exv10w22






Exhibit 10.22




EMPLOYMENT AGREEMENT




     EMPLOYMENT AGREEMENT between DORAL FINANCIAL CORPORATION, a corporation organized under the
laws of the Commonwealth of Puerto Rico (together with its successors and assigns, the “Company”),
and MAURICE SPAGNOLETTI (the “Executive”) dated as of December 31, 2010.



     WHEREAS, the Board of Directors of the Company (the “Board”) has determined that it is in the
best interests of the Company to employ the Executive on the terms set forth herein;



     WHEREAS, the Executive has agreed to be employed by the Company on the terms set forth herein;



     WHEREAS, the Executive and the Company wish to set forth the terms and conditions of the
Executive’s employment in this Agreement;



     NOW THEREFORE, in consideration of the mutual promises and covenants made herein and the
mutual benefits to be derived from this Agreement, the parties hereto agree as follows:



     1. Employment Period. Subject to the terms of this Agreement, the Company hereby
agrees to employ the Executive, and the Executive hereby agrees to serve the Company and its
affiliates, for the period commencing on the Commencement Date (as defined herein) and ending on
the second anniversary of the Commencement Date; provided that the Executive’s employment by the
Company will automatically be extended by twelve (12) additional months on the second anniversary
of the Commencement Date and each annual anniversary thereafter unless either party provides
written notice to the other party no less than sixty (60) days prior to the date of any such
scheduled extension of its or his intention not to extend the term of the Executive’s employment
(the original employment term plus any extension thereof being referred to herein as the
“Employment Period”). For purposes hereof, the Commencement Date means the date the Executive
commences employment with the Company which in all events shall be no later than October 26, 2010.
Notwithstanding the foregoing, the Employment Period shall end on the date on which the Executive’s
employment is terminated by either party in accordance with the provisions of this Agreement.



     2. Position and Duties.



          (a) During the Employment Period, the Executive shall serve as Executive Vice President —
Mortgage and Banking Operations at Doral Financial Corporation. During the Employment Period, the
Executive shall report directly to the Chief Executive Officer of the Company.







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          (b) The Executive’s principal work location, subject to travel on Company business, shall be
the Company’s headquarters in Puerto Rico. Beginning no later than January 1, 2011, and at all
times thereafter during the Employment Period, the primary place of residence of the Executive and
his family shall be Puerto Rico. The Executive’s family will relocate to Puerto Rico by January 1,
2011.




          (c) During the Employment Period, and excluding any periods of vacation and sick leave to
which the Executive is entitled, the Executive agrees to devote his full business attention and
time to the business and affairs of the Company, and to use his best efforts to perform faithfully
and efficiently such responsibilities. During the Employment Period, the Executive shall be
entitled to engage in charitable and educational activities and to manage his personal and family
investments, to the extent such activities are not competitive with the business of the Company or
its affiliates and do not interfere in any way, in the reasonable judgment of the Board (or a
committee thereof), with the performance of his duties for the Company and are otherwise consistent
with the Company’s governance policies.




     3. Compensation



          (a) Annual Base Salary. During the Employment Period, the Executive shall receive an
annual base salary (“Annual Base Salary”) at a rate of at least $400,000.00, payable in accordance
with the Company’s normal payroll policies. The Executive’s Annual Base Salary shall be prorated
for 2010 and for any other partial year of employment during the Employment Period based upon the
portion of the year that the Executive is employed by the Company. The Executive’s Annual Base
Salary shall be subject to review for increase in the sole discretion of the Board (or a committee
thereof).




          (b) Annual Bonus. With respect to each fiscal year completed during the Employment
Period, the Executive shall have a target annual bonus opportunity determined by the Executive’s
performance and provided the Company’s financial results are met, equal to 75% of his Annual Base
Salary (“Target Bonus”). The Board shall establish and determine, in its sole discretion, the
performance and payment conditions applicable to such annual bonuses. Any bonus payments due
hereunder shall be payable to the Executive no later than 21/2 months after the end of the Company’s
taxable year or the calendar year, whichever is later, in which the Executive is first vested in
such bonus payments for purposes of Section 409A of the Internal Revenue Code of 1986, as amended
(the “Internal Revenue Code”).




          (d) Additional Compensation:





	 	  (i)	 	Car Allowance: After the relocation benefit ends, during the
Employment Period, the Company will provide the Executive with a monthly car
allowance under the Company’s policy of $1,500.00 per month to be used to lease
or purchase an automobile for employee’s general use (including in the affairs
and business of the




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	 	 	 	Company) and to cover related gasoline and insurance expenses related to the
use of such automobile. The amount set forth herein shall not be considered
as a payment of other amounts, entitlements or benefits in the event of
termination of this Agreement.






	 	(ii)	 	Subject to the Executive’s execution of a sign on bonus
repayment agreement in the form and substance as attached as Exhibit A to this
agreement, the Executive will receive a onetime signing bonus of $15,000.00 in
a lump sum payment upon his hiring date.
	 
	 	(iii)	 	After the relocation benefit ends, the Company shall reimburse
the Executive for cost of housing in the amount of $3,000.00 per month, from
effective date of this agreement but in no event longer than ninety (90) days.





         (e) Long-Term Incentive Plans. During the Employment Period, the Executive may be
eligible to participate in the ongoing equity, retention programs, and other long-term awards and
programs of the Company. The benefits and terms of the aforementioned long-term incentive plans to
the Executive shall be determined in the sole discretion of the Board or a committee thereof.




         (f) Other Benefits and Perquisites. During the Employment Period, the Executive shall
be entitled to participate in the Company’s employee benefit plans, programs and arrangements
(including, without limitation, life, medical and dental insurance, 401(k), and disability
insurance, vacation and sick leave programs) and perquisite programs and arrangements, if any, in
each case, on the same basis as generally provided to other similarly-situated executives of the
Company. In all events, during the Employment Period, the Executive shall be entitled to eighteen
(18) days of paid vacation per calendar year (pro-rated for any partial year of employment).





	 	(g)	 	Certain Expenses.
	 
	 	(i)	 	During the Employment Period, the Company shall reimburse the
Executive for all appropriate business expenses in accordance with the terms of
the Company’s policies and procedures in effect from time to time.
	 
	 	(ii)	 	The Company shall reimburse the Executive for the relocation
expenses in accordance to the relocation benefits policy of the Company at the
time of the commencement of the Employment Period.




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     4. Termination of Employment.



     (a) Death or Disability. The Executive’s employment shall terminate automatically upon
the Executive’s death during the Employment Period. In the event of the Executive’s Disability (as
defined in Exhibit B attached hereto), the Company may provide the Executive with written
notice in accordance with Section 11(c) of this Agreement of its intention to terminate the
Executive’s employment due to Disability. In such event, the Executive’s employment with the
Company shall terminate effective fourteen (14) days from the date the Company sends such notice to
the Executive (the “Disability Commencement Date”); provided that the Executive’s employment
hereunder shall immediately terminate on the first date the Executive incurs a Disability as
defined in clause (i) of the definition of Disability set forth on Exhibit B.



     (b) With or Without Cause. The Executive is an employee at will and the Company may
terminate the Executive’s employment either with or without Cause (as defined in Exhibit A attached
hereto) subject to the terms and conditions of this agreement. For purposes of this Agreement, a
termination “without Cause” shall mean a termination by the Company of the Executive’s employment
other than due to Cause, death or Disability.



     (c) With or Without Good Reason. The Executive’s employment may be terminated by the
Executive voluntarily with or without Good Reason (as defined in Exhibit B attached hereto).



     (d) Notice of Termination. Any termination of the Executive’s employment by the
Company or the Executive (other than death) shall be communicated by Notice of Termination to the
other party hereto given in accordance with Section 11(c) of this Agreement. For purposes of this
Agreement, a “Notice of Termination” means a written notice which (i) indicates the specific
termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for termination of the
Executive’s employment under the provision so indicated and (iii) if necessary, specifies the Date
of Termination consistent with this Agreement (which date shall be not more than thirty (30) days
after the giving of such notice). The failure by the Executive or the Company to set forth in the
Notice of Termination any fact or circumstance which contributes to a showing of Good Reason or
Cause shall not waive any right of the Executive or the Company, respectively, hereunder or
preclude the Executive or the Company, respectively, from asserting such fact or circumstance in
enforcing the Executive’s or the Company’s rights hereunder.



     (e) Date of Termination. “Date of Termination” means (i) if the Executive’s employment
is terminated by the Company for Cause, the date of receipt of the Notice of Termination or any
later date specified therein within thirty (30) days of such notice, as the case may be; provided
that if the event giving rise to a termination for Cause is pursuant to clauses (iv), (v), (vi),
(vii) or (viii) of the definition of Cause, the date on which there is delivered to the Executive
written notice of the requisite Chief Executive



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Officer notification as set forth in the definition of “Cause” in Exhibit B, (ii) if
the Executive’s employment is terminated by the Company without Cause, the date of receipt of the
Notice of Termination or any later date specified therein within thirty (30) days of such notice,
as the case may be, (iii) if the Executive’s employment is terminated by the Executive for Good
Reason, thirty (30) days after the Company receives the Notice of Termination unless the Company
has cured the alleged grounds for such termination within thirty (30) days after such receipt or if
the Executive’s employment is terminated by the Executive without Good Reason, thirty (30) days
after the Company receives the Notice of Termination, provided however, in with respect to
termination without Good Reason the Company may accelerate the Date of Termination to an earlier
date by providing the Executive notice of such action, (iv) if the Employment Agreement is not
renewed, on the anniversary of the Commencement Date immediately following the notice of
non-renewal provided such notice is timely given, and (v) if the Executive’s employment is
terminated by reason of death or Disability, the date of the Executive’s death or the Disability
Commencement Date, as the case may be.




     (f) Resignation. Upon termination of the Executive’s employment for any reason, the
Executive agrees to resign, effective as of the Date of Termination, from any positions that the
Executive holds with the Company and its affiliates, the Board (and any committees thereof) and the
board of directors (and any committees thereof) of any of the Company’s affiliates. The Executive
hereby agrees to execute any and all documentation of such resignations upon request by the
Company, but he shall be treated for all purposes as having resigned from such positions upon
termination of his employment, regardless of when or whether he executes any such documentation, or
Executive is terminated due to his death or Disability.



     5. Obligations of the Company upon Termination of Employment.



     (a) Good Reason; Without Cause. If, during the Employment Period, the Company
terminates the Executive’s employment without Cause, or the Executive terminates his employment for
Good Reason within sixty (60) days of the occurrence of any of the events that may constitute “Good
Reason” as set forth in Exhibit A, the Company shall have no further obligations to the Executive
under this Agreement or otherwise other than to pay or provide to the Executive the following
amounts and benefits (provided the Executive has executed, delivered to the Company and not revoked
a general release of claims against the Company in the draft form and substance as attached as
Exhibit C, hereto (the “Release”) and subject to Section 8(h) hereof):




	 	(i)	 	An amount equal to Executive’s unpaid Annual Base Salary for
services through the Date of Termination;
	 
	 	(ii)	 	an amount equal to three (3) months of salary;
	 
	 	(iii)	 	unreimbursed business expenses;




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	 	(iv)	 	an amount for payment of unused, accrued vacation;
	 
	 	(v)	 	participation in all Company medical and dental plans in which
the Executive and his eligible dependents were participating immediately prior
to the Date of Termination until the earlier of (i) the first anniversary of
the Date of Termination and (ii) the date such Executive is or becomes eligible
for comparable coverage under health plans of another employer;
	 
	 	(vi)	 	as long as the Executive uses such services prior to the first
anniversary of the Date of Termination, up to $25,000 in outplacement services;
	 
	 	(vii)	 	payment of other amounts, entitlements or benefits, if any, in
accordance with applicable plans, programs, arrangements or other agreements of
the Company; and
	 
	 	(viii)	 	payment of Executive’s reasonable relocation costs (including for movement of
household goods and reasonable transportation expenses) to relocate Executive
and his family from Puerto Rico to New Jersey, USA. The payment of relocation
costs are subject to preapproval by the Company and may not exceed the costs
incurred by the Company to relocate the Executive and his family from New
Jersey to Puerto Rico.





     (b) Death or Disability. If the Executive’s employment is terminated by reason of the
Executive’s death or Disability during the Employment Period, the Company shall have no further
obligations to the Executive or his legal representatives, as applicable, under this Agreement or
otherwise other than for the payment of the amounts and provision of the benefits set forth below:




	 	(i)	 	payment of Annual Base Salary through the end of the month in
which the Executive’s Date of Termination occurs;
	 
	 	(ii)	 	unreimbursed business expenses;
	 
	 	(iii)	 	an amount for payment of unused, accrued vacation; and
	 
	 	(iv)	 	payment of other amounts, entitlements or benefits, if any, in
accordance with applicable plans, programs, arrangements or other agreements of
the Company.





     (c) Cause or Voluntary Resignation Without Good Reason. If the Executive’s employment
shall be terminated by the Company for Cause or by the Executive for any reason other than Good
Reason at any time during the Employment Period, the



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Company shall have no further obligations to the Executive under this Agreement or otherwise
other than for the payment of the amounts and provision of the benefits set forth below:





	 	(i)	 	an amount equal to the Executive’s unpaid Annual Base Salary
for services through the Date of Termination;
	 
	 	(ii)	 	unreimbursed business expenses;
	 
	 	(iii)	 	an amount for payment of unused, accrued vacation; and
	 
	 	(iv)	 	payment of other amounts, entitlements or benefits, if any, in
accordance with applicable plans, programs, arrangements or other agreements of
the Company.





     (d) Company or Executive’s failure to renew or extend this Agreement. If the
Executive’s employment is terminated by reason of the Company’s or the Executive’s failure to renew
or extend this Agreement, the Company shall have no further obligations to the Executive under this
Agreement or otherwise other than for the payment of the amounts and provision of the benefits set
forth below:




	 	(i)	 	payment of Annual Base Salary through the end of the month in
which the Executive’s Date of Termination occurs;
	 
	 	(ii)	 	unreimbursed business expenses;
	 
	 	(iii)	 	an amount for payment of unused, accrued vacation;
	 
	 	(iv)	 	payment of other amounts, entitlements or benefits, if any, in
accordance with applicable plans, programs, arrangements or other agreements of
the Company; and
	 
	 	(v)	 	payment of Executive’s reasonable relocation costs (including
for movement of household goods and reasonable transportation expenses) to
relocate Executive and his family from Puerto Rico to New Jersey, USA. The
payment of relocation costs are subject to preapproval by the Company and may
not exceed the costs incurred by the Company to relocate the Executive and his
family from New Jersey to Puerto Rico.





     6. Change in Control Protections,



     (a) In the event, during the Employment Period, the Company terminates the Executive’s
employment without Cause or the Executive terminates his employment for Good Reason, in both cases
upon or within two (2) years immediately following a Change in Control, the Company shall have no
further obligations to the Executive



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under the terms of this Agreement or otherwise other than to pay or provide to the Executive
the following amounts and benefits (provided the Executive has executed, delivered to the Company
and not revoked a general release of claims against the Company in a form satisfactory to the
Company (the “Release) and subject to Section 8(h) hereof):





	 	(i)	 	payment of Annual Base Salary through the end of the month in
which the Executive’s Date of Termination occurs;
	 
	 	(ii)	 	payment of an amount equal to two (2) times Executive’s
compensation (salary and bonus) received during the preceding year (“the
Severance Payment”), and if such termination occurs in the first year of
employment, the Severance Payment shall be $400,000.00;
	 
	 	(iii)	 	payment of unreimbursed business expenses;
	 
	 	(iv)	 	an amount for payment of unused, accrued vacation;
	 
	 	(v)	 	continued participation until the second anniversary of the
Date of Termination in all Company medical and dental plans in which the
Executive and his eligible dependents were participating immediately prior to
the Date of Termination (subject to offset as set forth in Section 7 hereof);
	 
	 	(vi)	 	as long as the Executive uses such services prior to the first
anniversary of the Date of Termination, up to $25,000 in outplacement services;
	 
	 	(vii)	 	payments of other amounts, entitlements or benefits, if any,
in accordance with applicable plans, programs, arrangements or other agreements
of the Company.
	 
	 	(viii)	 	payment of Executive `s reasonable relocation costs (including for movement
of household goods and reasonable transportation expenses) to relocate
Executive and his family from Puerto Rico to New Jersey, USA. The payment of
relocation costs are subject to preapproval by the Company and may not exceed
the costs incurred by the Company to relocate the Executive and his family from
New Jersey to Puerto Rico.





     7. No Duplication; No Mitigation. In no event shall the Executive be entitled to
duplicate payments or benefits under different provisions of this Agreement or pursuant to the
terms of any other plan, program or arrangement of the Company or its affiliates. In the event of
any termination of the Executive’s employment, the Executive shall be under no obligation to seek
other employment, and, there shall be no offset



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against amounts due the Executive under this Agreement on account of any remuneration
attributable to any subsequent employment except with respect to the continuation of benefits as
provided under Section 6(a)(iii), which require termination immediately upon obtaining comparable
coverage from another employer.




     8. Restrictive Covenants.



     (a) Confidentiality. During the Employment Period and thereafter, other than in the
ordinary course of performing his duties for the Company, the Executive agrees that he shall not
disclose to anyone or make use of any trade secret or proprietary or confidential information of
the Company or any affiliate of the Company, including such trade secret or proprietary or
confidential information of any customer or other entity to which the Company owes an obligation
not to disclose such information, which he acquires during the course of his employment, including,
but not limited to, records kept in the ordinary course of business, except when required to do so
by a court of law, by any governmental agency having supervisory authority over the business of the
Company or by any administrative or legislative body (including a committee thereof) with apparent
or actual jurisdiction to order him to divulge, disclose or make accessible such information. In
the event the Executive is requested to disclose information as contemplated in the preceding
sentence, the Executive agrees, unless otherwise prohibited by law, to use his best efforts to give
the Company’s General Counsel prompt written notice of any request for disclosure in advance of the
Executive making such disclosure in order to permit the Company a reasonable opportunity to
challenge such disclosure. The foregoing shall not apply to information that (i) was known to the
public prior to its disclosure by the Executive, or (ii) becomes known to the public through no
wrongful disclosure by or act of the Executive or any representative of the Executive.



     (b) Property Rights. Whether during the Employment Period or thereafter, the Executive
agrees to hereby sell, assign and transfer to the Company all of his right, title and interest in
and to all inventions, discoveries, improvements and copyrightable subject matter (the “Rights”)
which during the period of his employment are made or conceived by him, alone or with others, and
which are within or arise out of any general field of the Company’s business or arise out of any
work he performs, or information he receives regarding the business of the Company, while employed
by the Company. The Executive shall fully disclose to the Company as promptly as available all
information known or possessed by him concerning any Rights, and upon request by the Company and
without any further remuneration in any form to him by the Company, but at the expense of the
Company, execute all applications for patents and for copyright registration, assignments thereof
and other instruments and do all things which the Company may deem necessary to vest and maintain
in it the entire right, title and interest in and to all such Rights. The Executive agrees that at
the time of the termination of employment, whether at the instance of the Executive or the Company,
and regardless of the reasons therefore, he will promptly deliver to the Company’s General Counsel,
and not keep or deliver to anyone else, any and all of the following which is in his possession or
control: (i) Company property (including, without limitation, credit cards, computers,
communication devices, home office equipment and other



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Company tangible property) and (ii) notes, files, memoranda, papers and, in general, any and
all physical matter and computer files containing confidential or proprietary information of the
Company or any of its affiliates, including any and all documents relating to the conduct of the
business of the Company or any of its affiliates and any and all documents containing confidential
or proprietary information of the customers of the Company or any of its affiliates, except for (x)
any documents for which the Company’s General Counsel has given written consent to removal at the
time of termination of the Executive’s employment and (y) any information necessary for the
Executive to retain for his tax purposes.




     (c) Non-Competition. The Executive acknowledges that in his capacity in management the
Executive has had or will have a great deal of exposure and access of the Company’s trade secrets
and confidential and proprietary information. Therefore, unless otherwise agreed upon in writing by
the Company, during the Executive’s employment and for twelve (12) months following termination of
such employment (whether during the Employment Period or thereafter) (the “Restricted Period”) (i)
the Executive shall not use or disclose the Company’s trade secrets and other confidential and
proprietary information except in the ordinary course of performing his duties or as agreed by the
Company, and (ii) the Executive agrees that he shall not, other than in the ordinary course of
performing his duties hereunder or as agreed by the Company in writing, engage in a “Competitive
Business”, directly or indirectly, as an individual, partner, shareholder, director, officer,
principal, agent, employee, trustee, consultant, or in any relationship or capacity. The Executive
shall not be deemed to be in violation of this Section 8(c) by reason of the fact that he owns or
acquires, solely as an investment, two percent (2%) or less of the outstanding equity securities
(measured by value) of any publicly traded company. “Competitive Business” shall mean (x) the
Executive’s participation in any unsolicited offer to purchase the stock or assets of the Company
or its affiliates or (y) any financial institution in Puerto Rico.



     (d) Non-interference. The Executive acknowledges that information regarding the
Company’s business and financial relations with its vendors and customers is Confidential
Information and proprietary to the Company and that any interference with such relations based
directly or indirectly on the use of such information would cause irreparable damage to the
Company. Subject to the immediately following sentence, Executive agrees that, other than in the
ordinary course of performing his duties for the Company, during the Restricted Period, the
Executive will not, on behalf of himself or any other person or entity, directly or indirectly seek
to encourage or induce any vendor or customer of the Company to cease doing business with, or
lessen its business with, the Company, or otherwise interfere with or damage (or attempt to
interfere with or damage) any of the Company’s relationships with its vendors and customers. No
action by another person or entity shall be deemed to be a breach of this provision unless the
Executive directly or indirectly assisted, encouraged or otherwise counseled such person or entity
to engage in such activity.



     (e) No Hire; Non-Solicitation. The Executive agrees that, during the Restricted Period
(other than in the ordinary course of performing his duties for the Company), he



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will not, without the prior written consent of the Company, directly or indirectly, (i) hire
any employee of the Company or any of its affiliates who is then an employee of the Company or such
affiliate or was an employee during the prior twelve (12) months period; (ii) solicit or encourage
any such employee to leave the employ of the Company or such affiliate, as the case may be; or
(iii) solicit or service the Company’s vendors or customers on behalf of a competing business
enterprise. No action by another person or entity shall be deemed to be a breach of this provision
unless the Executive directly or indirectly assisted, encouraged or otherwise counseled such person
or entity to engage in such activity.




     (f) Public Comment. Following the Employment Period, the Executive shall not at any
time (i) make any public derogatory comment concerning the Company or its affiliates or anyone whom
the Executive knows to be a current or former director, officer, stockholder or employee of the
Company or (ii) without the prior written consent of the Company, which consent shall not be
unreasonably withheld, publish or produce any information or write any book, article, screenplay,
teleplay or similar type of publication relating to the Company or its affiliates or anyone whom
the Executive knows to be a current or former director, officer, stockholder or employee, provided
that no such consent shall be necessary for an academic work relating to Executive’s employment
with the Company. Following the Employment Period, the Company shall not at any time make any
public derogatory comment concerning the Executive. Notwithstanding the foregoing, nothing in this
Section 8(f) shall prohibit any person from (x) responding publicly to incorrect, disparaging or
derogatory public statements about the Company or the Executive relating to his employment with the
Company, (y) providing truthful testimony in any judicial or administrative matter, or (z) making
truthful statements required by law, by any regulatory authority or organization, or in connection
with any public filing required by the Securities and Exchange Commission or any other regulatory
authority.



     (g) Blue Penciling. If any restrictions on competitive or other activities contained
in this Section 8 shall for any reason be held by a court of competent jurisdiction to be
excessively broad as to duration, geographical scope, activity or subject, such restrictions shall
be construed so as thereafter to be limited or reduced to be enforceable to the extent compatible
with the applicable law; it being understood that by the execution of this Agreement, (i) the
parties hereto regard such restrictions as reasonable and compatible with their respective rights
and (ii) the Executive acknowledges and agrees that the restrictions will not prevent him from
obtaining gainful employment subsequent to the termination of his employment.



     (h) Remedies; Injunctive Relief.




	 	(i)	 	The Executive acknowledges and agrees that the covenants and
obligations of the Executive set forth in this Section 8 relate to special,
unique and extraordinary services rendered by the Executive to the Company and
that a violation of any of the terms of such covenants and obligations will
cause the Company




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	 	 	 	irreparable injury for which adequate remedies are not available at law.
Therefore, the Executive agrees that the Company shall be entitled to seek
an injunction, restraining order or other temporary or permanent equitable
relief (without the requirement to post bond) restraining the Executive from
committing any violation of the covenants and obligations contained herein.
These injunctive remedies are cumulative and are in addition to any other
rights and remedies the Company may have at law or in equity. The existence
of any claim or cause of action by the Executive against the Company shall
not constitute a defense to the enforcement by the Company of the foregoing
restrictive covenants, but such claim or cause of action shall be determined
separately.
	 
	 	(ii)	 	If at any time the Executive materially breaches any of the
covenants in Section 8 and fails to cure such breach within ten (10) days after
receipt of written notice from the Company, then (x) the Company shall have the
right to cease to pay or provide to the Executive any payment, benefit or
entitlement due (or accrued) under this Agreement except those required by
applicable law and (y) if a neutral fact-finder determines that the Executive
has materially breached any of the covenants in Section 8, the Executive shall
be required to repay to the Company the net after-tax amount (such after-tax
amount to be determined after taking into account tax deductions, tax credits,
and the like attributable to the repayment) of any severance paid to the
Executive under this Agreement. Such repayment to be made within 15 days after
the neutral fact-finder enters the decision.





     (i) Survival. The provisions of this Section 8 shall remain in full force and effect
until the expiration of the periods specified herein notwithstanding the earlier termination of the
Executive’s employment hereunder or the expiration of the Employment Period. For purposes of this
Section 8, “Company” shall mean the Company and any affiliate of the Company or any successor
thereto.



     9. Mandatory Arbitration. Except to the extent necessary to enforce the provisions of
Section 8 hereof in accordance with Section 8(g) or 8(h), the Executive (on behalf of himself and
his beneficiaries) and the Company agree that any controversy or claim arising out of, or relating
to this Agreement, or the breach thereof, or the Executive’s employment with the Company or any
affiliate, or any termination of such employment, shall be settled by confidential arbitration in
Puerto Rico in accordance with the Commercial Arbitration Rules of the American Arbitration
Association. Any award entered shall be final, binding and nonreviewable except on such limited
grounds for review of arbitration awards as may be permitted by applicable law. Judgment upon the
award rendered by the arbitrator(s) may be entered into any court having jurisdiction thereof.



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     10. Successors.



     (a) This Agreement is personal to the Executive and without the prior written consent of the
Company shall not be assignable by the Executive. This Agreement shall inure to the benefit of and
be enforceable by the Executive’s legal representatives, heirs or legatees.



     (b) This Agreement shall inure to the benefit of and be binding upon the Company and its
successors and assigns. No rights or obligations of the Company under this Agreement may be
assigned or transferred by the Company without the Executive’s prior written consent except that
such rights or obligations may be assigned or transferred pursuant to a merger or consolidation in
which the Company is not the continuing entity, or a sale, liquidation or other disposition of all
or substantially all of the assets of the Company, provided that the assignee or transferee is the
successor to all or substantially all of the assets of the Company and assumes the liabilities,
obligations and duties of the Company under this Agreement, either contractually or as a matter of
law.



     11. Miscellaneous.



     (a) The Executive represents and warrants that he has the free and unfettered right to enter
into this Agreement and to perform his obligations under it and that he knows of no agreement
between him and any other person, firm or organization, or any law or regulation, that would be
violated by the performance of his obligations under this Agreement. The Executive agrees that he
will not use or disclose any confidential or proprietary information of any prior employer in the
course of performing his duties for the Company or any of its affiliates.



     (b) This Agreement shall be governed by and construed in accordance with its express terms,
and otherwise in accordance with the laws of the Commonwealth of Puerto Rico, without reference to
principles of conflict of laws. The captions of this Agreement are not part of the provisions
hereof and shall have no force or effect. This Agreement may not be amended or modified otherwise
than by a written agreement executed by the parties hereto or their respective successors and legal
representatives. In the event of any conflict or inconsistency between the provisions of this
Agreement and any other Company plan, program, policy or agreement, the provisions of this
Agreement shall control.



     (c) All notices and other communications hereunder shall be in writing and shall be given (i)
when delivered personally (provided that a written acknowledgement of receipt is obtained), (ii)
three (3) days after being sent by certified or registered mail, postage prepaid, return receipt
requested or (iii) two (2) days after being sent by overnight courier (provided that a written
acknowledgement of receipt is obtained by the overnight courier), with any such notice duly
addressed to the party concerned at the address indicated below:



13









 





	 	 	 

	If to the Executive:

	 	At the most recent address

on file at the Company
	 
	 	 
	If to the Company:

	 	At the address of its
	 

	 	principal executive offices
	 

	 	Attention: General Counsel





or to such other address as either party shall have furnished to the other in writing in accordance
herewith.




     (d) The invalidity or unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement.



     (e) The Company may withhold from any amounts payable under this Agreement such federal,
Puerto Rico, state, local or foreign taxes as shall be required to be withheld pursuant to any
applicable law or regulation. In addition, this Agreement is intended to comply with the
requirements of Section 409A of the Code and the regulations promulgated thereunder (“Section
409A”) so as not to subject the Executive to the payment of interest or any additional tax under
Section 409A. In furtherance thereof, if payment or provision of any amount or benefit hereunder at
the time specified in this Agreement would subject such amount or benefit to any additional tax
under Section 409A, the payment or provision of such amount or benefit shall be postponed to the
earliest commencement date on which the payment or the provision of such amount or benefit could be
made without incurring such additional tax (including paying any severance that is delayed in a
lump sum upon the earliest possible payment date which is consistent with Section 409A).



     (f) Following the Executive’s termination of employment for any reason (whether during or
after the expiration of the Employment Period), upon reasonable request of the Company, the
Executive shall cooperate with the Company or any of its affiliates with respect to any legal or
investigatory proceeding, including any government or regulatory investigation, or any litigation
or other dispute relating to matters in which he was involved or had knowledge (or reasonably
should have had knowledge) during his employment with the Company, subject to his reasonable
personal and business schedules. The Company shall reimburse the Executive for all reasonable
out-of-pocket travel and meal expenses associated with any cooperation provided hereunder.



     (g) No waiver shall be valid unless in writing signed by the party against whom the waiver is
being enforced (that is, by the Executive or an authorized officer of the Company, as the case may
be).



     (h) This Agreement contains the entire agreement between the parties concerning the subject
matter hereof and supersedes all prior agreements, understandings, discussions, negotiations and
undertakings, whether written or oral, between the parties with respect thereto (including, without
limitation, the term sheet



14









 




previously negotiated by the parties). In the event of any inconsistency between the
provisions of this Agreement and the provisions of any other agreement or plan relating any other
equity award granted to Executive, the provisions of this Agreement shall control. Any provision of
this Agreement, to the extent necessary to carry out the intent of such provision, shall survive
after the expiration of the Employment Period.




     (i) The Executive shall be entitled to indemnification in connection with any litigation or
proceeding arising out of the Executive’s acting as President of the Company’s Consumer Banking
Division and of Doral Bank or as an employee, officer or director of the Company, to the fullest
extent permitted under the Company’s charter and by-laws and by applicable law. In addition, the
Executive shall, during the Employment Period and for ten (10) years thereafter, be entitled to
liability insurance coverage pursuant to a Company-purchased directors’ and officers’ liability
insurance policy on the same basis as other directors and officers of the Company to whom such
coverage (if any) is then provided.



     (j) Notwithstanding any other provision of this Agreement or otherwise, the Company will make
no payment pursuant to this Agreement or otherwise which would be prohibited by 12 USC Section
1828(k) or any implementing regulations thereunder.



     (k) This Agreement may be executed in one or more counterparts, each of which shall be deemed
to be an original but all of which together shall constitute one and the same instrument.
Signatures delivered by facsimile shall be effective for all purposes.



     (1) The Company will pay reasonable attorney fees incurred by Spagnoletti in the review and
negotiation of this Agreement and its Exhibits.



     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day
and year first above written.



	 	 	 	 	 
	 	DORAL FINANCIAL CORPORATION

 	 
	 	By:  	/s/
Enrique R. Ubarri 	 
	 	 	Name:  	Enrique R. Ubarri 	 
	 	 	Title:  	Executive Vice President 	 
	 



	 	 	 	 	 
	 	 	MAURICE SPAGNOLETTI

 	 
	 	 	/s/
Maurice Spagnoletti 	 
	 	 	 
	 	 	 
	 




15









 





EXHIBIT A




[Sign-On Bonus Agreement]




16









 





Hiring Bonus Repayment Agreement



This Agreement is dated as of December 31, 2010, and agreed to by the undersigned employee, Maurice
Spagnoletti (“Employee”).



Whereas, in connection with Employee’s hiring by Doral Financial Corporation or any of its
subsidiaries or affiliates (collectively the “Company”), the Company will pay a hiring bonus of
$15,000.00 on the first pay period following the execution of this Agreement; and



Whereas, Employee agrees to repay the Company the entire amount of the hiring bonus received and
paid by the Company, if Employee terminates his employment with the Company (“Employment”), or
Employment is terminated by the Company for causes as set forth below;



Now, therefore, in consideration of the Company paying for the hiring bonus, Employee agrees to the
following:



1. Employee acknowledges that the hiring bonus will be treated as taxable income.



2. (a) If, through two years following the execution of this Agreement, Employee voluntarily
terminates Employment (other than to work for a subsidiary or affiliate of the Company) or the
Company terminates Employment for “Cause”, as defined in the Employment Agreement, or violation of
the Company’s norms and policies (excluding termination due to layoffs, position eliminations,
reductions in force, or any situation unrelated to Employee’s conduct, actions or omission),
Employee agrees to repay the hiring bonus pursuant to the following schedule:





	 	(i)	 	100% of the hiring bonus payment in the event of any such
termination occurs during the first 12 months following the execution of this
Agreement; and
	 
	 	(ii)	 	50% of the hiring bonus in the event of any such termination
occurs during the 13th through the 24th month following
the execution of this Agreement.





     (b) Employee shall pay the Company all amounts due in accordance with the foregoing schedule
within 30 days following the Employee’s last day of Employment in case of termination pursuant to
clause (a).



     (c) Employee understands and agrees that the Company, in accordance with applicable law, may
(i) withhold any amounts due to employee, up to the amounts the Company is entitled to recover
pursuant to this Agreement, and/or (ii) use a collection agency to recover any such amounts.



17









 




3. Employee understands that his/her Employment is subject to the Puerto Rico Employment Laws or
his/her Employment Agreement. Notwithstanding the aforementioned, this Agreement is not an
employment contract and does not confer or imply that his/her Employment will continue for any
period of time or confer any rights with respect to the duration of Employment.



4. Employee understands that no hiring bonus will be paid to the Employee until this Agreement is
signed by the Senior Vice President HR & Organization Effectiveness Officer or authorized
representative of the Company.



5. (a) This Agreement shall be governed by the laws of Puerto Rico.




     (b) Employee shall not assign this Agreement or any part hereof without the Company’s prior
written consent, and any such purported assignment without such consent shall be void. This
Agreement shall be binding on and shall inure to the benefit of the Company’s successors and
assigns, including collection agencies.



     (c) This Agreement constitutes the entire agreement and understanding of the Employee with
respect to the subject matter hereof and there are no promises, representations, conditions,
provisions or other terms except those set forth in this Agreement. This Agreement supersedes all
previous undertakings, agreements and representations between the parties, written or oral, with
respect to the subject matter hereof. No modification of, addition to, or waiver of any provisions
of this Agreement shall be binding unless in a writing signed by the Company.



     (d) Nothing contained herein shall confer any rights upon or create any duties toward any
third party.



     (e) The Employee approves and consents to the terms and conditions of this Agreement by
affixing his/her signature here to.



	 	 	 

	/s/
Maurice Spagnoletti
	 	12/31/2010
	 
	 	 
	Employee Signature
	 	Date
	 
	 	 
	/s/
Enrique R. Ubarri
	 	12/31/2010
	 
	 	 
	Enrique R. Ubarri
	 	Date
	Executive Vice President
	 	 






18









 






EXHIBIT B




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



     “Affiliate” of a person or other entity shall mean a person or other entity controlled by,
controlling or under common control with the person or other entity specified.



     “Disability” shall mean (i) the Executive becomes eligible for full benefits under a long-term
disability policy provided by the Company or (ii) the Executive has been unable, due to physical or
mental illness or incapacity, to substantially perform the essential duties of his employment with
reasonable accommodation for a continuous period of ninety (90) days or an aggregate of one-hundred
eighty (180) days during any consecutive twelve (12)-month period.



     “Cause” shall mean:



     (i) the Executive’s refusal of or demonstration of an unwillingness to reasonably cooperate in
good faith with any Company or government investigation or provide testimony therein (other than
such failure resulting from Executive’s disability);



     (ii) the Executive’s violation of his fiduciary duty or his duty of loyalty to the Company or
the Company’s Code of Ethical Business Conduct in any respect;



     (iii) the Executive’s failure to perform his material duties with respect to the Company or
its subsidiaries as provided hereunder;



     (iv) the Executive’s act of fraud, misappropriation, or embezzlement or other illegal conduct
with respect to the Company or any material affiliate;



     (v) the Executive’s indictment for, conviction of, or plea of guilty or no contest to any
felony (other than a minor traffic violation) or any misdemeanor that would preclude employment
under the Company’s hiring policy;



     (vi) the Executive’s admission of liability of, or a finding by a court or the applicable
regulatory agency or body of liability for, the violation of any “Securities Laws” (but excluding
any technical violations of any Securities Laws which are not criminal in nature) or the violation
of any “Banking Laws” (but excluding any technical violations of any Banking Laws which are not
criminal in nature); as used herein, the term “Securities Laws” means any federal or state law,
rule or regulation governing the issuance or exchange of securities, including without limitation
the Securities Act of 1933, the Securities Exchange Act of 1934 and the rules and regulations
promulgated thereunder and “Banking Laws” means any federal or state banking law, rule or
regulation governing the Company or its affiliates;



19









 





     (vii) the Executive engages in conduct that constitutes neglect or misconduct;



     (viii) the Executive’s failure to comply with any valid and legal directive of the Company or
the Board; or



     (ix) the Executive’s breach of any covenant set forth in Section 8 of this Agreement.



     Anything notwithstanding to the contrary, the Executive’s employment shall not be terminated
for “Cause” within the meaning of clauses (i), (ii), (iii), (vii) and (viii) above, unless the
Executive has been given written notice by the Chief Executive Officer stating the basis for such
termination and he is given fifteen (15) days to cure the neglect or conduct that is the basis of
any such claim and he fails to cure such conduct.



     “Good Reason” shall mean the occurrence of any of the following without the Executive’s
written consent:



     (i) a reduction in the Executive’s then current Annual Base Salary or target bonus
opportunity.



     (ii) a material diminution in the Executive’s positions, including, without limitation,
removing the Executive from such positions (and for the avoidance of doubt, (a) in the event of any
Change in Control of the Company in which the Company becomes a wholly-owned subsidiary of an
entity whose assets prior to such Change in Control have a fair value that is five (5) times or
greater than the fair value of the assets of the Company prior to such Change in Control, no
material diminution of any of the foregoing shall be deemed to occur so long as the Executive
continues to be responsible for the same business matters at the Company for which the Executive
was responsible immediately prior to such Change in Control and (b) no material diminution of any
of the foregoing shall be deemed to occur solely as a result of a Change in Control);



     (iii) a change in reporting structure so that the Executive reports to someone other than the
Chief Executive Officer of the Company;



     (iv) an involuntary change in Executive’s principal place of work if the new place of work is
outside a 50-mile radius from the Company’s headquarters in San Juan, Puerto Rico;



     (iv) the failure of any successor to all or substantially all of the Company’s assets to
assume this Agreement, whether in writing or by operation of law.



     Anything notwithstanding to the contrary, the Executive may only terminate his employment for
“Good Reason” upon thirty (30) days’ written notice to the Company (provided the Company does not
cure the event or events giving rise to Good Reason prior to the expiration of such thirty (30)-day
notice period).



20









 





     “Change in Control” will be deemed to have taken place if:



     (i) any “person” (as such term is used in Sections 3(a)(9) and Section 13(d) of the Securities
Exchange Act of 1934) other than the Company or any employee benefit plan of the Company or any of
its subsidiaries, (x) becomes the “beneficial owner” (as such term is used in Rule 13d-3
promulgated under the Securities Exchange Act of 1934) of Company securities having more than 50%
of the combined voting power of the then outstanding securities of the Company that may be cast for
the election of directors of the Company (other than as a result of the issuance of securities
initiated by the Company in the ordinary course of business) (“Voting Securities”) or (y) becomes
the “beneficial owner” of Company of 25% or more of the Voting Securities of the Company and such
person has the power to appoint or elect a majority of the members of the Board; or



     (ii) persons who, as of the effective date of this Agreement constitute the Board (the
“Incumbent Directors”) cease for any reason, including without limitation, as a result of a tender
offer, proxy contest, merger or similar transaction, to constitute at least a majority thereof,
provided that any person becoming a director of the Company subsequent to the effective date of
this Agreement shall be considered an Incumbent Director if such person’s election or nomination
for election was approved by a vote of at least 50% of the Incumbent Directors; but provided
further, that any such person whose initial assumption of office is in connection with an
actual or threatened election contest relating to the election of members of the Board or other
actual or threatened solicitation of proxies or consents by or on behalf of a “person” (as defined
in Section 13(d) and 14(d) of the Exchange Act) other than the Board, including by reason of
agreement intended to avoid or settle any such actual or threatened contest or solicitation, shall
not be considered an Incumbent Director, or



     (iii) as the result of, or in connection with, any cash tender or exchange offer, merger or
other business combination, or any combination of the foregoing transactions, the holders of all
the Company’s securities entitled to vote generally in the election of directors of the Company
immediately prior to such transaction constitute, following such transaction, less than a majority
of the combined voting power of the then outstanding securities of the surviving entity (or in the
event each entity survives, the ultimate parent entity resulting from such transaction) (the
“Surviving Entity”) entitled to vote generally in the election to elect directors of the Surviving
Entity after such transaction.



21









 





EXHIBIT C




[RELEASE AGREEMENT]



22









 





CONFIDENTIAL TERMINATION AGREEMENT AND GENERAL RELEASE




     THIS CONFIDENTIAL TERMINATION AGREEMENT AND GENERAL RELEASE (“Agreement”) is made and entered
into by and between:



     THE PARTY FOR THE FIRST PART: Maurice Spagnoletti (“Spagnoletti”) and his spouse [INSERT
SPOUSE’S NAME](“Spagnoletti and his spouse”), both of them of legal age, married to each other, and
residents of San Juan, Puerto Rico; and,



     THE PARTY FOR THE SECOND PART: Doral Financial Corporation (“Doral” or the “Company”), a
financial institution organized under the laws of the Commonwealth of Puerto Rico:



W I
T N E S S  E T H:




     WHEREAS, Spagnoletti was employed by DORAL as Executive Vice President — Mortgage and Banking
Operations, from [DATE OF HIRE], until effective [DATE OF TERMINATION] (“the Termination Date”),
when his position was eliminated.



     WHEREAS, if Spagnoletti and his spouse execute and return this Agreement to the Company’s
General Counsel, and do not revoke such acceptance within seven days of the date of execution of
this Agreement (“the Effective Date”), then Spagnoletti will receive the benefits described in
Paragraph 1 below;



     WHEREAS, Spagnoletti and his spouse and the Company desire to enter into the following
Agreement to resolve all issues between them including, but not limited to those relating to
Spagnoletti’s employment with DORAL, and the termination thereof;



     NOW, THEREFORE, in consideration of the promises contained herein, it is agreed as follows:




	1.	 	Benefits.






	 	1.1.	 	Pursuant to the terms set forth in the Employment Agreement between Spagnoletti
and Doral, Spagnoletti will receive the following benefits:





(INSERT DETAILS OF SEVERANCE PAYMENT AND

BENEFITS TO BE RECEIVED]





	 	1.2.	 	All other benefits provided by DORAL will cease as of the Termination Date.
Spagnoletti and his spouse agree that they are not entitled to receive, will not claim
and expressly waive any entitlement to rights,




23









 






	 	 	 	benefits or compensation other than as expressly set forth in this Paragraph 1.
	 
	 	1.3.	 	The payment of the benefits detailed in Paragraph 1 of this Agreement shall not
be understood to be an acknowledgement on the part of DORAL or the Released Parties of
the commission of any illegal, discriminatory, unjustified, or retaliatory act.






	2.	 	Complete Release.






	 	2.1.	 	Release: Spagnoletti and his spouse irrevocably and unconditionally
release all of the claims described in Subparagraph 2.2 that Spagnoletti and his spouse
may have against the following persons or entities (the “Released Parties”): the
Company, Doral Bank, Doral Mortgage, all related or affiliated companies (including,
but not limited to, Doral Financial Corporation) and all of the Company’s or such
related or affiliated companies’ predecessors and successors; and, with respect to each
such entity, all of its past and present employees, officers, directors, stockholders,
owners, representatives, assigns, attorneys, agents, insurers, employee benefit
programs (and the trustees, administrators, fiduciaries and insurers of such programs)
and any other persons acting by, through, under or in concert with any of the persons
or entities listed in this Subparagraph.
	 
	 	2.2.	 	Claims Released: The claims released include all claims, promises,
debts, causes of action or similar rights of any type or nature Spagnoletti and his
spouse have or had against the Released Parties, including but not limited to those
which in any way relate to: (a) Spagnoletti’s employment with DORAL, or the termination
of that employment, such as claims for compensation, bonuses, commissions, lost wages
or unused accrued vacation, or sick pay; (b) the design or administration of any
long-term incentive plan, benefits, perquisites, employee benefit program or
Spagnoletti’s and his spouse’s entitlement to benefits under any such plan, benefits,
perquisites, or program, including, without limitation, any stock, stock option plan,
or retention program; (c) any rights Spagnoletti and his spouse have to severance or
similar benefits under any program, policy or procedure of the Company or any related
or affiliated company ; (d) any claims to attorneys fees or other indemnities; and (e)
any other claims or demands Spagnoletti and his spouse may on any basis have. The
claims released, for example, may have arisen under any of the following statutes or
legal doctrines:






	 	2.2.1.	 	Anti-Discrimination Statutes, such as Title VII of the Civil Rights Act of
1964, § 1981 of the Civil Rights Act of 1866 and Executive Order 11246, which
prohibit discrimination based on race, color, national origin, religion, sex or
retaliation; the Equal Pay Act, which prohibits




24









 






	 	 	 	paying men and women unequal pay for equal work; the American With
Disabilities Act and § 503 and § 504 of the Rehabilitation Act of 1973,
which prohibit discrimination against the disabled; the Family and Medical
Leave Act, which protects employee rights to leave; the Constitution of
Puerto Rico, which prohibits discriminatory treatment; Law 69 of July 6,
1985, which prohibits discrimination on the basis of sex; Law 17 of April
22, 1988, which prohibits sexual harassment.






	 	2.2.2.	 	Federal Employment Statutes, such as the Employee Retirement Income Security
Act of 1974 (“ERISA”), which, among other things, protects pension or health
plan benefits; and the Fair Labor Standards Act of 1938, which regulates wage
and hour matters.
	 
	 	2.2.3.	 	Other Laws, such as Law 80 of May 30, 1976 (unjustified dismissal); Law 100
of June 30, 1959; Law 3 of March 13, 1942, as amended; Law 116 of December 20,
1992; Law 139 of June 26, 1968 (SINOT); Law 45 of April 18, 1935 (State
Insurance Fund), however, the release of claims under Law 45 should not be
interpreted as a limitation of the right to file a claim for workers’
compensation in the State Insurance Fund; law 44 of July 2, 1985; Law 379 of
May 15, 1948 (Days and Hours of Work); Law 96 of June 26, 1956 (Minimum Wage);
Law 180 of July 27, 1998; the Insurance and Civil Codes of Puerto Rico and any
other federal, state or local (including Puerto Rico) laws, whether based on
statute, regulation or common law, providing workers’ compensation benefits;
restricting an employer’s right to terminate employees or otherwise regulating
employment; or enforcing express or implied employment contracts or requiring
an employer to deal with employees fairly or in good faith; providing recourse
for alleged wrongful discharge, harassment or discrimination, physical or
personal injury, emotional distress, fraud, negligent misrepresentation, libel,
slander, defamation and similar or related claims.
	 
	 	2.2.4.	 	Age Discrimination in Employment Act.






	 	2.2.4.1	 	Spagnoletti and his spouse also acknowledge and agree that by
signing this Agreement, that, in addition to the matters discussed
above, Spagnoletti and his spouse waive and release any and all claims,
charges, or rights Spagnoletti may have under the Age Discrimination in
Employment Act of 1967, as amended (“ADEA”), that this waiver and
release is knowing and voluntary, and that a consideration of [INSERT
AMOUNT THAT WILL BE TENDERED BACK IN CASE OF ANY CHALLENGE TO




25









 






	 	 	 	THE AGREEMENT] (included in the Severance Payment) was given for
the waiver and release of any potential claim under ADEA. Said
consideration is in addition to anything of value to which
Spagnoletti was already entitled as an employee of DORAL.
Spagnoletti and his spouse further acknowledges that they have been
advised that: (a) they should consult with an attorney (at
Spagnoletti’s own expense) prior to executing this Agreement
(Spagnoletti and his spouse understand that whether or not they
consult with an attorney is their decision); (b) they have at least
twenty one (21) [or forty five (45), depending on the
circumstances] days to consider this Agreement (although
Spagnoletti and his spouse may choose to execute this Agreement
earlier); (c) this Agreement does not waive or release any rights
or claims Spagnoletti and his spouse may have under the ADEA which
may arise after they execute this Agreement; (d) Spagnoletti and
his spouse have seven (7) days following execution of their
Agreement to revoke their consent to their Agreement (to be
effective, any revocation must be actually received in writing by
DORAL’s General Counsel, by 5:30 p.m. no later than on the seventh
day after Spagnoletti and his spouse sign the Agreement); and (e)
the agreement shall not be effective until the seven (7) day
revocation period has expired.
	 
	 	 
	 	2.2.4.2.	 	Spagnoletti and his spouse acknowledge and agree that they were
given a copy of this Agreement on [INSERT DATE]. Spagnoletti and his
spouse also acknowledge having received Addendum A, specifying the
positions impacted by the reduction in force [IF APPLICABLE TO THE
CIRCUMSTANCES OF THE TERMINATION] and have been given the opportunity
to consult with whomever they wish, and have entered into this
Agreement voluntarily and with full knowledge of its final and binding
effect.






	 	2.3.	 	Release Extends to Both Known and Unknown Claims: The release covers
both claims that Spagnoletti and his spouse know about and those they do not know
about. Spagnoletti and his spouse understand the significance of their release of
unknown claims and their waiver of statutory protection against a release of unknown
claims. Spagnoletti and his spouse expressly waive all rights afforded by any statute
which limits the effect of a release with respect to unknown claims.




26









 






	 	2.4.	 	Ownership of Claims: Spagnoletti and his spouse represent that they
have not assigned or transferred, or purported to assign or transfer, all or any part
of any claim released by this Agreement.






	3.	 	Spaqnoletti and His Spouse’s Promises.
	 
	 	 	In addition to the release of claims provided for in Paragraph 2, Spagnoletti and his spouse
also agree to the following:






	 	3.1	 	Representations:






	 	3.1.1.	 	Spagnoletti and his spouse represent and warrant that they have not been the
victims of retaliation or discrimination or suffered any damages attributable
to the Company or the Released Parties, including but not limited to the claims
that could have arisen from the statutes and regulations established in
paragraph 2, and declare and represent that their family members, heirs,
executor, assignee, guarantors, friends or relatives, have not suffered any
damages whatsoever that may be attributed to the Company or the Released
Parties and promise to testify to the above in any forum. Spagnoletti and his
spouse represent and warrant that they have not suffered any damages or
wrongful treatment attributed to the Company or the Released Parties, for any
reason including, but not limited to, Spagnoletti’s employment relationship
with DORAL, the termination of same and any other event, act or omission
occurring during Spagnoletti’s employment or thereafter and promises to testify
to such in any forum.
	 
	 	3.1.2	 	Spagnoletti agrees and understands that the terms, conditions,
and obligations set forth in the Employment Agreement between Spagnoletti and
the Company are binding and survive the termination of his employment. The
terms, conditions, and obligations set forth is Section 8 (“Restrictive
Covenants) of said Employment Agreement are incorporated entirely to this
Agreement as if set forth, at length, herein.
	 
	 	3.1.3	 	Spagnoletti and his spouse represent and warrant that they are
not aware of any facts that would (a) establish, (b) tend to establish, or (c)
in any way support an allegation of a violation by the Company of the federal
False Claims Act (or any similar state or federal quitam statute).






	 	3.2	 	Safeguard the Company: Spagnoletti and his spouse promise to safeguard
and fully compensate the Released Parties for any claim or complaint filed by
Spagnoletti, his spouse, relative, son/daughter, heirs, executor, assignees, bondsmen,
dependents, friends or relatives of




27









 






	 	 	 	Spagnoletti or his spouse against the Released Parties, based on the violation of
the Constitution of the Commonwealth of Puerto Rico and/or any other statute,
contract, or responsibility not in contract, regarding the employment or termination
of employment of Spagnoletti or any event, act or omission during the employment of
Spagnoletti, or after employment but related to the employment or termination of the
employment of Spagnoletti. The Released Parties will select the attorneys to
represent them in the litigation, and the legal fees and expenses incurred will be
fully paid by Spagnoletti or his spouse.






	 	3.3.	 	No Future Employment: Spagnoletti understands that that his employment
with DORAL and all of DORAL’s related or affiliated companies ended forever on the
Termination Date and Spagnoletti promises not to seek employment with DORAL or with its
related or affiliated companies.
	 
	 	3.4.	 	No Pursuit of Released Claims: Spagnoletti and his spouse promise never
to file or prosecute a lawsuit or other complaint or charge asserting any claims that
are released by the Agreement. Spagnoletti and his spouse represent that they have not
filed or caused to be filed any lawsuit, complaint or charge with respect to any claim
this Agreement releases. Spagnoletti and his spouse promise never to seek any damages,
remedies, or other relief for Spagnoletti or his spouse personally (any right to which
they hereby waive and promise never to accept) by filing or prosecuting a charge with
any administrative agency with respect to any claim purportedly released by this
Agreement.
	 
	 	3.5	 	Agreement to be Kept Confidential: Spagnoletti and his spouse agree not
to disclose the terms, amount, or existence of this Agreement to anyone other than a
professional representative of Spagnoletti and his spouse and, even as to such a
person, only if the person is informed of and agrees to honor this confidentiality
requirement. Such a person’s violation of this confidentiality requirement shall be
treated as a violation of this Agreement by Spagnoletti and his spouse. This
Subparagraph shall not prohibit disclosure of the terms, amount or existence of this
Agreement to the extent necessary legally to enforce this Agreement or to the extent
otherwise legally required. Since the damages DORAL would suffer if this Subparagraph
were violated would be difficult to calculate, Spagnoletti and his spouse promise to
pay DORAL $10,000 for each violation and, in addition, the DORAL shall be entitled to
the relief described in Paragraph 5.
	 
	 	3.6.	 	DORAL Property to be Returned: Spagnoletti promises that, on or before
the Effective Date and as a condition for payment of the benefits described in
Paragraph 1 of this Agreement, Spagnoletti will return to DORAL all files, memoranda,
documents, records, copies of the foregoing, credit cards, keys, computer, and any
other DORAL property in Spagnoletti’s




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	 	 	 	possession or control. Spagnoletti and his spouse understand and agree that DORAL
shall withhold delivery of any or all of the benefits identified in Paragraph I
until Spagnoletti returns to DORAL all Company property.
	 
	 	3.7.	 	Spagnoletti and His Spouse Not to Harm DORAL: Spagnoletti and his spouse agree
not to testify against the Company, criticize, denigrate or otherwise disparage DORAL,
any other Released Party, or any of DORAL’s or the Released Parties’ products,
processes, policies, practices, standards of business conduct, or areas or techniques
of research; provided, however, that nothing in this Agreement shall prohibit
Spagnoletti or his spouse from complying with any lawful subpoena or court order.
Should Spagnoletti or his spouse receive any subpoena or court order, they will
promptly notify DORAL (c/o General Counsel) of the existence of such subpoena or order
and provide a copy of the document.
	 
	 	3.8.	 	Taxes. The Severance Payment and all other benefits detailed in paragraph 1 of
this Agreement will be subjected to all applicable state and federal tax withholdings.
	 
	 	3.9	 	Spagnoletti’s Cooperation Required. Spagnoletti agrees
that when requested by DORAL, he will promptly and fully respond to all inquiries from the Company and any of
its representatives relating to any matter as to which he may have knowledge, including
but not limited to (i) any ongoing or future internal or external investigation of the
Company, or (ii) litigation or threatened litigation.






	4.	 	Non-Admission of Liability.
	 
	 	 	DORAL has entered into this Agreement with Spagnoletti and his spouse to effect a mutually
acceptable resolution of each claim that is released in Paragraph 2. DORAL does not believe
or admit that it or any other Released Party has done anything wrong. Spagnoletti and his
spouse agree that this Agreement shall not be admissible in any court or other forum for any
purpose other than the enforcement of its terms and representations.
	 
	5.	 	Consequences of Spaqnoletti’s or His spouse’s Violation of Promises.






	 	5.1.	 	General Consequences: If Spagnoletti or his spouse break any of their
promises in this Agreement, for example, by filing or prosecuting a lawsuit or charge
based on claims that Spagnoletti and his spouse have released, or if any representation
made by Spagnoletti and his spouse in this Agreement was false when made, they (a)
shall forfeit all right to future benefits under this Agreement, (b) following a
finding by a neutral fact finder that Spagnoletti or his spouse breached this
Agreement, then Spagnoletti (i) must repay all benefits previously received, upon the
DORAL’s demand and (ii) must pay reasonable attorney’s fees and all




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	 	 	 	other costs incurred as a result of Spagnoletti’s or his spouse’s breach or false
representation, such as the cost of defending any suit brought with respect to a
released claim by them or other owner of a released claim. Clause (b)(i) or (ii)
above shall not apply to the prosecution of claims released under Subparagraph 2.2.4
to the extent prohibited by law, claims that Spagnoletti and his spouse acknowledge
are completely and forever waived.






	 	 	 	In addition, Spagnoletti and his spouse hereby covenant that in order to ensure that
they have complied fully with their obligations under Paragraph 3.1.3 of this
Agreement, Spagnoletti and his spouse hereby covenant and agree that to the full
extent permitted by law, they hereby waive and release any and all rights or claims
they may have to any proceeds or awards that they may be entitled to under any cui
tam proceeding brought against any of the Released Parties. Spagnoletti and his
spouse further agree that they shall deliver any such money, proceeds, or awards to
the U.S. government.
	 
	 	5.2.	 	Injunctive Relief: Spagnoletti and his spouse further agree that DORAL
would be irreparably harmed by any actual or threatened violation of Paragraphs 3.1.2,
3.3 and 3.5 and that DORAL shall be entitled to an injunction prohibiting Spagnoletti
or his spouse from committing any such violation.
	 
	 	5.3.	 	Challenges to Validity: Should Spagnoletti or his spouse attempt to
challenge the formation or enforceability of this Agreement (except with respect to
claims released under Subparagraph 2.2.4, to the extent prohibited by law, claims which
Spagnoletti and his spouse acknowledge are completely and forever waived), they shall
initially tender, by certified check delivered to DORAL, all amounts received pursuant
to this Agreement, plus interest at the legal rate and invite DORAL to cancel this
Agreement. In the event DORAL accepts this offer, this Agreement shall be canceled. In
the event DORAL does not accept this offer, DORAI_ shall so notify Spagnoletti and the
amount tendered by Spagnoletti and his spouse shall be placed in an interest-bearing
account pending a determination of the enforceability of this Agreement. If the
Agreement is determined to be enforceable, the amount in the account shall be repaid to
Spagnoletti and his spouse, if this Agreement is determined not to be enforceable, the
amount in the account shall be retained by DORAL or its designee.




6. Except to the extent necessary to enforce the provisions of Section 8 of the Employment
Agreement between Spagnoletti and the Company, and paragraph 3.1.2 of this Agreement, Spagnoletti
and the Company agree that any controversy or claim arising out of, or relating to this Agreement,
or the breach thereof, shall be settled by confidential arbitration in Puerto Rico in accordance
with the Commercial Arbitration






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Rules of the American Arbitration Association. Any award entered shall be final, binding and
nonreviewable except on such limited grounds for review of arbitration awards as may be permitted
by applicable law. Judgment upon the award rendered by the arbitrator(s) may be entered into any
court having jurisdiction thereof.





	7.	 	Voluntarily Entering Agreement:
	 
	 	 	Spagnoletti and his spouse acknowledge that they (a) had a sufficient period to consider and
review this Agreement before signing it; (b) carefully read this Agreement; and (c) fully
understands it and are entering into it voluntarily.
	 
	8.	 	Choice of Laws.
	 
	 	 	This Agreement shall be governed by the substantive laws of the Commonwealth of Puerto Rico
as applied to contracts entered into and to be performed entirely within such jurisdiction
by residents thereof.
	 
	9.	 	Nature, Effect and Interrelation of this Agreement.






	 	9.1.	 	Entire Agreement: Spagnoletti and his spouse acknowledge that this
Agreement is the entire agreement between them and DORAL; it may not be modified or
canceled in any manner except by a writing signed by DORAL, and Spagnoletti and his
spouse. DORAL has made no promises to Spagnoletti and his spouse other than those in
this Agreement.
	 
	 	9.2.	 	Successors and Assigns: This Agreement shall bind Spagnoletti’s and his
spouse, their heirs, administrators, representatives, executors, successors and
assigns, and shall inure to the benefit of all Released Parties and their respective
heirs, administrators, representatives, executors, successors and assigns.
	 
	 	9.3.	 	Interpretation: This Agreement shall be construed as a whole according
to its fair meaning, and not strictly for or against any of the parties. Unless the
context indicates otherwise, the term “or” shall be deemed to include the term “and”
and the singular or plural number shall be deemed to include the others. Paragraph
headings used in this Agreement are intended solely for convenience of reference and
shall not be used in the interpretation of any of this Agreement.
	 
	 	9.4	 	Implementation: DORAL, Spagnoletti, and his spouse, agree that, without
the receipt of further consideration, they will sign and deliver any documents and do
anything else that is necessary in the future to make the provisions of this Agreement
effective.





PLEASE READ THIS AGREEMENT CAREFULLY. IT CONTAINS A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.







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     Executed in San Juan, Puerto Rico this _____th to day of __________________



FOR SPAGNOLETTI AND HIS SPOUSE:




	 	 	 

	 

	 	 
	MAURICE SPAGNOLETTI

	 	[SPOUSE’S NAME]
	Dated:                                        

	 	Dated:                                        
	 
	 	 
	FOR DORAL FINANCIAL CORPORATION:
	 	 
	 
	 	 
	 

GENERAL COUNSEL

	 	 







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