-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FZvJozL8n5mYHiB7NrqDBqYkD74w5nBBxHY7f12ocTXkrfYcqJXqah+g1EDNbyfW jjnnqj5ZMVybWrj+Qc7ztw== 0000950144-05-010166.txt : 20051007 0000950144-05-010166.hdr.sgml : 20051007 20051007173010 ACCESSION NUMBER: 0000950144-05-010166 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 20051007 DATE AS OF CHANGE: 20051007 EFFECTIVENESS DATE: 20051007 FILER: COMPANY DATA: COMPANY CONFORMED NAME: POPULAR INC CENTRAL INDEX KEY: 0000763901 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 660416582 STATE OF INCORPORATION: PR FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 333-128909 FILM NUMBER: 051130379 BUSINESS ADDRESS: STREET 1: 209 MUNOZ RIVERA AVE STREET 2: POPULAR CENTER BUILDING CITY: HATO REY STATE: PR ZIP: 00918 BUSINESS PHONE: 7877659800 MAIL ADDRESS: STREET 1: P.O. BOX 362708 CITY: SAN JUAN STATE: PR ZIP: 00936-2708 FORMER COMPANY: FORMER CONFORMED NAME: BANPONCE CORP DATE OF NAME CHANGE: 19920703 S-8 1 g97418sv8.htm POPULAR, INC. POPULAR, INC.
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
 
Popular, Inc.
(Exact name of Registrant as specified in its charter)
Puerto Rico
(State or Other Jurisdiction of Incorporation or Organization)
66-0416582
(I.R.S. Employer Identification No.)
Popular Center Building
209 Muñoz Rivera Avenue
Hato Rey, Puerto Rico
(Address, including zip code of Registrant’s principal executive offices)
POPULAR FINANCIAL HOLDINGS DEFERRAL PLAN
POPULAR FINANCIAL HOLDINGS SUPPLEMENTAL EMPLOYEE RETIREMENT PLAN
(Full title of the plan)
 
Jorge A. Junquera
Senior Executive Vice President
and Chief Financial Officer
209 Muñoz Rivera Avenue
San Juan, Puerto Rico 00918
(Name and address of agent for service)
(787) 765-9800
(Telephone number, including area code, of agent for service)
 
CALCULATION OF REGISTRATION FEE
                                             
 
                  Proposed       Proposed            
        Amount       maximum       maximum       Amount of    
        to be       offering price       aggregate -       registration    
  Title of each class of securities to be registered (1)     registered       per unit (2)       offering price       fee    
 
Common Stock, par value $6.00 per share
       500,000       $ 23.13       $ 11,565,000       $ 1,361.20    
 
(1)   This registration statement is being filed to register up to 200,000 shares that may be offered pursuant to the Popular Financial Holdings Deferral Plan and up to 300,000 shares that may be offered pursuant to the Popular Financial Holdings Supplemental Employee Retirement Plan. 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)   Computed pursuant to Rule 457(h) solely for purpose of determining the registration fee, based upon an assumed price of $23.13 per share, which was the average of the high and low prices of the Common Stock on October 6, 2005, as reported on the NASDAQ National Market System.
 
 

 

TABLE OF CONTENTS

Part I —
Part II —
Item 3. Incorporation of Certain Documents by Reference
Item 4. Description of Securities
Item 5. Interests of Named Experts and Counsel
Item 6. Indemnification of Directors and Officers
Item 7. Exemption from Registration Claimed
Item 8. Exhibits
Item 9. Undertakings
SIGNATURES
EXHIBIT INDEX
EX-4.3 POPULAR FINANCIAL HOLDINGS DEFERRAL PLAN
EX-4.4 POPULAR FINANCIAL HOLDINGS SUPPLEMENTAL EMPLOYEE RETIREMENT PLAN
EX-5 OPINION OF PIETRANTONI MENDEZ & ALVAREZ LLP
EX-23.2 CONSENT OF PRICEWATERHOUSECOOPERS LLP

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Part I —
INFORMATION REQUIRED IN THE SECTION 10(A) 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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Part II —
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference.
     The following documents previously filed with the Securities and Exchange Commission (the “Commission”) by Popular, Inc. (the “Company”) are incorporated by reference in this Registration Statement, except to the extent that such reports and/or documents are “furnished” to the Securities and Exchange Commission under Item 9 of Form 8-K, which are not incorporated by reference in this Registration Statement:
          a) The Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2004 filed with the Commission on March 16, 2005;
          b) The Company’s Quarterly Report of the Company on Form 10-Q for the quarter ended March 31, 2005 filed with the Commission on May 10, 2005;
          c) The Company’s Current Reports on Form 8-K dated as of January 3, 2005, January 18, 2005, January 20, 2005, February 23, 2005, April 15, 2005, April 25, 2005, July 15, 2005, August 3, 2005 and August 17, 2005 filed pursuant to Section 13 of the Securities Exchange Act of 1934 (the “Exchange Act”).
     All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of 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 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 Securities.
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.
          (a) Article ELEVENTH of the Company’s Restated Certificate of Incorporation of provides the following:
               (1) The Company 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 Company) by reason of the fact that he is or was a director, officer, employee or agent of the Company, or is or was serving at the written request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ 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 Company, 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 Company and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful.

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               (2) The Company 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 Company 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 Company, or is or was serving at the written request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees) actually and reasonably incurred by him in 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 Company, 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 Company 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 Company 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 attorneys’ 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 Company 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 Company 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 Company 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 Company 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 Company, or is or was serving at the written request of the Company, 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 Company 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.
          (b) Article 1.02(B)(6) of the Puerto Rico General Corporation Act (the “PR-GCA”) provides that a corporation may include in its certificate of incorporation a provision eliminating or limiting the personal liability of members of its board of directors or governing body for breach of a director’s fiduciary duty of care. However, no such provision may eliminate or limit the liability of a director for breaching his duty of loyalty, failing to act in good faith, engaging in intentional misconduct or knowingly violating a law, paying an unlawful dividend or approving an unlawful stock repurchase or obtaining an improper personal benefit.
          (c) Article 4.08 of the PR-GCA authorizes a Puerto Rico Corporation to indemnify its officers and directors against liabilities arising out of pending or threatened actions, suits or proceedings to which such officers and directors may be made parties by reason of being officers or directors. Such rights of indemnification are not

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exclusive of any other rights to which such officers or directors may be entitled under any by-law, agreement, vote of stockholders or otherwise.
          (d) The Company maintains a directors’ and officers’ liability insurance policy.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
The Exhibits accompanying this Registration Statement are listed on the accompanying Exhibit Index.
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, as amended (the “Securities Act”);
     (ii) To reflect in the prospectus any facts or events arising after the effective date of this 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 this Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective Registration Statement; and
     (iii) To include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information in this Registration Statement;
     provided, however, that paragraphs (a)(1)(i) and (a)(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 Commission by the registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in this 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) 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 Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in this Registration Statement shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(h) Insofar as indemnification for liabilities arising under the Securities Act 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

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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 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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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 the 7th day of October, 2005.
         
    POPULAR, INC.
 
        
 
  By:     /s/ Jorge A. Junquera
 
       
 
  Name:          Jorge A. Junquera
 
  Title:          Senior Executive Vice President and
 
             Chief Financial Officer
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 and Brunilda Santos de Alvarez, 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.

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     Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated on this 7th day of October, 2005.
         
Signature   Title   Date
/s/ Richard L. Carrión
        
         
Richard L. Carrión
  Chairman of the Board, President and   October 7, 2005
 
  Chief Executive Officer    
 
        
/s/ Juan J. Bermúdez
        
         
Juan J. Bermúdez
  Director   October 7, 2005
 
        
/s/ José B. Carrión, Jr.
      October 7, 2005
         
José B. Carrión, Jr.
  Director    
 
        
/s/ María Luisa Ferré
      October 7, 2005
         
María Luisa Ferré
  Director    
 
        
/s/ Manuel Morales, Jr.
      October 7, 2005
         
Manuel Morales, Jr.
  Director    
 
        
/s/ Francisco M. Rexach, Jr.
      October 7, 2005
         
Francisco M. Rexach, Jr.
  Director    
 
        
 
       
         
Frederic V. Salerno
  Director    
 
        
/s/ William J. Teuber, Jr.
      October 7, 2005
  William J. Teuber, Jr.   Director    
 
        
/s/ José R. Vizcarrondo
      October 7, 2005
         
José R. Vizcarrondo
  Director    
 
        
/s/ Jorge A. Junquera
        
         
Jorge A. Junquera
  Senior Executive Vice President and   October 7, 2005
 
  Chief Financial Officer    
 
  (Principal Financial Officer)    
 
        
/s/ Ileana González
        
         
Ileana González
  Senior Vice President and   October 7, 2005
 
  Comptroller    
 
  (Principal Accounting Officer)    

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EXHIBIT INDEX
         
Exhibit       Description
3.1
  —   Composite Articles of Incorporation of the Company, as currently in effect, incorporated by reference to Exhibit 3.1 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2004 filed with the Securities and Exchange Commission on March 16, 2005.
 
        
4.1
  —   By-laws of the Company, incorporated by reference to Exhibit 4.2 to the Company’s Registration Statement on Form S-8 (No. 333-80169) filed with the Securities and Exchange Commission on June 8, 1999.
 
        
4.2
  —   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, 1998 (File No. 000-13818).
 
        
4.3
  —   Popular Financial Holdings Deferral Plan
 
        
4.4
  —   Popular Financial Holdings Supplemental Employee Retirement Plan
 
        
5
  —   Opinion of Pietrantoni Méndez & Alvarez LLP, regarding compliance with ERISA.
 
        
23.1
  —   Consent of Pietrantoni Mendez & Alvarez LLP (included as part of Exhibit 5 above).
 
        
23.2
  —   Consent of PricewaterhouseCoopers LLP.
 
        
24.1
  —   Powers of Attorney (included on pages II-5 through II-6).

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EX-4.3 2 g97418exv4w3.txt EX-4.3 POPULAR FINANCIAL HOLDINGS DEFERRAL PLAN EXHIBIT 4.3 THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING SECURITIES THAT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED POPULAR FINANCIAL HOLDINGS, INC. SUPPLEMENTAL EMPLOYEE RETIREMENT PLAN AMENDED AND RESTATED EFFECTIVE OCTOBER 1, 2005 TABLE OF CONTENTS
PAGE ---- ARTICLE I - PURPOSE.................................................. 1 ARTICLE II - DEFINITIONS............................................. 1 ARTICLE III - ALLOCATION OF DEFERRED COMPENSATION.................... 3 ARTICLE IV - VESTING................................................. 3 ARTICLE V - ENTITLEMENT DEFERRED TO COMPENSATION..................... 4 ARTICLE VI - FUNDING OF DEFERRED COMPENSATION........................ 5 ARTICLE VII - DEATH BENEFIT.......................................... 5 ARTICLE VIII - DESIGNATION OF BENEFICIARIES.......................... 6 ARTICLE IX - ADMINISTRATION.......................................... 6 ARTICLE X - AMENDMENT OR TERMINATION................................. 7 ARTICLE XI - MISCELLANEOUS........................................... 8
i ARTICLE I PURPOSE 1.01 The purpose of this Plan is to provide for payment of Deferred Compensation to a select group of management or highly compensated employees of the Company and its affiliates, or a death benefit for their Beneficiaries. The Deferred Compensation shall be earned by the Employees and accrued by the Company on a defined contribution basis. The Plan is the survivor to the merger of nine supplemental employee retirement plans previously established by the Company's wholly-owned subsidiary, Equity One, Inc. The Company reserves the right to modify, alter or amend the provisions of the Plan in order for benefits accrued prior to the merger of the supplemental employee retirement plans not to be subject to the provisions of Section 409A of the Internal Revenue Code of 1986, as amended. ARTICLE II DEFINITIONS 2.01 "Account" means a bookkeeping reserve account established in the books of the Company for the Employee. 2.02 "Beneficiary" means the beneficiary or beneficiaries designated by the Employee to receive the amounts, if any, payable under the Plan upon his or her death, pursuant to Article VIII, below. 2.03 "Board of Directors" means the Board of Directors of Popular Financial Holdings, Inc. 2.04 "Cause" means any of the following: (a) the willful dereliction by the Employee of his or her duties to the Company; (b) any dishonest, fraudulent or criminal act on the part of the Employee that either (i) occurs in connection with his or her performance of services to the Company, or (ii) adversely affects the reputation of the Company; or (c) the willful failure of the Employee to comply fully with the lawful directives of the Board of Directors of the Company or of any other employee of the Company who has supervisory authority with respect to the Employee. 2.05 "Change of Control" shall be deemed to have occurred if (i) any person (other than Popular, Inc. or any of its direct or indirect wholly-owned subsidiaries or an employee benefit plan sponsored by Popular, Inc. or any of its direct or indirect wholly-owned subsidiaries) acquires direct or indirect ownership of 50% or more of the combined voting power of the then outstanding securities of the Company entitled to vote as a result of a tender or exchange offer, open market purchases, privately negotiated purchases or otherwise or (ii) the shareholders of the Company approve (A) any consolidation or merger of the Company in which the Company is not the surviving corporation (other than a merger of the Company with a direct or indirect wholly owned subsidiary of Popular, Inc.) or (B) any sale, lease or exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of the Company to an entity which is not a wholly-owned subsidiary of Popular, Inc. or any of its wholly-owned subsidiaries. 2.06 "Company" means Popular Financial Holdings, Inc., a Delaware corporation. 2.07 "Death Benefit" the benefit payable to a Beneficiary upon the death of an Employee and designated by the Board of Directors at the time the Employee is designated for participation in the Plan, or as subsequently revised. 2.08 "Deferred Compensation" means the supplemental compensation and earnings thereon credited to the Account. 2.09 "Effective Date" means October 1, 2005. 2.10 "Employee" means an employee of the Employer designated by the Board of Directors for participation in the Plan. 2.11 "Employer" means the Company or any subsidiary entity controlled by the Company. 2.12 "Plan" means this Popular Financial Holdings, Inc. Supplemental Employee Retirement Plan, as the same may be amended from time to time. 2.13 "Plan Year" means the 12-month period beginning on June 1, 2003 and ending on May 31, 2004 and each 12-month period beginning on each subsequent June 1. 2.14 "Total and Permanent Disability" shall mean (i) the inability of the Employee to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (ii) receipt by the Employee of income replacement benefits for a period of not less than 3 months under an accident and health plan covering employees of the Employer, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months. 2.15 "Trustee" means the individual or corporation appointed by the Company to serve as trustee of a trust established by the Company pursuant to Article VI, below. 2.16 "Valuation Date" means the last day of each calendar month. 2.17 "Year of Service" means the completion of 12 months of full-time service with the Employer by the Employee, excluding service prior to the date in which an employee first became a participant in the Plan or, if earlier, the supplemental employee retirement plan maintained by Equity One, Inc for the benefit of the employee and which was merged with and into the Plan. 2 ARTICLE III ALLOCATION OF DEFERRED COMPENSATION 3.01 For each Plan Year during which the Employee is employed by the Employer, the Company shall credit Deferred Compensation to the Account in the amount designated by the Board of Directors at the time the Employee is designated for participation in the Plan, or as subsequently revised, as of the first day of such Plan Year. In its discretion, the Company may credit additional Deferred Compensation to an Employee's Account for any one or more Plan Years. Under no circumstances, however, shall the Employee be entitled to allocations of Deferred Compensation to his or her Account if he or she ceases to be a member of the Company's Leadership Council (or successor organization). 3.02 As of each Valuation Date, the Company shall credit each Employee's Account with earnings (or losses) on the balance of the Account as of the immediately preceding Valuation Date in accordance with the earnings crediting options selected by the Employee from time to time. The Employee may allocate his or her Account among the earnings crediting options in whole percentages of not less than five percent (5%). The rate of return, positive or negative, credited under each earnings crediting option, is based upon the actual performance of the registered mutual funds or such other investment funds as the Company may designate from time to time. 3.03 Notwithstanding Section 3.02, above, the Company reserves the right, on a prospective basis, to add or delete earnings crediting options, in the Company's sole discretion; provided, however, that any such change in the earnings crediting options available hereunder will only affect the rate at which earnings will be credited to the Employee's Account in the future, and will not affect the value of the existing Account, including any earnings or losses credited hereunder up to the date of such change. 3.04 Notwithstanding that the rates of return credited to each Employee's Account under the earnings crediting options are based on the performance of the investment funds as the Company may designate, the Company shall not be obligated to invest such Account or any portion thereof in such portfolios or any other investment funds. ARTICLE IV VESTING 4.01 All amounts credited to each Employee's Account shall become fully vested and nonforfeitable upon termination of the Plan or in the event that the Employee suffers a Total and Permanent Disability while in the employ of the Employer. In addition, the Employee shall have a nonforfeitable and vested right to the balance of his Account in accordance with the following schedule:
YEARS OF SERVICE VESTED PERCENTAGE - ---------------- ----------------- Less than 1 0% 1 20% 2 40%
3 3 60% 4 80% 5 100%
4.02 If, within three (3) years after a Change in Control, the Plan is amended, discontinued, terminated or replaced by another plan ("New Plan") and the benefits provided under the Plan or the New Plan do not have an equivalent economic value to the benefits provided under the Plan before the Change in Control, all amounts credited to each Employee's Account will become fully vested and nonforfeitable. ARTICLE V ENTITLEMENT TO DEFERRED COMPENSATION 5.01 Upon termination of the Employee's employment with the Employer for reasons other than death or Cause, the portion of such Employee's Account which is vested and non-forfeitable, determined in accordance with Article IV, above, shall be paid to the Employee in one of the following optional forms of payment, as he or she may elect in writing, subject to the approval of the Company: (a) Annual installments payable for a number of whole years specified by the Employee; or (b) A lump sum payment in cash or in shares of common stock of Popular, Inc., at the option of the Employee. Such election must be made at least one year prior to the Employee' s termination of service or Total and Permanent Disability, as the case may be, and may not be changed or revoked. Payment shall commence as soon as practicable following the Employee's termination of employment, or Total and Permanent Disability, but no more than 60 days thereafter; provided, however, that a timely election made pursuant to the preceding sentence may include an election by the Employee to defer commencement of payment until a date certain following his or her termination of employment, or Total and Permanent Disability, subject to the approval of the Company. If an election under this paragraph is not timely made, or is not approved by the Company, payment shall be made in the form of option (b). The approval or disapproval of the Employee's election of the form and timing of payment shall be within the sole discretion of the Company. 5.02 Lump sum payments made hereunder shall be based on the value of the Employee's Account as of the Valuation Date immediately preceding the date of payment. If payments are to be made in annual installments, the amount of the first installment shall be equal to the balance of the Employee's Account as of the Valuation Date preceding the date of payment of the first installment divided by the number of whole years selected as the payment period by the Employee. The Employee's Account shall continue to be credited with earnings or losses in accordance with the methodology set forth in Section 3.02, above. The amount of an installment subsequent to the first installment shall be equal to the balance of the Employee's 4 Account as of the Valuation Date preceding the date of payment of that installment, divided by the number of remaining whole years within the payment period. 5.03 If the Employee's employment is terminated for Cause, or if the Employee dies while employed by the Company, no amounts shall be payable pursuant to this Article V. 5.04 If the Employee becomes entitled to receive the vested balance of his or her Account pursuant to Section 5.01, above, or if his or her employment is terminated for Cause, no amount shall become payable to the Employee's Beneficiary thereafter pursuant to Section 7.02, below. ARTICLE VI FUNDING OF DEFERRED COMPENSATION 6.01 Except as provided in Section 6.02 and 6.03, below, and by the terms of any trust established thereunder, neither the Employee nor the Beneficiary shall have any right, title, or interest in or to any investments or insurance policies which the Company may obtain to aid it in meeting its obligations hereunder. Such investments or policies, whether held in trust or otherwise, shall be unrestricted corporate assets and shall be subject to the claims of creditors of the Company. 6.02 The Company may, in its discretion, establish a trust for the purpose of funding the Deferred Compensation provided hereunder, or its obligations under this Plan. Such trust shall include such terms, restrictions and limitations as necessary to ensure that it will be treated as a "grantor trust" within the meaning of subpart E, part 1, subchapter J, chapter 1, subtitle A of the Internal Revenue Code of 1986, as amended, with respect to the Company. 6.03 If, within three (3) years after a Change in Control, the Plan is amended, discontinued, terminated or replaced by a New Plan and the benefits provided under the Plan or New Plan do not have an equivalent economic value to the benefits provided under the Plan before the Change in Control, the Company will establish a trust for the purpose of funding the Deferred Compensation provided hereunder, or its obligations under the Plan. Such trust shall include such terms, restrictions and limitations as necessary to ensure that it will be treated as a "grantor trust" within the meaning of subpart E, part 1, subchapter J, chapter 1, subtitle A of the Internal Revenue Code of 1986, as amended, with respect to the Company. ARTICLE VII DEATH BENEFIT 7.01 The Company shall make all reasonable attempts to secure a term life insurance policy on the life of the Employee that will pay the Death Benefit. The Company shall be the owner of such policy. 7.02 In the event of the Employee's death prior to his or her termination of employment with the Company and prior to becoming entitled to receive payment of the vested balance of his or her Account pursuant to Section 5.01, above, his or her Beneficiary shall receive the proceeds of the term life insurance policy described in Section 7.01, above, plus the 5 excess (if any) of the vested percentage of the Employee's Account determined in accordance with Article IV, above, over the amount of such life insurance proceeds; provided, however, in the event that the life insurance proceeds are not payable under the policy for any reason, the amount payable to the Employee's Beneficiary shall be limited to the vested percentage of the Employee's Account, determined in Accordance with Article IV, above. The life insurance proceeds payable hereunder shall be paid in accordance with the terms of the policy. The portion of the Employee's vested Account (if any) payable to the Beneficiary shall be paid in a lump sum or in shares of common stock of Popular, Inc., to the extent of amounts deemed invested in such shares as soon as practicable following the Employee's death. ARTICLE VIII DESIGNATION OF BENEFICIARIES 8.01 The Employee shall file with the Company and the insurance carrier a written designation of one or more natural or juridical persons or trusts as Beneficiary to receive the amount, if any, payable under the Plan upon his death. The Employee may, from time to time, revoke or change his Beneficiary designation by filing a new designation with the Company and the issuer of the insurance policy described in Section 7.01, above. The last such designation received by the Company and the issuer of the insurance policy shall be controlling, provided, however, that no designation, change or revocation thereof, shall be effective unless received by the Company and the insurance carrier prior to the Employee's death. Upon termination of the Employee's employment with the Company for any reason (other than death), the Employee's Beneficiary designation with respect to the life insurance policy described in Section 7.01, above, shall be null and void, and the sole Beneficiary with respect to such policy shall be the Company. 8.02 If no such Beneficiary designation is in effect at the time of the Employee's death, or if no designated Beneficiary survives the Employee, the payment of the amount, if any, payable under the Plan upon his or her death shall be made to his or her surviving spouse; if no surviving spouse, to the Employee's surviving children equally; if no surviving children, to the Employee's surviving grandchildren equally; if no surviving grandchildren, to the Employee's estate. ARTICLE IX ADMINISTRATION 9.01 The Company shall have the discretionary authority to determine eligibility for benefits under this Plan and to construe, interpret and administer the Plan. 9.02 The Employee or, in the event of the Employee's death, the Employee's primary Beneficiary or, if applicable, the Employee's contingent Beneficiary, may file a written claim for payment hereunder with the Company. In the event of a denial of any payment due to or requested by the Employee or beneficiary (the "claimant"), the Company will give the claimant written notification containing specific reasons for the denial. The written notification will contain specific reference to the pertinent provisions of this Agreement on which the denial of 6 the claim is based. In addition, it will contain a description of any other material or information necessary for the claimant to perfect a claim, and an explanation of why such material or information is necessary. The notification will provide further appropriate information as to the steps to be taken if the claimant wishes to submit the claim for review and the time limits applicable thereto, and a statement of the claimant's right to bring a civil action under Section 502(a) of the Employee Retirement Income Security Act of 1974, as amended. This written notification will be given to a claimant within ninety (90) days after receipt of the claim by the Company unless special circumstances require an extension of time for processing the claim, in which case the Company shall provide written notice of the extension to the claimant and the reasons therefore, and the date by which the Company expects to make its determination with respect to the claim. In no event shall such extension exceed 90 days. 9.03 In the event of a denial of a claim for benefits, the claimant or a duly authorized representative will be permitted to submit issues and comments in writing to the Company and to submit documents, records and other information relating to the claim for benefits. The claimant or a duly authorized representative shall also be provided, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claimant's claim for benefits. In addition, the claimant or a duly authorized representative may make a written request for a full and fair review of the claim and its denial by the Company that takes into account all comments, documents, records and other information submitted by the claimant, without regard to whether such information was submitted or considered in the initial benefits determination; provided, however, that such written request is received by the Company (or its delegate) within sixty (60) days after receipt by the claimant of written notification of the denial. The sixty (60) day requirement may be waived by the Company in appropriate cases. 9.04 A decision on review of a claim for benefits will be rendered by the Company within sixty (60) days after the receipt of the request. Under special circumstances, an extension (up to an additional sixty (60) days) can be granted for processing the decision. Notice of this extension must be provided in writing to the claimant prior to the expiration of the initial sixty-day period. In no event will the decision be rendered more than one hundred twenty (120) days after the initial request for review. Any decision by the Company will be furnished to the claimant in writing and will set forth the specific reasons for the decision and the specific provisions on which the decision is based. The claimant or a duly authorized representative shall also be provided, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claimant's claim for benefits. ARTICLE X AMENDMENT OR TERMINATION 10.01 The Company reserves the right at any time to amend or terminate the Plan in whole or in part, and for any reason and without the consent of the Employee or Beneficiary, provided that no such amendment may adversely affect the rights of the Employee or a Beneficiary with respect to amounts credited to the Account prior to such amendment. 10.02 Subject to Section 10.01, any amendment of any provision of the Plan may be made retroactively. 7 10.03 Upon termination of the Plan, each Employee (or his or her Beneficiary, as the case may be) shall be paid the balance of his/her Account, in a single lump sum, based on the value of the Account immediately preceding the date of payment. ARTICLE XI MISCELLANEOUS 11.01 Nothing contained in the Plan shall give the Employee the right to be retained in the employment of the Employer or affect the right of the Employer to dismiss the Employee. The adoption of the Plan shall not constitute a contract between the Employer and Employee. 11.02 If the Company shall find that any person to whom any amount is payable under the Plan is unable to care for his or her affairs because of illness or accident, or is a minor, the Company may direct that any amount to which such person is entitled be paid to his or her spouse, a child, a relative, an institution maintaining or having custody of such person, or any other person deemed by the Company to be a proper recipient on behalf of such person otherwise entitled to payment. Any such payment shall be a complete discharge of the liability of the Plan and the Employer therefore. 11.03 Except insofar as may otherwise be required by law, no amount payable at any time under the Plan shall be subject in any manner to alienation by anticipation, sale, transfer, assignment, bankruptcy, pledge, attachment, charge, encumbrance or garnishment by creditors of the Employee or the Beneficiary nor be subject in any manner to the debts or liabilities of any person, and any attempt to do so alienate or subject any such amount, whether presently or thereafter payable, shall be void. 11.04 It is the intention of the Company that the Plan shall be unfunded for Federal income tax purposes and for purposes of the Employee Retirement Income Security Act of 1974, as amended. 11.05 Any words herein used in the masculine or neuter shall read and by construed in the feminine, masculine or neuter where they would so apply. Words in the singular shall be read and construed as though used in the plural in all cases where they would so apply. 11.06 All rights under this Plan shall be governed by and construed in accordance with the laws of New Jersey, except to the extent such laws are superseded by the laws of the United States. IN WITNESS WHEREOF, the Company has caused this Plan to be executed by its authorized officers this 21st day of September 2005. ATTEST: POPULAR FINANCIAL HOLDINGS, INC. 8 By: _______________________________ /s/ Cameron E. Williams ----------------------- Cameron E. Williams President & CEO ___________________________________ Witness 9 EX-4.4 3 g97418exv4w4.txt EX-4.4 POPULAR FINANCIAL HOLDINGS SUPPLEMENTAL EMPLOYEE RETIREMENT PLAN EXHIBIT 4.4 [EBS LOGO] THE EXECUTIVE NONQUALIFIED EXCESS PLAN. THE EXECUTIVE NONQUALIFIED "EXCESS" PLAN(TM) PLAN DOCUMENT [EBS LOGO] (C) 2003 Executive Benefit Services, Inc. EXECUTIVE 4140 ParkLake Avenue, Suite 500 BENEFIT Raleigh, NC 27612 SERVICES [EBS LOGO] THE EXECUTIVE NONQUALIFIED EXCESS PLAN. THE EXECUTIVE NONQUALIFIED "EXCESS" PLAN(TM) TABLE OF CONTENTS
Page ---- Section 1. Purpose:...................................................... 1 Section 2. Definitions:.................................................. 1 2.1 "Accrued Benefit" ............................................ 1 2.2 "Active Participant" ......................................... 1 2.3 "Adoption Agreement" ......................................... 2 2.4 "Beneficiary" ................................................ 2 2.5 "Board" ...................................................... 2 2.6 "Committee" .................................................. 2 2.7 "Compensation" ............................................... 2 2.8 "Crediting Date" ............................................. 2 2.9 "Deferred Compensation Account" .............................. 2 2.10 "Disability" ................................................. 2 2.11 "Education Account" .......................................... 3 2.12 "Education Subaccount" ....................................... 3 2.13 "Education Recipient" ........................................ 3 2.14 "Effective Date" ............................................. 3 2.15 "Employee" ................................................... 3 2.16 "Employer" ................................................... 4 2.17 "Employer Credits" ........................................... 4 2.18 "Independent Contractor" ..................................... 4 2.19 "In-Service Account" ......................................... 4 2.20 "Normal Retirement Date" ..................................... 4 2.21 "Participant" ................................................ 5 2.22 "Participating Employer" ..................................... 5 2.23 "Plan" ....................................................... 5 2.24 "Plan Administrator" ......................................... 5 2.25 "Plan Year" .................................................. 5 2.26 "Qualifying Distribution Event" .............................. 5 2.27 "Retire" or "Retirement" ..................................... 5 2.28 "Retirement Account" ......................................... 5 2.29 "Salary Deferral Agreement" .................................. 6 2.30 "Salary Deferral Credits"..................................... 6 2.31 "Service" .................................................... 6 2.32 "Sponsor" .................................................... 6 2.33 "Spouse" or "Surviving Spouse"................................ 6 2.34 "Trust" ...................................................... 6 2.35 "Trustee" .................................................... 6 2.36 "Years of Service" ........................................... 6
i Section 3. Participation:................................................ 7 Section 4. Credits to Deferred Compensation Account:..................... 7 4.1 Salary Deferral Credits....................................... 7 4.2 Employer Credits.............................................. 8 4.3 Deferred Compensation Account................................. 8 Section 5. Qualifying Distribution Events:............................... 8 5.1 Death of a Participant........................................ 8 5.2 Disability of a Participant................................... 9 5.3 Termination of Service........................................ 9 5.4 Retirement.................................................... 9 Section 6. Distributions While in Service:............................... 9 6.1 In-Service Withdrawals........................................ 9 6.2 Financial Hardship Withdrawals................................ 10 6.3 "Haircut" Withdrawals......................................... 11 6.4 Education Withdrawals......................................... 11 Section 7. Qualifying Distribution Events Payment Options:............... 12 7.1 Payment Options............................................... 12 7.2 Prepayment.................................................... 13 Section 8. Vesting:...................................................... 13 Section 9. Accounts; Deemed Investment; Adjustments to Account:.......... 14 9.1 Accounts...................................................... 14 9.2 Deemed Investments............................................ 14 9.3 Adjustments to Deferred Compensation Account.................. 14 Section 10. Benefit Exchange:............................................. 15 Section 11. Transfer to Qualified Plan:................................... 15 11.1 Maximize Qualified Plan Deferrals............................. 15 11.2 Maximize Qualified Plan Match................................. 16 11.3 Transfer Deferral to Qualified Plan........................... 16 11.4 Credit Match to Qualified Plan................................ 16 11.5 Compliance with Qualified Plan................................ 17 Section 12. Administration by Committee:.................................. 17 12.1 Membership of Committee....................................... 17 12.2 Committee Officers; Subcommittee.............................. 17 12.3 Committee Meetings............................................ 17 12.4 Transaction of Business....................................... 18 12.5 Committee Records............................................. 18 12.6 Establishment of Rules........................................ 18 12.7 Conflicts of Interest......................................... 18
ii 12.8 Correction of Errors.......................................... 18 12.9 Authority to Interpret Plan................................... 19 12.10 Third Party Advisors.......................................... 19 12.11 Compensation of Members....................................... 19 12.12 Expense Reimbursement......................................... 19 12.13 Indemnification............................................... 19 Section 13. Contractual Liability; Trust:................................. 20 13.1 Contractual Liability......................................... 20 13.2 Trust......................................................... 20 Section 14. Allocation of Responsibilities:............................... 21 14.1 Board......................................................... 21 14.2 Committee..................................................... 21 14.3 Plan Administrator............................................ 21 Section 15. Benefits Not Assignable; Facility of Payments:................ 21 15.1 Benefits not Assignable....................................... 21 15.2 Payments to Minors and Others................................. 22 Section 16. Beneficiary:.................................................. 22 Section 17. Amendment and Termination of Plan:............................ 23 Section 18. Communication to Participants:................................ 23 Section 19. Claims Procedure:............................................. 24 19.1 Filing of a Claim for Benefits................................ 24 19.2 Notification to Claimant of Decision.......................... 24 19.3 Procedure for Review.......................................... 25 19.4 Decision on Review............................................ 25 19.5 Action by Authorized Representative of Claimant............... 25 Section 20. Miscellaneous Provisions:..................................... 26 20.1 Set off....................................................... 26 20.2 Notices....................................................... 26 20.3 Lost Distributees............................................. 26 20.4 Reliance on Data.............................................. 27 20.5 Receipt and Release for Payments.............................. 27 20.6 Headings...................................................... 27 20.7 Continuation of Employment.................................... 27 20.8 Merger or Consolidation; Assumption of Plan................... 28 20.9 Construction.................................................. 28
iii [EBS LOGO] THE EXECUTIVE NONQUALIFIED EXCESS PLAN. THE EXECUTIVE NONQUALIFIED "EXCESS" PLAN(TM) SECTION 1. PURPOSE: By execution of the Adoption Agreement, the Employer has adopted the Plan set forth herein to provide a means by which certain management Employees and Independent Contractors of the Employer may elect to defer receipt of current Compensation from the Employer in order to provide Retirement and other benefits on behalf of such Employees and Independent Contractors of the Employer, as selected in the Adoption Agreement. The Plan is not intended to be a tax-qualified retirement plan under Section 401(a) of the Internal Revenue Code (the "Code"). The Plan is intended to be an unfunded plan maintained primarily for the purpose of providing deferred compensation benefits for a select group of management or highly compensated employees under Sections 201(2), 301(a)(3) and 401(a)(1) of the Employee Retirement Income Security Act of 1974 and independent contractors. SECTION 2. DEFINITIONS: As used in the Plan, including this Section 2, references to one gender shall include the other and, unless otherwise indicated by the context: 2.1 "ACCRUED BENEFIT" means, with respect to each Participant, the balance credited to his Deferred Compensation Account. 2.2 "ACTIVE PARTICIPANT" means, with respect to any day or date, a Participant who is in Service on such day or date; provided, that a Participant shall cease to be an Active Participant immediately upon a determination by the Committee that the Participant has ceased to be an Employee or Independent Contractor, or that the Participant no longer meets the eligibility requirements of the Plan. 2.3 "ADOPTION AGREEMENT" means the written agreement pursuant to which the Employer adopts the Plan. The Adoption Agreement is a part of the Plan as applied to the Employer. 2.4 "BENEFICIARY" means the person, persons, entity or entities designated or determined pursuant to the provisions of Section 16 of the Plan. 2.5 "BOARD" means the Board of Directors of the Employer, if the Employer is a corporation. If the Employer is not a corporation, "Board" shall mean the Employer. 2.6 "COMMITTEE" means the administrative committee provided for in Section 12. 2.7 "COMPENSATION" shall have the meaning designated in the Adoption Agreement. 2.8 "CREDITING DATE" means the date designated in the Adoption Agreement for crediting the amount of any Salary Deferral Credits to the Deferred Compensation Account of a Participant. Employer Credits may be credited to the Deferred Compensation Account of a Participant on any day that securities are traded on a national securities exchange. 2.9 "DEFERRED COMPENSATION ACCOUNT" means the sum of the amounts credited to the Retirement Account, the In-Service Account and the Education Account of each Participant, as applicable. The Deferred Compensation Account of each Participant shall be adjusted as provided in Section 9. 2.10 "DISABILITY" means disability as defined in the Adoption Agreement. 2 2.11 "EDUCATION ACCOUNT" means a separate account to be kept for each Participant that can be divided into one or more Education Subaccounts as described in Section 6.4. The Education Account shall be established, adjusted for payments, credited with Salary Deferral Credits, and credited or debited for deemed investment gains or losses in the same manner and at the same time as such adjustments are made to the Deferred Compensation Account under Section 9 and in accordance with the rules and elections in effect under Section 9. 2.12 "EDUCATION SUBACCOUNT" means the subaccount of the Education Account which is maintained with respect to an Education Recipient. If the Participant does not designate more than one Education Recipient, the Education Account shall be the Education Subaccount with respect to such Education Recipient. 2.13 "EDUCATION RECIPIENT" means the individual designated by the Participant in the Salary Deferral Agreement with respect to whom the Participant will create an Education Subaccount. 2.14 "EFFECTIVE DATE" shall be the date designated in the Adoption Agreement as of which the Plan first becomes effective. 2.15 "EMPLOYEE" means an individual in the Service of the Employer if the relationship between the individual and the Employer is the legal relationship of employer and employee and if the individual is a highly compensated or management employee of the Employer. An individual shall cease to be an Employee upon the Employee's termination of Service. 3 2.16 "EMPLOYER" means the Employer identified in the Adoption Agreement, and any Participating Employer which adopts this Plan. The Employer may be a corporation, a limited liability company, a partnership or sole proprietorship. All references herein to the Employer shall be applied separately to each such Employer as if the Plan were solely the Plan of that Employer. 2.17 "EMPLOYER CREDITS" means the amounts credited to the Participant's Retirement Account by the Employer pursuant to the provisions of Section 4.2. 2.18 "INDEPENDENT CONTRACTOR" means an individual in the Service of the Employer if the relationship between the individual and the Employer is not the legal relationship of employer and employee. An individual shall cease to be an Independent Contractor upon the termination of the Independent Contractor's Service. An Independent Contractor shall include a director of the Employer who is not an Employee. 2.19 "IN-SERVICE ACCOUNT" means a separate account to be kept for each Participant, as described in Section 6.1. The In-Service Account shall be established, adjusted for payments, credited with Salary Deferral Credits, and credited or debited for deemed investment gains or losses in the same manner and at the same time as such adjustments are made to the Deferred Compensation Account under Section 9 and in accordance with the rules and elections in effect under Section 9. 2.20 "NORMAL RETIREMENT DATE" of a Participant is designated in the Adoption Agreement. The "Retirement Date" of a Participant means the date the Participant attains his Retirement Age. 4 2.21 "PARTICIPANT" means with respect to any Plan Year an Employee or Independent Contractor who has been designated by the Committee as a Participant and who has entered the Plan or who has an Accrued Benefit under the Plan. 2.22 "PARTICIPATING EMPLOYER" means any trade or business (whether or not incorporated) which adopts this Plan with the consent of the Employer identified in the Adoption Agreement. 2.23 "PLAN" means The Executive Nonqualified Excess Plan(TM), as herein set out or as duly amended. The name of the Plan as applied to the Employer shall be designated in the Adoption Agreement. 2.24 "PLAN ADMINISTRATOR" means the person designated in the Adoption Agreement. If the Plan Administrator designated in the Adoption Agreement is unable to serve, the Employer shall be the Plan Administrator. 2.25 "PLAN YEAR" means the twelve-month period ending on the last day of the month designated in the Adoption Agreement. 2.26 "QUALIFYING DISTRIBUTION EVENT" means the Participant's Retirement or the termination of Participant's Service with the Employer for any reason, including as a result of his death or Disability, as described in Section 5. 2.27 "RETIRE" OR "RETIREMENT" means Retirement within the meaning of Section 5.4. 2.28 "RETIREMENT ACCOUNT" means a separate account to be kept for each Participant, as described in Section 4.3. The Retirement Account shall be established, adjusted for payments, credited with Salary Deferral Credits and Employer Credits, and credited or debited for deemed investment gains or losses in the same manner and at the same time as such 5 adjustments are made to the Deferred Compensation Account under Section 9 and in accordance with the rules and elections in effect under Section 9. 2.29 "SALARY DEFERRAL AGREEMENT" means a written agreement entered into between a Participant and the Employer pursuant to the provisions of Section 4.1 2.30 "SALARY DEFERRAL CREDITS" means the amounts credited to the Participant's Deferred Compensation Account by the Employer pursuant to the provisions of Section 4.1. 2.31 "SERVICE" means employment by the Employer as an Employee. If the Participant is an Independent Contractor, "Service" shall mean the period during which the contractual relationship exists between the Employer and the Participant. 2.32 "SPONSOR" means Executive Benefit Services, Inc. 2.33 "SPOUSE" or "SURVIVING SPOUSE" means, except as otherwise provided in the Plan, the legally married spouse or surviving spouse of a Participant. 2.34 "TRUST" means the trust fund established pursuant to Section 13.2, if designated by the Employer in the Adoption Agreement. 2.35 "TRUSTEE" means the trustee, if any, named in the agreement establishing the Trust and such successor or additional trustee as may be named pursuant to the terms of the agreement establishing the Trust. 2.36 "YEARS OF SERVICE" means each Plan Year of Service completed by the Participant. For vesting purposes, Years of Service shall be calculated from the date designated in the Adoption Agreement. 6 SECTION 3. PARTICIPATION: The Committee in its discretion shall designate each Employee or Independent Contractor who is eligible to participate in the Plan. An Employee or Independent Contractor designated by the Committee as a Participant who has not otherwise entered the Plan shall enter the Plan and become a Participant as of the date determined by the Committee. A Participant who separates from Service with the Employer and who later returns to Service will not be an Active Participant under the Plan except upon satisfaction of such terms and conditions as the Committee shall establish upon the Participant's return to Service, whether or not the Participant shall have an Accrued Benefit remaining under the Plan on the date of his return to Service. SECTION 4. CREDITS TO DEFERRED COMPENSATION ACCOUNT: 4.1 SALARY DEFERRAL CREDITS. To the extent provided in the Adoption Agreement, each Active Participant may elect, by entering into a Salary Deferral Agreement with the Employer, to defer his Compensation from the Employer by a dollar amount or percentage specified in the Salary Deferral Agreement. The amount of the Participant's Salary Deferral Credit shall be credited by the Employer to the Deferred Compensation Account maintained for the Participant pursuant to Section 9. The following special provisions shall apply with respect to the Salary Deferral Credits of a Participant: 4.1.1 The Employer shall credit to the Participant's Deferred Compensation Account on each Crediting Date an amount equal to the total Salary Deferral Credit for the period ending on such Crediting Date. 4.1.2 An election pursuant to Section 4.1 shall be made by the Participant by executing and delivering a Salary Deferral Agreement to the Committee. The Salary Deferral Agreement shall become effective with respect to such Participant as of the first full payroll period commencing on or immediately following the first day of the Plan Year which occurs after the date such Salary Deferral Agreement is received by the Committee; provided, that a Participant who first becomes a Participant in the Plan during a Plan Year may enter into a Salary Deferral Agreement to be effective as of the first payroll period next following the date he enters the Plan. A Participant's election shall continue 7 in effect, unless earlier modified by the Participant, until the Service of the Participant is terminated, or, if earlier, until the Participant ceases to be an Active Participant under the Plan. 4.1.3 A Participant may unilaterally modify a Salary Deferral Agreement (either to increase or decrease the portion of his future Compensation which is subject to salary deferral within the percentage limits set forth in Section 4.1 of the Adoption Agreement) by providing a written modification of the Salary Deferral Agreement to the Employer. The modification shall become effective as of the first full payroll period commencing on or immediately following the first day of the Plan Year which occurs after the date such written modification is received by the Committee. The Participant may terminate the Salary Deferral Agreement effective as of the date designated in the Adoption Agreement. 4.1.4 The Committee may from time to time establish policies or rules governing the manner in which Salary Deferral Credits may be made. 4.2 EMPLOYER CREDITS. If designated by the Employer in the Adoption Agreement, the Employer shall cause the Committee to credit to the Deferred Compensation Account of each Active Participant an Employer Credit as determined in accordance with the Adoption Agreement. 4.3 DEFERRED COMPENSATION ACCOUNT. Unless otherwise designated by the Participant in the Salary Deferral Agreement, all Salary Deferral Credits made pursuant to Section 4.1 shall be credited to the Retirement Account of the Participant. All Employer Credits made pursuant to Section 4.2 shall be made to the Retirement Account of the Participant. The Retirement Account is a part of the Deferred Compensation Account of a Participant and shall be distributed upon a Qualifying Distribution Event. SECTION 5. QUALIFYING DISTRIBUTION EVENTS: 5.1 DEATH OF A PARTICIPANT. If a Participant dies while in Service, the Employer shall pay a benefit to the Participant's Beneficiary in the amount designated in the Adoption Agreement. Payment of such benefit shall be made by the Employer pursuant to Section 7. If a Participant dies following his Retirement or termination of Service for any 8 reason, including Disability, and before all payments to him under the Plan have been made, the balance of the Participant's vested Accrued Benefit shall be paid by the Employer to the Participant's Beneficiary pursuant to Section 7, and such balance shall be determined as of the commencement date of the payments. 5.2 DISABILITY OF A PARTICIPANT. If a Participant suffers a Disability while in Service prior to his Normal Retirement Date, he shall terminate Service with the Employer as of the date of the establishment of his Disability, whereupon he shall commence receiving payment of his vested Accrued Benefit, determined as of the commencement date of the payments. Such benefit shall be paid by the Employer as provided in Section 7. 5.3 TERMINATION OF SERVICE. If the Service of a Participant with the Employer shall be terminated for any reason other than Retirement, Disability or death, his vested Accrued Benefit shall be paid to him by the Employer as provided in Section 7, and such Accrued Benefit shall be determined as of the commencement date of the payments. If a Participant's Accrued Benefit is not fully vested at his termination of employment, he shall forfeit that portion of his Accrued Benefit that is not fully vested. If he subsequently returns to Service with the Employer, he shall be treated as a new Participant for purposes of determining the vested portion of his Accrued Benefit. 5.4 RETIREMENT. A Participant who is in Service on or after his Normal Retirement Date shall be eligible to Retire and commence receiving payment of his Accrued Benefit. Payment of such benefit shall be made by the Employer pursuant to Section 7. SECTION 6. DISTRIBUTIONS WHILE IN SERVICE: 6.1 IN-SERVICE WITHDRAWALS. If the Employer designates in the Adoption Agreement that in-service withdrawals are permitted under the Plan, a Participant may elect in the Salary Deferral Agreement to withdraw a designated amount from his Deferred 9 Compensation Account at the specified time or times designated by the Participant in the Salary Deferral Agreement, and the Participant's In-Service Account shall be credited with the amount designated for in-service withdrawals. The following special provisions shall apply with respect to the In-Service Account: 6.1.1 Notwithstanding any provision in this Section 6 to the contrary, if Participant incurs a Qualifying Distribution Event prior to the date on which the entire balance of his In-Service Account has been distributed to him, then the balance in the In-Service Account on the date of the Qualifying Distribution Event shall be distributed to him in the same manner and at the same time as his Deferred Compensation Account is distributed to him under Section 7 and in accordance with the rules and elections in effect under Section 7. 6.1.2 If permitted by the Employer in the Adoption Agreement, a Participant may defer the date of any withdrawal from the In-Service Account by giving notice of the new withdrawal date to the Committee within the time limits specified in the Adoption Agreement. 6.2 FINANCIAL HARDSHIP WITHDRAWALS. If the Employer designates in the Adoption Agreement that financial hardship withdrawals are permitted under the Plan, a distribution of the Deferred Compensation Account may be made to a Participant on account of financial hardship, subject to the following provisions: 6.2.1 A Participant may, at any time prior to his Retirement or termination of Service for any reason, including Disability, make application to the Committee to receive a distribution in a lump sum of all or a portion of the vested Accrued Benefit credited to his Deferred Compensation Account (determined as of the date the distribution, if any, is made under this Section 6.2) because of an unforeseeable emergency that results in severe financial hardship to the Participant. A distribution because of an unforeseeable emergency shall not exceed the amount required to meet the immediate financial need created by the unforeseeable emergency and not otherwise reasonably available from other resources of the Participant. Examples of an unforeseeable emergency shall include but shall not be limited to those financial needs arising on account of a sudden or unexpected illness or accident of the Participant or of a dependent of the Participant, loss of the Participant's property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. 10 6.2.2 The Participant's request for a distribution on account of financial hardship must be made in writing to the Committee. The request must specify the nature of the financial hardship, the total amount requested to be distributed from the Deferred Compensation Account, and the total amount of the actual expense incurred or to be incurred on account of financial hardship. 6.2.3 If a distribution under this Section 6.2 is approved by the Committee, such distribution will be made as soon as practicable following the date it is approved. The processing of the request shall be completed as soon as practicable from the date on which the Committee receives the properly completed written request for a distribution on account of a financial hardship. If a Participant's termination of Service occurs after a request is approved in accordance with this Section 6.2.3, but prior to distribution of the full amount approved, the approval of the request shall be automatically null and void and the benefits which the Participant is entitled to receive under the Plan shall be distributed in accordance with the applicable distribution provisions of the Plan. Only one financial hardship distribution shall be made within any Plan Year. 6.2.4 The Committee may from time to time adopt additional policies or rules governing the manner in which such distributions may be made so that the Plan may be conveniently administered. 6.3 "HAIRCUT" WITHDRAWALS. If the Employer designates in the Adoption Agreement that "haircut" withdrawals are permitted under the Plan, a Participant in Service may at his option make one or more withdrawals from his Deferred Compensation Account by written request to the Committee; provided, however, that a Participant who requests a withdrawal under this Section 6.3 shall incur a penalty (the "haircut") equal to a percentage (not less than 10%), as designated by the Employer in the Adoption Agreement, of the amount withdrawn, and this penalty shall be forfeited from the Deferred Compensation Account of the Participant notwithstanding the provisions of Section 8. 6.4 EDUCATION WITHDRAWALS. If the Employer designates in the Adoption Agreement that education withdrawals are permitted under the Plan, a Participant may elect in the Salary Deferral Agreement for a designated percentage or dollar amount of the Salary Deferral Credits to be credited to the Education Account of the Education Recipient designated by the Participant. If the Participant designates more than one Education Recipient, the 11 Education Account shall be divided into Education Subaccounts for each Education Recipient, and the Participant may designate in the Salary Deferral Agreement the percentage or dollar amount of each Salary Deferral Credit to be credited to each Education Subaccount. In the absence of a clear designation, all credits made to the Education Account shall be equally allocated to each Education Subaccount. As soon as practicable after the date designated by the Participant in the Salary Deferral Agreement, the Employer shall pay to the Participant the balance in the Education Subaccount with respect to such Education Recipient in the manner designated by the Participant in the Salary Deferral Agreement and permitted by the Employer in the Adoption Agreement. The following special provisions shall apply with respect to the Education Account: 6.4.1 Notwithstanding any provision in this Section 6 to the contrary, if a Participant incurs a Qualifying Distribution Event prior to the date on which the entire balance of the Education Account has been distributed to him, then the balance in the Education Account on the date of the Qualifying Distribution Event shall be distributed to him in the same manner and at the same time as his Deferred Compensation Account is distributed to him under Section 7 and in accordance with the rules and elections in effect under Section 7. 6.4.2 If permitted by the Employer in the Adoption Agreement, a Participant may defer the date of any withdrawal from the Education Account by giving notice of the new withdrawal date to the Committee within the time limits specified in the Adoption Agreement. SECTION 7. QUALIFYING DISTRIBUTION EVENTS PAYMENT OPTIONS: 7.1 PAYMENT OPTIONS. The Employer shall designate in the Adoption Agreement the payment options available upon a Qualifying Distribution Event. Upon a Participant's entry into the Plan, the Participant shall elect among these designated payment options the method under which his vested Accrued Benefit or, in the event of his death, any benefit payable as a result, will be distributed; provided, however, that if permitted by the Employer in the Adoption Agreement, a Participant may change the method of payment by 12 giving notice of the new payment method to the Committee within the time limits specified in the Adoption Agreement. In the event the Participant fails to make a valid designation of the payment method, the distribution will be made in a single lump sum payment. Notwithstanding any election made by the Participant, the vested Accrued Benefit of the Participant will be distributed in a single lump sum payment if the amount of such benefit does not exceed the dollar limit specified by the Employer in the Adoption Agreement, if applicable. 7.2 PREPAYMENT. Notwithstanding any other provisions of this Plan, if a Participant or any other person (a "recipient") is entitled to receive payments under the Plan, the Committee in its sole discretion may direct the Employer to prepay all or any part of the payments remaining to be made to or on behalf of the recipient, or to shorten the payment period. The amount of such prepayment shall be in full satisfaction of the Employer's obligations hereunder to the recipient and to all persons claiming under or through the recipient with respect to the payments being prepaid. In the event of a partial prepayment, the Committee shall designate which installments are being prepaid and, if applicable, the accounts of the Participant from which such prepayments shall be debited. The Committee's determinations under this Section 7.2 shall be final and conclusive upon all parties claiming benefits under this Plan. SECTION 8. VESTING: A Participant shall be fully vested in the portion of his Deferred Compensation Account attributable to Salary Deferral Credits, and all income, gains and losses attributable thereto. A Participant shall become fully vested in the portion of his Deferred Compensation Account attributable to Employer Credits, and income, gains and losses attributable thereto, in accordance with the vesting schedule and provisions designated by the Employer in the Adoption Agreement. 13 SECTION 9. ACCOUNTS; DEEMED INVESTMENT; ADJUSTMENTS TO ACCOUNT: 9.1 ACCOUNTS. The Committee shall establish a book reserve account, entitled the "Deferred Compensation Account," on behalf of each Participant. The Committee shall also establish a Retirement Account, In-Service Account and Education Account as a part of the Deferred Compensation Account of each Participant, if applicable. The amount credited to the Deferred Compensation Account shall be adjusted pursuant to the provisions of Section 9.3. 9.2 DEEMED INVESTMENTS. The Deferred Compensation Account of a Participant shall be credited with an investment return determined as if the account were invested in one or more investment funds made available by the Committee. The Participant shall elect the investment funds in which his Deferred Compensation Account shall be deemed to be invested. Such election shall be made in the manner prescribed by the Committee and shall take effect upon the entry of the Participant into the Plan. The investment election of the Participant shall remain in effect until a new election is made by the Participant. In the event the Participant fails for any reason to make an effective election of the investment return to be credited to his account, the investment return shall be determined by the Committee. 9.3 ADJUSTMENTS TO DEFERRED COMPENSATION ACCOUNT. With respect to each Participant who has a Deferred Compensation Account under the Plan, the amount credited to such account shall be adjusted by the following debits and credits, at the times and in the order stated: 9.3.1 The Deferred Compensation Account shall be debited each business day with the total amount of any payments made from such account since the last preceding business day to him or for his benefit. 9.3.2 The Deferred Compensation Account shall be credited on each Crediting Date with the total amount of any Salary Deferral Credits and Employer Credits to such account since the last preceding Crediting Date. 14 9.3.3 The Deferred Compensation Account shall be credited or debited on each day securities are traded on a national stock exchange with the amount of deemed investment gain or loss resulting from the performance of the investment funds elected by the Participant in accordance with Section 9.2. The amount of such deemed investment gain or loss shall be determined by the Committee and such determination shall be final and conclusive upon all concerned. SECTION 10. BENEFIT EXCHANGE: If elected by the Employer in the Adoption Agreement, the Employer and the Participant may enter into an agreement under which the Participant's vested Accrued Benefit may be exchanged for another nonqualified benefit in accordance with rules established by the Committee. SECTION 11. TRANSFER TO QUALIFIED PLAN: If elected by the Employer in the Adoption Agreement and directed by the Participant in the Salary Deferral Agreement, the Employer shall transfer amounts from the Deferred Compensation Account of the Participant to the account of the Participant under a tax-qualified retirement plan maintained by the Employer and identified in the Adoption Agreement (the "Qualified Plan") in accordance with the following procedures: 11.1 MAXIMIZE QUALIFIED PLAN DEFERRALS. As soon as administratively feasible after the end of each Plan Year, the Employer shall determine the amount of Salary Deferral Credits made to the Deferred Compensation Account of the Participant for the Plan Year (excluding the amount of deemed investment gain or loss with respect thereto) which is eligible for transfer to the Qualified Plan. Such amount shall be determined so as to permit the maximum allocation to the account of the Participant under the Qualified Plan for the Plan Year without exceeding the limitations applicable to the Qualified Plan (including by way of illustration and not limitation, the limitations under Sections 402(g) and 401(k)(3) of the Code, and any successors thereto). 15 11.2 MAXIMIZE QUALIFIED PLAN MATCH. As soon as administratively feasible after the end of each Plan Year, the Employer shall determine the amount of any Employer Credits made as a matching amount to the Deferred Compensation Account of the Participant for the Plan Year (excluding the amount of deemed investment gain or loss with respect thereto) which is eligible for transfer to the Qualified Plan. Such amount shall be determined so as to permit the maximum allocation to the account of the Participant under the Qualified Plan for the Plan Year without exceeding the limitations applicable to the Qualified Plan (including by way of illustration and not limitation, the limitation under Section 401(m)(2) of the Code, and any successors thereto). 11.3 TRANSFER DEFERRAL TO QUALIFIED PLAN. No later than two and one-half months following the end of the Plan Year, the Employer shall debit the amount determined under Section 11.1 from the Deferred Compensation Account of the Participant. If the Participant has directed in the Salary Deferral Agreement that such transfer be made, the Employer shall allocate such amount to the account of the Participant under the Qualified Plan. If the Participant has not directed such transfer, the Employer shall distribute such amount from the Deferred Compensation Account to the Participant. 11.4 CREDIT MATCH TO QUALIFIED PLAN. No later than two and one-half months following the end of the Plan Year, the Employer shall debit the amount determined under Section 11.2 from the Deferred Compensation Account of the Participant. If the transfer described in Section 11.3 is made, the Employer shall allocate the amount determined under Section 11.2 to the account of the Participant under the Qualified Plan. If such transfer is not made and the Participant receives a distribution of the amount determined under Section 11.1, the Participant shall forfeit the amount determined under Section 11.2. 16 11.5 COMPLIANCE WITH QUALIFIED PLAN. In its sole discretion, the Employer may make multiple transfers or distributions under this Section 11 during the Plan Year; provided, however, that no transfers shall be made under this Section 11 if precluded by the terms of the Qualified Plan. SECTION 12. ADMINISTRATION BY COMMITTEE: 12.1 MEMBERSHIP OF COMMITTEE. The Committee shall consist of at least three individuals who shall be appointed by the Board to serve at the pleasure of the Board. Any member of the Committee may resign, and his successor, if any, shall be appointed by the Board. The Committee shall be responsible for the general administration and interpretation of the Plan and for carrying out its provisions, except to the extent all or any of such obligations are specifically imposed on the Board. 12.2 COMMITTEE OFFICERS; SUBCOMMITTEE. The members of the Committee may elect Chairman and may elect an acting Chairman. They may also elect a Secretary and may elect an acting Secretary, either of whom may be but need not be a member of the Committee. The Committee may appoint from its membership such subcommittees with such powers as the Committee shall determine, and may authorize one or more of its members or any agent to execute or deliver any instruments or to make any payment on behalf of the Committee. 12.3 COMMITTEE MEETINGS. The Committee shall hold such meetings upon such notice, at such places and at such intervals as it may from time to time determine. Notice of meetings shall not be required if notice is waived in writing by all the members of the Committee at the time in office, or if all such members are present at the meeting. 17 12.4 TRANSACTION OF BUSINESS. A majority of the members of the Committee at the time in office shall constitute a quorum for the transaction of business. All resolutions or other actions taken by the Committee at any meeting shall be by vote of a majority of those present at any such meeting and entitled to vote. Resolutions may be adopted or other action taken without a meeting upon written consent thereto signed by all of the members of the Committee. 12.5 COMMITTEE RECORDS. The Committee shall maintain full and complete records of its deliberations and decisions. The minutes of its proceedings shall be conclusive proof of the facts of the operation of the Plan. 12.6 ESTABLISHMENT OF RULES. Subject to the limitations of the Plan, the Committee may from time to time establish rules or by-laws for the administration of the Plan and the transaction of its business. 12.7 CONFLICTS OF INTEREST. No individual member of the Committee shall have any right to vote or decide upon any matter relating solely to himself or to any of his rights or benefits under the Plan (except that such member may sign unanimous written consent to resolutions adopted or other action taken without a meeting), except relating to the terms of his Salary Deferral Agreement. 12.8 CORRECTION OF ERRORS. The Committee may correct errors and, so far as practicable, may adjust any benefit or credit or payment accordingly. The Committee may in its discretion waive any notice requirements in the Plan; provided, that a waiver of notice in one or more cases shall not be deemed to constitute a waiver of notice in any other case. With respect to any power or authority which the Committee has discretion to exercise under the Plan, such discretion shall be exercised in a nondiscriminatory manner. 18 12.9 AUTHORITY TO INTERPRET PLAN. Subject to the claims procedure set forth in Section 18 the Plan Administrator and the Committee shall have the duty and discretionary authority to interpret and construe the provisions of the Plan and to decide any dispute which may arise regarding the rights of Participants hereunder, including the discretionary authority to construe the Plan and to make determinations as to eligibility and benefits under the Plan. Determinations by the Plan Administrator and the Committee shall apply uniformly to all persons similarly situated and shall be binding and conclusive upon all interested persons. 12.10 THIRD PARTY ADVISORS. The Committee may engage an attorney, accountant, actuary or any other technical advisor on matters regarding the operation of the Plan and to perform such other duties as shall be required in connection therewith, and may employ such clerical and related personnel as the Committee shall deem requisite or desirable in carrying out the provisions of the Plan. The Committee shall from time to time, but no less frequently than annually, review the financial condition of the Plan and determine the financial and liquidity needs of the Plan. The Committee shall communicate such needs to the Employer so that its policies may be appropriately coordinated to meet such needs. 12.11 COMPENSATION OF MEMBERS. No fee or compensation shall be paid to any member of the Committee for his Service as such. 12.12 EXPENSE REIMBURSEMENT. The Committee shall be entitled to reimbursement by the Employer for its reasonable expenses properly and actually incurred in the performance of its duties in the administration of the Plan. 12.13 INDEMNIFICATION. No member of the Committee shall be personally liable by reason of any contract or other instrument executed by him or on his behalf as a member of the Committee nor for any mistake of judgment made in good faith, and the Employer shall 19 indemnify and hold harmless, directly from its own assets (including the proceeds of any insurance policy the premiums for which are paid from the Employer's own assets), each member of the Committee and each other officer, employee, or director of the Employer to whom any duty or power relating to the administration or interpretation of the Plan may be delegated or allocated, against any unreimbursed or uninsured cost or expense (including any sum paid in settlement of a claim with the prior written approval of the Board) arising out of any act or omission to act in connection with the Plan unless arising out of such person's own fraud, bad faith, willful misconduct or gross negligence. SECTION 13. CONTRACTUAL LIABILITY; TRUST: 13.1 CONTRACTUAL LIABILITY. The obligation of the Employer to make payments hereunder shall constitute a contractual liability of the Employer to the Participant. Such payments shall be made from the general funds of the Employer, and the Employer shall not be required to establish or maintain any special or separate fund, or otherwise to segregate assets to assure that such payments shall be made, and the Participant shall not have any interest in any particular assets of the Employer by reason of its obligations hereunder. To the extent that any person acquires a right to receive payment from the Employer, such right shall be no greater than the right of an unsecured creditor of the Employer. 13.2 TRUST. If so designated in Section 2.34 of the Adoption Agreement, the Employer may establish a Trust with the Trustee, pursuant to such terms and conditions as are set forth in the Trust Agreement. The Trust, if and when established, is intended to be treated as a grantor trust for purposes of the Code. The establishment of the Trust is not intended to cause Participants to realize current income on amounts contributed thereto, and the Trust shall be so interpreted and administered. 20 SECTION 14. ALLOCATION OF RESPONSIBILITIES: The persons responsible for the Plan and the duties and responsibilities allocated to each are as follows: 14.1 BOARD. (i) To amend the Plan; (ii) To appoint and remove members of the Committee; and (iii) To terminate the Plan. 14.2 COMMITTEE. (i) To designate Participants; (ii) To interpret the provisions of the Plan and to determine the rights of the Participants under the Plan, except to the extent otherwise provided in Section 19 relating to claims procedure; (iii) To administer the Plan in accordance with its terms, except to the extent powers to administer the Plan are specifically delegated to another person or persons as provided in the Plan; (iv) To account for the Accrued Benefits of Participants; and (v) To direct the Employer in the payment of benefits. 14.3 PLAN ADMINISTRATOR. (i) To file such reports as may be required with the United States Department of Labor, the Internal Revenue Service and any other government agency to which reports may be required to be submitted from time to time; and (ii) To administer the claims procedure to the extent provided in Section 19. SECTION 15. BENEFITS NOT ASSIGNABLE; FACILITY OF PAYMENTS: 15.1 BENEFITS NOT ASSIGNABLE. No portion of any benefit credited or paid under the Plan with respect to any Participant shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge, and any attempt so to anticipate, alienate, sell, transfer, assign, pledge, encumber or charge the same shall be void, nor shall any 21 portion of such benefit be in any manner payable to any assignee, receiver or any one trustee, or be liable for his debts, contracts, liabilities, engagements or torts. Notwithstanding the foregoing, in the event that all or any portion of the benefit of a Participant is transferred to the former spouse of the Participant incident to a divorce, the Committee shall maintain such amount for the benefit of the former spouse until distributed in the manner required by an order of any court having jurisdiction over the divorce, and the former spouse shall be entitled to the same rights as the Participant with respect to such benefit. 15.2 PAYMENTS TO MINORS AND OTHERS. If any individual entitled to receive a payment under the Plan shall be physically, mentally or legally incapable of receiving or acknowledging receipt of such payment, the Committee, upon the receipt of satisfactory evidence of his incapacity and satisfactory evidence that another person or institution is maintaining him and that no guardian or committee has been appointed for him, may cause any payment otherwise payable to him to be made to such person or institution so maintaining him. Payment to such person or institution shall be in full satisfaction of all claims by or through the Participant to the extent of the amount thereof. SECTION 16. BENEFICIARY: The Participant's beneficiary shall be the person or persons designated by the Participant on the beneficiary designation form provided by and filed with the Committee or its designee. If the Participant does not designate a beneficiary, the beneficiary shall be his Surviving Spouse. If the Participant does not designate a beneficiary and has no Surviving Spouse, the beneficiary shall be the Participant's estate. The designation of a beneficiary may be changed or revoked only by filing a new beneficiary designation form with the Committee or its designee. If a beneficiary (the "primary beneficiary") is receiving or is entitled to receive payments under the Plan and dies before receiving all of the payments due him, the balance to 22 which he is entitled shall be paid to the contingent beneficiary, if any, named in the Participant's current beneficiary designation form. If there is no contingent beneficiary, the balance shall be paid to the estate of the primary beneficiary. Any beneficiary may disclaim all or any part of any benefit to which such beneficiary shall be entitled hereunder by filing a written disclaimer with the Committee before payment of such benefit is to be made. Such a disclaimer shall be made in a form satisfactory to the Committee and shall be irrevocable when filed. Any benefit disclaimed shall be payable from the Plan in the same manner as if the beneficiary who filed the disclaimer had died on the date of such filing. SECTION 17. AMENDMENT AND TERMINATION OF PLAN: The Board may amend any provision of the Plan or terminate the Plan at any time; provided, that in no event shall such amendment or termination reduce any Participant's Accrued Benefit as of the date of such amendment or termination, nor shall any such amendment affect the terms of the Plan relating to the payment of such Accrued Benefit. Notwithstanding the foregoing, the Plan shall be terminated upon the occurrence of one or more of the events designated in the Adoption Agreement. Upon the occurrence of a termination event, the Accrued Benefit of each Participant may become fully vested and payable to the Participant in a lump sum if designated by the Employer in the Adoption Agreement. SECTION 18. COMMUNICATION TO PARTICIPANTS: The Employer shall make a copy of the Plan available for inspection by Participants and their beneficiaries during reasonable hours at the principal office of the Employer. 23 SECTION 19. CLAIMS PROCEDURE: The following claims procedure shall apply with respect to the Plan: 19.1 FILING OF A CLAIM FOR BENEFITS. If a Participant or beneficiary (the "claimant") believes that he is entitled to benefits under the Plan which are not being paid to him or which are not being accrued for his benefit, he shall file a written claim therefor with the Plan Administrator. In the event the Plan Administrator shall be the claimant, all actions which are required to be taken by the Plan Administrator pursuant to this Section 19 shall be taken instead by another member of the Committee designated by the Committee. 19.2 NOTIFICATION TO CLAIMANT OF DECISION. Within 90 days after receipt of a claim by the Plan Administrator (or within 180 days if special circumstances require an extension of time), the Plan Administrator shall notify the claimant of his decision with regard to the claim. In the event of such special circumstances requiring an extension of time, there shall be furnished to the claimant prior to expiration of the initial 90-day period written notice of the extension, which notice shall set forth the special circumstances and the date by which the decision shall be furnished. If such claim shall be wholly or partially denied, notice thereof shall be in writing and worded in a manner calculated to be understood by the claimant, and shall set forth: (i) the specific reason or reasons for the denial; (ii) specific reference to pertinent provisions of the Plan on which the denial is based; (iii) a description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary; and (iv) an explanation of the procedure for review of the denial and the time limits applicable to such procedures, including a statement of the claimant's right to bring a civil action under ERISA following an adverse benefit determination on review. 24 19.3 PROCEDURE FOR REVIEW. Within 60 days following receipt by the claimant of notice denying his claim, in whole or in part, or, if such notice shall not be given, within 60 days following the latest date on which such notice could have been timely given, the claimant shall appeal denial of the claim by filing a written application for review with the Committee. Following such request for review, the Committee shall fully and fairly review the decision denying the claim. Prior to the decision of the Committee, the claimant shall be given an opportunity to review pertinent documents and to submit issues and comments in writing. 19.4 DECISION ON REVIEW. The decision on review of a claim denied in whole or in part by the Plan Administrator shall be made in the following manner: 19.4.1 Within 60 days following receipt by the Committee of the request for review (or within 120 days if special circumstances require an extension of time), the Committee shall notify the claimant in writing of its decision with regard to the claim. In the event of such special circumstances requiring an extension of time, written notice of the extension shall be furnished to the claimant prior to the commencement of the extension. If the decision on review is not furnished in a timely manner, the claim shall be deemed denied as of the close of the initial 60-day period (or the close of the extension period, if applicable). 19.4.2 With respect to a claim that is denied in whole or in part, the decision on review shall set forth specific reasons for the decision, shall be written in a manner calculated to be understood by the claimant, and shall cite specific references to the pertinent Plan provisions on which the decision is based. 19.4.3 The decision of the Committee shall be final and conclusive. 19.5 ACTION BY AUTHORIZED REPRESENTATIVE OF CLAIMANT. All actions set forth in this Section 19 to be taken by the claimant may likewise be taken by a representative of the claimant duly authorized by him to act in his behalf on such matters. The Plan Administrator and the Committee may require such evidence as either may reasonably deem necessary or advisable of the authority to act of any such representative. 25 SECTION 20. MISCELLANEOUS PROVISIONS: 20.1 SET OFF. Notwithstanding any other provision of this Plan, the Employer may reduce the amount of any payment otherwise payable to or on behalf of a Participant hereunder by the amount of any loan, cash advance, extension of credit or other obligation of the Participant to the Employer that is then due and payable, and the Participant shall be deemed to have consented to such reduction. 20.2 NOTICES. Each Participant who is not in Service and each Beneficiary shall be responsible for furnishing the Committee or its designee with his current address for the mailing of notices and benefit payments. Any notice required or permitted to be given to such Participant or Beneficiary shall be deemed given if directed to such address and mailed by regular United States mail, first class, postage prepaid. If any check mailed to such address is returned as undeliverable to the addressee, mailing of checks will be suspended until the Participant or beneficiary furnishes the proper address. This provision shall not be construed as requiring the mailing of any notice or notification otherwise permitted to be given by posting or by other publication. 20.3 LOST DISTRIBUTEES. A benefit shall be deemed forfeited if the Plan Administrator is unable to locate the Participant or Beneficiary to whom payment is due on or before the fifth anniversary of the date payment is to be made or commence; provided, that the deemed investment rate of return pursuant to Section 9.2 shall cease to be applied to the Participant's account following the first anniversary of such date; provided further, however, that such benefit shall be reinstated if a valid claim is made by or on behalf of the Participant or Beneficiary for all or part of the forfeited benefit. 26 20.4 RELIANCE ON DATA. The Employer, the Committee and the Plan Administrator shall have the right to rely on any data provided by the Participant or by any Beneficiary. Representations of such data shall be binding upon any party seeking to claim a benefit through a Participant, and the Employer, the Committee and the Plan Administrator shall have no obligation to inquire into the accuracy of any representation made at any time by a Participant or beneficiary. 20.5 RECEIPT AND RELEASE FOR PAYMENTS. Subject to the provisions of Section 20.1, any payment made from the Plan to or with respect to any Participant or Beneficiary, or pursuant to a disclaimer by a Beneficiary, shall, to the extent thereof, be in full satisfaction of all claims hereunder against the Plan and the Employer with respect to the Plan. The recipient of any payment from the Plan may be required by the Committee, as a condition precedent to such payment, to execute a receipt and release with respect thereto in such form as shall be acceptable to the Committee. 20.6 HEADINGS. The headings and subheadings of the Plan have been inserted for convenience of reference and are to be ignored in any construction of the provisions hereof. 20.7 CONTINUATION OF EMPLOYMENT. The establishment of the Plan shall not be construed as conferring any legal or other rights upon any Employee or any persons for continuation of employment, nor shall it interfere with the right of the Employer to discharge any Employee or to deal with him without regard to the effect thereof under the Plan. 27 20.8 MERGER OR CONSOLIDATION; ASSUMPTION OF PLAN. No employer-party to the Plan shall consolidate or merge into or with another corporation or entity, or transfer all or substantially all of its assets to another corporation, partnership, trust or other entity (a "Successor Entity") unless such Successor Entity shall assume the rights, obligations and liabilities of the employer-party under the Plan and upon such assumption, the Successor Entity shall become obligated to perform the terms and conditions of the Plan. Nothing herein shall prohibit the assumption of the obligations and liabilities of the Employer under the Plan by any Successor Entity. 20.9 CONSTRUCTION. The Employer shall designate in the Adoption Agreement the state according to whose laws the provisions of the Plan shall be construed and enforced, except to the extent that such laws are superseded by ERISA. 28 [PRINCIPAL FINANCIAL GROUP LOGO] PRINCIPAL LIFE INSURANCE COMPANY Raleigh, NC 27612 1-800-999-4031 THE EXECUTIVE A member of the Principal Financial Group(R) NONQUALIFIED "EXCESS" PLAN(SM) ADOPTION AGREEMENT POPULAR FINANCIAL HOLDINGS, INC DEFERRAL PLAN THIS AGREEMENT is made as of the 1st day of October, 2005, by Popular Financial Holdings, Inc. (the "Employer"), having its principal office at 301 LIPPINCOTT DRIVE, MARLTON, NJ 08053 and EXECUTIVE BENEFIT SERVICES, INC. (the "Sponsor"), having its principal office at 4140 ParkLake Avenue, Suite 500, Raleigh, NC 27612. WITNESSETH: WHEREAS, the Sponsor has established The Executive Nonqualified Excess Plan(TM) (the "Plan"); and WHEREAS, Equity One, Inc., a wholly owned subsidiary of the Employer, has established an unfunded nonqualified deferred compensation plan known as the Equity One Deferral Plan through an adoption of the Plan; WHEREAS, by means of resolution adopted on August 24, 2005, the Board of Directors of Equity One, Inc. relinquished sponsorship of the Equity One Deferral Plan in favor of the Employer; WHEREAS, by means of a resolution adopted on August 26, 2005, the Board of Directors of the Employer, assumed sponsorship of the Equity One Deferral Plan and authorized its officer to take such actions and execute such documents necessary to amend the Equity One Deferral Plan to assume sponsorship of the Equity One Deferral Plan, constitute a grantor trust to accumulate funds for payment of benefits due under the Equity One Deferral Plan and include shares of common stock of Popular, Inc. as an investment option for deemed investments under the Equity One Deferral Plan. WHEREAS, the Employer has been advised by the Sponsor to obtain legal and tax advice from its professional advisors before amending the Plan, and that the Sponsor disclaims all liability for the legal and tax consequences which result from the elections made by the Employer in this Adoption Agreement; NOW, THEREFORE, the Employer hereby amends the Plan in accordance with the terms and conditions set forth in this Adoption Agreement: -2- ARTICLE I Terms used in this Adoption Agreement shall have the same meaning as in the Plan, unless some other meaning is expressly herein set forth. The Employer hereby represents and warrants that the Plan has been adopted and amended by the Employer upon proper authorization and the Employer hereby elects to amend the Plan and continue it for the benefit of its Participants as referred to in the Plan. By the execution of this Adoption Agreement, the Employer hereby agrees to be bound by the terms of the Plan. This Adoption Agreement may only be used in connection with The Executive Nonqualified Excess Plan(TM). The Sponsor will inform the Employer of any amendments to the Plan or of the discontinuance or abandonment of the Plan. For questions concerning the Plan, the Employer may call the Sponsor at (919) 833-1042. ARTICLE II The Employer hereby makes the following designations or elections for the purpose of the Excess Plan [Section references below correspond to Section references in the Excess Plan]: 2.7 COMPENSATION: The "Compensation" of a Participant shall mean all of each Participant's [check desired option(s)]: XX (A) Compensation received as an Employee reportable in box 1, Wages, Tips and other Compensation, on Form W-2. ___ (B) Annual base salary. ___ (C) Annual bonus. ___ (D) Long term incentive plan compensation. ___ (E) Compensation received as an Independent Contractor reportable on Form 1099. ___ (F) Commissions. ___ (G) other [specify]:_____________________________________________. Notwithstanding the foregoing, Compensation [X]SHALL [ ]SHALL NOT include Salary Deferral Credits under this Plan and amounts contributed by the Participant pursuant to a Salary Deferral Agreement to another employee benefit plan of the Employer which are not includible in the gross income of the Employee under Section 125, 132(f)(4), 402(e)(3), 402(h) or 403(b) of the Code. 2.8 CREDITING DATE: The Deferred Compensation Account of a Participant shall be credited with the amount of any Salary Deferral Credits to such account at the time designated below [check desired Crediting Date]: ___ (A) The last business day of each Plan Year. ___ (B) The last business day of each calendar quarter during the Plan Year. ___ (C) The last business day of each month during the Plan Year. XX (D) The last business day of each payroll period during the Plan Year. ___ (E) Any business day on which Salary Deferral Credits are received by the Sponsor. ___ (F) Other [specify]:_____________________________________________. 2.10 DISABILITY: The disability of a Participant shall be determined as follows: ___ (A) The Participant shall be considered to be disabled when he has been determined to be disabled for the purposes of any long term disability insurance covering the Participant that is sponsored by the Employer XX (B) The Participant shall be considered to be disabled when he has been determined to be disabled for purposes of the Federal Social Security Act. ___ (C) Other:________________________________________________________ ______________________________________________________________ ______________________________________________________________ 2.14 EFFECTIVE DATE [check desired option]: ___ (A) This is a newly-established Plan, and the Effective Date of the Plan is OCTOBER 1, 2003. XX (B) This is an amendment and restatement of a plan named EQUITY ONE DEFERRAL PLAN with an effective date of OCTOBER 1, 2003. The Effective Date of this amended and restated Plan is OCTOBER 1, 2005. This is amendment number ONE. 2.20 NORMAL RETIREMENT DATE: The Normal Retirement Date of a Participant shall be: [check desired option]: XX (A) The attainment of age 55. ___ (B) The later of age _____ or the ______ anniversary of the participation commencement date. The participation commencement date is the first day of the first Plan Year in which the Participant commenced participation in the Plan. ___ (C) The completion of _____ Years of Service. ___ (D) The completion of _____ Years of Service and attainment of age _____. 2.22 PARTICIPATING EMPLOYER(S): As of the Effective Date, the following Participating Employer(s) are parties to the Plan [list all employer-parties, including the Employer]:
Name of Employer Address Telephone No. EIN ---------------- ------- ------------- --- Equity One, Inc. 301 Lippincott Drive (856) 396-3645 36-3618185 Marlton, NJ 08053 Popular Financial Holdings, 301 Lippincott Drive (856) 396-3645 36-3618185 Inc Marlton, NJ 08053
2.23 PLAN: The name of the Plan as applied to the Employer is: POPULAR FINANCIAL HOLDINGS DEFERRAL PLAN. 2.24 PLAN ADMINISTRATOR: The Plan Administrator shall be [check desired option]: ___ (A) Committee. XX (B) Employer. ___ (C) Other (specify): ___________________________________________. 2.25 PLAN YEAR: The Plan Year shall be the 12 consecutive calendar month period ending on the last day of the month of DECEMBER, and each anniversary thereof. 2.34 TRUST: [check desired option]: XX (A) The Employer DOES DESIRE to establish a "rabbi" trust for the purpose of setting aside assets of the Employer contributed thereto for the payment of benefits under the Plan. ___ (B) The Employer DOES NOT DESIRE to establish a "rabbi" trust for the purpose of setting aside assets of the Employer contributed thereto for the payment of benefits under the Plan. ___ (C) The Employer desires to establish a "rabbi" trust for the purpose of setting aside assets of the Employer contributed thereto for the payment of benefits under the Plan UPON THE OCCURRENCE OF THE FOLLOWING EVENT(s): ______________________________________________________________ ______________________________________________________________ ______________________________________________________________. 4.1 SALARY DEFERRAL CREDITS: A Participant may elect to have his Compensation (as selected in Section 2.7 of this Adoption Agreement) reduced by the following annual percentage or amount as designated in writing to the Committee [check the applicable options]: XX (A) ANNUAL BASE SALARY: [Complete the following blanks ONLY if a minimum or maximum deferral is desired]: Minimum deferral: $ * or __________% Maximum deferral:$_________ or __________% XX (B) ANNUAL BONUS: [Complete the following blanks ONLY if a minimum or maximum deferral is desired]: Minimum deferral:$ * or __________% Maximum deferral:$_____________ or __________% *AGGREGATE MINIMUM DEFERRAL OF $5,000.00 ___ (C) OTHER [please specify type, as selected in Section 2.7 of this Adoption Agreement]: _____________________. [Complete the following blanks ONLY if a minimum or maximum deferral is desired]: Minimum deferral: $_____________ or __________% Maximum deferral: $_____________ or __________% ___ (D) NOT APPLICABLE - no salary deferral provision. 4.1.2 TERMINATION OF SALARY DEFERRALS: A Participant may terminate his Salary Deferral Agreement effective as of [check desired option]: XX (A) The first full payroll period commencing after the date written notice of the termination is received by the Committee. ___ (B) The first day of the Plan Year occurring after the date written notice of the termination is received by the Committee. ___ (C) Not applicable - no salary deferral provision. 4.2 EMPLOYER CREDITS: The Employer will make Employer Credits in the following manner [check a MAXIMUM OF 2 desired option(s)]: XX (A) EMPLOYER MATCHING CREDITS: The Employer may make matching credits to the Deferred Compensation Account of each Participant in an amount determined as follows [check desired option(s)]: ___ (i) ______% of the Participant's Salary Deferral Credits. ___ (ii) ______% of the first ______% of the Participant's Compensation which is elected as a Salary Deferral Credit. ___ (iii) An amount determined each Plan Year by the Employer. ___ (iv) The Employer shall not match amounts provided above in excess of $_______________or in excess of ______% of the Participant's Compensation per Plan Year. ___ (v) Other:_________________________________________________ ____________________________________________________________. XX (vi) Not applicable - no Employer matching credits provision. XX (B) EMPLOYER PROFIT SHARING CREDITS: The Employer may make profit sharing credits to the Deferred Compensation Account of each Active Participant in an amount determined as follows: ___ (i) Such amount out of the current or accumulated net profit of the Employer for such year as the Employer in its sole discretion shall determine. ___ (ii) Such amount as the Employer in its sole discretion shall determine without regard to current or accumulated net profit. ___ (iii) The Employer shall not make profit sharing credits in excess of $__________, or in excess of ____% of the Participant's Compensation per Plan Year. ___ (iv) Other:__________________________________________________ ________________________________________________________. XX (v) Not applicable - no Employer profit sharing provision. ___ (C) OTHER [DESCRIBE]: ______________________________________________________________ ______________________________________________________________ ______________________________________________________________ ______________________________________________________________. 5.1 DEATH OF A PARTICIPANT: If the Participant dies while in Service, the Employer shall pay a benefit to the Beneficiary in an amount equal to the Accrued Benefit of the Participant determined as of the date payments to the Beneficiary commence, plus [check if desired]: ___ (A) An amount to be determined by the Committee. ___ (B) Other [specify]: ________________________________________. XX (C) No additional benefits. 6.1 IN-SERVICE WITHDRAWALS: In-service withdrawals may be made from the Plan [check desired option]: XX (A) Yes. (i) The In-Service Account may be withdrawn only after the account has been established for [check desired option]: XX (a) A minimum of 2 years (insert minimum of 2 years.) ___ (b) Not applicable. (ii) A Participant may defer the date of any scheduled in-service withdrawal by giving notice of the new withdrawal date to the Committee [check desired option]: XX (a) At least 12 (insert minimum of 12) months prior to the scheduled withdrawal date. ___ (b) Not applicable. ___ (B) No in-service withdrawals. 6.2 FINANCIAL HARDSHIP WITHDRAWALS: Financial hardship withdrawals may be made from the Plan [check desired option]: XX (A) Yes. ___ (B) No. 6.4 EDUCATION WITHDRAWALS: Education withdrawals may be made from the Plan [check desired option]: XX (A) Yes. (i) Education withdrawals may be made in installment payments over no more than 5 years. (ii) A Participant may defer the date of any scheduled education withdrawal by giving notice of the new withdrawal date to the Committee [check desired option]: XX (a) At least 12 (insert minimum of 12) months prior to the scheduled withdrawal date. ___ (b) Not applicable. ___ (B) No education withdrawals. 7.1 PAYMENT OPTIONS: Any benefit payable under the Plan upon a Qualifying Distribution Event may be made to the Participant or his Beneficiary (as applicable) in any of the following payment forms, as selected by the Participant upon his entry into the Plan [check desired option(s)]: XX (A) A lump sum in cash or shares of common stock of Popular, Inc. as soon as practicable following the date of the Qualifying Distribution Event. XX (B) Approximately equal annual installments over a term no longer than 20 years as elected by the Participant upon his entry into the Plan. XX (i) Payment of the benefit shall commence as soon as practicable after the following date [select desired option]: ___ (a) The first business day of the CALENDAR YEAR following the date of the Qualifying Distribution Event. XX (b) The first business day of the CALENDAR QUARTER following the date of the Qualifying Distribution Event. ___ (c) The first business day of the CALENDAR MONTH following the date of the Qualifying Distribution Event. The payment of each annual installment shall be made on the anniversary of the date selected for the commencement of the installment payments in this subsection (i). The amount of the annual installment shall be adjusted on each anniversary date of the commencement of the installment payments for credits or debits to the Participant's account pursuant to Section 9 of the Plan. Such adjustment shall be made by dividing the balance in the Deferred Compensation Account on each such date (following adjustment on such date) by the number of annual installments remaining to be paid hereunder; provided that the last annual installment due under the Plan shall be the entire amount credited to the Participant's account on the date of the payment. XX (ii) Notwithstanding the payment option elected by the Participant, the vested Accrued Benefit of the Participant will be distributed in a single lump sum in cash if the amount of such benefit on the date that payment is to commence does not exceed [check desired option]: XX (a) $ 10,000 (Insert desired cash out amount). ___ (b) Not applicable. XX (C) A Participant may defer the date of any scheduled payment by giving notice of the new payment date to the Committee [check desired option]: XX (i) At least 12 (insert minimum of 12) months prior to the scheduled payment date. ___ (ii) Not applicable. ___ (D) Other [specify]:_____________________________________________. THIS SECTION IS NOT APPLICABLE. 8. VESTING: An Active Participant shall be fully vested in the Employer Credits made to the Deferred Compensation Account upon occurrence of the following events [check or complete all that apply]: ___ (A) Normal Retirement Date. ___ (B) Death. ___ (C) Disability. ___ (D) Completion of that number of Years of Service specified below: ___ (i) EMPLOYER MATCHING CREDITS [complete if applicable]: ___ (a) Immediate 100% vesting. ___ (b) 100% vesting after______ Years of Service. ___ (c) 100% vesting at age ____. ___ (d) Number of Years Vested of Service Percentage --------------- ---------- Less than 1 ____% 1 ____% 2 ____% 3 ____% 4 ____% 5 ____% 6 ____% 7 ____% 8 ____% 9 ____% 10 or more ____% For this purpose, Years of Service of a Participant shall be calculated from the date designated below [check desired option]: ___ (1) First Day of Service. ___ (2) Effective Date of the Plan Participation. ___ (3) Each Crediting Date. Under this option (3), each Employer Matching Credit shall vest based on the Years of Service of a Participant from the Crediting Date on which each Employer Credit is made to his or her Deferred Compensation Account. ___ (ii) EMPLOYER PROFIT SHARING CREDITS [complete if applicable]: ___ (a) Immediate 100% vesting. ___ (b) 100% vesting after ____Years of Service. ___ (c) 100% vesting at age ____. ___ (d) Number of Years Vested of Service Percentage --------------- ---------- Less than 1 ____% 1 ____% 2 ____% 3 ____% 4 ____% 5 ____% 6 ____% 7 ____% 8 ____% 9 ____% 10 or more ____% For this purpose, Years of Service of a Participant shall be calculated from the date designated below [check desired option]: ___ (1) First Day of Service. ___ (2) Effective Date of the Plan Participation. ___ (3) Each Crediting Date. Under this option (3), each Employer Profit Sharing Credit shall vest based on the Years of Service of a Participant from the Crediting Date on which each Employer Credit is made to his or her Deferred Compensation Account. ___ (iii) OTHER EMPLOYER CREDITS [complete if applicable]: ___ (a) Immediate 100% vesting. ___ (b) 100% vesting after____Years of Service. ___ (c) 100% vesting at age ____. ___ (d) Number of Years Vested of Service Percentage --------------- ---------- Less than 1 ____% 1 ____% 2 ____% 3 ____% 4 ____% 5 ____% 6 ____% 7 ____% 8 ____% 9 ____% 10 or more ____% For this purpose, Years of Service of a Participant shall be calculated from the date designated below [check desired option]: ___ (1) First Day of Service. ___ (2) Effective Date of the Plan Participation. ___ (3) Each Crediting Date. Under this option (3), each Other Employer Credit shall vest based on the Years of Service of a Participant from the Crediting Date on which each Employer Credit is made to his or her Deferred Compensation Account. 10. BENEFIT EXCHANGE: The Employer elects to permit the Participant to exchange all or any portion of the vested Accrued Benefit under the Plan for another type of nonqualified benefit [check desired option]: XX (A) Yes. ___ (B) No. 11. TRANSFER TO QUALIFIED PLAN: The Employer elects to permit the Participant to direct the transfer of a portion of his benefit under this Plan to a tax-qualified retirement plan maintained by the Employer [check desired option]: XX (A) Yes. QUALIFIED PLAN NAME: POPULAR FINANCIAL HOLDINGS, INC SAVINGS AND RETIREMENT PLAN. ___ (B) No. 17. AMENDMENT OR TERMINATION OF PLAN: [check or complete all that apply]: ___ (A) Notwithstanding any provision in this Adoption Agreement or the Plan to the contrary, Section _____ of the Plan shall be amended to read as follows: See attached Exhibit ____. ___ (B) The Plan shall be terminated upon the occurrence of one or more of the following events [check if desired]: ___ (i) The amount of shareholders equity shown on the financial statements of the Employer for each of the two most recent fiscal years is less than $_____________. ___ (ii) The aggregate net loss (after tax) as reported on the financial statements of the Employer for the two most recent fiscal years is greater than $____________. ___ (iii) There is a change of control of the Employer. For this purpose, a "change of control" shall be deemed to have occurred if: (A) any person other than an officer who is an Employee of the Employer for at least one year preceding the change of control, acquires or becomes the beneficial owner, directly or indirectly, of securities of the Employer representing ____% [insert percentage] or more of the combined voting power of the Employer's then outstanding securities and thereafter, the membership of the Board becomes such that a majority are persons who were not members of the Board at the time of the acquisition of securities; or (B) the Employer, or its assets, are acquired by or combined with another entity and less than a majority of the outstanding voting shares of such entity after the acquisition or combination are owned, immediately after the acquisition or combination, by the owners of voting shares of the Employer immediately prior to the acquisition or combination. ___ (iv) Other [specify]:________________________________________ ________________________________________________________ ________________________________________________________ ________________________________________________________. ___ (C) In the event of a termination of the Plan, the Employer elects that [check if desired]: ___ (i) Each Active Participant will become fully vested in the Deferred Compensation Account. [If not checked, the vesting provisions of Section 8 will continue to apply.] ___ (ii) The Deferred Compensation Account will be immediately distributed to each Participant in a single lump sum payment. [If not checked the payment provisions of Section 7 will continue to apply.] -13- 20.9 CONSTRUCTION: The provisions of the Plan and Trust (if any) shall be construed and enforced according to the laws of the State of DELAWARE, except to the extent that such laws are superseded by ERISA. IN WITNESS WHEREOF, this Agreement has been executed as of the day and year first above stated. POPULAR FINANCIAL HOLDINGS, INC. Name of Employer By: /s/ Cameron E. Williams ---------------------------------------- Authorized Person President and CEO ---------------------------------------- Title NOTE: EXECUTION OF THIS ADOPTION AGREEMENT CREATES A LEGAL LIABILITY OF THE EMPLOYER WITH SIGNIFICANT TAX CONSEQUENCES TO THE EMPLOYER AND PARTICIPANTS. THE EMPLOYER SHOULD OBTAIN LEGAL AND TAX ADVICE FROM ITS PROFESSIONAL ADVISORS BEFORE ADOPTING THE PLAN. THE SPONSOR DISCLAIMS ALL LIABILITY FOR THE LEGAL AND TAX CONSEQUENCES WHICH RESULT FROM THE ELECTIONS MADE BY THE EMPLOYER IN THIS ADOPTION AGREEMENT. -14- EX-5 4 g97418exv5.txt EX-5 OPINION OF PIETRANTONI MENDEZ & ALVAREZ LLP Exhibit 5 October 7, 2005 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 such 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 hundred thousand (500,000) 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 Popular Financial Holdings Deferral Plan and/or the Popular Financial Holdings Supplemental Employee Retirement Plan (collectively the "Plans") of Popular Financial Holdings, Inc., a wholly owned subsidiary of the Company, 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. SECURITIES AND EXCHANGE COMMISSION OCTOBER 7, 2005 PAGE 2 As counsel to the Company and in rendering this opinion we have examined the Plans documents and other related written 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 Plan. On the basis of the foregoing, we are of the opinion that the provisions of the written documents constituting the Plan 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 LLP EX-23.2 5 g97418exv23w2.txt EX-23.2 CONSENT OF PRICEWATERHOUSECOOPERS LLP EXHIBIT 23.2 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We hereby consent to the incorporation by reference in this Registration Statement on Form S-8 of our report dated February 24, 2005 relating to the financial statements, management's assessment of the effectiveness of internal control over financial reporting and the effectiveness of internal control over financial reporting, which appears in the 2004 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, 2004. /s/ PricewaterhouseCoopers LLP PricewaterhouseCoopers LLP San Juan, Puerto Rico October 6, 2005 -----END PRIVACY-ENHANCED MESSAGE-----