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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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POPULAR, INC.
(Exact name of registrant as specified in its charter)
PUERTO RICO 66-0416582
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
209 Munoz Rivera Avenue 00918
Hato Rey, Puerto Rico (Zip code)
(Address of principal executive offices)
BANCO POPULAR DE PUERTO RICO EMPLOYEES' STOCK PLAN (PUERTO RICO)
POPULAR SECURITIES, INC.-INSTITUTIONAL 1165(e) PLAN
POPULAR FINANCE, INC. RETIREMENT & SAVINGS PLAN
POPULAR LEASING & RENTAL, INC. RETIREMENT & SAVINGS PLAN
POPULAR SECURITIES, INC.-RETAIL 1165(e) PLAN
POPULAR MORTGAGE, INC. 1165(e) PLAN
(Full title of the plans)
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JORGE A. JUNQUERA
209 MUNOZ RIVERA AVENUE
HATO REY, PUERTO RICO 00918
(Name and address of agent for service)
(809) 765-9800
(Telephone number, including area code, of agent for service)
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Copies to:
DONALD J. TOUMEY
SULLIVAN & CROMWELL
125 BROAD STREET
NEW YORK, NEW YORK 10004
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<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
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Proposed Maximum Proposed Maximum
Title of each Class of Securities to be Amount to be Offering Price Per Aggregate Offering Amount of
Registered Registered(1)(2) Share(3) Price(3) Registration Fee
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $6 per share,
together with attached rights to purchase
Series A Participating Cumulative
Preferred Stock, no par value.............. 5,000,000 Shares $30.40625 $152,031,250 $42,265
==============================================================================================================================
<FN>
(1) The amount being registered also includes an indeterminate number of shares of Common Stock which may be issuable as a
result of stock splits, stock dividends and antidilution provisions and other terms, in accordance with Rule 416 under
the Securities Act.
(2) In addition, pursuant to Rule 416(c) under the Securities Act of 1933, as amended, this Registration Statement also
covers an indeterminate amount of interests to be offered and sold pursuant to the Banco Popular de Puerto Rico
Employees' Stock Plan (Puerto Rico), Popular Securities, Inc.-Institutional 1165(e) Plan, Popular Finance, Inc.
Retirement & Savings Plan, Popular Leasing & Rental, Inc. Retirement & Savings Plan, Popular Securities, Inc.-Retail
1165(e) Plan and Popular Mortgage, Inc. 1165(e) Plan.
(3) Estimated solely for the purpose of calculating the registration fee. Such estimate has been computed in accordance with
Rule 457(h) based upon the average of the high and low price of the Common Stock on the NASDAQ National Market System on
June 3, 1999, namely $30.40625.
</FN>
</TABLE>
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PART I
INFORMATION REQUIRED IN THE PROSPECTUS
As permitted by Rule 428 under the Securities Act of 1933, as amended
(the "Securities Act"), this Registration Statement omits the information
specified in Part I of Form S-8. The documents containing the information
specified in Part I will be delivered to the participants in the plans covered
by this Registration Statement as required by Rule 428(b). Such documents are
not being filed with the Securities and Exchange Commission (the "Commission")
as part of this Registration Statement or as prospectuses or prospectus
supplements pursuant to Rule 424 under the Securities Act.
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<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by Popular, Inc. (the
"Company"), Banco Popular de Puerto Rico Employees' Stock Plan (Puerto Rico),
Popular Securities, Inc.-Institutional 1165(e) Plan, Popular Finance, Inc.
Retirement & Savings Plan, Popular Leasing & Rental, Inc. Retirement & Savings
Plan, Popular Securities, Inc.-Retail 1165(e) Plan and Popular Mortgage, Inc.
1165(e) Plan are incorporated herein by reference:
(1) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1998;
(2) The Annual Reports on Form 11-K for the year ended December 31,
1997 for each of Banco Popular de Puerto Rico Employees' Stock Plan (Puerto
Rico), Popular Securities, Inc.-Institutional 1165(e) Plan (which was
entitled BP Capital Markets, Inc. 1165(e) Plan until January 28, 1999),
Popular Finance, Inc. Retirement & Savings Plan (which was entitled Popular
Consumer Services, Inc. Retirement & Savings Plan until January 28, 1999),
Popular Leasing & Rental, Inc. Retirement & Savings Plan, Popular
Securities, Inc.-Retail 1165(e) Plan and Popular Mortgage, Inc. 1165(e)
Plan (which was entitled Puerto Rico Home Mortgage 1165(e) Plan until
January 28, 1999);
(3) The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1999;
(4) The Company's Current Reports on Form 8-K, dated since December
31, 1998;
(5) The descriptions of the Company's Common Stock set forth in the
Company's Registration Statement on Form 8-A, filed August 18, 1988, and
any amendment or report filed for the purpose of updating any such
description; and
(6) The description of the Company's Rights Plan set forth in the
Company's Registration Statement on Form 8-A, filed August 28,1998, and any
amendment or report filed for the purpose of updating such description.
All documents filed by the Company, Banco Popular de Puerto Rico
Employees' Stock Plan (Puerto Rico), Popular Securities, Inc.-Institutional
1165(e) Plan, Popular Finance, Inc. Retirement & Savings Plan, Popular Leasing &
Rental, Inc. Retirement & Savings Plan, Popular Securities, Inc.-Retail 1165(e)
Plan and Popular Mortgage, Inc. 1165(e) Plan pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), subsequent to the date of this Registration Statement shall be deemed to
be incorporated by reference in this Registration Statement and to be a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of
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<PAGE>
this Registration Statement to the extent that a statement contained herein or
in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF CAPITAL STOCK
Not applicable. The Company's Common Stock is registered under Section
12 of the Exchange Act.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article ELEVENTH of the Restated Certificate of Incorporation of the
Corporation provides the following:
(1) The Corporation shall indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Corporation)
by reason of the fact that he is or was a director, officer, employee or
agent of the Corporation, or is or was serving at the written request of
the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorney's fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order, settlement, conviction,
or upon a plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the Corporation and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
(2) The Corporation shall indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the Corporation to procure a judgment
in its favor by reason of the fact that he is or was a director, officer,
employee or agent of the Corporation, or is or was serving at the written
request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorney's fees) actually and reasonably
incurred by him in
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connection with the defense or settlement of such action or suit if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation, except that no
indemnification shall be made in respect of any claim, issue or matter as
to which such person shall have been adjudged to be liable for negligence
or misconduct in the performance of his duty to the Corporation unless and
only to the extent that the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which such
court shall deem proper.
(3) To the extent that a director, officer, employee or agent of the
Corporation has been successful on the merits or otherwise in defense of
any action, suit or proceeding referred to in paragraph 1 or 2 of this
Article ELEVENTH, or in defense of any claim, issue or matter therein, he
shall be indemnified against expenses (including attorney's fees) actually
and reasonably incurred by him in connection therewith.
(4) Any indemnification under paragraph 1 or 2 of this Article
ELEVENTH (unless ordered by a court) shall be made by the Corporation only
as authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agent is proper in
the circumstances because he has met the applicable standard of conduct set
forth therein. Such determination shall be made (a) by the Board of
Directors by a majority vote of a quorum consisting of directors who were
not parties to such action, suit or proceeding, or (b) if such a quorum is
not obtainable, or, even if obtainable, a quorum of disinterested directors
so directs, by independent legal counsel in a written opinion, or (c) by
the stockholders.
(5) Expenses incurred in defending a civil or criminal action, suit or
proceeding may be paid by the Corporation in advance of the final
disposition of such action, suit or proceeding as authorized by the Board
of Directors in the specific case upon receipt of an undertaking by or on
behalf of the director, officer, employee or agent to repay such amount
unless it shall ultimately be determined that he is entitled to be
indemnified by the Corporation as authorized in this Article ELEVENTH.
(6) The indemnification provided by this Article ELEVENTH shall not be
deemed exclusive of any other rights to which those seeking indemnification
may be entitled under any statute, by-law, agreement, vote of stockholders
or disinterested directors or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office,
and shall continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors
and administrators of such a person.
(7) By action of its Board of Directors, notwithstanding any interest
of the directors in the action, the Corporation may purchase and maintain
insurance, in such amounts as the Board of Directors deems appropriate, on
behalf of any person who is or was a director, officer, employee or agent
of the Corporation, or is or was serving at the written
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<PAGE>
request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the
Corporation would have the power or would be required to indemnify him
against such liability under the provisions of this Article ELEVENTH or of
the General Corporation Law of the Commonwealth of Puerto Rico or of any
other State of the United States or foreign country as may be applicable.
Section 1202 of Title 14, Laws of Puerto Rico Annotated provides the
following:
Every corporation created under the provisions of this subtitle shall
have the power to --
* * * (10) indemnify any and all of its directors or officers or
former directors or officers or any person who may have served at its
request as a director or officer of another corporation in which it
owns shares of capital stock or of which it is a creditor against
expenses actually and necessarily incurred by them in connection with
the defense of any action, suit or proceeding in which they, or any of
them, are made parties, or a party, by reason of being or having been
directors or officers or a director or officer of the corporation, or
of such other corporation, except in relation to matters as to which
any such director or officer or former director or officer or person
shall be adjudged in such action, suit or proceeding to be liable for
negligence or misconduct in the performance of duty. Such
indemnification shall not be deemed exclusive of any other rights to
which those indemnified may be entitled, under any by-law, agreement,
vote of stockholders or otherwise.
In addition, the Company maintains a directors' and officers' liability
insurance policy.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
Exhibit
Number Description of Exhibits
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4.1 Restated Certificate of Incorporation of the Company, incorporated
by reference to Exhibit 4(a) to the registrant's Registration
Statement on Form S-3 (Nos. 333-26941, 333-26941-01 and
333-26941-02) filed with the Securities and Exchange Commission on
May 12, 1997.
II-4
<PAGE>
4.2 By-laws of the Company, as amended.
4.3 Specimen of Certificate of the registrant's Common Stock, par
value $6 per share, incorporated by reference to Exhibit 4.1 to
the Company's Annual Report on Form 10-K for the year ended
December 31, 1990.
4.4 (a) Banco Popular de Puerto Rico Employees' Stock Plan (Puerto
Rico);
(b) Master Defined Contribution Retirement Plan;
(c) Popular Securities, Inc.-Institutional 1165(e) Plan Adoption
Agreement;
(d) Popular Finance, Inc. Retirement & Savings Plan Adoption
Agreement;
(e) Popular Leasing & Rental, Inc. Retirement & Savings Plan
Adoption Agreement;
(f) Popular Securities, Inc.-Retail 1165(e) Plan Adoption
Agreement; and
(g) Popular Mortgage, Inc. 1165(e) Plan Adoption Agreement.
5.1 Opinion of Pietrantoni Mendez & Alvarez, regarding compliance with
ERISA.
23 Consents of Independent Accountants.
24 Powers of Attorney (included on pages 7 through 9).
ITEM 9. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933 (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement; and
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<PAGE>
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Securities and Exchange Commission by the registrant pursuant to section 13
or section 15(d) of the Exchange Act that are incorporated by reference in
the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Exchange Act (and each filing of an employee benefit plan's annual report
pursuant to section 15(d) of the Exchange Act) that is incorporated by reference
in the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
against the registrant in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
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<PAGE>
SIGNATURES
THE REGISTRANT. Pursuant to the requirements of the Securities Act of
1933, the Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of San Juan, Commonwealth of Puerto Rico, on this
8th day of June, 1999.
POPULAR, INC.
(Registrant)
By /s/ Jorge A. Junquera
----------------------------------
Name: Jorge A. Junquera
Title: Senior Executive Vice President
and Director
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT EACH PERSON WHOSE SIGNATURE
APPEARS BELOW CONSTITUTES AND APPOINTS RICHARD L. CARRION, DAVID H. CHAFEY, JR.,
JORGE A. JUNQUERA, ORLANDO BERGES, AMILCAR JORDAN AND ROBERTO R. HERENCIA, AND
EACH OF THEM INDIVIDUALLY, HIS TRUE AND LAWFUL ATTORNEYS-IN-FACT AND AGENTS,
WITH FULL POWER AND IN ANY AND ALL CAPACITIES, TO SIGN THIS REGISTRATION
STATEMENT AND ANY AND ALL AMENDMENTS (INCLUDING POST-EFFECTIVE AMENDMENTS) TO
THIS REGISTRATION STATEMENT, AND TO FILE SUCH REGISTRATION STATEMENT AND ALL
SUCH AMENDMENTS OR SUPPLEMENTS, WITH ALL EXHIBITS THERETO, AND OTHER DOCUMENTS
IN CONNECTION THEREWITH, WITH THE SECURITIES AND EXCHANGE COMMISSION, GRANTING
UNTO SAID ATTORNEYS-IN-FACT AND AGENTS, AND EACH OF THEM, FULL POWER AND
AUTHORITY TO DO AND PERFORM EACH AND EVERY ACT AND THING REQUISITE OR NECESSARY
TO BE DONE IN AND ABOUT THE PREMISES, AS FULLY TO ALL INTENTS AND PURPOSES AS HE
MIGHT OR COULD DO IN PERSON, THEREBY RATIFYING AND CONFIRMING ALL THAT SAID
ATTORNEYS-IN-FACT AND AGENTS OR ANY OF THEM, OR THEIR OR HIS SUBSTITUTES OR
SUBSTITUTE, MAY LAWFULLY DO OR CAUSE TO BE DONE BY VIRTUE THEREOF.
Signature Title Date
- --------- ----- ----
/s/ Richard L. Carrion Chairman of the Board, June 8, 1999
- ----------------------------- President and Chief Executive
Richard L. Carrion Officer
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Signature Title Date
- --------- ----- ----
/s/ Alfonso F. Ballester Director June 8, 1999
- -----------------------------
Alfonso F. Ballester
Director
- -----------------------------
Antonio Luis Ferre
/s/ Juan J. Bermudez Director June 8, 1999
- -----------------------------
Juan J. Bermudez
Director
- -----------------------------
Francisco J. Carreras
Director
- -----------------------------
Luis E. Dubon, Jr.
/s/ Hector R. Gonzalez Director June 8, 1999
- -----------------------------
Hector R. Gonzalez
/s/ Jorge A. Junquera Senior Executive Vice June 8, 1999
- ----------------------------- President and Director
Jorge A. Junquera (Principal Financial Officer)
Director
- -----------------------------
Manuel Morales, Jr.
/s/ Alberto M. Paracchini Director June 8, 1999
- -----------------------------
Alberto M. Paracchini
/s/ Francisco M. Rexach, Jr. Director June 8, 1999
- -----------------------------
Francisco M. Rexach, Jr.
Director
- -----------------------------
J. Adalberto Roig
/s/ Felix J. Serralles Nevares Director June 8, 1999
- -----------------------------
Felix J. Serralles Nevares
/s/ Julio E. Vizcarrondo Director June 8, 1999
- -----------------------------
Julio E. Vizcarrondo, Jr.
/s/ David H. Chafey, Jr. Senior Executive Vice June 8, 1999
- ----------------------------- President and Director
David H. Chafey, Jr.
/s/ Amilcar Jordan Senior Vice President June 8, 1999
- ----------------------------- (Principal Accounting Officer)
Amilcar Jordan
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<PAGE>
THE PLANS. Pursuant to the requirements of the Securities Act of 1933,
the persons who administer the employee benefit plans have duly caused this
registration statement to be signed on behalf of such plans by the undersigned,
thereunto duly authorized, in the City of San Juan, Commonwealth of Puerto Rico,
on this 8th day of June, 1999.
BANCO POPULAR DE PUERTO RICO
EMPLOYEES' STOCK PLAN (PUERTO RICO)
POPULAR SECURITIES, INC.-
INSTITUTIONAL 1165(e) PLAN
POPULAR FINANCE, INC. RETIREMENT &
SAVINGS PLAN
POPULAR LEASING & RENTAL, INC.
RETIREMENT & SAVINGS PLAN
POPULAR SECURITIES, INC.-RETAIL 1165(e)
PLAN
POPULAR MORTGAGE, INC. 1165(e) PLAN
By: /s/ Maria Isabel Burckhart
----------------------------------------------
Maria Isabel Burckhart
Member of the Administrative Committee
By: /s/ Jorge A. Junquera
----------------------------------------------
Jorge A. Junquera
Authorized Representative in the United States
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<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Exhibits
- ------ -----------------------
4.1 Restated Certificate of Incorporation of the Company, incorporated
by reference to Exhibit 4(a) to the registrant's Registration
Statement on Form S-3 (Nos. 333-26941, 333-26941-01 and
333-26941-02) filed with the Securities and Exchange Commission on
May 12, 1997.
4.2 By-laws of the Company.
4.3 Specimen of Certificate of the registrant's Common Stock, par
value $6 per share, incorporated by reference to Exhibit 4.1 to
the Company's Annual Report on Form 10-K for the year ended
December 31, 1990.
4.4 (a) Banco Popular de Puerto Rico Employees' Stock Plan (Puerto
Rico).
(b) Master Defined Contribution Retirement Plan;
(c) Popular Securities, Inc.-Institutional 1165(e) Plan Adoption
Agreement;
(d) Popular Finance, Inc. Retirement & Savings Plan Adoption
Agreement;
(e) Popular Leasing & Rental, Inc. Retirement & Savings Plan
Adoption Agreement;
(f) Popular Securities, Inc.-Retail 1165(e) Plan Adoption
Agreement; and
(g) Popular Mortgage, Inc. 1165(e) Plan Adoption Agreement.
5.1 Opinion of Pietrantoni Mendez & Alvarez, regarding compliance with
ERISA.
23 Consents of Independent Accountants.
24 Powers of Attorney (included on pages 7 through 9).
II-10
EXHIBIT 4.2
BY-LAWS
OF
POPULAR, INC.
ARTICLE 1: BOARD OF DIRECTORS
1.1 The business and affairs of the Corporation shall be conducted
under the authority of its Board of Directors. The directors shall be elected in
the manner set forth in the Certificate of Incorporation of the Corporation.
1.2 If for any reason or cause an election of directors is not held on
the Annual Meeting of Stockholders, or at any adjournment thereof, such election
may be held on any subsequent date at a special meeting of stockholders duly
called for such purpose.
1.3 Directors shall receive such reasonable compensation as may be
established from time to time by the Board of Directors by resolution approved
by an absolute majority thereof.
1.4 The Board may hold such regular meetings as may be established from
time to time by resolution approved by an absolute majority of the Board. Once
regular meetings are convened as established herein, notice thereof need not be
given. The Board may hold such extraordinary meetings as may be convened by the
Chairman of the Board, by the President or which may be required by at least
three (3) directors. Such regular or extraordinary meetings may be held at the
Corporation's principal office, at any other place or places within or without
Puerto Rico, or by such other means as permitted by law.
When required notices of meetings shall be mailed to each director,
addressed to him at his residence or usual place of business, not later than
three (3) days before the day on which the meeting is to be held, or shall be
sent to him at such place by telegraph, or be delivered personally or by
telephone, not later than the day before such day of meeting. Whenever notice of
any meeting of the Board of Directors is required to be given under any
provision of law, the Certificate of Incorporation or the By-Laws, a written
waiver thereof signed by the director entitled to notice, whether before, at, or
after the time of such meeting, shall be deemed equivalent to notice. Attendance
of a director at any meeting of the Board of Directors shall constitute a waiver
of notice of such meeting, except when the director attends such meeting for the
express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because such meeting is not lawfully called or
convened.
1.5 The quorum at any meeting of the Board of Directors shall consist
of a majority of the total number of directors. The vote of a majority of the
directors present at
<PAGE>
a meeting at which a quorum is present shall be the act of the Board unless the
Certificate of Incorporation or these By-Laws shall require a vote of a greater
number.
ARTICLE 2: MEETINGS OF STOCKHOLDERS
2.1 An Annual Meeting of Stockholders shall be held not later than the
fifth month following the end of the fiscal year of the Corporation at a place,
date and time fixed by the Board of Directors.
2.2 Special meetings of stockholders may be called by the Board of
Directors, the Chairman of the Board of Directors or the President of the
Corporation. The notice of such special meetings shall specify the purpose or
purposes for which the meeting is called.
2.3 All meeting of stockholders shall be convened by delivering a
notice to each holder or shares entitled to vote, not less than thirty (30) days
before the date of the meeting, either personally or by mail. If mailed, such
notice shall be deemed to be delivered when deposited in the United States mail,
addressed to the stockholder at his or her address as it appears on the Stock
Book of the Corporation, with postage thereon prepaid.
2.4 A majority of the outstanding shares of the Corporation entitled to
vote represented in person or by proxy, shall constitute a quorum at a meeting
of stockholders. If no quorum is present, the meeting shall be adjourned from
time to time without further notice until a date not less than eight (8) days
after the date for which the first meeting was called. Such adjourned meeting
shall be held and shall be lawfully organized whatever the number of shares
entitled to vote may be represented therein, and any business may be transacted
which might have been transacted at the meeting as originally noticed.
2.5 Unless otherwise provided in the Certificate of Incorporation, each
stockholder entitled to vote at any meeting of stockholders shall be entitled to
one vote for each share of stock held by such stockholder which has voting power
upon the matter in question. Each stockholder entitled to vote at a meeting of
stockholders or to express consent or dissent to corporate action in writing
without a meeting may authorize another person or persons to act for such
stockholder by proxy, but no such proxy shall be voted or acted upon after three
years from its date, unless the proxy provides for a longer period. Without
limiting the manner in which a stockholder may authorize another person or
persons to act for him as proxy, the following shall constitute valid means by
which a stockholder may grant such authority:
2.5.1 A stockholder may execute a writing authorizing another
person or persons to act for him as proxy. Execution may be accomplished by
the stockholder or his authorized officer, director, employee or agent
signing such writing or causing
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<PAGE>
his or her signature to be affixed to such writing by any reasonable means
including, but not limited to, by facsimile signature.
2.5.2 A stockholder may authorize another person or persons to
act for him as proxy by transmitting or authorizing the transmission of a
telegram, cablegram, Internet or other means of electronic transmission to
the person who will be the holder of the proxy or to a proxy solicitation
firm, proxy support service organization or like agent duly authorized by
the person who will be the holder of the proxy to receive such
transmission, provided that any such telegram, cablegram, Internet or other
means of electronic transmission must either set forth or be submitted with
information from which it can be determined that the telegram, cablegram,
Internet or other electronic transmission was authorized by the
stockholder. If it is determined that such telegrams, cablegrams, Internet
or other electronic transmissions are valid, the inspectors or, if there
are no inspectors, such other persons making that determination shall
specify the information upon which they relied.
Directors shall be elected by a majority of the votes cast by
Stockholders present in person or represented by proxy at the meeting and
entitled to vote on the election of directors. In all other matters, unless
otherwise provided by law or by the Certificate of Incorporation or these
By-Laws, the affirmative vote of the holders of a majority of the shares present
in person or represented by proxy at the meeting and entitled to vote on the
subject matter shall be the act of the stockholders.
Shares with respect to which a broker, financial institution or
other nominee has physically indicated on the proxy that it does not have
discretionary authority to vote on a particular matter ("broker non-votes"),
will not be considered as present and entitled to vote with respect to that
matter but will be considered as present and entitled to vote for purposes of
determining the presence of a quorum as determined in Section 2.5 of these
By-Laws.
2.6 The Chairman of the Board of Directors shall preside at any meeting
of stockholders and shall conduct such proceedings as are customary in this kind
of meeting, procuring at all times order and impartiality in the debates.
2.7 During the Annual Meeting of Stockholders, the financial statements
of the Corporation shall be presented to the stockholders for their approval,
and the directors shall provide such explanations as may be reasonably requested
by the stockholders regarding such statements as well as the operations of the
Corporation during the year.
-3-
<PAGE>
ARTICLE 3: OFFICERS AND EMPLOYEES
3.1 The Board shall appoint one of its members to be the Chairman of
the Board, to serve at the pleasure of the Board. He shall preside at all
meetings of the Board and of the stockholders. He shall also have and may
exercise such executive powers and duties as pertain to the office of Chairman
of the Board, or as from time to time may be conferred upon, or assigned to, him
by the Board.
3.2 The Board shall appoint one of its members to be the President of
the Corporation, to serve at the pleasure of the Board. In the absence of the
Chairman, the President shall preside at any meetings of the Board and of the
stockholders. He shall also have and may exercise such further powers and duties
as pertain to the office of President of the Corporation, or as from time to
time may be conferred upon, or assigned to, him by the Board.
3.3 The Board of Directors may appoint from among its members one or
more Vice Chairmen to serve at the pleasure of the Board. Each Vice Chairman
shall have such powers and duties as may be assigned to him by the Board.
3.4 The Board shall appoint a Secretary. The Secretary shall keep the
minutes of the meetings of the Board and of the stockholders. He or one of the
Assistant Secretaries shall see that proper notices are given of all meetings of
which notice is required. The Secretary shall have custody of the seal and when
necessary shall attest to the same when affixed to written instruments properly
executed on behalf of the Corporation; and generally, shall perform such other
duties as may be prescribed from time to time by the Board, the Chairman or the
President.
3.5 The Board shall appoint one or more Assistant Secretaries. The
Assistant Secretaries shall perform such duties as shall be prescribed by the
Board, The Chairman, the President or the Secretary.
3.6 The Board may appoint such other officers (who need not be
directors) and attorneys-in-fact as from time to time may appear to the Board to
be required or desirable to transact the business of the Corporation. Such
officers shall respectively exercise such powers and perform such duties as
pertain to their several offices, or as may be conferred upon, or assigned to,
them by the Board or the President.
ARTICLE 4: CERTIFICATES AND TRANSFERS OF STOCK
4.1 Certificates for Shares. Subject to the second paragraph of this
Section 4.1, every holder of shares of stock of the Corporation shall be
entitled to have a certificate
-4-
<PAGE>
representing all shares to which he is entitled. The certificates shall be
signed by the President or any Vice President and by the Treasurer or an
Assistant Treasurer, or by the Secretary or an Assistant Secretary. Such
signatures may be facsimiles if the certificate is manually signed on behalf of
a transfer agent or registrar other than the Corporation itself or an employee
of the Corporation. In case any officer who signed, or whose facsimile signature
has been placed upon, such certificate shall have ceased to be such officer
before such certificate is issued, it may be issued by the Corporation with the
same effect as if he were such officer at the date of its issuance. The
certificates representing the stock of the Corporation shall be in such form as
shall be approved by the Board of Directors.
4.2 Transfers of stock shall be made on the books of the Corporation
only by the person named in the certificate in the case of uncertificated
securities, or by attorney lawfully constituted in writing, and, in the case of
certificated securities, upon surrender and cancellation of a certificate or
certificates for a like number of shares of the same class of stock, with duly
executed assignment and power of transfer endorsed thereon or attached thereto,
and with such proof of the authenticity of the signatures as the Corporation or
its agents may reasonably require. No transfer of stock other than on the
records of the Corporation shall affect the right of the Corporation to pay any
dividend upon the stock to the holder of record thereof or to treat the holder
of record as the holder in fact thereof for all purposes, and no transfer shall
be valid, except between the parties thereto, until such transfers shall have
been made upon the records of the Corporation.
4.3 With respect to voting rights, the shares of stock shall be
considered indivisible. In the case of shares belonging to several persons
collectively, the co-owners shall appoint a representative to act on behalf of
the group.
4.4 If the loss, theft or destruction of a Certificate is reasonably
established before the Board of Directors, the latter may authorize the issuance
of a duplicate, provided the concerned stockholder presents before the Board of
Directors a sworn statement in which the stockholder describes circumstances
surrounding the loss, theft or destruction of said Certificate, and if the Board
of Directors so require give the Corporation a bond of indemnity, in form and
with one or more sureties satisfactory to the Board, in such sum as it may
direct as indemnity against any claim which may be made against the Corporation
with respect to the Certificate alleged to have been lost, stolen or destroyed.
The Board of Directors of the Corporation may provide by
resolution or resolutions that some or all of any or all classes or series of
its stock shall be uncertificated securities. Any such resolution shall not
apply to shares represented by a certificate until such certificate is
surrendered to the Corporation. Notwithstanding the adoption of such a
resolution by the Board of Directors, every holder of stock represented by
uncertificated shares, shall be entitled upon request, to a certificate in the
form set forth in the first paragraph of this Section 4.1.
-5-
<PAGE>
4.5 The Board of Directors may, in its discretion, appoint one or more
banks or trust companies in any such city or cities as the Board of Directors
may deem advisable, including any banking subsidiaries of the Corporation, from
time to time, to act as Transfer Agents and Registrars of the stock or other
securities of the Corporation; and upon such appointments being made, no stock
certificate shall be valid until countersigned by one of such Agents and
registered by one of such Registrars.
4.6 The Board of Directors may close the Stock Book in their discretion
for a period not exceeding fifty (50) days preceding any meeting of the
Stockholders, or the day appointed for the payment of dividends.
ARTICLE 5: WAIVER OF NOTICE
5.1 Any stockholder, director or officer may waive, in writing, any
notice required to be given under these By-Laws.
ARTICLE 6: FISCAL YEAR
6.1 The fiscal year of the Corporation shall commence on the first day
of January and shall end on the thirty-first day of December of each year.
ARTICLE 7: PROFITS AND DIVIDENDS
7.1 Dividends upon the capital stock of the Corporation, subject to the
provisions of the Certificate of Incorporation, if any, may be declared by the
Board of Directors at any regular or special meeting, pursuant to law. Dividends
may be paid in cash, in property, or in shares of the capital stock.
7.2 Before payment of any dividend or making any distribution of
profits, there may be set aside out of any funds of the Corporation available
for dividends as the Board of Directors from time to time, in their absolute
discretion, think proper as a reserve or reserves to meet contingencies, or for
equalizing dividends, or for repairing or maintaining any property of the
Corporation, or for such other purpose as the Board of Directors shall think
conducive to the interest of the Corporation, and, the Board of Directors may
modify or abolish any such reserve in the manner in which it was created.
-6-
<PAGE>
ARTICLE 8: SEAL
8.1 The corporate seal shall have inscribed thereon the name of the
Corporation and the words "Commonwealth of Puerto Rico". The seal may be used by
causing it or a facsimile thereof to be impressed or affixed or reproduced or
otherwise.
-7-
EXHIBIT 4.4.(a)
BANCO POPULAR DE PUERTO RICO
EMPLOYEES' STOCK PLAN (PUERTO RICO)
<PAGE>
BANCO POPULAR DE PUERTO RICO
EMPLOYEES' STOCK PLAN (PUERTO RICO)
Table of Contents
Page
Article I DEFINITIONS..................................................I-1
Article II PARTICIPATION...............................................II-1
Article III EMPLOYEE CONTRIBUTIONS.....................................III-1
Article IV EMPLOYER CONTRIBUTIONS......................................IV-1
Article V LIMITATIONS ON CONTRIBUTIONS.................................V-1
Article VI INVESTMENT OF CONTRIBUTIONS AND VALUATIONS..................VI-1
Article VII DISTRIBUTIONS..............................................VII-1
Article VIII PLAN ADMINISTRATION.......................................VIII-1
Article IX CLAIMS PROCEDURE............................................IX-1
Article X AMENDMENT OR TERMINATION OF THE PLAN OR
DISCONTINUANCE OF CONTRIBUTIONS..............................X-1
Article XI MISCELLANEOUS PROVISIONS....................................XI-1
<PAGE>
BANCO POPULAR DE PUERTO RICO
----------------------------
EMPLOYEES' STOCK PLAN (PUERTO RICO)
-----------------------------------
Banco Popular de Puerto Rico (the "Employer") adopted the Banco Popular de
Puerto Rico Employees' Stock Plan (Puerto Rico), hereinafter set forth,
effective as of April 1, 1995. The purpose of the Plan is to provide retirement
benefits to eligible Employees and their beneficiaries all as set forth herein.
The Plan established hereunder is intended to qualify as a profit sharing plan
which meets the requirements for qualification and tax-exemption under Sections
165 (a) and 165(e) of the Puerto Rico Income Tax Act, as now in effect or
hereafter amended, or any other applicable provisions of law including, without
limitation, the Employee Retirement Income Security Act of 1974, as now in
effect or hereafter amended.
<PAGE>
Article 1
DEFINITIONS
-----------
Where the following words and phrases appear in the Plan, they shall
have the respective meanings as set forth below, unless the context in which
they are used clearly indicates a different meaning.
1.1 Account
-------
The Account established and maintained on behalf of a Participant
including, as applicable, a Participant's "Elective Deferral Contribution
Account", "Employer Contribution Account" and "Rollover Account".
1.2 Act
---
The Puerto Rico Income Tax Act, as now in effect or as hereafter
amended. All citations to Sections of the Act are to such sections as they may
from time to time be amended or renumbered.
1.3 Administrative Committee
------------------------
The persons appointed by the Employer to administer the Plan in
accordance with the provisions of Article VIII. The Administrative Committee
shall serve as the Plan Administrator.
1.4 Anniversary Date
----------------
The Effective Date and each December 31 thereafter.
1.5 BanPonce Corporation
--------------------
BanPonce Corporation, a Puerto Rico corporation.
I-1
<PAGE>
1.6 Beneficiary
-----------
The person or persons designated to receive benefits payable under the
Plan in the event of a Participant's death. Such designation may be changed at
any time by the Participant. A Participant may also name one or more contingent
Beneficiaries to receive any benefits payable in the event of his death with no
surviving primary Beneficiary. In the absence of any designation, or if no
designated person is living when a benefit is payable, Beneficiary shall mean
the following person or persons, in the following order:
(1) The Participant's spouse,
(2) The Participant's issue in equal shares per stirpes,
(3) The Participant's mother,
(4) The Participant's father,
(5) The Participant's sisters and brothers in equal shares,
(6) The Participant's estate.
Notwithstanding the preceding, the election by a married Participant of
a Beneficiary other than his spouse shall not be deemed to be effective, and the
Participant's spouse shall automatically be deemed to be the Participant's sole
Beneficiary, unless the Participant's spouse agrees to such non-spousal
designation in writing and such spousal consent is witnessed by a member of the
Administrative Committee or a notary public.
1.7 Board of Governors
------------------
The Board of Governors of the Federal Reserve System.
1.8 Compensation
------------
The basic salary or wages paid to a person while he is an Employee of the
Employer and a Participant of the Plan, including the amount of Elective
Deferral Contributions made on the Participant's behalf for such Plan Year, but
excluding overtime pay, bonuses, severance pay, incentive or profit sharing
distributions, payments for life insurance or employee benefit plans, and other
forms of special compensation.
I-2
<PAGE>
1.9 Counterpart Plan
----------------
The Banco Popular de Puerto Rico Employees' Stock Plan (Puerto Rico)
adopted contemporaneously herewith.
1.10 Effective Date
--------------
April 1, 1995.
1.11 Elective Deferral Contribution
------------------------------
The Election by a Participant to have part of the amount that otherwise
would have been paid to him as Compensation deferred and contributed to his
Account in accordance with Section 3.01.
1.12 Elective Deferral Contribution Account
--------------------------------------
That portion of a Participant's Account under the Plan established for
a Participant to which Elective Deferral Contributions are made pursuant to
Section 3.01.
1.13 Elective Deferral Agreement
---------------------------
The agreement entered into by the Participant and the Employer whereby
the Employer defers a portion of such Participant's Compensation and contributes
an amount equal to such deferred portion of his Compensation to his Elective
Deferral Contribution Account.
1.14 Employee
--------
Any person who is employed by the Employer on a monthly salaried basis,
or who is on an authorized leave of absence in accordance with Subsection
1.16(c) and who was employed on a monthly salaried basis immediately preceding
such leave. Any person who is represented by a collective bargaining agent shall
not be considered an Employee for purposes of the Plan.
I-3
<PAGE>
1.15 Employer
--------
Banco Popular de Puerto Rico, or any Affiliated Company of BanPonce
Corporation which has expressly adopted the Plan in accordance with adoption
procedures established by BanPonce Corporation, in its sole discretion.
1.16 Employer Contribution Account
-----------------------------
That portion of a Participant's Account under the Plan established for
a Participant to which Employer Basic Contributions or Employer Matching
Contributions are made pursuant to Sections 4.01 and 4.03, respectively.
1.17 Employment Commencement Date
----------------------------
For all purposes of the Plan, the date on which a person employed by
the Employer first performs an Hour of Service.
1.18 Highly Compensated Employee
---------------------------
An employee who during the relevant period is a highly compensated
employee as defined in Act Section 165(e).
1.19 Hour of Service
---------------
(1) Each hour for which a person is directly or indirectly
compensated by the Employer or an Affiliated Company for the
performance of duties, including each such hour during which a
person was represented by a collective bargaining agent.
(2) Each hour for which a person is directly or indirectly
compensated by the Employer or an Affiliated Company on account
of a period of time during which no duties are performed or for
which back pay has been received by the person (irrespective of
whether mitigating damages have been awarded or agreed to by the
Employer or the Affiliated Company) due to:
I-4
<PAGE>
(1) vacation or holiday,
(2) illness or incapacity,
(3) layoff,
(4) jury duty,
(5) military duty,
(6) leave of absence,
provided that no more than 501 such hours shall be recognized on
account of a single continuous period during which no duties are
performed and further provided that:
(i) such payment is not made or due under a plan maintained
solely for purposes of complying with applicable workers'
compensation, unemployment compensation, or disability insurance
laws, and
(ii) such payment does not solely represent reimbursement for
medical or medically-related expenses, and further provided that
hours shall not be recognized with respect to periods during
which payments are received from the Banco Popular de Puerto Rico
Long Term Disability Plan or this Plan.
(3) Each hour for which a person would normally be scheduled to work
for the Employer or an Affiliated Company during an authorized
leave of absence, but only if he returns to work within the time
fixed by the Employer or Affiliated Company. Such leaves of
absence shall be granted under rules uniformly applied to all
persons.
With respect to Subsections (a) and (c) above, hours shall be recognized when
the duties are performed, or would normally have been performed. With respect to
Subsection (b) above, hours shall be recognized when payment is made or becomes
due, or in the case of back pay, in the period to which the award or payment
pertains. The provisions of this Section 1.15 shall be applied in accordance
with the provisions of Federal Regulations Sections 2530.220b-2(b) and (c) as
promulgated by the United States Department of Labor.
I-5
<PAGE>
1.20 Investment Fund
---------------
The investment fund established for the investment of Plan assets
pursuant to Section 6.02.
1.21 Maternity or Paternity Leave
----------------------------
An Employee's absence from work for the Employer (a) by reason of the
pregnancy of such Employee; (b) by reason of the birth of a child of such
Employee; (c) by reason of the placement of a child with the Employee in
connection with the adoption of such child by such Employee; or (d) for purposes
of caring for a child of such Employee immediately following the birth of the
child or the placement of the child with such Employee.
1.22 New York Fed
------------
The Federal Reserve Bank of New York.
1.23 Normal Retirement Date
----------------------
The date on which a Participant attains age 65.
1.24 Participant
-----------
An Employee eligible to participate in the Plan who has satisfied the
requirements of Section 2.01 (an Active Participant), or a former Employee
receiving or eligible to receive a benefit (an Inactive Participant).
1.25 Period of Severance
-------------------
The period, measured in full years and months (as defined in Section
1.32), between a Participant's Severance from Service Date and a subsequent
Reemployment Commencement Date.
Leaves of absence formally approved by the Employer shall not
constitute a Period of Severance but shall be considered as Years of Service in
determining service for vesting
I-6
<PAGE>
and eligibility provided the Participant returns to employment of the Employer
immediately following such leave of absence.
1.26 Plan
----
The retirement plan set forth herein and as amended hereafter, which is
known as the:
"Banco Popular de Puerto Rico Employees' Stock Plan".
1.27 Plan Year
---------
The period from the Effective Date to the end of the calendar year
containing the Effective Date shall be a short Plan Year. Thereafter, the Plan
Year shall be the calendar year.
1.28 Reemployment Commencement Date
------------------------------
The date on which a person formerly employed by the Employer first
performs an Hour of Service after a Period of Severance.
1.29 Retirement
----------
The date on which a Participant incurs a Severance from Service Date
after attaining his (i) Normal Retirement Date or (ii) his Early Retirement Date
as defined under the Banco Popular de Puerto Rico Retirement Plan.
1.30 Severance from Service Date
---------------------------
The later of the following:
(1) The date of a person's resignation from the employ of the
Employer, discharge, retirement, or death.
(2) The day following a period of one full year during which a person
previously employed by the Employer does not complete an Hour of
Service for any reason other than his resignation, discharge,
retirement, or death. These
I-7
<PAGE>
reasons shall include, but shall not be limited to, vacation, holiday,
sickness, disability, leave of absence, or layoff.
For all purposes of the Plan, a person's employment with the Employer or an
Affiliated Company shall be deemed to have terminated as of a Severance from
Service Date.
1.31 Total and Permanent Disability
------------------------------
A physical condition of a Participant which results in benefit payments
under the Banco Popular de Puerto Rico Long Term Disability Plan.
1.32 Trust Agreement
---------------
The legally-binding agreement between the Employer and the Trustee. Any
term defined in the Trust Agreement shall have the same meaning as therein
ascribed when used herein, unless the context clearly implies a different
meaning.
1.33 Trustee
-------
The trustee named in the Trust Agreement, or its successor, if any.
1.34 Trust Fund
----------
The fund created by the Employer to receive Plan contributions,
together with earnings thereon.
1.35 Valuation Date
--------------
The last day of each calendar month during the Plan Year.
1.36 Years of Service
----------------
The period measured in full years and months (as defined below)
beginning on a person's Employment Commencement Date and ending on his last
Severance from Service Date, but excluding the following:
I-8
<PAGE>
(1) any intervening Period of Severance provided that the person's
Reemployment Commencement Date followed a period of at least one
full year during which he completed no Hours of Service.
(2) any Years of Service preceding a Period of Severance of at least
five full years provided:
(1) the person was not entitled to any vested benefit
attributable to Employer Basic or Employer Matching
Contributions at the time of such Severance, and
(2) the length of the Period of Severance exceeded his Years of
Service determined as of the Severance from Service Date,
and
(3) the Participant had not incurred a Total and Permanent
Disability, which disability continued throughout the Period
of Severance.
In the event of an Employee's absence from the employ of the Employer
for a period:
(i) that commences on or after the Effective Date;
(ii) for which the Employee is not paid or entitled to
payment by the Employer;
(iii) that constitutes Maternity or Paternity Leave; and
(iv) that exceeds one year;
then, solely for purposes of determining the length of a Period of Severance for
purposes of this Section 1.36, the period of such absence commencing on the date
of the commencement of such absence and ending on the second anniversary of the
commencement of such absence (or, if earlier, on the last day of such absence)
shall not be considered a Period of Severance.
Notwithstanding any provision in the Plan to the contrary, the
preceding paragraph shall not apply unless the Employee furnishes to the
Administrative Committee such information as may reasonably be required in order
to establish (i) that the Employee's absence is one described in Section 1.19
and (ii) the number of days during such absence.
I-9
<PAGE>
For all purposes of this Section 1.36, a period beginning on any given
day of a month and ending on the day preceding the corresponding day of the
following month shall constitute a full month. Twelve such full months shall
constitute a full year.
In addition, while a Participant is on leave for military service, his
Years of Service will be frozen, and such Participant shall be classified as
terminated. Such Participant will receive credit for purposes of determining his
Years of Service for his actual period of military service if (i) he returns to
work for the Employer within 90 days of his discharge from military service and
his period of military absence involves no voluntary reenlistment, or (ii) he
dies in the course of his military service which involves no voluntary
reenlistment.
I-10
<PAGE>
Article 2
PARTICIPATION
-------------
2.1 Requirements for Participation
------------------------------
(1) Subject to the provisions of subsections (b), and (c) below, each
Employee as of the Effective Date and each person who becomes an
Employee subsequent to that date who performs services for the
Employer primarily within the Commonwealth of Puerto Rico, shall
become a Participant as of the first day of the month coincident
with or next following the completion of one Year of Service with
the Employer.
(2) If an Inactive or former Participant again becomes an Employee
who performs services for the Employer primarily within the
Commonwealth of Puerto Rico, he shall immediately be eligible to
participate in the Plan.
An Employee who is eligible to participate in the Plan in accordance with (a)
above shall complete and file the appropriate forms with the Administrative
Committee. Such forms shall include, as applicable, an Elective Deferral
Agreement, a payroll deduction authorization, a Beneficiary designation and an
agreement to be bound by all the terms and conditions of the Plan.
2.2 Cessation of Participation
--------------------------
An Employee's participation in the Plan shall cease upon the complete
distribution of his Account under the Plan.
In the event a Participant is no longer a member of an eligible class
of Employees and becomes ineligible to participate but has not incurred a Period
of Severance, such Employee will participate immediately upon returning to an
eligible class of Employees.
II-1
<PAGE>
In the event an Employee who is not a member of an eligible class of
Employees becomes a member of an eligible class, such Employee will participate
immediately if such Employee has satisfied the service requirements and would
have otherwise previously become a Participant.
2.3 Establishment of Accounts
-------------------------
(1) The Administrative Committee shall establish and maintain or
cause to be established and maintained in respect of each
Participant, an Account showing his interest under the Plan and
in the Trust Fund with respect to Elective Deferral
Contributions, Employer Contributions, if any credited to his
Account, and all other relevant data pertaining thereto. Each
Participant shall be furnished with a written statement of his
Account and the value of each such separate interest not less
frequently than annually and upon any distribution to him. In
maintaining the Accounts under the Plan or causing them to be
maintained, the Administrative Committee may conclusively rely on
the valuations of the Trust Fund in accordance with the Plan and
the terms of the Trust.
(2) The establishment and maintenance of, or allocations and credits
to, the Account of any Participant shall not vest in any
Participant any right, title or interest in and to any Plan
assets or benefits except at the time or times and upon the terms
and conditions and to the extent expressly set forth in the Plan
and in accordance with the terms of the Trust.
II-2
<PAGE>
Article 3
EMPLOYEE CONTRIBUTIONS
----------------------
3.1 Participant's Elective Deferral Contribution
--------------------------------------------
(1) On or after the Effective Date, each Participant may, pursuant to
this Section 3.01 and the overall limitations of Article V, elect
to defer between 0% to 10% of his Compensation each year. Such
deferrals may be made in percent of pay increments or as a fixed
dollar amount. However, no Participant shall be permitted to have
Elective Deferral Contributions made under this Plan, or any
other qualified plan maintained by the Employer, during any
taxable year, in excess of the dollar limitation contained in
Section 165(e)(7) of the Act in effect at the beginning of such
taxable year. Such election shall generally be made before the
Plan Year for which the election is to be effective, but in no
event later than the time permitted under applicable rulings and
regulations. Such election shall be made in writing pursuant to
an Elective Deferral Agreement entered into with the Employer.
The Administrative Committee may reduce (but not increase) the
amount to be deferred by a Participant(s) in order to satisfy the
requirements for cash and deferred profit sharing plans as set
forth in Section 165(e) of the Act and rulings and regulations
thereunder, on a uniform and non-discriminatory basis.
(2) A Participant's Elective Deferral Contribution Account shall at
all times, and in all events, be fully vested and not subject to
forfeiture for any reason whatsoever.
3.2 Changes to Elective Deferral Contributions
------------------------------------------
Subject to Article V, in accordance with procedures established by the
Administrative Committee, a Participant may increase or decrease his Elective
Deferral Contribution rate
III-1
<PAGE>
each April 1 or October 1 during the applicable Plan Year. In addition, a
Participant may suspend such contributions as of any payroll period during the
Plan Year.
III-2
<PAGE>
3.3 Payment of Employee Contributions
---------------------------------
All Elective Deferral Contributions made by or on behalf of a
Participant shall be delivered by the Employer to the Trustee as soon as
practicable, after the close of each calendar month, to be commingled, managed,
invested and reinvested with the other assets of the Plan. Such contributions
shall be credited to the Participant's Account in accordance with Section 2.03.
3.4 Participant's Rollover Account
------------------------------
A Participant may elect to transfer a Rollover Contribution to this
Plan, which amount shall be credited to the Participant's Rollover Account. At
Normal Retirement Date, or such other date when the Participant or his
Beneficiary are entitled to receive benefits from the Plan, the Participant's
Rollover Contribution Account will be used to provide additional benefits to the
Participant and will be distributed in accordance with Article VII. A
Participant's Rollover Account shall at all times and in all events, be fully
vested and not subject to forfeiture for any reason.
For all purposes of this Plan, the term Rollover Contribution shall
mean:
(a) An amount transferred to this Plan directly from another
qualified plan to the extent that such amount would otherwise be
taxable under the Act if received directly by the Participant.
(b) A lump sum distribution received by a Participant from another
qualified plan which is eligible for tax free rollover treatment
under the Act and which is transferred by the Participant to this
Plan within sixty days following his receipt thereof.
Prior to accepting any Rollover Contributions, the Plan Administrator
may require the Participant to establish that amounts to be transferred to this
Plan meet the requirements of this Section 3.04 and may also require that the
Participant provide an opinion of counsel satisfactory to the Employer that the
amounts to be transferred meet the requirements of this
III-3
<PAGE>
Section 3.04 and will not result in any adverse tax consequences for the
Employer or jeopardize the tax exempt status of the Plan.
Notwithstanding the preceding, if the Plan accepts a Rollover Contribution and
it is later determined that such amount does not in fact satisfy the above
requirements, such amounts shall be treated as after-tax contributions. Such
amounts, including investment earnings thereon, shall then be immediately
distributed to the Participant.
3.5 Employment Transfers
--------------------
(1) A participant in this Plan who transfers to perform services for
the Employer primarily outside of the Commonwealth of Puerto
Rico, shall cease to be a Participant in this Plan and shall
immediately be a participant in the Banco Popular de Puerto Rico
Employees' Stock Plan (the "Stock Plan") as of the effective date
of such transfer. His Account under this Plan shall be
transferred to the Stock Plan as soon as practicable after such
transfer.
(2) A Participant in the Stock Plan who transfers to perform services
for the Employer primarily within the Commonwealth of Puerto
Rico, shall cease to be a Participant in the Stock Plan and shall
immediately become a Participant in this Plan as of the effective
date of such transfer. His account balance under the Stock Plan
shall be transferred to this Plan as soon as practicable after
such transfer.
III-4
<PAGE>
Article 4
EMPLOYER CONTRIBUTIONS
----------------------
4.1 Employer Basic Contributions
----------------------------
The Employer may contribute to the Plan from the profits of the
Employer for the Plan Year, as may be determined by the Employer in its sole
discretion, a Basic Contribution.
4.2 Allocation of Employer Basic Contributions
------------------------------------------
Basic Contributions made by or on behalf of an Employer for the Plan
Year shall be allocated to the Accounts of those Participants (i) who are
Employees on the last day of the Plan Year or on Maternity or Paternity Leave as
of the last day of the Plan Year or (ii) who retire on or after their Retirement
date, die or incur a Total and Permanent Disability during such Plan Year, in
the ratio which the Compensation of each such Participant for such Plan Year
bears to the total Compensation of all such Participants for such Plan Year.
4.3 Employer Matching Contributions
-------------------------------
The Employer shall contribute to the Plan on behalf of each Participant
employed by the Employer, as a Matching Contribution, an amount equal to 50% of
each Participant's Elective Deferral Contributions up to a maximum of 2% of such
Participant's Compensation for the Plan Year. In no event shall such Matching
Contribution exceed 1% of such Participants Compensation for the Plan Year.
4.4 Payment of Employer Contributions
---------------------------------
(1) The Employer shall make payment of its Basic Contributions
directly to the Trustee with respect to any Plan Year on or
before the last date prescribed by law for the filing of its
federal income tax return (including any extension of time for
such filing) for the fiscal year which ends within or
concurrently with the Plan Year. In no event shall such Matching
Contribution exceed 1% of such Participants Compensation for the
Plan Year.
IV-1
<PAGE>
(2) The Employer shall make payment of its Matching Contribution for
each payroll period directly to the Trustee as soon as
practicable after the close of each calendar month in which such
payroll period ends.
4.5 Refunds of Employer Contributions
---------------------------------
Once a contribution is made to the Plan by the Employer, it may not be
refunded to the Employer unless the contribution:
(1) Was made in error as a result of a mistake in fact;
(2) Was made conditional upon receipt of favorable ruling from the
Puerto Rico Internal Revenue Service that the Plan would qualify
under the Act and such ruling were not received; or
(3) Was made conditional upon the contribution being allowed as a
deduction for Puerto Rico income tax purposes and such deduction
was disallowed.
A permissible refund under (a) must be made within one year from the
date the contribution was made to the Plan, and under (b) and (c) must be made
within one year from the date of disallowance of tax qualification or tax
deduction.
IV-2
<PAGE>
Article 5
LIMITATIONS ON CONTRIBUTIONS
----------------------------
5.1 Maximum Employer Contributions
------------------------------
In no event shall contributions made by an Employer in any Plan Year,
including for this purpose Elective Deferral Contributions, exceed the amount
deductible by the Employer for such year for federal income tax purposes.
5.2 Maximum Employee Elective Deferral Contributions
------------------------------------------------
Subject to Plan Section 5.03, Elective Deferral Contributions made on
behalf of a Participant in any calendar year shall not exceed the lesser of
$7,000 or 10% of total compensation or such other limit as may by provided under
Act Section 165(e)(7). In the event that the aggregate amount of Elective
Deferral Contributions made on behalf of a Participant exceeds the limitation in
the previous sentence, the amount of such excess deferrals, increased by any
income and decreased by any losses attributable thereto, shall be refunded to
the Participant no later than the end of the Plan year following the Plan Year
for which the Elective Deferral Contributions were made.
5.3 Actual Deferral Percentage Tests
--------------------------------
(1) Notwithstanding any other provision of the Plan to the contrary,
the Actual Deferral Percentage for the Plan Year for Highly
Compensated Employees who are eligible to participate in the Plan
pursuant to Section 2.01 shall not exceed the greater of the
following Actual Deferral Percentage tests:
(1) The Actual Deferral Percentage for such Plan Year of
non-Highly Compensated Employees who are eligible to
participate in the Plan pursuant to Plan Section 2.01
multiplied by 1.25; or
(2) The Actual Deferral Percentage for the Plan Year of
non-Highly Compensated Employees who are eligible to
participate in the Plan pursuant to Section 2.01 multiplied
by 2.0, provided that the Actual
V-1
<PAGE>
Deferral Percentage for Highly Compensated Employees does
not exceed the Actual Deferral Percentage for such other
Employees by more than 2%.
(2) The "Actual Deferral Percentage" for a Plan Year means, for each
specified group of Employees, the average of the ratios
(calculated separately for each Employee in such group) of
Elective Deferral Contributions credited to the Account of each
Participant for the Plan Year to the amount of each Participant's
compensation for such Plan Year. An Employee's Actual Deferral
Percentage shall be zero if no Elective Deferral Contributions
are made on his behalf for such Plan Year.
(3) The Administrative Committee shall determine as of the end of
each Plan Year, and at such other time or times as it shall
decide in its discretion, whether one of the Actual Deferral
Percentage tests specified above is satisfied for such Plan Year.
This determination shall be made after first determining the
amount, if any, of excess deferrals as provided in Section 5.02.
In the event that neither of the Actual Deferral Percentage tests
is satisfied, the Administrative Committee shall refund the
excess contributions in the manner described below. For purposes
of this Plan Section 5.03, "excess contributions" means, with
respect to any Plan Year and with respect to any Participant, the
excess of the amount of Elective Deferral Contributions and any
earnings and losses allocable thereto credited to the Accounts of
Highly Compensated Participants for such Plan Year, over the
maximum amount of Elective Deferral Contributions that could be
made on behalf of such Participants without violating the
requirements of (a) above. The amount of each Highly Compensated
Participant's excess contributions shall be determined by
reducing Elective Deferral Contributions made on behalf of
V-2
<PAGE>
Highly Compensated Participants in order of the Actual Deferral
Percentages beginning with the highest of such percentages.
(4) If required under (c) above, the Administrative Committee shall
refund excess contributions for a Plan Year to the Participant.
The distribution of such excess contributions shall be made to
Highly Compensated Participants no later than the end of the Plan
Year following such Plan Year. Any such distributions shall be
made to each Highly Compensated Participant on the basis of the
respective portions of such amounts attributable to each such
Highly Compensated Participant.
(5) If, as a result of the above test, the amount of Elective
Deferral Contributions is reduced to less than 2% of the
Participant's Compensation for the Plan Year, then any applicable
Employer Matching Contribution shall be forfeited.
V-3
<PAGE>
Article 6
INVESTMENT OF CONTRIBUTIONS AND VALUATION OF ACCOUNTS
-----------------------------------------------------
6.1 Establishment of Trust Fund
---------------------------
The Employer shall appoint a Trustee who will establish a Trust Fund to
which all Employer contributions shall be made. The Trust Fund shall be held,
invested, reinvested, used and disbursed by the Trustee in accordance with the
provisions of the Plan and a Trust Agreement entered into between the Employer
and the Trustee.
The Employer may remove the Trustee at any time upon the notice
required by the Trust Agreement. The Employer then shall designate a successor
Trustee. The Trustee shall have the sole and complete discretion with respect to
the management and control of the Trust Fund including the exclusive and sole
authority to vote on any matter involving the shares of Employer stock under the
Plan except as provided under Section 6.03. In addition, BanPonce Corporation
shall not influence the manner in which or the timing of any and all stock
purchased by the Trustee.
No person shall have any interest in, or right to, the Trust Fund or
any part thereof, except as expressly provided in the Plan or the Trust
Agreement. Any provisions of the Plan to the contrary notwithstanding, and
except for the payment of expenses, no part of the assets of the Trust Fund
shall, by reason of any modification, amendment, termination, or otherwise, be
used for or diverted to purposes other than for the exclusive benefit of
Participants and their Beneficiaries.
6.2 Operation of the Trust
----------------------
All amounts of money, securities or other property received under the
Plan shall be delivered to the Trustee under the Trust, to be managed, invested,
reinvested and distributed for the exclusive benefit of the Participants and
their Beneficiaries in accordance with the Plan. Separate, commingled funds for
the investment of Plan assets held in the Trust shall
VI-1
<PAGE>
be established and maintained under the Trust. Except for the temporary holding
of amounts representing contributions and distributions, the Investment Fund
shall consist exclusively of shares of common stock of BanPonce Corporation.
6.3 Voting of Stock
---------------
Any and all stock of BanPonce Corporation held in the Trust shall be
voted by the Trustee, in their sole discretion, except upon the occurrence of
the following:
(1) In the event that any bona fide tender, exchange or similar offer
to purchase all or any portion of the outstanding stock of
BanPonce Corporation is made by any person, all shares of such
stock held by the Trust Fund shall be allocated among and
credited to the Accounts of Participants under the Plan based
upon the ratio of each Participant's Account balance to the total
of all such Account balances, determined as of the most recent
Valuation Date coincident with or preceding the date of any
relevant vote or tender. Such stock shall remain allocated to the
Accounts of the Participants under the Plan subsequent to the
pass-through of such rights.
(2) In accordance with an event described in subsection (a), the
Trustee shall permit each Participant or, if applicable, his
Beneficiary to direct the Trustee as to the voting of such stock
allocated to their Accounts. All allocated stock as to which such
instructions have been received in accordance with procedures
established by the Trustee (which may include an instruction to
abstain) shall be voted in accordance with such instructions.
6.4 Valuation
---------
(1) As of each Valuation Date, the Trust Fund shall be valued at its
fair market value pursuant to the terms of the Trust to reflect
the effect of income received and accrued, realized and
unrealized profits and losses, and all other
VI-2
<PAGE>
transactions of the preceding period. Such valuation shall be
conclusive and binding upon all persons having an interest in the
Trust Fund.
(2) All contributions made on behalf of, or allocated to, a
Participant shall be credited to his Account. As of any Valuation
Date, the value of a Participant's Account shall be the value of
such Account as of the immediately preceding Valuation Date
adjusted to reflect changes in the value of the Trust Fund
allocable thereto in accordance with (a) above plus the amount of
contributions, if any, credited thereto and less any
distributions made therefrom since the immediately preceding
Valuation Date.
6.5 Accounting Procedures
---------------------
The Administrative Committee shall have complete discretion to
establish and utilize an accounting system to account for the interest of each
Participant. To the extent permitted by the Act and regulations, the
Administrative Committee may change the accounting system from time to time.
6.6 Payment of Expenses
-------------------
All expenses which arise in connection with the administration of the
Plan and the Trust Agreement including, but not limited to, the compensation of
the Trustee and of any recordkeeper, accountant, counsel, or other person
appointed by the Administrative Committee, the Employer, or the Trustee shall be
paid out of the Trust Fund, unless paid by the Employer.
6.7 Additional Restrictions
-----------------------
(1) The Plan shall not, and the Trustee shall cause the Plan not to,
without the Boards prior written approval, alone or in
conjunction with the Counterpart Plan, acquire 25 percent or more
of any class of the voting securities of any
VI-3
<PAGE>
bank or bank holding company, or otherwise acquire, alone or in
conjunction with the Counterpart Plan, control of any bank or
bank holding company.
(2) The Plan will notify the New York Fed of the terms of any
nonvoting equity investment in any bank or bank holding company
if the non-voting equity investment would cause the Plan, when
aggregated with the holdings of the Counterpart Plan, BanPonce
Corporation and all of BanPonce Corporations subsidiaries, to own
more than 5 percent of the total equity of such bank or bank
holding company.
(3) The Plan will not make any investments that could not be made by
a bank holding company under the Bank Holding Company Act of
1956, as amended, and the Plan will provide notification to the
New York Fed prior to acquiring voting securities, when
aggregated with the holdings of the Counterpart Plan,
constituting more than 5 percent of the voting securities of any
company (as defined in the Board of Governors Regulation Y, 12
CFR Part 225) other than the Employer or BanPonce Corporation.
(4) The Plan will not incur in any debt without the prior written
approval of the New York Fed, other than short-term debt incurred
for the purpose of terminating an Employee's Account, provided
that such short-term debt shall not be outstanding for a period
in excess of 180 days.
VI-4
<PAGE>
Article 7
DISTRIBUTIONS
-------------
7.1 Distributions on Retirement or Disability
-----------------------------------------
Each Participant who terminates employment on account of his Retirement
or Total and Permanent Disability shall have a nonforfeitable right to receive a
distribution of his entire Account. Distribution shall be made in accordance
with Sections 7.05 and 7.06.
7.2 Distributions On Death
----------------------
Upon an Active Participant's death, his Beneficiary shall have a
nonforfeitable right to receive a distribution of the Participant's entire
Account. Upon the death of an Inactive Participant, his Beneficiary shall have a
nonforfeitable right to receive the portion of his Account which was vested in
accordance with Section 7.03. Distribution shall be made in accordance with
Sections 7.05 and 7.06.
7.3 Distribution Upon Termination of Employment
-------------------------------------------
Any Participant who terminates employment for any reason other than
Retirement, Total and Permanent Disability or death, shall be entitled to
receive 100% of his Elective Deferral Contribution Account and Rollover Account
and the vested portion of the remainder of his Account as of the Valuation Date
immediately following his termination of employment based on the following
schedule:
Period of Service Nonforfeitable Interest
----------------- -----------------------
Less than 3 years 0%
3 but less than 4 years 20%
4 but less than 5 years 40%
5 but less than 6 years 60%
6 but less than 7 years 80%
7 or more years 100%
VII-1
<PAGE>
Distribution shall be made in accordance with Sections 7.05 and 7.06.
Upon the sale or closure of any operating unit of the Employer, the
Account of each Participant who at the time of such sale or closure was an
employee of such operating unit shall become 100% vested.
Upon the termination of employment of a Participant who is not
otherwise 100% vested in his Account, the Administrative Committee shall reflect
any prior distributions in determining the Participant=s current vested interest
in his Account in order to avoid duplication of payments.
7.4 Forfeitures
-----------
That portion of a Participants Account which shall not be vested at the
date of his termination of employment shall be forfeited. Forfeitures shall be
used to reduce the Employer=s contribution to the Plan. In the event such
Participant is later reemployed by the Employer prior to incurring a Period of
Severance of five years, the current value of such forfeited amounts shall be
restored to the Participant=s Account.
7.5 Forms of Payment
----------------
Subject to the provisions of Section 7.06, payment of a Participant's
vested Account shall be made in a lump sum. Payment shall be made either in cash
or, if elected by the Participant, shares of stock of BanPonce Corporation, or
both.
7.6 Time of Payment
---------------
Benefits payable to a Participant (or Beneficiary) under this Article
VII shall be paid or commence as soon as practicable after:
(1) The date of his death, Retirement, Total and Permanent Disability
or other termination of employment based on the value of his
vested Account
VII-2
<PAGE>
determined as of the Valuation Date coincident with or next
following such date, or
(2) If such date occurs prior to his Normal Retirement Date, any
Valuation Date coincident with or preceding his Normal Retirement
Date, based on the value of his vested Account as of such
Valuation Date.
The Participant (or Beneficiary) shall provide to the Administrative
Committee a written election at least 30 days preceding any applicable Valuation
Date, indicating the date benefits are to be paid or commence and the Form of
Payment elected.
7.7 Limitation On Distributions
---------------------------
Notwithstanding the foregoing, unless the Participant elects otherwise,
distribution shall commence no later than the 60th day after the latest of the
last day of the Plan Year in which the Participant
(1) attains his Normal Retirement Date,
(2) attains his 10th anniversary of Plan participation or
(3) terminates his employment.
7.8 Cash Outs
---------
Notwithstanding any other provision of the Plan, to the extent required
by ERISA and the regulations, if the value of a Participant's vested Account at
the time he terminates employment is $3,500 or less, such amount will be
distributed to him immediately in one lump sum payment; provided, however, that
no such lump sum payment shall be made after distribution has commenced without
the Participant's written consent. If the value of the Participant's vested
Account exceeds $3,500, no distribution shall be made to such Participant prior
to the date he attains age 65 without his written consent. In the absence of
VII-3
<PAGE>
receipt of such consent by the Administration Committee, distribution to such
Participant shall be made in a lump sum as of the Valuation Date coincident with
or next following his Normal Retirement Date. Payments shall be made in either
cash or, if elected by the Participant, shares of stock of BanPonce Corporation,
or both.
VII-4
<PAGE>
Article 8
PLAN ADMINISTRATION
-------------------
8.1 Appointment of an Administrative Committee
------------------------------------------
The Employer shall appoint an Administrative Committee to serve as Plan
Administrator. The Administrative Committee shall consist of five or more
persons and shall serve at the pleasure of, and may be removed at any time by,
the Employer. The Employer shall designate one of such persons to serve as
Chairman. Participants may be members of the Administrative Committee. No member
of the Administrative Committee shall receive compensation for his services as
such.
8.2 Operation of the Administrative Committee
-----------------------------------------
A majority of the members of the Administrative Committee at the time
in office shall constitute a quorum for the transaction of business. All
resolutions or other action taken by the Administrative Committee shall be by
vote of a majority of its members present at any meeting, or without a meeting,
by instrument in writing signed by all its members.
The Chairman of the Administrative Committee shall appoint a Secretary
who may but need not be a member of the Administrative Committee. The
Administrative Committee may delegate any of its powers or duties among its
members or to others as it shall determine. It may authorize one or more of its
members to execute or deliver any instrument or to make any payment in its
behalf. It may employ such counsel, agents, clerical, accounting and actuarial
services as it may require in carrying out the provisions of the Plan, and to
the extent permitted by law it shall be entitled to rely upon all tables,
valuations, certificates, opinions, or other reports furnished by such persons.
8.3 Powers and Duties of the Administrative Committee
-------------------------------------------------
The Administrative Committee shall have all powers necessary to
administer the Plan except to the extent any such powers are vested in any other
fiduciary by the Plan or by the
VIII-1
<PAGE>
Administrative Committee. The Administrative Committee may from time to time
establish rules for the administration of the Plan, and it shall have the
exclusive right to interpret the Plan and to decide any matters arising in
connection with the administration and operation of the Plan. The Administrative
Committee's rules interpretations and decisions shall be applied in a uniform
manner to all Employees similarly situated and shall be conclusive and binding
on the Employer and on Participants and Beneficiaries to the extent permitted by
law.
The Administrative Committee shall compute and certify to the Trustees
the amount of retirement benefits payable under the provisions of the Plan to
any Participant terminating his employment with a retirement benefit or to any
Beneficiary.
8.4 Delegation of Responsibility
----------------------------
Each fiduciary shall discharge his duties with respect to the Plan
solely in the interest of the Participants and Beneficiaries, for the exclusive
purpose of providing benefits to such persons and defraying reasonable expenses
of administering the Plan, while using the care, skill, prudence, and diligence,
under the circumstances then prevailing that a prudent man acting in a like
capacity and familiar with such matters would use in the conduct of an
enterprise of like character and with like aims.
The members of the Administrative Committee and any person to whom the
Administrative Committee may delegate any of its powers under the Plan may
employ persons to render advice with regard to any responsibility he has under
the Plan. No fiduciary shall be liable for any act or omission of another person
in carrying out any fiduciary responsibility where such fiduciary responsibility
is allocated to such other person by or pursuant to the Plan, except to the
extent required by Section 405 of the Employee Retirement Income Security Act of
1974.
VIII-2
<PAGE>
8.5 Indemnification of the Administrative Committee
-----------------------------------------------
The Employer may indemnify each member of the Administrative Committee
against all liabilities and expenses, including attorneys' fees, reasonably
incurred by him in connection with any legal action to which he may be a party,
or any threatened legal action to which he might have become a party, by reason
of his membership on the Administrative Committee, except with regard to any
matters as to which he shall be adjudged to be liable for willful misconduct in
the performance of his duties as such a member.
VIII-3
<PAGE>
Article 9
CLAIMS PROCEDURE
----------------
9.1 Notification of Benefit Eligibility
-----------------------------------
The Administrative Committee shall notify Participants of the
retirement benefits to which they are entitled as soon as is practical following
each Participant's termination of employment. Filing of a claim shall not be
required for benefit commencement.
9.2 Initial Review of Claims
------------------------
If a Participant or Beneficiary has reason to believe that he is
entitled to retirement benefits from the Plan in excess of those about which he
is notified in accordance with Section 9.01, he may file a claim in writing with
the Administrative Committee.
If the Administrative Committee denies the claim, the claimant shall be
notified in writing of the denial within 30 days after the Administrative
Committee's receipt of the claim. The notice shall (a) set forth the specific
reason or reasons for the denial, making reference to the pertinent provisions
of the Plan on which the denial is based, (b) describe any additional material
or information that should be received before the claim request may be acted
upon favorably, and explain why such material or information, if any, is needed
and (c) inform the person making the claim of his right to request a review of
the decision by the Administrative Committee.
9.3 Review of Claim Denial
----------------------
Any person who believes that he has submitted all available and
relevant information may request a review of the denial of his claim by the
Administrative Committee by submitting a written request for review within 60
days after the date on which such denial is received. This period may be
extended by the Administrative Committee for good cause shown. The person making
the request for review may examine pertinent Plan documents. The request for
review may discuss any issues relevant to the claim.
IX-1
<PAGE>
The Administrative Committee shall decide whether or not to grant the
claim within 30 days after receipt of the request for review, but this period
may be extended for up to an additional 90 days in special circumstances. The
Administrative Committee's decision shall be in writing, shall include specific
reasons for the decision, and shall refer to the pertinent provisions of the
Plan on which the decision is based.
IX-2
<PAGE>
Article 10
AMENDMENT OR TERMINATION OF THE PLAN OR
DISCONTINUANCE OF CONTRIBUTIONS
-------------------------------
10.1 Right to Amend or Terminate the Plan
------------------------------------
The Employer may amend the Plan, retroactively or otherwise, at any
time. No such amendment may have the effect of vesting in the Employer any part
of the Trust Fund, or of diverting any part of the Trust Fund to purposes other
than for the exclusive benefit of Participants and Beneficiaries, until all
liabilities with respect to such persons have been satisfied or provided for. No
amendment shall deprive any Participant or Beneficiary of any retirement benefit
therefore vested in him.
The continuance of the Plan and the payment of contributions under the
Plan are entirely voluntary and are not assumed as contractual obligations of
the Employer. The Employer reserves the right to terminate the Plan in whole or
in part or to discontinue contributions thereunder.
10.2 Result of Termination
---------------------
(1) Upon termination of the Plan as to any Employer, such Employer
shall not make any further contributions under the Plan and no
amount shall thereafter be payable under the Plan to or in
respect of any Participants then employed by such Employer except
as provided in this Article X. To the maximum extent permitted by
ERISA, the rights of Participants no longer employed by such
Employer and of former Participants and their Beneficiaries under
the Plan shall be unaffected by such termination and any
transfers, distributions or other dispositions of the assets of
the Plan as provided in this Article X shall constitute a
complete discharge of all liabilities under the Plan with respect
to such Employer's participation in the Plan and any Participant
then employed by such Employer.
X-1
<PAGE>
(2) The interest of each such Participant in service with such
Employer as of the termination date in his Account after payment
of or provision for expenses and charges and appropriate
adjustment of the Accounts of all such Participants for expenses,
charges, forfeitures and profits and losses shall be
nonforfeitable as of the termination date, and upon receipt by
the Administrative Committee of IRS approval of such termination,
the full current value of such amount shall be paid from the
Trust Fund in the manner described in Article VII or transferred
to a successor employee benefit plan which is tax-qualified under
Act Section 165(a); provided, however, that in the event of any
transfer of assets to a successor employee benefit plan the
provisions of Section 11.04 will apply.
(3) All determinations, approvals and notifications referred to above
shall be in form and substance and from a source satisfactory to
counsel for the Plan. To the maximum extent permitted by ERISA,
the termination of the Plan as to any Employer shall not in any
way affect any other Employer's participation in the Plan.
X-2
<PAGE>
Article 11
MISCELLANEOUS PROVISIONS
------------------------
11.1 Contract of Employment
----------------------
The Plan shall not be deemed to constitute a contract between any
Employee and the Employer or to be a consideration or an inducement to any
Employee for his employment by the Employer. Nothing contained in the Plan shall
be deemed to give any Employee the right to be retained in the employ of the
Employer or to interfere with the right of the Employer to discharge or to
terminate the employment of an Employee at any time without regard to the effect
of such action on his rights under the Plan. No Participant or Beneficiary shall
have any rights against the Employer for benefits payable under the Plan other
than rights, if any, which he may have with respect to the Trust Fund.
11.2 Furnishing of Information
-------------------------
Unless otherwise expressly provided in the Plan, all benefits to which
any Participant may be entitled shall be determined in accordance with the
provisions of the Plan as in effect on such Participant's Severance from Service
Date. In order to receive any benefits under the Plan, a Participant must
furnish the Administrative Committee with such information as may reasonably be
required for purposes of the proper administration of the Plan.
11.3 Assignment or Alienation of Benefits
------------------------------------
Any benefit payable under the Plan shall not be subject in any manner
to assignment, alienation, anticipation, sale, transfer, pledge, encumbrance,
lien or charge, and any attempt to cause any such benefit to be so subjected
shall not be recognized except to such extent as may be required by law.
11.4 Merger of Plans
---------------
In the event of any merger or consolidation of the Plan with, or
transfer of assets or liabilities of the Plan to, any other qualified plan, each
Participant shall (if such other plan
XI-1
<PAGE>
then terminates) be entitled to receive a benefit immediately after any such
merger, consolidation or transfer which is equal to or greater than the benefit
to which he would have been entitled immediately before such merger,
consolidation or transfer (if the Plan had then terminated).
11.5 Substitute Payee
----------------
If a Participant or Beneficiary entitled to receive any retirement
benefits from the Plan is in his minority, or is, in the judgment of the
Administrative Committee, legally, physically or mentally incapable of
personally receiving and receipting for any distribution, the Administrative
Committee may make distributions to his legally appointed guardian, or to such
other person, persons or institutions as it may judge to be then maintaining or
to have custody of the payee.
11.6 Domestic Relations Order
------------------------
For purposes of this Article XI, a Domestic Relations Order shall
refer to a judgment, decree or order (including the approval of a property
settlement) that is made pursuant to a state domestic relations or community
property law, and which relates to the provisions of child support, alimony
payments, or marital property rights to a spouse, child or other dependent of a
Participant.
11.7 Qualified Domestic Relations Order
----------------------------------
For purposes of this Article XI, a Qualified Domestic Relations Order
shall refer to a Domestic Relations Order that (a) clearly specifies (i) the
name and last known mailing address of the Participant and of each person given
rights under such Domestic Relations Order, (ii) the amount or percentages of
the Participant's benefits under this Plan to be paid to each person covered by
such Domestic Relations Order, (iii) the number of payments or the period to
which such Domestic Relations Order applies, and (iv) the name of this Plan; and
(b) does not require the payment of a benefit in a form or amount that is (i)
not otherwise
XI-2
<PAGE>
provided for under the Plan, or (ii) inconsistent with a previous Qualified
Domestic Relations Order.
11.8 Procedures Involving Domestic Relations Orders
----------------------------------------------
Notwithstanding the provisions of Section 11.03 to the contrary, upon
receiving a Domestic Relations Order, the Administrative Committee shall
segregate in a separate account or in an escrow account the amounts payable to
any person pursuant to such Domestic Relations Order, pending a determination
whether such Domestic Relations Order constitutes a Qualified Domestic Relations
Order, and shall give notice of the receipt of the Domestic Relations Order to
the Participant and each other person affected thereby.
If, within 18 months after receipt of such Domestic Relations Order, it
is determined by the Administrative Committee, by a court of competent
jurisdiction, or otherwise, that such Domestic Relations Order constitutes a
Qualified Domestic Relations Order, the Administrative Committee shall direct
the Trustee to segregate the amounts (plus any interest thereon) an account of
the person (or persons) entitled thereto under the Qualified Domestic Relations
Order. Such individual shall, thereafter, be considered a terminated vested
Participant under the Plan. If it is determined that the Domestic Relations
Order is not a Qualified Domestic Relations Order or if no determination is made
within the prescribed 18-month period, the segregated amounts shall be
desegregated as though the Domestic Relations Order had not been received, and
any later determination that such Domestic Relations Order constitutes a
Qualified Domestic Relations Order shall be applied only with respect to
benefits on the date of such determination.
The Administrative Committee shall be authorized to establish such
reasonable administrative procedures as is deemed necessary or appropriate to
administer this Section 11.08. This Section 11.08 shall be construed and
administered so as to comply with the requirements of Section 206(d) of ERISA.
XI-3
<PAGE>
11.9 Gender and Number
-----------------
The masculine pronoun, whenever used herein, shall include the feminine
pronoun, and the singular number shall include the plural number, unless the
context of the Plan clearly indicates otherwise.
11.10 Governing Law
-------------
The Plan shall be governed and construed in accordance with ERISA and
the laws of the Commonwealth of Puerto Rico.
XI-4
<PAGE>
IN WITNESS WHEREOF, the Employer has caused this Plan to be executed
this 23rd day of March, 1995.
By: [Eduardo Rodriguez]
--------------------------------
Title: Administrative Committee
-----------------------------
By:
Title:
By:
Title:
XI-5
<PAGE>
BANCO POPULAR DE PUERTO RICO
EMPLOYEES' STOCK PLAN (PUERTO RICO)
-----------------------------------
PLAN AMENDMENT NUMBER 1
WHEREAS, Banco Popular de Puerto Rico, hereinafter referred to as the
"Employer", has established the Banco Popular de Puerto Rico Employees' Stock
Plan (Puerto Rico), hereinafter referred to as the "Plan", and
WHEREAS, the Employer under Article X of the Plan reserves the right to amend
the Plan at any time.
NOW THEREFORE, BE IT
RESOLVED, that the Plan is hereby amended effective July 1, 1995 in the
following respect:
ARTICLE II, Section 2.01(a) shall be amended in its entirety to read as follows:
"(a) Subject to the provisions of subsection (b) below, each Employee as of the
Effective Date and each person who becomes an Employee subsequent to that
date who performs services for the employer primarily within the
Commonwealth of Puerto Rico, shall become a Participant as of the first day
of the month coincident with or next following the completion of three
months of Service with the Employer, for purposes of eligibility for making
Elective Deferral Contributions and Rollover Contributions, and receiving
Employer Matching Contributions. However, for purposes of receiving
Employer Basic Contributions, eligibility shall occur as of the first day
of the month coincident with or next following the completion of one Year
of Service with the Employer."
<PAGE>
BANCO POPULAR DE PUERTO RICO
EMPLOYEES' STOCK PLAN (PUERTO RICO)
-----------------------------------
PLAN AMENDMENT NUMBER 2
WHEREAS, Banco Popular de Puerto Rico, hereinafter referred to as the
"Employer", has established the Banco Popular de Puerto Rico Employees' Stock
Plan (Puerto Rico), hereinafter referred to as the "Plan", and
WHEREAS, the Employer under Article X of the Plan reserves the right to amend
the Plan at any time.
NOW THEREFORE, BE IT
RESOLVED, that the Plan is hereby amended effective April 1, 1996 in the
following respect:
ARTICLE III, Section 3.02 shall be amended in its entirety to read as follows:
"Subject to Article V, in accordance with procedures established by the
Administrative Committee, a Participant may increase or decrease his Elective
Deferral Contribution rate as of the first day of any month during the
applicable Plan Year. In addition, a Participant may suspend such contributions
as of any payroll period during the Plan Year."
In WITNESS WHEREOF, the Employer has caused this Amendment to be executed this
26th day of April, 1996.
<PAGE>
BANCO POPULAR DE PUERTO RICO
EMPLOYEES' STOCK PLAN (PUERTO RICO)
-----------------------------------
PLAN AMENDMENT NUMBER 3
WHEREAS, Banco Popular de Puerto Rico, hereinafter referred to as the
"Employer", has established the Banco Popular de Puerto Rico Employees' Stock
Plan (Puerto Rico), hereinafter referred to as the "Plan", and
WHEREAS, the Employer under Article X of the Plan reserves the right to amend
the Plan at any time.
NOW THEREFORE, BE IT
RESOLVED, that the Plan is hereby amended effective September 1, 1996 in the
following respect:
"11.11 Transfer of Certain Employees
Upon the transfer of all Participants of a unit of the Employer to an Affiliated
Company which does not participate in the Plan or in the Banco Popular de Puerto
Rico Employees' Stock Plan, the Accounts of such Participants shall be
transferred to the tax-qualified defined contribution plan sponsored by such
Affiliated Company, to the extent such plan allows such transfers, as soon as
administratively feasible thereafter. Such Participants shall be eligible to
receive an allocation of the Employer's contribution during the Plan Year of
their transfer based on their Compensation earned prior to their date of
transfer. Such allocations shall also be transferred to the tax-qualified
defined contribution plan sponsored by such Affiliated Company, to the extent
such plan allows such transfers, as soon as administratively feasible
thereafter.
<PAGE>
BANCO POPULAR DE PUERTO RICO
EMPLOYEES' STOCK PLAN (PUERTO RICO)
-----------------------------------
PLAN AMENDMENT NUMBER 4
WHEREAS, Banco Popular de Puerto Rico, hereinafter referred to as the
"Employer", has established the Banco Popular de Puerto Rico Employees' Stock
Plan (Puerto Rico), hereinafter referred to as the "Plan", and
WHEREAS, the Employer under Article X of the Plan reserves the right to
amend the Plan at any time.
NOW THEREFORE, BE IT
RESOLVED, that the Plan is hereby amended effective July 1, 1997 in the
following respects:
ARTICLE I, Section 1.36 shall be amended by the addition of the
following at the end thereof:
"For the Employees acquired by the Employer on July 1, 1997 due to the
acquisition of Banco Roig by the Employer, full years and months of
active employment with Banco Roig shall be considered Years of Service
only for purposes of benefit eligibility and vesting under this Plan."
<PAGE>
BANCO POPULAR DE PUERTO RICO
EMPLOYEES' STOCK PLAN (PUERTO RICO)
-----------------------------------
PLAN AMENDMENT NUMBER 5
WHEREAS, Banco Popular de Puerto Rico, hereinafter referred to as the
"Employer", has established the Banco Popular de Puerto Rico Employees' Stock
Plan (Puerto Rico), hereinafter referred to as the "Plan", and
WHEREAS, the Employer under Article X of the Plan reserves the right to amend
the Plan at any time.
NOW THEREFORE, BE IT
RESOLVED, that the Plan is hereby amended effective January 1, 1998 in the
following respect:
ARTICLE VII, Section 7.08, each occurrence of the phrase $3,500 shall be
substituted by the phrase "$5,000".
<PAGE>
BANCO POPULAR DE PUERTO RICO
EMPLOYEES' STOCK PLAN (PUERTO RICO)
-----------------------------------
PLAN AMENDMENT NUMBER 6
WHEREAS, Banco Popular de Puerto Rico, hereinafter referred to as the
"Employer", has established the Banco Popular de Puerto Rico Employees' Stock
Plan (Puerto Rico), hereinafter referred to as the "Plan", and
WHEREAS, the Employer under Article X of the Plan reserves the right to amend
the Plan at any time.
WHEREAS, the Tax Reform Act of 1997 amended the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") and the federal Internal Revenue Code
of 1986, as amended (the "US IRC") to establish investment limitations in
employer securities by certain qualified plans effective on the first day of the
first Plan year beginning on or after January 1, 1999; and
WHEREAS, BPPR wishes to amend the Plan to allow itself more time in which to
effect amendments to comply with the requirements of the Tax Reform Act of 1997.
NOW, THEREFORE, in consideration of the foregoing, the Plan is hereby amended as
follows.
1. Section 1.28 of the Plan is amended to read in its entirety as follows:
1.28 PLAN YEAR
---------
The period from the Effective Date to the end of calendar year containing the
Effective Date shall be a Short Plan Year. Thereafter the Plan Year shall be the
calendar year until calendar year 1998 in which the Plan Year shall end on
December 30, 1998. The Plan Year thereafter shall commence on December 31 and
end on December 30.
EXHIBIT 4.4.(b)
MASTER PLAN
MASTER DEFINED CONTRIBUTION RETIREMENT PLAN
AMENDED EFFECTIVE AS OF JANUARY 1, 1998
<PAGE>
The Banco Popular de Puerto Rico Master Defined Contribution Retirement
Plan (the "Master Plan") may be adopted through the execution of an adoption
agreement (the "Adoption Agreement") as either a money purchase pension plan or
a profit-sharing plan (the "Plan"), which may, or may not, contain a cash or
deferred arrangement. The Plans established hereunder are intended to qualify
under Sections 1165(a), (e) and (g) of the Puerto Rico Internal Revenue Code of
1994 of 1984, as amended and to comply with all applicable requirements of both
Title I of the Employee Retirement Income Security Act of 1974 , as amended and
the Puerto Rico Internal Revenue Code of 1984, as amended.
By executing the Adoption Agreement, the Employer has established a
Plan governed by the provisions of the Adoption Agreement and this Master Plan
document. If an Employer is interested in establishing more than one type of
Plan, a separate Adoption Agreement must be executed for each Plan. The purpose
of the Plan is to create a retirement fund intended to help provide for the
future security of the Participants and their Beneficiaries. In no event shall
any portion of the principal or income of the Master Trust established by the
Banco Popular de Puerto Rico and forming part of this Plan, or the Trust
established by the Employer to form part of this Plan, be used for, or diverted
to, any purpose other than the exclusive benefit of the Participants and their
Beneficiaries, except as and to the limited extent otherwise specifically
permitted under the Employee Retirement Income Security Act of 1974, as amended
and the Puerto Rico Internal Revenue Code of 1984, as amended.
The Plan consists of this Master Plan Document, the Adoption Agreement
executed by the Employer, the Master Trust established by Banco Popular de
Puerto Rico and/or the Trust established by the Employer, as each may be amended
from time to time. The Master Plan Sponsor is Banco Popular de Puerto Rico.
-2-
<PAGE>
MASTER PLAN
Master Defined Contribution Retirement Plan
Copyright@ 1998 by Banco Popular de Puerto Rico
ARTICLE 1 CONSTRUCTIONS, INTENT AND APPLICABLE LAW
1.1 CONSTRUCTION
Whenever used in the Plan, unless the context clearly indicates
otherwise, the masculine pronoun shall include the feminine, the singular shall
include the plural and the plural the singular. The conjunction "or" shall
include both the conjunctive and disjunctive, and the adjective "any" shall mean
one or more or all. Unless the context indicates otherwise, the words "herein",
"hereof", "hereunder" and words of similar import refer to the Plan as a whole
and not only to the section in which they appear. Article, section and paragraph
headings have been inserted for convenience of reference only and are to be
ignored in any construction of the provisions hereof. If any provision of the
Plan shall for any reason be invalid or unenforceable, the remaining provisions
shall nevertheless be valid, enforceable and fully effective.
1.2 INTENT
It is the intent that the Plan shall at all times be a qualified plan
and the Trust shall at all times be exempt from taxation under Section 1165(a)
of the IRC and section 501(a) of the Code (as provided in Section 1022(i)(1) of
ERISA). It is also intended that the cash or deferred arrangement contained in
the Plan meet the requirements of Section 1165(e) of the IRC.
-3-
<PAGE>
1.3 GOVERNING LAW
The Plan and all rights hereunder shall be governed by and construed in
accordance with the laws of the Commonwealth of Puerto Rico to the extent such
laws have not been preempted by applicable federal law.
ARTICLE 2 DEFINITIONS
Whenever used in the Plan, unless the context clearly indicates
otherwise, the following terms shall have the following meanings:
2.1 "ACTUAL DEFERRAL PERCENTAGE" shall mean, the ratio (expressed as a
percentage to the nearest one-hundredths of one percent) of (1) the sum of
Pre-Tax Contributions and Qualified Employer Deferral Contributions actually
paid over to the Trust on behalf of each Participant for the Plan Year to (2)
the Participant's Compensation for such Plan Year (whether or not the Employee
was a Participant for the entire Plan Year). For purposes of computing actual
deferral percentages, an Employee who would be a Participant but for the failure
to make Pre-Tax Contributions shall be treated as a Participant on whose behalf
zero (0) Pre-Tax Contributions are made.
2.2 "ADOPTION AGREEMENT" shall mean the Banco Popular de Puerto Rico
Master Defined Contribution Retirement Plan Adoption Agreement executed by the
Employer to establish or amend the Employer's Plan and to specify optional
provisions as part of the Employer's Plan.
2.3 "AFFILIATE" shall mean
-4-
<PAGE>
a. any corporation which is a member of the same controlled group of
corporations (within the meaning of ERISA Section 210(c)) as is the Employer,
and
b. any other trade or business (whether or not incorporated) under
common control (within the meaning of ERISA Section 210(d)) with the Employer.
2.4 "AFTER-TAX CONTRIBUTIONS" shall mean voluntary contributions made
by a Participant to the Plan during the Plan Year as described in Article 5.
2.5 "AFTER-TAX CONTRIBUTIONS ACCOUNT", with respect to a Participant,
shall mean the account established under the Plan for such Participant
representing the After-Tax Contributions plus any gains or losses allocated to
such account in accordance with the provisions of the Plan, as adjusted to
reflect distributions therefrom. Such account will be fully vested and
nonforfeitable at all times.
2.6 "ANNUITY STARTING DATE" shall mean the first day of the first
period for which an amount is payable as an annuity or, in the case of a benefit
not payable in the form of an annuity, the first day in which all events have
occurred which entitle the Participant to such benefit.
2.7 "AVERAGE ACTUAL DEFERRAL PERCENTAGE" shall mean the average
(expressed as a percentage to the nearest one-hundredth of one percent) of the
Actual Deferral Percentage of Participants in a group.
2.8 "BENEFICIARY" shall mean the person or persons (natural or
otherwise) designated by a Participant or Beneficiary, or by the Plan, to
receive any benefit payable upon the death of the Participant or Beneficiary.
-5-
<PAGE>
2.9 "COMPENSATION", unless elected otherwise in the Adoption Agreement,
shall mean with respect to any Participant total compensation paid by the
Employer during the Plan Year that is currently includible in income for income
tax purposes. Amounts contributed by the Employer under the Plan, except for
Pre-Tax Contributions, and any nontaxable fringe benefits shall not be
considered as Compensation. For a Self-Employed Individual or Owner-Employee,
Compensation will mean his Earned Income.
2.10 "DISABILITY" shall mean a physical or mental condition which in
the judgment of the Plan Administrator, based upon medical reports and other
evidence satisfactory to the Plan Administrator, presumably permanently prevents
an Employee from satisfactorily performing usual duties for the Employer or the
duties of such other position or job which the Employer makes available and for
which such Employee is qualified by reason of training, education, or
experience. Qualification by an Employee for permanent Disability benefits under
the social security system shall be deemed adequate evidence of Disability for
purposes of this Plan.
2.11 "EARLY RETIREMENT AGE" shall mean the early retirement date
selected by the Employer in the Adoption Agreement.
2.12 "EARLY RETIREMENT DATE" shall mean the first day of any month
coinciding with or following a Participant's attainment of Early Retirement Age.
2.13 "EARNED INCOME" shall mean, with respect to a Self-Employed
Individual, the net earnings from self employment in the trade or business with
respect to which the Plan is established, for which the personal services of the
individual are a material income producing factor. Net earnings will be
determined WITHOUT regard to items excluded from gross income and the deductions
allocable to such items. Net earnings are reduced by
-6-
<PAGE>
contributions by the Employer to a qualified plan to the extent deductible under
IRC Section 1023(n).
2.14 "EFFECTIVE DATE" shall mean the date elected in the Adoption
Agreement.
2.15 "1165(E) PLAN" shall mean a profit sharing plan containing a cash
or deferred arrangement qualified under Section 1165(e) of the IRC.
2.16 "ELIGIBLE SPOUSE" shall mean that spouse to whom a Participant is
married on either the Annuity Starting Date or the date of this death, whichever
occurs earlier.
2.17 "EMPLOYEE" shall mean any person employed by the Employer, but
excludes any person who is employed as an independent contractor. Employee
includes a Self-Employed Individual and an Owner-Employee.
2.18 "EMPLOYER" shall mean the Employer or Employers named in the
Adoption Agreement.
2.19 "EMPLOYER CONTRIBUTIONS" shall mean Profit-Sharing Contributions
or Money Purchase Contributions made by the Employer to the Plan pursuant to the
provisions of Article 6.
-7-
<PAGE>
2.20 "EMPLOYER CONTRIBUTIONS ACCOUNT", with respect to a Participant,
shall mean the account established under the Plan for such Participant
representing the Employer Contributions (and any forfeitures) plus any gains or
losses allocated to such account in accordance with the provisions of the Plan,
as adjusted to reflect distributions therefrom.
2.21 "EMPLOYER SECURITIES" shall mean stock issued by the Employer or
an Affiliate and which is publicly traded on a nationally recognized stock
exchange.
2.22 "ENTRY DATE" shall mean the date(s) elected in the Adoption
Agreement on which Participants may commence participation in the Plan.
2.23 "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
2.24 "EXCESS CONTRIBUTIONS" shall mean, with respect to any Plan Year,
the excess of:
a. The aggregate amount of Pre-Tax Contributions and Qualified Employer
Deferral Contributions actually taken into account in computing the Actual
Deferral Percentage of Highly Compensated Employees for such Plan Year,
over
b. The maximum amount of such contributions permitted by the actual
deferral percentage test.
2.25 "EXCESS DEFERRALS" shall mean those Pre-Tax Contributions that are
includible in a Participant's gross income under IRC Section 1165(e)(7) to the
extent such Participant's Pre-Tax Contributions for a taxable year exceed the
lesser of 10% of the Participant's Compensation or $8,000 for taxable year 1998
and thereafter (or any other
-8-
<PAGE>
dollar amount may be determined in the future under the IRC or the regulations
issued thereunder).
2.26 "HIGHLY COMPENSATED EMPLOYEE" shall mean, with respect to a Plan
Year, any Employee who, determined on the basis of Compensation for such Plan
Year, has Compensation greater than two-thirds (2/3) of all other Participants.
2.27 "IRC" shall mean the Puerto Rico Internal Revenue Code of 1994, as
amended.
2.28 "MASTER PLAN" shall mean the Master Defined Contribution
Retirement Plan sponsored by Banco Popular de Puerto Rico, as set forth in this
document.
2.29 "MASTER PLAN SPONSOR" shall mean Banco Popular de Puerto Rico, or
any successor thereof.
2.30 "MATCHING CONTRIBUTIONS" shall mean contributions made by the
Employer to the Plan on behalf of a Participant on account of a Participant's
After-Tax or Pre-Tax Contributions.
2.31 "MATCHING CONTRIBUTIONS ACCOUNT", with respect to a Participant,
shall mean the account established under the Plan for such Participant
representing the Matching Contributions plus any gains or loss allocated to such
account in accordance with the provisions of the Plan, as adjusted to reflect
distributions therefrom.
2.32 "MONEY PURCHASE CONTRIBUTIONS" shall mean contributions made by
the Employer pursuant to a Money Purchase Pension Plan using the formula
established by the Employer in the Adoption Agreement.
-9-
<PAGE>
2.33 "NON-HIGHLY COMPENSATED EMPLOYEE" shall mean those Participants
that are not Highly Compensated Employees.
2.34 "NORMAL RETIREMENT AGE" shall mean the latter of:
a. Age sixty-five (65); or
b. The Participant's age on the fifth anniversary of the first day of
the Plan Year in which he/she commenced participation in the Plan.
2.35 "NORMAL RETIREMENT DATE" shall mean the first day of the month
following the end of the Plan Year in which a Participant has attained Normal
Retirement Age.
2.36 "OWNER-EMPLOYEE" shall mean an individual who is a sole
proprietor, or who is a partner or shareholder owning more than 10 percent of
either the capital or profits interest of a special partnership or corporation
of individuals.
2.37 "PARTICIPANT" shall mean any Employee who has become eligible to
participate in the Plan and has not for any reason become ineligible to
participate in the Plan.
2.38 "PLAN" shall mean the Employer's Plan as set forth in this Master
Plan Document and the Adoption Agreement executed by the Employer, including all
amendments to either document.
2.39 "PLAN ADMINISTRATOR" shall mean the person or persons designated
in the Adoption Agreement to control and manage the operation and administration
of the Employer's Plan as provided in Article 14.
-10-
<PAGE>
2.40 "PLAN SPONSOR" Shall mean the Employer establishing a Plan
pursuant to the execution of an Adoption Agreement under this Master Plan.
2.41 "PLAN YEAR" shall mean the calendar year unless another Plan Year
is specified in the Adoption Agreement.
2.42 "PRE-TAX CONTRIBUTIONS" shall mean any Employer contributions made
to the Plan at the election of the Participant, in lieu of cash compensation,
pursuant to a salary reduction agreement or other deferral mechanism.
2.43 "PRE-TAX CONTRIBUTIONS ACCOUNT", with respect to a Participant,
shall mean the account established under the Plan for such Participant
representing the Pre-Tax Contributions plus any gains or losses allocated to
such account in accordance with the provisions of the Plan, as adjusted to
reflect distributions therefrom. Such account will be fully vested and
nonforfeitable at all times.
2.44 "PROFIT-SHARING CONTRIBUTIONS" shall mean contributions made by
the Employer pursuant to a Profit-Sharing Plan.
2.45 "QUALIFIED EMPLOYER DEFERRAL CONTRIBUTIONS" shall mean Qualified
Non-Elective Contributions and Qualified Matching Contributions which are taken
into account under this Plan, and any other qualified plans that are maintained
by the Employer which are aggregated with this Plan under section 4.5(b) and
(c), in determining a Participant's Actual Deferral Percentage.
2.46 "QUALIFIED MATCHING CONTRIBUTIONS" shall mean Matching
Contributions which are taken into account under the Plan in determining a
Participant's Actual Deferral Percentage. In order for Matching Contributions to
be considered as
-11-
<PAGE>
Qualified Matching Contributions, the Matching Contributions must be one hundred
percent (100%) vested and nonforfeitable when made and must not be distributable
under the Plan to Participants or their Beneficiaries earlier than provided in
section 4.4C.
2.47 "QUALIFIED MATCHING CONTRIBUTIONS ACCOUNT", with respect to a
Participant, shall mean the account established under the Plan for such
Participant representing the Qualified Matching Contributions plus any gains or
losses allocated to such account in accordance with the provisions of the Plan,
as adjusted to reflect distributions therefrom. Such account will be fully
vested and nonforfeitable at all times.
2.48 "QUALIFIED NON-ELECTIVE CONTRIBUTIONS" shall mean contributions
made by the Employer to this Plan (other than Pre-Tax Contributions and Matching
Contributions) which are taken into account in determining a Participant's
Actual Deferral Percentage and which the Participant may not elect to receive in
cash until distributed from the Plan. In order for such contributions to be
considered as Qualified Non-Elective Contributions, they must be one hundred
percent (100%) vested and nonforfeitable when made and must not be distributable
under the terms of the Plan to Participants or their Beneficiaries earlier than
provided in section 4.4C.
2.49 "QUALIFIED NON-ELECTIVE CONTRIBUTIONS ACCOUNT", with respect to a
Participant, shall mean the account established under the Plan for such
Participant representing the Qualified Non-Elective Contributions plus any gains
or losses allocated to such account in accordance with the provisions of the
Plan, as adjusted to reflect distributions therefrom. Such account will be fully
vested and nonforfeitable at all times.
2.50 "ROLLOVER CONTRIBUTIONS" shall mean contributions to the Plan as
described in Article 7.
-12-
<PAGE>
2.51 "ROLLOVER CONTRIBUTIONS ACCOUNT", with respect to a Participant,
shall mean the account established under the Plan for such Participant
representing the Rollover Contributions plus any gains or losses allocated
thereto, in accordance with the provisions of the Plan, as adjusted to reflect
distributions therefrom. Such account will be fully vested and nonforfeitable at
all times.
2.52 "SELF-EMPLOYED INDIVIDUAL" shall mean an individual who has Earned
Income for the taxable year from the trade or business for which the Plan is
established, or an individual who would have had Earned Income but for the fact
that the trade or business had no net profits for the taxable year.
2.53 "SPOUSAL CONSENT" shall mean the Eligible Spouse's written consent
which acknowledges the effect of the Participant's election and is witnessed by
the Plan Administrator (or any Plan representative appointed by the Plan
Administrator for such purposes) or a notary public. The written consent shall
specify the nonspouse Beneficiary, if any (and, in the case of a Participant's
election to waive a qualified joint and survivor annuity, the alternate form of
distribution elected). A Spousal Consent shall be irrevocable unless the
Participant changes his Beneficiary designation or revokes his election to waive
the qualified joint and survivor annuity or the qualified pre-retirement
survivor annuity, as applicable; upon such event, a consent shall be deemed to
be revoked. Notwithstanding the foregoing, Spousal Consent is not required if
the Participant establishes to the satisfaction of a Plan Administrator that
such written consent may not be obtained because there is no Eligible Spouse or
that the Eligible Spouse cannot be located. In addition, no Spousal Consent is
necessary if the Participant has been legally separated or abandoned within the
meaning of local law and the Participant provides the Plan Administrator with a
court order to that effect, so long as such court order does not conflict with a
qualified domestic relations order as defined in Article 17. If the Eligible
Spouse is legally incompetent to consent, the
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<PAGE>
Eligible Spouse's legal guardian may consent on his/her behalf, even if the
legal guardian is the Participant.
2.54 "TRUST" shall mean the Master Trust established under the Plan by
Banco Popular de Puerto Rico and/or the Trust established by the Employer for
purposes of the Plan, as specified by the Employer in the Adoption Agreement, in
both cases for the payment of the benefits provided by the Plan.
2.55 "TRUSTEE" shall mean Banco Popular de Puerto Rico or other person
appointed by the Employer, as specified by the Employer in the Adoption
Agreement.
2.56 "VALUATION DATE" shall mean the last business day of the Plan Year.
The Plan Sponsor or Employer may designate other valuation dates.
ARTICLE 3 PARTICIPATION
3.1 INITIAL PARTICIPATION
An Employee shall become a Participant in the Plan in accordance with
the following requirements:
a. Each Employee who, on the Effective Date of the Plan, has complied
with the minimum age and service requirements specified by the Employer in
the Adoption Agreement will become a Participant as of such date.
b. Each Employee (other than one who is a Participant under subsection
a. above) will become a Participant on the Entry Date immediately following
the date in which he complies with the minimum age and service requirements
specified by the Employer in the Adoption Agreement.
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<PAGE>
c. Employees who are included in a unit of Employees covered by a
collective bargaining agreement between the Employer and Employee
representatives, where retirement benefits were the subject of good faith
bargaining with the Employer and the agreement does not call for his
inclusion in the Plan and Employees who are nonresidents of Puerto Rico are
not allowed to participate in the Plan.
d. Unless specified otherwise in the Adoption Agreement, the Entry
Dates will be the first day of the first and seventh months of the Plan
Year (January 1 and July 1 for calendar year Plans). If the Adoption
Agreement provides for additional or other Entry Dates, the Entry Dates
will be as so specified; provided that the first day of the Plan Year will
always be an Entry Date.
e. If the Employer's Plan permits Pre-Tax Contributions or After-Tax
Contributions, each Employee who has become a Participant under the
preceding subsections of this section may make Pre-Tax Contributions and/or
After-Tax Contributions subject to the applicable provisions of the Plan
and the Adoption Agreement, and such an Employee will be considered a
Participant even if he elects not to make Pre-Tax Contributions or
After-Tax Contributions. However, an Employee may not make Pre-Tax
Contributions and/or After-Tax Contributions before the date the Employer
signs the Adoption Agreement.
3.2 TERMINATION OF PARTICIPATION
An Employee will cease to be a Participant when he is no longer
eligible to participate in the Plan due either to a change in his employment
status or to the termination of his service as an Employee because of
Disability, death, retirement or any other reason.
-15-
<PAGE>
3.3 RESUMES PARTICIPATION
If a former Participant returns to service with the Employer, he will
resume participation in the Plan immediately upon his return.
3.4 RULES RELATING TO SERVICE
The rules and definitions regarding the computation of years of service
for purposes of determining eligibility to participate in the Plan and vesting
will be as follows:
A. HOURS OF SERVICE METHOD. The definitions and rules in this
subsection will apply to Employers who in the Adoption Agreement elected to have
Employees' service determined under the hours of service method.
1. EMPLOYMENT COMMENCEMENT DATE means the date on which an Employee
first performs an hour of service; or, in the case of an Employee who has
incurred one or more breaks in service, as defined below, such Employee's
employment commencement date shall mean the date on which such Employee first
performs an hour of service following such breaks in service.
2. ELIGIBILITY COMPUTATION PERIOD, with respect to an Employee, means
the period of twelve (12) consecutive months commencing on an Employee's most
recent employment commencement date, or any anniversary thereof, in which he is
credited with at least 1000 hours of service.
3. YEAR OF SERVICE, with respect to an Employee, means an eligibility
computation period during which an Employee completes at least 1,000 hours of
service regardless of whether such Employee is in service continuously during
all of such eligibility
-16-
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computation period. An Employee who completes one thousand (1,000) hours of
service during an eligibility computation period shall not be deemed to have
completed a year of service until the last day of such eligibility computation
period regardless of when such Employee completes such one thousand (1,000)
hours of service.
4. HOURS OF SERVICE:
a. each hour for which an Employee is paid, or entitled to payment, by
the Employer for the performance of duties for the Employer during any
eligibility computation period. These hours will be credited to the
Employee for the eligibility computation period in which the duties are
performed;
b. each hour for which an Employee is paid, or entitled to payment, by
the Employer on account of a period of time during which no duties are
performed (irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity (including
Disability), layoff, jury duty, military duty or leave of absence.
Notwithstanding the preceding sentence, no more than 501 hours of service
shall be credited under this subsection b to an Employee on account of any
single continuous period during which the Employee performs no duties
(whether or not such period occurs within a single eligibility computation
period). Hours under this subsection b will be calculated and credited
under United States Department of Labor Regulations, 29 C.F.R.
ss.2530.200b-2(b) and (c), which are incorporated herein by this reference;
c. each hour for which back pay, irrespective of mitigation of damages,
is either awarded or agreed to by the Employer. The same hours of service
shall not be credited both under subsections a or b, as the case may be,
and under this subsection c; and no more than 501 hours of service shall be
credited under this
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subsection c with respect to payments of back-pay, to the extent that such
pay is agreed to or awarded for a period of time described in subsection b
during which the Employee did not perform or would not have performed any
duties. These hours will be credited to the Employee for the eligibility
computation period(s) to which the award or agreement pertains rather than
the computation period in which the award, agreement or payment is made;
d. in addition to hours credited to an Employee under subsections a
through c above, an Employee will be credited with the number of hours (not
exceeding 40 for a full week or pro rata portion of 40 for a partial week)
he normally would have worked except for the fact that he was absent on one
of the following types of unpaid absence: (i) leave of absence for a period
authorized by the Employer under a leave policy applied uniformly to all
Employees, provided he returns to service with the Employer at or before
the expiration of such period; or (ii) leave of absence for service in the
armed forces of the United States, provided he returns to service with the
Employer within the period during which his reemployment rights are
protected by law; and
e. solely for purposes of determining whether a break in service, as
defined in subsection 5, has occurred in an eligibility computation period,
an Employee who is absent from work for maternity or paternity reasons will
receive credit for the hours of service which would otherwise have been
credited to such Employee but for such absence, (or in any case in which
such hours cannot be determined, eight hours of service per day of such
absence). For purposes of this subsection e, an absence from work for
maternity or paternity reasons means an absence (i) by reason of the
pregnancy of the Employee, (ii) by reason of a birth of a child of the
Employee, (iii) by reason of the placement of a child with the Employee in
connection with the Employee's adoption of such child, or (iv) for purposes
of caring for such child for
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a period beginning immediately following such birth or placement. No more
than 501 hours of service shall be credited under this subsection e. The
hours of service credited under this subsection e will be credited (i) in
the eligibility computation period in which the absence begins if the
crediting is necessary to prevent a break in service in that period, or
(ii) in all other cases, in the following eligibility computation period if
necessary to prevent a break in service in that eligibility computation
period.
5. BREAK IN SERVICE, with respect to an Employee, means a computation
period during which such Employee does not complete more than five hundred (500)
hours of service.
6. VESTING COMPUTATION PERIOD, for purposes of computing an Employee'
nonforfeitable right to his Employer Contributions Account and/or Matching
Contributions Account, an Employee's vesting computation period(s) will be the
period of twelve (12) consecutive months commencing on an Employee's most recent
employment commencement date, or any anniversary thereof, in which he is
credited with at least 1000 hours of service.
7. COUNTING YEARS OF SERVICE FOR PARTICIPATION, all of an Employee's
years of service with the Employer are counted toward meeting the Plan's
participation eligibility requirement (if any), except that, if the Plan
provides for 100% vesting after two years or less of service, service before a
break in service which occurs before the Employee satisfies the Plan's
requirement for eligibility will be disregarded. However, the preceding sentence
will not apply if the Employer's Plan is a 1165(e) Plan.
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If the service requirement to become a Participant as specified in the
Adoption Agreement includes a fractional year, an Employee will not be required
to complete any minimum number of hours of service to receive credit for such
fractional year.
8. COUNTING YEARS OF SERVICE FOR VESTING. For purposes of determining a
Participant's vested percentage, all of his years of service will be counted,
except that, if the Plan specifically so provided, the following years of
service will not be counted:
a. years of service completed before age 18;
b. years of service before the Employer maintained the Plan or a
predecessor plan.
A plan is a predecessor plan if it was terminated on or after the date
it was required to comply with ERISA and within five years before or after the
Effective Date of the Plan. A plan is not treated as a predecessor plan with
respect to an Employee unless he was a participant in such plan.
9. SERVICE WITH OTHER ORGANIZATIONS.
a. To determine whether an Employee is a Participant and to determine
his vested percentage, an Employee will receive credit for Hours of Service
under section 3.4A.4 for employment with the Employer and any Affiliate.
Service credited under this paragraph shall be limited to the period that
the other entities were related to the Employer in the manner described in
section 2.3 of the Master Plan document, unless the Employer has elected in
the Adoption Agreement to recognize service with any such entity for any
period prior to the time such relationship commenced.
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b. If the Employer maintains a plan of a predecessor employer, service
with the predecessor employer will be treated as service with the Employer.
c. If not treated as service with the Employer under section 3.4A.9.b
above, service with any entity specifically so designated in the Adoption
Agreement will be treated as service with the Employer.
B. ELAPSED TIME METHOD. The definitions and rules in this subsection
will apply to Employers who in the Adoption Agreement elected to have Employees'
service determined under the elapsed time method.
1. SERVICE
a. IN GENERAL. Service of an Employee includes all of the following:
i. any period of service, as defined below, whether or not
continuous; and
ii. for a reemployed Employee, any period of severance provided
that his reemployment commencement date occurs within one year
after his severance date.
b. YEAR OF SERVICE. To determine an Employee's years of service, all
of his service will be aggregated and each 365 days of such aggregated
service will constitute a year of service. If any provision of the Plan
calls for completion of a fractional year of service, such fraction of
365 days of the Employee's aggregated service will satisfy the
provision; for example, if one-half year of service is required,
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then such requirement will be met when the Employee's aggregated
service equals 183 days.
2. DEFINITIONS RELATING TO SERVICE
a. PERIOD OF SERVICE shall mean an Employee's service, beginning on his
employment commencement date or reemployment commencement date and
ending on his severance date.
b. EMPLOYMENT COMMENCEMENT DATE. An Employee's employment commencement
date is the date on which he first completes an hour of service, as
defined below.
c. REEMPLOYMENT COMMENCEMENT DATE. In the case of an Employee who has a
period of severance which is not taken into account under subsection
1.a(ii), the reemployment date is the date on which he first
completes an hour of service after such period of severance.
d. PERIOD OF SEVERANCE. A period of severance of an Employee means a
period beginning on his severance date and, if applicable, ending on
his reemployment commencement date.
In the case of an Employee who is absent from work for maternity or
paternity reasons, the 12-consecutive month period beginning on the date of such
absence will constitute a year of service; the first anniversary of the first
date of such absence will be treated as neither a period of service nor a period
of severance; any period after the 24- consecutive month period beginning on the
date of such absence will constitute a period of severance. For purposes of this
section, an absence from work for maternity or paternity
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reasons means an absence (1) by reason of the pregnancy of the Employee, (2) by
reason of the birth of a child of the Employee, (3) by reason of the placement
of a child with the Employee in connection with the Employee's adoption of such
child, or (4) for purposes of caring for such child for a period beginning
immediately following such birth or placement.
Each Employee will share in Employer Contributions and Matching
Contributions for the period beginning on the date the Employee commences
participation under the Plan and ending on the date on which such Employee
severs employment with the Employer or is no longer a Participant.
e. SEVERANCE FROM SERVICE DATE. An Employee's severance from service
date is the earlier of:
i the date on which he quits, retires, is discharged or dies, or
ii. the first anniversary of the first day of a period during which
he is absent (with or without compensation) from performing
duties for the Employer for any reason other than quit,
retirement, discharge or death, such as vacation, holiday,
sickness, leave of absence or layoff
a. HOUR OF SERVICE. Hour of service is an hour for which the Employee
is paid or entitled to payment for the performance of duties for the
Employer.
3. COUNTING YEARS OF SERVICE FOR PARTICIPATION. All of an Employee's
years of service with the Employer are counted toward meeting the Plan's
participation requirement (if any), except that, if the Plan provides for 100%
vesting after two years or less
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of service, service will be disregarded if it was completed before a period of
severance of one year or more which occurs before the Employee satisfied the
Plan's service requirement for eligibility. However, the preceding sentence will
not apply if the Employer's Plan is a 1165(e) Plan.
4. COUNTING YEARS OF SERVICE FOR VESTING. For purposes of determining a
Participant's vested percentage, all of his years of service will be counted
except that, if the Plan so provides, the following years of service will not be
counted:
a. service completed before age 18;
b. service before the Employer maintained this Plan or a predecessor
Plan.
A plan is a predecessor plan if it was terminated on or after the date
it was required to comply with ERISA and within five years before or after the
Effective Date of this Plan. A plan is not treated as a predecessor plan with
respect to an Employee unless he was a participant in such plan.
5. SERVICE WITH OTHER ORGANIZATIONS.
a. To determine whether an Employee is a Participant and to determine
his vested percentage, an Employee will receive credit for Hours of Service
under section 3.4A.4 for employment with the Employer and any Affiliate.
Service credited under this paragraph shall be limited to the period that
the other entities were related to the Employer in the manner described in
section 2.3 of the Master Plan document, unless the Employer has elected in
the Adoption Agreement to recognize
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service with any such entity for any period prior to the time such
relationship commenced.
b. If the Employer maintains a plan of a predecessor employer, service
with the predecessor employer will be treated as service with the Employer.
c. If not treated as service with the Employer under section 3.4B.5.b
above, service with any entity specifically so designated in the Adoption
Agreement will be treated as service with the Employer.
3.5 BENEFITS FOR OWNER-EMPLOYEES
If the Plan provides contributions or benefits for one or more
Owner-Employees who together control the trade or business with respect to which
the Plan is established, and who also control as Owner-Employees, one or more
other trades or businesses, the Plan and plans established with respect to such
other trades or businesses must, when looked at as a single plan, satisfy
Sections 1165(a) and (g) of the IRC with respect to the Employees of the trade
or business with respect for which the Plan is established and all such other
trades or businesses. If the Plan provides contributions or benefits for one or
more Owner-Employees who control one or more other trades or businesses, the
Employees of each other trades or businesses must be included in a plan which
satisfies the requirements of Sections 1165(a) and (g) of the IRC and which
provides contributions and benefits not less favorable than those provided for
such Owner-Employee under the Plan. If an individual is covered as an
Owner-Employee under two or more additional plans of trades or businesses not
controlled by him, and the individual controls one or more other trades or
businesses, the contributions or benefits of the Employees under the plan of the
trade or business controlled by him must be at least as favorable as those
provided for him under the plan of the trade of business not controlled by him.
For purposes of this subsection, an Owner-Employee, or two or more
Owner-Employees, shall be considered to
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control a trade or business if such Owner-Employee, or such two or more
Owner-Employees together:
a. own the entire interest in an unincorporated trade or business, or
b. in the case of a special partnership or corporation of individuals,
own more than 50 percent of either the capital interest or the profits
interest in such partnership or corporation of individuals.
For purposes of the preceding sentence, an Owner-Employee or two or
more Owner-Employees shall be treated as owning any interest in a special
partnership or corporation of individuals which is owned, directly or
indirectly, by a special partnership or corporation of individuals, which such
Owner-Employee or such two or more Owner-Employees are considered to control
within the meaning of the preceding sentence.
ARTICLE 4 PRE-TAX CONTRIBUTIONS
4.1 ELIGIBILITY
If the Employer's Plan is a profit-sharing plan and the Adoption
Agreement so provides, an Employee who meets the participation requirements of
section 3.1 may elect to make Pre-Tax Contributions under IRC Section 1165(e).
Pre-Tax Contributions are voluntary and no Employee is required to make such
contributions. Pre-Tax Contributions Accounts are fully vested and
nonforfeitable at all times.
4.2 PRE-TAX CONTRIBUTION ELECTION
The Participation must file a written election form with the Plan
Administrator indicating the amount of Pre-Tax Contributions he wishes to make
and
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agreeing to reduce his Compensation by such amount. Subject to any rules
specified in the Adoption Agreement or established by the Plan Administrator, a
Participant may increase, decrease, discontinue or resume his Pre-Tax
Contributions during a Plan Year by filing an appropriate form with the Plan
Administrator. A discontinuance of Pre-Tax Contributions will be effective as
soon as reasonably practicable after the Plan Administrator's receipt of the
Participant's election form. An increase or decrease of Pre-Tax Contributions,
or a resumption after a discontinuance, will be effective as of the Entry Date
next following the Participant's timely election.
No change under the preceding paragraph may cause a Participant's
Pre-Tax Contributions to exceed the maximum provided for under section 4.4.
The Plan Administrator, with the approval of the Plan Sponsor, may
establish reasonable rules of uniform application governing Participants'
elections and changes. Such rules may include the number and frequency of
elections or changes during any Plan Year, effective dates for elections or
changes (for example, the first day of the payroll period coinciding with or
next following the applicable election or change date), cutoff dates for timely
filing of elections or changes, and other rules to facilitate operation of this
article.
Notwithstanding the preceding, a Participant will be permitted to
change his election at least once each year.
4.3 COLLECTION OF PRE-TAX CONTRIBUTIONS
The Employer will collect Participants' Pre-Tax Contributions using
payroll procedures. The Employer will transfer the amounts collected to the
Trustee as of the earliest date when such contributions can reasonably be
segregated from the Employer's
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general assets, but not later than fifteen (15) business days after the end of
the month in which such amounts would otherwise have been payable to the
Participant in cash.
4.4 LIMITATIONS ON PRE-TAX CONTRIBUTIONS
A. LIMITS ON PRE-TAX CONTRIBUTIONS. The minimum amount of Pre-Tax
Contributions the Participant may elect to make is one percent (1%) of his
Compensation. Pre-Tax Contributions may not exceed the lesser of: (1) ten
percent (10%) of the Participant's Compensation up to a maximum of $8,000 (or
any other dollar amount may be established in the future under the IRC or the
regulations issued thereunder) in any calendar year; (2) the maximum amount
permitted under section 4.5 for Highly Compensated Employees for any Plan Year;
or (3) any maximum or other limitation imposed by the Plan Administrator.
If a Participant makes Pre-Tax Contributions in a calendar year equal
to the legal applicable maximum, his Pre-Tax Contributions will immediately
cease.
B. LIMITS DUE TO WITHDRAWALS. Notwithstanding section 4.1 and section
4.4.A above, a Participant who makes a withdrawal on account of a financial
hardship under section 9.1 may not make Pre-Tax Contributions or After-Tax
Contributions hereunder (or under any other Plan maintained by the Employer) for
a period of 12 months following the date of the in-service withdrawal. Also, in
the taxable year following the date of the withdrawal, such a Participant may
not make Pre-Tax Contributions which, when added to his Pre-Tax Contributions
made during the taxable year of the withdrawal, exceed the amount specified in
subsection A above.
C. LIMITS ON DISTRIBUTIONS. Pre-Tax Contributions may not be
distributed to Participants or their Beneficiaries earlier than:
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1. separation from service, death or Disability,
2. termination of the Plan without the establishment of a successor
plan,
3. the date of the sale or other disposition to an unrelated entity of
substantially all of the assets used by the Employer in a trade or business,
provided the Employee continues in employment with the purchaser of the assets,
4. the date of sale or other disposition to an unrelated
entity of a subsidiary of the Employer, provided the Employee continues in
employment with the subsidiary,
5. reaching the age of fifty-nine and a half (59 1/2) years, or
6. a case of financial hardship, as defined in section 9.1.
4.5 ACTUAL DEFERRAL PERCENTAGE TEST
A. As of the last day of each Plan Year, the Average Actual Deferral
Percentages of Highly Compensated Employees (such average is called the HCE-ADP
in this section) may not exceed the Average Actual Deferral Percentages of
Non-Highly Compensated Employees (such average is called the NHCE-ADP in this
section) by more than the amount specified in the following table:
IF NHCE-ADP IS: HCE-ADP MAY NOT EXCEED:
less than 2% two times NHCE-ADP
2% but less than 8% two percentage points more than NHCE-ADP
8% or higher 10%
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The determination and treatment of Participant's Actual Deferral
Percentages will be subject to the requirements of any applicable regulations
under ERISA or the IRC.
B. The Actual Deferral Percentage for any Participant who is a Highly
Compensated Employee for the Plan Year and who is eligible to make Pre-Tax
Contributions (and, if applicable, to receive Qualified Employer Deferral
Contributions allocated to his accounts) under two or more arrangements
described in IRC Section 1165(e) that are maintained by the Employer, shall be
determined as if such Pre-Tax Contributions (and, if applicable, such Qualified
Employer Deferral Contributions) were made under a single arrangement. If a
Highly Compensated Employee participates in two or more cash or deferred
arrangements that have different Plan Years, all cash or deferred arrangements
ending with or within the same calendar year shall be treated as a single
arrangement.
C. In the event that this Plan satisfies the requirements of IRC
Sections 1165(e), 1165(a)(3) or 1165(a)(4) only if aggregated with one or more
other Plans, or if one or more other Plans satisfy the requirements of such
Sections of the IRC only if aggregated with this Plan, then this section shall
be applied by determining the Actual Deferral Percentage of Employees as if all
such Plans were a single Plan.
D. For purposes of determining the Actual Deferral Percentage test,
Pre-Tax Contributions and Qualified Employer Deferral Contributions must be made
before the last day of the twelve-month period immediately following the Plan
Year to which contributions relate.
E. The Employer shall maintain records sufficient to demonstrate
satisfaction of the Actual Deferral Percentage test and the amount of Qualified
Employer Deferral Contributions used in such test.
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4.6 QUALIFIED NON-ELECTIVE CONTRIBUTIONS
If the Employer's Plan provides for Profit-Sharing Contributions and
such contributions meet the requirements of this section, then, subject to the
requirements of applicable regulations, the Plan Administrator may elect to
treat all or part of such contributions as Qualified Non-Elective Contributions
which will be considered Qualified Employer Deferral Contributions for purposes
of the Actual Deferral Percentage test of section 4.5, above.
Profit-Sharing Contributions meet the requirements of this section if
they are always fully vested when made, and they are subject to the limitations
on distribution of section 4.4C. Also, any Profit-Sharing Contributions not
treated as Qualified Employer Deferral Contributions under the preceding
paragraph must be nondiscriminatory under IRC Section 1165(a)(4).
In lieu of distributing Excess Contributions as provided in section
4.8A. of the Plan, the Employer may make Qualified Non-Elective Contributions
under the Plan on behalf of Non-Highly Compensated Employees in an amount as is
needed to meet the Actual Deferral Percentage test. In such case, the allocation
of Qualified Non-Elective Contributions shall be made only to the accounts of
Participants who are Non-Highly Compensated Employees in the ratio that each
Participant's Compensation for the Plan Year bears to the Compensation of all
such Participants for such Plan Year.
4.7 QUALIFIED MATCHING CONTRIBUTIONS
Generally, Matching Contributions will not be included in determining a
Participant's Deferral Percentage. However, if the Plan provides for Matching
Contributions and such contributions meet the requirements of this section, the
Plan Administrator may
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elect to treat all or part of such contributions as Qualified Matching
Contributions which will be considered Qualified Employer Deferral Contributions
for purposes of the Actual Deferral Percentage tests of section 4.5 above.
Matching Contributions meet the requirements of this section if they
are fully vested when made, and they are subject to the limitations on
distribution of section 4.4C.
Qualified Matching Contributions will be taken into account as
Qualified Employer Deferral Contributions for purposes of calculating the Actual
Deferral Percentages, subject to such other requirements as may be prescribed by
the Puerto Rico Secretary of the Treasury and shall be made as are needed to
meet the Actual Deferral Percentage test. The Employer will make Qualified
Matching Contributions to the Plan on behalf of Participants who are Non-Highly
Compensated Employees who make either Pre-Tax Contributions and/or After-Tax
Contributions to the Plan.
4.8 MONITORING PARTICIPANT'S ACTUAL DEFERRAL PERCENTAGES
The Plan Administrator (or an administrative service provider - which
may be the Trustee or the Plan Sponsor - retained by the Plan Administrator to
perform recordkeeping and other administrative duties) will monitor
Participants' Actual Deferral Percentages to insure compliance with the
requirements of section 4.5 above. Any adjustments in Participants' elections or
Actual Pre-Tax Contributions necessary to meet the requirements of section 4.5
will be made as follows: The Plan Administrator will reduce the Actual Deferral
Percentage of the participating Highly Compensated Employee who has the highest
Actual Deferral Percentage until it reaches the Actual Deferral Percentage of
the next participating Highly Compensated Employee(s) with the next highest
Actual Deferral Percentage; then the Plan Administrator will reduce the Actual
Deferral Percentages of both or all such participating Highly Compensated
Employees until they reach that of the Highly
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Compensated Employee(s) with the then next highest Actual Deferral Percentage;
and so on. The foregoing reductions will be made only to the extent necessary to
meet the requirements of section 4.5.
A. EXCESS CONTRIBUTIONS. The Plan Administrator will adjust Pre-Tax
Contributions elections by Highly Compensated Employees in accordance with the
preceding paragraph at such time or times before or during a Plan Year as the
Plan Administrator deems advisable to insure that the requirements of section
4.5 are met as of the last day of the Plan Year.
If, notwithstanding the preceding sentence, the requirements of section
4.5 are not met as of the last day of a Plan Year, such adjustments may be made
after the end of a Plan Year in one or a combination of the following ways: (i)
paying to a Participant the amount of his Excess Contributions plus earnings (or
losses) on such excess, (ii) recharacterizing the Excess Contributions of such a
Participant as After-Tax Contributions during such year, or (iii) in the
Employer's discretion, by making Qualified Non-Elective Contributions or
Qualified Matching Contributions that meet the requirements of section 4.6 or
4.7, respectively, on behalf of Non-Highly Compensated Employees in the amount
needed so that the requirements of section 4.5 are met. For purposes of the
preceding sentence, any such payment or recharacterization of Excess
Contributions will be designated as such by the Employer, and will be made by
the end of the succeeding Plan Year. However, the amount to be paid or
recharacterized will be reduced by any amounts relating to such Plan Year
previously withdrawn by the Participant. For purposes of clause (ii) of this
paragraph, recharacterizing will be available only if the Adoption Agreement
permits After-Tax Contributions.
Recharacterized amounts will remain nonforfeitable and subject to the
same distribution requirements as Pre-Tax Contributions. Amounts may not be
recharacterized
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by a Highly Compensated Employee to the extent that such amount in combination
with other After-Tax Contributions made by that Employee would exceed any stated
limit provided in the Adoption Agreement, or by the Puerto Rico Secretary of the
Treasury, on After-Tax Contributions. Recharacterized amounts will be taxable to
the Participant in the tax year in which the Participant would have received
them in cash.
Recharacterization must occur no later than two and one-half months
after the last day of the Plan Year in which such Excess Contributions arose and
is deemed to occur no earlier than the date the last Highly Compensated Employee
is informed in writing of the amount recharacterized and the consequences
thereof.
Excess Contributions shall be distributed from the Participant's
Pre-Tax Contributions Account and Qualified Matching Contributions Account (if
applicable) in proportion to the Participant's Pre-Tax Contributions and
Qualified Matching Contributions (to the extent used in the Actual Deferral
Percentage test) for the Plan Year. Excess Contributions shall be distributed
from the Participant's Qualified Non-Elective Contributions Account only to the
extent that such Excess Contributions exceed the balance in the Participant's
Pre-Tax Contributions Account and Qualified Matching Contributions Account.
A distribution of Excess Contributions under this section may be made
notwithstanding any otherwise applicable restrictions or Spousal Consent
requirements on in-service withdrawals or distributions.
4.9 EXCESS DEFERRALS
Notwithstanding any other provision of the Plan, Excess Deferrals, plus
any income and minus any loss allocable thereto, shall be distributed no later
than April 15 to any
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Participant to whose account Excess Deferrals were assigned for the preceding
year and who claims Excess Deferrals for such taxable year. A withdrawal of an
Excess Deferral under this section may be made notwithstanding any otherwise
applicable restrictions or Spousal Consent requirement on in-service
withdrawals. The amount of any Excess Deferrals to be withdrawn under this
section will be reduced by any amounts previously distributed or recharacterized
under section 4.8.
4.10 LIMITS ON DISCONTINUANCE OF CONTRIBUTIONS
Notwithstanding section 4.1, section 4.2 and section 4.4A above, a
Participant who discontinues his' or her's Pre-Tax Contributions may not make
Pre-Tax Contributions or After-Tax Contributions hereunder (or under any other
Plan maintained by the Employer) for a period of 12 months following the date of
such discontinuance of the Pre-Tax Contributions.
ARTICLE 5 AFTER-TAX CONTRIBUTIONS
5.1 ELIGIBILITY
If the Adoption Agreement so provides, an Employee may elect to make
After-Tax Contributions. After-Tax Contributions are voluntary and no Employee
will be required to make such contributions. After-Tax Contributions Accounts
are fully vested and nonforfeitable at all times.
5.2 LIMITS ON AMOUNT
The minimum amount of After-Tax Contributions a Participant may elect
is 1 percent of his Compensation. After-Tax Contributions for any Plan Year may
not exceed
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the lesser of 10% of the Aggregate Compensation paid to the Employee during all
the years he or she has been a Plan Participant or any other limitation imposed
by the Plan Administrator. The Plan Administrator shall adjust in the future
this maximum limitation as needed to ensure that the Plan shall meet any limits
prescribed by the IRC and Regulations thereunder. Additional restrictions on
After-Tax Contributions may apply in certain cases to Participants who make a
in-service withdrawal on account of a financial hardship under section 9.1. (See
the first sentence of section 4.4B.)
5.3 AFTER-TAX CONTRIBUTION ELECTION
The procedures for electing and changing After-Tax Contributions will
be similar to those described in section 4.2.
5.4 COLLECTION OF AFTER-TAX CONTRIBUTIONS
The Employer will collect Participants' After-Tax Contributions using
payroll or other procedures.
The Employer will transfer the amounts collected to the Trustee as of
the earliest date on which such contributions can reasonably be segregated from
the Employer's general assets, but not later than fifteen (15) business days
after the end of the month in which such amounts are received by the Employer or
the date on which such amounts would otherwise have been payable to the
Participant in cash.
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ARTICLE 6 EMPLOYER AND MATCHING CONTRIBUTIONS
6.1 ELIGIBILITY
If the Adoption Agreement so provides, the Employer will make Employer
Contributions (Money Purchase Contributions or Profit-Sharing Contributions)
and/or Matching Contributions to all Participants pursuant to the provisions of
this Article 6. Participants will have a vested and nonforfeitable interest in
their Employer Contributions Account and Matching Contributions Account in
accordance with the vesting schedule specified by the Employer in the Adoption
Agreement.
6.2 EMPLOYER CONTRIBUTIONS
A. IN GENERAL. For each Plan Year that the Plan is in effect, the
Employer will make Employer Contributions (Money Purchase Contributions or
Profit-Sharing Contributions) in cash, the amount (if any) to be determined
according to the provisions of this Article. If, due to miscalculation or error,
the Employer Contributions exceed the amount prescribed or determined by the
Employer, such excess may, at the election of the Employer, be treated as a
contribution for the succeeding Plan Year or years.
The Employer Contribution may be paid in a single sum or installments,
but the total amount will be paid to the Trustee not later than the earlier of
the time (including extensions thereof) prescribed by law for filing the
Employer's Puerto Rico income tax return for its taxable year ending with or
within the Plan Year.
B. MONEY PURCHASE PENSION PLANS. If pursuant to the Adoption Agreement
the Plan is a money purchase pension plan, the following provisions will apply:
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1. MONEY PURCHASE CONTRIBUTION. For each Plan Year the Employer will
contribute an amount which will equal the contribution required for all
Participants entitled to receive an allocation for such year under the
contribution formula elected by the Employer in the Adoption Agreement.
2. MAXIMUM CONTRIBUTION. Employer Contributions to the Plan shall not
exceed the maximum amount which the Employer may deduct under IRC section
1023(n), or any successor provision or similar statutory provisions hereafter
enacted.
3. FORFEITURES. Forfeitures will be either allocated to the accounts of
Participants during such Plan Year in the proportion that each such
Participant's Compensation during such Plan Year bears to the total Compensation
during such Plan Year of all such Participants or used to reduce the amount the
Employer must contribute to the Plan.. No forfeitures will occur solely as a
result of an Employee's withdrawal of Employee contributions.
C. PROFIT-SHARING PLANS. If pursuant to the Adoption Agreement the Plan
is a profit-sharing plan, the following provisions will apply:
1. PROFIT-SHARING CONTRIBUTION. If specified in the Adoption Agreement,
for each Plan Year in which the Plan is in effect, the Employer shall make
contributions to the Trust in such amounts as it may determine; the Employer
will not be obligated to contribute any particular amount in a Plan Year or to
make any contribution at all in any particular Plan Year.
2. MAXIMUM CONTRIBUTION. All Employer Contributions to the Plan shall
be made out of Net Profits and shall not exceed the lesser of:
a. The Employer's Net Profits; or
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b. The maximum amount permitted to be deducted by the Employer under
IRC section 1023(n), or any successor or similar statutory provisions hereafter
enacted.
3. NET PROFITS DEFINED. "Net Profits" for purposes of this formula
shall mean, in the case of a for profit Employer, the taxable income of the
Employer as determinable for Puerto Rico income tax purposes, without any
deduction for taxes based upon income or for contributions made by the Employer
under the Plan or to any other qualified plans maintained by the Employer and
including any undistributed Net Profits from prior years, after deduction of
taxes based upon income and contributions made by the Employer under the Plan or
any other qualified plans maintained by the Employer. In the case of a not-for
profit Employer, "Net Profits" shall mean the surplus of the Employer as
determinable for Puerto Rico income tax purposes, without any deduction for
contributions made by the Employer under the Plan or to any other qualified
plans maintained by the Employer and including any accumulated surplus from
prior years, after deduction of contributions made by the Employer under the
Plan or any other qualified plans maintained by the Employer.
4. FORFEITURES. Forfeitures will be either allocated to the accounts of
Participants during such Plan Year in the proportion that each such
Participant's Compensation during such Plan Year bears to the total Compensation
during such Plan Year of all such Participants or to reduce the amount the
Employer must contribute to the Plan. No forfeitures will occur solely as a
result of an Employee's withdrawal of Employee contributions.
6.3 ALLOCATION OF EMPLOYER CONTRIBUTIONS
Employer Contributions for each Plan Year shall be allocated as of the
last day of such Plan Year (even though receipt of the Employer Contributions by
the Trustee
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may take place after the close of such Plan Year) among the Employer
Contributions Accounts of those Participants who either completed more than 500
hours of service or were actively employed by the Employer at the end of such
Plan Year.
Notwithstanding the above, a Participant whose employment with the
Employer terminates because of his retirement, Disability or death during the
Plan Year is not required to fulfill the foregoing employment requirement to
share in the allocation of Employer Contributions for such Plan Year.
Employer Contributions will be allocated so that each Participant
receives a proportionate amount of the total Employer Contribution equal to the
ratio of his Compensation over the Compensation of all Participants for the Plan
Year (Employer Contributions to a profit-sharing plan), or so that each
Participant receives the percentage of his Compensation for the Plan Year
specified in the Adoption Agreement (money purchase pension plan).
6.4 MATCHING CONTRIBUTIONS
A. AMOUNT OF CONTRIBUTION. If the Employer so chooses in the Adoption
Agreement, for each matching period, as defined below, the Employer will make a
Matching Contribution in cash on behalf of each Participant who makes Pre-Tax
Contributions under Article 4 and/or After-Tax Contributions under Article 5
during such period. A Participant will be required to be an Employee on the last
day of a matching period (or to have left employment during such period because
of retirement, death or Disability) in order to receive a Matching Contribution
for such period.
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The amount of such Matching Contribution will be as specified in the
Adoption Agreement. The Employer will not make a Matching Contribution with
respect to any Excess Contributions under section 4.8.
The Plan Administrator will select the matching period, which may be
the Plan Year or a period shorter than the Plan Year such as each month, three
months (quarterly), four months (tri-annual) or six months (semi-annual).
Matching contributions for a matching period will be transferred to the Trustee
within a reasonable time after the end of such period. However, the total amount
of the Employer's matching contributions for a Plan Year will be paid to the
Trustee by the time specified in section 6.2.
Matching Contributions shall be vested in accordance with the vesting
schedule selected in the Adoption Agreement. In any event, Matching
Contributions shall be fully vested at Normal Retirement Age, upon the complete
or partial termination of the Plan, or upon the complete discontinuance of
contributions by the Employer.
B. SOURCE OF CONTRIBUTIONS. In a profit-sharing or 1165(e) plan, the
Matching Contributions required under this section will be limited to the
Employer's net profits, as defined in section 6.2C.3.
C. USE OF FORFEITURES. Any forfeitures occurring during a matching
period will be allocated to the accounts of Participants during such Plan Year
in the proportion that each such Participant's Compensation during such Plan
Year bears to the total Compensation during such Plan Year of all such
Participants.
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ARTICLE 7 ROLLOVERS
7.1 ROLLOVER CONTRIBUTIONS
A. With the approval of the Plan Administrator, an Employee may:
1. make a rollover transfer to the Plan of cash in an amount which
constitutes all of a qualifying rollover distribution, as defined in IRC Section
1165(b)(2); or
2. cause any amount which could be rolled over to the Plan under
subsection 1 to be transferred directly to the Trustee of the Plan from the
Trustee or custodian of a Puerto Rico qualified plan or annuity. In the case of
such transfers directly from another Puerto Rico qualified plan funded through a
trust or annuity contract, amounts consisting of the following will be accounted
for separately: employer contributions to a money purchase plan, employer
contributions to a profit-sharing or 1165(e) plan, pre-tax contributions and
after-tax contributions. The Employee will be responsible for providing the Plan
Administrator with records that will reflect such amounts separately.
B. The Employer, the Plan Administrator and the Trustee have no
responsibility for determining the propriety of, proper amount or time of, or
status as a tax free transaction of any transfer under subsection a above.
C. If an Employee who is not yet a Participant makes a transfer under
subsection a above, he will be considered to be a Participant with respect to
administering such transferred amount only. He will not be a Participant for any
other purpose of the Plan until he completes the participation requirements
under Article 3.
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D. The Employer, Plan Administrator or Trustee in its discretion may
direct the return to the Employee (or the retransfer to another Trustee or
custodian designated by the Employee) of any transfer to the extent that such
return is deemed necessary to insure the continued qualification of this Plan
under IRC Section 1165(a) or that holding such contribution hereunder would be
administratively burdensome.
E. The Plan Administrator will credit any Rollover Contribution to the
Participant's Rollover Contributions Account as soon as practicable after
receipt thereof by the Trustee. Any amounts separately accounted for under
subsection A.2 above will be separately accounted for hereunder as subaccounts
within the Employee's Rollover Contributions Account.
ARTICLE 8 VESTING
8.1 VESTING
A Participant will have a vested and nonforfeitable interest in that
percentage of his Employer Contributions Account and/or Matching Contributions
Account determined under the vesting schedule specified by the Employer in the
Adoption Agreement.
8.2 FULL VESTING
Notwithstanding section 8.1, Participants will become fully vested in
their Employer Contributions Account and/or Matching Contributions Account upon
the earlier of (i) reaching Normal Retirement Age while still employed by the
Employer; (ii) upon retirement at their Normal Retirement Date or at an Early
Retirement Date as specified in the Adoption Agreement; (iii) upon Disability as
defined in section 2.10; or (iv) upon death while still an Employee.
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8.3 PAYMENT OF VESTED INTEREST
A Participant's vested interest in his accrued benefit will be paid to
him, or payments will begin, on a date elected by the Participant and will be
paid to him in one or more of the methods described in section 10.1 as elected
by the Participant. The Participant's election as to either time or form of
payment will be subject to the rules of Article 10.
8.4 FORFEITURE OF NON-VESTED INTEREST
A Participant who has separated from service will forfeit the
non-vested portion of his accrued benefit on the day after he incurs a period of
five consecutive breaks in service (as per section 3.4A, if the Employer's Plan
counts service for vesting purposes using the hours of service method), or a
Period of Severance of sixty (60) months (as per section 3.4B, if the Employer's
Plan counts service for vesting purposes using the elapsed time method).
Forfeitures applied as provided in Articles 6.2B.3 and 6.2C.4 of this Plan.
8.5 RESUMPTION OF EMPLOYMENT
A former Participant who returns to employment with the Employer after
a period of less than five consecutive breaks in service will receive credit for
all his prior years of service for vesting purposes.
8.6 CALCULATING VESTED INTEREST AFTER WITHDRAWAL OR DISTRIBUTION
This section applies only in cases in which the Employer chooses in the
Adoption Agreement the graded vesting schedule. Where a Participant's Employer
Contributions Account and/or Matching Contributions Account is charged with a
withdrawal
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or distribution at a time when he is not fully vested in such account, the
remaining balance of the Participant in such account will be credited to a
separate suspense account within the Participant's Employer Contributions
Account and/or Matching Contributions Account, or accounting records will be
maintained in a manner which has the same effect as establishing a separate
suspense account. The Participant's vested interest in such separate suspense
account will be determined in accordance with the following formula:
X = P(AB + W/D) - W/D
For purposes of the formula:
a. "X" is the Participant's vested interest in the separate suspense
account at the time the formula is applied;
b. "P" is the Participant's vested percentage in his/her Employer
Contributions Account and/or Matching Contributions Account at the time the
formula is applied;
c. "AB" is the balance in the separate suspense account at the time the
formula is applied; and
d. "W/D" is the amount withdrawn by, or distributed to, the Participant
at the time the formula is applied.
The term remaining balance as used in this section means a
Participant's interest in his Employer Contributions Account and/or Matching
Contributions Account remaining after a withdrawal or distribution of a portion
or all of his vested interest therein.
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ARTICLE 9 IN-SERVICE WITHDRAWALS
9.1 WITHDRAWAL OF PRE-TAX CONTRIBUTIONS
A. AMOUNT. A Participant may make in-service withdrawals from his
Pre-Tax Contributions Account in the event of financial hardship only. The
maximum withdrawal from the Participant's Pre-Tax Contributions Account is the
smaller of the amount of his Pre-Tax Contributions, without earnings or
investment gains, or the amount needed to alleviate his financial hardship. A
Participant, however, may not apply for more than two (2) in-service withdrawals
in any Plan Year.
B. FINANCIAL HARDSHIP.
1. An in-service withdrawal will be on account of financial hardship
only if the Participant has an immediate and heavy financial need and the
withdrawal is necessary to meet such need.
2. A withdrawal will be deemed to be on account of an immediate and
heavy financial need if it is occasioned by:
a. a deductible medical expense incurred by the Participant or his
spouse, children or dependent;
b. purchase of the Participant's principal residence (not including
mortgage payments);
c. tuition payments and educational expenses for the next twelve months
of post-secondary education for the Participant or his spouse, child or
dependent;
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d. rent or mortgage payments to prevent the Participant's eviction from
or the foreclosure of the mortgage on his principal residence; or
e. such other event or circumstances as the Puerto Rico Secretary of
the Treasury through regulations may permit.
3. A withdrawal will be deemed necessary to satisfy the Participant's
financial needs if either:
a. the Participant has made all non-financial hardship withdrawals and
obtained all nontaxable loans available under all of the Employer's
qualified retirement Plans; and each such other Plan which provides for
Pre-Tax Contributions contains restrictions similar to those in section
4.4B.; or
b. the Participant satisfies such other requirements as may be
prescribed by the Puerto Rico Secretary of the Treasury.
4. A Participant must establish to the Plan Administrator's
satisfaction both that the Participant has an immediate and heavy financial need
and that the withdrawal is necessary to meet the need, as provided in
subsections 2 and 3 above.
A Participant's application for a financial hardship withdrawal will be
in writing on such form and containing such information (or other evidence or
materials establishing the Participant's financial hardship) as the Plan
Administrator may require. The Plan Administrator's determination of the
existence of and the amount needed to meet a financial hardship will be binding
on the Participant.
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Any withdrawal under this section will be paid to the Participant as
soon as practicable after the Plan Administrator's receipt of the Participant's
withdrawal form.
C. WITHDRAWALS AFTER AGE 59 1/2. Notwithstanding subsection B above,
1. to the extent provided in the Adoption Agreement, a Participant may
make in-service withdrawals from his Pre-Tax Contributions, Qualified Matching
and/or Qualified Non-Elective Contributions Accounts after he has reached age
59-1/2; and
2. a Participant may make in-service withdrawals from his Pre-Tax
Contributions, Qualified Matching and/or Qualified Non-Elective Contributions
Accounts under the following circumstances: (i) termination of the Plan without
the establishment of a successor Plan; (ii) the sale or other disposition to an
unrelated entity of substantially all of the assets used by the Employer in a
trade or business, provided the Employee continues in employment with the
purchaser of the assets; (iii) the sale or other disposition to an unrelated
entity of a subsidiary of the Employer, provided the Employee continues in
employment with the subsidiary.
D. SPOUSAL CONSENT TO IN-SERVICE WITHDRAWALS. A married Participant's
spouse must consent to an in-service withdrawal under this section. Such consent
must be in writing and witnessed by a notary public or the Plan Administrator
(or any Plan representative appointed by the Plan Administrator for such
purpose).
E. PAYMENT. Any withdrawal under this section will be paid to the
Participant as soon as practicable after the Plan Administrator's receipt of the
Participant's withdrawal form.
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F. LIMITATION ON FUTURE CONTRIBUTIONS. A Participant who makes an
in-service withdrawal under this section may not make a Pre-Tax Contribution or
After-Tax Contribution for a period of up to 12 months following such in-service
withdrawal. The Participation shall also be subject to the additional
restrictions imposed on Article 4.4B of this Plan.
9.2 WITHDRAWAL OF AFTER-TAX CONTRIBUTIONS
A. AMOUNT. A Participant whose employment has not terminated may upon
reasonable advance written notice to the Plan Administrator withdraw all or any
portion of his After-Tax Contributions Account to the extent not previously
withdrawn.
B. PAYMENT. Any withdrawal under this section will be paid to the
Participant as soon as practicable after the Plan Administrator's receipt of the
Participant's withdrawal form; however the Plan Administrator may approve an
earlier payment of some or all of the amount to be withdrawn if such earlier
payment would not be detrimental to the interests of the other Participants.
C. LIMITATION ON FUTURE WITHDRAWALS. If so provided in the Adoption
Agreement, a Participant who makes an in-service withdrawal under this section
may not make a Pre-Tax Contribution or After-Tax Contribution for a period of 12
months following the date of such in-service withdrawal. The Participant shall
also be subject to the additional restrictions imposed on Article 4.4B of this
Plan.
The Plan Sponsor and the Plan Administrator may establish reasonable
minimum withdrawal amounts and reasonable limitations on the frequency or number
of withdrawals during a Plan Year. No forfeitures will occur solely as a result
of an Employee's making an in-service withdrawal.
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9.3 WITHDRAWAL OF MATCHING CONTRIBUTIONS
A. AMOUNT. A Participant may make in-service withdrawals from his
vested portion of his Matching Contributions Account, to the extent provided in
the Adoption Agreement. The Adoption Agreement may limit such in-service
withdrawals to financial hardship situations, or may permit in-service
withdrawals for reasons other than financial hardship.
Any withdrawal under this section will be paid to the Participant as
soon as practicable after the Plan Administrator's receipt of the Participant's
withdrawal form.
9.4 WITHDRAWALS OF PROFIT-SHARING CONTRIBUTIONS
A. AMOUNT. A Participant may make in-service withdrawals from his
vested portion of his Profit-Sharing Contributions Account, to the extent
provided in the Adoption Agreement. The Adoption Agreement may limit such
in-service withdrawals to financial hardship situations, or may permit
in-service withdrawals for reasons other than financial hardship.
Any withdrawal under this section will be paid to the Participant as
soon as practicable after the Plan Administrator's receipt of the Participant's
withdrawal form.
9.5 WITHDRAWALS OF MONEY PURCHASE CONTRIBUTIONS
A. AMOUNT. A Participant may make in-service withdrawals from his
vested portion of his Money Purchase Contributions Account, to the extent
provided in the Adoption Agreement. The Adoption Agreement may limit such
in-service withdrawals to
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financial hardship situations, or may permit in-service withdrawals for reasons
other than financial hardship.
Any withdrawal under this section will be paid to the Participant as
soon as practicable after the Plan Administrator's receipt of the Participant's
withdrawal form.
9.6 WITHDRAWALS OF ROLLOVER CONTRIBUTIONS
A. AMOUNTS. A Participant may upon reasonable advance written notice to
the Plan Administrator withdraw all or any portion of his Rollover Contributions
Account. The Plan Administrator may establish reasonable minimum withdrawal
amounts.
Notwithstanding the preceding paragraph, amounts separately accounted
for under section 7.1A.2 will be subject to restrictions on withdrawal as
follows: employer contributions to a money purchase plan or profit-sharing plan
are not available for in-service withdrawal; pre-tax contributions are available
for in-service withdrawal only under section 9.1; Qualified Employer Deferral
Contributions are not available for in-service withdrawal; matching and
after-tax contributions are available for in-service withdrawal, as provided in
the Adoption Agreement.
B. PAYMENT. Any withdrawal under this section will be paid to the
Participant as soon as practicable after the Plan Administrator's receipt of the
Participant's withdrawal form; however, the Plan Administrator may approve an
earlier payment of all or some of the amount to be withdrawn if such earlier
payment would not be detrimental to the interests of the other Participants.
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ARTICLE 10 DISTRIBUTION OF BENEFITS
10.1 METHODS OF DISTRIBUTION
A. The distribution of benefits to which a Participant may become
entitled shall be made in accordance with this Article 10.
1. The benefits provided by the Plan shall be distributed under
whichever of the following methods is elected by the Employer in the Adoption
Agreement:
a. The purchase of a nontransferable, conventional fixed or variable
annuity contract, providing payments at least annually, of such type and
from such insurance company approved by the Plan Administrator;
b. A single distribution of the entire vested balance then standing in
the Participant's accounts; or
c. Payments in monthly, quarterly, semiannual or annual installments of
substantially equal designated amounts over a period of years certain.
If the Employer elects more than one method of distribution in the
Adoption Agreement, then, the Participants shall elect under which of those
methods his or her benefits shall be distributed.
Except in the case of a Participant in a profit sharing or 1165(e)
version of this Master Plan, retirement benefits to a married Participant will
be paid in the form of a qualified joint and survivor annuity unless the
Participant elects otherwise as provided in subsection A.2.b, below. Under a
profit sharing or 1165(e) version of this Master Plan, the
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Participant will only receive his benefits in the form of a lump sum payment. If
the Participant elects or is entitled to receive his accrued benefits under this
Master Plan in the form of a lump sum payment, such benefits shall be paid, at
the Participant's discretion, in cash, common stock of the Plan Sponsor, if
applicable, or a combination thereof. The value of the Participant's benefits
shall be determined as provided in Article 9.2.B of this Master Plan.
An election to receive a Plan distribution under any method set forth
in this subsection A.1 for an Annuity Starting Date which occurs on or after the
Participant's Normal Retirement Age, Early Retirement Age or Disability shall
apply to all subsequent distributions made from the Participant's accounts.
Except with respect to the payment of a qualified joint and survivor annuity
pursuant to subsection A.2 below, the Participant shall in all cases elect a
distribution method which requires that the present value of the payments to be
made to the Participant exceed fifty percent (50%) of the present value of the
total payments to be made to the Participant and his Beneficiary, determined as
of the date such payments commence.
2. If at any time the Participant elects or has elected that his
benefits be paid through the purchase of an annuity, the Plan Administrator
shall direct the Trustee to purchase an annuity contract in the form of a
qualified joint and survivor annuity for all distributions to the Participant.
a. The term "qualified joint and survivor annuity" means an annuity
that commences immediately for the life of the Participant if he does not
have an Eligible Spouse or, if he has an Eligible Spouse, an annuity that
commences immediately, which is at least as valuable as any other alternate
form of benefit payable under the Plan, for the life of his Eligible
Spouse. Upon the election of the Participant, which may be made at any time
and any number of times, the survivor annuity shall be fifty
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percent (50%) or one hundred percent (100%) of the amount of the annuity
payable during the joint lives of the Participant and his Eligible Spouse,
both of which shall be actuarially equivalent; provided that in the event
no election is made, the survivor annuity shall be fifty percent (50%) of
the amount payable during the Participant's and his Eligible Spouse's joint
lives. In determining the Participant's interest subject to the qualified
joint and survivor annuity requirement, any security interest held by the
Plan by reason of a loan outstanding to the Participant shall reduce the
Participant's interest if the security interest is treated as payment in
satisfaction of the Plan loan to the Participant.
b. Notwithstanding the foregoing, a Participant may elect to waive the
qualified joint and survivor annuity and thereby receive an alternate form
of distribution. Such waiver must be made within the ninety (90) day period
ending on the Participant's Annuity Starting Date with respect to such
benefit. A Participant may subsequently revoke an election to waive a
qualified joint and survivor annuity and elect again to waive the qualified
joint and survivor annuity at any time and any number of times prior to
such Annuity Starting Date. All such elections and revocations shall be in
writing. Any election to waive a qualified joint and survivor annuity (1)
must specify the alternate form of distribution elected, (2) must be
accompanied by the designation of a specific nonspouse beneficiary
(including any class of beneficiaries or any contingent beneficiaries) who
will receive the benefit upon the Participant's death, if applicable, and
(3) must be accompanied by a Spousal Consent, to the extent required under
section 2.53.
B. If a Participant dies before the Annuity Starting Date with respect
to such benefits, the portion of his vested accounts balances which are not
currently being distributed in the form of a qualified joint and survivor
annuity shall be distributed as provided in this subsection B.
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1. If the Participant is unmarried on the date of his death, his entire
interest (reduced by any security interest held by the Plan by reason of a loan
outstanding to the Participant) shall be distributed to his Beneficiary in a
single distribution or in installments at the time set forth in section 10.3.
2. Except as provided in subsection 3 below, if the Participant is
married on the date of his death, his entire interest (reduced by any security
interest held by the Plan by reason of a loan outstanding to the Participant)
shall be distributed to his Beneficiary in a single distribution or in
installments at the time set forth in section 10.3.
3. If the Participant is married on the date of his death and the Plan
is, with respect to the Participant, an offset plan or a direct or indirect
transferee (in a transfer after December 31, 1984) of a defined benefit plan, a
money purchase pension plan (including a target benefit plan), or a stock bonus
or profit-sharing plan which otherwise would be required to provide for a life
annuity form of payment to the Participant, then fifty percent (50%) of the
Participant's vested interest as of the date of his death (or fifty percent
(50%) of the amount of the Participant's accounts attributable to the
transferred amount, if such transferred amount is separately accounted for and
gains, losses, withdrawals, contributions, forfeitures, and other credits or
charges are allocated on a reasonable basis between the transferred amount and
other assets in the Participant's accounts) shall be applied toward the purchase
of an annuity for the life of his Eligible Spouse (a "qualified pre-retirement
survivor annuity") unless otherwise elected as provided below. This Plan shall
be considered to be an offset plan if it is used to offset benefits in a plan
which is subject to the survivor annuity requirements with respect to the
Participant whose benefits are offset. In determining the Participant's
interest, any security interest held by the Plan by reason of a loan outstanding
to the Participant shall reduce the Participant's interest if the security
interest is treated as payment in satisfaction of the Plan loan to the
Participant. The portion of the Participant's vested interest not applied to the
purchase of the qualified pre-retirement
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survivor annuity shall be distributed to the Participant's Beneficiary as
provided in subsection B:
a. Within the applicable notice period, each Participants shall be
furnished with a written "notice of the qualified pre-retirement survivor
annuity" in such terms and in such manner as would be comparable to the
"general notice of distribution" provided pursuant to section 10.2A. This
notice must be accompanied by a general description of the eligibility
conditions, relative values, and other material features of each method of
distribution under section 10.1A.1. The "applicable notice period" means,
with respect to each Participant, whichever of the following periods ends
last: (1) the period beginning with the first day of the Plan Year in which
the Participant attains age 32 and ending with the close of the Plan Year
preceding the Plan Year in which the Participant attains age 35; (2) the
period commencing one year before an ending one year after the individual
becomes a Participant; or (3) the period commencing one year before and
ending one year after the annuity requirement of section 10.1A.1.a first
applies to such Participant. In addition, the applicable notice period for
a Participant who separates from service before attaining age 35 shall be
the period beginning one year before and ending one year after the
Participant's separation from service. Such notice shall be given to the
Participant in person, by mailing, by posting, or by placing it in an
Employer publication which is distributed in such a manner as to be
reasonably available to such Participant. If the explanation is to be
posted, it shall be posted at the location within the Participant's
principal place of employment which is customarily used for employer
notices to employees with regard to labor-management relations matters.
b. A Participant may elect to waive a qualified pre-retirement survivor
annuity, revoke such election, and elect again to waive the qualified
pre-retirement survivor annuity at any time and any number of times during
the applicable election
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period. All such elections and revocations shall be in writing. Any
election to waive a qualified pre-retirement survivor annuity must be
accompanied by (1) the designation of a specific nonspouse beneficiary
(including any class of beneficiaries or any contingent beneficiaries) who
will receive the benefit upon the Participant's death, if applicable, and
(2) a Spousal Consent to the extent required under section 2.53. The
"applicable election period" for the waiver of the qualified pre-retirement
survivor annuity shall commence once the Participant receives a written
explanation of such annuity as set forth in section 10.1B.3.a above or on
the first day of the Plan Year in which the Participant attains age 35,
whichever occurs earlier. Any waiver of the qualified pre-retirement
survivor annuity made prior to the first day of the Plan Year in which the
Participant attained age 35 shall become invalid as of such date and a new
waiver must be issued in order for a waiver of a qualified pre-retirement
survivor annuity to be effective.
c. Except as provided in subsection d below, the qualified
pre-retirement survivor annuity benefit shall only apply to a Participant
if he is credited with at least one Hour of Service with the Employer on or
after August 23, 1984.
d. If a Participant dies with an effective waiver of the qualified
pre-retirement survivor annuity in force or the Eligible Spouse so elects
after the Participant's death, his account shall be distributed in the
manner specified for unmarried Participants in section 10.1B.1 above.
10.2 TIME OF DISTRIBUTION TO PARTICIPANT
A. The Plan Administrator must provide the Participant with "general
notice of distribution" no less than thirty (30) and no more than ninety (90)
days before the Participant's Annuity Starting Date. Such notice must be in
writing and must set forth the
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following information: (i) an explanation of the eligibility requirements for,
the material features of, and the relative values of the alternate forms of
benefits available under section 10.1A, and (ii) the Participant's right to
defer receipt of a Plan distribution under sections 10.2C. and d. If the Plan is
a transferee or offset plan with respect to the Participant as set forth in
section 10.1A.1.a, the general notice also shall include (a) the terms and
conditions of a qualified joint and survivor annuity; (b) the Participant's
right to make, and the effect of, an election to waive the qualified joint and
survivor annuity; (c) the rights of the Participant's Eligible Spouse; and (d)
the right to make, and the effect of, a revocation of an election to waive a
qualified joint and survivor annuity. Such notice shall be given to the
Participant in person, by mailing, by posting, or by placing it in an Employer
publication which is distributed in such a manner as to be reasonably available
to such Participant. If the notice is to be posted, it shall be posted at the
location within the Participant's principal place of employment which is
customarily used for Employer notices to employees with regard to
labor-management relation matters.
B. Upon receipt of the general notice of distribution, a Participant
may consent to receive a distribution of his vested accounts (based upon the
valuation date preceding his termination of service) as soon as practicable
after his termination of service. A Participant's vested accounts shall be
distributed in the manner set forth in section 10.1A. If at any time the
Participant elects or has elected that his benefits be paid through the purchase
of an annuity, the Participant's consent to receive such distribution prior to
his Normal Retirement Age must be accompanied by the written consent of the
Participant's Eligible Spouse, if married, which is comparable to the Spousal
Consent requirements in section 2.53, unless the distribution is to be made in
the form of a qualified joint and survivor annuity.
C. Subject to the maximum deferral requirements of sections 10.2E and
F, a Participant may elect to defer receipt of a Plan distribution, provided
that such election
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is in writing, described the form of benefit payment, indicates the date the
distribution is to commence, and is signed by the Participant. To the extent not
consistent with section 10.2D below, in the event that the Participant does not
elect to defer receipt of his distribution, payment of the vested balance in the
Participant's accounts shall begin no later than the 60th day after the latest
of the close of the Plan Year in which:
1. The Participant attains the earlier of age sixty-five (65) or Normal
Retirement Age;
2. Occurs the tenth (10th) anniversary of the year in which the
Participant entered the Plan; or
3. The Participant terminates service with the Employer.
D. In the event that the Participant has terminated service and the
Participant (and the Eligible Spouse, if applicable) neither consents to receive
a Plan distribution nor elects to defer receipt of a Plan distribution, the
Participant's accounts shall be distributed in the normal benefit form as soon
as practicable thereafter, but in no event before the date the Participant
attains Normal Retirement Age, if such vested accounts exceed $5,000 (or, if the
Participant's vested accounts balances exceeded $5,000 prior to such
distribution, is less than or equal to $5,000 for distributions made after the
initial distribution date). For purposes of this section, "normal benefit form"
shall mean a single distribution or, if the Plan is a transferee or offset plan
with respect to the Participant as set forth in section 10.1A.1.a, a qualified
joint and survivor annuity as set forth in section 10.1A.1.b and 10.1A.2,
respectively.
E. If the form of distribution is other than a single distribution,
then the Participant's entire interest shall be paid over a period not extending
beyond the life (or the
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life expectancy) of the Participant and his Beneficiary. For purposes of this
subsection, a Participant may elect (other than in the case of a life annuity)
to have the life expectancy of either he or his spouse, or both, redetermined;
provided, however, that if a timely election is not made, such redetermination
shall not be made. A Participant's election to redetermine life expectancy shall
be made no later than the time distributions are required to commence under
subsection f. below, shall be irrevocable, shall specify the frequency with
which redeterminations are to be made (not more frequently than annually), and
shall require that such redeterminations be made from that date forward.
F. Notwithstanding anything to the contrary contained in this Plan,
distribution of the vested balance in the Participant's accounts, or the first
installment of such distribution, shall be made or commenced, at the employee's
option, on the April 1 of the calendar year following the calendar year in which
the Participant attains age 70 1/2. If the amount of the required payment cannot
be ascertained by the date payment is to be made or commenced, or if it is not
possible to make such payment because of the Plan Administrator's inability to
locate the Participant after making reasonable efforts to do so, a payment
retroactive to the required commencement date shall be made no later than sixty
(60) days after the date the amount of such payment can be ascertained or the
Participant is located.
10.3 TIME OF DISTRIBUTION TO BENEFICIARY
A. A Participant's Beneficiary may consent to receive a distribution of
the Participant's vested accounts balances which shall commence within ninety
(90) days (or within such longer period as is reasonable based on the particular
facts and circumstances) after the Participant's death, to be distributed in the
manner set forth in section 10.1B. If the Beneficiary is the Participant's
Eligible Spouse, such consent must be comparable to the Spousal Consent
requirements in section 2.53.
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B. A Beneficiary may elect to defer such distribution beyond the time
specified in subsection A above, provided that such election is in writing,
describes the form of benefit payment to be received, indicates the date
distributions are to commence, is signed by the Beneficiary, and satisfied the
requirements of subsection D below.
C. In the event that the Beneficiary neither consents to receive a Plan
distribution nor elects to defer receipt of a Plan distribution, the Beneficiary
shall receive a Plan distribution in the normal benefit form within ninety (90)
days (or within such longer period as is reasonable based on the particular
facts and circumstances) after the Participant's death. For purposes of this
subparagraph, "normal benefit form" shall mean a single distribution and, to the
extent required by section 10.1B.3, a qualified pre-retirement survivor annuity.
Notwithstanding the foregoing but subject to subsection d. below, if the
Beneficiary is the Participant's Eligible Spouse and the Plan is a transferee or
offset plan with respect to the Participant as set forth in section 10.1A.1.a,
the Beneficiary shall not receive a Plan distribution before the date the
Participant attained or would have attained Normal Retirement Age if the
Participant's vested accounts balances exceed $5,000 at the time of distribution
(or, if the Participant's vested accounts balances exceeded $5,000 prior to such
distribution, is less than or equal to $5,000 for distributions made after the
initial distribution date).
D. Notwithstanding any provision of this Article to the contrary, any
distribution to a Participant's Beneficiary must comply with the following
requirements:
1. If distributions to a Participant have begun and the Participant
dies before the entire interest has been distributed to him, the remaining
portion shall be distributed at least as rapidly as under the distribution
method being utilized on the date of his death.
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2. Except as provided in subsection D.3 below, in no event shall
distributions be made later than December 31 of the calendar year which contains
the fifth anniversary of the Participant's death unless the Participant's
designated Beneficiary elects to receive payments in substantially equal
installments at least annually for a period not exceeding the Beneficiary's life
expectancy, in which case the first installment must be made by December 31 of
the calendar year immediately following the calendar year of the Participant's
death. Any such election shall be made prior to the date the distribution is
scheduled to commence.
3. An Eligible Spouse who elects to receive installment payments as set
forth in subsection D.2 above, over such Eligible Spouse's life expectancy
(which may be redetermined no more frequently than annually) may defer
commencement of payments until December 31 of the calendar year the deceased
Participant would have attained age 70 1/2. Such an election shall be made by
the earlier of (a) the date the distribution is required to commence under the
preceding sentence, or (b) December 31 of the calendar year which contains the
fifth anniversary of the Participant's death. An Eligible Spouse who elects to
have her life expectancy redetermined must do so no later than the time
distributions are required to commence under this subsection, at which time the
election will be irrevocable and shall apply to all subsequent years; provided,
however, that if no election is made by the time distribution is required to
commence, life expectancy may not be redetermined. If the Eligible Spouse elects
to defer such distribution in accordance with this subsection and the Eligible
Spouse dies leaving an unpaid balance, the balance shall be distributed no later
than December 31 of the calendar year which contains the fifth anniversary of
the Eligible Spouse's death to the Beneficiary designated by the Participant or,
in the absence of such designation, to the estate of the Eligible Spouse.
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10.4 SMALL ACCOUNT BALANCES
Notwithstanding anything to the contrary in sections 10.1, 10.2 and
10.3, if the Participant has terminated service or has died with vested accounts
balances of $5,000 or less on the date distributions commence, the entire vested
accounts balance shall be distributed in a single sum distribution as soon as
practicable to the Participant, or, in the event of his death, to his
Beneficiary. No distribution may be made under the preceding sentence after the
Participant's Annuity Starting Date unless the Participant and his Eligible
Spouse consent thereto in a manner which is comparable to the Spousal Consent
requirements in section 2.53.
10.5 NONLIABILITY
Any payment to any Participant, or to his legal representative or
Beneficiary, in accordance with the provisions of the Plan, shall to the extent
thereof be in full satisfaction of all claims hereunder against the Trustee, the
Plan Administrator and the Employer, any of whom may require such Participant,
legal representative or Beneficiary, as a condition precedent to such payment,
to execute a receipt therefor in such form as shall be determined by the
Trustee, the Plan Administrator, or the Employer, as the case may be. The
Employer does not guarantee the Trust, the Participants, former Participants or
their Beneficiaries against lost of or depreciation in value of any right or
benefit that any of them may acquire under the terms of this Plan. All benefits
payable hereunder shall be paid or provided for solely from the Trust, and the
Employer does not assume any liability or responsibility therefor.
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10.6 MISSING PERSONS
In the case of any benefit payable to a person under this Plan, if the
Plan Administrator is unable to locate the person within six (6) months from the
date a certified letter was mailed to such person notifying him of the benefit,
the Plan Administrator shall direct the Trustee to establish a segregated
account. This account shall share in the allocations of Trust income or loss on
a segregated basis. The Trustee shall continue to maintain this segregated
account until: (a) the person entitled to the benefit makes application
therefore; or (b) the benefit reverts by escheat to the state, whichever occurs
first.
10.7 BENEFICIARIES
A. DESIGNATION OF BENEFICIARY. Subject to the qualified pre-retirement
survivor annuity and qualified joint and survivor annuity requirements set forth
in this Article 10, a Participant shall have the right to designate, on forms
provided by the Employer, a Beneficiary or Beneficiaries to receive the benefits
herein provided in the event of this death (reduced by any security interest
held by the Plan by reason of a loan outstanding to the Participant) and to
revoke such designation or to substitute another Beneficiary or Beneficiaries at
any time. Notwithstanding the preceding sentence, if this Plan is not a
transferee or offset plan with respect to the Participant, a married
Participant's initial designation of a Beneficiary or change in Beneficiary
designation to someone other than or in addition to his Eligible Spouse shall
not be effective unless Spousal Consent is obtained.
B. ABSENCE OF VALID DESIGNATION OF BENEFICIARIES. If, upon the death of
a Participant, former Participant or Beneficiary, there is no valid designation
of Beneficiary on file with the Employer, the following shall be designated by
the Plan Administrator as the Beneficiary or Beneficiaries, in order of
priority:
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The surviving spouse;
1. Surviving children, including adopted children, in equal shares;
2. Surviving parents, in equal shares;
3. The Participant's estate;
4. The Beneficiaries estate.
The determination of the Plan Administrator as to which persons, if
any, qualify within the categories listed above shall be final and conclusive
upon all persons.
ARTICLE 11 LOANS
11.1 IN GENERAL
If the Adoption Agreement so provides, loans will be available from the
Plan. If loans are available, the Plan Administrator will establish guidelines
and procedures for loans from the Plan to Participants in specific instances,
which guidelines may include limitations on the number of loans that may be
outstanding to a Participant at any time or on the frequency of loans. Each loan
must be approved by the Plan Administrator and must conform to the loan
guidelines and procedures. The guidelines and procedures must be formulated and
administered so that they conform with ERISA section 408(b)(1) and ERISA Reg.
ss.2550.408-1(d). In addition, the following requirements of this section must
be satisfied.
A. Loans are available to all Participants and any other person
required by the United States Department of Labor on a reasonably equivalent
basis. However, no loan will be made to a Participant who is an Owner-Employee
or a shareholder-employee unless such person has at his expense obtained an
administrative exemption from ERISA's
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prohibited transaction rules from the United States Department of Labor with
respect to such loan, unless the United States Department of Labor has issued a
prohibited transaction class exemption covering such loans. Any loan will be
evidenced by a promissory note signed by the Participant.
B. Loans shall not be made available to Highly Compensated Employees in
an amount greater than the amount made available to Non-Highly Compensated
Employees.
C. Loans are adequately secured and bear a reasonable rate of interest.
However, no more than fifty percent (50%) of a Participant's non-forfeitable
accrued benefit may be pledged as collateral.
Each loan hereunder will be a Participant-directed investment for the
benefit of the Participant requesting such loan; accordingly, any default in the
repayment of principal or interest of any loan hereunder will reduce the amount
available for distribution to such Participant (or his Beneficiary). Thus, any
loan hereunder will be effectively and adequately secured by the Participant's
accounts.
D. A loan to a Participant (when added to the outstanding balance of
all other loans from this Plan and any other qualified plan maintained by the
Employer) shall not be in an amount that exceeds the lesser of:
1. $50,000 reduced by the excess, if any, of:
i. the highest outstanding balance of loans from the plan during the
one-year period ending on the day before such loan is made, over
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ii. the outstanding balance of loans from the Plan on the date such
loan is made; or
2. fifty percent (50%) of the vested Participant's account balances.
A Participant, however, may not have outstanding more than two (2)
loans in any Plan Year.
E. Except as provided in the next sentence, the maximum term of a loan
will be five years. If a Participant requests a loan for the acquisition of the
principal residence of the Participant, the maximum repayment period will be
determined by reference to bank loans for the same purpose.
F. A Participant must obtain the consent of his or her spouse, if any,
within the 90 day period before the time the account balance is used as security
for the loan. A new consent is required if the account balance is used as
security for any increase in the loan balance, for renegotiation, extension,
renewal, or other revision of the loan. However, Spousal Consent is not
necessary if the total amount of loans outstanding hereunder does not exceed
$5,000. The consent of any subsequent spouse will not be necessary in order to
foreclose the Plan's security interest in the Participant's account balance if
the Participant's then spouse validly consented to the original use of the
account balance as security (or if the Participant was unmarried at such time).
If a valid Spousal Consent has been obtained in accordance with this
section, then, notwithstanding any other provision of this Plan, the portion of
the Participant's vested account balance used as a security interest held by the
Plan by reason of a loan outstanding to the Participant shall be taken into
account for purposes of determining the amount of the account balance payable at
the time of death or distribution, but only if the reduction is used
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as repayment of the loan. If less than 100% of the Participant's vested account
balance (determined without regard to the preceding sentence) is payable to the
surviving spouse, then the account balance shall be adjusted by first reducing
the vested account balance by the amount of the security used as repayment of
the loan, and then determining the benefit payable to the surviving spouse.
G. The Plan Administrator may require a Participant to agree to repay
the principal and interest of a loan through regular payroll deduction payments.
The Plan Administrator may establish back-up repayment procedures for
Participants who do not make payroll deduction repayment; except as may
otherwise be permitted under ERISA or the IRC, any such back-up procedures will
provide for substantially level amortization payments made quarterly or more
frequently. Any loan hereunder may be prepaid, in whole or in part, at any time
without penalty. If a Participant's service as an Employee is terminated for any
reason, the entire unpaid principal and interest of any loan then outstanding to
such Participant will become immediately due and payable.
If a Participant defaults on any payment of interest or principal of a
loan hereunder or defaults upon any other obligation relating to such loan, the
Plan Administrator may take (or direct the Trustee to take) such action or
actions as it determines to be necessary to protect the interest of the Plan.
Such actions may include commencing legal proceedings against the Participant,
or foreclosing on any security interest in the Participant's account or other
security given in connection with a loan hereunder. In the event of a default,
foreclosure on the Participant's note and attachment of one or more of the
Participant's accounts given as security will not occur until a distributable
event occurs in the Plan.
An assignment or pledge of any portion of the Participant's interest in
the Plan and a loan, pledge, or assignment with respect to any insurance
contract purchased under the Plan, will be treated as a loan under this section.
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H. In the case of any Participant with one or more loans outstanding
hereunder, the amount available for distribution to such Participant (or his
Beneficiary) will consist of the Participant's vested account balance(s) (not
including the outstanding principal and accrued but unpaid interest on such
loans), plus the notes representing such loans.
ARTICLE 12 INVESTMENTS
12.1 IN GENERAL
A. Investment Funds will mean any investment fund or Employer
Securities chosen by the Employer in the Adoption Agreement as an investment
medium for the Plan. The Master Plan Sponsor and the Plan Administrator shall
have the discretion to make available and terminate such funds as they shall
deem appropriate.
B. The Master Plan Sponsor may impose requirements concerning the
investment funds or securities in which contributions to the Plan must be
invested, and the Employer agrees to observe such requirements as a condition of
participating in this Master Plan. Subject to such requirements, the Employer
may permit each Participant to direct the investment of some or all of the
contributions to his accounts. To the extent that Participants do direct the
investment of their accounts, ERISA section 404(c) will apply to the Employer's
Plan, and neither the Employer, the Plan Administrator, the Trustee, the Master
Plan Sponsor nor any other fiduciary will have any responsibility or liability
for the Participant's exercise of such investment control or for any loss of
diminution in value occasioned thereby.
The Trustee shall be considered a directed Trustee unless it is
otherwise agreed to by the parties in the Adoption Agreement.
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12.2 PARTICIPANT INVESTMENT DIRECTIONS
A. If the Employer allows, amounts credited to a Participant's accounts
will be invested in the investment funds selected by the Employer in the
Adoption Agreement for the Plan in accordance with the Participant's directions.
Such Participant investment control may be permitted with respect to certain
types of contributions but no others. Where allowed, a Participant's investment
directions will govern the investment of contributions to his accounts and the
transfer of amounts in one investment fund to another. Participants' exercise of
investment control over their accounts will be subject to any rules of the Plan
Administrator under section 12.3.
B. Subject to the Plan Sponsor's requirements under section 12.1B.
above, the investment of any account over which the Participant does not
exercise investment control under subsection a. above shall be made in equal
proportions among the investment funds chosen by the Employer in the Adoption
Agreement.
12.3 RULES FOR EXERCISE OF INVESTMENT OPTIONS
Any designation of investments by the Participants will be subject to
nondiscriminatory general rules established by the Plan Administrator and the
Trustee; such rules may include; (a) restrictions on the minimum amount or
percentage of any contribution which may be placed in any particular investment
fund; (b) restrictions on the use of different amounts or percentages for
different types of contributions; (c) minimums or maximums (or both) on the
amount which may be invested or transferred to or from any particular investment
fund; and (d) restrictions on the time and frequency of designations, changes in
designations and transfers from one investment fund to another including the
required advance notice.
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These rules may differ for different types of contributions. The
effective date of any change in a Participant's election respecting allocation
of contributions among investment funds or any transfer from one fund to another
must coincide with a valuation date for each fund, unless the Plan
Administrator, Plan Sponsor and Trustee provide otherwise.
12.4 INVESTMENT IN EMPLOYER STOCK
A. Voting of Employer Stock Generally.
Each Participant shall have the right and shall be afforded the
opportunity to instruct the Trustee how to vote at any meeting of the
shareholders of the issuer of Employer Stock the total number of shares of
Employer Stock held in the Participant's Account. Instructions by Participants
to the Trustee shall be in such form and pursuant to such regulations as the
Plan Administrator and the Trustee may prescribe. Any such instructions shall
remain in the strict confidence of the Trustee. Any share for which no such
instructions are received by the Trustee shall be voted by the Trustee in the
same proportion as the shares for which instructions are received.
B. Tender of Exchange Offers.
In the event of a tender or exchange offer for any or all shares of
Employer Stock, the Plan Administrator and the Trustee shall notify each
Participant or Beneficiary and utilize its best efforts to timely distribute or
cause to be distributed to him such information as will be distributed to the
shareholders of the issuer of the Employer Stock in connection with any such
tender or exchange offer. Each Participant or his Beneficiary shall have the
right to instruct the Trustee in writing not to tender or exchange shares of
Employer Stock credited to his account under the Trust. The Trustee shall tender
or exchange all shares of
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common stock credited to a Participant's Account under the Trust unless
instructions not to tender or exchange such shares have been received.
ARTICLE 13 ACCOUNTS
13.1 SEPARATE ACCOUNTS
A. The Plan Administrator and the Trustee shall establish and maintain,
where appropriate, separate accounts for each Participant, including Pre-Tax
Contributions Account, After-Tax Contributions Account, Employer Contributions
Account, Matching Contributions Account, and Rollover Contributions Account; a
Participant's Rollover Contributions Account may contain subaccounts as provided
in section 7.1. Earnings will be credited to such accounts (and subaccounts) in
accordance with the provisions of this Article. Since these individual accounts
are maintained only for accounting purposes, a segregation of the Trust assets
within each account is not required.
B. The Plan Administrator may itself maintain records of Participants'
accounts or may arrange for such records to be maintained by an outside service
provider (which may be the Master Plan Sponsor or Trustee or a person contracted
by the Master Plan Sponsor or Trustee). If the Plan Administrator arranges with
a service provider to maintain records of Participants' accounts, the Plan
Administrator will provide such information as is necessary for the service
provider to maintain such accounts as required herein.
13.2 VALUATION AND ALLOCATION OF EARNINGS AND LOSSES TO PARTICIPANTS
ACCOUNTS
As of each Valuation Date, the Plan Administrator shall allocate to the
account of each Participant the net earnings and gains or losses on the
Participant's account received by the Trustee since the preceding Valuation
Date.
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13.3 ALLOCATION OF EXPENSES
Any fees and expenses will be paid by the Employer unless it elects not
to pay any or all such fees and expenses; in such event, any fee or expense not
paid by the Employer will be paid from the Trust and will be allocated to the
accounts of Participants or to collective investment funds in which accounts are
invested in a manner which reasonably reflects the accounts and investment funds
that generated such fees and expenses. Approximations may be used whenever its
is not feasible to allocate such expenses on an exact basis.
ARTICLE 14 PLAN ADMINISTRATION
14.1 PLAN ADMINISTRATOR
The Employer will be the Plan Administrator for purposes of section
3(16) of ERISA, and any reference in this document or the Adoption Agreement to
the Plan Administrator means the Employer. The Employer may in the Adoption
Agreement designate an individual or a group of individuals acting as a
committee to act on the Employer's behalf in carrying out its duties as Plan
Administrator. Such persons may, but need not, be Participants or Employees,
partners, or officers of the Employer. The Employer will notify the Trustee of
any such appointment. The Employer may remove any such individual or committee
member at any time with or without cause, by filing written notice of his
removal with the Trustee. Any such individual or committee member may resign at
any time by filing his written resignation with the Employer and the Trustee. A
vacancy however arising, will be filled by the Employer.
If the Employer does not appoint an individual or committee to act for
the Employer, the Employer will carry out the responsibilities of the Plan
Administrator. If the
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Employer is a sole proprietorship, in the event of the sole proprietor's death,
his executor or administrator will be the Plan Administrator. If the Employer is
a partnership, in the event of the death of all the partners, the executor or
administrator of the last to die will be the Plan Administrator.
14.2 PLAN ADMINISTRATION
The Plan Administrator is a named fiduciary of the Plan. In addition,
the Plan Administrator shall have the power and the duty to perform the
following administrative functions according to the policies, interpretations,
rules, practices and procedures established by the Employer in accordance with
the respective areas of named fiduciary responsibilities:
A. Apply Plan rules determining eligibility for participation or
benefits;
B. Calculate service and compensation credits for benefits;
C. Prepare employee communications materials;
D. Maintain Participants' service and employment records;
E. Prepare reports required by government agencies, which shall include
maintaining records to demonstrate compliance with the Actual Deferral
Percentage test of Article 4 of the Plan that indicate the extent that Qualified
Non-Elective Contributions and Qualified Matching Contributions were taken into
account to satisfy such requirements;
F. Calculate benefits;
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G. Orient new Participants and advise Participants regarding their
rights and options under the Plan;
H. Collect contributions and apply contributions as provided in the
Plan;
I. Prepare reports concerning Participants' benefits; and
J. Process claims.
The Plan Administrator (and those to whom it has delegated its
authority) shall have vested in it under the terms of this Plan full
discretionary and final authority when exercising its duties hereunder.
14.3 COMPENSATION AND EXPENSES
The Plan Administrator will serve without compensation unless otherwise
determined by the Employer, but no Employee of the Employer will be compensated
for his service as Plan Administrator. All reasonable expenses of operating and
administering the Plan will be paid by the Employer or from the assets of the
Trust, as provided in section 13.3. Such expenses include the compensation of
all persons employed or retained by the Plan Administrator (such as attorneys,
accountants, actuaries, trustee or other consultants or specialists), premiums
for insurance or bonds protecting the Plan and required by law or deemed
advisable by the Plan Administrator, and all other fees, expenses or costs of
Plan administration.
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14.4 CLAIMS PROCEDURES
A. FILING OF CLAIM. A Participant or Beneficiary who believes he is
entitled to a benefit which he has not received may file a claim in writing with
the Plan Administrator. The Plan Administrator may require a claimant to submit
additional information, if necessary to process the claim. The Plan
Administrator shall review the claim and render its decision within ninety (90)
days from the date the claim is filed (or the requested additional information
is submitted, if later), unless special circumstances require an extension of
time for processing the claim. If such an extension is required, written notice
of the extension shall be furnished the claimant within the initial ninety (90)
day period. The notice shall indicate the special circumstances requiring the
extension and the date by which the Plan Administrator expects to reach a
decision on the claim. In no event shall the extension exceed a period of ninety
(90) days from the end of the initial period.
B. NOTICE OF CLAIM DENIED. If the Plan Administrator denies a claim, in
whole or in part, it shall provide the claimant with written notice of the
denial within the period specified in subparagraph a. The notice shall be
written in language calculated to be understood by the claimant, and shall
include the following information:
1. The specific reason for such denial;
2. Specific reference to pertinent Plan provisions upon which the
denial is based;
3. A description of any additional material or information which may be
needed to clarify or perfect the request, and an explanation of why such
information is required; and
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4. An explanation of the Plan's review procedure with respect to the
denial of benefits.
C. REVIEW PROCEDURE. Any claimant whose claim has been denied, in whole
or in part, shall follow those review procedures as set forth herein.
1. A claimant whose claim has been denied, in whole or in part, may
request a full and fair review of the claim by the Plan Administrator by making
written request therefor within sixty (60) days of receipt of the notification
of denial. The Plan Administrator, for good cause shown, may extend the period
during which the request may be filed. The claimant shall be permitted to
examine all documents pertinent to the claim and shall be permitted to submit
issues and comments regarding the claim to the Plan Administrator in writing.
2. The Plan Administrator shall render its decision within sixty (60)
days after receipt of the application for review, unless special circumstances
(such as the need to hold a hearing) require an extension of time for
processing, in which case the decision shall be rendered as soon as possible but
not later than one hundred and twenty (120) days after receipt of a request for
review. If an extension of time is necessary, written notice shall be furnished
the claimant before the extension period commences.
3. The Plan Administrator shall decide whether a hearing shall be held
on the claim. If so, it shall notify the claimant in writing of the time and
place for the hearing. Unless the claimant agrees to a shorter period, the
hearing shall be scheduled at least fourteen (14) days after the date of the
notice of hearing. The claimant and/or his authorized representative may appear
at any such hearing.
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<PAGE>
4. The Plan Administrator shall send its decision on review to the
claimant in writing within the time specified in his section. If the claim is
denied, in whole or in part, the decision shall specify the reasons for the
denial in a manner calculated to be understood by the claimant, referring to the
specific Plan provisions on which the decision is based. The Plan Administrator
shall not be restricted in its review to those provisions of the Plan cited in
the original denial of the claim.
5. If the Plan Administrator does not furnish its decision on review
within the time specified in this subsection c., the claim shall be deemed
denied on review.
14.5 AGENT FOR LEGAL PROCESS
The Employer shall be the agent for service of legal process.
ARTICLE 15 AMENDMENT, TERMINATION OR MERGER OF MASTER PLAN AND PLAN
15.1 AMENDMENT BY PLAN SPONSOR
The Master Plan Sponsor may amend any or all provisions of this Master
Plan at any time without obtaining the consent of the Employer, and the Employer
hereby expressly delegates authority to amend this Master Plan to the Master
Plan Sponsor.
15.2 AMENDMENT BY EMPLOYER
Except for changes of design options selected in the Adoption
Agreement, if the Employer amends the Plan or non-elective portions of the
Adoption Agreement it will no longer participate in this Master Plan and will be
considered to have an individually designed plan.
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<PAGE>
15.3 RESTRICTIONS ON AMENDMENTS
No amendment under section 15.1 or 15.2 will:
A. cause or permit any part of the assets of the Trust to be diverted
to purposes other than the exclusive benefit of Participants and their
Beneficiaries, or cause or permit any portion of such assets to revert to or
become the property of the Employer;
B. retroactively deprive any Participant of any benefit of which he was
entitled hereunder by reason of contributions made by the Employer or the
Participant before the amendment, unless such amendment is necessary to conform
the Trust or Plan to, or satisfy the conditions of any law, governmental
regulation or ruling or to permit the Plan and Trust to meet the requirements of
ERISA and the IRC;
C. decrease a Participant's account balance, except as permitted in
ERISA Section 302(c)(8). For purposes of this paragraph, a Plan amendment which
has the effect of decreasing a Participant's account balance or eliminating an
optional form of benefit, with respect to benefits attributable to service
before the amendment shall be treated as reducing an accrued benefit;
D. if the vesting schedule of a Plan is amended, for an Employee who is
a Participant as of the later of the date such amendment is adopted or the date
it becomes effective, cause the nonforfeitable percentage (determined as of such
date) of such Employee's right to his Employer-derived accrued benefit to be
less than his percentage computed under the Plan without regard to such
amendment; also, if an amendment affects the vesting schedule of a Plan, any
Participant with three (3) or more Years of Service will have his vesting
determined under the pre-amendment vesting schedule if this would result in such
Participant having a greater vested interest then under the new vesting
schedule.
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<PAGE>
E. eliminate an optional form of distribution in violation of ERISA
Section 204(g); or
F. increase or otherwise affect the duties, liabilities or rights of
the Trustee unless the Trustee consents thereto in writing.
15.4 NONREVERSION
Except as provided in this section, the assets of the Plan shall never
inure to the benefit of an Employer; such assets shall be held for the exclusive
purpose of providing benefits to Participants and their Beneficiaries and for
defraying the reasonable administrative expenses of the Plan.
A. If an Employer Contribution is made by virtue of a mistake of fact,
to the extent permitted by applicable law, this section shall not prohibit the
return of such contribution to the Employer within one (1) year after the
payment of the contribution.
B. If a deduction for an Employer Contribution is disallowed under IRC
Section 1023(n), or any successor provision thereto, to the extent permitted by
applicable law, the contribution shall be returned to the Employer (to the
extent disallowed) within one (1) year after such disallowance.
15.5 TERMINATION OF THE PLAN
Although the Employer has established the Plan with the bona fide
intention and expectation that it will be able to make contributions
indefinitely, nevertheless the Employer is not and shall not be under any
obligation or liability whatsoever to continue its contributions or to maintain
the Plan for any given length of time. An Employer may in its
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<PAGE>
sole and absolute discretion, discontinue such contributions or terminate the
Plan with respect to its Employees, in accordance with the provisions of the
Plan, at any time with no liability whatsoever for such discontinuance or
termination. If the Plan is terminated or partially terminated, or if
contributions of an Employer are completely discontinued, the rights of all
affected Participants in their accounts shall thereupon become nonforfeitable,
notwithstanding any other provisions of the Plan. However, the Trust shall
continue until all Participants' accounts have been completely distributed to or
for the benefit of the Participants, in accordance with the Plan.
15.6 DISPOSITION AND TERMINATION OF THE PLAN
A. Upon complete or partial termination of the Plan, the Plan
Administrator will determine, subject to the joint and survivor rules of this
Plan, whether to direct the Trustee to continue to hold the accounts of
Participants affected by the termination or partial termination, to disburse
them as immediate benefit payments, to purchase immediate or deferred annuity
contracts, or to follow any other procedure he deems advisable. The Trustee will
follow the directions of the Plan Administrator.
B. For purposes of each Employer adopting the Plan, the Trustee created
hereunder will terminate when all the assets in the Trust related to such
Employer have been distributed.
15.7 MERGER OF PLANS
A. If the Employer merges or consolidates with or into a corporation,
or if substantially all of the assets of the Employer are transferred to another
business, the Plan hereby created shall terminate on the effective date of such
merger, consolidation or transfer. However, if the surviving corporation
resulting from such merger or consolidation, or the
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<PAGE>
business to which the Employer's assets have been transferred, adopts this Plan,
it shall continue and such corporation or business shall succeed to all rights,
powers and duties of the Employer hereunder. The employment of any Employee who
continues in the employ of such successor corporation or business shall not be
deemed to have been terminated for any purpose hereunder.
B. In no event shall this Plan be merged or consolidated with any other
plan, nor shall there be any transfer of assets or liabilities from this Plan to
any other plan, unless immediately after such merger, consolidation or transfer,
each Participant's benefits, if such other plan were then to terminate, are at
least equal to or greater than the benefits to which the Participant would have
been entitled, had this Plan been terminated immediately before such merger,
consolidation, or transfer.
ARTICLE 16 TRANSFERS FROM OR TO OTHER QUALIFIED PLANS
16.1 TRANSFERS FROM ANOTHER PLAN OF THE EMPLOYER
A. Notwithstanding any other provision hereof, the Employer, with the
approval of the Master Plan Sponsor, may cause to be transferred to the Trustee
all or any of the assets held (whether by a Trustee, custodian, or otherwise)
under any other defined contribution Plan which satisfies the requirements of
IRC Section 1165(a) and which is maintained by the Employer for the benefit of
any of the Participants hereunder. If the Trustee is keeping separate accounts
for each Participant, any such assets so transferred will be accompanied by
written instructions from the Employer or Plan Administrator naming the
Participants for whose benefit such assets have been transferred and showing
separately the respective contributions by the Employer and by the Participants
and the current value of the assets attributable thereto.
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<PAGE>
B. Upon receipt of any assets transferred to it under subsection (a),
the Trustee may sell any non-cash assets and invest the proceeds and any cash
transferred to it. The Trustee will make appropriate credits to the proper
accounts in accordance with the Employer's or Plan Administrator's instructions.
16.2 TRANSFERS TO OTHER PLANS
Upon the written request of the Employer, the Trustee will transfer an
amount designated by the Employer to the Trustee or custodian of any other
qualified Plan under which Plan Participants are covered.
ARTICLE 17 QUALIFIED DOMESTIC RELATIONS ORDER
17.1 GENERAL
The provisions of section 18.1 shall not be applicable to a Qualified
Domestic Relations Order (as defined in section 17.2), and payment of benefits
under the Plan shall be made in accordance with the terms of such order,
provided that such order:
A. creates or recognizes the existence of an alternate payee's (as
defined in section 17.2) right to, or assigns to an alternate payee the right
to, receive all or a portion of the benefits payable to a Participant under the
Plan;
B. clearly specifies:
1. the name and the last known mailing address (if any) of the
Participant and the name and mailing address of each alternate payee covered by
the order;
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<PAGE>
2. the amount or percentage of the Participant's benefits to be paid by
the Plan to each such alternate payee or the manner in which such amount or
percentage is to be determined;
3. the number of payments or the period to which the order applies; and
4. the name of each plan to which such order applies;
C. does not require the Plan to provide any type or form of benefit, or
any option, not otherwise provided under the Plan;
D. does not require the Plan to provide increased benefits (determined
on the basis of actuarial value); and
E. does not require the payment of benefits to an alternate payee which
are required to be paid to another alternate payee under another order
previously determined to be Qualified Domestic Relations Order.
17.2 DEFINITIONS
The following terms shall have the following meanings for purposes of
this Article:
A. "ALTERNATE PAYEE" means any spouse, former spouse, child or other
dependent of a Participant who is recognized by a domestic relations order as
having a right to receive all, or a portion of, the benefits payable under the
Plan with respect to such Participant.
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<PAGE>
B. "QUALIFIED DOMESTIC RELATIONS ORDER" means any judgment, decree or
order (including approval of a property settlement agreement), which:
1. relates to the provision of child support, alimony payments, or
marital property rights to a spouse, former spouse, child, or other dependent of
a Participant;
2. is made pursuant to a state domestic relations law (including a
community property law); and
3. which meets the requirements of the foregoing section 17.1.
17.3 PAYMENTS AFTER THE EARLIEST RETIREMENT AGE
In the case of any payment made before a Participant has separated from
service, a Qualified Domestic Relations Order shall not be considered as failing
to meet the requirements of section 17.1C solely because such order requires
that payment of benefits be made to an alternate payee:
a. on or after the date on which the Participant first attains (or
would have attained) the earliest retirement age;
b. as if the Participant had retired on the date on which such payment
is to begin under such order (but taking into account only the present
value of benefits accrued); and
c. in any form in which such benefits may be paid under the Plan to the
Participant.
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<PAGE>
17.4 TREATMENT OF FORMER SPOUSE AS SURVIVING SPOUSE
To the extent provided in any Qualified Domestic Relations Order:
a. the former spouse of a Participant shall be treated as a "surviving
spouse" of such Participant for purposes of Section 205 of ERISA; and
b. if married for at least one (1) year to the Participant, such former
spouse shall be treated as meeting the requirements of Section 205(f) of
ERISA.
17.5 PROCEDURES
The Plan Administrator shall promptly notify a Participant and any
other alternate payee of the receipt of a domestic relations order and of the
Plan's procedure for determining whether the order meets the requirements of a
Qualified Domestic Relations Order under this Article. Within a reasonable
period of time after the receipt of such order, the Plan Administrator, in
accordance with such procedures as it shall from time to time establish, shall
determine whether such order meets the requirements of a Qualified Domestic
Relations Order under this Article and shall notify the Participant and each
alternate payee of such determination.
17.6 PROCEDURES DURING PERIOD OF DETERMINATION
During any period of time in which the issue of whether a domestic
relations order meets the requirements of a Qualified Domestic Relations Order
under this Article is being determined by a court of competent jurisdiction, the
Plan Administrator shall segregate in a separate account in the Plan or in an
escrow account the amounts which would have been payable to the alternate payee
during such period if the order had been determined to be a
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<PAGE>
Qualified Domestic Relations Order under this Article. If within eighteen (18)
months such order is determined to be a Qualified Domestic Relations Order under
this Article, the Plan Administrator shall instruct the Trustee to pay the
segregated amounts (plus any interest thereon) to the person or persons entitled
thereto. If within eighteen (18) months it is determined that such order is not
a Qualified Domestic Relations Order under this Article, or the issue as to
whether such order so qualifies is not resolved, then the Plan Administrator
shall instruct the Trustee to pay the segregated amounts (plus any interest
thereon) to the person or persons who would have been entitled to such amounts
if there had been no order. Any determination that an order is a Qualified
Domestic Relations Order under this Article which is made after the end of the
eighteen (18) month period, shall be applied prospectively only.
ARTICLE 18 MISCELLANEOUS
18.1 NON-ALIENATION AND NON-ASSIGNMENT OF BENEFITS
Except as provided in Article 17, no benefit under this Plan shall be
subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance or charge, and any attempt so to do shall be void, nor shall
any benefit be in any manner liable for or subject to garnishment, attachment,
execution or levy, or liable for or subject to the debts, contracts,
liabilities, engagements or torts of the person entitled to such benefit; and in
the event that the Plan Administrator shall find that any Participant or other
person entitled to a benefit under this plan has become bankrupt or that any
attempt has been made to anticipate, alienate, sell, transfer, assign, pledge,
encumber or charge any of his benefits under this Plan, then such benefit shall
cease and terminate and in that event the Plan Administrator shall hold or apply
the same to or for the benefit of such Participant or such other person, his
spouse, children, parents or other blood relatives, or any of them.
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<PAGE>
18.2 LIMITATION ON RIGHTS CREATED BY PLAN
A. The adoption and maintenance of the Plan and Trust will not be
construed to give a Participant the right to continue in the employ of the
Employer or to interfere with the right of the Employer to discharge, lay off or
discipline a Participant at any time, or give the Employer the right to require
any Participant to remain in its employ or to interfere with the Participant's
right to terminate his employment.
B. The adoption and maintenance of the Plan and Trust, the creation of
any account or the payment of any benefit will not be construed as creating any
legal or equitable right against the Employer or the Trust except as this Plan
specifically provides.
C. The Employer, the Trustee, the Plan Administrator and the Rollover
Contributions Account do not guaranty the payment of benefits hereunder and
benefits will be paid only to the extent of the assets of the Trust. It is a
condition of participation in the Plan that each Participant (and his
Beneficiary or anyone else claiming through him) will look only to the assets of
the Trust for the payment of any benefit to which he or his Beneficiary or other
person is entitled.
18.3 ALLOCATION OF RESPONSIBILITIES
The Employer, the Trustee and the Plan Administrator will each have
only those duties and responsibilities specifically allocated to each of them
under the Plan. There will be no joint fiduciary responsibility between or among
fiduciaries unless specifically stated otherwise. Any person may serve in more
than one fiduciary capacity.
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<PAGE>
18.4 CURRENT ADDRESS OF PAYEE
The Plan Administrator, the Trustee and the Employer have no obligation
to locate any person entitled to payments hereunder and will be fully protected
if all payments, notices and other papers are mailed to the last address of
which such person has notified the Plan Administrator in writing, or are
withheld pending receipt of proof of his current address and proof that he is
alive.
18.5 APPLICATION OF PLAN'S TERMS
A. If an Employee retired, died or otherwise terminated his service
before the Effective Date of the Employer's Plan, the Employee and his
beneficiaries will receive no benefits and will have no rights under the Plan.
B. If an Employee retires, dies or otherwise terminates his service on
or after the Effective Date of the Employer's Plan, the benefits and rights of
the Employee and his beneficiaries will be determined in accordance with the
terms of the Plan that are in effect on the date of such termination of service.
C. The allocations to a Participant's account for any year of reference
will be determined in accordance with the terms of the Plan that are in effect
for such year.
18.6 EMPLOYERS WITH EMPLOYEES WITHIN AND WITHOUT PUERTO RICO OR THAT
ARE MEMBERS OF AN AFFILIATED GROUP OF CORPORATIONS OR PARTNERSHIPS
The satisfaction of the participation and non-discrimination
requirements of Sections 1165(a)(3)(A), 1165(a)(4), and 1165(e)(3) of the IRC
shall be determined by taking into the account the active Employees that the
Employer has in Puerto Rico.
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<PAGE>
Notwithstanding the above, in the case of an Employer having Employees within
and without Puerto Rico or that are members of an affiliated group of
corporations or partnerships (within the meaning of Section 1028 of the IRC)
that adopt the same plan, said Employer or Employers may elect to meet the above
mentioned requirements as follows:
i. By taking into the account all the active Employees (employed within
and without Puerto Rico) of the Employers or of each individual employer;
ii. By taking into the account all the Employees of the affiliated
group of corporation or partnerships (even if some of the members of the
affiliated group of corporations or partnerships have no Employees in
Puerto Rico);
iii. By taking into the account all the Employees of those members of
the affiliated group of corporations or partnerships having Employees in
Puerto Rico; or
iv. By taking into the account all the Employees employed by the
members of the affiliated group of corporations or partnerships in Puerto
Rico.
The above-mentioned options shall be available as long as the Plan
offers to the Puerto Rico resident Employees the same benefits offered to those
Employees located outside of Puerto Rico.
18.7 USERRA
Notwithstanding any provision of this Plan to the contrary,
contributions, benefits and service credit with respect to qualified military
service will be provided in accordance with the Uniformed Services Employment
and Reemployment Rights Act, effective for employment on or after December 12,
1994.
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EXHIBIT 4.4.(c)
1165(e) PLAN ADOPTION AGREEMENT
MASTER DEFINED CONTRIBUTION RETIREMENT PLAN
AMENDED EFFECTIVE AS OF JANUARY 1, 1998
(1/01/99 VERSION)
<PAGE>
BY executing this Adoption Agreement the Employer is
adopting a profit sharing plan with optional Section 1165(e) provisions for the
benefit of its Employees. The Employer's Plan is comprised of: (i) [X] the Banco
Popular de Puerto Rico Master Defined Contribution Retirement Plan Document or
[ ] the Employer's Defined Contribution Retirement Plan Document; (ii) [X] the
Banco Popular de Puerto Rico Master Defined Contribution Retirement Plan Master
Trust or [X] the Employer's Defined Contribution Retirement Plan Trust; and
(iii) [X] this Adoption Agreement. The terms used in this Adoption Agreement, as
well as the rules to be complied with in connection with the Plan, are fully
explained in the [X] Master Plan Document or [ ] the Employer's Plan Document.
When signing this Adoption Agreement, if applicable, the Employer has received
copy of the Banco Popular de Puerto Rico Master Defined Contribution Retirement
Plan and the Master Plan's Summary Plan Description. The Banco Popular de Puerto
Rico Master Defined Contribution Retirement Plan Master Trust is available upon
request at Banco Popular's main offices in Hato Rey, Puerto Rico.
1165(e) PLAN ADOPTION AGREEMENT
MASTER DEFINED CONTRIBUTION RETIREMENT PLAN
COPYRIGHT@ 1998 BY BANCO POPULAR DE PUERTO RICO
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<PAGE>
EMPLOYER INFORMATION
NAME OF EMPLOYER: POPULAR SECURITIES, INC.
------------------------------------------------------------
ADDRESS: 1020 Banco Popular Center
-----------------------------------------------------------------------
Hato Rey, Puerto Rico 00918-1075
- --------------------------------------------------------------------------------
TELEPHONE: 766-4160 TELEFAX: 763-3485
---------------------------- ------------------------------
PERSON FOR BANCO POPULAR DE PUERTO RICO TO CONTACT: Mr. Kenneth W. McGrath
----------------------------
EMPLOYER TAX IDENTIFICATION NUMBER: 66-0374802
--------------------------------------------
TYPE OF BUSINESS:
[ ] Unincorporated Trade or Business
Parntership
[X ] Corporation
[ ] Other (specify) --------------------------------------------------
Employer's taxable year:
[X ] Calendar Year
[ ] Fiscal Year ending on
--------------------------------------------
GENERAL PLAN INFORMATION
PLAN NAME
Popular Securities, Inc. - Institutional 1165(e) Plan
- --------------------------------------------------------------------------------
(Employer's name and type of plan)
ADOPTION OR AMENDMENT OF PLAN
By signing this Adoption Agreement the Employer:
[ ] adopts the Banco Popular de Puerto Rico Master Defined Contribution
Retirement Plan and its Master Trust
[ ] adopts the Banco Popular de Puerto Rico Master Defined Contribution
Retirement Plan and an Individual Trust
[ ] adopts an Individual Defined Contribution Retirement Plan and the
Banco Popular de Puerto Rico Master Defined Contribution Retirement
Plan Master Trust,
[X ] amends certain options of an earlier Banco Popular de Puerto Rico
Master Defined Contribution Retirement Plan Adoption Agreement for
this 1165(e) Plan,
[ ] amends and restates the following Plan:
Name of Plan:
-----------------------------------------------
Effective Date:
-----------------------------------------------
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<PAGE>
EFFECTIVE DATE
The effective date of this Plan or amendment is: January 28, 1999
--------------------------------
(month/day/year)
(cannot be earlier than the first day of the Plan Year in which the Employer
signs this Adoption Agreement).
PLAN YEAR
The Plan Year will be a calendar year unless the Employer elects otherwise by
checking the box below:
[ ] The Plan Year shall begin on and end on
--------------- ---------------
(month/day) (month/day)
[X ] If applicable, the first Plan Year is a short Plan Year beginning on
5/1/95 and ending on 12/31/95
--------------- ---------------
(month/day) (month/day)
ACCOUNTING METHOD
The Plan shall use the cash basis accounting method.
ELIGIBILITY FOR PLAN PARTICIPATION
WAIVER OF REQUIREMENTS FOR NEW PLANS
[X ] If checked, each Employee employed on the Effective Date is automatically
eligible to participate. Employees hired after the Effective Date are
eligible upon satisfying any service and/or age requirements specified
below:
AGE REQUIREMENT. An employee must fulfill the following age requirement to
become a Participant:
[ ] No minimum age required.
[X ] Minimum age 18 (not greater than 21).
-------------
[ ] Other
SERVICE REQUIREMENTS. An employee must fulfill the following service requirement
to become a Participant:
[ ] No service requirement.
[X ] One year of service.
[ ] Other
METHOD FOR CALCULATING YEAR OF SERVICE.
[ ] HOURS OF SERVICE METHOD. An Employee's service will be determined by
using the Hours of Service method as described in Article 3 of the
Master Plan document or the Employer's Individual Plan Document.
[X ] ELAPSED TIME METHOD. An Employee's service will be determined using the
elapsed time method, as described in Article 3 of the Master Plan
document or the Employer's Individual Plan Document.
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<PAGE>
PREDECESSOR EMPLOYERS. Service with the following predecessor employers will be
treated as service with the Employer:
CS First Boston (Puerto Rico), Inc.
- --------------------------------------------------------------------------------
Any Popular, Inc. Subsidiary.
- --------------------------------------------------------------------------------
ENTRY DATES
An Employee may elect to become a Participant and start making Employee
Contributions on any entry date on or after he or she satisfies the Plan's
eligibility requirements.
INDICATE THE PLAN'S ENTRY DATES:
[ ] Monthly Entry Dates. The first day of each month date.
[X ] Quarterly Entry Dates. The first day of each of the first, fourth,
seventh and tenth months of the Plan Year is an entry date.
[ ] Semi-Annual Entry Dates. The first day of each of the first and seventh
months of the Plan Year is an entry date.
COMPENSATION
A Participant's Compensation shall mean the total compensation that is currently
includible in income for income tax purposes paid to him by the Employer during
a Plan Year. Except that if checked below, Compensation will exclude the
following items:
[ ] bonuses
[ ] overtime
[ ] commissions
[ ] other items (specify)
------------------------------------------------
-----------------------------------------------------------------------------
CONTRIBUTIONS
PROFIT SHARING CONTRIBUTIONS
[ ] The Employer will make no Profit Sharing Contributions
[X ] For each Plan Year in which this Plan is in effect the Employer may make
contributions to the Trust in one or more installments out of its Net
Profits (as defined in section 6.2c.(3) of the Plan) for the Plan Year,
in such amounts as the Employer may determine (if any). The Plan Year
for which each contribution is made shall be designated at the time of
the contribution. Profit-Sharing Contributions may not exceed the lesser
of Employer's Net Profits or 15% of a Participant's Compensation in any
Plan Year. See Exhibit A.
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<PAGE>
EMPLOYEE CONTRIBUTIONS
Participants may make contributions as follows:
[ ] Pre-Tax Contributions.
[ ] After-Tax Contributions.
[X ] Pre-Tax Contributions and/or After-Tax Contributions, at the election
of the Participant.
Pre-Tax Contributions in a Plan Year may not exceed 10% of Compensation or
$7,500, in 1997, and $8,000, in 1998 and thereafter whichever is less.
After-Tax Contributions in a Plan Year, if authorized, may not exceed 10% of the
aggregate compensation paid to the Employee during all the years he or she has
been a Plan Participant.
Pre-Tax Contributions and/or After-Tax Contributions may not commence prior to
the date the Plan is adopted.
MATCHING CONTRIBUTIONS
[ ] The Employer will make no Matching Contributions.
[X ] The Employer will make a Matching Contribution equal to 50 cents for
each dollar of a Participant's:
[X ] Pre-Tax Contributions.
[ ] After-Tax Contributions.
[ ] Pre-Tax Contributions and After-Tax Contributions.
However, the Employer will not make Matching Contributions above 10% of the
Participant's Compensation.
QUALIFIED MATCHING AND NON-ELECTIVE CONTRIBUTIONS
Qualified Matching Contributions and Qualified Non-Elective Contributions, as
defined in the Master Plan Document or the Employer's Plan Document, will be
taken into account for purposes of calculating the Actual Deferral Percentages
of Non-Highly Compensated Employees to the extent necessary to meet the Actual
Deferral Percentage test.
ROLLOVER CONTRIBUTIONS
The Plan's Trustee shall be authorized to receive rollover contributions,
[ ] Only if the Employee has met the participation requirements of the Plan
as of the date of the contribution.
[ ] Even if the Employee has not met the participation requirements of the
Plan as of the date of the contribution.
VESTING
PRE-TAX AND/OR AFTER-TAX CONTRIBUTIONS
Pre-Tax and/or After-Tax Contributions are always 100% vested.
MATCHING CONTRIBUTIONS AND/OR PROFIT SHARING CONTRIBUTIONS
Matching Contributions and/or Profit Sharing Contributions will vest in
accordance with the following vesting schedule:
-6-
<PAGE>
<TABLE>
<CAPTION>
Graded Vesting Table
<S> <C> <C> <C>
(1) (2) (3)
[ ] FULL VESTING. Participants are 100% vested at all times YEARS OF VESTED MINIMUM REQUIRED
SERVICE PERCENTAGE PERCENTAGE
[ ] CLIFF VESTING. Participants are 100% vested after completing ____ years
of service (insert number; cannot be greater than 5). The Participant
will be 0% vested until completing the years of service specified
above. Less than 1 0
--------
At least 1 20 0
--------
[X ] GRADED VESTING. Participants are vested in accordance with the At least 2 40 0
following vesting schedule. (A Participant's vested percentage is --------
the percentage inserted in column (2) or the percentage in column
(3), whichever is greater. Spaces left blank are treated as zeros). At least 3 60 20
--------
At least 4 80 40
--------
At least 5 100 60
--------
At least 6 80
--------
At least 7 100
--------
</TABLE>
YEARS OF SERVICE EXCLUDED IN DETERMINING VESTED PERCENTAGES. Need not be
completed - check as many as desired.
[ ] Years completed before the effective date of this Plan (or a
predecessor plan).
[ ] Years completed before the Participant's _____ birthday (insert
birthday not greater than 18th).
LOANS
[ ] Loans from the Plan will be permitted, subject to the Plan's loan
rules. (Loans will not be available to Owner-Employees unless one of
the following occurs: such person has at his expense obtained an
administrative exemption from ERISA's prohibited transaction rules
from the United States Department of Labor with respect to such loan
or the United States Department of Labor has issued a prohibited
transaction class exemption covering such loans.)
[X ] Loans to Participants from the Plan are not permitted.
IN-SERVICE WITHDRAWALS
The following provisions will govern the availability of in-service withdrawals
from a Participant's accounts. See Article 9 of the Plan document for additional
details, including definitions and limitations.
PROFIT SHARING CONTRIBUTIONS. In-service withdrawals from Profit Sharing
Contributions will not be allowed unless one of the following boxes is checked:
[ ] In-service withdrawals from Profit Sharing Contributions Account
will only be allowed in case of a financial hardship as such term is
defined in Article 9.1 of the Master Plan Document or the Employer's
Individual Plan Document.
[ ] In-service withdrawals from Profit Sharing Contributions Account will
be allowed for any reason.
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<PAGE>
PRE-TAX CONTRIBUTIONS. In-service withdrawals from Pre-Tax Contributions will
only be allowed in case of a financial hardship as such term is defined in
Article 9.1 of the Master Plan Document or the Employer's Individual Plan
Document.
AFTER-TAX CONTRIBUTIONS. In-service withdrawals from After-Tax Contributions
will be allowed for any reason.
MATCHING CONTRIBUTIONS. In-service withdrawals from Matching Contributions will
not be allowed unless one of the following boxes is checked:
[ ] In-service withdrawals from Profit Sharing Contributions Account
will only be allowed in case of a financial hardship as such term is
defined in Article 9.1 of the Master Plan Document or the Employer's
Individual Plan Document.
[ ] In-service withdrawals from Profit Sharing Contributions Account will
be allowed for any reason.
ROLLOVER CONTRIBUTIONS. Refer to Article 9 of the Master Plan document.
WITHDRAWALS AFTER AGE 59 1/2.
[ ] If checked, after 59 1/2 a Participant may make in-service withdrawals
from his Pre-Tax Contributions and, if applicable, from his Qualified
Matching and Non-Elective Contributions Accounts without financial
hardship (up to the vested percentage of each such accounts).
FINANCIAL HARDSHIP. An in-service withdrawal will be on account of financial
hardship only if the Participant has an immediate and heavy financial need and
the withdrawal is necessary to meet such need. A withdrawal will be deemed to be
on account of an immediate and heavy financial need if it is occasioned by:
o a deductible medical expense incurred by the Participant or his
spouse, children or dependent; (not reimbursed by medical insurance or
otherwise);
o purchase of the Participant's principal residence (not including
mortgage payments);
o tuition payments for the next semester or quarter of post-secondary
education for the Participant or his spouse, child or dependent;
o rent or mortgage payments to prevent the Participant's eviction from
or the foreclosure of the mortgage on his principal residence; or
o such other event or circumstances as the Puerto Rico Secretary of the
Treasury through regulations may permit.
A Participant must establish to the Plan Administrator's satisfaction both that
the Participant has an immediate and heavy financial need and that the
withdrawal is necessary to meet the need. The Trustee and the Plan Administrator
shall agree as to the most convenient way of administering the financial
hardship provisions of the Plan.
A Participant who makes a withdrawal on account of a financial hardship may not
make Pre-Tax Contributions or After-Tax Contributions hereunder (or under any
other Plan maintained by the Employer) for a period of 12 months following the
date of the in-service withdrawal.
-8-
<PAGE>
PAYMENT. Participants in-service withdrawal request shall be paid on or before
the last day of each:
/ / month
/ / quarter
/ / semester
/ / the Plan year
RETIREMENT AGE
NORMAL RETIREMENT AGE. A Participant will be fully vested and may retire after
the latter of: reaching age 65 or the fifth anniversary of the first day of the
Plan Year in which he/she commenced participation in the Plan.
DISABILITY RETIREMENT. A Participant will be fully vested and may retire before
normal retirement upon becoming disabled.
EARLY RETIREMENT AGE.
[X ] If checked, a Participant will be fully vested and may retire prior
to Normal Retirement Age upon reaching age 55 and completing 10 years
of service.
DISTRIBUTION OF VESTED BENEFITS BEFORE RETIREMENT, DEATH OR DISABILITY.
If the Participant terminates his employment with the Employer before reaching
his normal or early retirement age, becoming disable or dying, Participant
/ / shall be / / shall not be allowed to apply for an early distribution of
his plan benefits.
DISTRIBUTION OF BENEFITS
Upon becoming entitled to the distribution of this Plan benefits, the
Participants or their authorized representative must request from the Employer
that their benefits be distributed. In such request, the Participant, or his' or
her's authorized representative, must elect one of the following payment
alternatives:
[X ] Lump-Sum cash distribution
[ ] periodical payments
The election of one optional payment form may require the consent of the
Participant's surviving spouse. Benefit distributions may not exceed the
Participant's life expectancy and that of his or her surviving spouse.
If the Employer elects more that one method of distribution hereunder, then, the
Participants' shall elect under which of such methods his' or her's benefit
shall be distributed.
-9-
<PAGE>
TIME OF PAYMENT
When a Participant retires, becomes disable or die, the distribution of his
benefits shall commence:
[X ] as soon as it is administratively feasible following the termination
of the Plan Year in which the Participant requests the distribution
of his or her benefits or such amount becomes payable.
[ ] as soon as it is administratively feasible following the date in which
the Plan Participant requests the distribution of his' or her's
benefits or such amount becomes payable.
[ ] as soon as it is administratively feasible following the termination
of the Plan Year in which there is a __________ consecutive break in
service of one year.
[ ] only after you have reached your Normal Retirement Date or Early
Retirement Date (if applicable).
If the Plan Participant terminate his employment for a reason other than deaths,
disability, or retirement payments shall commence:
[X ] as soon as it is administrative feasible following the termination
of the Plan Year in which the Participants requested the distribution
or the same becomes payable.
[ ] as soon as it is administrative feasible following the date in
which the Plan Participant requested the distribution of his' or her's
benefits or such amount becomes payable.
[ ] as soon as it is administratively feasible following the termination
of the Plan Year in which the Plan Participant incurs _______
consecutive break in service of one year.
[ ] only after you have reached your Normal Retirement Date or Early
Retirement Date (if applicable).
INVESTMENT FUNDS
Investment Funds shall be those selected by the Employer on the separate
Investment Funds Selection Form. All investment instructions as to each
Participant's accounts will be directed by the Participant and/or the Employer.
However, if no investment instructions are provided by the Participant and/or
the Employer, the Participant's accounts will be invested in equal proportions
among the investment funds chosen by the Employer.
For purposes of the Plan, the Trustee /X/ shall be / / shall not be considered
as a directed trustee.
PARTICIPANT'S INVESTMENT INSTRUCTIONS
The Participants will be allowed to modify their investments instructions on a
/ / monthly /X/ quarterly / / semi annual / / annual basis.
PARTICIPANT'S CONTRIBUTIONS TO THE PLAN
The Participants will be allowed to modify or suspend their pre-tax and/or their
after-tax contributions to the Plan on a / / monthly /X/ quarterly / / semi
annual / / annual basis.
-10-
<PAGE>
PLAN ADMINISTRATION
PLAN ADMINISTRATOR. The Employer is the legal Plan Administrator under ERISA.
Specify one or more officers, partners, Employees or other persons to perform
the functions of the Plan Administrator:
Kenneth W. McGrath - President & Chief Executive Officer
- --------------------------------------------------------------------------------
James A. Rodriguez Colom
- --------------------------------------------------------------------------------
Carlos Juan Ortiz
- --------------------------------------------------------------------------------
Each person selected must submit a specimen signature. Any such appointment may
be changed by written notice.
MASTER TRUST
By executing this Adoption Agreement the Employer /X/ adopts / / does not adopts
the Master Trust established by Banco Popular de Puerto Rico to carry out the
purposes of the Plan and thus retains Banco Popular as Trustee. The terms of the
Trust and corresponding fees are contained in the Banco Popular de Puerto Rico
Master Defined Contribution Retirement Plan, Master Trust and Fee Schedule
respectively, which are incorporated by reference into this Adoption Agreement.
RECORDKEEPER
/X/ By executing this Adoption Agreement, the Employer retains Banco Popular de
Puerto Rico as Recordkeeper of the Plan pursuant to the Recordkeeping
Agreement and Fee Schedule incorporated by reference into this Adoption
Agreement.
/ / The Employer has selected as recordkeeper for the Plan:
Name
----------------------------------------------------------------------
Address
-------------------------------------------------------------------
Telephone No.
------------------------------------------------------------
Contact Person
------------------------------------------------------------
RECORDKEEPER AND TRUSTEE'S FEES
By executing this Adoption Agreement, the Employer agrees to retain Banco
Popular de Puerto Rico as Recordkeeper and, if applicable, as Trustee of the
Plan, for an initial minimum period of three years. This Agreement shall renew
automatically for an indefinite period of time. The Employer may terminate this
Agreement at any time subject to a written termination notice received by Banco
Popular at least thirty days prior to the effective date of termination. If
termination occurs during the initial three year period, the Employer agrees to
compensate Banco Popular with a
-11-
<PAGE>
termination fee equal to three times the total annual fees minus any amount
already satisfied in connection with the services rendered since the effective
date of this agreement. Banco Popular may change the Fee Schedule from time to
time and shall provide written notification to the Employer.
VALUATING OF PARTICIPANT'S ACCOUNTS
The Participant's Accounts shall be valued / / monthly /X/ quarterly / / semi
annually / / annually.
PARTICIPANT'S ACCOUNT STATEMENTS
The Participants shall be provided with a statement of their account on a
/ / monthly /X/ quarterly / / semi annually / / annual basis.
SATISFACTION OF THE PARTICIPATION AND NON-DISCRIMINATION REQUIREMENTS OF THE IRC
BY EMPLOYERS WITH EMPLOYEES WITHIN AND WITHOUT PUERTO RICO OR THAT ARE MEMBERS
OF AN AFFILIATED GROUP.
The satisfaction of the participation and non-discrimination requirements of
section 1165(a)(3)(A), 1165(a)(4), and 1165(e)(3) of the IRC shall be determine
by taking into the account the active Employees that the Employer has in Puerto
Rico. Notwithstanding the above, in the case of an Employer having Employees
within and without Puerto Rico or that is a member of an affiliated group of
corporations or partnerships (within the meaning of section 1028 of the IRC)
that adopt the same plan, said Employer or Employers may elect to meet the above
mentioned requirements as follows:
/ / By taking into the account all the active Employees (employed within
and without Puerto Rico) of the Employers or of each individual
Employer;
/X/ By taking into the account all the Employees of the affiliated group
of corporation or partnerships (even if some of the members of the
affiliated group of corporations or partnerships have no Employees in
Puerto Rico);
/ / By taking into the account all the Employees of those members of the
affiliated group of corporations or partnerships having Employees in
Puerto Rico; or
/ / By taking into the account all the Employees employed by the members
of the affiliated group of corporations or partnerships in Puerto
Rico.
The above mentioned options shall be available as long as the Plan offers to the
Puerto Rico resident Employees the same benefits offered to those Employees
located outside of Puerto Rico.
-12-
<PAGE>
EXECUTION OF ADOPTION AGREEMENT
EMPLOYER
Name of Employer: Popular Securities, Inc.
--------------------------------------------------------------
Signed: [Kenneth W. Mc Grath]
------------------------------------------------------------------------
Print name and title: Kenneth W. McGrath, President & Chief Exdecutive Officer
----------------------------------------------------------
Date: January 28, 1999
--------------------------------------------------------------------------
RESPONSIBILITIES OF EMPLOYER
The Employer understands that, by establishing this Plan, it will have certain
legal responsibilities for which neither the Trustee nor the Plan Sponsor will
be responsible. The Employer also understands that it will be solely responsible
for any taxes, costs or expenses arising from the disqualification of the
Employer's Plan. The Employer warrants that it has obtained legal and tax advice
to the extent the Employer deems necessary before signing this Adoption
Agreement.
TRUSTEE
Name of Trustee: BANCO POPULAR DE PUERTO RICO
--------------------------------------------------------------
Address: 209 Ponce de Leon Avenue, Hato Rey, Puerto Rico 00917
--------------------------------------------------------------
Signed: [Maryvette Velazquez Torres]
----------------------------------------------------------
Print name and title: Maryvette Velazquez Torres, Vice President
& Pension Plan Manager
----------------------------------------------------------
Date: January 28, 1999
----------------------------------------------------------
The identifying number for the Banco Popular de Puerto Rico Master Defined
Contribution Retirement Plan document is 01 and for this Adoption Agreement is
102. The Plan Sponsor is (insert Employer's name and address)
- ------------------------------------------------------------------------------.
Banco Popular de Puerto Rico will notify you if it amends or discontinues this
Master Plan.
The Employer should insure that this Adoption Agreement has been filled out
completely and properly. Failure to do so may result in Plan disqualification.
-13-
<PAGE>
EMPLOYER'S SELECTION OF INVESTMENT FUNDS
-----------------------------------------
Employer Name: Popular Securities, Inc.
------------------------------------------------------------------
Plan Name: Popular Securities, Inc. - Institutional 1165(e) Plan
---------------------------------------------------------------------
The Employer selects the following Investment Funds for the above named plan:
(At least three.)
1. Vanguard Index Trust 500
---------------------------------------------------------------
2. Vanguard American Century Ultra-Inv.
---------------------------------------------------------------
3. Vanguard Long Term Treasury
---------------------------------------------------------------
4. Fidelity Growth & Income
---------------------------------------------------------------
5. Trust for US Treasury Obligations
---------------------------------------------------------------
6. Popular, Inc. Common Stock
---------------------------------------------------------------
In San Juan, Puerto Rico on the 28th day of January, 1999.
EMPLOYER
Name of Employer: Popular Securities, Inc.
Signed: [Kenneth W. McGrath
Print name and Title: Kenneth W. McGrath, President and
Chief Executive Officer
--------------------------------------------
Date: January 28, 1999
TRUSTEE
Name of Trustee: Banco Popular de Puerto Rico
Signed: [Maryvette Velazquez Torres]
Print name and Title: Maryvette Velazquez Torres, Vice President
& Pension Plan Manager
--------------------------------------------
Date: January 28, 1999
-14-
EXHIBIT 4.4.(d)
1165(e) PLAN ADOPTION AGREEMENT
MASTER DEFINED CONTRIBUTION RETIREMENT PLAN
AMENDED EFFECTIVE AS OF JANUARY 1, 1998
(1/01/99 VERSION)
<PAGE>
BY executing this Adoption Agreement the Employer is
adopting a profit sharing plan with optional Section 1165(e) provisions for the
benefit of its Employees. The Employer's Plan is comprised of: (i) [X] the Banco
Popular de Puerto Rico Master Defined Contribution Retirement Plan Document or
[ ] the Employer's Defined Contribution Retirement Plan Document; (ii) [X] the
Banco Popular de Puerto Rico Master Defined Contribution Retirement Plan Master
Trust or [X] the Employer's Defined Contribution Retirement Plan Trust; and
(iii) [X] this Adoption Agreement. The terms used in this Adoption Agreement, as
well as the rules to be complied with in connection with the Plan, are fully
explained in the [X] Master Plan Document or [ ] the Employer's Plan Document.
When signing this Adoption Agreement, if applicable, the Employer has received
copy of the Banco Popular de Puerto Rico Master Defined Contribution Retirement
Plan and the Master Plan's Summary Plan Description. The Banco Popular de Puerto
Rico Master Defined Contribution Retirement Plan Master Trust is available upon
request at Banco Popular's main offices in Hato Rey, Puerto Rico.
1165(E) PLAN ADOPTION AGREEMENT
MASTER DEFINED CONTRIBUTION RETIREMENT PLAN
COPYRIGHT@ 1998 BY BANCO POPULAR DE PUERTO RICO
-2-
<PAGE>
EMPLOYER INFORMATION
NAME OF EMPLOYER: POPULAR FINANCE, INC.
--------------------------------------------------------------
ADDRESS: SUITE 613, COND. EL SENORIAL, 13 SALUD ST.
-----------------------------------------------------------------------
PONCE, PR 00731
- --------------------------------------------------------------------------------
TELEPHONE: ------------------------------- TELEFAX:-----------------------------
PERSON FOR BANCO POPULAR DE PUERTO RICO TO CONTACT: EDGARDO NOVOA
----------------------------
EMPLOYER TAX IDENTIFICATION NUMBER: 66-0459649
--------------------------------------------
TYPE OF BUSINESS:
[ ] Unincorporated Trade or Business
[ ] Partnership
[X ] Corporation
[ ] Other (specify) --------------------------------------------------
Employer's taxable year:
[X ] Calendar Year
[ ] Fiscal Year ending on --------------------------------------------
GENERAL PLAN INFORMATION
PLAN NAME
Popular Finance, Inc. Retirement & Savings Plan
- --------------------------------------------------------------------------------
(Employer's name and type of plan)
ADOPTION OR AMENDMENT OF PLAN
By signing this Adoption Agreement the Employer:
[ ] adopts the Banco Popular de Puerto Rico Master Defined Contribution
Retirement Plan and its Master Trust
[ ] adopts the Banco Popular de Puerto Rico Master Defined Contribution
Retirement Plan and an Individual Trust
[ ] adopts an Individual Defined Contribution Retirement Plan and the
Banco Popular de Puerto Rico Master Defined Contribution Retirement
Plan Master Trust,
[X ] amends certain options of an earlier Banco Popular de Puerto Rico
Master Defined Contribution Retirement Plan Adoption Agreement for
this 1165(e) Plan,
[ ] amends and restates the following Plan:
Name of Plan: ------------------------------------------------
Effective Date: -----------------------------------------------
-3-
<PAGE>
EFFECTIVE DATE
The effective date of this Plan or amendment is: January 28, 1999
--------------------------------
(month/day/year)
(cannot be earlier than the first day of the Plan Year in which the Employer
signs this Adoption Agreement).
PLAN YEAR
The Plan Year will be a calendar year unless the Employer elects otherwise by
checking the box below:
[ ] The Plan Year shall begin on and end on
--------------- ---------------
(month/day) (month/day)
[ ] If applicable, the first Plan Year is a short Plan Year beginning on
and ending on
--------------- ---------------
(month/day) (month/day)
ACCOUNTING METHOD
The Plan shall use the cash basis accounting method.
ELIGIBILITY FOR PLAN PARTICIPATION
WAIVER OF REQUIREMENTS FOR NEW PLANS
[X ] If checked, each Employee employed on the Effective Date is automatically
eligible to participate. Employees hired after the Effective Date are
eligible upon satisfying any service and/or age requirements specified
below:
AGE REQUIREMENT. An employee must fulfill the following age requirement to
become a Participant:
[ ] No minimum age required.
[X ] Minimum age 18 (not greater than 21).
-------------
[ ] Other
SERVICE REQUIREMENTS. An employee must fulfill the following service requirement
to become a Participant:
[ ] No service requirement.
[X ] One year of service.
[ ] Other
METHOD FOR CALCULATING YEAR OF SERVICE.
[X ] HOURS OF SERVICE METHOD. An Employee's service will be determined by
using the Hours of Service method as described in Article 3 of the
Master Plan document or the Employer's Individual Plan Document.
[ ] ELAPSED TIME METHOD. An Employee's service will be determined using the
elapsed time method, as described in Article 3 of the Master Plan
document or the Employer's Individual Plan Document.
-4-
<PAGE>
PREDECESSOR EMPLOYERS. Service with the following predecessor employers will be
treated as service with the Employer:
Best Finance Corporation.
- --------------------------------------------------------------------------------
Any Popular, Inc. subsidiary
- --------------------------------------------------------------------------------
ENTRY DATES
An Employee may elect to become a Participant and start making Employee
Contributions on any entry date on or after he or she satisfies the Plan's
eligibility requirements.
INDICATE THE PLAN'S ENTRY DATES:
[ ] Monthly Entry Dates. The first day of each month date.
[X ] Quarterly Entry Dates. The first day of each of the first, fourth,
seventh and tenth months of the Plan Year is an entry date.
[ ] Semi-Annual Entry Dates. The first day of each of the first and seventh
months of the Plan Year is an entry date.
COMPENSATION
A Participant's Compensation shall mean the total compensation that is currently
includible in income for income tax purposes paid to him by the Employer during
a Plan Year. Except that if checked below, Compensation will exclude the
following items:
[ ] bonuses
[X ] overtime
[X ] commissions
[X ] other items (specify) Christmas Bonus; Car Allowance
------------------------------------------------
-----------------------------------------------------------------------------
CONTRIBUTIONS
PROFIT SHARING CONTRIBUTIONS
[ ] The Employer will make no Profit Sharing Contributions
[X ] For each Plan Year in which this Plan is in effect the Employer may
make contributions to the Trust in one or more installments out of its
Net Profits (as defined in section 6.2c.(3) of the Plan) for the Plan
Year, in such amounts as the Employer may determine (if any). The Plan
Year for which each contribution is made shall be designated at the
time of the contribution. Profit-Sharing Contributions may not exceed
the lesser of Employer's Net Profits or 15% of a Participant's
Compensation in any Plan Year.
-5-
<PAGE>
EMPLOYEE CONTRIBUTIONS
Participants may make contributions as follows:
[ ] Pre-Tax Contributions.
[ ] After-Tax Contributions.
[X ] Pre-Tax Contributions and/or After-Tax Contributions, at the election
of the Participant.
Pre-Tax Contributions in a Plan Year may not exceed 10% of Compensation or
$7,500, in 1997, and $8,000, in 1998 and thereafter whichever is less.
After-Tax Contributions in a Plan Year, if authorized, may not exceed 10% of the
aggregate compensation paid to the Employee during all the years he or she has
been a Plan Participant.
Pre-Tax Contributions and/or After-Tax Contributions may not commence prior to
the date the Plan is adopted.
MATCHING CONTRIBUTIONS
[ ] The Employer will make no Matching Contributions.
[X ] The Employer will make a Matching Contribution equal to 50 cents for
each dollar of a Participant's:
[X ] Pre-Tax Contributions.
[ ] After-Tax Contributions.
[ ] Pre-Tax Contributions and After-Tax Contributions.
However, the Employer will not make Matching Contributions above 5% of the
Participant's Compensation.
QUALIFIED MATCHING AND NON-ELECTIVE CONTRIBUTIONS
Qualified Matching Contributions and Qualified Non-Elective Contributions, as
defined in the Master Plan Document or the Employer's Plan Document, will be
taken into account for purposes of calculating the Actual Deferral Percentages
of Non-Highly Compensated Employees to the extent necessary to meet the Actual
Deferral Percentage test.
ROLLOVER CONTRIBUTIONS
The Plan's Trustee shall be authorized to receive rollover contributions,
[ ] Only if the Employee has met the participation requirements of the Plan
as of the date of the contribution.
[X ] Even if the Employee has not met the participation requirements of the
Plan as of the date of the contribution.
VESTING
PRE-TAX AND/OR AFTER-TAX CONTRIBUTIONS
Pre-Tax and/or After-Tax Contributions are always 100% vested.
MATCHING CONTRIBUTIONS AND/OR PROFIT SHARING CONTRIBUTIONS
Matching Contributions and/or Profit Sharing Contributions will vest in
accordance with the following vesting schedule:
-6-
<PAGE>
<TABLE>
<CAPTION>
Graded Vesting Table
<S> <C> <C> <C>
(1) (2) (3)
[ ] FULL VESTING. Participants are 100% vested at all times YEARS OF VESTED MINIMUM REQUIRED
SERVICE PERCENTAGE PERCENTAGE
[ ] CLIFF VESTING. Participants are 100% vested after completing ____ years
of service (insert number; cannot be greater than 5). The Participant
will be 0% vested until completing the years of service specified
above. Less than 1 0
--------
At least 1 20 0
--------
[X ] GRADED VESTING. Participants are vested in accordance with the At least 2 40 0
following vesting schedule. (A Participant's vested percentage is --------
the percentage inserted in column (2) or the percentage in column
(3), whichever is greater. Spaces left blank are treated as zeros). At least 3 60 20
--------
At least 4 80 40
--------
At least 5 100 60
--------
At least 6 80
--------
At least 7 100
--------
</TABLE>
YEARS OF SERVICE EXCLUDED IN DETERMINING VESTED PERCENTAGES. Need not be
completed - check as many as desired.
[ ] Years completed before the effective date of this Plan (or a
predecessor plan).
[ ] Years completed before the Participant's _____ birthday (insert
birthday not greater than 18th).
LOANS
[ ] Loans from the Plan will be permitted, subject to the Plan's loan
rules. (Loans will not be available to Owner- Employees unless one of
the following occurs: such person has at his expense obtained an
administrative exemption from ERISA's prohibited transaction rules
from the United States Department of Labor with respect to such loan
or the United States Department of Labor has issued a prohibited
transaction class exemption covering such loans.)
[X ] Loans to Participants from the Plan are not permitted.
IN-SERVICE WITHDRAWALS
The following provisions will govern the availability of in-service withdrawals
from a Participant's accounts. See Article 9 of the Plan document for additional
details, including definitions and limitations.
PROFIT SHARING CONTRIBUTIONS.
In-service withdrawals from Profit Sharing Contributions will not be allowed
unless one of the following boxes is checked:
[ ] In-service withdrawals from Profit Sharing Contributions Account will
only be allowed in case of a financial hardship as such term is
defined in Article 9.1 of the Master Plan Document or the Employer's
Individual Plan Document.
[ ] In-service withdrawals from Profit Sharing Contributions Account will
be allowed for any reason.
PRE-TAX CONTRIBUTIONS.
In-service withdrawals from Pre-Tax Contributions will only be allowed in case
of a financial hardship as such term is defined in Article 9.1 of the Master
Plan Document or the Employer's Individual Plan Document.
AFTER-TAX CONTRIBUTIONS. In-service withdrawals from After-Tax Contributions
will be allowed for any reason.
-7-
<PAGE>
MATCHING CONTRIBUTIONS. In-service withdrawals from Matching Contributions will
not be allowed unless one of the following boxes is checked:
[ ] In-service withdrawals from Profit Sharing Contributions Account
will only be allowed in case of a financial hardship as such term is
defined in Article 9.1 of the Master Plan Document or the Employer's
Individual Plan Document.
[ ] In-service withdrawals from Profit Sharing Contributions Account will
be allowed for any reason.
ROLLOVER CONTRIBUTIONS. Refer to Article 9 of the Master Plan document.
WITHDRAWALS AFTER AGE 59 1/2.
[ ] If checked, after 59 1/2 a Participant may make in-service
withdrawals from his Pre-Tax Contributions and, if applicable, from
his Qualified Matching and Non-Elective Contributions Accounts
without financial hardship (up to the vested percentage of each such
accounts).
FINANCIAL HARDSHIP. An in-service withdrawal will be on account of financial
hardship only if the Participant has an immediate and heavy financial need and
the withdrawal is necessary to meet such need.
A withdrawal will be deemed to be on account of an immediate and heavy financial
need if it is occasioned by:
o a deductible medical expense incurred by the Participant or his spouse,
children or dependent; (not reimbursed by medical insurance or otherwise);
o purchase of the Participant's principal residence (not including mortgage
payments);
o tuition payments for the next semester or quarter of post-secondary
education for the Participant or his spouse, child or dependent;
o rent or mortgage payments to prevent the Participant's eviction from or the
foreclosure of the mortgage on his principal residence; or
o such other event or circumstances as the Puerto Rico Secretary of the
Treasury through regulations may permit.
A Participant must establish to the Plan Administrator's satisfaction both that
the Participant has an immediate and heavy financial need and that the
withdrawal is necessary to meet the need.
The Trustee and the Plan Administrator shall agree as to the most convenient way
of administering the financial hardship provisions of the Plan.
A Participant who makes a withdrawal on account of a financial hardship may not
make Pre-Tax Contributions or After- Tax Contributions hereunder (or under any
other Plan maintained by the Employer) for a period of 12 months following the
date of the in-service withdrawal.
PAYMENT. Participants in-service withdrawal request shall be paid on or before
the last day of each:
/ / month
/ / quarter
/ / semester
/ / the Plan year
-8-
<PAGE>
RETIREMENT AGE
NORMAL RETIREMENT AGE. A Participant will be fully vested and may retire after
the latter of: reaching age 65 or the fifth anniversary of the first day of the
Plan Year in which he/she commenced participation in the Plan.
DISABILITY RETIREMENT. A Participant will be fully vested and may retire before
normal retirement upon becoming disabled.
EARLY RETIREMENT AGE.
[ ] If checked, a Participant will be fully vested and may retire prior
to Normal Retirement Age upon reaching age _____ and completing _____
years of service.
DISTRIBUTION OF VESTED BENEFITS BEFORE RETIREMENT, DEATH OR DISABILITY.
If the Participant terminates his employment with the Employer before reaching
his normal or early retirement age, becoming disabled or dying, Participant
/ / shall be / / shall not be allowed to apply for an early distribution of
his plan benefits.
DISTRIBUTION OF BENEFITS
Upon becoming entitled to the distribution of this Plan benefits, the
Participants or their authorized representative must request from the Employer
that their benefits be distributed. In such request, the Participant, or his' or
her's authorized representative, must elect one of the following payment
alternatives:
[X ] Lump-Sum cash distribution
[ ] periodical payments
The election of one optional payment form may require the consent of the
Participant's surviving spouse. Benefit distributions may not exceed the
Participant's life expectancy and that of his' or her's surviving spouse.
If the Employer elects more that one method of distribution hereunder, then, the
Participants' shall elect under which of such methods his' or her's benefit
shall be distributed.
TIME OF PAYMENT
When a Participant retires, becomes disabled or dies, the distribution of his
benefits shall commence:
[X ] as soon as it is administratively feasible following the termination
of the Plan Year in which the Participant requests the distribution
of his or her benefits or such amount becomes payable.
[ ] as soon as it is administratively feasible following the date in which
the Plan Participant requests the distribution of his or her benefits
or such amount becomes payable.
[ ] as soon as it is administratively feasible following the termination
of the Plan Year in which there is a ______ consecutive break in
service of one year.
[ ] only after you have reached your Normal Retirement Date or Early
Retirement Date (if applicable).
-9-
<PAGE>
If the Plan Participant terminates his employment for a reason other than death,
disability, or retirement payments shall commence:
[X ] as soon as it is administratively feasible following the termination
of the Plan Year in which the Participants requested the distribution
or the same becomes payable.
[ ] as soon as it is administratively feasible following the date in
which the Plan Participant requested the distribution of his or her
benefits or such amount becomes payable.
[ ] as soon as it is administratively feasible following the termination
of the Plan Year in which the Plan Participant incurs ____
consecutive break in service of one year.
[ ] only after you have reached your Normal Retirement Date or Early
Retirement Date (if applicable).
INVESTMENT FUNDS
Investment Funds shall be those selected by the Employer on the separate
Investment Funds Selection Form.
All investment instructions as to each Participant's accounts will be directed
by the Participant and/or the Employer.
However, if no investment instructions are provided by the Participant and/or
the Employer, the Participant's accounts will be invested in equal proportions
among the investment funds chosen by the Employer.
For purposes of the Plan, the Trustee /X/ shall be / / shall not be considered
as a directed trustee.
PARTICIPANT'S INVESTMENT INSTRUCTIONS
The Participants will be allowed to modify their investments instructions on a
monthly /X/ quarterly / / semi annual / / annual basis.
PARTICIPANT'S CONTRIBUTIONS TO THE PLAN
The Participants will be allowed to modify or suspend their pre-tax and/or their
after-tax contributions to the Plan on a monthly X quarterly semi annual annual
basis.
PLAN ADMINISTRATION
PLAN ADMINISTRATOR.
The Employer is the legal Plan Administrator under ERISA. Specify one or more
officers, partners, Employees or other persons to perform the functions of the
Plan Administrator:
Celeste Cardoza
- --------------------------------------------------------------------------------
Edgardo Novoa
- --------------------------------------------------------------------------------
Maria de los Angeles Lugo
- --------------------------------------------------------------------------------
Each person selected must submit a specimen signature. Any such appointment may
be changed by written notice.
-10-
<PAGE>
MASTER TRUST
By executing this Adoption Agreement the Employer /X/ adopts / / does not adopts
the Master Trust established by Banco Popular de Puerto Rico to carry out the
purposes of the Plan and thus retains Banco Popular as Trustee. The terms of the
Trust and corresponding fees are contained in the Banco Popular de Puerto Rico
Master Defined Contribution Retirement Plan, Master Trust and Fee Schedule
respectively, which are incorporated by reference into this Adoption Agreement.
RECORDKEEPER
/ / By executing this Adoption Agreement, the Employer retains Banco
Popular de Puerto Rico as Recordkeeper of the Plan pursuant to the
Recordkeeping Agreement and Fee Schedule incorporated by reference
into this Adoption Agreement.
/ / The Employer has selected as recordkeeper for the Plan:
Name
------------------------------------------------------------------------
Address
------------------------------------------------------------------------
Telephone No.
-----------------------------------------------------------------
Contact Person
-----------------------------------------------------------------
RECORDKEEPER AND TRUSTEE'S FEES
By executing this Adoption Agreement, the Employer agrees to retain Banco
Popular de Puerto Rico as Recordkeeper and, if applicable, as Trustee of the
Plan, for an initial minimum period of three years. This Agreement shall renew
automatically for an indefinite period of time. The Employer may terminate this
Agreement at any time subject to a written termination notice received by Banco
Popular at least thirty days prior to the effective date of termination. If
termination occurs during the initial three year period, the Employer agrees to
compensate Banco Popular with a termination fee equal to three times the total
annual fees minus any amount already satisfied in connection with the services
rendered since the effective date of this agreement. Banco Popular may change
the Fee Schedule from time to time and shall provide written notification to the
Employer.
VALUATING OF PARTICIPANT'S ACCOUNTS
The Participant's Accounts shall be valued / / monthly /X/ quarterly / / semi
annually / / annually.
PARTICIPANT'S ACCOUNT STATEMENTS
The Participants shall be provided with a statement of their account on a
/ / monthly /X/ quarterly / / semi annually / / annual basis.
-11-
<PAGE>
SATISFACTION OF THE PARTICIPATION AND NON-DISCRIMINATION REQUIREMENTS OF THE IRC
BY EMPLOYERS WITH EMPLOYEES WITHIN AND WITHOUT PUERTO RICO OR THAT ARE MEMBERS
OF AN AFFILIATED GROUP.
The satisfaction of the participation and non-discrimination requirements of
section 1165(a)(3)(A), 1165(a)(4), and 1165(e)(3) of the IRC shall be determine
by taking into the account the active Employees that the Employer has in Puerto
Rico. Notwithstanding the above, in the case of an Employer having Employees
within and without Puerto Rico or that is a member of an affiliated group of
corporations or partnerships (within the meaning of section 1028 of the IRC)
that adopt the same plan, said Employer or Employers may elect to meet the above
mentioned requirements as follows:
/X/ By taking into the account all the active Employees (employed within
and without Puerto Rico) of the Employers or of each individual
Employer;
/ / By taking into the account all the Employees of the affiliated group
of corporation or partnerships (even if some of the members of the
affiliated group of corporations or partnerships have no Employees in
Puerto Rico);
/ / By taking into the account all the Employees of those members of the
affiliated group of corporations or partnerships having Employees in
Puerto Rico; or
/ / By taking into the account all the Employees employed by the members
of the affiliated group of corporations or partnerships in Puerto
Rico.
The above mentioned options shall be available as long as the Plan offers to the
Puerto Rico resident Employees the same benefits offered to those Employees
located outside of Puerto Rico.
EXECUTION OF ADOPTION AGREEMENT
EMPLOYER
Name of Employer: Popular Finance, Inc.
----------------------------------------------------------
Signed: [Edgardo Novoa]
-------------------------------------------------------------------------
Print name and title: Edgardo Novoa, President
----------------------------------------------------------
Date: January 28, 1999
-------------------------------------------------------------------------
RESPONSIBILITIES OF EMPLOYER
The Employer understands that, by establishing this Plan, it will have certain
legal responsibilities for which neither the Trustee nor the Plan Sponsor will
be responsible. The Employer also understands that it will be solely responsible
for any taxes, costs or expenses arising from the disqualification of the
Employer's Plan. The Employer warrants that it has obtained legal and tax advice
to the extent the Employer deems necessary before signing this Adoption
Agreement.
-12-
<PAGE>
TRUSTEE
Name of Trustee: BANCO POPULAR DE PUERTO RICO
----------------------------------------------------------
Address: 209 Ponce de Leon Avenue, Hato Rey,
Puerto Rico 00917
----------------------------------------------------------
Signed: [Maryvette Velazquez]
----------------------------------------------------------
Print name and title: Maryvette Velazquez, Vice-President
----------------------------------------------------------
Date: January 28, 1999
---------------------------------------------------------------------------
The identifying number for the Banco Popular de Puerto Rico Master Defined
Contribution Retirement Plan document is 01 and for this Adoption Agreement is
102. The Plan Sponsor is (insert Employer's name and address)
- --------------------------------------------------------------------------------
Banco Popular de Puerto Rico will notify you if it amends or discontinues this
Master Plan.
The Employer should insure that this Adoption Agreement has been filled out
completely and properly. Failure to do so may result in Plan disqualification.
-13-
<PAGE>
EMPLOYER'S SELECTION OF INVESTMENT FUNDS
----------------------------------------
Employer Name: Popular Finance, Inc.
------------------------------------------------------------------
Plan Name: Popular Finance, Inc. Retirement & Savings Plan
---------------------------------------------------------------------
The Employer selects the following Investment Funds for the above named plan:
(At least three.)
1. Windsor II
-----------------------------------------------------------------------------
2. Strong Government Securities
-----------------------------------------------------------------------------
3. Lazard Small Caps
-----------------------------------------------------------------------------
4. Fidelity Advisor
-----------------------------------------------------------------------------
5. Dodge & Cox Income Fund
-----------------------------------------------------------------------------
6. Popular, Inc. Common Stock
-----------------------------------------------------------------------------
In San Juan, Puerto Rico on the 28th day of January, 1999.
EMPLOYER
Name of Employer: Popular Finance, Inc.
Signed: [Edgardo Novoa]
--------------------------------------------
Print name and Title: Edgardo Novoa, President
Date: January 28, 1999
TRUSTEE
Name of Trustee: Banco Popular de Puerto Rico
Signed: [Maryvette Velazquez Torres]
--------------------------------------------
Print name and Title: Maryvette Velazquez Torres, Vice President
& Pension Plan Manager
Date: January 28, 1999
-14-
EXHIBIT 4.4.(e)
1165(e) PLAN ADOPTION AGREEMENT
MASTER DEFINED CONTRIBUTION RETIREMENT PLAN
AMENDED EFFECTIVE AS OF JANUARY 1, 1998
(1/01/99 VERSION)
<PAGE>
BY executing this Adoption Agreement the Employer is
adopting a profit sharing plan with optional Section 1165(e) provisions for the
benefit of its Employees. The Employer's Plan is comprised of: (i) [X] the Banco
Popular de Puerto Rico Master Defined Contribution Retirement Plan Document or
[ ] the Employer's Defined Contribution Retirement Plan Document; (ii) [X] the
Banco Popular de Puerto Rico Master Defined Contribution Retirement Plan Master
Trust or [X] the Employer's Defined Contribution Retirement Plan Trust; and
(iii) [X] this Adoption Agreement. The terms used in this Adoption Agreement, as
well as the rules to be complied with in connection with the Plan, are fully
explained in the [X] Master Plan Document or [ ] the Employer's Plan Document.
When signing this Adoption Agreement, if applicable, the Employer has received
copy of the Banco Popular de Puerto Rico Master Defined Contribution Retirement
Plan and the Master Plan's Summary Plan Description. The Banco Popular de Puerto
Rico Master Defined Contribution Retirement Plan Master Trust is available upon
request at Banco Popular's main offices in Hato Rey, Puerto Rico.
1165(e) PLAN ADOPTION AGREEMENT
MASTER DEFINED CONTRIBUTION RETIREMENT PLAN
COPYRIGHT@ 1998 BY BANCO POPULAR DE PUERTO RICO
-2-
<PAGE>
EMPLOYER INFORMATION
NAME OF EMPLOYER: POPULAR LEASING & RENTAL, INC.
------------------------------------------------------------
ADDRESS: P.O. BOX 50045
-----------------------------------------------------------------------
SAN JUAN, PR 00903
- --------------------------------------------------------------------------------
TELEPHONE: ------------------------------- TELEFAX:-----------------------------
PERSON FOR BANCO POPULAR DE PUERTO RICO TO CONTACT:
----------------------------
EMPLOYER TAX IDENTIFICATION NUMBER: 66-0453249
--------------------------------------------
TYPE OF BUSINESS:
[ ] Unincorporated Trade or Business
[ ] Partnership
[X ] Corporation
[ ] Other (specify) --------------------------------------------------
Employer's taxable year:
[ ] Calendar Year
[X ] Fiscal Year ending on November 30
--------------------------------------------
GENERAL PLAN INFORMATION
PLAN NAME
Popular Leasing & Rental, Inc. - Retirement & Savings Plan
- --------------------------------------------------------------------------------
(Employer's name and type of plan)
ADOPTION OR AMENDMENT OF PLAN
By signing this Adoption Agreement the Employer:
[ ] adopts the Banco Popular de Puerto Rico Master Defined Contribution
Retirement Plan and its Master Trust
[ ] adopts the Banco Popular de Puerto Rico Master Defined Contribution
Retirement Plan and an Individual Trust
[ ] adopts an Individual Defined Contribution Retirement Plan and the
Banco Popular de Puerto Rico Master Defined Contribution Retirement
Plan Master Trust,
[X ] amends certain options of an earlier Banco Popular de Puerto Rico
Master Defined Contribution Retirement Plan Adoption Agreement for
this 1165(e) Plan,
[ ] amends and restates the following Plan:
-3-
<PAGE>
Name of Plan:
-----------------------------------------------
Effective Date:
-----------------------------------------------
EFFECTIVE DATE
The effective date of this Plan or amendment is: January 28, 1999
--------------------------------
(month/day/year)
(cannot be earlier than the first day of the Plan Year in which the Employer
signs this Adoption Agreement).
PLAN YEAR
The Plan Year will be a calendar year unless the Employer elects otherwise by
checking the box below:
[ ] The Plan Year shall begin on and end on
--------------- ---------------
(month/day) (month/day)
[ ] If applicable, the first Plan Year is a short Plan Year beginning on
and ending on
--------------- ---------------
(month/day) (month/day)
ACCOUNTING METHOD
The Plan shall use the cash basis accounting method.
ELIGIBILITY FOR PLAN PARTICIPATION
WAIVER OF REQUIREMENTS FOR NEW PLANS
[ ] If checked, each Employee employed on the Effective Date is automatically
eligible to participate. Employees hired after the Effective Date are
eligible upon satisfying any service and/or age requirements specified
below:
AGE REQUIREMENT. An employee must fulfill the following age requirement to
become a Participant:
[ ] No minimum age required.
[X ] Minimum age 18 (not greater than 21).
-------------
[ ] Other
SERVICE REQUIREMENTS. An employee must fulfill the following service requirement
to become a Participant:
[ ] No service requirement.
[X ] One year of service.
[ ] Other
METHOD FOR CALCULATING YEAR OF SERVICE.
[ ] HOURS OF SERVICE METHOD. An Employee's service will be determined by
using the Hours of Service method as described in Article 3 of the
Master Plan document or the Employer's Individual Plan Document.
[X ] ELAPSED TIME METHOD. An Employee's service will be determined using the
elapsed time method, as described in Article 3 of the Master Plan
document or the Employer's Individual Plan Document.
-4-
<PAGE>
PREDECESSOR EMPLOYERS. Service with the following predecessor employers will be
treated as service with the Employer:
Inversiones Internacionales; Velco; Metropolitana de Prestamos, Banco Popular
- --------------------------------------------------------------------------------
and any other subsidiary of Popular, Inc.
- --------------------------------------------------------------------------------
ENTRY DATES
An Employee may elect to become a Participant and start making Employee
Contributions on any entry date on or after he or she satisfies the Plan's
eligibility requirements.
INDICATE THE PLAN'S ENTRY DATES:
[ ] Monthly Entry Dates. The first day of each month date.
[X ] Quarterly Entry Dates. The first day of each of the first, fourth,
seventh and tenth months of the Plan Year is an entry date.
[ ] Semi-Annual Entry Dates. The first day of each of the first and seventh
months of the Plan Year is an entry date.
COMPENSATION
A Participant's Compensation shall mean the total compensation that is currently
includible in income for income tax purposes paid to him by the Employer during
a Plan Year. Except that if checked below, Compensation will exclude the
following items:
[ ] bonuses
[X ] overtime
[ ] commissions
[ ] other items (specify)
------------------------------------------------
-----------------------------------------------------------------------------
CONTRIBUTIONS
PROFIT SHARING CONTRIBUTIONS
[ ] The Employer will make no Profit Sharing Contributions
[X ] For each Plan Year in which this Plan is in effect the Employer may
make contributions to the Trust in one or more installments out of its
Net Profits (as defined in section 6.2c.(3) of the Plan) for the Plan
Year, in such amounts as the Employer may determine (if any). The Plan
Year for which each contribution is made shall be designated at the
time of the contribution. Profit-Sharing Contributions may not exceed
the lesser of Employer's Net Profits or 15% of a Participant's
Compensation in any Plan Year.
EMPLOYEE CONTRIBUTIONS
Participants may make contributions as follows:
[ ] Pre-Tax Contributions.
-5-
<PAGE>
[ ] After-Tax Contributions.
[X ] Pre-Tax Contributions and/or After-Tax Contributions, at the election
of the Participant.
Pre-Tax Contributions in a Plan Year may not exceed 10% of Compensation or
$7,500, in 1997, and $8,000, in 1998 and thereafter whichever is less.
After-Tax Contributions in a Plan Year, if authorized, may not exceed 10% of the
aggregate compensation paid to the Employee during all the years he or she has
been a Plan Participant.
Pre-Tax Contributions and/or After-Tax Contributions may not commence prior to
the date the Plan is adopted.
MATCHING CONTRIBUTIONS
[ ] The Employer will make no Matching Contributions.
[X ] The Employer will make a Matching Contribution equal to 50 cents for
each dollar of a Participant's:
[X ] Pre-Tax Contributions.
[ ] After-Tax Contributions.
[ ] Pre-Tax Contributions and After-Tax Contributions.
However, the Employer will not make Matching Contributions above 8% of the
Participant's Compensation.
QUALIFIED MATCHING AND NON-ELECTIVE CONTRIBUTIONS
Qualified Matching Contributions and Qualified Non-Elective Contributions, as
defined in the Master Plan Document or the Employer's Plan Document, will be
taken into account for purposes of calculating the Actual Deferral Percentages
of Non-Highly Compensated Employees to the extent necessary to meet the Actual
Deferral Percentage test.
ROLLOVER CONTRIBUTIONS
The Plan's Trustee shall be authorized to receive rollover contributions,
[ ] Only if the Employee has met the participation requirements of the Plan
as of the date of the contribution.
[ ] Even if the Employee has not met the participation requirements of the
Plan as of the date of the contribution.
VESTING
PRE-TAX AND/OR AFTER-TAX CONTRIBUTIONS
Pre-Tax and/or After-Tax Contributions are always 100% vested.
MATCHING CONTRIBUTIONS AND/OR PROFIT SHARING CONTRIBUTIONS
Matching Contributions and/or Profit Sharing Contributions will vest in
accordance with the following vesting schedule:
-6-
<PAGE>
<TABLE>
<CAPTION>
Graded Vesting Table
<S> <C> <C> <C>
(1) (2) (3)
[ ] FULL VESTING. Participants are 100% vested at all times YEARS OF VESTED MINIMUM REQUIRED
SERVICE PERCENTAGE PERCENTAGE
[ ] CLIFF VESTING. Participants are 100% vested after completing ____ years
of service (insert number; cannot be greater than 5). The Participant
will be 0% vested until completing the years of service specified
above. Less than 1 0
--------
At least 1 20 0
--------
[X ] GRADED VESTING. Participants are vested in accordance with the At least 2 40 0
following vesting schedule. (A Participant's vested percentage is --------
the percentage inserted in column (2) or the percentage in column
(3), whichever is greater. Spaces left blank are treated as zeros). At least 3 60 20
--------
At least 4 80 40
--------
At least 5 100 60
--------
At least 6 80
--------
At least 7 100
--------
</TABLE>
YEARS OF SERVICE EXCLUDED IN DETERMINING VESTED PERCENTAGES. Need not be
completed - check as many as desired.
[ ] Years completed before the effective date of this Plan (or a
predecessor plan).
[ ] Years completed before the Participant's _____ birthday (insert
birthday not greater than 18th).
LOANS
[ ] Loans from the Plan will be permitted, subject to the Plan's loan
rules. (Loans will not be available to Owner-Employees unless one of
the following occurs: such person has at his expense obtained an
administrative exemption from ERISA's prohibited transaction rules
from the United States Department of Labor with respect to such loan
or the United States Department of Labor has issued a prohibited
transaction class exemption covering such loans.)
[X ] Loans to Participants from the Plan are not permitted.
IN-SERVICE WITHDRAWALS
The following provisions will govern the availability of in-service withdrawals
from a Participant's accounts. See Article 9 of the Plan document for additional
details, including definitions and limitations.
PROFIT SHARING CONTRIBUTIONS.
In-service withdrawals from Profit Sharing Contributions will not be allowed
unless one of the following boxes is checked:
[ ] In-service withdrawals from Profit Sharing Contributions Account
will only be allowed in case of a financial hardship as such term is
defined in Article 9.1 of the Master Plan Document or the Employer's
Individual Plan Document.
[ ] In-service withdrawals from Profit Sharing Contributions Account
will be allowed for any reason.
PRE-TAX CONTRIBUTIONS. In-service withdrawals from Pre-Tax Contributions will
only be allowed in case of a financial hardship as such term is defined in
Article 9.1 of the Master Plan Document or the Employer's Individual Plan
Document.
AFTER-TAX CONTRIBUTIONS. In-service withdrawals from After-Tax Contributions
will be allowed for any reason.
-7-
<PAGE>
MATCHING CONTRIBUTIONS. In-service withdrawals from Matching Contributions will
not be allowed unless one of the following boxes is checked:
[ ] In-service withdrawals from Profit Sharing Contributions Account
will only be allowed in case of a financial hardship as such term is
defined in Article 9.1 of the Master Plan Document or the Employer's
Individual Plan Document.
[ ] In-service withdrawals from Profit Sharing Contributions Account will
be allowed for any reason.
ROLLOVER CONTRIBUTIONS. Refer to Article 9 of the Master Plan document.
WITHDRAWALS AFTER AGE 59 1/2.
[ ] If checked, after 59 1/2 a Participant may make in-service withdrawals
from his Pre-Tax Contributions and, if applicable, from his Qualified
Matching and Non-Elective Contributions Accounts without financial
hardship (up to the vested percentage of each such accounts).
FINANCIAL HARDSHIP. An in-service withdrawal will be on account of financial
hardship only if the Participant has an immediate and heavy financial need and
the withdrawal is necessary to meet such need. A withdrawal will be deemed to be
on account of an immediate and heavy financial need if it is occasioned by:
o a deductible medical expense incurred by the Participant or his
spouse, children or dependent; (not reimbursed by medical insurance or
otherwise);
o purchase of the Participant's principal residence (not including
mortgage payments);
o tuition payments for the next semester or quarter of post-secondary
education for the Participant or his spouse, child or dependent;
o rent or mortgage payments to prevent the Participant's eviction from
or the foreclosure of the mortgage on his principal residence; or
o such other event or circumstances as the Puerto Rico Secretary of the
Treasury through regulations may permit.
A Participant must establish to the Plan Administrator's satisfaction both that
the Participant has an immediate and heavy financial need and that the
withdrawal is necessary to meet the need.
The Trustee and the Plan Administrator shall agree as to the most convenient way
of administering the financial hardship provisions of the Plan.
A Participant who makes a withdrawal on account of a financial hardship may not
make Pre-Tax Contributions or After- Tax Contributions hereunder (or under any
other Plan maintained by the Employer) for a period of 12 months following the
date of the in-service withdrawal.
PAYMENT. Participants in-service withdrawal request shall be paid on or before
the last day of each:
/ / month
/ / quarter
/ / semester
/ / the Plan year
-8-
<PAGE>
RETIREMENT AGE
NORMAL RETIREMENT AGE. A Participant will be fully vested and may retire after
the latter of: reaching age 65 or the fifth anniversary of the first day of the
Plan Year in which he/she commenced participation in the Plan.
DISABILITY RETIREMENT. A Participant will be fully vested and may retire before
normal retirement upon becoming disabled.
EARLY RETIREMENT AGE.
[ ] If checked, a Participant will be fully vested and may retire prior
to Normal Retirement Age upon reaching age _____ and completing _____
years of service.
DISTRIBUTION OF VESTED BENEFITS BEFORE RETIREMENT, DEATH OR DISABILITY.
If the Participant terminates his employment with the Employer before reaching
his normal or early retirement age, becoming disable or dying, Participant
/ / shall be / / shall not be allowed to apply for an early distribution of his
plan benefits.
DISTRIBUTION OF BENEFITS
Upon becoming entitled to the distribution of this Plan benefits, the
Participants or their authorized representative must request from the Employer
that their benefits be distributed. In such request, the Participant, or his or
her authorized representative, must elect one of the following payment
alternatives:
[X ] Lump-Sum cash distribution
[ ] periodic payments
The election of one optional payment form may require the consent of the
Participant's surviving spouse. Benefit distributions may not exceed the
Participant's life expectancy and that of his or her surviving spouse.
If the Employer elects more that one method of distribution hereunder, then, the
Participants' shall elect under which of such methods his' or her's benefit
shall be distributed.
TIME OF PAYMENT
When a Participant retires, becomes disable or die, the distribution of his
benefits shall commence:
[X ] as soon as it is administrative feasible following the termination
of the Plan Year in which the Participant request the distribution
of his' or her's benefits or such amount becomes payable.
[ ] as soon as it is administrative feasible following the date in which
the Plan Participant requests the distribution of his' or her's
benefits or such amount becomes payable.
[ ] as soon as it is administrative feasible following the termination
of the Plan Year in which there is a __________ consecutive break in
service of one year.
[ ] only after you have reached your Normal Retirement Date or Early
Retirement Date (if applicable).
If the Plan Participant terminate his employment for a reason other than deaths,
disability, or retirement payments shall commence:
-9-
<PAGE>
[X ] as soon as it is administrative feasible following the termination
of the Plan Year in which the Participants requested the distribution
or the same becomes payable.
[ ] as soon as it is administrative feasible following the date in
which the Plan Participant requested the distribution of his' or her's
benefits or such amount becomes payable.
[ ] as soon as it is administrative feasible following the termination
of the Plan Year in which the Plan Participant incurs _______
consecutive break in service of one year.
[ ] only after you have reached your Normal Retirement Date or Early
Retirement Date (if applicable).
INVESTMENT FUNDS
Investment Funds shall be those selected by the Employer on the separate
Investment Funds Selection Form.
All investment instructions as to each Participant's accounts will be directed
by the Participant and/or the Employer. However, if no investment instructions
are provided by the Participant and/or the Employer, the Participant's accounts
will be invested in equal proportions among the investment funds chosen by the
Employer.
For purposes of the Plan, the Trustee /X / shall be / / shall not be considered
as a directed trustee.
PARTICIPANT'S INVESTMENT INSTRUCTIONS
The Participants will be allowed to modify their investments instructions on a
/ / monthly /X/ quarterly / / semi annual / /annual basis.
PARTICIPANT'S CONTRIBUTIONS TO THE PLAN
The Participants will be allowed to modify or suspend their pre-tax and/or their
after-tax contributions to the Plan on a / / monthly /X/ quarterly / /
/ / semi annual / / annual basis.
PLAN ADMINISTRATION
PLAN ADMINISTRATOR. The Employer is the legal Plan Administrator under ERISA.
Specify one or more officers, partners, Employees or other persons to perform
the functions of the Plan Administrator:
Mercedes Moure
- --------------------------------------------------------------------------------
Andres F. Morrell
- --------------------------------------------------------------------------------
Willie Bidot
- --------------------------------------------------------------------------------
Each person selected must submit a specimen signature. Any such appointment may
be changed by written notice.
MASTER TRUST
By executing this Adoption Agreement the Employer /X / adopts / / does not
adopts the Master Trust established by Banco Popular de Puerto Rico to carry out
the purposes of the Plan and thus retains Banco Popular as Trustee. The
-10-
<PAGE>
terms of the Trust and corresponding fees are contained in the Banco Popular de
Puerto Rico Master Defined Contribution Retirement Plan, Master Trust and Fee
Schedule respectively, which are incorporated by reference into this Adoption
Agreement.
RECORDKEEPER
/X/ By executing this Adoption Agreement, the Employer retains Banco Popular de
Puerto Rico as Recordkeeper of the Plan pursuant to the Recordkeeping
Agreement and Fee Schedule incorporated by reference into this Adoption
Agreement.
/ / The Employer has selected as recordkeeper for the Plan:
Name
----------------------------------------------------------------------
Address
-------------------------------------------------------------------
Telephone No.
------------------------------------------------------------
Contact Person
------------------------------------------------------------
RECORDKEEPER AND TRUSTEE'S FEES
By executing this Adoption Agreement, the Employer agrees to retain Banco
Popular de Puerto Rico as Recordkeeper and, if applicable, as Trustee of the
Plan, for an initial minimum period of three years. This Agreement shall renew
automatically for an indefinite period of time. The Employer may terminate this
Agreement at any time subject to a written termination notice received by Banco
Popular at least thirty days prior to the effective date of termination. If
termination occurs during the initial three year period, the Employer agrees to
compensate Banco Popular with a termination fee equal to three times the total
annual fees minus any amount already satisfied in connection with the services
rendered since the effective date of this agreement. Banco Popular may change
the Fee Schedule from time to time and shall provide written notification to the
Employer.
VALUATING OF PARTICIPANT'S ACCOUNTS
The Participant's Accounts shall be valued / / monthly /X/ quarterly / / semi
annually / / annually.
PARTICIPANT'S ACCOUNT STATEMENTS
The Participants shall be provided with a statement of their account on a
/ / monthly /X/ quarterly / / semi annually / / annual basis.
SATISFACTION OF THE PARTICIPATION AND NON-DISCRIMINATION REQUIREMENTS OF THE IRC
BY EMPLOYERS WITH EMPLOYEES WITHIN AND WITHOUT PUERTO RICO OR THAT ARE MEMBERS
OF AN AFFILIATED GROUP.
-11-
<PAGE>
The satisfaction of the participation and non-discrimination requirements of
section 1165(a)(3)(A), 1165(a)(4), and 1165(e)(3) of the IRC shall be determine
by taking into the account the active Employees that the Employer has in Puerto
Rico. Notwithstanding the above, in the case of an Employer having Employees
within and without Puerto Rico or that is a member of an affiliated group of
corporations or partnerships (within the meaning of section 1028 of the IRC)
that adopt the same plan, said Employer or Employers may elect to meet the above
mentioned requirements as follows:
/X/ By taking into the account all the active Employees (employed within
and without Puerto Rico) of the Employers or of each individual
Employer;
/ / By taking into the account all the Employees of the affiliated group
of corporation or partnerships (even if some of the members of the
affiliated group of corporations or partnerships have no Employees in
Puerto Rico);
/ / By taking into the account all the Employees of those members of the
affiliated group of corporations or partnerships having Employees in
Puerto Rico; or
/ / By taking into the account all the Employees employed by the members
of the affiliated group of corporations or partnerships in Puerto
Rico.
The above mentioned options shall be available as long as the Plan offers to the
Puerto Rico resident Employees the same benefits offered to those Employees
located outside of Puerto Rico.
EXECUTION OF ADOPTION AGREEMENT
EMPLOYER
Name of Employer: Popular Leasing & Rental, Inc.
--------------------------------------------------------------
Signed: [Andres F. Morrell]
------------------------------------------------------------------------
Print name and title: Andres F. Morrell, President
----------------------------------------------------------
Date: January 28, 1999
--------------------------------------------------------------------------
RESPONSIBILITIES OF EMPLOYER
The Employer understands that, by establishing this Plan, it will have certain
legal responsibilities for which neither the Trustee nor the Plan Sponsor will
be responsible. The Employer also understands that it will be solely responsible
for any taxes, costs or expenses arising from the disqualification of the
Employer's Plan. The Employer warrants that it has obtained legal and tax advice
to the extent the Employer deems necessary before signing this Adoption
Agreement.
TRUSTEE
Name of Trustee: BANCO POPULAR DE PUERTO RICO
--------------------------------------------------------------
Address: 209 Ponce de Leon Avenue, Hato Rey, Puerto Rico 00917
--------------------------------------------------------------
-12-
<PAGE>
Signed: [Maryvette Velazquez Torres]
----------------------------------------------------------
Print name and title: Maryvette Velazquez Torres, Vice President
----------------------------------------------------------
Date: January 28, 1999
----------------------------------------------------------
The identifying number for the Banco Popular de Puerto Rico Master Defined
Contribution Retirement Plan document is 01 and for this Adoption Agreement is
102. The Plan Sponsor is (insert Employer's name and address)
- ------------------------------------------------------------------------------.
Banco Popular de Puerto Rico will notify you if it amends or discontinues this
Master Plan.
The Employer should insure that this Adoption Agreement has been filled out
completely and properly. Failure to do so may result in Plan disqualification.
-13-
<PAGE>
EMPLOYER'S SELECTION OF INVESTMENT FUNDS
----------------------------------------
Employer Name: Popular Leasing & Rental, Inc.
-----------------------------------------------------------------
Plan Name: Popular Leasing & Rental, Inc. Retirement & Savings Plan
-----------------------------------------------------------------
The Employer selects the following Investment Funds for the above named plan:
(At least three.)
1. Vanguard Windsor II
-----------------------------------------------------------------------
2. Strong Government Securities
-----------------------------------------------------------------------
3. Fidelity Advisor Inst. Equity Growth
-----------------------------------------------------------------------
4. Dodge & Cox Income
-----------------------------------------------------------------------
5. Lazard Small Cap Portfolio
-----------------------------------------------------------------------
6. Popular, Inc. Common Stock
-----------------------------------------------------------------------
In San Juan, Puerto Rico on the 28th day of January, 1999.
EMPLOYER
Name of Employer: Popular Leasing & Rental, Inc.
Signed: [Andres F. Morrell]
Print name and Title: Andres F. Morrell, President
--------------------------------------------
Date: January 28, 1999
TRUSTEE
Name of Trustee: Banco Popular de Puerto Rico
Signed: [Maryvette Velazquez Torres]
--------------------------------------------
Print name and Title: Maryvette Velazquez Torres, Vice President
& Pension Plan Manager
Date: January 28, 1999
-14-
EXHIBIT 4.4.(f)
1165(E) PLAN ADOPTION AGREEMENT
MASTER DEFINED CONTRIBUTION RETIREMENT PLAN
AMENDED EFFECTIVE AS OF JANUARY 1, 1998
(1/01/99 VERSION)
-1-
<PAGE>
BY executing this Adoption Agreement the Employer is
adopting a profit sharing plan with optional Section 1165(e) provisions for the
benefit of its Employees. The Employer's Plan is comprised of: (i) [X] the Banco
Popular de Puerto Rico Master Defined Contribution Retirement Plan Document or
[ ] the Employer's Defined Contribution Retirement Plan Document; (ii) [X] the
Banco Popular de Puerto Rico Master Defined Contribution Retirement Plan Master
Trust or [X] the Employer's Defined Contribution Retirement Plan Trust; and
(iii) [X] this Adoption Agreement. The terms used in this Adoption Agreement, as
well as the rules to be complied with in connection with the Plan, are fully
explained in the [X] Master Plan Document or [ ] the Employer's Plan Document.
When signing this Adoption Agreement, if applicable, the Employer has received
copy of the Banco Popular de Puerto Rico Master Defined Contribution Retirement
Plan and the Master Plan's Summary Plan Description. The Banco Popular de Puerto
Rico Master Defined Contribution Retirement Plan Master Trust is available upon
request at Banco Popular's main offices in Hato Rey, Puerto Rico.
1165(E) PLAN ADOPTION AGREEMENT
MASTER DEFINED CONTRIBUTION RETIREMENT PLAN
COPYRIGHT@ 1998 BY BANCO POPULAR DE PUERTO RICO
-2-
<PAGE>
EMPLOYER INFORMATION
NAME OF EMPLOYER: POPULAR SECURITIES, INC.
------------------------------------------------------------
ADDRESS: 268 Munoz Rivera Avenue, Hato Rey Tower, Plaza Level
-----------------------------------------------------------------------
San Juan, PR 00918
- --------------------------------------------------------------------------------
TELEPHONE: TELEFAX:
---------------------------- ------------------------------
PERSON FOR BANCO POPULAR DE PUERTO RICO TO CONTACT: Beatriz Castellvi
----------------------------
EMPLOYER TAX IDENTIFICATION NUMBER: 66-0374802
--------------------------------------------
TYPE OF BUSINESS:
[ ] Unincorporated Trade or Business
[ ] Partnership
[X ] Corporation
[ ] Other (specify) --------------------------------------------------
Employer's taxable year:
[ ] Calendar Year
[X ] Fiscal Year ending on November 30
--------------------------------------------
GENERAL PLAN INFORMATION
PLAN NAME
Popular Securities, Inc. - Retail 1165(e) Plan
- --------------------------------------------------------------------------------
(Employer's name and type of plan)
ADOPTION OR AMENDMENT OF PLAN
By signing this Adoption Agreement the Employer:
[X ] adopts the Banco Popular de Puerto Rico Master Defined Contribution
Retirement Plan and its Master Trust
[ ] adopts the Banco Popular de Puerto Rico Master Defined Contribution
Retirement Plan and an Individual Trust
[ ] adopts an Individual Defined Contribution Retirement Plan and the
Banco Popular de Puerto Rico Master Defined Contribution Retirement
Plan Master Trust,
[ ] amends certain options of an earlier Banco Popular de Puerto Rico
Master Defined Contribution Retirement Plan Adoption Agreement for
this 1165(e) Plan,
[ ] amends and restates the following Plan:
Name of Plan:
-----------------------------------------------
Effective Date:
-----------------------------------------------
-3-
<PAGE>
EFFECTIVE DATE
The effective date of this Plan or amendment is: January 28, 1999
--------------------------------
(month/day/year)
(cannot be earlier than the first day of the Plan Year in which the Employer
signs this Adoption Agreement).
PLAN YEAR
The Plan Year will be a calendar year unless the Employer elects otherwise by
checking the box below:
[ ] The Plan Year shall begin on and end on
--------------- ---------------
(month/day) (month/day)
[X ] If applicable, the first Plan Year is a short Plan Year beginning on
06/01/97 and ending on 12/31/97
--------------- ---------------
(month/day) (month/day)
ACCOUNTING METHOD
The Plan shall use the cash basis accounting method.
ELIGIBILITY FOR PLAN PARTICIPATION
WAIVER OF REQUIREMENTS FOR NEW PLANS
[X ] If checked, each Employee employed on the Effective Date is automatically
eligible to participate. Employees hired after the Effective Date are
eligible upon satisfying any service and/or age requirements specified
below:
AGE REQUIREMENT. An employee must fulfill the following age requirement to
become a Participant:
[ ] No minimum age required.
[X ] Minimum age 18 (not greater than 21).
-------------
[ ] Other
SERVICE REQUIREMENTS. An employee must fulfill the following service requirement
to become a Participant:
[ ] No service requirement.
[X ] One year of service.
[ ] Other
METHOD FOR CALCULATING YEAR OF SERVICE.
[ ] HOURS OF SERVICE METHOD. An Employee's service will be determined by
using the Hours of Service method as described in Article 3 of the
Master Plan document or the Employer's Individual Plan Document.
[X ] ELAPSED TIME METHOD. An Employee's service will be determined using the
elapsed time method, as described in Article 3 of the Master Plan
document or the Employer's Individual Plan Document.
PREDECESSOR EMPLOYERS. Service with the following predecessor employers will be
treated as service with the Employer:
Marketing One Securities, Inc.; CS First Boston (Puerto Rico) Inc.; Banco
- --------------------------------------------------------------------------------
Popular de Puerto Rico; BP Capital Markets, Inc.; any Popular, Inc. Subsidiary
- --------------------------------------------------------------------------------
-4-
<PAGE>
ENTRY DATES
An Employee may elect to become a Participant and start making Employee
Contributions on any entry date on or after he or she satisfies the Plan's
eligibility requirements.
INDICATE THE PLAN'S ENTRY DATES:
[ ] Monthly Entry Dates. The first day of each month date.
[X ] Quarterly Entry Dates. The first day of each of the first, fourth,
seventh and tenth months of the Plan Year is an entry date.
[ ] Semi-Annual Entry Dates. The first day of each of the first and seventh
months of the Plan Year is an entry date.
COMPENSATION
A Participant's Compensation shall mean the total compensation that is currently
includible in income for income tax purposes paid to him by the Employer during
a Plan Year. Except that if checked below, Compensation will exclude the
following items:
[X ] bonuses - Performance Only
[ ] overtime
[X ] commissions
[ ] other items (specify) deferred commissions; compensation will not
------------------------------------------------
exceed $150,000
- --------------------------------------------------------------------------------
-----------------------------------------------------------------------------
CONTRIBUTIONS
PROFIT SHARING CONTRIBUTIONS
[ ] The Employer will make no Profit Sharing Contributions
[X ] For each Plan Year in which this Plan is in effect the Employer may make
contributions to the Trust in one or more installments out of its Net
Profits (as defined in section 6.2c.(3) of the Plan) for the Plan Year,
in such amounts as the Employer may determine (if any). The Plan Year
for which each contribution is made shall be designated at the time of
the contribution. Profit-Sharing Contributions may not exceed the lesser
of Employer's Net Profits or 15% of a Participant's Compensation in any
Plan Year.
EMPLOYEE CONTRIBUTIONS
Participants may make contributions as follows:
[ ] Pre-Tax Contributions.
[ ] After-Tax Contributions.
[X ] Pre-Tax Contributions and/or After-Tax Contributions, at the election
of the Participant. Pre-Tax Contributions in a Plan Year may not
exceed 10% of Compensation or $7,500, in 1997, and $8,000, in 1998 and
thereafter whichever is less.
-5-
<PAGE>
After-Tax Contributions in a Plan Year, if authorized, may not exceed 10% of the
aggregate compensation paid to the Employee during all the years he or she has
been a Plan Participant.
Pre-Tax Contributions and/or After-Tax Contributions may not commence prior to
the date the Plan is adopted.
MATCHING CONTRIBUTIONS
[ ] The Employer will make no Matching Contributions.
[X ] The Employer will make a Matching Contribution equal to 50 cents for
each dollar of a Participant's:
[X ] Pre-Tax Contributions.
[ ] After-Tax Contributions.
[ ] Pre-Tax Contributions and After-Tax Contributions.
However, the Employer will not make Matching Contributions above 10% of the
Participant's Compensation.
QUALIFIED MATCHING AND NON-ELECTIVE CONTRIBUTIONS
Qualified Matching Contributions and Qualified Non-Elective Contributions, as
defined in the Master Plan Document or the Employer's Plan Document, will be
taken into account for purposes of calculating the Actual Deferral Percentages
of Non-Highly Compensated Employees to the extent necessary to meet the Actual
Deferral Percentage test.
ROLLOVER CONTRIBUTIONS
The Plan's Trustee shall be authorized to receive rollover contributions,
[ ] Only if the Employee has met the participation requirements of the Plan
as of the date of the contribution.
[ ] Even if the Employee has not met the participation requirements of the
Plan as of the date of the contribution.
VESTING
PRE-TAX AND/OR AFTER-TAX CONTRIBUTIONS
Pre-Tax and/or After-Tax Contributions are always 100% vested.
MATCHING CONTRIBUTIONS AND/OR PROFIT SHARING CONTRIBUTIONS
Matching Contributions and/or Profit Sharing Contributions will vest in
accordance with the following vesting schedule:
-6-
<PAGE>
<TABLE>
<CAPTION>
Graded Vesting Table
<S> <C> <C> <C>
(1) (2) (3)
[ ] FULL VESTING. Participants are 100% vested at all times YEARS OF VESTED MINIMUM REQUIRED
SERVICE PERCENTAGE PERCENTAGE
[ ] CLIFF VESTING. Participants are 100% vested after completing ____ years
of service (insert number; cannot be greater than 5). The Participant
will be 0% vested until completing the years of service specified
above. Less than 1 0
--------
At least 1 20 0
--------
[X ] GRADED VESTING. Participants are vested in accordance with the At least 2 40 0
following vesting schedule. (A Participant's vested percentage is --------
the percentage inserted in column (2) or the percentage in column
(3), whichever is greater. Spaces left blank are treated as zeros). At least 3 60 20
--------
At least 4 80 40
--------
At least 5 100 60
--------
At least 6 80
--------
At least 7 100
--------
</TABLE>
YEARS OF SERVICE EXCLUDED IN DETERMINING VESTED PERCENTAGES. Need not be
completed - check as many as desired.
[ ] Years completed before the effective date of this Plan (or a
predecessor plan).
[ ] Years completed before the Participant's _____ birthday (insert
birthday not greater than 18th).
LOANS
[ ] Loans from the Plan will be permitted, subject to the Plan's loan
rules. (Loans will not be available to Owner-Employees unless one of
the following occurs: such person has at his expense obtained an
administrative exemption from ERISA's prohibited transaction rules
from the United States Department of Labor with respect to such loan
or the United States Department of Labor has issued a prohibited
transaction class exemption covering such loans.)
[X ] Loans to Participants from the Plan are not permitted.
IN-SERVICE WITHDRAWALS
The following provisions will govern the availability of in-service withdrawals
from a Participant's accounts. See Article 9 of the Plan document for additional
details, including definitions and limitations.
PROFIT SHARING CONTRIBUTIONS. In-service withdrawals from Profit Sharing
Contributions will not be allowed unless one of the following boxes is checked:
[ ] In-service withdrawals from Profit Sharing Contributions Account
will only be allowed in case of a financial hardship as such term is
defined in Article 9.1 of the Master Plan Document or the Employer's
Individual Plan Document.
[ ] In-service withdrawals from Profit Sharing Contributions Account will
be allowed for any reason.
PRE-TAX CONTRIBUTIONS. In-service withdrawals from Pre-Tax Contributions will
only be allowed in case of a financial hardship as such term is defined in
Article 9.1 of the Master Plan Document or the Employer's Individual Plan
Document.
AFTER-TAX CONTRIBUTIONS. In-service withdrawals from After-Tax Contributions
will be allowed for any reason.
-7-
<PAGE>
MATCHING CONTRIBUTIONS. In-service withdrawals from Matching Contributions will
not be allowed unless one of the following boxes is checked:
[ ] In-service withdrawals from Profit Sharing Contributions Account
will only be allowed in case of a financial hardship as such term is
defined in Article 9.1 of the Master Plan Document or the Employer's
Individual Plan Document.
[ ] In-service withdrawals from Profit Sharing Contributions Account will
be allowed for any reason.
ROLLOVER CONTRIBUTIONS. Refer to Article 9 of the Master Plan document.
WITHDRAWALS AFTER AGE 59 1/2.
[X ] If checked, after 59 1/2 a Participant may make in-service withdrawals
from his Pre-Tax Contributions and, if applicable, from his Qualified
Matching and Non-Elective Contributions Accounts without financial
hardship (up to the vested percentage of each such accounts).
FINANCIAL HARDSHIP. An in-service withdrawal will be on account of financial
hardship only if the Participant has an immediate and heavy financial need and
the withdrawal is necessary to meet such need. A withdrawal will be deemed to be
on account of an immediate and heavy financial need if it is occasioned by:
o a deductible medical expense incurred by the Participant or his
spouse, children or dependent; (not reimbursed by medical insurance or
otherwise);
o purchase of the Participant's principal residence (not including
mortgage payments);
o tuition payments for the next semester or quarter of post-secondary
education for the Participant or his spouse, child or dependent;
o rent or mortgage payments to prevent the Participant's eviction from
or the foreclosure of the mortgage on his principal residence; or
o such other event or circumstances as the Puerto Rico Secretary of the
Treasury through regulations may permit.
A Participant must establish to the Plan Administrator's satisfaction both that
the Participant has an immediate and heavy financial need and that the
withdrawal is necessary to meet the need. The Trustee and the Plan Administrator
shall agree as to the most convenient way of administering the financial
hardship provisions of the Plan.
A Participant who makes a withdrawal on account of a financial hardship may not
make Pre-Tax Contributions or After- Tax Contributions hereunder (or under any
other Plan maintained by the Employer) for a period of 12 months following the
date of the in-service withdrawal.
PAYMENT. Participants in-service withdrawal request shall be paid on or before
the last day of each:
/ / month
/ / quarter
/ / semester
/ / the Plan year
-8-
<PAGE>
RETIREMENT AGE
NORMAL RETIREMENT AGE. A Participant will be fully vested and may retire after
the latter of: reaching age 65 or the fifth anniversary of the first day of the
Plan Year in which he/she commenced participation in the Plan.
DISABILITY RETIREMENT. A Participant will be fully vested and may retire before
normal retirement upon becoming disabled.
EARLY RETIREMENT AGE.
[X ] If checked, a Participant will be fully vested and may retire prior
to Normal Retirement Age upon reaching age 55 and completing 10 years
of service.
DISTRIBUTION OF VESTED BENEFITS BEFORE RETIREMENT, DEATH OR DISABILITY.
If the Participant terminates his employment with the Employer before reaching
his normal or early retirement age, becoming disable or dying, Participant
/X/ shall be / / shall not be allowed to apply for an early distribution of
his plan benefits.
DISTRIBUTION OF BENEFITS
Upon becoming entitled to the distribution of this Plan benefits, the
Participants or their authorized representative must request from the Employer
that their benefits be distributed. In such request, the Participant, or his' or
her's authorized representative, must elect one of the following payment
alternatives:
[X ] Lump-Sum cash distribution
[ ] periodical payments
The election of one optional payment form may require the consent of the
Participant's surviving spouse. Benefit distributions may not exceed the
Participant's life expectancy and that of his' or her's surviving spouse.
If the Employer elects more that one method of distribution hereunder, then, the
Participants' shall elect under which of such methods his' or her's benefit
shall be distributed.
TIME OF PAYMENT
When a Participant retires, becomes disable or die, the distribution of his
benefits shall commence:
[X ] as soon as it is administratively feasible following the termination
of the Plan Year in which the Participant request the distribution
of his' or her's benefits or such amount becomes payable.
[ ] as soon as it is administrative feasible following the date in which
the Plan Participant request the distribution of his' or her's
benefits or such amount becomes payable.
[ ] as soon as it is administrative feasible following the termination
of the Plan Year in which there is a __________ consecutive break in
service of one year.
[ ] only after you have reached your Normal Retirement Date or Early
Retirement Date (if applicable).
If the Plan Participant terminate his employment for a reason other than deaths,
disability, or retirement payments shall commence:
-9-
<PAGE>
[X ] as soon as it is administrative feasible following the termination
of the Plan Year in which the Participants requested the distribution
or the same becomes payable.
[ ] as soon as it is administrative feasible following the date in which
the Plan Participant requested the distribution of his' or her's
benefits or such amount becomes payable.
[ ] as soon as it is administrative feasible following the termination
of the Plan Year in which the Plan Participant incurs _______
consecutive break in service of one year.
[ ] only after you have reached your Normal Retirement Date or Early
Retirement Date (if applicable).
INVESTMENT FUNDS
Investment Funds shall be those selected by the Employer on the separate
Investment Funds Selection Form. All investment instructions as to each
Participant's accounts will be directed by the Participant and/or the Employer.
However, if no investment instructions are provided by the Participant and/or
the Employer, the Participant's accounts will be invested in equal proportions
among the investment funds chosen by the Employer.
For purposes of the Plan, the Trustee /X/ shall be / / shall not be considered
as a directed trustee.
PARTICIPANT'S INVESTMENT INSTRUCTIONS
The Participants will be allowed to modify their investments instructions on a
/ / monthly /X/ quarterly / / semi annual / / annual basis.
PARTICIPANT'S CONTRIBUTIONS TO THE PLAN
The Participants will be allowed to modify or suspend their pre-tax and/or their
after-tax contributions to the Plan on a / / monthly /X/ quarterly / / semi
annual / / annual basis.
PLAN ADMINISTRATION
PLAN ADMINISTRATOR. The Employer is the legal Plan Administrator under ERISA.
Specify one or more officers, partners, Employees or other persons to perform
the functions of the Plan Administrator:
Juan O. Guerrero
- --------------------------------------------------------------------------------
Beatriz Castellvi
- --------------------------------------------------------------------------------
Sylvia Lopez
- --------------------------------------------------------------------------------
Each person selected must submit a specimen signature. Any such appointment may
be changed by written notice.
MASTER TRUST
By executing this Adoption Agreement the Employer /X/ adopts / / does not adopts
the Master Trust established by Banco Popular de Puerto Rico to carry out the
purposes of the Plan and thus retains Banco Popular as Trustee. The
-10-
<PAGE>
terms of the Trust and corresponding fees are contained in the Banco Popular de
Puerto Rico Master Defined Contribution Retirement Plan, Master Trust and Fee
Schedule respectively, which are incorporated by reference into this Adoption
Agreement.
RECORDKEEPER
/X/ By executing this Adoption Agreement, the Employer retains Banco Popular de
Puerto Rico as Recordkeeper of the Plan pursuant to the Recordkeeping
Agreement and Fee Schedule incorporated by reference into this Adoption
Agreement.
/ / The Employer has selected as recordkeeper for the Plan:
Name
----------------------------------------------------------------------
Address
-------------------------------------------------------------------
Telephone No.
------------------------------------------------------------
Contact Person
------------------------------------------------------------
RECORDKEEPER AND TRUSTEE'S FEES
By executing this Adoption Agreement, the Employer agrees to retain Banco
Popular de Puerto Rico as Recordkeeper and, if applicable, as Trustee of the
Plan, for an initial minimum period of three years. This Agreement shall renew
automatically for an indefinite period of time. The Employer may terminate this
Agreement at any time subject to a written termination notice received by Banco
Popular at least thirty days prior to the effective date of termination. If
termination occurs during the initial three year period, the Employer agrees to
compensate Banco Popular with a termination fee equal to three times the total
annual fees minus any amount already satisfied in connection with the services
rendered since the effective date of this agreement. Banco Popular may change
the Fee Schedule from time to time and shall provide written notification to the
Employer.
VALUATING OF PARTICIPANT'S ACCOUNTS
The Participant's Accounts shall be valued / / monthly /X/ quarterly / / semi
annually / / annually.
PARTICIPANT'S ACCOUNT STATEMENTS
The Participants shall be provided with a statement of their account on a
/ / monthly /X/ quarterly / / semi annually / / annual basis.
SATISFACTION OF THE PARTICIPATION AND NON-DISCRIMINATION REQUIREMENTS OF THE IRC
BY EMPLOYERS WITH EMPLOYEES WITHIN AND WITHOUT PUERTO RICO OR THAT ARE MEMBERS
OF AN AFFILIATED GROUP.
-11-
<PAGE>
The satisfaction of the participation and non-discrimination requirements of
section 1165(a)(3)(A), 1165(a)(4), and 1165(e)(3) of the IRC shall be determine
by taking into the account the active Employees that the Employer has in Puerto
Rico. Notwithstanding the above, in the case of an Employer having Employees
within and without Puerto Rico or that is a member of an affiliated group of
corporations or partnerships (within the meaning of section 1028 of the IRC)
that adopt the same plan, said Employer or Employers may elect to meet the above
mentioned requirements as follows:
/X/ By taking into the account all the active Employees (employed within
and without Puerto Rico) of the Employers or of each individual
Employer;
/ / By taking into the account all the Employees of the affiliated group
of corporation or partnerships (even if some of the members of the
affiliated group of corporations or partnerships have no Employees in
Puerto Rico);
/ / By taking into the account all the Employees of those members of the
affiliated group of corporations or partnerships having Employees in
Puerto Rico; or
/ / By taking into the account all the Employees employed by the members
of the affiliated group of corporations or partnerships in Puerto
Rico.
The above mentioned options shall be available as long as the Plan offers to the
Puerto Rico resident Employees the same benefits offered to those Employees
located outside of Puerto Rico.
EXECUTION OF ADOPTION AGREEMENT
EMPLOYER
Name of Employer: Popular Securities, Inc.
----------------------------------------------------------
Signed: [Juan Guerrero]
------------------------------------------------------------------------
Print name and title: Juan Guerrero, Managing Director - Retail
----------------------------------------------------------
Date January 28, 1999
------------------------------------------------------------------------
RESPONSIBILITIES OF EMPLOYER
The Employer understands that, by establishing this Plan, it will have certain
legal responsibilities for which neither the Trustee nor the Plan Sponsor will
be responsible. The Employer also understands that it will be solely responsible
for any taxes, costs or expenses arising from the disqualification of the
Employer's Plan. The Employer warrants that it has obtained legal and tax advice
to the extent the Employer deems necessary before signing this Adoption
Agreement.
TRUSTEE
Name of Trustee: BANCO POPULAR DE PUERTO RICO
--------------------------------------------------------------
Address: 209 Ponce de Leon Avenue, Hato Rey, Puerto Rico 00917
--------------------------------------------------------------
Signed: [Maryvette Velazquez Torres]
----------------------------------------------------------
-12-
Print name and title: Maryvette Velazquez Torres, Vice President
----------------------------------------------------------
Date: January 28, 1999
----------------------------------------------------------
The identifying number for the Banco Popular de Puerto Rico Master Defined
Contribution Retirement Plan document is 01 and for this Adoption Agreement is
102. The Plan Sponsor is (insert Employer's name and address)
- ------------------------------------------------------------------------------.
Banco Popular de Puerto Rico will notify you if it amends or discontinues this
Master Plan.
The Employer should insure that this Adoption Agreement has been filled out
completely and properly. Failure to do so may result in Plan disqualification.
-13-
<PAGE>
EMPLOYER'S SELECTION OF INVESTMENT FUNDS
----------------------------------------
Employer Name: Popular Securities, Inc.
-----------------------------------------------------------------
Plan Name: Popular Securities, Inc. - Retail 1165(e) Plan
--------------------------------------------------------------------
The Employer selects the following Investment Funds for the above named plan:
(At least three.)
1. Vanguard Index Trust 500
----------------------------------------------------------------------
2. Trust for U.S. Treasury Obligations
----------------------------------------------------------------------
3. Vanguard Long Term Treasury
----------------------------------------------------------------------
4. Fidelity Growth & Income
----------------------------------------------------------------------
5. American Century Ultra -Inv.
----------------------------------------------------------------------
6. Popular, Inc. Common Stock
----------------------------------------------------------------------
In San Juan, Puerto Rico on the 28th day of January, 1999.
EMPLOYER
Name of Employer: Popular Securities, Inc.
Signed: [Juan O. Guerrero]
----------------------------------------------
Print name and Title: Juan O. Guerrero, Managing Director - Retail
Date: January 28, 1999
TRUSTEE
Name of Trustee: Banco Popular de Puerto Rico
Signed: [Maryvette Velazquez Torres]
----------------------------------------------
Print name and Title: Maryvette Velazquez Torres, Vice President
& Pension Plan Manager
Date: January 28, 1999
-14-
EXHIBIT 4.4.(g)
1165(E) PLAN ADOPTION AGREEMENT
MASTER DEFINED CONTRIBUTION RETIREMENT PLAN
AMENDED EFFECTIVE AS OF JANUARY 1, 1998
(1/01/98 VERSION)
-1-
<PAGE>
BY executing this Adoption Agreement the Employer is
adopting a profit sharing plan with optional Section 1165(e) provisions for the
benefit of its Employees. The Employer's Plan is comprised of: (i) [X] the Banco
Popular de Puerto Rico Master Defined Contribution Retirement Plan Document or
[ ] the Employer's Defined Contribution Retirement Plan Document; (ii) [X] the
Banco Popular de Puerto Rico Master Defined Contribution Retirement Plan Master
Trust or [X] the Employer's Defined Contribution Retirement Plan Trust; and
(iii) [X] this Adoption Agreement. The terms used in this Adoption Agreement, as
well as the rules to be complied with in connection with the Plan, are fully
explained in the [X] Master Plan Document or [ ] the Employer's Plan Document.
When signing this Adoption Agreement, if applicable, the Employer has received
copy of the Banco Popular de Puerto Rico Master Defined Contribution Retirement
Plan and the Master Plan's Summary Plan Description. The Banco Popular de Puerto
Rico Master Defined Contribution Retirement Plan Master Trust is available upon
request at Banco Popular's main offices in Hato Rey, Puerto Rico.
1165(E) PLAN ADOPTION AGREEMENT
MASTER DEFINED CONTRIBUTION RETIREMENT PLAN
COPYRIGHT@ 1998 BY BANCO POPULAR DE PUERTO RICO
-2-
<PAGE>
EMPLOYER INFORMATION
NAME OF EMPLOYER: POPULAR MORTGAGE, INC.
------------------------------------------------------------
ADDRESS: P.O. Box 193970
-----------------------------------------------------------------------
San Juan, PR 00919-3970
- --------------------------------------------------------------------------------
TELEPHONE: TELEFAX:
---------------------------- ------------------------------
PERSON FOR BANCO POPULAR DE PUERTO RICO TO CONTACT:
----------------------------
EMPLOYER TAX IDENTIFICATION NUMBER:
--------------------------------------------
TYPE OF BUSINESS:
[ ] Unincorporated Trade or Business
[ ] Partnership
[X ] Corporation
[ ] Other (specify) --------------------------------------------------
Employer's taxable year:
[ ] Calendar Year
[X ] Fiscal Year ending on November
--------------------------------------------
GENERAL PLAN INFORMATION
PLAN NAME
Popular Mortgage, Inc. 1165(e) Plan
- --------------------------------------------------------------------------------
(Employer's name and type of plan)
ADOPTION OR AMENDMENT OF PLAN
By signing this Adoption Agreement the Employer:
[ ] adopts the Banco Popular de Puerto Rico Master Defined Contribution
Retirement Plan and its Master Trust
[ ] adopts the Banco Popular de Puerto Rico Master Defined Contribution
Retirement Plan and an Individual Trust
[ ] adopts an Individual Defined Contribution Retirement Plan and the
Banco Popular de Puerto Rico Master Defined Contribution Retirement
Plan Master Trust,
[X ] amends certain options of an earlier Banco Popular de Puerto Rico
Master Defined Contribution Retirement Plan Adoption Agreement for
this 1165(e) Plan,
[ ] amends and restates the following Plan:
Name of Plan:
-----------------------------------------------
Effective Date:
-----------------------------------------------
-3-
<PAGE>
EFFECTIVE DATE
The effective date of this Plan or amendment is: January 28, 1999
--------------------------------
(month/day/year)
(cannot be earlier than the first day of the Plan Year in which the Employer
signs this Adoption Agreement).
PLAN YEAR
The Plan Year will be a calendar year unless the Employer elects otherwise by
checking the box below:
[ ] The Plan Year shall begin on and end on
--------------- ---------------
(month/day) (month/day)
[ ] If applicable, the first Plan Year is a short Plan Year beginning on
and ending on
--------------- ---------------
(month/day) (month/day)
ACCOUNTING METHOD
The Plan shall use the cash basis accounting method.
ELIGIBILITY FOR PLAN PARTICIPATION
WAIVER OF REQUIREMENTS FOR NEW PLANS
[ ] If checked, each Employee employed on the Effective Date is automatically
eligible to participate. Employees hired after the Effective Date are
eligible upon satisfying any service and/or age requirements specified
below:
AGE REQUIREMENT. An employee must fulfill the following age requirement to
become a Participant:
[ ] No minimum age required.
[X ] Minimum age 18 (not greater than 21).
-------------
[ ] Other
-------------
SERVICE REQUIREMENTS. An employee must fulfill the following service requirement
to become a Participant:
[ ] No service requirement.
[X ] One year of service.
[ ] Other
------------
METHOD FOR CALCULATING YEAR OF SERVICE.
[X ] HOURS OF SERVICE METHOD. An Employee's service will be determined by
using the Hours of Service method as described in Article 3 of the
Master Plan document or the Employer's Individual Plan Document.
[X ] ELAPSED TIME METHOD. An Employee's service will be determined using the
elapsed time method, as described in Article 3 of the Master Plan
document or the Employer's Individual Plan Document.
PREDECESSOR EMPLOYERS. Service with the following predecessor employers will be
treated as service with the Employer:
Puerto Rico Home Mortgage.
- --------------------------------------------------------------------------------
Any Popular, Inc. Subsidiary
- --------------------------------------------------------------------------------
-4-
<PAGE>
ENTRY DATES
An Employee may elect to become a Participant and start making Employee
Contributions on any entry date on or after he or she satisfies the Plan's
eligibility requirements.
INDICATE THE PLAN'S ENTRY DATES:
[ ] Monthly Entry Dates. The first day of each month date.
[X ] Quarterly Entry Dates. The first day of each of the first, fourth,
seventh and tenth months of the Plan Year is an entry date.
[ ] Semi-Annual Entry Dates. The first day of each of the first and seventh
months of the Plan Year is an entry date.
COMPENSATION
A Participant's Compensation shall mean the total compensation that is currently
includible in income for income tax purposes paid to him by the Employer during
a Plan Year. Except that if checked below, Compensation will exclude the
following items:
[ ] bonuses
[X ] overtime
[ ] commissions
[X ] other items (specify) Christmas bonus, car allowance, and in the case
of Churchill G. Carey, his profit sharing bonus
-----------------------------------------------------------------------------
CONTRIBUTIONS
PROFIT SHARING CONTRIBUTIONS
[ ] The Employer will make no Profit Sharing Contributions
[X ] For each Plan Year in which this Plan is in effect the Employer may make
contributions to the Trust in one or more installments out of its Net
Profits (as defined in section 6.2c.(3) of the Plan) for the Plan Year,
in such amounts as the Employer may determine (if any). The Plan Year
for which each contribution is made shall be designated at the time of
the contribution. Profit-Sharing Contributions may not exceed the lesser
of Employer's Net Profits or 15% of a Participant's Compensation in any
Plan Year.
EMPLOYEE CONTRIBUTIONS
Participants may make contributions as follows:
[ ] Pre-Tax Contributions.
[ ] After-Tax Contributions.
[X ] Pre-Tax Contributions and/or After-Tax Contributions, at the election
of the Participant.
-5-
<PAGE>
Pre-Tax Contributions in a Plan Year may not exceed 10% of Compensation or
$7,500, in 1997, and $8,000, in 1998 and thereafter whichever is less.
After-Tax Contributions in a Plan Year, if authorized, may not exceed 10% of the
aggregate compensation paid to the Employee during all the years he or she has
been a Plan Participant.
Pre-Tax Contributions and/or After-Tax Contributions may not commence prior to
the date the Plan is adopted.
MATCHING CONTRIBUTIONS
[ ] The Employer will make no Matching Contributions.
[X ] The Employer will make a Matching Contribution equal to 50 cents for
each dollar of a Participant's:
[ ] Pre-Tax Contributions.
[ ] After-Tax Contributions.
[X ] Pre-Tax Contributions and After-Tax Contributions.
However, the Employer will not make Matching Contributions above 6% of the
Participant's Compensation.
QUALIFIED MATCHING AND NON-ELECTIVE CONTRIBUTIONS
Qualified Matching Contributions and Qualified Non-Elective Contributions, as
defined in the Master Plan Document or the Employer's Plan Document, will be
taken into account for purposes of calculating the Actual Deferral Percentages
of Non-Highly Compensated Employees to the extent necessary to meet the Actual
Deferral Percentage test.
ROLLOVER CONTRIBUTIONS
The Plan's Trustee shall be authorized to receive rollover contributions,
[ ] Only if the Employee has met the participation requirements of
the Plan as of the date of the contribution.
[ ] Even if the Employee has not met the participation requirements
of the Plan as of the date of the contribution.
VESTING
PRE-TAX AND/OR AFTER-TAX CONTRIBUTIONS
Pre-Tax and/or After-Tax Contributions are always 100% vested.
MATCHING CONTRIBUTIONS AND/OR PROFIT SHARING CONTRIBUTIONS
Matching Contributions and/or Profit Sharing Contributions will vest in
accordance with the following vesting schedule:
-6-
<PAGE>
<TABLE>
<CAPTION>
Graded Vesting Table
<S> <C> <C> <C>
(1) (2) (3)
[ ] FULL VESTING. Participants are 100% vested at all times YEARS OF VESTED MINIMUM REQUIRED
SERVICE PERCENTAGE PERCENTAGE
[ ] CLIFF VESTING. Participants are 100% vested after completing ____ years
of service (insert number; cannot be greater than 5). The Participant
will be 0% vested until completing the years of service specified
above. Less than 1 0
--------
At least 1 0
--------
[X ] GRADED VESTING. Participants are vested in accordance with the At least 2 25 0
following vesting schedule. (A Participant's vested percentage is --------
the percentage inserted in column (2) or the percentage in column
(3), whichever is greater. Spaces left blank are treated as zeros). At least 3 50 20
--------
At least 4 75 40
--------
At least 5 100 60
--------
At least 6 80
--------
At least 7 100
--------
</TABLE>
YEARS OF SERVICE EXCLUDED IN DETERMINING VESTED PERCENTAGES. Need not be
completed - check as many as desired.
[ ] Years completed before the effective date of this Plan (or a
predecessor plan).
[ ] Years completed before the Participant's _____ birthday (insert
birthday not greater than 18th).
LOANS
[ ] Loans from the Plan will be permitted, subject to the Plan's loan
rules. (Loans will not be available to Owner-Employees unless one of
the following occurs: such person has at his expense obtained an
administrative exemption from ERISA's prohibited transaction rules
from the United States Department of Labor with respect to such loan
or the United States Department of Labor has issued a prohibited
transaction class exemption covering such loans.)
[X ] Loans to Participants from the Plan are not permitted.
IN-SERVICE WITHDRAWALS
The following provisions will govern the availability of in-service withdrawals
from a Participant's accounts. See Article 9 of the Plan document for additional
details, including definitions and limitations.
PROFIT SHARING CONTRIBUTIONS.
In-service withdrawals from Profit Sharing Contributions will not be allowed
unless one of the following boxes is checked:
[X ] In-service withdrawals from Profit Sharing Contributions Account
will only be allowed in case of a financial hardship as such term is
defined in Article 9.1 of the Master Plan Document or the Employer's
Individual Plan Document.
[ ] In-service withdrawals from Matching Contributions Account will be
allowed for any reason.
PRE-TAX CONTRIBUTIONS. In-service withdrawals from Pre-Tax Contributions will
only be allowed in case of a financial hardship as such term is defined in
Article 9.1 of the Master Plan Document or the Employer's Individual Plan
Document.
AFTER-TAX CONTRIBUTIONS. In-service withdrawals from After-Tax Contributions
will be allowed for any reason.
-7-
<PAGE>
MATCHING CONTRIBUTIONS. In-service withdrawals from Matching Contributions will
not be allowed unless one of the following boxes is checked:
[ ] In-service withdrawals from Profit Sharing Contributions Account
will only be allowed in case of a financial hardship as such term is
defined in Article 9.1 of the Master Plan Document or the Employer's
Individual Plan Document.
[ ] In-service withdrawals from Profit Sharing Contributions Account will
be allowed for any reason.
ROLLOVER CONTRIBUTIONS. Refer to Article 9 of the Master Plan document.
WITHDRAWALS AFTER AGE 59 1/2.
[ ] If checked, after 59 1/2 a Participant may make in-service withdrawals
from his Pre-Tax Contributions and, if applicable, from his Qualified
Matching and Non-Elective Contributions Accounts without financial
hardship (up to the vested percentage of each such accounts).
FINANCIAL HARDSHIP. An in-service withdrawal will be on account of financial
hardship only if the Participant has an immediate and heavy financial need and
the withdrawal is necessary to meet such need. A withdrawal will be deemed to be
on account of an immediate and heavy financial need if it is occasioned by:
o a deductible medical expense incurred by the Participant or his
spouse, children or dependent; (not reimbursed by medical insurance or
otherwise);
o purchase of the Participant's principal residence (not including
mortgage payments);
o tuition payments for the next semester or quarter of post-secondary
education for the Participant or his spouse, child or dependent;
o rent or mortgage payments to prevent the Participant's eviction from
or the foreclosure of the mortgage on his principal residence; or
o such other event or circumstances as the Puerto Rico Secretary of the
Treasury through regulations may permit.
A Participant must establish to the Plan Administrator's satisfaction both that
the Participant has an immediate and heavy financial need and that the
withdrawal is necessary to meet the need.
The Trustee and the Plan Administrator shall agree as to the most convenient way
of administering the financial hardship provisions of the Plan.
A Participant who makes a withdrawal on account of a financial hardship may not
make Pre-Tax Contributions or After- Tax Contributions hereunder (or under any
other Plan maintained by the Employer) for a period of 12 months following the
date of the in-service withdrawal.
PAYMENT. Participants in-service withdrawal request shall be paid on or before
the last day of each:
/ / month
/ / quarter
/ / semester
/ / the Plan year
-8-
<PAGE>
RETIREMENT AGE
NORMAL RETIREMENT AGE. A Participant will be fully vested and may retire after
the latter of: reaching age 65 or the fifth anniversary of the first day of the
Plan Year in which he/she commenced participation in the Plan.
DISABILITY RETIREMENT. A Participant will be fully vested and may retire before
normal retirement upon becoming disabled.
EARLY RETIREMENT AGE.
[ ] If checked, a Participant will be fully vested and may retire prior
to Normal Retirement Age upon reaching age __ and completing __ years
of service.
DISTRIBUTION OF VESTED BENEFITS BEFORE RETIREMENT, DEATH OR DISABILITY.
If the Participant terminates his employment with the Employer before reaching
his normal or early retirement age, becoming disable or dying, Participant
/ / shall be / / shall not be allowed to apply for an early distribution of
his plan benefits.
DISTRIBUTION OF BENEFITS
Upon becoming entitled to the distribution of this Plan benefits, the
Participants or their authorized representative must request from the Employer
that their benefits be distributed. In such request, the Participant, or his' or
her's authorized representative, must elect one of the following payment
alternatives:
[X ] Lump-Sum cash distribution
[ ] periodical payments
The election of one optional payment form may require the consent of the
Participant's surviving spouse. Benefit distributions may not exceed the
Participant's life expectancy and that of his' or her's surviving spouse.
If the Employer elects more that one method of distribution hereunder, then, the
Participants' shall elect under which of such methods his' or her's benefit
shall be distributed.
TIME OF PAYMENT
When a Participant retires, becomes disable or die, the distribution of his
benefits shall commence:
[X ] as soon as it is administratively feasible following the termination
of the Plan Year in which the Participant request the distribution
of his' or her's benefits or such amount becomes payable.
[ ] as soon as it is administrative feasible following the date in which
the Plan Participant request the distribution of his' or her's
benefits or such amount becomes payable.
[ ] as soon as it is administrative feasible following the termination
of the Plan Year in which there is a __________ consecutive break in
service of one year.
[ ] only after you have reached your Normal Retirement Date or Early
Retirement Date (if applicable).
If the Plan Participant terminates his employment for a reason other than death,
disability, or retirement payments shall commence:
-9-
<PAGE>
[X ] as soon as it is administrative feasible following the termination of
the Plan Year in which the Participants requested the distribution or
the same becomes payable.
[ ] as soon as it is administrative feasible following the date in
which the Plan Participant requested the distribution of his' or her's
benefits or such amount becomes payable.
[ ] as soon as it is administratively feasible following the termination
of the Plan Year in which the Plan Participant incurs _______
consecutive break in service of one year.
[ ] only after you have reached your Normal Retirement Date or Early
Retirement Date (if applicable).
INVESTMENT FUNDS
Investment Funds shall be those selected by the Employer on the separate
Investment Funds Selection Form. All investment instructions as to each
Participant's accounts will be directed by the Participant and/or the Employer.
However, if no investment instructions are provided by the Participant and/or
the Employer, the Participant's accounts will be invested in equal proportions
among the investment funds chosen by the Employer.
For purposes of the Plan, the Trustee /X/ shall be / / shall not be considered
as a directed trustee.
PARTICIPANT'S INVESTMENT INSTRUCTIONS
The Participants will be allowed to modify their investments instructions on a
monthly /X/ quarterly / / semi annual / / annual basis.
PARTICIPANT'S CONTRIBUTIONS TO THE PLAN
The Participants will be allowed to modify or suspend their pre-tax and/or their
after-tax contributions to the Plan on a / / monthly /X/ quarterly / / semi
annual / / annual basis.
PLAN ADMINISTRATION
PLAN ADMINISTRATOR. The Employer is the legal Plan Administrator under ERISA.
Specify one or more officers, partners, Employees or other persons to perform
the functions of the Plan Administrator:
Sylvio Lopez
- --------------------------------------------------------------------------------
Gilberto Monzon
- --------------------------------------------------------------------------------
Vivian Colon
Each person selected must submit a specimen signature. Any such appointment may
be changed by written notice.
MASTER TRUST
By executing this Adoption Agreement the Employer /X/ adopts / / does not adopts
the Master Trust established by Banco Popular de Puerto Rico to carry out the
purposes of the Plan and thus retains Banco Popular as Trustee. The
-10-
<PAGE>
terms of the Trust and corresponding fees are contained in the Banco Popular de
Puerto Rico Master Defined Contribution Retirement Plan, Master Trust and Fee
Schedule respectively, which are incorporated by reference into this Adoption
Agreement.
RECORDKEEPER
By executing this Adoption Agreement, the Employer retains Banco Popular de
Puerto Rico as Recordkeeper of the Plan pursuant to the Recordkeeping Agreement
and Fee Schedule incorporated by reference into this Adoption Agreement.
The Employer has selected as recordkeeper for the Plan:
Name
---------------------------------------------------------------------------
Address
------------------------------------------------------------------------
Telephone No.
----------------------------------------------------------------
Contact Person
----------------------------------------------------------------
RECORDKEEPER AND TRUSTEE'S FEES
By executing this Adoption Agreement, the Employer agrees to retain Banco
Popular de Puerto Rico as Recordkeeper and, if applicable, as Trustee of the
Plan, for an initial minimum period of three years. This Agreement shall renew
automatically for an indefinite period of time. The Employer may terminate this
Agreement at any time subject to a written termination notice received by Banco
Popular at least thirty days prior to the effective date of termination. If
termination occurs during the initial three year period, the Employer agrees to
compensate Banco Popular with a termination fee equal to three times the total
annual fees minus any amount already satisfied in connection with the services
rendered since the effective date of this agreement. Banco Popular may change
the Fee Schedule from time to time and shall provide written notification to the
Employer.
VALUATING OF PARTICIPANT'S ACCOUNTS
The Participant's Accounts shall be valued / / monthly /X/ quarterly / /semi
annually / /annually.
PARTICIPANT'S ACCOUNT STATEMENTS
The Participants shall be provided with a statement of their account on a
monthly quarterly semi annually annual basis.
SATISFACTION OF THE PARTICIPATION AND NON-DISCRIMINATION REQUIREMENTS OF THE IRC
BY EMPLOYERS WITH EMPLOYEES WITHIN AND WITHOUT PUERTO RICO OR THAT ARE MEMBERS
OF AN AFFILIATED GROUP.
The satisfaction of the participation and non-discrimination requirements of
section 1165(a)(3)(A), 1165(a)(4), and 1165(e)(3) of the IRC shall be determine
by taking into the account the active Employees that the Employer has in Puerto
Rico. Notwithstanding the above, in the case of an Employer having Employees
within and without Puerto Rico or that is a member of an affiliated group of
corporations or partnerships (within the meaning of section 1028 of the
-11-
<PAGE>
IRC) that adopt the same plan, said Employer or Employers may elect to meet the
above mentioned requirements as follows:
By taking into the account all the active Employees (employed within
and without Puerto Rico) of the Employers or of each individual
Employer;
By taking into the account all the Employees of the affiliated group of
corporation or partnerships (even if some of the members of the
affiliated group of corporations or partnerships have no
Employees in Puerto Rico);
By taking into the account all the Employees of those members of the
affiliated group of corporations or partnerships having Employees in
Puerto Rico; or
By taking into the account all the Employees employed by the members of
the affiliated group of corporations or partnerships in Puerto Rico.
The above mentioned options shall be available as long as the Plan offers to the
Puerto Rico resident Employees the same benefits offered to those Employees
located outside of Puerto Rico.
EXECUTION OF ADOPTION AGREEMENT
EMPLOYER
Name of Employer: Popular Mortgage, Inc.
------------------------------------------------------------
Signed: [Sylvio Lopez, President]
------------------------------------------------------------------------
Print name and title: Sylvio Lopez, President
-----------------------------------------------------------
Date: January 28, 1999
RESPONSIBILITIES OF EMPLOYER
The Employer understands that, by establishing this Plan, it will have certain
legal responsibilities for which neither the Trustee nor the Plan Sponsor will
be responsible. The Employer also understands that it will be solely responsible
for any taxes, costs or expenses arising from the disqualification of the
Employer's Plan. The Employer warrants that it has obtained legal and tax advice
to the extent the Employer deems necessary before signing this Adoption
Agreement.
TRUSTEE
Name of Trustee: BANCO POPULAR DE PUERTO RICO
--------------------------------------------------------------
Address: 209 Ponce de Leon Avenue, Hato Rey, Puerto Rico 00917
--------------------------------------------------------------
Signed: [Maryvette Velazquez, Vice-President]
----------------------------------------------------------
Print name and title: Maryvette Velazquez, Vice-President
----------------------------------------------------------
Date: January 28, 1999
----------------------------------------------------------
-12-
<PAGE>
The identifying number for the Banco Popular de Puerto Rico Master Defined
Contribution Retirement Plan document is 01 and for this Adoption Agreement is
102. The Plan Sponsor is (insert Employer's name and address)
- -------------------------------------------------------------------------------.
Banco Popular de Puerto Rico will notify you if it amends or discontinues this
Master Plan.
The Employer should insure that this Adoption Agreement has been filled out
completely and properly. Failure to do so may result in Plan disqualification.
-13-
<PAGE>
EMPLOYER'S SELECTION OF INVESTMENT FUNDS
----------------------------------------
Employer Name: Popular Mortgage, Inc.
------------------------------------------------------------------
Plan Name: Popular Mortgage, Inc. 1165(e) Plan
---------------------------------------------------------------------
The Employer selects the following Investment Funds for the above named plan:
(At least three.)
1. Vanguard Short Term Federal Fund
---------------------------------------------------------------
2. Strong Government Securities
---------------------------------------------------------------
3. Vanguard Wellesley Income
---------------------------------------------------------------
4. Fidelity Equity Income II
---------------------------------------------------------------
5. Mutual Beacon - Class Z
---------------------------------------------------------------
6. Popular, Inc. Common Stock
---------------------------------------------------------------
In San Juan, Puerto Rico on the 28th day of January, 1999.
EMPLOYER
Name of Employer: Popular Mortgage, Inc.
Signed: [Sylvio Lopez]
Print name and Title: Sylvio Lopez, President
--------------------------------------------
Date: January 28, 1999
TRUSTEE
Name of Trustee: Banco Popular de Puerto Rico
Signed: [Maryvette Velazquez Torres]
Print name and Title: Maryvette Velazquez Torres, Vice President
& Pension Plan Manager
--------------------------------------------
Date: January 28, 1999
-14-
June 8, 1999
Securities and Exchange Commission
450 Fifth Street, N.W.
Judiciary Square
Washington, DC 20549
RE: Popular, Inc. Form S-8 Registration Statement
---------------------------------------------
Ladies and Gentlemen:
We are counsel to Popular, Inc. (the "Company") and have acted as
co-counsel to the Company in connection with the filing by the Company of its
registration statement on Form S-8 (the "Registration Statement") under the
Securities Act of 1933 (the "Act") and the rules and regulations promulgated
thereunder (the "Rules and Regulations"). The Registration Statement relates to
five (5) million shares of the common stock, par value $6 per share of the
Company (the "Company Stock"), which may be allocated to the accounts of
eligible employees participant in the respective employee benefit plan (the
"Plans") of each of the wholly owned subsidiaries of the Company listed in
Exhibit A hereto (the "Subsidiaries"), and interests therein. The Plans are
subject to the requirements of the Employee Retirement Income Security Act of
1974, as amended ("ERISA").
This opinion, given as of the date hereof, is based upon facts and
conditions presently known and laws and regulations presently in effect, and is
being delivered pursuant to Item 601 of Regulation S-K under the Act as required
by Item 20 of the Registration Statement.
As co-counsel of the Company and in rendering this opinion we have
examined the Plan documents and other related written
<PAGE>
Securities and Exchange Commission
June 8, 1999
Page 2
documentation as we have deemed necessary or appropriate to provide a basis for
the opinion set forth below. In our examination, we have assumed the conformity
to original documents submitted to us as photostatic copies, the genuineness of
all signatures and the taking of all required corporate action in relation with
the Plans.
On the basis of the foregoing, we are of the opinion that the
provisions of the written documents constituting the Plans are in compliance
with the requirements of ERISA pertaining to such provisions.
We are members of the bar of the Commonwealth of Puerto Rico and the
opinion set forth herein is limited to matters governed by the Federal laws of
the United States of America. This opinion is being furnished to you solely for
your benefit in connection with the filing of the Registration Statement
pursuant to the Act and the Rules and Regulations and is not to be used,
circulated, quoted, relied upon or otherwise referred to for any other purpose,
without our prior written consent. We hereby consent to the use of this opinion
as an exhibit to the Registration Statement and to the reference to this opinion
under the caption "Legal Opinions" therein.
Very truly yours,
/s/ PIETRANTONI MENDEZ & ALVAREZ
Pietrantoni Mendez & Alvarez
<PAGE>
Securities and Exchange Commission
June 8, 1999
Page 3
EXHIBIT A
POPULAR, INC.
WHOLLY OWNED SUBSIDIARIES AND
THEIR EMPLOYEE BENEFIT PLANS
SUBSIDIARY EMPLOYEE BENEFIT PLAN
---------- ---------------------
Banco Popular de Puerto Rico Banco Popular de Puerto Rico Employees'
Stock Plan (Puerto Rico)
Popular Securities, Inc. Popular Securities, Inc. - Retail 1165(e)
Plan and Popular Securities, Inc. -
Institutional 1165(e) Plan,
Popular Mortgage, Inc. Popular Mortgage, Inc. 1165(e) Plan
Popular Finance, Inc. Popular Finance, Inc. Retirement & Savings
Plan
Popular Leasing & Popular Leasing & Rental, Inc. Retirement &
Rental, Inc. Savings Plan
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated March 5, 1999 relating to the
financial statements, which appears in the 1998 Annual Report to Shareholders of
Popular, Inc., which is incorporated by reference in Popular, Inc.'s Annual
Report on Form 10-K for the year ended December 31, 1998. We also consent to the
incorporation by reference in the Registration Statement of our report dated
March 29, 1999 relating to the financial statements, which appears in the Annual
Report of the Banco Popular de Puerto Rico Employees' Stock Plan (Puerto Rico)
on Form 11-K for the year ended December 31, 1997.
/s/ PRICEWATERHOUSECOOPERS LLP
PricewaterhouseCoopers LLP
San Juan, Puerto Rico
June 7, 1999
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated March 5, 1999 relating to the
financial statements, which appears in the 1998 Annual Report to Shareholders of
Popular, Inc., which is incorporated by reference in Popular, Inc.'s Annual
Report on Form 10-K for the year ended December 31, 1998. We also consent to the
incorporation by reference in the Registration Statement of our report dated
March 29, 1999 relating to the financial statements, which appears in the Annual
Report of the Popular Consumer Services, Inc. Retirement & Savings Plan on Form
11-K for the year ended December 31, 1997.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
San Juan, Puerto Rico
June 7, 1999
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated March 5, 1999 relating to the
financial statements, which appears in the 1998 Annual Report to Shareholders of
Popular, Inc., which is incorporated by reference in Popular, Inc.'s Annual
Report on Form 10-K for the year ended December 31, 1998. We also consent to the
incorporation by reference in the Registration Statement of our report dated
March 29, 1999 relating to the financial statements, which appears in the Annual
Report of the Popular Leasing & Rental, Inc. Retirement & Savings Plan on Form
11-K for the year ended December 31, 1997.
/s/ PRICEWATERHOUSECOOPERS LLP
PricewaterhouseCoopers LLP
San Juan, Puerto Rico
June 7, 1999
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated March 5, 1999 relating to the
financial statements, which appears in the 1998 Annual Report to Shareholders of
Popular, Inc., which is incorporated by reference in Popular, Inc.'s Annual
Report on Form 10-K for the year ended December 31, 1998. We also consent to the
incorporation by reference in the Registration Statement of our report dated
March 29, 1999 relating to the financial statements, which appears in the Annual
Report of the Puerto Rico Home Mortgage Plan on Form 11-K for the year ended
December 31, 1997.
/s/ PRICEWATERHOUSECOOPERS LLP
PricewaterhouseCoopers LLP
San Juan, Puerto Rico
June 7, 1999
