EXHIBIT 4.2
ADOPTION AGREEMENT
FOR THE
ORIENTAL BANK AND TRUST
MASTER PROTOTYPE DEFINED
CONTRIBUTION PLANS
TABLE OF CONTENTS
PAGE
ARTICLE I INTRODUCTION...........................................................................1
ARTICLE II IDENTIFICATION OF EMPLOYER AND PLAN....................................................2
ARTICLE III ACCOUNTING PERIOD, EFFECTIVE DATE......................................................4
ARTICLE IV COMPENSATION...........................................................................4
ARTICLE V NORMAL AND EARLY RETIREMENT AGE........................................................5
ARTICLE VI METHOD OF SERVICE CREDIT COMPUTATION...................................................5
ARTICLE VII BREAKS IN SERVICE; YEARS OF SERVICE....................................................5
ARTICLE VIII ELIGIBILITY............................................................................6
ARTICLE IX ENTRY DATES............................................................................6
ARTICLE X VESTING OF EMPLOYER CONTRIBUTIONS......................................................7
ARTICLE XI ELECTIVE CODA CONTRIBUTIONS AND EMPLOYEE
DIRECTED INVESTMENTS...................................................................8
ARTICLE XII VOLUNTARY CONTRIBUTIONS................................................................9
ARTICLE XIII PLAN CONTRIBUTION FORMULA..............................................................9
ARTICLE XIV VALUATION OF PLAN ASSETS..............................................................11
THE ADOPTION AGREEMENT
This is the Adoption Agreement for the Oriental Bank and Trust Master
Prototype Defined Contribution Plan (the "Plan") and its Master Trust Agreement
(the "Trust Agreement"). Employers adopting the Plan are advised to consult
their own legal counsel on questions of interpretation and to refer to the Plan
and Trust Agreement documents when completing this Adoption Agreement. By
adopting the Plan employers will be adopting a retirement plan pre-qualified by
the Puerto Rico Department of the Treasury ("Treasury"). Each time an employer
adopts the Plan, however, a request for a favorable determination will have to
be filed with Treasury for the issuance of an administrative determination
regarding the qualification of such particular adoption of the Plan under the
provisions of the Puerto Rico Internal Revenue Code of 1994, as amended (the "PR
Code"). Failure to properly fill out this Adoption Agreement may result in the
non-qualification or disqualification of the Employer's Plan.
The Sponsoring Organization of this Plan is Oriental Bank and Trust.
Its address and telephone number are:
Oriental Bank and Trust
X.X. Xxx 000000
Xxx Xxxx, Xxxxxx Xxxx 00000-0000
(000) 000-0000
The Sponsoring Organization will inform the adopting employer of any
amendments made to the Plan or the termination of the Plan, should that be
necessary.
ARTICLE I
INTRODUCTION
BY THIS INSTRUMENT, Oriental Financial Group Inc. (the "Employer") hereby
(a) Adopts the Plan and its corresponding Trust Agreement as and
for the establishment of an employee benefit plan for the
benefit of its eligible employees;
(b) Appoints Oriental Bank and Trust as Trustee of said plan (the
"Trustee"). The
Trustee's mailing address is:
Oriental Bank and Trust
Xxx 000000
Xxx Xxxx, Xxxxxx Xxxx 00000-0000
(c) Acknowledges receipt of a copy of the Plan, Trust Agreement
and the Plan's Summary Plan Description. The Employer shall be
responsible for distributing copies of the Plan's Summary Plan
Description to all Eligible Employees and their Beneficiaries
within the time limits prescribed by ERISA.
(d) Appoints a Plan Administrator or Administrative Committee
(which shall be known as the "Oriental Group Retirement
Committee") which shall act as provided in the Plan (each of
whom have indicated their respective acceptances of such
appointment by affixing their signatures hereto:
Name Signature
Xxxx Xxxxxx Xxxxxxxxx
-------------------------------------------------
Xxxx X. Xxxxxxxx
-------------------------------------------------
Xxxxxx Xxxxxxxx
-------------------------------------------------
Xxxx Xxxxxx
-------------------------------------------------
(e) Ratifies and affirms its acceptance to be bound by the
provisions of the Plan, the Trust Agreement, the rules and
regulations of the Sponsoring Organization and the obligations
imposed upon it by law and government regulations.
ARTICLE II
IDENTIFICATION OF EMPLOYER AND PLAN
The Employer's adopting this plan hereunder are:
Name: Oriental Financial Group Inc.
Principal Place of Business: San Xxxx, PR
Mailing Address: X.X. Xxx 000000
Telephone Number: (000) 000-0000 Fax Number: (000) 000-0000
Social Security or Employer Tax Identification Number: 00-0000000
2
The Employer represents that the related employers listed below have adopted the
Plan:
Oriental Bank & Trust: 00-0000000
Oriental Financial Services: 00-0000000
Oriental Trust: 00-0000000
Oriental Mortgage: 00-0000000
FISA Insurance Agency: 00-0000000
Plan Name: Oriental Group CODA Profit Sharing Plan
Plan Number: 002
Employer Contact Person:
Name: Xxxxxxx Xxxxxxxx
Title: HR Director Telephone Number: (000) 000-0000
The Employer is (check one):
[ ] a sole proprietorship.
[ ] Special Partnership.
[ ] Corporation of Individuals.
[X] a corporation.
[ ] Exempt Organization.
[ ] other
-------------------------------
ADOPTION OR AMENDMENT OF THE PLAN
By signing this Adoption Agreement the Employer is adopting one of the
Oriental Bank and Trust Master Prototype Defined Contribution Plans described
below:
[ ] Master Prototype Defined Contribution Profit Sharing Plan.
[ ] Master Prototype Defined Contribution Money Purchase Plan
[X] Master Prototype Defined Contribution Cash or Deferred
Arrangement Profit Sharing Plan
3
[ ] Amending certain provisions of an earlier Oriental Bank and
Trust Master Prototype Defined Contribution Plan that was
effective: ___________________________
[X] Amendment & Re-Statement of a plan previously adopted and
effective 01/01/1992.
ARTICLE III
ACCOUNTING PERIOD, EFFECTIVE DATE
(a) Employer's taxable year
[ ] Calendar year
[X] Fiscal year ending on 6/30.
(b) The Plan Year will mean
[X] The Calendar year
[ ] The period of twelve consecutive months beginning
on ________________________
(month/day)
(month/day) and ending on________________________
(month/day)
[ ] The Employer's taxable year. If the Employer's taxable year
changes, the Plan Year will change accordingly.
(c) The Effective Date of the amendment & Restatement of this Plan shall
be: January 1, 2002.
ARTICLE IV
COMPENSATION
Compensation shall mean the compensation for the Plan year paid in cash
or in kind by the Employer for personal services, as reportable on the
Employee's Annual Withholding Statement Form 499-R-2/W-2. For any Self-Employed
Individual covered under the Plan, if applicable, compensation shall mean Earned
Income. However, compensation shall not include any amount paid by reason of
services performed (i) after the date an employee ceases to be a Participant,
and (ii) prior to the date an employee becomes a Participant. Compensation shall
not include any amounts contributed by an Employer, for or on account of its
employees, under this Plan or under any other employee benefit plan.
Certain items of compensation may be excluded if so indicated:
[ ] Overtime
4
[ ] Commissions
[ ] Bonuses
[ ] Other Type of Remuneration (specify):
ARTICLE V
NORMAL AND EARLY RETIREMENT AGE
(a) Normal Retirement Age
For each Participant, Normal Retirement Age is:
[X] Age - (not to exceed 65); or
The later of:
[ ] Age ______ (not to exceed 65) or
[ ] The ______ (not to exceed 5th) anniversary
of the participation commencement date.
(b) Early Retirement Age
The following would be the Early Retirement Age permitted
under the Plan:
[ ] Age ______ (not less than 50); or
[ ] The later of such participant attaining age 55 or the
fifth's (5th) anniversary of a participant's
participation commencement date
[X] Early Retirement would not be permitted under the
Plan.
ARTICLE VI
METHOD OF SERVICE CREDIT COMPUTATION
This Plan and the records upon which the rights of the Participants
herein are maintained shall be based on the Hours of Service method.
The Hours of Services to be credited to employees shall be computed by counting:
[X] Actual hours worked
[ ] 10 hours per days
[ ] 45 hours per week
[ ] 95 hours per half month
[ ] 190 hours per month.
5
ARTICLE VII
BREAKS IN SERVICE; YEARS OF SERVICE
(a) A Break in Service shall occur if an employee completes not more than
500 Hours of Service in the Plan Year
(b) An employee shall receive credit for a Year of Service for eligibility
determination purposes in any Eligibility Computation Period in which
he or she completes or have completed at least 1,000 Hours of Service.
(c) An employee shall receive credit for a Year of Service for benefit
accrual purposes in any Plan Year in which he or she completes at least
1,000 Hours of Service.
ARTICLE VIII
ELIGIBILITY
The following employees are be eligible to participate in the Plan:
[ ] No exclusions. All Employees of the Employer will be eligible
to participate in the Plan.
[X] All Employees except those marked below:
[X] Employees in a unit of Employees covered by a
collective bargaining agreement with respect to which
retirement benefits were the subject of good faith
bargaining.
[ ] Hourly paid Employees
[ ] Salaried Employees
[ ] Employees paid by commissions only
[X] Leased Employees (in the case of a Cash or Deferred
Arrangement Profit Sharing Plan)
[ ] Employees in the following other classes (specify):
AGE AND SERVICE REQUIREMENTS
An employee shall become eligible to participate in the Plan upon
attaining the age of 21 years old (not to exceed 21; 20 1/2 in case of Plan with
annual entry dates) and completing:
[ ] No minimum service requirement
[ ] 3 months of service
[X] 6 months of service
[ ] 1 year of service
[ ] 2 years of service (requires immediate full vesting)
[ ] All employees will be eligible at the effective date of the
Plan. All employees hired after effective date of Plan will be
eligible after 12 month of service.
6
ARTICLE IX
ENTRY DATES
The Plan's Entry Dates are:
[X] Monthly Entry Dates. The first day of each month of the Plan
Year.
[ ] Quarterly Entry Dates. The first day of the first fourth,
seventh and tenth month of the Plan Year.
[ ] Semi-Annual Entry Dates. The first day of the first and
seventh months of the Plan Year.
[ ] Annual Entry Dates. The first day of the Plan Year.
ARTICLE X
VESTING OF EMPLOYER CONTRIBUTIONS
[ ] The Participants would be fully and immediately vested at all times
with respect to Employer (Matching, in the case of a Cash or Deferred
Arrangement Profit Sharing Plan) Contributions.
[ ] A Participant's Employer (Profit Sharing, in the case of a Cash or
Deferred Arrangement Profit Sharing Plan) Contributions Account shall
vest in accordance with the following schedule
COMPLETED VESTED
YEARS OF SERVICE PERCENTAGE
---------------- ----------
Less than 3 0%
3 20
4 40
5 60
6 80
7 or more 100
[X] A Participant's Employer (Matching, in the case of a Cash or Deferred
Arrangement Profit Sharing Plan) Contributions Account shall vest in
accordance with the following schedule:
COMPLETED VESTED
YEARS OF SERVICE PERCENTAGE
---------------- ----------
1-2 0%
3 100%
7
[ ] A Participant's Employer (Matching, in the case of a Cash or Deferred
Arrangement Profit Sharing Plan) Contributions Account shall vest in
accordance with the following schedule:
COMPLETED VESTED
YEARS OF SERVICE PERCENTAGE
---------------- ----------
1 0%
2 0%
3 100%
The following employee's Years of Service with the Employer will be
counted to determine the nonforfeitable percentage in the Employee's Account
Balance derived from Employer contributions:
[ ] Years of service before the Employer established this Plan.
[X] Years of service since the inception of this Plan.
ARTICLE XI
ELECTIVE CODA CONTRIBUTIONS AND
EMPLOYEE DIRECTED INVESTMENTS
In the case of a Cash or Deferred Arrangement Profit Sharing Plan:
(a) Elective CODA Contributions would:
[X] Be made only if a Participant makes an affirmative election to
have the Employer make such contributions to the Trust on the
Participant's behalf.
[ ] Always be made unless a Participant makes an affirmative
election to receive cash instead of having the Employer make
such contributions to the Trust on the Participant's behalf (a
negative election). Elective CODA Contributions for a
Participant who does not make a negative election shall equal
___% (not to exceed 10%) of the Participant's Taxable
Compensation for the year or such other percentage elected by
the Participant on a deferral agreement.
(b) the Employee Directed Investments would:
8
[X] Be permitted (For Employee Contributions made on a Pre-Tax or
After-Tax Basis)**.
[ ] Not be permitted.
**Employer Matching Contributions will be made to the plan in Employer
Securities and the employee will not have an election for investing
such contribution. The Participant may vote his or her shares of stock
acquired through the Plan. Please refer to the Summary Plan Description
for more details.
A Participant making a hardship withdrawal from the Plan would not have the
right to make Elective Contributions for a period of 12 months following the
date of said withdrawal.
ARTICLE XII
VOLUNTARY CONTRIBUTIONS
Voluntary After-Tax Contributions would:
[X] Be permitted.
[ ] Not be permitted.
A Participant making a withdrawal from his Voluntary Contribution Account would:
[ ] Not have the right to make Voluntary Contributions for a
period of _____ month(s) following the Plan Year of said
withdrawal.
[X] Have the right to make Voluntary Contributions following said
withdrawal.
ARTICLE XIII
PLAN CONTRIBUTION FORMULA
(a) Money Purchase Pension Plan
[ ] Non-Integrated Allocation Formula
An amount of ___________ (not to exceed 25% of
compensation), or the percentage of Compensation (as
defined in the Plan and its Adoption Agreement) to be
contributed each Plan Year by the Employer for each
Participant who either completes more than 1,000
hours of service during the Plan Year or is employed
on the last day of the Plan year shall be (not to
exceed 25%).
9
[ ] Integrated Allocation Formula
An amount of ________________ (not to exceed 25% of
compensation), or the percentage of compensation (as
defined in the Plan and its Adoption Agreement) to be
contributed each Plan Year by the Employer for each
Participant who either completes more than 1,000
hours of service during the Plan Year or is employed
on the last day of the Plan Year shall be _______%,
plus ______% (not to exceed the lesser of (i) the
amount first specified in this paragraph or (ii) 7%
of such Participant's Compensation in excess of
$_____________ (i.e., the integration level).
- Only one plan maintained by the Employer may be
integrated with
- Social Security.
(b) Profit Sharing Plan
[ ] Non-Integrated Allocation Formula
The Employer contributions would be determined as
provided in Article IV of the Profit Sharing Plan
document.
[ ] Integrated Allocation Formula
The Employer contributions would be determined as
provided in Article IV of the Profit Sharing Plan
document except that ______ percent (not to exceed
7%) of a Participant's Compensation in excess of
$____________ (i.e., the integration level) will be
allocated in the same proportion that his Excess
Compensation bears to the Excess Compensation of all
Participants. The balance will be allocated in the
same proportion that his total compensation bears to
the total compensation of all Participants. Only one
plan maintained by the Employer may be integrated
with Social Security.
10
(c) Cash or Deferred Arrangement Profit Sharing Plan - The Employer's
Matching Contributions will be as follows:
[ ] _______% of the first ______% of a Participant's
contribution for the year as an Elective CODA Contribution;
and no Matching Contributions will be made with respect to
Elective CODA Contributions made by a Participant in excess of
______% of a Participant's Compensation for a Plan year.
[X] Other: The participating companies may make matching
contributions at a rate determined by each participating
company. As of the effective date of this agreement, the
Employer will match 80% of the participant's Pre-Tax Elective
Contribution, up to a maximum of $832 per plan year.
Combination: An Employer maintaining a Master Prototype Defined Contribution
Profit Sharing Plan and a Master Prototype Defined Contribution Money Purchase
Plan at the same time, for purposes of contributing to the same:
[ ] Would combine Employer contributions within the 25%
limitation referred in this Article.
[ ] Would not combine Employer contributions.
ARTICLE XIV
VALUATION OF PLAN ASSETS
The assets of the Plan will be valued:
[ ] Annually. The last day of the Plan Year.
[ ] Semi-Annually. The last day of the first and seven
months of the Plan Year
[ ] Quarterly. The last day of the first, fourth, seventh
and tenth months of the Plan Year.
[ ] Monthly. The last day of each month.
[X] Daily Valuation of Assets.
11
The undersigned ("Employer") hereby executes this Adoption Agreement
this 9th day of August, 2002.
------------------------------------
Representative of the Employer
Appointment as Trustee is accepted:
ORIENTAL BANK AND TRUST
By:
------------------------
Title:
---------------------
Date:
----------------------
12
