Exhibit 10
CHANGE IN CONTROL COMPENSATION AGREEMENT
BETWEEN
ORIENTAL FINANCIAL GROUP INC.
AND
JULIO R. MICHEO
     Agreement made as of the 1st day of December, 2006, by and between Oriental
Financial Group Inc., a Puerto Rico corporation and a financial holding company
with principal offices in San Juan, Puerto Rico (hereinafter referred to as
“OFG”) and Julio R. Micheo, of legal age, married, business executive and
resident of San Juan, Puerto Rico (hereinafter referred to as the “Executive
Officer”).
WITNESSETH:
     WHEREAS, the Executive Officer is presently the Senior Executive Vice
President, Chief Investment Officer and Treasurer of OFG.
     WHEREAS, it is in the best interest of OFG to promote the retention of the
Executive Officer’s services on behalf of OFG by reducing concerns that the
Executive Officer may be adversely affected in the event of change in control of
OFG as defined herein below;
     WHEREAS, OFG and the Executive Officer wish to enter into this Agreement to
set forth the terms and conditions for the payment by OFG of certain
compensation to the Executive Officer

 

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in the event of a termination of Executive Officer’s employment as a result of a
change in control of OFG;
     NOW, THEREFORE, in consideration of the mutual covenants set forth herein,
OFG and the Executive Officer do hereby agree as follows:
          1.     TERM.
                   This Agreement shall be in full force and effect so long as
the Executive Officer is employed by the Company.
          2.     TERMINATION OF EMPLOYMENT DUE TO A CHANGE IN CONTROL
                   A.     In the event there is a Change in Control of OFG (as
defined herein below) while this Agreement is in effect and as a result thereof
or within one (1) year after the Change in Control, the Executive Officer’s
employment with OFG is terminated by OFG or its successor in interest, the
Executive Officer shall be entitled to the cash payment compensation determined
as provided in subparagraph B below.
                   B.     The cash payment compensation shall be in an amount
equal to two (2) times the sum of the Executive Officer’s annual base salary at
the time the termination of his employment occurs and the last cash bonus paid
to the Executive Officer prior to the termination of his employment.
                   C.     The cash payment compensation shall be in lieu of any
other payments which the Executive Officer may be entitled to receive by law,
contract or otherwise. The cash payment compensation shall be due and payable in
a lump sum to

 

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the Executive Officer on or before the thirtieth (30th) day following the
termination of the Executive Officer employment. The receipt of the cash payment
compensation shall not affect the rights of Executive Officer to any vested
benefits or accrued compensation, including bonuses.
                   D.     For purposes of this Agreement, a “Change in Control
of OFG” shall be deemed to have occurred if any Person or persons acting as a
group within the meaning of Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), is or becomes the Beneficial Owner
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of OFG representing 25% or more of either the then outstanding shares
of common stocks of OFG or the combined voting power of OFG’s then outstanding
securities and if individuals who on the date hereof are members of OFG’s Board
of Directors cease for any reason to constitute at least a majority thereof,
unless the appointment election or nomination of each new director who was not a
director on the date hereof has been approved by at least two-thirds of the
directors in office on the date hereof.
                   E.     For purposes of this Agreement, “Person” shall have
the meaning given in Section 3(a)(9) of the Exchange Act, except that such term
shall not include (i) OFG or any of its subsidiaries; (ii) an individual who on
the date of this Agreement is a director or officer of OFG or any of its
subsidiaries, or a beneficial owner of more than ten percent (10%) of OFG’s
outstanding securities; (iii) a trustee or other fiduciary holding securities
under an employee benefit plan of OFG or any of its subsidiaries; (iv) an
underwriter temporarily holding securities pursuant to an offering of such
securities; or

 

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(v) a corporation or entity owned, directly or indirectly, by the stockholders
of OFG in substantially the same proportion as their ownership of stock of OFG
on the date of this Agreement.
                   F.     Notwithstanding anything to the contrary herein, any
event or transaction which would otherwise constitute a Change in Control of OFG
(hereinafter referred to as a “Transaction”) shall not constitute a Change in
Control of OFG for purposes of this Agreement if the Executive Officer
participates as an acquirer in the Transaction or as an equity investor or
stockholder of the acquiring entity or any of its affiliates and thus, the
Executive Officer shall not be entitled to receive the benefits provided for in
this Agreement.
          3.     ASSIGNMENT.
                   This Agreement is personal to each of the parties hereto and
neither party may assign or delegate any of his or its rights or obligations
hereunder without first obtaining the written consent of the other party.
          4.     AMENDMENTS OR ADDITIONS.
                   No amendments or additions to this Agreement shall be binding
unless in writing and signed by both parties. The prior approval by a two-thirds
affirmative vote of the full Board of Directors of OFG shall be required in
order for OFG to authorize any amendments or additions to this Agreement, to
give any consent or waivers of provisions of this Agreement, or to take any
other action under this Agreement.

 

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          5.     MISCELLANEOUS.
                    A.     The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
                    B.     This Agreement shall be governed in all respects and
be interpreted by and under the laws of the Commonwealth of Puerto Rico, except
to the extent that such law may be preempted by applicable United States federal
law, in which case this Agreement shall be governed and be interpreted by and
under United States federal law. Venue for the litigation of any and all maters
arising under or in connection with this Agreement shall be laid in the United
States District Court for the District of Puerto Rico, at San Juan, in the case
of federal jurisdiction, and in the Court of First Instance, Superior Part, the
Commonwealth of Puerto Rico in San Juan, in the case of state court
jurisdiction.

      EXECUTIVE OFFICER   ORIENTAL FINANCIAL GROUP INC.        
/s/ Julio R. Micheo   /s/ José Rafael Fernández       Julio R. Micheo   José
Rafael Fernández
President and CEO