EX-10.28 3 d52551dex1028.htm EX-10.28
1
AWARD
AGREEMENT
EXHIBIT 10.28
This AWARD
AGREEMENT (“Agreement”) is made and entered into
by and between Carlos J.
Vázquez
(“Executive”) and Popular, Inc. (the “Corporation”)
as of December 7, 2023.
WHEREAS
, Executive is currently employed by
the Corporation as Executive Vice
President and Chief
Financial Officer;
WHEREAS,
Executive has decided to voluntarily
retire from the Corporation effective
March 31, 2024;
and
WHEREAS,
in connection
with Executive’s
voluntarily retirement,
the Corporation, through
the Talent
and Compensation Committee of
the Board of
Directors of the
Corporation (the “Committee”), has
decided to grant
Executive the short-term and long-term awards set forth in this Agreement; and
NOW THEREFORE,
in consideration of the promises, and the agreements of the parties set forth in this
Agreement,
and
other
good
and
valuable
consideration,
the
receipt
and
sufficiency
of
which
are
hereby
acknowledged, the parties hereby agree as follows:
1.
Awards.
Subject to the terms and conditions set forth herein
and the continuous employment of
Executive with the Corporation until
March 31, 2024 (the “Retirement Date”),
the Corporation
shall
provide
Executive
with
the
short-term
and
long-term
awards
set
forth
below
(the
“Awards”). The Awards
shall be made under the Popular, Inc. 2020 Omnibus
Incentive Plan, as
amended (the “Plan”), and, except as otherwise provided herein, shall be subject to the terms of
the Plan. Capitalized terms used but not
otherwise defined in this Agreement have the
meanings
given in the Plan.
(i)
Short-Term
Award
–
The
Corporation
shall
grant
Executive
a
prorated
short-term
incentive cash award
corresponding to fiscal
year 2024 equal
to $153,000, corresponding
to the Executive’s target opportunity under the short-term annual cash
incentive for such
year,
equal to
80% of
the Executive’s
current base
salary,
prorated based
on the
three
full
calendar
months
of
employment
during
2024.
The
Short-Term
Award
shall
be
payable
to
Executive
on
the
first
payroll
date
following
the
Retirement
Date.
Notwithstanding
the above,
the Executive
will continue
to be
eligible for
a short-term
incentive cash award for fiscal year 2023, payable during the first quarter of
2024.
(ii)
Long-Term
Award
–
The
Corporation
shall
grant
Executive
a
long-term
equity
incentive award for fiscal year 2024 equal to $612,000. The Long-Term
Award shall be
granted
by
the
Committee
to
the
Executive
in
restricted
stock
at
the
first
scheduled
meeting
of
the
Committee
taking
place
in
the
month
of
February
2024
(the
“Grant
Date”), on which date the
Committee shall determine the
total number of restricted stock
earned based on the closing price of the Corporation’s common stock on the Grant Date
(the “Restricted
Stock”). The
Long-Term
Award
corresponds to
the Executive’s
target
opportunity under the long-term equity incentive
of 80% of the
current base salary of the
Executive.
2.
Long-Term Award
Vesting
and Payout.
(a)
Restricted
Stock
Vesting.
Except
as
otherwise
stated
in
this
Section
2
and
subject to Section
6 of the
Agreement, the Restricted Stock
shall become vested
on March 31, 2025 (the “Vesting
Date”).
2
(b)
Death.
In
the
event
of
the
Executive’s
death
before
the
Vesting
Date
and
Executive’s rights in respect of
the Long-Term Award have not been previously
terminated, any
then unvested outstanding
Restricted Stock shall
immediately
vest
and
be
paid
to
the
representative
of
Executive’s
estate
promptly
after
Executive’s death.
(c)
Disability.
If Executive becomes subject to Disability before the Vesting
Date
and
Executive’s
rights
in
respect
of
the
Long-Term
Award
have
not
been
previously
terminated,
any
then
unvested
outstanding
Restricted
Stock
shall
immediately
vest
and
shall
be
paid
to
Executive
promptly
after
Executive
becomes subject to Disability.
(d)
Payout.
The shares vested in accordance with
this Section 2, will be delivered
to Executive
as soon as
administratively practicable,
generally within
45 days
following the Vesting
Date.
3.
Termination of
Award.
(a)
Except
as provided
herein,
Executive’s
rights
in
respect
of
the
Awards
shall
immediately terminate, and no Awards shall be paid in respect
thereof, if at any
time prior to the Retirement Date Executive terminates his employment.
(b)
If the
Corporation
terminates Executive’s
employment for
Cause prior
to the
Retirement
Date,
Executive’s
Awards
shall
be
cancelled
and
the
provisions
under the Plan will apply.
4.
Non-transferability.
The
Awards
(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)
Executive
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 Awards.
The Corporation will
withhold shares of Common Stock for the payment of taxes in connection with
the vesting
of the
Restricted Stock
or upon
the occurrence
of any
other event
that, in accordance with
applicable law, will generate a
tax liability with
regards
to the
Long-Term
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
Executive
wishes
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,
Executive
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)
Executive’s right to receive shares
pursuant to the Long-Term
Award
is
conditioned on the receipt to the reasonable satisfaction of the Committee of
any required documentation that the Committee may reasonably
determine to
be necessary or advisable.
3
6.
Restrictive Covenants.
(a)
In consideration of the terms of the Awards,
Executive agrees to the restrictive
covenants
and
associated
remedies
as
set
forth
below,
which
exist
independently of and in
addition to any
obligation to which Executive
is subject
under
the
terms
of
any
other
agreement
with
the
Corporation
or
any
of
its
subsidiaries (Collectively,
“Popular”).
(b)
For a period of one
year immediately following the Retirement
Date, Executive
will
not
do
any
of
the
following,
either
directly
or
indirectly
or
through
associates, agents, or employees:
(i)
work or associate (including
as a director, officer, employee,
partner,
consultant,
agent
or
advisor)
with
or
otherwise
provide
services
to,
or
operate,
manage
or
control
in
any
way,
a
Competitive
Enterprise
performing
the
same
or
similar duties as
those which
were performed
by Executive
in
Popular
during
the
12-month
period
immediately
preceding
the
Retirement
Date.
“Competitive
Enterprise”
means
any
business
enterprise
that
either
(1)
engages
in
commercial
or
consumer
financial
services,
retail banking,
internet
banking,
or
other
financial,
investment,
financial
advisor,
trust or
insurance services
to either
commercial or
consumer
customers in
the Commonwealth
of Puerto
Rico
or the
States of
New York
or Florida,
or (2)
holds a
5% or
greater
equity,
voting or
profit participation
interest in
any
enterprise that engages in such a competitive activity within
the
Commonwealth
of
Puerto
Rico
or
the
States
of
New
York
or Florida;
(ii)
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
of
the
Retirement
Date)
for
the
purpose
of
encouraging that
employee or consultant
to leave Popular’s
employ or sever an agreement for services; or
(iii)
solicit,
participate
in
or
assist
in
the
solicitation
of
any
of
Popular’s
customers
serviced
by
Executive
or
with
whom
Executive
had
a
Material
Contact
and/or
regarding
whom
Executive received
Confidential Information
(as defined
in
Popular’s Code of Ethics) during the three-year period prior
to the Retirement
Date 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 the
Executive
and the
customer
within
the
three
years
prior
to
the
Retirement
Date
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
Executive.
4
If Executive breaches any of the terms of this restrictive covenant, all outstanding
Restricted Stock awarded under
the Agreement, whether
vested or unvested,
held by Executive
shall be immediately
and irrevocably forfeited
for
no
consideration.
This
paragraph
does
not
constitute
the
Corporation’s
exclusive
remedy
for
violation
of
the
restrictive covenant obligations, and the Corporation may seek any additional legal or equitable remedy,
including
injunctive relief, for any such violation.
7.
Section 409A.
Shares awarded
under this
Agreement are
intended to be
exempt from
Section
409A of the U.S. Code, to the extent applicable, and this 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.
Successors and Assigns
of the Corporation.
The terms and
conditions of this
Agreement shall
be binding upon, and shall inure to the benefit of, the Corporation and its successor entities.
9.
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
Agreement, and its determinations shall be final, binding and conclusive.
10.
Amendment.
The Committee reserves the
right at any time
to amend the terms
and conditions
set forth in
this Agreement; provided
that, notwithstanding
the foregoing,
no such amendment
shall
materially
adversely
affect
Executive’s
rights
and
obligations
under
this
Agreement
without Executive’s
consent (or
the consent
of Executive’s
estate, if
such consent
is obtained
after Executive’s 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
Agreement.
Any
amendment
of
this
Agreement
shall
be
in
writing
signed
by
an
authorized
member
of
the
Committee or a person or persons designated by the Committee.
11.
Adjustment; Other Plan Provisions.
Subject to Section 10, 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
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.
12.
Governing
Law
and
Jurisdiction.
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. Any
civil action or
legal proceeding arising out
of or relating to
the Agreement
will be brought exclusively in the courts of the Commonwealth of Puerto Rico.
13.
Severability.
Should a court or arbiter with competent jurisdiction determine that any clause in
this Agreement is
illegal, invalid, or unenforceable
under present or future
law, such
provision
will be fully severable, and the remaining provisions of the Agreement will remain in full force
and effect.
14.
Incentive
Recoupment.
The
Awards
shall
be
subject
to
the
terms
of
the
Popular,
Inc.
Compensation
Recoupment
Policy
in
effect
as of
the
Grant
Date
and
as
such
policy
may
be
required to be modified in accordance with applicable law or regulation.
15.
Headings.
The headings in this Agreement are for the purpose of convenience only and are not
intended to define or limit the construction of the provisions hereof.
9.10
5
16.
Counterparts. The Agreement may be executed in one or more counterparts,
each of which
will be deemed an original, but all of which taken together will constitute one and
the same
instrument.
[Signature Page Follows]
6
IN
WITNESS
WHEREOF,
the
Corporation
and
Executive
have
caused
this
Agreement
to
be
duly
executed and delivered as of December 7, 2023.
POPULAR, INC.
ACCEPTED:
By:
Ignacio Alvarez
By:
Carlos J. Vázquez
Title:
President and Chief Executive Officer
Title:
Executive
Vice
President
and
Chief
Financial
Officer
/s/ Ignacio Alvarez
/s/ Carlos J. Vázquez
Signature
Signature