Form of Popular, Inc. 2025 Long-Term Equity Incentive Award and Agreement

Contract Categories: Human Resources › Bonus & Incentive Agreements
EX-10.1 2 d936763dex101.htm EX-10.1 EX-10.1
 
 
 
 
 
 
 
 
1
Exhibit 10.1
FORM OF POPULAR, INC.
2025 LONG-TERM EQUITY INCENTIVE AWARD
 
AND AGREEMENT
 
Recipient:
 
The Talent
 
and Compensation
 
Committee of
 
the Board
 
of Directors
 
of Popular,
 
Inc. (the
“
Committee
”)
 
awarded
 
you
 
on
 
February
 
25,
 
2025
(the
“Grant
 
Date”
)
a
 
Long-Term
 
Incentive
 
Award
consisting
 
of
 
Restricted
 
Stock
 
(“
Restricted
 
Stock
”)
 
and
 
Performance
 
Shares
 
(“
Restricted
 
Stock
”)
 
and
Performance Shares (“
Performance Shares
” and, in conjunction with the Restricted Stock, the “
Award”
).
 
This award agreement (the “Award Agreement”), dated as of the Grant Date, sets forth the
terms and conditions of your Award.
 
This Award is made under the Popular, Inc. 2020 Omnibus Incentive
Plan, as amended (the “Plan”), and, except
 
as otherwise provided herein, is subject to
 
the terms of the Plan.
Capitalized terms used but not otherwise defined in this Award
 
Agreement have the meanings given in the
Plan.
1.
Award.
 
The number of shares
 
of Restricted Stock and
 
Performance Shares subject
to this Award
 
is set forth in Annex 1 hereto.
 
The Award
 
will vest as set forth below.
 
2.
Vesting;
 
Payout.
Subject to Section 6 of this Agreement, you will be entitled to the following
:
(a)
Restricted Stock
 
Vesting.
 
Except as
 
otherwise stated
 
in this
 
Section 2,
 
your Restricted
 
Stock
shall vest
 
in four
 
substantially equal
 
annual installments
 
on each
 
of the
 
dates specified
 
in Annex
1 (each of the dates described therein, a
“Restricted Stock
Vesting
 
Date
”).
(b)
Performance Shares
 
Vesting.
 
Except as
 
otherwise stated
 
in this
 
Section 2,
 
you shall
 
become
vested in the
 
Performance Shares on
 
the day of
 
the first scheduled
 
meeting of the
 
Committee
taking place in the month of February 2026, subject to the achievement by Popular,
 
Inc. of the
Performance
 
Goals
 
specified
 
in
 
Annex
 
1
 
during
 
the
 
Performance
 
Cycle,
 
as
 
certified
 
by
 
the
Committee in such meeting (hereinafter the
 
“Performance Shares Vesting
 
Date”
and, together
with the Restricted Stock Vesting
 
Date, the
 
“Vesting
 
Date”)
.
 
The Performance Goals will be
based
 
on
 
two
 
performance
 
metrics weighted
 
equally:
 
the
 
Relative
 
Total
 
Shareholder
 
Return
(the “
TSR
”) and the
 
Absolute Return on Average
 
Tangible
 
Common Equity (the “
ROATCE
”)
goals. The Performance Cycle is a
 
three (3) year period beginning on
 
January 1 of the calendar
year of the Grant Date and
 
ending on December 31 of the
 
third year.
 
Each Performance Goal
will have a defined minimum threshold (i.e., minimum result for which
 
an incentive would be
earned),
 
target
 
(i.e.,
 
result
 
at
 
which
 
100%
 
of
 
the
 
incentive
 
would
 
be
 
earned)
 
and
 
maximum
level of performance (i.e., result at which 1.5 times the incentive target would be earned).
(c)
Approved Retirement.
 
Upon an Approved Retirement after attaining (x) age 55 with
 
10 years
of service with Popular,
 
Inc. or its subsidiaries (the
 
“
Corporation
”) or (y) age 60 with
 
5 years
of service with the Corporation: (1) your outstanding Restricted
 
Stock shall fully vest; and (2)
your
 
outstanding
 
Performance
 
Shares
 
shall
 
continue
 
outstanding
 
and
 
vest
 
in
 
full
 
on
 
the
 
 
 
 
 
 
 
 
 
 
 
 
 
2
Performance
 
Shares
 
Vesting
 
Date
 
in
 
accordance
 
with
 
the
 
actual
 
results
 
of
 
the
 
Performance
Goals during the Performance Cycle.
(d)
Vesting
 
upon Retirement
 
on or
 
after age
 
50 before
 
attaining age
 
55 and
 
10 years
 
of service.
The Committee,
 
at its
 
discretion, may
 
accord the
 
same treatment
 
accorded in
 
Section 2(c)
 
above
if you retire from
 
your employment on or
 
after age 50, and
 
before attaining age 55
 
and 10 years
of service, provided the sum of your age and years of service is at least 75.
(e)
Death. Provided that
 
on the date
 
of your death
 
you are still
 
employed by the
 
Corporation and
your rights in
 
respect of your
 
Award
 
have not been
 
previously terminated,
 
any then unvested
outstanding
 
Award
 
shall
 
immediately
 
vest
 
and
 
be
 
paid
 
to
 
the
 
representative
 
of
 
your
 
estate
promptly after your death.
 
In the case of the Performance
 
Shares, the number of shares will
 
be
calculated as if the target number of Performance Shares had in fact been earned.
(f)
Disability.
 
If you
 
become subject
 
to Disability
 
while you
 
are still
 
employed by
 
the Corporation,
any then unvested outstanding Award
 
shares shall vest and shall be paid to you promptly after
you become subject to Disability.
 
In the case of the Performance Shares, the
 
number of shares
will be calculated as if the target number of Performance Shares had in fact been earned.
(g)
Change
 
of
 
Control.
 
If
 
your
 
employment
 
is
 
terminated
 
by
 
the
 
Corporation
 
or
 
any
 
successor
entity thereto
 
without Cause,
 
or if
 
you terminate your
 
employment for
 
Good Reason, in
 
each
case upon or within two years after a Change of Control,
 
prior to a Vesting Date, and provided
your rights in respect
 
of the shares of
 
your unvested Award have not previously terminated, the
shares of your unvested
 
Award
 
shall immediately vest and
 
be delivered to you
 
promptly after
such
 
termination
 
of
 
employment;
provided
 
that
,
 
as
 
of
 
the
 
Change
 
of
 
Control
 
date,
 
any
outstanding
 
Performance
 
Shares
 
shall
 
be deemed
 
earned
 
at
 
the
 
greater of
 
the
 
target
 
level
 
or
actual performance level through the Change of Control date (or if no target level
 
is specified,
the maximum level)
 
with respect to
 
all open performance
 
periods and such
 
Performance Shares
shall be
 
subject to
 
time-based vesting
 
through the
 
end of
 
the original
 
Performance Cycle
 
for
each such
 
Award,
 
subject to
 
accelerated vesting
 
in accordance
 
with the
 
first sentence
 
of this
clause.
(h)
Termination
 
without
 
Cause.
 
If the
 
Corporation
 
terminates your
 
employment
 
without
 
Cause
you will receive payment of the Award on a prorated basis based on the number
 
of full months
in the
 
vesting schedule
 
in which
 
you were
 
an active
 
employee (with
 
a partial
 
month worked
counted as a full month if you were an active employee for 15 days or more in the month) and
such reduced Award
 
will vest immediately
 
upon your termination
 
of employment, calculated
in the
 
case of
 
Performance Shares
 
as if
 
the target
 
number of
 
Performance Shares
 
had in
 
fact
been earned, as provided in the Plan.
(i)
Payout.
 
The transfer restrictions on the applicable number
 
of whole shares of Restricted Stock
shall lapse on each Vesting Date or such other vesting date as determined in this Section 2 and
in the terms of
 
the Plan. The payout
 
with respect to vested
 
Performance Shares shall be
 
made
on
 
the
 
Performance
 
Shares
 
Vesting
 
Date,
 
on
 
which
 
date
 
the
 
Committee
 
shall
 
determine
 
the
total
 
number
 
of
 
shares
 
earned
 
based
 
upon
 
the
 
actual
 
performance
 
results
 
during
 
the
Performance
 
Cycle.
 
The
 
vested
 
shares
 
will
 
be
 
delivered
 
to
 
you
 
as soon
 
as
 
administratively
practicable, generally within 45 days following each Vesting
 
Date.
3.
Termination of Award
 
.
 
 
 
3
(a)
Except
 
as
 
provided
 
herein,
 
your
 
rights
 
in
 
respect
 
of
 
your
 
outstanding
 
unvested
Award
 
shares
 
shall immediately
 
terminate, and
 
no shares
 
shall be
 
paid in
 
respect thereof,
 
if at
 
any time
prior to the respective Vesting
 
Date you terminate your employment.
 
(b)
If
 
the
 
Corporation
 
terminates
 
your
 
employment
 
for
 
Cause, your Award
 
shares shall be cancelled and the provisions under the Plan will apply.
4.
Non-transferability.
 
This Award (or any rights
 
and obligations hereunder)
 
may not
be sold,
 
exchanged,
 
transferred, assigned,
 
pledged,
 
hypothecated or
 
otherwise
 
disposed
 
of or
 
hedged,
 
in
any manner (including through
 
the use of any
 
cash-settled instrument), whether voluntarily or
 
involuntarily
and whether by operation of law or otherwise, other than by
 
will or by the laws of descent and distribution.
 
5.
Withholding, Consents and Legends.
(a)
You
 
shall
 
be
 
solely
 
responsible
 
for
 
any
 
applicable
 
taxes
 
(including,
 
without
limitation,
 
income
 
and
 
excise
 
taxes)
 
and
 
penalties,
 
and
 
any
 
interest
 
that
 
accrues
 
thereon,
 
incurred
 
in
connection with your Award.
 
The Corporation will withhold
 
shares of Common Stock
 
for the payment of
taxes
 
in
 
connection
 
with
 
the
 
vesting
 
of
 
your
 
Award
 
or
 
upon
 
the
 
occurrence
 
of
 
any
 
other
 
event
 
that,
 
in
accordance with applicable law,
 
will generate a tax
 
liability with regards to
 
your Award.
 
The Corporation
will
 
withhold
 
shares
 
of
 
Common
 
Stock
 
with
 
a
 
value
 
equal
 
to
 
the
 
amount
 
of
 
taxes
 
that
 
the
 
Corporation
determines it is
 
required to withhold
 
under applicable laws
 
(with such withholding
 
obligation determined
based on any
 
applicable minimum statutory
 
withholding rates). The
 
Corporation will
 
use the Fair
 
Market
Value
 
of the
 
Common Stock
 
on the
 
Vesting
 
Date or
 
such other
 
date, as
 
applicable, in
 
order to
 
determine
the number of
 
shares to be
 
withheld. If you
 
wish to remit
 
cash to the
 
Corporation (through payroll
 
deduction
or
 
otherwise),
 
in
 
each
 
case
 
in
 
an
 
amount
 
sufficient
 
in
 
the
 
opinion
 
of
 
the
 
Corporation
 
to
 
satisfy
 
such
withholding
 
obligation,
 
you
 
must
 
notify
 
the
 
Corporation
 
in
 
advance
 
and
 
do
 
so
 
in
 
compliance
 
with
 
all
applicable laws and
 
pursuant to such
 
rules as the
 
Corporation may establish
 
from time to
 
time, including,
but not limited to, the Corporation’s Insider Trading
 
Policy.
 
(b)
Your
 
right to receive shares pursuant to the Award is conditioned on the receipt to
the reasonable
 
satisfaction of
 
the Committee
 
of any
 
required consent
 
that the
 
Committee may
 
reasonably
determine to be necessary or advisable.
 
By accepting delivery of the shares, you acknowledge that you
 
are
subject to the Corporation’s Insider Trading
 
Policy.
6.
Restrictive Covenants.
 
(a)
In consideration of the
 
terms of the Award,
 
you agree to the
 
restrictive covenants
and associated remedies as set forth
 
below, which
 
exist independently of and in
 
addition to any obligation
to which you are subject
 
under the terms of any other
 
agreement you may have with the
 
Corporation or any
of its subsidiaries (“
Popular
”).
(b)
For a period
 
of one year
 
immediately following
 
termination of your
 
employment
with Popular
 
for any
 
reason, you
 
will not
 
do any
 
of the following,
 
either directly
 
or indirectly
 
or through
associates, agents, or employees:
 
(i)
solicit,
 
recruit
 
or
 
assist
 
in
 
the
 
solicitation
 
or
 
recruitment
 
of
 
any
 
employee
 
or
consultant
 
of
 
Popular
 
(or
 
who
 
was
 
an
 
employee
 
or
 
consultant
 
of
 
Popular
 
within
 
the
 
prior
 
six
months) for the purpose
 
of encouraging that employee
 
or consultant to leave
 
Popular’s employ or
sever an agreement for services; or
 
 
 
 
 
 
4
(ii)
solicit,
 
participate
 
in
 
or
 
assist
 
in
 
the
 
solicitation
 
of
 
any
 
of
 
Popular’s
 
customers
serviced
 
by
 
you
 
or
 
with
 
whom
 
you
 
had
 
Material
 
Contact
 
and/or
 
regarding
 
whom
 
you
 
received
Confidential Information (as
 
defined in
 
Popular’s Code of
 
Ethics) during the
 
three-year period
 
prior
to
 
your
 
employment
 
termination
 
who
 
were
 
still
 
customers
 
of
 
Popular
 
during
 
the
 
immediately
preceding 12-month period, for
 
the purpose of providing
 
products or services in
 
competition with
Popular’s products or
 
services. "Material
 
Contact" means interaction
 
between you
 
and the customer
within the three-year prior to your last day
 
as a team member which takes place to
 
manage, service
or further the business relationship.
 
The term “Solicit”, when used
 
in this section, will mean
 
any direct or indirect communication
 
of any kind
regardless of
 
who initiates
 
it, that
 
in any
 
way invites,
 
advises, encourages
 
or requests
 
any person
 
to take
any
 
action;
 
provided
 
that
 
such
 
term
 
will
 
not
 
be
 
deemed
 
to
 
include
 
solicitation
 
by
 
public
 
advertisement
media of general distribution (i.e., not targeted to present employees,
 
consultants or customers of Popular)
without specific instruction or direction by you.
If you breach
 
any of the
 
terms of this
 
restrictive covenant, all
 
outstanding Restricted Stock
 
and Performance
Shares awarded hereunder,
 
whether vested or unvested,
 
held by you shall
 
be immediately and irrevocably
forfeited for
 
no consideration.
 
For any
 
Restricted Stock
 
and Performance
 
Shares awarded
 
hereunder that
vested within one (1)
 
year prior to
 
the termination of
 
your employment with Popular
 
or at any
 
time between
your termination
 
of employment
 
and the
 
date of
 
said breach,
 
you shall
 
be required
 
to repay
 
or otherwise
reimburse Popular an amount having a value equal to the aggregate fair market value
 
(determined as of the
date of vesting)
 
of such vested
 
shares. This paragraph
 
does not constitute
 
Popular’s exclusive
 
remedy for
violation of
 
your restrictive covenant
 
obligations, and
 
Popular may
 
seek any
 
additional legal or
 
equitable
remedy, including injunctive relief, for any
 
such violation.
7.
Section 409A.
 
Shares awarded
 
under this
 
Award
 
Agreement are
 
intended
 
to be
exempt from
 
Section 409A
 
of the
 
U.S. Code,
 
to the
 
extent applicable,
 
and this
 
Award Agreement is intended
to, and
 
shall be
 
interpreted, administered
 
and construed
 
consistent therewith.
 
The Committee
 
shall have
full authority to give effect to the intent of this Section 7.
8.
No Rights to Continued Employment.
 
Nothing in this Award
 
Agreement shall be
construed as
 
giving you
 
any right
 
to continued
 
employment by
 
the Corporation
 
or any
 
of its
 
affiliates or
affect
 
any right
 
that the
 
Corporation or
 
any of
 
its affiliates
 
may have
 
to terminate
 
or alter
 
the terms
 
and
conditions of your employment.
 
9.
Successors
 
and
 
Assigns
 
of
 
the
 
Corporation.
 
The
 
terms
 
and
 
conditions
 
of
 
this
Award Agreement shall be binding upon, and
 
shall inure to the
 
benefit of, the Corporation
 
and its successor
entities.
10.
Committee Discretion.
 
Subject to the terms of the Plan, the Committee shall have
full discretion with respect to any actions to be
 
taken or determinations to be made in connection
 
with this
Award
 
Agreement, and its determinations shall be final, binding and conclusive.
11.
Amendment.
 
The Committee
 
reserves the
 
right at
 
any time
 
to amend
 
the terms
and conditions
 
set forth
 
in this
 
Award
 
Agreement;
provided
 
that, notwithstanding
 
the foregoing,
 
no such
amendment
 
shall
 
materially
 
adversely
 
affect
 
your
 
rights
 
and
 
obligations
 
under
 
this
 
Award
 
Agreement
without
 
your
 
consent
 
(or
 
the
 
consent
 
of
 
your
 
estate,
 
if
 
such
 
consent
 
is
 
obtained
 
after
 
your
 
death),
 
and
provided
,
further
, that the Committee may not postpone
 
the payout of shares to occur at any
 
time after the
applicable time provided for in this Award
 
Agreement. Any amendment of this Award Agreement
 
shall be
in
 
writing
 
signed
 
by
 
an
 
authorized
 
member
 
of
 
the
 
Committee
 
or
 
a
 
person
 
or
 
persons
 
designated
 
by
 
the
Committee.
 
 
 
 
5
12.
Adjustment;
 
Other Plan
 
Provisions.
 
Subject to
 
Section
 
11,
 
the Committee
 
shall
adjust equitably the terms
 
of this Award
 
in accordance with Section
 
5.3 of the Plan,
 
if applicable. Subject
to
 
the
 
terms
 
of
 
this
 
Award
 
Agreement,
 
the
 
Restricted
 
Stock
 
shall
 
be
 
subject
 
to
 
the
 
terms
 
of
 
the
 
Plan,
including,
 
but
 
not
 
limited
 
to,
 
the
 
provisions
 
of
 
Section
 
8.4
 
related
 
to
 
dividends
 
and
 
voting
 
rights.
 
Cash
dividends paid on the Restricted Stock and on all of the Common Stock
 
that may be subsequently acquired
with such
 
cash dividends,
 
will be
 
invested in
 
the purchase
 
of additional
 
shares of
 
Common Stock
 
of the
Corporation
 
in
 
accordance
 
with
 
the
 
Popular,
 
Inc.
 
Dividend
 
Reinvestment
 
and
 
Stock
 
Purchase
 
Plan
 
(the
“
DRIP
”); such shares
 
are not subject
 
to the restrictions
 
and are immediately
 
vested. The
 
Restricted Stock
shall be held in custody by the Fiduciary Services Division of Banco Popular de Puerto Rico.
Performance
 
Shares
 
will
 
accrue
 
Dividend
 
Equivalents
 
prior
 
to
 
the
 
Performance
 
Shares
 
Vesting
 
Date.
Accrued Dividend Equivalents with respect to the
 
Performance Shares will be invested in
 
additional shares
of Common Stock
 
of the Corporation
 
in accordance with
 
the formula set
 
forth in the
 
DRIP.
 
All shares of
Common
 
Stock
 
acquired
 
pursuant
 
to
 
the
 
reinvestment
 
of
 
dividends
 
will
 
be
 
subject
 
to
 
the
 
terms
 
and
conditions of Section
 
2 and will
 
be paid
 
out on the
 
Performance Shares Vesting
 
Date based on
 
the actual
number of Performance Shares earned on that date.
13.
Governing
 
Law.
 
This
 
award
 
shall be
 
governed
 
by and
 
construed
 
in
 
accordance
with the laws of Puerto Rico, without regard to principles of conflicts of laws.
14.
Incentive Recoupment. This
 
award shall be
 
subject to the
 
terms of the
 
Popular, Inc.
Incentive Recoupment Guideline in effect as of the Grant
 
Date and as such guideline may be
 
required to be
modified in accordance with applicable law or regulation.
15.
Headings.
 
The
 
headings
 
in
 
this
 
Award
 
Agreement
 
are
 
for
 
the
 
purpose
 
of
convenience only and are not intended to define or limit the construction of the provisions hereof.
 
IN WITNESS WHEREOF,
 
POPULAR, INC. and
 
the Recipient caused
 
this Award
 
Agreement to
be duly executed and delivered as of the Grant Date.
POPULAR, INC.
 
ACCEPTED:
 
By:
 
[Insert Name of Representative]
 
By:
 
[Insert Name of Recipient]
Title:
 
[Insert Name of Representative]
 
Title: [Insert Name of Recipient]
_________________________
 
___________________________
Signature
 
Signature
 
 
 
 
 
 
 
6
ANNEX 1
POPULAR, INC.
2025 LONG-TERM EQUITY INCENTIVE AWARD
Recipient:
 
Employee Number:
 
Grant Date: February 25, 2025
Total Dollar Value
 
of Award:
 
$
Common Stock Market Price as of closing on Grant Date:
 
$
Restricted Stock
Dollar Value
 
of Restricted Stock Award:
 
$
Common Stock Market Price as of closing on Grant Date:
 
$
Total Shares of Restricted Stock
 
Awarded:
 
Restricted Stock Vesting
 
Dates:
 
Shares
Shares
Shares
Shares
February 23, 2026
 
February 23, 2027
February 23, 2028
February 23, 2029
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
7
Performance Shares
 
Dollar Value
 
of Performance Shares Award:
 
$
Common Stock Market Price as of closing on Grant Date:
 
$
Total Target
 
Number of Shares:
 
(50% Total Shareholder
 
Return / 50% ROATCE)
Relative Total Shareholder
 
Return (TSR)
1
 
–
 
Opening Price =
 
Percentile Rank among
Comparator Group
Shares Earned
(% of Target)
75
th
 
Percentile or above
(maximum)
(1.5x target shares)
50th Percentile
(target)
(1x target shares)
25
th
 
Percentile
(threshold)
(0.5x target shares)
Below 25
th
 
Percentile
0
Absolute
 
Return
 
on
 
Average
 
Tangible
 
Common
 
Equity
(ROATCE)
2
 
–
 
ROATCE
Shares Earned
(% of Target)
3-year simple average ROATCE
 
2025-2027
13.4% or above
(maximum)
(1.5x target shares)
12.00%
(target)
(1x target shares)
8.75%
(threshold)
(0.5x target shares)
Lower than 8.75%
0
Results between threshold, target and maximum performance
 
will be interpolated to determine vesting award
1
 
TSR will be calculated as [(Closing Price at end of period * (1 + number of shares purchased assuming reinvestment of dividends))/Opening Price at
beginning of period] – 1
●
Closing Price and Opening Price are based on the preceding 60 trading days average daily close price to mitigate against share price volatility of
point-in-time metrics.
o
Opening price = average price 10/07/2024 – 12/31/2024
o
Closing price = average price based on the 60-day trading period ending December 31, 2027
●
TSR calculations shall assume that dividends are reinvested on the ex-dividend date (i.e., the date a dividend asset is guaranteed).
Comparator Group -- U.S. Banks (GICS Code 401010) with Assets between $25B - $500B – Performance will be based on the composition of the group at
the beginning of the 3-year Performance Cycle. If a company has been acquired as of the end of the performance period, the company will be removed
from the index. If a company goes bankrupt during the performance period, the company will be included in the ranking at -100%.
If Popular’s absolute TSR is negative, payout will be limited to a maximum of 100% of target.
2
3-year simple average ROATCE for 3 years
 
(2025-2027).
 
The Committee may adjust the goal or results to reflect a core profitability that would not be
unduly inflated or deflated by certain transactions that do not reflect the underlying performance of Popular’s ongoing operations, including, but not limited
to: the impact of significant tax reform; sales of non-earning assets, branches or other businesses; capital actions (such as share buybacks) that result in
material variations from goal-setting assumptions, including those related to outstanding share count; certain business acquisition costs and revenues;
extraordinary events; charitable contributions; severance costs; and certain litigation and settlement costs.