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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(A)
AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)
R&G FINANCIAL CORPORATION
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(name of Issuer)
Class B Common Stock
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(Title of Class of Securities)
749136107
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(CUSIP Number)
Ramon Prats
Vice Chairman of the Board and President
R&G Financial Corporation
280 Jesus T. Pinero Avenue
San Juan, Puerto Rico 00918
(787) 758-2424
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
May 8, 2001
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(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1 (b)(3) or (4), check the following
box [ ].
NOTE: Six copies of this statement, including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) for other parties to whom copies
are to be sent.
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(*)The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter the disclosures provided in a prior cover page.
The information required in the remainder of this cover page shall not
be deemed to be "filed" for purposes of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
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CUSIP No. 749136107
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(1) NAME OF REPORTING PERSON
Ramon Prats
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(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP(**)
(a) [ ]
(b) [X]
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(3) SEC USE ONLY
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(4) SOURCE OF FUNDS(*) SC, AF
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(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
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(6) CITIZENSHIP OR PLACE OF ORGANIZATION Puerto Rico
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NUMBER OF (7) SOLE VOTING POWER 550,454
SHARES -------------------------------------------------------------
BENEFICIALLY (8) SHARED VOTING POWER 0
OWNED BY -------------------------------------------------------------
EACH (9) SOLE DISPOSITIVE POWER 550,454
REPORTING -------------------------------------------------------------
PERSON WITH (10) SHARED DISPOSITIVE POWER 0
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(11) AGGREGATE AMOUNT BENEFICIALLY OWNED 550,454
BY EACH REPORTING PERSON
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(12) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (11) EXCLUDES CERTAIN SHARES(*) [ ]
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(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.14%
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(14) TYPE OF REPORTING PERSONAL(*) IN
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(*)SEE INSTRUCTIONS BEFORE FILLING OUT
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Item 1 Security and Issuer.
The equity securities under report and to which this statement
relates are the Class B Common Stock, par value $.01 per share
(the "Class B Common Stock") of R&G Financial Corporation,
Inc. (the "Company"). The principal executive offices of the
Company are located at 280 Jesus T. Pinero Avenue, San Juan,
Puerto Rico, 00918.
Item 2. Identity and Background.
(a) Ramon Prats.
(b) The business address of Mr. Prats is: c/o R&G Financial
Corporation, 280 Jesus T. Pinero Avenue, San Juan, Puerto
Rico, 00918.
(c) Mr. Prats serves as the Vice Chairman of the Board of
Directors and President of the Company. Mr. Prats also serves
as President of R& Mortgage Corp., R&G Premier Bank of Puerto
Rico, and Mortgage Store of Puerto Rico, Inc., as a director
of R&G Mortgage Corp. and Continental Capital Corp, and as
Vice Chairman of the Board of Directors of R&G Premier Bank.
Each of R&G Premier Bank of Puerto Rico, R&G Mortgage Corp.,
Mortgage Store of Puerto Rico, Inc. and Continental Capital
Corp are subsidiaries of the Company (the "Subsidiaries"), and
the address for each of them is: 280 Jesus T. Pinero Avenue,
San Juan, Puerto Rico, 00918.
(d) Mr. Prats has not during the last five years been convicted in
a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) Mr. Prats has not, during the last five years, been party to a
civil proceeding of a judicial or administrative body of
competent jurisdiction and, as a result of such proceeding,
was or is subject to, a judgment decree or final order
enjoining future violations of, or prohibiting or mandating
activities subject to, Federal or State securities laws or
finding any violation with respect to such laws.
(f) Mr. Prats is a citizen of the United States.
Item 3. Source and Amount of Funds or Other Consideration.
A majority of the shares of Class B Common Stock held directly by Mr.
Prats were awarded to him by the Company in lieu of compensation for
his role as a director and officer of the Company and its Subsidiaries.
The remainder of the shares of Class B Common Stock directly held by
Mr. Prats are shares of R-G Premier Bank which were exchanged for
shares of Class B Common Stock of the Company.
Mr. Prats has also been awarded options to acquire additional shares of
Class B Common Stock through from the Company pursuant to the 1996
Stock Option Plan and by Victor J. Galan, the Chairman of the Board and
Chief Executive Officer of the Company, as is discussed in further
detail below.
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On September 25, 1997 the Company distributed a 4:5 stock split. On
June 25, 1998, the Company effected a 2:1 stock split. All share
amounts and per share prices herein are adjusted to take into account
these stock splits.
(a) Directly Held Shares of Class B Common Stock
(i) From Company
Mr. Prats acquired 72,000 of his shares of Class B Common
Stock from the Company on August 27, 1996 in lieu of further
consideration for services rendered as an officer and director
of the Company and its Subsidiaries. These shares were not
registered under the Securities Act of 1933.
(ii) From Exchange
Mr. Prats acquired shares in the predessor to R&G Premier
Bank in 1987 in consideration for $10,000. In January 1997,
those shares were exchanged for shares of Class B Common
Stock, which now amount to 10,454 shares of Class B Common
Stock.
(b) Options for Shares of Class B Common Stock
(i) From the Company
In compensation for his services rendered as a director and
officer of the Company and its Subsidiaries, Mr. Prats has
acquired stock options from the Company to purchase an
aggregate amount of 288,000 shares of Class B Common Stock, at
an exercise price of $4.03 a share, pursuant to the 1996 Stock
Option Plan.
(ii) From Victor J. Galan
Mr. Prats holds an option to acquire an aggregate of 360,000
shares of Class B Common Stock, at a purchase price of $4.03 a
share, from Victor J. Galan, the Chairman of the Board of
Directors and Chief Executive Officer of the Company, by
virtue of a Stock Option Agreement dated May 8, 1998 between
Mr. Prats and Mr. Galan, a copy of which is attached hereto as
Exhibit 1. Under the terms of Stock Option Agreement, shares
vest 1/6th each year. As of May 8, 2001, half of the shares
under the Stock Option Agreement, or 180,000 shares have
become vested and are exercisable within 60 days of the date
of this filing. The vesting on May 8, 2001 gave rise to Mr.
Prats' Schedule 13D filing obligation.
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Item 4. Purpose of Transaction.
Except as referenced in response to Item 6 below, Mr. Prats
currently has no plans or proposals (excluding action which may be
taken or proposed to be taken by the Board of Directors of the Company
of which Mr. Prats is a member) which relate to or would result in (a)
the acquisition by any person of additional securities of the Company
or the disposition of securities of the Company; (b) an extraordinary
corporate transaction, such as a merger, reorganization or liquidation,
involving the Company or any of its Subsidiaries; (c) a sale or
transfer of a material amount of assets of the Company or any of its
Subsidiaries; (d) any change in the present Board of Directors or
management of the Company, including any plans or proposals to change
the number or term of directors or to fill existing vacancies on the
Board; (e) any material change in the present capitalization or
dividend policy of the Company; (f) any other material change in the
Company's business or corporate structure;(g) changes in the Company's
charter, bylaws or instruments corresponding thereto or other actions
which may impede the acquisition or control of the company by any
person; (h) causing a class of securities of the Company to be delisted
from a national securities exchange or cease to be authorized to be
quoted in an inter-dealer quotation systems of a registered national
securities association; (i) a class of equity securities of the Company
becoming eligible for termination of registration pursuant to 12(g)(4)
of the Securities Exchange Act of 1934, as amended; or (j) any action
similar to those enumerated above.
Item 5. Interest in Securities of the Issuer.
(a) Mr. Prats beneficially owns 550,454 shares of Class B Common
Stock (including options to acquire 180,000 shares of Class B Common
Stock from Mr. Galan and 288,000 options to acquire shares of Class B
Common Stock under the Company Stock Option Plan, both types of options
are exercisable within 60 days), which represent approximately 5.14% of
the 10,237,675 outstanding shares of Class B Common Stock of the
Company.
(b) Mr. Prats has sole power to vote and dispose of all 550,454
shares of Class B Common Stock over which he is attributed beneficial
ownership.
(c) Mr. Prats did not effect any transactions involving the Class
B Common Stock of the Company; rather, he became vested in an
additional 60,000 shares of Class B Common Stock from options given to
him by Mr. Galan on May 8, 2001. This additional vesting gave rise to
Mr. Prats' Schedule 13D filing obligation. See also the response to
Item 3(b)(ii) hereof.
(d) No other person is known to have the right to receive or the
power to direct the receipt of dividends from, or the proceeds from the
sale of, Mr. Prats securities reported herein.
(e) Not applicable.
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Item 6. Contracts, Arrangements, Understandings or Relationships With
Respect to Securities of the Issuer.
On May 8, 1998, Mr. Prats executed a stock option agreement (the "Stock
Option Agreement"), pursuant to which he was granted by Victor Galan the option
(the "Option") to purchase up to 360,000 shares of Class B Common Stock (the
"Option Shares"). The following description summarizes certain terms and
conditions of the Stock Option Agreement, but does not purport to be a complete
description of all of its terms and is qualified in its entirety by reference to
the copy of the Stock Option Agreement filed herewith as Exhibit 1 to this
Schedule.
The Stock Option Agreement was executed by Mr. Galan in consideration
of Mr. Prats' agreement to render faithful and efficient service to the Company
with such duties and responsibilities as the Company shall from time to time
prescribe, and as inducement for Mr. Prats to remain in the service of the
Company and for his increased efforts during such service.
The Option is exercisable as follows: (a) with respect to all of the
Option Shares, upon the occurrence of a "Change of Control" of the Company
(defined, for purposes of the Stock Option Agreement, as the acquisition by any
person other than Mr. Galan of direct or indirect beneficial ownership of voting
securities of the Company representing 50% or more of the Company's outstanding
securities), or the death, disability or retirement (on or after reaching age
65) of Mr. Prats; and (b) upon the occurrence of any sale by Mr. Galan of his
Class A Common Stock or his Class B Common Sock, in full or in part (a "Stock
Disposition"), with respect to the number of Option Shares corresponding to the
same proportion of the total number of Option Shares as the amount of common
stock sold by Mr. Galan bears to the total number of common stock shares owned
by Mr. Galan at the time. In either of the foregoing instances, the Option to
acquire the corresponding number of Option Shares shall expire on the first
anniversary of the event that makes the Option exercisable.
In the event of a Stock Disposition, Mr. Prats shall have the option to
cause Mr. Galan to purchase all or part of the Option at a price (the "Put
Price") equal to the price at which Mr. Galan shall have made the Stock
Disposition less (i) the exercise price of $4.03 per share and less (ii) the
proportionate share of the costs incurred by Mr. Galan in effecting the Stock
Disposition.
If neither a Change of Control or a Stock Disposition has occurred, the
Option shall be exercisable during a period of six years beginning on the first
anniversary of Stock Option Agreement as follows:
(1) beginning on its first anniversary, Mr. Prats may exercise up
to one-sixth of the total number of Option Shares;
(2) beginning on its second anniversary, Mr. Prats may exercise up
to one-third of the total number of Option Shares;
(3) beginning on its third anniversary Mr. Prats may exercise up
to one-half of the total number of Option Shares;
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(4) beginning on its fourth anniversary, Mr. Prats may exercise up
to two-thirds of the total number of Option Shares;
(5) beginning on its fifth anniversary, Mr. Prats may exercise up
to five-sixths of the total number of Option Shares; and
(6) beginning on its sixth anniversary, Mr. Prats may exercise the
total number of Option Shares.
The purchase price of the Class B Shares covered by the Option is $4.03
per share. The Stock Option Agreement contains certain anti-dilution adjustment
provisions for the number of Class B Shares subject to the Option.
The Option shall expire in the event that Mr. Prats employment with the
Company terminates for any reason other than death, disability or retirement (on
or after reaching age 65), except that Mr. Prats may exercise the Option with
respect to any Option Shares for which the Option is then exercisable for a
period of 30 days following such termination of employment.
The Option is not transferable by Mr. Prats (except to his estate
pursuant to the laws of descent and distribution).
Item 7. Materials to be Filed as Exhibits.
Copy of Stock Option Agreement (Exhibit 1).
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
the undersigned certify that the information set forth in this statement is
true, complete and correct.
DATED: May 31, 2001.
By: /s/ Ramon Prats
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Ramon Prats