Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. Effective on May 13, 2009, the Board of Directors of Doral Financial Corporation (the "Company") appointed Mr. Frank W. Baier to serve as a director of the Company. Mr. Baier previously served as a director of the Company from July 2007 to September 2008.
Mr. Baier has been Chief Financial Officer of Capital Access Network, Inc. since February 1, 2008. From September 2008 to October 5, 2008 he was a Special Advisor to the President of Washington Mutual Inc. From June 1, 2008 to September 2008 he was a Chief Financial Officer of Securities Industry and Financial Markets Association ("SIFMA"). Mr. Baier was the Chief Financial Officer of Independence Community Bank from 2001 to 2006.
Mr. Baier will serve as a member of the Audit and Risk Policy Committees of the Board of Directors.
There are no related party transactions between Mr. Baier and the Company. There were no arrangements or understandings between Mr. Baier and any other person pursuant to which he was appointed to his position, other than the right of Doral Holdings Delaware, LLC ("Doral Holdings"), which beneficially owns approximately 90% of the issued and outstanding shares of common stock of the Company, to designate all nominees to the Board of Directors pursuant to a shareholders agreement between the Company and Doral Holdings dated July 19, 2007. A copy of the shareholders agreement has been filed as an exhibit to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on July 26, 2007.
In addition, five of the limited partnerships that invested in the managing partner of Doral Holdings have the ability to exercise Doral Holdings' right to designate all nominees to the Board of Directors of the Company. In addition, pursuant to an agreement among the members of Doral Holdings, each of the Designating Members has the right to designate one director for nomination. D.E. Shaw & Co. L.P., as one of the Designating Members, designated Mr. Baier as a nominee to the Board of Directors of the Company.
Directors designated by any of the Designating Members or their affiliates, with certain exceptions, do not receive directors fees. In lieu of any director fees that would otherwise be payable to such directors, we have agreed to pay the Designating Members an annual fee of $125,000. In the case of Mr. Baier, we have agreed to pay directly to Mr. Baier an annual stipend of $100,000, and $25,000 to D.E. Shaw Laminar Portfolios, LLC, which designated Mr. Baier to the Board of Directors.