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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,
and
WHEREAS,
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,
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
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
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”).
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(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.
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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.
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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
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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]
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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