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
Corporation.
●
Annual
Installments
Stock Units in equal annual installments on
each
15
th
st
,
2
nd
,
3
rd
,
4
th
5
th
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
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
issued to the Director on such date.
●
Restricted
Stock Units
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
Stock Unit Award on the
15
th
director of the Corporation.
●
Annual
Installments
Restricted Stock Unit Award in equal annual installments on
each
15
th
st
,
2
nd
,
3
rd
,
4
th
th
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:
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:
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 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.
Name:
[Name
of
Director]
POPULAR,
INC.
RESTRICTED STOCK UNIT AWARD AGREEMENT
This
RESTRICTED STOCK UNIT
AWARD AGREEMENT
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).
, the Corporation maintains the Popular, Inc. 2020 Omnibus Incentive
Plan,
as amended (the “Plan”);
, 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.
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.
th
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
th
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.
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.
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.
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.
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.
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.
the laws of the Commonwealth of Puerto Rico, without regard to
principles of conflicts of
laws.
14.
Severability.
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.
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.
which shall
constitute one and the same instruments, and any party
hereto may execute this
Agreement by signing and delivering one or more
counterparts.
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:
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
th
to be a director of the Corporation.
__________
Annual
Installments
th
st
,
2
nd
,
3
rd
,
4
th
th
Director ceases to be a director of the Corporation.