EX-10.2 EMPLOYMENT AGREEMENT DATED 12-29-06



 





Exhibit 10.2*




December 29, 2006




Mr. Carlos García

Santander BanCorp

Puerto Rico




Dear Mr. García:



We hereby confirm the terms and conditions with regards to your employment agreement as Senior
Executive Vice President and Chief Operating Officer of Santander BanCorp and Banco Santander
Puerto Rico (hereafter “the Group”):





	 	1.	 	The employment agreement dated March 23, 2005 between the Group and you will expire on
January 1, 2007. As agreed upon, the Group and you have decided to enter in a new
employment agreement which shall be effective from January 1, 2007.
	 
	 	2.	 	In your position, you shall be responsible for and will supervise all of the business
areas of the Group.
	 
	 	3.	 	The conditions set forth herein shall be in full force and effect for two years
commencing on January 1, 2007 and ending, therefore, on January 1, 2009.
	 
	 	4.	 	During the period whereby these conditions are in full force and effect, the Group may
terminate your employment if there is just cause, without any compensation whatsoever. The
Group may also terminate your employment without just cause. In this latter case, you shall
receive as indemnity the greater of the following amounts:






	 	a.	 	The pending gross amount due from the time of termination of employment
until the date of expiration of this Agreement (January 1, 2009) in accordance to
the annual salary set forth in Section 5; or
	 
	 	b.	 	$1,000,000 gross






	 	 	If by the term of expiration of this Agreement the parties have not renewed the same,
the Group shall pay, unless you have been offered an extension to this Agreement under
the same terms and conditions hereby established and the extension was rejected by you,
the gross amount of $1,000,000 as the final compensation for your separation from the
Group, as so thereby liberating you from any additional







 








			
	 
	
    *
    		
    This is an English translation of
the original Employment Agreement entered into between Santander
BanCorp, Banco Santander Puerto Rico and Carlos García:. Pursuant
to Rule 306 of Regulation S-T, a signed original of the original
Employment Agreement has been retained by the Company and furnished
to the Securities and Exchange Commission upon request.









 









 





Carlos García
Page 2






	 	 	 	responsibility under this Agreement, with exception to the temporary non-competition
clause under Section 7.
	 
	 	 	 	In the case of a change in control of the Group in Puerto Rico, the Group shall
compensate you the gross amount of $1,000,000 if the Group does not maintain you in your
present position and classification, or if there is a separation from your position, or
if any of the terms set forth herein that give you such right shall occur. Consequently
this indemnity shall not be cumulative. As to the effects of this Agreement, “change in
control” shall be defined as any circumstance that will cause Banco Santander Central
Hispano, S.A. to decrease its beneficial ownership to less than 50% of the common stock
in circulation.






	 	5.	 	Your gross annual salary for the year 2007 shall be $525,000.00. For the year 2008 this
annual gross salary shall be $550,000.00. This salary shall be distributed in the payment
installments that the Group has established.
	 
	 	 	 	You will remain under the bonus policy of the Group. In that regard, this policy shall be
determined with each bonus period that will take place under the following terms:






	 	a.	 	Three quarters (3/4) of its amount shall be determined by reaching the
annual budget of the Group and the conditions established by the Group’s
Compensation Committee.
	 
	 	b.	 	The remaining one-quarter will be based on the Santander BanCorp stock
in regard to other competitors of reference in accordance to the agreed schedule,
of which the Santander BanCorp Compensation Committee shall inform you.






	 	 	 	Also, you may be eligible to participate in other compensations schemes that may be
established by the Compensation Committee.






	 	6.	 	The remainder of conditions and benefits shall be governed in accordance to the
applicable policies of officers and employees of your position at the Bank and other terms
and conditions agreed upon by you and so established in the contracts mentioned in the
first section.
	 
	 	7.	 	You acknowledge that the functions and duties that you will perform under this
agreement are of an essentially confidential nature, and as so you will privy of facts,
matters, plans and strategies, as well as confidential financial information of the Group
and its clients. Therefore, you agree to maintain in absolute confidentiality and abstain
to disclose this information during and after the term of this agreement.
	 
	 	 	 	In the supposed termination given under the circumstances contemplated in the before the
last paragraph of the fourth section, in consideration of the benefits granted thereunder
and the specific compensation recognized under such section, you shall refrain from
performing professional services in any Banking Institution nor for any of the direct




 









 





Carlos García
Page 3




	 	 	 	competitors of Santander Securities Corporation, until six months have elapsed from your
date of last employment with the Group.
	 
	 	 	 	Should any dispute arise with regards to the interpretation, validity, compliance, or early
termination of this agreement that shall not be solved by the parties, you hereby agree to
submit to compulsory arbitration in the City of San Juan, Puerto Rico, in accordance to the
American Arbitration Association rules. The party that requests the arbitration must notify
the other party, no later than ten (10) days. The Bank shall pay the arbitration costs,
including the arbiter fees. Each party shall be responsible for its own attorney’s fees as
well as the preparation and presentation of evidence.




Please execute this agreement as a sign of your approval.



I take the opportunity to wish you great success in your functions.




Sincerely,




/s/ María Calero

María Calero

Executive Vice President




/s/ Ivonna Pacheco

Ivonna Pacheco

First Senior Vice President




Signature of approval:




	 	 	 
	/s/ Carlos M. García
	 
	Carlos M. García