Document:

EX-10.20 COMPENSATION AGREEMENT FOR MICHAEL MASIN

 

Exhibit 10.20

January 25, 2007

PERSONAL AND CONFIDENTIAL

Mr. Michael Masin

Times Square Tower

7 Times Square

New York, NY 10036

Dear Mr. Masin:

We are very pleased to have you on 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 $6,667 for the period ending on
the day the 2007 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”); and

- A grant of $11,667 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 2007 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.

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

Cordially,

Richard L. Carrión

Chairman of the Board, President & CEO

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Annual grant

Restricted Stock Agreement

     This Annual Grant Restricted Stock Agreement (“Agreement”) by and between Popular, Inc. (the
“Corporation”) and Michael Masin (“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 25, 2007, the Corporation has agreed to grant to the Director SIX THOUSAND SIX
HUNDRED SIXTYSEVEN DOLLARS ($6,667) worth of Restricted Stock for the period ending on the day the
2007 annual meeting of the Corporation’s shareholders is held and an annual grant of THIRTY FIVE
THOUSAND DOLLARS ($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 2007 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.

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     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.

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     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

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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 25TH
day of January 2007.

	 	 	 	 	 	 	 
	 

	 	POPULAR,	 	 INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Tere Loubriel	 	 
	 

	 	 	 	 

	 
	 	 	 	 	 	 
	 

	 	Name:	 	Tere Loubriel	 	 
	 

	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:	 	Executive Vice
President

People, Communications and Planning
	 

	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	DIRECTOR:
	 	/s/ Michael Masin
	 
	 	 	 	 	 	 
	 

	 	Name:	 	Michael Masin	 	 
	 

	 	 	 	 

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EXHIBIT B

Section 83(b) Statement

     This statement is being made under Section 83(b) of the Internal Revenue Code, pursuant to
Treas. Reg. Section 1.83-2.

     The person who performed the services is:

	 	     	 	 	 
	     Name:
	 	 

	 	 
	 	 	 
	 	 
	 
	 	 
	 	 
	     Address:
	 	 
	 	 
	 	 	 
	 	 
	 
	 	 
	 	 
	 
	 	 
	 	 
	 	 	 
	 	 

     Taxpayer Identification No.: __________________

     Taxable Year: Calendar Year

     The property with respect to which the election is being made is ___shares of Common Stock of
Popular, Inc. (the “Restricted Stock”).

     The property was issued on __________________, ______.

     The property is subject to forfeiture if for any reason stockholder’s relationship with the
issuer is terminated prior to vesting of the property. The forfeiture provision lapses according
to Section 2 of the Agreement.

     The fair market value at the time of transfer (determined without regard to any restriction
other than a restriction that by its terms will never lapse) is
$___ per share.

     The
value of such property was $___ per share on the Grant Date.

     A copy of this statement is being furnished to Popular, Inc., for whom Director rendered the
service underlying the transfer of property.

     This statement is executed as of __________________, ______.

	 	 	 	 	 
	 	 	 
	 	 	 
	 	Director 	 
	 	 	 
	 

 

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 Michael Masin (“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 and/or its wholly owned subsidiary, Banco Popular de Puerto Rico
(“BPPR”), 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 25, 2007 (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 which date shall be 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
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.

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     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.

     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

9

 

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. 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.

10

 

     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 25th
day of January 2007.

	 	 	 	 	 	 	 
	 

	 	POPULAR,
	 	 INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Tere Loubriel 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Name:	 	Tere Loubriel 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:	 	Executive Vice President

People, Communications and Planning 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	DIRECTOR:
	 	/s/ Michael Masin 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Name:	 	Michael Masin 	 	 
	 

	 	 	 	 	 	 

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EXHIBIT B

Section 83(b) Statement

     This statement is being made under Section 83(b) of the Internal Revenue Code, pursuant to
Treas. Reg. Section 1.83-2.

     The person who performed the services is:

	 	     	 	 	 
	     Name:
	 	 

	 	 
	 	 	 
	 	 
	 
	 	 
	 	 
	     Address:
	 	 
	 	 
	 	 	 
	 	 
	 
	 	 
	 	 
	 
	 	 
	 	 
	 	 	 
	 	 

     Taxpayer Identification No.: __________________

     Taxable Year: Calendar Year

     The property with respect to which the election is being made is ___shares of Common Stock of
Popular, Inc. (the “Restricted Stock”).

     The property was issued on __________________, ______.

     The property is subject to forfeiture if for any reason stockholder’s relationship with the
issuer is terminated prior to vesting of the property. The forfeiture provision lapses according
to Section 2 of the Agreement.

     The fair market value at the time of transfer (determined without regard to any restriction
other than a restriction that by its terms will never lapse) is
$___ per share.

     The
value of such property was $___ per share on the Grant Date.

     A copy of this statement is being furnished to Popular, Inc., for whom Director rendered the
service underlying the transfer of property.

     This statement is executed as of __________________, ______.

	 	 	 	 	 
	 	 	 
	 	 	 
	 	DirectorEX-10.39 2008 INCENTIVE AWARD AND AGREEMENT

 

Exhibit 10.39

POPULAR, INC.

2008 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 following person (the “Grantee”):

Richard L. Carrion

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

 

          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 2008 Plan Year:

	 	i.	 	“Corporate Performance Goal” means the Corporation’s after-tax Net Income

	(b)	 	With regard to the Restricted Stock Award: The Corporation’s after-tax Net Income (prior to
change in accounting principle) for the 2008 Plan Year.
	 
	(c)	 	With regard to the Performance Shares Award: The Corporation’s simple average 3-year Return
on Equity (“ROE”) during the Performance Cycle.

The 2008 threshold, target and maximum Performance Goals shall be determined by the Plan
Administrator and communicated to the Grantee by March 31, 2008. Such Performance Goals may be
revised by the Plan Administrator during the Plan Year.

          Section 2.6. “Performance Cycle,” with regard to the Performance Shares Award, shall
be the calendar years 2008, 2009 and 2010.

          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 2008 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 average shareholder’s equity of a calendar year, excluding the effects of Extraordinary Items.

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SECTION 3

Award

          Section 3.1. Short-Term Annual Incentive Award — General

The Short-Term Annual Incentive Award of the Grantee shall be an amount in cash equal to the sum of
the Grantee’s:

	 	(i)	 	Corporate Performance Component, as described in Section 3.2.(a); plus

	 
	 	(ii)	 	Strategic and Personal Performance Component, as described in Section 3.2.(b).

          Section 3.2. Short-Term Annual Incentive Award — Components

	(a)	 	Corporate Performance Component: For the 2008 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%
	 	40%
	100%
	 	85%
	110% and above
	 	135%

	(b)	 	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 15% of the Grantee’s Eligible Earnings.

          Section 3.3. 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%
	 	50%
	100%
	 	100%
	105%
	 	105%
	Over 105%
	 	4% for every % over
105% performance, not to exceed 125%

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          Section 3.4. Long-Term Incentive Award — Performance Shares

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.

	 	 	 
	2008-2010 Average	 	Shares of Popular, Inc.
	3-year ROE	 	Common Stock
	Below threshold
	 	0
	Threshold
	 	31,344 (50% of target)
	Target
	 	62,688
	Maximum
	 	125,376 (200% of target)

SECTION 4

Payment of Award

          Section 4.1 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 4.2. 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 (c) below, the restrictions on 100% 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.
	 
	(c)	 	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.
	 
	(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.

4

 

	(f)	 	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 (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.
	 
	 	 	Section 4.3. Long Term Annual Incentive Award. — Performance Shares
	 
	(a)	 	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.
	 
	(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. Notwithstanding the terms
of Article IX of the Plan, in the event of termination by reason of Approved Retirement during
the applicable Performance Cycle, the Grantee shall receive a payment (based on the
Corporation’s results during the Performance Cycle) at the end of the Performance Cycle
assuming that Grantee had been an active employee during the entire Performance Cycle.

SECTION 5

Tax Considerations

          Section 5.1. 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 6

Miscellaneous

          Section 6.1 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 6.2. The Plan. This Award is subject to the terms of the Plan, a copy of
which has been provided to you.

          Section 6.3. Controlling Law. The laws of the Commonwealth of Puerto Rico shall be
controlling in all matters relating to this Award.

5

 

          Section 6.4. 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 21st day of February, 2008.

	 	 	 	 	 	 	 	 	 
	 	 	POPULAR, INC.	 	 	 	          GRANTEE	 	 
	 
	 	 	 	 	 	 	 	 
	/S/ Tere Loubriel	 	 	 	/S/ Richard L. Carrion	 	 
	 	 	 	 	 	 	 
	By:

	 	Tere Loubriel
	 	 	 	By: Richard L. Carrion	 	 
	Title:

	 	Executive Vice President
	 	 	 	Date: February 21, 2008	 	 
	Date:

	 	February 21, 2008	 	 	 	 	 	 

6

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