Exhibit 10.43
(POPULAR, INC. LOGO) [g05717g0471000.gif]
POPULAR, INC.
2007 INCENTIVE AWARD AND AGREEMENT
SECTION 1
Introduction
          Section 1.1. Purpose. Popular, Inc. (the “Corporation”) has
established and maintains the 2004 Omnibus Incentive Plan (the “Plan”) to, among
others, provide flexibility to the Corporation and its affiliates to attract,
retain and motivate their officers, executives and other key employees through
the grant of awards and to adjust its compensation practices to the best
compensation practices and corporate governance trends as they develop from time
to time. The Corporation hereby grants a Short-Term Annual Incentive Award and a
Long-Term Incentive Award (the “Award”) under the Plan to the person identified
in Section 3.
SECTION 2
Definitions
          When used in this Award, unless the context clearly requires a
different meaning, the following words and terms shall have the meanings set
forth below. Terms not otherwise defined herein shall have the meaning ascribed
to them in the Plan. Whenever appropriate, words and terms used in the singular
shall be deemed to include the plural, and vice versa, and the masculine gender
shall be deemed to include the feminine gender.
          Section 2.1. “Affiliate” shall mean any corporation or other form of
entity of which the Corporation owns, from time to time, directly or indirectly,
50% or more of the total combined voting power of all classes of stock or other
equity interests.
          Section 2.2. “Eligible Earnings” shall mean the Grantee’s base salary
(prior to any deferrals under a cash or deferred compensation plan sponsored by
the Corporation or an Affiliate) paid during the Plan Year. From time to time
the Plan Administrator may, in its sole discretion, establish rules for
determining the amounts of Eligible Earnings for employees who become Grantees
other than on the first day of a Plan Year as well as any reduction of Eligible
Earnings as a result of paid leave of absences.
          Section 2.3. “Extraordinary Items” shall mean extraordinary, unusual
and/or non-recurring items of income and expenses.
          Section 2.4. “Net Income” for any Plan Year shall mean net income
excluding the effects of Extraordinary Items for that Plan Year.

1

--------------------------------------------------------------------------------

 

(POPULAR, INC. LOGO) [g05717g0471000.gif]
          Section 2.5. “Performance Goal” shall mean:
(a) With regard to the Short-Term Annual Incentive Award: After-tax Net Income
(prior to change in accounting principle) for the 2007 Plan Year:

  i.   “Corporate Performance Goal” = $382,238,000 for Popular, Inc.     ii.  
“Circle Performance Goal = $345,000,000 for Puerto Rico Circle, comprising Banco
Popular de Puerto Rico, Popular Finance, Popular Auto, Popular Mortgage, BPNAT
Culebra Branch, Popular Securities, Popular Insurance (including RE and VI)

(b) With regard to the Restricted Stock Award: After-tax Net Income (prior to
change in accounting principle) for the 2007 Plan Year:

  i.   “Corporate Performance Goal” = $382,238,000 for Popular, Inc.

(c) With regard to the Performance Shares Award: Popular, Inc. simple average
3-year Return on Equity (“ROE”) during the Performance Cycle:

  i.   Popular, Inc. 3-year Return on Equity = 14%

          Section 2.6. “Performance Cycle,” with regard to the Performance
Shares Award, shall be the calendar years 2007, 2008 and 2009.
          Section 2.7. “Performance Shares,” shall mean an award in units
denominated in the Corporation’s common stock, par value $6.00 per share, the
number of such units which may be adjusted over the Performance Cycle based upon
the satisfaction of the Performance Goal, pursuant to Article IX of the Plan.
          Section 2.8. “Plan Administrator” shall mean the Compensation
Committee of the Board of Directors of the Corporation.
          Section 2.9. “Plan Year” shall be the 2007 calendar year.
          Section 2.10. “Restricted Period” shall mean the period of time during
which the shares of Restricted Stock are subject to forfeiture or restrictions
on transfer pursuant to Article VIII of the Plan.
          Section 2.11. “Restricted Stock” shall mean shares of the
Corporation’s common stock, par value $6.00 per share, subject to forfeiture and
restrictions on transferability in accordance with Article VIII of the Plan.
          Section 2.12. “Return on Equity” shall mean the ratio of after-tax net
income divided by shareholder’s equity at the end of a calendar year, excluding
the effects of Extraordinary Items.

2

--------------------------------------------------------------------------------

 

(POPULAR, INC. LOGO) [g05717g0471000.gif]
SECTION 3
Grantee of Award
          Section 3.1. Grantee of Award. An award is granted to David H. Chafey,
Jr. (the “Grantee”).
SECTION 4
Award
          Section 4.1. Short-Term Annual Incentive Award — General
The Short-Term Annual Incentive Award of the Grantee shall be an amount equal to
the sum of the Grantee’s:

  (i)   Corporate Performance Component, as described in Section 4.2.(a); plus  
  (ii)   Circle Performance Component, as described in Section 4.2.(b); plus    
(iii)   Strategic and Personal Performance Component, as described in
Section 4.2.(c).

          Section 4.2. Short-Term Annual Incentive Award — Components

(a)   Corporate Performance Component: For the 2007 Plan Year, the Grantee’s
Corporate Performance Component shall be an amount equal to a percentage of the
Grantee’s Eligible Earnings, determined as follows:

          % of Corporate   % of Eligible Performance Goal   Earnings
Below 90%
    0 %
90%
    20 %
100%
    40 %
105%
    50 %
Over 105%
  2% for every % over 105% performance, not to exceed 60%

3

--------------------------------------------------------------------------------

 

(POPULAR, INC. LOGO) [g05717g0471000.gif]

(b)   Circle Performance Component: For the 2007 Plan Year, the Grantee’s Circle
Performance Component shall be an amount equal to a percentage of the Grantee’s
Eligible Earnings, determined as follows:

          % of Circle   % of Eligible Performance Goal   Earnings
Below 90%
    0 %
90%
    20 %
100%
    40 %
105%
    50 %
Over 105%
  2% for every % over 105% performance, not to exceed 60%

(c)   Strategic and Personal Performance Component: Based on the strategic and
personal performance of the Grantee during the Plan Year, the Plan Administrator
may grant between 0% and 20% of the Grantee’s Eligible Earnings.

          Section 4.3. Long-Term Incentive Award – Restricted Stock
The Restricted Stock Award shall be an amount equal to a percentage of the
Grantee’s Eligible Earnings determined as follows:

          % of Corporate   % of Eligible Performance Goal   Earnings
Below 90%
    0 %
90%
    25 %
100%
    50 %
105%
    55 %
Over 105%
  2% for every % over 105% performance, not to exceed 65%

4

--------------------------------------------------------------------------------

 

(POPULAR, INC. LOGO) [g05717g0471000.gif]
          Section 4.4. Long-Term Incentive Award – Performance Shares

(a)   The Grantee is hereby granted the Performance Shares Award described
below. The Grantee will earn a number of shares of the Corporation’s common
stock based on the Corporation’s achievement of the Performance Goal at the end
of the Performance Cycle as follows:

          2007-2009 Average 3-year   Shares of Popular, Inc. Return on Equity
(ROE)   Common Stock
Below 12%
    0  
12%
    9,764  
14%
    19,527  
16%
    39,054  

(b)   For the consequences of the termination of employment with respect to the
Performance Shares awarded to the Grantee, which may result in the forfeiture of
such Performance Shares, please refer to Article IX of the Plan and to the
Prospectus of the Plan.

SECTION 5
Payment of Award
          Section 5.1 Short-Term Annual Incentive Award. The Short Term Annual
Incentive Award shall be payable in cash as soon as practicable after the Plan
Administrator has determined the amount of those Awards.
          Section 5.2. Long Term Annual Incentive Award. – Restricted Stock

(a)   The Restricted Stock Award shall be paid in Restricted Stock to be
purchased on the open market. The number of shares of Restricted Stock payable
shall be based on the average price per share for all shares purchased by the
Corporation to pay Awards approved concurrently by the Plan Administrator.   (b)
  Except as otherwise provided in paragraph (h) below, the restrictions on 40%
of the Restricted Stock awarded to the Grantee will lapse upon termination of
the Grantee’s employment on or after the date the Grantee both has attained age
55 and completed 10 years of service, as determined pursuant to personnel
policies and procedures.

5

--------------------------------------------------------------------------------

 

(POPULAR, INC. LOGO) [g05717g0471000.gif]

(c)   Except as otherwise provided in paragraph (h) below, the restrictions on
the remaining 60% of the Restricted Stock awarded to the Grantee will lapse on
the earlier of: i) termination of the Grantee’s employment on or after the date
the Grantee has both attained age 55 and completed 10 years of service, as
determined pursuant to personnel policies and procedures; or ii) as provided
below:

              % of Award Free Period of Time After the Award   of Restrictions
1 year
    12 %
2 years
    12 %
3 years
    12 %
4 years
    12 %
5 years
    12 %

(d)   The shares of Restricted Stock awarded to the Grantee herein may not be
sold, assigned, transferred, pledged, hypothecated or otherwise encumbered by
the Grantee during the Restricted Period, except as may be provided under the
Plan.   (e)   For the consequences of the termination of employment with respect
to the shares of Restricted Stock awarded to the Grantee, which may result in
the forfeiture of such shares of Restricted Stock, please refer to Article VIII
of the Plan and to the Prospectus of the Plan.   (f)   Cash dividends paid on
the Restricted Stock, and 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 (DRIP). Such shares
are not subject to the restrictions described in paragraph (d) above and are
immediately vested.   (g)   The Restricted Stock shall be held in custody by the
Trust Division of Banco Popular de Puerto Rico. The Grantee shall have the right
to vote the Restricted Stock.   (h)   If the Grantee’s employment is terminated
for Cause, the Grantee will forfeit the Restricted Stock awarded that was
subject to restrictions at the time of termination for Cause.

          Section 5.3. Long Term Annual Incentive Award. – Performance Shares
The Performance Shares earned by the Grantee will be determined and delivered to
the Grantee as soon as practicable subsequent to the determination of the
Corporation’s financial results for the Performance Cycle and approval by the
Plan Administrator. The corresponding shares of the Corporation’s common stock
will be purchased on the open market.

6

--------------------------------------------------------------------------------

 

(POPULAR, INC. LOGO) [g05717g0471000.gif]
SECTION 6
Tax Considerations
          Section 6.1. Certain Income Tax Considerations. The granting of the
Award may have certain income tax considerations to the Grantee, which are
generally described in the Prospectus of the Plan.
SECTION 7
Miscellaneous
          Section 7.1 Leave of Absence. The Plan Administrator may establish a
method for adjusting the Award of the Grantee if he was on an approved leave of
absence during the Plan Year and may establish different methods for different
forms of leave of absence.
          Section 7.1. The Plan. This Award is subject to the terms of the Plan,
a copy of which has been provided to you.
          Section 7.2. Controlling Law. The laws of the Commonwealth of Puerto
Rico shall be controlling in all matters relating to this Award.
          Section 7.3. Titles and Captions. Titles and captions in this document
are used only for convenience and are not to be used in the interpretation of
this Award.
IN WITNESS WHEREOF, Popular, Inc. and the Grantee have executed this Incentive
Award and Agreement as of the 25th January, 2007.

                  POPULAR, INC.
      GRANTEE    
/s/ Tere Loubriel
    /s/ David H. Chafey, Jr.                
By:
  Tere Loubriel       By: David H. Chafey, Jr.    
Title:
  Executive Vice President       Date:  January 25, 2007  
Date:
  January 25, 2007            

7