SEPARATION AGREEMENT AND
GENERAL RELEASE
THIS SEPARATION
AGREEMENT AND GENERAL RELEASE (hereinafter, “this
Agreement”) is made and entered into by and between Fernando
L. Batlle (hereinafter, “the Executive”) and FIRSTBANK
PUERTO RICO INC. (hereinafter, “the Bank”), represented
by its Senior Executive Vice-President, Luis Beauchamp.
The
Executive’s spouse, Maria del Pilar Rivera (hereinafter
“Spouse”), also appears and executes this Agreement for
the purposes stated herein.
WHEREAS, Executive
has been employed by the Bank or a predecessor thereof, in an
executive employee position since June 1994. At the time of
the execution of this Agreement Executive occupies the position of
“Executive Vice President”.
WHEREAS, at the
time of the execution of this Agreement, the Executive’s
employment is subject to an Employment Agreement with the Bank,
dated May 14, 1998 (hereinafter, “Employment
Agreement”).
WHEREAS, the
parties to this Agreement have agreed the Executive’s
employment with the Bank shall terminate effective on the date and
hour of execution of this Agreement, (hereinafter “Separation
Date”).
WHEREAS, Executive
and Spouse have notified the Bank that as a result of events
occurring prior to and including the termination of
Executive’s employment, both of them have suffered
significant emotional anguish.
WHEREAS, Executive
and the Bank have successfully conferred personally for the
purposes of settling the aformentioned controversies and disputes
between them concerning Executive’s employment, the
conclusion there from and the Employment Agreement.
WHEREAS, Executive
and the Bank desire to provide for an orderly and appropriate
conclusion of Employee’s employment and the Executive’s
future assistance to the Bank, as herein provided, in connection
with matters with which Executive may have dealt with during his
employment.
WHEREAS, All
parties recognize and agree that the execution of this Agreement in
no manner constitutes a recognition or admission of the breach of
any contractual or other legal duty by any other party.
WHEREAS, All
parties recognize and acknowledge that they have been granted
reasonable time to have and review a copy of this Agreement prior
to the signing of same and have further consulted with their
respective legal representatives, and have carefully read and fully
understand all of the provisions hereof; and are voluntarily
entering into this Agreement.
NOW, THEREFORE, in
consideration of the premises and mutual promises herein contained,
it is agreed as follows:
FIRST: Executive
agrees that Executive’s employment with the Bank will
terminate on the Separation Date; that Executive is not entitled to
any further pay or compensation from the Bank after the Separation
Date, except as specifically stipulated in this
Agreement.
SECOND: The Bank
agrees that no later than five calendar days after Separation Date,
the following compensation will be granted to Executive and/or
Spouse, as consideration for this Agreement and the releases given
and obligations assumed herein by Executive and/or Spouse and as
full, final and complete settlement of all claims Executive and/or
Spouse may presently or in the future have against the Bank, based
on events occurring prior to or on the Separation Date as further
provided in this Agreement:
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A.
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A
lump sum payment payable to the Executive, in the amount of SIX
HUNDRED THOUSAND DOLLARS ($600,000.00), without any withholdings,
as a termination payment, to cover any claim under Puerto
Rico’s wrongful discharge law. (Act 80 of May 30,
1976)
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B.
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A
lump sum payment to the Executive, in the amount of TWO HUNDRED
THOUSAND DOLLARS ($200,000.00), without deductions, in settlement
of Executive’s alleged personal, emotional, moral and/or
psychological injuries.
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C.
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A
lump sum payment to Spouse, in the amount of ONE HUNDRED THOUSAND
DOLLARS ($100,000.00), without deductions, in settlement of the
Spouse’s alleged personal, emotional, moral and/or
psychological injuries.
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D.
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A
lump sum payment to the Executive in the amount of EIGHT HUNDRED
FIFTY THOUSAND DOLLARS ($850,000.00), subject to a 7% withholding
for purposes of Puerto Rico income taxes, as provided for in
Section 1142 of Puerto Rico’s Internal Revenue Code, and
also subject to any withholding required for applicable social
security (FICA) and/or medicare taxes, with regard to all
other claims or rights of the Executive under the Employment
Agreement or under the law, which may be considered taxable
income.
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E.
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A
lump sum payment to the Executive in the amount of FIFTY THOUSAND
DOLLARS ($50,000.00), corresponding to the year 2004 performance
bonus, less applicable legal withholdings.
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F.
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The
Bank will transfer to Executive, free of charges and liens, title
of the company car in the Executive’s possession prior to the
execution of this Agreement, which has a present book value of
$13,542. This car is identified as follows: Model BMW-530i, year
2002.
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G.
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The
Bank shall promptly transfer to the Executive title to the portable
computer and printer in his possession prior to the Separation
Date, providing that the Executive shall
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permit access
to same by the Bank’s representatives, in order to remove all
files, documents and other information related to the Bank’s
business and erase same from the computer memory. Executive
represents that he has not copied or retained or provided, in any
form, to a third party such information and data, except as
required in the normal course of business in the performance of his
duties.
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H.
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Should the Executive elect to
continue participation in the Bank’s group health coverage as
provided for under COBRA, the Bank will pay the coverage premiums
corresponding to the first twelve (12) months of COBRA
coverage. It is understood that the maximum period of group health
coverage will be for the period established under COBRA legislation
and subject to all applicable restrictions; that Executive will
receive the applicable COBRA notice; and that the Bank’s only
obligation will be limited to undertaking the premium payments
during the aforestated period.
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I.
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Hereinafter, all the payments and
benefits paid under this paragraph of the Agreement will be
referred to as the “Payments”.
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THIRD: For all
bookkeeping and filing purposes, the Bank shall treat as
non-taxable income all payments made pursuant to Subparagraphs A, B
and C of Paragraph SECOND of this Agreement and shall not
adopt a position inconsistent with such treatment. Executive and
Spouse assume all tax responsibilities, if any, which may arise
from all the payments under Paragraph SECOND. Executive and
Spouse acknowledge that they have not received any orientation or
representation by the Bank as to tax matters. The Bank denies
having caused damages to Executive and/or spouse.
FOURTH: In
consideration of the payments and transfers mentioned in
Paragraph SECOND, Executive, Spouse and the conjugal
partnership composed between them agree:
That Executive,
Spouse and their conjugal partnership, their heirs, executors,
assignees or agents do not have, and if they have they waive, any
claim of any type, and the remedies, under any federal, state or
Puerto Rico law, including those related to or that may be alleged
as arising from the employment relationship with the Bank, or the
termination of same, and grant the most complete release for any
claim or cause of action and the remedies they have or may have or
had, known or unknown, whether in law or in equity, in contract, or
torts, against the Bank, its parent, subsidiaries, affiliates or
predecessors corporations (hereinafter “the
Corporations”), the 1165 (e) Savings Plan for salaried
employees and the 1997 Employee Stock Option Plan (“The
Plans”) as well as Trustees, Administrators and members of
the Plans Committees; and their respective directors, officers,
employees, agents, representatives, insurance carriers, bonding
agents or guarantors (hereinafter “its
Representatives”). The claims or causes of action and the
remedies that Executive, Spouse and their conjugal partnership
waive and grant a release for include, but are not limited to:
reprisals; for breach of contract or quasi-contract or promise or
representation; for breaching the Employment Agreement; for
violation of a public policy; for whistle-blowing, for torts; for
invasion of privacy; for violation of any regulations, norms,
practices or policies of the Bank; for unjustified termination (Act
80 of May 30, 1976); or for discriminatory or illegal
termination or treatment or harassment barred under the
Constitution of Puerto Rico or the United States, or by any Puerto
Rico, State or Federal law, including for race,
color, age,
national origin, sex, disability, condition as veteran of the
Vietnam War Era, marriage and others including, but not limited to
the Age Discrimination in Employment Act of 1970, the Civil Rights
Act of 1964, the Civil Rights Act of 1991, the Civil Ri
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