EX-10.1






September 26, 2013



Mr. David I. Matson 55 Oso Trail


Glen Ellen, CA 95442


Dear Mr. Matson:



The Board of Directors (the “Board”) of First BanCorp (the “Corporation”) is pleased to offer
you the position as a Director of the Board of the Corporation, which offer is contingent on the
absence of any objection or reservation by any applicable regulatory authority. Your service as a
Director shall be effective as of September 26, 2013 (the “Effective Date”), the date of the
execution of this offer letter (the “Offer Letter”).



The following are the detailed terms of this Offer Letter:




	1.	 	Position/Services.






	 	a.	 	You will be expected to devote a reasonable amount of your business time to
your services to the Corporation pursuant to this Offer Letter commensurate with your
role as a member of the Board and as a member or Chair of a Board committee and you
agree that you will not, without the prior written consent of the Corporation, directly
or indirectly, provide any material services to any other banking entity which competes
in any material respect with the Corporation and its subsidiaries until the earlier of
(i) the termination of your services to the Corporation pursuant to this Offer Letter,
and (ii) your resignation as Director (such date, the “Termination Date”), provided
however that any services provided by you to any other banking entity which you have
disclosed to the Corporation prior to the presentation of this Offer Letter and which
continues to be provided as of its execution is not prohibited pursuant to this section
and shall not require the prior written consent of the Corporation. You may resign as
a member of the Board at any time upon written notice to its Chairman.






	 	b.	 	You shall lead the Corporation’s efforts to design and create a Risk Management
Committee of the Board within the Corporation’s enterprise risk management framework
which shall include key components that address the objectives, strategy, organization,
risk processes, monitoring, reporting of risk management, and, the eventual formation
of the committee. The Corporation shall make available to you to assist you in such
efforts the services of the senior risk management personnel of the Corporation and its
subsidiaries and other senior management officials as appropriate. It is expected that
the Board will appoint you as the initial Chair of such committee upon its creation.






	 	c.	 	You shall render services as a member of the Board, as well as a member of the
Risk Management Committee of the Board and any other committee which you may be
appointed to by the Board during your services as a member of the Board, which may
include the appointment as a committee chair. You shall attend and participate to the
maximum extent practicable in such number of meetings of the Board and of the
committee(s) of which you are a member as regularly or specially called.






	2.	 	Term. Your term as Director shall continue until your successor is duly elected and
qualified or until any resignation by you shall be effective. The position shall be up for
re-election each year at the annual shareholders’ meeting and upon re-election, the terms and
provisions of this Offer Letter (as modified from time to time) shall remain in full force and
effect.






	3.	 	Fees and Compensation.






	 	a.	 	Annual Director’s Fees. Commencing on the Effective Date, you will be paid
fees for your services as a Director in a total amount equal to $100,000 per year (such
amount, the “Annual Fee”). The Annual Fee shall be payable seventy five percent (75%)
in cash (the “Annual Retainer”) and twenty five percent (25%) in the form of an annual
grant of restricted stock (the “Restricted Stock”), under the Corporation’s 2008
Omnibus Incentive Plan, as amended on December 9, 2011. The cash Annual Retainer shall
be paid in equal installments on a monthly basis over a twelve-month period. The
Restricted Stock shall be awarded at the beginning of each twelve-month period during
which you are a Director and shall be subject to a twelve-month vesting period. In
addition, you may receive additional compensation in the form of retainers depending
upon the Board committees which you may be appointed to by the Board during your
services as a member of the Board as follows, subject to the right of the Board to
change such fee structure at its discretion based on changed circumstances:






You shall be entitled to the aforementioned cash retainer of $25,000 corresponding
to your role as chair of the Risk Management Committee, which will be paid in equal
installments on a monthly basis over a twelve-month period commencing at the time of
your election as a director to develop the structure, responsibilities and charter
for such committee.




	 	b.	 	Taxes. You are responsible for paying all Federal, state, and local income or
business taxes, including estimated taxes, self-employment and any other taxes, fees,
additions to tax, interest, or penalties, which may be assessed, imposed, or incurred
as a result of any amounts paid to you pursuant to this Offer Letter. The Corporation
may withhold or cause to be withheld from any Annual Fee any Federal, Puerto Rico,
state or local taxes required by law to be withheld with respect to such Annual Fee.
By acceptance of this Agreement, Director agrees to such deductions.






	4.	 	Reimbursement of Board Meeting/Committee Expenses: D&O Insurance and Indemnification.






	 	a.	 	You shall be entitled to receive reimbursement for all reasonable and
substantiated (i) expenses incurred by you in connection with your attending each Board
meeting and any director education meetings, including reasonable and substantiated
business class or equivalent travel expenses and meals and lodging, and (ii) legal
expenses incurred by you in connection with the negotiation of this Offer Letter. All
expenses incurred under this Section 4 will be reimbursed in accordance with the
applicable policies and procedures of the Corporation; provided, however, that any
amounts reimbursed in one taxable year will not affect the amounts eligible for
reimbursement by the Corporation in a different taxable year, and all reimbursement
requests must be submitted by you no later than December 31 of the calendar year
following the calendar year in which the expense was incurred.






	 	b.	 	The Corporation shall, at its expense, purchase and maintain director’s and
officer’s (“D&O”) insurance in an amount comparable to the amount of D&O insurance
provided by chartered banks with similar total assets and of a similar size and
complexity to the Corporation (but in no event less than $10 million), to protect
itself and you, as a Director serving at the request of the Corporation, against any
expense, liability, or loss, whether or not the Corporation would have the power to
indemnify you against such expense, liability, or loss under applicable law. Such
insurance shall be written by an insurer or insurers admitted to issue such insurance
in Puerto Rico and holding a financial strength rating (“FSR”) of not less than B+ as
such FSR is assigned by Best’s and shall be on terms and conditions as shall be
customary in the current market from time to time. Such coverage shall include a “Side
A” coverage available to directors in an amount comparable to that obtained by other
comparable institutions (but in no event less than $10 million). The Corporation shall
purchase such coverage on a basis that will provide protection to you not only during
the time of your service as a director of the Board but also for six years after such
service shall terminate for any reason. The Corporation will provide copies of its
D&O insurance policies to you upon request and will promptly advise you of any changes
that may occur in its existing coverages.






	 	c.	 	As a Director serving at the request of the Corporation, you shall be
indemnified by the Corporation to the fullest extent permitted by applicable law
against judgments, penalties (including excise and similar taxes and punitive damages),
fines, settlements, and reasonable expenses (including reasonable attorneys’ and expert
witness fees) actually incurred by you in connection with any actual or threatened
proceeding (a “Proceeding”) relating to or arising from your service as a member of the
Board or any committee thereof with any such expenses being advanced to you within 30
days of your written request therefore; provided that in any matter covered by
paragraph (2) of Article Ninth of the Articles of Incorporation of the Corporation your
conduct is not finally adjudged in a non-appealable decision by a court of competent
jurisdiction to have constituted fraud, bad faith, gross negligence or willful and
knowing violation of any law applicable to the Corporation or your service as a
director or member of a committee of the Board, in which case there shall be no
indemnification and you shall return any advances to the Corporation (a
“Non-Indemnifiable Claim”); provided, further, however, that you shall be entitled to
indemnification in any circumstance in which you acted or failed to act in reliance
upon advice of counsel to the Corporation or the Board or any committee thereof or the
court in which such action was brought shall determines upon application, that despite
the adjudication of liability but in view of all the circumstances of the case, you are
fairly and reasonably entitled to indemnity for such expenses which the court shall
deem proper. Your entitlement to indemnification under this Section 4.c. shall not be
limited to your entitlement to protection under any applicable insurance coverage and
to any other indemnification or payment you may be entitled to under the circumstances
under the Corporation’s articles of incorporation or by-laws or under any other
agreement. Notwithstanding the foregoing, the Corporation shall not be obligated to
provide any indemnification or advancement of expenses when (i) a Proceeding is between
the Corporation and you (provided that you shall be entitled to such indemnification in
respect of any action brought by or in the right of the Corporation by any shareholder
thereof, i.e., a derivative action, and in respect of any action brought by you to
establish your right to indemnification hereunder or otherwise; providing any such
actions do not constitute a Non-Indemnifiable Claim); or (ii) prohibited by applicable
law or regulation, including 12 C.F.R. part 359.






	 	d.	 	Each and every provision of this Section 4 is separate and distinct so that if
any provision hereof shall be held to be invalid or unenforceable for any reason, such
invalidity or unenforceability shall not affect the validity or enforceability of any
other provision hereof. To the extent required, any provision of this Section 4 may be
modified by a court of competent jurisdiction to preserve its validity and to provide
you with the broadest possible indemnification permitted under Puerto Rican law.






	 	e.	 	If any provision of this Section 4 is invalidated on any ground by any court of
competent jurisdiction, the Corporation shall nevertheless indemnify you as to any
expenses, judgments, fines, penalties or excise taxes incurred with respect to any
Proceeding to the full extent permitted by any provision hereof that has not been
invalidated or by any other applicable provision of Puerto Rico law.






	5.	 	General Provisions.






	 	a.	 	This Offer Letter supersedes any other agreements or promises made to you by
anyone at the Corporation, whether oral or written, and, subject to approval by the
Board, comprises the final, complete, and exclusive agreement between you and the
Corporation.






	 	b.	 	This Offer Letter shall be governed by the laws of the Commonwealth of Puerto
Rico, without regard to its principles of conflicts or choices of laws.






	 	c.	 	This Offer Letter may be modified only by a written instrument duly executed by
you and an authorized representative of the Corporation.






	 	d.	 	This Offer Letter may be executed by the parties in separate counterparts, each
of which, when so executed and delivered, shall be an original, but all of which, when
taken as a whole, shall constitute one and the same instrument.






	 	e.	 	Any notices that are required to be given pursuant to this Offer Letter must be
in writing and may be given by personal delivery, registered or certified mail (postage
prepaid, return receipt requested), facsimile, courier, or overnight mail delivery to
the following addresses:





	 	 	 
	To the Company:
	 	First BanCorp

PO Box 9146

San Juan, PR 00907-0146

	To You:
	 	Mr. David I. Matson

ADDRESS OMITTED








	 	f.	 	The Corporation and you hereby consent to the jurisdiction of the Courts of the
State of New York, sitting in New York, New York, or any federal court sitting in the
Southern District of New York, for the purpose of hearing any Proceeding between you
and the Corporation arising hereunder or in respect to your service as a member of the
Board or any committee thereof.






	 	g.	 	This Offer Letter shall be binding upon, and shall inure to the benefit of you
and your heirs, executors and administrators, whether or not you have ceased to be a
director, and the Corporation and its successors and assigns.





(SIGNATURE PAGE FOLLOWS)





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Please sign and date this Offer Letter below and return it to the Corporation as soon as
possible but in no event later than September 26, 2013, to indicate your agreement to the terms and
conditions described herein.



We look forward to your favorable reply and to a productive and enjoyable work relationship.



Sincerely,



First BanCorp



By: /s/ Roberto Herencia


Roberto Herencia


Chairman of the Board



Agreed and Accepted:



By: /s/ David I. Matson


David I. Matson




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