Exhibit 10.2

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May 18, 2006

CONFIDENTIAL

Mr. Norberto Medina

General Counsel

R-G PREMIER BANK OF PUERTO RICO

San Juan, Puerto Rico

Re: Change of Control Bonus Agreement

Dear Mr. Medina:

This Special Compensation Agreement (the “Letter Agreement”) sets forth the
terms and conditions pursuant to which R-G Premier Bank of Puerto Rico (the
“Bank”), in the event that a “Change of Control” (as defined below) should occur
with respect to R&G Financial Corporation (“Financial”) on or prior to June 30,
2007 (the “Expiration Date”), will pay you the amount (the “Change of Control
Bonus”) of $400,000.00.

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

For purposes of this Letter Agreement, the following words and terms shall have
the meanings set forth below:

“Change of Control” means the consummation of:

(i) the sale of all or substantially all of the assets of the Bank to an
unrelated person or entity;

(ii) a merger, reorganization or consolidation involving Financial, as a result
of which the holders of Financial’s outstanding voting power immediately prior
to such transaction do not own a majority of the outstanding voting power of the
surviving or resulting entity immediately upon completion of such transaction;
or

(iii) any other transaction involving Financial, as a result of which the owners
of Financial’s outstanding voting power immediately prior to such transaction do
not own a majority of the outstanding voting power of the relevant entity after
the transaction, in each case, regardless of the form thereof.

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Main Office: R-G Plaza, 280 Jesus T. Piñero Ave. • Tel. (787) 766-6666 / Fax
(787) 764-6667

P.O. Box 2510, Guaynabo, Puerto Rico 00970-2510

www.rgonline.com

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Mr. Norberto Medina

March 20, 2006

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“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 Letter 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 Letter Agreement, you
indicate your intent and agreement to continue to be employed by the Bank
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 Bank may in good
faith assign to you, which shall not be inconsistent with your position with the
Bank.

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 Bank
(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 Bank as in effect from time to
time and as may be modified.

3. This Letter Agreement shall not confer, and shall not be construed as
conferring, any legal or other right for the continuation of your employment
with the Bank for any period. The Bank 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.

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

(a) If your employment is terminated prior to the Effective CC Date for any
reason, you will not be entitled to the Change of Control Bonus.

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Mr. Norberto Medina

March 20, 2006

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(b) Any termination of your employment by the Bank shall be effective on the
date that the Bank provides you with written notice of said termination. Any
termination of your employment for any other reason shall be effective on the
date of such termination.

5. Regulatory Restrictions.

(a) Temporary Suspension or Prohibition. If you are suspended and/or temporarily
prohibited from participating in the conduct of the Bank's affairs by a notice
served under Section 8(e)(3) or (g)(1) of the Federal Deposit Insurance Act, as
amended (the “FDIA”), 12 U.S.C. Section 1818(e)(3) and (g)(1), or pursuant to
Section 28(e) of the Puerto Rico Banking Act, as amended (the “Banking Act”), 7
L.P.R.A. Sec. 151(e), the Bank’s obligations under this Agreement shall be
suspended as of the date of service, unless stayed by appropriate proceedings.
If the charges in the notice are dismissed, the Bank may in its discretion
(i) pay you all or part of the compensation withheld while its obligations under
this Letter Agreement were suspended and (ii) reinstate in whole or in part any
of its obligations which were suspended.

(b) Permanent Suspension or Prohibition. If you are removed and/or permanently
prohibited from participating in the conduct of the Bank’s affairs by an order
issued under Section 8(e)(4) or (g)(1) of the FDIA, 12 U.S.C. Section 1818(e)(4)
and (g)(1), or pursuant to Section 28(e) of the Banking Act, all obligations of
the Bank under this Agreement shall terminate as of the effective date of the
order.

6. This Letter Agreement sets forth the entire agreement of the parties with
respect to the Change of Control Bonus and/or the reduction or cancellation
thereof, and supersedes any and all agreements, oral or written, with respect
thereto.

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

8. From and after the date of execution of this Letter Agreement, you will not
disclose this Letter Agreement, or any of its contents, to any person, entity,
or corporation, other than your spouse, attorney, tax advisor, or financial
advisor. You may discuss this Letter Agreement with the Director of the Bank’s
Human Resources Department.

9. 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 Bank pursuant to federal or Commonwealth laws.

10. 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 Letter
Agreement, and any attempted assignment, pledge or other transfer by you (other
than by will or the laws of

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Mr. Norberto Medina

March 20, 2006

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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.

11. No provision of this Letter 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 Bank,
on behalf of the Bank.

12. Arbitration.

(a) By signing this Letter Agreement, you agree that all claims or disputes
covered by this Letter 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 Bank.

(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 Bank 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 Bank 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
Letter Agreement.

(f) If, notwithstanding the foregoing provisions of this Section, any claim,
arising under this Letter Agreement is found6 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.

13. Notwithstanding anything to the contrary, the Expiration Date shall be
extended until the Effective CC Date if the shareholders of Financial 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.

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Mr. Norberto Medina

March 20, 2006

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

 

Very truly yours,

 

R-G PREMIER BANK OF PUERTO RICO

By:

 

/s/ Hector Secola

Name:

 

Hector Secola

Position:

 

Human Resources SUP

STATEMENT OF AGREEMENT AND ACCEPTANCE BY EXECUTIVE:

I hereby accept and agree to be bound by the terms of the foregoing Letter
Agreement, and I further declare and represent that I have carefully read and
fully understand the terms of this Letter 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.

 

/s/ Norberto Medina

Norberto Medina

Date: May 18, 2006