AMENDMENT NO. 2 TO EMPLOYMENT AGREEMENT
EXHIBIT 10.6
AMENDMENT NO. 2 TO EMPLOYMENT AGREEMENT
This AMENDMENT NO. 2 TO EMPLOYMENT AGREEMENT (this “Amendment”), is entered into and is
effective as of October 27, 2009, by and between, on the one hand, FIRST BANCORP (the
“Corporation”), a corporation organized under the laws of the Commonwealth of Puerto Rico (the
“Commonwealth”), and FIRSTBANK PUERTO RICO (the “Bank”), a banking institution organized under the
laws of the Commonwealth that is a wholly-owned subsidiary of the Corporation, and, on the other
hand, Xxxxxxx Xxxxxx (the “Executive”), President and Chief Executive Officer of the Corporation.
Recitals
WHEREAS, the Corporation and the Executive entered into a certain Employment Agreement
dated as of February 24, 1998 (the “Employment Agreement”), pursuant to which the Corporation and
the Bank retained the professional services of the Executive, subject to the terms and conditions
set forth therein;
WHEREAS, the Corporation has entered into agreements with the U.S. Department of the Treasury
(the “Treasury”) under which the Corporation issued preferred shares (“Preferred Shares”) and other
securities to the Treasury (the “TARP Investment”) as part of the Troubled Assets Relief Program
Capital Purchase Program (“CPP”) established under the Emergency Economic Stabilization Act of 2008
(“EESA”), as amended by the America Reinvestment and Recovery Act of 2009 (“ARRA”);
WHEREAS, EESA and ARRA impose certain restrictions on employment agreements, severance, bonus
and incentive compensation, stock awards, and other compensation and benefit plans and arrangements
(the “Plans”) maintained by the Corporation, the Bank and other subsidiaries of the Corporation and
requires that such restrictions remain in place for so long as the Treasury holds any debt or
equity securities issued by the Corporation.
WHEREAS, the parties hereto wish to amend the terms of the Employment Agreement in the
manner set forth below in order to assure compliance with EESA and ARRA restrictions.
NOW THEREFORE, in consideration of the premises herein contained, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
hereto, each intending to be legally bound hereby, agree as follows:
1. Definitions. All capitalized terms used but not otherwise defined herein shall
have the meanings ascribed to such terms in the Employment Agreement; provided, however, that for
all purposes the term “Corporation”, whenever utilized in the Employment Agreement, shall include
the Bank, its affiliates, and any other subsidiaries of the Corporation, irrespective of the
context of which such term is utilized.
2. Particular Amendments to the Employment Agreement. The Employment Agreement is
hereby amended as follows:
The parties hereby agree that all Plans, including the Employment Agreement, providing
benefits to Executive shall be construed and interpreted at all times that the Treasury maintains
any debt or equity investment in the Corporation in a manner consistent with EESA and ARRA, and all
such Plans shall be deemed to have been
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amended as determined by the Corporation so as to comply with the restrictions imposed by EESA
and ARRA. Notwithstanding any other terms of this Amendment or any other Plan providing benefits to
Executive, to the extent that any provision of this Amendment, the Employment Agreement or any
other Plan is determined by the Corporation, to be subject to and not in compliance with EESA and
ARRA, including the timing, amount or entitlement of Executive to any payment of severance, bonus
or any other amounts, such provisions shall be interpreted and deemed to have been amended to
comply with the terms of EESA, ARRA and the rules and regulations thereunder. The above will not
be applicable to any compensation, bonus or amount to be paid in accordance with the Employment
Agreement that is permitted under EESA, ARRA or their Regulations. The parties hereto further agree
that (i) Executive shall at no time be entitled to receive any compensation based upon incentives
that encourage Executive to take unnecessary and excessive risks on behalf of Bank or the
Corporation; (ii) the Bank shall recover from Executive any bonus or incentive compensation paid to
Executive based on statements of earnings, gains, or other criteria that are later proven to be
materially inaccurate; (iii) the limitations imposed herein shall apply during the period that the
Treasury holds the TARP Investment in the Corporation pursuant to the provision of Section 101(a)
of EESA; accordingly upon the repayment of the TARP Investment the provisions of the Employment
Agreement shall revert to its original terms and conditions.
3. Effectiveness. This Amendment embodies the entire agreement between the parties and
supersedes Amendment No. 1 to Employment Agreement executed on January 15, 2009 or any other any
prior agreements or understanding between the parties in connection with the subject matter hereof
and the amendments contemplated hereby. Except as expressly amended herein, the Employment
Agreement shall continue to be and shall remain in full force and effect in accordance with its
terms; and, in such connection, it is hereby acknowledged and agreed to by the parties hereto that
this Amendment is not intended to cause an extinctive novation of the terms and conditions of, and
the obligations of the respective parties under, the Employment Agreement.
4. Waiver. Except as expressly amended herein, the execution, delivery, and
effectiveness of this Amendment shall not operate as a waiver of any right, power, or remedy of the
parties to the Employment Agreement nor constitute a waiver of any provision of the Employment
Agreement.
5. Governing Law. This Amendment shall be governed by and construed in
accordance with the laws of the Commonwealth.
6. Counterparts. This Amendment may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute but one and the same
document. Delivery of an executed counterpart of a signature page to this Amendment by telecopier
shall be as effective as delivery of a manually executed counterpart of this Amendment.
7. Severability. Any provision of this Amendment which is prohibited,
unenforceable or not authorized in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition, unenforceability or non-authorization, without invalidating the
remaining provisions hereof or affecting the validity, enforceability or legality of such provision
in any other jurisdiction.
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[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed and delivered, or caused this
Amendment to be duly executed and delivered by their respective officers thereunto as of the date
first above written.
| FIRST BANCORP | ||||
By:
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/s/ Xxxxxxxx Xxxxx | |||
Name:
|
||||
Title:
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Executive Vice President and General Counsel | |||
| FIRSTBANK PUERTO RICO | ||||
By:
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/s/ Xxxxxxx Xxxxxx | |||
Name:
|
Xxxxxxx Xxxxxx | |||
Title:
|
President and Chief Executive Officer | |||
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