EX-10.1 2 d936763dex101.htm 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.