PRE 14A
SCHEDULE 14A
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant þ
Filed by a Party other than the Registrant o
Check the appropriate box:
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Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e) (2)) |
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Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material Pursuant to Section 240.14a-12 |
FIRST BANCORP.
(Name of Registrant as Specified In Its Charter)
Not Applicable
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No fee required. |
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
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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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1519
PONCE DE LEON AVENUE
SAN JUAN, PUERTO RICO 00908
(787) 729-8200
NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS
To the Stockholders of First BanCorp:
NOTICE IS HEREBY GIVEN that pursuant to a resolution of the
Board of Directors and Section 2 of the Corporations
By-laws, the Annual Meeting of Stockholders of First BanCorp
will be held at its principal offices located at 1519 Ponce de
Leon Avenue, Santurce, Puerto Rico, on Tuesday, April 28,
2009, at 2:00 p.m., for the purpose of considering and
taking action on the following matters, all of which are more
completely set forth in the accompanying Proxy Statement:
1. To elect eleven (11) directors, each for a term of
one year expiring at the 2010 Annual Meeting of Stockholders.
2. To approve a non-binding, advisory proposal on the
compensation of First BanCorps named executive officers.
3. To vote on a proposal to ratify the appointment of
PricewaterhouseCoopers LLP as the Corporations Independent
Registered Public Accounting Firm for fiscal year 2009.
4. To transact such other business as may properly come
before the meeting or any adjournment thereof.
Only stockholders of record as of the close of business on
March 13, 2009 are entitled to receive notice of and to
vote at the meeting. A list of such stockholders shall be open
to the examination of any stockholder, for any purpose germane
to the meeting, during ordinary business hours, for a period of
ten days prior to the meeting, at the offices of the Corporation.
You are cordially invited to attend the Annual Meeting. It is
important that your shares be represented regardless of the
number you own. Even if you plan to be present at the meeting,
you are urged to complete, sign, date and promptly return the
enclosed proxy in the envelope provided. If you attend the
meeting, you may vote either in person or by proxy. You may
revoke any proxy that you give in writing or in person at any
time prior to its exercise.
By Order of the Board of Directors,
Lawrence Odell
Secretary
San Juan, Puerto Rico
March [24], 2009
TABLE OF
CONTENTS
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1519
Ponce De Leon Avenue
Santurce, Puerto Rico 00908
TO BE HELD ON APRIL 28,
2009
This Proxy Statement is furnished in connection with the
solicitation of proxies on behalf of the Board of Directors of
First BanCorp (the Corporation) for use at the
Annual Meeting of Stockholders to be held at the
Corporations principal offices located at 1519 Ponce de
Leon Avenue, Santurce, Puerto Rico, on April 28, 2009, at
2:00 p.m., and at any adjournment thereof (the Annual
Meeting). This Proxy Statement and form of proxy are first
being sent or given to stockholders of record on or about
March [24], 2009. The cost of this proxy solicitation is
borne by the Corporation.
SOLICITATION
AND REVOCATION
The Board of Directors has designated two individuals to serve
as proxies to vote the shares represented at the Annual Meeting.
Shares represented by properly executed proxies received will be
voted at the Annual Meeting in accordance with the instructions
specified in the proxy. If you properly submit a proxy but do
not give instructions on how you want your shares to be voted,
your shares will be voted by the designated proxies in
accordance with the Board of Directors recommendations
described below. Any proxy given as a result of this
solicitation may be revoked at any time before it is exercised
by the stockholder by: (i) submitting a written
notification to the Secretary of the Corporation before the date
of the Annual Meeting, (ii) submitting a duly executed
proxy bearing a later date, or (iii) appearing at the
Annual Meeting and giving written notice to the Secretary of his
or her intention to vote in person. The proxies that are being
solicited may be exercised only at the Annual Meeting of the
Corporation or at any adjournment of the meeting.
Each proxy solicited hereby gives discretionary authority to the
Board of Directors of the Corporation to vote the proxy with
respect to such other matters as may properly come before the
Annual Meeting. Except with respect to procedural matters
incident to the conduct of the Annual Meeting, the Board of
Directors is not aware of any business that may properly come
before the Annual Meeting other than that described in this
Proxy Statement. However, if any other matters come before the
Annual Meeting, it is intended that proxies solicited hereby
will be voted with respect to those other matters in accordance
with the judgment of the person voting those proxies.
VOTING
SECURITIES
The Board of Directors has fixed the close of business on
March 13, 2009 as the record date for the determination of
stockholders entitled to receive notice of, and to vote at, the
Annual Meeting. At the close of business on the record date,
there were 92,546,749 issued and outstanding shares of common
stock of the Corporation (the common stock), each of
which is entitled to one vote for each proposal to be considered
at the Annual Meeting.
The presence, either in person or by proxy, of at least a
majority of the Corporations issued and outstanding shares
entitled to vote shall constitute a quorum. Abstentions and
broker non-votes will be treated as shares that are present and
entitled to vote for purposes of determining a quorum. A broker
non-vote results when a broker or nominee has not received
instructions from a stockholder and has expressly indicated in
the proxy card that it does not have discretionary authority
regarding how to vote on a particular matter. There are three
proposals that will be presented for stockholder consideration
at the meeting that will require stockholder vote:
Proposal No. 1 Election of eleven
(11) directors
The affirmative vote of a majority of the total votes cast is
needed to approve the election of directors. To be elected, each
director nominee must receive more votes cast FOR
such nominees election than votes cast AGAINST
such nominees election. Abstentions and broker non-votes
will not be counted as either an affirmative vote or a negative
vote, hence will have no effect on the outcome of the vote on
the proposals, assuming a quorum is present. If a nominee who
currently serves as a director does not receive the required
vote for re-election, corporate
law provides that such director will continue to serve on the
Board of Directors as a holdover director. However,
under the Corporations By-laws each holdover director is
required to tender his or her resignation to the Board. The
Board will act on the tendered resignation within 90 days
following certification of the stockholder vote and shall take
action with respect to the vacancy on the Board in accordance
with the Corporations By-laws.
Proposal No. 2 Approval of a
non-binding advisory vote on the compensation of the
Corporations named executive officers
The affirmative vote of a majority of the total votes present in
person or by proxy and entitled to vote is needed to approve the
advisory proposal on the compensation of the Corporations
named executive officers. Abstentions will have the same effect
as a negative vote and broker non-votes will not be counted in
determining the number of shares necessary for approval.
Proposal No. 3 Ratification of the
appointment of the Independent Registered Public Accounting Firm
The affirmative vote of a majority of the total votes present in
person or by proxy and entitled to vote is needed to ratify the
appointment of PricewaterhouseCoopers LLP as the
Corporations Independent Registered Public Accounting Firm
for fiscal year 2009. Abstentions will have the same effect as a
negative vote and broker non-votes will not be counted in
determining the number of shares necessary for approval.
IMPORTANT
NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS
FOR THE STOCKHOLDER MEETING TO BE HELD ON APRIL 28,
2009
This Proxy Statement and annual report to security holders are
available at
http://bnymellon.mobular.net/bnymellon/fbp.
You may obtain directions to be able to attend the meeting and
vote in person by contacting Lawrence Odell, Secretary of the
Board of Directors, by
e-mail at
lawrence.odell@firstbankpr.com or by telephone at
787-729-8141.
BENEFICIAL
OWNERSHIP OF SECURITIES
Principal
Beneficial Owners
The following sets forth, as of the record date, except as
otherwise stated, information concerning persons who
beneficially own more than 5% of the Corporations issued
and outstanding common stock.
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Name and Address
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Number of Shares
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Percentage
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The Bank of Nova Scotia
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9,250,450
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(a)
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10.00
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%
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44 King Street West 6th Fl.
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Toronto, Canada M5H 1H1
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First Trust Portfolio L.P.
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7,787,467
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(b)
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8.41
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120 East Liberty Drive, Suite 400
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Wheaton, Illinois 60187
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FMR LLC
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7,450,000
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(c)
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8.05
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82 Devonshire Street
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Boston, MA 02109
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Angel Alvarez-Pérez
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7,308,918
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(d)
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7.90
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Condominio Plaza Stella Apt.1504
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Avenida Magdalena 1362
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San Juan, Puerto Rico 00907
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Barclays Global Investors, NA
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6,098,544
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(e)
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6.59
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400 Howard Street
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San Francisco, CA 94105
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(a) |
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On August 24, 2007, the Corporation entered into a
Stockholder Agreement with The Bank of Nova Scotia, which
completed a private placement of 9,250,450 shares of the
Corporations common stock at a price of $10.25 per share
pursuant to the terms of an investment agreement dated
February 15, 2007. The Bank of Nova |
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Scotia filed a Schedule 13D on September 4, 2007
reporting the 10% or 9,250,450 shares beneficial ownership
of the Corporation as of August 24, 2007. The Bank of Nova
Scotia reported that it possessed sole voting power and sole
dispositive power over 9,250,450 shares. The Bank of Nova
Scotia also reported that it did not possess shared voting or
shared dispositive power over any shares beneficially owned. |
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Based solely on a Schedule 13G filed with the Securities
and Exchange Commission on February 9, 2009 in which First
Trust Portfolios L.P. and certain of its affiliates
reported aggregate beneficial ownership of 7,787,467 shares
of the Corporation as of December 31, 2008. First
Trust Portfolios L.P. and certain of its affiliates
reported that they possessed shared power to vote or to direct
the vote of and shared power to dispose or to direct the
disposition of 7,787,467 shares beneficially owned. |
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Based solely on a Schedule 13G/A filed with the Securities
and Exchange Commission on February 16, 2009 in which FMR
LLC reported aggregate beneficial ownership of
7,450,000 shares of the Corporation as of December 31,
2008. FMR LLC reported that it possessed sole power to dispose
or to direct the disposition of 7,450,000 shares. FMR
reported that it did not possess sole power to vote any shares
beneficially owned. FMR LLC also reported that it did not
possess shared voting or shared dispositive power over any
shares beneficially owned. |
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Based solely on a Schedule 13D filed with the Securities
and Exchange Commission on May 19, 2008 by Mr. Angel
Àlvarez Pérez in which Mr. Àlvarez Pérez
reported aggregate beneficial ownership of 7,308,918 shares
of the Corporation. |
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Based solely on a Schedule 13G filed with the Securities
and Exchange Commission on February 6, 2009 in which
Barclays Global Investors, NA and certain of its affiliates
reported aggregate beneficial ownership of 6,098,544 shares
of the Corporation as of December 31, 2008. Barclays Global
Investors, NA and certain of its affiliates reported that they
possessed sole voting power over 4,895,366 shares and sole
dispositive power over 6,098,544 shares. Barclays Global
Investors, NA and certain of its affiliates also reported that
they did not possess shared voting or shared dispositive power
over any shares beneficially owned. |
Beneficial
Ownership by Directors or Nominees and Executive Officers of the
Corporation
The following table sets forth information with regard to the
total number of shares beneficially owned, as of
February 17, 2009, by (i) each current member of the
Board of Directors, (ii) each nominee to the Board of
Directors, (iii) each executive officer named in the
Summary Compensation table, (iv) certain other officers of
the Corporation, and (v) all current directors, executive
officers and certain other officers as a group. Information
regarding the beneficial ownership by officers and directors is
derived from information submitted to the Corporation by such
officers and directors.
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Name
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Number of Shares*
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Percentage**
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Directors or Director Nominees:
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Luis M. Beauchamp, Chairman, President & CEO
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2,097,672
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(a)
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2.24
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%
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Aurelio Alemán, COO & Senior Executive VP
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808,000
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(b)
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*
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José Menéndez-Cortada
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35,446
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(c)
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*
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José Teixidor
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129,767
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*
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Jorge L. Díaz
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62,737
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(d)
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*
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José Ferrer-Canals
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5,527
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*
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Sharee Ann Umpierre-Catinchi
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81,677
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(e)
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*
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Fernando Rodríguez-Amaro
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30,687
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*
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Héctor M. Nevares
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4,543,396
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(f)
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4.91
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Frank Kolodziej
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2,762,483
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2.98
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José F. Rodríguez
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324,077
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*
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Executive Officers:
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Fernando Scherrer, CFO & Executive VP
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222,500
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(g)
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*
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Lawrence Odell, General Counsel, Secretary & Executive
VP
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205,000
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(h)
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*
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3
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Name
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Number of Shares*
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Percentage**
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Randolfo Rivera, Executive VP
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406,450
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(i)
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*
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Emilio Martinó, Chief Credit Officer & Executive
VP
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72,691
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(j)
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*
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Nayda Rivera-Batista, Chief Risk Officer & Executive VP
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78,564
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(k)
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*
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Dacio Pasarell, Executive VP
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126,000
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(l)
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*
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Cassan Pancham, Executive VP
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116,366
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(m)
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*
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Pedro Romero, Chief Accounting Officer and Senior VP
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35,091
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(n)
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*
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Victor Barreras, Treasurer & Senior VP
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70,000
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(o)
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*
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Current Directors and Executive Officers as a group(p)
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12,214,131
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12.78
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%
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* |
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Number of shares does not include shares acquired through the
Corporations Defined Contribution Plan in which
participants may acquire shares of the Corporation through a
unitized stock fund. |
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** |
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Represents less than 1%. |
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(a) |
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Includes options to purchase 1,103,600 shares. |
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(b) |
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Includes options to purchase 708,000 shares. |
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Includes 550 shares owned by Martínez-Alvarez,
Menéndez-Cortada & Lefranc Romero, PSC of which
Mr. Menéndez-Cortada is an indirect beneficial owner. |
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Includes 22,460 shares owned separately by his spouse. |
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Includes 9,000 shares owned jointly with her spouse.
Excludes shares owned by Mrs. Umpierre-Catinchis
father and a former director, Angel L. Umpierre, with respect to
which Mrs. Umpierre-Catinchi disclaims ownership. |
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Includes 3,941,459 shares owned by his father, Héctor
G. Nevares, with respect to which Mr. Héctor M.
Nevares shares voting and investment powers pursuant to a power
of attorney. |
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(g) |
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Includes options to purchase 175,000 shares. Includes
15,000 shares owned by MF Top Side effects and
5,500 shares owned by FM Side Development, both of which
Mr. Scherrer is a beneficial owner. |
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(h) |
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Includes options to purchase 175,000 shares. |
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(i) |
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Includes options to purchase 382,110 shares. |
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(j) |
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Includes options to purchase 68,000 shares. |
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(k) |
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Includes options to purchase 70,000 shares. |
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(l) |
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Includes options to purchase 96,000 shares. |
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(m) |
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Includes options to purchase 110,000 shares. |
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(n) |
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Includes options to purchase 35,000 shares. |
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(o) |
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These are options to purchase 70,000 shares. |
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(p) |
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Some of the Corporations officers and directors own shares
of preferred stock which are not reflected in the table above as
the same are non-voting, except for class voting rights on
matters that would adversely affect the rights of the holders of
the preferred stock, and non-convertible preferred stock. |
On January 16, 2009, as part of the Capital Purchase
Program of the United States Department of the Treasurys
(the Treasury), the Corporation entered into a
Letter Agreement with the Treasury pursuant to which the
Corporation sold 400,000 shares of Preferred Stock to the
Treasury, along with a warrant to purchase 5,842,259 shares
of Common Stock (the Warrant Shares) at an initial
exercise price of $10.27 per share. The table above does not
reflect the Treasurys ownership of the Preferred Stock
because, subject to the terms of the Certificate of Designations
of the Preferred Stock, the Preferred Stock is non-voting except
for class voting rights on matters that would adversely affect
the rights of the holders of the Preferred Stock. The table does
not reflect beneficial ownership by the Treasury of the Warrant
Shares because, pursuant to the Letter Agreement, the Treasury
does not have any voting rights with respect to the Warrant
Shares.
4
INFORMATION
WITH RESPECT TO NOMINEES STANDING FOR ELECTION AS DIRECTORS AND
WITH RESPECT TO EXECUTIVE OFFICERS OF THE CORPORATION
The By-laws of the Corporation provide that the Board of
Directors shall consist of a number of members fixed from time
to time by resolution of a majority of the Board of Directors,
provided that the number of directors shall always be an odd
number and not less than five nor more than fifteen. The Board
of Directors currently has eleven members. The
Corporations Articles of Incorporation and By-laws were
amended by stockholders at the annual meeting of stockholders
held on April 29, 2008 to eliminate the provisions
requiring a classified Board. Therefore, in accordance with the
restated Articles of Incorporation and By-laws, the
Corporations directors now stand for election annually.
The individuals elected will serve for one year terms expiring
at the 2010 Annual Meeting and, with respect to each director,
until his or her successor is elected and qualified.
The Corporations By-laws further provide that any director
elected by an affirmative vote of the majority of the Board of
Directors to fill a vacancy shall serve until the next election
of directors by stockholders.
The Corporations retirement policy for the Board of
Directors states that directors who reach the age of 70 may
continue to serve until the end of the term to which they were
elected, but will not be eligible to stand for re-election. For
a detailed description of the Corporate Governance and
Nominating Committees functions, responsibilities and
operations please refer to the Corporate Governance and
Nominating Committee section.
Unless otherwise directed, each proxy executed and returned by a
stockholder will be voted FOR the election of the nominees
listed below. If any nominee should be unable or unwilling to
stand for election at the time of the Annual Meeting, the
proxies will nominate and vote for the replacement nominee or
nominees as the Board of Directors may propose. At this time,
the Board of Directors of the Corporation knows of no reason why
any of the persons listed below may not be able to serve as a
director if elected. On February 26, 2009, the Board of
Directors approved the inclusion of the nominees in the
Corporations 2009 proxy card.
The members of the Board of Directors of First BanCorp are also
the members of the Board of Directors of FirstBank Puerto Rico
(FirstBank or the Bank). The information
presented below regarding the time of service on the Board of
Directors includes terms concurrently served on the Board of
Directors of the Bank.
PROPOSAL NO. 1
NOMINEES
STANDING FOR ELECTION AS DIRECTORS FOR A ONE-YEAR TERM
EXPIRING
2010
Luis M.
Beauchamp, 66
Chairman, President and Chief Executive Officer
Chairman from January 2006 to present. President and Chief
Executive Officer from October 2005 to present. Senior Executive
Vice President, Wholesale Banking of FirstBank, from March 1997
to October 2005. Executive Vice President, Chief Lending Officer
from 1990 to March 1997. General Manager New York
banking operations of Banco de Ponce from 1988 to 1990. He had
the following responsibilities at the Chase Manhattan Bank,
N.A.: Regional Manager for the Ecuador and Colombia operations
and corporate finance for the Central American operations, in
1988; Country Manager for Mexico from 1986 to 1988; and Manager
of Wholesale Banking in Puerto Rico from 1984 to 1986. Director
and Chairman of the Board of FirstBank, First Leasing and Rental
Corporation, First Federal Finance Corporation d/b/a Money
Express, First Mortgage, Inc., FirstBank Overseas Corp., First
Insurance Agency VI, Inc., First Express, Inc., FirstBank
Insurance Agency Inc., Ponce General, Inc., and FirstBank
Florida. Joined the Corporation in 1990. Director since
September 2005.
Aurelio
Alemán, 50
Senior Executive Vice President and Chief Operating
Officer
Senior Executive Vice President and Chief Operating Officer from
October 2005 to present. Executive Vice President, responsible
for consumer banking and auto financing of FirstBank, since 1998
and since April 2005 also responsible for the retail banking
distribution network, First Mortgage and FistBank Virgin Islands
operations. President of First Federal Finance Corporation d/b/a
Money Express from 2000 to 2005. President of FirstBank
5
Insurance Agency, Inc. from 2001 to 2005. President of First
Leasing & Rental Corp. from 1999 to June 2007. From
1996 to 1998, Vice President of CitiBank, N.A., responsible for
wholesale and retail automobile financing and retail mortgage
business. Vice President of Chase Manhattan Bank, N.A., of
banking operations and technology for Puerto Rico and the
Eastern Caribbean region from 1990 to 1996. Director of
FirstBank, First Leasing and Rental Corporation, First Federal
Finance Corporation d/b/a Money Express, FirstBank Insurance
Agency, Inc., First Insurance Agency, Inc., FirstExpress, Inc.,
FirstMortgage, Inc., Ponce General Corporation, FirstBank
Florida, Grupo Empresas Servicios Financieros, Inc. d/b/a PR
Finance, and FirstBank Overseas Corp. Joined the Corporation in
1998. Director since September 2005.
José
Menéndez-Cortada, 61
Attorney at law since 1973. Director and Vice President in
charge of the corporate and tax divisions of
Martínez-Alvarez, Menéndez-Cortada & Lefranc
Romero, PSC, a firm that was formerly a partnership where
Mr. Menéndez served as the partner in charge of the
corporate and tax divisions, formed since 1977. General Counsel
to the Board of Bermudez & Longo, S.E. from 1985 to
present. Director of Tasis Dorado School since 2002. Director of
the Homebuilders Association of Puerto Rico since 2002. Trustee
of the Luis A. Ferré Foundation, Inc., since 2002. Director
since April 2004. He has been the Lead Independent Director
since February 2006.
José
Teixidor, 55
Chief Executive Officer of B. Fernandez & Hnos., Inc.
and Chief Executive Officer and President of
B. Fernández Holding, Inc. from May 2003 to present;
Chairman of the Board of Pan Pepín Inc. from 1998 to
present; Chairman of the Board of Baguettes, Inc. from 1998 to
2006; Chairman of the Board of Pan Pepín Baking, Inc. from
2004 to present; President of Swiss Chalet, Inc. from 2000 to
present; Chairman of the Board of Marvel International from 2005
to present; member of the Board of the Puerto Rico Chamber of
Commerce and of the Industry and Food Distribution Chamber of
Commerce; member of the Board of the Distributors and
Manufacturers Association; member of the Wholesalers Chamber of
Puerto Rico; member of the Board of El Nuevo Día from 1996
to 2006; and Chairman of Bohio International Inc. from 2007 to
present. Director since January 1994.
Jorge L.
Díaz, 54
Executive Vice President and member of the Board of Directors of
Empresas Díaz, Inc. from 1981 to present, and Executive
Vice President and Director of Betteroads Asphalt Corporation,
Betterecycling Corporation, and Coco Beach Development
Corporation, and its subsidiaries. Member of the Chamber of
Commerce of Puerto Rico, the Association of General Contractors
of Puerto Rico and the U.S. National Association of General
Contractors, member of the Board of Trustees of Baldwin School
of Puerto Rico. Director since 1998.
José
L. Ferrer-Canals, 49
Doctor of Medicine in private Urology practice since 1992.
Commissioned captain in the United States Air Force Reserve in
March 1991 and honorably discharged with rank of Major in 2005.
Member of the Alpha Omega Alpha Honor Medical Society since
induction in 1986. Member of the Board of Directors of the
American Cancer Society, Puerto Rico Chapter, from 1999 to 2003.
Member of the Board of Directors of the American Red Cross,
Puerto Rico Chapter, from 2005 to present. Obtained a Master of
Business Administration degree from the University of New
Orleans, of the Louisiana State University System in September
2007. Director since 2001.
Sharee
Ann Umpierre-Catinchi, 49
Doctor of Medicine. Associate Professor at the University of
Puerto Ricos Department of Obstetrics and Gynecology from
1993 to present. Director of the Division of Gynecologic
Oncology of the University of Puerto Ricos School of
Medicine from 1993 to present. Board Certified by the National
Board of Medical Examiners, American Board of Obstetrics and
Gynecology and the American Board of Obstetrics and Gynecology,
Division of Gynecologic Oncology. Director since 2003.
6
Fernando
Rodríguez-Amaro, 60
Certified Public Accountant, Certified Fraud Examiner, Certified
Valuation Analyst and Certified Financial Forensics. Managing
Partner and Partner in Charge of the Audit and Accounting
Division of RSM ROC & Company. Has been with RSM
ROC & Company for the past twenty-eight years and
prior thereto served as Audit Manager with Arthur
Andersen & Co. for over nine years.
Mr. Rodríguez Amaro has over 37 years of public
accounting experience. He has served clients in the banking,
insurance, manufacturing, construction, government, advertising,
radio broadcasting and services industries. Member of the Board
of Trustees of Sacred Heart University of Puerto Rico since
August 2003 to present, serving as member of the Executive
Committee and Chairman of the Audit Committee since 2004. Member
of the Board of Trustees of Colegio Puertorriqueño de
Niñas, since 1996 to present, and also serving as a member
of the Board of Directors from 1998 to 2004 and from late 2008
to present and Member of the Board of Directors of Proyecto de
Niños de Nueva Esperanza, Inc. since 2003. Director and
Chairman of the Audit Committee since November 2005.
Héctor
M. Nevares, 58
Attorney at law since 1977. Member of the Board of Directors of
Dean Foods Company, a publicly held company, since 1995 to
present, where he also serves on the Audit Committee. Member of
the Board of Directors of V. Suarez & Co. since 2006
to present, and member of the Board of Directors of Indulac from
1982 to 2005. President and Chief Executive Officer of Suiza
Dairy, a Puerto Rico dairy processor, from 1983 to 1998, having
served in additional executive capacities at Suiza Dairy from
June 1972 to 1983. In the nonprofit sectors, Mr. Nevares
was a member of the Board of Directors of the Puerto Rico
Government Development Bank from 1989 to 1993, and is currently
a member of the Boards of Caribbean Preparatory Schools since
1999, the Corporation for the Development of the Cantera
Peninsula since 1998, and Hacienda San Martin Inc. since
2000. Mr. Nevares was previously a member of the Board of
Directors of the Corporation from 1993 to 2002 and currently a
Director since July 2007.
Frank
Kolodziej, 65
President and Chief Executive Officer of Centro Tomográfico
de Puerto Rico, Inc. since 1978 to present; Somascan, Inc. since
1983 to present; Instituto Central de Diagnóstico, Inc.
from 1991 to present, Advanced Medical Care, Inc. from 1994 to
present; Somascan Plaza, Inc. and PlazaMED, Inc. since 1997 to
present; International Cyclotrons, Inc. since 2004 to present;
and Somascan Cardiovascular since January 2007 to present.
Pioneer in the Caribbean in the areas of Computerized Tomography
(CT), Digital Angiography (DSA), Magnetic Resonance Imaging
(MRI), and PET/CT-16 (Positron Emission Tomography).
Mr. Kolodziej was previously a member of the Board of
Directors of the Corporation from 1988 to 1993 and currently a
Director since July 2007.
José
F. Rodríguez, 59
President of L&R Investments, Inc., a privately owned local
investment company, from May 2005 to present; Vice-Chairman and
member of the Board of Directors of Government Development Bank
for Puerto Rico from March 2005 to December 2006. Member of the
Board of Directors of Fundación Chana &
Samuel Levis from 1998 to 2007. Partner, Executive
Vice-president and member of the Board of Directors of
Ledesma & Rodríguez Insurance Group, Inc. from
1990 to 2005. President of Prudential Bache PR, Inc.,
wholly-owned subsidiary of then existing Prudential Bache Group,
from 1980 to 1990. Director since July 2007.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE
ELECTION OF EACH INDIVIDUAL NOMINATED TO SERVE AS A DIRECTOR.
7
EXECUTIVE
OFFICERS WHO ARE NOT DIRECTORS
The executive officers of the Corporation and FirstBank who are
not directors are listed below.
Fernando
Scherrer, 40
Executive Vice President and Chief Financial Officer
Executive Vice President and Chief Financial Officer since July
2006. He is a Certified Public Accountant.
Co-Founder,
Managing Partner and Head of Audit and Consulting Practices at
Scherrer Hernández & Co., from 2000 to 2006.
Prior to founding Scherrer Hernández & Co., he
worked with PricewaterhouseCoopers LLP for 10 years
where he audited financial institutions and insurance companies.
He has over 17 years of financial and accounting experience
in the financial services, insurance, retail and education
industries. Since October 2006, he has served as a director of
First Leasing and Rental Corporation, First Federal Finance
Corporation d/b/a Money Express, FirstBank Insurance Agency,
Inc., FirstMortgage, Inc., Ponce General Corporation.
Lawrence
Odell, 60
Executive Vice President, General Counsel and Secretary
Executive Vice President, General Counsel and Secretary since
February 2006. Senior Partner at Martínez Odell &
Calabria since 1979. Has over 26 years of experience in
specialized legal issues related to banking, corporate finance
and international corporate transactions. Served as Secretary of
the Board of Pepsi-Cola Puerto Rico, Inc. from 1992 to 1997.
Served as Secretary to the Board of Directors of BAESA, S.A.
from 1992 to 1997.
Randolfo
Rivera, 55
Executive Vice President and Wholesale Banking Executive
Executive Vice President in charge of corporate banking, middle
market, international, government and institutional, structure
finance and cash management areas of FirstBank since June 1998
and since October 2005 also in charge of real estate lending,
commercial mortgage unit in Puerto Rico and merchant banking.
Vice President and component executive for local companies,
public sector and institutional markets for Chase Manhattan
Bank, N.A. in Puerto Rico from April 1990 to December 1996.
Corporate Finance Executive in charge of the Caribbean and
Central American region for Chase Manhattan Bank in Puerto Rico
from January 1997 to May 1998.
Emilio
Martinó, 58
Executive Vice President and Chief Lending Officer
Chief Lending Officer and Executive Vice President of FirstBank
since October 2005. Director of FirstBank Florida since August
2006. Senior Vice President and Credit Risk Manager of FirstBank
from June 2002 to October 2005. Staff Credit Executive for
FirstBanks Corporate and Commercial Banking Business
components since November 2004. First Senior Vice President of
Banco Santander Puerto Rico; Director for Credit Administration,
Workout and Loan Review, from 1997 to 2002. Senior Vice
President for Risk Area in charge of Workout, Credit
Administration, and Portfolio Assessment for Banco Santander
Puerto Rico from 1996 to 1997. Deputy Country Senior Credit
Officer for Chase Manhattan Bank Puerto Rico from 1986 to 1991.
Nayda
Rivera-Batista, 35
Executive Vice President, Chief Risk Officer and Assistant
Secretary
Senior Vice President and Chief Risk Officer since April 2006
and promoted to Executive Vice President in January 2008.
Assistant Secretary of the Board since November 2006. Senior
Vice President and General Auditor from July 2002 to April 2006.
She is a Certified Public Accountant, Certified Internal Auditor
and Certified in Financial Forensics. She has more than
13 years of combined work experience in public company,
auditing, accounting, financial reporting, internal controls,
corporate governance, risk management and regulatory compliance.
Served as a member of the Board of Trustees of the Bayamón
Central University from January 2005 to January 2006. Joined the
Corporation in 2002.
8
Dacio A.
Pasarell, 60
Executive Vice President and Banking Operations Executive
Executive Vice President and Banking Operations Executive since
September 2002. Had over 27 years of experience at Citibank
N.A. in Puerto Rico, which included the following positions:
Vice President, Retail Bank Manager, from 2000 to 2002; Vice
President and Chief Financial Officer from 1996 to 1998; Vice
President, Head of Operations Caribbean Countries
from 1994 to 1996; Vice President Mortgage and Automobile
Financing; Product Manager, Latin America from 1986 to 1994;
Vice President, Mortgage and Automobile Financing Product
Manager for Puerto Rico from 1986 to 1996. President of
Citiseguros PR, Inc. from 1998 to 2001. Chairman of Ponce
General Corporation and Director of FirstBank Florida since
April 2005.
Cassan
Pancham, 48
Executive Vice President and Eastern Caribbean Region
Executive
Executive Vice President of FirstBank since October 2005. First
Senior Vice President, Eastern Caribbean Region of FirstBank
from October 2002 until October 2005. Director and President of
FirstExpress, Inc., and First Insurance Agency, Inc. He held the
following positions at JP Morgan Chase Bank Eastern Caribbean
Region Banking Group: Vice President and General Manager, from
December 1999 to October 2002; Vice President, Business,
Professional and Consumer Executive, from July 1998 to December
1999; Deputy General Manager from March 1999 to December 1999,
and Vice President, Consumer Executive, from December 1997 to
1998. Member of the Governing Board of Directors of the Virgin
Islands Port Authority since June 2007; Chairman of the Board
since January, 2008.
The Corporations By-laws provide that each officer shall
be elected annually at the first meeting of the Board of
Directors after the annual meeting of stockholders and that each
officer shall hold office until his or her successor has been
duly elected and qualified or until his or her death,
resignation or removal from office.
CERTAIN
OTHER OFFICERS
Pedro
Romero, 35
Senior Vice President and Chief Accounting Officer
Senior Vice President and Chief Accounting Officer since August
2006. Senior Vice President and Comptroller from May 2005 to
August 2006. Vice President and Assistant Comptroller from
December 2002 to May 2005. He is a Certified Public Accountant
with a Master of Science in Accountancy and has technical
expertise in management reporting, financial analysis, corporate
tax, internal controls and compliance with US GAAP, SEC rules
and Sarbanes Oxley. He has more than eleven years of experience
in accounting including, big four public accounting company,
banking and financial services. Joined the Corporation in
December 2002.
Víctor
M. Barreras-Pellegrini, 40
Senior Vice President and Treasurer
Senior Vice President and Treasurer since July 6, 2006.
Previously held various positions with Banco Popular de Puerto
Rico from January 1992 to June 2006, including, Fixed-Income
Portfolio Manager of the Popular Assets Management division from
1998 to 2006 and Investment Officer in the Treasury division
from 1995 to 1998. Director of FirstBank Overseas Corp. and
First Mortgage. He has over 16 years of experience in
banking and investments and holds the Chartered Financial
Analyst designation. Joined the Corporation in 2006.
9
CORPORATE
GOVERNANCE AND RELATED MATTERS
General
The following discussion summarizes the Corporations
corporate governance including director independence, board and
committee structure, function and composition, and governance
charters, policies and procedures. The Corporations
Corporate Governance Guidelines and Principles, the charters
approved by the Board of Directors (the Board) of
the Audit Committee, the Compensation and Benefits Committee,
the Corporate Governance and Nominating Committee, the Credit
Committee, the Asset/Liability Committee, the Corporations
Code of Ethics, the Corporations Code of Ethics for Senior
Financial Officers and the Independence Principles for Directors
are available through the Corporations web site at
www.firstbankpr.com, under Investor
Relations / Our Management / Governance
Documents. First BanCorp stockholders may obtain printed
copies of these documents by writing to Lawrence Odell,
Secretary of the Board of Directors, at First BanCorp, 1519
Ponce de León Avenue, Santurce, Puerto Rico 00908.
Code of
Ethics
In October 2008, the Corporation adopted a new Code of Ethics
for Senior Financial Officers (the Code). The Code
applies to each officer of the Corporation or its affiliates
having any or all of the following responsibilities
and/or
authority, regardless of formal title: the president, the chief
executive officer, the chief financial officer, the chief
accounting officer, the controller, the treasurer, the tax
manager, the general counsel, the general auditor, any assistant
general counsel responsible for finance matters, any assistant
controller and any regional or business unit financial officer.
The Code states the principles to which senior financial
officers must adhere in order to act in a manner consistent with
the highest moral and ethical standards. The Code imposes a duty
to avoid conflicts of interest and to comply with the laws and
regulations that apply to the Corporation and its subsidiaries,
among other matters. Only the Board, or a duly authorized
committee of the Board, may grant waivers from compliance with
this Code. Any waiver of any part of the Code will be promptly
disclosed to stockholders as required by the rules of the
Securities and Exchange Commission (SEC) and the New
York Stock Exchange (NYSE). Neither the Audit
Committee nor the General Counsel received any requests for
waivers under the Code in 2008.
The Corporation has also adopted a Code of Ethics that is
applicable to all employees and Directors of the Corporation and
all of its subsidiaries, which seeks to strengthen the ethical
culture that prevails in the Corporation. The Code of Ethics
addresses, among other matters, conflicts of interest,
operational norms and confidentiality of the Corporations
and its customers information.
Independence
of the Board of Directors
The Board annually evaluates the independence of its members
based on the criteria for determining independence identified by
the NYSE, the SEC and the Corporations Independence
Principles for Directors. The Corporations Corporate
Governance Guidelines and Principles requires that a majority of
the Board be composed of directors who meet the requirements for
independence established in the Corporations Independence
Principles for Directors, these, at a minimum, incorporate those
requirements established by the NYSE and the SEC. The Board has
concluded that the Corporation has a majority of independent
directors. The Board has determined that Messrs. José
Teixidor-Méndez, José L. Ferrer-Canals, Jorge L.
Díaz, Fernando Rodríguez-Amaro, José
Menéndez-Cortada, Sharee Ann Umpierre-Catinchi, Héctor
M. Nevares-La Costa, Frank Kolodziej-Castro and José
Rodríguez-Perelló are independent under the
Independence Principles for Directors. In determining director
José L. Ferrer-Canals independence, the Board took
into consideration appraisal services rendered by his sibling to
First Mortgage, a wholly owned subsidiary of FirstBank, for
which First Mortgage paid $4,011 in 2008.
Messrs. Luis M. Beauchamp, President and Chief Executive
Officer, and Aurelio Alemán, Senior Executive Vice
President and Chief Operating Officer, are not considered to be
independent as they are management Board members. During 2008,
the independent directors usually met in executive sessions
without the Corporations management on days where there
were regularly scheduled Board meetings. In addition,
non-management directors separately met twice during 2008 with
José Menéndez-Cortada, Lead Independent Director,
serving as chairman during the meeting.
10
Director
Stock Ownership
The Board believes that appropriate stock ownership by directors
further aligns their interests with those of the stockholders.
Accordingly, in August 2007, the Board adopted Director Stock
Ownership Requirement Guidelines (the Guidelines)
for all non-management directors, which became effective upon
adoption. Non-management directors are expected to hold an
investment position in the Corporations common stock
having a cost basis, except as described below, equivalent to at
least $250,000. Shares of stock owned by the non-management
directors upon the adoption of the Guidelines were considered
for purposes of compliance. In this respect, the amount of
shares of stock owned by the non-management directors were
valued at the greater of the historical cost or the market value
at the closing price of the stock on the date the Guidelines
were adopted. Upon meeting the ownership goal, that number of
shares, considering stock split adjustments, becomes fixed and
must be maintained until the end of the directors service
on the Board. Directors are required to achieve the ownership
goal within three years after the later of the Boards
adoption of the Guidelines or the directors appointment to
the Board. In reaching the ownership requirement, annual
investments are expected to be made in equal proportions
throughout the three-year period. The Guidelines shall be
administrated by the Corporate Governance and Nominating
Committee of the Board. The Committee shall have the discretion
to submit for approval by the Board, and the Board may at any
time approve amendments or modifications to the Guidelines.
Communications
with the Board
Any person who desires to communicate with the
Corporations Board may do so by writing to the Chairman of
the Board or to the Lead Independent Director in care of the
Office of the Corporate Secretary at the Corporations
headquarters, 1519 Ponce de León Avenue, Santurce, Puerto
Rico 00908 or by
e-mail to
directors@firstbankpr.com. Communications may also be made by
calling the following telephone number: 1-787-729-8200.
Communications related to accounting, internal accounting
controls or auditing matters will be referred to the Chair of
the Audit Committee. Depending upon the nature of other
concerns, it may be referred to the Corporations Internal
Audit Department, the Legal or Finance Department, or any other
appropriate department. As they deem necessary or appropriate,
the Chairman of the Board or the Chair of the Audit Committee
may direct that certain concerns communicated to them be
presented to the Audit Committee or the Board, or that they
receive special treatment, including the retention of outside
counsel or other outside advisors.
Board
Meetings
The Board is responsible for directing and overseeing the
business and affairs of the Corporation. The Board represents
the Corporations stockholders and its primary purpose is
to build long term stockholder value. The Board meets on a
regularly scheduled basis during the year to review significant
developments affecting the Corporation and to act on matters
that require Board approval. It also holds special meetings when
an important matter requires Board action between regularly
scheduled meetings. The Board of the Corporation met twenty
(20) times during fiscal year 2008. Each member of the
Board participated in at least 75% of the Board meetings held
during fiscal year 2008. While the Corporation has not adopted a
formal policy with respect to directors attendance at
annual meetings of stockholders, the Corporation encourages it s
directors to attend such meetings. All of the Corporations
directors attended the last annual meeting of stockholders held
on April 29, 2008.
Board
Committees
The Board has five standing committees: the Audit Committee, the
Compensation and Benefits Committee, the Corporate Governance
and Nominating Committee, the Asset/Liability Committee and the
Credit Committee. The members of the committees are appointed
and removed by the Board, which also appoints a chair for each
committee. The functions of those committees, their current
members and the number of meetings held during 2008 are set
forth below. Each member of the Board Committees participated in
at least 75% of Board and applicable Committee meetings held
during fiscal year 2008.
Audit
Committee
The Audit Committee charter provides that this Committee shall
be composed of at least three outside directors who meet the
independence criteria established by the NYSE, the SEC and the
Corporations Independence Principles for Directors.
11
As set forth in the Audit Committee Charter, the Audit Committee
represents and assists the Board in fulfilling its
responsibility to oversee management regarding (i) the
conduct and integrity of the Corporations financial
reporting to any governmental or regulatory body, shareholders,
other users of Corporation financial reports and the public;
(ii) the performance of the Corporations internal
audit function; (iii) the Corporations systems of
internal control over financial reporting and disclosure
controls and procedures; (iv) the qualifications,
engagement, compensation, independence and performance of the
Corporations independent auditors, their conduct of the
annual audit of the Corporations financial statements, and
their engagement to provide any other services; (v) the
Corporations legal and regulatory compliance;
(vi) the application of the Corporations related
person transaction policy as established by the Board;
(vii) the application of the Corporations codes of
business conduct and ethics as established by management and the
Board; and (viii) the preparation of the audit committee
report required to be included in the Corporations annual
proxy statement by the rules of the SEC.
The members of this Committee are Fernando Rodríguez-Amaro,
Chairman since January 2006,
José Ferrer-Canals
and Héctor M. Nevares. Each member of the
Corporations Audit Committee is financially literate,
knowledgeable and qualified to review financial statements. The
audit committee financial expert designated by the
Corporations Board is Fernando Rodríguez-Amaro. The
Audit Committee met a total of eighteen (18) times during
2008.
Audit
Committee Report
In the performance of its oversight function, the Audit
Committee has reviewed and discussed the audited financial
statements of the Corporation for the fiscal year ended
December 31, 2008 with management and
PricewaterhouseCoopers LLP, the Corporations independent
registered public accountants. The Audit Committee has also
discussed with the independent accountants the matters required
to be discussed by Statement on Auditing Standards No. 61,
as amended, as adopted by the Public Company Accounting
Oversight Board. Finally, the Audit Committee has received the
written disclosures and the letter from PricewaterhouseCoopers
LLP required by applicable requirements of the Public Company
Accounting Oversight Board regarding the independent
accountants communications with the Audit Committee
concerning independence, has considered whether the provision of
non-audit services by the independent registered public
accounting firm to the Corporation is compatible with
maintaining the auditors independence, and has discussed
with the independent registered public accountants its
independence from the Corporation and its management. These
considerations and discussions, however, do not assure that the
audit of the Corporations financial statements has been
carried out in accordance with the standards of the Public
Company Accounting Oversight Board, that the financial
statements are presented in accordance with generally accepted
accounting principles in the United States or that the
Corporations registered public accountants are in fact
independent.
The members of the Audit Committee are not engaged
professionally in rendering, auditing or accounting services on
behalf of the Corporation nor are they employees of the
Corporation. The Corporations management is responsible
for its accounting, financial management and internal controls.
As such, it is not the duty or responsibility of the Audit
Committee or its members to conduct field work or
other types of auditing or accounting reviews or procedures to
set auditor independence standards.
Based on the Audit Committees consideration of the audited
financial statements and the discussions referred to above with
management and the independent registered public accountants,
and subject to the limitations on the role and responsibilities
of the Audit Committee set forth in the Charter and those
discussed above, the Committee recommended to the Board that the
Corporations audited financial statements be included in
the Corporations Annual Report on
Form 10-K
for the year ended December 31, 2008 for filing with the
SEC.
This report is provided by the following independent directors
who comprised the Committee at the date of the recommendation:
Fernando Rodríguez-Amaro (Chairman)
José Ferrer-Canals
Héctor M. Nevares
12
Compensation
and Benefits Committee
The Compensation and Benefits Committee charter provides that
the Committee shall be composed of a minimum of three directors
who meet the independence criteria established by the NYSE and
the Corporations Independence Principles for Directors. In
addition, the members of the Committee are independent as
defined in
Rule 16b-3
under the Securities Exchange Act of 1934, as amended (the
Exchange Act). The Committee is responsible for the
oversight of the Corporations compensation policies and
practices including the evaluation and recommendation to the
Board of the proper and competitive salaries and competitive
incentive compensation programs of the executive officers and
key employees of the Corporation. The responsibilities and
duties of the Committee include the following:
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Review and approve the annual goals and objectives relevant to
compensation of the chief executive officer and other executive
officers, as well as the various elements of the compensation
paid to the executive officers.
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Evaluate the performance of the chief executive officer and
other executive officers in light of the agreed upon goals and
objectives and recommend to the Board the appropriate
compensation levels of the chief executive officer and other
executive officers based on such evaluation.
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Establish and recommend to the Board for its approval the
salaries, short-term incentive awards (including cash
incentives) and long-term incentives awards (including
equity-based incentive plans) of the chief executive officer,
other executive officers and selected senior executive officers.
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Evaluate and recommend to the Board for its approval severance
arrangements and employment contracts for executive officers and
selected senior executives.
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Review and discuss with management the Corporations
Compensation Discussion and Analysis for inclusion in the
Corporations annual proxy statement.
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During the period of the Corporations participation in the
U.S. Treasury Department Trouble Asset Relief Program
Capital Purchase Program, take necessary actions to comply with
any applicable laws, rules and regulations related to the
Capital Purchase Program, including, without limitation, a risk
assessment of the Corporations compensation arrangements
and the inclusion of a certification of that assessment in the
Compensation Discussion and Analysis in the Corporations
annual proxy statement.
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Periodically review the operation of the Corporations
overall compensation program for key employees and evaluate its
effectiveness in promoting stockholder value and corporate
objectives.
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The Committee has the sole authority to engage outside
consultants to assist it in determining appropriate compensation
levels for the chief executive officer, other executive
officers, and selected senior executives and to set fees and
retention arrangements for such consultants. The Committee has
full access to any relevant records of the Corporation and may
request any employee of the Corporation or other person to meet
with the Committee or its consultants.
The current members of this Committee are Sharee Ann
Umpierre-Catinchi, appointed Chairperson since August 2006,
José Teixidor-Méndez and Jorge Díaz-Irizarry. The
Compensation and Benefits Committee met a total of five
(5) times during fiscal year 2008.
Corporate
Governance and Nominating Committee
The Corporate Governance and Nominating Committee charter
provides that the Committee shall be composed of a minimum of
three directors who meet the independence criteria established
by the NYSE, the SEC and the Corporations Independence
Principles for Directors. The responsibilities and duties of the
Committee include, among others, the following:
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Annually review and make any appropriate recommendations to the
Board for further developments and modifications to the
corporate governance principles applicable to the Corporation.
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Develop and recommend to the Board the criteria for Board
membership.
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13
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Identify, screen and review individuals qualified to serve as
directors, consistent with qualifications or criteria approved
by the Board (including evaluation of incumbent directors for
potential re-nomination); and recommend to the Board candidates
for: (i) nomination for election or re-election by the
shareholders; and (ii) any Board vacancies that are to be
filled by the Board.
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Review annually the relationships between directors, the
Corporation and members of management and recommend to the Board
whether each director qualifies as independent based
on the criteria for determining independence identified by the
NYSE, the SEC and the Corporations Independence Principles
for Directors.
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As vacancies or new positions occur, recommend to the Board the
appointment of members to the standing committees and the
committee chairs and review annually the membership of the
committees, taking account of both the desirability of periodic
rotation of committee members and the benefits of continuity and
experience in committee service.
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Recommend to the Board on an annual basis, or as vacancies
occur, one member of the Board to serve as Chairperson (who also
may be the Chief Executive Officer).
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Evaluate and advise the Board whether the service by a director
on the board of another company or a not-for-profit organization
might impede the directors ability to fulfill his or hers
responsibilities to the Corporation.
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Have sole authority to retain and terminate outside consultants
or search firms to advice the Committee regarding the
identification and review of board candidates, including sole
authority to approve such consultants or search
firms fees, and other retention terms.
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Review annually the Corporations Insider Trading Policy to
ensure continued compliance with applicable legal standards and
corporate best practices. In connection with its annual review
of the Insider Trading Policy, the Committee shall also review
the list of executive officers subject to Section 16 of the
Securities Exchange Act of 1934, as amended, and the list of
affiliates subject to the trading windows contained in the
Policy.
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Develop, with the assistance of management, programs for
director orientation and continuing director education.
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Direct and oversee the Corporations executive succession
plan, including succession planning for all executive officer
positions and interim succession for the chief executive officer
in the event of an unexpected occurrence.
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Provide oversight of the Corporations policies and
practices with respect to corporate social responsibility,
including environmentally sustainable solutions.
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Consistent with the foregoing, take such actions as it deems
necessary to encourage continuous improvement of, and foster
adherence to, the Corporations corporate governance
policies, procedures and practices at all levels and perform
other corporate governance oversight functions as requested by
the Board.
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During 2007, the Corporate Governance and Nominating Committee
retained Caliper for the development of a corporate succession
plan to identify and prepare certain selected employees to
benefit from mentoring, training, and job rotation, in order to
eventually replace key executives of the Corporation in an
unforeseen event or due to other specific circumstances. The
succession plan encompasses the development of the set of skills
necessary for each executive management position which shall
assist the senior executives in periodically reviewing those in
the next lower levels to determine their progress for the
targeted executive management position.
14
Identifying
and Evaluating Nominees for Directors
The Boards Corporate Governance and Nominating Committee
is responsible for identifying and recommending to the Board
qualified candidates for Board membership, based primarily on
the following criteria:
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Judgment, character, integrity, expertise, skills and knowledge
useful to the oversight of the Corporations business;
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Diversity of viewpoints, backgrounds, experiences and other
demographics;
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Business or other relevant experience; and
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The extent to which the interplay of the candidates
expertise, skills, knowledge and experience with that of other
Board members will build a Board that is effective, collegial
and responsive to the needs of the Corporation.
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The Committee gives appropriate consideration to candidates for
Board membership nominated by stockholders and evaluates such
candidates in the same manner as candidates identified by the
Committee. The Committee may use outside consultants to assist
in identifying candidates. Members of the Committee discuss and
evaluate possible candidates in detail prior to recommending
them to the Board.
The Committee is also be responsible for initially assessing
whether a candidate would be an independent director
under the requirements for independence established in the
Corporations Independence Principles for Directors
of First BanCorp and applicable rules and regulations (an
Independent Director). The Board, taking into
consideration the recommendations of the Committee, is
responsible for selecting the nominees for election to the Board
by the stockholders and for appointing directors to the Board to
fill vacancies, with primary emphasis on the criteria set forth
above. The Board, taking into consideration the assessment of
the Committee, also makes a determination as to whether a
nominee or appointee would be an Independent Director.
The current members of this committee are José Luis
Ferrer-Canals, Chairman since February 2006, José
Menéndez-Cortada, and Frank Kolodziej. The Corporate
Governance and Nominating Committee met a total of four
(4) times during fiscal year 2008.
Asset/Liability
Committee
On May 27, 2008, the Board revised the Corporations
committee structure and resolved to segregate the
Asset/Liability Risk Committees responsibilities into two
separate committees; the Credit Committee and the
Asset/Liability Committee. The Asset/Liability Committees
charter provides that the Committee shall be composed of a
minimum of three directors who meet the independence criteria
established by the NYSE, the SEC, and the Corporations
Independence Principles for Directors, and shall also include
the Corporations Chief Executive Officer, Chief Operating
Officer, Treasurer and Chief Risk Officer. Under the terms of
its charter, the Asset/Liability Committee assists the Board in
its oversight of the Corporations policies and procedures
related to asset and liability management, (i) funds
management, (ii) investment management,
(iii) liquidity, (iv) interest rate risk management,
(v) capital adequacy, and (vi) the use of derivatives
(the ALM). In doing so, the committees primary
functions involve:
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The establishment of a process to enable the identification,
assessment and management of risks that could affect the
Corporations ALM;
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The identification of the Corporations risk tolerance
levels for yield maximization related to its ALM;
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The evaluation of the adequacy and effectiveness of the
Corporations risk management process related to the
Corporations ALM, including managements role in that
process; and
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The evaluation of the Corporations compliance with its
risk management process related to the Corporations ALM.
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The current members of this committee are, José
Rodríguez-Perelló appointed Chairman in May 2008, Luis
Beauchamp, Aurelio Alemán, José Menéndez-Cortada,
José Teixidor-Méndez, Héctor M. Nevares and Jorge
Díaz-Irizarry. The Asset/Liability Committee met a total of
five (5) times during fiscal year 2008.
15
Credit
Committee
The Credit Committees charter provides that the Committee
shall be composed of a minimum of three directors who meet the
independence criteria established by the NYSE, the SEC and the
Corporations Independence Principles for Directors, and
shall also include the Corporations Chief Executive
Officer, Chief Operating Officer, Chief Lending Officer and
Corporate Wholesale.Banking Executive. Under the terms of its
charter, the Credit Committee assists the Board in its oversight
of the Corporations policies and procedures related to all
matters of the Corporations lending function, hereafter
Credit Management. In doing so, the Committees
primary functions involve:
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The establishment of a process to enable the identification,
assessment and management of risks that could affect the
Corporations Credit Management;
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The identification of the Corporations risk tolerance
levels related to its Credit Management;
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The evaluation of the adequacy and effectiveness of the
Corporations risk management process related to the
Corporations Credit Management, including
managements role in that process;
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The evaluation of the Corporations compliance with its
risk management process related to the Corporations Credit
Management; and
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The approval of loans as required by the lending authorities
approved by the Board.
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The current members of this Committee are Jorge
Díaz-Irizarry, Chairman since May 2008, Luis Beauchamp,
Aurelio Alemán, José Menéndez-Cortada, José
Teixidor-Méndez, Héctor M. Nevares and José
Rodríguez-Perelló. The Credit Committee met a total of
twenty-two (22) times during fiscal year 2008.
The Board, with the assistance of the Asset/Liability Committee,
the Credit Committee, and the Audit Committee of the
Corporation, oversees the Corporations overall risk
management process. Accordingly, certain risk assessment and
management responsibilities are handled by either the
Asset/Liability Committee, the Audit Committee or the Credit
Committee as detailed in their respective Committee charters.
CERTAIN
RELATIONSHIPS AND RELATED PERSON TRANSACTIONS
The Corporation reviews all transactions and relationships in
which the Corporation and any of its directors, director
nominees, executive officers, security holders who are known to
the Corporation to own of record or beneficially more than five
percent of any class of the Corporations voting securities
and any immediate family member of any of the foregoing persons
are participants to determine whether such persons have a direct
or indirect material interest. In addition, the
Corporations Corporate Governance Guidelines and
Principles and Code of Ethics for Senior Financial Officers
require our directors, executive officers and principal
financial officers to report to the Board or the Audit Committee
any situation that could be perceived as a conflict of interest.
In addition, applicable law and regulations require that all
loans or extensions of credit to executive officers and
directors must be made in the ordinary course of business on
substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable
transactions with other persons (unless the loan or extension of
credit is made under a benefit program generally available to
all employees and does not give preference to any insider over
any other employee) and must not involve more than the normal
risk of repayment or present other unfavorable features.
Pursuant to Regulation O of the Federal Reserve Board any
extension of credit to an executive officer, director, or
principal shareholder, and includes any related interest of such
a person (together an Insider), when aggregated with
all other loans or lines of credit to that Insider or his or her
related interest: (a) exceeds 5% of the banks capital
and unimpaired surplus or $25,000, whichever is greater, or
(b) exceeds (in any case) $500,000, must be approved in
advance by the majority of the entire Board, excluding the
interested party.
During 2007, the Board adopted a Related Person Transaction
Policy (the Policy) that addresses the reporting,
review and approval or ratification of transactions with related
persons which includes a director, a director nominee, an
executive officer of the Corporation, a security holder who is
known to the Corporation to own of record or beneficially more
than five percent of any class of the Corporations voting
securities, and an immediate family member of any of the
foregoing (together the Related Person). The policy
is not designed to prohibit
16
related person transactions; rather, it is to provide for timely
internal reporting of such transactions and appropriate review,
appropriate approval or rejection, oversight and public
disclosure of them.
For purposes of the Policy, related person
transaction means a transaction or arrangement or series
of transactions or arrangements in which the Corporation
participates (whether or not the Corporation is a party), the
amount involved exceeds $120,000, and a Related Person has a
direct or indirect material interest. A Related Persons
interest in a transaction or arrangement is presumed material to
such person unless it is clearly incidental in nature or has
been determined in accordance with the policy to be immaterial
in nature. A transaction in which any subsidiary of the
Corporation or any other company controlled by the Corporation
participates shall be considered a transaction in which the
Corporation participates.
Examples of related person transactions generally include sales,
purchases or other transfers of real or personal property, use
of property and equipment by lease or otherwise, services
received or furnished and the borrowing and lending of funds, as
well as guarantees of loans or other undertakings and the
employment by the Corporation of an immediate family member of a
Related Person or a change in the terms or conditions of
employment of such an individual that is material to such
individual. However, the policy contains a list of categories of
transactions that will not be considered related person
transactions for purposes of the Policy given their nature, size
and/or
degree of significance to the Corporation, and therefore, need
not be brought to the Audit Committee for their review and
approval.
Any director, director nominee or executive officer who intends
to enter into a related person transaction shall disclose that
intention and all material facts with respect to such
transaction to the General Counsel, and any officer or employee
of the Corporation who intends to cause the Corporation to enter
into any related person transaction must disclose that intention
and all material facts with respect to the transaction to his or
her superior, who shall be responsible for seeing that such
information is reported to the General Counsel. The General
Counsel, will be responsible for determining whether a
transaction may meet the requirements of a related person
transaction requiring review under the Related Transaction
Policy and upon such determination shall report the material
facts respecting the transaction and the Related Persons
interest in such transaction to the Audit Committee for their
review and approval or ratification. Any related party
transaction in which the General Counsel has a direct or
indirect interest in, will be evaluated directly by the Audit
Committee.
If a member of the Audit Committee has an interest in a related
person transaction and, after such committee member excusing
himself or herself from consideration of the transaction would
reduce the number of Audit Committee members available to review
and approve the transaction to less than two members, the
transaction shall instead be reviewed by an ad hoc committee of
at least two independent directors designated by the Board. The
Audit Committee may delegate its authority to review, approve or
ratify specified related person transactions or categories of
related person transactions where the Audit Committee determines
that such action is warranted.
Annually, the Audit Committee shall review any previously
approved or ratified related person transaction that is
continuing (unless the amount involved in the uncompleted
portion of the transaction is less than $120,000) and determine,
based on the then existing facts and circumstances, including
the Corporations existing contractual or other
obligations, if it is in the best interests of the Corporation
to continue, modify or terminate the transaction.
The Audit Committee has the authority to (i) determine
categories of related person transactions that are immaterial
and not required to be individually reported to, reviewed by,
and/or
approved or ratified by the Audit Committee and
(ii) approve in advance categories of related person
transactions that need not be individually reported to, reviewed
by, and/or
approved or ratified by the Audit Committee but may instead be
reported to and reviewed by the Audit Committee collectively on
a periodic basis, which shall be at least annually, and shall
not require ratification by the Audit Committee. The Audit
Committee shall notify the Board on a quarterly basis of all
related person transactions approved or ratified by the Audit
Committee.
In connection with approving or ratifying a related person
transaction, the Audit Committee (or its delegate) shall, in its
judgment, consider in light of the relevant facts and
circumstances whether or not the transaction is in, or not
inconsistent with, the best interests of the Corporation,
including consideration of the following factors to the extent
pertinent:
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the position or relationship of the Related Person with the
Corporation;
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17
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the materiality of the transaction to the Related Person and the
Corporation, including the dollar value of the transaction,
without regard to profit or loss;
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the business purpose for and reasonableness of the transaction,
taken in the context of the alternatives available to the
Corporation for attaining the purposes of the transaction;
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whether the transaction is comparable to a transaction that
could be available on an arms-length basis or is on terms that
the Corporation offers generally to persons who are not Related
Persons;
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whether the transaction is in the ordinary course of the
Corporations business and was proposed and considered in
the ordinary course of business; and
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the effect of the transaction on the Corporations business
and operations, including on the Corporations internal
control over financial reporting and system of disclosure
controls and procedures, and any additional conditions or
controls (including reporting and review requirements) that
should be applied to such transaction.
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During fiscal year 2008, directors and officers and persons or
entities related to such directors and officers were customers
of and had transactions with the Corporation
and/or its
subsidiaries. All such transactions, except for the ones set
forth below, were made in the ordinary course of business on
substantially the same terms, including interest rates and
collateral, as those prevailing at the time they were made for
comparable transactions with persons not related the
Corporation, and did not involve more than the normal risk of
collectibility or present other unfavorable features:
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Lawrence Odell, General Counsel of the Corporation since
February 2006, is a partner at Martínez Odell &
Calabria (the Law Firm). During 2006, the
Corporation entered into a Services Agreement with the Law Firm
effective as of February 15, 2006 and amended on
February 24, 2006, which was approved by the Board, see
Exhibits 10.4 and 10.5 of
Form 10-K
for the year ended December 31, 2005 filed by the
Corporation on February 9, 2007, pursuant to which it
agreed to pay the Law Firm $60,000 per month, except for the
payment made in February 2006, which was for $30,000, as
consideration for the services rendered to the Corporation by
Lawrence Odell. The Services Agreement has a term of four years
unless earlier terminated. The Corporation has also hired the
Law Firm to be the corporate and regulatory counsel to it and
FirstBank. In 2008, the Corporation paid $1,461,720 to the Law
Firm for its legal services and $720,000 to the Law Firm in
accordance with the terms of the Services Agreement.
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During 2007, the Corporation entered into a loan agreement with
an immediate family member of director Fernando
Rodríguez-Amaro. The loan was made in the ordinary course
of business on substantially the same terms, including interest
rates and collateral, as those prevailing at the time it was
made for comparable transactions with persons not related to the
Corporation, and did not involve more than the normal risk of
collectibility or present other unfavorable features. However,
recently, the Corporation classified this loan in non-accruing
status because of concerns about the financial condition of the
borrower.
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SECTION 16(a)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires our directors
and executive officers, and persons who own more than 10% of a
registered class of our equity securities, to file with the SEC
initial reports of ownership and reports of changes in ownership
of our common stock and other equity securities. Officers,
directors and greater than ten percent stockholders are required
by SEC regulation to furnish us copies of all Section 16(a)
forms they file.
To our knowledge, based solely on a review of the copies of such
reports furnished to us and written representations that no
other reports were required, during the fiscal year ended
December 31, 2008, all Section 16(a) filing
requirements applicable to our officers, directors and greater
than 10% stockholders were complied with, except that
(1) director Jorge Diaz-Irizarry filed a late Form 4
to report one transaction relating to the acquisition of shares
of common stock and (2) director Héctor M. Nevares
filed two late Form 4s reporting seven transactions
relating to the acquisition and sale of shares of the
Corporations preferred stock.
18
COMPENSATION
COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Corporations Compensation and Benefits Committee
during fiscal year 2008 consisted of directors Sharee Ann
Umpierre-Catinchi, appointed Chairperson since August 2006,
José Teixidor-Méndez, and Jorge L. Díaz-Irizarry.
No Executive Officer of the Corporation serves on any board of
directors or compensation committee of any entity whose board
members or management serves on the Corporations Board or
on the Corporations Compensation and Benefits Committee.
Other than disclosed in the Certain Relationships and Related
Transactions and Director Independence sections of this Proxy
Statement, none of the members of the Compensation and Benefits
Committee had any relationship with the Corporation requiring
disclosure under Item 404 of the SEC
Regulation S-K.
INVOLVEMENT
IN CERTAIN LEGAL PROCEEDINGS
There are no legal proceedings to which any director, officer or
principal stockholder, or any affiliate thereof, is a party
adverse to the Corporation or has a material interest adverse to
the Corporation.
COMPENSATION
OF DIRECTORS
Non-management directors of the Corporation receive an annual
retainer and compensation for attending meetings of the Board
but not for attending meetings of the Board of Directors of the
Bank when such meetings are held on the same day on which a
Board meeting of the Corporation is held. Directors who are also
officers of the Corporation, of FirstBank or of any other
subsidiary do not receive fees or other compensation for service
on the Board, the Board of Directors of FirstBank, the Board of
Directors of any other subsidiary or any of their committees.
Accordingly, Luis M. Beauchamp and Aurelio Alemán are not
included in the table set forth below because they were
employees during 2008 and, therefore, received no compensation
for their services as a director.
In 2007, the Compensation and Benefits Committee retained
Mercer, an outside compensation consultant, to provide services
as compensation consultants. Mercer performed a director
compensation review to assess the competitiveness of the
Corporations Board compensation strategy for its
non-management directors and provided recommendations in terms
of structure and magnitude of compensation. As a result, on
January 23, 2008, the Board approved a new compensation
structure for non-management directors of the Corporation, which
became effective February 1, 2008. Under the terms of the
new structure, each director receives an annual retainer of
$30,000, the Chair of the Audit Committee receives an additional
annual retainer of $25,000 and the Lead Independent Director
receives an additional annual retainer of $20,000. The retainers
are payable in cash on a monthly basis over a twelve-month
period. The directors will also receive an annual equity award
of $35,000 payable in the form of restricted stock full value
shares. In addition, all meeting fees were reduced to $1,000 for
each Board or Committee meeting attended, which is also payable
in cash. On December 1, 2008 the annual equity award was
granted under the terms and provisions of the First BanCorp 2008
Omnibus Incentive Plan, which was approved by the stockholders
of the Corporation at the 2008 Annual Meeting of Stockholders,
and pursuant to the provisions of the Corporations Policy
Regarding the Granting of Equity-Based Compensation Awards
approved by the Board in October 2008.
Before February 1, 2008, the following was the fee
structure with respect to non-management director compensation:
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Board Meeting Fees each non-management
director received $1,750 for each meeting attended.
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Fees for meetings of Compensation and Benefits Committee,
Corporate Governance and Nominating Committee, and
Asset/Liability Risk Committee each
non-management director received $1,200 for each meeting
attended.
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Fees for meetings of Audit Committee each
non-management director received $1,500 for each meeting
attended.
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19
The Corporation reimburses Board members for travel, lodging and
other reasonable
out-of-pocket
expenses in connection with attendance at board and committee
meetings or performing other services for the Corporation in
their capacities as directors.
The Compensation and Benefits Committee will periodically review
market data in order to determine the appropriate level of
compensation for maintaining a competitive director compensation
structure necessary to attract qualified candidates for board
service.
The following table sets forth all the compensation that the
Corporation paid to non-management directors during fiscal year
2008:
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Change in Pension
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Value and
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Fees
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Nonqualified
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Earned or
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Non-Equity
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Deferred
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Paid in
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Stock
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Option
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Incentive Plan
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Compensation
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All Other
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Cash
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Awards
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Awards
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Compensation
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Earnings
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Compensation
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Total
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Name
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($)
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($)(a)
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($)
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($)
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($)
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($)(b)
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($)
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José Teixidor-Méndez
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74,650
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972
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239
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75,861
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Jorge Díaz-Irizarry
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74,650
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972
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239
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75,861
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José Ferrer-Canals
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69,750
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972
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239
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70,961
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Sharee Ann Umpierre-Catinchi
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51,450
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972
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239
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52,661
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José Menéndez-Cortada
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98,983
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972
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|
|
|
|
|
|
|
|
|
|
|
239
|
|
|
|
100,194
|
|
Fernando Rodríguez-Amaro
|
|
|
87,667
|
|
|
|
972
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
239
|
|
|
|
88,878
|
|
Héctor M. Nevares-La Costa
|
|
|
83,950
|
|
|
|
972
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
239
|
|
|
|
85,161
|
|
Frank Kolodziej-Castro
|
|
|
48,250
|
|
|
|
972
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
239
|
|
|
|
49,461
|
|
José Rodríguez-Perelló
|
|
|
72,450
|
|
|
|
972
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
239
|
|
|
|
73,661
|
|
|
|
|
(a) |
|
On December 1, 2008, the Corporation granted to each
non-management director 4,027 shares of restricted stock
with a fair value of $8.69 per share under the First BanCorp
2008 Omnibus Incentive Plan. The restrictions on such restricted
stock award lapse ratably on an annual basis over a three-year
period commencing on December 1, 2009. The amounts in this
column reflects the dollar amounts recognized for financial
reporting purposes for the year ended December 31, 2008, in
accordance with Statement of Financial Accounting Standards
No. 123, Share-Based Payment (SFAS 123R).
The total unrecognized compensation cost related to the
non-vested restricted stocks was $306,250 as of
December 31, 2008 and is expected to be recognized over the
next 2.9 years. The assumptions made when calculating the
amounts in this column are found in Note 20 of the
Consolidated Financial Statements of the Corporation on
Form 10-K
for 2008. |
|
(b) |
|
Represents life insurance policy premium paid by the Corporation
on behalf of non-management directors. |
COMPENSATION
DISCUSSION AND ANALYSIS
The Compensation Discussion and Analysis (CD&A)
describes the objectives of the Corporations executive
compensation program, the process for determining executive
officer compensation, and the elements of the compensation for
the Corporations President and Chief Executive Officer
(CEO), Chief Financial Officer (CFO),
and the next three highest paid executive officers of the
Corporation (together the Named Executives).
The executive compensation program is administered by the
Compensation and Benefits Committee (the Compensation
Committee). The Compensation Committee reviews and
recommends to the Board the annual goals and objectives relevant
to the CEO and evaluates and recommends to the Board the base
salaries, short-term annual incentives and long-term equity
incentive awards for the CEO, executive vice presidents and
other selected executives of the Corporation.
During 2007, the Compensation Committee retained Mercer, an
outside compensation consultant, to provide services as
compensation consultants. Mercer performed an executive
compensation review which included a
20
market competitiveness study and a pay for performance
assessment, and assisted the Compensation Committee in
developing a new compensation program for the Corporations
management.
As a result of the assessment, the Board approved on
March 13, 2008 a new executive compensation structure
designed to tie compensation to annual and long-term
corporate-wide, business unit and individual performance goals
through a set of specific performance metrics that vary by
participant and by award. This program, which was previously
disclosed in the Corporations Proxy Statement for the 2008
annual meeting of stockholders, became effective for the 2008
performance period. As part of its review, Mercer analyzed pay
levels as well as financial performance of a peer group of
banks. The peer group is made up of the following companies
Popular Inc., Commerce BanCorp Inc./NJ, Colonial Bancgroup,
Astoria Financial Corp, Associated Ban-Corp, W Holding Co Inc.,
First Citizens Bancgroup, Fulton Financial Corp., City national
Corp., TCF Financial Corp., Doral Financial Corp., Valley
National BanCorp, Bancorpsouth Inc., and Santander BanCorp. As
an additional point of reference, Mercer reviewed pay data from
surveys. Mercer utilized their own survey as well as other
surveys sponsored by Watson Wyatt Data Services.
Based on the competitive compensation analysis, the Compensation
Committees compensation consultant provided the
Compensation Committee and senior management with their views
and recommendations. The analysis provided the Compensation
Committee with compensation data for the President and CEO, the
CFO, the Chief Operating Officer (COO), and to the
extent available, any positions equivalent to the direct reports
of the President.
Executive
Compensation Policy
The Corporation designed an executive compensation structure
under the new compensation philosophy designed to help attract,
motivate, reward and retain highly qualified executives, and
will fairly reflect, in the judgment of the Compensation
Committee, the Corporations performance, and the
responsibilities and personal performance of the individual
executives. To support those goals, the Corporation provides its
Named Executives with a competitive base salary, a short-term
annual incentive, a long-term equity incentive and other fringe
benefits. The short-term annual incentive and the long-term
equity incentive, which are the variable components of the
compensation, are based on specific performance metrics that
vary by participant.
Pay for
Performance
The compensation structure reflects the belief that executive
compensation must, to a large extent, be at risk where the
amount earned depends on achieving rigorous corporate, business
unit and individual performance objectives designed to enhance
stockholder value. Actual incentive payouts will be larger if
superior target performance is achieved and smaller if target
performance is not achieved.
Market
Competitiveness
The Corporation targets total compensation, including base
salaries, annual target incentive opportunities, and long-term
target incentive opportunities including equity-based
incentives, at the
75th
percentile of compensation paid by similarly-sized companies. We
believe targeting the
75th percentile
is appropriate given the degree of difficulty in achieving our
performance targets and the challenges of attracting and
retaining talent. While the philosophy is to set total
compensation for executives at the
75th
percentile of compensation paid by a peer group of banks, the
Corporation will also assesses competitive or recruiting
pressures in the market for executive talent. These pressures
potentially may threaten the ability to retain key executives.
The Board will exercise its discretion in adjusting compensation
targets as necessary and appropriate to address these risks.
Compensation
Review Process
The Compensation Committee typically reviews and recommends to
the Board the base salaries, short-term incentive awards and
long-term incentive awards of the CEO and other selected senior
executives in the first quarter of each year with respect to
performance results for the preceding year. The
Corporations President and CEO, following the compensation
structure approved by the Board, makes recommendations
concerning the amount of compensation to be awarded to executive
officers, excluding himself. The CEO does not participate in the
21
Compensation Committees deliberations or decisions. The
Compensation Committee reviews and considers his recommendations
and makes a final determination. In making its determinations,
the Compensation Committee reviews the Corporations
performance as a whole and the performance of the executives as
it relates to the accomplishment of the goals and objectives set
forth for management for the year, together with any such goals
that have been established for the relevant lines of business of
the Corporation.
Elements
of Executive Compensation
The Corporations executive compensation program consists
of the following components:
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Base salary
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Short-term annual incentives
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Long-term equity incentives
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|
Other compensation
|
Each element of the new compensation structure is intended to
support and promote the following results and behavior:
Base
Salary
Base salary is the basic element of direct cash compensation,
designed to reward individual performance and level of
experience. In setting the base salary, the Board takes into
consideration the experience, skills, knowledge and
responsibilities required of the Named Executives in their
roles, the individuals achievement of pre-determined goals
and objectives, the Corporations performance and
marketplace salary data to help ensure that base salaries of the
Corporations Named Executives are within competitive
practices relative to the base salaries of named executive
officers in peer group companies. The Board seeks to maintain
base salaries that are competitive with the marketplace, to
allow it to attract and retain executive talent.
Considering economic conditions and the performance of the
Corporation during 2008, the base salaries of the CEO and the
other Named Executives were not increased during 2008. The
salaries of the CEO, COO and Wholesale Banking Executive have
not been increased since 2005 and the salaries of the CFO and
General Counsel have not been adjusted since 2006 when they
became employees of the Corporation.
Short-Term
Annual Incentive
Generally, the annual short-term annual incentive element of the
Corporations executive compensation program is designed to
provide cash bonuses to executive officers who generate strong
corporate financial performance and, therefore, seeks to link
the payment of cash bonuses to the achievement of key strategic,
operational and financial performance objectives. Other
criteria, beside financial performance, may include objectives
and goals that may not involve actions that specifically and
directly relate to financial matters, but the resolutions of
which would necessarily protect the financial soundness of the
Corporation. The short-term annual incentive provides variable
pay opportunities for short-term performance designed to reward
the Named Executives based on corporate and individual
performance and operational results of business units. The Board
approved for 2008 a short-term annual incentive program for the
Named Executives that provides for cash bonus payments based on
the following performance metrics: Financial Measure, Risk
Management, and Business Unit and Strategic Goals. The weights
of the measures established for 2008 vary depending on the
executives positions as follows:
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|
|
|
|
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|
|
|
|
|
|
Named Executives
|
|
|
|
|
|
|
|
|
|
|
|
|
General
|
|
|
Wholesale
|
|
Performance Metrics
|
|
CEO
|
|
|
COO
|
|
|
CFO
|
|
|
Counsel
|
|
|
Banking
|
|
|
Financial Measure
|
|
|
50
|
%
|
|
|
40
|
%
|
|
|
40
|
%
|
|
|
40
|
%
|
|
|
40
|
%
|
Risk Management
|
|
|
20
|
%
|
|
|
20
|
%
|
|
|
40
|
%
|
|
|
40
|
%
|
|
|
20
|
%
|
Individual Business Unit and Strategic Goals
|
|
|
30
|
%
|
|
|
40
|
%
|
|
|
20
|
%
|
|
|
20
|
%
|
|
|
40
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22
The short-term annual incentive metrics are established for
three different possible payout levels (target, threshold and
maximum) and may constitute a combination thereof depending on
the achievement of the performance metrics. If the performance
measure established by the Board for each performance metric is
fully met, the target payout amount would be met. The target
payout amount is calculated as a percentage of the Named
Executives base salary, which for 2008 was 100% for the
CEO, and range from 65% to 100% for the other Named Executives.
Performance below the levels established by the Board but equal
to or above 80% of the target performance will result in a
threshold performance with a payout amount ranging from 50% to
99.99% of target. The threshold amount is the lowest amount
potentially payable; therefore, performance below threshold will
result in no pay-out amount. Performance above the levels
established by the Board will result in a maximum performance
pay-out amount of up to 200% of target at 120% of targeted
performance. This short-term annual incentive provides the
opportunity to the Named Executives to receive a cash award
ranging from 0% to 200% of
his/her base
salary based on the achievement of the above-mentioned criteria
as summarized in the following table:
|
|
|
Performance
|
|
Payout
|
|
less than 80% of target performance
|
|
no payout
|
at 80% of target performance
|
|
50% of target payout (minimum payout)
|
at 100% of target performance
|
|
100% of target payout
|
at 120% of target performance
|
|
200% of target payout (maximum payout)
|
We use straight-line interpolation to calculate payout values
between minimum, target, and maximum levels. This means that we
determine actual payouts by formula and that payouts are
directly proportional to actual performance.
In January 2009, management provided the Compensation Committee
with an assessment of the short-term annual incentives as scored
against the pre-set performance objectives approved by the Board
at the beginning of 2008. Scoring ranges from 50% for threshold
performance to 200% for maximum performance, in each case
measured on a scale centered around the target performance level
as discussed above. The Compensation Committee reviewed actual
performance relative to the pre-set goals and, in doing so,
determined the amount of the final award payment.
Financial
Measure Performance Metric
The Financial Measure for 2008 was after tax net income of
$123.7 million, adjusted for certain extraordinary and
unusual items. As a result of the worsening economic conditions
throughout 2008, adjusted net income fell below this target but
within the threshold performance level, achieving 87% of the
targeted performance. This target measure applied to all Named
Executives. Potential and actual awards to the Named Executives
are summarized on the following table.
|
|
|
|
|
|
|
|
|
|
|
|
|
Named Executives
|
|
|
|
|
|
|
|
|
General
|
|
Wholesale
|
Performance Metrics
|
|
CEO
|
|
COO
|
|
CFO
|
|
Counsel
|
|
Banking
|
|
Financial Measure
|
|
|
|
|
|
|
|
|
|
|
Threshold
|
|
98,933
|
|
98,933
|
|
98,933
|
|
98,933
|
|
98,933
|
Target
|
|
123,666
|
|
123,666
|
|
123,666
|
|
123,666
|
|
123,666
|
Maximum
|
|
148,399
|
|
148,399
|
|
148,399
|
|
148,399
|
|
148,399
|
Actual
|
|
107,920
|
|
107,920
|
|
107,920
|
|
107,920
|
|
107,920
|
Payout ratio as a percentage of target
|
|
87%
|
|
87%
|
|
87%
|
|
87%
|
|
87%
|
Risk
Management Performance Metric
The risk management measures for 2008 were divided into
corporate-wide performance objectives and certain risk factors
corresponding to each individual business unit. The
corporate-wide objectives related to the results of regulatory
and internal audits and the individual business unit objectives
related to the results of individual business unit internal
audits, remediation of prior year deficiencies in internal
control and two asset quality metrics. The targeted performance
established for 2008 with respect to the asset quality metrics
depended upon the
23
responsibilities of the Named Executives. The Corporation
achieved the target levels for the corporate-wide and certain
individual business unit performance objectives. However, the
positive performance of the corporate-wide and individual
business unit objectives was slightly offset by the threshold
level of performance on the asset quality metrics established
for the year for each of the Named Executives.
Business
Unit and Strategic Goals Performance Metric
The business units and strategic goals measures included loans
and deposit growth targets, as applicable to the respective
business unit, and progress toward various business and
strategic initiatives. The total loan growth and deposit growth
targets vary depending on the Named Executives respective
responsibilities and did not apply to the CFO and General
Counsel. The loan and deposit growth performance objectives were
exceeded for 2008 with actual total loans of $13.1 billion
as compared to the target of $12.5 billion and actual total
deposits, excluding brokered certificates of deposit, of
$4.6 billion as compared to the target of
$4.1 billion. In addition, the Named Executives met or
exceeded the qualitative objectives with respect to a majority
of the strategic initiatives.
Also, as part of the business unit and strategic goals measures,
the Compensation Committee considered individual performance.
For each individual performance factor, the Compensation
Committee is provided with a qualitative assessment by the CEO
of the individual contribution of each Named Executive (other
than himself) to the Corporations performance, with each
officer receiving a performance rating on a scale generally
ranging from 0% to 120%. The Compensation Committee itself
assigned the CEOs individual performance rating, which
also could have ranged from 0% to 120%, based on its assessment
of his contribution to the Corporations performance.
The final bonus amounts awarded for 2008 fell slightly below the
target levels at target payouts for the Named Executives ranging
from 84% to 99% of the Named Executive target payout; the
bonus amounts are set forth in the Summary Compensation table
under the Non-Equity Incentive Plan Compensation
column for 2008.
Long-Term
Equity Incentive
The long-term equity incentive executive compensation structure
approved by the Board at the beginning of 2008 provides a
variable pay opportunity for long-term performance through a
combination of restricted stock and stock option grants designed
to reward overall corporate performance. The award is intended
to align the interest of the Named Executive directly to the
interest of the stockholder and is an important retention tool
for the Corporation. The compensation structure approved for
2008 considered long-term incentive award values allocated as
follows: 50% in stock options and 50% in performance-accelerated
restricted stock. Based on the compensation structure approved,
stock option grants could have been awarded based on overall
individual performance and the performance-accelerated
restricted stock could have been awarded if a minimum of 80% of
the respective years after tax adjusted net income target
is achieved. No grant of performance-accelerated restricted
shares can be awarded in the event that the performance target
is not met. Stock options (i) will vest ratably over a four
year period from the date of grant; (ii) will have a term
of ten years; and (iii) will have an exercise price equal
to the closing price of the Corporations common shares on
the date of the grant. The performance-accelerated restricted
shares will begin to vest ratably over a four-year period three
years after the performance-accelerated restricted shares have
been awarded, for a total vesting period of 7 years.
However, the performance-accelerated restricted shares will vest
at the end of year three if a target measure is achieved. In
this regard, a target measure will be reached by achieving,
during a three-year period, a 10% increase per year in adjusted
earnings per share. The adjusted earnings per share will be
calculated excluding certain extraordinary and unusual items.
This long-term annual incentive provides the opportunity to the
Named Executives to receive an award ranging from 0% to 200% in
the case of the CEOs base salary and from 0% to 100% in
the case of the other Named Executives base pay based on the
above mentioned criteria. The long-term equity incentive awards
may be granted pursuant to First BanCorps 2008 Omnibus
Incentive Plan (the Omnibus Plan) approved by
stockholders on April 29, 2008 at the 2008 annual meeting
of stockholder.
Given the importance to the Board, the Corporations
investors and others of maintaining the integrity of the
Corporations equity-based award process, the Board of the
Corporation has approved and adopted a policy to promote the
consistent and efficient administration of equity-based grants
to the Corporations directors, officers, and employees
pursuant to the Corporations equity-based compensation
structure as approved by the Board. This
24
policy shall apply to the grant of all forms of equity-based
awards permitted to be granted pursuant the Omnibus Plan and any
other plan that may be adopted from time to time by the
Corporation.
It is the policy of the Compensation Committee that all
equity-based awards will be made in strict compliance with the
Omnibus Plan, the terms of each award approved by the Board upon
receiving the relevant recommendations of the Compensation
Committee, and all applicable laws and regulations. Further, it
is the policy of the Corporation that neither the Board nor any
member of the Corporations management shall change the
date of an award to a date other than the date of the grant, or
give an award with a date that is not the date of the grant, in
each case, as defined for accounting purposes, nor in any manner
approve any equity grant, or manipulate the timing of the public
release of material information or of the grant date of any
equity award with the intent of benefiting a grantee of an
equity award. In furtherance of this policy, the Compensation
Committee has adopted specific practices with respect to grant
approval, grant date for annual, new hire, promotion and
retention grants and timing of public announcements.
The executive officers, having met the performance metrics
established for the award of long-term equity incentives, were
entitled to awards thereunder which in the aggregate would have
cost the Corporation approximately $4.4 million.
Notwithstanding the foregoing, considering worsening economic
conditions which affected the performance of the Corporation,
senior management of the Corporation recommended to the
Compensation Committee that it forego the granting of any
benefits under the long-term equity incentive plan. The
Compensation Committee accepted senior managements
recommendation in this regard. As a result, Named Executives
total compensation decreased when compared to the previous year,
with the CEOs total compensation decreasing by 29% and the
other Named Executives compensation decreasing by between 15%
and 19%.
Other
Compensation
The use of personal benefits and perquisites as an element of
compensation in the Corporations 2008 executive
compensation program is extremely limited. The Named Executives
are provided with a corporate-owned automobile, club memberships
and a life insurance policy of $1,000,000 ($500,000 in excess of
other employees) like other employees, the Named Executives
participate in the 1165(e) plan (including Corporations
match) and group medical and dental plans and receive long-term
and short-term disability, health care, and group life insurance
benefits. In addition, the CEO is provided with personal
security solely for business purposes.
Effect of
the Emergency Economic Stabilization Act of 2008
On October 14, 2008, the U.S. Department of the
Treasury (the Treasury) announced a program under
the Emergency Economic Stabilization Act of 2008
(EESA) under which the Treasury has purchased
preferred stock investments in participating financial
institutions (the Capital Purchase Program or
CPP). The Corporation participated in the Capital
Purchase Program in 2009 by selling preferred stock and a
warrant to purchase common stock of the Corporation to the
Treasury. As a result, we became subject to certain executive
compensation restrictions under EESA, Treasury regulations, and
the contract pursuant to which we sold such preferred stock.
Those restrictions apply to what the Treasury refers to as our
Senior Executive Officers (SEOs), which are the Named
Executives. Those restrictions relate to:
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Prohibition on compensation that provides an incentive to
take unnecessary and excessive risks. EESA
prohibits the Corporation from providing incentive compensation
arrangements that encourages the SEOs to take unnecessary and
excessive risks that threaten the value of the Corproation.
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|
|
|
Risk Avoidance Analysis. The Treasury
regulations require the Compensation Committee to review SEO
incentive compensation arrangements with the Corporations
senior risk officers to ensure that SEOs are not encouraged to
take unnecessary and excessive risks. The regulations also
require the Compensation Committee to meet at least annually
with the Corporations senior risk officers to discuss and
review the relationship between the Corporations risk
management policies and practices and the SEO incentive
compensation arrangements.
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25
|
|
|
|
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Clawback. EESA requires the Corporation to
recover any bonus or incentive compensation paid to an SEO where
the payment was later found to have been based on statements of
earnings, gains, or other criteria that prove to be materially
inaccurate.
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Golden Parachutes. EESA limits the amounts
that can be paid under change in control and similar agreements
that provide payments upon separation of service. EESA also
amended Section 280G of the Internal Revenue Code by
expanding the definition of a parachute payment to include
certain severance payments paid by reason of an involuntary
termination or in connection with bankruptcy, liquidation or
receivership of the employer. Each SEO has contractually agreed
to abide by the limits imposed by EESA for so long as Treasury
holds an equity interest in the Corporation.
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|
Limit on tax deduction. EESA amended the
Internal Revenue Code by adding 162(m)(5).
Section 162(m)(5) imposes a $500,000 deduction limit for
SEO.
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|
Binding SEO agreements. Prior to selling the
preferred stock to the Treasury, each of the Corporations
SEOs executed an agreement that reduces his compensation and
other benefits to the extent necessary to comply with these EESA
requirements. These agreements will remain effective for so long
as Treasury owns any of the Corporations equity securities.
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Effect of
the America Reinvestment and Recovery Act of 2009
On February 17, 2009, President Obama signed into law the
America Reinvestment and Recovery Act of 2009
(ARRA). ARRA contains expansive new restrictions on
executive compensation for financial institutions and other
companies participating in the CPP. These restrictions apply to
the Corporation. ARRA amends the executive compensation and
corporate governance provisions of EESA. In doing so, it
continues all the same compensation and governance restrictions
and adds substantially to the restrictions in several areas.
ARRA implements many, but not all, of the restrictions in the
Treasury Guidelines and in several instances goes beyond them.
Some key features of the new executive compensation restrictions
in ARRA are described below:
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ARRA prohibits cash bonuses and similar payments to top
employees. ARRA prohibits the accrual and payment
of any bonus, retention award, or incentive
compensation to SEO and the next 10 most
highly-compensated employees for as long as any CPP-related
obligations are outstanding. The prohibition does not apply to
bonuses payable pursuant to employment agreements in
effect prior to February 11, 2009. ARRA does not explain
how to identify the most highly-compensated employees and does
not define incentive compensation.
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Limited amount of restricted stock excluded from bonus
prohibition. Long-term restricted
stock is excluded from ARRAs bonus prohibition, but only
to the extent (i) the value of the stock does not exceed
one-third of the total amount of annual compensation of the
employee receiving the stock, (ii) the stock does not
fully vest until after all CPP-related obligations
have been satisfied, and (iii) any other conditions that
the Treasury may specify have been met.
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Shareholder
say-on-pay
vote required. ARRA requires every company
receiving CPP assistance to permit a non-binding shareholder
vote to approve the compensation of executives as disclosed in
the companys proxy statement. ARRA directs the SEC to
adopt regulations within 1 year to implement this
requirement. Although ARRA is not clear, the Corporations has
included a
say-on-pay
non-binding proposal in this Proxy Statement.
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Stricter restrictions on golden parachute
payments. EESA generally limited golden
parachute payments to senior executives to three times the
executives base compensation. ARRA prohibits any golden
parachute payment to a SEO or any of the next five most
highly-compensated employees upon termination of employment for
any reason for as long as any CPP-related obligations remain
outstanding. A golden parachute payment is defined
as any payment made upon departure from the institution for any
reason, except for payments for services performed or benefits
accrued.
|
|
|
|
Broader bonus clawback requirements. EESA
required CPP-participating companies to recover any bonus or
other incentive payment paid to a SEO on the basis of materially
inaccurate financial or other performance criteria. ARRA extends
this recovery requirement to the next 20 most highly compensated
employees in addition to the SEO.
|
26
|
|
|
|
|
Prohibition on compensation plans that encourage
earnings manipulation. ARRA prohibits CPP
participants from implementing any compensation plan that would
encourage manipulation of the reported earnings of the company
in order to enhance the compensation of any of its employees.
|
|
|
|
Board compensation committee required. ARRA
requires CPP participants to establish a board compensation
committee composed of at least three independent directors and
requires the committee to meet at least semiannually to discuss
and evaluate employee compensation plans in light of an
assessment of any risk to the company posed by such plans.
|
|
|
|
New reporting and certification
requirements. ARRA requires the CEO and CFO of
any publicly-traded CPP-participating company to provide a
written certification of compliance with the executive
compensation restrictions in ARRA in the Corporations
annual filings with the SEC.
|
|
|
|
Policy on luxury expenditures. ARRA requires
each CPP-participating company to implement a company-wide
policy regarding excessive or luxury expenditures, including
excessive expenditures on entertainment or events, office and
facility renovations, aviation or other transportation services.
|
|
|
|
Treasury review of prior payments. ARRA
directs the Treasury to review bonuses, retention awards, and
other compensation paid to the SEO and the next 20 most
highly-compensated employees of each company receiving CPP
assistance before ARRA was enacted, and to seek to
negotiate with the CPP participant and affected employees
for reimbursement if it finds any such payments were
inconsistent with CPP or otherwise in conflict with the public
interest.
|
In addition to the above requirements, ARRA adopts and continues
two requirements from EESA essentially unchanged:
|
|
|
|
|
$500,000 annual deduction limit. Like EESA,
ARRA prohibits CPP participants from deducting annual
compensation paid to SEO in excess of $500,000.
|
|
|
|
No excessive risks. Like EESA, ARRA requires
the Treasury to implement limits on compensation that exclude
incentives for SEOs of a CPP-participating company to take
unnecessary and excessive risks that threaten the value of the
company for as long as any CPP-related obligation remains
outstanding. The Treasury implemented this directive under EESA
by requiring periodic compensation committee review and
certification of the risk characteristics of a companys
incentive compensation arrangements. ARRA requires that the
compensation committee perform such a review at least
semi-annually.
|
Guidelines
and/or
regulations under the ARRA have not yet been issued. As a
result, the Compensation Committee will continue to assess what
actions may be necessary in response to these limitations in
order to ensure that the executive compensation program will
continue to fulfill its philosophy and objectives.
Risk
Avoidance Analysis
The Corporations incentive compensation arrangements do
not encourage the SEOs to take unnecessary and excessive risks
that threaten the value of the financial institution in part
because:
|
|
|
|
|
The Corporation periodically assesses the competitiveness of its
executive compensation structure through internal research and
external studies conducted by independent compensation
consultants taking into consideration survey and proxy data.
|
|
|
|
The compensation structure is based on a pay for performance
methodology. The compensation depends on the Corporation,
business unit and individual achieving performance objectives
designed to enhance stockholder value. Actual incentive payouts
are larger if superior target performance is achieved and
smaller if target performance is not achieved.
|
|
|
|
The compensation structure has a balance between performance
objectives and risk management measures to prevent the taking of
excessive risks.
|
|
|
|
The Corporations risk management structure, including
policies and procedures, provides the mechanism to assist in
attempting to anticipate, and to identify, measure, monitor and
control risks faced by the Corporation. The adequacy of the
internal controls and risk management structure are continuously
evaluated by internal and external examiners.
|
27
|
|
|
|
|
The cash incentive plan imposes a specific target dollar maximum
amount payed to each SEO. The equity incentive plan imposes
grant limits that apply on an individual basis.
|
|
|
|
Equity incentive plan by itself provides for downside leverage
if the stock does not perform well.
|
|
|
|
Shares granted under the stock award program vest ratably over a
4-year
period following year 3 for a total vesting period of
7 years. Vesting acceleration provisions impose target
performance goals tied to the earning per share that needs to be
met.
|
COMPENSATION
COMMITTEE REPORT
The Compensation Committee has reviewed the Compensation
Discussion and Analysis and discussed it with management. Based
on its review and discussions with management, the Compensation
and Benefits Committee recommended to the Board of Directors
that the Compensation Discussion and Analysis be included in the
Corporations Proxy Statement on Schedule 14A for the
2009 Annual Meeting of stockholders.
The Compensation and Benefits Committee certifies that it has
reviewed with the Corporations senior risk officers the
incentive compensation arrangements with the executive officers
of the Corporation (each of whom is a senior executive
officer for purposes of Section 111(b)(3) of the
EESA) and has made reasonable efforts to ensure that such
arrangements do not encourage the executive officers of the
Corporation to take unnecessary and excessive risks that
threaten the value of the Corporation.
Sharee Ann Umpierre-Catinchi (Chairperson)
José Teixidor-Méndez
Jorge Díaz-Irizarry
28
TABULAR
EXECUTIVE COMPENSATION DISCLOSURE
SUMMARY
COMPENSATION TABLE
The Summary Compensation Table set forth below discloses
compensation for the Named Executives of the Corporation,
FirstBank or its subsidiaries.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonqualified
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
Deferred
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
Option
|
|
Incentive Plan
|
|
Compensation
|
|
All Other
|
|
|
|
|
|
|
Salary
|
|
Bonus
|
|
Awards
|
|
Awards
|
|
Compensation
|
|
Earnings
|
|
Compensation
|
|
Total
|
Name and Principal Position
|
|
Year
|
|
($)(a)
|
|
($)(b)
|
|
($)
|
|
($)(c)
|
|
($)(d)
|
|
($)
|
|
($)(e)
|
|
($)
|
|
Luis Beauchamp
|
|
|
2008
|
|
|
|
1,000,000
|
|
|
|
2,200
|
|
|
|
|
|
|
|
|
|
|
|
974,749
|
|
|
|
|
|
|
|
80,956
|
|
|
|
2,057,905
|
|
Chairman, President and
|
|
|
2007
|
|
|
|
1,000,000
|
|
|
|
977,200
|
|
|
|
|
|
|
|
857,500
|
|
|
|
|
|
|
|
|
|
|
|
77,724
|
|
|
|
2,912,424
|
|
Chief Executive Officer
|
|
|
2006
|
|
|
|
1,000,000
|
|
|
|
852,200
|
|
|
|
|
|
|
|
1,595,676
|
|
|
|
|
|
|
|
|
|
|
|
77,340
|
|
|
|
3,525,216
|
|
Aurelio Alemán
|
|
|
2008
|
|
|
|
750,000
|
|
|
|
2,200
|
|
|
|
|
|
|
|
|
|
|
|
748,952
|
|
|
|
|
|
|
|
20,319
|
|
|
|
1,521,471
|
|
Senior Executive Vice
|
|
|
2007
|
|
|
|
750,000
|
|
|
|
702,200
|
|
|
|
|
|
|
|
367,500
|
|
|
|
|
|
|
|
|
|
|
|
19,698
|
|
|
|
1,839,398
|
|
President and
|
|
|
2006
|
|
|
|
750,000
|
|
|
|
602,200
|
|
|
|
|
|
|
|
683,861
|
|
|
|
|
|
|
|
|
|
|
|
36,824
|
|
|
|
2,072,885
|
|
Chief Operating Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fernando Scherrer(f)
|
|
|
2008
|
|
|
|
700,000
|
|
|
|
2,200
|
|
|
|
|
|
|
|
|
|
|
|
442,566
|
|
|
|
|
|
|
|
20,176
|
|
|
|
1,164,942
|
|
Executive Vice President and
|
|
|
2007
|
|
|
|
700,000
|
|
|
|
452,200
|
|
|
|
|
|
|
|
183,750
|
|
|
|
|
|
|
|
|
|
|
|
28,558
|
|
|
|
1,364,508
|
|
Chief Fiancial Officer
|
|
|
2006
|
|
|
|
290,769
|
|
|
|
602,200
|
|
|
|
|
|
|
|
288,000
|
|
|
|
|
|
|
|
|
|
|
|
22,180
|
|
|
|
1,203,149
|
|
Lawrence Odell(g)
|
|
|
2008
|
|
|
|
720,100
|
|
|
|
2,200
|
|
|
|
|
|
|
|
|
|
|
|
437,563
|
|
|
|
|
|
|
|
7,729
|
|
|
|
1,167,592
|
|
Executive Vice President,
|
|
|
2007
|
|
|
|
720,100
|
|
|
|
452,200
|
|
|
|
|
|
|
|
183,750
|
|
|
|
|
|
|
|
|
|
|
|
10,887
|
|
|
|
1,366,937
|
|
General Counsel and
|
|
|
2006
|
|
|
|
630,100
|
|
|
|
402,200
|
|
|
|
|
|
|
|
459,000
|
|
|
|
|
|
|
|
|
|
|
|
8,505
|
|
|
|
1,499,805
|
|
Secretary of the
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Board of Directors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Randolfo Rivera
|
|
|
2008
|
|
|
|
550,000
|
|
|
|
2,200
|
|
|
|
|
|
|
|
|
|
|
|
393,338
|
|
|
|
|
|
|
|
21,650
|
|
|
|
967,188
|
|
Executive Vice President and
|
|
|
2007
|
|
|
|
550,000
|
|
|
|
452,200
|
|
|
|
|
|
|
|
183,750
|
|
|
|
|
|
|
|
|
|
|
|
15,150
|
|
|
|
1,201,100
|
|
Wholesale Banking Executive
|
|
|
2006
|
|
|
|
550,000
|
|
|
|
402,200
|
|
|
|
|
|
|
|
341,931
|
|
|
|
|
|
|
|
|
|
|
|
31,656
|
|
|
|
1,325,787
|
|
|
|
|
(a) |
|
Includes regular base pay before deductions for years 2006, 2007
and 2008. |
|
(b) |
|
The column includes the Christmas bonus and discretionary
performance bonus payments. The performance bonus payments for
2006 were granted during a meeting of the Compensation Committee
held in January 2007, which were meant as compensation for
performance of the Named Executives during fiscal year 2006. The
performance bonus payments for 2007 were granted during a
meeting of the Compensation Committee held in January 2008,
which were meant as compensation for performance of the Named
Executives during fiscal year 2007. |
|
(c) |
|
The amounts in this column reflect the dollar amounts recognized
for financial reporting purposes in accordance with
SFAS 123R. The assumptions made when calculating the
amounts in this column for 2006 and 2007 are found in
Note 20 of the Consolidated Financial Statements of the
Corporation on
Form 10-K
for year 2008. No options were awarded during 2008. |
|
(d) |
|
The amounts in this column represent the payments made to Named
Executives under a new compensation structure approved by the
Board in March 2008 relating to the short-term annual incentive
component of total executive compensation. The short-term annual
incentive is determined as a percentage of base salary using
metrics against which performance is measured. The details of
the short-term annual incentive award structure are included in
the Compensations Discussion and Analysis section of this Proxy
Statement. |
29
|
|
|
(e) |
|
Set forth below is a breakdown of all other compensation (i.e.,
personal benefits): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company-
|
|
|
1165(e) Plan
|
|
|
|
|
|
Memberships &
|
|
|
|
|
|
|
|
Name and Principal
|
|
|
|
|
Owned Vehicles
|
|
|
Contribution
|
|
|
Security
|
|
|
Dues
|
|
|
Other
|
|
|
Total
|
|
Position
|
|
Year
|
|
|
($)
|
|
|
($)(a)
|
|
|
($)
|
|
|
($)
|
|
|
($)(b)
|
|
|
($)
|
|
|
Luis Beauchamp
|
|
|
2008
|
|
|
|
14,133
|
|
|
|
5,600
|
|
|
|
48,797
|
|
|
|
11,628
|
|
|
|
798
|
|
|
|
80,956
|
|
|
|
|
2007
|
|
|
|
9,345
|
|
|
|
5,783
|
|
|
|
47,494
|
|
|
|
12,162
|
|
|
|
2,940
|
|
|
|
77,724
|
|
|
|
|
2006
|
|
|
|
16,863
|
|
|
|
5,783
|
|
|
|
41,612
|
|
|
|
8,780
|
|
|
|
4,302
|
|
|
|
77,340
|
|
Aurelio Alemán
|
|
|
2008
|
|
|
|
10,374
|
|
|
|
5,600
|
|
|
|
|
|
|
|
3,547
|
|
|
|
798
|
|
|
|
20,319
|
|
|
|
|
2007
|
|
|
|
7,835
|
|
|
|
5,523
|
|
|
|
|
|
|
|
3,400
|
|
|
|
2,940
|
|
|
|
19,698
|
|
|
|
|
2006
|
|
|
|
16,192
|
|
|
|
5,600
|
|
|
|
|
|
|
|
9,530
|
|
|
|
5,502
|
|
|
|
36,824
|
|
Fernando Scherrer
|
|
|
2008
|
|
|
|
17,415
|
|
|
|
|
|
|
|
|
|
|
|
1,963
|
|
|
|
798
|
|
|
|
20,176
|
|
|
|
|
2007
|
|
|
|
23,438
|
|
|
|
|
|
|
|
|
|
|
|
2,180
|
|
|
|
2,940
|
|
|
|
28,558
|
|
|
|
|
2006
|
|
|
|
7,058
|
|
|
|
|
|
|
|
|
|
|
|
10,850
|
|
|
|
4,272
|
|
|
|
22,180
|
|
Lawrence Odell
|
|
|
2008
|
|
|
|
6,931
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
798
|
|
|
|
7,729
|
|
|
|
|
2007
|
|
|
|
7,947
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,940
|
|
|
|
10,887
|
|
|
|
|
2006
|
|
|
|
2,313
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,192
|
|
|
|
8,505
|
|
Randolfo Rivera
|
|
|
2008
|
|
|
|
11,478
|
|
|
|
5,600
|
|
|
|
|
|
|
|
3,774
|
|
|
|
798
|
|
|
|
21,650
|
|
|
|
|
2007
|
|
|
|
8,130
|
|
|
|
|
|
|
|
|
|
|
|
4,080
|
|
|
|
2,940
|
|
|
|
15,150
|
|
|
|
|
2006
|
|
|
|
16,736
|
|
|
|
5,600
|
|
|
|
|
|
|
|
6,080
|
|
|
|
3,240
|
|
|
|
31,656
|
|
|
|
|
(a) |
|
Includes the Corporations pro-rata contribution to the
executives participation in the Defined Contribution
Retirement Plan. |
|
(b) |
|
Other compensation for the three fiscal years includes the
amount of the life insurance policy premium paid by the
Corporation in excess of the $500,000 life insurance policy
available to all employees and for 2006 expenses incurred by the
Corporation for family members who accompanied the executive to
employer-sponsored activities. |
|
|
|
(f) |
|
Fernando Scherrer was hired in July 2006; his employment
agreement stipulates a base salary of no less than $700,000 a
year and a guaranteed bonus of $400,000 upon the first
anniversary of his employment. In addition, Mr. Scherrer
received a signing bonus of $200,000 which is included in the
bonus section of the Summary Compensation Table for 2006 and
stock options exercisable for 100,000 shares of common
stock. |
|
(g) |
|
In February 2006, the Corporation entered into an employment
agreement with Lawrence Odell and at the same time entered into
a services agreement with his law firm Martinez
Odell & Calabria (the Law Firm) relating
to the services of Mr. Odell as Executive Vice President
and General Counsel of the Corporation. Mr. Odell received
a nominal base salary of $100.00 a year and the opportunity to
receive an annual performance bonus based upon his achievement
of predetermined business objectives. In addition, he received a
stock option exercisable for 100,000 shares of common
stock. The services agreement provides for monthly payments to
the Law Firm of $60,000 which has been taken into consideration
in determining Mr. Odells salary and has been
included as such in the Summary Compensation Table for years
2006, 2007 and 2008. |
GRANTS OF
PLAN-BASED AWARDS
The table set forth below discloses information with respect to
short-term annual incentive awards granted in fiscal year 2008.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All
|
|
|
All
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Option
|
|
|
Exercise
|
|
|
|
|
|
Grant
|
|
|
|
|
|
|
Estimated
|
|
|
Estimated
|
|
|
Awards:
|
|
|
Awards:
|
|
|
or Base
|
|
|
Market
|
|
|
Date Fair
|
|
|
|
|
|
|
Possible Payouts
|
|
|
Possible Payouts
|
|
|
Number
|
|
|
Number of
|
|
|
Price for
|
|
|
Price on
|
|
|
Value of
|
|
|
|
|
|
|
Under Non-Equity
|
|
|
Under Equity
|
|
|
of Shares
|
|
|
Securities
|
|
|
Options
|
|
|
Grant
|
|
|
Stock and
|
|
|
|
Grant
|
|
|
Incentive Plan Awards(1)
|
|
|
Incentive Plan Awards
|
|
|
of Stock
|
|
|
Underlying
|
|
|
Awards
|
|
|
Date
|
|
|
Option
|
|
Name
|
|
Date
|
|
|
Threshold ($)
|
|
|
Target ($)
|
|
|
Maxium ($)
|
|
|
Threshold ($)
|
|
|
Target ($)
|
|
|
Maxium ($)
|
|
|
or units (#)
|
|
|
Options(#)
|
|
|
($/SH)
|
|
|
($/SH)
|
|
|
Awards
|
|
|
Luis Beauchamp
|
|
|
|
|
|
|
500,000
|
|
|
|
1,000,000
|
|
|
|
2,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aurelio Alemán
|
|
|
|
|
|
|
375,000
|
|
|
|
750,000
|
|
|
|
1,500,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fernando Scherrer
|
|
|
|
|
|
|
227,500
|
|
|
|
455,000
|
|
|
|
910,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lawrence Odell
|
|
|
|
|
|
|
234,033
|
|
|
|
468,065
|
|
|
|
936,130
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Randolfo Rivera
|
|
|
|
|
|
|
233,750
|
|
|
|
467,500
|
|
|
|
935,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30
|
|
|
(1) |
|
The amounts shown in these columns represent the minimum, target
and maximum amounts payable under the Corporations
executive compensation structure approved by the Board in March
2008 with respect to short-term annual incentive awards for 2008. |
OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR END
The following table sets forth certain information with respect
to the unexercised options held by Named Executives as of
December 31, 2008.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan
|
|
Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
Awards:
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
Number of
|
|
Market or
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
Unearned
|
|
Payout
|
|
|
|
|
Number
|
|
Plan Awards:
|
|
|
|
|
|
|
|
|
|
Shares,
|
|
Value of
|
|
|
|
|
of
|
|
Number
|
|
|
|
|
|
Number
|
|
|
|
Unit or
|
|
Unearned
|
|
|
Number
|
|
Securities
|
|
of
|
|
|
|
|
|
of
|
|
|
|
Other
|
|
Shares,
|
|
|
of
|
|
Underlying
|
|
Securities
|
|
|
|
|
|
Shares
|
|
Market Value
|
|
Rights
|
|
That
|
|
|
Securities
|
|
Unexercised
|
|
Underlying
|
|
|
|
|
|
or Units
|
|
of Shares or
|
|
That
|
|
Have
|
|
|
Underlying
|
|
Options
|
|
Unexercised
|
|
Option
|
|
Option
|
|
of Stock
|
|
Units of Stock
|
|
Have
|
|
Not
|
|
|
Options (#)
|
|
(#)
|
|
Unearned
|
|
Exercise
|
|
Expiration
|
|
That Have
|
|
That Have
|
|
Not
|
|
Vested
|
Name
|
|
Exercisable
|
|
Unexercisable
|
|
Options (#)
|
|
Price ($)
|
|
Date
|
|
Not Vested
|
|
Not Vested
|
|
Vested (#)
|
|
($)
|
|
Luis Beauchamp
|
|
|
90,000
|
|
|
|
|
|
|
|
|
|
|
|
7.44
|
|
|
|
12/13/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
96,000
|
|
|
|
|
|
|
|
|
|
|
|
9.34
|
|
|
|
2/26/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
64,000
|
|
|
|
|
|
|
|
|
|
|
|
12.81
|
|
|
|
2/25/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
76,800
|
|
|
|
|
|
|
|
|
|
|
|
21.45
|
|
|
|
2/20/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
76,800
|
|
|
|
|
|
|
|
|
|
|
|
23.92
|
|
|
|
2/22/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
350,000
|
|
|
|
|
|
|
|
|
|
|
|
12.68
|
|
|
|
1/24/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
350,000
|
|
|
|
|
|
|
|
|
|
|
|
9.20
|
|
|
|
1/21/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aurelio Alemán
|
|
|
36,000
|
|
|
|
|
|
|
|
|
|
|
|
6.54
|
|
|
|
11/23/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
78,000
|
|
|
|
|
|
|
|
|
|
|
|
7.44
|
|
|
|
12/13/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
90,000
|
|
|
|
|
|
|
|
|
|
|
|
9.34
|
|
|
|
2/26/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
60,000
|
|
|
|
|
|
|
|
|
|
|
|
12.81
|
|
|
|
2/25/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
72,000
|
|
|
|
|
|
|
|
|
|
|
|
21.45
|
|
|
|
2/20/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
72,000
|
|
|
|
|
|
|
|
|
|
|
|
23.92
|
|
|
|
2/22/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
150,000
|
|
|
|
|
|
|
|
|
|
|
|
12.68
|
|
|
|
1/24/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
150,000
|
|
|
|
|
|
|
|
|
|
|
|
9.20
|
|
|
|
1/21/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fernando Scherrer
|
|
|
100,000
|
|
|
|
|
|
|
|
|
|
|
|
9.20
|
|
|
|
7/24/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
75,000
|
|
|
|
|
|
|
|
|
|
|
|
9.20
|
|
|
|
1/21/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lawrence Odell
|
|
|
100,000
|
|
|
|
|
|
|
|
|
|
|
|
12.64
|
|
|
|
2/15/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
75,000
|
|
|
|
|
|
|
|
|
|
|
|
9.20
|
|
|
|
1/21/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Randolfo Rivera
|
|
|
2,110
|
|
|
|
|
|
|
|
|
|
|
|
7.44
|
|
|
|
12/13/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
60,000
|
|
|
|
|
|
|
|
|
|
|
|
9.34
|
|
|
|
2/26/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000
|
|
|
|
|
|
|
|
|
|
|
|
12.81
|
|
|
|
2/25/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
60,000
|
|
|
|
|
|
|
|
|
|
|
|
21.45
|
|
|
|
2/20/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
60,000
|
|
|
|
|
|
|
|
|
|
|
|
23.92
|
|
|
|
2/22/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
75,000
|
|
|
|
|
|
|
|
|
|
|
|
12.68
|
|
|
|
1/24/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
75,000
|
|
|
|
|
|
|
|
|
|
|
|
9.20
|
|
|
|
1/21/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31
OPTIONS
EXERCISED AND STOCK VESTED TABLE
The following table sets forth certain information with respect
to the options exercised by the Named Executives during fiscal
year 2008.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
Number of Shares
|
|
|
|
|
|
Number of Shares
|
|
|
|
|
|
|
Acquired
|
|
|
Value Realized
|
|
|
Acquired
|
|
|
Value Realized on
|
|
Name
|
|
Through
Exercise (#)
|
|
|
Exercise ($)
|
|
|
on Vesting (#)
|
|
|
Vesting ($)
|
|
|
Luis Beauchamp
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aurelio Aleman
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fernando Scherrer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lawrence Odell
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Randolfo Rivera(a)
|
|
|
|
|
|
|
195,600
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
|
Under the 1997 stock option plan, which expired on
January 21, 2007, the Compensation Committee had the
authority to grant stock appreciation rights (SARs)
at any time subsequent to the grant of an option. Pursuant to
SARs, the optionee surrenders the right to exercise an option
granted under the plan in consideration for payment by the
Corporation of an amount equal to the excess of the fair market
value of the shares of common stock subject to such option
surrendered over the total option price of such shares. Any
option surrendered is cancelled by the Corporation and the
shares subject to the option are not eligible for further grants
under the option plan. In this respect, during the second
quarter of 2008, Mr. Rivera surrendered the right to
exercise 120,000 stock options granted on May 26, 1998 in
the form of a SAR. |
PENSION
BENEFITS
The Corporation does not have a defined benefit or pension plan
in place for the Named Executives.
DEFINED
CONTRIBUTION RETIREMENT PLAN
The Named Executives are elegible to participate in the
Corporations Defined Contribution Retirement Plan pursuant
to Section 1165(e) of the Puerto Rico Internal Revenue Code
(PRIRC) which provides retirement, death, disability
and termination of employment benefits. The Defined Contribution
Retirement Plan complies with the Employee Retirement Income
Security Act of 1974, as amended (ERISA) and the
Retirement Equity Act of 1984, as amended (REA). An
individual account is maintained for each participant and
benefits are paid based solely on the amount of each
participants account.
The Named Executives may defer from 1% to 10% of their annual
salary into the Defined Contribution Retirement Plan on a
pre-tax basis as employee salary savings contributions. Each
year the Corporation will make a contribution equal to 25% of
the first 4% of each participating employees contribution;
no match is provided for contributions in excess of 4% of
compensation. Corporate contributions are made to employees with
a minimum of one year of service. At the end of the fiscal year,
the Corporation may, but is not obligated to, make additional
contributions in an amount determined by the Board; however, the
maximum of any additional contribution in any year may not
exceed 15% of the total compensation of the Named Executives and
no basic monthly or additional annual matches need be made in
years during which the Corporation incurs a loss.
NON-QUALIFIED
DEFERRED COMPENSATION
Under the Deferred Compensation Plan Named Executives may defer
a portion of
his/her
compensation. These deferred amounts, if any, are included in
the compensation disclosed in the Summary Compensation Table.
The Corporation does not match any of the deferred amounts. The
deferred amounts are deposited in a trust that is administered
by FirstBank. Investments by the trust may be made in stocks,
bonds or other securities. The income, gains and losses both,
realized and unrealized, from investments made by the Trust, net
of any expenses properly chargeable, is determined annually at
the close of each year and allocated among the accounts of the
participants in proportion to the values of their respective
contingent future benefits. The Corporation does not guarantee a
return
32
on the investment of these funds. Payment of the amount
allocated to a participant is deferred until such
participants retirement, resignation, disability or death,
or in the event of an unforeseeable emergency or necessity.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive
|
|
|
Registrant
|
|
|
Aggregate
|
|
|
Aggregate
|
|
|
Aggregate
|
|
|
|
Contribution
|
|
|
Contribution
|
|
|
Earnings
|
|
|
Withdrawals/
|
|
|
Balance at
|
|
Name
|
|
in Last FY ($)
|
|
|
in Last FY ($)
|
|
|
in Last FY ($)
|
|
|
Distributions ($)
|
|
|
Last FYE ($)
|
|
|
Luis Beauchamp
|
|
|
|
|
|
|
|
|
|
|
(23,922
|
)
|
|
|
|
|
|
|
698,428
|
|
Aurelio Alemán
|
|
|
75,000
|
|
|
|
|
|
|
|
30,772
|
|
|
|
|
|
|
|
724,919
|
|
Total
|
|
|
75,000
|
|
|
|
|
|
|
|
6,850
|
|
|
|
|
|
|
|
1,423,347
|
|
EMPLOYMENT
CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE IN
CONTROL ARRANGEMENTS
Employment Agreements. The following table
discloses information regarding the employment agreements of the
Named Executives.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective
|
|
|
Current Base
|
|
|
Term of
|
|
Name(a)
|
|
Date
|
|
|
Salary
|
|
|
Years
|
|
|
Luis M. Beauchamp
|
|
|
5/14/1998
|
|
|
$
|
1,000,000
|
|
|
|
4
|
|
Aurelio Alemán
|
|
|
2/24/1998
|
|
|
$
|
750,000
|
|
|
|
4
|
|
Randolfo Rivera
|
|
|
5/26/1998
|
|
|
$
|
550,000
|
|
|
|
4
|
|
Lawrence Odell
|
|
|
2/15/2006
|
|
|
$
|
720,100
|
|
|
|
4
|
|
Fernando Scherrer(b)
|
|
|
7/24/2006
|
|
|
$
|
700,000
|
|
|
|
3
|
|
|
|
|
(a) |
|
In connection with the Corporations participation in the
Capital Purchase Program, (i) the Corporation amended its
compensation, bonus, incentive and other benefit plans,
arrangements and agreements (including severance and employment
agreements), to the extent necessary to be in compliance with
the executive compensation and corporate governance requirements
of Section 111(b) of the EESA and applicable guidance or
regulations issued by the Treasury on or prior to
January 16, 2009 and (ii) each Senior Executive
Officer, as defined in the Capital Purchase Program, executed a
written waiver releasing the Treasury and the Corporation from
any claims that such officers may otherwise have as a result of
the Corporations amendment of such arrangements and
agreements to be in compliance with Section 111(b) of EESA.
Until such time as Treasury ceases to own any equity securities
of the Corporation acquired pursuant to the Capital Purchase
Program, the Corporation must maintain compliance with these
requirements. |
|
(b) |
|
Mr. Scherrers employment agreement was amended on
March 27, 2008 to increase the term of such agreement from
one to three years and to amend any provisions under the
employment agreement that considers the term of employment to
calculate severance payments for reasons of termination or
change in control of the Corporation. |
The agreements provide that on each anniversary of the date of
commencement of each agreement the term of such agreement shall
be automatically extended for an additional one (1) year
period beyond the then-effective expiration date, unless either
party receives written notice that the agreement shall not be
further extended.
Under the employment agreements, the Board may terminate the
contracting officer at any time; however, unless such
termination is for cause, the contracting officer will be
entitled to a severance payment of four (4) times
his/her
annual base salary (base salary defined as $450,000 in the case
of Lawrence Odell), less all required deductions and
withholdings, which payment shall be made semi-monthly over a
period of one year, except under Fernando Scherrers
employment agreement, under which the severance payment shall be
of three (3) times his base salary. With respect to a
termination for cause, cause is defined to include
personal dishonesty, incompetence, willful misconduct, breach of
fiduciary duty, intentional failure to perform stated duties,
material violation of any law, rule or regulation (other than
traffic violations or similar offenses) or final cease and
desist order or any material breach of any provision of the
employment agreement.
In the event of a change in control of the
Corporation during the term of the employment agreements, the
executive shall be entitled to receive a lump sum severance
payment equal to his or her then current base annual
33
salary (base salary defined as $450,000 in the case of Lawrence
Odell) plus (i) the highest cash performance bonus received
by the executive in any of the four (4) fiscal years prior
to the date of the change in control (three (3) years in
the case of Fernando Scherrer) and (ii) the value of any
other benefits provided to the executive during the year in
which the change in control occurs, multiplied by four (4)
(three (3) in the case of Fernando Scherrer). Termination
of employment is not a requirement for a change in control
severance payment. Pursuant to the employment agreements, a
change in control shall be deemed to have taken
place if a third person, including a group as defined in
Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended, becomes the beneficial owner of shares of the
Corporation having 25% or more of the total number of votes
which may be cast for the election of directors of the
Corporation, or which, by cumulative voting, if permitted by the
Corporations charter or By-laws, would enable such third
person to elect 25% or more of the directors of the Corporation;
or if, as a result of, or in connection with, any cash tender or
exchange offer, merger or other business combination, sales of
assets or contested election, or any combination of the
foregoing transactions, the persons who were directors of the
Corporation before any such transaction cease to constitute a
majority of the Board of the Corporation or any successor
institution.
The following table describes and quantifies the benefits and
compensation to which the Named Executives would have been
entitled under existing plans and arrangements if their
employment had terminated on December 31, 2008, based on
their compensation and services on that date. The amounts shown
on the table do not include payments and benefits available
generally to salaried employees upon termination of employment,
such as accrued vacation pay, distribution from the 1165(e)
plan, or any death, disability or post-retirement welfare
benefits available under broad-based employee plans.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Death, Disability, Termination Without
|
|
|
|
Non-
|
|
|
|
|
|
|
|
|
Cause, Termination With Cause and
|
|
|
|
Qualified
|
|
Disability
|
|
Insurance
|
|
|
Name
|
|
Change in Control
|
|
Severance($)(a)
|
|
Plans($)(b)
|
|
Benefit($)
|
|
Benefit($)
|
|
Total($)
|
|
Luis Beauchamp
|
|
Death(c)
|
|
|
|
|
|
|
698,428
|
|
|
|
|
|
|
|
500,000
|
|
|
|
1,198,428
|
|
|
|
Permanent Disability(d)
|
|
|
|
|
|
|
698,428
|
|
|
|
2,400,000
|
|
|
|
|
|
|
|
3,098,428
|
|
|
|
Termination without cause
|
|
|
4,000,000
|
|
|
|
698,428
|
|
|
|
|
|
|
|
|
|
|
|
4,698,428
|
|
|
|
Termination with cause
|
|
|
|
|
|
|
698,428
|
|
|
|
|
|
|
|
|
|
|
|
698,428
|
|
|
|
Change in Control
|
|
|
8,237,188
|
|
|
|
698,428
|
|
|
|
|
|
|
|
|
|
|
|
8,935,616
|
|
Aurelio Alemán
|
|
Death(c)
|
|
|
|
|
|
|
724,919
|
|
|
|
|
|
|
|
500,000
|
|
|
|
1,224,919
|
|
|
|
Permanent Disability(d)
|
|
|
|
|
|
|
724,919
|
|
|
|
1,800,000
|
|
|
|
|
|
|
|
2,524,919
|
|
|
|
Termination without cause
|
|
|
3,000,000
|
|
|
|
724,919
|
|
|
|
|
|
|
|
|
|
|
|
3,724,919
|
|
|
|
Termination with cause
|
|
|
|
|
|
|
724,919
|
|
|
|
|
|
|
|
|
|
|
|
724,919
|
|
|
|
Change in Control
|
|
|
5,897,300
|
|
|
|
724,919
|
|
|
|
|
|
|
|
|
|
|
|
6,622,219
|
|
Fernando Scherrer
|
|
Death(c)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
500,000
|
|
|
|
500,000
|
|
|
|
Permanent Disability(d)
|
|
|
|
|
|
|
|
|
|
|
1,260,000
|
|
|
|
|
|
|
|
1,260,000
|
|
|
|
Termination without cause
|
|
|
2,100,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,100,000
|
|
|
|
Termination with cause
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in Control
|
|
|
3,522,546
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,522,546
|
|
Lawrence Odell
|
|
Death(c)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
500,000
|
|
|
|
500,000
|
|
|
|
Permanent Disability(d)
|
|
|
|
|
|
|
|
|
|
|
1,728,240
|
|
|
|
|
|
|
|
1,728,240
|
|
|
|
Termination without cause
|
|
|
1,800,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,800,000
|
|
|
|
Termination with cause
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in Control
|
|
|
3,632,116
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,632,116
|
|
Randolfo Rivera
|
|
Death(c)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
500,000
|
|
|
|
500,000
|
|
|
|
Permanent Disability(d)
|
|
|
|
|
|
|
|
|
|
|
1,320,000
|
|
|
|
|
|
|
|
1,320,000
|
|
|
|
Termination without cause
|
|
|
2,200,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,200,000
|
|
|
|
Termination with cause
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in Control
|
|
|
4,100,288
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,100,288
|
|
|
|
|
(a) |
|
As described above in connection with the Corporations
participation in the Capital Purchase Program in January 2009,
the Corporation amended its compensation, bonus, incentive and
other benefit plans, arrangements and agreements (including
severance and employment agreements), to the extent necessary to
be in compliance with the executive compensation and corporate
governance requirements of Section 111(b) of the EESA and
applicable guidance or regulations issued in connection with the
Capital Purchase Program; these amendments have not been taken
into consideration when quantifying the benefits and
compensation to which the Named Executives would have been
entitled to receive under this column if their employment had
terminated on December 31, 2008. |
34
|
|
|
(b) |
|
The Nonqualified Plan includes the accumulated balance of the
deferred compensation plan as of December 31, 2008 as
applicable for the Named Executive. |
|
(c) |
|
Amount includes life insurance benefits in excess of those
amounts available generally to other employees. |
|
(d) |
|
If the executive shall become disabled or incapacitated for a
number of consecutive days exceeding those to which the
executive is entitled as sick-leave and it is determined that
the executive will continue to temporarily be unable to perform
his/her duties, the executive shall receive 60% of his/her
compensation exclusive of any other benefits he/she is entitled
to receive under the corporate-wide plans and programs available
to other employees. If it is determined that the executive is
permanently disabled, the executive shall receive 60% of his/her
compensation for the remaining term of the employment agreement.
The executive shall be considered permanently
disabled if absent due to physical or mental illness on a
full time basis for three consecutive months. |
PROPOSAL NO. 2
ADVISORY
VOTE ON EXECUTIVE COMPENSATION
Background
of the Proposal
The ARRA requires that those financial institutions, like the
Corporation, which have received financial assistance provided
under the Troubled Asset Relief Program (TARP),
allow a separate and non-binding stockholder vote to approve the
compensation of such financial institutions executive
officers. This requirement applies during the period in which
obligations under TARP remain outstanding.
Executive
Compensation
Pursuant to the ARRA the Board has authorized a non-binding
stockholder vote on the Corporations executive
compensation program as reflected in the Compensation Discussion
and Analysis and the disclosures regarding Named Executives
compensation provided in the various tables and accompanying
narrative disclosures included in this Proxy Statement. This
proposal, commonly known as a Say on Pay proposal,
gives the Corporations stockholders the opportunity to
vote on the Corporations executive compensation program
through the following resolution:
Resolved, that the stockholders approve the overall
executive compensation policies and procedures employed by the
Corporation, as described in the Compensation Discussion and
Analysis and the disclosures regarding the Named Executives
compensation provided in the various tables, and the
accompanying narrative disclosures, included in this Proxy
Statement for the 2009 Annual Meeting of Stockholders.
This stockholder vote is advisory and will not be binding upon
the Board or construed as overruling any decision by the Board.
However, the Compensation Committee may take into account the
outcome of the vote when considering future executive
compensation arrangements.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR
APPROVAL OF THIS PROPOSAL ON EXECUTIVE COMPENSATION.
PROPOSAL NO. 3
REGISTERED
PUBLIC ACCOUNTING FIRM
The firm of PricewaterhouseCoopers LLP has been selected as the
Independent Registered Public Accounting Firm of the Corporation
for the fiscal year ending December 31, 2009. The firm will
be represented at the Annual Meeting and representatives will
have the opportunity to make a statement, if they so desire, and
also will be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION
OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS THE
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM OF THE CORPORATION
FOR THE FISCAL YEAR ENDING DECEMBER 31, 2009.
35
AUDIT
FEES
The total fees paid or accrued by the Corporation for
professional services rendered by the external auditors for the
years ended December 31, 2007 and 2008 were $1,562,854 and
$1,696,175, respectively, distributed as follows:
|
|
|
|
|
Audit Fees: $1,455,454 relating to the audit
of the financial statements and internal control over financial
reporting for the year ended December 31, 2007; and
$1,575,275 for the audit of the financial statements and
internal control over financial reporting for the year ended
December 31, 2008.
|
|
|
|
Audit-Related Fees: $101,400 in 2007 and
$120,900 in 2008 for other audit-related fees, which consisted
mainly of the audits of employee benefit plans.
|
|
|
|
Tax Fees: none in 2007 and none in 2008.
|
|
|
|
Other Fees: $6,000 in 2007 related to fees
paid for access to an accounting and auditing electronic library
and none in 2008.
|
The Audit Committee has established controls and procedures that
require the pre-approval of all audits, audit-related and
permissible non-audit services provided by the independent
registered public accounting firm in order to ensure that the
rendering of such services does not impair the auditors
independence. The Audit Committee may delegate to one or more of
its members the authority to pre-approve any audit,
audit-related or permissible non-audit services, and the member
to whom such delegation was made must report any pre-approval
decisions at the next scheduled meeting of the Audit Committee.
Under the pre-approval policy, audit services for the
Corporation are negotiated annually. In the event that any
additional audit services not included in the annual
negotiation, audit-related or permissible non-audit services are
required by the Corporation, an amendment to the existing
engagement letter or an additional proposed engagement letter is
obtained from the independent registered public accounting firm
and evaluated by the Audit Committee or the member(s) of the
Audit Committee with authority to pre-approve such services.
STOCKHOLDER
PROPOSALS
SEC rules and regulations require that proposals that
stockholders would like included in a companys proxy
materials 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 years 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 years meeting. When the date is changed by more
than 30 days from the date of the previous years
meeting, the deadline is a reasonable time before the company
begins to print and send its proxy materials. In accordance with
the Corporations By-laws, the Corporation expects to hold
its 2010 Annual Meeting of Stockholders on or before
April 27, 2010, subject to the right of the Board to change
such date based on changed circumstances.
Any proposal that a stockholder wishes to have considered for
presentation at the 2010 Annual Meeting and included in the
Corporations proxy statement and form of proxy used in
connection with such meeting, must be forwarded to the Secretary
of the Corporation at the principal executive offices of the
Corporation no later than November [23], 2009. Any such
proposal must comply with the requirements of
Rule 14a-8
promulgated under the Securities Exchange Act of 1934, as
amended. The deadline for submitting a stockholder proposal
outside the processes of
Rule 14a-8,
other than mentioned below, is no later than February [5],
2010.
Under the Corporations By-laws, if a stockholder seeks to
propose a nominee for director for consideration at the annual
meeting of stockholder, notice must be received by the Secretary
of the Corporation at least 30 days prior to the date of
the annual meeting of stockholders. Accordingly, under the
By-laws, any stockholder nominations for directors for
consideration at the 2010 Annual Meeting must be received by the
Secretary of the Corporation at the principal executive offices
of the Corporation no later than March 26, 2010.
OTHER
MATTERS
Management of the Corporation does not know of any business to
be brought before the Annual Meeting other than that specified
herein. However, if any other matters are properly brought
before the Annual Meeting, the proxies solicited hereby will be
voted with respect to those other matters in accordance with the
judgment of the proxies.
36
The cost of solicitation of proxies will be borne by the
Corporation. First BanCorp has retained the services of
Morrow & Co., LLC, a professional proxy solicitation
firm, to assist in the solicitation of proxies. The fee arranged
with Morrow & Co., LLC is in the amount of $5,500 plus
reimbursement for out-of-pocket expenses. The Corporation
requested that brokerage firms, banks and other custodians,
nominees and fiduciaries solicit proxies from their principals
and will reimburse them for reasonable expenses incurred by them
in sending proxy materials to the beneficial owners of First
BanCorps common stock. In addition to solicitation by
mail, telephone, and any other electronic mail, directors,
officers and employees of the Corporation may solicit proxies by
personal interview, telephone and similar means without
additional compensation.
ANNUAL
REPORT
A copy of our Annual Report to Stockholders for the year ended
December 31, 2008 has been mailed concurrently with this
Proxy Statement to all stockholders entitled to notice of and to
vote at our annual meeting of stockholders. The Annual Report is
not incorporated into this Proxy Statement and is not considered
proxy-soliciting material. Stockholders may obtain additional
printed copies of our Annual Report on
Form 10-K
for the year ended December 31, 2008, as filed with the
Securities and Exchange Commission, without charge upon written
request. Any Exhibits listed in the
Form 10-K
will also be furnished upon written request at the
Corporations expense. Any such request should be directed
to Lawrence Odell, Secretary of the Board of Directors, at First
BanCorp, 1519 Ponce de León Avenue, Santurce, Puerto Rico
00908. An electronic copy of the Annual Report on
Form 10-K
for the year ended December 31, 2008 is also available on
the Corporations website at www.firstbankpr.comor at
http://bnymellon.mobular.net/bnymellon/fbp.
By Order of the Board of Directors,
Lawrence Odell
Secretary
San Juan, Puerto Rico
March [24], 2009
37
|
|
|
In keeping with
the environment, this proxy statement has been printed on
recycled paper.
|
|
|
THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION IS INDICATED, WILL BE VOTED FOR ITEMS 1 THROUGH 3.
Please mark your votes as X indicated in this example
1. ELECTION OF DIRECTORS
Nominees
FOR AGAINST ABSTAINFOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
01 Luis M. Beauchamp
02 Aurelio Alemán
03 José Menéndez-Cortada
04 José Teixidor
05 Jorge L. Díaz
06 José L. Ferrer-Canals
07 Sharee Ann Umpierre-Catinchi
08 Fernando Rodríguez-Amaro
09 Héctor M. Nevares
10 Frank Kolodziej
11 José F. Rodríguez
FOR AGAINST ABSTAIN
2. Vote to ratify PricewaterhouseCoopers LLP as our independent public accountant
3. Vote to approve a non-binding advisory proposal on the compensation of named executive officers
Mark Here for Address Change or Comments
SEE REVERSE
Signature Signature Date
NOTE: Please sign as name appears hereon. Joint owners should each sign. When signing as attorney,
executor, administrator, trustee or guardian, please give full title as such.
FOLD AND DETACH HERE
WE ENCOURAGE YOU TO TAKE ADVANTAGE OF INTERNET OR TELEPHONE VOTING, BOTH ARE AVAILABLE 24 HOURS A
DAY, 7 DAYS A WEEK.
Internet and telephone voting is available through 11:59 PM Eastern Time the day prior to annual
meeting day.
INTERNET http://www.proxyvoting.com/fbp
Use the Internet to vote your proxy. Have First BanCorp your proxy card in hand when you access the
web site.
OR
TELEPHONE 1-866-540-5760
Use any touch-tone telephone to vote your proxy. Have your proxy card in hand when you call.
If you vote your proxy by Internet or by telephone, you do NOT need to mail back your proxy card.
To vote by mail, mark, sign and date your proxy card and return it in the enclosed postage-paid envelope.
Your Internet or telephone vote authorizes the named proxies to vote your shares in the same manner
as if you marked, signed and returned your proxy card.
Important notice regarding the Internet availability of proxy materials for the Annual Meeting of shareholders
The Proxy Statement and the 2008 Annual Report to Stockholders are available at:
http://bnymellon.mobular.net/bnymellon/fbp |
PROXY
FIRST BANCORP
Annual Meeting of Stockholders April 28, 2009
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF FIRST BANCORP
The undersigned hereby appoints Luis M. Beauchamp and José Menéndez-Cortada, and each of them, with
power to act without the other and with power of substitution, as proxies and attorneys-in-fact and
hereby authorizes them to represent and vote, as provided on the other side, all the shares of
common stock of First BanCorp (the Corporation) which the undersigned is entitled to vote, and,
in their discretion, to vote upon such other business as may properly come before the Annual
Meeting of Stockholders of the Corporation to be held April 28, 2009 or at any adjournment or
postponement thereof, with all powers which the undersigned would possess if present at the Meeting.
(Continued and to be marked, dated and signed, on the other side)
Address Change/Comments
(Mark the corresponding box on the reverse side)
BNY MELLON SHAREOWNER SERVICES
P.O. BOX 3550
SOUTH HACKENSACK, NJ 07606-9250
FOLD AND DETACH HERE
You can now access your BNY Mellon Shareowner Services account online.
Access your BNY Mellon Shareowner Services shareholder/stockholder account online via Investor
ServiceDirect® (ISD).
The transfer agent for First BanCorp, now makes it easy and convenient to get current information
on your shareholder account.
· View account status
· View payment history for dividends
· View certificate history
· Make address changes
· View book-entry information
· Obtain a duplicate 1099 tax form
· Establish/change your PIN
Visit us on the web at http://www.bnymellon.com/shareowner/isd
For Technical Assistance Call 1-877-978-7778 between 9am-7pm Monday-Friday Eastern Time
****TRY IT OUT**** www.bnymellon.com/shareowner/isd
Investor ServiceDirect®
Available 24 hours per day, 7 days per week
Choose MLinkSM for fast, easy and secure 24/7 online access to your future proxy materials, in
vestment plan statements, tax documents and more. Simply lo g on to Investor ServiceDirect® at
www.bnymelon.com/shareowner/isd where step-by-step instructions will prompt you through enrollment. 46474 |