EX-10 2 exhibit101.htm EXHIBIT-10.1
1
EXHIBIT
10.1
FIRST BANCORP
LONG-TERM EQUITY
INCENTIVE AWARD
AGREEMENT
THIS AGREEMENT
is entered
into as
of the
____ day
of _______,
and effective
as of
the ___
day of
_____ (the
“Effective
Date”), by and between First BanCorp. (the "Corporation"), and __________
(the "Participant").
The Corporation,
pursuant
to
its First
BanCorp
Omnibus
Incentive
Plan,
as amended
(the
"Plan"),
hereby
grants
a
Long-Term
Equity
Incentive
Award
consisting
of
time-vested
Restricted
Stock
(the
“Restricted
Stock”)
and
Performance
Shares
(the
“Performance Shares”
and, together with
the Restricted Stock,
the “Award”)
to the Participant,
which award
shall have the
terms and
conditions set forth in this Agreement:
1.
Definitions
All capitalized
terms used herein
and not otherwise
specifically defined
herein shall
have the
meanings ascribed
to such
terms in
the Plan.
2.
Award
(a)
Restricted
Stock
.
The
Corporation,
as
of
the
Effective
Date,
hereby
grants
to
the
Participant
a
Restricted
Stock
award
of
________
shares
of
common
stock,
par
value
$0.10
per
share,
of
the
Corporation
(the
"Common
Stock"),
subject
to
the
terms
and
conditions set
forth herein
and subject
to the
terms and
conditions of
the Plan
which is
incorporated herein
by reference
and made
a
part hereof for all purposes.
(b) Performance
Shares
.
The Corporation,
as of
the Effective
Date, hereby
grants to
the Participant
a Performance
Shares award
of ______ shares of
Common Stock, subject
to the terms and
conditions set forth herein
and subject to the
terms and conditions
of the
Plan,
which
is
incorporated
herein
by
reference
and
made
part
hereof
for
all
purposes.
The
Performance
Shares
vest
based
on
the
achievement
of
two
performance
metrics
weighted
equally:
(i)
the
Corporation’s
Relative
Total
Shareholder
Return
(the
“Relative
TSR
Performance
Goal”)
as
compared
to
the
Corporation’s
Peer
Group
(as
defined
in
Appendix
A),
and
(ii)
the
achievement
of
a
tangible book
value per
share goal
(the “TBVPS
Performance Goal”,
and, collectively
with the
Relative TSR
Performance Goal,
the
“Performance
Goals”).
Details
of
the
Performance
Goals
are
specified
in
Appendix
A.
The
performance
cycle
is
a
three-year
performance period defined as January 1, ____ through December 31,
____ (the “Performance Cycle”).
The Participant may
earn ___% of
its target opportunity
for threshold-level performance
up to ___%
of its target
opportunity for
maximum-level performance, which is measured
based upon the achievement of the Performance
Goals during the Performance Cycle
as detailed in
Appendix A.
Amounts between
threshold, target
and maximum
performance will be
interpolated to
reward incremental
achievement, and no amounts are paid for results on a particular performance metric
if actual results are below threshold.
The Award
will vest as set forth below.
3.
Vesting
(a) Restricted
Stock Vesting.
Subject to
the terms
and conditions
of this
Agreement, the
Restricted Stock
shall vest
solely on
the
basis
of
the
passage
of
time
over
a
three-year
period
(the
“Restricted
Stock
Vesting
Date”),
as
follows:
fifty
percent
(50%)
of
the
shares shall vest on
the second anniversary date
of the Effective
Date of the award
and the remaining fifty
percent (50%) shall vest
on
the third anniversary date
of the Effective Date
of the award. Notwithstanding
the foregoing, and subject
to earlier vesting as provided
in Section 7 hereof, Restricted Stock
may vest more quickly in the event of
death, Disability,
Retirement, a Change in Control or
other
specified permitted vesting events.
(b) Performance
Shares Vesting.
Subject to the
terms and conditions
of this Agreement,
the Performance Shares
shall vest on
the
third
anniversary
of
the
Effective
Date
of
the
award,
subject
to
the
achievement
of
the
Performance
Goals
established
by
the
Committee
during
the Performance
Cycle (the
“Performance
Shares Vesting
Date”, and,
together
with the
Restricted
Stock Vesting
Date, the “Vesting
Date”). Notwithstanding the
foregoing, and subject
to earlier vesting
as provided in
Section 7 hereof,
Performance
2
Shares may vest more quickly in the event of death, Disability,
a Change in Control or other specified permitted vesting events.
4.
Restriction on Transfer
(a) Until the shares of the Award
vest pursuant to Section 3 hereof,
none of the shares may be sold, assigned,
transferred, pledged,
hypothecated or otherwise encumbered,
and no attempt to transfer the
shares, whether voluntary or involuntary,
by operation of law or
otherwise, shall vest the transferee with any interest or right in or with respect to the Award.
(b) Notwithstanding
the foregoing
(and assuming
that the
Participant has
not made
an accelerated
income tax
inclusion election
with respect
to the
Award),
at any
time beginning
with the
date upon
which any
shares of
the Award
become vested
and ending
on
December 31
of the
calendar year
including that
date, a
portion of
such shares
may be
transferred as
may reasonably
be required
to
pay the federal, state, local, or
foreign taxes that are anticipated to
apply to the income recognized due
to this vesting, and the
amounts
made transferrable for this purposes shall not count toward the percentages
in the schedule above.
5.
Issuance and Custody
(a)
Shares
of
Common
Stock
underlying
an
Award
shall
be
issued
in
book-entry
form
only
and
shall
not
be
represented
by
a
certificate, and shall be registered in the name of the Participant. Each
such book-entry shall bear the following legend:
“THE SALE, TRANSFER OR ASSIGNMENT OF THE SECURITIES
REPRESENTED BY THIS BOOK-ENTRY
FORM
ARE
SUBJECT
TO
THE
TERMS
AND
CONDITIONS
OF
A
CERTAIN
LONG-TERM
INCENTIVE
AWARD
AGREEMENT EFFECTIVE
AS OF
_____, ____,
AS AMENDED
FROM TIME
TO TIME,
AND THE
FIRST
BANCORP
OMNIBUS
INCENTIVE
PLAN,
AS
AMENDED.
COPIES
OF
SUCH
AGREEMENT
AND
PLAN MAY
BE OBTAINED
AT
NO COST BY WRITTEN
REQUEST MADE BY THE
HOLDER OF RECORD
OF THIS BOOK-ENTRY FORM TO
THE SECRETARY
OF THE CORPORATION.”
(b) Participant
shall execute
stock powers
relating to
the Award
and deliver
the same
to the
Corporation.
The Corporation
shall
use such stock powers only for the purpose of canceling any unvested Award
that is forfeited.
(c) Each
book-entry
form issued
pursuant
to Section 5(a)
hereof,
together with
the stock
powers relating
to the
Award,
shall be
deposited
by
the
Corporation
with
the
Secretary
of
the
Board
of
Directors
(the
“Secretary”)
of
the
Corporation
or
a
custodian
designated by the
Secretary.
Unless otherwise determined
by the Committee,
delivery of the Award
will be by book-entry
credit to an
account maintained
by the registrar and
transfer agent of
the shares with the
applicable restrictions
on transferability imposed
on such
Award
by this Award
Agreement. Upon vesting of
the Award
in accordance with this Award
Agreement, the Corporation will instruct
the transfer agent to electronically
transfer the Participant’s
shares to a brokerage or other
account on the Participant’s
behalf (or make
such other arrangements for the delivery of the shares as Corporation reasonably
determines).
(d) After any
Restricted Stock or Performance
Shares vest pursuant
to Section 3 hereof and
there exists no restrictions
on transfer
pursuant to Section 4 hereof, the Corporation shall promptly
issue a book-entry form evidencing such vested Award,
free of the legend
provided in section 5(a) hereof, and shall be delivered to the Participant
or the Participant's legal representatives, beneficiaries or heirs.
6.
Distributions and Adjustments
(a)
If
all
or
any
portion
of
the
Award
vest
subsequent
to
any
change
in
the
number
or
character
of
shares
of
Common
Stock
(through
stock
dividend,
recapitalization,
stock
split,
reverse
stock
split,
reorganization,
merger,
consolidation,
split-up,
spin-off,
combination, repurchase
or exchange of
shares of Common Stock
or other securities
of the Corporation,
issuance of warrants
or other
rights
to
purchase
shares
of
Common
Stock
or
other
securities
of
the
Corporation
or
other
similar
corporate
transaction
or
event
affecting the shares
such that an adjustment
is determined by the
Compensation and Benefit
Committee of the
Board of Directors (the
"Committee") to
be appropriate in
order to prevent
dilution or enlargement
of the interest
represented by
the shares),
Participant shall
then receive
upon such
vesting the
number and
type of
securities or
other consideration
which he
would have
received if
the Award
had vested prior to the event changing the number or character of outstanding shares of
Common Stock.
(b)
Any
additional
shares
of
Common
Stock,
any
other
securities
of
the
Corporation
and
any
other
property
(except
for
cash
dividends)
distributed
with
respect
to
the
Award
prior
to
the
Vesting
Date
shall
be
subject
to
the
same
restrictions,
terms
and
conditions as the Award.
3
(c) Any
additional shares
of Common
Stock,
any securities
and
any
other property
(except for
cash dividends)
distributed
with
respect
to
the
Award
prior
to
the
Vesting
Date
shall
be
promptly
deposited
with
the
Secretary
or
the
custodian
designated
by
the
Secretary to be held in custody in accordance with Section 5(c) hereof.
(d) The
Restricted Stock
shall have
the rights
to dividends
or dividend
equivalents, as
applicable, during
the Restriction
Period.
Such dividends or dividend equivalents
will accrue during the Restriction Period,
but not be paid until restrictions
lapse. Subject to the
aforementioned
and
issuance
of
dividends
or
dividend
equivalents
on
the
Corporation’s
Common
Stock,
dividends
will
be
paid
in
cash.
(e)
Performance
Shares
shall
have
the
right
to
receive
dividend
equivalents.
Such
dividend
equivalents
will
accrue
during
the
Performance Cycle and be paid at
the Performance Shares Vesting
Date based upon achievement of the
Performance Goals. Subject to
the aforementioned
and issuance of
dividends or
dividend equivalents on
the Corporation’s
Common Stock,
dividends will be
paid in
cash.
(f) In the case of Restricted Stock, the Participant will have the right to vote the shares.
7.
Forfeiture; Termination
of Services; Change in Control
(a) In
the event
of the
death of
the Participant
while employed
by the
Corporation, the
Award
held by
the Participant
which has
not vested, shall vest
irrespective of whether the
vesting period has been
completed. In the case
of Performance Shares, the
number of
shares will be calculated as if the target number of the Performance
Goals had in fact been earned.
(b) In the event
the Participant’s
employment is terminated
by reason of Disability,
the Award
held by such participant
which has
not vested, shall vest
irrespective of whether the
vesting period has been
completed. In the case
of Performance Shares, the
number of
shares will be calculated as if the target number of the Performance
Goals had in fact been earned.
(c) In
the event
the Participant’s
employment is
terminated by
the Corporation
or any
Affiliate for
Cause, the
Award
held by
the
Participant which has not vested shall be forfeited and canceled upon such
termination.
(d) Unless otherwise
determined by the Committee,
in the event the
Participant’s employment
ends as a result
of the Participant’s
resignation
from
the
Corporation
or
an
Affiliate,
any
Award
held
by
such
Participant
which
has
not
vested,
shall
be
forfeited
and
canceled upon such termination.
(e) In the
event the Participant’s
employment is involuntarily
terminated within one
year after a Change
in Control, if
any Award
held
by
the
Participant
is
not
assumed
by
the
successor
entity
it
shall
vest
irrespective
of
whether
the
vesting
period
has
been
completed.
In
the
case
of
Performance
Shares,
the
number
of
shares
will
be
calculated
as
if
the
target
number
of
the
Performance
Goals had in fact been earned.
(f)
In
the
event
of
the
Participant’s
Retirement:
(1)
Restricted
Stock
held
by
Participant
which
have
not
vested,
shall
vest
irrespective of whether the vesting
period has been completed; and
(2) outstanding Performance Shares
shall continue outstanding and
vest
in
full
on
the
Performance
Shares
Vesting
Date
in
accordance
with
the
actual
results
of
the
Performance
Goals
during
the
Performance Cycle.
(g)
Based
on
particular
circumstances
evaluated
by
the
Committee
as
they
may
relate
to
the
termination
of
a
Participant,
the
Board may,
with the
recommendation of
the Committee,
grant the
full vesting
of the
Award
held by
the Participant
upon termination
of employment.
(h)
If
awards
are
accelerated
for
reasons
other
than
death,
disability,
retirement,
or
change
in
control,
those
discretionarily
accelerated shares will be limited to 10% of the total number of shares authorized
under Section 5(a) of the Plan.
8.
Taxes
The Corporation
is authorized to
withhold from
any Award
granted, any
payment relating
to an Award
under the
Plan, including
from a
distribution of
shares of
Common Stock,
or any
payroll or
other payment
to a
participant, amounts
of withholding
and other
taxes
due
or
potentially
payable
in
connection
with
any
transaction
involving
an
Award,
and
to
take
such
other
action
as
the
Committee may deem
advisable to enable
the Corporation and
participants to satisfy obligations
for the payment
of withholding taxes
and other tax obligations
relating to any Award.
This authority shall include
authority to withhold or
receive shares of Common
Stock
or other
property and
to make
cash payments
in respect
thereof in
satisfaction of
a participant’s
withholding obligations,
either on
a
mandatory or
elective basis
in the
discretion of
the Committee,
or in
satisfaction of
other tax
obligations if
such withholding
will not
4
result in additional accounting expense
to the Corporation. Notwithstanding other provisions
of the Plan, only the minimum amount
of
shares
of
Common
Stock
deliverable
in
connection
with
an
Award
necessary
to
satisfy
statutory
withholding
requirements
will
be
withheld, unless withholding
of any additional
amount of shares of
Common Stock will
not result in
additional accounting expense
to
the Corporation.
9.
Miscellaneous
(a) This Agreement
is issued pursuant to
the Plan and is subject
to its terms. In
the event of any
conflicts between this Agreement
and the
Plan, the
terms and
conditions
of the
Plan shall
prevail. Participant
hereby
acknowledges receipt
of a
copy of
the Plan.
The
Plan is also available for inspection during business hours at the principal office
of the Corporation.
(b) This Agreement
shall not confer on
the Participant any right
with respect to continuance
of employment of
the Corporation or
any of its Affiliates.
(c) This
Agreement shall
be governed
by and
construed under
the laws of
the Commonwealth
of Puerto
Rico, without
regard for
conflicts of laws principles thereof.
5
IN WITNESS WHEREOF
, the parties hereto have caused this Agreement to be duly
executed, and the corporate seal affixed, by
its officers thereunto duly authorized, and the Participant has
hereunto set his hand, all on the day and year first above written.
Corporate Seal
FIRST BANCORP
PARTICIPANT
By:
By:
6
Appendix A
Performance Shares
Total Target
Number of Performance Shares: _______
(Relative TSR Performance Goal: ____; and TBVPS Performance Goal:____)
I.
TBVPS Performance Goal:
__%
of
the
Performance
Shares
vest
based
on
the
achievement
of
the
TBVPS
Performance
Goal
of
$____
at
the
end
of
the
Performance Cycle. The Participant
may earn __% of its targe
t
opportunity for threshold-level performance
(__% performance) which
is measured
based upon
the growth
in the TBVPS
during the
Performance Cycle
up to the
TBVPS Performance
Goal (from $______
to
$______).
The
Participant
may
earn
up
to
___%
of
its
target
opportunity
for
maximum
level
performance
(___%
performance),
which is measured
based upon the
growth of TBVPS
during the Performance
Cycle in excess
of the TBVPS
Performance Goal (from
$_____
to
$_____).
Amounts
between
threshold,
target
and
maximum
are
interpolated
to
reward
incremental
achievement,
and
no
amounts are paid for results on a particular performance metric if actual results are below
threshold.
TBVPS Performance at the
Performance Shares Vesting
Date
TBVPS Performance Goal
for Each of the Categories
Award Payout
Threshold:
at
__%
of
target
performance
$____
__%
of
target
payout
(minimum payout)
Target:
at ___% of target performance
$____
___% of target payout
Maximum:
at
___%
of
target
performance
$____
___%
of
target
payout
(maximum payout)
II.
Relative TSR Performance Goal:
__% of the Performance Shares vest based on the achievement
of the Relative TSR Performance Goal, as detailed in the below table
at
the end of the Performance Cycle.
Relative TSR
Percentile Rank among Peer
Group
Award Payout
Opening Price =
__
th
Percentile (threshold)
__%
of
target
payout
(minimum
payout)
__
th
Percentile (target)
___% of target payout
__
th
Percentile (maximum)
___%
of
target
payout
(maximum
payout)
The TSR for a company (including the Corporation) shall be computed
based on the fifteen (15) days average closing price of the
company’s common stock
immediately preceding the beginning and end of the Performance Cycle, and it assumes
any dividends paid
during the Performance Cycle are reinvested in additional shares of the
underlying stock on the ex-dividend date.
The Corporation’s “Peer Group” shall
mean _________________________. If the Corporation’s
relative TSR is negative, payout will
be limited to a maximum of 100% of target, subject to the above
detailed performance levels. For avoidance of doubt, if the
Corporation’s relative negative
TSR was at the __
th
percentile (maximum) or above of the Peer Group, payout will be limited to 100%.