SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a.6)
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 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):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i) (1) and 0-11.
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date File:
FIFTH
ANNUAL MEETING OF SHAREHOLDERS
SUNDAY, APRIL 27, 2003
TABLE OF CONTENTS
Invitation 3
Notice 5
Proxy Statement 8
Proposals of the Board of Directors
Election of Directors 15
Approval of Resolution Number 1 48
Approval of Resolution Number 2 51
Approval of Resolution Number 3 54
Approval of Resolution Number 4 56
Proposals of the Shareholders
Approval of Resolution Number 5 59
Approval of Resolution Number 6 60
Appendix A: Audit Committee Charter 63
Form of Proxy Insert
Page 2
March 28, 2003
INVITATION TO THE
ANNUAL MEETING OF SHAREHOLDERS
Dear Shareholders:
The Board of Directors invites you to the Annual Meeting of Shareholders of
Triple-S Management Corporation ("Triple-S Management"), which will take place
on Sunday, April 27, 2003, at 9:00 am, in Rooms Ponce de Leon A, B and C of the
Condado Plaza Hotel, at 999 Ashford Avenue, San Juan, Puerto Rico.
It is very important that you are present at the Annual Meeting and that you
personally exercise your right to vote. However, if you cannot attend, we ask
that you sign and date the Form of Proxy of the Board of Directors being
solicited by the Board of Directors of Triple-S Management, and that you send it
by fax or by mail to the following address:
OFFICE OF THE SECRETARY OF THE BOARD OF DIRECTORS
TRIPLE-S MANAGEMENT CORPORATION
PO BOX 363628
SAN JUAN, PUERTO RICO 00936-3628
FAX:
(787) 749-4191 OR (787) 706-4023
ATTENTION:
DR. JESUS R. SANCHEZ-COLON
SECRETARY OF THE BOARD OF DIRECTORS
Page 3
The Shareholders may personally register their Proxies with the Office of the
Secretary of Triple-S Management, situated on the sixth floor of the principal
offices of the Triple-S Building, at 1441 F.D. Roosevelt Avenue, San Juan,
Puerto Rico, before the day set for the Annual Meeting and during Triple-S
Management's office hours, Monday through Friday from eight in the morning (8:00
am) to four thirty in the afternoon (4:30 pm), except Saturdays, Sundays and
holidays.
The Shareholders shall have the opportunity to personally register their Proxies
in the Panama Room in the Condado Plaza Hotel, San Juan, Puerto Rico, on
Saturday, April 26, 2003, from one o'clock (1:00 pm) until five in the afternoon
(5:00 pm).
Those Shareholders that do not register their Proxies before the day the Annual
Meeting takes place, will be able to register them on Sunday, April 27, 2003,
from seven thirty in the morning (7:30 am) until the Registry of Proxies is
ordered to be closed.
In order to accelerate the process of computerized registration, attached is the
Proxy of the Board of Directors, printed with the name and the number of shares
registered in the name of each Shareholder. We are sure that this will
contribute to the success of the Registry of Proxies.
THE BOARD OF DIRECTORS COUNTS WITH YOUR PARTICIPATION. YOUR VOTE IS IMPORTANT!
Sincerely,
/s/ Dr. Fernando J. Ysern-Borras
-----------------------------------
Dr. Fernando J. Ysern-Borras
Chairman of the Board of Directors
Page 4
NOTICE FOR THE
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON SUNDAY, APRIL 27, 2003
To the Shareholders of Triple-S Management:
Pursuant to Article 5-1 (Annual Meetings) and Article 5-3 (Notice to the
Meeting) of the By-laws of Triple-S Management, the Board of Directors convenes
an Annual Meeting of Shareholders on Sunday, April 27, 2003, at 9:00 am, in the
Ponce de Leon Rooms A, B and C of the Condado Plaza Hotel, at 999 Ashford
Avenue, San Juan, Puerto Rico.
The Annual Meeting will take place in order to consider and vote upon the
following matters:
PROPOSALS OF THE BOARD OF DIRECTORS:
- Election of Directors:
The election of six (6) directors who will serve for a term of three
(3) years.
- Resolution Number 1:
Presented by the Board of Directors of Triple-S Management to
acknowledge that the Board of Directors may declare dividends subject
to the determination of the Board of Directors that in their best
judgment the payment of such dividends is financially and legally
feasible and that in determining the amount to declare as a dividend,
the Board of Directors shall only take in consideration Triple-S
Management's profits and the dividends received from the Subsidiaries
that operate as for profit corporations, and shall not take into
consideration the investment of Triple-S Management in Triple-S, Inc.
and Triple-S, Inc.'s operating reserves.
- Resolution Number 2:
Presented by the Board of Directors of Triple-S Management in order for
its Shareholders to ratify their interest that Triple-S, Inc. continues
with its tax treatment as a non-profit organization and with the
corresponding conditions imposed by the Treasury Department in the Tax
Exemption Ruling.
Page 5
- Resolution Number 3:
Presented by the Board of Directors of Triple-S Management in order to
amend Article 8-5 and Section C of Article 8-11 of the By-laws of
Triple-S Management to state that the Board of Directors will name the
Chair of the Audit Committee and the rest of the directors that form
part of said Committee.
- Resolution Number 4:
Presented by the Board of Directors of Triple-S Management to amend
Article Eighth of the Articles of Incorporation and Article 4-2 of the
By-laws of Triple-S Management to allow the voting shares of a
Shareholder to be registered in the books of Triple-S Management under
the name of the spouse or heirs of such Shareholder, if they are
physicians or dentists, without exceeding the 21 share limit. This
Resolution shall only be considered in the Annual Meeting if the 75% of
the issued and outstanding shares are not present or represented at the
Continuation of the Special Meeting, which was recessed last February
23.
PROPOSALS OF THE SHAREHOLDERS:
- Resolution Number 5:
Presented by Francisco J. Echegaray-Espada, MD, shareholder of Triple-S
Management, to encourage the Board of Directors of Triple-S Management
update the results of the Study about the Development of the
Corporation and present the same to the Shareholders, since from the
date the Study was prepared up to the present, various positive changes
have occurred in the development and financial results of the
Corporation.
- Resolution Number 6:
Presented by Eliseo Roques, MD, and Leslie H. Lopez-Velez, DDS,
shareholders of Triple-S Management, to encourage the Board of
Directors evaluate the benefits of Triple-S, Inc. continuing its
operations as a non-profit organization and the desirability of
Triple-S Management operating as a for-profit organization in order to
be able to pay dividends. The Shareholders should be notified of the
results of this evaluation no later than two (2) months prior to the
next Triple-S Management's Regular Annual Shareholders Meeting.
Page 6
OTHER MATTERS:
The Board of Directors is not aware of any business that may properly
come before the Annual Meeting, other than the proposals indicated in
the Proxy Statement.
However, if any new matter, requiring the vote of the Shareholders, is
properly presented before the Annual Meeting of Shareholders, proxies
may be voted with respect thereto in accordance with the best judgment
of the persons voting the proxies.
The Board of Directors has set the date of March 20, 2003, as the date to
determine which Shareholders have the right to be convened and to vote at the
Annual Meeting on April 27, 2003.
The Proposals are described in more detail in the accompanying Proxy Statement.
We encourage you to read it before voting. The Board of Directors has carefully
considered each of the Proposals described above and recommends that you vote
FOR each of them.
San Juan, Puerto Rico By Order of the Board of Directors
March 28, 2003
/s/ Dr. Fernando J. Ysern-Borras /s/ Dr. Jesus R. Sanchez-Colon
----------------------------------- -------------------------------------
Dr. Fernando J. Ysern-Borras Dr. Jesus R. Sanchez-Colon
Chairman of the Board of Directors Secretary of the Board of Directors
WE CORDIALLY INVITE ALL OF OUR SHAREHOLDERS TO ATTEND THE ANNUAL MEETING
OF TRIPLE-S MANAGEMENT. IT IS IMPORTANT THAT YOUR SHARES BE
REPRESENTED, REGARDLESS OF THE NUMBER OF SHARES THAT YOU OWN. EVEN IF
YOU PLAN TO BE PRESENT AT THE ANNUAL MEETING, YOU ARE URGED TO COMPLETE,
SIGN, DATE AND RETURN THE ENCLOSED PROXY PROMPTLY IN THE ENVELOPE
PROVIDED.
Page 7
PROXY STATEMENT
FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON SUNDAY, APRIL 27, 2003
To the Shareholders of Triple-S Management:
This Proxy Statement is furnished to the Shareholders of Triple-S Management
Corporation ("Triple-S Management") in connection with the Annual Shareholders
Meeting (the "Annual Meeting"), to be held on Sunday, April 27, 2003, at 9:00
am, in the Ponce de Leon Rooms A, B and C of the Condado Plaza Hotel, at 999
Ashford Avenue, San Juan, Puerto Rico, or any postponement, recess, suspension
or adjournment of said Annual Meeting.
The Board of Directors of Triple-S Management solicits that you grant your proxy
to the Board of Directors, the form of which is attached to this Proxy
Statement. Therefore, we urge you to sign, date and return your proxy by fax or
by mail at the following address:
OFFICE OF THE SECRETARY OF THE BOARD OF DIRECTORS
TRIPLE-S MANAGEMENT CORPORATION
PO BOX 363628
SAN JUAN, PUERTO RICO 00936-3628
FAX: (787) 749-4191 OR (787) 706-4023
ATTENTION:
DR. JESUS R. SANCHEZ-COLON
SECRETARY OF THE BOARD OF DIRECTORS
The members of the Board of Directors, designated as proxies in the Form of
Proxy, any one of them or their substitutes, will have the power and authority
to vote with respect to all of the shares of capital stock of Triple-S
Management of that Shareholder that grants the Proxy to the Board of Directors,
who has the right to act and vote as if he/she would be present at the Annual
Meeting, or any postponement, recess, suspension or adjournment of said Annual
Meeting.
Page 8
The Form of Proxy will not be valid unless is signed by the Shareholder and
Triple-S Management receives it on time, before the Annual Meeting. The Proxy
solicited hereby may only be exercised at the Annual Shareholders Meeting on
April 27, 2003, and in any postponement, recess, suspension or adjournment of
said Annual Meeting.
The Board of Directors pledges to vote all of the shares represented in every
Proxy granted to the Board of Directors by any Shareholder. The vote will be
exercised pursuant to the instructions received from the Shareholder granting
the Proxy, if, in said Proxy, the Shareholder indicates whether he/she chooses
to approve, disapprove or abstain from the matters that will be under
consideration at the Annual Meeting. If the Shareholder does not indicate
whether he/she chooses to approve, disapprove or abstain from the matters that
will be under consideration at the Annual Meeting, proxies will be voted FOR
each of them.
The Board of Directors is not aware of any other business that may properly come
before the Annual Meeting, other than the matters indicated in this Proxy
Statement. The Board of Directors informs you that if any matter, other than
those indicated above, should be presented to the Annual Meeting of
Shareholders, the Board of Directors intends that proxies solicited hereby will
be voted with respect to those other matters in accordance with the best
judgment of the persons voting the proxies.
The Board of Directors requests that the Shareholders complete the Form of Proxy
attached hereto. However, the Puerto Rico General Corporations Law of 1995, as
amended, affords every shareholder of a corporation the right to be represented
at a shareholder meeting by completing any document (proxy), if and when said
document complies with the requirements set forth in said law.
If a Shareholder signs a Form of Proxy without expressly designating the name of
the proxyholder and sends it to Triple-S Management, said Proxy will be
considered as having been granted in favor of the Board of Directors. These
Proxies will be voted at the Annual Meeting as indicated therein with regards to
those matters mentioned in the Notice of Annual Meeting.
The Annual Meeting will take place in order to present and consider the matters
indicated in the Notice of Annual Meeting and this Proxy Statement.
MAILING DATE
On March 28, 2003, the Board of Directors of Triple-S Management will send this
Proxy Statement with its Appendix A, the Notice of the Annual Meeting and the
Form of Proxy to the Shareholders entitled to vote at the Annual Meeting.
Page 9
RECORD DATE
The Board of Directors has set March 20, 2003, as the date to determine which
Shareholders have the right to receive notice of and vote at the Annual Meeting.
SOLICITATION OF PROXIES
The solicitation of proxies will be done by the Board of Directors of Triple-S
Management. The solicitation of proxies will take place pursuant to the
applicable requirements established in the Articles of Incorporation and the
By-laws of Triple-S Management, as well as the applicable provisions of the
Puerto Rico General Corporations Law and the Securities and Exchange Act of 1934
and the regulations, thereunder.
As of the date of the mailing of this Proxy Statement, no director has given
written notice to the Board of Directors that he/she intends to oppose any
action taken or to be taken by the Board.
METHOD OF SOLICITATION
In addition to soliciting proxies by mail, the Board of Directors of Triple-S
Management may solicit proxies in person, by phone, by fax or by any other means
of communication.
The Board of Directors may also solicit proxies through employees or persons
hired to do such work. These persons may visit the Shareholders of Triple-S
Management in order to collect the Proxies and send them to the Office of the
Secretary of the Board of Directors of Triple-S Management. If a Shareholder has
not received the Notice of Annual Meeting, the Proxy Statement nor any other
document, these persons will give copies of said documents to such shareholders,
will briefly explain the contents of the documents and will urge the shareholder
to vote in favor of the positions favored by the Board of Directors.
Triple-S Management will pay the cost of the solicitation of proxies, which in
its estimation may reach approximately fifty thousand dollars ($50,000).
REVOCABILITY OF PROXIES
The Shareholders have an unconditional right to revoke the Proxy at any time
before it is voted. Any shareholder may revoke his/her proxy by giving written
notice to the Secretary of the Board of Directors of Triple-S Management at the
following address: Triple-S Management Corporation, PO Box 363628, San Juan,
Puerto Rico, 00936-3628.
Page 10
Any Shareholder of Triple-S Management who has revoked the Proxy and attends the
Annual Meeting may vote in person if he/she registers to vote. In addition, if a
Shareholder attends and registers to vote at the Annual Meeting, the Proxy which
he/she have granted to the Board of Directors will be automatically revoked, and
the Shareholder will be free to vote in person according to his/her shares.
A Proxy granted at a later date, will revoke a Proxy granted at an earlier date.
SOLICITATIONS INDEPENDENT FROM THE
SOLICITATION OF THE BOARD OF DIRECTORS
The Board of Directors informs its Shareholders that if they wish to conduct a
proxy solicitation independent from the solicitation being conducted through
this Proxy Statement and the Form of Proxy, they must comply with the
requirements set forth in the Articles of Incorporation and By-laws of Triple-S
Management, the Puerto Rico General Corporations Law and the Securities and
Exchange Act of 1934 and the regulations, thereunder.
ISSUED AND OUTSTANDING VOTING SHARES
The only outstanding voting securities of Triple-S Management are shares of its
Common Stock, par value $40 per share. As of March 20, 2003, there were 9,337
shares of Common Stock issue and outstanding with right to vote.
SHAREHOLDERS' RIGHT TO VOTE
At the Annual Meeting, each Shareholder will have as many votes as the amount of
shares that are registered under his/her name in the corporate books of Triple-S
Management.
The right to vote at the Annual Meeting may be exercised in person or by Proxy.
No authorization to vote will be valid unless it is issued with the signature of
the Shareholder and it is received before the Registry of Proxies is closed at
the Annual Meeting.
The Articles of Incorporation and the By-laws of Triple-S Management expressly
prohibit cumulative voting.
Page 11
QUORUM
Pursuant to Article 5-5 of the By-laws of Triple-S Management, a majority of
voting shares issued and outstanding at the time the Annual Meeting is set to
begin will constitute quorum. In terms of the percentage of issued and
outstanding voting shares, this means that at 9:00 am fifty percent plus one
(50% + 1) of the shares with the right to vote issued and outstanding must be
present at the Annual Meeting to constitute quorum.
As of March 20, 2003, the record date set in order to determine the Shareholders
with the right to vote that shall receive notice and vote at the Annual Meeting,
Triple-S Management had 9,337 voting shares issued and outstanding; therefore,
at 9:00 am, 4,670 voting shares issued and outstanding that are present at the
Annual Meeting will constitute quorum.
The By-laws also provide that if at the time set in the Notice of Annual Meeting
to begin the Annual Meeting (at 9:00 am), quorum is not present, there will be a
waiting period of thirty minutes (until 9:30 am). At the end of the thirty
minutes, one third (1/3) of the voting shares issued and outstanding present at
the Annual Meeting will constitute quorum. Therefore, at 9:30 am 3,113 voting
shares issued and outstanding that are present at the Annual Meeting will
constitute quorum.
Article 5-5 of the By-laws provides that if a quorum is not present at that
time, the Annual Meeting will be convened within the next thirty (30) days. At
this second notice for the Annual Meeting, one third (1/3) of the voting shares
issued and outstanding that are present at the Annual Meeting will constitute a
quorum. If a quorum is not present at this Meeting, the Board of Directors may
convene as many Meetings as are necessary as long as the requirements of a
quorum of one third (1/3) of the voting shares issued and outstanding that are
present at the Annual Meeting are met.
PRINCIPAL HOLDERS OF THE SHARES
As of March 20, 2003 there is no entity or entities which, by itself or as a
group, as these terms are defined in Section 13(d)(3) of the Securities and
Exchange Act of 1934, are beneficial owners of five percent (5%) or more of the
shares of common stock of Triple-S Management.
The following table shows the total amount of shares owned beneficially by the
Directors and Executive Officers of Triple-S Management and its Subsidiaries
(the "Corporation"), as individuals, as well as the total number of shares owned
beneficially by all of the Executive Officers and Directors of Triple-S
Management and its Subsidiaries as a group.
Page 12
Name of Shareholder Shares Percentage
------------------- ------ ----------
Directors of Triple-S Management
Fernando J. Ysern-Borras, MD 1 **
Valeriano Alicea-Cruz, MD 2 **
Jose Arturo Alvarez-Gallardo * 1 **
Mario S. Belaval * 1 **
Arturo R. Cordova-Lopez, MD 1 **
Jose Davison-Lampon, Esq. * 1 **
Porfirio E. Diaz-Torres, MD 3 **
Sonia Gomez de Torres, CPA * 1 **
Hector Ledesma * 1 **
Vicente J. Leon-Irizarry, CPA * 1 **
Juan Jose Leon-Soto, Esq. * 1 **
Fernando L. Longo, MD 2 **
Wilfredo Lopez-Hernandez, MD 2 **
Manuel A. Marcial-Seoane, MD 2 **
Wilmer Rodriguez-Silva, MD 15 **
Ramon M. Ruiz-Comas, CPA * 1 **
Jesus R. Sanchez-Colon, DMD 1 **
Adamina Soto-Martinez, CPA * 1 **
Manuel Suarez-Mendez, PE * 1 **
Page 13
Name of Shareholder Shares Percentage
------------------- ------ ----------
Officers of Triple-S Management and its Subsidiaries
Hector R. Ramos-Diaz, Esq. 0 0
Juan Jose Roman-Jimenez, CPA 0 0
Socorro Rivas-Rodriguez, CPA 0 0
Alejandro E. Franco-Linares, MD 4 **
Earl M. Harper 0 0
Luis A. Marini-Mir, DMD 1 **
Roberto O. Morales-Tirado, Esq. 0 0
Luis M. Pimentel-Zerbi 0 0
Carlos D. Torres-Diaz 0 0
Total shares of Triple-S Management owned by the directors and 44 **
officers of Triple-S Management and its Subsidiaries
-------------
* These persons are directors representing the community and have received one
share of common stock of Triple-S Management in order to comply with the
requirement established in the By-laws of Triple-S Management which provide that
the directors must be shareholders of Triple-S Management.
** Less than 1%.
Page 14
MATTERS TO BE ACTED UPON
PROPOSALS OF THE BOARD OF DIRECTORS
The Board of Directors asks the Shareholders to support the Board's position in
the following matters and grant their Proxy.
PROPOSAL:
ELECTION OF DIRECTORS
BOARD OF DIRECTORS:
The Articles of Incorporation and the By-laws state that the Board of Directors
shall be made up of nineteen persons, ten of which have to be representatives of
the community or subscribers, but not physicians or dentists. The other nine
directors must be physicians or dentists.
The representatives of the community cannot be physicians or dentists, nor
service providers, employees or members of the Board of Directors of any
participant or health services provider since it is a requirement of the Blue
Cross and Blue Shield Association (BCBSA), of which Triple-S Management and
Triple-S, Inc. are members.
Pursuant to the Articles of Incorporation and the By-laws, a director may only
serve for nine years or three terms of three years, except the President of
Triple-S Management. The Eleventh Article of the Articles of Incorporation and
Article 7-1 of the By-laws also state that the terms and the years that a
director served in Triple-S, Inc. will be considered in order to compute the
years and terms that the director has served in Triple-S Management. In
addition, these provisions state that if "any director will continue serving
his/her office until a successor is duly elected and takes possession of his/her
office".
DIRECTORS WHOSE TERMS WILL EXPIRE IN 2005:
1. Arturo R. Cordova-Lopez, MD
2. Wilfredo Lopez-Hernandez, MD
3. Manuel A. Marcial-Seoane, MD
4. Wilmer Rodriguez-Silva, MD
5. Ramon M. Ruiz-Comas, CPA
6. Adamina Soto-Martinez, CPA
Page 15
DIRECTORS WHOSE TERMS WILL EXPIRE IN 2004:
1. Fernando J. Ysern-Borras, MD
2. Mario S. Belaval
3. Jose Davison-Lampon, Esq.
4. Sonia Gomez de Torres, CPA
5. Hector Ledesma
6. Juan Jose Leon-Soto, Esq.
7. Manuel Suarez-Mendez, PE
NOMINEES FOR ELECTION AS DIRECTORS IN 2003:
At the Annual Meeting, six directors will be elected by ballot, each serving a
term of three years; therefore, until April 2006. Of those six directors whose
terms expire, three are physicians (Dr. Valeriano Alicea-Cruz, Dr. Porfirio E.
Diaz-Torres, and Dr. Fernando L. Longo), one is a dentist (Dr. Jesus R.
Sanchez-Colon) and two are representatives of the community (Mr. Vicente J.
Leon-Irizarry and Mr. Jose Arturo Alvarez-Gallardo). Therefore, four directors
to be elected are required to be physicians or dentists and two must be
representatives of the community, each serving a term of three years.
The Nominating Committee of the Board of Directors of Triple-S Management met
and evaluated based on certain criteria, all of the persons that were
recommended as nominees for the position of Directors. After their evaluation,
the Committee submitted a report to the Board of Directors, nominating for
reelection the following:
- Two directors as representatives of the community:
1. Mr. Jose Arturo Alvarez-Gallardo
2. CPA Vicente J. Leon-Irizarry
- Four directors for the positions of directors who are
physicians or dentists:
1. Dr. Valeriano Alicea-Cruz
2. Dr. Porfirio E. Diaz-Torres
3. Dr. Fernando L. Longo
4. Dr. Jesus R. Sanchez-Colon
These six directors have not been elected to the Board of Directors for three
terms nor have they served for more than nine years, which means that they may
be nominated for reelection for a new term of three years.
Page 16
The Board of Directors understands that all of the persons being nominated can
be reelected for the abovementioned positions and may serve for a term of three
years, since they comply with all of the requirements for such reelection.
The persons named as proxyholders in the Form of Proxy attached hereto, or any
substitute proxyholder, must vote the Proxies in favor of the six directors
nominated for reelection in this Proxy Statement. If for any reason, unknown at
this time, any of the persons nominated are not available for reelection, the
Proxies will be voted in favor of the person chosen by the Board of Directors.
VOTE AND RECOMMENDATION:
The directors will be elected by a majority of the affirmative votes of the
issued and outstanding shares with the right to vote in the elections for
directors that are present or represented by proxy at the Annual Meeting,
pursuant to Section A of Article 7-1 of the By-laws of Triple-S Management and
Article 7.06(C) of the General Corporations Law of 1995, as amended.
The Board of Directors recommends a vote FOR the election of each nominee to the
Board of Directors.
DIRECTORS AND EXECUTIVE OFFICERS
Triple-S Management is managed by its Board of Directors, which in accordance
with its Articles of Incorporation and By-laws, currently consists of nineteen
directors.
Groups of directors are elected on a staggered basis every three years at the
annual regular shareholders meeting. The last election of directors by
Shareholders was on April 28, 2002. The Board of Directors may appoint new
directors to fill the vacancies that occur when a director cannot continue in
the Board of Directors for any reason. The new director will serve for the
remainder of term that the former director was elected.
Triple-S Management's President and Chief Executive Officer (CEO) is appointed
by the Board of Directors and holds the office at the Board's discretion.
Scheduled meetings of Triple-S Management's Board of Directors are held at least
once a month. Special Board meetings are held when convened by the Chairman of
the Board or by at least five Board members.
Listed below are Triple-S Management's current Directors and Executive Officers:
Page 17
TRIPLE-S MANAGEMENT CORPORATION
Name Age Office
---- --- ------
Board of Directors
Fernando J. Ysern-Borras, MD 47 Director, Chairman of the Board
Valeriano Alicea-Cruz, MD 57 Director
Jose Arturo Alvarez-Gallardo 60 Director
Mario S. Belaval 64 Director
Arturo R. Cordova-Lopez, MD 59 Director, Board's Assistant Secretary
Jose Davison-Lampon, Esq. 69 Director
Porfirio E. Diaz-Torres, MD 61 Director
Sonia Gomez de Torres, CPA 67 Director, Board's Assistant Treasurer
Hector Ledesma 74 Director
Vicente J. Leon-Irizarry, CPA 64 Director, Board's Treasurer
Juan Jose Leon-Soto, Esq. 60 Director
Fernando L. Longo, MD 63 Director
Wilfredo Lopez-Hernandez, MD 59 Director
Manuel A. Marcial-Seoane, MD 48 Director
Wilmer Rodriguez-Silva, MD 49 Director, Board's Vice-Chairman
Ramon M. Ruiz-Comas, CPA 46 Director, President and CEO
Jesus R. Sanchez-Colon, DMD 47 Director, Board's Secretary
Adamina Soto-Martinez, CPA 55 Director
Manuel Suarez-Mendez, PE 57 Director
Executive Officers
Ramon M. Ruiz-Comas, CPA 46 President and CEO
Hector R. Ramos-Diaz, Esq. 55 Senior Vice President for Corporate Affairs
Juan Jose Roman-Jimenez, CPA 38 Finance Vice President and Chief Financial Officer
Triple-S Management is a holding company that conducts its business through its
wholly-owned subsidiaries: Triple-S, Inc., Seguros de Vida Triple-S, Inc.,
Seguros Triple-S, Inc., Interactive Systems, Inc., and Triple-C, Inc.
Page 18
The following is a list of the Directors and Executive Officers of each
Subsidiary. In addition to the shares owned by Triple-S Management, each
director owns a qualifying share in order to be Director of the Subsidiaries.
The amount of shares owned by Directors is minimal.
TRIPLE-S, INC.
Name Age Office
---- --- ------
Board of Directors
Fernando J. Ysern-Borras, MD 47 Director, Chairman of the Board
Valeriano Alicea-Cruz, MD 57 Director
Jose Arturo Alvarez-Gallardo 60 Director
Mario S. Belaval 64 Director
Arturo R. Cordova-Lopez, MD 59 Director, Board's Assistant Secretary
Jose Davison-Lampon, Esq. 69 Director
Porfirio E. Diaz-Torres, MD 61 Director
Sonia Gomez de Torres, CPA 67 Director, Board's Assistant Treasurer
Hector Ledesma 74 Director
Vicente J. Leon-Irizarry, CPA 64 Director, Board's Treasurer
Juan Jose Leon-Soto, Esq. 60 Director
Fernando L. Longo, MD 63 Director
Wilfredo Lopez-Hernandez, MD 59 Director
Manuel A. Marcial-Seoane, MD 48 Director
Socorro Rivas-Rodriguez, CPA 55 Director, President
Wilmer Rodriguez-Silva, MD 49 Director, Board's Vice-Chairman
Jesus R. Sanchez-Colon, DMD 47 Director, Board's Secretary
Adamina Soto-Martinez, CPA 55 Director
Manuel Suarez-Mendez, PE 57 Director
Executive Officers
Socorro Rivas-Rodriguez, CPA 55 President
Earl M. Harper 44 Senior Vice President and Chief Operating Officer
Alejandro E. Franco-Linares, MD 64 Senior Vice President of the Medical, Dental and
Professional Affairs Division
Jaime R. Pericas-Alfaro 38 First Vice President of the Sales and Marketing
Division
Page 19
SEGUROS DE VIDA TRIPLE-S, INC.
Name Age Office
---- --- ------
Board of Directors
Porfirio E. Diaz-Torres, MD 61 Director, Chairman of the Board
Sonia Gomez de Torres, CPA 67 Director, Board's Vice-Chairman
Hector Ledesma 74 Director
Roberto O. Morales-Tirado, Esq. 59 Director, President
Wilmer Rodriguez-Silva, MD 49 Director, Board's Secretary
Ramon M. Ruiz-Comas, CPA 46 Director
Adamina Soto-Martinez, CPA 55 Director, Board's Treasurer
Manuel Suarez-Mendez, PE 57 Director
Fernando J. Ysern-Borras, MD 47 Director
Executive Officers
Roberto O. Morales-Tirado, Esq. 59 President
Page 20
SEGUROS TRIPLE-S, INC.
Name Age Office
---- --- ------
Board of Directors
Manuel Suarez-Mendez, PE 57 Director, Chairman of the Board
Arturo R. Cordova-Lopez, MD 59 Director, Board's Secretary
Vicente J. Leon-Irizarry, CPA 64 Director, Board's Treasurer
Wilfredo Lopez-Hernandez, MD 59 Director, Board's Vice-Chairman
Fernando L. Longo, MD 63 Director
Manuel A. Marcial-Seoane, MD 48 Director
Luis M. Pimentel-Zerbi 47 Director, President
Ramon M. Ruiz-Comas, CPA 46 Director
Fernando J. Ysern-Borras, MD 47 Director
Executive Officers
Luis M. Pimentel-Zerbi 47 President
A. Eduardo Arroyo 63 Executive Vice President and Chief Operating
Officer
Eva G. Salgado 46 Senior Vice President of the Underwriting
Department
Page 21
INTERACTIVE SYSTEMS, INC.
Name Age Office
---- --- ------
Board of Directors
Valeriano Alicea-Cruz, MD 57 Director, Chairman of the Board
Jose Arturo Alvarez-Gallardo 60 Director, Board's Treasurer
Mario S. Belaval 64 Director, Board's Vice-Chairman
Vicente J. Leon-Irizarry, CPA 64 Director
Juan Jose Leon-Soto, Esq. 60 Director, Board's Secretary
Ramon M. Ruiz-Comas, CPA 46 Director
Jesus R. Sanchez-Colon, DMD 47 Director
Carlos D. Torres-Diaz 44 Director, President
Fernando J. Ysern-Borras, MD 47 Director
Executive Officers
Carlos D. Torres-Diaz 44 President
Ramon Orlando De La Torre 47 Vice President
Page 22
TRIPLE-C, INC.
Name Age Office
---- --- ------
Board of Directors
Wilmer Rodriguez-Silva, MD 49 Director, Chairman of the Board
Arturo R. Cordova-Lopez, MD 59 Director, Board's Vice-Chairman
Jose Davison-Lampon, Esq. 69 Director, Board's Secretary
Sonia Gomez de Torres, CPA 67 Director, Board's Treasurer
Vicente J. Leon-Irizarry, CPA 64 Director, Board's Assistant Treasurer
Juan Jose Leon-Soto, Esq. 60 Director
Fernando L. Longo, MD 63 Director
Wilfredo Lopez-Hernandez, MD 59 Director
Luis A. Marini-Mir, DMD 54 Director, President
Ramon M. Ruiz-Comas, CPA 46 Director
Jesus R. Sanchez-Colon, DMD 47 Director
Manuel Suarez-Mendez, PE 57 Director, Board's Assistant Secretary
Fernando J. Ysern-Borras, MD 47 Director
Executive Officers
Luis A. Marini-Mir, DMD 54 President
Nydia Ortiz, CPA 39 Executive Vice President
Sarah Lopez-Torres, MD 51 Vice President of the Medical and Dental Affairs
Division
Page 23
LISTED BELOW IS CERTAIN BIOGRAPHICAL INFORMATION OF THE DIRECTORS OF TRIPLE-S
MANAGEMENT SHOWING THEIR PAST EXPERIENCE IN THE LAST FIVE (5) YEARS.
FERNANDO J. YSERN-BORRAS, MD
- Is currently the Chairman of the Board of Directors of Triple-S
Management and Triple-S, Inc.
- Has served as director of Triple-S Management since 1999 and of
Triple-S, Inc. since 1998.
- Doctor Ysern-Borras also serves as director of Seguros de Vida
Triple-S, Inc., Seguros Triple-S, Inc., Interactive Systems, Inc., and
Triple-C, Inc.
- Since 1986, he has worked in the Grupo Pediatrico of Caguas, Puerto
Rico.
- He has worked in several hospitals and has been the Chair of the
Pediatric Department in the Inter-American Hospital of Advanced
Medicine.
- He has held positions as Assistant Professor at the University of
Puerto Rico, School of Medicine, and the San Juan Bautista School of
Medicine, Adolescent Medicine Fellowship Director at the Caguas
Regional Hospital.
- He was President of the Health and Social Welfare Commission when he
served as Member of Caguas' Municipal Assembly.
- He is Member of the Puerto Rico Medical Association and the American
Academy of Pediatrics.
- Doctor Ysern-Borras holds an MD degree from the University of Puerto
Rico, School of Medicine.
- He has a specialty degree in Pediatrics from the University Pediatrics
Hospital in Rio Piedras, Puerto Rico, and a subspecialty in adolescent
medicine.
- He is also Board Certified in Pediatrics.
VALERIANO ALICEA-CRUZ, MD
- Has served as director of Triple-S Management since 2000.
- He is also director of Triple-S, Inc. since 2000.
- Currently, he is the Chairman of the Board of Directors of
Interactive Systems, Inc.
- Is an ophthalmologist with a private practice since 1975 and has
offices in two municipalities of Puerto Rico.
- He was President of the Puerto Rico Medical Association.
Page 24
- Has served in the Medical Board of the Department of Transportation and
Public Works, the Board of Directors of Ojos, Inc., the Puerto Rico
Medical Association, the American Academy of Ophthalmology, the Puerto
Rican Society of Ophthalmology, and the Pan-American Association of
Ophthalmology.
- Doctor Alicea-Cruz holds a BS degree from the University of Puerto
Rico, an MD degree from the University of Puerto Rico, School of
Medicine, and a Postgraduate Degree in Ophthalmology from the Puerto
Rico Medical Center and Affiliate Hospitals.
JOSE ARTURO ALVAREZ-GALLARDO
- Has served as director of Triple-S Management and Triple-S,
Inc. since 2000.
- Currently, he is director and the Treasurer of the Board of Directors
of Interactive Systems, Inc.
- Mr. Alvarez-Gallardo has served in various positions within
Mendez & Co., Inc. since 1964.
- He served as Vice President of the Grocery Division of Mendez & Co.,
Inc. from 1979 to 1997, and has been the President of said company
since January 1998 to the present.
- Has been a member of the Board of Directors of Mendez & Co., Inc.,
Bamco Products Corporation, International Shipping Agency, Menaco
Corporation, and Mendez Realty, Inc.
- Mr. Alvarez-Gallardo holds a BA degree in Business Administration from
Iona College.
MARIO S. BELAVAL
- Has served as director of Triple-S Management since 1999.
- He is also director of Triple-S, Inc. since 1998.
- Currently, he is Vice-Chairman of the Board of Directors of
Interactive Systems, Inc.
- From January 2002 to present, he serves as consultant to Miradero
Capital Partners; from February 1997 to February 2001 served as
consultant to the Economic Development Bank of Puerto Rico, and from
December 1996 to December 2001 he served as Chairman of the Board of
Directors of Bacardi Corporation.
- Mr. Belaval has served as director of the Puerto Rico Investors
Tax-Free Fund since March, 1995, of the Tax Free Puerto Rico Fund since
February, 2001, and of UBS-US PWPR IRA Select Growth and Income Puerto
Rico Fund since April, 1998.
- Mr. Belaval holds a BS degree in Economics from Franklin and Marshall
College in Pennsylvania.
Page 25
ARTURO R. CORDOVA-LOPEZ, MD
- Has served as director and Assistant Secretary of Triple-S Management
since 1999.
- He also serves as director of Triple-S, Inc. since 1999.
- Currently, he is the Assistant Secretary of the Board of Directors of
Triple-S, Inc., director and Secretary of the Board of Directors of
Seguros Triple-S, Inc., and Vice-Chairman of the Board of Directors of
Triple-C, Inc.
- Doctor Cordova-Lopez has served as a Staff Pneumologist and Critical
Care Consultant at Pavia Hospital from 1990 to the present.
- In addition, doctor Cordova-Lopez is an associate professor of medicine
at the University of Puerto Rico, School of Medicine, since 1986.
- Before 1995, he was the President of the Medical Faculty at Pavia
Hospital.
- He is a member of the American Thoracic Society, the American College
of Physicians, the American Lung Association, the College of Physicians
and Surgeons of Puerto Rico, and the American College of Chest
Physicians (ACCP), where he is currently the Governor for Puerto Rico
for the ACCP.
- He holds a Bachelor's degree in Science in Electrical Engineering from
the University of Puerto Rico, an MD degree from the same institution,
and a Master in Science in Epidemiology from the Harvard University
School of Public Health.
- He is Board Certified in internal medicine, pulmonary diseases,
critical care medicine and managed care medicine.
JOSE DAVISON-LAMPON, ESQ.
- Has served as director of Triple-S Management since 1999.
- He is also a director of Triple-S, Inc. since 1998.
- Currently, he is director and Secretary of the Board of Directors of
Triple-C, Inc.
- Mr. Davison-Lampon is a litigating attorney and public notary in Puerto
Rico in the private practice since 1969.
- His practice is focused on medical malpractice, representing doctors,
diagnostic centers, and hospitals.
- Mr. Davison-Lampon holds a Juris Doctor (JD) degree from the Inter
American University of Puerto Rico.
Page 26
PORFIRIO E. DIAZ-TORRES, MD
- Has served as director of Triple-S Management and Triple-S,
Inc. since 2000.
- Currently, he is the Chairman of the Board of Directors of Seguros de
Vida Triple-S, Inc. and Smart Solutions Insurance Agency Corporation (a
wholly owned subsidiary of Seguros de Vida Triple-S, Inc.).
- Since 1988 to the present, doctor Diaz-Torres serves as the Director of
the Cardiology Division of the Cardiology and Nuclear Center in San
Juan, Puerto Rico.
- Doctor Diaz-Torres is also the President of Old Harbor Brewery of
Puerto Rico, Inc., and Di'Rome Productions, Inc., Past Vice President
of the Inter-American College of Cardiology, Past President of the
Puerto Rican Society of Cardiology, and active member of the American
College of Cardiologists, American Medical Association.
- Also, he is active in the medical staff of Centro Cardiovascular de
Puerto Rico y del Caribe, and Auxilio Mutuo Hospital.
- Doctor Diaz-Torres holds a BA degree in Business Administration from
the University of Puerto Rico and an MD degree from Universidad Central
del Este, Dominican Republic.
SONIA GOMEZ DE TORRES, CPA
- Has served as director and Assistant Treasurer of the Board of
Directors of Triple-S Management since 1999.
- She also serves as director of Triple-S, Inc. since 1995.
- Currently, she is the Assistant Treasurer of the Board of Directors of
Triple-S, Inc., director and the Treasurer of the Board of Directors of
Triple-C, Inc., and director and the Vice-Chair of the Board of
Directors of Seguros de Vida Triple-S, Inc.
- Ms. Gomez de Torres is a Certified Public Accountant and was an
accounting professor at the University of Puerto Rico.
- She is a member of the American Institute of Certified Public
Accountants (AICPA) where she has served as Council member and in its
International Qualification Appraisal Board Committee.
- Also, she is a member of the National Association of State Board of
Accountancy (NASBA) and has served in the CPE Advisory Committee.
- She is a member and Past President of the Puerto Rico Society of
Certified Public Accountants.
- She holds a BA degree from the University of Puerto Rico and a Masters
degree in Business Administration from New York University, with a
major in accounting and a minor in finance.
Page 27
HECTOR LEDESMA
- Has served as director of Triple-S Management since 1999.
- He is also a director of Triple-S, Inc. since 1997.
- Currently, he serves as director of Seguros de Vida Triple-S, Inc.
- Mr. Ledesma is a private financial consultant.
- He retired in 1990 from Banco Popular of Puerto Rico where he served as
President.
VICENTE J. LEON-IRIZARRY, CPA
- Has served as director of Triple-S Management and Triple-S, Inc. since
2000.
- He is currently director and the Treasurer of the Board of Directors of
Triple-S Management, Triple-S, Inc., and Seguros Triple-S, Inc.
- Also, he is currently director and the Assistant Treasurer of the Board
of Directors of Triple-C, Inc., and director of Interactive Systems,
Inc.
- He is a Certified Public Accountant and, since January 2002, he is a
business consultant.
- From February 2000 to December 2001, he served as consultant of
Falcon-Sanchez & Associates, a Certified Public Accountants firm; from
January 1999 to February 2000 he acted as a business consultant and
Certified Public Accountant; and in 1998 was a partner of KPMG Peat
Marwick LLP.
- He is a member of the Puerto Rico Society of Certified Public
Accountants.
- He holds a BA degree in Accounting from the University of Puerto Rico.
JUAN JOSE LEON-SOTO, ESQ.
- Has served as director of Triple-S Management since 1999.
- He is also a director of Triple-S, Inc. since 1995.
- Currently, he serves as director and Secretary of the Board of
Directors of Interactive Systems, Inc., and director of Triple-C, Inc.
- He is an IT Consultant and President of Information Consulting
Services, Inc. since July 2000.
- From January 1996 to July 2000, he was associated to AVANT
Technologies, Inc.
- He has been Chairman of the Private Industry Council Board (1997-2000),
and the Local Workforce Investment Board (since 2000) of the
Caguas-Guayama Consortium under JTPA and WIA federal laws,
respectively.
- Mr. Leon-Soto holds a BA degree in Sciences and a Juris Doctor (JD)
degree from the University of Puerto Rico.
Page 28
FERNANDO L. LONGO, MD
- Has served as director of Triple-S Management since 1999.
- He also served as Chairman of the Board of Directors of Triple-S
Management and Triple-S, Inc. from 1999 to 2002.
- Doctor Longo also serves as director of Triple-S, Inc., since 1997.
- Currently, he is director of Seguros Triple-S, Inc. and Triple-C, Inc.
- He holds a private practice in otolaryngology in Bayamon, Puerto Rico.
- Presently, he is the Secretary of the Board of Directors of Hospital
San Pablo in Bayamon, Puerto Rico.
- He has been a member of the American Medical Association, the Society
of Military ENT, the Puerto Rican Medical Association and a Junior
Member in the American Academy of Facial Plastic and Reconstructive
Surgery.
- Doctor Longo holds a BS degree from the University of Puerto Rico.
- He also holds an MD degree from the School of Medicine of the
University of Puerto Rico and a specialty degree in Otolaryngology from
the San Juan Municipal Hospital training.
WILFREDO LOPEZ-HERNANDEZ, MD
- Has served as director of Triple-S Management since 1999.
- He is also a director of Triple-S, Inc. since 1999.
- Currently, he serves as Vice-Chairman of the Board of Directors of
Seguros Triple-S, Inc., and director of Triple-C, Inc.
- Doctor Lopez-Hernandez has a medical private practice since 1979.
- He was an Associate Professor at the Puerto Rico School of Medicine, an
Associate Professor at the San Juan Bautista School of Medicine, and
Chief of Service at San Rafael Hospital.
- He has been a member of the Puerto Rico Urological Association, Societe
International D'Urologie, American Confederation of Urology, and the
American Urological Association.
- He holds a BS degree from the University of Puerto Rico, an MD degree
from the University of Santiago de Compostela, Spain, and Specialty in
Urology from the University of Puerto Rico, School of Medicine.
Page 29
MANUEL A. MARCIAL-SEOANE, MD
- Was elected as director of Triple-S Management on April 28, 2002.
- Currently, he serves as director of Triple-S Management, Triple-S, Inc.
and Seguros Triple-S, Inc.
- Dr. Marcial-Seoane is presently the Chairman and CEO of University
Pathologists, a surgical pathology group practice.
- He also serves as Director of Business Development for Quest
Diagnostics, a reference medical laboratory. - Dr. Marcial-Seoane was
the President of the Medical Staff at Pavia Hospital from 1995 to 1998
and Director of the Hospital's Advisory Board from 1995 to 2002.
- He dedicated his first decade of practice to academic medicine, serving
as Professor and Chairman of Pathology at the Universidad Central del
Caribe, School of Medicine.
- He is a Fellow of the American College of Physicians, the American
Society of Clinical Pathologists, the College of American Pathologists
and the American College of Physician Executives.
- Dr. Marcial-Seoane pursued his premedical education at Johns Hopkins
and received his MD degree from the University of Puerto Rico in 1979.
- He did his pathology residency and gastrointestinal pathology
fellowship at Harvard's Brigham and Women's Hospital.
- Dr. Marcial-Seoane is a Diplomate of the American Board of Pathology in
both Anatomic and Clinical Pathology.
WILMER RODRIGUEZ-SILVA, MD
- Is currently the Vice-Chairman of the Board of Directors of Triple-S
Management and Triple-S, Inc.
- Since 1999, he has served as director of Triple-S Management and
Triple-S, Inc.
- In addition, he currently serves as Chairman of the Board of Directors
of Triple-C, Inc., and director and Secretary of the Board of Directors
of Seguros de Vida Triple-S, Inc.
- Doctor Rodriguez-Silva is the Former Chief of the Gastrointestinal
Section of the San Pablo Medical Center.
- He is also a member of the American College of Physicians, the American
Gastroenterology Association, the American Society for Gastrointestinal
Endoscopy, the Puerto Rico Medical Association, the Puerto Rico Society
for Gastroenterology, and the American College of Gastroenterology.
- Doctor Rodriguez-Silva holds a BS degree from the University of Puerto
Rico and an MD degree from the University of Puerto Rico, School of
Medicine.
Page 30
RAMON M. RUIZ-COMAS, CPA
- Has served as director of Triple-S Management since May 2002. o
Currently, he is director of Seguros de Vida Triple-S, Inc., Seguros
Triple-S, Inc., Interactive Systems, Inc., and Triple-C, Inc.
- Since May 1st, 2002, he is the President and Chief Executive Officer of
Triple-S Management.
- Mr. Ruiz-Comas served as Executive Vice President of Triple-S
Management from November 2001 to April 2002 and as Senior Vice
President and Chief Financial Officer of Triple-S Management from
February 1999 to October 2001.
- Prior to that, he was Triple-S, Inc.'s Senior Vice President of Finance
from 1995 to 1999 and Vice President of Finance from 1990 to 1995.
- He is a Certified Public Accountant and a member of the Puerto
Rico Society of Certified Public Accountants.
- He holds a Juris Doctor (JD) degree and a BA degree in Accounting from
the University of Puerto Rico.
JESUS R. SANCHEZ-COLON, DMD
- Has served as director of Triple-S Management since 2000.
- Currently, he is the Secretary of the Board of Directors of Triple-S
Management and Triple-S, Inc.
- He is also a director of Triple-S, Inc., Triple-C, Inc. and Interactive
Systems, Inc.
- Doctor Sanchez-Colon is a dentist with private practice since 1982.
- He is a member of the College of Dental Surgeons of Puerto Rico and has
served as Secretary of this organization.
- He has been a member of the Board of Directors of the Corporation for
the Economic Development of the City of San Juan, Delta Dental Plan of
Puerto Rico, where he served as Chairman, and B. Fernandez & Hermanos.
- Doctor Sanchez-Colon holds a BA in Psychology from St. Louis
University, a DMD from the University of Puerto Rico, and a Post
Graduate General Practice Residency.
Page 31
ADAMINA SOTO-MARTINEZ, CPA
- Was elected as director of Triple-S Management on April 28, 2002.
- Currently, she serves as director of Triple-S Management and Triple-S,
Inc.
- Also, she is a director and Treasurer of the Board of Directors of
Seguros de Vida Triple-S, Inc.
- She is currently a partner and a founding member of the firm Kevane
Soto Pasarell Grant Thornton, LLP, certified public accountants.
- Ms. Soto-Martinez is a member of the Puerto Rico State Society of
Certified Public Accountants and the American Institute of Certified
Public Accountants.
- She is a graduate of the University of Puerto Rico.
MANUEL SUAREZ-MENDEZ, PE
- Has served as director of Triple-S Management since 1999.
- He is also director of Triple-S, Inc. since 1998.
- Currently, he serves as director and Chairman of the Board of Directors
of Seguros Triple-S, Inc., director and Assistant Secretary of the
Board of Directors of Triple-C, Inc., and director of Seguros de Vida
Triple-S, Inc.
- Since 1972, Mr. Suarez-Mendez is the owner of R.B. Construction, S.E.
- He has been a member of the Puerto Rico College of Engineers, the Home
Builders Association, the National Society of Professional Engineers,
the Associated General Contractors of America, the American Concrete
Institute and the Construction Specifications Institute.
- Mr. Suarez-Mendez holds a BS degree in Civil Engineering from the CAAM,
University of Puerto Rico, Mayaguez Campus, and a Post Graduate studies
in Urban Planning from the University of Puerto Rico.
Page 32
LISTED BELOW IS BIOGRAPHICAL INFORMATION OF CERTAIN EXECUTIVE OFFICERS OF
TRIPLE-S MANAGEMENT AND ITS SUBSIDIARIES (THE "CORPORATION").
Name Work Experience in the Last Five Years
---- --------------------------------------
Ramon M. Ruiz-Comas, CPA President and Chief Executive Officer of
Triple-S Management since May 1st, 2002;
Executive Vice President of Triple-S
Management from 2001 to 2002; Senior Vice
President and Chief Financial Officer of
Triple-S Management from 1999 to 2001;
Finance Senior Vice President of Triple-S,
Inc. from 1995 to 1999; and Finance Vice
President of Triple-S, Inc. from 1990 to
1995.
Hector R. Ramos-Diaz, Esq. Senior Vice President for Corporate Affairs
of Triple-S Management since 1999 and Senior
Vice President of Triple-S, Inc. from 1995
to 1999.
Juan Jose Roman-Jimenez, CPA Finance Vice President and Chief Financial
Officer of Triple-S Management since 2002,
Executive Vice President of Triple-C from
1999 to 2002; and Vice President of Finance
of Triple-C from 1996 to 1999.
Socorro Rivas-Rodriguez, CPA President of Triple-S, Inc. since May 2002;
General Manager and Executive Vice President
of Triple-S, Inc. from 1999 to 2002 and
Executive Vice President of Triple-S, Inc.
from 1990 to 1999.
Earl M. Harper Senior Vice President and Chief Operating
Officer of Triple-S, Inc. since 1999 and
Senior Vice President of the Medicare
Division of Triple-S, Inc. from 1992 to
1999.
Page 33
Name Work Experience in the Last Five Years
---- --------------------------------------
Alejandro E. Franco-Linares, MD Senior Vice President of the Medical, Dental
and Professional Affairs Division of
Triple-S, Inc. since 1996.
Jaime R. Pericas-Alfaro First Vice President of the Sales and
Marketing Division of Triple-S, Inc. since
2001 and Sales Representative of Triple-S,
Inc. from 1994 to 2001.
Roberto O. Morales-Tirado, Esq. President of Seguros de Vida Triple-S, Inc.
since 2000; Consultant to Seguros de Vida
Triple-S, Inc. and Triple-S, Inc. from 1998
to 2000; and President and Chief Executive
Officer of AIG Life Insurance Company of
Puerto Rico from 1993 to 1998.
Luis M. Pimentel-Zerbi President of Seguros Triple-S, Inc. since
1990.
A. Eduardo Arroyo Executive Vice President and Chief Operating
Officer of Seguros Triple-S, Inc. since
1996.
Eva G. Salgado Senior Vice President of the Underwriting
Department of Seguros Triple-S, Inc. since
2002 and Vice President of the Underwriting
Department of Seguros Triple-S, Inc. from
1997 to 2002. Senior Vice President of the
Underwriting Department of Integrand
Assurance Company from 1979 to 1996.
Carlos D. Torres-Diaz President of Interactive Systems, Inc. since
1996.
Ramon Orlando De la Torre Vice President of Interactive Systems, Inc.
since 1996.
Page 34
Name Work Experience in the Last Five Years
---- --------------------------------------
Luis A. Marini-Mir, DMD President of Triple-C since 1999, Dental
Director of Medical, Dental and Professional
Affairs Division of Triple-S, Inc. from 1998
to 1999 and Dean of Dental School,
University of Puerto Rico, from 1993 to
1997.
Nydia Ortiz, CPA Executive Vicepresident of Triple-C since
March 17, 2003 to present, which was ocupied
by Mr. Fernando Rivera as Acting, Vice
President of the Internal Audit. Office of
Triple-S Management since september 2001 up
to March 16, 2003, Director of the Internal
Audit Office of Triple-S Management since
february 1999 up to september 2001, Director
of the Internal Audit Office of Triple-S,
Inc. since september 1997 up to de febrero
de 1999.
Sarah Lopez-Torres, MD Vice President of the Medical and Dental
Affairs Division of Triple-C since 2000;
Medical Director of the Utilization
Management Department of Triple-C from 1997
to 1999; and Medical Director of the
Corporacion de Servicios Integrales de la
Montana since 1988 up to 1997.
TENURE OF DIRECTORS
The Articles of Incorporation and By-laws of Triple-S Management provide that
the Board of Directors shall be divided into three groups, where directors of
Triple-S Management shall be elected to serve terms of three years in a
staggered manner. They also provide that with the exception of the President of
Triple-S Management, directors can only serve a maximum of three terms of three
years each or nine years. The years of service as director of Triple-S, Inc.
prior to the Reorganization are taken into consideration as years of service in
Triple-S Management's Board of Directors when determining whether a director may
continue as director of Triple-S Management.
In addition, Triple-S Management has an outstanding policy adopted by the Board
of Directors that establishes that the Chairman of the Board of Directors, who
is elected every year, can not serve in said office for more than three years.
Page 35
BOARD OF DIRECTORS OF TRIPLE-S MANAGEMENT AND ITS COMMITTEES
The Board of Directors of Triple-S Management held twenty-three meetings during
the year ended December 31, 2002. No Board member attended less than 75% of the
aggregate of the meetings (regular and special) of the Board of Directors of
Triple-S Management held during the year 2002.
The By-laws provide that the Board of Directors of Triple-S Management shall
have the Executive Committee, Finance Committee, Resolutions and Regulations
Committee, Nominations Committee, and Audit Committee. Also, the By-laws state
that the Board of Directors or its Chairman may create any other Committee which
they deem necessary for the proper operation of Triple-S Management's business.
Triple-S Management has various standing committees as described below, in
addition to other ad hoc committees.
EXECUTIVE COMMITTEE:
- The Executive Committee reviews and approves the following: (1) every
plan, project or proposal which could affect standing policies and
guidelines established by Triple-S Management; (2) the budget for
operational expenses of Triple-S Management and any amendment to said
budget, (3) salaries, incentive bonuses and other compensation of
officers of Triple-S Management, and (4) subject to the approval of the
full Board of Directors, significant contracts, loans or other
transactions, financial or otherwise, that would be material to
Triple-S Management.
- The full Board of Directors is empowered to delegate other functions to
the Executive Committee, provided it does not delegate to such
committee the following: (1) the appointment or destitution of
officers, (2) proposing amendments to Triple-S Management's Articles of
Incorporation and By-laws, (3) the approval of mergers or
consolidations, (4) making recommendations to shareholders in
connection with the sale, lease or exchange of all or a substantial
part of the assets of Triple-S Management, (5) the approval of
resolutions recommending the liquidation or the revocation of the
liquidation of Triple-S Management, (6) the authorization of the
issuance of capital stock and (7) the creation of Triple-S Management's
Subsidiaries. All actions taken by the Executive Committee shall be
presented to the full Board of Directors in order to be ratified,
modified or rejected.
- The members of the Committee are: (1) Dr. Fernando J. Ysern-Borras,
Chair of the Committee, (2) Mr. Vicente J. Leon-Irizarry, (3) Mr. Juan
Jose Leon-Soto, (4) Dr. Fernando L. Longo, (5) Dr. Wilmer
Rodriguez-Silva, (6) Mr. Ramon M. Ruiz-Comas, and (7) Dr. Jesus R.
Sanchez-Colon.
- The Committee met eleven times during the year ended December 31, 2002.
Page 36
FINANCE COMMITTEE:
- The Finance Committee oversees all financial activities of Triple-S
Management and its Subsidiaries, provides guidance to the full Board of
Directors in connection to finance matters, studies changes in the
economic structure of Triple-S Management and evaluates financial
procedures used by Triple-S Management and its Subsidiaries.
- The members of the Committee are: (1) Mr. Vicente J. Leon-Irizarry,
Chair of the Committee, (2) Mr. Jose Arturo Alvarez-Gallardo, (3) Mr.
Mario S. Belaval, (4) Ms. Sonia Gomez de Torres, (5) Mr. Hector
Ledesma, (6) Mr. Juan Jose Leon-Soto, (7) Dr. Wilfredo Lopez-Hernandez,
(8) Mr. Ramon M. Ruiz-Comas, and (9) Dr. Fernando J. Ysern-Borras.
- The Committee met twelve times during the year ended December 31, 2002.
RESOLUTIONS AND REGULATIONS COMMITTEE:
- The Resolutions and Regulations Committee regularly reviews the
Articles of Incorporation and By-laws of Triple-S Management and its
Subsidiaries in order to propose amendments or resolutions related to
institutional corporate issues. In addition, the Committee also
evaluates the resolutions proposed or presented by Triple-S
Management's shareholders.
- The members of the Committee are: (1) Mr. Juan Jose Leon-Soto, Chair of
the Committee, (2) Dr. Valeriano Alicea-Cruz, (3) Dr. Arturo R.
Cordova-Lopez, (4) Mr. Jose Davison-Lampon, (5) Dr. Porfirio E.
Diaz-Torres, (6) Dr. Fernando L. Longo, (7) Dr. Wilmer Rodriguez-Silva,
(8) Mr. Ramon M. Ruiz-Comas, (9) Dr. Jesus R. Sanchez-Colon, and (10)
Dr. Fernando J. Ysern-Borras.
- The Committee met fifteen times during the year ended December 31,
2002.
NOMINATIONS COMMITTEE:
- The Nominations Committee makes recommendations to Triple-S
Management's Board of Directors of qualified candidates to fill Board's
vacancies, for Triple-S Management's President and for Director of the
Internal Audit Office of the Corporation. In addition, the Committee
regularly establishes and reviews criteria to be considered in
connection with the nomination of candidates to the Board of Directors.
- The members of the Committee are: (1) Dr. Arturo R. Cordova-Lopez,
Chair of the Committee, (2) Mr. Jose Arturo Alvarez-Gallardo, (3) Mr.
Mario S. Belaval, (4) Dr. Wilfredo Lopez-Hernandez, (5) Dr. Manuel A.
Marcial-Seoane, (6) Dr. Wilmer Rodriguez-Silva, (7) Mr. Ramon M.
Ruiz-Comas, (8) Mr. Manuel Suarez-Mendez, and (9) Dr. Fernando J.
Ysern-Borras.
- The Committee met four times during the year ended December 31, 2002.
Page 37
AUDIT COMMITTEE:
- The Audit Committee reviews the following matters: (1) compliance with
internal controls of Triple-S Management and its Subsidiaries, (2)
activities of the Internal Audit Office, (3) results from audits made
by regulators, (4) consolidated financial results of Triple-S
Management and its Subsidiaries, and (5) the annual report prepared by
Triple-S Management and its Subsidiaries' external auditors. In
addition, the Audit Committee selects and recommends for final approval
by the full Board of Directors the public accounting firm to be the
external auditors of Triple-S Management and its Subsidiaries.
- The members of the Committee are: (1) Mr. Mario S. Belaval, Chair of
the Committee, (2) Dr. Valeriano Alicea-Cruz, (3) Mr. Jose
Davison-Lampon, (4) Mr. Hector Ledesma, (5) Mr. Vicente J.
Leon-Irizarry, (6) Ms. Adamina Soto-Martinez, (7) Mr. Manuel
Suarez-Mendez, and (8) Dr. Fernando J. Ysern-Borras.
- The Board of Directors, in its business judgment, has determined that
each of the members of the Audit Committee is an independent director
as such term is currently defined under the listing standards of the
New York Stock Exchange
- The Committee met eleven times during the year ended December 31, 2002.
REPORT OF THE AUDIT COMMITTEE
The Audit Committee consists of eight members of the Triple-S Management's Board
of Directors. Each of the members of the Audit Committee is "independent", as
such term is currently defined under the applicable standards of the New York
Stock Exchange. The Audit Committee operates pursuant to a Charter that was
adopted by the Board of Directors of Triple-S Management on October 29, 2002. A
copy of such Charter is attached to this Proxy Statement as APPENDIX A.
The role of the Audit Committee is to assist the Corporation's Board of
Directors in its oversight of the Corporation's financial reporting process and
the Corporation's internal and external audit processes. The Committee can
communicate directly with the Boards of Directors of each of the subsidiaries
and require corrective plans for recommendations included in reports submitted
by the Internal or External Auditors, as well as any other matter that is
brought to the attention of the Committee.
The Committee shall have the resources and authority appropriate to discharge
its responsibilities, including the authority to engage External Auditors for
special audits, reviews and other procedures and to retain special counsel and
other experts, consultants or advisors. The Committee approves the appointment
or discharge of the External Auditors and reviews the External Auditors'
proposed audit scope and approach, including coordination of the audit effort
with internal audit.
Page 38
As set forth in the Charter, management of the Corporation is responsible for
the preparation, presentation and integrity of the Corporation's financial
statements, and for maintaining appropriate accounting and financial reporting
principles and policies and internal controls and procedures designed to achieve
compliance with accounting standards and applicable laws and regulations. The
independent auditors of the Corporation are responsible for auditing the
Corporation's financial statements and expressing an opinion as to their
conformity with generally accepted accounting principles.
The members of the Committee are not full-time employees of the Corporation and
are not, and do not represent themselves to be, accountants or auditors by
profession. Moreover, as set forth in the Charter, the Audit Committee relies on
and makes no independent verification of the financial and other information
presented to it or representations made by management or the independent
auditors. Accordingly, the Audit Committee's oversight does not provide an
independent basis to determine that management has maintained appropriate
accounting and financial reporting principles and policies, or internal controls
and procedures, designed to achieve compliance with accounting standards and
applicable laws and regulations.
In the performance of its oversight function, the Audit Committee has reviewed
and discussed the audited financial statements of the Corporation for the fiscal
year ended December 31, 2002 with management and the independent auditors.
The Audit Committee has also discussed with the independent auditors the matters
required to be discussed by Statement on Auditing Standards No. 61
(Communication with Audit Committees), as currently modified or supplemented.
Finally, the Audit Committee has received the written disclosures and the letter
from KPMG, LLP required by Independence Standards Board Standard No. 1
(Independence Discussion with Audit Committees), as currently modified or
supplemented, has considered whether the provision of non-audit-services by the
independent auditors to the Corporation is compatible with maintaining the
auditors' independence, and has discussed with the independent auditors the
auditors' independence from the Corporation and its management.
Based on the Audit Committee's review of the audited financial statements and
the discussions referred to above with management and the independent auditors
and subject to the limitations on the role and responsibilities of the Audit
Committee set forth in the Charter and those discussed above, the Audit
Committee recommended to the Board of Directors that the Corporation's audited
financial statements be included in the Corporation's Annual Report on Form 10-K
for the year ended December 31, 2002 for filing with the Securities and Exchange
Commission.
Page 39
SUBMITTED BY:
1. Mario S. Belaval, Chair of the Committee
2. Valeriano Alicea-Cruz, MD
3. Jose Davison-Lampon, Esq.
4. Hector Ledesma
5. Vicente J. Leon-Irizarry, CPA
6. Adamina Soto Martinez, CPA
7. Manuel Suarez-Mendez, PE
8. Fernando J. Ysern-Borras, MD
APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors, in accordance with the recommendation of its Audit
Committee, has appointed KPMG LLP as independent accountants to audit the
consolidated financial statements of the Corporation for the year ending
December 31, 2002.
Representatives of KPMG LLP will be present at the Annual Meeting and will be
afforded the opportunity to make a statement if they desire to do so and to
respond to appropriate questions.
DISCLOSURE OF AUDIT FEES
The following is a description of the fees expected to be billed by KPMG LLP,
the Corporation's independent public accountants for the year ended December 31,
2002:
AUDIT FEES:
The aggregate fees expected to be billed by KPMG LLP for professional services
rendered in connection to the audit of the Corporation's annual financial
statements as of and for the year ended December 31, 2002 and for the reviews of
the financial statements included in the Corporation's quarterly report on Form
10-Q for that year were $372,850.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES:
During the year ended December 31, 2002, KPMG LLP did not perform any
information technology services relating to financial information systems design
and implementation.
Page 40
ALL OTHER FEES:
The aggregate fees expected to be billed for services rendered to the
Corporation by KPMG LLP, other than the services described above under "Audit
Fees" and "Financial Information Systems Design and Implementation Fees," for
the year ended December 31, 2002 were $484,186.
The Audit Committee has considered that the provision of the services covered by
this paragraph is compatible with maintaining the independence of the
independent public accountants of the Corporation.
EXECUTIVE COMPENSATION
COMPENSATION OF DIRECTORS:
During fiscal year 2002, the Chairman of the Board of Triple-S Management
received a fee of $350 for each Board of Directors meeting attended. Each
director of Triple-S Management received a fee of $250 for each Board of
Directors meeting attended, and $200 for each committee meeting attended. The
Chair of each committee of the Board of Directors of Triple-S Management
received a fee of $300 for each meeting, which he or she attended and was the
chair. Only directors who are not employees of Triple-S Management receive fees
for attendance to Board of Directors meetings or committee meetings.
During fiscal year 2002, the Chairman of the Board of Directors of Triple-S,
Inc. received a fee of $300 for each Board of Directors meeting attended. Each
director of Triple-S, Inc. received a fee of $200 for each Board of Directors
meeting attended and a fee of $150 for each committee meeting attended. The
Chair of each committee of the Board of Directors of Triple-S, Inc. received a
fee of $250 for each meeting of the committee, which he or she attended and was
the chair. Only directors who are not employees of Triple-S, Inc. receive fees
for attendance at Board of Directors meetings or committee meetings.
During fiscal year 2002, the Chairman of the Board of Directors of Seguros de
Vida Triple-S, Inc., Seguros Triple-S, Inc., Interactive Systems, Inc. and
Triple-C, Inc. received a fee of $300 for each Board of Directors meetings
attended. Each director of Seguros de Vida Triple-S, Inc., Seguros Triple-S,
Inc., Interactive Systems, Inc. and Triple-C, Inc. received a fee of $200 for
each of their respective Board of Directors meetings attended. Only directors
who are not employees of Seguros de Vida Triple-S, Inc., Seguros Triple-S, Inc.,
Interactive Systems, Inc. and Triple-C, Inc. receive fees for attendance at
their respective Board of Directors meetings.
Page 41
In addition to the fees described above, Directors of Triple-S Management
receive health insurance free of charge. In the case of Directors that are
currently serving as Directors of Triple-S Management, such coverage also
includes spouses and dependants. Former directors of the Corporation, who had
served at least for the specified term and are older than 55 years, may also
receive health insurance free of charge if they comply with the eligibility
rules.
Furthermore, Directors of the Corporation also receive as additional
compensation a per diem amount of $300 for every day the director is unable to
work at his or her office as a result of travel related to their
responsibilities as directors or having to appear at activities or engagements
of Triple-S Management, except for the Board of Directors' Annual Meeting.
ANNUAL COMPENSATION:
The following table sets forth the annual compensation for Triple-S Management's
President and Chief Executive Officer, the Presidents of the five Subsidiaries
and the Corporation's four other most highly compensated executive officers for
the years ended December 31, 2000, 2001 and 2002.
Page 42
SUMMARY OF COMPENSATION TABLE:
Annual Compensation
--------------------------------------------
All Other
Annual All Other
Name Year Salary Bonus (1) Compensation (2) Compensation (3)
---- ---- ------ --------- ----------------- ----------------
Mr. Miguel A. Vazquez-Deynes (4) 2002 177,561 171,334 66,851 117,545
2001 366,945 10,416 57,040 24,711
2000 428,135 12,700 29,392 ---
CPA Socorro Rivas-Rodriguez (5) 2002 295,811 127,700 40,432 ---
2001 234,713 23,117 31,322 ---
2000 197,652 19,266 35,983 26,672
CPA Ramon M. Ruiz-Comas (6) 2002 328,800 72,629 30,790 7,876
2001 171,889 26,783 23,396 ---
2000 127,416 13,034 22,518 16,153
Mr. Luis M. Pimentel-Zerbi 2002 187,637 85,617 32,453 31,218
2001 167,192 78,995 27,711 9,360
2000 158,089 32,718 26,830 6,864
Dr. Alejandro E. Franco-Linares 2002 202,994 63,403 35,236 ---
2001 192,257 19,885 34,706 ---
2000 195,093 18,777 19,805 ---
Dr. Luis A. Marini-Mir (7) 2002 171,388 81,042 28,729 8,413
2001 158,388 15,050 27,800 ---
2000 147,592 13,950 30,326 ---
Mr. Roberto O. Morales-Tirado (8) 2002 149,412 62,280 26,153 ---
2001 124,412 37,325 22,069 ---
2000 159,353 --- 7,098 ---
Mr. Carlos D. 2002 115,636 36,381 18,960 8,581
Torres-Diaz (9) 2001 115,046 11,008 16,933 ---
2000 101,573 10,396 17,361 11,239
Page 43
NOTES:
(1) Includes Christmas bonus and performance bonus.
(2) Includes liquidation of sick leave license not used, memberships, or
company car.
(3) Includes liquidation of accrued vacations, except for Mr. Miguel A.
Vazquez-Deynes, see below.
(4) Mr. Miguel A. Vazquez-Deynes deferred from his base salary $20,000,
$60,000, and $15,000 during the years 2002, 2001, and 2000,
respectively. He was the President and CEO of Triple-S Management and
Triple-S, Inc. until he retired on April 30, 2002. He was succeeded in
Triple-S Management by Mr. Ramon M. Ruiz-Comas and in Triple-S, Inc. by
Ms. Socorro Rivas-Rodriguez. All other annual compensation includes a
supplementary pension plan and fees for a non competition and
professional services agreement.
(5) Ms. Socorro Rivas-Rodriguez deferred from her base salary $120,595,
$42,000, and $43,784 during the years of 2002, 2001, and 2000,
respectively.
(6) Mr. Ramon M. Ruiz-Comas deferred from his base salary $78,800, $13,000,
and $2,400 during the years of 2002, 2001 and 2000, respectively.
(7) Mr. Luis A. Marini-Mir deferred from this base salary $30,000 during
the years 2002, 2001, and 2000, respectively.
(8) Mr. Roberto O. Morales-Tirado commenced to work for Seguros de Vida
Triple-S, Inc. in June 2000. Previously to be appointed as President of
Seguros de Vida Triple-S, Inc., he was a consultant to Seguros de Vida
Triple-S, Inc. and Triple-S, Inc. Salary information for years 2000
include $87,499 for services paid as consultant. He deferred from his
base salary $25,000 in 2002.
(9) Mr. Carlos D. Torres-Diaz deferred from his base salary $24,800,
$15,000, and $5,665 during the years 2002, 2001, and 2000,
respectively.
Page 44
PENSION PLAN
The Corporation sponsors a noncontributory defined-benefit pension plan for all
of its employees who are age 21 or older and have completed one year of service.
Pension benefits begin to vest after five years of vesting service, as defined,
and are based on years of service and final average salary, as defined. The
funding policy is to contribute to the plan as necessary to meet the minimum
funding requirements set forth in the Employees Retirement Income Security Act
of 1974, as amended, plus such additional amounts as the Corporation may
determine to be appropriate from time to time.
The following table sets forth the estimated annual benefits that would become
payable under the Retirement Plan based upon certain assumptions as to annual
basic salary levels and years of service. The amount payable in this table are
not necessarily representative of amounts that may actually become payable under
the Retirement Plan. The amounts represent the benefits upon retirement on
December 31, 2002, of a participant at age 65.
PENSION PLAN TABLE:
Years of Service
-------------------------------------------------------------------------------
Remuneration * 15 20 25 30 35
------------- -- -- -- -- --
$125,000 $ 37,500 $ 50,000 $ 62,500 $ 75,000 $ 75,000
150,000 45,000 60,000 75,000 90,000 90,000
175,000 52,500 70,000 87,500 105,000 105,000
200,000 60,000 80,000 100,000 120,000 120,000
225,000 67,500 90,000 112,500 135,000 135,000
250,000 75,000 100,000 125,000 150,000 150,000
300,000 90,000 120,000 150,000 180,000 180,000
400,000 120,000 160,000 200,000 240,000 240,000
450,000 135,000 180,000 225,000 270,000 270,000
500,000 150,000 200,000 250,000 300,000 300,000
* Final average earnings.
Page 45
COMPENSATION COVERED BY THE PLAN:
The highest average annual rate of pay from any five (5) consecutive calendar
year periods out of the last ten (10) years. The annual rate of pay in the year
of termination is included.
LIST OF EXECUTIVE OFFICERS:
2002 Credited Service
Name Covered Compensation as of 12/31/02
---- -------------------- --------------
Mr. Miguel A. Vazquez-Deynes $177,561 12.29
CPA Socorro Rivas-Rodriguez 295,811 20.97
CPA Ramon M. Ruiz-Comas 328,800 12.56
Mr. Luis A. Pimentel-Zerbi 187,637 12.71
Dr. Alejandro E. Franco-Linares 202,994 6.56
Dr. Luis A. Marini-Mir 171,388 4.91
Mr. Roberto O. Morales-Tirado 149,412 2.56
Mr. Carlos D. Torres-Diaz 115,636 12.69
BASIS FOR COMPUTATION OF BENEFITS:
The single life annuity benefit is equal to 2% of the final average earnings
multiplied by Plan and Association Service up to 30 years, minus prior plan
benefit (if any). The accrued benefit cannot be less than the benefit calculated
considering Employer Service only. The benefits are not subject to any deduction
for Social Security.
The Corporation also has a Supplemental Retirement Program. This program covers
benefits in excess of the United States Internal Revenue Code limits that apply
to the qualified program.
Page 46
REPORT OF BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION
The Board of Directors of Triple-S Management evaluates the compensation policy
for the President and CEO, and Executive Officers of Triple-S Management and its
Subsidiaries based upon the recommendations made by a Special Committee of the
Board. The compensation policy is developed considering, among others factors,
competitive pay practices for developing a stronger relationship between
executive compensation and the Corporation's long-term performance.
THE PRESIDENT AND CHIEF EXECUTIVE OFFICER:
On an annual basis the President and CEO submits to Triple-S Management's Board
of Directors a plan setting forth both quantitative and intangible goals
applicable to each year and long-term goals. In order to determine the President
and CEO's compensation, the Board of Directors evaluates the President's
performance by taking into consideration the growth of the organization,
implementation of a diversification strategy, achievement of financial goals,
improvements to the product and service delivery system and development of human
resources. During 2002, Mr. Ramon M. Ruiz-Comas' base salary was $328,800.
EXECUTIVE OFFICERS:
The group of Executive Officers of the Corporation is composed of a President
and CEO, the Presidents of the Subsidiaries, Executive Vice Presidents, Senior
Vice Presidents and Vice Presidents. The Special Committee of the Board
recommends to the Board of Directors of Triple-S Management, for their approval,
the salary increases and the bonuses to be awarded to the Executive Officers
pursuant to the plan and compensation policy.
SUBMITTED BY:
(1) Dr. Fernando J. Ysern-Borras, Chairman of the Board, (2) Dr. Valeriano
Alicea-Cruz, (3) Mr. Jose Arturo Alvarez-Gallardo, (4) Mr. Mario S. Belaval, (5)
Dr. Arturo R. Cordova-Lopez, (6) Mr. Jose Davison-Lampon, (7) Dr. Porfirio E.
Diaz-Torres, (8) Ms. Sonia Gomez de Torres, (9) Mr. Hector Ledesma (10) Mr.
Vicente J. Leon-Irizarry, (11) Mr. Juan Jose Leon-Soto, (12) Dr. Fernando L.
Longo, (13) Dr. Wilfredo Lopez-Hernandez, (14) Dr. Manuel A. Marcial-Seoane,
(15) Dr. Wilmer Rodriguez-Silva, (16) Mr. Ramon M. Ruiz-Comas, (17) Dr. Jesus R.
Sanchez-Colon, (18) Ms. Adamina Soto-Martinez, and (19) Mr. Manuel
Suarez-Mendez.
Page 47
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Triple-S, Inc. and other Subsidiaries of Triple-S Management have contractual
arrangements regarding management and technical assistance.
Furthermore, in the ordinary course of business, Triple-S, Inc., Seguros de Vida
Triple-S, Inc., and Seguros Triple-S, Inc. are providers of insurance to Mendez
& Co., where one of Triple-S Management's directors has a direct business
interest. Triple-S, Inc., Seguros de Vida Triple-S, Inc., and Seguros Triple-S,
Inc. are also providers of their insurance products to some directors in their
individual business or practices.
The terms of the agreements with Mendez & Co., Inc., as well as those with each
one of the directors, are terms usual and comparable to the terms of agreements
with companies or individuals which have no persons associated with said
companies or individuals serving as directors of Triple-S Management.
Directors of Triple-S Management that are medical doctors or dentists are
service providers of Triple-S, Inc. in the ordinary course of their business as
medical doctors and dentists. The terms of the agreements as service providers
of Triple-S, Inc. are no different from agreements with medical doctors and
dentists that are not directors of Triple-S Management.
PROPOSAL:
APPROVAL OF RESOLUTION NUMBER 1
Resolution Number 1 is presented by the Board of Directors of Triple-S
Management to acknowledge that the Board of Directors may declare dividends
subject to the determination of the Board of Directors that in their best
judgment the payment of such dividends is financially and legally feasible and
that in determining the amount to declare as a dividend, the Board of Directors
shall only take in consideration Triple-S Management's profits and the dividends
received from the Subsidiaries that operate as for profit corporations, and
shall not take into consideration the investment of Triple-S Management in
Triple-S, Inc. and Triple-S, Inc.'s operating reserves.
Page 48
RESOLUTION:
Whereas: Triple-S Management is a corporation organized as a for-profit
corporation, which has operated as a non-profit organization,
and therefore it has not declared or distributed dividends.
Whereas: Triple-S Management is the holding company and owner of the
shares of the following subsidiaries: Triple-S, Inc., Seguros
de Vida Triple-S, Inc., Seguros Triple-S, Inc., Interactive
Systems, Inc. and Triple-C, Inc.
Whereas: Except for Triple-S, Inc., all other Subsidiaries operate as
for profit corporations.
Whereas: Triple-S, Inc. has a tax exemption pursuant to Section 1101(6)
of the Internal Revenue Code of Puerto Rico of 1994, as
amended, as stated in the Administrative Determination (the
"Tax Exemption Ruling") issued by the Treasury Department of
Puerto Rico on November 8, 1998, as supplemented.
Whereas: The Shareholders have expressed their interest regarding the
distribution of dividends by the Board of Directors.
Therefore: Be it resolved, as is presently resolved, by this Honorable
Shareholders Meeting of Triple-S Management, held today April
27, 2003 in San Juan, Puerto Rico, that:
1. The Board of Directors may, in the exercise of its
best judgment, declare dividends to the Shareholders,
if it is financially viable and the norms,
limitations and responsibilities imposed by the
General Corporations Law of Puerto Rico, the Articles
of Incorporation, the By-laws, the Tax Exemption
Ruling issued by the Treasury Department of Puerto
Rico, and the applicable laws and regulations are
complied with, and
2. In determining the amount to declare as a dividend,
the Board of Directors shall only take in
consideration Triple-S Management's profits and the
dividends received from the Subsidiaries that operate
as for profit corporations, and shall not take into
consideration the investment of Triple-S Management
in Triple-S, Inc. and Triple-S, Inc.'s operating
reserves.
Page 49
POSITION OF THE BOARD OF DIRECTORS:
The Board of Directors of Triple-S Management recommends that the Shareholders
vote in favor of this Resolution.
REASONS TO VOTE IN FAVOR OF THE RESOLUTION:
As our Shareholders know, Triple-S Management is the result of the "Corporate
Reorganization of Triple-S, Inc. and its Subsidiaries" approved by our
Shareholders in the Special Meeting held on February 23, 1997. Contrary to
Triple-S, Inc., an organization that operates as a non-for profit and subject to
a Tax Exemption Ruling granted by the Treasury Department, Triple-S Management
may declare dividends. Up to now, however, Triple-S Management and its
Shareholders have decided to operate in a similar manner to Triple-S, Inc. and,
as a result, dividends have not been declared.
The Board of Directors is aware that on different occasions, and in different
places, Triple-S Management's Shareholders have expressed an interest in the
declaration of dividends by Triple-S Management.
The General Law of Corporations of Puerto Rico allows the board of directors of
a corporation to declare dividends out of its available surplus or, in its
absence, out of its net profits for the year in which the dividend is declared,
the prior year or both. Therefore, the Board of Directors of Triple-S Management
has the discretional legal authority to declare dividends from time to time
subject to the above limitation.
Also, the Treasury Department has acknowledged that Triple-S Management may
declare dividends from Triple-S Management's profits and from the dividends
received from the Subsidiaries that operate as for profit corporations.
Therefore, the Board of Directors can declare dividends from the sources
described above and it cannot take into account Triple-S Management's investment
in Triple-S, Inc. and Triple-S, Inc.'s operating reserves at the time the
dividend is declared.
For all of the above reasons, the Board of Directors urges its Shareholders to
vote in favor of this Resolution.
REQUIRED VOTE:
In order for this Resolution to be approved it must receive the affirmative vote
of a majority of the shares issued and outstanding with the right to vote that
are present at the Annual Meeting.
Page 50
PROPOSAL:
APPROVAL OF RESOLUTION NUMBER 2
Resolution Number 2 is presented by the Board of Directors of Triple-S
Management in order for its Shareholders to ratify their interest that Triple-S,
Inc. continues with its tax treatment as a non-profit organization and with the
corresponding conditions imposed by the Treasury Department in the Tax Exemption
Ruling.
RESOLUTION:
Whereas: Since its inception, Triple-S, Inc. has operated as a
non-profit organization in order to improve the health care
services provided to the Puerto Rican community and to promote
social well-being.
Whereas: On November 6, 1998, the Treasury Department of Puerto Rico
(the "Department") issued an Administrative Determination (the
"Tax Exemption Ruling") granting a tax exemption to Triple-S,
Inc. as a non-profit organization pursuant to Section 1101(6)
of the Internal Revenue Code of Puerto Rico of 1994, as
amended, (the "Code") and imposing several conditions in order
for Triple-S, Inc. to be treated as such.
Whereas: One of the conditions imposed by the Department in the Tax
Exemption Ruling was that every year, Triple-S Management, as
the only shareholder of Triple-S, Inc., and the Shareholders
of Triple-S Management shall ratify: (1) the tax exemption
established in the Tax Exemption Ruling and the conditions
therein for the previous taxable year, and (2) the continuance
of the tax treatment of Triple-S, Inc., as a non-profit
corporation.
Whereas: The members of the Board of Directors of Triple-S, Inc. and
Triple-S Management, and Triple-S Management as Triple-S,
Inc.'s sole shareholder, have determined that considering the
purpose for which Triple-S, Inc. was created, it is in
Triple-S, Inc.'s best interest to ratify the tax exemption
granted by the Department in the Tax Exemption Ruling for the
taxable year ending December 31, 2002, including the
conditions imposed therein, and that Triple-S, Inc. continue
operating as a non-profit organization pursuant to Section
1101(6) of the Code.
Page 51
Therefore: Resolved by this Honorable Assembly of Shareholders of
Triple-S Management meeting today, April 27, 2003, in San
Juan, Puerto Rico, to ratify:
1. The tax exemption granted to Triple-S, Inc. by the
Treasury Department in the Tax Exemption Ruling for
the taxable year ending December 31, 2002.
2. Our interest that Triple-S, Inc. continues with its
tax treatment as a non-profit organization and with
the corresponding conditions imposed by the Treasury
Department in the Tax Exemption Ruling.
POSITION OF THE BOARD OF DIRECTORS:
The Board of Directors recommends that the Shareholders vote in favor of this
Resolution.
REASONS TO VOTE IN FAVOR OF THE RESOLUTION:
This Resolution arises from the obligations assumed under the Tax Exemption
Ruling issued by the Treasury Department which include, among others, that our
Shareholders express their decision of maintaining the tax treatment and the
conditions set forth in the Tax Exemption Ruling which grants the tax exemption
to Triple-S, Inc.
Therefore, the Shareholders of Triple-S Management must ratify the Tax Exemption
Ruling, including the corresponding conditions imposed therein by the Treasury
Department and our interest in maintaining the tax treatment of Triple-S, Inc.
as a non-profit organization.
The Board of Directors and the Management of Triple-S, Inc., as well as the
Board of Directors and the Management of Triple-S Management, understand that
confirming the continuation of the Tax Exemption Ruling is convenient and
necessary. It is in armony with Triple-S, Inc.'s organization and operation.
Failure to approve this Resolution would mean a rejection to the Tax Exemption
Ruling for Triple-S, Inc., which could imply a violation of the Administrative
Determination. As a result, the Treasury Department could revoke the tax
exemption, which could cause an adverse financial effect to Triple-S, Inc. and
Triple-S Management.
Page 52
Important Aspects of the Administrative Determination issued by the Treasury
Department on November 6, 1998:
A. As indicated before, the Administrative Determination was effective on
January 5, 1999, the day following the effective date for the
Reorganization, January 4, 1999, and its continuity is subject to
compliance with the following conditions:
1. Every year, Triple-S Management and its Shareholders must
ratify the Tax Exemption Ruling with the conditions imposed
therein and its interest that Triple-S, Inc. continues
operating as a non-profit organization.
2. Triple-S, Inc. must file an annual report to the Treasury
Department, which should contain:
a. A Certification from the Secretary of Triple-S, Inc.
and the Secretary of Triple-S Management regarding
the ratification by the Shareholders of the
continuance of Triple-S, Inc. as a non-profit
organization.
b. The combined increase of the fees for physicians and
dentists approved by the Board of Directors of
Triple-S, Inc.
c. The percentage of change in the premium charged to
insureds.
d. The use of any benefit and surplus of Triple-S, Inc.
B. The President of Triple-S, Inc. will certify annually that:
1. Triple-S, Inc. operated exclusively for the promotion of
social well-being and as a non-profit corporation, in order to
provide more and better health care services to all of the
Puerto Rican community.
2. The assets of Triple-S, Inc. were primarily used for the
purposes related to its business of health insurance.
3. The compensation granted to the officers and directors of
Triple-S, Inc. was reasonable.
4. Triple-S, Inc. did not distribute dividends.
5. The fees paid to the physicians and dentists of Triple-S,
Inc., that also are Shareholders of Triple-S Management, were
the same fees that were paid to all of the other physicians
and dentists of Triple-S, Inc.
6. The benefits and surplus have been exclusively set aside in
order to increase and improve the health care services
provided to the insureds, make contributions in order to
promote the social and socioeconomic well-being in the areas
of health care or to increase up to six-month the claims
operational reserve requirements.
Page 53
REQUIRED VOTE:
In order for this Resolution to be approved it must receive the affirmative vote
of a majority of the shares issued and outstanding with the right to vote that
are present at the Annual Meeting.
PROPOSAL:
APPROVAL OF RESOLUTION NUMBER 3
Resolution Number 3 is presented by the Board of Directors of Triple-S
Management in order to amend Article 8-5 and Section C of Article 8-11 of the
By-laws of Triple-S Management to state that the Board of Directors will name
the Chair of the Audit Committee and the rest of the directors that form part of
said Committee.
RESOLUTION:
Be it resolved, as resolved herein, by this Honorable Shareholders Meeting,
today, April 27, 2003, in San Juan, Puerto Rico, to amend Article 8-5 (the
Chairman) and Section C (Audit Committee) of Article 8-11 (Committees), of
Chapter 8 (Directors) of the By-laws of Triple-S Management to state that the
Board of Directors will name the Chair of the Audit Committee and the rest of
the directors that form part of said Committee.
CHAPTER 8 - DIRECTORS
8.5 THE CHAIRMAN
The Chairman of the Board of Directors will preside over the
meetings of the shareholders, the meetings of the Board of
Directors and will assume all those duties and faculties that
shall be conferred upon him by the Board of Directors. Among
his responsibilities are the following:
A. ...
B. ...
C. Name the Chairs of the Committees of the Board of
Directors, except THE CHAIR OF THE AUDIT COMMITTEE
AND THE CHAIR OF THE FINANCE COMMITTEE. THE BOARD OF
DIRECTORS WILL NAME THE CHAIR OF THE AUDIT COMMITTEE.
THE TREASURER OF THE BOARD OF DIRECTORS, by the
nature of his office, will be the Chair of the
Finance Committee.
D. Name the members of the Committees of the Board of
Directors, EXCEPT FOR THE MEMBERS OF THE AUDIT
COMMITTEE, WHO SHALL BE NAMED BY THE BOARD OF
DIRECTORS.
Page 54
E. ...
F. ...
G. ...
H. ...
I. ...
J. ...
8-11 COMMITTEES
C. Audit Committee
THE Board of Directors shall name the Chair of this
Committee, who cannot be the Treasurer or the
Assistant Treasurer of the Board of Directors, and no
less than six (6) additional members of the Board of
Directors, who shall meet no less than once every
three (3) months, and at any other times as
necessary. The decisions reached by the Committee
shall be by majority of the members present at the
meeting.
The responsibilities of the Committee shall be:
2. ...
3. ...
4. ...
5. ...
6. ...
POSITION OF THE BOARD OF DIRECTORS:
The Board of Directors encourages the Shareholders to vote in favor of this
Resolution.
REASONS TO VOTE IN FAVOR OF THE RESOLUTION:
The By-laws of Triple-S Management currently grants the Chairman of the Board of
Directors the power to appoint the Chair and other members of the Audit
Committee, as is the case with most of the committees of the Board of Directors.
Page 55
As a result of recent changes in corporate governance rules, the audit committee
is being required to be more independent. These rules are aimed at obtaining a
higher level of independence from the audit committee to assure investors and
creditors, and the market in general that the financial information of companies
disclosed is accurate, complete and correct.
Allowing the whole Board of Directors to select the members of the Audit
Committee and its Chairman increases the level of independence that the Audit
Committee may achieve. The selection by the Chairman of the Board of Directors
alone does not encourage the participation of "independent directors" in the
selection process, which is the key in forming a truly independent Audit
Committee. The amendments proposed hereby would change the current scheme and
would allow the whole Board of Directors to appoint the members of the Audit
Committee and who will serve as its Chair.
The approval of this amendment would place Triple-S Management in the group of
companies that have taken seriously the strict compliance with changes in
corporate governance, internal controls and independence of audit committees
after the passage of the Sarbanes-Oxley Act of 2002.
VOTES REQUIRED:
In order for this Resolution to be approved it must receive the affirmative vote
of the majority of the shares of Triple-S Management issued and outstanding with
the right to vote that are present at the Annual Meeting in order to approve the
amendments to the By-laws of Triple-S Management, pursuant to Section A of
Article 9-1 (Chapter 9 - Amendments).
PROPOSAL:
APPROVAL OF RESOLUTION NUMBER 4
Resolution Number 4 is presented by the Board of Directors of Triple-S
Management to amend Article Eighth of the Articles of Incorporation and Article
4-2 of the By-laws of Triple-S Management to allow the voting shares of a
Shareholder to be registered in the books of Triple-S Management under the name
of the spouse or heirs of such Shareholder, if they are physicians or dentists,
without exceeding the 21 share limit. This Resolution shall only be considered
in the Annual Meeting if the 75% of the issued and outstanding shares are not
present or represented at the Continuation of the Special Meeting, which was
recessed last February 23.
Page 56
RESOLUTION:
Be it resolved, as it is presently resolved, by the Honorable Shareholders
Meeting, today, April 27, 2003, in San Juan, Puerto Rico, to amend Article
Eighth of the Articles of Incorporation and Article 4-2 of Chapter 4 of the
By-laws of Triple-S Management to allow the voting shares of a Shareholder to be
registered in the books of Triple-S Management under the name of the spouse or
heirs of such Shareholder, if the latter are physicians or dentists, without
exceeding the 21 share limit.
ARTICLES OF INCORPORATION
EIGHTH: Triple-S Management will have a right of first refusal in the
event of a sale, donation, or other transfer or cession of the
shares of Triple-S Management. Any shareholder that wishes to
sell, donate or in any other way transfer or cede his shares
of Triple-S Management, must first offer his shares, in
writing, to Triple-S Management. Triple-S Management will then
proceed to buy said shares at the same price paid by the
shareholder for the shares. However, if said shares have been
donated or are part of a bequest in a testament or in any
other way transferred to a person that is (1) a descendant,
OTHER HEIR OR THE SPOUSE of the shareholder and (2) a
physician or dentist, then said person will have the rights to
be the owner of said shares, up to a maximum of 21 shares.
BY-LAWS
CHAPTER 4 - ON THE STOCKS
4-2 Triple-S Management will enjoy preferred rights of acquisition
in the eventuality of a sale, donation or other transfer or
cession of Triple-S Management's stock. Any stockholder who
wishes to sell, donate, or in any other way transfer or cede
his corporate stock must first put the offer in writing to
Triple-S Management, who will proceed to purchase said stocks
from the stockholder for the same price he paid for them.
However, in the event that said stocks were donated or
inherited through a will or in any other way to a person who
is (1) a descendant, OTHER HEIR OR THE SPOUSE of the
stockholder and (2) a physician or a dentist, then said person
has the right to hold up to a maximum 21 stocks.
Page 57
POSITION OF THE BOARD OR DIRECTORS:
The Board of Directors encourages the Shareholders to vote in favor of this
Resolution.
REASONS FOR VOTING IN FAVOR OF THE RESOLUTION:
At the Annual Shareholders Meeting held on April 29, 2001, Resolution Number 5
was approved, recommending that the Board of Directors take the necessary steps
in order for the voting shares of a Shareholder to be registered in the books of
Triple-S Management in the name of the spouse or the heirs of the Shareholder,
when and if they are physicians and dentists, without exceeding the limit of 21
shares.
Article Eighth of the Articles of Incorporation and Article 4-2 of the By-laws
of Triple-S Management's state the right of first refusal over the shares,
unless the shares are transferred to a descendant of a Shareholder who is a
physician or dentist. These provisions do not permit that the spouse or other
heirs who are physicians and dentists receive the share of the Shareholder,
because of the right of first refusal.
Several of our Shareholders have expressed their wish to change these provisions
so that they can transfer all or some of their shares to their spouses or heirs,
if they are physicians or dentists. In order to implement this recommendation,
it is necessary that the Shareholders with voting shares approve the
abovementioned amendments to the Articles of Incorporation and the By-laws of
Triple-S Management.
The primary interest of the Board of Directors is that Shareholders support and
approve this measure as soon as possible in order to attend to the Shareholders'
interests regarding this issue, strengthening, at the same time, the operations
and development of Triple-S Management.
REQUIRED VOTE:
In order for this Resolution to be approved it must receive the affirmative vote
of no less than two thirds of the shares issued and outstanding with the right
to vote, since it is an amendment to the Articles of Incorporation, pursuant to
Section A of Article Thirteenth of the Articles of Incorporation.
Page 58
PROPOSALS OF OUR SHAREHOLDERS
The following Resolutions are proposed by Shareholders:
PROPOSAL:
APPROVAL OF RESOLUTION NUMBER 5
Presented by Francisco J. Echegaray-Espada, MD, shareholder of Triple-S
Management, to encourage the Board of Directors of Triple-S Management update
the results of the Study about the Development of the Corporation and present
the same to the Shareholders, since from the date the Study was prepared up to
the present, various positive changes have occurred in the development and
financial results of the Corporation.
Whereas: At the Annual Meeting held on April 30, 2000, we asked the
Board of Directors to study the Corporation's options for its
future development.
Whereas: At the Special Meeting held on February 11, 2001, the results
of the Study about the Development of the Corporation were
presented to the Shareholders.
Whereas: The Study indicated that, at that time, the principal options
to guide the future development of the Corporation under an
initial public offering (IPO) or a sale of a majority or
minority of the shares of the Corporation to one or more
investors were not favorable for the Corporation nor the
Shareholders.
Whereas: In addition, the financial projections of the Corporation for
the five (5) years following the Study were favorable, which
positioned the Corporation as one of the best insurance
businesses with enough resources for the development of its
businesses, which would facilitate the increase of benefits to
our constituents.
Whereas: Some Shareholders have expressed our desire for the
Corporation to be evaluated the convenience of it going public
so that the values of the shares would be the market value of
said shares, and not the original value of the shares when
Triple-S was created.
Whereas: We understand that it is appropriate to update the results of
the Study since, from the date the Study was performed up to
the present, various positive changes have occurred in the
development and financial results of the Corporation.
Page 59
Therefore: Be it resolved by this Honorable Shareholders Meeting, today,
April 27, 2003, in San Juan, Puerto Rico, to encourage the
Board of Directors of Triple-S Management update the results
of the Study about the Development of the Corporation and
present the same to the Shareholders, since from the date the
Study was performed up to the present, various positive
changes have occurred in the development and financial results
of the Corporation.
POSITION OF THE PROPOSING SHAREHOLDER:
The Whereas state the reason to propose and endorse this Resolution.
POSITION OF THE BOARD OF DIRECTORS:
The Board of Directors endorses the approval of this Resolution.
REQUIRED VOTE:
In order for this Resolution to be approved it must receive the affirmative vote
of the majority of the shares issued and outstanding with the right to vote that
are present at the Annual Meeting.
PROPOSAL:
APPROVAL OF RESOLUTION NUMBER 6
Presented by Eliseo Roques, MD, and Leslie H. Lopez-Velez, DDS, shareholders of
Triple-S Management, to encourage the Board of Directors evaluate the benefits
of Triple-S, Inc. continuing its operations as a non-profit organization and the
desirability of Triple-S Management operating as a for-profit organization in
order to be able to pay dividends. The Shareholders should be notified of the
results of this evaluation no later than two (2) months prior to the next
Triple-S Management's Regular Annual Shareholders Meeting.
Whereas: Triple-S, Inc. was incorporated as a for-profit insurer, as
required by the Insurance Code of Puerto Rico.
Whereas: Through a decision from its Shareholders, Triple-S, Inc. has
been operating as a non-profit organization since its
beginnings in 1959.
Whereas: The Treasury Department granted Triple-S, Inc. a Tax Exemption
because it operated on a not for profit basis.
Page 60
Whereas: As a result of a Triple-S, Inc. Corporate Reorganization in
1999, Triple-S Management is its only shareholder.
Whereas: Some shareholders, formerly from Triple-S, Inc. and now
belonging to Triple-S Management, feel that an evaluation of
the benefits of Triple-S, Inc. continuing its operations as a
non-profit organization is advisable.
Whereas: Triple-S Management operates as a non-profit organization that
does not distribute dividends to its Shareholders.
Therefore: Be it resolved by this Honorable Shareholders Meeting, meeting
today, April 27, 2003, in San Juan, Puerto Rico, to encourage
that the Triple-S Management's Board of Directors evaluate:
1. The benefits of Triple-S, Inc. continuing its
operations as a non-profit organization.
2. The desirability of Triple-S Management operating as
a for-profit organization in order to be able to pay
dividends.
3. The Shareholders should be notified of the results of
this evaluation no later than two (2) months prior to
the next Triple-S Management's Annual Shareholders
Meeting.
POSITION OF THE PROPOSING SHAREHOLDERS:
The Whereas state the reason to propose and endorse this Resolution.
POSITION OF THE BOARD OF DIRECTORS:
The Board of Directors endorses the approval of this Resolution.
REQUIRED VOTE:
In order for this Resolution to be approved it must receive the affirmative vote
of the majority of the shares issued and outstanding with the right to vote that
are present at the Annual Meeting.
Page 61
OTHER MATTERS
The Board of Directors is not aware of any business that may properly come
before the Annual Meeting, other than the proposals indicated in the Proxy
Statement.
However, if any new matter, requiring the vote of the shareholders, is properly
presented before the Annual Meeting of Shareholders, proxies may be voted with
respect thereto in accordance with the best judgment of the persons voting the
proxies.
PROPOSALS OF SHAREHOLDERS TO BE PRESENTED
AT THE 2004 ANNUAL MEETING OF SHAREHOLDERS
Shareholders' proposals intended to be presented at the 2004 Annual Meeting of
Shareholders must be received by the Secretary of the Board of Directors, at its
principal executive offices, located at the sixth floor of 1441 F.D. Roosevelt
Avenue, San Juan, Puerto Rico, 00920, or by fax at (787) 749-4191 or (787)
706-4023, or by mail at the PO Box 363628, San Juan, Puerto Rico, 00936-3628,
not later than November 28, 2003 for inclusion in the Triple-S Management's
Proxy Statement and Form of Proxy relating to the 2004 Annual Meeting of
Shareholders.
San Juan, Puerto Rico By Order of the Board of Directors
March 28, 2003
/s/ Dr. Fernando J. Ysern-Borras /s/ Dr. Jesus R. Sanchez-Colon
---------------------------------- -----------------------------------
Dr. Fernando J. Ysern-Borras Dr. Jesus R. Sanchez-Colon
Chairman of the Board of Directors Secretary of the Board of Directors
Appendix
Page 62
APPENDIX A
AUDIT COMMITTEE CHARTER
SEC Release No. 34-42266 (effective January 31, 2000) requires that companies
dicsclose in their proxy statement a copy of the Audit Committee Charter as an
appendix to the proxy statement at least once every three years.
PURPOSE:
The primary purpose of the Audit Committee (the Committee) of the Board of
Directors of Triple-S Management Corporation (the Board) is to assist the Boards
of Directors of Triple-S Management Corporation and each of the Subsidiaries
(hereinafter collectively referred to as the Corporation) in fulfilling their
oversight responsibilities for:
- External financial reporting process, including the
preparation of the Corporation's financial statements and the
independent audit thereof.
- System of internal control over financial reporting process.
- Internal and external audit processes.
- Corporation's process for monitoring compliance with laws and
regulations.
The function of the Committee is oversight. The management of the Corporation is
responsible for the preparation, presentation and integrity of the Corporation's
financial statements. Management is responsible for maintaining appropriate
accounting and financial reporting principles and policies and internal controls
and procedures that provide for compliance with accounting standards and
applicable laws and regulations. The Internal Audit Office is responsible for
examining and evaluating the adequacy and effectiveness of the systems of
internal control of the Corporation and its subsidiaries to ensure (i) the
reliability and integrity of information; (ii) compliance with the Corporation's
policies, plans and procedures, as well as applicable laws and regulations;
(iii) the safekeeping of assets; and (iv) the economical and efficient use of
resources. The External Auditors are responsible for planning and carrying out a
proper audit of the Corporation's annual financial statements prior to their
issuance and the filing with the Securities and Exchange Commission and for the
review of each quarterly report on Form 10-Q, and other procedures.
The members of the Committee are not full-time employees of the Corporation and
are not, and do not represent themselves to be, accountants or auditors by
profession. As such, it is not the duty or responsibility of the Committee or
its members to conduct "field work" or other types of auditing or accounting
reviews or procedures or to set auditor independence standards. Each member of
the Committee shall be entitled to rely on the following:
Page 63
- The integrity of those persons and organizations within and
outside the Corporation from which it receives information,
- The accuracy of the financial and other information provided
to the Committee by such persons or organizations absent
actual knowledge to the contrary (which shall be promptly
reported to the Board of Directors), and
- The accuracy of the representations made by management as to
any information technology, internal audit and other non-audit
services provided by the External Auditors to the Corporation.
The External Auditors shall submit to the Corporation annually a formal written
statement of the fees billed for each of the following categories of services
rendered by the External Auditors: (i) the audit of the Corporation's annual
financial statements for the most recent fiscal year and reviews of the
financial statements included in the Corporation's Quarterly Reports on Form
10-Q for such fiscal year; (ii) information technology consulting services for
the most recent fiscal year, in the aggregate and for each service (each
separately identifying fees for such services relating to financial information
systems design and implementation); and (iii) all other services rendered by the
External Auditors for the most recent fiscal year, in the aggregate and by each
service.
The Committee can communicate directly with the Boards of Directors of each of
the subsidiaries and require corrective action plans for recommendations
included in reports submitted by the Internal or External Auditors, as well as
any other matter that is brought to the attention of the Committee.
The Committee must provide an open avenue of communication among External
Auditors, financial and senior management, the Internal Audit Office, and the
Board.
The Committee shall have the resources and authority appropriate to discharge
its responsibilities, including the authority to engage External Auditors for
special audits, reviews and other procedures and to retain special counsel and
other experts, consultants or advisors.
COMPOSITION OF THE AUDIT COMMITTEE:
The Committee shall be comprised of five or more independent directors. The
Board of Directors of Triple-S Management Corporation will appoint Committee
members and the Committee Chair. All members of the Committee shall have a
working familiarity with basic finance and accounting practices and at least one
member shall be an expert on accounting or related financial management
experience. Each of the members of the Committee shall not be an officer or
employee of the Corporation or its subsidiaries, shall not have any relationship
which, in the opinion of the Board, would interfere with the exercise of
independent judgment in carrying out the responsibilities of the member and
shall otherwise satisfy the applicable independence requirements under the rules
of the New York Stock Exchange, as such requirements are interpreted by the
Board in its business judgment.
Page 64
The Committee must work closely and cooperatively with management, on which it
relies for information and resources. Nevertheless, the Committee must remain at
arm's length from the operations so that it can be independent in its judgements
and decisions, and can pursue its responsibilities without undue influence.
The Committee shall meet at least once every three months or more frequently, as
circumstances dictate. The Committee will invite members of management,
auditors, or others to attend meetings and provide pertinent information, as
necessary. The Committee shall meet in separate executive sessions at least
annually with management, the Director of the Internal Audit Office and the
External Auditors to discuss any matters that the Committee or each of these
groups believe should be discussed privately.
Members of the Committee may participate in any meeting thereof by means of
conference call or similar communications equipment by means of which all
persons participating in the meeting can hear each other. A quorum shall consist
of a majority of the members of the Committee. The decisions of the Committee
shall be adopted by the affirmative vote of a majority of the members of the
Committee present at the meeting in which the decision is considered.
RESPONSIBILITIES AND DUTIES:
To fulfill its responsibilities and duties the Committee shall:
I. External Financial Reporting Process
- Review significant accounting and reporting issues, including
complex or unusual transactions and highly judgmental areas,
and recent professional and regulatory pronouncements, and
understand their impact on the financial statements.
- Review with management and the External Auditors the results
of the audit, including any difficulties encountered.
- Review the annual financial statements, and consider whether
they are complete and reflect appropriate accounting
principles, based on the discussion with management and
External Auditors.
- Review other sections of the annual report and related
regulatory filings before release and consider the accuracy
and completeness of the information.
- Review with management and the External Auditors all matters
required to be communicated to the Committee under Generally
Accepted Auditing Standards.
- Understand how management develops interim financial
information, and the nature and extent of Internal and
External Auditors involvement.
- Review and discuss with management and the External Auditors
the annual audited financial statements and quarterly
unaudited financial statements.
Page 65
- Review and discuss the annual and quarterly reports, including
the Corporation disclosures under "Management's Discussion and
Analysis of Financial Condition and Results of Operations"
with management and the External Auditors before filing with
regulators, and consider whether they are complete and
consistent based on the discussion with management and the
External Auditors.
II. System of internal control over financial reporting process
- Consider the effectiveness of the Corporation's internal
control over annual and interim financial reporting, including
information technology security and control.
- Understand the scope of Internal and External Auditors review
of internal control over financial reporting, and obtain
reports on significant findings and recommendations, together
with management's responses.
III. Internal and External Audit Processes
A. Internal Audit
- Review the appointment and replacement of the
Director of the Internal Audit Office.
- Review with management and the Director of Internal
Audit Office the charter, plans, activities,
staffing, and organizational structure of the
internal audit function.
- Ensure there are no unjustified restrictions or
limitations to their scope.
- Review the effectiveness of the internal audit
function, including compliance with The Institute of
Internal Auditors' Standards for the Professional
Practice of Internal Auditing.
B. External Audit
- Review the External Auditors' proposed audit scope
and approach, including coordination of audit effort
with internal audit.
- All auditing services (including underwriting comfort
letters or statutory audits required for insurance
companies) and non-audit services must be
pre-approved by the Committee. Pre-approval is not
required for non-auditing services if: (1) the
aggregate dollar value of such services does not
exceed five percent of the total fees paid by the
Corporation to the External Auditors during the
fiscal year in which the non-audit services are
provided; (2) such services were not recognized by
the Corporation at the time of the engagement to be
non-audit services; and (3) such services are
promptly brought to the attention of and approved by
the Committee prior to the completion of the audit.
Page 66
- Approve the appointment or discharge of the External
Auditors.
- Ensure that the External Auditors prepare and deliver
annually a Statement as to Independence (it being
understood that the External Auditors are responsible
for the accuracy and completeness of this Statement),
to discuss with the External Auditors any
relationships or services disclosed in this Statement
that may affect the objectivity and independence of
the External Auditors and to recommend that the Board
take appropriate actions in response to this
Statement to satisfy itself of the independence of
the External Auditors.
- Obtain from the External Auditors assurance that the
audit was conducted in a manner consistent with
Section 10A of the Securities Exchange Act of 1934,
as amended, which sets forth certain procedures to be
followed in any audit of financial statements
required under the Securities Exchange Act of 1934,
as amended.
- Discuss with the Corporation's legal counsel any
significant legal matters that may have a material
effect on the financial statements and the
Corporation's policies, including material notices to
or inquiries received from governmental entities.
IV. Corporation's Process for Monitoring Compliance with Laws and
Regulations
- Receive and review reports from Compliance Officers of the
Corporation.
- Review the effectiveness of the system for monitoring
compliance with laws and regulations and the results of
management's investigation and follow-up (including
disciplinary action) of any instances of noncompliance.
- Receive and review reports for any investigation, examination
or audits by regulatory agencies.
- Obtain regular updates from management and the Corporation's
legal counsel regarding compliance matters.
V. Other Responsibilities
- Receive, retain, and treat complaints regarding questionable
accounting, internal control or auditing matters.
- Regularly report to the Board about Committee activities,
issues, and related recommendations.
- Provide an open avenue of communication among internal audit,
the External Auditors, and the Board.
- Review any other reports the Corporation issues that relate to
Committee responsibilities.
- Perform other activities related to this charter as requested
by the Board.
Page 67
- Institute and oversee special investigations as needed.
- Review and assess the adequacy of the Committee charter
annually, requesting Board approval for proposed changes.
- Prepare any report or other disclosures, including any
recommendation of the Committee, required by the rules of the
Securities and Exchange Commission to be included in the
Corporation's annual proxy statement.
- Confirm annually that all responsibilities outlined in this
charter have been carried out.
- The Board will evaluate the Committee's and individual
members' performance on a regular basis.
APPROVAL:
This Charter has been reviewed by the Committee and approved by the
Board of Directors of Triple-S Management Corporation to establish the
purpose of the Audit Committee of the Board of Directors, and to
specify its objectives and responsibilities. This Charter shall be
reviewed at least annually.
Approved by the Board of Directors of Triple-S Management.
Page 68
FORM OF PROXY OF THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING OF SHAREHOLDERS OF TRIPLE-S MANAGEMENT CORPORATION
TO BE HELD ON SUNDAY, APRIL 27, 2003
THE BOARD OF DIRECTORS OF TRIPLE-S MANAGEMENT CORPORATION SOLICITS THIS PROXY.
The undersigned, Shareholder of Triple-S Management Corporation ("Triple-S
Management"), hereby appoints DR. FERNANDO J. YSERN-BORRAS, DR. VALERIANO
ALICEA-CRUZ, MR. JOSE ARTURO ALVAREZ-GALLARDO, MR. MARIO S. BELAVAL, DR. ARTURO
R. CORDOVA-LOPEZ, MR. JOSE DAVISON-LAMPON, DR. PORFIRIO E. DIAZ-TORRES, MS.
SONIA GOMEZ DE TORRES, MR. HECTOR LEDESMA, MR. VICENTE J. LEON-IRIZARRY, MR.
JUAN JOSE LEON-SOTO, DR. FERNANDO L. LONGO, DR. WILFREDO LOPEZ-HERNANDEZ, DR.
MANUEL A. MARCIAL-SEOANE, DR. WILMER RODRIGUEZ-SILVA, MR. RAMON M. RUIZ-COMAS,
DR. JESUS R. SANCHEZ-COLON, MS. ADAMINA SOTO-MARTINEZ, AND MR. MANUEL
SUAREZ-MENDEZ, OR ANY ONE OF THEM, EACH WITH FULL POWER OF SUBSTITUTION, TO BE
PROXIES, to represent the undersigned and to vote and act with respect to all
shares that the Shareholder would be entitled to vote, at the Annual
Shareholders Meeting of Triple-S Management to be held on Sunday, April 27,
2003, at 9:00 am, at the Condado Plaza Hotel, San Juan, Puerto Rico, or at in
any adjournment, recess or deferment thereof, on all matters which come before
the Assembly, and on any other business before the Annual Meeting, with all
powers the undersigned would possess if personally present.
The matters to be considered at the Annual Meeting are described in this Proxy
and are discussed in detail in the Proxy Statement attached hereto. The Proxy
Statement is incorporated herein by reference. This Proxy replaces any other
proxy granted previously by the undersigned. The undersigned instructs the
abovementioned proxies, any one of them or their substitutes, to vote in the
manner indicated herein with regards to the following matters to be considered
before the Annual Meeting:
PROPOSAL: ELECTION OF DIRECTORS
(1) MR. JOSE ARTURO ALVAREZ-GALLARDO (COMMUNITY REPRESENTATIVE)
(2) CPA VICENTE J. LEON-IRIZARRY (COMMUNITY REPRESENTATIVE)
(3) DR. VALERIANO ALICEA-CRUZ (PHYSICIAN)
(4) DR. PORFIRIO E. DIAZ-TORRES (PHYSICIAN)
(5) DR. FERNANDO L. LONGO (PHYSICIAN)
(6) DR. JESUS R. SANCHEZ-COLON (DENTIST)
[ ] VOTE GRANTED FOR all nominees
----
[ ] VOTE WITHHELD FOR all nominees
----
[ ] VOTE GRANTED FOR, EXCEPT FOR the following nominee(s):
----
--------------------------------------------------------------------------------
(Write, in the space provided below, the names of those nominees for whom you do
not wish to vote.)
RESOLUTION YES NO ABSTAIN
---------- --- -- -------
The RESOLUTION NUMBER 1 is presented by the Board of Directors of Triple-S
Management to acknowledge that the Board of Directors may declare dividends
subject to the determination of the Board of Directors that in their best
judgment the payment of such dividends is financially and legally feasible and
that in determining the amount to declare as a dividend, the Board of Directors
shall only take in consideration Triple-S Management's profits and the dividends
received from the Subsidiaries that operate as for profit corporations, and
shall not take into consideration the investment of Triple-S Management in
Triple-S, Inc. and Triple-S, Inc.'s operating reserves.
-------------------------------------------------------------------------------------------------------------------------
The RESOLUTION NUMBER 2 is presented by the Board of Directors of Triple-S
Management in order for its Shareholders to ratify their interest that Triple-S,
Inc. continues with its tax treatment as a non-profit organization and with the
corresponding conditions imposed by the Treasury Department in the Tax Exemption
Ruling.
-------------------------------------------------------------------------------------------------------------------------
RESOLUTION YES NO ABSTAIN
---------- --- -- -------
The RESOLUTION NUMBER 3 is presented by the Board of Directors of Triple-S
Management in order to amend Article 8-5 and Section C of Article 8-11 of the
By-laws of Triple-S Management to state that the Board of Directors will name
the Chair of the Audit Committee and the rest of the directors that form part of
said Committee.
-------------------------------------------------------------------------------------------------------------------------
The RESOLUTION NUMBER 4 is presented by the Board of Directors of Triple-S
Management to amend Article Eighth of the Articles of Incorporation and Article
4-2 of the By-laws of Triple-S Management to allow the voting shares of a
Shareholder to be registered in the books of Triple-S Management under the name
of the spouse or heirs of such Shareholder, if they are physicians or dentists,
without exceeding the 21 share limit. This Resolution shall only be considered
in the Annual Meeting if the 75% of the issued and outstanding shares are not
present or represented at the Continuation of the Special Meeting, which was
recessed last February 23.
-------------------------------------------------------------------------------------------------------------------------
The RESOLUTION NUMBER 5 is presented by Francisco J. Echegaray-Espada, MD,
shareholder of Triple-S Management, to encourage the Board of Directors of
Triple-S Management update the results of the Study about the Development of the
Corporation and present the same to the Shareholders, since from the date the
Study was prepared up to the present, various positive changes have occurred in
the development and financial results of the Corporation.
-------------------------------------------------------------------------------------------------------------------------
The RESOLUTION NUMBER 6 is presented by Eliseo Roques, MD, and Leslie H.
Lopez-Velez, DDS, shareholders of Triple-S Management, to encourage the Board of
Directors evaluate the benefits of Triple-S, Inc. continuing its operations as a
non-profit organization and the desirability of Triple-S Management operating as
a for-profit organization in order to be able to pay dividends. The Shareholders
should be notified of the results of this evaluation no later than two (2)
months prior to the next Triple-S Management's Regular Annual Shareholders
Meeting.
-------------------------------------------------------------------------------------------------------------------------
PLEASE INDICATE YOUR VOTE. IF THE UNDERSIGNED DOES NOT INDICATE ANY CHOICE OF
VOTE WITH REGARDS TO THE ELECTION OF DIRECTORS' PROPOSAL AND RESOLUTIONS 1, 2,
3, 4, 5 AND 6, THE BOARD OF DIRECTORS WILL VOTE FOR THE ELECTION OF DIRECTORS
AND RESOLUTIONS 1, 2, 3, 4, 5 AND 6, AND IN RESPECT TO ANY OTHER BUSINESS BEFORE
THE ANNUAL MEETING, ACCORDING TO THEIR BEST JUDGMENT. THE BOARD OF DIRECTORS IS
NOT AWARE OF ANY OTHER MATTERS THAN THOSE INDICATED IN THIS PROXY.
This Proxy is executed on the date indicated below and is valid for the Annual
Shareholders Meeting of Triple-S Management, to be held on Sunday, April 27,
2003, or at any adjournment, recess or deferment thereof.
In witness whereof, I sign this Proxy on this ____ day of ________________ 2003.
---------------------------------- ---------------------------------------
Signature of the Shareholder Amount of Shares
---------------------------------- ---------------------------------------
Name of the Shareholder Number of Participant in Triple-S, Inc.
PLEASE SIGN, DATE AND SEND THIS PROXY BY MAIL OR
FAX TO (787) 749-4191 OR 706-4023.