Exhibit 10.03

[R&G Financial Corporation Letterhead]

CONFIDENTIAL

[Name of Executive]

[Title]

R&G Financial Corporation

San Juan, Puerto Rico

Dear [Name of Executive]:

This Agreement (the “Agreement”) sets forth the terms and conditions pursuant to
which R&G Financial Corporation (the “Company”) will pay you the amount (the
“Change of Control Bonus”) of $_________ [an amount equivalent to the
Executive’s annual compensation (base salary plus the last performance bonus)]
in the event that a “Change of Control” (as defined below) should occur with
respect to the Company between the date hereof and December 31, 2008.

Your right to receive payment of the Change of Control Bonus shall be also
contingent upon your continued employment with the Company from the date hereof
through and until the Effective CC Date (as defined below).

For purpose of this Agreement, a “Change of Control” of the Company shall mean
an event of a nature that: (i) would be required to be reported in response to
Item 1.01 of the requirements for filing of Current Reports on Form 8-K, as in
effect on the date hereof, pursuant to Sections 13 or 15(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”); or (ii) results in a
Change in Control of the Company within the meaning of any applicable statute or
regulations of the Company’s primary federal regulators as in effect on the date
hereof; or (iii) without limitation, such a Change in Control shall be deemed to
have occurred at such time as (A) any “person” (as the term is used in
Section 13(d) under the Exchange Act) other, directly or indirectly, after the
date hereof becomes the “beneficial owner” (as defined in Rule 13d-3 under the
Exchange Act) of voting securities of the Company representing 20% or more of
the Company’s outstanding voting securities or right to acquire such securities,
except for any voting securities of the Company purchased by any employee
benefit plan of the Company, or (B) individuals who constitute the Board of
Directors of the Company on the date hereof (the “Incumbent Board”) cease for
any reason to constitute at least a majority thereof, provided that any person
becoming a director subsequent to the date hereof whose election was approved by
a vote of at least three-quarters of the directors comprising the Incumbent
Board, or whose nomination for election by the Company’s stockholders was
approved by a Nominating Committee Solely comprised of members who are Incumbent
Board members, shall be, for purposes of this clause (B), considered as though
he were a member of the Incumbent Board, or (C) a plan of reorganization,
merger, consolidation, sale of all or substantially all the assets of the
Company or similar transaction occurs or is effectuated in which the Company is
not the resulting entity; provided, however, that such an event listed above
will be deemed to have occurred or to have been effectuated upon the receipt of
all required federal regulatory approvals not including the lapse of any
statutory waiting periods, or (D) a proxy statement shall be distributed
soliciting proxies from stockholders of the Company, by someone other than the
current

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management of the Company, seeking stockholder approval of a plan of
reorganization, merger or consolidation of the Company or its subsidiaries with
one or more corporations as a result of which the outstanding shares of the
class of securities then subject to such plan or transaction are exchanged for
or converted into cash or property or securities not issued by the Company or
its subsidiaries shall be distributed; or (E) a tender offer is made and
accepted for 20% or more of the voting securities of the Company or its
subsidiaries. Notwithstanding anything to the contrary, the sale or merger of
any subsidiary of the Company shall not constitute a “Change of Control” for
purposed of this Agreement.

“Effective CC Date” means the date as of which a Change of Control shall be
consummated and become effective, after receipt of any and all applicable
regulatory and/or shareholder approvals therefor and the lapse of any applicable
waiting period therefor, and without any pending approvals, actions, or filings
for its consummation and effectiveness.

You are referred to in this Agreement as “you” or “the Executive.”

Your right to receive the Change of Control Bonus is also subject to the
following terms and conditions:

1.    By agreeing to the terms and conditions of this Agreement, you indicate
your intent and agreement to continue to be employed by the Company through and
until the Expiration Date, and you will devote your best efforts and all of your
business time, attention, and skill to the performance of the duties associated
with your employment. You will also perform such other duties as the Chairman of
the Board and/or the Chief Executive Officer of the Company may in good faith
assign to you, which shall not be inconsistent with your position with the
Company.

2.    The Change of Control Bonus shall be payable separately from, and in
addition to, any other compensation and benefits to which you are entitled for
your employment and performance; provided, however, that the Change of Control
Bonus shall not be considered as earnings, compensation, or otherwise for
purposes of determining your benefits under any other plan or program of the
Company (including, without limitation, any bonus, stock option, disability,
life insurance, and/or retirement benefits under any qualified or unqualified
plan.) Your entitlement to any compensation or benefits other than the Change of
Control Bonus provided herein shall be determined in accordance with the
compensation and employee benefit plans of the Company as in effect from time to
time and as may be modified.

3.    This Agreement shall not confer, and shall not be construed as conferring,
any legal or other right for the continuation of your employment with the
Company for any period. The Company expressly reserves the authority (which may
be exercised at any time and without regard to any Change of Control or the
Expiration Date) to discharge you from your employment, and such discharge shall
not entitle you to the Change of Control Bonus, but in any event such discharge
shall be without prejudice to any other rights you may have in the event of such
termination under any plan and/or under any applicable law.

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4.     Termination of Employment Prior to a Change of Control.

(a) If you terminate your employment for any reason, or if your employment is
terminated by the Company for cause as such term is defined in your Employment
Agreement, prior to the Effective CC Date, you will not be entitled to the
Change of Control Bonus.

(b) Any termination of your employment by the Company shall be effective in
accordance with the terms of your Employment Agreement with the Company.

5.    This Agreement sets forth the entire agreement of the parties with respect
to the Change of Control Bonus and supersedes any and all agreements, oral or
written, with respect thereto.

6.    The validity, interpretation, construction, and performance of this
Agreement shall in all respects be governed by the laws of the Commonwealth of
Puerto Rico.

7.    The payment of the Change of Control Bonus hereunder shall be subject to
all income tax, social security, and other applicable taxes and/or other amounts
required to be withheld by the Company pursuant to federal or Commonwealth laws.

8.    You shall not assign, pledge or otherwise transfer all or any portion of
the Change of Control Bonus or any other rights conferred to you under this
Agreement, and any attempted assignment, pledge or other transfer by you (other
than by will or the laws of descent and distribution) shall cause any right that
you may have to receive payment of the Change of Control Bonus (or any portion
thereof) to be immediately forfeited.

9.    No provision of this Agreement may be modified, altered, or amended except
by an instrument in writing executed by (a) you and (b) the Chief Executive
Officer or the Director of the Human Resources Department of the Company, on
behalf of the Company.

 

10.    Arbitration.

(a) By signing this Agreement, you agree that all claims or disputes covered by
this Agreement or otherwise arising out of or relating to your right or
entitlement to, or forfeiture of, the Change of Control Bonus, and which
disputes or claims cannot be resolved informally, must be submitted to binding
arbitration and that this arbitration will be the sole and exclusive remedy for
resolving any such claim or dispute. This promise to resolve claims by
arbitration is equally binding upon both you and the Company.

(b) Any arbitration will be administered by the American Arbitration Association
under its Commercial Arbitration Rules, and any arbitration shall take place in
San Juan, Puerto Rico. The arbitrator shall have jurisdiction to hear and rule
on pre-hearing disputes and is authorized to hold pre-hearing conferences by
telephone or in person as the arbitrator deems necessary. The decision of the
arbitrator shall be final and binding and judgment upon the award may be entered
in any court having jurisdiction thereof.

(c) The Company shall pay the costs of arbitration and each party shall bear its
own expenses; provided, however, that if you are the prevailing party in any
such proceeding, the

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Company shall reimburse you for your reasonable costs and expenses, including
attorney’s fees, incurred in connection with such proceeding.

(d) The arbitration proceedings and the decision rendered by the arbitrator
shall remain strictly confidential.

(e) The arbitration provisions of this Section shall survive termination of this
Agreement.

(f) If, notwithstanding the foregoing provisions of this Section, any claim,
arising under this Agreement is found not to be subject to final and binding
arbitration, the parties agree to waive any right to a jury trial if such claim
is brought in federal court.

11.    Notwithstanding anything to the contrary, the Expiration Date shall be
extended until the Effective CC Date if the shareholders of the Company and the
applicable regulatory agencies shall have approved the Change of Control prior
to the Expiration Date, but the consummation and effectiveness thereof shall be
pending as of the Expiration Date.

* * *

If you accept the terms of this Agreement, please read the “Statement of
Agreement and Acceptance by Executive” and sign in the space provided.

Very truly yours,

R&G FINANCIAL CORPORATION

 

By:     

Name:

Position:

 

[Name of Executive]

[Title]

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STATEMENT OF AGREEMENT AND ACCEPTANCE BY EXECUTIVE:

I hereby accept and agree to be bound by the terms of the foregoing Agreement,
and I further declare and represent that I have carefully read and fully
understand the terms of this Agreement, and that I knowingly and voluntarily, of
my own free will, without any duress, being fully informed and after due
deliberate thought and action, accept the terms of and sign the same as my own
free act.

 

    [Name of Executive]

Date: