EMPLOYMENT AGREEMENT BETWEEN ORIENTAL FINANCIAL GROUP INC. AND JOSÉ RAFAEL FERNÁNDEZ
Exhibit 10.16
This Employment Agreement (the “Agreement”) is made and entered into as of the 3rd day of
December, 2010, by and between ORIENTAL FINANCIAL GROUP INC., a financial holding company that has
its principal office in San ▇▇▇▇, Puerto Rico (the “Company”), and ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (the
“President and CEO” or “▇▇. ▇▇▇▇▇▇▇▇▇”).
WITNESSETH:
WHEREAS, ▇▇. ▇▇▇▇▇▇▇▇▇ has been an executive officer of the Company since June 1991, is
presently the Company’s President, Chief Executive Officer, and Vice Chairman of the Board of
Directors, and the retention of his services for and on behalf of the Company is of material
importance to the preservation and enhancement of the value of the Company’s business;
WHEREAS, the Company and the President and CEO wish to enter into this Agreement and intend
that this Agreement shall become effective on January 1, 2011 (the “Effective Date”), and replace
the Employment Agreement, dated October 31, 2007 (the “2007 Employment Agreement”), between the
Company and the President and CEO, which is now in effect;
NOW THEREFORE, in consideration of the mutual covenants herein set forth, the Company and the
President and CEO do hereby agree as follows:
1. TERM OF EMPLOYMENT
1.1 The Company hereby employs ▇▇. ▇▇▇▇▇▇▇▇▇ as its President and Chief Executive Officer, and
▇▇. ▇▇▇▇▇▇▇▇▇ hereby accepts said employment and agrees to render such services to the Company on
the terms and conditions set forth in this Agreement for a term of three (3) years commencing on
the Effective Date and terminating on December 31, 2013, unless further extended or sooner
terminated in accordance with the terms and conditions herein set forth.
Not less than one hundred twenty (120) days in advance of the expiration of the term of this
Agreement, the parties will determine whether to extend the term and, if extended, under what terms
and conditions. Unless otherwise agreed to in writing by ▇▇. ▇▇▇▇▇▇▇▇▇ and the Company, and except
in the event of a termination for just cause pursuant to Section 6.1 hereof or a removal or bar
from office pursuant to Section 6.5 hereof, ▇▇. ▇▇▇▇▇▇▇▇▇ shall remain as an employee of the
Company after the expiration of the term of this Agreement and shall be entitled to all the rights
and benefits of an employee under the laws of the Commonwealth of Puerto Rico.
1.2 During the term of this Agreement, the President and CEO shall devote his best efforts to
performing such services for the Company as may be consistent with his title of President and Chief
Executive Officer and those which from time to time may be assigned to him by the Company’s Board of Directors (the “Board of Directors”).
1.3 The services of the President and CEO to the Company shall be rendered principally in the
Commonwealth of Puerto Rico, but he shall do such traveling on behalf of the Company as may be
reasonably required by his duties.
1.4 The President and CEO shall report directly to the Board of Directors and shall have
overall responsibility for all of the business and affairs of the Company, including making all
determinations concerning hiring, dismissal and compensation for all classes of employees of the
Company (exception in the case of the Head of the Company’s Internal Audit Department), which
determinations shall be in accordance with the policies for such hiring, dismissal and compensation
established by the Compensation Committee of the Board of Directors (the “Compensation Committee”)
from time to time and in accordance with applicable laws, rules and regulations, including the
applicable regulations of the Federal Deposit Insurance Corporation (the “FDIC”), the Board of
Governors of the Federal Reserve System (the “FRB”), the Securities and Exchange Commission
(“SEC”), and the Office of the Commissioner of Financial Institutions of Puerto Rico (the “OCFI”).
1.5 The President and CEO shall continue to occupy his position as Vice Chairman of the Board
of Directors. Furthermore, during the term of this Agreement and any extension thereof, and in any
election of directors in which his term as a member of the Board of Directors will expire, the Board of Directors shall nominate
and recommend to the Company’s stockholders the election of ▇▇. ▇▇▇▇▇▇▇▇▇ to the Board of Directors
and, if elected, the Board of Directors shall appoint him as its Vice Chairman.
2. COMPETITIVE ACTIVITIES
2.1 The President and CEO agrees that during the term of this Agreement, except with the
express written consent of the Board of Directors, he will not, directly or indirectly, engage or
participate in, become a director of, or render advisory or other services for, or in connection
with, or become interested in, or make financial investment in any firm, corporation, business
entity or business enterprise; provided, however, that the President and CEO shall not thereby be
precluded or prohibited from owning passive investments including investments in the securities of
other financial institutions, so long as such ownership does not require him to devote substantial
time to management or control of the business or activities in which he has invested.
2.2 The President and CEO agrees and acknowledges that during the time that he is employed by
the Company, he will maintain an intimate knowledge of the activities and affairs of the Company
including trade secrets and other confidential matters. As a result, and also because of the
special, unique, and extraordinary services that the President and CEO is capable of performing for
the Company or one of its competitors, the President and CEO recognizes that the
services to be rendered by him hereunder are of a character giving them a peculiar value, the loss
of which cannot be adequately or reasonably compensated for by damages. Therefore, if during the
time he is employed by the Company, the President and CEO renders services to a competitor of the
Company other than as authorized pursuant to Section 2.1 hereof, the Company shall be entitled to
immediate injunctive or other equitable relief to restrain the President and CEO from rendering his
services to the competitor of the Company, in addition to any other remedies to which the Company
may be entitled under law; provided, however, that the right to such injunctive or other equitable
relief shall not survive the termination of the President and CEO’s employment with the Company.
3. COMPENSATION AND REIMBURSEMENT OF EXPENSES
3.1 Compensation.
(a) The Company will compensate and pay the President and CEO an annual base salary of five
hundred thousand dollars ($500,000) equivalent to forty-one thousand six hundred and sixty-six
dollars with sixty-six cents ($41,666.66) per month for his services to the Company during the term
of this Agreement.
(b) Not later than March 31 of each contract year subsequent to the first contract year of
this Agreement, the Compensation Committee shall evaluate and determine the amount of any increase
to the President and CEO’s annual base salary. Any increases to the President and CEO’s annual base
salary determined by the Compensation Committee shall be retroactive to January 1 of the then running contract year and the increased annual base salary shall become
the President and CEO’s new contractual annual base salary.
3.2 Bonus. The Company shall set for the President and CEO an annual target bonus of
one hundred fifty percent (150%) of his annual base salary and car allowance as may be earned by
him under the Company’s non-equity incentive bonus plan. The bonus shall be due and payable on or
before March 31 following the expiration of each contract year of this Agreement.
3.3 Car Allowance. During the term of this Agreement and any extension thereof, the
Company shall provide the President and CEO an annual car allowance in the amount of thirty
thousand dollars ($30,000) from which the President and CEO shall pay all his car-related expenses.
3.4 Memberships and Professional Expenses. During the term of this Agreement and any
extension thereof, the Company shall provide the President and CEO with an annual allowance in the
sum of thirty thousand dollars ($30,000). From such allowance, the President and CEO shall pay his
membership expenses for such social, business or professional organizations and other expenses
which, in his judgment, are reasonably appropriate for the performance of his duties under this
Agreement. All such membership(s) shall be maintained in the name of the President and CEO.
3.5 Reimbursement of Expenses. Not less frequently than monthly, the Company shall
pay for or reimburse the President and CEO for all reasonable travel and other expenses incurred by
the President and CEO in the performance of his duties under this Agreement, including, without
limiting the generality of the foregoing, the allowance and reimbursable expenses provided for in
Sections 3.3 and 3.4 above.
3.6 Life Insurance. The Company shall provide a ten (10) year term life insurance
policy in the sum of three million dollars ($3,000,000) covering the life of the President and CEO
and having as its beneficiary the spouse and heirs of ▇▇. ▇▇▇▇▇▇▇▇▇ or any other person or entity
which the President and CEO may designate in writing from time to time. The President and CEO
hereby authorizes the Company to obtain a ten million dollar ($10,000,000) key-man term life
insurance policy covering his life and having the Company as its beneficiary. For as long as the
President and CEO is employed by the Company, all premiums and costs associated with such term life
insurance policies shall be for the account of the Company.
3.7 Vacation. The President and CEO shall be entitled to twenty-five (25) days of
paid vacation each year during the term of this Agreement.
4. DISABILITY
4.1 If the President and CEO shall become physically or mentally disabled or incapacitated to
the extent that he is unable to perform his duties under this Agreement, and so long as such disability continues, the President and CEO shall, subject to the provisions of Section 6.2
and 6.3 hereof, and for a period not to exceed the remaining term of this Agreement, continue to
receive his full compensation, as set forth in Section 3 hereof, including an annual cash bonus
equal to the annual cash bonus paid to him in the last fiscal year prior to his disability or
incapacitation.
4.2 There shall be deducted from the amounts paid to the President and CEO hereunder during
any period of disability or incapacitation, as described in Section 4.1 hereof, any amounts
actually paid to the President and CEO pursuant to any disability insurance or other similar
program(s) which the Company has instituted or may institute on behalf of its employees for the
purpose of providing compensation in the event of disability.
5. ADDITIONAL COMPENSATION AND BENEFITS
5.1 During the term of this Agreement, the President and CEO will be entitled to participate
in, and receive the benefits of, any equity-based compensation plan, profit sharing plan, or other
plans, benefits and privileges given to employees and executives of the Company or its subsidiaries
and affiliates which may now exist or come into existence hereinafter, to the extent commensurate
with his then duties and responsibilities, as fixed by the Compensation Committee, and, to the
extent that the President and CEO is otherwise eligible and qualifies, to so participate in, and
receive such benefits or privileges. The Company shall not make any changes in such plans,
benefits or privileges which would adversely
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affect the President and CEO’s rights or benefits thereunder, unless such change or changes are
made pursuant to a program applicable to all executives of the Company and does not result in a
proportionately greater adverse change in the rights of or benefits to the President and CEO as
compared to any executive officer of the Company. Nothing paid to the President and CEO under any
plan or arrangement presently in effect or made available in the future shall be deemed in lieu of
the annual base salary or bonus payable to the President and CEO pursuant to Sections 3.1 and 3.2
hereof.
5.2 (a) On the date hereof, and upon the execution of this Agreement, the Compensation
Committee shall award the President and CEO (i) qualified stock options to purchase one hundred
thousand (100,000) shares of the Company’s common stock and (ii) fifty thousand (50,000) restricted
stock units. Both awards are made under and are subject to the provisions of the Company’s Amended
and Restated 2007 Omnibus Performance Incentive Plan (the “Plan”), as further amended from time to
time.
(b) The Compensation Committee shall consider in each contract year of this Agreement granting
the President and CEO additional incentive compensation under the Plan based on his performance
scorecard, as approved by the Compensation Committee, up to an annual amount equal to one hundred
percent (100%) of his annual base salary.
(c)(i) Up to twenty-five percent (25%) of the stock options granted to the President and CEO
hereunder may be exercised by the President and CEO each year during a period commencing on the second anniversary
of the award and ending on the tenth anniversary thereof, provided that the stock options will
become fully vested and exercisable in the event of a Change of Control of the Company, as defined
in the Change in Control Compensation Agreement between the Company and the President and CEO,
dated December 15, 2004, as amended (the “Change in Control Compensation Agreement”), or if the
President and CEO dies or becomes disabled; and
(ii) Restrictions on the restricted stock units granted to the President and CEO hereunder
will expire on the third anniversary of the award or earlier in the event of a Change of Control of
the Company, as defined in the Change in Control Compensation Agreement, or if the President and
CEO dies or becomes disabled.
5.3 In consideration of the equity awards provided in Section 5.2(a) hereof, the President and
CEO hereby waives his right to receive any equity awards for 2010 under the 2007 Employment
Agreement.
6. TERMINATION
6.1 The Board of Directors shall have the right, at any time upon prior written Notice of
Termination (as defined in Section 6.8(b) hereof), to terminate the President and CEO’s employment
hereunder for just cause or in connection with a removal or bar from office pursuant to Section 6.5
hereof. For purposes of this Agreement, the term “termination for just cause” shall mean
termination because of the willful and continued failure of the President and CEO to perform his duties under this Agreement, or
the willful engaging by the President and CEO in illegal conduct or gross misconduct materially
injurious to the Company as determined by a court of competent jurisdiction or a federal or state
regulatory agency having jurisdiction over the Company. For purposes of this paragraph, no act, or
failure to act, on the part of the President and CEO shall be considered “willful” unless done, or
omitted to be done, by him not in good faith and without reasonable belief that his action or
omission was in the best interest of the Company; provided, however, that any act or omission to
act by the President and CEO in reliance upon an opinion of counsel to the Company or counsel to
the President and CEO shall not be deemed to be willful.
6.2 In the event the President and CEO’s employment is terminated for just cause pursuant to
Section 6.1 hereof or he is removed or barred from office pursuant to Section 6.5 hereof, the
President and CEO shall have no right to compensation or other benefits for any period after such
date of termination. If the President and CEO is terminated by the Company other than for just
cause pursuant to Section 6.1 hereof, other than in connection with a removal or bar from office
pursuant to Section 6.5 hereof, and other than in connection with a Change of Control of the
Company, as defined in the Change in Control Compensation Agreement, the President and CEO’s right
to compensation and other benefits under this Agreement shall be as set forth in Sections 6.8(c) and (d) hereof.
6.3 The President and CEO shall have the right, upon prior written Notice of Termination of
not less than thirty (30) days, to terminate his employment hereunder. In such event, the
President and CEO shall have the right, as of the date of termination, to receive all accrued
compensation and other benefits provided for in this Agreement; provided, however, that if the
President and CEO terminates his employment hereunder for “good reason” pursuant to Section 6.8(a)
hereof he shall be entitled to receive the severance payment provided for in Section 6.8(c) hereof.
If the President and CEO provides a Notice of Termination for good reason, the date of termination
shall be the date on which the Notice of Termination is given to the Company.
6.4 If the President and CEO is suspended from office and/or temporarily prohibited from
participating in the conduct of the Company’s affairs pursuant to a notice served under the Federal
Deposit Insurance Act (“FDIA”), the Federal Reserve Act (“FRA”), the Bank Holding Company Act of
1956 (the “BHCA”), the Securities Exchange Act of 1934 (the “SEA”), or the Puerto Rico Banking Act
(the “PRBA”), each as amended from time to time, the Company’s obligations under this Agreement
shall be suspended as of the date of service unless stayed by appropriate proceedings. If the
charges in the notice are dismissed, the Company shall: (i) pay the President and CEO all the compensation withheld while
contractual obligations were suspended, and (ii) reinstate in whole or in part, as applicable, any
of the Company’s obligations which were suspended.
6.5 If the President and CEO is removed from office and/or permanently prohibited from
participating in the conduct of the Company’s affairs by an order issued under the FDIA, the FRA,
the BHCA, the SEA, or the PRBA all obligations of the Company under this Agreement shall terminate,
as of the effective date of the order, but the rights of the President and CEO to compensation
earned as of the date of termination shall not be affected.
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6.6 If the Company is in default, as defined to mean an adjudication or other official
determination of a court of competent jurisdiction or other public authority pursuant to which a
conservator, receiver or other legal custodian is appointed for the Company for the purpose of
liquidation, all obligations under this Agreement shall terminate as of the date of default, but
the rights of the President and CEO to compensation and benefits accrued as of the date of
termination shall not be affected.
6.7 In the event that the President and CEO is terminated in a manner which violates the
provisions of Section 6.1 hereof, as determined by a court of competent jurisdiction, the President and CEO shall be entitled
to reimbursement for all reasonable costs, including attorneys’ fees, in challenging such
termination. Such reimbursement shall be in addition to all rights to which the President and CEO
is otherwise entitled under this Agreement.
6.8 (a) The President and CEO may terminate his employment hereunder for good reason. For
purposes of this Agreement, the term “good reason” shall mean (i) a failure by the Company to
comply with any material provision of this Agreement, which failure has not been cured within ten
(10) days after a notice of such noncompliance has been given by the President and CEO to the
Company; (ii) any purported termination of the President and CEO’s employment hereunder which is
not effected pursuant to a Notice of Termination (and for purposes of this Agreement no such
purported termination shall be effective); (iii) any reduction in the President and CEO’s
compensation and fringe benefits, including a reduction in his target bonus opportunity, without
his written consent; (iv) failure to nominate the President and CEO for reelection as a member of
the Board of Directors and, if elected, failure to appoint him as Vice Chairman of the Board of
Directors; (v) a material diminution in his positions, duties and authorities as President and
Chief Executive Officer of the Company; (vi) if President and CEO is not the President and Chief
Executive Officer of the ultimate parent entity resulting from a Change of Control of the Company, as defined in the Change in Control Compensation Agreement; (vii) a
change in reporting structure so that the President and CEO reports to someone other than the Board
of Directors, or (viii) the failure of any successor to all or substantially all of the Company’s
assets to assume this Agreement whether in writing or by operation of law.
(b) Any termination of the President and CEO’s employment by the Company or by the President
and CEO shall be communicated by a written Notice of Termination to the other party hereto. For
purposes of this Agreement, the term “Notice of Termination” shall mean a dated notice which shall
(i) indicate the specific termination provision in the Agreement relied upon; (ii) set forth in
reasonable detail the facts and circumstances claimed to provide a basis for termination of the
President and CEO’s employment under the provision so indicated; (iii) specify a date of
termination, which shall be not less than thirty (30) nor more than ninety (90) days after such
Notice of Termination is given, except in the case of the Company’s termination of the President
and CEO’s employment for just cause pursuant to Section 6.1 hereof or in connection with a removal
or bar from office pursuant to Section 6.5 hereof, in which case the Notice of Termination may
specify a date of termination as of the date such Notice of Termination is given; and (iv) be given
in the manner specified in Section 9.1 hereof.
(c) In the event that: (i) the President and CEO shall terminate his employment for good
reason as defined in Section 6.8(a) hereof, or (ii) if the President and CEO is terminated by the
Company other than for just cause pursuant to Section 6.1 hereof, other than in connection with a
removal or bar from office pursuant to Section 6.5 hereof, and other than in connection with a
Change of Control of the Company, as defined in the Change in Control Compensation Agreement, then
in lieu of any further compensation to the President and CEO for periods subsequent to the
date of termination, the Company shall pay as severance to the President and CEO an amount equal
to the product of (A) the aggregate annual compensation paid to or payable by the Company and any
of its subsidiaries to the President and CEO during the year in which the termination of the
President and CEO’s employment occurs, which amount shall include the President and CEO’s (i)
annual base salary, (ii) bonus (equal to the average cash bonus paid to the President and CEO in
the last two fiscal years prior to the date of termination of employment), (iii) car allowance, and
(iv) equity awards (equal to the average of the aggregate grant date fair value of the equity
awards granted to the President and CEO in the last two fiscal years prior to the date of
termination of employment; provided, however, that solely for purposes of this Section 6.8(c), of
the total number of equity awards provided in Section 5.2(a) hereof, seventy—five percent (75%)
shall be deemed to have been granted in the first contract year of this Agreement and twenty-five
percent (25%) shall be deemed to have been granted in the second contract year of this Agreement),
multiplied by (B) 3.00, such payment to be made in a lump sum on or before the fifth day following
the date of termination.
(d) Unless the President and CEO’s employment is terminated for just cause pursuant to
Section 6.1 hereof, or in connection with a removal or bar from office pursuant to Section 6.5
hereof, or in connection with a Change of Control of the Company, as defined in the Change in
Control Compensation Agreement, the Company shall maintain in full force and effect, for the
continued benefit of the President and CEO for the balance of the term of this Agreement (as such
term may have been extended as provided herein), all employee benefit plans and programs in which
the President and CEO was entitled to participate immediately prior to the date of termination,
provided that the President and CEO’s continued participation is possible under the general terms
and provisions of such plans and programs.
(e) The President and CEO shall not be required to mitigate the amount of any payment
provided for in paragraphs (c) and (d) of this Section 6.8 by seeking other employment or
otherwise.
7. INDEMNIFICATION
7.1 The Company shall indemnify the President and CEO to the fullest extent authorized by
applicable federal and Commonwealth of Puerto Rico laws and regulations, with respect to any
threatened, pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of the Company) that the
President and CEO is a party or is threatened to made a party by reason of the fact that he is or
was the President and Chief Executive Officer of the Company or that he is or was a member of the
Board of Directors, or is or was serving at the written request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint venture, trust or other
enterprise, against costs and expenses (including attorneys’ fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a matter he reasonably believed to be in or not opposed
to the best interests of the Company, and, with respect to any criminal action or proceeding, had
no reasonable cause to believe his conduct was unlawful, provided that the Company shall not be
liable for any amounts which may be due to the President and CEO in connection with a settlement of
any action, suit or proceeding effected without its prior written consent or any action, suit or
proceeding initiated by the President and CEO seeking indemnification hereunder without its prior
written consent. The provisions of this Section 7.1 shall also extend the conjugal partnership of the President and CEO and his spouse and to the
President and CEO’s spouse, when applicable, and shall survive the termination of this Agreement.
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8. SUCCESSORS OF THE PARTIES
8.1 This Agreement shall inure to the benefit of and be binding upon the President and CEO,
and, to the extent applicable, his assigns, executors, and personal representatives and the
Company, its successors, and assigns, including, without limitation, any person, partnership, or
corporation which may acquire all or substantially all of the Company’s assets and business, or
with or into which the Company may be consolidated or merged, and this provision shall apply in the
event of any subsequent merger, consolidation, or transfer.
8.2 This Agreement is personal to each of the parties hereto and neither party may assign or
delegate any of his or its rights or obligations hereunder without first obtaining the written
consent of the other party.
9. NOTICES
9.1 All notices required by this Agreement to be given by one party to the other shall be in
writing and shall be deemed to have been delivered either:
(a) When personally delivered to the office of the Secretary of the Company at his
regular corporate office, or the President and CEO in person; or
(b) Five days after depositing such notice in the United States mails, certified mail with
return receipt requested and postage prepaid to:
| (i) | ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 1893 Urb. ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ |
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| (ii) | Oriental Financial Group Inc. ▇.▇. ▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ Attention: Chairman — Compensation Committee |
or such other address as either party may designate to the other by notice in writing in accordance
with the terms hereof.
10. AMENDMENTS OR ADDITIONS
10.1 No amendments or additions to this Agreement shall be binding unless in writing and
signed by both parties. The prior approval by a two-thirds affirmative vote of the full Board of
Directors shall be required in order for the Company to authorize any amendments or additions to
this Agreement, to give any consent or waivers of provisions of this Agreement, or to take any
other action under this Agreement including any termination of the employment of the President and
CEO with or without just cause under Section 6.1 hereof.
11. MISCELLANEOUS
11.1 No course of conduct between the Company and President and CEO to exercise any right or
power given under this Agreement shall: (i) impair the subsequent exercise of any right or power,
or (ii) be construed to be a waiver of any default or any acquiescence in or consent to the curing
of any default while any other default shall continue to exist, or be construed to be a waiver of
such continuing default or of any other right or power that shall theretofore have arisen; and,
every power and remedy granted by law and by this Agreement to any party hereto may be exercised
from time to time, and as often as may be deemed expedient. All such rights and powers shall be
cumulative to the fullest extent permitted by law.
11.2 The provisions of this Agreement shall be deemed severable and the invalidity or
unenforceability of any provision shall not affect the validity or enforceability of the other
provisions hereof.
11.3 This Agreement shall be governed in all respects and be interpreted by and under the laws
of the Commonwealth of Puerto Rico, except to the extent that such law may be preempted by
applicable federal law, including applicable regulations, opinions or orders duly issued by the
FDIC, the FRB or the SEC (“Federal Law”), in which event this Agreement shall be governed and be
interpreted by and under Federal Law. Venue for the litigation of any and all matters arising
under or in connection with this Agreement shall be laid in the United States District Court for
the District of Puerto Rico, in the case of federal jurisdiction, and in the Court of First Instance, Superior Part of San ▇▇▇▇, of the Commonwealth of Puerto Rico, in the case of state court
jurisdiction.
11.4 Notwithstanding anything to the contrary herein contained, the payment or obligation to
pay any monies or granting of any rights or privileges to the President and CEO as provided in this
Agreement shall not be in lieu or derogation of the rights and privileges that the President and
CEO now has under any plan or benefit presently outstanding.
11.5 As used herein, the term “Company” shall include all of the Company’s subsidiaries.
11.6 This Agreement constitutes the entire agreement and understanding between the parties
hereto with respect to the subject matter hereof and, as of the Effective Date, supersedes all
prior agreements and understandings, whether written or oral, relating to such subject matter.
11.7 This Agreement may be executed in one or more counterparts, each of which shall be deemed
an original and all of which taken together shall constitute one and the same agreement.
11.8 The heading of each section or paragraph of this Agreement is for reference purposes only
and shall not in any way affect the meaning or interpretation of any provision of this Agreement.
[Signature page follows]
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IN WITNESS WHEREOF, the parties have duly executed and delivered this Agreement in San ▇▇▇▇,
Puerto Rico, as of the date first above written.
| PRESIDENT AND CEO |
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| /s/▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ | ||||
| ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ | ||||
| ORIENTAL FINANCIAL GROUP INC. |
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| By: | Compensation Committee of the Board of Directors |
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| By: | /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ | |||
| ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ | ||||
| Chairman — Compensation Committee | ||||
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