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, Aurelio
Alemán (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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     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:
  /s/ Lawrence Odell    
Name:
 
 
Lawrence Odell    
Title:
  Executive Vice President and General Counsel    
 
        FIRSTBANK PUERTO RICO    
 
       
By:
  /s/ Aurelio Alemán    
 
       
Name:
  Aurelio Alemán    
Title:
  President and Chief Executive Officer    

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