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EXHIBIT 4(a)
CERTIFICATE OF INCORPORATION
OF BANPONCE CORPORATION
FIRST: The name of the Corporation is BanPonce Corporation.
SECOND: The principal office of the Corporation shall be at the
Popular Center Building, 209 Munoz Rivera Avenue, Hato Rey, Puerto Rico 00918
and its resident agent at such address is Leda, Brunilda Santos de Alvarez.
THIRD: The nature of the business and the purposes of the Corporation
are to engage in, carry out and conduct, for profit, to the extent permitted by
law, the following activities:
1. To purchase, subscribe for, or otherwise acquire and
own, hold, use, sell, assign, transfer, mortgage, pledge, exchange, or
otherwise dispose of, and deal in and with the personal or mixed property of
every kind and description, including shares of stock, bonds, debentures,
notes, evidences of indebtedness and other securities, or other interests in
debentures, notes, mortgages, or other contracts or obligations and any
certificates, receipts or other instruments representing options, right or
warrants to receive, purchase or subscribe for the same or representing any
other rights or interests therein or in any property or assets of or created or
issued by any person, or persons, corporation or corporations, association or
associations, domestic or foreign, including agencies, instrumentalities,
authorities, administrations, corporations or other public governmental bodies
or subdivision thereof, and to pay therefor, in whole or in part, in cash or by
exchanging therefor, stocks, bonds, or other evidences of indebtedness or
securities of this or other corporation, and while the owner or holder of any
such personal or mixed property, stocks, bonds, debentures, notes, evidences of
indebtedness or other securities, contracts or obligations, to receive, collect
and dispose of the interest, dividends, and income arising from such property
and to possess and exercise in respect thereof all the rights, powers and
privileges of ownership, including all voting powers on any stocks so owned to
the same extent as a natural person might or could do.
2. To purchase or otherwise acquire and own, hold, use,
sell, assign, transfer, exchange and convey, pledge, lease, rent, remodel,
improve, reconstruct, mortgage and otherwise encumber or dispose of real estate
whether improved or unimproved, and any right, privilege or interest of any
kind whatsoever therein, and to manage, operate, own, hold, deal in and dispose
of all or any part of such property and assets whether real, personal or mixed,
as may be necessary or desirable for the successful conduct and operation of
such business and to possess and exercise in respect thereof all the rights,
powers and privileges of ownership, to the same extent as a natural person
might or could do; provided, however, that the Corporation shall not be
authorized, as respects real property located within the Commonwealth of Puerto
Rico, to conduct the business of buying and selling real estate, and shall in
all other respects be subject to the provisions of Section 14 of Article VI of
the Constitution of the Commonwealth of Puerto Rico.
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3. To aid either by loans or by guaranty of securities or in any other
manner, any corporation, domestic or foreign, any shares of stock, or any
bonds, debentures, evidences of indebtedness or other securities whereof are
held by this corporation or in which it shall have any interest, and to do any
acts designed to protect, preserve, improve, or enhance the value of any
property at any time held or controlled by this Corporation or in which it at
the same time may be interested.
4. To endorse or guarantee the payment of principal, interest, or
dividends on securities and to guarantee the performance of sinking funds or
other obligations of, and to guarantee in any way permitted by law the
performance of any contracts or obligations of every kind and description with
or of any person, firm, association, corporation or of the government or
subdivisions thereof.
5. To lend its surplus or uninvested funds from time to time to such
extent, to such persons, firms, associations, corporations or governmental
bodies or subdivisions, agencies or instrumentalities thereof, and on such
terms and on such security, if any, as the Board of Directors of the Corporation
may determine.
6. To borrow money for any of the purposes of the Corporation, from
time to time, and without limit as to amount; from time to time, to issue and
sell its own securities in such amounts, on such terms and conditions, for such
purposes and for such consideration, as may now be or hereafter shall be
permitted by the laws of the Commonwealth of Puerto Rico; and to secure the same
by mortgage upon, or the pledge, or the conveyance or assignment in trust of,
the whole or any part of the properties, assets, business and good will of the
Corporation then owned or acquired.
7. To merge into or consolidate with, and to enter into agreements and
cooperative relations, not in contravention of law, with any person, firm,
association or corporation; to purchase or otherwise acquire and to hold,
cancel, reissue, sell, exchange, transfer or otherwise deal in its own shares
of capital stock or other securities from time to time to the extent and upon
such terms as shall be permitted by the law of the Commonwealth of Puerto Rico;
provided, however, that shares of its own capital stock so purchased or held
shall not be directly or indirectly voted, nor shall they be entitled to the
payment of dividends during such period or periods as they shall be held by the
Corporation.
8. To manufacture, process, purchase, sell and generally to trade and
deal in and with goods, wares and merchandise of every kind, nature and
description, and to engage and participate in any mercantile, industrial or
trading business of any kind or character whatsoever.
9. To apply for, register, obtain, purchase, lease, take licenses in
respect of or otherwise acquire, and to hold, own, use, operate, develop,
enjoy, turn to account, grant licenses and immunities in respect of, manufacture
under and to introduce, sell, assign, mortgage, pledge, or otherwise dispose
of, and, in any manner deal with and contract with reference to:
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(a) inventions, devices, formulas, processes and any
improvements and modifications thereof;
(b) letters patent, patent rights, patented processes,
copyrights, designs, and similar rights, trade-marks, trade symbols and other
indications of origin and ownership granted by or recognized under the laws of
the Commonwealth of Puerto Rico, the Government of the United States of America
or of any state or subdivision thereof, or of any foreign country or subdivision
thereof, and all rights connected therewith or appertaining thereunto;
(c) franchises, licenses, grants and concessions.
10. To acquire by purchase, exchange or otherwise, all of any part
of, or any interest in, the properties, assets, business and good will of any
one or more persons, firms, associations, or corporations heretofore or
hereafter engaged in any business for which a corporation may now or hereafter
be organized under the laws of the Commonwealth of Puerto Rico; to pay for the
same in cash, property or its own or other securities; to hold, operate,
reorganize, liquidate, sell or in any manner dispose of the whole or any part
thereof; and in connection therewith, to assume or guarantee performance of any
liabilities, obligations or contracts of such persons, firms, associations or
corporations, and to conduct the whole or any part of any business thus
acquired.
11. To draw, make, accept, endorse, discount, execute, and issue
promissory notes, drafts, bills of exchange, warrants, bonds, debentures, and
other negotiable or transferable instruments and evidences of indebtedness
whether secured by mortgage or otherwise, as well as to secure the same by
mortgage or otherwise, so far as may be permitted by the laws of the
Commonwealth of Puerto Rico.
12. To the extent permitted by law, and subject to obtaining the
license required under the provisions of Section 9.060 of the Insurance Code of
Puerto Rico (26 LPRA 906), to act as agent for insurance companies in
soliciting and receiving applications for property, marine and transportation,
vehicle, casualty surety and title insurance, and all other kinds of insurance
except life and disability insurance, the collection of premiums, and doing
such other business as may be delegated to agents by such companies, and to
conduct a general insurance agency business.
13. To organize or cause to be organized under the laws of the
Commonwealth of Puerto Rico, or of any other State of the United States of
America, or the District of Columbia, or of any territory, dependency, colony or
possession of the United States of America, or of any foreign country, a
corporation or corporations for the purpose of transacting, promoting or
carrying on any or all of the objects or purposes for which the corporation
is organized, and to dissolve, wind up, liquidate merge or consolidate any
such corporation or corporations or to cause the same to be dissolved, wound up,
liquidated, merged or consolidated.
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14. To conduct its business in any and all of its branches and maintain
offices both within and without the Commonwealth of Puerto Rico, in any and all
States of the United States of America, in the District of Columbia, in any or
all territories, dependencies, colonies or possessions of the United States of
America, and in foreign countries.
15. To such extent as a corporation organized under the laws of the
Commonwealth of Puerto Rico may now or hereafter lawfully do, to do, either as
principal or agent and either alone or through subsidiaries or in connection
with other persons, firms, associations or corporations, all and everything
necessary, suitable, convenient or proper for, or in connection with or incident
to, the accomplishment of any of the purposes or the attainment of any one
or more of the objects herein enumerated, or designed directly or indirectly to
promote interests of the Corporation or to enhance the value of its properties;
and in general to do any and all things and exercise any and all powers,
rights, and privileges which a corporation may now or hereafter be organized to
do or to exercise under the laws of the Commonwealth of Puerto Rico.
The foregoing provisions of this Article THIRD shall be construed both
as purposes and powers and each as an independent purpose and power. The
foregoing enumeration of specific purposes and powers shall not be held to limit
or restrict in any manner the purposes and powers of the Corporation and the
purposes and powers herein specified shall, except when otherwise provided in
this Article THIRD, be in no way limited or restricted by reference to, or
interference from, the terms of any provisions of this or any other Article of
this Certificate of Incorporation.
FOURTH: The Corporation is to have perpetual existence.
FIFTH: The minimum amount of capital with which the Corporation shall
commence business shall be $1,000.00.
The total number of shares of all classes of capital stock which the
Corporation shall have authority to issue, upon resolutions approved by the
Board of Directors from time to time, is one hundred million shares
(100,000,000), of which ninety million shares (90,000,000) shall be shares of
Common Stock of the par value of $6.00 per shares (hereinafter called "Common
Stock"), and ten million shall be shares of Preferred Stock without par value
(hereinafter called "Preferred Stock").
The amount of the authorized capital stock of any class or classes of
stock may be increased or decreased by the affirmative vote of the holders of a
majority of the stock of the Corporation entitled to vote.
The designations and the powers, preferences and rights, and the
qualifications, limitations or restrictions thereof, of the Preferred Stock
shall be as follows:
(1) The Board of Directors is expressly authorized at any time, and
from time
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to time, to provide for the issuance of shares of Preferred Stock in one or
more series, and with such voting powers, full or limited but not to exceed one
vote per share, or without voting powers, and with such designations,
preferences, and relative participating, optional or other special rights, and
qualifications, limitations or restrictions thereof, as shall be expressed in
the resolution or resolutions providing or the issue thereof adopted by the
Board of Directors and as are not otherwise expressed in this Certificate of
Incorporation or any amendment thereto, including (but without limiting the
generality of the foregoing) the following:
(a) the designation of such series;
(b) the purchase price which the Corporation shall receive
for each share of such series;
(c) the dividend rate of such series, the conditions and
dates upon which such dividends shall be payable, the preference or relation
which such dividends shall bear to the dividends payable on any other class or
classes or on any other series of any class or classes of capital stock of the
Corporation, and whether such dividends shall be cumulative or non-cumulative;
(d) whether the shares of such series shall be subject to
redemption by the Corporation, and, if made subject to such redemption, the
times, prices and other terms and conditions of such redemption;
(e) the terms and amounts of any sinking fund provided for
the purchase or redemption of the shares of such series;
(f) whether the shares of such series shall be convertible
into or exchangeable for shares of any other class of classes or of any other
series of any class or classes of capital stock of the Corporation, and, if
provision be made for conversion or exchange, the times, prices, rates,
adjustments, and other terms and conditions of such conversion or exchange;
(g) the extent, if any, to which the holders of the shares of
such series shall be entitled to vote as a class or otherwise with respect to
the election of directors or otherwise;
(h) the restrictions and conditions, if any, upon the reissue
of any additional Preferred Stock ranking on a parity with or prior to such
shares as to dividends or upon dissolution;
(i) the rights of the holders of the shares of such series
upon the dissolution of, or upon the distribution of assets of, the
Corporation, which rights may be different in the case of a voluntary
dissolution than in the case of any involuntary dissolution.
(2) Except as otherwise required by law and except for such voting
powers with
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respect to the election of directors or other matters as may be stated in the
resolutions of the Board of Directors creating any series of Preferred Stock,
the holders of any such series shall have no voting power whatsoever.
SIXTH: The Board of Directors shall have the power, whenever it may
deem necessary to so act, from time to time, to authorize the issue of new
shares of stock. The common stockholders of record on any date designated by
resolution of the Board of Directors shall preference for the subscription for
common stock on a pro rata basis unless the Board of Directors unanimously
resolves otherwise, but the stockholders shall have no preference to subscribe
therefor in the event of new issues of shares of stock which may be authorized
pursuant to any Dividend Reinvestment and Stock Purchase Plan of the
Corporation or which may be authorized in order to exchange such new shares of
stock for property which the Board of Directors may consider convenient or
necessary for the Corporation to acquire, nor shall the stockholders have any
right of preference therefore in the event of new issues of stock in payment of
services rendered to the Corporation, or of shares of stock to be issued for
sale to officers or employees, on the basis of options, as an incentive either
to commence or to continue rendering services for the Corporation.
SEVENTH: The name and address of each incorporator is:
Name Address
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1. Socorro Santiago . . . . . 1395 San Alfonso Avenue
Urb. Altamesa
Rio Piedras, Puerto Rico
2. Annie Serrano . . . . . . DH-27 Llanuras Street
Rio Hondo IV
Bayamon, Puerto Rico
3. Julie Vazquez . . . . . . 31st Street, AE-22
Villas de Loiza
Canovanas, Puerto Rico
EIGHTH: (1) The Board shall be composed of such number of directors as
are established from time to time by the Board of Directors and approved by an
absolute majority of directors; provided, however, that the total number of
directors shall always be an odd number and not less than nine (9) nor more
than twenty-five (25). The Board of Directors shall be divided into three
classes as nearly equal in number as possible, with each class having at least
three members and with the term of office of one class expiring each year.
Each director shall serve for a term ending on the date of the third annual
meeting of stockholders following the annual meeting at which such director was
elected; provided, however, that each initial director in Class 1 shall hold
office until the annual meeting of stockholders in 1991; each initial director
in Class
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2 shall hold office until the annual meeting of stockholders in 1992; and each
initial director in Class 3 shall hold office until the annual meeting of
stockholders in 1993. Except as provided in this Article Eighth, a director
shall be elected by the affirmative vote of a majority of the shares of the
class of stock represented at the annual meeting of stockholders for which the
director stands for election and entitled to elect such director.
(2) Any vacancies in the Board of Directors, by reason of an increase
in the number of directors or otherwise, shall be filled solely by the Board of
Directors, by majority vote of the directors then in office, though less than a
quorum, but any such director so elected shall hold office only until the next
succeeding annual meeting of stockholders. At such annual meeting, such
director shall be elected and qualified in the class in which such director is
assigned to hold office for the term or remainder of the term of such class.
Directors shall continue in office until others are chosen and qualified in
their stead. When the number of directors is changed, any newly created
directorships or any decrease in directorships shall be so assigned among the
classes by a majority of the directors then in office, though less than a
quorum, so as to make all classes as nearly equal in number as possible. To
the extent of any inequality within the limits of the foregoing, the class of
directorships shall be the class or classes then having the last date or the
later dates for the expiration of its or their terms. No decrease in the
number of directors shall shorten the term of any incumbent director.
(3) Any director may be removed from office as a director but only
for cause by the affirmative vote of the holders of two-thirds (2/3) of the
combined voting power of the then outstanding shares of stock of the
Corporation entitled to vote generally in the election of directors, voting
together as a single class.
The Board of Directors may, by resolution passed by a majority of the
whole board, designate one or more committees, each committee to consist of two
or more of the directors of the Corporation, which to the extent provided in
the resolution or in the by-laws of the Corporation, shall have and may
exercise the powers of the Board of Directors (other than the power to remove
or elect officers) in the management of the business and affairs of the
Corporation, and may 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 stated in the by-laws of the Corporation or as may be
determined from time to time by resolution adopted by the Board of Directors.
The Board of Directors may from time to time, in the manner provided
for in the by-laws of the Corporation, hold its regular or extraordinary
meetings outside of Puerto Rico.
NINTH: The Board of Directors may, upon resolution approved by an
absolute majority thereof, from time to time (after adoption of the original
by-laws of the Corporation) adopt, amend or repeal the by-laws of the
Corporation; provided, that any by-laws adopted, amended or repealed by the
Board of Directors may be amended or repealed, and any by-laws may be adopted,
by the stockholders of the Corporation.
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TENTH: The affirmative vote of the holders of not less than
seventy-five percent (75%) of the total number of outstanding shares of the
Corporation shall be required (i) to amend this Article TENTH, (ii) to approve
any Business Combination for which stockholder approval is required by
applicable law or (iii) to approve the voluntary dissolution of the
Corporation, notwithstanding that applicable law would otherwise permit any of
the above with the approval of fewer shares or without the approval of any
shares:
For purposes of this Article TENTH, the term "Business Combination"
shall mean:
(a) a merger, reorganization or consolidation in which the Corporation
is a constituent corporation; or
(b) the sale, lease, or hypothecation of substantially all the assets
of the Corporation.
Other than with respect to this Article TENTH, the affirmative vote of
the holders of not less than two-thirds of the total number of outstanding
shares of the Corporation shall be required to amend these Articles of
Incorporation, notwithstanding, that applicable law would otherwise permit
such amendment with the approval of fewer shares or without the approval of any
shares.
ELEVENTH: (1) 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 investigate (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 written 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's 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 interest of the Corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. The termination of any action, suit or proceeding by judgment,
order, settlement, conviction, or upon a plea of nolo contendere 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, had reasonable cause to believe that his conduct
was unlawful.
(2) 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 written request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, join venture, trust or other enterprise, against expenses
(including attorneys's fees) actually and
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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,
except that no indemnification shall be made in respect of any claim, issue or
matter as to which such person shall have been adjudged to be liable for
negligence or misconduct in the performance of his duty 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.
(3) 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 paragraph 1 or 2 of this Article
ELEVENTH, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorney's fees) actually and
reasonably incurred by him in connection therewith.
(4) Any indemnification under paragraph 1 or 2 of this Article
ELEVENTH (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 therein. 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
proceeding, or (b) if such a quorum is not obtainable, or, even if obtainable a
quorum of disinterest directors so directs, by independent legal counsel in a
written opinion, or (c) by the stockholders.
(5) Expenses incurred in defending a civil or criminal action, suit or
proceeding may be paid by the Corporation in advance of the final disposition
of such action, suit or proceeding as authorized by the Board of Directors in
the specific case upon receipt of an undertaking by or on behalf of the
director, officer, employee or agent to repay such amount unless it shall
ultimately be determined that he is entitled to be indemnified by the
Corporation as authorized in this Article ELEVENTH.
(6) The indemnification provided by this Article ELEVENTH shall not be
deemed exclusive of any other rights to which those seeking indemnification may
be entitled under any statute, by-law, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his official
capacity 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.
(7) By action of its Board of Directors, notwithstanding any interest of
the directors in the action, the Corporation may purchase and maintain
insurance, in such amounts as the Board of Directors deems appropriate, 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 written request of the Corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or
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other enterprise, against any liability asserted against him and incurred by
him in any such capacity, or arising out of this status as such, whether or not
the Corporation would have the power or would be required to indemnify him
against such liability under the provisions of his Article ELEVENTH or of the
General Corporation Law of the Commonwealth of Puerto Rico or of any other
State of the United State or foreign county as may be applicable.
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CERTIFICATE OF RESOLUTION
OF THE BOARD OF DIRECTORS OF BANPONCE CORPORATION
8.35% NON-CUMULATIVE
MONTHLY INCOME PREFERRED STOCK, 1994 SERIES A
(Pursuant to Article 501 of the General Corporation Law of the Commonwealth
of Puerto Rico)
We, the undersigned, Executive Vice President and Secretary of BANPONCE
CORPORATION (hereinafter called the "Corporation"), a corporation duly
organized and existing under the laws of the Commonwealth of Puerto Rico,
do hereby certify that, pursuant to the authority conferred upon the Board of
Directors of the Corporation by the Certificate of Incorporation of the
Corporation, the said Board of Directors on June 16, 1994, adopted the
following resolutions creating a series of 4,000,000 shares of Preferred Stock
designated as the "8.35% Non-Cumulative Monthly Income Preferred Stock, 1994
Series A."
RESOLVED, that pursuant to the authority expressly
granted to and vested in the Board of Directors of the
Corporation in accordance with the provisions of its
Certificate of Incorporation, a series of Preferred Stock
of the Corporation be and it hereby is created.
FURTHER RESOLVED, that the directors have determined
that the preferences and relative, participating, optional
or other special rights of the shares of such series of
Preferred Stock, and the qualifications, limitations or
restrictions thereof, as stated and expressed herein, are
under the circumstances prevailing on the date hereof
fair and equitable to all the existing shareholders of
the Corporation.
FURTHER RESOLVED, that the designation and amount
of such series and the voting powers, preferences and
relative, participating, optional or other special
rights of the shares of such series of Preferred Stock,
and the qualifications, limitations or restrictions
thereof are as follows:
A. DESIGNATION AND AMOUNT
The shares of such series of Preferred Stock shall
designated as the "8.35% Non-Cumulative Monthly Income
Preferred Stock 1994 Series A" (hereinafter called the
"Series A Preferred Stock"), and the number of
authorized shares constituting such series shall be
4,000,000.
B. DIVIDENDS
1. Holders of record of the Series A Preferred
Stock will be entitled to receive, when,
as and if declared by the Board of
Directors of the Corporation, out of funds
of the Corporation legally available
therefor, non-cumulative cash dividends
at the annual rate per share of 8.35% of
the liquidation preference of $25 per
share, or $0.173958 per share per
month, with each aggregate payment made
to each record holder of the Series A
Preferred Stock being rounded to the
next lowest cent.
2. Dividends on the Series A Preferred Stock
will accrue from their date of original
issuance and will be payable (when, as
and if declared by the Board of Directors
of the Corporation out of funds of the
Corporation legally available therefor)
monthly in arrears in United States
dollars commencing on July 31, 1994,
and on the last day of each calendar
month of each year thereafter to the
holders of record of the Series A
Preferred
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Stock as they appear on the books of the Corporation on the
second Business Day (as defined below) immediately
preceding the relevant date of payment. In the case of the
dividend payable on July 31, 1994, such dividend shall cover
the period from the date of issuance of the Series A Preferred
Stock to July 31, 1994. In the event that any date on which
dividends are payable is not a Business Day, then payment of
the dividend payable on such date will be made on the next
succeeding Business Day without any interest or other payment in
respect of any such delay, except that, if, such Business Day
is in the next succeeding calendar year, such payment will be
made on the Business Day immediately preceding the relevant
date of payment, in each case with the same force and effect as
if made on such date. A "Business Day" is a day other than a
day on which banking institutions in San Juan, Puerto Rico or
New York, New York are authorized or required by law to close.
3. Dividends on the Series A Preferred Stock will be
non-cumulative. The Corporation is not obligated or
required to declare or pay dividends on the Series A Preferred
Stock, even if it has funds available for the payment of such
dividends. If the Board of Directors of the Corporation or an
authorized committee thereof does not declare a dividend
payable on a dividend payment date in respect of the Series A
Preferred Stock, then the holders of the Series A Preferred
Stock shall have no right to receive a dividend in respect of
the monthly dividend period ending on such dividend payment
date and the Corporation will have no obligation to pay the
dividend accrued for such monthly dividend period or to pay any
interest thereon, whether or not dividends on such Series A
Preferred Stock are declared for any future monthly dividend
period.
4. The amount of dividends payable for any monthly dividend period
will be computed on the basis of twelve 30-day months
and a 360-day year. The amount of dividends payable for any
period shorter than a full monthly dividend period will be
computed on the basis of the actual number of days elapsed in
such period.
5. Subject to any applicable fiscal or other laws and regulations,
each dividend payment will be made by dollar check drawn
on a bank in New York, New York or San Juan, Puerto Rico and
mailed to the record holder thereof at such holder's address as
it appears on the register for such Series A Preferred Stock.
6. So long as any shares of the Series A Preferred Stock remain
outstanding, the Corporation shall not declare, set
apart or pay any dividend or make any other distribution of
assets (other than dividends paid or other distributions made
in stock of the Corporation ranking junior to the Series A
Preferred Stock as to the payment of dividends and as to the
distribution of assets, upon liquidation, dissolution or
winding up of the Corporation) on, or redeem, purchase, set
apart or otherwise acquire (except upon conversion or exchange
for stock of the Corporation ranking junior to the Series A
Preferred Stock as to the payment of dividends and as to the
distribution of assets upon liquidation, dissolution or winding
up of the Corporation), shares of common stock or of any other
class of stock of the Corporation ranking junior to the Series
A Preferred Stock
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as to the payment of dividends or as to the distribution
of assets upon liquidation, dissolution or winding up of
the Corporation, unless (i) all accrued and unpaid dividends
on the Series A Preferred Stock for the twelve monthly
dividend periods ending on the immediately preceding dividend
payment date shall have been paid or are paid
contemporaneously and the full monthly dividend on the Series
A Preferred Stock for the then current month has been or is
contemporaneously declared and paid or declared and set apart
for payment and (ii) the Corporation has not defaulted in the
payment of the redemption price of any shares of Series A
Preferred Stock called for redemption.
7. When dividends are not paid in full on the Series A
Preferred Stock and any other shares of stock of the
Corporation ranking on a parity as to the payment of dividends
with the Series A Preferred Stock, all dividends declared upon
the Series A Preferred Stock and any such other shares of
stock of the Corporation will be declared pro rata so that the
amount of dividends declared per share on the Series A
Preferred Stock and any such other shares of stock will in all
cases bear to each other the same ratio that the liquidation
preference per share of the Series A Preferred Stock and any
such other shares of stock bear to each other.
8. Holders of record of the Series A Preferred Stock will
not be entitled to any dividend, whether payable in cash,
property or stock, in excess of the dividends provided for
herein on the shares of Series A Preferred Stock. The
Corporation may, however, at its discretion, declare a special
dividend in an amount sufficient to allow the Corporation to
pay dividends on any stock of the Corporation ranking junior
to the Series A Preferred Stock in compliance with the
provisions of Section B.6 above.
C. CONVERSION; EXCHANGE
The Series A Preferred Stock will not be convertible into or
exchangeable for any other securities of the Corporation.
D. REDEMPTION AT THE OPTION OF THE CORPORATION
1. The shares of the Series A Preferred Stock are not
redeemable prior to June 30, 1998. On and after that date,
the shares of the Series A Preferred Stock will be
redeemable in whole or in part from time to time at the option
of the Corporation, upon not less than 30 nor more than 60
days' notice by mail, at the redemption prices set forth below,
during the twelve-month periods beginning on June 30 of the
years set forth below, plus accrued and unpaid dividends for
the then current monthly dividend period to the date fixed for
redemption.
Year Redemption Price
____ ________________
1998 ................................. $26.25
1999 ................................. $26.00
2000 ................................. $25.75
2001 ................................. $25.50
2002 and thereafter .................. $25.00
14
-4-
2. In the event that less than all of the outstanding shares of
the Series A Preferred Stock are to be redeemed in any
redemption at the option of the Corporation, the total number
of shares to be redeemed in such redemption shall be
determined by the Board of Directors and the shares to be
redeemed shall be allocated pro rata or by lot as may be
determined by the Board of Directors or by such other method
as the Board of Directors may approve and deem equitable,
including any method to conform to any rule or regulation of
any national or regional stock exchange or automated
quotation system upon which the shares of the Series A
Preferred Stock may at the time be listed or eligible for
quotation.
3. Notice of any proposed redemption shall be given by the
Corporation by mailing a copy of such notice to the holders of
record of the shares of Series A Preferred Stock to be
redeemed, at their address of record, not more than sixty nor
less than thirty days prior to the redemption data. The
notice of redemption to each holder of shares of Series A
Preferred Stock shall specify the number of shares of Series A
Preferred Stock to be redeemed, the redemption date and the
redemption price payable to such holder upon redemption, and
shall state that from and after said date dividends thereon
will cease to accrue. If less than all the shares owned by a
holder are then to be redeemed at the option of the
Corporation, the notice shall also specify the number of
shares of Series A Preferred Stock which are to be redeemed
and the numbers of the certificates representing such shares.
Any notice which is mailed as herein provided shall be
conclusively presume to have been duly given, whether or not
the stockholder receives such notice; and failure duly to
give such notice by mail, or any defect in such notice, to the
holders of any shares designated for redemption shall not
affect the validity of the proceedings for the redemption of
any other shares of Series A Preferred Stock.
4. Notice having been mailed as aforesaid, from and after the
redemption date (unless default be made in the payment of the
redemption price for any shares to be redeemed), all dividends
on the shares of Series A Preferred Stock called for redemption
shall cease to accrue and all rights of the holders of such
shares as stockholders of the Corporation by reason of the
ownership of such shares (except the right to receive the
redemption price, on presentation and surrender of the
respective certificates representing the redeemed shares),
shall cease on the redemption date, and such shares shall not
after the redemption date be deemed to be outstanding. In
case less than all the shares represented by any such
certificate are redeemed a new certificate shall be issued
without cost to the holder thereof representing the unredeemed
shares.
5. At its option, the Corporation may, on or prior to the
redemption date, irrevocably deposit the aggregate amount
payable upon redemption of the shares of the Series A
Preferred Stock to be redeemed with a bank or trust company
designated by the Corporation having its principal office in
New York, New York, San Juan, Puerto Rico, or any other city in
which the Corporation shall at that time maintain a transfer
agent with respect to its capital stock, and having a combined
capital and surplus (as shown by its latest published
statement) of at least $50,000,000 (hereinafter
15
-5-
referred to as the "Depositary"), to be held in trust
by the Depositary for payment to the holders of the shares of
the Series A Preferred Stock to be redeemed. If such deposit
is made and the funds so deposited are made immediately
available to the holders of the shares of the Series A
Preferred Stock to be redeemed, the Corporation shall
thereupon be released and discharged (subject to the
provisions of Section D.6) from any obligation to make
payment of the amount payable upon redemption of the shares of
the Series A Preferred Stock to be redeemed, and the holders
of such shares shall look only to the Depositary for such
payment.
6. Any funds unclaimed at the end of two years from and
after the redemption date in respect of which such funds were
deposited shall be returned to the Corporation forthwith and
thereafter the holders of shares of the Series A Preferred
Stock called for redemption with respect to which such funds
were deposited shall look only to the Corporation for the
payment of the redemption price thereof. Any interest accrued
on any funds deposited with the Depositary shall belong to the
Corporation and shall be paid to it from time to time on
demand.
7. Any shares of the Series A Preferred Stock which shall at any
time have been redeemed shall, after such redemption, have the
status of authorized but unissued shares of Preferred Stock,
without designation as to series, until such shares are
once more designated as part of a particular series by the
Board of Directors.
E. LIQUIDATION PREFERENCE
1. Upon any voluntary or involuntary liquidation, dissolution,
or winding up of the Corporation, the then record holders of
shares of Series A Preferred Stock will be entitled to
receive out of the assets of the Corporation available for
distribution to shareholders, before any distribution is made
to holders of common stock or any other equity securities
of the Corporation ranking junior upon liquidation to the
Series A Preferred Stock, distributions upon liquidation in the
amount of $25 per share plus an amount equal to any accrued
and unpaid dividends for the current monthly dividend period
to the date of payment. Such amount shall be paid to the
holders of the Series A Preferred Stock prior to any payment
or distribution to the holders of the common stock of the
Corporation ranking junior to the Series A Preferred Stock in
respect of dividends or as to the distribution of assets upon
liquidation.
2. If upon any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the amounts
payable with respect to the Series A Preferred Stock and any
other shares of stock of the Corporation ranking as to any
such distribution on a parity with the Series A Preferred Stock
are not paid in full, the holders of the Series A Preferred
Stock and of such other shares wills share ratably in any such
distribution of assets of the Corporation in proportion to the
full liquidation preferences to which is entitled. After
payment of the full amount of the liquidation preference to
which they are entitled, the holders of shares of Series A
16
-6-
Preferred Stock will not be entitled to any further participation in any
distribution of assets of the Corporation.
3. Neither the consolidation or merger of the Corporation with any other
corporation, nor any sale, lease or conveyance of all or any part of the
property or business of the Corporation, shall be deemed to be a
liquidation, dissolution, or winding up of the Corporation.
4. If the assets distributable upon any dissolution, liquidation, or winding
up of the Corporation shall be insufficient to permit the payment to the
holders of the Series A Preferred Stock of the full preferential amounts
aforesaid, then such assets or the proceeds thereof shall be distributed
among the holders of the Series A Preferred Stock ratably in proportion
to the respective amounts the holders of such shares of stock would be
entitled to receive if they were paid the full preferential amounts
aforesaid.
F. Voting Rights
1. Except as described in this Section F, or except as required by
applicable law, holders of the Series A Preferred Stock will not be
entitled to receive notice of or attend or vote at any meeting of
stockholders of the Corporation.
2. If the Corporation does not pay dividends in full on the Series A
Preferred Stock for eighteen consecutive monthly dividend periods, the
holders of outstanding shares of the Series A Preferred Stock, together
with the holders of any other shares of stock of the Corporation having
the right to vote for the election of directors solely in the event of
any failure to pay dividends, acting as a single class without regard to
series, will be entitled, by written notice to the Corporation given by
the holders of a majority in liquidation preference of such shares or by
ordinary resolution passed by the holders of a majority in liquidation
preference of such shares or by ordinary resolution passed by the
holders of a majority in liquidation preference of such shares present
in person or by proxy at a separate general meeting of such holders
convened for the purpose, to appoint two additional members of the
Board of Directors of the Corporation, to remove any such member from
office and to appoint another person in place of such member. Not later
than 30 days after such entitlement arises, if written notice by a
majority of the holders of such shares has not been given as provided
for in the preceding sentence, the Board of Directors or an authorized
committee thereof will convene a separate general meeting for the above
purpose. If the Board of Diretors or such authorized committee fails to
convene such meeting with such 30-day period, the holders of 10% of the
outstanding shares of the Series A Preferred Stock and any such other
stock will be entitled to convene such meting. The provisions of the
Certificate of Incorporation and By-laws of the Corporation relating to
the convening and conduct of general meetings of stockholders will apply
with respect to any such separate general meeting. Any member of the
Board of Directors so appointed shall vacate office if, following the
event which gave rise to such appointment, the Corporation shall have
resumed the payment of dividends in full on the Series A
17
-7-
Preferred Stock and each such other series of stock for twelve consecutive
monthly dividend periods.
3. Any variation or abrogation of the rights, preferences and privileges of
the Series A Preferred Stock by way of amendment of the Corporation's
Certificate of Incorporation or otherwise (including, without limitation,
the authorization or issuance of any shares of the Corporation ranking,
as to dividend rights or rights on liquidation, winding up and
dissolution, senior to the Series A Preferred Stock) shall not be
effective (unless otherwise required by applicable law) except with the
consent in writing of the holders of at least two-thirds of the
outstanding shares of the Series A Preferred Stock or with the sanction
of a special resolution passed at a separate general meeting by the
holders of at least two-thirds in liquidation preference of the
outstanding shares of the Series A Preferred Stock. Notwithstanding the
foregoing, the Corporation may, without the consent or sanction of the
holders of the Series A Preferred Stock, authorize and issue shares of
the Corporation ranking, as to dividend rights and rights on liquidation,
winding up and dissolution, on a parity with or junior to the Series A
Preferred Stock.
4. No vote of the holders of the Series A Preferred Stock will be required
for the Corporation to redeem or purchase and cancel the Series A
Preferred Stock in accordance with the Certificated of Incorporation of
the Corporation or the Certificate of Resolution for the Series A
Preferred Stock.
5. The Corporation will cause a notice of any meeting at which holders of
the Series A Preferred Stock are entitled to vote to be mailed to each
record holder of such Series A Preferred Stock. Each such notice will
include a statement setting forth (i) the date of such meeting, (ii) a
description of any resolution to be proposed for adoption at such meeting
on which such holders are entitled to vote and (iii) instructions for
deliveries of proxies.
6. Except as set forth in this Section F, holders of Series A Preferred
Stock shall have no special voting rights and their consent shall not be
required (except to the extent they are entitled to vote as set forth
herein) for taking any corporate action.
G. Rank
The Series A Preferred Stock will, with respect to dividend rights and
rights on liquidation, winding up and dissolution, rank (i) senior to all
classes of common stock of the Corporation, to the Corporation's Series A
Participating Preferred Stock and to all other equity securities issued by the
Corporation the terms of which specifically provide that such equity securities
will rank junior to the Series A Preferred Stock (or to all series of the
Preferred Stock in general); (ii) on a parity with all equity securities issued
by the Corporation the terms of which specifically provide that such equity
securities will rank on a parity with the Series A Preferred Stock (or to all
series of the Preferred Stock in general); and (iii) junior to all equity
securities issued by the Corporation the terms of which specifically provide
that such equity securities issued by the Corporation the terms of which
specifically provide that such equity securities will rank senior to the
Series A Preferred Stock (or to all series of the Preferred Stock in general).
For this purpose, the
18
-8-
term "equity securities" does not include debt securities convertible into or
exchangeable for equity securities.
H. Form of Certificate for Series A Preferred Stock; Transfer and Registration
1. The Series A Preferred Stock shall be issued in registered form only.
The Corporation may treat the record holder of a share of Series A
Preferred Stock, including the Depository Trust Company and its nominee
and any other holder that holds such share on behalf of any other
person, as such record holder appears on the books of the registrar
for the Series A Preferred Stock, as the sole owner of such share for
all purposes.
2. The transfer of a share of Series A Preferred Stock may be registered
upon the surrender of the certificate evidencing the share of Series A
Preferred Stock to be transferred, together with the form of transfer
endorsed on it duly completed and executed, at the office of the
transfer agent and registrar.
3. Registration of transfers of shares of Series A Preferred Stock will be
effected without charge by or on behalf of the Corporation, but upon
payment (or the giving of such indemnity as the transfer agent and
registrar may require) in respect of any tax or other governmental
charges which may be imposed in relation to it.
4. The Corporation will not be required to register the transfer of a
share of Series A Preferred Stock after such share has been called for
redemption.
I. Replacement of Lost Certificates
If any certificate for a share of Series A Preferred Stock is mutilated or
alleged to have been lost, stolen or destroyed, a new certificate representing
the same share may be issued to the holder upon request subject to delivery of
the old certificate or, if alleged to have been lost, stolen or destroyed,
compliance with such conditions as to evidence, indemnity and the payment of
out-of-pocket expenses of the Corporation in connection with the request as the
Board of Directors of the Corporation may determine.
J. No Preemptive Rights
Holders of the Series A Preferred Stock will have no preemptive rights
purchase any securities of the Corporation.
K. No Repurchase at the Option of the Holders; Miscellaneous
Holders of the Series A Preferred Stock will have no right to require the
Corporation to repurchase any shares of Series A Preferred Stock, and the
shares of Series A Preferred Stock are not subject to any sinking fund or
similar obligation. The Corporation may, at its option, purchase shares of the
Series A Preferred Stock from holders thereof from time to time, by tender, in
privately negotiated transactions or otherwise.
19
-9-
The undersigned hereby certify that the capital of the Corporation will
not be reduced under or by reason of the adoption of the above resolutions
providing for the creation of the above described series of Preferred Stock.
IN WITNESS WHEREOF, the Corporation has caused its corporate seal to be
hereunto affixed and this Certificate to be signed by its Executive Vice
President, David H. Chafey, Jr., and its Secretary, Samuel T. Cespedes, this
16th day of June, 1994.
BANPONCE CORPORATION
By: /s/ David H. Chafey, Jr.
------------------------
David H. Chafey, Jr.
Executive Vice President
[CORPORATE SEAL]
By: /s/ Samuel T. Cespedes
------------------------
Samuel T. Cespedes
Secretary
Affidavit No. 576
-----
Acknowledged and subscribed before me in San Juan, Puerto Rico, this
16th day of June, 1994, by the following persons: David H. Chafey, Jr., of
legal age, married, executive, and resident of San Juan, Puerto Rico, in his
capacity as Executive Vice President of BanPonce Corporation; and Samuel T.
Cespedes, of legal age, married, attorney, and resident of San Juan, Puerto
Rico, in his capacity as Secretary of BanPonce Corporation, both are personally
know to me.
/s/ Alberto J. Morales
------------------------
Notary Public
20
Certificate of Resolution
The undersigned, as Assistant Secretary of the Board of Directors of
BanPonce Corporation, does hereby certify that at a meeting of the Board of
Directors held on the 26th day of April, 1996, at which a quorum was present,
and acting throughout, a resolution was duly and regularly adopted, which is in
full force and effect and unrescinded, and which reads as follows:
"RESOLVED, that pursuant to the authority vested in the Board of
Directors of this Corporation in accordance with the provisions of its
Certificate of Incorporation, a series of Preferred Stock of the Corporation
was created pursuant to a resolution adopted by the Board of Directors on August
11, 1988, as amended on November 8, 1990 and November 12, 1992 and the
number of shares constituting said series shall be and is hereby increased from
350,000 shares to 700,000 shares.
RESOLVED FURTHER, that the directors have determined that the
preferences and relative, participating, optional or other special rights of
the shares of such series, and the qualifications, limitations or restrictions
thereof, as stated and expressed herein, are under the circumstances prevailing
on the date hereof fair and equitable to all the existing stockholders of the
Corporation.
RESOLVED FURTHER, that the designation and amount of such series and
the voting powers, preferences and relative, participating, optional or other
special rights of the shares of such series, and the qualifications,
limitations or restrictions thereof are as follows:
21
Section 1. Designation and Amount. The shares of such series
shall be designated as "Series A Participating Cumulative Preferred
Stock (no par value)" and the number of shares constituting such
series is hereby increased from 350,000 to 700,000.
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of
any shares of any series of Preferred Stock ranking prior and superior
to the Series A Participating Cumulative Preferred Stock with respect
to dividends, the holders of shares of Series A Participating
Cumulative Preferred Stock, in preference to the shares of Common
Stock, par value $6 per share, of the Corporation (the "Common Stock")
and any other stock of the Corporation junior to the Series A
Participating Cumulative Preferred Stock with respect to dividends,
shall be entitled to receive, when, as and if declared by the Board
of Directors out of funds legally available for the purpose, quarterly
dividends payable in cash on March 15, June 15, September 15 and
December 31 of each year (each such date being referred to herein as a
"Quarterly Dividend Payment Date"), commencing on the first Quarterly
Dividend Payment Date after the issuance of a share or fraction of a
share of Series A Participating Cumulative Preferred Stock, in an
amount per share (rounded tot he nearest cent) equal to the greater of
(a) $1.00 or (b) subject to the provision for adjustment hereinafter
set forth, 100 times the aggregate per share amount (payable in kind)
of all non-cash dividends or other distributions other than a dividend
payable in shares of Common Stock or a subdivision of the outstanding
shares of Common Stock (by reclassification of otherwise), declared on
the Common Stock, since the immediately preceding Quarterly Dividend
Payment Date, or, with respect to the first Quarterly Dividend Payment
Date, since the first issuance of any share or fraction of a share of
Series A Participating Cumulative Preferred Stock. In the event the
Corporation shall at any time after August 31, 1988 (the "Rights
Declaration Date") (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock,
or (iii) combine the outstanding Common Stock into a smaller number of
shares, then in each such case the amount to which holders of shares
of Series A Participating Cumulative Preferred Stock were entitled
immediately prior to such event under clause (b) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction
the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which
is the number of shares of Common Stock that were outstanding
immediately prior to such event.
22
(B) The Corporation shall declare a dividend or
distribution on the Series A Participating Cumulative Preferred Stock
as provided in paragraph (A) above immediately after it declares a
dividend or distribution on the Common Stock (other than a dividend
payable in shares of Common Stock); provided that, in the event no
dividend or distribution shall have been declared on the Common Stock
during the period between any Quarterly Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per
share on the Series A Participating Cumulative Preferred Stock shall
nevertheless be payable on such subsequent Quarterly Dividend Payment
Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Participating Cumulative Preferred
Stock from the quarterly Dividend Payment Date next preceding the date
of issue of such shares of Series A Participating Cumulative Preferred
Stock, unless the date of issue of such shares is prior to the record
date for the first Quarterly Dividend Payment Date, in which case
dividends on such shares shall begin to accrue from the date of issues
of such shares, unless the date of issue is a Quarterly Dividend
Payment Date or is a date after the record date for the determination
of holders of shares of Series A Participating Cumulative Preferred
Stock entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from such Quarterly
Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series A Participating
Cumulative Preferred Stock in an amount less than the total amount of
such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at
the time outstanding. The Board of Directors may fix a record date
for the determination of holders of shares of Series A Participating
Cumulative Preferred Stock entitled to receive payment of a dividend
or distribution declared thereon, which record date shall be no more
than 50 days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. In addition to any other
voting rights required by law, the holders of shares of Series A
Participating Cumulative Preferred Stock shall have only the
following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Participating Cumulative Preferred Stock
shall entitle the holder thereof to one vote on all matters submitted
to a vote of the stockholders of the Corporation.
23
(B) Except as otherwise provided herein or by law, the holders
of shares of Series A Participating Cumulative Preferred Stock and
the holders of shares of Common Stock shall vote together as one class
on all matters submitted to a vote of stockholders of the Corporation.
(C) (i) If at any time dividends on any Series A Participating
Cumulative Preferred Stock shall be in arrears in an amount equal to
six quarterly dividends thereon, the occurrence of such contingency
shall mark the beginning of a period (herein called a "default
period") which shall extend until such time when all accrued and
unpaid dividends for all previous quarterly dividend periods and for
the current quarterly dividend period on all shares of Series A
Participating Cumulative Preferred Stock then outstanding shall have
been declared and paid or set apart for payment. During each default
period, all holders of Preferred Stock (including holders of Series A
Participating Cumulative Preferred Stock) with dividends in arrears in
an amount equal to six quarterly dividends thereon, voting as a class,
irrespective of series, shall have the right to elect two Directors.
(ii) During any default period, such voting right of the
holders of Series A Participating Cumulative Preferred Stock may
be exercised initially at a special meeting called pursuant to
subparagraph (iii) of this Section 3(C) or at any annual meeting of
stockholders, and thereafter at annual meetings of stockholders,
provided that neither such voting right nor the right of the holders
of any other series of Preferred Stock, if any, to increase, in
certain cases, the authorized number of Directors shall be exercised
unless the holders of ten percent in number of shares of Preferred
Stock outstanding shall be present in person or by proxy. The absence
of a quorum of the holders of Common Stock shall not affect the
exercise by the holders of Preferred Stock of such voting right. At
any meeting at which the holders of Preferred Stock shall exercise
such voting right initially during an existing default period, they
shall have the right, voting as a class, to elect Directors to fill
such vacancies, if any, in the Board of Directors as may then exist up
to two Directors or, if such right is exercised at an annual meeting,
to elect two Directors. If the number which may be so elected at any
special meeting does not amount to the required number, the holders of
the Preferred Stock shall have the right to make such increase in the
number of Directors as shall be necessary to permit the election by
them of the required number. After the holders of the Preferred Stock
shall have exercised their right to elect Directors in any
default period and during the continuance of such
24
period, the number of Directors shall not be increased or decreased
except by vote of the holders of Preferred Stock as herein provided or
pursuant to the rights of any equity securities ranking senior to or
pari passu with the Series A Participating Cumulative Preferred
Stock.
(iii) Unless the holders of Preferred Stock shall, during an
existing default period, have previously exercised their right
to elect Directors, the Board of Directors may order, or any
stockholder or stockholders owning in aggregate not less than ten
percent of the total number of shares of Preferred Stock outstanding,
irrespective of series, may request, the calling of a special meeting
of the holders of Preferred Stock which meeting shall thereupon be
called by the President, a Vice-President or the Secretary of the
Corporation. Notice of such meeting and of any annual meeting at
which holders of Preferred Stock are entitled to vote pursuant to
this paragraph (C) (iii) shall be given to each holder of record of
Preferred Stock by mailing a copy of such notice to him at his last
address as the same appears on the books of the Corporation. Such
meeting shall be called for a time not earlier than 20 days and not
later than 50 days after such order or request or in default of the
calling of such meeting within 50 days after such order or request,
such meeting may be called on similar notice by any stockholder or
stockholders owning in the aggregate not less than ten percent of the
total number of shares of Cumulative Preference Stock outstanding.
Notwithstanding the provisions of this paragraph (C)(iii), no such
special meeting shall be called during the period within 50 days
immediately preceding the date fixed for the next annual meeting of
the stockholders.
(iv) In any default period, the holders of Common Stock, and
other classes of stock of the Corporation if applicable, shall
continue to be entitled to elect the whole number of Directors until
the holders of Preferred Stock shall have exercised their right to
elect two (2) Directors voting as a class, after the exercise of which
right (x) the Directors so elected by the holders of Preferred Stock
shall continue in office until their successors shall have been
elected by such holders or until the expiration of the default period,
and (y) any vacancy in the Board of Directors may (except as provided
in paragraph (C) (ii) of this Section 3) be filled by vote of a
majority of the remaining Directors theretofore elected the Director
whose office shall have become vacant. References in this paragraph
(C) to Directors elected by the holders of a particular class of stock
shall include Directors elected by such Directors to fill vacancies as
provided in clause (y) of the foregoing sentence.
25
(v) Immediately upon the expiration of a default period,
(x) the right of the holders of Preferred Stock as a class to elect
Directors shall cease, (y) the term of any Directors elected by the
holders of Preferred Stock as a class shall terminate, and (z) the
number of Directors shall be such number as may be provided for in the
certificate of incorporation of by-laws irrespective of any increase
made pursuant to the provisions of paragraph (C)(ii) of this Section 3
(such number being subject, however, to change thereafter in any
manner provided by law or in the certificate of incorporation of
by-laws). Any vacancies in the Board of Directors effected by the
provisions of clauses (y) and (x) in the preceding sentence may be
filled by a majority of the remaining Directors.
(D) Unless the vote or consent of the holders of a greater
number of shares of Preferred Stock (including shares of the Series A
Participating Cumulative Preferred Stock) shall then be required by
law, the consent of the holders of at least a majority of all shares of
Preferred Stock (including shares of the Series A Participating
Cumulative Preferred Stock) at the time outstanding, given in person
or by proxy, either in writing or by a vote at a meeting called for
such purpose in accordance with the provisions of subparagraph (iii)
of Section 3(C) (as if a default period had occurred and was
continuing) at which the holders of all shares of Preferred Stock shall
vote together as a class without regard to series, shall be necessary
for authorizing, effecting or validating (i) the merger or
consolidation of the Corporation into or with any other corporation,
if such merger or consolidation would adversely affect the powers,
preferences or rights of any shares of any series of Preferred Stock or
(ii) the amendment, alteration or repeal of any of the provisions of
the Certificate of Incorporation or of any amendment thereof or
supplement thereto (including any Certificate of Designation,
Preferences and Rights or any similar document relating to any series
of Preferred Stock) as to affect adversely the powers, preferences,
or rights, of any series of Preferred Stock. The increase of the
authorized amount of the Preferred Stock, or the creation,
authorization or issuance of any shares of any other class of stock of
the Corporation ranking prior to or on a parity with the shares of any
series of Preferred Stock as to dividends or upon liquidation, or the
reclassification of any authorized or outstanding stock of the
Corporation into any such prior or parity shares, or the creation,
authorization or issuance of any obligation or security convertible
into or evidencing the right to purchase any such prior or parity
shares shall not be deemed to affect adversely the powers, preferences
or rights of any series of Preferred Stock.
26
(E) Except as set forth herein, holders of Series A Participating
Cumulative Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent they are entitled to vote
with holders of Common Stock as set forth herein) for taking any corporate
action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Participating Cumulative Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and unpaid dividends
and distributions, whether or not declared, on shares of Series A Participating
Cumulative Preferred Stock outstanding shall have been paid in full, the
Corporation shall not:
(i) declare or pay dividends on, make any other distributions on, or
redeem or purchase or otherwise acquire for consideration any shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Participating Cumulative Preferred Stock;
(ii) declare or pay dividends on or make any other distributions on
any shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Participating
Cumulative Preferred Stock, except dividends paid ratably on the Series A
Participating Cumulative Preferred Stock and all such parity stock on which
dividends are payable or in arrears in proportion to the total amounts to which
the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration shares
of any stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Participating Cumulative Preferred
Stock, provided that the Corporation may at any time redeem, purchase otherwise
acquire shares of any such parity stock in exchange for shares of any stock of
the Corporation ranking junior (either as to dividends or upon dissolution,
liquidation or winding up) with the Series A Participating Cumulative Preferred
Stock, or
(iv) redeem or purchase or otherwise acquire for consideration any
shares of Series A Participating Cumulative Preferred Stock, or any shares of
stock ranking on a parity with the Series A Participating Cumulative Preferred
Stock, except in accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all holders of such
shares upon such terms as the Board of Directors,
27
after consideration of the respective annual dividend rates and other relative
rights and preferences of the respective series and classes, shall determine in
good faith will result in fair and equitable treatment among the respective
series classes.
(B) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under paragraph (A) of this Section
4, purchase or otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A Participating
Cumulative Preferred Stock purchased or otherwise acquired by the Corporation
in any manner whatsoever shall be retired and cancelled promptly after the
acquisition thereof. All such shares shall upon their cancellation become
authorized but unissued shares of Preferred Stock and may be reissued as part of
a new series of Preferred Stock to be created by resolution or resolutions of
the Board of Directors, subject to the conditions and restrictions on issuance
set forth in the Certificate of Incorporation.
Section 6. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made (1) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A
Participating Cumulative Preferred Stock unless, prior thereto, the holders of
shares of Series A Participating Cumulative Preferred Stock shall have received
$100.00 per share, plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such payment,
provided that the holders of shares Series A Participating Cumulative Preferred
Stock shall be entitled to receive an aggregate amount per share, subject to the
provision for adjustment hereinafter set forth, equal to 100 times the
aggregate amount to be distributed per share to holders of stock ranking on a
Stock, or (2) to the holders of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series A
Participating Cumulative Preferred Stock, except distributions made ratably on
the Series A Participating Cumulative Preferred Stock and all other such parity
stock in proportion to the total amounts to which the holders of all such shares
are entitled upon such liquidation, dissolution or winding up. In the event
the Corporation shall at any time after the Rights Declaration Date declare or
pay any dividend on Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of
28
the outstanding shares of Common Stock (by reclassification or otherwise than
by payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the aggregate amount
to which holders of shares of Series A Participating Cumulative Preferred Stock
were entitled immediately prior to such event under the proviso in clause (1)
of the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
Section 7. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the shares of
Series A Participating Cumulative Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share (subject to the provision
for adjustment hereinafter set forth) equal to 100 times the aggregate amount
of stock, securities, cash and/or any other property (payable in kind), as the
case may be, into which or for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such
case the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series A Participating Cumulative Preferred
Stock shall be adjusted by multiplying such amount by a fraction the numerator
of which is the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
Section 8. No Redemption. The shares of Series A Participating
Cumulative Preferred Stock shall not be redeemable.
Section 9. Rank. The Series A Participating Cumulative Preferred
Stock shall rank junior with respect to payment of dividends and on liquidation
to all other series of the Corporation's preferred stock outstanding on the
date hereof and to all such other series that specifically provide that they
shall rank senior to the Series A Participating Cumulative Preferred Stock.
29
Section 10. Amendment. The Certificate of Incorporation of the Corporation
shall not be amended in any manner which would materially alter or change the
powers, preferences or special rights of the Series A Participating Cumulative
Preferred Stock so as to affect them adversely without the affirmative vote of
the holders of a majority or more of the outstanding shares, if any, of Series
A Participating Cumulative Preferred Stock, voting separately as a Class.
Section 11. Fractional Shares. Series A Participating Cumulative Preferred
Stock may be issued in fractions of a share which shall entitle the holder, in
proportion to such holder's fractional shares, to exercise voting rights,
receive dividends, participate in distributions and to have the benefit of all
other rights of holders of Series A Participating Cumulative Preferred Stock.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of this
Corporation in San Juan, Puerto Rico, this 6th day of November, 1996.
BANPONCE CORPORATION
By: /s/ Brunilda Santos de Alvarez
--------------------------------------
Brunilda Santos de Alvarez
Assistant Secretary
Affidavit Number: 645
-------
Subscribed and acknowledged to before me by Mrs. Brunilda Santos de
Alvarez, of legal age, married, lawyer and resident of Guaynabo, Puerto Rico,
as Assistant Secretary of the Board of Directors of BanPonce Corporation, to me
personally known at San Juan, Puerto, this 6th day of November, 1996.
[SEAL]
/s/ Estela Martinez de Miranda
------------------------------
Notary Public
30
CERTIFICATE
The undersigned, Richard L. Carrion, President of the Board of Directors,
President and Chief Executive Officer of BanPonce Corporation, and Samuel T.
Cespedes, Secretary of the Board of Directors of BanPonce Corporation, hereby
certify:
That in the annual meeting of stockholders of BanPonce Corporation, held
in the city of San Juan, Puerto Rico on the 25th day of April, 1997, which was
duly called together, the following resolutions were adopted amending Article
First and Article Fifth of the Amended Articles of Incorporation of BanPonce
Corporation by the affirmative vote of more than two thirds and the affirmative
vote of the majority, respectively, of the common stock of BanPonce Corporation
issued and outstanding:
"RESOLVED, that Article First of the Restated Articles of Incorporation of
BanPonce Corporation be, and it hereby is, amended in its entirety to read as
follows:
"FIRST: The name of the Corporation is Popular, Inc."
RESOLVED, FURTHER, that the proper officers of the Corporation be, and
hereby are, authorized and directed to take all actions, execute all
instruments, and make all payments that are necessary or desirable, at their
discretion, to make effective the foregoing amendment to the Restated Articles
of Incorporation of the Corporation, including without limitation, filing a
certificate of such amendment with the Secretary of State of the Commonwealth
of Puerto Rico.
RESOLVED, that Article Fifth of the Restated Articles of Incorporation of
the Corporation be, and it hereby is, amended in its entirety to read as
follows:
"FIFTH: The minimum amount of capital with which the Corporation shall
commence business shall be $1,000.
The total number of shares of all classes of capital stock that the
Corporation shall have authority to issue, upon resolutions approved by the
Board of Directors from time to time, is one hundred ninety million shares
(190,000,000), of which one hundred eighty million shares (180,000,000) shall
be shares of Common Stock of the par value of $6, per shares (hereinafter
called "Common Stock"), and ten million (10,000,000) shall be shares of
Preferred Stock without par value (hereinafter called "Preferred Stock").
The amount of the authorized capital stock of any class or classes of
stock may be increased or decreased by the affirmative vote of the holders of a
majority of the stock of the Corporation entitled to vote.
The designations and the powers, preferences and rights, and the
qualifications, limitations or restrictions thereof, of the Preferred Stock
shall be as follows:
31
(1) The Board of Directors is expressly authorized at any time, and
from time to time, to provide for the issuance of shares of Preferred Stock in
one or more series, and with such voting powers, full or limited but not to
exceed one vote per share, or without voting powers, and with such
designations, preferences, and relative participating, optional or other
special rights, and qualifications, limitations or restrictions thereof, as
shall be expressed in the resolution or resolutions providing for the issue
thereof adopted by the Board of Directors and as are not otherwise expressed in
this Certificate of Incorporation or any amendment thereto, including (but
without limiting the generality of the foregoing) the following:
(a) the designation of such series;
(b) the purchase price that the Corporation shall receive
for each share of such series;
(c) the dividend rate of such series, the conditions and
dates upon which such dividends shall be payable, the preference or relation
that such dividends shall bear to the dividends payable on any other class or
classes or on any other series of any class or classes of capital stock of the
Corporation, and whether such dividends shall be cumulative or non-cumulative;
(d) whether the shares of such series shall be subject to
redemption by the Corporation, and, if made subject to such redemption, the
times, prices and other terms and conditions of such redemption;
(e) the terms and amounts of any sinking fund provided for
the purchase or redemption of the shares of such series;
(f) whether the shares of such series shall be convertible
into or exchangeable for shares of any other class of classes or of any other
series of any class or classes of capital stock of the Corporation, and, if
provision be made for conversion or exchange, the times, prices, rates,
adjustments and other terms and conditions of such conversion or exchange;
(g) the extent, if any, to which the holders of the shares
of such series shall be entitled to vote as a class or otherwise with respect
to the election of directors or otherwise;
(h) the restrictions and conditions, if any, upon the
reissue of any additional Preferred Stock ranking on a parity with or prior to
such shares as to dividends or upon dissolution;
(i) the rights of the holders of the shares such series
upon the dissolution of, or upon the distribution of assets of, the
Corporation, which rights may be different in the case of a voluntary
dissolution than in the case of an involuntary dissolution.
32
(2) Except as otherwise required by law and except for such voting
powers with respect to the election of directors or other matters as may be
stated in the resolutions of the Board of Directors creating any series of
Preferred Stock, the holders of any such series shall have no voting power
whatsoever.
RESOLVED FURTHER, that the proper officers of the Corporation be, and
hereby are, authorized and directed to take all actions, execute all
instruments, and make all payments that are necessary or desirable, at their
discretion, to make effective the foregoing amendment to the Restated Articles
of Incorporation, including without limitation on filing a certificate of such
amendment with the Secretary of State of the Commonwealth of Puerto Rico.
IN WITNESS WHEREOF, we have hereunto set our hands and affixed the seal of
the Corporation in San Juan, Puerto Rico, this 25th day of April, 1997.
/s/ Richard L. Carrion /s/ Samuel T. Cespedes
- ------------------------------------ --------------------------------------
RICHARD L. CARRION SAMUEL T. CESPEDES
PRESIDENT - BOARD OF DIRECTORS SECRETARY
PRESIDENT AND CHIEF EXECUTIVE
OFFICER
Affidavit No. 730
Sworn and subscribed to before me by Richard L. Carrion, of legal age,
married and resident of San Juan, Puerto Rico, in his capacity as President of
the Board of Directors, President and Chief Executive Officer of BanPonce
Corporation, and Samuel T. Cespedes, of legal age, married and resident of San
Juan, Puerto Rico, in his capacity as Secretary of the Board of Directors of
BanPonce Corporation, who are both personally known to me in San Juan, Puerto
Rico, this 25th day of April, 1997.
/s/ Estella Martinez De Miranda
--------------------------------------
NOTARY PUBLIC