TRIPLE-S MANAGEMENT CORPORATION
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OMB APPROVAL |
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OMB Number:
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3235-0059 |
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Expires:
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February 28, 2006 |
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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Filed by the Registrant
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Filed by a Party other than the Registrant o |
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Check the appropriate box: |
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o 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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o Definitive Proxy Statement |
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þ Definitive Additional Materials |
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Soliciting Material Pursuant to §240.14a-12 |
TRIPLE-S MANAGEMENT CORPORATION
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy
Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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þ 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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1) Title of each class of securities to which transaction applies: |
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2) Aggregate number of securities to which transaction applies: |
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined): |
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4) Proposed maximum aggregate value of transaction: |
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o Fee paid previously with preliminary materials. |
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o 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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1) Amount Previously Paid: |
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2) Form, Schedule or Registration Statement No.: |
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| SEC 1913 (11-01) |
Persons who are to respond to the collection of information
contained in this form are not required to respond unless the form displays a currently valid
OMB control number. |
NOTICE TO CONTINUE THE
SEVENTH
ANNUAL MEETING OF SHAREHOLDERS
SUNDAY, FEBRUARY 5, 2006
TABLE OF CONTENTS
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Invitation |
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3 |
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Notice |
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Attachment |
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8 |
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Proposals of the Board of Directors |
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Resolution Number 3 |
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Resolution Number 4 |
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Resolution Number 5 |
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Shareholders’ Proposals |
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39 |
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Resolution Number 6 |
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January 5, 2006
INVITATION TO THE CONTINUATION OF THE
SEVENTH ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders of Triple-S Management Corporation:
On April 24, 2005, the Seventh Annual Meeting of Shareholders of Triple-S Management Corporation
(the “Corporation”) was held. During said Meeting, new directors were elected and the following
resolutions were approved: Resolution Number 1, which establishes that the Annual Meeting of
Shareholders will take place on the last Sunday of the month of April of each year or, as an
exception, at such other date which is closest to this date as determined by the Board; and
Resolution Number 2, which amended Article 9-1 of the By-Laws to harmonize its language with the
Articles of Incorporation regarding the amount of issued and outstanding common shares with the
right to vote required in order to approve certain amendments to the By-laws.
Resolution Number 3, which required the affirmative vote of two-thirds or more of the issued and
outstanding common shares with the right to vote and Resolutions Number 4, 5, and 6, which required
three-fourths or more, for their approval, were not voted because the amount of votes necessary for
their consideration were not registered. Those present at the Meeting, determined to continue the
Annual Meeting on a later date in order to obtain the necessary vote of 75% of the
shares present or represented.
The Continuation of the Annual Meeting will take place on Sunday, February 5, 2006, to vote on
Resolutions Number 3, 4, 5, and 6 so that they may be able to resolve certain matters related to
the Corporation’s shares, which include the transfer of shares by those shareholders who do not
have any descendants that are physicians or dentists, or any other form of transfer of their
shares.
On March 24, 2005, the Board of Directors sent you the Invitation, Notice, Proxy Statement, and
Proxy Form for the Annual Meeting. The Election of Directors and the Resolutions Number 1 and 2
were voted on April 24, 2005. On this occasion we ask for your vote on Resolutions Number 3, 4, 5
and 6. Enclosed you will find an additional Proxy Form with a preaddressed envelope for you to
sign and make your vote count.
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/s/
Wilmer Rodríguez-Silva, MD |
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Wilmer Rodríguez-Silva, MD |
Chairman of the Board of Directors |
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NOTICE TO CONTINUE THE
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON SUNDAY, FEBRUARY 5, 2006
To the Shareholders of Triple-S Management:
The Board of Directors of Triple-S Management Corporation invites you to attend on February 5, 2006
the continuation of the Annual Meeting of Shareholders commenced on April 24, 2005. On March
24, 2005 the Board of Directors sent you the Invitation, Notice, Proxy Statement, and Proxy Form of
the Board of Directors for the Annual Meeting.
The work of the Annual Meeting of Shareholders will continue on Sunday, February 5, 2006 at
9:00 am in the Ponce de León Rooms A, B, and C of the Condado Plaza Hotel, at 999 Ashford
Avenue in San Juan, Puerto Rico, and will take place in order to consider and vote exclusively on
the following matters, adjourned at the meeting of April 24, 2005:
Board of Directors’ Proposals
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Resolution Number 3 |
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Currently, the Articles of Incorporation and By-laws provide that a shareholder of Triple-S
Management Corporation may only transfer his/her common shares to his/her descendants who
are physicians or dentists, if such descendant complies with the twenty-one (21) common
shares limit per person. |
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Resolution Number 3 is presented by the Board of Directors of Triple-S Management
Corporation to amend Article Eighth of the Articles of Incorporation and Articles 4-2 and
4-3 of the By-laws of Triple-S Management Corporation to allow the transfer to any physician
or dentist of one or more common shares of a shareholder, during his/her lifetime or upon
his/her death, if no kind of payment, service, obligation, or other inducement has been or
will be provided or rendered, and if said physician or dentist complies with the twenty-one
(21) common shares limit requirement. |
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Resolution Number 4 |
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Resolution Number 4 is presented by the Board of Directors of Triple-S Management
Corporation to amend and renumber Articles Fourth, Fifth, Sixth, Seventh, Eighth, Ninth,
Tenth, Eleventh, Twelfth, and Thirteenth of the Articles of Incorporation of Triple-S
Management Corporation to establish that the authorized capital of Triple-S Management
Corporation will be divided into two classes of common shares: (1) Voting Common Shares,
which are the common shares authorized by Triple-S Management Corporation |
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since its establishment, in other words, the existing common shares, and (2) Non-Voting
Common Shares, which are not available for purchase, since they will only be issued so that
one or more of the voting common shares of a shareholder may be exchanged, upon his/her
death, for an equal amount of non-voting common shares for the benefit of his/her heirs or
surviving spouse when they are not physicians or dentists, subject to, among other
requirements to be complied with, the twenty-one (21) common shares per person limit. In
addition, this Resolution will include the revisions of some provisions in order to improve
or correct the text or language of the Articles of Incorporation. |
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Resolution Number 5 |
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Resolution Number 5 is presented by the Board of Directors of Triple-S Management
Corporation to amend Chapters 1, 2, 3, 4, 5, 6, 7, 8, 9, and 10 of the By-laws of Triple-S
Management Corporation to establish that the authorized capital of Triple-S Management
Corporation will be divided into two classes of common shares: (1) Voting Common Shares,
which are the common shares authorized by Triple-S Management Corporation since its
establishment, in other words, the existing common shares, and (2) Non-Voting Common Shares,
which are not available for purchase, since they will only be issued so that one or more of
the voting common shares of a shareholder may be exchanged, upon his/her death, for an equal
amount of non-voting common shares for the benefit of his/her heirs or surviving spouse when
they are not physicians or dentists, subject to, among other requirements to be complied
with, the twenty-one (21) common shares per person limit. In addition, this Resolution will
include the revisions of some provisions in order to improve or correct the text or language
of the By-laws. |
Shareholder’s Proposals
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Resolution Number 6 |
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Resolution Number 6 is presented by Leslie H. López Vélez, DDS, shareholder of Triple-S
Management Corporation, to amend Articles Sixth, Seventh, and Thirteenth of the Articles of
Incorporation and Articles 4-1 and 9-1 of the By-laws of Triple-S Management Corporation in
order to reduce from three-fourths (3/4) to two-thirds (2/3) the amount of issued and
outstanding common shares with the right to vote required to approve certain amendments to
Article Sixth of the Articles of Incorporation and Article 4-1 of the By-laws. |
The Board of Directors has set March 15, 2005 as the date to determine which shareholders have the
right to receive notice of and vote at the Annual Meeting.
Other Matters
The Board of Directors is not aware of any other business that may come before the continuation of
the Annual Meeting, other than the matters indicated in this Notice. However, the Board of
Directors informs you that if any matter, other than those indicated above, should come before the
continuation of the Annual Meeting, or any postponement, recess, suspension, or
adjournment of the same, Proxies solicited hereby will be voted according to the best judgment of
the Board of Directors.
Page 5
The Proposals set forth herein are described in the Proxy Statement that was sent to you on March
24, 2005. We encourage you to read the Resolutions 3, 4, 5, and 6, which are attached to this
Notice, prior to voting. The Board of Directors has carefully considered each of the Proposals and
recommends that you vote In Favor of the Resolutions Number 3, 4, 5, and 6.
It is very important that you attend and personally exercise your right to vote at the continuation
of the Annual Meeting. However, if you cannot attend, we urge you to sign, date, and return the
Proxy Form solicited by the Board of Directors of Triple-S Management Corporation. You may send
the Proxy Form to the attention of Dr. Jesús R. Sánchez-Colón, Secretary of the Board of Directors,
at the following faxes or addresses:
FAX:
(787) 749-4191 or (787) 706-4023
IN PERSON OR BY MESSENGER:
Office of the Secretary of the Board of Directors
Triple-S Management Corporation Principal Office Building
1441 FD Roosevelt Avenue, Sixth Floor
San Juan, Puerto Rico 00920
BY MAIL:
Office of the Secretary of the Board of Directors
Triple-S Management Corporation
PO Box 363628
San Juan, Puerto Rico 00936-3628
Shareholders may personally register their Proxies at the Office of the Secretary of the Board of
Directors of Triple-S Management, before the day set for the continuation of the Annual Meeting and
during Triple-S Management’s office hours, Monday through Friday from eight o’clock in the morning
(8:00 a.m.) to four-thirty in the afternoon (4:30 p.m.), except Saturdays, Sundays, and holidays.
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Those shareholders who do not register their Proxies before the day the continuation of the Annual
Meeting takes place, will be able to register them on Sunday, February 5, 2006, from seven-thirty
in the morning (7:30 a.m.) until the Registry of Proxies is ordered to close.
The Board of Directors is counting on your participation. Your vote is important!
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San Juan, Puerto Rico
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By Order of the Board of Directors |
January 5, 2006 |
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/s/ Wilmer Rodríguez-Silva, MD |
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/s/ Jesús R. Sánchez-Colón, DMD |
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Wilmer Rodríguez-Silva, MD
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Jesús R. Sánchez-Colón, DMD |
Chairman of the Board of Directors
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Secretary of the Board of Directors |
We cordially invite you to attend the continuation Annual Meeting.
It is important that your shares be present or represented, regardless of the amount that you own.
Even if you are considering attending the continuation of the Annual Meeting, we urge you to
complete, sign, date, and return the Proxy Form solicited by the Board of Directors.
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PROPOSALS OF THE BOARD OF DIRECTORS
The Board of Directors asks the shareholders to support the Board’s Proposals with respect to the
following matters and grant their proxy accordingly.
PROPOSAL
RESOLUTION NUMBER 3
Currently, the Articles of Incorporation and By-laws provide that a shareholder of Triple-S
Management may only transfer his/her common shares to his/her descendants who are physicians or
dentists, if such descendant complies with the twenty-one (21) common shares limit per person.
Resolution Number 3 is presented by the Board of Directors of Triple-S Management to amend Article
Eighth of the Articles of Incorporation and Articles 4-2 and 4-3 of the By-laws of Triple-S
Management to allow the transfer to any physician or dentist of one or more common shares of a
shareholder, during his/her lifetime or upon his/her death, if no kind of payment, service,
obligation, or other inducement has been or will be provided or rendered, and if said physician or
dentist complies with the twenty-one (21) common shares limit requirement.
Resolution
Be it resolved, as this continuation of the Annual Meeting of Shareholders hereby resolves, today,
February 5, 2006, in San Juan, Puerto Rico, to amend Article Eighth of the Articles of
Incorporation and Articles 4-2 and 4-3 of the By-laws of Triple-S Management so that they read as
follows:
ARTICLES OF INCORPORATION
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EIGHTH:
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TRANSFER OF COMMON SHARES |
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A shareholder may, during his/her lifetime or upon his/her
death, donate, bequeath, grant, or transfer one or more of his/her common
shares to any other physician or dentist, if said shareholder and the physician
or dentist that will receive the common shares comply with each and everyone of
the following requirements and the same are evidenced to the Corporation’ s
satisfaction: |
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Deliver a prior written and duly executed
notification to the Corporation regarding the donation, bequest, grant,
or transfer; |
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Deliver evidence to the Corporation that no
kind of payment, service, obligation, or other inducement has been or
will be provided or rendered; |
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Deliver evidence to the Corporation of the
fulfillment of the twenty-one (21) common shares per person limit
requirement; and |
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Deliver all evidence to the Corporation
that is necessary to show the fulfillment of the conditions required to
recognize and register the transfer of these common shares on the
Corporation’s books. |
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The Corporation will have the right of first refusal over
its common shares if one or more of the common shares are sold, donated,
bequeathed, granted, or transferred, in any manner, during a shareholder’s
lifetime or upon his/her death, pursuant to a will or by operation of law: (1)
to someone who is not a physician or dentist, or (2) when any kind of payment,
service, obligation, or other inducement has been or will be provided or
rendered. |
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When a transfer of common shares is requested and (1) the
transfer of common shares is to be made to a person who is not a physician or
dentist, (2) any kind of payment, service, obligation, or other inducement has
been or will be provided or rendered, or (3) the provisions in this Article
regarding the transfer of common shares are not complied with, the Corporation
may purchase them at the same price paid to the Corporation when the common
shares were originally issued. |
The Corporation will have the right of first refusal in the event of a sale,
donation, or any other sale or cession of the shares of the Corporation. Any
Shareholder who wishes to sell, donate, or in any other way sell or cede his/her
shares of the Corporation, must first offer his shares to the Corporation in
writing. The Corporation may then purchase said shares from the Shareholder for the
same price he/she paid for them. However, in the event that said shares were
donated or inherited through a will, or in any other way, to a person who is (1) a
descendant of the Shareholder and (2) a physician or a dentist, then said person has
the right to hold up to a maximum 21 shares.
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BY-LAWS
CHAPTER 4 — ON THE COMMON STOCKS
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The Corporation will have the right of first refusal in the event of a sale, donation, or any
other sale or cession of the shares of the Corporation. Any Shareholder who wishes to sell,
donate, or in any other way sell or cede his/her shares of the Corporation, must first offer
his/her shares to the Corporation in writing. The Corporation shall then purchase said shares
from the Shareholder for the same price he/she paid for them. However, in the event that the
shares were donated or inherited through a will, or in any other way, to a person who is (1) a
descendant of the Shareholder and (2) a physician or a dentist, then said person shall have
the right to hold up to a maximum 21 shares. |
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SHAREHOLDER LISTING |
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LIST OF SHAREHOLDERS |
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The Secretary of the Corporation shall keep, or ensure the keeping of, a complete and exact
register, in alphabetical order, of all the shareholders, including their address and the
amount of shares registered under each shareholder holds, in the offices of the
Corporation. Said register shall be readily available and may be photocopied during
working hours, and shall be available for inspection by any shareholder, particularly, ten
(10) days before a shareholders meeting, and when any other shareholder meeting is being
held. |
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The Corporation’s register will constitute the only acceptable evidence to determine which
shareholders have the right to inspect the Corporation’s Shareholders Register, the books of
the Corporation, and to determine which shareholders have the right to vote in person or by
proxy during any meeting or shareholders meeting. |
Position of the Board or Directors
The Board of Directors recommends that you vote In Favor of this Resolution.
Reasons for Voting in Favor of the Resolution
At the Annual Meeting of Shareholders held on April 29, 2001, Resolution Number 5 was approved,
recommending that the Board of Directors take the necessary steps in order to register the common
shares of a shareholder on the books of Triple-S Management under the name of his/her spouse or
his/her heirs, if they are physicians and dentists, and the twenty-one (21) common shares per
person limit is not exceeded. At various Annual Meetings, the Board of Directors presented a
resolution similar to this one. Said resolution was not approved, since two-thirds (2/3) of the
issued and outstanding common shares required for its approval have not been present at the
meetings.
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Article Eighth of the Articles of Incorporation and Article 4-2 of the By-laws of Triple-S
Management establish the right of first refusal Triple-S Management has over its common shares,
unless these common shares are transferred to a descendant of a shareholder (children,
grandchildren, great-grandchildren, etc.) who is a physician or dentist. These provisions do not
allow a shareholder to donate, bequeath, grant, or transfer his/her common shares to any other
physician or dentist (spouse, siblings, cousins, nieces/nephews, son-in-law/daughter-in-law, etc.)
since they are not descendants of the shareholder. In these cases, Triple-S Management has the
right of first refusal over its common shares and, therefore, has an obligation to redeem the same
as provided in the Articles of Incorporation and the By-laws.
Some of our shareholders have expressed their wish to change these provisions of the Articles of
Incorporation and By-laws so that they are able to donate, bequeath, grant, or transfer, during
their lifetime or upon their death, when no kind of payment, service, obligation, or other
inducement has been or will be provided or rendered, one or more of their common shares to any
other physician or dentist. Among these shareholders, Dr. Arturo Flores-Gallardo has petitioned,
in more than one occasion, that this amendment be approved.
In order to implement these changes, our shareholders must approve the amendments to the Articles
of Incorporation and By-laws of Triple-S Management described in this Resolution. In addition,
with these amendments we will avoid that Article Eighth of the Articles of Incorporation, as well
as Article 4-2 of the By-laws, have the same language regarding the redemption and transfer of the
common shares, which might be confusing.
The Board of Directors’ goal is that shareholders support and approve this Resolution as soon as
possible in order to attend the shareholders’ requests regarding this issue.
Effectiveness of Resolution Number 3
If this Resolution Number 3 is approved at the Annual Meeting of Shareholders on April 24, 2005, or
at any postponement, recess, suspension, or adjournment of said Meeting, this Resolution will be
effective upon the filing of the corresponding Certificate of Amendment to the Articles of
Incorporation at the State Department of Puerto Rico, as required by the General Corporation’s Law
of Puerto Rico of 1995, as amended. Article Eighth of the Articles of Incorporation and Articles
4-2 and 4-3 of the By-laws of Triple-S Management will read as provided in this Resolution Number
3.
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If our shareholders approve Resolution Number 3 and Resolutions Number 4 and 5 at the Annual
Meeting of Shareholders on April 24, 2005 or at any postponement, recess, suspension, or
adjournment of said Meeting, Resolution Number 3 will not be effective. This is due to the fact
that Resolution Number 3 as well as Resolutions Number 4 and 5 propose to amend Article Eighth of
the Articles of Incorporation and Articles 4-2 and 4-3 of the By-laws of Triple-S Management.
Since the effectiveness of Resolution Number 5 depends upon the approval and effectiveness of
Resolution Number 4, the Board of Directors informs you that Resolution Number 4 shall be effective
upon the filing of the corresponding Certificate of Amendment to the Articles of Incorporation at
the State Department of Puerto Rico. At this time, the amendments indicated in Resolutions Number
4 and 5 shall be incorporated into the Articles of Incorporation and By-laws of Triple-S
Management.
However, if Resolutions 4 and 5 are approved after the approval of Resolution Number 3, the
Articles of Incorporation and By-laws will read as provided in Resolutions Number 4 and 5,
respectively, and their effectiveness shall be prospective. Said amendments shall be made after
the corresponding Certificate of Amendment to the Articles of Incorporation is filed at the State
Department so that Resolution Number 4 becomes effective, which also depends on the approval of
Resolution Number 5.
Required Vote
This Resolution will be approved if it receives the affirmative vote of two-thirds (2/3) or more of
the issued and outstanding common shares with the right to vote, pursuant to Article Thirteenth of
the Articles of Incorporation of Triple-S Management.
PROPOSAL
RESOLUTION NUMBER 4
Resolution Number 4 is presented by the Board of Directors of Triple-S Management to amend and
renumber Articles Fourth, Fifth, Sixth, Seventh, Eighth, Ninth, Tenth, Eleventh, Twelfth, and
Thirteenth of the Articles of Incorporation of Triple-S Management to establish that the authorized
capital of Triple-S Management will be divided into two classes of common shares: (1) Voting Common
Shares, which are the common shares authorized by Triple-S Management since its origins, in other
words, the existing common shares, and (2) Non-Voting Common Shares, which are not available for
purchase, since they will only be issued so that one or more of the voting common shares of a
shareholder may be exchanged, upon his/her death, for an equal amount of non-voting common shares
for the benefit of his/her heirs or surviving spouse when they are not physicians or dentists,
subject to, among other requirements to be complied with, the twenty-one (21) common shares per
person limit. In addition, this Resolution will include the revisions of some provisions in order
to improve or correct the text or language of the Articles of Incorporation.
Page 13
Resolution
Be it resolved, as this continuation of the Annual Meeting of Shareholders hereby resolves, today,
February 5, 2006, in San Juan, Puerto Rico, to amend and renumber Articles Fourth, Fifth, Sixth,
Seventh, Eighth, Ninth, Tenth, Eleventh, Twelfth, and Thirteenth of the Articles of Incorporation
of Triple-S Management so that they read as follows:
ARTICLES OF INCORPORATION
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FOURTH:
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The nature of the business and the object and purposes proposed to be transacted, promoted,
and carried on for pecuniary profit, in the same manner as done by any natural person in any
part of the world, are as follows: |
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The Corporation shall be the stock holding
company for the entities engaged in the insurance business and
other businesses related to insurance, and to other types
of business entities and other activities. |
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B. |
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The preceding clauses will be interpreted as powers as well as objectives
and purposes, and what is expressed in said clauses the statements
expressed in each clause will not be limited by reference or inference by
the content of any other clause unless herein indicated to the contrary, and
the same will be considered independent objectives.
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FIFTH:
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The authorized capital of the Corporation will be One Million Dollars
($1,000,000.00) divided into the following two classes of common shares: |
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Voting Common Shares: This class will
consist of twelve thousand five hundred (12,500) common shares with a
par value of Forty Dollars ($40). |
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Non-Voting Common Shares: This class will
consist of twelve thousand five hundred (12,500) common shares with a
par value of Forty Dollars ($40). |
The authorized capital of the corporation will be FIVE HUNDRED THOUSAND DOLLARS
($500,000) divided in TWELVE THOUSAND FIVE HUNDRED (12,500) common shares with a par
value of FORTY DOLLARS ($40).
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SIXTH:
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The preferences, rights, privileges, and restrictions of the Voting Common Shares are: |
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These are the voting common shares that the
Corporation has authorized since its origin. |
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B. |
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These common shares will have the right to
one vote per share. |
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C. |
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The voting common shares may be exchanged
for an equal amount of non-voting common shares upon the death of a
shareholder for the benefit of those natural persons who are his/her
heirs or surviving spouse if they are not physicians or dentists. |
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1. |
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The exchange of one or more
of these common shares may take place if the person to whom the
exchange will be made, in addition, complies with each and every
one of the following requirements and the same are evidenced to
the Corporation’s satisfaction: |
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a. |
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Deliver a
prior written and duly executed request to the
Corporation asking for the exchange of the voting common
shares for non-voting common shares and to register the
exchanged common shares under his/her name on the
Corporation’s books; |
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b. |
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Deliver
evidence to the Corporation that no kind of payment,
service, obligation, or other inducement has been or
will be provided or rendered; |
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c. |
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Deliver
evidence to the Corporation of the fulfillment of the
twenty-one (21) common shares per person limit
requirement; and |
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d. |
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Deliver all
evidence to the Corporation that is necessary to show
the fulfillment of the conditions required to exchange
and register the exchanged common shares on the
Corporation’s books. |
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2. |
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When an exchange of common
shares is requested and (a) the exchange is to be made for the
benefit of a person who is not his/her heir or surviving spouse,
(b) any kind of payment, service, obligation, or other
inducement has been or will be provided or rendered, or (c) the
provisions in this Article regarding the exchange of voting
common shares are not complied with, the Corporation may
purchase them at the same price paid to the Corporation when the
common shares were originally issued. |
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|
|
SEVENTH:
|
|
The preferences, rights, privileges, and restrictions of the Non-Voting Common Shares are: |
| |
A. |
|
These common shares will not be available
for purchase and will only be issued for the benefit of those natural
persons that are heirs or the surviving spouse of a shareholder who
owns voting common shares if these persons are not physicians or
dentists. |
| |
| |
B. |
|
These common shares will not have the right
to vote. |
| |
| |
C. |
|
The shareholders who own these common
shares will not have the right to be convened to the Corporation’s
shareholder meetings or in any process for a written consent
(referendum), except for those matters in which the law recognizes them
the right to vote. |
| |
| |
D. |
|
The non-voting common shares may be
exchanged for an equal amount of voting common shares during the
lifetime or upon the death of a shareholder when any of the following
events take place: (1) that a person, after being a shareholder, who
owns non-voting common shares, becomes a physician or dentist, or (2)
that a physician or dentist receives a donation, bequest, grant, or
transfer of non-voting common shares. |
| |
1. |
|
The exchange of one or more
of these common shares may take place if the physician or
dentist to whom the exchange will be made, in addition, complies
with each and every one of the following requirements and the
same are evidenced to the Corporation’s satisfaction: |
Page 16
| |
a. |
|
Deliver a
prior written and duly executed request to the
Corporation asking for the exchange of the non-voting
common shares for voting common shares and to register
the exchanged common shares under his/her name on the
Corporation’s books; |
| |
| |
b. |
|
Deliver
evidence to the Corporation that no kind of payment,
service, obligation, or other inducement has been or
will be provided or rendered; |
| |
| |
c. |
|
Deliver
evidence to the Corporation of the fulfillment of the
twenty-one (21) common shares per person limit
requirement; and |
| |
| |
d. |
|
Deliver all
evidence to the Corporation that is necessary to show
the fulfillment of the conditions required to exchange
and register the exchanged common shares on the
Corporation’s books. |
| |
2. |
|
When an exchange of common
shares is requested and (a) the exchange is to be made for the
benefit of a person who is not a physician or dentist, (b) any
kind of payment, service, obligation, or other inducement has
been or will be provided or rendered, or (c) the provisions in
this Article regarding the exchange of non-voting common shares
are not complied with, the Corporation may purchase them at the
same price paid to the Corporation when the common shares were
originally issued. |
Page 17
| |
|
|
SIXTH:
|
|
|
EIGHTH:
|
|
HOLDING OF COMMON SHARES |
| |
A. |
|
Only physicians and dentists shall be
shareholders owning voting common shares of the Corporation. However,
it is provided that those entities, such as the College of Dental
Surgeons of Puerto Rico, Bella Vista Hospital, and Menonita Hospital,
among others, who acquired common shares of Triple-S, Inc., may remain
as shareholders owning voting common shares of Triple-S Management
Corporation with all of the rights, preferences, privileges, and
restrictions provided in the Articles of Incorporation for the voting
common shares, except for the right to transfer them in any manner or
to exchange them for non-voting common shares. |
| |
| |
B. |
|
No person may have more than twenty-one
(21) common shares registered under his/her name on the books of the
Corporation. |
| |
| |
C. |
|
No person may hold five percent (5%) or
more of the voting common shares registered under his/her name on the
books of the Corporation, as provided in the Blue Cross and Blue Shield
Association (BCBSA) license. |
Only physicians and dentists shall be Shareholders of the Corporation. No
person may own more than 21 shares, or five percent (5%) or more, of the
Corporation’s voting shares issued and outstanding. However, organizations
such as hospitals, laboratories, and the College of Dental Surgeons of
Puerto Rico, who had originally acquired shares of the subsidiary Triple-S,
Inc., can convert them into shares of this Corporation. These are: College
of Dental Surgeons of Puerto Rico, Bella Vista Hospital, Mennonite Hospital,
and the Central Urological Society.
| |
|
|
SEVENTH:
|
|
|
NINTH:
|
|
VOTING RIGHT |
| |
A. |
|
Each shareholder with the right to vote on
a matter will be entitled at the meetings to as many votes as common
shares are registered under his/her name on the books of the
Corporation. |
| |
| |
B. |
|
Cumulative voting, as contemplated in the
General Corporations Law of Puerto Rico, as amended, or any other law,
regulation, or provision, is expressly prohibited. |
Page 18
Each Shareholder shall be entitled to as many votes as shares are registered
in his name in the corporate books. The cumulative vote, as states in the
Puerto Rico Corporations General Law or any other law, regulation or
provision, is expressly prohibited.
| |
|
|
EIGHTH:
|
|
|
TENTH:
|
|
TRANSFER OF COMMON SHARES |
| |
1. |
|
A shareholder who owns voting
common shares may, during his/her lifetime or upon his/her
death, donate, bequeath, grant, or transfer one or more of
his/her common shares to any other physician or dentist, if said
shareholder and the physician or dentist that will receive the
common shares comply with each and everyone of the following
requirements and the same are evidenced to the Corporation’s
satisfaction: |
| |
a. |
|
Deliver a
prior written and duly executed notification to the
Corporation regarding the donation, bequest, grant, or
transfer; |
| |
| |
b. |
|
Deliver
evidence to the Corporation that no kind of payment,
service, obligation, or other inducement has been or
will be provided or rendered; |
| |
| |
c. |
|
Deliver
evidence to the Corporation of the fulfillment of the
twenty-one (21) common shares per person limit
requirement; and |
| |
| |
d. |
|
Deliver all
evidence to the Corporation that is necessary to show
the fulfillment of the conditions required to recognize
and register the transfer of these common shares on the
Corporation’s books. |
Page 19
| |
2. |
|
The Corporation will have
the right of first refusal over these common shares if one or
more of them are sold, donated, bequeathed, granted, or
transferred in any manner, during a shareholder’s lifetime or
upon his/her death, pursuant to a will or by operation of law:
(a) to someone who is not a physician or dentist, or (b) when
any kind of payment, service, obligation, or other inducement
has been or will be provided or rendered. |
| |
| |
3. |
|
When a transfer of common
shares is requested and (a) the transfer is to be made to a
person who is not a physician or dentist, (b) any kind of
payment, service, obligation, or other inducement has been or
will be provided or rendered, or (c) the provisions in this
Article regarding the transfer of voting common shares are not
complied with, the Corporation may purchase them at the same
price paid to the Corporation when the common shares were
originally issued. |
| |
B. |
|
Non-Voting Common Shares: |
| |
1. |
|
A shareholder who owns
non-voting common shares may, during his/her lifetime or upon
his/her death, donate, bequeath, grant, or transfer all or part
of his/her common shares to any other natural person, if said
natural person that will receive the common shares complies with
each and everyone of the following requirements and the same are
evidenced to the Corporation’s satisfaction: |
| |
a. |
|
Delivery a
prior written and duly executed notification to the
Corporation regarding the donation, bequest, grant, or
transfer; |
| |
| |
b. |
|
Deliver
evidence to the Corporation that no kind of payment,
service, obligation, or other inducement has been or
will be provided or rendered; |
Page 20
| |
c. |
|
Deliver
evidence to the Corporation of the fulfillment of the
twenty-one (21) common shares per person limit
requirement; and |
| |
| |
d. |
|
Deliver all
evidence to the Corporation that is necessary to show
the fulfillment of the conditions required to recognize
and register the transfer of these common shares on the
Corporation’s books. |
| |
2. |
|
The Corporation will have
the right of first refusal over these common shares if one or
more of them are sold, donated, bequeathed, granted, or
transferred in any manner, during a shareholder’s lifetime or
upon his/her death, pursuant to a will or by operation of law:
(a) to someone who is not a natural person, or (b) when any
kind of payment, service, obligation, or other inducement has
been or will be provided or rendered. |
| |
| |
3. |
|
When a transfer of common
shares is requested and (a) the transfer is to be made to a
person who is not a natural person, (b) any kind of payment,
service, obligation, or other inducement has been or will be
provided or rendered, or (c) the provisions in this Article
regarding the transfer of non-voting common shares are not
complied with, the Corporation may purchase them at the same
price paid to the Corporation when the common shares were
originally issued. |
The Corporation will have a right of preferential acquisition in the event
of a sale, donation or other sale or assignment of the Corporation shares.
Any Shareholder, who wishes to sell, donate or otherwise sell or assign its
shares in the Corporation, will first have to make an offer in writing to
the Corporation. The Corporation will then proceed to purchase said shares
from the Shareholder at the same price paid by him for the shares. However,
in the event that said shares have been donated or bequeathed through Will
or otherwise to a person who is (1) a descendant of the Shareholder and (2)
a doctor or dentist, then said person will have the right to be the holder
of said shares up to a maximum of 21 shares.
Page 21
| |
|
|
NINTH:
|
|
|
ELEVENTH:
|
|
The Board of Directors of the Corporation may not authorize the
sale of any of the common shares of its subsidiary, Triple-S,
Inc., without first having approved a resolution to that effect
through the affirmative vote of three-fourths (3/4) of the
members of the Board of Directors. If said resolution is
approved, it will be submitted to the shareholders of the
Corporation who have the right to vote on this matter for their
consideration in a Special Shareholders Meeting called for this
purpose. The resolution to recommend the sale of the Triple-S,
Inc.’s common shares will have to be approved by the affirmative
vote of two-thirds (2/3) of the issued and outstanding common
shares with the right to vote of the Corporation in the special
meeting. Common shares of the subsidiary Triple-S, Inc. will
not be sold until compliance with these requirements has been
met. |
|
|
|
TENTH:
|
|
|
TWELFTH:
|
|
The names and addresses of each one of the Incorporates are the following: |
|
|
|
|
|
The persons who incorporated Triple-S Management Corporation, pursuant
to the original Articles of Incorporation were: |
| |
1. |
|
... |
| |
| |
2. |
|
... |
| |
| |
3. |
|
... |
| |
| |
4. |
|
... |
| |
| |
5. |
|
... |
| |
| |
6. |
|
... |
| |
| |
7. |
|
... |
| |
| |
8. |
|
... |
| |
| |
9. |
|
... |
| |
| |
10. |
|
... |
| |
| |
11. |
|
... |
| |
| |
12. |
|
... |
| |
| |
13. |
|
... |
| |
| |
14. |
|
... |
| |
| |
15. |
|
... |
| |
| |
16. |
|
... |
| |
| |
17. |
|
... |
| |
| |
18. |
|
... |
| |
| |
19. |
|
Vacancy * (This vacancy was due to the death of a director.) |
| |
* |
|
In the event there is a vacant position due to the recent death of a director. |
Page 22
The Incorporators’ physical and postal address is as follows:
1441 F.D. Roosevelt Ave., San Juan, Puerto Rico 00920
PO Box 363628, San Juan, Puerto Rico 00936-3628
| |
A. |
|
... |
| |
| |
B. |
|
... |
| |
| |
C. |
|
... |
| |
| |
D. |
|
... |
| |
| |
E. |
|
The first Board of Directors of Triple-S Management Corporation was composed by the following persons: |
| |
| |
|
|
will be composed of the following persons, who will hold their charges until the date herein indicated: |
| |
1. |
|
... |
| |
| |
2. |
|
... |
| |
| |
3. |
|
... |
| |
| |
4. |
|
... |
| |
| |
5. |
|
... |
| |
| |
6. |
|
... |
| |
| |
7. |
|
... |
| |
| |
8. |
|
... |
| |
| |
9. |
|
... |
| |
| |
10. |
|
... |
| |
| |
11. |
|
... |
| |
| |
12. |
|
... |
| |
| |
13. |
|
... |
| |
| |
14. |
|
... |
| |
| |
15. |
|
... |
| |
| |
16. |
|
... |
| |
| |
17. |
|
... |
| |
| |
18. |
|
... |
| |
| |
19. |
|
Vacancy * (This vacancy was due to the death of a director.) |
| |
* |
|
At present there is one position vacant due to the recent death of a director. |
Page 23
| |
|
|
TWELFTH:
|
|
|
FOURTEENTH: |
|
|
|
|
|
|
|
The cCorporation will have perpetual existence. |
| |
|
|
THIRTEENTH:
|
|
|
FIFTEENTH:
|
|
AMENDMENTS |
| |
A. |
|
In order to amend these Articles of
Incorporation, the Board of Directors must consider and approve the
proposed amendments, then the resolution to amend the Articles of
Incorporation must be notified and included in the notice of the
shareholders’ meeting, and, lastly, at said meeting, the shareholders
must approve the amendments with the affirmative vote of two-thirds
(2/3) of the issued and outstanding common shares with the right to
vote on such matter, provided that: |
| |
1. |
|
Article Fifth, which provides
that the authorized capital may be amended through the
affirmative vote of a majority of the Corporation’s issued and
outstanding common shares with the right to vote on such
matter. |
| |
| |
2. |
|
Section “C” of Article Eighth
(that no person may hold five percent (5%) or more of the voting
common shares of the Corporation), Section “B” of Article Ninth
(that prohibits cumulative voting), and Section “B” of Article
Thirteenth (that the Board of Directors shall be divided into
three staggered groups), may only be amended by the affirmative
vote of three-fourths (3/4) of the issued and outstanding common
shares with the right to vote on such matter. |
In order to amend these Articles of Incorporation, an
affirmative vote of no less than two thirds (2/3) of the voting
shares issued and outstanding, provided, however, that Article FIFTH,
which provides the authorized capital, may be amended through an
affirmative vote by a majority of the Corporation’s voting shares
issued and outstanding, and the Articles SIXTH, SEVENTH AND ELEVENTH,
Section B, shall only be amended by an affirmative vote of three
fourths (3/4) of the voting shares of the Corporation issued and
outstanding.
Page 24
| |
B. |
|
Despite the provisions of Chapter 9 (Sales of Assets; Dissolution)
and Chapter 10 (Fusion or Consolidation) of the 1995 General
Corporations Law, as amended, the approval of the transactions
provided for therein shall be done through the affirmative vote of
two-thirds (2/3) of the issued and outstanding common shares with
the right to vote on such matter. voting of the Corporation. |
Position of the Board or Directors
The Board of Directors recommends that you vote In Favor of this Resolution.
Reasons for Voting in Favor of the Resolution
The approval of this Resolution Number 4, which proposes amendments to our Articles of
Incorporation, is conditioned to the approval of Resolution Number 5. Both Resolutions have the
purpose to establish that the authorized capital of Triple-S Management will be divided into two
classes of common shares: (1) Voting Common Shares, which are the common shares authorized by
Triple-S Management since its origins, in other words, the existing common shares, and (2)
Non-Voting Common Shares, which are not available for purchase, since they will only be issued so
that one or more of the voting common shares of a shareholder may be exchanged, upon his/her death,
for an equal amount of non-voting common shares for the benefit of his/her heirs or surviving
spouse when they are not physicians or dentists, subject to, among other requirements to be
complied with, the twenty-one (21) common shares per person limit. In addition, this Resolution
will include the revisions of some provisions in order to improve or correct the text or language
of the Articles of Incorporation.
These amendments to our Articles of Incorporation will achieve the approval of a fundamental act of
justice for our shareholders by allowing their heirs or surviving spouse to be shareholders who own
non-voting common shares of Triple-S Management upon the death of a shareholder when these persons
are not physicians or dentists. This is achieved by establishing that the authorized capital of
Triple-S Management will be divided into two classes of common shares: Voting Common Shares and
Non-Voting Common Shares, issued so that the existing common shares may be exchanged for an equal
amount of non-voting common shares. Therefore, these non-voting common shares will not be sold,
since they shall only be issued on behalf of the heir or surviving spouse of a shareholder when
these are not physicians or dentists.
These new non-voting common shares shall have essentially all of the same rights, prerogatives, and
limitations of the existing voting common shares, except for the right to attend, participate, and
vote at shareholders’ meetings. A shareholder who owns non-voting common shares may be nominated
to occupy a position as director of the Board as a representative of the community if such person
is not a physician or dentist, but in order to qualify and perform the duties as a director,
Triple-S Management must issue one voting common share to said director, pursuant to the By-laws
and if he/she complies with the twenty-one (21) common shares per person limit.
Page 25
In addition, these new non-voting common shares may be exchanged for voting common shares, with the
right to vote, attend, and participate in the shareholders’ meetings if: (1) said shareholder, who
owns non-voting common shares, becomes a physician or dentist and requests the exchange of his/her
non-voting common shares for voting common shares, or (2) a physician or dentist receives a
donation, bequest, grant, or transfer of non-voting common shares.
On the other hand, through this Resolution and the amendments proposed thereby, our shareholders,
who are physicians or dentists, may also donate, bequeath, grant, or transfer, during his/her
lifetime or upon his/her death, one or more of his/her voting common shares to any other physician
or dentist if pursuant to such donation, bequest, grant, or transfer when no kind of payment,
service, obligation, or other inducement has been or will be provided or rendered, the twenty-one
(21) common shares per person limit is complied with, and every one of the requirement established
in the Articles of Incorporation are performed.
Principal Effect to the Shareholders of the Amendments
The proposed new class of non-voting common shares will not affect the existing rights of the
shareholders who own voting common shares, since the new class of non-voting common shares to be
created will have fewer rights than the existing voting common shares presently have.
If the amendments proposed in this Resolution are approved, the composition of our class of
shareholders will change, by allowing persons who are not physicians or dentists to become
shareholders of Triple-S Management. Therefore, our shareholder base will be composed of:
Shareholders who own Voting Common Shares and Shareholders who own Non-Voting Common Shares.
The Board of Directors encourages our shareholders to vote in favor of the proposed amendments to
the Articles of Incorporation in this Resolution Number 4. In this way, pursuant to the wish of a
vast majority of our shareholders, their heirs and surviving spouse may preserve the participations
of the existing shareholders of Triple-S Management even though they are not physicians or
dentists, since they may exchange the voting common shares for non-voting common shares and
therefore may request that Triple-S Management register the non-voting common shares in the shares
registry under the name of such heir or surviving spouse, who then would become shareholders who
own non-voting common shares of Triple-S Management.
Effectiveness of Resolution Number 4
The effectiveness of the amendments to the Articles of Incorporation proposed in this Resolution
Number 4 depends and is subject to the approval of Resolution Number 5 that appears in this Proxy
Statement, which proposes several parallel amendments to the By-laws. Therefore, this Resolution
Number 4 will become effective if the shareholders also approve Resolution Number 5.
Page 26
However, if Resolution Number 5 and Resolution Number 4 are approved at the Annual Meeting of
Shareholders on April 24, 2005, or at any postponement, recess, suspension, or adjournment of the
Meeting, this Resolution will become effective when the corresponding certificate of amendment to
the Articles of Incorporation is filed with the State Department of Puerto Rico, pursuant to the
General Corporations Law of Puerto Rico of 1995, as amended. At this time, the Articles of
Incorporation and By-laws of Triple-S Management will be amended as provided in Resolutions Number
4 and 5, respectively.
Required Vote
This Resolution will be approved if it receives the affirmative vote of three-fourths (3/4) or more
of the issued and outstanding common shares with the right to vote, pursuant to Article Thirteenth
of the Articles of Incorporation of Triple-S Management.
PROPOSAL
RESOLUTION NUMBER 5
Resolution Number 5 is presented by the Board of Directors of Triple-S Management to amend Chapters
1, 2, 3, 4, 5, 6, 7, 8, 9, and 10 of the By-laws of Triple-S Management to establish that the
authorized capital of Triple-S Management will be divided into two classes of common shares: (1)
Voting Common Shares, which are the common shares authorized by Triple-S Management since its
origins, in other words, the existing common shares, and (2) Non-Voting Common Shares, which are
not available for purchase, since they will only be issued so that one or more of the voting common
shares of a shareholder may be exchanged, upon his/her death, for an equal amount of non-voting
common shares for the benefit of his/her heirs or surviving spouse when they are not physicians or
dentists, subject to, among other requirements to be complied with, the twenty-one (21) common
shares per person limit. In addition, this Resolution will include the revisions of some
provisions in order to improve or correct the text or language of the By-laws.
Resolution
Be it resolved, as this continuation of the Annual Meeting of Shareholders hereby resolves, today,
February 5, 2006, in San Juan, Puerto Rico, to amend Chapters 1, 2, 3, 4, 5, 6, 7, 8, 9, and 10 of
the By-laws of Triple-S Management so that they read as follows:
BY-LAWS
CHAPTER 1
| 1-1 |
|
The shareholders of “Triple-S Management Corporation” (hereinafter the “Corporation”),
adopt these amended By-laws to regulate the proceedings of the Corporation and be applicable
to the administration of its business. |
Page 27
| |
|
The Incorporators of Triple-S Management Corporation, adopt the present BY-LAWS which
will regulate the proceedings of the Corporation and be applicable to the administration of
its business. |
| |
| 1-2 |
|
These By-laws may be amended or repealed by the shareholders of the Corporation, pursuant
to these By-laws. |
| |
| |
|
The By-Laws herein approved will be submitted to the Shareholders, who may adopt, amend or
derogate the same. |
| |
| 1-3 |
|
The Corporation will use a circular seal with the name “Triple-S Management Corporation”
in its circumference. |
CHAPTER 2 — BOARD OF DIRECTORS
| 2-1 |
|
The Board of Directors will be composed of nineteen
(19) members persons. |
| |
| 2-2 |
|
Of the nineteen (19) directors who will compose the Board of Directors, ten (10) must be
representatives of the community and non-physicians or dentists. |
CHAPTER 3 — CAPITAL IN SHARES
| 3-1 |
|
The authorized capital of the Corporation will be One Million Dollars ($1,000,000.00)
divided into the following two classes of common shares: |
| |
A. |
|
Voting Common Shares: This class will consist of twelve thousand five
hundred (12,500) common shares with a par value of Forty Dollars ($40). |
| |
| |
B. |
|
Non-Voting Common Shares: This class will consist of twelve thousand five
hundred (12,500) common shares with a par value of Forty Dollars ($40). |
The Corporation may issue up to twelve thousand five hundred (12,500) common shares with a
par value of FORTY DOLLARS ($40).
| 3-2 |
|
The preferences, rights, privileges, and restrictions of the common shares are
established in the Articles of Incorporation of the Corporation. |
| |
| |
|
The Corporation will use a circular seal measuring 1-7/8 in diameter with the name of
Triple-S Management Corporation around its circumference. |
Page 28
CHAPTER 4 — ON THE COMMON SHARES
The Incorporators shareholders declare and agree, and so establish in these Amended
By-laws that for the purpose of creating, defining, limiting, and handling the rights and
privileges of the shareholders, in addition to those rights and privileges provided in the
Articles of Incorporation, the following provisions are established:
| 4-1 |
|
HOLDING OF COMMON SHARES |
| |
| |
|
SALE OF COMMON SHARES |
| |
A. |
|
No person may have more than twenty-one (21) common shares registered under
his/her name on the books of the Corporation. |
| |
| |
|
|
No person may own more than twenty-one (21) shares, or five percent (5%) or more, of
the Corporation’s voting shares issued and outstanding. |
| |
| |
B. |
|
No person may hold five percent (5%) or more of the voting common shares
registered under his/her name on the books of the Corporation, as provided in the Blue
Cross and Blue Shield Association (BCBSA) license. |
| |
| |
C. |
|
The issuance by the Corporation or transfer, in any manner, by the
shareholders of the voting common shares shall be exclusively limited to physicians and
dentists. However, it is provided that those entities, such as the College of Dental
Surgeons of Puerto Rico, Bella Vista Hospital, and Menonita Hospital, among others, who
acquired common shares of Triple-S, Inc., may remain as shareholders owning voting
common shares of Triple-S Management Corporation with all of the rights, preferences,
privileges, and restrictions provided in the Articles of Incorporation for the voting
common shares, except for the right to transfer them in any manner or to exchange them
for non-voting common shares. |
| |
| |
|
|
The sales of shares will be exclusively limited to physicians and
dentists. However, organizations such as hospitals, laboratories, and the
College of Dental Surgeons of Puerto Rico, who had originally acquired shares
of Triple-S, Inc., may continue as stockholders of Triple-S Management
Corporation, with all the rights. In addition, the members of the Board of
Directors who represent the community will be Shareholders as long as they
remain on the Board. |
Page 29
| |
D. |
|
The Corporation will issue, free of charge, one voting common share to the
directors of the Board who represent the community, while they continue as members of
the Board, with the only purpose of qualifying them for the position of director of the
Corporation. Said qualifying voting common share issued to the representatives of the
community will automatically revert to the Corporation when they cease to be directors
of the Corporation. |
| |
| |
|
|
The members of the Board of Directors who represent the community,
as long as they remain as members of the Board, will receive one share of the
Corporation, free of charge, with the single purpose of qualifying them for the
position of Director of the Corporation. Said community representatives shall
return the qualifying share that had received when their duties as Directors of
the Corporation end. |
4-2 |
|
The Corporation will have the right of first refusal in the event of a sale, donation, or any
other sale or cession of the shares of the Corporation. Any Shareholder who wishes to sell,
donate, or in any other way sell or cede his/her shares of the Corporation, must first offer
his/her shares to the Corporation in writing. The Corporation shall then purchase said shares
from the Shareholder for the same price he/she paid for them. However, in the event that the
shares were donated or inherited through a will, or in any other way, to a person who is (1) a
descendant of the Shareholder and (2) a physician or a dentist, then said person shall have
the right to hold up to a maximum 21 shares. |
| |
4-3 |
|
SHAREHOLDER LISTING |
| |
| 4-2 |
|
LIST OF SHAREHOLDERS |
| |
| |
|
The Secretary of the Corporation shall keep, or ensure the keeping of, a complete and exact
register, in alphabetical order, of all the shareholders, including their address and the
amount of shares registered under each shareholder holds, in the offices of the
Corporation. Said register shall be readily available and may be photocopied during
working hours, and shall be available for inspection by any shareholder, particularly, ten
(10) days before a shareholders meeting, and when any other shareholder meeting is being
held. |
| |
| |
|
The Corporation’s register will constitute the only acceptable evidence to determine which
shareholders have the right to inspect the Corporation’s Shareholders Register, the books of
the Corporation, and to determine which shareholders have the right to vote in person or by
proxy during any meeting or shareholders meeting. |
Page 30
CHAPTER 5 — MEETINGS
| 5-1 |
|
ANNUAL MEETING |
| |
| |
|
The Annual Meeting of Shareholders of Triple-S Management Corporation will be held at the
Corporation’s main office or at any other place in Puerto Rico as determined by the Board of
Directors from time to time, at the place indicated in the Notice of Meeting, at 9:00 am, on
the last Sunday in April of each year or, as an exception, at such other date which is
closest to the last Sunday of the month of April as determined by the Board due to any legal
requirement applicable to the Corporation. The purpose of the Meeting will be to fill
any vacancies of the Board of Directors, receive and consider reports from officials
regarding the business of the Corporation, and resolve any other matters that are properly
submitted for consideration. However, neither the Articles of Incorporation nor the By-laws
may be amended unless the shareholders, who have the right to vote at the meeting,
have been previously notified that among the matters that are being considered at the
meeting are amendments to the Articles of Incorporation and By-laws. |
| |
| 5-2 |
|
SPECIAL MEETINGS |
| |
| |
|
The Chairman of the Board of Directors, a majority of the Board of Directors, or
shareholders who hold own 25% or more of the registered voting shares
issued and outstanding common shares with the right to vote at the shareholders’
meetings may call special shareholders‘ meetings to be held at the place and
time established by the notice of meeting, and for the purposes expressed therein. The
special meetings (special shareholders meetings) should be notified no less than ten (10)
days or more than thirty (30) days before said meeting. The special shareholders’
meetings must be notified in the same manner as annual shareholders’ meetings. |
| |
| 5-3 |
|
NOTICE OF MEETINGS |
| |
| |
|
The notices for every the annual shareholders’ meetings of the Shareholders
shall be given to each shareholder entitled to vote, by delivering the same personally, or
by mailing such notice to him, at the address which appears on the records of the
Corporation during a period of no less than twenty (20) and no more than sixty (60) days
prior to the meeting. Along with this notice, all shareholders with the right
to vote at the annual shareholders’ meeting will receive copies of the Corporation’s and
its subsidiaries’ consolidated financial statements. The notice shall indicate the place
and the date the shareholders’ meeting will be held, and the matter or matters to be
considered during the Meeting. |
Page 31
| 5-4 |
|
NOTICE — Substitute |
| |
| |
|
If the directors and officers of the Corporation should refrain from calling and
celebrating, at its designated time, an Annual Meeting, five shareholders who own voting
common shares may call for and celebrate said Meeting as required in these By-laws. In
case an officer does not attend said Meeting, one of the shareholders present may be elected
to substitute, provisionally, said officer. Decisions made at the Meeting will be valid, as
if made at an Annual Meeting, and will be registered in the corporate books of the
Corporation. |
| |
| 5-5 |
|
QUORUM |
| |
| |
|
Notice to attend annual and special meetings will be sent to all shareholders with the
right to vote at the meeting whose names appear in the Corporate Registry, twenty (20)
days prior to the meeting date of the shareholder meeting. |
| |
| |
|
At the annual or special meetings, a majority of the issued and outstanding voting
common shares issued and outstanding shall constitute a quorum; and if at the
appointed time quorum is not reached, the meeting will be postponed for a half hour, after
which one-third (1/3)
of the issued and outstanding voting common shares issued and
outstanding present at the shareholders’ meeting will constitute a quorum. If
quorum is not reached, the meeting shall be scheduled thirty (30) days hence, when one-third
(1/3) of the issued and outstanding voting common shares issued and
outstanding present at the shareholders’ meeting will constitute a quorum. If a
quorum is not reached pursuant to the regulation, as many new meetings as necessary may be
scheduled, with the same one-third (1/3) requirement of the issued and outstanding
voting common shares present at the shareholders’ meeting. |
| |
| |
|
At the time of voting on a particular matter, the requirements to constitute quorum
established in the preceding paragraph shall apply to any class of the Corporation’s shares
that by law are entitled to vote as a class. |
CHAPTER 6 — VOTING RIGHT
| 6-1 |
|
Each shareholder with the right to vote on a matter will be entitled, at the
meetings, to as many votes as common shares are registered under his/her name on
the books of the Corporation. The vote may be in person or, if absent, via certified mail or
by proxy. No vote sent by mail or by proxy will be valid unless issued with the shareholder’s
signature or its duly authorized proxy holder, and it is received on time to be
voted at before the Meeting for which destined begins it is intended. No proxy
will be valid after its expiration date. |
Page 32
| 6-2 |
|
CUMULATIVE VOTING — Prohibition |
| |
| |
|
Cumulative voting vote, as contemplated in the General Corporations Law of Puerto
Rico, as amended, or any other law, regulation, or provision, is expressly prohibited. |
| |
| 6-3 |
|
Any proxy holder designated by a shareholder of record who owns voting common shares
must be a shareholder who owns voting common shares or a participating physician or
dentist who has a contract in effect with the subsidiary Triple-S, Inc. |
CHAPTER 7 — ELECTIONS
| 7-1 |
|
BOARD OF DIRECTORS — ELECTION |
| |
A. |
|
The election of directors members to the Board of Directors will take
place during at the Annual Meeting of the Shareholders duly called
convened and will be by ballot. The members necessary persons required
to complete the total of nineteen (19) directors will be elected each year. |
| |
| |
|
|
The directors will be elected Each director shall be elected if they receive the
affirmative vote of a majority of the votes of the issued and outstanding
voting common shares in the election of directors that are represented in
person or by proxy at the meeting. |
| 7-2 |
|
DIRECTORS’ REQUIREMENTS |
| |
| |
|
In order to be a Director of the Corporation, every person must at least meet the following
requirements. |
| |
A. |
|
... |
| |
| |
D. |
|
In the case of The directors, who are physicians or dentists, they
should have at least one voting common share registered under his/her name on
Triple-S Management’s books and be active participants in the Subsidiary of
Triple-S, Inc., and have been so during at least two (2) years prior to their
nomination as directors in the Corporation. |
| |
| |
E. |
|
The directors that are representatives of the community may or may not be
owners of non-voting common shares, but in order to qualify as directors and perform
their functions as such, they must be shareholders who hold voting common shares. The
Corporation will issue one qualifying voting common share under the name of this
director if he/she complies with the twenty-one (21) common shares per person limit.
Pursuant to Article 4-1-D of the By-laws, said share will automatically revert to the
Corporation when the director ceases his/her functions as director of the
Corporation. |
Page 33
CHAPTER 8 — DIRECTORS
| 8-1 |
|
BOARD OF DIRECTORS — POWERS |
| |
A. |
|
The Board of Directors will be composed of nineteen (19) members directors
elected by the shareholders’ at the meeting, or by the Board of Directors
in case of vacancies, and will exercise the corporation’s powers and the management of
its business in accordance with the General Corporations Law of Puerto Rico, as
amended, the Articles of Incorporation and By-laws of the Corporation, as well as
the guidelines issued by the shareholders of the Corporation. |
| |
| |
B. |
|
... |
| |
| |
C. |
|
In order to become a Director of the Corporation, you must be a shareholder
who holds voting common shares of the Corporation. |
| |
| |
D. |
|
... |
| |
| |
E. |
|
Of the nineteen (19) members directors of the Board of Directors, ten
(10) must be representatives of the community and/or subscribers and not medical
doctors or dentists. |
| |
| |
F. |
|
Board Meetings |
| |
1. |
|
... |
| |
| |
2. |
|
... |
| |
| |
3. |
|
The Chairperson of the Board of Directors may convene
extraordinary meetings of the Board to be held at the place, date, and time
established in the notice to the meeting and for the purposes expressed
therein. |
| |
| |
4. |
|
... |
| 8-3 |
|
ACTS OF THE BOARD OF DIRECTORS — Referendum |
| |
| |
|
Save provision to the contrary foreseen provided in the Articles of Incorporation or
the General Corporations Law of Puerto Rico, as amended, any act or agreement
required or permitted to be taken in any meeting of the Board of Directors or any of its
committees, may be executed without requiring a meeting to the effect if all the members of
the Board of Directors or of the Committee, whichever the cases, consent to it in writing
and said written approval is submitted and incorporated to the minutes of the meetings of
the Board of Directors or the Committee. |
Page 34
| |
B. |
|
Audit Committee |
| |
| |
|
|
The Board of Directors shall appoint at least five (5) Directors to this Committee. |
| |
| |
|
|
Each Director that is a member of the Committee shall comply with the independence
requirements that have been adopted and approved by the Board of Directors. |
| |
| |
|
|
The Chair of this Committee shall be appointed by the Directors that are members of
the Committee. |
| |
| |
|
|
This Committee shall meet at least once every three months and as many times as
deemed necessary. The decisions of the Audit Committee shall be by a majority of
the Directors present at each meeting. |
| |
| |
|
|
The Committee’s main responsibilities will be to: |
| |
1. |
|
... |
| |
| |
2. |
|
... |
| |
| |
3. |
|
... |
| |
| |
4. |
|
... |
| |
| |
5. |
|
... |
| |
| |
6. |
|
... |
| |
| |
7. |
|
Appoint or terminate the Director Officer in charge of the Internal Audit Office. |
| 8-14 |
|
CAUSES FOR REMOVAL OF DIRECTORS AND EXECUTIVE OFFICERS NAMED TO THE BOARD OF DIRECTORS |
| |
| |
|
The following will be considered just cause for the removal of officers: |
| |
1. |
|
... |
| |
| |
2. |
|
... |
| |
| |
3. |
|
... |
| |
| |
4. |
|
... |
| |
| |
5. |
|
... |
| |
| |
6. |
|
... |
| |
| |
7. |
|
... |
| |
| |
8. |
|
... |
Page 35
| |
9. |
|
... |
| |
| |
10. |
|
... |
| |
| |
11. |
|
Violate in a consistent manner the Articles of Incorporation or the By-laws and
Regulations of the Corporation, as well as the General Corporations Law of Puerto
Rico, as amended, and/or the agreements approved in the Shareholders Meeting or
by the Board of Directors. |
CHAPTER 9 — AMENDMENTS
Amendments may be made to the By-laws when the following requirements are complied with and
when the proposed amendments have been previously submitted to the Board of Directors and
have been included in the notice for the Meeting.
| |
A. |
|
In order to amend these By-laws, the Board of Directors must consider and
approve the proposed amendments, then the resolution to amend the By-laws must be
notified and included in the notice for the shareholders’ meeting, and, lastly, at said
meeting, the shareholders must approve the amendments pursuant to the voting
requirements set forth herein: |
| |
1. |
|
By the affirmative vote of a majority of the issued and
outstanding common shares with the right to vote present at a validly
constituted meeting of shareholders, except for those cases set forth
below. |
| |
| |
2. |
|
By the affirmative vote of three-fourths (3/4) of the
issued and outstanding common shares with the right to vote, in the case of
Section “B” of Article 4-1 (that no person may hold five percent (5%) or more
of the voting common shares of the Corporation), Article 6-2 (that prohibits
cumulative voting), and Section “B” of Article 7-1 (that establishes that the
Board of Directors will be divided into three staggered groups). |
| |
| |
3. |
|
By the affirmative vote of a majority of the issued and
outstanding common shares with the right to vote, in the case of Article 3-1
regarding authorized capital. |
| |
| |
4. |
|
By the affirmative vote of such amount of votes or
percentage of votes required by the Articles of Incorporation if the
requirements established therein are greater than those established in this
Article 9-1 for any particular matter that is contained in the Articles of
Incorporation as well as in the By-laws. |
Page 36
Through a resolution approved by the majority of those shares of the Corporation
issued and outstanding with the right to vote which are present at a meeting validly
constituted, provided, however, that the Articles 4-1, Section “A”, 6-2 and 7-1,
Section “B”, shall only be amended by the affirmative vote of three fourths (3/4) of
the Corporation’s voting shares issued and outstanding which are present at a
meeting validly constituted.
| |
B. |
|
Amendments approved will be certified by the President and the Secretary, in
triplicate, with the seal of the Corporation. |
| |
| |
C. |
|
The amendments to the By-laws approved by the shareholders at a meeting or by
referendum will be distributed to the shareholders. |
CHAPTER 10 — ADMINISTRATION
| |
|
10-1 NAMING OF THE PRESIDENT OF THE CORPORATION AND HIS/HER FACULTIES |
| |
| |
|
The Board of Directors will name a President to the Corporation who will be in charge of the
general administration, superintendence, and management of the business of the Corporation,
subject to the orders and regulations of the Board of Directors, who will fix his/her
salary. The President of the Corporation will assume all other duties and responsibilities
that are imposed upon him/her at the Shareholders Meetings or by the Board of Directors. |
Position of the Board of Directors
The Board of Directors recommends that you vote In Favor of this Resolution.
Reasons for Voting in Favor of the Resolution
The approval of this Resolution Number 5, which proposes amendments to our By-laws, is conditioned
to the approval of Resolution Number 4. Both Resolutions propose to establish that the authorized
capital of Triple-S Management will be divided into two classes of common shares: (1) Voting Common
Shares, which are the common shares authorized by Triple-S Management since its origins, in other
words, the existing common shares, and (2) Non-Voting Common Shares, which are not available for
purchase, since they will only be issued so that one or more of the voting common shares of a
shareholder may be exchanged, upon his/her death, for an equal amount of non-voting common shares
for the benefit of his/her heirs or surviving spouse when they are not physicians or dentists,
subject to, among other requirements to be complied with, the twenty-one (21) common shares per
person limit. In addition, this Resolution will include the revisions of some provisions in order
to improve or correct the text or language of the By-laws.
Page 37
As indicated in “Reasons for Voting in Favor of the Resolution 4,” the abovementioned is achieved
by establishing that the authorized capital of Triple-S Management will be divided into two classes
of common shares: Voting Common Shares and Non-Voting Common Shares, that will be issued so that
the existing common shares may be exchanged for an equal amount of non-voting common shares.
Therefore, these non-voting common shares will not be sold, since they shall only be issued for the
benefit of the heir or surviving spouse of a shareholder when these are not physicians or dentists.
These new non-voting common shares shall have essentially all of the same rights, prerogatives, and
limitations of the existing voting common shares, except for the right to attend, participate, and
vote at shareholders’ meetings. A shareholder who owns non-voting common shares may be nominated
to occupy a position as director of the Board as a representative of the community if such person
is not a physician or dentist, but in order to qualify and perform the duties as a director,
Triple-S Management must issue one voting common share to said director, pursuant to the By-laws
and if he/she complies with the twenty-one (21) common shares per person limit.
In addition, these new non-voting common shares may be exchanged for voting common shares with the
right to vote, attend, and participate in the shareholders’ meetings if: (1) said shareholder, who
owns non-voting common shares, becomes a physician or dentist and requests the exchange of his/her
non-voting common shares for voting common shares, or (2) a physician or dentist receives a
donation, bequest, grant, or transfer of non-voting common shares.
Principal Effect to the Shareholders of the Amendments
The proposed new class of non-voting common shares will not affect the existing rights of the
shareholders who own voting common shares, since the new class of non-voting common shares to be
created will have fewer rights than the existing voting common shares presently have.
If the amendments proposed in this Resolution are approved, the composition of our class of
shareholders will change, by allowing persons who are not physicians or dentists to become
shareholders of Triple-S Management. Therefore, our shareholder base will be composed of:
Shareholders who own Voting Common Shares and Shareholders who own Non-Voting Common Shares.
The Board of Directors encourages our shareholders to vote in favor of the proposed amendments to
the By-laws in this Resolution Number 5. In this way, pursuant to the wish of a vast majority of
our shareholders, their heirs and surviving spouse may preserve the participations of the existing
shareholders of Triple-S Management even though they are not physicians or dentists, since they may
exchange their voting common shares for non-voting common shares and, therefore, may request that
Triple-S Management register the non-voting common shares in the share registry under the name of
such heir or surviving spouse, who then would become shareholders who own non-voting common shares
of Triple-S Management.
Page 38
Effectiveness of Resolution Number 5
The effectiveness of the amendments to the By-laws proposed in this Resolution Number 5 depend and
are subject to the approval of Resolution Number 4 that appears in this Proxy Statement, which
proposes several parallel amendments to our Articles of Incorporation. Therefore, this Resolution
Number 5 will become effective if the shareholders also approve Resolution Number 4.
However, if Resolution Number 5 and Resolution Number 4 are approved at the Annual Meeting of
Shareholders on April 24, 2005, or at any postponement, recess, suspension, or adjournment of the
Meeting, Resolution Number 4 will become effective when the corresponding certificate of amendment
to the Articles of Incorporation is filed with the State Department of Puerto Rico, pursuant to the
General Corporations Law of Puerto Rico of 1995, as amended. At this time, the Resolution Number 5
shall also become effective and as a result the Articles of Incorporation and By-laws of Triple-S
Management will be amended as provided in Resolutions Number 4 and 5, respectively.
Required Vote
This Resolution will be approved if it receives the affirmative vote of three-fourths (3/4) or more
of the issued and outstanding common shares with the right to vote, as provided in Section “A” of
Article 9-1 of the By-laws of Triple-S Management.
SHAREHOLDERS’ PROPOSALS
The following Resolutions are proposed by Shareholders.
PROPOSAL
RESOLUTION NUMBER 6
Resolution Number 6 is presented by Leslie H. López Vélez, DDS, shareholder of Triple-S Management,
to amend Articles Sixth, Seventh, and Thirteenth of the Articles of Incorporation and Articles 4-1
and 9-1 of the By-laws of Triple-S Management in order to reduce from three-fourths (3/4) to
two-thirds (2/3) the amount of issued and outstanding common shares with the right to vote required
to approve certain amendments to Article Sixth of the Articles of Incorporation and Article 4-1 of
the By-laws.
Resolution
Be it resolved, as this continuation of the Annual Meeting of Shareholders hereby resolves, today,
February 5, 2006, in San Juan, Puerto Rico, to amend Articles Sixth, Seventh, and Thirteenth of the
Articles of Incorporation and Articles 4-1 and 9-1 of the By-laws of Triple-S Management so that
they read as follows:
Page 39
ARTICLES OF INCORPORATION
| |
|
|
SIXTH:
|
|
HOLDING OF COMMON SHARES |
| |
A. |
|
Only physicians and dentists shall be
shareholders of the Corporation. However, it is provided that those
entities, such as the College of Dental Surgeons of Puerto Rico, Bella
Vista Hospital, and Menonita Hospital, among others, who acquired
common shares of Triple-S, Inc., may remain as shareholders of Triple-S
Management Corporation with all of the rights, preferences, privileges,
and restrictions that those common shares may have, except for the
right to transfer them in any manner. |
| |
| |
B. |
|
No person may have more than twenty-one
(21) common shares registered under his/her name on the books of the
Corporation. |
| |
| |
C. |
|
No person may hold five percent (5%) or
more of the voting common shares registered under his/her name on the
books of the Corporation, as provided in the Blue Cross and Blue Shield
Association (BCBSA) license. |
Only physicians and dentists shall be Shareholders of the Corporation. No
person may own more than 21 shares, or five percent (5%) or more, of the
Corporation’s voting shares issued and outstanding. However, organizations
such as hospitals, laboratories, and the College of Dental Surgeons of
Puerto Rico, who had originally acquired shares of the subsidiary Triple-S,
Inc., can convert them into shares of this Corporation. These are: College
of Dental Surgeons of Puerto Rico, Bella Vista Hospital, Mennonite Hospital,
and the Central Urological Society.
| |
A. |
|
Each shareholder with the right to vote on
a matter will be entitled at the meetings to as many votes as common
shares are registered under his/her name on the books of the
Corporation. |
| |
| |
B. |
|
Cumulative voting, as contemplated in the
General Corporations Law of Puerto Rico, as amended, or any other law,
regulation, or provision, is expressly prohibited. |
Page 40
Each Shareholder shall be entitled to as many votes as shares are registered
in his name in the corporate books. The cumulative vote, as states in the
Puerto Rico Corporations General Law or any other law, regulation or
provision, is expressly prohibited.
| |
A. |
|
In order to amend these Articles of
Incorporation, the Board of Directors must consider and approve the
proposed amendments, then the resolution to amend the Articles of
Incorporation must be notified and included in the notice of the
shareholders’ meeting, and, lastly, at said meeting, the shareholders
must approve the amendments with the affirmative vote of two-thirds
(2/3) of the issued and outstanding common shares with the right to
vote on such matter, provided that: |
| |
1. |
|
Article Fifth, which provides
that the authorized capital may be amended through the
affirmative vote of a majority of the Corporation’s issued and
outstanding common shares with the right to vote on such
matter. |
| |
| |
2. |
|
Section “C” of Article Sixth
(that no person may hold five percent (5%) or more of the voting
common shares of the Corporation), Section “B” of Article
Seventh (that prohibits cumulative voting), and Section “B” of
Article Eleventh (that the Board of Directors shall be divided
into three staggered groups), may only be amended by the
affirmative vote of three-fourths (3/4) of the issued and
outstanding common shares with the right to vote on such
matter. |
In order to amend these Articles of Incorporation, an affirmative
vote of no less than two thirds (2/3) of the voting shares issued and
outstanding, provided, however, that Article FIFTH, which provides
the authorized capital, may be amended through an affirmative vote by
a majority of the Corporation’s voting shares issued and outstanding,
and the Articles SIXTH, SEVENTH AND ELEVENTH, Section B, shall only
be amended by an affirmative vote of three fourths (3/4) of the
voting shares of the Corporation issued and outstanding.
Page 41
| |
B. |
|
Despite the provisions of Chapter 9 (Sales of
Assets; Dissolution) and Chapter 10 (Fusion or Consolidation) of the
1995 General Corporations Law, as amended, the approval of the
transactions provided for therein shall be done through the affirmative
vote of two-thirds (2/3) of the issued and outstanding common shares
with the right to vote on such matter. voting of the Corporation. |
BY-LAWS
CHAPTER 4. — ON THE COMMON SHARES
| 4-1 |
|
HOLDING OF COMMON SHARES |
SALE OF SHARES
| |
A. |
|
No person may have more than twenty-one (21) common shares registered under
his/her name on the books of the Corporation. |
| |
| |
|
|
No person may own more than twenty-one (21) shares, or five percent (5%) or more, of
the Corporation’s voting shares issued and outstanding. |
| |
| |
B. |
|
No person may hold five percent (5%) or more of the voting common shares
registered under his/her name on the books of the Corporation, as provided in the Blue
Cross and Blue Shield Association (BCBSA) license. |
| |
| |
C. |
|
The issuance by the Corporation or transfer, or in any manner, by the
shareholders of the common shares shall be exclusively limited to physicians and
dentists. However, it is provided that those entities, such as the College of Dental
Surgeons of Puerto Rico, Bella Vista Hospital, and Menonita Hospital, among others, who
acquired common shares of Triple-S, Inc., may remain as shareholders of Triple-S
Management Corporation with all of the rights, preferences, privileges, and
restrictions that those common shares may have, except for the right to transfer them
in any manner. |
| |
| |
|
|
The sales of shares will be exclusively limited to physicians and
dentists. However, organizations such as hospitals, laboratories, and the
College of Dental Surgeons of Puerto Rico, who had originally acquired shares
of Triple-S, Inc., may continue as stockholders of Triple-S Management
Corporation, with all the rights. In addition, the members of the Board of
Directors who represent the community will be Shareholders as long as they
remain on the Board. |
Page 42
| |
D. |
|
The Corporation will issue, free of charge, one common share to the
directors of the Board who represent the community, while they continue as members of
the Board, with the only purpose of qualifying them for the position of director of the
Corporation. Said qualifying common share issued to the representatives of the
community will automatically revert to the Corporation when they cease to be directors
of the Corporation. |
| |
| |
|
|
The members of the Board of Directors who represent the community,
as long as they remain as members of the Board, will receive one share of the
Corporation, free of charge, with the single purpose of qualifying them for the
position of Director of the Corporation. Said community representatives shall
return the qualifying share that had received when their duties as Directors of
the Corporation end. |
CHAPTER 9 — AMENDMENTS
| 9-1 |
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AMENDMENTS |
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Amendments may be made to the By-laws when the following requirements are complied with and
when the proposed amendments have been previously submitted to the Board of Directors and
have been included in the notice for the Meeting. |
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A. |
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In order to amend these By-laws, the Board of Directors must consider and
approve the proposed amendments, then the resolution to amend the By-laws must be
notified and included in the notice for the shareholders’ meeting, and, lastly, at said
meeting, the shareholders must approve the amendments pursuant to the voting
requirements set forth herein: |
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1. |
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By the affirmative vote of a majority of the issued and
outstanding common shares with the right to vote present at a validly
constituted meeting of shareholders, except for those cases set forth
below. |
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2. |
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By the affirmative vote of three-fourths (3/4) of the
issued and outstanding common shares with the right to vote, in the case of
Section “B” of Article 4-1 (that no person may hold five percent (5%) or more
of the voting common shares of the Corporation), Article 6-2 (that prohibits
cumulative voting), and Section “B” of Article 7-1 (that establishes that the
Board of Directors will be divided into three staggered groups). |
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3. |
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By the affirmative vote of a majority of the issued and
outstanding common shares with the right to vote, in the case of Article 3-1
regarding authorized capital. |
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4. |
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By the affirmative vote of such amount of votes or
percentage of votes required by the Articles of Incorporation if the
requirements established therein are greater than those established in this
Article 9-1 for any particular matter that is contained in the Articles of
Incorporation as well as in the By-laws. |
Through a resolution approved by the majority of those shares of the Corporation
issued and outstanding with the right to vote which are present at a meeting validly
constituted, provided, however, that the Articles 4-1, Section “A”, 6-2 and 7-1,
Section “B”, shall only be amended by the affirmative vote of three fourths (3/4) of
the Corporation’s voting shares issued and outstanding which are present at a
meeting validly constituted.
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B. |
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The approved amendments will be certified by the President and the Secretary,
in triplicate, with the seal of the Corporation. |
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C. |
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The amendments to the By-laws approved by the shareholders at a meeting or by
referendum will be distributed to the shareholders. |
Position of the Proposing Shareholder
The Resolution expresses the reasons why Dr. Leslie H. López Vélez proposes and endorses this
Resolution.
Position of the Board or Directors
The Board of Directors recommends that you vote In Favor of this Resolution.
Article Thirteenth “A” of the Articles of Incorporation establishes that the amount of the
affirmative votes required to amend it equals the affirmative votes of two-thirds (2/3) of the
issued and outstanding common shares with the right to vote. However, other provisions of the
Articles of Incorporation may be amended with the affirmative vote of three-fourths (3/4) of the
issued and outstanding common shares with the right to vote.
The By-laws incorporate similar requirements. Article 9-1 of the By-laws also establishes that the
amount of the affirmative votes required to amend it equals the affirmative vote of the majority of
the issued and outstanding common shares with the right to vote. However, Section “B” of Article
4-1 may only be amended by the affirmative vote of three-fourths (3/4) of the issued and
outstanding common shares with the right to vote.
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There are three cases in which the affirmative vote requirement of three-fourths (3/4) of the
issued and outstanding common shares with the right to vote emanate from the conditions established
in the Blue Cross and Blue Shield Association (BCBSA) license. These BCBSA license requirements
shall remain in the Articles of Incorporation and the By-laws. These corporate documents include
provisions regarding: (1) that no person may hold five percent (5%) or more of the voting common
shares of Triple-S Management, (2) that cumulative voting is prohibited, and (3) that the Board of
Directors will be divided into three staggered groups, and that the affirmative vote of
three-fourths (3/4) of the issued and outstanding common shares with the right to vote is needed in
order to amend these provisions.
If this Resolution is approved, the provisions that require three-fourths (3/4) of the issued and
outstanding common shares with the right to vote in order to amend them will only be those stated
in the Articles of Incorporation and the By-laws, which contain these voting requirements pursuant
to the BCBSA license. All other provisions of the Articles of Incorporation may be amended if they
receive the affirmative vote of two-thirds (2/3) of the issued and outstanding common shares with
the right to vote, including the provisions which establish the twenty-one (21) common shares
limits per person, except for the provisions regarding authorized capital which may be amended by a
majority of the issued and outstanding common shares with the right to vote.
In order to provide the shareholders with greater flexibility in the decision making processes, the
Board of Directors understands the need to reduce from three-fourths (3/4) to two-thirds (2/3) of
the affirmative vote in order to amend Article Sixth of the Articles of Incorporation and Article
4-1 of the By-laws, except for the requirement that states that no person may hold five percent
(5%) or more of the voting common shares of Triple-S Management.
Effectiveness of Resolution Number 6
If this Resolution Number 6 is approved at the Annual Meeting of Shareholders on April 24, 2005, or
at any postponement, recess, suspension, or adjournment of said Meeting, this Resolution will be
effective upon the filing of the corresponding Certificate of Amendment to the Triple-S
Management’s Articles of Incorporation at the State Department of Puerto Rico, as required by the
General Corporation’s Law of Puerto Rico of 1995, as amended. Articles Sixth, Seventh, and
Thirteenth of the Articles of Incorporation and Articles 4-1 and 9-1 of the By-laws of Triple-S
Management will read as provided in this Resolution Number 6.
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If our shareholders approve Resolution Number 6 and Resolutions Number 4 and 5 at the Annual
Meeting of Shareholders on April 24, 2005 or at any postponement, recess, suspension, or
adjournment of said Meeting, Resolution Number 6 will not be effective. This is due to the fact
that Resolution Number 6 as well as Resolutions Number 4 and 5 propose to amend Articles Sixth,
Seventh, and Thirteenth of the Articles of Incorporation and Articles 4-1 and 9-1 of the By-laws of
Triple-S Management. Since the effectiveness of Resolution Number 5 depends upon the approval and
effectiveness of Resolution Number 4, the Board of Directors informs you that Resolution Number 4
shall be effective upon the filing of the corresponding Certificate of Amendment to the Triple-S
Management’s Articles of Incorporation at the State Department of Puerto Rico. At this time, the
amendments indicated in Resolutions Number 4 and 5 shall be incorporated into the Articles of
Incorporation and By-laws of Triple-S Management.
However, if Resolutions 4 and 5 are approved after the approval of Resolution Number 6, the
Articles of Incorporation and By-laws will read as provided in Resolutions Number 4 and 5,
respectively, and their effectiveness shall be prospective. Said amendments shall be made after
the corresponding Certificate of Amendment to the Triple-S Management’s Articles of Incorporation
is filed at the State Department so that Resolution Number 4 becomes effective, which also depends
on the approval of Resolution Number 5.
Required Vote
This Resolution will be approved if it receives the affirmative vote of three-fourths (3/4) or more
of the issued and outstanding common shares with the right to vote, pursuant to Article Thirteenth
of the Articles of Incorporation of Triple-S Management.
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