UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DCD.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities
Exchange Act of 1934
þ(Amendment No. 1)
Filed by the Registrant
Check the appropriate box:
x | Preliminary Proxy Statement | |||
¨ | ||||
¨ | Definitive Proxy Statement | |||
¨ | Definitive Additional Materials | |||
¨ | Soliciting Material Under Rule 14a-12 | |||
FIRST BANCORP. | ||||
(Name of Registrant as Specified In Its Charter) | ||||
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x | No fee required. | |||
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and |
1) | Title of each class of securities to which transaction applies: |
2) | Aggregate number of securities to which transaction applies: |
3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 |
4) | Proposed maximum aggregate value of transaction: |
5) | Total fee paid: | |||
Fee paid previously with preliminary materials. | ||||
¨ | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. | |||
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SAN JUAN, PUERTO RICO 00908
(787) 729-8200
NOTICE OF SPECIAL MEETING OF STOCKHOLDERSPROXY STATEMENT
The Board of Directors of First BanCorp. (the “Corporation”) is furnishing this Proxy Statement to solicit from holders of shares of our 7.125% Noncumulative Perpetual Monthly Income Preferred Stock, Series A (“Series A Preferred Stock”), 8.35% Noncumulative Perpetual Monthly Income Preferred Stock, Series B (“Series B Preferred Stock”), 7.40% Noncumulative Perpetual Monthly Income Preferred Stock, Series C (“Series C Preferred Stock”), 7.25% Noncumulative Perpetual Monthly Income Preferred Stock, Series D (“Series D Preferred Stock”), and 7.00% Noncumulative Perpetual Monthly Income Preferred Stock, Series E (“Series E Preferred Stock”; collectively, “Preferred Stock”), proxies that will permit action by written consent in lieu of a stockholder meeting with respect to an amendment to delete the text of paragraph 2 of Section 3F., Voting Rights, of the Corporation’s By-laws,certificate of designation (the “Preferred Stock Amendment”) for each series of our outstanding Preferred Stock. Paragraph 2 of Section F. permits holders of our Preferred Stock to appoint two additional members to our Board of Directors when the Corporation has not paid dividends in full on the Preferred Stock for 18 monthly dividend periods (whether consecutive or not). Holders of Preferred Stock currently have this right given that the Corporation has not paid dividends since August 2009.
The affirmative written consent of holders of at least two-thirds of the aggregate liquidation preference of the outstanding shares of a Special Meetingseries of Stockholders of First BanCorp will be held at our offices located at 1130 Muñoz Rivera Avenue, San Juan, Puerto Rico, on August [23], 2011, at 10:00 a.m., for the purpose of considering and taking the following action, whichPreferred Stock is described in the accompanying Proxy Statement:
We are entitledoffering to receive noticeissue up to shares of Common Stock in exchange for the $63,046,800 aggregate liquidation preference of Preferred Stock that is outstanding, upon the terms and subject to votethe conditions set forth in our preliminary prospectus dated , 2013 (the “Prospectus”), and in the related letter of transmittal. The Prospectus is included in our registration statement on Form S-4, Registration No. 333-185393, which has been filed with the U.S. Securities and Exchange Commission (the “SEC”). A Form for Tendering Holders, which provides a form of proxy in favor of the Preferred Stock Amendment, is part of the letter of transmittal accompanying the Prospectus. A detachable Form for Non-tendering Holders, which is a form of proxy, is also attached to the letter of transmittal for holders of Preferred Stock that do not tender shares in the Exchange Offer.
This Proxy Statement is being delivered to you in connection with the Exchange Offer. The Exchange Offer will expire at 11:59 p.m., New York City time, on , 2013 (the “Expiration Date”), unless extended or earlier terminated by us. The Board of Directors will set the Special Meeting or any adjournment or adjournments of that meeting. A list of stockholdersExpiration Date as of the record date (the “Record Date”) for determining holders of Preferred Stock entitled to grant their proxy. The deadline for granting your proxy is the Expiration Date. You should exercise your right to vote on the Preferred Stock Amendment now even though the Record Date has not yet been set. This Proxy Statement and the forms of proxy, which are included in the letter of transmittal, were first provided to stockholders on , 2013.
As described in the Prospectus, to participate in the Exchange Offer you must grant a proxy to the individuals appointed by the Corporation as proxies (the “proxyholders”) to execute a written consent (“Consent”) in favor of the Preferred Stock Amendment. If you are the beneficial owner of shares of Preferred Stock, you must
contact your broker, securities dealer, custodian, commercial bank, trust company or other nominee and follow its instructions regarding how to grant the required proxy. If you are a stockholder of record of shares of Preferred Stock, your execution of the Form for Tendering Holders in the manner specified in the letter of transmittal, will provide the required proxy.
Holders of Preferred Stock that is not tendered in the Exchange Offer will receive a fee of $ per share of Preferred Stock for their proxies in favor of the Preferred Stock Amendment (the “Consent Fee”) if the Preferred Stock Amendment is approved. To participate in the Exchange Offer, tendering holders of Preferred Stock must grant a proxy to the proxyholders to execute a written Consent in favor of the Preferred Stock Amendment. No Consent Fee will be openpaid with respect to tendered Preferred Stock.
If you are a beneficial owner of shares of Preferred Stock and you withdraw your shares of Preferred Stock tendered in the Exchange Offer by following the procedures established by your broker, securities dealer, custodian, commercial bank, trust company or other nominee, such withdrawal will revoke your proxy. In such a case, if you want to grant a proxy, you must follow the instructions of your nominee to grant a proxy to the examination of any stockholder, for any purpose germaneproxyholders with respect to the Special Meeting, during ordinary business hours, for a period of ten daysPreferred Stock Amendment on or prior to the Special Meeting,Expiration Date.
If you are a stockholder of record and you withdraw your shares of Preferred Stock tendered in the Exchange Offer by informing Computershare (the “Exchange Agent”) on or prior to the Expiration Date that you are withdrawing your shares, such withdrawal will revoke your proxy. In such a case, if you want to grant a proxy, you must execute a Form for Non-tendering Holders to grant a proxy to the proxyholders with respect to the Preferred Stock Amendment on or prior to the Expiration Date.
If you are a beneficial owner of shares of Preferred Stock and do not want to exchange your shares of Preferred Stock, to grant a proxy with respect to the Preferred Stock Amendment, you must contact your broker, securities dealer, custodian, commercial bank, trust company or other nominee and follow its instructions regarding how to grant a proxy to the proxyholders with respect to the Preferred Stock Amendment. If you are a stockholder of record of shares of Preferred Stock and do not want to exchange your shares of Preferred Stock, to grant a proxy with respect to the Preferred Stock Amendment, you must complete the detachable Form for Non-tendering Holders provided in the letter of transmittal accompanying the Prospectus and deliver it to the Exchange Agent.
If you are a beneficial owner, to revoke your voting instructions with respect to the Preferred Stock Amendment, you must contact your broker, securities dealer, custodian, commercial bank, trust company or other nominee and follow its instructions. If you are a stockholder of record of shares of Preferred Stock, you may revoke your proxy with respect to the Preferred Stock Amendment at our principal offices at 1519 Ponce De León Avenue, San Juan, Puerto Rico 00908.
This Proxy Statement provides you with important information about the Preferred Stock Amendment. We encourage you to read it carefully. The Prospectus provides you with information about the Exchange Offer. To obtain more information about the Corporation, see “Where You are cordially invited to attend the Special Meeting. Can Find Additional Information” below.
It is important that your shares be represented regardless of the number of shares you own. EvenIf you own shares in more than one series, or in more than one name, or if your stock is registered in more than one way, you plan to be present atmay receive more than one copy of this Proxy Statement, the Special Meeting, you are urged to complete,Prospectus, and the letter of transmittal. If so, please sign date and promptly return the enclosed proxydocuments that you receive in the envelope provided. If you attendmanner specified in the Special Meeting, you may vote either in person or by proxy. You may revoke anyletter of transmittal. Your proxy that you giveis revocable at any time on or prior to its exercise.
What is the purpose of this proxy solicitation?
This proxy solicitation requests that you grant a proxy to the Special Meeting?
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No.
What is the consequence of sharesapproval of Commonthe Preferred Stock you own. Accordingly, we urge youAmendment?
If the Preferred Stock Amendment is approved, any holders of Preferred Stock remaining after completion of the Exchange Offer will not have the right to complete, date, sign and return your proxy promptly.
What materials should I receive?
You should receive this Proxy Statement, the Notice of Special Meeting of StockholdersProspectus, and a proxy card.
Who is soliciting my proxy?
The Board of Common Stock you owned at the close of business on July 5, 2011, the Record Date for the Special Meeting.
What is the Board of CommonDirectors’ recommendation?
The Board of Directors has approved and declared advisable the Preferred Stock Amendment and recommends that were outstanding onyou vote in favor of the Record Date.
If I amWho is entitled to grant a holderproxy?
Holders of shares of Common Stock, but I did not hold my shares of CommonPreferred Stock as of the Record Date am Iare entitled to vote?grant their proxy.
Since the Record Date is a date in the future, can I grant a proxy before the Record Date is set?
Yes. Beneficial owners and stockholders of record of Preferred Stock can grant a proxy before the Record Date is set. If you wereare not a recordbeneficial owner or beneficial holdera stockholder of record of shares of CommonPreferred Stock onas of the Record Date, youyour proxy will not be entitleddisregarded.
Will there be a meeting of stockholders with respect to the Preferred Stock Amendment?
No. To save the expense associated with holding a special meeting, the Board of Directors is soliciting proxies that grant a proxy to the proxyholders to vote onby written Consent with respect to the Proposal.
What stockholder approval is required for the adoption of the Preferred Stock Amendment?
The affirmative written consent of holders of at least two-thirds of the outstanding aggregate liquidation preference of the outstanding shares of Commoneach series of Preferred Stock must be present either in person or by proxy to enable us to conduct businessand the affirmative written consent of holders of at the Special Meeting. Proxies received but marked as abstentions will be included in the calculation of the number of shares considered to be present at the Special Meeting for purposes of determining whether holders ofleast a majority of theour outstanding shares of Common Stock are present. A broker non-vote occurs when a broker or other nominee has not received voting instructions from the beneficial owner and the broker or other nominee does not have discretionary authority to vote on a particular matter. Brokers and other nominees do not have discretionary authority to vote on the Proposal and, therefore, broker non-votes will not be counted for purposes of determining whether a quorum is present at the Special Meeting.We urge you to vote by proxy even if you plan to attend the Special Meeting so that we will know as soon as possible whether enough votes will be present for us to conduct business at the Special Meeting.
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How many shares of Preferred Stock are outstanding and how many votes per share of Preferred Stock are abstentions and broker non-votes treated?permitted?
As of shares upon the exercise of anti-dilution rights must receive the affirmative vote of the holders of a majority of the votes cast with regard to the Proposal, provided that the total votes cast with regard to the Proposal, whether for or against, constitute over 50% of all the outstandingJanuary 28, 2013, 2,521,872 shares of Common Stock. Abstentions will be considered votes cast and, therefore, will have the effectPreferred Stock are outstanding, consisting of a vote against the Proposal whereas broker non-votes will not be counted in determining the number of votes cast.Because the Proposal will not be approved for purposes of the NYSE rule unless over 50% of all of the outstanding450,195 shares of CommonSeries A Preferred Stock, are voted, it is very important that you vote.
What is the difference between a signed proxy card without indicating your decision (for, against, or abstain), your shares will be voted “FOR” the Proposal.
Beneficial Owner.If you hold your shares of CommonPreferred Stock throughare held by a broker, securities dealer, custodian, commercial bank, trust company or other nominee, and you return your voting instruction card without providing voting instructions, you will be deemed to have not voted on the Proposal because your nominee will not have the discretion to vote your shares of Common Stock. Such broker non-vote will not be counted towards the NYSE requirement that over 50% of the outstanding shares of Common Stock vote on the Proposal.
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Stockholder of Record. If your shares heldof Preferred Stock are registered in your account, and it will informname with our transfer agent, Computershare, you how to instruct it to vote your shares. The organization that holds your shares, however, isare considered the stockholder of record with respect to those shares, and the proxy and Exchange Offer materials are being sent directly to you for purposesyour consideration.
What is the deadline for granting my proxy?
The deadline for granting your proxy is the Expiration Date, which is 11:59 p.m., New York City time, on , 2013, unless the Exchange Offer is extended in accordance with applicable law or earlier terminated by us. Any extension of voting at the Special Meeting. As noted above, becauseExpiration Date will be followed as promptly as practicable by a public announcement thereof to be issued no later than 9:00 a.m., New York City time, on the next business day after the last previously scheduled Expiration Date.
How do I grant a proxy with respect to the Preferred Stock Amendment if I want to participate in the Exchange Offer?
If you are nota beneficial owner of shares of Preferred Stock and you want to grant a proxy to the proxyholders to vote by written Consent in favor of the Preferred Stock Amendment in order to participate in the Exchange Offer, you must contact your broker, securities dealer, custodian, commercial bank, trust company or other nominee and follow its instructions.You are urged to instruct your broker, securities dealer, custodian, commercial bank, trust company or other nominee promptly in order to allow adequate time for processing your instructions. We may disregard and give no effect to tenders received by the Exchange Agent after the Expiration Date.
If you are a stockholder of record of shares of Preferred Stock and you may notwant to grant a proxy to the proxyholders to vote by written Consent in favor of the Preferred Stock Amendment and you want to participate in the Exchange Offer, you must execute and deliver your letter of transmittal, including the Form for Tendering Holders, to the Exchange Agent on or prior to the Expiration Date. The Form for Tendering Holders will
evidence your grant of a proxy to the proxyholders to execute a written Consent in favor of the Preferred Stock Amendment. To participate in the Exchange Offer, you must also validly tender the stock certificate(s) representing your shares of Preferred Stock.
If you want to grant a proxy to the proxyholders to execute a written Consent with respect to the Preferred Stock Amendment without tendering shares of Preferred Stock in person at the Special Meeting unlessExchange Offer, see “How do I grant a proxy to the proxyholders to execute a written Consent with respect to the Preferred Stock Amendment without participating in the Exchange Offer?” below.
How do I grant a proxy to the proxyholders to execute a written Consent with respect to the Preferred Stock Amendment without participating in the Exchange Offer?
If you requestare a beneficial owner of shares of Preferred Stock and obtainyou want to grant a valid, legal proxy fromto the proxyholders to execute a written Consent with respect to the Preferred Stock Amendment without participating in the Exchange Offer, you must contact your broker, securities dealer, custodian, commercial bank, trusteetrust company or other nominee givingand follow its instructions regarding how to grant a proxy with respect to the Preferred Stock Amendment.You are urged to instruct your broker, securities dealer, custodian, commercial bank, trust company or other nominee promptly in order to allow adequate time for processing your instructions.
If you are a stockholder of record and you want to grant a proxy to the rightproxyholders to voteexecute a written Consent with respect to the Preferred Stock Amendment without participating in the Exchange Offer, you must execute, detach and deliver to the Exchange Agent the Form for Non-tendering Holders, which is attached to the letter of transmittal, on or prior to the Expiration Date.
Holders of Preferred Stock that is not tendered in the Exchange Offer will receive a fee of $ per share of Preferred Stock for their proxies in favor of the Preferred Stock Amendment if the Preferred Stock Amendment is approved. See “Material U.S. Federal Income Tax Considerations Regarding Consent Fees” and “Puerto Rico Tax Considerations Regarding Consent Fees” below.
How can I revoke my proxy?
If you are a beneficial owner of shares atof Preferred Stock and want to revoke your proxy with respect to the Special Meeting.The organizationPreferred Stock Amendment, you must follow the procedures established by your broker, securities dealer, custodian, commercial bank, trust company or other nominee so that holdsyour proxy may be revoked on or prior to the Expiration Date. If you tendered your shares cannot voteof Preferred Stock for exchange in the Exchange Offer, revocation of your proxy will withdraw your tender.
If you are a stockholder of record and want to revoke your proxy with respect to the Preferred Stock Amendment, you must inform the Exchange Agent, on or prior to the Expiration Date, that you are revoking your proxy. If you tendered your shares withoutof Preferred Stock for exchange in the Exchange Offer, revocation of your instructions, so itproxy will withdraw your tender.
What happens if my tendered shares are not accepted?
If your tendered shares of Preferred Stock are not accepted for exchange because the tender is importantnot in proper form, or holders of at least two-thirds of the outstanding aggregate liquidation preference of the outstanding shares of the series of Preferred Stock that you exerciseown and/or holders of at least a majority of our outstanding Common Stock do not consent to the Preferred Stock Amendment, or our acceptance of the tender would be unlawful in our opinion, or tendered shares are not accepted for any other reason pursuant to the terms and conditions of the Exchange Offer, such shares will be returned without expense to you or, in the case of shares of Preferred Stock tendered by book-entry transfer, such shares will be credited to an account maintained at The Depository Trust Company designated by the participant who delivered such shares, in each case, promptly following the expiration, withdrawal or termination, as applicable, of the Exchange Offer. Any holders of tendered shares of Preferred Stock that are not accepted for payment will be deemed to have not granted a proxy with respect to the Preferred Stock Amendment.
What if I am a beneficial owner of shares of Preferred Stock and do not instruct my nominee as to how to grant a proxy with respect to the Preferred Stock Amendment?
If you are a beneficial owner of shares of Preferred Stock and you do not instruct your rightbroker, securities dealer, custodian, commercial bank, trust company or other nominee regarding how to vote.
What if I am a stockholder of record of shares of Preferred Stock and deliver an executed letter of transmittal, including the Form for Tendering Holders, or an executed Form for Non-tendering Holders, but do not indicate my decision with respect to the Preferred Stock Amendment?
If you are a stockholder of record and return an executed letter of transmittal, including the Form for Tendering Holders or the Form for Non-tendering Holders, without indicating your decision on the Preferred Stock Amendment, you will be deemed to have granted a proxy to the proxyholders to execute a written Consent in favor of the Preferred Stock Amendment.
What if I am a stockholder of record of shares of Preferred Stock and I do not deliver to the Exchange Agent a letter of transmittal or a Form for Non-tendering Holders?
If you are a stockholder of record and do not deliver to the Exchange Agent an executed letter of transmittal or a Form for Non-tendering Holders, you will be deemed to have voted against the Preferred Stock Amendment.
Who will beartabulate the costs of soliciting proxiesvotes for the Special Meeting?Preferred Stock Amendment?
The Exchange Agent will tabulate the proxies received, which will determine whether there are sufficient votes to approve the Preferred Stock Amendment.
What should I do if I receive more than one set of proxy and Exchange Offer materials?
Complete, sign, date and return each letter of transmittal that you receive, including the Form for Tendering Holders or the Form for Non-tendering Holders, so that all of your shares are represented with respect to the Preferred Stock Amendment. You may receive more than one copy of the proxy and Exchange Offer materials if you own shares in more than one series, or more than one name, or if your stock is registered in more than one way.
Who will bear the cost of soliciting proxies forproxies?
The Corporation will pay the Special Meeting.cost of soliciting proxies. In addition to solicitationsoliciting proxies by mail, we may solicit proxies may be solicited personally, by personal interview, telephone or otherwise. The Board of Directors has engaged Broadridge Financial SolutionsGeorgeson, Inc. to aid in the solicitation of proxies.proxies from holders of Preferred Stock and Common Stock with respect to the Preferred Stock Amendment. The cost of that engagement is estimated at $5,000 to $10,000,$ , plus reimbursement of reasonableout-of-pocket expenses. Our directors, officers and employees may also solicit proxies but they will not receive any additional compensation for such solicitation. Proxiesservices. Proxy and proxyExchange Offer materials will also be distributed at our expense by brokers, nominees, custodians and other similar parties.
4Preferred Stock Amendment. See “Dealer Manager Fee” and “Soliciting Dealer Fee” below.
Any questions or requests for assistance concerning the proxy solicitation or the Exchange Offer should contact Lawrence Odell, Secretarybe directed to the Dealer Manager. Any questions regarding the procedures for granting or revoking your proxy, or filling out the forms of proxy contained in the letter of transmittal, or requests for additional copies of the proxy and Exchange Offer materials should be directed to the Exchange Agent or Georgeson, Inc. (the “Information Agent”).
The Dealer Manager for the Exchange Offer is:
1251 Avenue of the Americas, 6th Floor
New York, New York 10020
866-805-4128 (toll-free)
212-466-7807 (collect)
Attn: Liability Management Group
The Exchange Agent for the Exchange Offer is:
Computershare
By Mail: | By Hand or Overnight Courier: | |
Computershare | Computershare | |
Attn: Corporate Action Dept. | Attn: Corporate Action Dept., 27th Floor | |
PO Box 3301 | 480 Washington Blvd | |
South Hackensack, NJ 07606 | Jersey City, NJ 07310 |
The Information Agent for the Exchange Offer is:
Georgeson, Inc.
199 Water Street, 26th Floor
New York, NY 10038
All Holders, Banks and Brokers Call: 866-856-6388
We are offering to issue up to shares of our Common Stock in exchange for any and all issued and outstanding shares of our Preferred Stock. We decided to conduct the Exchange Offer to further improve the quality of our capital for regulatory purposes and to simplify our capital structure. In addition, approval of the Preferred Stock Amendment will result in the removal of the provision in the certificate of designation for each series of Preferred Stock that entitles the holders of Preferred Stock to appoint two additional members to our Board of Directors when the Corporation has not paid dividends in full on the Preferred Stock for 18 monthly dividend periods (whether consecutive or not), which removal will enhance the Corporation’s ability to comply with contractual requirements related to the composition of the Board of Directors bye-mail at lawrence.odell@firstbankpr.com or by telephone at787-729-8041and eliminate the potential for increased disparity between the economic interest and Board representation of holders of Preferred Stock.
To participate in the Exchange Offer, tendering holders of Preferred Stock must grant a proxy to execute a written consent in favor of the Preferred Stock Amendment, as described below under Preferred Stock Amendment. Holders of Preferred Stock that are not tendered in the Exchange Offer will receive a fee of $ per share of Preferred Stock for their proxies in favor of the Preferred Stock Amendment if you have any questions about howthe Preferred Stock Amendment is approved. See “Material U.S. Federal Income Tax Considerations Regarding Consent Fees” and “Puerto Rico Tax Considerations Regarding Consent Fees” below. No fee will be paid with respect to grant or revoke your vote or need copiestendered shares of Preferred Stock.
For each share of Preferred Stock that we accept for exchange in accordance with the terms of the Exchange Offer, we will issue a number of shares of our filings.
The Board of Directors is soliciting proxies from holders of each series of Preferred Stock that grant a proxy to the proxyholders to vote bye-mail written consent to amend each respective certificate of designation to delete the text of paragraph 2 of Section F., Voting Rights, which provides the right to holders of Preferred Stock to appoint two additional members to our Board of Directors when the Corporation has not paid dividends in full on the Preferred Stock for 18 monthly dividend periods (whether consecutive or not), (defined herein as the Preferred Stock Amendment). The affirmative written consent of holders of at lawrence.odell@firstbankpr.comleast two-thirds of the outstanding aggregate liquidation preference of the outstanding shares of a series of Preferred Stock as of the Record Date is required to approve the Preferred Stock Amendment. In addition, we are seeking the consent of the holders of our Common Stock to approve the Preferred Stock Amendment because the affirmative written consent of holders of at least a majority of all outstanding shares of Common Stock is required to approve the Preferred Stock Amendment. None of the certificates of designation will be amended unless the requisite approval from holders of each series of Preferred Stock is obtained. If the Preferred Stock Amendment is approved, any holders of Preferred Stock remaining after completion of the Exchange Offer will not have the right to appoint two directors to our Board of Directors, even though the Corporation has not paid dividends to holders of Preferred Stock since August 2009.
MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS REGARDING CONSENT FEES
Non-tendering U.S. Holders
The U.S. federal income tax consequences of a holder delivering a proxy in favor of the Preferred Stock Amendment when such holder does not tender shares pursuant to the Exchange Offer (a “Non-tendering Holder”) and accepts a Consent Fee in exchange for such proxy are subject to uncertainty. While not free from doubt, the Corporation intends to take the position that the Consent Fees are paid in connection with the performance of services and are taxable as ordinary income. The Corporation has been advised by its Puerto Rico tax counsel that Consent Fees paid to Non-tendering U.S. Holders should generally not be subject to withholding in Puerto Rico. However, since the Corporation will not be able to distinguish between U.S. Holders (as defined below) and other Non-tendering Holders with respect to the payment of the Consent Fees, it has been advised by its Puerto Rico counsel that it should withhold on the Consent Fees paid to all Non-tendering Holders at a rate of 7%. The Corporation has decided to gross-up the Consent Fee in respect of the 7% Puerto Rico withholding tax remitted to the Puerto Rico taxing authority. As a result, the net amount of the Consent Fee (after taking into account the 7% Puerto Rico withholding tax) will be $ per share of Preferred Stock for which a proxy in favor of the Preferred Stock Amendment is delivered. The Corporation intends to treat such grossed-up Puerto Rico withholding tax payment as an additional amount paid in connection with the performance of services and taxable as ordinary income for U.S. federal income tax consequences. The Corporation believes the Consent Fees paid to Non-tendering U.S. Holders are from sources within the United States for U.S. federal income tax purposes, including for the purpose of determining the U.S. Holder’s foreign tax credit limitations. Assuming that a U.S. Holder is entitled to a refund of the 7% withholding tax from the Puerto Rico tax authorities, as discussed under “PUERTO RICO TAX CONSIDERATIONS REGARDING CONSENT FEES” below, the U.S. Holder will not be entitled to a foreign tax credit for the 7% Puerto Rico withholding tax. As used herein, the term “U.S. Holder” means a beneficial owner of shares of Preferred Stock that does not own directly, constructively or by telephoneattribution 10% or more of the voting stock of First BanCorp and is, for U.S. federal income tax purposes:
a citizen or resident individual of the U.S.;
a domestic corporation;
an estate the income of which is subject to U.S. federal income tax regardless of its source; or
a trust if (i) a U.S. court can exercise primary supervision over the trust’s administration and one or more U.S. persons are authorized to control all substantial decisions of the trust or (ii) that has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person.
The term “U.S. Holder” does not include individual Puerto Rico Holders nor does it include Puerto Rico corporations.Please consult your tax advisor concerning the tax treatment to you of the Consent Fees based on your own particular circumstances, including the ability to claim a refund of any Puerto Rico withholding taxes paid on your behalf with respect to the Consent Fees and the United States foreign tax credit consequences of such payments.
Non-tendering Puerto Rico Holders
In general, income from the Consent Fee paid for a proxy in favor of the Preferred Stock Amendment to a Puerto Rico Holder (as defined below) who does not tender shares in the Exchange Offer will constitute income from sources within Puerto Rico, and will not be includible in such stockholder’s gross income for, and will be exempt from, U.S. federal income taxation.As used herein, the term “Puerto Rico Holder” means an individual who is a bona fide resident of Puerto Rico during the entire taxable year (or, in certain cases, a portion thereof) within the meaning of Sections 933 and 937 of the Internal Revenue Code of 1986, as amended (the “Code”). Please consult your tax advisor concerning the tax treatment to you of the Consent Fees based on your own particular circumstances.
Non-tendering Puerto Rico Corporations
In general, income from the Consent Fee paid for a proxy in favor of the Preferred Stock Amendment to a Puerto Rico corporation (as defined below) that does not tender shares in the Exchange Offer will not, in the hands of the Puerto Rico corporation, be subject to U.S. federal income tax if the fee is not effectively connected with a United States trade or business of the Puerto Rico corporation. The Code provides special rules for Puerto Rico corporations that are “Controlled Foreign Corporations,” “Personal Holding Companies,” or “Passive Foreign Investment Companies” for U.S. federal income tax purposes.As used herein, the term “Puerto Rico corporation” means a corporation created or organized in or under the laws of Puerto Rico. Please consult your tax advisor concerning the tax treatment to you of the Consent Fees based on your own particular circumstances.
Impact on Tendering U.S. Holders, Puerto Rico Holders, and Puerto Rico Corporations.
Although Consent Fees are not being paid to the tendering Holders (as defined below), the payment of Consent Fees to the Non-tendering Holders and the requirement that the tendering Holders grant a proxy in favor of the Preferred Stock Amendment subject the tendering Holders to uncertainty as to whether any portion of the Common Stock they receive pursuant to the Exchange Offer will be treated as paid in exchange for services and, therefore, taxable as ordinary income rather than treated as received in a recapitalization within the meaning of Section 368(a)(1)(E) of the Code for federal income tax purposes. In the opinion of Morgan, Lewis & Bockius, LLP, however, it is unlikely that the IRS would successfully claim that Common Stock received by tendering Holders pursuant to the Exchange Offer is properly treated as paid in exchange for services and, therefore, taxable as ordinary income rather than treated as received in a recapitalization within the meaning of Section 368(a)(1)(E) of the Code as a result of the Consent Fees paid to Non-tendering Holders in exchange for proxies in favor of the Preferred Stock Amendment. This belief is based on a number of factors including the following: (1) it is a condition precedent for a tendering Holder to participate in the Exchange Offer to grant a proxy in favor of the Preferred Stock Amendment and the Corporation will not pay tendering Holders Consent Fees with respect to Preferred Stock exchanged for our Common Stock in the Exchange Offer; (2) the tendering Holders must surrender Preferred Stock owned as well as all rights held thereunder in order to participate in the Exchange Offer with respect to such Preferred Stock; (3) the liquidation preference associated with all Preferred Stock to which the Exchange Offer relates is greater than the Exchange Value; (4) a nonbinding IRS ruling suggests that consents given as part of a taxable sale of debt securities do not cause the sale to be bifurcated into a property exchange component and a service component for federal income tax purposes; and (5) customary factual representations contained in a certain tax certificate executed by officers of First BanCorp.As used herein, the term “Holders” means U.S. Holders, Puerto Rico Holders, and Puerto Rico corporations, collectively. Please consult your own tax advisor concerning the tax consequences to you of the Consent Fees payable to the Non-tendering Holders based on your own particular circumstances.
PUERTO RICO TAX CONSIDERATIONS REGARDING CONSENT FEES
Non-tendering Holders
The Puerto Rico income tax consequences of a Non-tendering Holder that accepts a Consent Fee in exchange for a proxy in favor of the Preferred Stock Amendment are subject to uncertainty. While not free from doubt, First BanCorp intends to take the position that the Consent Fees are paid in connection with the performance of services and are taxable as ordinary income and will constitute Puerto Rico source income to the extent such services are deemed to have been rendered in Puerto Rico. In general, income from the Consent Fees paid to Non-tendering Holders that are not residents of Puerto Rico should not be deemed to constitute income for services rendered in Puerto Rico and, thus, such Consent Fees should not be subject to Puerto Rico income and/or withholding tax.
Subject to certain exceptions provided in the Puerto Rico Internal Revenue Code of 2011, as amended (the “PR Code”), payments for services rendered in Puerto Rico by non-employees are subject to a 7% Puerto Rico withholding tax. First BanCorp has been advised that it will not be able to establish the residency of the Non-tendering Holders and/or whether such Non-tendering Holders fall within one of the exceptions from withholding provided in the PR Code. Therefore, First BanCorp will make the corresponding 7% Puerto Rico withholding at source from all Consent Fees paid to Non-tendering Holders. First BanCorp has agreed to gross-up the Consent Fee in respect of the 7% Puerto Rico withholding tax remitted to the Puerto Rico taxing authority. As a result, the net amount of the Consent Fee (after taking into account the 7% Puerto Rico withholding tax) will be $ per share of Preferred Stock for which a proxy in favor of the Preferred Stock Amendment is delivered. First BanCorp intends to treat such grossed-up Puerto Rico withholding tax payment as an additional amount paid in connection with the performance of services and taxable as ordinary income for Puerto Rico income tax consequences. However, as discussed above, generally, Non-tendering Holders that are not residents of Puerto Rico should not be subject to Puerto Rico income and/or withholding tax on the Consent Fees paid to them. Thus, such non-Puerto Rico resident Non-tendering Holders should be entitled to claim a refund for the 7% Puerto Rico withholding tax.Please consult your tax advisor concerning the tax treatment to you of the Consent Fees based on your own particular circumstances, including the ability to claim a refund of any Puerto Rico withholding taxes paid on your behalf with respect to the Consent Fees and, if you are a U.S. Holder, the United States foreign tax credit consequences of such payments.
787-729-8041.Impact on Tendering Holders
Although Consent Fees are not being paid to the tendering holders, the payment of Consent Fees to the Non-tendering Holders and the requirement that the tendering holders grant a proxy in favor of the Preferred Stock Amendment subject the tendering holders to uncertainty as to whether any portion of our Common Stock they receive pursuant to the Exchange Offer will be treated as paid in exchange for services and, therefore, taxable as ordinary income rather than treated as received in a recapitalization within the meaning of Section 1034.04(g)(1)(E) of the PR Code for Puerto Rico income tax purposes. In the opinion of Pietrantoni Mendez & Alvarez LLC, however, it is unlikely that the Puerto Rico Treasury Department would successfully claim that the Common Stock received by tendering holders pursuant to the Exchange Offer is properly treated as paid in exchange for services and, therefore, taxable as ordinary income rather than treated as received in a recapitalization within the meaning of Section 1034.04(g)(1)(E) of the PR Code as a result of the Consent Fees paid to Non-tendering Holders in exchange for proxies in favor of the Preferred Stock Amendment. This belief is based on a number of factors including the following: (1) it is a condition precedent for a tendering holder to participate in the Exchange Offer to grant a proxy in favor of the Preferred Stock Amendment and First BanCorp will not pay tendering holders Consent Fees with respect to Preferred Stock exchanged for our Common Stock in the Exchange Offer; (2) the tendering holders must surrender Preferred Stock owned as well as all rights held thereunder in order to participate in the Exchange Offer with respect to such Preferred Stock; (3) the liquidation preference associated with all Preferred Stock to which the Exchange Offer relates is greater than the Exchange Value; (4) a nonbinding IRS ruling, interpreting similar provisions of law contained in the PR Code, suggests that
consents given as part of a taxable sale of securities do not cause the sale to be bifurcated into a property exchange component and a service component for federal income tax purposes; and (5) customary factual representations contained in a certain tax certificate executed by officers of First BanCorp.Please consult your own tax advisor concerning the tax consequences to you of the Consent Fees payable to the Non-tendering Holders based on your own particular circumstances.
The Corporation will pay brokers, securities dealers, custodians, commercial banks, trust companies and other nominees that solicit tenders or proxies from holders of Preferred Stock (each a “soliciting dealer”) a fee in an amount equal to $ for each share of Preferred Stock owned by a holder of fewer than 10,000 shares of Preferred Stock if such soliciting dealer’s soliciting activities result in (i) the tender of shares by such holder and the Corporation’s acceptance of such shares of Preferred Stock in the Exchange Offer or (ii) such holder’s grant of a proxy in favor of the Preferred Stock Amendment, provided the Preferred Stock Amendment is approved.
To be eligible to receive the Soliciting Dealer Fee, a properly completed soliciting dealer form must be delivered by the relevant soliciting dealer to the Exchange Agent on or prior to the Expiration Date. We will, in our sole discretion, determine whether a broker has satisfied the criteria for receiving a Soliciting Dealer Fee (including, without limitation, the submission of the appropriate documentation without defects or irregularities and in respect of bona fide tenders). Other than the foregoing, no fees or commissions have been or will be paid by us to any broker, dealer or other person, other than the Dealer Manager, the Exchange Agent and the Information Agent, in connection with the Exchange Offer and this proxy solicitation.
A soliciting dealer is a retail broker designated in the soliciting dealer form and is:
a broker or dealer in securities, which is a member of any national securities exchange in the United States or of the Financial Industry Regulatory Authority, Inc.; or
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a bank or trust company located in the United States.
The cost of the proxy solicitation services provided by the soliciting dealers will be approximately $ if all shares of Preferred Stock are tendered and accepted by the Corporation.
The Corporation will pay the Dealer Manager a fee in an amount equal to (i) 0.80% of the aggregate liquidation preference of the Preferred Stock (a) accepted by the Corporation in the Exchange Offer from previously identified holders of Preferred Stock or (b) with respect to which such previously identified holders of Preferred Stock grant a proxy in favor of the Preferred Stock Amendment, plus (ii) 1.50% of the aggregate liquidation preference of the Preferred Stock (a) accepted by the Corporation in the Exchange Offer from any other holder of Preferred Stock or (b) with respect to which such other holders of Preferred Stock grant a proxy in favor of the Preferred Stock Amendment. We will pay the Dealer Manager a retainer fee, less the amounts previously noted.
DESCRIPTION AND COMPARISON OF PREFERRED STOCK AND COMMON STOCK RIGHTS
Our Restated Articles of Incorporation authorize the issuance of 2,000,000,000 shares of Common Stock, par value $0.10 per share, and 50,000,000 shares of Preferred Stock, par value $1.00 per share. The following summary describes the rights of holders of shares of Preferred Stock and holders of shares of Common Stock set forth in our Restated Articles of Incorporation, including the Certificates of Designation, and our by-laws (the “By-Laws”).
GOVERNING DOCUMENTS AND GOVERNING LAW
Preferred Stock: Holders of shares of Preferred Stock have the rights set forth in our Restated Articles of Incorporation, including the applicable Certificate of Designation, the By-Laws and Puerto Rico law.
Common Stock: Holders of shares of our Common Stock have the rights set forth in our Restated Articles of Incorporation, the By-Laws and Puerto Rico law.
DIVIDENDS AND DISTRIBUTIONS
On July 30, 2009, we announced the suspension of dividends on each series of our Preferred Stock and our Common Stock effective August 2009. Further, we cannot pay dividends until all applicable regulatory requirements and approvals have been met or obtained.
Preferred Stock: Shares of Preferred Stock rank senior to shares of Common Stock and any other stock that is expressly junior to Preferred Stock as to payment of dividends. Dividends on shares of Preferred Stock are payable monthly and are not mandatory or cumulative. Holders of shares of Preferred Stock are entitled to receive dividends, when, as, and if declared by our Board of Directors, out of funds legally available for dividends.
Common Stock: Subject to the preferential rights of any other class or series of capital stock, including Preferred Stock, holders of our Common Stock are entitled to receive dividends when and as declared by our Board of Directors out of funds legally available for the payment of dividends. In general, so long as any shares of Preferred Stock remain outstanding and unless and until we meet various federal regulatory considerations and receive regulatory approval, we cannot declare, set apart or pay any dividends on shares of our Common Stock unless all accrued and unpaid dividends on our Preferred Stock for the twelve monthly dividend periods ending on the immediately preceding dividend payment date have been paid or are paid contemporaneously and the full monthly dividend on our Preferred Stock for the then current month has been or is contemporaneously declared and paid or declared and set apart for payment.
RANKING
Preferred Stock: Each series of Preferred Stock currently ranks senior to the Common Stock with respect to dividend rights and rights upon liquidation, dissolution or winding-up of the Corporation. Each series of Preferred Stock is equal in right of payment with the other outstanding series of shares of Preferred Stock. The liquidation preference of the shares of Preferred Stock is $25 per share, plus accrued and unpaid dividends thereon for the current monthly dividend period to the date of distribution.
Common Stock: The Common Stock ranks junior with respect to dividend rights and rights upon liquidation, dissolution or winding-up of the Corporation to all other securities and indebtedness of the Corporation.
CONVERSION RIGHTS
None of the shares of Preferred Stock or Common Stock are convertible into other securities.
VOTING RIGHTS
Preferred Stock: Whenever dividends remain unpaid on the shares of Preferred Stock or any other class or series of Preferred Stock that ranks on a parity with shares of Preferred Stock as to payment of dividends and has equivalent voting rights (“Parity Stock”) for 18 monthly dividend periods (whether or not consecutive), the holders of the shares of Preferred Stock together with holders of Parity Stock, voting separately as a single class, have the right, pursuant to procedures set forth in the applicable Certificate of Designation and subject to the current proposal to eliminate this right through the Preferred Stock Amendment, to appoint two additional members of our Board of Directors, thereby increasing the size of our Board of Directors by two members. When the Corporation has paid full dividends on any class or series of non-cumulative Parity Stock for at least 12 consecutive monthly dividend periods following such non-payment, and has paid cumulative dividends in full on any class or series of cumulative Parity Stock, the voting rights will cease and the authorized number of directors will be reduced by two.
Holders of shares of each series of Preferred Stock have the right to one vote per share, with respect to:
any amendment, alteration or repeal of the provisions of the Restated Articles of Incorporation, including the relevant Certificate of Designation, or By-Laws that would alter or change the voting powers, preferences or special rights of such series of shares of Preferred Stock; or
any amendment or alteration of the Restated Articles of Incorporation to authorize or increase the authorized amount of any shares of, or any securities convertible into shares of, any of the Corporation’s capital stock ranking senior to such series of shares of Preferred Stock;
except, in the case of the Series B, C, D and E Preferred Stock, only if any such amendment, alteration or repeal would affect the holders materially and adversely.
In such cases, approval of holders of at least two-thirds of the aggregate liquidation preference of the outstanding shares of each such affected series of Preferred Stock is required.
Common Stock: Holders of shares of our Common Stock are entitled to one vote per share on all matters voted on by the Corporation’s stockholders. There are no cumulative voting rights for the election of directors. The United States Department of the Treasury (“Treasury”) has agreed to vote, or cause to be voted, the shares of Common Stock that it holds and any shares that it may acquire pursuant to the amended and restated warrant that it holds, except with respect to certain matters, in the same proportion as the votes on all other outstanding shares of Common Stock. Treasury has discretionary authority to vote on the election and removal of directors, the approval of any business combination or sale of substantially all of the assets or property of the Corporation, the approval of any dissolution of the Corporation, the approval of any issuance of any securities of the Corporation on which holders of Common Stock are entitled to vote, the approval of any amendment to our Restated Articles of Incorporation or By-Laws on which holders of Common Stock are entitled to vote, and on any other matters reasonably incidental to those matters, as determined by Treasury.
REDEMPTION
Preferred Stock:The Corporation may redeem all or a portion of each series of shares of Preferred Stock, at its option at $25 per share, on any dividend payment date for which dividends have been declared in full. Shares of Preferred Stock are not redeemable at the option of the holders.
Common Stock:The Corporation has no obligation or right to redeem our Common Stock.
LISTING
Preferred Stock: Each series of Preferred Stock was listed for trading on the New York Stock Exchange (“NYSE”) through January 13, 2012 and is currently traded in the over-the-counter market on the OTCQB.
Common Stock: The Common Stock is listed for trading on the NYSE.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following tables set forth certain information as of July 8, 2011,January 28, 2013, unless otherwise described,specified, with respect to shares of our Common Stock beneficially owned (unless otherwise indicated in the footnotes) by: (1) each person known to us to be the beneficial owner of more than 5% of our Common Stock; (2) each director; (3)director and each named executive officer (as definednamed in Item 402(a)(2) of Securitiesthe Summary Compensation Table in our Proxy Statement dated April 30, 2012; and Exchange Commission (“SEC”)Regulation S-K); and (4)(3) all current directors and executive officers as a group. This information has been provided by each of the directors and executive officers at our request or derived from statements filed with the SEC pursuant to Section 13(d), 13(g), or 13(g)16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), adjusted, where applicable, to give effect to theone-for-fifteen reverse split of our Common Stock in January 2011.. Beneficial ownership of securities as shown below, has been determined in accordance with applicable guidelines issued by the SEC. Beneficial ownership includesmeans the possession, directly or indirectly, through any formal or informal arrangement, either individually or in a group, of voting power (which includes the power to vote, or to direct the voting of, such security)security, including the ability to grant proxies) and/or investment power (which includes the power to dispose of, or to direct the disposition of, such security).
(1) | |
Beneficial Owners of More Than 5% of |
Amount and Nature of | Percent of | |||||||
Name and Address of Beneficial Owner | Beneficial Ownership | Class(a) | ||||||
United States Department of the Treasury 1500 Pennsylvania Avenue Northwest Washington, DC 20229 | 29,634,796 | (b) | 58.18 | % | ||||
UBS AG Bahnhofstrasse 45 PO Box CH-8021 Zurich, Switzerland | 2,403,742 | (c) | 11.28 | % |
Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class(a) | ||||||
Thomas H. Lee Advisors (Alternative), VI, Ltd. | 50,684,485 | (b) | 24.58 | % | ||||
c/o Walkers Corporate Services Limited | ||||||||
Walker House, 87 Mary Street | ||||||||
Geargetown, E9, KY1-9001 | ||||||||
Entities affiliated with Oaktree Principal Fund V (Delaware), L.P. and | 50,684,485 | (c) | 24.58 | % | ||||
Oaktree FF Investment Fund AIF (Delaware), L.P. | ||||||||
c/o Oaktree Capital Management, L.P. | ||||||||
333 South Grand Avenue, 28th Floor | ||||||||
Los Angeles, CA 90071 | ||||||||
Wellington Management Company, LLP. | 20,336,087 | (d) | 9.86 | % | ||||
c/o Wellington Management Company, LLP | ||||||||
280 Congress Street | ||||||||
Boston, MA 02210 | ||||||||
United States Department of the Treasury | 34,227,696 | (e) | 16.49 | % | ||||
1500 Pennsylvania Avenue Northwest | ||||||||
Washington, DC 20229 |
(a) | Based on |
(b) |
(c) | Based on a Form 4 filed with the SEC on August 7, 2012, Form 4s filed with the SEC on October 28, 2011, and a Schedule 13D filed with the SEC on October 17, 2011, by each of Oaktree Principal Fund V (Delaware), L.P. (the “PF V Fund”), Oaktree FF Investment Fund AIF (Delaware), L.P. (the “AIF Fund” and, together with the PF V Fund, the “Oaktree Funds” or “Oaktree”), Oaktree Capital Group Holdings GP, LLC (“OCGH GP”), in its capacity as the manager of Oaktree Capital Group, LLC (“OCG”) |
(d) | Based |
(e) | Consists of 32,941,797 shares of Common Stock that the Corporation issued to Treasury on October 7, 2011 upon conversion of all of the Corporation’s outstanding Fixed Rate Cumulative Mandatorily Convertible Preferred Stock, Series G, and 1,285,899 shares of Common Stock underlying a warrant it acquired from the Corporation on January |
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(2) | |
Beneficial Ownership of |
Amount and Nature of | Percent of | |||||||
Name of Beneficial Owner | Beneficial Ownership(a) | Class | ||||||
Directors | ||||||||
Aurelio Alemán-Bermúdez, President & Chief Executive Officer | 52,933 | * | ||||||
José Menéndez-Cortada, Chairman of the Board | 10,827 | * | ||||||
Jorge L. Díaz-Irizarry | 5,851 | (b) | * | |||||
José Ferrer-Canals | 368 | * | ||||||
Sharee Ann Umpierre-Catinchi | 76,913 | (c) | * | |||||
Fernando Rodríguez-Amaro | 2,146 | * | ||||||
Héctor M. Nevares-La Costa | 449,014 | (d) | 2.11 | % | ||||
Frank Kolodziej-Castro | 184,165 | * | ||||||
José F. Rodríguez-Perelló | 21,605 | * | ||||||
Executive Officers | ||||||||
Orlando Berges-González, Executive Vice President & Chief Financial Officer | 666 | * | ||||||
Lawrence Odell, Executive Vice President, General Counsel & Secretary | 14,999 | * | ||||||
Victor Barreras-Pellegrini, Treasurer & Senior Vice President | 4,666 | * | ||||||
Calixto García-Vélez, Executive Vice President | — | * | ||||||
All current directors and NEOs, Executive Officers, Treasurer and the Chief Accounting Officer as a group (19 persons as a group) | 859,689 | 4.02 | % |
Name of Beneficial Owner | Amount and Nature of Beneficial Ownership(a) | Percent of Class | ||||||||
Directors | ||||||||||
Aurelio Alemán-Bermúdez, President & Chief Executive Officer | 192,349 | * | ||||||||
Thomas M. Hagerty | 50,691,970 | (b) | 24.58 | % | ||||||
Michael P. Harmon | 50,691,970 | (c) | 24.58 | % | ||||||
Roberto R. Herencia, Chairman of the Board | 312,166 | — | ||||||||
José Menéndez-Cortada | 33,486 | * | ||||||||
Fernando Rodríguez-Amaro | 12,704 | * | ||||||||
José F. Rodríguez-Perelló | 127,485 | * | ||||||||
Robert T. Gormley | 6,097 | * | ||||||||
Executive Officers | ||||||||||
Victor Barreras-Pellegrini, Treasurer & Senior Vice President | 14,666 | * | ||||||||
Orlando Berges-González, Executive Vice President & Chief Financial Officer | 80,999 | * | ||||||||
Lawrence Odell, Executive Vice President, General Counsel & Secretary | 86,999 | * | ||||||||
Cassan Pancham, Executive Vice President and Business Group Executive | 58,608 | * | ||||||||
All current directors and Executive Officers as a group (19 persons as a group) | 102,593,856 | 49.73 | % |
* | Less than 1% of our outstanding Common Stock. |
(a) | For purposes of this table, “beneficial ownership” is determined in accordance withRule 13d-3 under the Exchange Act, pursuant to which a person or group of persons is deemed to have “beneficial ownership” of a security if that person has the right to acquire beneficial ownership of such security within 60 days. Therefore, it includes the number of shares of Common Stock that could be purchased by exercising stock options that were exercisable on |
(b) | ||
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(c) | Mr. Harmon is the |
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After the Issuance | After the Rights Offering | |||||||||||||||
Shares | Percentage | Shares | Percentage | |||||||||||||
Stockholders as of July 5, 2011 | 21,303,669 | 10.43 | %* | 31,955,504 | 13.89 | % | ||||||||||
U.S. Treasury | 32,941,797 | 16.13 | % | 32,941,797 | 14.32 | % | ||||||||||
Funds advised by Thomas H. Lee Partners, L.P. | 49,746,992 | 24.36 | % | 56,015,646 | 24.36 | % | ||||||||||
Funds advised by Oaktree Capital Management, L.P. | 49,746,992 | 24.36 | % | 56,015,646 | 24.36 | % | ||||||||||
Funds advised by Wellington Management Company, LLP | 20,220,300 | 9.90 | % | 22,768,275 | 9.90 | % | ||||||||||
Over 1% Investors** | 23,857,144 | 11.68 | % | 23,857,144 | 10.37 | % | ||||||||||
Other investors | 6,428,572 | 3.15 | % | 6,428,572 | 2.80 | % | ||||||||||
Total | 204,245,466 | 100 | % | 229,982,584 | 100 | % |
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Quarter Ended March 31, 2011 | ||||||||||||
Pro forma | Pro forma and | |||||||||||
$525MM | as adjusted | |||||||||||
Actual | Capital Raise | for Rights Offering | ||||||||||
(In thousands, except for per share data) | ||||||||||||
Net (loss) income attributable to common stockholders | $ | (35,437 | ) | $ | 170,075 | $ | 170,075 | |||||
Average common shares outstanding | 21,303 | 204,245 | 229,982 | |||||||||
Net (loss) income per common share | $ | (1.66 | ) | $ | 0.83 | $ | 0.74 | |||||
Book value per common share | $ | 28.19 | $ | 7.02 | $ | 6.62 |
Year Ended December 31, 2010 | ||||||||||||
Pro forma | Pro forma and | |||||||||||
$525MM | as adjusted | |||||||||||
Actual | Capital Raise | for Rights Offering | ||||||||||
(In thousands, except for per share data) | ||||||||||||
Net (loss) income attributable to common stockholders | $ | (122,045 | ) | $ | 76,450 | $ | 76,450 | |||||
Average common shares outstanding | 11,310 | 176,202 | 201,939 | |||||||||
Net (loss) income per common share | $ | (10.79 | ) | $ | 0.43 | $ | 0.38 | |||||
Book value per common share | $ | 29.71 | $ | 7.17 | $ | 6.75 |
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As of March 31, 2011 | ||||||||||||
Pro forma and | ||||||||||||
Pro forma* | as adjusted | |||||||||||
$525MM | for Rights | |||||||||||
Actual | Capital Raise | Offering | ||||||||||
(In thousands, except share data) | ||||||||||||
Long term borrowings | $ | 225,000 | $ | 225,000 | $ | 225,000 | ||||||
Stockholders’ equity | ||||||||||||
Preferred stock, $1.00 par value, 50,000,000 shares authorized; | ||||||||||||
450,195 shares of Series A Preferred Stock outstanding | 11,255 | 11,255 | 11,255 | |||||||||
475,987 shares of Series B Preferred Stock outstanding | 11,900 | 11,900 | 11,900 | |||||||||
460,611 shares of Series C Preferred Stock outstanding | 11,515 | 11,515 | 11,515 | |||||||||
510,592 shares of Series D Preferred Stock outstanding | 12,765 | 12,765 | 12,765 | |||||||||
624,487 shares of Series E Preferred Stock outstanding | 15,612 | 15,612 | 15,612 | |||||||||
424,174 shares of Series G Preferred Stock outstanding, net of discount | 363,677 | — | — | |||||||||
Common stock, $0.10 par value; 2,000,000,000 shares authorized, 21,963,522 shares issued and 21,303,669 shares outstanding, actual; $0.10 par value, 2,000,000,000 shares authorized, 204,905,319 shares issued and 204,245,466 shares outstanding, pro forma with a capital raise of $525 million; $0.10 par value, 2,000,000,000 shares authorized, 230,642,437 shares issued and 229,982,584 shares outstanding, pro forma and as adjusted for Rights Offering | 2,196 | 20,490 | 23,064 | |||||||||
Treasury stock (at par value) | (66 | ) | (66 | ) | (66 | ) | ||||||
Additional paid-in capital | 319,483 | 943,712 | 1,028,747 | |||||||||
Legal surplus | 299,006 | 299,006 | 299,006 | |||||||||
(Accumulated deficit) retained earnings | (35,498 | ) | 155,227 | 155,227 | ||||||||
Accumulated other comprehensive income-unrealized gain on securities available for sale, net of tax | 15,424 | 15,424 | 15,424 | |||||||||
Total stockholders’ equity | 1,027,269 | 1,496,840 | 1,584,449 | |||||||||
Total Capitalization | $ | 1,252,269 | $ | 1,721,840 | $ | 1,809,449 | ||||||
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As of March 31, 2011 | ||||||||||||
Pro forma* | Pro forma and | |||||||||||
$525MM | as adjusted | |||||||||||
Actual | Capital Raise | for Rights Offering | ||||||||||
Total capital (Total capital to risk-weighted assets) | 11.97 | % | 16.19 | % | 16.97 | % | ||||||
Tier 1 capital ratio (Tier I to risk-weighted assets) | 10.65 | % | 14.86 | % | 15.64 | % | ||||||
Leverage ratio | 7.78 | % | 10.52 | % | 11.01 | % | ||||||
Tangible common equity ratio (tangible common equity to tangible assets) | 3.71 | % | 8.96 | % | 9.47 | % | ||||||
Tier 1 common equity to risk-weighted assets ratio | 4.82 | % | 12.29 | % | 13.07 | % |
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SEC rules provideand regulations require that stockholders must submit to a company any proposals that theystockholders would like included in thea company’s proxy statementmaterials must be received by the Secretary of the Corporation no later than 120 days before the first anniversary of the date on which the previous year’s proxy statement was first mailed to stockholders unless the date of the annual meeting has been changed by more than 30 days from the date of the previous year’s meeting. When the date is changed by more than 30 days from the date of the previous year’s meeting, the deadline is a reasonable time before the company begins to print and send its proxy materials. In accordance with our By-laws, we expectThe Corporation expects to hold our 2011its 2013 Annual Meeting of Stockholders on November 17, 2011,or before April 25, 2013, subject to the right of the Board of Directors to change thatsuch date based on changed circumstances.
The due date for a proposal that a stockholder wishes to havewanted considered for presentation at the 20112013 Annual Meeting and included in ourthe Corporation’s proxy statement and form of proxy used in connection with thatsuch meeting must be received by the Secretary of the Corporation at the principal executive offices of the Corporation no later than September 7, 2011.was November 28, 2012. Any such proposal must comply with the requirements ofRule 14a-8 promulgated under the Securities Exchange Act of 1934, as amended.
Under the Corporation’s By-laws,By-Laws, if a stockholder seeks to propose a nominee for election as a director for consideration at the annual meeting of stockholders, notice must be received by the Corporate Secretary of the Corporation at least 30 days prior to the date of the annual meeting of stockholders. Accordingly, under the By-laws,By-Laws, any stockholders’stockholder nominations for directors for consideration at the 20112013 Annual Meeting must be received by the Secretary of the Corporation at the principal executive offices of the Corporation no later than October 18, 2011.
We Each person to whom this Proxy Statement is delivered may request additional copies of this document, the Prospectus or the Registration Statement, other than an exhibit to the Registration Statement unless that exhibit is specifically incorporated by reference into the document, and First BanCorp. P.O. Box 9146 San Juan, Puerto Rico 00908-0146 (787)729-8041 By Order of the Board of Directors, Form of Amendment to Certificate of Designation for each Series of Preferred Stock FIRST AMENDMENT TO CERTIFICATE OF DESIGNATION OF [ ]% NONCUMULATIVE PERPETUAL MONTHLY INCOME PREFERRED STOCK, SERIES [ ] OF FIRST BANCORP. First BanCorp., a corporation organized and existing under the laws of the Commonwealth of Puerto Rico (the “Corporation”), in accordance with the provisions of the Puerto Rico General Corporations Act (the “Act”), does hereby certify that: On [ ], the Corporation filed with the Secretary of State for the Commonwealth of Puerto Rico a Certificate of Designation of [ ]% Noncumulative Perpetual Monthly Income Preferred Stock, Series [ ] (the “Certificate of Designation”) that created a series of Preferred Stock of the Corporation designated as “[ ]% Noncumulative Perpetual Monthly Income Preferred Stock, Series [ ]” (the “Designated Preferred Stock”). The Board of Directors of the Corporation, in accordance with the Restated Articles of Incorporation, as amended, the By-Laws of the Corporation and Section 3682 of the Puerto Rico Corporations Act adopted the following resolution on , , amending the terms and conditions applicable to the Designated Preferred Stock. The stockholders of the Corporation approved and the Corporation provided notice as required by Section 3657 of the Puerto Rico Corporations Act, of the following amendment, amending the terms and conditions applicable to the Designated Preferred Stock. RESOLVED, that the following text, which is in paragraph 2 of Section F., Voting Rights, of the Certificate of Designation, is hereby deleted in its entirety and shall be replaced with the word “Reserved”: If the Corporation does not pay dividends in full on the Series Preferred Stock for eighteen monthly dividend periods (whether consecutive or not), the holders of outstanding shares of the Series 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 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 Directors or such authorized committee fails to convene such meeting within such 30-day period, the holders of 10% of the outstanding shares of the Series Preferred Stock and any such other stock will be entitled to convene such meeting. 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 Preferred Stock and each such other series of stock for twelve consecutive monthly dividend periods. [Remainder of Page Intentionally Left Blank] IN WITNESS WHEREOF, First BanCorp. has caused this First Amendment to the Certificate of Designation to be signed by Lawrence Odell,MOREADDITIONAL INFORMATIONfile annual, quarterlyincorporate by reference into this Proxy Statement the unaudited financial statements and current reportsrelated notes and other information with the SEC. You can read“Management’s Discussion and copy any materials we fileAnalysis of Financial Condition and Results of Operations” included in our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2012, June 30, 2012, and September 30, 2012 filed with the SEC aton May 11, 2012, August 9, 2012, as amended on September 6, 2012, and November 9, 2012, respectively, and the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. You can request copiesaudited financial statements and related notes and the “Management’s Discussion and Analysis of these documents by writing to the SECFinancial Condition and paying a fee for the copying cost. You can call the SEC at1-800-SEC-0330 for more information about the operationResults of the public reference room. Our SEC filings are also available on the SEC’s internet website atwww.sec.gov.In addition, you can read and copy our SEC filings at the offices of the New York Stock Exchange, 20 Broad Street, New York, N.Y. 10005. Copies of the materials we file with the SEC are also available on our website atwww.firstbankpr.com.We have previously filed with the SEC:(a)Operations” included in our Annual Report onForm 10-K for the fiscal year ended December 31, 2010;(b) our Quarterly Report2011 filed with the SEC onForm 10-Q for March 13, 2012. We also incorporate by reference the quarter ended March 31, 2011; and(c) our Current Reports onForm 8-K filed on January 10, 2011, January 31, 2011, February 15, 2011 with respectMarch 16, 2012, which relates to Item 8.01 only, April 4, 2011, April 15, 2011, June 2, 2011 (as amended July 19, 2011), June 23, 2011, June 29, 2011 (as amended July 19, 2011) (except with respectthe change in our independent registered public accounting firm. The information incorporated by reference is considered to Item 7.01),be a part of this Proxy Statement. You may also access this information at our website at www.firstbankpr.com. No additional information on our website is deemed to be part of or incorporated by reference into this Proxy Statement.July 19 2011.By: Lawrence Odell Secretary Lawrence OdellSan Juan, Puerto RicoJuly [20], 201123
FIRST BANCORP. | ||
By: | ||
Name: | Lawrence Odell | |
Title: | Executive Vice President, General Counsel and |
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