Assistant Treasurer will assume, in the absence or if the Treasurer is
unable to perform his/her duties, all of the duties and faculties
conferred upon the Treasurer.
8-11 COMMITTEES
The permanent Committees of the Board of Directors will be classified
according to their nature and the importance of their duties, as well as
the responsibilities delegated to each Committee, and the impact of its
tasks in the operation and results of the Corporation. In compliance with
the above, the "Core Committees" will be the Corporate Governance
Committee, the Audit Committee, the Nominations Committee, the
Compensation Committee, and the Finance Committee.
A. CORPORATE GOVERNANCE COMMITTEE
The Board of Directors shall appoint at least five (5) Directors to
this Committee, one of which shall be the Chairperson of the Board,
who shall be the Committee's Chair.
Each Director that is a member of the Committee shall comply with
the independence requirements that have been adopted and approved by
the Board of Directors.
The members of the Committee shall meet at least once a year and as
many times as deemed necessary. The decisions of the Corporate
Governance Committee shall be by a majority of the Directors present
at each meeting.
The Committee's main responsibilities will be to:
1. Examine the best practices of good corporate governance and
ensure that the Corporation complies with said practices. The
corporate governance structure:
a. Establishes the distribution of the rights and
responsibilities among the different constituents of the
Corporation: the Board of Directors, Management,
Shareholders, and any other constituent.
b. Sets up the rules and procedures in order to make
corporate decisions.
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Triple-S Management Corporation
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2. Advise the Boards of Directors of the Corporation and its
Subsidiary Corporations, as well as their respective Chairs,
about the best practices of corporate governance and the
conduct of the Directors.
3. Provide to the Directors of the Corporation with orientation
and educational mechanisms that are relevant and pertinent to
their duties and responsibilities in the Corporation.
B. AUDIT COMMITTEE
The Board of Directors shall appoint at least five (5) Directors to
this Committee.
Each Director that is a member of the Committee shall comply with
the independence requirements that have been adopted and approved by
the Board of Directors.
The Chair of this Committee shall be appointed by the Directors that
are members of the Committee.
This Committee shall meet at least once every three months and as
many times as deemed necessary. The decisions of the Audit Committee
shall be by a majority of the Directors present at each meeting.
The Committee's main responsibilities will be to:
1. Review and ensure that the Corporation and its Subsidiary
Corporations have an adequate internal control structure to
safeguard the assets, generate reliable financial information,
and assure the compliance with applicable laws and
regulations.
2. Review the activities performed by the Internal Audit Office
of the Corporation.
3. Appoint or terminate the engagement with the external
auditors.
4. Review the results of the audits performed by the regulatory
agencies.
5. Review the consolidated financial reports of the Corporation
to be issued or filed with regulatory agencies.
6. Review and judge the annual report prepared by the external
auditors.
7. Appoint or terminate the Director of the Internal Audit
Office.
By-laws of
Triple-S Management Corporation
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C. NOMINATIONS COMMITTEE
The Board of Directors shall appoint at least seven (7) members of
the Board of Directors to this Committee, one of which shall be the
Chairperson of the Board.
Each Director that is a member of the Committee shall comply with
the independence requirements that have been adopted and approved by
the Board of Directors.
The Chair of this Committee shall be appointed by the Directors who
are members of the Committee.
The Committee shall meet at least once a year and as many times as
deemed necessary. The decisions of the Nominations Committee shall
be by a majority of the Directors present at each meeting.
The Committee's main responsibilities will be to:
1. Recommend to the Board of Directors the best qualified
candidates that can be members of the Board of Directors and
fill any vacancy that arises therein.
2. Develop and periodically review the qualities that any
candidate to be named to the Board of Directors should have.
3. Recommend to the Board of Directors the best qualified
candidates to occupy the position of President of the
Corporation.
4. Evaluate annually, or as often as deemed appropriate, the
Directors' performance pursuant to the criteria and objectives
that, from time to time, the Board of Directors establishes.
D. COMPENSATION COMMITTEE
The Board of Directors shall appoint at least five (5) Directors of
the Board of Directors to this Committee.
Each Director that is a member of the Committee shall comply with
the independence requirements that have been adopted and approved by
the Board of Directors.
The Chair of this Committee shall be appointed by the Directors who
are members of the Committee.
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Triple-S Management Corporation
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The Committee shall meet at least once a year and as many times as
deemed necessary. The decisions of the Compensation Committee shall
be by a majority of the Directors present at each meeting.
The Committee's main responsibilities will be to:
1. Develop, recommend, and review the compensation policies for
the Executive Officers of the Corporation and its Subsidiary
Corporations.
2. Recommend to the Board of Directors the compensation for the
Executive Officers of the Corporation and its Subsidiary
Corporations.
3. Recommend to the Boards of Directors of the Corporation and
its Subsidiary Corporations those changes to the compensation
levels of the Directors of the Corporation and its Subsidiary
Corporations that are deemed necessary.
4. Develop an annual report regarding the compensation of the
Board of Directors and the Executive Officers of the
Corporation and its Subsidiary Corporations, pursuant to the
applicable laws and regulations.
E. FINANCE COMMITTEE
The Chairperson of the Board of Directors shall appoint to this
Committee at least four (4) Directors of the Board. In addition to
those Directors, the other members of this Committee shall be the
Chairperson of the Board, the President of the Corporation, and the
Treasurer of the Board, who shall be the Committee's Chair.
The Committee shall meet at least once every two months, and as many
times as deemed necessary. The decisions of the Finance Committee
shall be by a majority of the Directors present at each meeting.
The Committee's main responsibilities will be to:
1. Monitor all the financial activities of the Corporation.
2. Provide guidance to the Board of Directors in all matters that
are related to the finances of the Corporation.
3. Study all recommended changes to the economic structure of the
Corporation.
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Triple-S Management Corporation
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4. Evaluate the financial procedures of the Corporation.
5. Develop the investments policy of the Corporation, and review
and recommend amendments to the policy, as deemed necessary.
F. RESOLUTIONS AND REGULATIONS COMMITTEE
The Chairperson of the Board of Directors shall appoint at least
five (5) Directors of the Board of Directors to this Committee. In
addition to those Directors, the other members of this Committee
shall be the Chairperson of the Board and the President of the
Corporation.
The Chair of this Committee shall be appointed by the Chairperson of
the Board of Directors from among the members of the Committee.
This Committee shall meet at least once a year, and as many times as
deemed necessary. The decisions of the Resolutions and Regulations
Committee shall be by a majority of the Directors present at each
meeting.
The Committee's main responsibilities will be to:
1. Review the Articles of Incorporation and By-laws of the
Corporation, and propose and prepare those resolutions to
amend the Articles of Incorporation and By-laws or any other
resolution related with other institutional issues.
2. Evaluate and judge all resolutions that are presented by the
Shareholders at the Shareholders Meetings.
3. Follow up on the status of all resolutions approved by the
Shareholders at the Shareholders Meetings.
G. GENERAL PROVISIONS FOR ALL COMMITTEES
1. Each of the Committees established by these By-laws shall
adopt a Charter in order to govern its actions and to
discharge its duties and responsibilities. The Committees
shall periodically review their respective Charters, in order
to make the necessary changes to achieve its purposes. The
Charters, as well as any amendment thereto, shall be approved
by the Board of Directors.
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Triple-S Management Corporation
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2. All Committees shall keep records of their meetings.
3. The Chair of each Committee may convene special meetings, as
deemed necessary.
4. The Chairperson of the Board of Directors may, from time to
time, request the advice of any of the Committees of the
Board, as needed.
5. The President of the Corporation shall be a member of all
Committees, except the Audit Committee and those Committees
where he/she does not comply with the independence
requirements that have been adopted and approved by the Board
of Directors.
H. The Board of Directors or its Chairperson may create any other
Committee which they deem necessary for the proper operation of the
Corporation's business.
8-12 DISBURSEMENTS
The Corporation will not make any disbursement of $25 or more without
evidencing such disbursement with a voucher correctly describing the
reason for the payment and backed by an endorsed check or receipt signed
by the person receiving the payment, or in the name of the same person if
the payment is for services or as a refund. The voucher must describe the
services performed and detail the expenses by classification.
8-13 INTERESTS OF THE DIRECTORS
None of the members of the Board of Directors will accept, nor will
benefit from any fee, broker's fee or commission, donation or other
emolument in relation to any investment, loan, deposit, purchase, sale,
exchange, service or other similar transaction of the Corporation; nor
will it have any financial interest in said transactions in any capacity,
except in representation and for the benefit of the Corporation and under
the previous authority of the Board of Directors.
However, travel and representation expenses or expenses incurred as a
result of the attendance to the Board of Directors or Committee meetings
may be paid to the Directors; as well as for those professional services
performed as a medical doctor or dentist to the insurers of Triple-S,
Inc., or any other health subsidiary in its capacity as a participating
provider of the health insurance plan or plans.
No ex-director may be part of the Administration of the Corporation or its
Subsidiaries nor perform any type of professional services in its capacity
as a private citizen or as part of any business, until after three (3)
years after the end of his/her term as a member of the Board of Directors.
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Triple-S Management Corporation
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8-14 CAUSES FOR REMOVAL OF DIRECTORS AND EXECUTIVE OFFICERS NAMED TO THE BOARD
OF DIRECTORS
The following will be considered just cause for the removal of officers:
1. Act with gross negligence in the performance of his/her duties.
2. Receive or give a bribe.
3. Convicted of a felony or grave misdemeanor, which involves
depravation by a competent court.
4. Act immorally or improperly.
5. Have personal interests incompatible with the interests of the
Corporation.
6. Embezzle or fraudulently or negligently use or dispose of funds of
the Corporation.
7. Improperly use his/her position for personal benefit.
8. To be absent without any justification for three (3) consecutive
ordinary meetings of the Board properly notified or to be absent
from six (6) ordinary meetings during the period of one year with or
without justification.
9. Provide confidential or sensitive information of the Corporation
without the proper authorization or when it damages the interests of
the business.
10. Lose the Board's confidence when a minimum of three fourths of the
total number of directors which comprise the Board concur in voting
for the removal of a director.
11. Violate in a consistent manner the Articles of Incorporation or the
By-laws and Regulations of the Corporation, as well as the General
Corporations Law of Puerto Rico and/or the agreements approved in
the Shareholders Meeting or by the Board of Directors.
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Triple-S Management Corporation
Page 17
CHAPTER 9 - AMENDMENTS
9-1 AMENDMENTS
A. In order to amend these By-laws, the Board of Directors must
consider and approve the proposed amendments, then the resolution to
amend the By-laws must be notified and included in the notice for
the shareholders' meeting, and, lastly, at said meeting, the
shareholders must approve the amendments pursuant to the voting
requirements set forth herein:
1. By the affirmative vote of a majority of the issued and
outstanding common shares with the right to vote present at a
validly constituted meeting of shareholders, except for those
cases set forth below.
2. By the affirmative vote of three-fourths (3/4) of the issued
and outstanding common shares with the right to vote, in the
case of Section "A" of Article 4-1 (that no person may hold
five percent (5%) or more of the voting common shares of the
Corporation), Article 6-2 (that prohibits cumulative voting),
and Section "B" of Article 7-1 (that establishes that the
Board of Directors will be divided into three staggered
groups).
3. By the affirmative vote of a majority of the issued and
outstanding common shares with the right to vote, in the case
of Article 3-1 regarding authorized capital.
4. By the affirmative vote of such amount of votes or percentage
of votes required by the Articles of Incorporation if the
requirements established therein are greater than those
established in this Article 9-1 for any particular matter that
is contained in the Articles of Incorporation as well as in
the By-laws.
B. The approved amendments will be certified by the President and the
Secretary, in triplicate, with the seal of the Corporation.
C. The amendments to the By-laws approved by the shareholders at a
meeting or by referendum will be distributed to the shareholders.
By-laws of
Triple-S Management Corporation
Page 18
CHAPTER 10 - ADMINISTRATION
10-1 NAMING OF THE PRESIDENT OF THE CORPORATION AND HIS/HER FACULTIES
The Board of Directors will name a President to the Corporation who will
be in charge of the general administration, superintendence, and
management of the business of the Corporation, subject to the orders and
regulations of the Board of Directors, who will fix his salary. The
President of the Corporation will assume all other duties and
responsibilities that are imposed upon him/her at the Shareholders
Assemblies or by the Board of Directors.
10-2 ADMINISTRATION
The Board will have the faculty to name any other officers that they deem
convenient and necessary.
10-3 BONDS
The President of the Corporation, as well as any officer or employee that
collects, receives, manages or is responsible for or guard funds or
securities of the Corporation, will have to give a fidelity bond in the
amount set forth by the Board of Directors.
10-4 BUDGET FOR EXPENSES
The President of the Corporation will prepare each calendar year the
budget for the administrative expenses of the Corporation, which will be
submitted to the Board of Directors on or before November 15 for their
consideration. The Board of Directors will approve the budget on or before
December 31, and it will become effective the 1st of January of the next
calendar year. In the event that the budget is not approved by the stated
date, the corporate operations will continue based on the budget for the
previous year until the Board approves a new budget for the administrative
expenses of the Corporation. The budget will be available for inspection
by the Shareholders at the principal offices of the Corporation, after
January 15 of the corresponding year.
By-laws were effective on April 14, 1998.
Revised on December 7, 1998; April 25, 1999; April 30, 2000; April 29, 2001;
April 28, 2002; April 27, 2003; April 25, 2004; April 24, 2005.