EX-10.1 2 d164129dex101.htm EX-10.1
Exhibit 10.1
FORM OF DOCUMENTS RELATED
TO DIRECTOR COMPENSATION
FOR BETTY
DEVITA AND JOSE R. RODRIGUEZ
June 25, 2021
PERSONAL AND CONFIDENTIAL
[Name of Director]
[Address]
Dear [Name of Director]:
We are very pleased to welcome you to the Board of Directors (the “Board”) of Popular,
Inc. (the
“Corporation”), and are writing
to set forth the
general terms of your
compensation as a Director
of the Corporation and certain of its wholly
owned subsidiaries. These terms are subject
to future
modification by the Board.
The annual compensation for directors approved by the Corporation’s
Board on September 21, 2018 is as follows (the “Annual Compensation”):
●
A grant (the “Equity Grant”) of $125,000 (payable in equity) under the Popular, Inc. 2020
Omnibus Incentive Plan (the “Omnibus Plan”);
●
A retainer
fee (the
“Annual Retainer”)
of $75,000
(payable in
cash or
in equity,
at your
option);
●
A committee chair
retainer (the “Committee
Chair Retainer”) payable
(in cash or
in equity,
at
the
director’s
option)
to
the
director
designated
as
Chairperson
of
the
following
Committees:
o
Audit and Risk Committees: $20,000.
o
Compensation and
Corporate Governance
& Nominating
Committees $15,000;
and
●
A
grant
(the
“Lead
Director
Grant”)
of
$25,000
(payable
in
equity)
under
the
Omnibus
Plan, to the director designated as lead director.
As compensation for your services as a director for the period commencing on
June 25, 2021 and
ending on
the day
before the
2022 annual
shareholder’s meeting,
you will
receive the
following
prorated Annual Compensation:
●
An Equity Grant of $107,877;
and
●
An Annual Retainer of $64,725 (payable in cash or in equity, at your option);
All equity payments may be
received in either immediately vested
Restricted Stock or Restricted
Stock Units, at your option.
The Annual Compensation
is attributable to
the period commencing
on May 6,
2021 and ending
on the
day before the
2022 annual
shareholder’s
meeting, and
for each subsequent
year that
you
are
a
director
and/or
elected
as
committee
chair
or
lead
director
until
such
compensation
is
modified by
the Board
of
Directors. The
annual
compensation period
for
subsequent years
will
commence on
the day
of the
corresponding annual
shareholders’ meeting
and end
on the
day before
the following year’s annual shareholder’s meeting.
The Annual
Retainer and
Committee Chair
Retainer will
be paid
in cash,
unless you
elect to
receive
the payment in the form of
equity under the Omnibus Plan, as
discussed below.
The Equity Grant,
Lead Director Grant (if
applicable) and any
retainers which you
elected to receive
in the form
of
equity
will
be
paid
in
the
form
of
Restricted
Stock,
unless
you
elect
to
receive
the
payment
in
Restricted Stock Units. Shares of Restricted Stock will
vest immediately on the grant date and be
issued to you on such
date. If you elect to
receive the equity component of
your compensation in
the form of Restricted Stock
Units, you will elect
to receive the shares of
stock of the underlying
Restricted Stock Units in one of the two following forms:
●
Lump-Sum
– You
will receive the shares of stock of the underlying Restricted Stock Units
on
the
15
th
of
August
immediately
following
the
date
you
cease
to
be
a
director
of
the
Corporation.
●
Annual Installments
– You
will
receive the
shares
of Stock
of the
underlying
Restricted
Stock Units in equal
annual installments on each
15
th
of August of the 1
st
, 2
nd
, 3
rd
, 4
th
and
5
th
year after you cease to be a director of the Corporation.
In
order
to
make
the
elections
discussed
above,
you
must
return
to
us
the
attached
Director
Compensation
Election
Form
no
later
than
June
28,
2021
.
If
you
do
not
submit
the
Director
Compensation
Election
Form
prior
to
such
date,
the
Annual
Retainer
and
Committee
Chair
Retainer will
be payable
to you
in cash
and the
equity component
of your
compensation will
be
payable to you in immediately vested Restricted Stock. Once you
have made an election it will be
applicable
to
all
future
payments,
unless
you
notify
us
in
writing
of
your
desire
to
change
the
election. You may make such change in connection with future payments, by sending us a written
notice no
later than
the 31
st
of December
of the
year preceding the
date of the
Corporation’s annual
shareholders’ meeting to which the change would be in effect.
The number of shares of
Restricted Stock or Restricted Stock
Units (depending on your election)
to be
delivered in
payment of
the Equity
Grant, the
Annual Retainer, the
Committee Chair
Retainer
and
the
Lead
Director
Grant,
as
applicable,
will
be
determined
by
dividing
the
corresponding
amount of the
payment in cash
by the closing
price of the
Corporation’s common stock on the
date
of the annual shareholder’s meeting.
The Restricted Stock Units will
be subject to the
terms and conditions of
the Restricted Stock Unit
Award
Agreement attached hereto. To
the extent that cash dividends are declared and paid on the
Corporation’s outstanding common stock after the award of Restricted Stock
Units but before the
actual shares of common stock are delivered,
you will receive an additional number of Restricted
Stock Units that reflect reinvested dividend equivalents.
We have enclosed the following
documents in connection to your compensation:
1.
Director Compensation Election Form;
2.
Restricted Stock Unit Award Agreement; and
3.
Omnibus Plan.
Please complete and sign the Director Compensation
Election Form and the Restricted Stock Unit
Award
Agreement
where
indicated,
and
return
the
executed
documents
to
Daniel
E.
Gonzalez
Ortiz at the Corporate Secretary’s Office. Please retain a copy of the documents
for your records.
Cordially,
Javier D. Ferrer
Executive Vice President,
Chief Legal Officer & Secretary
DIRECTOR COMPENSATION ELECTION FORM
Name: [Name of Director]
This Election Form is subject to all the terms and conditions of Popular, Inc.’s (the “Corporation”) 2020
Omnibus Incentive Plan, as amended (the “Plan”) and the Restricted Stock
Unit Award Agreement (as
applicable) executed by me and the Corporation in connection with
this Election Form (the
“Agreement”). I acknowledge that I have received the letter informing me of
my compensation as a
member of the Board of Directors of the Corporation (the “Board”)
and/or certain of its wholly-owned
subsidiaries commencing on June 25, 2021 and continuing until such compensation
is changed by the
Board and that I agree with the terms set forth therein. Capitalized terms used
in this Election Form but
not defined herein shall have the meanings set forth in the Plan.
In accordance with the Plan and the Agreement, I hereby make the following
elections with respect to the
compensation to be received by me for my services as a member of the Board
and/or certain of its wholly-
owned subsidiaries for the period commencing on June 25, 2021 and
continuing in future years:
Election I
ANNUAL RETAINERS
I hereby elect to receive the Annual Retainer and Committee Chair Retainer
(if applicable) component of
my compensation for the period commencing on June 25, 2021 and
continuing for future years in the
following form (select only one):
CASH
EQUITY
Election II
EQUITY AWARDS
I hereby elect to receive the equity components of my compensation
(Equity Grant and Lead Director
Grant (if applicable)) and any annual retainers which I elected to receive in
the form of equity in Election
I above) for the period commencing on June 25, 2021 and continuing
for future years in the following
form (select only one):
●
Restricted Stock
– The
shares of
Common Stock
will vest
immediately on
the grant
date and
be
issued to the Director on such date.
●
Restricted Stock Units
- The delivery of the shares of Common Stock of the underlying Restricted
Stock Unit Award will be deferred to a future date selected by the Director in Election III below.
RESTRICTED
STOCK
RESTRICTED
STOCK UNITS
Election III
DEFERRAL OF SETTLEMENT OF RESTRICTED STOCK UNITS
To be
completed only if you selected “Restricted Stock Units” in Election
II above.
I hereby defer the settlement of the Restricted Stock Units granted to
me by the Corporation and elect to
receive the shares of Common Stock of the underlying Restricted Stock Units
(including any additional
Restricted Stock Units resulting from dividend equivalents) in the following
form (select only one):
●
Lump-Sum
- The
Director will
receive the
shares of
Common Stock
of the
underlying Restricted
Stock Unit Award on the 15
th
of August immediately following
the date the Director ceases
to be a
director of the Corporation.
●
Annual Installments
-
The Director
will
receive the
shares of
Common Stock
of
the
underlying
Restricted Stock Unit Award in equal annual installments on each
15
th
of August of the 1
st
, 2
nd
, 3
rd
,
4
th
and 5
th
year after the Director ceases to be a director of the Corporation.
LUMP-SUM
DISTRIBUTION
ANNUAL
INSTALLMENTS
I acknowledge that, notwithstanding any deferral election I make under
this Election Form, as set forth in
the Agreement, in the event of my death or a Change of Control, the settlement
of my Restricted Stock
Units will accelerate and be settled as soon as practicable but in no event
more than sixty (60) days
following my death or such Change of Control.
Other Information:
I hereby inform the Corporation that my place of residence for tax purposes
is:
__The Commonwealth of Puerto Rico
__Mainland United States of America
__Other: ____________________
I hereby instruct the Corporation to deliver and deposit the shares of Common
Stock awarded to me as
part of my compensation to my account at:
__Popular Securities (Account Number: _____________)
__Popular, Inc.’s Dividend Reinvestment and Stock Purchase Plan (Account Number: __________)
__Other:
(Account Number:
)
This Election Form will become irrevocable with respect to the grant year
to which it applies and shall be
effective for subsequent grant years until I file with the Corporation a new Election Form revoking
or
changing such election in accordance with the requirements of Section 409A of
the U.S. Code and the
procedures specified by the Corporate Governance and Nominating Committee.
To be effective, any
revocation or change of this Election Form must be filed by December 31
st
of the year preceding the date
of the Corporation’s annual shareholders meeting to which the revocation or change is made. I understand
that this Election Form may be revoked or changed in accordance with
the requirements of Section 409A
of the U.S. Code, or that I may need to complete another Election Form
for future compensation, if the
terms of the Plan are amended. I further understand that the ability to
make a subsequent deferral election
may not be available to me in the future if the Corporation changes the Plan
or its Plan administration
policies. I am aware that any elections I have hereby made may have significant
tax consequences to me
and, to the extent I deem necessary, I have received advice from my personal tax advisor before making
this deferral election. This Election Form is in all respects subject to the terms
and conditions of the Plan
and the Agreement. Should any inconsistency exist between this Election
Form, the Plan, and/or the
Agreement, then the provisions of either the Plan or the Agreement will
control.
The undersigned hereby agrees to be bound by this Election Form
and agrees to comply with the terms
and conditions of the Plan, the Agreement (as applicable), and the
elections set forth herein.
Please send the executed version of this Election Form to Daniel E. González
at the Corporate Secretary’s
Office no later than June 28, 2021.
Any Election Form received after that date will not be given effect.
DIRECTOR
By:____________________
Name:
[Name of
Director]
POPULAR, INC.
RESTRICTED STOCK UNIT AWARD
AGREEMENT
This
RESTRICTED STOCK UNIT AWARD
AGREEMENT
(the “Agreement”) is
made and entered into as of June 25, 2021, by and between POPULAR, INC. (the
“Corporation”) and [Name of Director] (“Director”). Capitalized terms used but not otherwise
defined herein shall have the meanings ascribed to them under the Plan (as defined therein).
WHEREAS
, the Corporation maintains the Popular, Inc.
2020 Omnibus Incentive Plan,
as amended (the “Plan”);
WHEREAS
, in connection with the Director’s service as a member of the Board of
Directors of the Corporation and/or certain of its wholly-owned subsidiaries, the Corporation
desires to grant Restricted Stock Units to the Director, subject to the terms and conditions of the
Plan and this Agreement; and
NOW,
THEREFORE
, in consideration of the covenants and agreements contained
herein and for other good and valuable consideration, the parties agree as follows:
1.
Award of
Restricted Stock Units
. Subject to the terms and conditions of this
Agreement
and the Plan, in consideration
of Director’s services as a
member of the Board of
Directors
of the Corporation and/or certain
of its wholly-owned subsidiaries, the
Corporation hereby
grants to the
Director the number
of Restricted Stock
Units (“RSUs”) set
forth from time
to
time
in
Annex
I
of
this
Agreement
(the
“Award
”).
Annex
I
will
be
delivered
to
the
Director upon each Award and will form part of this Agreement. Each RSU represents the
unfunded and unsecured
promise of the
Corporation to
issue to the
Director one
share of
Common Stock, par
value $.01 per share,
of the Corporation on
the Settlement Date (as
set
forth in Section 4 hereof). No fractional RSUs shall be
issued. Whenever
the computation
of the number of RSUs to be awarded results in a fractional amount, such amount shall be
rounded up to the next greater whole number of RSUs.
2.
Vesting
and Transfer
Restrictions.
The RSUs awarded
under this
Agreement shall
vest
and become non-forfeitable
on the Grant
Date (as set forth
in Annex I)
of such Award. The
RSUs may not be assigned, transferred,
pledged or otherwise disposed of in any
way other
than by the
Last Will and Testament of the Director or
the laws of
descent and distribution,
subject to the bylaws of the Corporation. Any RSUs held by a beneficiary shall be subject
to the
restrictions imposed
on such
RSUs by
this Agreement
and the
Plan. Any
such attempt
at assignment, transfer, pledge or other disposition shall be without effect.
3.
Election to
Defer
Receipt
of Shares.
The
Director has
elected to
defer,
to some
future
date as provided in Section 4 of this Agreement and
set forth in Annex I,
the receipt of all
the
shares of
Common
Stock
underlying
the
Award
granted pursuant
to
this
Agreement
(the “Shares”). In order
to defer the receipt
of the Shares, the
Director has completed and
filed
an
election
form
with
the
Plan
administrator,
which
election
form
is
incorporated
herein by reference.
4.
Settlement Date and Issuance of Shares.
The Director
has elected
to receive
the Shares
in one of the following manners (each a “Settlement Date”) as set forth in Annex I hereto:
a)
Lump-Sum.
The
Director
will
receive
the
Shares
on
the
15
th
of
August
immediately following
the date
the Director
ceases to
be a
director of
the
Corporation, or
b)
Annual Installments.
The Director
will receive
the Shares
in equal
annual
installments on each
15
th
of August of
the 1
st
, 2
nd
, 3
rd
, 4
th
and 5
th
year after
the Director ceases to be a director of the Corporation.
On the Settlement Date selected by the Director, the Corporation shall issue to the Director the
Shares as provided in this section.
5.
Death; Change of Control
. Notwithstanding the forgoing or anything in this
Agreement
or
any
deferral
election
form
to
the
contrary,
in
the
event
of
the
Director’s
death
or
a
Change of Control, the Settlement Date of the Award shall accelerate and the Award
shall
be settled
as soon
as practicable
but in
no event
more than
sixty (60)
days following
the
date of the Director’s death or such Change of Control.
6.
Rights as Stockholder.
The Director shall not have any rights (including voting rights)
of
a shareholder
of the
Corporation with
respect to
the RSUs
until the
Shares have
been issued
to the Director on the Settlement Date.
7.
Dividend
Equivalents.
To
the
extent
that
cash
dividends
are
declared
and
paid
on
the
Corporation’s
outstanding Common
Stock after the
Grant Date
but before
the Settlement
Date of
the Award,
the
Director shall
receive an
additional number
of RSUs
that reflect
reinvested dividend equivalents. The
dividend equivalents will be equal
in value (based on
the reported dividend rate
on the date dividends
are paid) to
the amount of
dividends that
would
have
been
paid
on
the
Shares
not
yet
delivered
to
the
Director
(the
“Dividend
Equivalents”). The Director shall receive as of the date of the dividend payment a number
of RSUs equal
to the amount
of the cash
dividend paid by
the Corporation on
a single share
of
Common
Stock
multiplied
by
the
number
of
RSUs
awarded
under
this
Agreement,
divided by the Fair Market Val
ue of the Common Stock of
the Corporation on the date of
the dividend payment (the “Dividend Equivalent RSUs”). The Dividend Equivalent RSUs
will be delivered to
the Director as soon
as practicable following
the date of
the dividend
payment
and
will
vest
immediately.
The
underlying
shares
of
Common
Stock
of
such
Dividend
Equivalent
RSUs
will
be
issued
to
the
Director
on
the
Settlement
Date
in
accordance
with
Section 4
and
Annex
I
of
this
Agreement,
in
the
same
manner
as
the
Shares are issued.
Dividend Equivalent RSUs obtained
by the Director
will also be
entitled
to obtain Dividend Equivalents in
accordance with this Section 7,
when cash dividends are
declared
and
paid
by
the
Corporation.
Shares
of
Common
Stock
underlying
Dividend
Equivalent RSUs shall also be referred to herein as “Shares”.
8.
Tax
Matters.
a)
Tax
Witholding
.
The
Director
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
the
Award
and
any Dividend Equivalent RSUs.
The Corporation may withhold or cause to be
withheld
from
the
Award
and
any
Dividend
Equivalent
RSUs
(or
Director’s
other compensation) any
Federal, Puerto Rico,
state or local
taxes required by
law to be
withheld with respect
to such Award
or Dividend Equivalent
RSUs.
By acceptance
of this
Agreement, Director
agrees to
such deductions.
If a
tax
withholding
is
required
under
applicable
law,
the
Corporation
will
withhold
shares of Common Stock
with a value
equal to the payment
of the taxes
that the
Corporation determines
it is
required to
withhold under
applicable tax
laws with
respect
to
the
Award
and
any
Dividend
Equivalent
RSUs
(with
such
withholding obligation determined based on any applicable
minimum statutory
withholding rates),
in connection
with the
issuance of
the Shares
thereof. The
Corporation
will
use
the
Fair
Market
Value
of
the
Common
Stock
on
the
Settlement Date
in order
to determine
the number
of shares
to be
withheld. If
the
Director
wishes
to
remit
cash
to
the
Corporation
(through
payment
deductions or otherwise), in each case in an amount sufficient in the opinion of
the Corporation to
satisfy such withholding
obligation, the Director
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)
Section
409A.
The
intent
of
the
parties
is
that
the
Award
and
any
Dividend
Equivalent
RSUs
granted
hereunder
comply
with
Section 409A
of
the
U.S.
Code
to
the
extent
subject
thereto,
and,
accordingly,
to
the
maximum
extent
permitted,
this
Agreement,
the
Plan
and
the
deferral
election
form
shall
be
interpreted and
be administered
to be
in compliance
therewith. Notwithstanding
anything to the contrary,
the Director shall not be considered to have ceased to
be a director or to
have terminated service with the Corporation
for purposes of
this Agreement until
the Director has
incurred a “separation
from service” from
the
Corporation
within
the
meaning
of
Section 409A
of
the
U.S.
Code.
In
addition, for purposes
of this
Agreement, each
amount to be
paid to
the Director
pursuant
to
this
Agreement
shall
be
construed
as
a
separate
payment
for
purposes of Section 409A of the U.S. Code.
9.
Securities Law
Compliance.
The delivery
of all
or any
of the
Shares under
this Agreement
shall only be effective at such
time as the issuance of such
Shares will not violate any state
or
federal
securities
or
other
laws.
The
Corporation
is
under no
obligation
to
effect
any
registration of Shares under the Securities Act of 1933 or to effect any state registration or
qualification of the Shares. The Corporation may,
in its sole discretion, delay the delivery
of the
Shares or place
restrictive legends on
such Shares in
order to ensure
that the issuance
of any
Shares will
be in
compliance with
federal or
state securities
laws and
the rules
of
NASDAQ or any other exchange upon which the Corporation’s
Common Stock is traded.
If the Corporation delays
the delivery of the
Shares in order to ensure
compliance with any
state
or
federal
securities
or
other
laws,
the
Corporation
shall
deliver
the
Shares
at
the
earliest date at which
the Corporation reasonably believes that
such delivery will not cause
such violation, or at such other date that may be permitted under law.
10.
Agreement
not
a
Service
Contract.
This
Agreement
is
not
an
employment
or
service
contract, and nothing in
this Agreement nor the
Plan shall be deemed
to confer on Director
any right
to continue
in the
service of,
or to
continue
or establish
any other
relationship
with, the Corporation or its subsidiaries, as
applicable, or limit in any way
the right of the
Corporation
or
its
subsidiaires
or
its
shareholders
to
terminate
its
relationship
with
the
Director at any time.
11.
Plan Governs.
This Agreement is subject
to the terms and
conditions of the Plan,
which
is incorporated herein by
reference and which the
Director hereby acknowledges receiving
a copy. The Director agrees to be bound
by all terms and
provisions of the Plan
and related
administrative
rules
and
procedures,
including,
without
limitation,
terms
and
provisions
and administrative rules and
procedures adopted and/or modified
after the granting of
the
Award.
If any provisions
hereof are inconsistent
with those of
the Plan, the
provisions of
the Plan shall control.
12.
Notices.
Any notices required to
be given or delivered to
the Director or the
Corporation
under the
terms of this
Agreement or the
Plan shall be
given in writing
and shall be
deemed
effectively
given
upon
receipt
or,
in
the
case
of
notices
delivered
by
mail
by
the
Corporation to the
Director, five
(5) days
after deposit
in the United
States mail,
postage
prepaid,
addressed
to
the
Director
at
the
last
address
the
Director
provided
to
the
Corporation.
Notice
to
the
Corporation
shall
be
given
in
writing
and
shall
be
deemed
effectively given
upon receipt
or, in the
case of
notices delivered
by mail
to the
Corporation
by
the
Director,
five
(5)
days
after
deposit
in
the
United
States
mail,
postage
prepaid,
addressed to Chief Legal Officer, Popular, Inc. Board of Directors (751), PO Box 362708,
San Juan, Puerto Rico 00936-2708.
13.
Governing Law.
This Agreement shall be governed by and construed in accordance
with
the laws of the Commonwealth of Puerto Rico, without regard to principles of conflicts of
laws.
14.
Severability.
If any
provision of
this Agreement
is held
to be
illegal
or invalid
for any
reason,
the
illegality
or
invalidity
shall
not
affect
the
remaining
provisions
of
the
Agreement,
but
such
provision
shall
be
fully
severable
and
the
Agreement
shall
be
construed and enforced as if the illegal or invalid provision had
never been included in the
Agreement.
15.
Successors.
This
Agreement
shall
be
binding
upon
and
inure
to
the
benefit
of
any
successors or
assigns
of
the
Corporation.
Subject
to
the
restrictions
on transfer
set
forth
herein, this
Agreement and
the Plan
shall be
binding upon
Director and
Director’s heirs,
legatees, executors, administrators, legal representatives, and successors.
16.
Counterparts.
This
Agreement may
be
executed
in
any
number
of
counterparts,
all
of
which shall constitute
one and the
same instruments, and
any party hereto
may execute this
Agreement by signing and delivering one or more counterparts.
[Signature Page Follows]
a)
IN WITNESS WHEREOF,
the parties hereto have entered into this Agreement as of June
25,
2021.
POPULAR, INC.
By:
______________________
Name:
Javier D. Ferrer
Title:
Executive Vice President,
Chief Legal Officer and Secretary
DIRECTOR
By:
______________________
Name: [Name of Director]
ANNEX I
POPULAR, INC.
RESTRICTED STOCK UNIT AWARD
Recipient:
[Name of Director]
Grant Date:
Total
Dollar Value
of Award:
$
Common Stock Market Price on Grant Date
:
$
Restricted Stock Units Awarded:
Settlement Date selected by the Director on the Director Compensation Election Form:
__________
Lump-Sum
- the 15
th
of August immediately following the date the Director ceases
to be a director of the Corporation.
__________
Annual Installments
- each 15
th
of August of the 1
st
, 2
nd
, 3
rd
, 4
th
and 5
th
year after the
Director ceases to be a director of the Corporation.