Document:

Exhibit 10.3

EXHIBIT 10.3

PINNACLE ENTERTAINMENT, INC.

STOCK OPTION GRANT NOTICE

(2005 Equity and Performance Incentive Plan)

Pinnacle Entertainment, Inc. (the “Company”), pursuant to its 2005 Equity and Performance Incentive
Plan (the “Plan”), hereby grants to Optionee the option to purchase the number of Shares of the
Company set forth below (the “Option”). This Option is subject to all of the terms and conditions
as set forth in this Grant Notice and the attached Stock Option Agreement (the “Option Agreement”)
and the Plan (a copy of which has been made available to you), all of which are incorporated herein
in their entirety.

	 	 	 	 	 
	Optionee:

	 	 	 	 
	 

	 	 	 	 
	Date of Grant:
	 	 	 	 
	 

	 	 	 	 
	Number of Shares of Common Stock:
	 	 	 	 
	 

	 	 	 	 
	Exercise Price Per Share:
	 	 	 	 
	 

	 	 	 	 
	Term of Option:
	 	 	 	 
	 

	 	 	 	 
	Initial Vesting Date:
	 	 	 	 
	 

	 	 	 	 
	Type of Option (Enter an X in one box)

	 	 o ISO            o NQSO	 	 

Vesting Schedule: Subject to the restrictions and limitations of the Option Agreement and the
Plan, this Option shall vest and become exercisable with respect to ___ % of the Shares subject to
this Option on the Initial Vesting Date. On each subsequent anniversary of the Initial Vesting
Date, this Option shall become vested and exercisable with respect to an additional ___ % of the
Shares subject to this Option.

Additional Terms/Acknowledgements: The undersigned Optionee acknowledges receipt of, and has read
and understands and agrees to, the Option Agreement. Optionee further acknowledges that as of the
Date of Grant, the Option Agreement, and the Plan set forth the entire understanding between
Optionee and the Company regarding the grant by the Company of the Option referred to in this Grant
Notice. Optionee hereby agrees to accept as binding, conclusive and final all decisions or
interpretations of the Board of Directors or the Compensation Committee upon any questions arising
under the Plan. Defined terms not otherwise defined herein have the meanings ascribed to them in
the Option Agreement and if not therein, then in the Plan.

	 	 	 	 	 	 	 
	PINNACLE ENTERTAINMENT, INC.	 	OPTIONEE:
	 
	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	     Signature
	 
	 	 	 	 	 	 
	Title:

	 	 	 	Date:	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Date:
	 	 	 	 	 	 
	 

	 	 	 	 	 	 

ATTACHMENTS:       Option Agreement

SPOUSE OF OPTIONEE:

Spouse has read and understands the Option Agreement and is executing this Grant Notice to evidence
Spouse’s consent and agreement to be bound by all of the terms and conditions of the Option
Agreement and the Plan (including those relating to the appointment of the Optionee as agent for
any interest that Spouse may have in the Option Shares). A copy of the Plan has been made
available to Spouse.

	 	 	 
	 

	 	 
	 

	 	 
	Signature

	 	Date

	 	 	 
	Optionee Address:
	 	 
	 

	 	 

 

 

 

PINNACLE ENTERTAINMENT, INC.

STOCK OPTION AGREEMENT

THIS STOCK OPTION AGREEMENT (together with the attached grant notice (the “Grant Notice”), the
“Agreement”) is made and entered into as of the date set forth on the Grant Notice by and between
Pinnacle Entertainment, Inc., a Delaware corporation (the “Company”), and the individual (the
“Optionee”) set forth on the Grant Notice.

A. Pursuant to the Pinnacle Entertainment, Inc. 2005 Equity and Performance Incentive Plan
(the “Plan”), the Compensation Committee (the “Committee”) has determined that it is to the
advantage and best interest of the Company to grant to the Optionee an option (the “Option”) to
purchase the number of shares of the Common Stock of the Company (the “Shares” or the “Option
Shares”) set forth on the Grant Notice, at the exercise price determined as provided herein, and in
all respects subject to the terms, definitions and provisions of the Plan, which is incorporated
herein by reference.

B. Unless otherwise defined herein, capitalized terms used in this Agreement shall have the
meanings set forth in the Plan.

NOW, THEREFORE, in consideration of the mutual agreements contained herein, the Optionee and
the Company hereby agree as follows:

1. Grant and Terms of Stock Option.

1.1 Grant of Option. Pursuant to the Grant Notice, the Company has granted to the
Optionee the right and option to purchase, subject to the terms and conditions set forth in the
Plan and this Agreement, all or any part of the number of Shares set forth on the Grant Notice at a
purchase price per Share equal to the exercise price per Share set forth on the Grant Notice. If
the Grant Notice indicates (under “Type of Option”) that this Option is an “ISO,” then this Option
is intended by the Company and the Optionee to be an Incentive Stock Option. However, if the Grant
Notice indicates that this Option is a “NQSO,” then this Option is not intended to be an Incentive
Stock Option and is instead intended to be a Nonqualified Stock Option.

1.2 Vesting. Subject to the provisions of the Plan and the other provisions of this
Agreement, this Option shall vest and become exercisable in accordance with the schedule set forth
in the Grant Notice. Notwithstanding the foregoing and except as otherwise provided (including,
without limitation, any additional vesting provisions) in a written employment agreement between
the Company and the Optionee, (a) in the event of termination of the Optionee’s Continuous Status
as an Employee, Director or Consultant for any reason (other than because of termination due to
Cause, death or Disability), this Option shall immediately cease vesting; (b) in the event of
termination of the Optionee’s Continuous Status as an Employee, Director or Consultant as a result
of death or Disability, this Option shall immediately cease vesting; or (c) in the event of
termination of the Optionee’s Continuous Status as an Employee, Director or Consultant because of
termination due to Cause, then this entire Option shall be cancelled and terminated as of the date
of such termination and shall no longer be exercisable as to any Shares, whether or not previously
vested.

1.3 Term of Option. The “Term” of this Option shall begin on the Date of Grant set
forth in the Grant Notice and end on the expiration of the Term specified in the Grant Notice. No
portion of this Option may be exercised after the expiration of the Term.

1.3.1 In the event of termination of Optionee’s Continuous Status as an Employee,
Director or Consultant for any reason other than death, Disability, or Cause, except as otherwise provided in a written employment agreement between the Company
and the Optionee, the portion of this Option that is not vested and exercisable as of the
date of termination shall be immediately cancelled and terminated. In addition, except as
otherwise provided in a written employment agreement between the Company and the Optionee, the portion of this Option that is
vested and exercisable as of the date of termination shall terminate and be cancelled on
the earlier of (i) the expiration of the Term, or (ii) 12 months after termination of
Optionee’s Continuous Status as an Employee, Director or Consultant.

 

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1.3.2 In the event of termination of Optionee’s Continuous Status as an Employee,
Director or Consultant by death or Disability, except as otherwise provided in a written
employment agreement between the Company and the Optionee, the portion of this Option that
is not vested and exercisable as of the date of termination shall be immediately cancelled
and terminated. In addition, except as otherwise provided in a written employment
agreement between the Company and the Optionee, the portion of this Option that is vested
and exercisable as of the date of termination shall terminate and be cancelled on the
earlier of (i) the expiration of the Term, or (ii) 12 months after termination of
Optionee’s Continuous Status as an Employee, Director or Consultant by death or Disability.

1.3.3 If Optionee’s Continuous Status as an Employee, Director or Consultant is
terminated for Cause, or if, after the termination of Optionee’s Continuous Status as an
Employee, Director or Consultant, the Committee determines that Cause existed before such
termination, except as otherwise provided in a written employment agreement between the
Company and the Optionee, this entire Option shall be cancelled and terminated as of the
date of such termination and shall no longer be exercisable as to any Shares, whether or
not previously vested.

2. Method of Exercise. 

2.1 Delivery of Notice of Exercise. This Option shall be exercisable by written
notice in the form attached hereto as Exhibit A which shall state the election to exercise this
Option, the number of Shares in respect of which this Option is being exercised, and such other
representations and agreements with respect to such Shares as may be required by the Company
pursuant to the provisions of this Agreement and the Plan. Such written notice shall be signed by
the Optionee (or by the Optionee’s executors, administrators, guardian, beneficiary or legal
representative, Family Members or any other person entitled to exercise this Option under the Plan)
and shall be delivered in person or by certified mail to the Secretary of the Company. The written
notice shall be accompanied by payment of the exercise price. This Option shall not be deemed
exercised until the Company receives such written notice accompanied by payment of the exercise
price and any other applicable terms and conditions of this Agreement are satisfied. This Option
may not be exercised for a fraction of a Share.

2.2 Restrictions on Exercise. No Shares will be issued pursuant to the exercise of
this Option unless and until there shall have been full compliance with all applicable requirements
of the Securities Act of 1933, as amended (whether by registration or satisfaction of exemption
conditions), all applicable listing requirements of any national securities exchange or other
market system on which the Common Stock is then listed and all applicable requirements of any
Applicable Laws and of any regulatory bodies having jurisdiction over such issuance. As a
condition to the exercise of this Option, the Company may require the Optionee to make any
representation and warranty to the Company as may be necessary or appropriate, in the judgment of
the Committee, to comply with any Applicable Law.

2.3 Method of Payment. Payment of the exercise price shall be made in full at the
time of exercise (a) in cash or by certified check or bank check or wire transfer of immediately
available funds, (b) by tendering previously acquired Shares (either actually or by attestation,
valued at their then Fair Market Value) that have been owned for a period of at least six months
(or such other period to avoid accounting charges against the Company’s earnings), (c) by delivery
of a properly executed exercise notice together with any other documentation as the Committee and
the Optionee’s broker, if applicable, require to effect an exercise of the Option and delivery to
the Company of the sale or other proceeds (as permitted by Applicable Law) required to pay the
exercise price, or (d) any combination of any of the foregoing. In addition, the Committee may
impose such other conditions in connection with the delivery of shares of Common Stock in
satisfaction of the exercise price as it deems appropriate in its sole discretion.

 

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2.4 Notice of Disqualifying Disposition of Incentive Stock Option. If this Option is
an Incentive Stock Option and the Optionee sells or otherwise disposes of any of the Shares
acquired upon exercise of this Option on or before the later of (i) two years after the date of
grant, or (ii) one year after the date such Shares were acquired, the Optionee shall immediately
notify the Company in writing of such disposition. The Optionee agrees that he or she may be
subject to income tax withholding by the Company on the taxable income recognized as a result of
such disposition and that the Optionee shall be required to satisfy such withholding obligations
either by making a payment to the Company in cash or by withholding from current earnings of the
Optionee.

2.5 No Rights as a Stockholder. Until the stock certificate evidencing shares of
Common Stock issued upon exercise of this Option is issued (as evidenced by the appropriate entry
on the books of the Company or of a duly authorized transfer agent of the Company), no right to
vote or receive dividends or any other rights as a stockholder will exist with respect to the
Shares, notwithstanding the exercise of the Option.

3. Non-Transferability of Option. This Option may not be transferred in any manner
otherwise than by will or by the laws of descent or distribution or to a beneficiary designated
pursuant to the Plan, and may be exercised during the lifetime of Optionee only by Optionee or the
Optionee’s guardian or legal representative. Subject to all of the other terms and conditions of
this Agreement, following the death of Optionee, this Option may, to the extent it is vested and
exercisable by Optionee in accordance with its terms on the date of death, be exercised by
Optionee’s beneficiary or other person entitled to exercise this Option in the event of Optionee’s
death under the Plan. Notwithstanding the first sentence of this Section 3, if this Option is a
Nonqualified Stock Option, this Option may be assigned, in connection with the Optionee’s estate
plan, in whole or in part, during the Optionee’s lifetime to one or more Family Members of the
Optionee. Rights under the assigned portion may be exercised by the person or persons who acquire
a proprietary interest in such Option pursuant to the assignment. The terms applicable to the
assigned portion shall be the same as those in effect for the Option immediately before such
assignment and shall be set forth in such documents issued to the assignee as the Committee deems
appropriate.

4. Restrictions; Restrictive Legends. Ownership and transfer of Shares issued pursuant to
the exercise of this Option will be subject to the provisions of, including ownership and transfer
restrictions (including, without limitation, ownership and transfer restrictions imposed by
applicable gaming laws) contained in, the Company’s Certificate of Incorporation, as amended from
time to time, restrictions imposed by Applicable Laws and restrictions set forth or referenced in
legends imprinted on certificates representing such Shares.

5. Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of
the Company, to the extent that this Option had not been previously exercised, it will terminate
immediately prior to the consummation of such proposed dissolution or liquidation. In such
instance, the Committee may, in the exercise of its sole discretion, declare that this Option will
terminate as of a date fixed by the Committee and give the Optionee the right to exercise this
Option prior to such date as to all or any part of the optioned stock, including shares as to which
this Option would not otherwise be exercisable.

6. General.

6.1 Governing Law. This Agreement shall be governed by and construed under the laws
of the State of Delaware applicable to agreements made and to be performed entirely in Delaware,
without regard to the conflicts of law provisions of Delaware or any other jurisdiction.

6.2 Notices. Any notice required or permitted under this Agreement shall be given in
writing by express courier or by postage prepaid, United States registered or certified mail,
return receipt requested, to the address set forth below or to such other address for a party as
that party may designate by 10 days advance written notice to the other parties. Notice shall be
effective upon the earlier of receipt or 3 days after the mailing of such notice.

	 	 	 	 	 
	 

	 	If to the Company:
	 	Pinnacle Entertainment, Inc.
	 

	 	 	 	3800 Howard Hughes Parkway
	 

	 	 	 	Las Vegas, Nevada 89169
	 

	 	 	 	Attention: General Counsel

 

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If to the Optionee, at the address set forth on the Grant Notice.

6.3 Community Property. Without prejudice to the actual rights of the spouses as
between each other, for all purposes of this Agreement, the Optionee shall be treated as agent and
attorney-in-fact for that interest held or claimed by his or her spouse with respect to this Option
and the parties hereto shall act in all matters as if the Optionee was the sole owner of this
Option. This appointment is coupled with an interest and is irrevocable.

6.4 No Employment Rights. Nothing herein contained shall be construed as an agreement
by the Company or any of its subsidiaries, express or implied, to employ the Optionee or contract
for the Optionee’s services, to restrict the Company’s or such subsidiary’s right to discharge the
Optionee or cease contracting for the Optionee’s services or to modify, extend or otherwise affect
in any manner whatsoever the terms of any employment agreement or contract for services which may
exist between the Optionee and the Company or any of its subsidiaries.

6.5 Modifications. This Agreement may be amended, altered or modified only by a
writing signed by each of the parties hereto.

6.6 Application to Other Stock. In the event any capital stock of the Company or any
other corporation shall be distributed on, with respect to, or in exchange for shares of Common
Stock as a stock dividend, stock split, reclassification or recapitalization in connection with any
merger or reorganization or otherwise, all restrictions, rights and obligations set forth in this
Agreement shall apply with respect to such other capital stock to the same extent as they are, or
would have been applicable, to the Option Shares on or with respect to which such other capital
stock was distributed.

6.7 Additional Documents. Each party agrees to execute any and all further documents
and writings, and to perform such other actions, which may be or become reasonably necessary or
expedient to be made effective and carry out this Agreement.

6.8 No Third-Party Benefits. Except as otherwise expressly provided in this
Agreement, none of the provisions of this Agreement shall be for the benefit of, or enforceable by,
any third-party beneficiary.

6.9 Successors and Assigns. Except as provided herein to the contrary, this Agreement
shall be binding upon and inure to the benefit of the parties, their respective successors and
permitted assigns.

6.10 No Assignment. Except as otherwise provided in this Agreement, the Optionee may
not assign any of his, her or its rights under this Agreement without the prior written consent of
the Company, which consent may be withheld in its sole discretion. The Company shall be permitted
to assign its rights or obligations under this Agreement, but no such assignment shall release the
Company of any obligations pursuant to this Agreement.

6.11 Severability. The validity, legality or enforceability of the remainder of this
Agreement shall not be affected even if one or more of the provisions of this Agreement shall be
held to be invalid, illegal or unenforceable in any respect.

6.12 Equitable Relief. The Optionee acknowledges that, in the event of a threatened
or actual breach of any of the provisions of this Agreement, damages alone will be an inadequate
remedy, and such breach will cause the Company great, immediate and irreparable injury and damage.
Accordingly, the Optionee agrees that the Company shall be entitled to injunctive and other
equitable relief, and that such relief shall be in addition to, and not in lieu of, any remedies it
may have at law or under this Agreement.

6.13 Arbitration.

 

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6.13.1 General. Any controversy, dispute, or claim between the parties to this
Agreement, including any claim arising out of, in connection with, or in relation to the formation,
interpretation, performance or breach of this Agreement shall be settled exclusively by
arbitration, before a single arbitrator, in accordance with this Section 6.13 and the then most applicable rules of the American
Arbitration Association. Judgment upon any award rendered by the arbitrator may be entered by any
state or federal court having jurisdiction thereof. Such arbitration shall be administered by the
American Arbitration Association. Arbitration shall be the exclusive remedy for determining any
such dispute, regardless of its nature. Notwithstanding the foregoing, either party may in an
appropriate matter apply to a court for provisional relief, including a temporary restraining order
or a preliminary injunction, on the ground that the award to which the applicant may be entitled in
arbitration may be rendered ineffectual without provisional relief. Unless mutually agreed by the
parties otherwise, any arbitration shall take place in the City of Las Vegas, Nevada.

6.13.2 Selection of Arbitrator. In the event the parties are unable to agree upon an
arbitrator, the parties shall select a single arbitrator from a list of nine arbitrators drawn by
the parties at random from the “Independent” (or “Gold Card”) list of retired judges or, at the
option of the Optionee, from a list of nine persons (which shall be retired judges or corporate or
litigation attorneys experienced in stock options and buy-sell agreements) provided by the office
of the American Arbitration Association having jurisdiction over Las Vegas, Nevada. If the parties
are unable to agree upon an arbitrator from the list so drawn, then the parties shall each strike
names alternately from the list, with the first to strike being determined by lot. After each
party has used four strikes, the remaining name on the list shall be the arbitrator. If such
person is unable to serve for any reason, the parties shall repeat this process until an arbitrator
is selected.

6.13.3 Applicability of Arbitration; Remedial Authority. This agreement to resolve
any disputes by binding arbitration shall extend to claims against any parent, subsidiary or
affiliate of each party, and, when acting within such capacity, any officer, director, stockholder,
employee or agent of each party, or of any of the above, and shall apply as well to claims arising
out of state and federal statutes and local ordinances as well as to claims arising under the
common law. In the event of a dispute subject to this paragraph the parties shall be entitled to
reasonable discovery subject to the discretion of the arbitrator. The remedial authority of the
arbitrator (which shall include the right to grant injunctive or other equitable relief) shall be
the same as, but no greater than, would be the remedial power of a court having jurisdiction over
the parties and their dispute. The arbitrator shall, upon an appropriate motion, dismiss any claim
without an evidentiary hearing if the party bringing the motion establishes that he or it would be
entitled to summary judgement if the matter had been pursued in court litigation. In the event of
a conflict between the applicable rules of the American Arbitration Association and these
procedures, the provisions of these procedures shall govern.

6.13.4 Fees and Costs. Any filing or administrative fees shall be borne initially by
the party requesting arbitration. The Company shall be responsible for the costs and fees of the
arbitration, unless the Optionee wishes to contribute (up to 50%) of the costs and fees of the
arbitration. Notwithstanding the foregoing, the prevailing party in such arbitration, as
determined by the arbitrator, and in any enforcement or other court proceedings, shall be entitled,
to the extent permitted by law, to reimbursement from the other party for all of the prevailing
party’s costs (including but not limited to the arbitrator’s compensation), expenses, and
attorneys’ fees.

6.13.5 Award Final and Binding. The arbitrator shall render an award and written
opinion, and the award shall be final and binding upon the parties. If any of the provisions of
this paragraph, or of this Agreement, are determined to be unlawful or otherwise unenforceable, in
whole or in part, such determination shall not affect the validity of the remainder of this
Agreement, and this Agreement shall be reformed to the extent necessary to carry out its provisions
to the greatest extent possible and to insure that the resolution of all conflicts between the
parties, including those arising out of statutory claims, shall be resolved by neutral, binding
arbitration. If a court should find that the arbitration provisions of this Agreement are not
absolutely binding, then the parties intend any arbitration decision and award to be fully
admissible in evidence in any subsequent action, given great weight by any finder of fact, and
treated as determinative to the maximum extent permitted by law.

 

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6.14 Withholding Taxes. The Company has the right to take whatever steps the Company
deems necessary or appropriate to comply with all applicable federal, state, local, and employment
tax withholding requirements, and the Company’s obligations to deliver shares of Common Stock upon
the exercise of this Option will be conditioned upon compliance with all such withholding tax
requirements. Without limiting the generality of the foregoing, upon the exercise of this Option,
the Company will have the right to withhold taxes from any other compensation or other amounts which it may owe to the Optionee, or to require
the Optionee to pay to the Company the amount of any taxes which the Company may be required to
withhold with respect to the shares issued on such exercise. Without limiting the generality of
the foregoing, the Committee in its discretion may authorize the Optionee to satisfy all or part of
any withholding tax liability by (a) having the Company withhold from the shares of Common Stock
which would otherwise be issued on the exercise of an Option that number of shares having a Fair
Market Value, as of the date the withholding tax liability arises, equal to or less than the amount
of the Company’s withholding tax liability, or (b) by delivering to the Company previously-owned
and unencumbered shares of the Common Stock having a Fair Market Value, as of the date the
withholding tax liability arises, equal to or less than the amount of the Company’s withholding tax
liability.

6.15 Headings. The section headings in this Agreement are inserted only as a matter
of convenience, and in no way define, limit, extend or interpret the scope of this Agreement or of
any particular section.

6.16 Number and Gender. Throughout this Agreement, as the context may require, (a)
the masculine gender includes the feminine and the neuter gender includes the masculine and the
feminine; (b) the singular tense and number includes the plural, and the plural tense and number
includes the singular; (c) the past tense includes the present, and the present tense includes the
past; (d) references to parties, sections, paragraphs and exhibits mean the parties, sections,
paragraphs and exhibits of and to this Agreement; and (e) periods of days, weeks or months mean
calendar days, weeks or months.

6.17 Counterparts. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

6.18 Complete Agreement. The Grant Notice, this Agreement and the Plan constitute the
parties’ entire agreement with respect to the subject matter hereof and supersede all agreements,
representations, warranties, statements, promises and understandings, whether oral or written, with
respect to the subject matter hereof.

6.19 Waiver of Jury Trial. TO THE EXTENT EITHER PARTY INITIATES LITIGATION INVOLVING
THIS AGREEMENT OR ANY ASPECT OF THE RELATIONSHIP BETWEEN US (EVEN IF OTHER PARTIES OR OTHER CLAIMS
ARE INCLUDED IN SUCH LITIGATION), ALL OF THE PARTIES WAIVE THEIR RIGHT TO A TRIAL BY JURY. THIS
WAIVER WILL APPLY TO ALL CAUSES OF ACTION THAT ARE OR MIGHT BE INCLUDED IN SUCH ACTION, INCLUDING
CLAIMS RELATED TO THE ENFORCEMENT OR INTERPRETATION OF THIS AGREEMENT, ALLEGATIONS OF STATE OR
FEDERAL STATUTORY VIOLATIONS, FRAUD, MISREPRESENTATION, OR SIMILAR CAUSES OF ACTION, AND IN
CONNECTION WITH ANY LEGAL ACTION INITIATED FOR THE RECOVERY OF DAMAGES BETWEEN OR AMONG US OR
BETWEEN OR AMONG ANY OF OUR OWNERS, AFFILIATES, OFFICERS, EMPLOYEES OR AGENTS.

[SIGNATURES TO APPEAR ON FOLLOWING PAGE]

 

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	 	 	PINNACLE ENTERTAINMENT, INC.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Its:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	OPTIONEE
	 
	 	 	 	 
	 	 	 
	 	 	Name:

 

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SPOUSAL CONSENT

By his or her signature below, the spouse of the Optionee agrees to be bound by all of the
terms and conditions of the foregoing Stock Option Agreement (including those relating to the
appointment of the Optionee as agent for any interest that Spouse may have in the Option Shares).

	 	 	 
	 

	 	OPTIONEE’S SPOUSE
	 
	 	 
	 
	 	 
	 

	 	 
	 

	 	Signature
	 
	 	 
	 
	 	 
	 

	 	 
	 

	 	Print Name

 

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EXHIBIT A

NOTICE OF EXERCISE OF STOCK OPTION

Pinnacle Entertainment, Inc.

3800 Howard Hughes Parkway

Las Vegas, Nevada 89169

Attn: General Counsel

Ladies and Gentlemen:

The undersigned hereby elects to exercise the option indicated below:

Option Grant Date:
                  
                    

Type of Option: Incentive Stock Option / Nonqualified Stock Option

Number of Shares Being Exercised:
                  
                    

Exercise Price Per Share:
                  
                    

Total Exercise Price: $
                  
                    

Method of Payment:
                  
                    

Enclosed herewith is payment in full of the total exercise price and a copy of the Grant
Notice.

My exact name, current address and social security number for purposes of the stock
certificates to be issued and the stockholder list of the Company are:

	 	 	 	 	 	 	 	 	 
	 

	 	Name:
	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Address:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Social Security Number:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 	 	 	 
	 

	 	 	 	Sincerely,
	 
	 	 	 	 
	 
	 	 	 	 
	Dated:
	 	 	 	 
	 

	 	 
	 	 
	 

	 	 	 	(Optionee’s Signature)exv10w9

Exhibit 10.9

January 28, 2010

PERSONAL AND CONFIDENTIAL

Mr. Alejandro M. Ballester

Ballester & Hnos.

P. O. Box 364548

San Juan, PR 00936-4548

Dear Mr. Ballester:

We are very pleased to welcome you to the Board of Directors (the “Board”) of Popular, Inc. (the
“Corporation”), and are writing to set forth the general terms of your compensation as a Director,
pursuant to resolutions adopted by the Board (without your participation) on July 14, 2004. These
terms are, of course, subject to future modification by the Board.

As compensation for your services, you will receive:

- An annual retainer fee (the “Annual Retainer”) of $5,445 for the period ending on the
day the 2010 annual meeting of shareholders of the Corporation is held and $20,000 for
each subsequent twelve month period that you are a Director or $25,000 if you are elected
Chairman of any Board committee;

- $1,000 for each meeting of the Board or of a Board committee that you attend (the
“Meeting Fee”). Attendance at meetings of Banco Popular de Puerto Rico (“BPPR”) will be
compensated accordingly; and

- A grant of $9,528 payable in Restricted Stock of Popular, Inc. (the “Restricted Stock”)
under the Popular, Inc. 2004 Omnibus Incentive Plan (the “Omnibus Plan”) for the period
ending on the day the 2010 annual meeting of shareholders of the Corporation is held and
an annual grant of $35,000 payable in Restricted Stock under the Omnibus Plan for each
subsequent twelve month period that you are a Director.

The Annual Retainer will be paid annually in advance, within the 30 days following the annual
Corporation’s shareholder meeting, in cash unless you elect to receive payment in Restricted Stock.
The Meeting Fee may be paid in cash on a per meeting basis or quarterly in arrears in Restricted
Stock. The number of shares of Restricted Stock to be delivered in payment of an Annual Retainer
and/or Meeting Fee shall be determined based on the per share closing price of the Corporation’s
common stock on the date payment is made and the amount of the Annual Retainer and/or Meeting Fee
owed you.

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If you elect to receive payment in the form of Restricted Stock, such shares shall be subject
to the terms of the Annual Retainer and/or Meeting Fee Restricted Stock Agreement (attached
hereto). If you elect to receive Restricted Stock you must return to us the attached Director
Compensation Election Form and the executed Annual Retainer and/or Meeting Fee Restricted Stock
Agreement. If you do not provide us with a completed election form prior to such date, the Annual
Retainer will be paid to you annually in advance in cash and the Meeting Fee will be paid in cash
on a per meeting basis. Once you have made an election to receive Restricted Stock, the election
will be applicable to all future payments of the Annual Retainer and/or Meeting Fee, unless you
notify us in writing of your desire to no longer receive Restricted Stock. In such case, your
notice will apply to compensation payable for the year following receipt of the notice.

If you do not currently elect to receive the Annual Retainer and/or the Meeting Fee in the form of
Restricted Stock, you may make such an election for future payments of either compensation element,
by sending us a written notice with respect to the Annual Retainer, at least 30 days prior to the
date of such year’s annual meeting of the Corporation’s shareholders for which the election would
be in effect and, with respect to the Meeting Fees, at least 30 days prior to Board of Director’s
meeting for which you want to commence receiving the Meeting Fee in the form of Restricted Stock.

An election to receive the Annual Retainer and/or Meeting Fee in the form of Restricted Stock will
result in deferral of taxation of those amounts until such later year as the restrictions lapse.

Dividends paid on your Restricted Stock will be reinvested in your name in the Popular, Inc.
Dividend Reinvestment Plan. The dividend will be subject to Puerto Rico income taxes in the year
paid by the Corporation at a special 10% rate.

Your grant of Restricted Stock is covered by a separate agreement attached hereto. We have
enclosed the following documents in connection with the foregoing:

	 	1.	 	Director Compensation Election Form,
	 
	 	2.	 	Annual Grant Restricted Stock Agreement,
	 
	 	3.	 	Annual Retainer and/or Meeting Fee Restricted Stock Agreement, and
	 
	 	4.	 	Omnibus Plan

Please complete and sign the Director Compensation Election Form and sign the Annual Grant
Restricted Stock Agreement where indicated. If you elect to receive payment of the Annual Retainer
and/or the Meeting Fee in Restricted Stock, please sign the Annual Retainer and/or Meeting Fee
Restricted Stock Agreement. Return all of the executed documents to Marie Reyes Rodríguez at the
Corporate Secretary’s Office. Please retain a copy of these documents for your records.

2

 

Once more, thank you for joining the Board of Directors of Popular, Inc. We look forward to
working with you.

Cordially,

/s/
Richard L. Carriόn
Richard L. Carriόn 

Chairman of the Board & CEO

3

 

Annual grant

Restricted Stock Agreement

     This Annual Grant Restricted Stock Agreement (“Agreement”) by and between Popular, Inc.
(the “Corporation”) and Alejandro M. Ballester (“Director”) is entered pursuant to the meeting of
the Board of Directors of the Corporation held on the 14th day of July 2004, whereby the
Corporation in consideration of Director’s services as a member of the Board of Directors of the
Corporation and/or its wholly owned subsidiary, Banco Popular de Puerto Rico (“BPPR”), granted to
the Director a number of restricted shares of the Corporation’s Common Stock (the “Restricted
Stock”) subject to the terms and conditions hereinafter set forth and the terms and conditions of
the Popular, Inc. 2004 Omnibus Incentive Plan (the “Plan”), a copy of which is attached hereto as
Exhibit A. Capitalized terms not otherwise defined herein shall having the meaning ascribed them in
the Plan.

     1. Number of Shares. Pursuant to the terms of the Director’s Compensation letter
dated January 28, 2010, the Corporation has agreed to grant to the Director $9,528 worth of
Restricted Stock for the period ending on the day the 2010 annual meeting of the Corporation’s
shareholders is held and an annual grant of $35,000 for each subsequent year the Director is
such
of the Corporation and/or BPPR, based on the per share closing price of the Corporation’s
Common Stock on the Grant Date. The Grant Date shall be the day the Restricted Stock is
purchased for the Director with respect to the period ending the day of the 2010 annual
meeting
of shareholders of the Corporation and with respect to subsequent annual grants, within the 30
days following the annual meeting of the Corporation’s shareholders. For all purposes the
Grant
Price shall be zero ($0).

     The Restricted Stock shall be subject to all the terms, conditions, and restrictions set
forth in this Agreement and the Plan. In the event any stock dividend, stock split,
recapitalization or other change affecting the outstanding common stock of the Corporation as a
class is effected without consideration, then any new, substituted or additional securities or
other property (including money paid other than as a regular cash dividend) that is by reason of
any such transaction distributed with respect to shares of Restricted Stock will be immediately
subject to the provisions of this Agreement in the same manner and to the same extent as the
Restricted Stock with respect to which such change was effected. Cash dividends paid on Restricted
Stock shall be reinvested in Common Stock through the Corporation’s Dividend Reinvestment Plan.

     2. Forfeiture and Transfer Restrictions. All Restricted Stock granted to
Director shall be issued and delivered on the Grant Date. In the event Director’s
relationship
with the Corporation or BPPR, as applicable, is terminated for Cause (as defined in the
Plan), or
if Director, Director’s legal representative, or other holder of the Restricted Stock
attempts to
sell, exchange, transfer, pledge, or otherwise dispose of any Restricted Stock, all
Restricted
Stock will be immediately forfeited without any further action by the Corporation.

4

 

     Restricted Stock may not be assigned, transferred, pledged or otherwise disposed of in any
way other than by the Last Will and Testament of the Director or the laws of descent and
distribution, subject to the bylaws of the Corporation. Any Restricted Stock held by a beneficiary
shall be subject to the restrictions imposed on such Restricted Stock. Any such attempt at
assignment, transfer, pledge or other disposition shall be without effect.

     3. Securities Law Compliance. Notwithstanding anything to the contrary
contained herein, no shares under this Agreement may be granted unless the shares of Restricted
Stock issuable upon such grant are then registered under the Securities Act of 1933, as amended
(the “Securities Act”) or, if such shares of Restricted Stock are not then so registered, the
Corporation has determined that such grant and issuance would be exempt from the registration
requirements of the Securities Act. The grant of shares must also comply with other applicable laws
and regulations governing the grant, and no grant of shares will be permitted if the Corporation
determines that such purchase would not be in material compliance with such laws and regulations.

     4. Stock Legend. The Corporation and Director agree that all certificates representing all
shares of Restricted Stock that at any time are subject to the provisions of this Agreement and the
Plan will have endorsed upon them in bold-faced type a legend substantially in the following form:

THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, ASSIGNED, TRANSFERRED,
ENCUMBERED OR IN ANY MANNER DISPOSED OF, EXCEPT IN COMPLIANCE WITH THE TERMS OF AN
ANNUAL GRANT RESTRICTED STOCK AGREEMENT BETWEEN THE CORPORATION AND THE INITIAL
HOLDER OF THE SHARES. THE ANNUAL GRANT RESTRICTED STOCK AGREEMENT MAY GRANT CERTAIN
PURCHASE OPTIONS TO THE CORPORATION, PROVIDES FOR FORFEITURE OF THE STOCK IN CERTAIN
CIRCUMSTANCES, AND IMPOSES RESTRICTIONS ON THE TRANSFER OF THESE SHARES. A COPY OF
THE ANNUAL GRANT RESTRICTED STOCK AGREEMENT IS ON DEPOSIT AT THE PRINCIPAL OFFICE OF
THE CORPORATION AND WILL BE FURNISHED BY THE CORPORATION TO THE REGISTERED HOLDER
HEREOF UPON WRITTEN REQUEST.

     5. Agreement not a Service Contract. This Agreement is not an employment or service contract,
and nothing in this Agreement nor the Plan shall be deemed to create in any way whatsoever any
obligation for the Director to continue his relationship with the Corporation or BPPR, as
applicable, or of the Corporation or BPPR, as applicable, to continue the relationship with the
Director.

     6. Section 83(b) Election. Director acknowledges that if he is subject to taxation under the
United States Internal Revenue Code of 1986, as amended (the “Code”), under Section 83(b) of the
Code, the difference between the Grant Price and its fair market value at the time any forfeiture
restrictions applicable to such Restricted Stock lapse is reportable as ordinary income at that
time. For this purpose, the term “forfeiture restrictions” includes the forfeiture provisions, and
restrictions described in Section 2 of this Agreement.

5

 

     Notwithstanding the preceding, Director understands that he or she may elect to be taxed at
the time the Restricted Stock is acquired hereunder, rather than when and as such Restricted Stock
ceases to be subject to such forfeiture restrictions, by filing an election under Section 83(b) of
the Code with the Internal Revenue Service within 30 days after the Grant Date. If the Grant Price
equals the fair market value of the Restricted Stock on such date, or if it is likely that the
fair market value of the Restricted Stock at the time any forfeiture restrictions lapse will
exceed the Grant Price, the election may avoid adverse tax consequences in the future. A form for
making this election is attached as Exhibit B. Director understands that the failure to
make this filing within said 30 day period will result in the recognition of ordinary income by
Director (in the event the fair market value of the Restricted Stock increases after Grant Date)
as the forfeiture restrictions lapse. Director acknowledges that it is his or her sole
responsibility, and not the Corporation’s, to file a timely election under Section 83(b). Director
further acknowledges that the election under Section 83(b) is an election that must be made with
respect to each separate grant of Restricted Stock that is subject to this Agreement.

     7. Notices. Any notices provided for in this Agreement or the Plan shall be given in writing
and shall be deemed effectively given upon receipt or, in the case of notices delivered by mail by
the Corporation to the Director, five (5) days after deposit in the United States mail, postage
prepaid, addressed to the Director at the last address the Director provided to the Corporation
and/or BPPR. Notice to the Corporation and/or BPPR shall be given in writing and shall be deemed
effectively given upon receipt or, in the case of notices delivered by mail to the Corporation
and/or BPPR by the Director, five (5) days after deposit in the United States mail, postage
prepaid, addressed to Chief Legal Officer, Popular, Inc./Banco Popular de Puerto Rico, Board of
Directors (751), PO Box 362708, San Juan, Puerto Rico 00936-2708.

     8. Rights as a Shareholder. Except for the restrictions set forth in this
Agreement and the Plan and unless otherwise determined by the Corporation, the Director shall be
entitled to all of the rights of a shareholder with respect to the shares of Restricted Stock
awarded pursuant to this Agreement including the right to vote such shares of Restricted Stock and
to receive dividends and other distributions (if any) payable with respect to such shares.
Provided, however, that cash dividends paid on Restricted Stock shall be reinvested in Common
Stock through the Corporation’s Dividend Reinvestment Plan.

     9. Tax Withholding. The Corporation may withhold or cause to be withheld
from any Restricted Stock grant (or Director’s compensation) any Federal, Puerto Rico, state or
local taxes required by law to be withheld with respect to such Restricted Stock grant. By
acceptance of this Agreement, Director agrees to such deductions.

     10. Governing Law. All questions arising with respect to this Agreement and
the provisions of the Plan shall be determined by application of the laws of the Commonwealth of
Puerto Rico except to the extent such governing law is preempted by Federal law. The obligation of
the Corporation to grant and deliver Restricted Stock under this Agreement is subject to applicable
laws and to the approval of any governmental authority required in connection with the
authorization, issuance, sale, or delivery of such Restricted Stock.

     11. Severability. If any provision of this Agreement is held to be illegal or invalid for any
reason, the illegality or invalidity shall not affect the remaining provisions of the

6

 

Agreement, but such provision shall be fully severable and the Agreement shall be
construed and enforced as if the illegal or invalid provision had never been included in the
Agreement.

     12. Successors. This Agreement shall be binding upon the Director, his legal
representatives, heirs, legatees, distributees, and shall be binding upon the Corporation and
its successors and assigns.

     IN WITNESS WHEREOF, the parties hereto have entered into this Agreement this
28th day of January 2010.

	 	 	 	 	 	 	 
	 	 	POPULAR, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Jorge A. Junquera
 

	 	 
	 

	 	Name:
	 	 Jorge A. Junquera	 	 
	 

	 	Title:
	 	Senior Executive VP	 	 
	 
	 	 	 	 	 	 
	 	 	DIRECTOR:	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	/s/ Alejandro M. Ballester	 	 
	 

	 	 	 	 

	 	 
	 

	 	Name:
	 	 Alejandro M. Ballester	 	 

7

 

Annual Retainer and/or Meeting Fee 

Restricted Stock Agreement

     This Annual Retainer and/or Meeting Fee Restricted Stock Agreement (“Agreement”) by and
between Popular, Inc. (the “Corporation”) and Alejandro M. Ballester (“Director”) is entered
pursuant to the meeting of the Board of Directors of the Corporation held the 14th day
of July 2004, whereby the Corporation in consideration of Director’s services as a member of the
Board of Directors of the Corporation granted to the Director certain compensation for his
services as such and Director elected to receive some or all of such compensation in a number of
restricted shares of the Corporation’s Common Stock (the “Restricted Stock”), subject to the terms
and conditions hereinafter set forth and the terms and conditions of the Popular, Inc. 2004
Omnibus Incentive Plan (the “Plan”), a copy of which is attached hereto as Exhibit A. Capitalized
terms not otherwise defined herein shall having the meaning ascribed them in the Plan.

	1.	 	Number of Shares. Pursuant to the terms of the Director’s Compensation
letter dated January 28, 2010 (the “Compensation Letter”), the Corporation and/or BPPR has
agreed to pay the Director certain compensation and the Director has elected to receive such
compensation in the form of Restricted Stock. The number of shares of Restricted Stock shall
be based on the per share closing price of the Corporation’s Common Stock on the Grant Date
and the total amount of compensation owed to the Director on the Grant Date. The Grant Date
shall be the day the Restricted Stock is purchased for the Director with respect to the period
ending the day the 2010 annual meeting of shareholders of the Corporation and with respect to
subsequent annual grants within the 30 days following the date the compensation is payable to
the Director pursuant to the Compensation Letter. For all purposes the Grant Price shall be
zero ($0).
	 
	 	 	The Restricted Stock shall be subject to all the terms, conditions, and restrictions set forth
in this Agreement and the Plan. In the event any stock dividend, stock split, recapitalization
or other change affecting the outstanding common stock of the Corporation as a class is
effected without consideration, then any new, substituted or additional securities or other
property (including money paid other than as a regular cash dividend) that is by reason of any
such transaction distributed with respect to shares of Restricted Stock will be immediately
subject to the provisions of this Agreement in the same manner and to the same extent as the
Restricted Stock with respect to which such change was effected. Cash dividends paid on
Restricted Stock shall be reinvested in Common Stock through the Corporation’s Dividend
Reinvestment Plan.
	 
	2.	 	Forfeiture and Transfer Restrictions. All Restricted Stock granted to Director shall
be issued and delivered on the Grant Date. In the event Director’s relationship with the
Corporation or BPPR, as applicable, is terminated for Cause (as defined in the Plan), or if
Director, Director’s legal representative, or other holder of the Restricted Stock attempts to

8

 

	 	 	sell, exchange, transfer, pledge, or otherwise dispose of any Restricted Stock, all Restricted
Stock will be immediately forfeited without any further action by the Corporation.
	 
	 	 	Restricted Stock may not be assigned, transferred, pledged or otherwise disposed of in any way
other than by the Last Will and Testament of the Director or the laws of descent and
distribution, subject to the bylaws of the Corporation. Any Restricted Stock held by a
beneficiary shall be subject to the restrictions imposed on such Restricted Stock. Any such
attempt at assignment, transfer, pledge or other disposition shall be without effect.
	 
	3.	 	Securities Law Compliance. Notwithstanding anything to the contrary contained
herein, no shares under this Agreement may be granted unless the shares of Restricted Stock
issuable upon such grant are then registered under the Securities Act of 1933, as amended (the
“Securities Act”) or, if such shares of Restricted Stock are not then so registered, the
Corporation has determined that such grant and issuance would be exempt from the registration
requirements of the Securities Act. The grant of shares must also comply with other applicable
laws and regulations governing the grant, and no grant of shares will be permitted if the
Corporation determines that such purchase would not be in material compliance with such laws
and regulations.
	 
	4.	 	Stock Legend. The Corporation and Director agree that all certificates representing
all shares of Restricted Stock that at any time are subject to the provisions of this
Agreement and the Plan will have endorsed upon them in bold-faced type a legend substantially
in the following form:

THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, ASSIGNED, TRANSFERRED,
ENCUMBERED OR IN ANY MANNER DISPOSED OF, EXCEPT IN COMPLIANCE WITH THE TERMS OF AN
ANNUAL RETAINER AND/OR MEETING FEE RESTRICTED STOCK AGREEMENT BETWEEN THE
CORPORATION AND THE INITIAL HOLDER OF THE SHARES. THE ANNUAL RETAINER AND/OR MEETING
FEE RESTRICTED STOCK AGREEMENT MAY GRANT CERTAIN PURCHASE OPTIONS TO THE
CORPORATION, PROVIDES FOR FORFEITURE OF THE STOCK IN CERTAIN CIRCUMSTANCES, AND
IMPOSES RESTRICTIONS ON THE TRANSFER OF THESE SHARES. A COPY OF THE ANNUAL RETAINER
AND/OR MEETING FEE RESTRICTED STOCK AGREEMENT IS ON DEPOSIT AT THE PRINCIPAL OFFICE
OF THE CORPORATION AND WILL BE FURNISHED BY THE CORPORATION TO THE REGISTERED HOLDER
HEREOF UPON WRITTEN REQUEST.

	5.	 	Agreement not a Service Contract. This Agreement is not an employment or service
contract, and nothing in this Agreement nor the Plan shall be deemed to create in any way
whatsoever any obligation for the Director to continue his relationship with the Corporation
or BPPR, as applicable, or of the Corporation or BPPR, as applicable, to continue the
relationship with the Director.

9

 

	6.	 	Section 83(b) Election. Director acknowledges that if he is subject to taxation
under the United States Internal Revenue Code of 1986, as amended (the “Code”), under Section
83(b) of the Code, the difference between the Grant Price and its fair market value at the time
any forfeiture restrictions applicable to such Restricted Stock lapse is reportable as ordinary
income at that time. For this purpose, the term “forfeiture restrictions” includes the
forfeiture provisions, and restrictions described in Section 2 of this Agreement.
	 
	 	 	Notwithstanding the preceding, Director understands that he or she may elect to be taxed at the
time the Restricted Stock is acquired hereunder, rather than when and as such Restricted Stock
ceases to be subject to such forfeiture restrictions, by filing an election under Section 83(b)
of the Code with the Internal Revenue Service within 30 days after the Grant Date. If the Grant
Price equals the fair market value of the Restricted Stock on such date, or if it is likely that
the fair market value of the Restricted Stock at the time any forfeiture restrictions lapse will
exceed the Grant Price, the election may avoid adverse tax consequences in the future. A form
for making this election is attached as Exhibit B. Director understands that the failure
to make this filing within said 30 day period will result in the recognition of ordinary income
by Director (in the event the fair market value of the Restricted Stock increases after Grant
Date) as the forfeiture restrictions lapse. Director acknowledges that it is his or her sole
responsibility, and not the Corporation’s, to file a timely election under Section 83(b).
Director further acknowledges that the election under Section 83(b) is an election that must be
made with respect to each separate grant of Restricted Stock that is subject to this Agreement.
	 
	7.	 	Notices. Any notices provided for in this Agreement or the Plan shall be given in
writing and shall be deemed effectively given upon receipt or, in the case of notices
delivered by mail by the Corporation to the Director, five (5) days after deposit in the
United States mail, postage prepaid, addressed to the Director at the last address the
Director provided to the Corporation and/or BPPR. Notice to the Corporation and/or BPPR shall
be given in writing and shall be deemed effectively given upon receipt or, in the case of
notices delivered by mail to the Corporation and/or BPPR by the Director, five (5) days after
deposit in the United States mail, postage prepaid, addressed to Chief Legal Officer, Popular,
Inc./Banco Popular de Puerto Rico, Board of Directors (751), PO Box 362708, San Juan, Puerto
Rico 00936- 2708.
	 
	8.	 	Rights as a Shareholder. Except for the restrictions set forth in this Agreement and
the Plan and unless otherwise determined by the Corporation, the Director shall be entitled to
all of the rights of a shareholder with respect to the shares of Restricted Stock awarded
pursuant to this Agreement including the right to vote such shares of Restricted Stock and to
receive dividends and other distributions (if any) payable with respect to such shares.
Provided, however, that cash dividends paid on Restricted Stock shall be reinvested in Common
Stock through the Corporation’s Dividend Reinvestment Plan.
	 
	9.	 	Tax Withholding. The Corporation may withhold or cause to be withheld from any
Restricted Stock grant (or Director’s compensation) any Federal, Puerto Rico, state or local
taxes required by law to be withheld with respect to such Restricted Stock grant. By
acceptance of this Agreement, Director agrees to such deductions.

10

 

	10.	 	Governing Law. All questions arising with respect to this Agreement and the provisions of
the Plan shall be determined by application of the laws of the Commonwealth of Puerto Rico
except to the extent such governing law is preempted by Federal law. The obligation of the
Corporation to grant and deliver Restricted Stock under this Agreement is subject to
applicable laws and to the approval of any governmental authority required in connection with
the authorization, issuance, sale, or delivery of such Restricted Stock.
	 
	11.	 	Severability. If any provision of this Agreement is held to be illegal or invalid
for any reason, the illegality or invalidity shall not affect the remaining provisions of the
Agreement, but such provision shall be fully severable and the Agreement shall be construed
and enforced as if the illegal or invalid provision had never been included in the Agreement.
	 
	12.	 	Successors. This Agreement shall be binding upon the Director, his legal representatives,
heirs, legatees, distributees, and shall be binding upon the Corporation and its successors
and assigns.

     IN WITNESS WHEREOF, the parties hereto have entered into this Agreement this 28th
day of January 2010.

	 	 	 	 	 	 	 
	 	 	POPULAR, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Jorge A. Junquera	 	 
	 

	 	Name:
	 	 

Jorge A. Junquera
	 	 
	 

	 	Title:
	 	Senior Executive VP	 	 
	 
	 	 	 	 	 	 
	 	 	DIRECTOR:	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	/s/ Alejandro M. Ballester	 	 
	 

	 	Name:
	 	 

Alejandro M. Ballester
	 	 

11

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