The Corporation maintained a Stock Option Plan (the “Stock Option Plan”), which permitted the granting of incentive awards in the form of qualified stock options, incentive stock options, or non-statutory stock options of the Corporation. In April 2004, the Corporation's shareholders adopted the Popular, Inc. 2004 Omnibus Incentive Plan (the “Incentive Plan”), which replaced and superseded the Stock Option Plan. The adoption of the Incentive Plan did not alter the original terms of the grants made under the Stock Option Plan prior to the adoption of the Incentive Plan.

Employees and directors of the Corporation or any of its subsidiaries were eligible to participate in the Stock Option Plan. The Board of Directors or the Compensation Committee of the Board had the absolute discretion to determine the individuals that were eligible to participate in the Stock Option Plan. This plan provided for the issuance of Popular, Inc.'s common stock at a price equal to its fair market value at the grant date, subject to certain plan provisions. The shares are to be made available from authorized but unissued shares of common stock or treasury stock. The Corporation's policy has been to use authorized but unissued shares of common stock to cover each grant. The maximum option term is ten years from the date of grant. Unless an option agreement provides otherwise, all options granted are 20% exercisable after the first year and an additional 20% is exercisable after each subsequent year, subject to an acceleration clause at termination of employment due to retirement.

	(Not in thousands)
Exercise price per share				Options outstanding	Weighted-average exercise price of options outstanding		Weighted-average remaining life of options outstanding in years	Options exercisable (fully vested)	Weighted-average exercise price of options exercisable
		$	272.00	44,797	$	272.00	0.38	44,797	$	272.00

There was no intrinsic value of options outstanding and exercisable at September 30, 2014 and 2013.

The following table summarizes the stock option activity and related information:

(Not in thousands)	Options Outstanding		Weighted-Average Exercise Price
Outstanding at December 31, 2012	160,986	$	222.71
Granted	-		-
Exercised	-		-
Forfeited	-		-
Expired	(60,549)		171.42
Outstanding at December 31, 2013	100,437	$	253.64
Granted	-		-
Exercised	-		-
Forfeited	-		-
Expired	(55,640)		238.85
Outstanding at September 30, 2014	44,797	$	272.00

There was no stock option expense recognized for the quarters and nine months ended September 30, 2014 and 2013.

The Incentive Plan permits the granting of incentive awards in the form of Annual Incentive Awards, Long-term Performance Unit Awards, Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Units or Performance Shares. Participants in the Incentive Plan are designated by the Compensation Committee of the Board of Directors (or its delegate as determined by the Board). Employees and directors of the Corporation and/or any of its subsidiaries are eligible to participate in the Incentive Plan.

Under the Incentive Plan, the Corporation has issued restricted shares, which become vested based on the employees' continued service with Popular. Unless otherwise stated in an agreement, the compensation cost associated with the shares of restricted stock is determined based on a two-prong vesting schedule. The first part is vested ratably over five years commencing at the date of grant and the second part is vested at termination of employment after attainment of 55 years of age and 10 years of service. The five-year vesting part is accelerated at termination of employment after attaining 55 years of age and 10 years of service. The vesting schedule for restricted shares granted on 2014 was modified as follows, the first part ratably over four years commencing at the date of the grant and the second part is vested at termination of employment after attainment of 55 years of age and 10 years of service or 60 years of age and 5 years of service. The four year vesting part is accelerated at termination of employment after attaining 55 years of age and 10 years of service or 60 years of age and 5 years of service. The restricted shares granted consistent with the requirements of the TARP Interim Final Rule vest in two years from grant date.

The following table summarizes the restricted stock activity under the Incentive Plan for members of management.

(Not in thousands)	Restricted Stock		Weighted-Average Grant Date Fair Value
Non-vested at December 31, 2012	491,223	$	20.59
Granted	229,131		28.20
Vested	(131,324)		31.23
Forfeited	(3,783)		24.63
Non-vested at December 31, 2013	585,247	$	21.16
Granted	235,112		29.56
Vested	(302,517)		18.78
Forfeited	(7,393)		29.49
Non-vested at September 30, 2014	510,449	$	26.32

During the quarter ended September 30, 2014 and 2013, no shares of restricted stock were awarded to management under the Incentive Plan. For the nine-month period ended September 30, 2014, 235,112 shares of restricted stock (September 30, 2013 – 229,131) were awarded to management under the Incentive Plan, from which 162,332 shares (September 30, 2013 – 165,304) were awarded to management consistent with the requirements of the TARP Interim Final Rule.

During the quarter ended September 30, 2014, the Corporation recognized $ 1.6 million of restricted stock expense related to management incentive awards, with a tax benefit of $ 0.2 million (September 30, 2013 - $ 1.4 million, with a tax benefit of $ 0.4 million). For the nine-month period ended September 30, 2014, the Corporation recognized $ 4.7 million of restricted stock expense related to management incentive awards, with a tax benefit of $ 0.7 million (September 30, 2013 - $ 3.9 million, with a tax benefit of $ 1.2 million). For the nine-month period ended September 30, 2014, the fair market value of the restricted stock vested was $5.6 million at grant date and $8.8 million at vesting date. This triggers a windfall, net of shortfalls, of $1.2 million of which $0.4 million was recorded as a windfall pool in additional paid in capital. No windfall pool was recorded for the remaining $0.8 million due to the valuation allowance of the deferred tax asset. The total unrecognized compensation cost related to non-vested restricted stock awards and performance shares to members of management at September 30, 2014 was $ 8.6 million and is expected to be recognized over a weighted-average period of 2 years.

The following table summarizes the restricted stock activity under the Incentive Plan for members of the Board of Directors:

(Not in thousands)	Restricted Stock		Weighted-Average Grant Date Fair Value
Non-vested at December 31, 2012	-	$	-
Granted	20,930		29.43
Vested	(20,930)		29.43
Forfeited	-		-
Non-vested at December 31, 2013	-	$	-
Granted	21,051		30.26
Vested	(21,051)		30.26
Forfeited	-		-
Non-vested at September 30, 2014	-	$	-

During the quarter ended September 30, 2014, the Corporation granted 2,318 shares of restricted stock to members of the Board of Directors of Popular, Inc., which became vested at grant date (September 30, 2013 – 1,669). During this period, the Corporation recognized $0.1 million of restricted stock expense related to these restricted stock grants, with a tax benefit of $14 thousand (September 30, 2013 - $0.1 million, with a tax benefit of $46 thousand). For the nine-month period ended September 30, 2014, the Corporation granted 21,051 shares of restricted stock to members of the Board of Directors of Popular, Inc., which became vested at grant date (September 30, 2013 – 18,885). During this period, the Corporation recognized $0.4 million of restricted stock expense related to these restricted stock grants, with a tax benefit of $43 thousand (September 30, 2013 - $0.4 million, with a tax benefit of $0.1 million). The fair value at vesting date of the restricted stock vested during the nine months ended September 30, 2014 for directors was $ 0.6 million.