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EXHIBIT 10.49
FIRST FINANCIAL CARIBBEAN CORPORATION
0000 X.X. Xxxxxxxxx Xxxxxx
Xxxxxx Xxxxx, Xxxxxx Xxxx 00000
As of December 1, 1996
Xx. Xxxx X. Xxxxxxxx
000 Xxxxxx Xxxxxx Xxxxxx
Xxx Xxxx, Xxxxxx Xxxx 00000
Dear Xx. Xxxxxxxx:
We are pleased to detail herein below the provisions of your
employment agreement with First Financial Caribbean Corporation ("FFCC").
1. TERMS OF EMPLOYMENT
The term of this Agreement shall be for a period commencing
retroactively to January 1, 1996 and ending December 31, 1997, unless sooner
terminated as herein provided. This Agreement supersedes and cancels all prior
employment, personal service or similar agreements between you and FFCC and its
subsidiaries, divisions and ventures.
2. POSITION AND RESPONSIBILITIES
You will serve as an Executive President of FFCC. By your
acceptance of this Agreement, you undertake to accept such employment and to
devote your full time and attention to FFCC, and to use your best efforts,
ability and fidelity in the performance of the duties attaching to such
employment. During the term of your employment hereunder, you shall not
perform any services for any other company, which services conflict in any way
with your obligations under the two preceding sentences of this Section 2,
whether or not such company is competitive with the businesses of FFCC,
provided, however, that nothing in this Agreement shall preclude you from
devoting reasonable periods required for
(i) serving as a director or member of a committee of any
organization involving no conflict or potential conflict of interest with the
interests of FFCC;
(ii) delivering lectures, fulfilling speaking engagements,
teaching at educational institutions;
(iii) engaging in charitable and community activities; and
(iv) managing your personal and family investments,
provided that such activities do not interfere with the regular performance of
your duties and responsibilities under this Agreement.
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You shall, at all times during the term hereof, be subject to
the supervision and direction of the Chairman of the Board and Chief Executive
Officer, the President and the Senior Executive Vice President of FFCC with
respect to your duties, responsibilities and the exercise of your powers.
3. COMPENSATION
(a) During the term of this Agreement you shall receive
an annual salary of $150,000 annually, payable no less often than monthly in
accordance with corporate policy.
(b) (i) During the term of this Agreement, you shall
also be entitled to receive an annual incentive bonus
equal to the greater of (A) $25,000 and (B) 2% of
Adjusted Net Income (as hereinafter defined), to the
extent such Adjusted Net Income exceeds an amount
equal to a 15% Return on Equity Capital (as
hereinafter defined);
provided, however, that total salary and incentive compensation payable to you
pursuant to this Agreement shall not exceed $300,000 per annum.
(ii) The incentive bonus shall be payable annually
by FFCC within 30 days following the date on which
its Annual Report on Form 10-K for the fiscal year
ended the prior December 31 shall have been filed
with the United States Securities and Exchange
Commission; provided that such amount shall only be
payable if you shall have served as Executive Vice
President to FFCC pursuant to this Agreement for the
entire fiscal year to which such payments relate. As
used in this Section 3, "Adjusted Net Income" means
the annual consolidated net income by FFCC and its
subsidiaries after all taxes (including net income
from equity interests held by FFCC in any other
venture and net income of any successor of FFCC which
may be formed by merger, consolidation or sale of
substantially all of the assets of FFCC) during the
calendar year preceding the payment as determined in
accordance with generally accepted accounting
principles applied on a consistent basis throughout
the periods involved and as shown by FFCC's published
consolidated financial statements audited by its
independent accountants (hereinafter referred to as
"GAAP"), such net income to be adjusted (A) adding
back to net income any payments made pursuant to
Section 3(b)(i) hereof and payments of similar
incentive compensation to other executive officers of
FFCC and (B) by adding back to such net income any
extraordinary items of income and expense such as
merger related expenses. As used in this Section 3,
(1) "Equity Capital" means FFCC's consolidated
Stockholders Equity including preferred stock at the
December 31 immediately preceding the beginning of
the fiscal year for which the calculation is being
made, determined in accordance with GAAP and (2)
"Return on Equity Capital" for any fiscal year means
the percentage determined by dividing FFCC's
consolidated net income after all taxes determined in
accordance with GAAP for such fiscal year by Equity
Capital for such preceding December 31; provided that
such calculation shall be adjusted as set forth in
the immediately succeeding sentence. If FFCC sells
its equity securities during the fiscal year, Equity
Capital shall be increased by the net proceeds to
FFCC (after expenses) of such sale multiplied by a
fraction the numerator of which shall be the number
of days in such fiscal year which had elapsed from
the date of
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the closing of such sale to the end of such fiscal
year and the denominator of which shall be 365.
(c) You shall be entitled to participate in the other
benefit plans of FFCC upon the terms and conditions on which such benefits are
made available to other officers of FFCC. Nothing herein shall obligate FFCC
to continue any existing benefit plan or to establish any replacement benefit
plan.
(d) You shall be entitled to reimbursement for reasonable
travel and entertainment expenses incurred in connection with the rendering of
your services hereunder. Nothing contained herein shall authorize you to make
any political contributions, including but not limited to payments for dinners
and advertising in any political party program or any other payment to any
person which might be deemed a bribe, kickback or otherwise and improper
payment under corporate policy or practice and no portion of the compensation
payable hereunder is for any such purpose.
(e) Payments under this Agreement shall be subject to
reduction by the amount of any applicable federal, Commonwealth, state or
municipal income, withholding, social security, state disability insurance, or
similar or other taxes or other items which may be required or authorized to be
deducted by law or custom.
(f) No additional compensation shall be due to you for
services performed or offices held in any subsidiary, division, affiliate, or
venture of FFCC.
4. MISCELLANEOUS PROVISIONS RELATING TO THE BONUS AND OTHER
MATTERS
(a) Your acceptance of this Agreement will confirm that
you understand and agree that the granting of the incentive compensation
referred to in Section 3(b) (the "incentive compensation"), and any action
thereunder, does not involve any statement or representation of any kind by
FFCC as to its business, affairs, earnings or assets, or as to the tax status
of the incentive compensation or the tax consequences of any payment thereof,
or otherwise. You further agree that any action at any time taken by or on
behalf of FFCC or by its directors or any committee thereof, which might or
shall at any time adversely affect you or the incentive compensation, may be
freely taken notwithstanding any such adverse effect without your being thereby
or otherwise entitled to any right or claim against FFCC, any subsidiary or
affiliate of FFCC or any other person or party by reason thereof.
(b) The incentive compensation is personal to you and,
except as provided as contemplated in Section 3(b) above, in the event of your
death or incapacity, is not transferable or assignable either by your act or by
operation of law, and no assignee, trustee in bankruptcy, receiver or other
party whosoever shall have any right to demand any incentive compensation or
any other right with respect to it. If, in the event of your death or
incapacity, your legal representative shall be entitled to demand the incentive
compensation under any of the provisions hereof then, unless otherwise
indicated by the context or otherwise required by any term hereof, references
to "you" shall apply to said representative.
(c) If and when questions arise from time to time as to
the intent, meaning or application of any one or more of the provisions hereof
such questions will be decided by the Board of Directors of FFCC
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or any Committee appointed to consider such matters, or, in the event
FFCC is merged into or consolidated with any other corporation, by the Board of
Directors (or a Committee appointed by it) of the surviving or resulting
corporation, and the decision of such Board of Directors or Committee, as the
case may be, as to what is a fair and equitable settlement of each such
question or as to what is a fair and proper interpretation of any provision
hereof or thereof, whatever the effect of such a decision may be, beneficial or
adverse, upon the incentive compensation, shall be conclusive and binding and
you hereby agree that the incentive compensation is granted to and accepted by
you subject to such condition and understanding. You understand that the
incentive compensation is not held or set aside in trust and (1) FFCC may seek
to retain, offset, attach or similarly place a lien on such funds in
circumstances where you have been discharged for cause and shall be entitled to
do so for (x) malfeasance damaging to FFCC, (y) conversion to you of an FFCC
opportunity, or (z) a violation of FFCC's conflict of interest policy, in each
case as determined in the sole discretion of the Board of Directors, and (2) in
the event FFCC is unable to make any payment under this Agreement because of
insolvency, bankruptcy or similar status or proceedings, you will be treated as
a general unsecured creditor of FFCC and may be entitled to no priority under
applicable law with respect to such payments.
5. RESTRICTIONS ON COMPETITION
During the term of this Agreement and for a period of one year
after you cease to be an employee of FFCC or an affiliate of FFCC, you will
not, without the prior written consent of FFCC, (a) accept employment or render
service to any person, firm or corporation, directly or indirectly, in
competition with FFCC, or any affiliate thereof for any purpose which would be
competitive with the mortgage banking business within the Commonwealth of
Puerto Rico or any other geographic area in which FFCC or any affiliate of FFCC
by which you were employed, conducted operations (the "Restricted Area") or any
business as to which studies or preparations relating to the entry into which
were made by FFCC or any affiliate of FFCC by which you were employed within
two years prior thereto (collectively, the "Restricted Businesses") or (b)
directly or indirectly, enter into or in any manner take part in or lend your
name, counsel or assistance to any venture, enterprise, business or endeavor,
whether as proprietor, principal, investor, partner, director, officer,
employee, consultant, adviser, agent, independent contractor or in any other
capacity whatsoever for any purpose which would be competitive with the
Restricted Businesses in the Restricted Area. An investment not exceeding 5%
of the outstanding stock in any corporation regularly traded on any National
Securities Exchange or in the Over-the-Counter market shall not be deemed to
violate this provision, provided that you shall not render any services for
such corporation.
6. TERMINATION OF EMPLOYMENT
(a) Your employment hereunder may be terminated for
dishonesty, death, incapacity, or inability to perform the duties of your
employment on a daily basis, resulting from physical or mental disability
caused by illness, accident or otherwise or refusal to perform the duties and
responsibilities of you employment hereunder, or breach of fidelity to FFCC.
(b) At any time following a "Change in Control" of FFCC,
this Agreement may be terminated by FFCC or you on 30 days' written notice to
you or FFCC, as the case may be, such termination to be effective as of the end
of the calendar year during which such notice is given. As used herein, a
"Change
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in Control" shall be deemed to have occurred at such time as (i) any person or
group becomes the beneficial owner of more than 50% of the voting power of
FFCC's voting stock, or (ii) FFCC consolidates with or merges into any other
corporation or conveys or otherwise disposes of all or substantially all of its
assets to any person.
(c) If at any time you shall voluntarily terminate your
employment, then this Agreement, except for Section 5 hereof, shall terminate
and all further obligations of FFCC hereunder shall cease, provided that in any
termination pursuant to subsection (b) of this Section 6 you shall be entitled
to receive all compensation due to pursuant to Section 3 hereof for the
calendar year in which such date of termination occurs.
You agree that this Section 6 shall create no additional
rights in you to direct the operations of FFCC.
7. WAIVERS AND MODIFICATIONS
No waiver by either party of any breach by the other of any
provisions hereof shall be deemed to be a waiver of any later or other breach
thereof, or as a waiver of any such or other provision of this Agreement. This
Agreement sets forth all of the terms of the understandings between the parties
with reference to the subject matter set forth herein and may not be waived,
changed, discharged or terminated orally or by any course of dealing between
the parties, but only by an instrument in writing signed by the party against
whom any waiver, change, discharge or termination is sought.
8. SEVERABILITY
Wherever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective under applicable law. In the
event that any provision, or any portion of any provision, of this Agreement
shall be held to be void and unenforceable, the remaining provisions of this
Agreement, and the remaining portion of any provision found void or
unenforceable in part only, shall continue in full force and effect.
9. ARBITRATION
Any dispute arising under this Agreement shall be submitted to
arbitration in New York, New York under the rules of the American Arbitration
Association.
10. NOTICES
Any notice or communication required or permitted to be given
hereunder shall be deemed duly given if delivered personally or sent by
registered or certified mail, return receipt requested, to the address of the
intended recipient as herein set forth or to such other address as a party may
theretofore have specified in writing to the other by delivering or mailing in
a similar manner. Any notice or communication intended for FFCC shall be
addressed to the attention of its Board of Directors.
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11. GOVERNING LAW
This Agreement shall be construed in accordance with the laws
of the Commonwealth of Puerto Rico.
12. MISCELLANEOUS
This Agreement shall be binding upon the successors and
assigns of FFCC. This Agreement is personal to you, and you therefore may not
assign your duties under this Agreement. The headings of the Sections of this
Agreement are inserted for convenience only and shall not be deemed to
constitute a part thereof or to affect the meaning hereof.
If the foregoing terms and conditions correctly embody your
mutual understanding with FFCC, kindly endorse your acceptance and agreement
therewith in the space below provided, whereupon this shall become a binding
agreement.
Very truly yours,
FIRST FINANCIAL CARIBBEAN CORPORATION
By: /s/ Xxxxx Xxxxx
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Name: Xxxxx Xxxxx
Title: President
Accepted and Agreed to as of the
date first above set forth:
/s/ Xxxx X. Xxxxxxxx
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Xxxx X. Xxxxxxxx
