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%.