**Exhibit 10.3****EMPLOYMENT AGREEMENT**          AGREEMENT between DORAL FINANCIAL CORPORATION, a corporation organized under the laws of theCommonwealth of Puerto Rico (together with its successors and assigns, the “Company”), and MarangalI. Domingo (the “Executive”) dated as of September 25, 2006.          WHEREAS, the Board of Directors of the Company (the “Board”) has determined that it is in thebest 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 theExecutive’s employment in this Agreement;          NOW THEREFORE, in consideration of the mutual promises and covenants made herein and themutual 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 herebyagrees to employ the Executive, and the Executive hereby agrees to serve the Company and itsaffiliates, for the period commencing on the Commencement Date (as defined herein) and ending onthe second anniversary of the Commencement Date; provided that the Executive’s employment by theCompany will automatically be extended by twelve (12) additional months on the second anniversaryof the Commencement Date and each annual anniversary thereafter unless either party provideswritten notice to the other party no less than one hundred and eighty (180) days prior to the dateof any such scheduled extension of its or his intention not to extend the term of the Executive’semployment (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 Executivecommences employment with the Company which in all events shall be no later than September 30,2006. Notwithstanding the foregoing, the Employment Period shall end on the date on which theExecutive’s employment is terminated by either party in accordance with the provisions of thisAgreement.     2. **Position and Duties**.          (a) During the Employment Period, the Executive shall serve as EVP- Chief Investment Officerand Treasurer, and shall have such duties and responsibilities as are commensurate with suchpositions and consistent with the Company’s Certificate of Incorporation and By-Laws. TheInvestment and Treasury areas include, without limitation, the following: balance sheet, allinvestment decisions, ALCO, dividend policy, fund raising, deposit strategies, product pricingstrategies, secondary markets, etc.
1

 
          (b) During the Employment Period, the Executive shall report directly to the Chief ExecutiveOfficer of the Company or the Board.     3. The Executive’s principal work location, subject to travel on Company business, shall bethe Company’s headquarters in Puerto Rico. Beginning no later than September 30, 2006, and at alltimes thereafter during the Employment Period, the primary place of residence of the Executiveshall be Puerto Rico.          (a) During the Employment Period, and excluding any periods of vacation and sick leave towhich the Executive is entitled, the Executive agrees to devote his full business attention andtime to the business and affairs of the Company, and to use his best efforts to perform faithfullyand efficiently such responsibilities. During the Employment Period, the Executive shall beentitled to engage in charitable and educational activities and to manage his personal and familyinvestments, to the extent such activities are not competitive with the business of the Company orits affiliates and do not interfere in any way, in the reasonable judgment of the Board (or acommittee thereof), with the performance of his duties for the Company and are otherwise consistentwith the Company’s governance policies.     4. **Compensation**.          (a) Annual Base Salary. During the Employment Period, the Executive shall receive anannual base salary (“Annual Base Salary”) at a rate of $500,000.00, payable in accordance with theCompany’s normal payroll policies. The Executive’s Annual Base Salary shall be prorated for 2006and for any other partial year of employment during the Employment Period based upon the portion ofthe year that the Executive is employed by the Company. The Executive’s Annual Base Salary shallbe subject to review in accordance to the Company’s annual compensation program. Annual BaseSalary, however, shall not be subject to reduction without the Executive’s prior written consent.          (b) Annual Bonus. With respect to each fiscal year completed during the EmploymentPeriod, the Executive shall have a target annual bonus opportunity equal to 100% of his Annual BaseSalary (“Target Bonus”). The Board shall establish, in its sole discretion, the performance andpayment conditions applicable to such annual bonuses. The Company will grant for the year 2006payable in 2007 a guaranteed amount of 60% equal to $300,000.00, of the Executive’s base salary.The years after, 100% of his base pay if the Employee meets the target in her assignment to rewardbusiness goals accomplishments. Shall the employee leave the Company for any reason before theconclusion of the period herein stated, this bonus will not be paid.          (c) Stock Options. Effective as of the Commencement Date, the Company shall grant theExecutive 150,000 options at market (the “Stock Option Award”) upon joining. The Stock Option Awardwill vest at the rate of 25% per year. Notwithstanding anything to the contrary in this Agreement,the granting, vesting and exercise of these stock options shall be subject to the granting of suchoptions by the Compensation Committee pursuant to the terms
2

 
and conditions of the Doral Financial Corporation Omnibus Incentive Plan. Subsequent grantswill be awarded at the discretion of the Board.          (d) Additional Compensation:          (i) Car Allowance: The Company will provide the Executive with a monthly carallowance under the Company’s policy of $630.00 per month to be used to lease orpurchase an automobile for use in the affairs and business of the Company and tocover related gasoline and insurance expenses related to the use of such automobile.          (ii) The Executive will receive a one time signing bonus of $250,000.00 in alump sum payment upon his hiring date.          (e) Long-Term Incentive Plans. During the Employment Period, the Executive shall beeligible to participate in the ongoing equity and other long-term awards and programs of theCompany as determined in the sole discretion of the Board or a committee thereof.          (f) Other Benefits and Perquisites. During the Employment Period, the Executive shallbe entitled to participate in the Company’s employee benefit plans, programs and arrangements(including, without limitation, life, medical and dental insurance, 401(k), and disabilityinsurance, vacation and sick leave programs) and perquisite programs and arrangements, if any, ineach case, on the same basis as generally provided to other similarly-situated executives of theCompany. In all events, during the Employment Period, the Executive shall be entitled to four (4)weeks of paid vacation per calendar year (pro-rated for any partial year of employment).          (g) Certain Expenses.          (i) The Company shall reimburse the Executive for all appropriatebusiness expenses in accordance with the terms of the Company’s policies andprocedures in effect from time to time.          (ii) The Company shall reimburse the Executive for the followingrelocation expenses: (1) cost of moving household goods and autos from hiscurrent residence to Puerto Rico, (2) cost of up to two (2) trips fromcurrent residence to Puerto Rico for the Executive and his family to findsuitable housing, (3) cost of approved temporary living expenses in PuertoRico until the Executive finds suitable housing, but in no event longer thanthree (3) months, (4) commissions, fees and closing costs on sale ofresidence when sold during the first one year period from commencement, (5)fees and expenses associated with purchase of home in Puerto Rico, includingmortgage points and other closing costs.
3

 
          (iii) The Company shall reimburse the Executive for cost of housing inthe amount of $4,000.00 per month, from commencement date but in no eventlonger than twelve (12) months.     5. **Termination of Employment**.          (a) Death or Disability. The Executive’s employment shall terminate automaticallyupon the Executive’s death during the Employment Period. In the event of the Executive’sDisability (as defined in Exhibit A attached hereto), the Company may provide the Executive withwritten notice in accordance with Section 12(c) of this Agreement of its intention to terminate theExecutive’s employment due to Disability. In such event, the Executive’s employment with theCompany shall terminate effective on the date the Company sends such notice to the Executive (the“Disability Commencement Date”); provided that the Executive’s employment hereunder shallimmediately terminate on the first date the Executive incurs a Disability as defined in clause (i)of the definition of Disability set forth on Exhibit A.          (b) With or Without Cause. The Executive is an employee at will and the Company mayterminate the Executive’s employment either with or without Cause (as defined in Exhibit A attachedhereto). For purposes of this Agreement, a termination “without Cause” shall mean a termination bythe 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 theExecutive voluntarily with or without Good Reason (as defined in Exhibit A attached hereto).          (d) Notice of Termination. Any termination of the Executive’s employment by theCompany or the Executive (other than death) shall be communicated by Notice of Termination to theother party hereto given in accordance with Section 12(c) of this Agreement. For purposes of thisAgreement, a “Notice of Termination” means a written notice which (i) indicates the specifictermination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth inreasonable detail the facts and circumstances claimed to provide a basis for termination of theExecutive’s employment under the provision so indicated and (iii) if necessary, specifies the Dateof Termination consistent with this Agreement (which date shall be not more than thirty (30) daysafter the giving of such notice). The failure by the Executive or the Company to set forth in theNotice of Termination any fact or circumstance which contributes to a showing of Good Reason orCause shall not waive any right of the Executive or the Company, respectively, hereunder orpreclude the Executive or the Company, respectively, from asserting such fact or circumstance inenforcing the Executive’s or the Company’s rights hereunder.          (e) Date of Termination. “Date of Termination” means (i) if the Executive’semployment is terminated by the Company for Cause, the date of receipt of the Notice of Terminationor any later date specified therein within thirty (30) days of such notice, as the case
4

 
may be; provided that if the event giving rise to a termination for Cause is pursuant toclauses (i), (iv), (v) or (vi) of the definition of Cause, the date on which there is delivered tothe Executive written notice of the requisite Board vote as set forth in the definition of “Cause”in Exhibit A, (ii) if the Executive’s employment is terminated by the Company without Cause, thedate 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 theExecutive for Good Reason, 30 days after the Company receives the Notice of Termination unless theCompany has cured the alleged grounds for such termination within 30 days after such receipt or ifthe Executive’s employment is terminated by the Executive without Good Reason, 30 days after theCompany receives the Notice of Termination, provided however, in either case the Company mayaccelerate the Date of Termination to an earlier date by providing the Executive notice of suchaction, and (iv) if the Executive’s employment is terminated by reason of death or Disability, thedate 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, theExecutive agrees to resign, effective as of the Date of Termination, from any positions that theExecutive holds with the Company and its affiliates, the Board (and any committees thereof) and theboard of directors (and any committees thereof) of any of the Company’s affiliates. The Executivehereby agrees to execute any and all documentation of such resignations upon request by theCompany, but he shall be treated for all purposes as having so resigned upon termination of hisemployment, regardless of when or whether he executes any such documentation, or Executive isterminated due to his death or Disability, .     6. **Obligations of the Company upon Termination of Employment**.          (a) Good Reason; Without Cause. If, during the Employment Period, the Companyterminates the Executive’s employment without Cause, or the Executive terminates his employment forGood Reason, or if the Company fails to renew or extend this Agreement upon expiration of theEmployment Period, the Company shall have no further obligations to the Executive under thisAgreement or otherwise other than to pay or provide to the Executive the following amounts andbenefits (provided the Executive has executed, delivered to the Company and not revoked a generalrelease of claims against the Company in a form satisfactory to the Company (the “Release”) andsubject to Section 8(h) hereof):          (i) An amount equal to Executive’s unpaid Annual Base Salary forservices through the Date of Termination;          (ii) a termination of Employee’s employment by the Company, other thanfor cause, shall not prejudice the Employee’s right to compensation or otherbenefits under this Agreement. That is, if the Employee’s employment isinvoluntarily terminated other than for cause, the Company shall pay theEmployee a Severance Payment equal to the amount of the Executive’s AnnualBase Salary and Target Bonus
5

 
established in this agreement that is due for the remaining term ofthis Agreement or for a period of 18 months whichever is greater, in lumpsum not later than 30 days after the Date of Termination;          (iii) full vesting as of the Date of Termination of Executive’s StockOption Awards (as defined in Section 3(c) hereof) and any other equityawards granted to Executive, with continued exercisability of theoutstanding options for twelve (12) months following the Date of Termination(but in no event beyond the original term of the options);          (iv) continued participation for eighteen (18) months from the Date ofTermination in all Company medical and dental plans in which the Executiveand his eligible dependents were participating immediately prior to the Dateof Termination (subject to offset as set forth in Section 7 hereof);          (v) as long as the Executive uses such services prior to the firstanniversary of the Date of Termination, up to $25,000 in outplacementservices; and          (vi) payment of other amounts, entitlements or benefits, if any, inaccordance with applicable plans, programs, arrangements or other agreementsof the Company.          (b) Death or Disability. If the Executive’s employment is terminated by reason of theExecutive’s death or Disability during the Employment Period, the Company shall have no furtherobligations to the Executive or his legal representatives, as applicable, under this Agreement orotherwise 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 whichthe Executive’s Date of Termination occurs;          (ii) payment of the Severance Payment provided in subsection (a)(ii)above;          (iii) full vesting as of the Date of Termination of the Stock OptionAward (as defined in Section 3(c) hereof), and any other equity awardsgranted to Executive, with continued exercisability of the outstandingoptions for twelve (12) months following the Date of Termination (but in noevent beyond the end of the original term of the options);
6

 
          (iv) except in the case of Executive’s death, continued participationuntil the second anniversary of the Date of Termination in all Companymedical and dental plans in which the Executive and his eligible dependentswere participating immediately prior to the Date of Termination (subject tooffset as set forth in Section 7 hereof); and          (v) payment of other amounts, entitlements or benefits, if any, inaccordance with applicable plans, programs, arrangements or other agreementsof the Company.          (c) Cause or Voluntary Resignation Without Good Reason. If the Executive’s employmentshall be terminated by the Company for Cause or by the Executive for any reason other than GoodReason at any time during the Employment Period, the Company shall have no further obligations tothe Executive under this Agreement or otherwise other than for the payment of the amounts andprovision of the benefits set forth below:          (i) an amount equal to the Executive’s unpaid Annual Base Salary forservices through the Date of Termination;          (ii) for a voluntary resignation (without Good Reason), continuedexercisability for 90 days following the Date of Termination for the portionof the Stock Option Award or any other equity awards, if any, that wasvested and outstanding as of the Date of Termination (but in no event beyondthe expiration of the original term of the award);          (iii) for a termination for Cause, forfeiture and cancellation of theunexercised Stock Option Award as of the Date of Termination;          (iv) forfeiture and cancellation of the unvested portion of the StockOption Award and any other equity awards as of the Date of Termination; and          (v) payment of other amounts, entitlements or benefits, if any, inaccordance with applicable plans, programs, arrangements or other agreementsof the Company.**6.****Change in Control Protections**.          (a) Upon the occurrence of a Change in Control (as defined in Exhibit A attached hereto), theStock Option Award (as defined in Section 3(c) hereof) and all other equity awards shallimmediately vest and become exercisable and all restrictions shall immediately lapse.
7

 
          (b) In the event, during the Employment Period, the Company terminates the Executive’semployment without Cause or the Executive terminates his employment for Good Reason, in bothcases upon or within two (2) years immediately following a Change in Control, the Company shallhave no further obligations to the Executive under the terms of this Agreement or otherwise otherthan to pay or provide to the Executive the following amounts and benefits (provided theExecutive has executed, delivered to the Company and not revoked a general release of claimsagainst the Company in a form satisfactory to the Company (the “Release) and subject to Section8(h) hereof):          (i) payment of Annual Base Salary through the end of the month in whichthe Executive’s Date of Termination occurs;          (ii) payment of the Severance Payment provided in Section (5)(a)(ii)above;          (iii) full vesting as of the Date of Termination of the Stock OptionAward (as defined in Section 3(c) hereof), and any other equity awardsgranted to Executive, with continued exercisability of the outstandingoptions for twelve (12) months following the Date of Termination (but in noevent beyond the end of the original term of the options);          (iv) continued participation until the second anniversary of the Dateof Termination in all Company medical and dental plans in which theExecutive and his eligible dependents were participating immediately priorto the Date of Termination (subject to offset as set forth in Section 7hereof); and          (v) as long as the Executive uses such services prior to the firstanniversary of the Date of Termination, up to $25,000 in outplacementservices; and          (vi) payments of other amounts, entitlements or benefits, if any, inaccordance with applicable plans, programs, arrangements or other agreementsof the Company.**7.** **No Duplication; No Mitigation**. In no event shall the Executive be entitled toduplicate payments or benefits under different provisions of this Agreement or pursuant to theterms of any other plan, program or arrangement of the Company or its affiliates. In theevent of any termination of the Executive’s employment, the Executive shall be under noobligation to seek other employment, and, there shall be no offset against amounts due theExecutive under this Agreement on account of any remuneration attributable to any subsequentemployment except with respect to the continuation of benefits under Sections 5(a)(iv), whichshall terminate immediately upon obtaining comparable coverage from another employer.
8

 
**8.** **Restrictive Covenants**. a. Confidentiality. During the Employment Period and thereafter, otherthan in the ordinary course of performing his duties for the Company, the Executiveagrees that he shall not disclose to anyone or make use of any trade secret orproprietary or confidential information of the Company or any affiliate of the Company,including such trade secret or proprietary or confidential information of any customeror other entity to which the Company owes an obligation not to disclose suchinformation, which he acquires during the course of his employment, including, but notlimited to, records kept in the ordinary course of business, except when required to doso by a court of law, by any governmental agency having supervisory authority over thebusiness of the Company or by any administrative or legislative body (including acommittee thereof) with apparent or actual jurisdiction to order him to divulge,disclose or make accessible such information. In the event the Executive is requestedto disclose information as contemplated in the preceding sentence, the Executiveagrees, unless otherwise prohibited by law, to use his best efforts to give theCompany’s General Counsel prompt written notice of any request for disclosure inadvance of the Executive making such disclosure in order to permit the Company areasonable opportunity to challenge such disclosure. The foregoing shall not apply toinformation 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 theExecutive 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 hisright, title and interest in and to all inventions, discoveries, improvements andcopyrightable subject matter (the “Rights”) which during the period of his employmentare made or conceived by him, alone or with others, and which are within or arise outof any general field of the Company’s business or arise out of any work he performs, orinformation he receives regarding the business of the Company, while employed by theCompany. The Executive shall fully disclose to the Company as promptly as availableall information known or possessed by him concerning any Rights, and upon request bythe Company and without any further remuneration in any form to him by the Company, butat the expense of the Company, execute all applications for patents and for copyrightregistration, assignments thereof and other instruments and do all things which theCompany may deem necessary to vest and maintain in it the entire right, title andinterest in and to all such Rights. The Executive agrees that at the time of thetermination of employment, whether at the instance of the Executive or the Company, andregardless of the reasons therefore, he will promptly deliver to the Company’s GeneralCounsel, and not keep or deliver to anyone else, any and all of the following which isin his possession or control: (i) Company property (including, without limitation,credit cards, computers, communication devices, home office equipment and other Companytangible property) and (ii) notes, files, memoranda, papers and, in general, any andall physical matter and computer files
9

 
   containing confidential or proprietary information of the Company or any of itsaffiliates, including any and all documents relating to the conduct of the business ofthe Company or any of its affiliates and any and all documents containing confidentialor 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 writtenconsent to removal at the time of termination of the Executive’s employment and (y) anyinformation necessary for the Executive to retain for his tax purposes.  c. Non-Competition. The Executive acknowledges that in his capacity inmanagement the Executive has had or will have a great deal of exposure and access ofthe Company’s trade secrets and confidential and proprietary information. Therefore,during the Executive’s employment and for twelve (12) months following termination ofsuch employment (whether during the Employment Period or thereafter) (the “RestrictedPeriod"**)**(i) the Executive shall protect the Company’s trade secrets and otherconfidential and proprietary information, and (ii) the Executive agrees that he shallnot, other than in the ordinary course of performing his duties hereunder or as agreedby 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 bedeemed to be in violation of this Section 9(c) by reason of the fact that he owns oracquires, solely as an investment, two percent (2%) or less of the outstanding equitysecurities (measured by value) of any publicly traded company. “Competitive Business”shall mean (x) the Executive’s participation in any unsolicited offer to purchase thestock or assets of the Company or its affiliates or (y) any financial institution witha substantial presence in the mortgage origination business in Puerto Rico.Notwithstanding the foregoing, if the Company provides the Executive with notice thatit is not renewing the Employment Period in accordance with Section 1 hereof, theprovisions of this Section 9(c) shall no longer be effective upon the expiration of theEmployment Period.  d. Non-Interference. The Executive acknowledges that informationregarding the Company’s business and financial relations with its vendors and customersis Confidential Information and proprietary to the Company and that any interferencewith such relations based directly or indirectly on the use of such information wouldcause irreparable damage to the Company. The Executive acknowledges that by virtue ofhis employment with the Company, he has gained or may gain knowledge of suchinformation concerning the Company’s vendors and customers (respectively “VendorInformation” or “Customer Information”), and that he would inevitably have to draw onthis Vendor Information and Customer Information and on other Confidential Informationif he were to solicit or service the Company’s vendors or customers on behalf of acompeting business enterprise. Accordingly, and subject to the immediately followingsentence, the Executive agrees that, other than in the ordinary course of performinghis duties for the Company, during the Restricted
10

 
   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 Companyto cease doing business with, or lessen its business with, the Company, or otherwiseinterfere with or damage (or attempt to interfere with or damage) any of the Company’srelationships with its vendors and customers. No action by another person or entityshall be deemed to be a breach of this provision unless the Executive directly orindirectly assisted, encouraged or otherwise counseled such person or entity to engagein such activity.  e. No Hire; Non-Solicitation. The Executive agrees that, during theRestricted Period (other than in the ordinary course of performing his duties for theCompany), he will not, without the prior written consent of the Company, directly orindirectly, (i) hire any employee of the Company or any of its affiliates who is thenan employee of the Company or such affiliate or was an employee during the prior six(6) month period, or (ii) solicit or encourage any such employee to leave the employ ofthe Company or such affiliate, as the case may be. No action by another person orentity shall be deemed to be a breach of this provision unless the Executive directlyor indirectly assisted, encouraged or otherwise counseled such person or entity toengage in such activity.  f. Public Comment. Following the Employment Period, the Executive shallnot at any time (i) make any public derogatory comment concerning the Company or itsaffiliates 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 writtenconsent of the Company, which consent shall not be unreasonably withheld, publish orproduce any information or write any book, article, screenplay, teleplay or similartype of publication relating to the Company or its affiliates or anyone whom theExecutive 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 toExecutive’s employment with the Company. Following the Employment Period, the Companyshall not at any time make any public derogatory comment concerning the Executive.Notwithstanding the foregoing, nothing in this Section 8(f) shall prohibit any personfrom (x) responding publicly to incorrect, disparaging or derogatory public statementsabout the Company or the Executive relating to his employment with the Company, (y)providing truthful testimony in any judicial or administrative matter, or (z) makingtruthful statements required by law, by any regulatory authority or organization, or inconnection with any public filing required by the Securities and Exchange Commission orany other regulatory authority.  g. Blue Penciling. If any restrictions on competitive or other activitiescontained in this Section 8 shall for any reason be held by a court of competentjurisdiction to be excessively broad as to duration, geographical scope, activity orsubject, such restrictions shall be construed so as thereafter to be limited or reducedto be enforceable to the extent compatible with the applicable law; it being understoodthat
11

 
   by the execution of this Agreement, (i) the parties hereto regard such restrictions asreasonable and compatible with their respective rights and (ii) the Executiveacknowledges and agrees that the restrictions will not prevent him from obtaininggainful employment subsequent to the termination of his employment.  h. Remedies; Injunctive Relief.(i) The Executive acknowledges and agrees that the covenantsand obligations of the Executive set forth in this Section 8relate to special, unique and extraordinary services renderedby the Executive to the Company and that a violation of anyof the terms of such covenants and obligations will cause theCompany irreparable injury for which adequate remedies arenot available at law. Therefore, the Executive agrees thatthe Company shall be entitled to seek an injunction,restraining order or other temporary or permanent equitablerelief (without the requirement to post bond) restraining theExecutive from committing any violation of the covenants andobligations contained herein. These injunctive remedies arecumulative and are in addition to any other rights andremedies the Company may have at law or in equity. Theexistence of any claim or cause of action by the Executiveagainst the Company shall not constitute a defense to theenforcement by the Company of the foregoing restrictivecovenants, but such claim or cause of action shall bedetermined separately.(ii) If at any time the Executive materially breaches any ofthe covenants in Section 8, and fails to cure such breachwithin ten (10) days after receipt of written notice from theCompany, then (x) the Company shall have the right to ceaseto pay or provide to the Executive any payment, benefit orentitlement due (or accrued) under this Agreement and (y) theExecutive shall be required to repay to the Company the netafter-tax amount (such after-tax amount to be determinedafter taking into account tax deductions, tax credits, andthe like attributable to the repayment) of any severancepaid to the Executive under this Agreement. Such repayment tobe made within 15 days after written notice from the Companyto the Executive requesting such repayment.
12

 
(iii) If at any time following the Restricted Period butprior to the second anniversary of the termination of theExecutive’s employment, the Executive takes any action orengages in any conduct that would have constituted a materialbreach of Section 8(d) or 8(e) if it had occurred during theRestricted Period, then clauses (x) and (y) of Section8(h)(ii) — as limited by Section 8(h)(ii) — shall apply asif such material breach had occurred during the RestrictedPeriod. i. Survival. The provisions of this Section 8 shall remain in full forceand effect until the expiration of the periods specified herein notwithstanding theearlier termination of the Executive’s employment hereunder or the expiration of theEmployment Period. For purposes of this Section 8, “Company” shall mean the Companyand any affiliate of the Company or any successor thereto.**9.** **Mandatory Arbitration**. Except to the extent necessary to enforce the provisions ofSection 8 hereof in accordance with Section 8(g) or 8(h), the Executive (on behalf of himselfand his beneficiaries) and the Company agree that any controversy or claim arising out of, orrelating to this Agreement, or the breach thereof, or the Executive’s employment with theCompany or any affiliate, or any termination of such employment, shall be settled byconfidential arbitration in Puerto Rico in accordance with the Commercial Arbitration Rules ofthe American Arbitration Association. Any award entered shall be final, binding andnonreviewable except on such limited grounds for review of arbitration awards as may bepermitted by applicable law. Judgment upon the award rendered by the arbitrator(s) may beentered into any court having jurisdiction thereof.**10.** **Successors**. a. This Agreement is personal to the Executive and without the prior writtenconsent of the Company shall not be assignable by the Executive. This Agreement shallinure 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 Companyand its successors and assigns. No rights or obligations of the Company under thisAgreement may be assigned or transferred by the Company without the Executive’s priorwritten consent except that such rights or obligations may be assigned or transferredpursuant to a merger or consolidation in which the Company is not the continuingentity, or a sale, liquidation or other disposition of all or substantially all of theassets of the Company, provided that the assignee or transferee is the successor to allor substantially all of the assets of the Company and assumes the liabilities,obligations and duties of the Company under this Agreement, either contractually or asa matter of law.
13

 
**11.** **Miscellaneous**. a. The Executive represents and warrants that he has the free and unfettered rightto enter into this Agreement and to perform his obligations under it and that he knowsof no agreement between him and any other person, firm or organization, or any law orregulation, that would be violated by the performance of his obligations under thisAgreement. The Executive agrees that he will not use or disclose any confidential orproprietary information of any prior employer in the course of performing his dutiesfor the Company or any of its affiliates.  b. This Agreement shall be governed by and construed in accordance with itsexpress terms, and otherwise in accordance with the laws of the Commonwealth of PuertoRico, without reference to principles of conflict of laws. The captions of thisAgreement 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 agreementexecuted by the parties hereto or their respective successors and legalrepresentatives. In the event of any conflict or inconsistency between the provisionsof this Agreement and any other Company plan, program, policy or agreement, theprovisions of this Agreement shall control.  c. All notices and other communications hereunder shall be in writing and shall begiven (i) when delivered personally (provided that a written acknowledgement of receiptis 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 byovernight courier (provided that a written acknowledgement of receipt is obtained bythe overnight courier), with any such notice duly addressed to the party concerned atthe address indicated below:       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 Counselor to such other address as either party shall have furnished to the other in writing inaccordance herewith. d. The invalidity or unenforceability of any provision of this Agreement shall notaffect the validity or enforceability of any other provision of this Agreement.  e. The Company may withhold from any amounts payable under this Agreement suchfederal, Puerto Rico, state, local or foreign taxes as shall be required to be withheldpursuant to any applicable law or regulation. In addition, this Agreement is intendedto comply with the requirements of Section 409A of the Code and the regulations
14

 
   promulgated thereunder (“Section 409A”) so as not to subject the Executive to thepayment 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 thisAgreement 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 earliestcommencement date on which the payment or the provision of such amount or benefit couldbe made without incurring such additional tax (including paying any severance that isdelayed in a lump sum upon the earliest possible payment date which is consistent withSection 409A).  f. Following the Executive’s termination of employment for any reason (whetherduring or after the expiration of the Employment Period), upon reasonable request ofthe Company, the Executive shall cooperate with the Company or any of its affiliateswith respect to any legal or investigatory proceeding, including any government orregulatory investigation, or any litigation or other dispute relating to matters inwhich he was involved or had knowledge (or reasonably should have had knowledge) duringhis employment with the Company, subject to his reasonable personal and businessschedules. The Company shall reimburse the Executive for all reasonable out-of-pockettravel and meal expenses associated with any cooperation provided hereunder.  g. No waiver shall be valid unless in writing signed by the party against whom thewaiver is being enforced (that is, by the Executive or an authorized officer of theCompany, as the case may be).  h. This Agreement contains the entire agreement between the parties concerning thesubject matter hereof and supersedes all prior agreements, understandings, discussions,negotiations and undertakings, whether written or oral, between the parties withrespect thereto (including, without limitation, the term sheet previously negotiated bythe parties). In the event of any inconsistency between the provisions of thisAgreement and the provisions of any other agreement or plan relating to the StockOption Award or any other equity award granted to Executive, the provisions of thisAgreement shall control. Any provision of this Agreement, to the extent necessary tocarry out the intent of such provision, shall survive after the expiration of theEmployment Period.  i. The Executive shall be entitled to indemnification in connection with anylitigation or proceeding arising out of the Executive’s acting as EVP — ChiefInvestment Officer & Treasurer or as an employee, officer or director of the Company,to the fullest extent permitted under the Company’s charter and by-laws and byapplicable law. In addition, the Executive shall, during the Employment Period and forten (10) years thereafter, be entitled to liability insurance coverage pursuant to aCompany-purchased directors’ and officers’ liability insurance policy on the same basisas other directors and officers of the Company to whom such coverage (if any) is thenprovided.
15

 
 j. Notwithstanding any other provision of this Agreement or otherwise, the Companywill make no payment pursuant to this Agreement or otherwise which would be prohibitedby 12 USC Section 1828(k) or any implementing regulations thereunder.  k. This Agreement may be executed in one or more counterparts, each of which shallbe deemed to be an original but all of which together shall constitute one and the sameinstrument. Signatures delivered by facsimile shall be effective for all purposes.
16

 
          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as ofthe day and year first above written.         DORAL FINANCIAL CORPORATION           By: /s/ Lesbia Blanco           Name: Lesbia Blanco    Title: Executive Vice President — Corporate HR Director     /s/ Marangal I. Domingo         Marangal I. Domingo  
 

 
**EXHIBIT A**     For all purposes of this Agreement, the following terms shall have the meanings set forthbelow:     “**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-termdisability policy provided by the Company or (ii) the Executive has been unable, due to physical ormental illness or incapacity, to substantially perform the essential duties of his employment withreasonable accommodation for a continuous period of ninety (90) days or an aggregate of one-hundredeighty (180) days during any consecutive twelve (12)-month period.     “**Cause**” shall mean: i. the Executive’s act of fraud, misappropriation, orembezzlement with respect to the Company or any material affiliate;  ii. the Executive’s indictment for, conviction of, orplea of guilty or no contest to any felony (other than a minortraffic violation);  iii. the Executive’s admission of liability of, or afinding by a court or the applicable regulatory agency or body ofliability for, the violation of any “Securities Laws” (but excludingany technical violations of any Securities Laws which are notcriminal in nature) or the violation of any “Banking Laws” (butexcluding any technical violations of any Banking Laws which are notcriminal in nature); as used herein, the term “Securities Laws” meansany federal or state law, rule or regulation governing the issuanceor exchange of securities, including without limitation theSecurities Act of 1933, the Securities Exchange Act of 1934 and therules and regulations promulgated thereunder and “Banking Laws” meansany federal or state banking law, rule or regulation governing theCompany or its affiliates;  iv. the Executive engages in conduct that constituteswillful gross neglect or willful misconduct, in either case,resulting in significant harm to the Company’s or its affiliates’business or reputation;  v. the Executive’s intentional failure afterreasonable prior written notice from the Company to comply with anyvalid and legal directive of the Board; or
 

 
 vi. the Executive’s material breach of any covenant setforth in Section 8 of this Agreement.     For purposes of this definition of “Cause,” an action or failure to act by the Executive shallnot be considered “willful” if the Executive believed in good faith that his action or failure toact was in, or not opposed to, the best interests of the Company and its affiliates.     Anything notwithstanding to the contrary, the Executive’s employment shall not be terminatedfor “Cause” within the meaning of clauses (i), (iv), (v) or (vi) above, unless the Executive hasbeen given written notice by the Board stating the basis for such termination and he is givenfifteen (15) days to cure the neglect or conduct that is the basis of any such claim and, if hefails to cure such conduct, or such conduct cannot be cured, the Executive has an opportunity to beheard before the full Board and after such hearing, the Board gives the Executive written noticeconfirming that in the judgment of a majority of the members of the Board (other than theExecutive, if applicable) “Cause” for terminating the Executive’s employment exists.     “**Good Reason**” shall mean the occurrence of any of the following without the Executive’swritten consent:(i) a reduction in the Executive’s then current Annual Base Salaryor target bonus opportunity;(ii) a material diminution in the Executive’s positions, duties orauthorities as EVP — Chief Investment Officer & Treasurer,including, without limitation, removing him from such positions;provided, that Good Reason shall also exist if at any time followinga Change in Control involving an entity of smaller or similar sizeto the Company (measured on the basis of assets), Executive does nothold the positions set forth above at the ultimate parent entityresulting from such Change in Control;(iii) Executive’s principal work location is moved more thantwenty-five (25) miles from San Juan, Puerto Rico;(iv) a change in reporting structure so that the Executive reportsto someone other than the Chief Executive Officer of the Company orthe Board; or(v) the failure of any successor to all or substantially all of theCompany’s assets to assume this Agreement, whether in writing or byoperation of law.
19

 
     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 notcure the event or events giving rise to Good Reason prior to the expiration of such thirty (30)-daynotice period).     “**Change in Control**” will be deemed to have taken place if:(i) any “person” (as such term is used in Sections 3(a)(9) andSection 13(d) of the Securities Exchange Act of 1934) other than theCompany or any employee benefit plan of the Company or any of itssubsidiaries, (x) becomes the “beneficial owner” (as such term isused in Rule 13d-3 promulgated under the Securities Exchange Act of1934) of Company securities having more than 50% of the combinedvoting power of the then outstanding securities of the Company thatmay be cast for the election of directors of the Company (other thanas a result of the issuance of securities initiated by the Companyin the ordinary course of business) (“Voting Securities”) or (y)becomes the “beneficial owner” of Company of 25% or more of theVoting Securities of the Company and such person has the power toappoint or elect a majority of the members of the Board; or(ii) persons who, as of the effective date of this Agreementconstitute the Board (the “Incumbent Directors”) cease for anyreason, including without limitation, as a result of a tender offer,proxy contest, merger or similar transaction, to constitute at leasta majority thereof, provided that any person becoming a director ofthe Company subsequent to the effective date of this Agreement shallbe considered an Incumbent Director if such person’s election ornomination for election was approved by a vote of at least 50% ofthe Incumbent Directors; but provided further, that any suchperson whose initial assumption of office is in connection with anactual or threatened election contest relating to the election ofmembers of the Board or other actual or threatened solicitation ofproxies or consents by or on behalf of a “person” (as defined inSection 13(d) and 14(d) of the Exchange Act) other than the Board,including by reason of agreement intended to avoid or settle anysuch actual or threatened contest or solicitation, shall not beconsidered an Incumbent Director; or(iii) as the result of, or in connection with, any cash tender orexchange offer, merger or other business combination, or anycombination of the foregoing transactions, the holders of all the
20

 
Company’s securities entitled to vote generally in the election ofdirectors of the Company immediately prior to such transactionconstitute, following such transaction, less than a majority of thecombined voting power of the then-outstanding securities of thesurviving entity (or in the event each entity survives, the ultimateparent entity resulting from such transaction) (the “SurvivingEntity”) entitled to vote generally in the election to electdirectors of the Surviving Entity after such transaction.
21