EXHIBIT 4.4.(a)
BANCO POPULAR DE PUERTO RICO
EMPLOYEES' STOCK PLAN (PUERTO RICO)
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
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.
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.
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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.
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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.
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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:
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(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.
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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
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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
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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:
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(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.
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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.
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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.
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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.
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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
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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.
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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
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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.
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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.
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(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.
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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
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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
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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.
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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
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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
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
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
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
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
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
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
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
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
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
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
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
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
(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
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
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
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
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
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
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."
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.
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.
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."
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".
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.