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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 11-K
[ X ] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to ______
Commission file number 0-13818
POPULAR SECURITIES, INC. INSTITUTIONAL - 1165(e) Plan (1)
(Full title of the Plan and address of the Plan, if
different from that of the issuer named below)
POPULAR, INC.
209 MUNOZ RIVERA AVENUE
HATO REY, PUERTO RICO 00918
(Name of issuer of the securities held pursuant to the
plan and the address of principal executive office)
(1) The Name of BP Capital Markets, Inc. 1165(e) Plan has
Changed to Popular Securities, Inc. Institutional 1165(e) Plan.
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POPULAR SECURITIES, INC. INSTITUTIONAL - RETAIL 1165(E) PLAN
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Unaudited Financial Statements:
Statement of Assets Available for
Benefits as of
December 31, 1999 and 1998 ...................... 2
Statement of Changes in Assets
Available for Benefits
for the years ended December 31, 1999
and December 31, 1998 ........................... 3
Notes to unaudited Financial Statements ......... 4-9
Signature ............................................. 10
</TABLE>
1
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POPULAR SECURITIES, INC. INSTITUTIONAL - 1165(E) PLAN
UNAUDITED STATEMENT OF ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
Assets:
Investments, at fair value $3,678,798 $2,785,858
Dividend and interest receivable 6,735 251
---------- ----------
Total Assets Available for Benefits $3,685,533 $2,786,109
========== ==========
</TABLE>
The accompanying notes are an integral part of
these unaudited financial statements.
2
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POPULAR SECURITIES, INC. INSTITUTIONAL - 1165(E) PLAN
UNAUDITED STATEMENT OF CHANGES IN ASSETS
AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
Additions to net assets:
Investment income -
Net (depreciation) appreciation
in fair value of investments $ (149,538) $ 418,717
Gain 315,735 150,551
Interest 696 104,463
Dividends 204,304 12,475
----------- -----------
Total investment income 371,197 686,206
----------- -----------
Contributions -
Employer 225,665 190,897
Participants 327,637 246,148
Rollover from other qualified plans 10,215
----------- -----------
Total contributions 553,302 447,260
----------- -----------
Total additions 924,499 1,133,466
----------- -----------
Deductions from assets:
Benefits paid to participants 25,075 203,827
----------- -----------
Net increase 899,424 929,639
Assets available for benefits:
Beginning of year 2,786,109 1,856,470
----------- -----------
End of year $ 3,685,533 $ 2,786,109
=========== ===========
</TABLE>
The accompanying notes are an integral part of
these unaudited financial statements.
3
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POPULAR SECURITIES, INC. INSTITUTIONAL - 1165(E) PLAN
NOTES TO UNAUDITED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
1. DESCRIPTION OF PLAN
The following description of BP Capital Markets, Inc.-1165(e) Plan (the
"Plan"), provides only general information. Participants should refer
to the Plan agreement for a more complete description of its
provisions.
General
The Plan is a defined contribution plan, which became effective on May
1, 1995. The Plan covers substantially all employees of the
institutional division of Popular Securities, Inc. (previously BP
Capital Markets, Inc.) (the "Company") (a subsidiary of Popular, Inc.),
who have one year of service (work at least 365 days), are age eighteen
or older, and are residents of the Commonwealth of Puerto Rico. The
Plan was created for the purpose of providing retirement benefits to
employees and to encourage and assist employees in adopting a regular
savings program by means of payroll deductions, through a plan that
qualifies under the applicable laws of the Commonwealth of Puerto Rico.
The Plan is subject to the provisions of the Employee Retirement
Security Act of 1974 ("ERISA").
Contributions
Plan participants may authorize the Company to make payroll deductions
under the Plan ranging from 1% to 10% of their monthly compensation. At
no time participant contributions may exceed the lesser of 10% of the
participant's compensation, as defined, or $8,000. With the approval of
the Plan Administrator, participants may also contribute amounts
representing distributions from other qualified defined benefit or
contribution plans. The Company matches participant's savings
contributions at the rate of 50 cents for each dollar saved, on the
first 10% of the participant's compensation ("Matching Contribution").
Additionally, the Company may make contributions out of its net profits
in such amounts as the Company may determine, if any, but not exceeding
the lesser of $15,000 or 10% of the participant's compensation, as
defined ("Profit Sharing Contribution").
Participant Accounts
Each participant account is credited with the participant's
contribution and allocations of (a) the Company's matching and profit
sharing contribution, (b) plan earnings, and (c) forfeitures of
terminated participants' non-vested accounts with at least five periods
of consecutive breaks in service. For purpose of the above, break in
service with respect to an employee means an eligibility computation
period (one year) during which such employee does not complete more
than 365 days of continuous service. During the break in period, if the
terminated participant is re-employed by the Company, the current value
of such forfeited amounts shall be restored to the participant's
account. As of December 31, 1999, no forfeitures have occurred since
the Plan is less than five years old. Allocations are based on the
proportion that each participant's compensation during the Plan year
bears to the total compensation during such Plan year or account
balances, as defined. The benefit to which a participant is entitled is
the benefit that can be provided from the particular account of each
participant. The net change in value of the Plan assets is posted to
the participants' accounts on a monthly basis.
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POPULAR SECURITIES, INC. INSTITUTIONAL - 1165(E) PLAN
NOTES TO UNAUDITED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
Vesting
Participants are immediately vested in their contributions plus actual
earnings thereon. Vesting in the Company's contributions plus actual
earnings thereon is based on years of service. The contributions vest
in accordance with the following schedule:
<TABLE>
<CAPTION>
YEARS OF SERVICE VESTING %
<S> <C>
Less than 1 0
At least 1 20
At least 2 40
At least 3 60
At least 4 80
At least 5 100
</TABLE>
Investment Options
Upon enrollment in the Plan, participants may elect to have their
contributions invested in one or more of the following investment
funds:
<TABLE>
<CAPTION>
FUND DESCRIPTION
<S> <C>
Vanguard Index Seeks investment results that correspond with the price and yield performance of the
500 Fund S&P 500 Index.
Fidelity Income Seeks long-term growth, current income, and growth of income, consistent with
& Growth Fund reasonable investment risk. The fund invests primarily in dividend-paying common
stocks with growth potential. Generally, the fund sells securities with dividends
that fall below the yield of the S&P 500 index. Some common-stock selections, however,
may be made in securities not paying dividends, but offering prospects for capital
growth or the fund's fixed-income investments, which generally consist of corporate
bonds.
American 20th Seeks capital growth. The fund typically invests at least 90% of assets in equities
Century Fund selected for their appreciation potential. The majority of these securities are common
stocks issued by companies that meet management's standards for earnings and revenue
growth. The fund may only purchase securities of companies that have operated
continuously for three or more years.
Federated Trust Is an open-end money market mutual fund whose investment objective seeks to provide
For US Fund shareholders with current income as is consistent with stability of principal and
maintenance of liquidity.
Vanguard Fixed Seeks current income consistent with maintenance of principal and liquidity. The fund
Income Fund normally invests at least 85% of assets in long-term U.S. Treasury bonds and other
guaranteed U.S. government obligations. It may invest the balance of assets in other
U.S. government securities, including repurchase agreements on such securities. The
fund typically maintains an average weighted maturity of between 15 and 30 years.
Popular, Inc. Investment in Popular, Inc.'s common stock.
Common Stock
</TABLE>
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POPULAR SECURITIES, INC. INSTITUTIONAL - 1165(E) PLAN
NOTES TO UNAUDITED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
Popular, Inc. is the Company's parent company. Banco Santander de
Puerto Rico is the trustee for the investment in Popular, Inc. stock.
Payments of Benefits
Plan participants are permitted to make withdrawals from the Plan,
subject to provisions in the Plan agreement and only from after-tax
contributions. If a participant suffers financial hardship, as defined
in the Plan agreement, the participant may request a withdrawal from
his or her contributions. On termination of service due to disability,
retirement or other reasons, a participant may elect to receive either
a lump sum amount equal to the value of the participant's vested
interest in his or her account or installment payments. In the case of
a participant termination because of death, the entire vested amount is
paid to the person or persons legally entitled thereto. Effective on
June 1, 1997, an amendment was made to the Puerto Rico Internal Revenue
Code Section 1165(b) which requires that a 20% tax be withheld from
termination payments in excess of after tax participant contributions.
Plan Expenses and Administration
The Company is responsible for the general administration of the Plan
and for carrying out the provisions thereof.
Company contributions are held and managed by a trustee appointed by
the Board of Directors of the Company, which invests cash received,
interest and dividend income and makes distributions to participants.
Banco Popular de Puerto Rico is the trustee and record keeper of the
Plan. All expenses of the Plan are paid by the Company.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Under the Department of Labor Rules and Regulations for Reporting and
Disclosure under ERISA, the Plan files Form 5500-C/R, which is required
for employee's benefit plans with fewer than 100 participants. Employee
benefit plans with 100 or more participants are required to file Form
5500. Those plans filing Form 5500 are required to prepare audited
financial statements as well as all applicable schedules required by
Section 2520.103-10 of Department of Labor's Rules and Regulations for
Reporting and Disclosure under ERISA. Such requirements are not
mandated for those plans filing Form 5500-C/R. Accordingly, the
attached financial statements are unaudited and the above mentioned
schedules are not presented.
Basis of Accounting
The financial statements of the Plan are prepared on the accrual method
of accounting.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
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POPULAR SECURITIES, INC. INSTITUTIONAL - 1165(E) PLAN
NOTES TO UNAUDITED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
Investment Valuation and Income Recognition
The Plan's investments are stated at fair value. Shares of registered
investment companies are valued at quoted market prices which represent
their net asset value at year end. Popular, Inc. common stock is valued
at its quoted market price. The plan presents in the statement of
changes in assets available for benefits the net appreciation in the
fair value of its investments which consists of the realized gains or
losses and the unrealized appreciation (depreciation) on them.
Purchases and sales of securities are recorded on a trade-date basis.
Dividends and interest earned are recorded on the accrual basis and
credited to each participant's account, as appropriate, based on
proportional shares held at the date of record.
Contributions
Employee and Company matching contributions are recorded in the year in
which the Company makes the payroll deductions from the participants
earnings. These contributions are temporarily placed in a
non-participant directed time deposit open account.
Transfer of Assets to Other Plans
Company employees or retirees may elect to transfer their savings to
other plans qualified by the Puerto Rico Department of the Treasury.
Payment of Benefits
Benefits are recorded when paid.
3. INVESTMENTS
The following table presents the Plan's investments that represent five
percent or more of the Plan's assets at December 31:
<TABLE>
<CAPTION>
1999 1998
----------------------------- -----------------------------
# of shares Value # of shares Value
<S> <C> <C> <C> <C>
Mutual funds:
Vanguard Index 500 Fund 6,489 $ 878,170 2,871 $ 326,768
Fidelity Income & Growth Fund 10,551 497,614 9,250 430,318
American 20th Century Fund 30,790 1,409,583 25,360 926,299
Common stock - Popular, Inc. 29,146 814,261 29,835 1,024,690
</TABLE>
During 1999, the Plan's investments (including gains and losses on
investments bought and sold) appreciated (depreciated) in value as
follows:
<TABLE>
<S> <C>
Mutual Funds $ 488,093
Common Stock (321,896)
</TABLE>
4. PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and
to terminate the Plan subject to the provisions of
7
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POPULAR SECURITIES, INC. INSTITUTIONAL - 1165(E) PLAN
NOTES TO UNAUDITED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
ERISA. In the event the Plan terminates, the interest of each
participant in the Plan shall be fully vested and such termination
shall not reduce the interest of any participating employee or their
beneficiaries accrued under the Plan up to the date of such
termination.
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POPULAR SECURITIES, INC. INSTITUTIONAL - 1165(E) PLAN
NOTES TO UNAUDITED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
5. TAX STATUS
The Puerto Rico Department of Treasury has determined and informed the
Company that the Master Plan and the related trust are designed in
accordance with the applicable Puerto Rico income tax law and,
therefore, exempt from income taxes. The Plan and the income tax law
have been amended since receiving the determination letter. However,
the Plan Administrator and the Plan's tax counsel believe that the Plan
is designed and is currently being operated in compliance with the
applicable requirements of the income tax law. Therefore, no provision
for income taxes has been included in the Plan's financial statements.
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Signature
Pursuant to the requirement of the Securities Exchange Act of 1934, the
persons who administer the employee benefit plan have duly caused this annual
report to be signed on its behalf by the undersigned hereunto duly authorized.
POPULAR SECURITIES, INC.
INSTITUTIONAL - 1165(e) Plan
(Name of Plan)
By: /s/ Maria Isabel Burckhart
---------------------------------------
Maria Isabel Burckhart
Authorized Representative
By: /s/ Jorge A. Junquera
---------------------------------------
Jorge A. Junquera
Authorized Representative
in the United States
Dated: June 27, 2000
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