<PAGE>

                                                                   EXHIBIT 10.2


                     FORM OF 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 Annual Incentive Award (the "Award") under the Plan to the
persons 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.   "Business Line" shall mean the Puerto Rico Business,
United States Business, and Evertec Business.

         Section 2.3.   "Business Line Performance Goal" shall mean for the
[year] Plan Year:

<TABLE>
<CAPTION>

                  Business Line                 Amount of Net Income
                  -------------                 --------------------

<S>               <C>                           <C>
                  Puerto Rico Business             [$________]
                  Evertec Business                 [$________]
                  United States Business           [$________]
</TABLE>


If the budget is adjusted during the year due to the creation of Evertec the
numbers used will be the adjusted budget numbers.

         Section 2.4.   "Corporate Performance Goal" shall mean for the [year]
Plan Year [$        ] of Net Income by the Corporation.

         Section 2.5.   "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 amount of Eligible Earnings for employees who become Grantees
other than on the first day of a Plan Year as well as any reduction on Eligible
Earnings as result of paid leave of absences.

         Section 2.6.   "Extraordinary Items" shall mean extraordinary, unusual
and/or non recurring items of income and expenses.

         Section 2.7.   "Net Income" for any Plan Year shall mean the
consolidated net income of the Corporation, or the net income of the Business
Lines, as applicable, as it appears in the Corporation's statement




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<PAGE>

of income or the Business Lines' statement of income prepared in accordance
with generally accepted accounting principles, excluding the effects of
Extraordinary Items, for that Plan Year.

         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 [year] calendar year.

         Section 2.10.  "Puerto Rico Business" shall mean all Affiliates of the
Corporation incorporated under the laws of Puerto Rico, excluding Evertec, Inc.

         Section 2.11.  "Restricted Stock" shall mean shares of the
Corporation's common stock, par value $6.00 per share, subject to restrictions
on resale until the Grantee's employment with the Corporation or an Affiliate
has terminated due to the Grantee's Approved Retirement.

         Section 2.12.  "Trust" shall mean the Long Term Annual Incentive Award
Trust constituted by the Corporation to hold grants of Restricted Stock under
the Plan.

         Section 2.13.  "United States Business" shall mean Banco Popular North
America and Popular Cash Express, subsidiaries of the Corporation.

                                   SECTION 3

                               Grantees of Awards

         Section 3.1    Grantees of Awards. Awards are granted to [Insert Name
of Grantees] ("Grantees").

                                   SECTION 4

                                     Awards

         Section 4.1    Short Term Annual Incentive Award.

         (a)      The Short Term Annual Incentive Award of any Grantee shall be
                  an amount equal to the sum of that Grantee's:

                  (i)   Corporate Performance Component, as described in SECTION
                        4.2; plus

                  (ii)  Business Line Performance Component, as described in
                        SECTION 4.3; plus

                  (iii) Individual Performance Component, as described in
                        SECTION 4.4.

         (b)      The Plan Administrator may establish a method for adjusting
                  the Short Term Annual Incentive Award of any Grantee who was
                  on an approved leave of absence during the Plan Year and may
                  establish different methods for different forms of leave of
                  absence.

         Section 4.2       Corporate Performance Component.

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

<TABLE>
<CAPTION>

              % of Corporate Performance Goal           % of Eligible Earnings
              -------------------------------           ----------------------
<S>           <C>                                       <C>
                  XXXXX                                          XXXXXX
                  XXXXX                                          XXXXXX
                  XXXXX                                          XXXXXX
                  XXXXX                                          XXXXXX
                  XXXXX                                          XXXXXX

</TABLE>



                                      -2-
<PAGE>

         Section 4.3       Business Line Performance Component.

         (a)    For the [year] Plan Year, a Grantee's Business Line Performance
         Component shall be an amount equal to a percentage of the Grantee's
         Eligible Earnings determined as follows:

<TABLE>
<CAPTION>

              % of Business Line Performance Goal         % of Eligible Earnings
              -----------------------------------         ----------------------
<S>           <C>                                         <C>
                  XXXXX                                              XXXXXX
                  XXXXX                                              XXXXXX
                  XXXXX                                              XXXXXX
                  XXXXX                                              XXXXXX
                  XXXXX                                              XXXXXX
</TABLE>


         (b)    The Business Performance Component of the Grantees shall be
         determined as follows by reference to the Business Line Performance
         Goal and Net Income of the Business Lines or the Corporate Performance
         Goal and Net Income of the Corporation, as applicable:

<TABLE>
<CAPTION>

                     Grantee                                      Entity
                     -------                                      ------

<S>               <C>                                             <C>
                  XXXXX                                            XXXXXX
                  XXXXX                                            XXXXXX
                  XXXXX                                            XXXXXX
                  XXXXX                                            XXXXXX
                  XXXXX                                            XXXXXX
                  XXXX                                             XXXXX
                  XXXX                                             XXXXX
</TABLE>

         Section 4.4       Individual Performance Component.

         (a)    Based on the individual performance of each Grantee during the
         Plan Year and upon recommendation of the Chief Executive Officer of
         the Corporation, the Plan Administrator may grant between [ %] and [
         %] of a Grantee's Eligible Earnings.

         Section 4.5.      Long Term Annual Incentive Award.

         (a) The Long Term Annual Incentive Award of each Grantee shall be an
         amount equal to a percentage of the Grantee's Eligible Earnings
         determined as follows:

<TABLE>
<CAPTION>

              % of Corporate Performance Goal             % of Eligible Earnings
              -------------------------------             ----------------------
<S>           <C>                                         <C>

                  XXXXX                                              XXXXXX
                  XXXXX                                              XXXXXX
                  XXXXX                                              XXXXXX
                  XXXXX                                              XXXXXX
                  XXXXX                                              XXXXXX
</TABLE>

         (b)    The Plan Administrator may establish a method for adjusting the
         Long Term Annual Incentive Award of any Grantee who was on an approved
         leave of absence during the Plan Year and may establish different
         methods for different forms of leave of absence.




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<PAGE>

                                   SECTION 5

                               Payment of Awards

         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.

         (a)    The Long Term Annual Incentive Award shall be paid in Restricted
Stock to be purchased in the open market. Such Restricted Stock shall be held
in the Trust for the benefit of the Grantee. Dividends paid on the Restricted
Stock while held in the Trust shall be reinvested in shares of common stock of
the Corporation, par value $6.00 per share, under the Corporation's Dividend
Reinvestment Plan. Each Grantee shall have the right to vote the Restricted
Stock.

         (b)    A Grantee may request the Plan Administrator that the restricted
period with respect to any portion of the Restricted Stock held in the Trust
lapse and that such shares of stock be distributed if the Grantee has (i) an
immediate and heavy financial need and (ii) the distribution is necessary to
satisfy such financial need.

         A request for a distribution will be deemed to comply with the above
requirements if it meets the requirements for a hardship distribution under the
Banco Popular de Puerto Rico Profit Sharing Plan.

         (c)    Before the lapse of the Restriction Period, a Grantee may defer
receipt of all or any portion of the corresponding shares of common stock of
the Corporation, par value $6.00 per share, to a future date. Once a Grantee
defers receipt of such shares, except in the case of an immediate and heavy
financial need, Grantee does not have the right to request a distribution of
such shares.

                                   SECTION 6

                                 Miscellaneous

         Section 6.1.   The Plan. This Award is subject to the terms of the
Plan, a copy of which is attached hereto.

         Section 6.2.   Controlling Law. The laws of the Commonwealth of Puerto
Rico shall be controlling in all matters relating to this Award.

         Section 6.3.   Titles and Captions. Titles and captions in this Plan
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 has executed this
Incentive Award and Agreement as of the _____ day of _____________ of ____.


         POPULAR, INC.                                      GRANTEE


---------------------------------              ---------------------------------
By:                                            By:
Title:                                         Date:
Date:




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