Document:

TMST Exhibit 10.7 03.31.2015

Exhibit 10.7

TIMKENSTEEL CORPORATION
Deferred Shares Agreement

WHEREAS, __________ (“Grantee”) is an employee of TimkenSteel Corporation (the “Company”) or a Subsidiary; and
WHEREAS, the grant of Deferred Shares evidenced hereby was authorized by a resolution of the Compensation Committee (the “Committee”) of the Board of Directors (the “Board”) of the Company that was duly adopted on January 29, 2015 (the “Date of Grant”), and the execution of a Deferred Shares Agreement in the form hereof (this “Agreement”) was authorized by a resolution of the Committee duly adopted on January 29, 2015.
NOW, THEREFORE, pursuant to the Company’s 2014 Equity and Incentive Compensation Plan (the “Plan”) and subject to the terms and conditions thereof, in addition to the terms and conditions of this Agreement, the Company confirms to Grantee the grant of the right to receive (i) _____ Common Shares and (ii) dividend equivalents payable in cash on a deferred basis (the “Deferred Cash Dividends”) with respect to the Common Shares covered by this Agreement.  All terms used in this Agreement with initial capital letters that are defined in the Plan and not otherwise defined herein shall have the meanings assigned to them in the Plan.
		
	1.
	Five-Year Vesting of Awards.  

		
	(a)
	Normal Vesting:  Subject to the terms and conditions of Sections 2 and 3 hereof, Grantee’s right to receive the Common Shares covered by this Agreement and any Deferred Cash Dividends accumulated with respect thereto shall become nonforfeitable on the fifth anniversary of the Date of Grant if Grantee has been in the continuous employ of the Company or a Subsidiary from the Date of Grant until the date of said fifth anniversary.  

For purposes of this Agreement, Grantee’s continuous employment with the Company or a Subsidiary shall not be deemed to have been interrupted, and Grantee shall not be deemed to have ceased to be an employee of the Company or a Subsidiary, by reason of any transfer of employment among the Company and its Subsidiaries.
		
	(b)
	Vesting Upon Retirement with Consent:  In the event Grantee should retire with the Company’s consent prior to the fifth anniversary of the Date of Grant, then, subject to the payment provisions of Section 5 hereof, Grantee’s right to receive the Common Shares covered by this Agreement, along with any Deferred Cash Dividends accumulated with respect thereto, shall become nonforfeitable in accordance with the terms and conditions of Section 1(a) as if Grantee had remained in the continuous employ of the Company or a Subsidiary from the Date of Grant until the date of the fifth anniversary of the Date of Grant or the occurrence of an event referenced in Section 2, whichever occurs first.

CLI-202342578v3         

For purposes of this Agreement, retirement “with the Company’s consent” shall mean: (i) the retirement of Grantee prior to age 62 under a retirement plan of the Company or a Subsidiary, if the Board or the Committee determines that his retirement is for the convenience of the Company or a Subsidiary, or (ii) the retirement of Grantee at or after age 62 under a retirement plan of the Company or a Subsidiary.  
		
	2.
	Alternative Vesting of Awards.

Notwithstanding the provisions of Section 1 hereof, and subject to the payment provisions of Section 5 hereof, Grantee’s right to receive the Common Shares covered by this Agreement and any Deferred Cash Dividends then accumulated with respect thereto may become nonforfeitable if any of the following circumstances apply:

		
	(a)
	Death or Disability:   Grantee’s right to receive the Common Shares covered by this Agreement and any Deferred Cash Dividends then accumulated with respect thereto shall immediately become nonforfeitable if Grantee should die or become permanently disabled while in the employ of the Company or any Subsidiary. If Grantee should die or become permanently disabled during the period that Grantee is deemed to be in the continuous employ of the Company or a Subsidiary pursuant to Section 1(b), 2(c) or 2(d), then the Common Shares covered by this Agreement and any Deferred Cash Dividends then accumulated with respect thereto will immediately become nonforfeitable, except that to the extent that Section 2(d) applies, the Common Shares covered by this Agreement and any Deferred Cash Dividends then accumulated with respect thereto will immediately become nonforfeitable only to the extent that the Common Shares covered by this Agreement and any Deferred Cash Dividends then accumulated with respect thereto would have become nonforfeitable during the severance period.

For purposes of this Agreement, “permanently disabled” shall mean that Grantee has qualified for long-term disability benefits under a disability plan or program of the Company or a Subsidiary that defines disability in accordance with Section 409A of the Code and its corresponding regulations, or, in the absence of a disability plan or program of the Company or a Subsidiary, under a government-sponsored disability program that defines disability in accordance with Section 409A of the Code and its corresponding regulations.
		
	(b)
	Change in Control:

		
	(i)
	Upon a Change in Control occurring during the five-year period described in Section 1(a) above while Grantee is an employee of the Company or a Subsidiary, to the extent the Common Shares covered by this Agreement and any Deferred Cash Dividends accumulated with respect thereto have not been forfeited, the Common Shares covered by this Agreement and any Deferred Cash Dividends accumulated with respect thereto shall 

CLI-202342578v3    2     

immediately become nonforfeitable (except to the extent that a Replacement Award is provided to Grantee for such Common Shares and Deferred Cash Dividends).  If Grantee is deemed to be in the continuous employ of the Company or a Subsidiary pursuant to Section 1(b), 2(c) or 2(d), upon a Change in Control prior to the fifth anniversary of the Date of Grant, then the Common Shares covered by this Agreement and any Deferred Cash Dividends then accumulated with respect thereto will immediately become nonforfeitable, except that to the extent that Section 2(d) applies, the Common Shares covered by this Agreement and any Deferred Cash Dividends then accumulated with respect thereto will immediately become nonforfeitable only to the extent that the Common Shares covered by this Agreement and any Deferred Cash Dividends then accumulated with respect thereto would have become nonforfeitable during the severance period.
		
	(ii)
	For purposes of this Agreement, a “Replacement Award” means an award (A) of service-based deferred shares, (B) that has a value at least equal to the value of the Common Shares covered by this Agreement and any Deferred Cash Dividends accumulated with respect thereto, (C) that relates to publicly traded equity securities of the Company or its successor in the Change in Control (or another entity that is affiliated with the Company or its successor following the Change in Control), (D) the tax consequences of which, under the Code, if Grantee is subject to U.S. federal income tax under the Code, are not less favorable to Grantee than the tax consequences of the Common Shares covered by this Agreement and any Deferred Cash Dividends accumulated with respect thereto, (E) that vests in full upon a termination of Grantee’s employment with the Company or a Subsidiary or their successors in the Change in Control (or another entity that is affiliated with the Company or a Subsidiary or their successors following the Change in Control) (as applicable, the “Successor”) for Good Reason by Grantee or without Cause by such Successor within a period of two years after the Change in Control, and (F) the other terms and conditions of which are not less favorable to Grantee than the terms and conditions of the Common Shares covered by this Agreement and any Deferred Cash Dividends then accumulated with respect thereto (including the provisions that would apply in the event of a subsequent Change in Control).  A Replacement Award may be granted only to the extent it conforms to the requirements of Treasury Regulation 1.409A-3(i)(5)(iv)(B) or otherwise does not result in the Common Shares covered by this Agreement and any Deferred Cash Dividends then accumulated with respect thereto, or Replacement Award, failing to comply with or be exempt from Section 409A of the Code.  Without limiting the generality of the foregoing, the Replacement Award may take the form of a continuation of the Common Shares covered by this Agreement and any Deferred Cash Dividends then accumulated with 

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respect thereto if the requirements of the preceding sentence are satisfied. The determination of whether the conditions of this Section 2(b)(ii) are satisfied will be made by the Committee, as constituted immediately before the Change in Control, in its sole discretion.
		
	(iii)
	For purposes of Section 2(b)(ii), “Cause” will be defined not less favorably with respect to Grantee than:  any intentional act of fraud, embezzlement or theft in connection with the Grantee’s duties with the Successor, any intentional wrongful disclosure of secret processes or confidential information of the Successor, or any intentional wrongful engagement in any competitive activity that would constitute a material breach of Grantee’s duty of loyalty to the Successor, and no act, or failure to act, on the part of Grantee shall be deemed “intentional” unless done or omitted to be done by Grantee not in good faith and without reasonable belief that Grantee’s action or omission was in or not opposed to the best interest of the Successor; provided, that for any Grantee who is party to an individual severance or employment agreement defining Cause, “Cause” will have the meaning set forth in such agreement.  For purposes of Section 2(b)(ii), “Good Reason” will be defined to mean a material reduction in the nature or scope of the responsibilities, authorities or duties of Grantee attached to Grantee’s position held immediately prior to the Change in Control, a change of more than 60 miles in the location of Grantee’s principal office immediately prior to the Change in Control, or a material reduction in Grantee’s remuneration upon or after the Change in Control; provided, that no later than 90 days following an event constituting Good Reason Grantee gives notice to the Successor of the occurrence of such event and the Successor fails to cure the event within 30 days following the receipt of such notice.

		
	(iv)
	 If a Replacement Award is provided, notwithstanding anything in this Agreement to the contrary, any outstanding Common Shares covered by this Agreement and any Deferred Cash Dividends then accumulated with respect thereto which at the time of the Change in Control are not subject to a “substantial risk of forfeiture” (within the meaning of Section 409A of the Code) will be deemed to be nonforfeitable at the time of such Change in Control.

		
	(c)
	Divestiture:  If Grantee’s employment with the Company or a Subsidiary terminates as the result of a divestiture, then the Common Shares covered by this Agreement and any Deferred Cash Dividends then accumulated with respect thereto shall become nonforfeitable in accordance with the terms and conditions of Section 1(a) as if Grantee had remained in the continuous employ of the Company or a Subsidiary from the Date of Grant until the fifth anniversary of the Date of Grant or the occurrence of a circumstance referenced in Section 2(a) or 2(b), whichever occurs first.

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For the purposes of this Agreement, the term “divestiture” shall mean a permanent disposition to a Person other than the Company or any Subsidiary of a plant or other facility or property at which Grantee performs a majority of Grantee’s services whether such disposition is effected by means of a sale of assets, a sale of Subsidiary stock or otherwise.
		
	(d)
	Layoff:  If (i) Grantee’s employment with the Company or a Subsidiary terminates as the result of a layoff and (ii) Grantee is entitled to receive severance pay pursuant to the terms of any severance pay plan of the Company in effect at the time of Grantee’s termination of employment that provides for severance pay calculated by multiplying Grantee’s base compensation by a specified severance period, then Grantee’s right to receive the Common Shares covered by this Agreement and any Deferred Cash Dividends then accumulated with respect thereto shall become nonforfeitable in accordance with the terms and conditions of Section 1(a) as if Grantee had remained in the continuous employ of the Company or a Subsidiary from the Date of Grant until the end of the severance period or the occurrence of a circumstance referenced in Section 2(a) or 2(b), whichever occurs first.  Notwithstanding the foregoing, in the event Grantee’s employment is terminated as a result of layoff after Grantee becomes eligible for retirement at or after age 62 under a retirement plan of the Company or a Subsidiary, then Section 1(b) shall govern.  

For purposes of this Agreement, a “layoff” shall mean the involuntary termination by the Company or any Subsidiary of Grantee’s employment with the Company or any Subsidiary due to (i) a reduction in force leading to a permanent downsizing of the salaried workforce, (ii) a permanent shutdown of the plant, department or subdivision in which Grantee works, or (iii) an elimination of position.  

		
	3.
	Forfeiture of Awards.  Grantee’s right to receive the Common Shares covered by this Agreement and any Deferred Cash Dividends accumulated with respect thereto shall be forfeited automatically and without further notice on the date that Grantee ceases to be an employee of the Company or a Subsidiary prior to the fifth anniversary of the Date of Grant for any reason other than as described in Sections 1 or 2 hereof.  In the event that Grantee shall intentionally commit an act that the Committee determines to be materially adverse to the interests of the Company or a Subsidiary, Grantee’s right to receive the Common Shares covered by this Agreement and any Deferred Cash Dividends accumulated with respect thereto shall be forfeited at the time of that determination notwithstanding any other provision of this Agreement to the contrary.  

		
	4.
	Crediting of Deferred Cash Dividends.  With respect to each of the Common Shares covered by this Agreement, Grantee shall be credited on the records of the Company with Deferred Cash Dividends in an amount equal to the amount per share of any cash dividends declared by the Board on the outstanding Common Shares during the period beginning on the Date of Grant and ending on the date on which Grantee receives 

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payment of the Common Shares covered by this Agreement pursuant to Section 5 hereof or at the time when the Common Shares covered by this Agreement are forfeited in accordance with Section 3 of this Agreement.  The Deferred Cash Dividends shall accumulate without interest.
		
	5.
	Payment of Awards.  

		
	(a)
	General:  Subject to Section 3 and Section 5(b), payment for the Common Shares covered by this Agreement that are nonforfeitable and any Deferred Cash Dividends accumulated with respect thereto will be made within 10 days following the fifth anniversary of the Date of Grant.

		
	(b)
	Other Payment Events:  Notwithstanding Section 5(a), to the extent that the Common Shares covered by this Agreement are nonforfeitable on the dates set forth below, payment with respect to the Common Shares covered by this Agreement that have become nonforfeitable and any Deferred Cash Dividends accumulated with respect thereto will be made as follows:

		
	(i)
	Change in Control.  Upon a Change in Control, Grantee is entitled to receive payment for the Common Shares covered by this Agreement that are nonforfeitable and any Deferred Cash Dividends accumulated with respect thereto on the date of the Change in Control; provided, however, that if such Change in Control would not qualify as a permissible date of distribution under Section 409A(a)(2)(A) of the Code, and the regulations thereunder, and where Section 409A of the Code applies to such distribution, Grantee is entitled to receive the corresponding payment on the date that would have otherwise applied pursuant to Sections 5(a) or 5(b)(ii) as though such Change in Control had not occurred.  

		
	(ii)
	Death or Disability.  On the date of Grantee’s death or the date Grantee becomes permanently disabled, Grantee is entitled to receive payment for the Common Shares covered by this Agreement that are nonforfeitable and any Deferred Cash Dividends accumulated with respect thereto on such date.

		
	6.
	Compliance with Law.  The Company shall make reasonable efforts to comply with all applicable federal and state securities laws; provided, however, notwithstanding any other provision of this Agreement, the Company shall not be obligated to issue any of the Common Shares covered by this Agreement or pay any Deferred Cash Dividends accumulated with respect thereto if the issuance or payment thereof would result in violation of any such law.  To the extent that the Ohio Securities Act shall be applicable to this Agreement, the Company shall not be obligated to issue any of the Common Shares or other securities covered by this Agreement or pay any Deferred Cash Dividends accumulated with respect thereto unless such Common Shares and Deferred Cash Dividends are (a) exempt from registration thereunder, (b) the subject of a transaction  that is exempt from compliance therewith, (c) registered by description or qualification 

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thereunder or (d) the subject of a transaction that shall have been registered by description thereunder.
		
	7.
	Transferability.  Neither Grantee’s right to receive the Common Shares covered by this Agreement nor his right to receive any Deferred Cash Dividends shall be transferable by Grantee except by will or the laws of descent and distribution.  Any purported transfer in violation of this Section 7 shall be null and void, and the purported transferee shall obtain no rights with respect to such Shares.

		
	8.
	Compliance with Section 409A of the Code.  To the extent applicable, it is intended that this Agreement and the Plan comply with the provisions of Section 409A of the Code.  This Agreement and the Plan shall be administered in a manner consistent with this intent, and any provision that would cause the Agreement or the Plan to fail to satisfy Section 409A of the Code shall have no force and effect until amended to comply with Section 409A of the Code (which amendment may be retroactive to the extent permitted by Section 409A of the Code and may be made by the Company without the consent of Grantee).  

		
	9.
	Adjustments.  Subject to Section 13 of the Plan, the Committee shall make any adjustments in the number or kind of shares of stock or other securities covered by this Agreement that the Committee may determine to be equitably required to prevent any dilution or expansion of Grantee’s rights under this Agreement that otherwise would result from any (a) stock dividend, stock split, combination of shares, recapitalization or other change in the capital structure of the Company, (b) merger, consolidation, separation, reorganization or partial or complete liquidation involving the Company or (c) other transaction or event having an effect similar to any of those referred to in subsection (a) or (b) herein.  Furthermore, in the event that any transaction or event described or referred to in the immediately preceding sentence shall occur, the Committee shall provide in substitution of any or all of Grantee’s rights under this Agreement such alternative consideration as the Committee may determine in good faith to be equitable under the circumstances.

		
	10.
	Withholding Taxes.  To the extent that the Company is required to withhold federal, state, local or foreign taxes in connection with any delivery of Common Shares to Grantee, and the amounts available to the Company for such withholding are insufficient, it shall be a condition to the receipt of such delivery that Grantee make arrangements satisfactory to the Company for payment of the balance of such taxes required to be withheld.  Grantee may elect that all or any part of such withholding requirement be satisfied by retention by the Company of a portion of the Common Shares delivered to Grantee.  If such election is made, the shares so retained shall be credited against such withholding requirement at the Market Value per Share on the date of such delivery.

		
	11.
	Detrimental Activity and Recapture.

		
	(a)
	In the event that, as determined by the Committee, Grantee shall engage in Detrimental Activity during employment with the Company or a Subsidiary, the 

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Common Shares covered by this Agreement and any Deferred Cash Dividends accumulated with respect thereto will be forfeited automatically and without further notice at the time of that determination notwithstanding any other provision of this Agreement.  For purposes of this Agreement, “Detrimental Activity” shall mean:
		
	(i)
	engaging in any activity, as an employee, principal, agent, or consultant for another entity that competes with the Company in any actual, researched, or prospective product, service, system, or business activity for which Grantee has had any direct responsibility during the last two years of his or her employment with the Company or a Subsidiary, in any territory in which the Company or a Subsidiary manufactures, sells, markets, services, or installs such product, service, or system, or engages in such business activity;

		
	(ii)
	soliciting any employee of the Company or a Subsidiary to terminate his or her employment with the Company or a Subsidiary;

		
	(iii)
	the disclosure to anyone outside the Company or a Subsidiary, or the use in other than the Company or a Subsidiary’s business, without prior written authorization from the Company, of any confidential, proprietary or trade secret information or material relating to the business of the Company and its Subsidiaries, acquired by Grantee during his or her employment with the Company or its Subsidiaries or while acting as a director of or consultant for the Company or its Subsidiaries thereafter;

		
	(iv)
	the failure or refusal to disclose promptly and to assign to the Company upon request all right, title and interest in any invention or idea, patentable or not, made or conceived by Grantee during employment by the Company and any Subsidiary, relating in any manner to the actual or anticipated business, research or development work of the Company or any Subsidiary or the failure or refusal to do anything reasonably necessary to enable the Company or any Subsidiary to secure a patent where appropriate in the United States and in other countries;

		
	(v)
	activity that results in Termination for Cause.  For the purposes of this subsection, “Termination for Cause” shall mean a termination: (A) due to Grantee’s willful and continuous gross neglect of his or her duties for which he or she is employed; or (B) due to an act of dishonesty on the part of Grantee constituting a felony resulting or intended to result, directly or indirectly, in his or her gain for personal enrichment at the expense of the Company or a Subsidiary; or

		
	(vi)
	any other conduct or act determined to be injurious, detrimental or prejudicial to any significant interest of the Company or any Subsidiary 

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unless Grantee acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Company.
		
	(b)
	If a Restatement occurs and the Committee determines that Grantee is personally responsible for causing the Restatement as a result of Grantee’s personal misconduct or any fraudulent activity on the part of Grantee, then the Committee has discretion to, based on applicable facts and circumstances and subject to applicable law, cause the Company to recover all or any portion (but no more than 100%) of the Common Shares covered by this Agreement and any Deferred Cash Dividends accumulated with respect thereto earned or payable to Grantee for some or all of the years covered by the Restatement. The amount of any earned or payable Common Shares covered by this Agreement and any Deferred Cash Dividends accumulated with respect thereto recovered by the Company shall be limited to the amount by which such earned or payable Common Shares and Deferred Cash Dividends exceeded the amount that would have been earned by or paid to Grantee had the Company’s financial statements for the applicable restated fiscal year or years been initially filed as restated, as reasonably determined by the Committee. The Committee shall also determine whether the Company shall effect any recovery under this Section 11(b) by: (i) seeking repayment from Grantee; (ii) reducing, except with respect to any non-qualified deferred compensation under Section 409A of the Code, the amount that would otherwise be payable to Grantee under any compensatory plan, program or arrangement maintained by the Company (subject to applicable law and the terms and conditions of such plan, program or arrangement); (iii) by withholding, except with respect to any non-qualified deferred compensation under Section 409A of the Code, payment of future increases in compensation (including the payment of any discretionary bonus amount) that would otherwise have been made to Grantee in accordance with the Company’s compensation practices; or (iv) by any combination of these alternatives.  For purposes of this Agreement, “Restatement” means a restatement (made within 36 months of the publication of the financial statements that are required to be restated) of any part of the Company’s financial statements for any fiscal year or years after 2014 due to material noncompliance with any financial reporting requirement under the U.S. securities laws applicable to such fiscal year or years.

		
	12.
	No Right to Future Awards or Employment.  This award is a voluntary, discretionary bonus being made on a one-time basis and it does not constitute a commitment to make any future awards.  This award and any payments made hereunder will not be considered salary or other compensation for purposes of any severance pay or similar allowance, except as otherwise required by law.  No provision of this Agreement shall limit in any way whatsoever any right that the Company or a Subsidiary may otherwise have to terminate Grantee’s employment at any time.

		
	13.
	Relation to Other Benefits.  Any economic or other benefit to Grantee under this Agreement or the Plan shall not be taken into account in determining any benefits to 

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which Grantee may be entitled under any profit‐sharing, retirement or other benefit or compensation plan maintained by the Company or a Subsidiary and shall not affect the amount of any life insurance coverage available to any beneficiary under any life insurance plan covering employees of the Company or a Subsidiary.
		
	14.
	Processing of Information.  Information about Grantee and Grantee’s award of Common Shares and Deferred Cash Dividends may be collected, recorded and held, used and disclosed for any purpose related to the administration of the award.  Grantee understands that such processing of this information may need to be carried out by the Company and its Subsidiaries and by third party administrators whether such persons are located within Grantee’s country or elsewhere, including the United States of America.  Grantee consents to the processing of information relating to Grantee and Grantee’s receipt of the Common Shares and Deferred Cash Dividends in any one or more of the ways referred to above.

		
	15.
	Amendments.  Any amendment to the Plan shall be deemed to be an amendment to this Agreement to the extent that the amendment is applicable hereto; provided, however, that subject to the provisions of Section 8 hereof no amendment shall adversely affect the rights of Grantee with respect to either the Common Shares or other securities covered by this Agreement or the Deferred Cash Dividends without Grantee’s consent.

		
	16.
	Severability.  If any provision of this Agreement or the application of any provision hereof to any person or circumstances is held invalid or unenforceable, the remainder of this Agreement and the application of such provision in any other person or circumstances shall not be affected, and the provisions so held to be invalid or unenforceable shall be reformed to the extent (and only to the extent) necessary to make it enforceable and valid.

		
	17.
	Governing Law.  This Agreement is made under, and shall be construed in accordance with, the internal substantive laws of the State of Ohio.

[SIGNATURES ON FOLLOWING PAGE]

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This Agreement is executed by the Company on this ___ day of _____, ____.
TimkenSteel Corporation

By:___________________________________
Frank DiPiero
Executive Vice President and General 
Counsel 
                

The undersigned Grantee hereby acknowledges receipt of an executed original of this Agreement and accepts the right to receive the Common Shares or other securities covered hereby and any Deferred Cash Dividends accumulated with respect thereto, subject to the terms and conditions of the Plan and the terms and conditions herein above set forth.

_________________________________
Grantee

Date:   ___________________________

CLI-202342578v3    11EX-10.1

 Exhibit 10.1 
  

 
 FORM OF POPULAR, INC. 

2015 LONG-TERM EQUITY INCENTIVE AWARD 

AND AGREEMENT 

Recipient:                      

The Compensation Committee of the Board of Directors of Popular, Inc. (the “Committee”) awarded you on February 27, 2015
(the “Approval Date”) a Long-Term Incentive Award consisting of Restricted Stock (“Restricted Stock”) and Performance Shares (“Performance Shares” and, in conjunction with the Restricted Stock, the
“Award”). 
 This award agreement (the “Award Agreement”), dated as of April 29, 2015 (the
“Grant Date”) sets forth the terms and conditions of your Award. This Award is made under the Popular, Inc. 2004 Omnibus Incentive Plan, as amended (the “Plan”) and, except as otherwise provided herein, is subject
to the terms of the Plan. Capitalized terms used but not otherwise defined in this Award Agreement have the meanings given in the Plan. 

1. Award. The number of shares of Restricted Stock and Performance Shares subject to this Award is set forth in Annex 1 hereto. The
Award will vest as set forth below. 
 2. Vesting; Payout. 

(a) Restricted Stock Vesting. Except as otherwise stated in this Section 2, you shall become vested in the Restricted Stock as
follows (each of the dates described in (i) and (ii) below, a “Restricted Stock Vesting Date”): 
 (i) 80% of
your Restricted Stock shall vest in equal annual installments on each of the first four (4) anniversaries of the Approval Date specified in Annex 1, and 

(ii) 20% of your Restricted Stock shall vest upon termination of your employment after attaining (x) age 55 with 10 years of service with
the Corporation or (y) age 60 with 5 years of service with the Corporation. 
 Years of service shall be determined pursuant to the
Corporation’s personnel policies and procedures. 
 (b) Performance Shares Vesting. Except as otherwise stated in this
Section 2, you shall become vested in the Performance Shares on the third anniversary of the Approval Date specified in Annex 1, subject to the Corporation’s achievement of the Performance Goals specified in Annex 1 during the Performance
Cycle as certified by the Committee (hereinafter the “Performance Shares Vesting Date” and, together with 

 
the Restricted Stock Vesting Date, the “Vesting Date”). The Performance Goals will be based on two performance metrics weighted equally: the Relative Total Shareholder Return
(the “TSR”) and the Absolute Earnings per Share (the “EPS”) goals. The Performance Cycle is a three (3) year period beginning on January 1 of the calendar year of the Approval Date and ending on December 31 of the
third year. Each Performance Goal will have a defined minimum threshold (i.e., minimum result for which an incentive would be earned), target (i.e., result at which 100% of the incentive would be earned) and maximum level of performance (i.e.,
result at which 1.5 times the incentive target would be earned). 
 (c) Approved Retirement. Upon an Approved Retirement after
attaining (x) age 55 with 10 years of service with the Corporation or (y) age 60 with 5 years of service with the Corporation: (1) your outstanding Restricted Stock shall fully vest; and (2) your outstanding Performance Shares
shall continue outstanding and vest in full on the Performance Shares Vesting Date in accordance with the actual results of the Performance Goals during the Performance Cycle. 

(d) Vesting upon Retirement on or after age 50 before attaining age 55 and 10 years of service. The Committee, at its discretion, may
accord the same treatment accorded in Section 2(c) above if you retire from your employment on or after age 50, and before attaining age 55 and 10 years of service, provided the sum of your age and years of service is at least 75. 

(e) Death. Provided that on the date of your death you are still employed by the Corporation and your rights in respect of your Award
have not been previously terminated, any then unvested outstanding Award shall immediately vest and be paid to the representative of your estate promptly after your death. In the case of the Performance Shares, the number of shares will be
calculated as if the target number of Performance Shares had in fact been earned. 
 (f) Disability. If you become subject to
Disability while you are still employed by the Corporation, any then unvested outstanding Award shares shall vest and shall be paid to you promptly after you become subject to Disability. In the case of the Performance Shares, the number of shares
will be calculated as if the target number of Performance Shares had in fact been earned. 
 (g) Change of Control. If your
employment is terminated by the Corporation or any successor entity thereto without Cause, or if you terminate your employment for Good Reason, in each case upon or within two years after a Change of Control, prior to a Vesting Date, and provided
your rights in respect of the shares of your unvested Award have not previously terminated, the shares of your unvested Award shall immediately vest and be delivered to you promptly after such termination of employment. In the case of the
Performance Shares, the number of shares will be calculated as if the target number of Performance Shares had in fact been earned. 
 (h)
Termination without Cause. If the Corporation terminates your employment without Cause you will receive payment of the Award on a prorated basis based on the number of full months in the vesting schedule in which you were an active employee
(with a partial month worked counted as a full month if you were an active employee for 15 days or more in the month) and such reduced Award will vest immediately upon your termination of employment, calculated in the case of Performance Shares as
if the target number of Performance Shares had in fact been earned, as provided in the Plan. 
 (i) Payout. The transfer restrictions
on the applicable number of whole shares of Restricted Stock shall lapse on each Vesting Date or such other vesting date as determined in this Section 2 and in the terms of the Plan. In the case of the Performance Shares, the criteria that the
Committee will utilize to determine the number of shares earned will be based upon the actual performance results during the Performance Cycle. 

  
 2 

 3. Termination of Award. 

(a) Except as provided herein, your rights in respect of your outstanding unvested Award shares shall immediately terminate, and no shares
shall be paid in respect thereof, if at any time prior to the respective Vesting Date you terminate your employment. 
 (b) If the
Corporation terminates your employment for Cause, your Award shares shall be cancelled and the provisions under the Plan will apply. 
 4.
Non-transferability. This Award (or any rights and obligations hereunder) may not be sold, exchanged, transferred, assigned, pledged, hypothecated or otherwise disposed of or hedged, in any manner (including through the use of any
cash-settled instrument), whether voluntarily or involuntarily and whether by operation of law or otherwise, other than by will or by the laws of descent and distribution. 

5. Withholding, Consents and Legends. 

(a) You shall be solely responsible for any applicable taxes (including, without limitation, income and excise taxes) and penalties, and any
interest that accrues thereon, incurred in connection with your Award. The Corporation will withhold shares of Common Stock with a value equal to the payment of the taxes that the Corporation determines it is required to withhold under applicable
tax laws with respect to the Award (with such withholding obligation determined based on any applicable minimum statutory withholding rates), in connection with the vesting of the shares thereof, and cause the restrictions on the remainder of the
shares subject to your Award to lapse pursuant to Section 2(i). The Corporation will use the Fair Value of the Common Stock in order to determine the number of shares to be withheld. If you wish to remit cash to the Corporation (through payroll
deduction or otherwise), in each case in an amount sufficient in the opinion of the Corporation to satisfy such withholding obligation, you must notify the Corporation in advance and do so in compliance with all applicable laws and pursuant to such
rules as the Corporation may establish from time to time, including, but not limited to, the Corporation’s Insider Trading Policy. 

(b) Your right to receive shares pursuant to the Award is conditioned on the receipt to the reasonable satisfaction of the Committee of any
required consent that the Committee may reasonably determine to be necessary or advisable. By accepting delivery of the shares, you acknowledge that you are subject to Corporation’s Insider Trading Policy. 

  
 3 

 6. Section 409A. Shares awarded under this Award Agreement are intended to be exempt
from Section 409A of the U.S. Code, to the extent applicable, and this Award Agreement is intended to, and shall be interpreted, administered and construed consistent therewith. The Committee shall have full authority to give effect to the
intent of this Section 6. 
 7. No Rights to Continued Employment. Nothing in this Award Agreement shall be construed as giving
you any right to continued employment by the Corporation or any of its affiliates or affect any right that the Corporation or any of its affiliates may have to terminate or alter the terms and conditions of your employment. 

8. Successors and Assigns of the Corporation. The terms and conditions of this Award Agreement shall be binding upon, and shall inure
to the benefit of, the Corporation and its successor entities. 
 9. Committee Discretion. Subject to the terms of the Plan, the
Committee shall have full discretion with respect to any actions to be taken or determinations to be made in connection with this Award Agreement, and its determinations shall be final, binding and conclusive. 

10. Amendment. The Committee reserves the right at any time to amend the terms and conditions set forth in this Award Agreement;
provided that, notwithstanding the foregoing, no such amendment shall materially adversely affect your rights and obligations under this Award Agreement without your consent (or the consent of your estate, if such consent is obtained after
your death), and provided, further, that the Committee may not accelerate or postpone the payout of shares to occur at a time other than the applicable time provided for in this Award Agreement. Any amendment of this Award Agreement
shall be in writing signed by an authorized member of the Committee or a person or persons designated by the Committee. 
 11.
Adjustment; Other Plan Provisions. Subject to Section 10, the Committee shall adjust equitably the terms of this Award in accordance with Section 5.4 of the Plan, if applicable. Subject to the terms of this Award Agreement, the
Restricted Stock shall be subject to the terms of the Plan, including, but not limited to, the provisions of Section 8.4 related to dividends and voting rights. Cash dividends paid on the Restricted Stock and on all of the Common Stock that may
be subsequently acquired with such cash dividends, will be invested in the purchase of additional shares of Common Stock of the Corporation in accordance with the Popular, Inc. Dividend Reinvestment and Stock Purchase Plan (DRIP); such shares are
not subject to the restrictions and are immediately vested. Dividends on Performance Shares will accrue during the Performance Cycle and be paid at vesting based on the actual number of shares that vest. 

12. The Restricted Stock shall be held in custody by the Fiduciary Services Division of Banco Popular de Puerto Rico. 

  
 4 

 13. Governing Law. This award shall be governed by and construed in accordance with the
laws of Puerto Rico, without regard to principles of conflicts of laws. 
 14. Incentive Recoupment. This award shall be subject to
the terms of the Popular, Inc. Incentive Recoupment Guideline in effect as of the Grant Date and as such guideline may be required to be modified in accordance with applicable law or regulation. 

15. Headings. The headings in this Award Agreement are for the purpose of convenience only and are not intended to define or limit the
construction of the provisions hereof. 
 IN WITNESS WHEREOF, POPULAR, INC. and the Recipient caused this Award Agreement to be duly
executed and delivered as of the Grant Date. 
  

							
	POPULAR, INC.				 ACCEPTED:

				
	By:		[insert name of representative]				[insert name of Recipient]
				
	Title:		[insert title of representative]				
			
	  
				  

	Signature				Signature

  
 5 

 ANNEX 1 

POPULAR, INC. 
 2015
LONG-TERM EQUITY INCENTIVE AWARD 
  

			
	Recipient:                     		Employee Number             

 Approval Date: February 27, 2015 

Total Dollar Value of Award: $          

Grant Date: April 29, 2015 
 Common Stock Market Price as
of closing on Grant Date: $          
 Restricted Stock Scheduled Vesting Dates: 

Dollar Value of Restricted Stock Award: $          

Shares of Restricted Stock Awarded: (#)                  

 

			
	             Shares (80%) as follows:		
		
	             Shares (20%)		February 27, 2016
	             Shares (20%)		February 27, 2017
	             Shares (20%)		February 27, 2018
	             Shares (20%)		February 27, 2019
		
	             Shares (20%)		 Upon termination of your employment after attaining:

(i) age 55 with 10 years of service, or (ii) age 60 with 5 years of service.

  
 6 

 Performance Shares Vesting (Vesting Date: February 27, 2018): 

Dollar Value of Performance Shares Award: $         

Grant Date: April 29, 2015 
 Common Stock Market Price as
of closing on Grant Date: $          
 Total Target Number of Performance Shares: (#)
                 
  

					
	Relative Total Shareholder Return (TSR)1 -	  	 Percentile Rank among

Comparator Group
	  	 # of Shares Earned

	 Opening Price = $31.52
	  	75th Percentile or above	  	 
                              

(1.5x target shares)

	 Target Number of Performance Shares:            
	  	50th Percentile	  	 
                                

(1x target shares)

		  	25th Percentile	  	 
                                  

(0.5x target shares)

		  	Below 25th Percentile	  	0
			
	 Absolute Earnings Per Share (EPS)2 -

Cumulative annual EPS 2015-2017
	  	 EPS
	  	 Shares Earned

(% of Target)

		  		  	                  

(1.5x target shares)

		  		  	                  

(1x target shares)

	 Target Number of Performance Shares:             
	  		  	                  

(0.5x target shares)

		  		  	0

 Results between threshold, target and maximum performance will be interpolated to determine vesting award 

 

	1 	TSR will be calculated as [(Closing Price at end of period * (1 + number of shares purchased assuming reinvestment of dividends))/Opening Price at beginning of period] – 1 

 

	 	•	 	Closing Price and Opening Price are based on the preceding 60 trading days average in order to mitigate against share price volatility of point-in-time metrics. 

 

	 	•	 	Opening price = average price 10/7/14-12/31/14 

  

	 	•	 	Closing price = average price 10/5/17-12/29/17 

  

	 	•	 	TSR calculations shall assume that dividends are reinvested on the ex-dividend date (i.e., the date a dividend asset is guaranteed). 

Comparator Group — SNL US Banks greater than $10 billion in assets – Performance will be based on the composition of the group at the end of the
3-year Performance Cycle. 
 If Popular’s absolute TSR is negative, payout will be limited to a maximum of 100% of target. 

 

	2 	Cumulative total of annual basic EPS for 3 years (2015-2017). The Committee may adjust the goal or results to reflect a core profitability that would not be artificially inflated or deflated by extraordinary or
nonrecurring items, including, but not limited to, the impact of the pending Puerto Rico tax reform, sales of non-earning assets, sales of branches or other businesses, certain business acquisition costs and revenues, extraordinary events or
charitable contributions, severance costs and certain litigation and settlement costs, among others. 

  
 7

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