Exhibit 10.12
EMPLOYMENT AGREEMENT
     AGREEMENT dated ______by and between FIRST BANCORP PUERTO RICO (the
“Company”) and ______.
     WHEREAS, the Company wishes to retain the services of ______and the
retention of ______ services for and on behalf of the Company and FirstBank
Puerto Rico (the “Bank”) is of material importance to the preservation and
enhancement of the value of the Company’s and the Bank’s business;
     WHEREAS, the Board of Directors of the Company has approved and authorized
the execution of this Agreement with ______to take effect as of the date above
written.
     WHEREAS, the Compensation Committee of the Board of Directors of the
Company has approved the granting to ______an amount of options to purchase
stock of the Company provided in Section 6 herein, as partial consideration for
entering into this Agreement, which will become effective upon execution of this
Agreement.
     WHEREAS, the parties desire to enter into this Agreement setting forth the
terms and conditions of the employment relationship of the Company, the Bank and
______;
     NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein, the parties agree as follows:
     1. Employment. The Company agrees to employ ______and ______agrees the
employment by the Company for the period stated in Paragraph 4 hereof and
subject the other terms and conditions herein provided.
     2. Position and Responsibilities. The Company hereby employs ______as
______and shall carry out and render to the Company and to the Bank such
services as are customarily performed by persons holding a similar position.
______shall also perform such other related duties as he may from time to time
be reasonably directed in writing, including, but not limited to performing
duties for the Company, the Bank and other subsidiaries of the Company.
______shall report to the ______of the Company. In the absence of the President
and ______of the Company, ______shall report to the Board of Directors, through
the Chairman of the Board, or such other Director as may be designated by the
Board of Directors. Notwithstanding the foregoing, the Board of Directors of

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the Bank may delegate or assign specific tasks to ______, provided that the
assignment clearly sets for the priority of the task, and whether it takes
precedence over other duties and obligations of ______.
     3. Duties. During the period of employment hereunder, and except for
illness, vacation periods, and leaves of absence, the Executive shall devote his
business time, attention, skill, and efforts to the faithful performance of his
duties as provided herein as is customary for an executive holding a similar
position in a financial institution of comparable size.
     ______agrees that, during the term of his employment hereunder, except with
the express consent of the Board of Directors, he will not, directly or
indirectly, engage or participate, become director of, or render advisory or
other services for, or in connection with, or become interested in, or make any
financial investment in any firm, corporation, business entity or business
enterprise that directly competes with the Company or its subsidiaries in Puerto
Rico; provided, however, that ______shall not thereby be precluded or prohibited
from owning passive investments, including investments in the securities of
other financial institutions so long as such ownership does not require him to
devote substantial time to the management or control of the business or
activities of any such firm, corporation, business entity or enterprise.
     4. Term. The initial term of employment under this Agreement shall be for a
period of ______years, commencing on ______and terminating on ______. On each
anniversary of the date of commencement of this Agreement, the term of the
employment hereunder shall automatically be extended for an additional one
(1) year period beyond the then effective expiration date, unless either party
receives written notice, not less than 90 days prior to the anniversary date,
advising the other party that this Agreement shall not be further extended. Any
such written notice shall not affect any prior extensions of the term of
employment hereunder.
     5. Standards. ______shall perform his duties and responsibilities under
this Agreement, in accordance with such reasonable standards as established from
time to time by the Board of Directors and/or management of the Company and
conveyed in writing to ______. The

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reasonableness of such standards shall be measured against standards for
executive performance generally prevailing in the financial industry (in Puerto
Rico).
     Notwithstanding anything to the contrary, nothing in this Agreement will be
interpreted in any manner which would tend to limit or interfere with the
authority or oversight duties and discretion of the Board of Directors to
establish adequate guidelines for the effective management of the Company.
     6. Compensation and Reimbursement of Expenses.
          a) Compensation
     The Company agrees to pay ______during the term of this Agreement a base
salary of not less than $______a year.
          b) Performance Bonus
              In addition to the base salary set forth above, the performance of
the Executive and of the Bank during each year of employment shall be evaluated
on the basis of the Bank’s achievement of the predetermined business objectives
contained in the Company’s annual business plan in connection with the areas of
endeavor assigned to ______. The contribution of ______to the achievement of the
Company’s annual business objectives and his performance in such other
functions, as may be reasonably assigned under his charge, will be evaluated by
the President and Chief Executive Officer who will recommend to the Compensation
Committee payment of a performance bonus in an amount which the Compensation
Committee, and ultimately the Board of Directors, may determine their
discretion.
          c) Stock Options
              ______shall be entitled to participate in and receive the benefits
of any stock option, profit sharing, or other plans, benefits and privileges
granted to employees and executives of the Company or its subsidiaries and
affiliates which now exist or may come into existence hereafter, to the extend
commensurate with his then assigned duties and responsibilities, as recommended
by the Compensation Committee and approved by the Board of Directors. The terms
and conditions of such stock options will be within the parameters set forth in
the employee stock option plan of the Company and/or its subsidiaries or other
similar plan under which a benefit or privilege is made available to ______.
Notwithstanding the above, the Company agrees that the Initial Stock Option
grant is independent from,

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and shall never be taken into consideration in the determination and approval of
the participating rights to be granted to ______, with respect to all or any of
the benefits referred to in this subsection (c).
          d) Automobile Expenses
          (i) The Company shall provide ______with a company owned automobile.
Such automobile will be furnished in accordance with the existing Company’s
executive automobile policy as approved by the Board of Directors. All expenses,
including but not limited to insurance, maintenance, repairs, fuel, and
lubrication services, shall be provided by the Company.
          (ii) The Company agrees that on a monthly basis, but never more than
thirty (30) days after the expenses is incurred by ______, it shall pay or
reimburse ______for any gasoline, oil and maintenance or repair expenses
incurred by him in the operation of the automobile provided hereunder.
          e) Reimbursement of Expenses
          Not less frequently than monthly, the Company shall pay or reimburse
______for all reasonable travel and other expenses incurred by ______in the
performance of his duties under this Agreement.
          f) Club Membership
           The Company will pay for the initiation dues of the Dorado Beach
Resort, or any similar club, plus the yearly membership dues during the term of
this Agreement or any renewal thereof.
          g) Office
              The Company shall furnish ______with a private office, a private
secretary and such other assistance and accommodations as shall be suitable to
the character of ______position with the Company and adequate for the
performance of his duties hereunder.
     7. Participation in Benefit Plans. The payment and benefits provided in
this Agreement are independent and separate of any payment and benefits to which
______may be or may become entitled to under any other present or future group
employee benefit plan or insurance programs of the Company for which executives
of the Company and or its subsidiaries are or shall become eligible, and

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______shall be eligible to receive all benefits and entitlements for which said
executives are eligible under every such plan or program.
     8. Voluntary Absences; Vacations and Sick Leave. ______shall be entitled,
without loss of pay, to absent himself voluntarily for reasonable periods of
time from the performance of his duties and responsibilities under this
Agreement. All such voluntarily absences shall count either as paid vacation
time or sick leave, unless otherwise provided by the Board of Directors.
______shall be entitled to an annual paid vacation of eighteen (18) working days
per every twelve (12) month period, or such longer periods as the Board of
Directors may approve, which vacations shall be scheduled by ______with the
prior approval of the President and Chief Executive Officer, taking into account
the needs of the Company. ______may accumulate unused paid vacation time from
twelve (12) month period to the next; provided that such accumulation shall not
exceed eighteen (18) working days of unused vacation time from prior twelve
(12) month periods. ______shall be entitled to up to fifteen (15) non-cumulative
working days of paid sick leave for each twelve (12) month period or such longer
non-cumulative working days as the Board of Directors may approve. Upon
termination of employment with or without cause, or for any reason, the Company
shall pay all accrued and unused vacation days, at the highest rate of salary
earned by the Executive, during his tenure.
     9. Benefits Payable Upon Disability or Death. The Company shall, at all
times, maintain in effect disability and death benefits insurance for the
benefit of ______in an amount at least equal to that maintained for executives
of similar rank and which will not be less than that maintained by the Company
for all officers and employees. Provided that the Company may increase, but
never decrease the benefits which ______and/or the Executive’s heirs would be
entitled to thereunder.
     10. Termination of Employment.
          (a) Without cause. The Board of Directors may, without cause,
terminate this Agreement at any time, by giving ninety (90) days written notice
to ______. In such event, the Executive, if requested by the Board of Directors,
shall continue to render his services, and shall be paid his regular salary up
to the date of termination. In addition, ______shall be paid from the date of

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termination a severance payment equal to the annual base compensation amount to
which ______ would be entitled to under this Agreement prorated to cover the
balance of the three (3) year term.
          ______may, without cause, terminate the Agreement by giving ninety
(90) days written notice to the Board of Directors. In such event, the Executive
shall continue to render his services and shall be paid his regular salary up to
the date of termination, but shall not receive any severance payment.
          (b) With Cause: The Board of Directors may, at any time, terminate
this Agreement for cause. In such event, ______shall not be entitled to receive
any further compensation from the date of notice of termination. The notice of
termination shall be in writing, shall set forth the date of delivery to ______,
and the effect of termination shall not be retroactive to a date prior to
delivery of such notice. For the purpose of this Agreement, “termination for
cause” shall include any act or omission on the part of ______which involves
personal dishonesty, willful misconduct, material breach of fiduciary duty, a
material violation of any law, rule or regulation relating to the banking
industry or a material breach of any provision of this Agreement, such as the
willful and continue failure of ______to perform the duties herein set forth. No
act or failure to act on the Executive’s part shall be considered “willful”
unless done, or omitted to be done, not in good faith and without reasonable
belief that his action or omission was in the best interest of the Company. For
purposes of this paragraph, any act or omission to act on the part of ______in
reliance upon an opinion of counsel, outside auditor or advisor to the Company
or to ______shall not be deemed to be willful or without reasonable belief that
the act or omission to act was in the best interest of the Company.
          ______may, with cause, terminate this Agreement. For purposes of this
section, termination with cause shall mean a failure of the Company to comply
with any material provision of this Agreement, which failure has not been cured
within fifteen (15) days of receipt of a written notice by ______of such
noncompliance by the Company.
          Either party may submit for arbitration, as provided in Section 22 of
this Agreement, among other matters, any controversy that may arise with regard
to the cause for termination that is set forth in the written notice of
termination provided by the Board of Directors or the Executive, as the case may
be.

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          (c) If ______is suspended and/or prohibited from participating in the
conduct of the Company’s affairs by a notice or order served under
Section 8(e)(3),(e)(4) or (g)(1) of the Federal Deposit Insurance Act [12 USC
1818(e)(3), (e)(4) and (g)(1)], or any other similar provision of state or
federal law now in place or enacted in the future, the Company’s obligations
under this Agreement shall be suspended as of the date of service, unless such
prohibition and/or suspension is stayed by appropriate proceedings. If after a
hearing is held and upon judicial review, the notice or order suspending and/or
prohibiting ______from participating in the affairs of the Company is confirmed,
then this Agreement shall be terminated with cause. If the charges in the notice
or order are dismissed, the Company shall: (i) pay ______all the compensation
withheld while the contractual obligations were suspended and (ii) reinstate, in
whole or in part, any of the obligations which were suspended.
          (d) In the event that ______is terminated or he terminates this
Agreement, in a manner which violates the provisions of this Section 11, as
determined by the arbitration procedure provided in Section 22, ______or the
Company, as the case may be, shall be entitled to reimbursement for all
reasonable costs, including attorney’s fees, incurred by ______or the Company,
as the case may be, in challenging such termination.
     11. Change in Control:
          (a) If during the term of this Agreement there is “change in control”
of the Company, as such term is defined in Sub-section (b) hereunder,
______shall be entitled to receive from the Company a severance payment in
consideration of having bound himself to employment by the Company and having
foregone other business or professional opportunities, actual or potential. The
severance payment shall be a lump sum cash payment equal to ______times the base
annual compensation, plus ______times the highest cash Performance Bonus paid to
______in any of the three (3) fiscal years prior to the date of the change in
control, and (ii) the value of any other benefits provided to ______during the
year in which the change in control occurs which are listed and attached hereto
as Exhibit A, as it may be amended from time to time. Payment of the amounts set
forth in this section 12(a) shall be made on or before the fifth day following
the date on which the change of control occurs. If the change of control occurs
during the course of the first year and the Performance Bonus has not been paid,

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the payment hereunder shall be ______times the base annual compensation plus
______times $______.
          (b) The term “change in control” shall be deemed to have taken place
if: (i) a third person, including a “group” as defined in Section 13(d)(3) of
the Securities Exchange Act of 1934, becomes the beneficial owner of shares of
the Company having 25% or more of the total number of votes which may be cast
for the election of directors of the Company or which, by cumulative voting, if
permitted by the Company’s charter or bylaws, would enable such third person to
elect 50% or more of the directors of the Company; or (ii) as the result of, or
in connection with, any cash tender or exchange offer, merger or any other
business combination, sales of assets or contested election, or any combination
of the foregoing transactions, the person who were directors of the Company
before such transaction shall cease to constitute a majority of the Board of the
Company or any successor institution.
          (c) Any payment made to ______pursuant to this Agreement are subject
to and conditioned upon their compliance with 12 USC 1828(k) and any regulations
promulgated thereunder. The Company through the Bank shall in good faith seek to
obtain, if necessary or required, any consents or approvals from the FDIC or any
other applicable regulatory agency and any successors thereto with respect to
any payments to be made or any benefits to be provided to ______pursuant to the
terms of this Agreement.
     12. Confidentiality; Injunctive Relief: Recognizing that the knowledge and
information about, or relationships with, the business associates, customers,
clients, and agents of the Company and its affiliated companies and the business
methods, systems, plans, and policies of the Company and of its affiliated
companies which ______will receive, obtain, or establish as an employee of the
Company or otherwise are valuable and unique assets of the Company, ______
agrees that, during the continuance of this Agreement and thereafter, he shall
not (otherwise than pursuant to his duties hereunder) disclose without the
written consent of the Company, any material or substantial, confidential, or
proprietary know-how, data, or information pertaining to the Company, or its
business, personnel, or plans, to any person, firm, corporation, or other
entity, for any reason or purpose whatsoever. ______acknowledges and agrees that
all memoranda, notes, records, and other documents made or complied by ______or
made

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available to ______concerning the Company’s business shall be the Company’s
exclusive property and shall be delivered by ______to the Company upon
expiration or termination of this Agreement or at any other time upon the
request of the Company.
          The provision of this Section 13 shall survive the expiration or
termination of this Agreement or any part thereof, without regard to the reason
therefore.
          ______hereby acknowledges that the services to be rendered by him are
of special, unique, and extraordinary character and, in connection with such
services he will have access to confidential information concerning the
Company’s business. By reason of this, ______consents and agrees that if he
violates any of the provisions of this Agreement with respect to
confidentiality, the Company would sustain irreparable harm and, therefore, in
addition to any other remedies which the Company may have under this Agreement
or otherwise, the Company will be entitled to an injunction to be issued by any
court of competent jurisdiction restraining ______ from committing or continuing
any such violation of this Agreement. The term “Confidential Information” means:
(i) proprietary information of the Company; (2) information marked or designated
by the Company as confidential; (3) information, whether or not in written form
and whether or not designated as confidential, which is known to ______as
treated by the Company as confidential; and (4) information provided to the
Company by third parties which the Company is obligated to keep confidential,
specifically including customer lists and information. Confidential information
does not include any information now or hereafter voluntarily disseminated by
the Company to the public, or which otherwise becomes part of the public domain
through lawful means.
     13. No Assignments. This Agreement is personal to each of the parties
hereto. 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. However, in the event of the death of ______all his rights to receive
payments hereunder shall become rights of his estate.
     14. Benefits. Any benefits due or provided hereunder to ______shall be in
addition to, and not in substitution of, any benefit to which ______is otherwise
entitled to without regard to the Agreement.

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     15. Mitigation. ______shall not be obligated to seek other employment in
mitigation of the amounts payable or arrangements made under any provision of
this Agreement, and the obtaining of any such other employment shall in no event
effect any reduction of the Company’s obligation to make the payments and
arrangements required to be made under this Agreement.
     16. Notices. All notices required by this Agreement to be given by one
party to the other shall be in writing and shall be deemed to have been
delivered either:
          (a) When personally delivered to the Office of the Secretary of the
Company at his regular corporate office, or ______in person; or
          (b) Five days after depositing such notice in the United States mails,
certified mail with return receipt requested and postage prepaid at:

  i.  
the Company:
C/O Office of the Secretary of the Company
First BanCorp Puerto Rico
PO Box 9146
Santurce, PR 00908-0146
    ii.  
______

or to such other address as either party may designate to the other by notice in
writing in accordance with the terms hereof.
     17. Amendments or Additions; Action by Board of Directors. 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 the Company shall be required in order for the Company 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 including any termination of the employment of ______with or without
cause under Section 11 hereof.
     18. Sections Headings. The Section headings used in this agreement are
included solely for convenience and shall not affect, or be used in connection
with, the interpretation of this Agreement.

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     19. Severability. 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 hereto.
     20. Governing Law. This Agreement shall be governed by the laws of the
Commonwealth of Puerto Rico. Venue for the litigation of any and all matters
arising under or in connection with this Agreement shall be in the Court of
First Instance, San Juan Superior Part for the Commonwealth of Puerto Rico, in
the case of state court jurisdiction, or in the U.S. District Court for the
District of Puerto Rico, in the case of federal court jurisdiction.
     21. Arbitration. Any controversy as to the interpretation of this Agreement
must be submitted before three arbitrators to be appointed by the American
Arbitration Association (“AAA”). The rules and regulations of the AAA shall
govern the procedures of said arbitration. The award of a majority of
arbitrators shall be binding and final on the parties.
     22. The Company agrees to reimburse ______for all reasonable legal fees
incurred by him in connection with the negotiation, drafting and execution of
this Agreement.
FIRST BANCORP PUERTO RICO
By:

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