AGREEMENT
dated May 06, 2009 and effective May 11, 2009 by and
between FIRST BANCORP (the “Company”) and Orlando
Berges-González (or “O. Berges”).
WHEREAS ,
the Company wishes to retain the services of O. Berges and the
retention of O. Berges’ services for and on behalf of the
Company and FirstBank Puerto Rico (the “Bank”) is of
material importance to the preservation and enhancement of the
value of the Company’s and the Bank’s
business;
WHEREAS ,
the Board of Directors of the Company has approved and authorized
the execution of this Agreement with O. Berges to take effect as of
the date above written.
WHEREAS ,
the parties desire to enter into this Agreement setting forth the
terms and conditions of the employment relationship of the Company,
the Bank and O. Berges;
NOW,
THEREFORE , in consideration of the foregoing and the mutual
covenants and agreements herein, the parties agree as
follows:
1.
Employment . The Company agrees to employ O. Berges and O.
Berges agrees to the employment by the Company for the period
stated in Paragraph 4 hereof and subject to the other terms
and conditions herein provided.
2.
Position and Responsibilities . The Company hereby employs
O. Berges as Executive Vice President and shall carry out and
render to the Company and to the Bank such services as are
customarily performed by persons holding a similar corporate title.
O. Berges shall also perform such other related duties as he may
from time to time be reasonably directed in writing, including, but
not limited to performing duties for the Company, the Bank and
other subsidiaries of the Company. O. Berges shall report to the
Chief Executive Officer of the Company. In the absence of the Chief
Executive Officer, O. Berges shall report to the Chief Operating
Officer or any other officer designated by the Board of Directors.
Notwithstanding the foregoing, the Board of Directors of the
Company or the Bank may delegate or assign specific tasks to O.
Berges, provided that the assignment clearly sets for the priority
of the task, and whether it takes precedence over other duties and
obligations of O. Berges.
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3.
Duties . During the period of employment hereunder, and
except for illness, vacation periods, and leaves of absence, O.
Berges shall devote his business time, attention, skill, and
efforts to the faithful performance of his duties as provided
herein as is customary for an executive holding a similar position
in a financial institution of comparable size.
O.
Berges agrees that, during the term of his employment hereunder, he
will not, directly or indirectly, engage or participate, become
director of, or render advisory or other services for, or in
connection with, or become interested in, or make any financial
investment in any firm, corporation, business entity or business
enterprise that directly competes with the Company or its
subsidiaries in Puerto Rico; provided, however, that O. Berges
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 the management or control of the
business or activities of any such firm, corporation, business
entity or enterprise.
4.
Term . The initial term of employment under this Agreement
shall be for a period of three (3) years, commencing on
May 11, 2009 and terminating on May 11, 2012. On each
anniversary of the date of commencement of this Agreement, the term
of the employment hereunder shall automatically be extended for an
additional one (1) year period beyond the then effective
expiration date, unless either party receives written notice, not
less than 90 days prior to the anniversary date, advising the
other party that this Agreement shall not be further extended. Any
such written notice shall not affect any prior extensions of the
term of employment hereunder.
5.
Standards . O. Berges shall perform his duties and
responsibilities under this Agreement, in accordance with such
reasonable standards as established from time to time by the Board
of Directors and/or management of the Company and conveyed in
writing to O. Berges. The reasonableness of such standards shall be
measured against standards for executive performance generally
prevailing in the financial industry.
Notwithstanding
anything to the contrary, nothing in this Agreement will be
interpreted in any manner which would tend to limit or interfere
with the authority or oversight duties and discretion of the Board
of Directors to establish adequate guidelines for the effective
management of the Company.
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6.
Compensation and Reimbursement of Expenses .
The Company agrees
to pay O. Berges during the term of this Agreement a base salary of
not less than $600,000 a year.
In
addition to the base salary set forth above, O. Berges shall be
entitled to a performance bonus determined on the basis of his
achievement of the predetermined business objectives contained in
the Company’s annual business plan in connection with the
areas of endeavor assigned to O. Berges. The contribution of O.
Berges to the achievement of the Company’s annual business
objectives and his performance in such other functions, as may be
reasonably assigned under his charge, will be evaluated by the
Chief Executive Officer who will recommend to the Compensation and
Benefits Committee (the “Compensation Committee”)
payment of a performance bonus in an amount which the Compensation
Committee, and ultimately the Board of Directors, may determine at
their discretion.
c)
Long-Term Incentive Compensation Benefits
O. Berges
shall be entitled to participate in and receive the benefits of any
stock-based award, or other benefits and privileges granted to
employees and executives of the Company or its subsidiaries and
affiliates which now exist or may come into existence hereafter, to
the extend commensurate with his then assigned duties and
responsibilities, as recommended by the Compensation Committee and
approved by the Board of Directors. The terms and conditions of
such benefit will be within the parameters set forth in the now
existing 2008 First BanCorp Omnibus Incentive Plan or any other
similar plan which may come into existence hereafter under which a
benefit or privilege is made available to O. Berges.
The
Company shall provide O. Berges with a company owned automobile.
Such automobile will be furnished in accordance with the existing
executive automobile policy as approved by the Board of Directors,
provided however that the approved initial vehicle cost shall be no
greater than $65,000. All expenses, including but not limited to
insurance, maintenance, repairs, fuel, and lubrication services,
shall be provided by the Bank.
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e)
Reimbursement of Expenses
Not
less frequently than monthly, the Company shall pay or reimburse O.
Berges for all reasonable travel and other expenses incurred by O.
Berges in the performance of his duties under this
Agreement.
The
Company will pay for the initiation fees and annual dues of a club
membership to be designated by O. Berges during the term of this
Agreement or any renewal thereof.
The
Company shall furnish O. Berges with a private office, a private
secretary and such other assistance and accommodations as shall be
suitable to the character of O. Berges’ position with the
Company and adequate for the performance of his duties
hereunder.
7.
Participation in Benefit Plans . The payment and benefits
provided in this Agreement are independent and separate of any
payment and benefits to which O. Berges may be or may become
entitled to under any other present or future group employee
benefit plan or insurance programs of the Company for which
executives of the Company and or its subsidiaries are or shall
become eligible, and O. Berges shall be eligible to receive all
benefits and entitlements for which said executives are eligible
under every such plan or program.
8.
Voluntary Absences; Vacations and Sick Leave . O. Berges
shall be entitled, without loss of pay, to absent himself
voluntarily for reasonable periods of time from the performance of
his duties and responsibilities under this Agreement. All such
voluntarily absences shall count either as paid vacation time or
sick leave, unless otherwise provided by the Board of Directors. O.
Berges shall be entitled to an annual paid vacation of eighteen
(18) working days per every twelve (12) month period, or
such longer periods as the Board of Directors may approve, which
vacations shall be scheduled by O. Berges with the prior approval
of the Chief Executive Officer, taking into account the needs of
the Company. O. Berges may accumulate unused paid vacation time
from twelve (12) month period to the next; provided that such
accumulation shall not exceed eighteen (18) working days of unused
vacation time from prior twelve (12) month periods. O. Berges
shall be entitled to up to fifteen (15) non-cumulative working
days of paid sick leave for each twelve (12) month period or such
longer non-cumulative working days as the Board of
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Directors may
approve. Upon termination of employment with or without cause, or
for any reason, the Company shall pay all accrued and unused
vacation days, at the highest rate of salary earned by O. Berges,
during his tenure.
9.
Benefits Payable Upon Disability or Death. The Company
shall, at all times, maintain in effect disability and death
benefits insurance for the benefit of O. Berges in an amount at
least equal to that maintained for executives of similar rank and
which will not be less than that maintained by the Company for all
officers and employees. Provided that the Company may increase, but
never decrease the benefits which O. Berges and/or O. Berges’
heirs would be entitled to thereunder.
10.
Termination of Employment .
(a)
Without cause . The Board of Directors may, without cause,
terminate this Agreement at any time, by giving ninety
(90) days written notice to O. Berges. In such event, O.
Berges, if requested by the Board of Directors, shall continue to
render his services, and shall be paid his regular salary up to the
date of termination. In addition, O. Berges shall be paid on the
date of termination a severance payment equal to the annual base
compensation amount to which O. Berges would be entitled to under
this Agreement prorated to cover the remaining balance of the three
(3) year term.
O.
Berges may, without cause, terminate the Agreement by giving ninety
(90) days written notice to the Board of Directors. In such
event, O. Berges shall continue to render his services and shall be
paid his regular salary up to the date of termination, but shall
not receive any severance payment.
(b)
With Cause : The Board of Directors may, at any time,
terminate this
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