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:
[X] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a.6)
[ ] 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)
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(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:
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[ ] 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:
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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 at (787) 749-4191 or (787) 706-4023, 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 706-4023
ATTENTION:
DR. JESUS R. SANCHEZ-COLON
SECRETARY OF THE BOARD OF DIRECTORS
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
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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/ FERNANDO J.YSERN-BORRAS
-------------------------------
Fernando J. Ysern-Borras, M.D.
Chairman of the Board of Directors
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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) 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:
o Election of Directors
The election of six (6) directors who will serve for a term of three (3)
years.
o 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.
o Resolution Number 2
Presented by the Board of Directors of Triple-S Management in order for
its Shareholders 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
required by the Treasury Department in the Tax Exemption Ruling.
o 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
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directors that form part of said Committee.
o 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:
o Resolution Number 5
Presented by Francisco J. Echegaray-Espada, M.D., shareholder of Triple-S
Management, to encourage the Board of Directors update the results of the
Study about Triple-S Management's Development 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 Triple-S Management.
o Resolution Number 6
Presented by Eliseo Roques, M.D., and Leslie H. Lopez-Velez, D.D.S.,
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 months prior to the next Triple-S
Management's Ordinary Annual Shareholders Meeting.
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.
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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.
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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 to
(787) 749-4191 or (787) 706-4023, 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 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.
The Form of Proxy will not be valid unless it 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 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
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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 are exclusively 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 are exclusively 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 properly 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 herein. 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 Appendices, the Notice of the Annual Meeting and the
Form of Proxy to the Shareholders entitled to vote at the Annual Meeting.
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 is 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
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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 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.
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 may 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
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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 $40.00 per share. As of March 20, 2003, there were _____
shares of Common Stock outstanding.
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 Proxy Registry is ordered to be
closed at the Annual Meeting.
The Articles of Incorporation and the By-laws of Triple-S Management expressly
prohibit cumulative voting.
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 should 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 _____ voting shares issued and outstanding; therefore,
at 9:00 am, _____ 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 9:30am _____ voting
shares issued and outstanding who 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 notified to convene within the next thirty (30)
days. At this second notice for
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the Annual Meeting, one third (1/3) of the voting shares issued and outstanding
who are present at the Annual Meeting will constitute a quorum. If a quorum is
not present at this Annual Meeting, the Board of Directors may notify to 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.
Name of Shareholder Shares Percentage
------------------- ------ ----------
Directors of Triple-S Management
Fernando J. Ysern-Borras, M.D. 1 **
Valeriano Alicea-Cruz, M.D. 2 **
Jose Arturo Alvarez-Gallardo * 1 **
Mario S. Belaval * 1 **
Arturo R. Cordova-Lopez, M.D. 1 **
Jose Davison-Lampon, Esq. * 1 **
Porfirio E. Diaz-Torres, M.D. 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, M.D. 2 **
Wilfredo Lopez-Hernandez, M.D. 2 **
Manuel A. Marcial-Seoane, M.D 2 **
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Name of Shareholder Shares Percentage
------------------- ------ ----------
Wilmer Rodriguez-Silva, M.D. 15 **
Ramon M. Ruiz-Comas, CPA * 1 **
Jesus R. Sanchez-Colon, D.M.D. 1 **
Adamina Soto-Martinez, CPA * 1 **
Manuel Suarez-Mendez, P.E.* 1 **
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, M.D. 4 **
Earl M. Harper 0 0
Luis A. Marini-Mir, D.M.D. 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 45 **
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%.
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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 "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, M.D., (2) Wilfredo Lopez-Hernandez, M.D., (3)
Manuel A. Marcial-Seoane, M.D., (4) Wilmer Rodriguez-Silva, M.D., (5) Ramon M.
Ruiz-Comas, CPA, and (6) Adamina Soto-Martinez, CPA
DIRECTORS WHOSE TERMS WILL EXPIRE IN 2004
(1) Fernando J. Ysern-Borras, M.D. (2) Mario S. Belaval, (3) Jose
Davison-Lampon, Esq., (4) Sonia Gomez de Torres, CPA, (5) Hector Ledesma, (6)
Juan Jose Leon-Soto, Esq., and (7) Manuel Suarez-Mendez, P.E.
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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:
X Two directors as representatives of the community:
1. Jose Arturo Alvarez-Gallardo
2. Vicente J. Leon-Irizarry, CPA
X Four directors for the positions of directors who are physicians or
dentists:
1. Valeriano Alicea-Cruz, M.D.
2. Porfirio E. Diaz-Torres, M.D.
3. Fernando L. Longo, M.D.
4. Jesus R. Sanchez-Colon, D.M.D.
These six directors have not been elected to the Board for three terms nor have
they served for more than nine years, which means that they are able to be
nominated for reelection for a new term of three years.
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
shares issued and in circulation with the right to vote in the elections for
directors that are present or represented by
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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 ordinary 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 hold 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:
TRIPLE-S MANAGEMENT CORPORATION
Board of Directors
Name Age Office
---- --- ------
Fernando J. Ysern-Borras, M.D. 47 Director, Chairman of the Board
Valeriano Alicea-Cruz, M.D. 57 Director
Jose Arturo Alvarez-Gallardo 60 Director
Mario S. Belaval 64 Director
Arturo R. Cordova-Lopez, M.D. 59 Director, Board's Assistant Secretary
Jose Davison-Lampon, Esq. 69 Director
Porfirio E. Diaz-Torres, M.D. 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, M.D. 63 Director
Wilfredo Lopez-Hernandez, M.D. 59 Director
Manuel A. Marcial-Seoane, M.D. 48 Director
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Wilmer Rodriguez-Silva, M.D. 49 Director, Board's Vice-Chairman
Ramon M. Ruiz-Comas, CPA 46 Director, President and CEO
Jesus R. Sanchez-Colon, D.M.D. 47 Director, Board's Secretary
Adamina Soto-Martinez, CPA 55 Director
Manuel Suarez-Mendez, P.E. 57 Director
Executive Officers
Name Age Office
---- --- ------
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 37 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.
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.
Board of Directors
Name Age Office
---- --- ------
Fernando J. Ysern-Borras, M.D. 47 Director, Chairman of the Board
Valeriano Alicea-Cruz, M.D. 57 Director
Jose Arturo Alvarez-Gallardo 60 Director
Mario S. Belaval 64 Director
Arturo R. Cordova-Lopez, M.D. 59 Director, Board's Assistant Secretary
Jose Davison-Lampon, Esq. 69 Director
Porfirio E. Diaz-Torres, M.D. 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, M.D. 63 Director
Wilfredo Lopez-Hernandez, M.D. 59 Director
Manuel A. Marcial-Seoane, M.D. 48 Director
Socorro Rivas-Rodriguez, CPA 55 Director, President
Wilmer Rodriguez-Silva, M.D. 49 Director, Board's Vice-Chairman
Jesus R. Sanchez-Colon, D.M.D. 47 Director, Board's Secretary
Page 17
Adamina Soto-Martinez, CPA 55 Director
Manuel Suarez-Mendez, P.E. 57 Director
Executive Officers
Name Age Office
---- --- ------
Socorro Rivas-Rodriguez, CPA 55 President
Earl M. Harper 44 Senior Vice President and Chief Operating Officer
Alejandro E. Franco-Linares, M.D. 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
SEGUROS DE VIDA TRIPLE-S, INC.
Board of Directors
Name Age Office
---- --- ------
Porfirio E. Diaz-Torres, M.D. 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, M.D. 49 Director, Board's Secretary
Ramon M. Ruiz-Comas, CPA 46 Director
Adamina Soto-Martinez, CPA 55 Director, Board's Treasurer
Manuel Suarez-Mendez, P.E. 57 Director
Fernando J. Ysern-Borras, M.D. 47 Director
Executive Officers
Name Age Office
---- --- ------
Roberto O. Morales-Tirado, Esq. 59 President
SEGUROS TRIPLE-S, INC.
Board of Directors
Name Age Office
---- --- ------
Manuel Suarez-Mendez, P.E. 57 Director, Chairman of the Board
Arturo R. Cordova-Lopez, M.D. 59 Director, Board's Secretary
Vicente J. Leon-Irizarry, CPA 64 Director, Board's Treasurer
Wilfredo Lopez-Hernandez, M.D. 59 Director, Board's Vice-Chairman
Fernando L. Longo, M.D. 63 Director
Manuel A. Marcial-Seoane, M.D. 48 Director
Luis M. Pimentel-Zerbi 47 Director, President
Ramon M. Ruiz-Comas, CPA 46 Director
Page 18
Fernando J. Ysern-Borras, M.D. 47 Director
Executive Officers
Name Age Office
---- --- ------
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
INTERACTIVE SYSTEMS, INC.
Board of Directors
Name Age Office
---- --- ------
Valeriano Alicea-Cruz, M.D. 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, D.M.D. 47 Director
Carlos D. Torres-Diaz 44 Director, President
Fernando J. Ysern-Borras, M.D. 47 Director
Executive Officers
Name Age Office
---- --- ------
Carlos D. Torres-Diaz 44 President
Ramon Orlando De La Torre 47 Vice President
TRIPLE-C, INC.
Board of Directors
Name Age Office
---- --- ------
Wilmer Rodriguez-Silva, M.D. 49 Director, Chairman of the Board
Arturo R. Cordova-Lopez, M.D. 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, M.D. 63 Director
Wilfredo Lopez-Hernandez, M.D. 59 Director
Luis A. Marini-Mir, D.M.D. 54 Director, President
Ramon M. Ruiz-Comas, CPA 46 Director
Page 19
Jesus R. Sanchez-Colon, D.M.D. 47 Director
Manuel Suarez-Mendez, P.E. 57 Director, Board's Assistant Secretary
Fernando J. Ysern-Borras, M.D. 47 Director
Executive Officers
Name Age Office
---- --- ------
Luis A. Marini-Mir, D.M.D. 54 President
Fernando Rivera-Rivera 51 Acting Executive Vice President
Sarah Lopez-Torres, M.D. 51 Vice President of the Medical and Dental Affairs
Division
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, M.D., is currently the Chairman of the Board of
Directors of Triple-S Management and Triple-S, Inc. He 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 M.D. 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, M.D., 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. Doctor
Alicea-Cruz 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 and 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 B.S. degree from the University of
Puerto Rico, an M.D. 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,
Page 20
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. He 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 B.A. 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 B.S. degree in
Economics from Franklin and Marshall College in Pennsylvania.
ARTURO R. CORDOVA-LOPEZ, M.D., 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 M.D. 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 degree from the Inter American University of Puerto Rico.
PORFIRIO E. DIAZ-TORRES, M.D., has served as director of Triple-S Management and
Triple-S,
Page 21
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 B.A. degree
in Business Administration from the University of Puerto Rico and an M.D. 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 State Society of CPA. She holds a B.A. 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.
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. Mr.
Leon-Irizarry is a member of the Puerto Rico Society of Certified Public
Accountants. He holds a B.A. 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
Page 22
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 B.A. degree in Sciences and a Juris Doctor
degree from the University of Puerto Rico.
FERNANDO L. LONGO, M.D., 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 B.S. degree from the
University of Puerto Rico. He also holds an M.D. 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, M.D., 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 B.S. degree from
the University of Puerto Rico, an M.D. degree from the University of Santiago de
Compostela, Spain, and Specialty in Urology from the University of Puerto Rico,
School of Medicine.
MANUEL A. MARCIAL-SEOANE, M.D., 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
Page 23
Hopkins and received his M.D. 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, M.D., 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 B.S. degree from the University of Puerto Rico
and an M.D. degree from the University of Puerto Rico, School of Medicine.
RAMON M. RUIZ-COMAS, CPA, has served as director of Triple-S Management since
May 2002. 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 degree and a B.A. degree in Accounting from
the University of Puerto Rico.
JESUS R. SANCHEZ-COLON, D.M.D., has served as director of Triple-S Management
since 2000. 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 B.A. in Psychology
from St. Louis University, a D.M.D. from the University of Puerto Rico, and a
Post Graduate General Practice Residency.
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
Page 24
Accountants. She is a graduate of the University of Puerto Rico.
MANUEL SUAREZ-MENDEZ, P.E., 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 B.S. 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.
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.
Alejandro E. Franco-Linares, M.D. Senior Vice President of the Medical, Dental and Professional
Affairs Division of Triple-S, Inc. since 1996.
Page 25
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. 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.
Luis A. Marini-Mir, D.M.D. President of Triple-C since 1999; Dental Director of Triple-S,
Inc.'s Medical, Dental and Professional Affairs Division from
1998 to 1999; and Dean of the University of Puerto Rico Dental
School from 1993 to 1997.
Fernando Rivera-Rivera Acting Executive Vice President of Triple-C since 2002 and Vice
President of Management Information Systems of Triple-C from
1996 to present.
Sarah Lopez-Torres, M.D. 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, for a total of nine years. The years of service as director of
Triple-S,
Page 26
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.
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
Page 27
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.
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
Page 28
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.
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 Auditing 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
Committee met eleven times during the year ended December 31, 2002.
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
defined under the listing standards of the New York Stock Exchange.
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 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 Exhibit 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
Page 29
audit effort with internal audit.
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, auditors 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.
SUBMITTED BY:
(1) Mario S. Belaval, Chair of the Committee, (2) Valeriano Alicea-Cruz, M.D.,
(3) Jose Davison-Lampon, Esq., (4) Hector Ledesma, (5) Vicente J. Leon-Irizarry,
CPA, (6) Adamina
Page 30
Soto Martinez, CPA, (7) Manuel Suarez-Mendez, P.E., (8) Fernando J.
Ysern-Borras, M.D.
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.
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
Page 31
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.
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 six years and are older than 55 years, may also receive health
insurance free of charge if they complied 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 32
SUMMARY OF COMPENSATION TABLE:
Annual Compensation
--------------------------------------------------
All Other All Other
Annual Compen- Compen-
Name Year Salary Bonus(1) sation(2) sation(3)
---- ---- ------ -------- -------------- ---------
1. Miguel A. Vazquez-Deynes (a) 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 --
2. Socorro Rivas-Rodriguez (b) 2002 295,811 127,700 40,432 --
2001 234,713 23,117 31,322 --
2000 197,652 19,266 35,983 26,672
3. Ramon M. Ruiz-Comas (c) 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
4. 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
5. 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 --
6. Luis A. Marini-Mir (d) 2002 171,388 81,042 28,729 8,413
2001 158,388 15,050 27,800 --
2000 147,592 13,950 30,326 --
7. Roberto O. Morales-Tirado (e) 2002 149,412 62,280 26,153 --
2001 124,412 37,325 22,069 --
2000 159,353 -- 7,098 --
8. Carlos D. Torres-Diaz (f) 2002 115,636 36,381 18,960 8,581
2001 115,046 11,008 16,933 --
2000 101,573 10,396 17,361 11,239
NOTES:
(1) Includes Christmas bonus and performance bonus.
(2) Include liquidation of sick leave license not used, memberships, and/or
company car.
(3) Include liquidation of accrued vacations, except for Mr. Miguel A.
Vazquez-Deynes, see below.
(a) 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 by Mr. Ramon M.
Ruiz-Comas and Ms. Socorro Rivas-Rodriguez, respectively. All other annual
compensation includes a supplementary pension plan and
Page 33
fees for professional services rendered to the Corporation.
(b) 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.
(c) 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.
(d) Mr. Luis A. Marini-Mir deferred from this base salary $30,000 during the
years 2002, 2001, and 2000, respectively.
(e) 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.
(f) 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.
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
Page 34
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.
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
Ms. Socorro Rivas-Rodriguez 295,811 20.97
Mr. Ramon M. Ruiz-Comas 328,800 12.56
Mr. Luis A. Pimentel-Zerbi 187,637 12.71
Mr. Alejandro E. Franco-Linares 202,994 6.56
Mr. 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.
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 by considering, among others
factors, competitive pay practices for developing a stronger relationship
between executive compensation and the Corporation's long-term performance.
Page 35
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. The weight and significance accorded to these factors is subjective
in nature. 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, (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.
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
Page 36
of said 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.
PROPOSALS OF THE BOARD OF DIRECTORS
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.
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
Page 37
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.
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 acknowledges that Triple-S Management may declare
dividends as well as the dividends came 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.
Page 38
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 2
Resolution Number 2 is presented by the Board of Directors of Triple-S
Management in order for its Shareholders 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 required 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
Page 39
the Code.
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.
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.
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
Page 40
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.
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.
Page 41
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.
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
Page 42
majority of the members present at the meeting.
The responsibilities of the Committee shall be:
1. ...
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.
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 in circulation
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).
Page 43
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.
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 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,
Page 44
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 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.
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,
when and if they are physicians or dentist. 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 45
PROPOSALS OF OUR SHAREHOLDERS
The following proposals are presented by the shareholders:
PROPOSAL:
APPROVAL OF RESOLUTION NUMBER 5
Presented by Francisco J. Echegaray-Espada, M.D., shareholder of Triple-S
Management, to encourage the Board of Directors update the results of the Study
about Triple-S Management's Development 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 Triple-S Management.
Whereas: At the Annual Meeting held on April 30, 2000, we asked the Board of
Directors to study Triple-S Management's options for its future
development.
Whereas: At the Special Meeting held on February 11, 2001, the results of the
Study about Triple-S Management's Development were presented to the
Shareholders.
Whereas: The Study indicated that, at that time, the principal options to
guide the future development of Triple-S Management under an initial
public offering (IPO) or a sale of a majority or minority of the
shares of Triple-S Management to one or more investors were not
favorable for Triple-S Management nor the Shareholders.
Whereas: In addition, the financial projections of Triple-S Management for
the five years following the Study were favorable, which positioned
Triple-S Management 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 Triple-S Management
to be evaluated in terms of the convenience or not 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 Triple-S Management.
Therefore: Be it resolved, as it is presently 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 Triple-S Management
Development 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
Triple-S Management.
Page 46
POSITION OF THE PROPOSING SHAREHOLDERS
The Whereas states the Shareholder's 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, M.D., and Leslie H. Lopez-Velez, D.D.S.,
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 months
prior to the next Triple-S Management's Ordinary Annual Shareholders Meeting.
Whereas: Triple-S, Inc. was incorporated as a for-profit insurer, as is
required by the Puerto Rico Insurance Code.
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.
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, as it is presently resolved, through this Honorable
Shareholders
Page 47
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 months prior to the
next Triple-S Management's Annual Shareholders Meeting.
POSITION OF THE PROPOSING SHAREHOLDERS
The Whereas states the Shareholders' 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.
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/ Jesus R. Sanchez-Colon
---------------------------------- -----------------------------------
Fernando J. Ysern-Borras, M.D. Jesus R. Sanchez-Colon, D.M.D.
Chairman of the Board of Directors Secretary of the Board of Directors
Page 48
EXHIBIT A
AUDIT COMMITTEE CHARTER
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:
- 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
Page 49
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 actions 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 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.
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
Page 50
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.
- 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.
Page 51
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.
- 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
Page 52
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.
- Institute and oversee special investigations
as needed.
- Review and assess the adequacy of the
Committee charter annually, requesting
Page 53
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:
-------------------------
Chairman of the Board
Date of Approval:
Page 54
FORM OF PROXY OF THE BOARD OF DIRECTORS FOR THE ANNUAL SHAREHOLDERS MEETING
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 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,
(2) CPA VICENTE J. LEON-IRIZARRY,
(3) VALERIANO ALICEA-CRUZ, M.D.,
(4) PORFIRIO E. DIAZ-TORRES, M.D.,
(5) FERNANDO L. LONGO, M.D.,
(6) JESUS R. SANCHEZ-COLON, D. M.D.
[____] VOTE GRANTED FOR all nominees
[____] VOTE WITHHELD FOR all nominees
[____] VOTE GRANTED, 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
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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.
NUMBER 2
Presented by the Board of Directors of Triple-S Management in order for its
Shareholders 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 required by the
Treasury Department in the Tax Exemption Ruling.
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RESOLUTION YES NO ABSTAIN
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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.
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.
NUMBER 5
Presented by Francisco J. Echegaray-Espada, M.D., shareholder of Triple-S
Management, to encourage the Board of Directors update the results of the Study
about Triple-S Management's Development 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 Triple-S Management.
NUMBER 6
Presented by Eliseo Roques, M.D., and Leslie H. Lopez-Velez, D.D.S.,
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 months
prior to the next Triple-S Management's Ordinary 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.
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