EXHIBIT 10.1 


 


EMPLOYMENT
AGREEMENT


BETWEEN


OFG BANCORP


AND


JOSÉ RAFAEL FERNÁNDEZ


 


 


This Employment
Agreement (the “Agreement”) is made and entered into on the 28th day of
February 2018, by and between OFG BANCORP, a financial holding company
that has its principal office in San Juan, Puerto Rico (the “Company”), and JOSÉ
RAFAEL FERNÁNDEZ (the “President and CEO” or “Mr. Fernández”).


 


WITNESSETH:


 


WHEREAS,
Mr. Fernández has been an executive officer of the Company since June 1991, is
presently the Company’s President, Chief Executive Officer, and Vice Chairman
of the Board of Directors, and the retention of his services for and on behalf
of the Company is of material importance to the preservation and enhancement of
the value of the Company's business;


 


WHEREAS,
the Company and the President and CEO wish to enter into this Agreement and
intend that this Agreement shall become effective on March 1, 2018 (the
“Effective Date”), and replace the Employment Agreement, dated September 27,
2016 between the Company and the President and CEO, which is now in effect;


 


NOW THEREFORE,
in consideration of the mutual covenants herein set forth, the Company and the
President and CEO do hereby agree as follows:


 


1.               
TERM OF EMPLOYMENT


 


1.1      
The Company hereby employs Mr. Fernández as its President and Chief Executive
Officer, and Mr. Fernández hereby accepts said employment and agrees to render
such services to the Company on the terms and conditions set forth in this
Agreement for a term commencing on the Effective Date and ending on June 30,
2021, unless further extended or sooner terminated in accordance with the terms
and conditions herein set forth.


 


Unless written notice
of non-renewal is given by either party not less than one hundred twenty (120)
days in advance of the expiration of the term, this Agreement will be
automatically extended for one (1) additional year.  Unless otherwise agreed to
in writing by Mr. Fernández and the Company, and except in the event of a
termination for just cause pursuant to Section 6.1 hereof or a removal or bar
from office pursuant to Section 6.5 hereof, Mr. Fernández shall remain as an
employee of the Company after the expiration of the term of this Agreement and
shall be entitled to all the rights and benefits of an employee under the laws
of the Commonwealth of Puerto Rico.






 












 





 


1.2         During
the term of this Agreement, the President and CEO shall devote his best efforts
to performing such services for the Company as may be consistent with his title
of President and Chief Executive Officer and those which from time to time may
be assigned to him by the Company’s Board of Directors (the “Board of
Directors”).


 


1.3         The
services of the President and CEO to the Company shall be rendered principally
in the Commonwealth of Puerto Rico, but he shall do such traveling on behalf of
the Company as may be reasonably required by his duties.


 


1.4         The
President and CEO shall report directly to the Board of Directors and shall
have overall responsibility for all of the business and affairs of the Company,
including making all determinations concerning hiring, dismissal and
compensation for all classes of employees of the Company (exception in the case
of the Head of the Company’s Internal Audit Department), which determinations
shall be in accordance with the policies for such hiring, dismissal and
compensation established by the Compensation Committee of the Board of
Directors (the “Compensation Committee”) from time to time and in accordance with
applicable laws, rules and regulations, including the applicable regulations of
the Federal Deposit Insurance Corporation (the “FDIC”), the Board of Governors
of the Federal Reserve System (the “FRB”), the Securities and Exchange
Commission (“SEC”), and the Office of the Commissioner of Financial
Institutions of Puerto Rico (the “OCFI”).


 


1.5         The
President and CEO shall continue to occupy his position as Vice Chairperson of
the Board of Directors. Furthermore, during the term of this Agreement and any
extension thereof, and in any election of directors in which his term as a
member of the Board of Directors will expire, the Board of Directors shall
nominate and recommend to the Company’s stockholders the election of Mr.
Fernández to the Board of Directors and, if elected, the Board of Directors
shall appoint him as its Vice Chairperson.


 


 


2.               
COMPETITIVE ACTIVITIES


 


2.1         The
President and CEO agrees that during the term of this Agreement, except with
the express written consent of the Board of Directors, he will not, directly or
indirectly, engage or participate in, become a director of, or render advisory
or other services for, or in connection with, or become interested in, or make
financial investment in any firm, corporation, business entity or business
enterprise; provided, however, that the President and CEO shall not thereby be
precluded or prohibited from owning passive investments including investments
in the securities of other financial institutions, so long as such ownership
does not require him to devote substantial time to management or control of the
business or activities in which he has invested.


 


2.2         The
President and CEO agrees and acknowledges that during the time that he is
employed by the Company, he will maintain an intimate knowledge of the
activities and affairs of the Company including trade secrets and other
confidential matters.  As a result, and also because of the special, unique,
and extraordinary services that the President and CEO is capable of performing for
the Company or one of its competitors, the President and CEO recognizes that
the services to be rendered by him hereunder are of a character giving them a
peculiar value, the loss of which cannot be adequately or reasonably
compensated for by damages.  Therefore, if during the time he is employed by
the Company, the President and CEO renders services to a competitor of the
Company other than 




 












 





as authorized pursuant to Section
2.1 hereof, the Company shall be entitled to immediate injunctive or other
equitable relief to restrain the President and CEO from rendering his services
to the competitor of the Company, in addition to any other remedies to which
the Company may be entitled under law; provided, however, that the right to
such injunctive or other equitable relief shall not survive the termination of
the President and CEO’s employment with the Company.


 


 


3.           COMPENSATION AND REIMBURSEMENT OF
EXPENSES


 


3.1         Compensation. 


 


(a) The Company
will compensate and pay the President and CEO an annual base salary of eight
hundred sixty-five thousand dollars ($865,000) equivalent to seventy two
thousand eighty three dollars and thirty three cents ($72,083.33) per month for
his services to the Company during the term of this Agreement.


 


(b) Not later than
March 31 of each contract year, the Compensation Committee shall evaluate and
determine the amount of any increase to the President and CEO’s annual base
salary.  Any increases to the President and CEO’s annual base salary determined
by the Compensation Committee shall be effective on January 1 of the then
running contract year and the increased annual base salary shall become the
President and CEO’s new contractual annual base salary.


 


3.2         Bonus.  
The Company shall set for the President and CEO an annual target bonus of one
hundred percent ( 100%) of his annual base salary as may be earned by him under
the Company’s non-equity incentive bonus plan (the “Incentive Bonus”).  The
bonus shall be due and payable on or before March 31 of each contract year of
this Agreement commencing with the bonus corresponding to calendar year 2016
due and payable on or before March 31, 2017.


 


3.3         Expense
Allowance.  During the term of this Agreement and
any extension thereof, the Company shall provide the President and CEO an
annual expense allowance (the “Expense Allowance”)in the amount of eighty five
thousand dollars ($85,000) from which the President and CEO shall pay his (i)
car-related expenses; (ii) membership expenses for social, business or professional
organizations (all such membership(s) shall be maintained in the name of the
President and CEO); and (iii) any other expenses which, in his judgment, are
reasonably appropriate for the performance of his duties under this Agreement.


 


3.4         Reimbursement
of Expenses.  Not less frequently than monthly, the
Company shall pay for or reimburse the President and CEO for all reasonable
travel and other expenses incurred by the President and CEO in the performance
of his duties under this Agreement, including, without limiting the generality
of the foregoing, the Expense Allowance provided for in Section 3.3 above.


 


3.5         Life
Insurance.  The Company shall renew for an
additional ten (10) year term the existing ten (10) year term life insurance
policy in the sum of three million dollars ($3,000,000) covering the life of
the President and CEO and having as its beneficiary the spouse and heirs of Mr.
Fernández; provided, that the President and CEO may designate in writing from
to time any other person or entity as its beneficiary.  The President and CEO
hereby authorize the Company to use reasonable efforts to obtain at a 




 












 





reasonable cost a ten million dollar ($10,000,000) key-man
term life insurance policy covering his life and having the Company as its
beneficiary.  For as long as the President and CEO is employed by the Company,
all premiums and costs associated with such term life insurance policy  shall
be for the account of the Company.


 


3.6         Vacation. 
The President and CEO shall be entitled to twenty-five (25) days of paid
vacation each year during the term of this Agreement.


 


 


4.           DISABILITY


 


4.1         If
the President and CEO shall become physically or mentally disabled or incapacitated
to the extent that he is unable to perform his duties under this Agreement, and
so long as such disability continues, the President and CEO shall, subject to
the provisions of Section 6.2 and 6.3 hereof, and for a period not to exceed
the remaining term of this Agreement, continue to receive his full
compensation, as set forth in Section 3 hereof, including an annual cash bonus
equal to the annual cash bonus paid to him in the last fiscal year prior to his
disability or incapacitation.


 


4.2         There
shall be deducted from the amounts paid to the President and CEO hereunder
during any period of disability or incapacitation, as described in Section 4.1
hereof, any amounts actually paid to the President and CEO pursuant to any
disability insurance or other similar program(s) which the Company has
instituted or may institute on behalf of its employees for the purpose of
providing compensation in the event of disability.


 


 


5.         ADDITIONAL COMPENSATION AND
BENEFITS


 


5.1         During
the term of this Agreement, the President and CEO will be entitled to
participate in, and receive the benefits of, any equity-based compensation
plan, profit sharing plan, or other plans, benefits and privileges given to
employees and executives of the Company or its subsidiaries and affiliates
which may now exist or come into existence hereinafter, to the extent
commensurate with his then duties and responsibilities, as fixed by the
Compensation Committee, and, to the extent that the President and CEO is
otherwise eligible and qualifies, to so participate in, and receive such
benefits or privileges.  The Company shall not make any changes in such plans,
benefits or privileges which would adversely affect the President and CEO’s
rights or benefits there under, unless such change or changes are made pursuant
to a program applicable to all executives of the Company and does not result in
a proportionately greater adverse change in the rights of or benefits to the
President and CEO as compared to any executive officer of the Company.  Nothing
paid to the President and CEO under any plan or arrangement presently in effect
or made available in the future shall be deemed in lieu of the annual base
salary, Incentive Bonus, Special Bonus, Expense Allowance and term life insurance
payable or provided to the President and CEO pursuant to Sections 3.1, 3.2, 3.3
and 3.5 hereof.


 


5.2         (a)
The Company shall pay the remaining balance, $425,000, of the $850,000 special
bonus granted to Mr. Fernandez pursuant to the September 27, 2016 employment
agreement (the “Special Bonus”).  The remaining balance of $425,000 shall be
paid to Mr. Fernández in three equal semi-annual installments with the first
such installment to be paid on July 1, 2018, the second installment to be paid
on January 1, 2019, and the final such installment to be paid on July 1, 2019.
If Mr. Fernández 




 












 





employment is terminated for any
reason before the expiration of the term of this Agreement (other than
termination caused by the death or disability of Mr. Fernández), then he shall
not be entitled to receive any further installments of the Special Bonus. 


 


(b) The Compensation
Committee shall consider in each contract year of this Agreement granting the
President and CEO additional incentive compensation under the Company’s
equity-based compensation plan based on his performance scorecard, as approved
by the Compensation Committee, up to an annual amount equal to eighty five
percent (85%) of his annual base salary. The incentive compensation grants to
the President and CEO shall be made on or before March 31 of each contract year
of this Agreement commencing with the year 2017. As long as he is in compliance
with the requirements of the Company’s Stock Ownership Policy, with respect to
any incentive compensation award granted to him by the Compensation Committee,
the President and CEO shall have the option of electing to receive the award in
deferred cash equivalents.


 


(c) Restrictions on the
restricted stock units granted to the President and CEO hereunder will expire on
the third anniversary of the award or earlier in the event of a Change of
Control of the Company, as defined in the Change in Control Compensation
Agreement between the Company and the President and CEO, dated December 5,
2004, as amended (the “Change in Control Compensation Agreement”), or if the
President and CEO dies or becomes disabled.


 


 


6.         TERMINATION


 


6.1         The
Board of Directors shall have the right, at any time upon prior written Notice
of Termination (as defined in Section 6.8(b) hereof), to terminate the
President and CEO’s employment hereunder for just cause or in connection with a
removal or bar from office pursuant to Section 6.5 hereof.  For purposes of
this Agreement, the term “termination for just cause” shall mean termination
because of the willful and continued failure of the President and CEO to
perform his duties under this Agreement, or the willful engaging by the
President and CEO in illegal conduct or gross misconduct materially injurious
to the Company as determined by a court of competent jurisdiction or a federal
or state regulatory agency having jurisdiction over the Company.  For purposes
of this paragraph, no act, or failure to act, on the part of the President and
CEO shall be considered “willful” unless done, or omitted to be done, by him
not in good faith and without reasonable belief that his action or omission was
in the best interest of the Company; provided, however, that any act or
omission to act by the President and CEO in reliance upon an opinion of counsel
to the Company or counsel to the President and CEO shall not be deemed to be
willful.


 


6.2         In
the event the President and CEO’s employment is terminated for just cause
pursuant to Section 6.1 hereof or he is removed or barred from office pursuant
to Section 6.5 hereof, the President and CEO shall have no right to
compensation or other benefits for any period after such date of termination. 
If the President and CEO is terminated by the Company other than for just cause
pursuant to Section 6.1 hereof, other than in connection with a removal or bar
from office pursuant to Section 6.5 hereof, and other than in connection with a
Change of Control of the Company, as defined in the Change in Control
Compensation Agreement, the President and CEO’s right to compensation and other
benefits under this Agreement shall be as set forth in Sections 6.8(c) and (d)
hereof.


 






 












 





6.3        
The
President and CEO shall have the right, upon prior written Notice of
Termination of not less than thirty (30) days, to terminate his employment
hereunder.  In such event, the President and CEO shall have the right, as of
the date of termination, to receive all accrued compensation and other benefits
provided for in this Agreement; provided, however, that if the President and CEO
terminates his employment hereunder for “good reason” pursuant to Section
6.8(a) hereof he shall be entitled to receive the severance payment provided
for in Section 6.8(c) hereof.  If the President and CEO provides a Notice of
Termination for good reason, the date of termination shall be the date on which
the Notice of Termination is given to the Company.


 


6.4         If
the President and CEO is suspended from office and/or temporarily prohibited
from participating in the conduct of the Company’s affairs pursuant to a notice
served under the Federal Deposit Insurance Act (“FDIA”), the Federal Reserve
Act (“FRA”), the Bank Holding Company Act of 1956 (the “BHCA”), the Securities
Exchange Act of 1934 (the “SEA”), or the Puerto Rico Banking Act (the “PRBA”), each
as amended from time to time, the Company’s obligations under this Agreement
shall be suspended as of the date of service unless stayed by appropriate
proceedings.  If the charges in the notice are dismissed, the Company shall: 
(i) pay the President and CEO all the compensation withheld while contractual
obligations were suspended, and (ii) reinstate in whole or in part, as
applicable, any of the Company’s obligations which were suspended.


 


6.5         If
the President and CEO is removed from office and/or permanently prohibited from
participating in the conduct of the Company’s affairs by an order issued under
the FDIA, the FRA, the BHCA, the SEA, or the PRBA all obligations of the
Company under this Agreement shall terminate, as of the effective date of the
order, but the rights of the President and CEO to compensation earned as of the
date of termination shall not be affected.


 


6.6         If
the Company is in default, as defined to mean an adjudication or other official
determination of a court of competent jurisdiction or other public authority
pursuant to which a conservator, receiver or other legal custodian is appointed
for the Company for the purpose of liquidation, all obligations under this
Agreement shall terminate as of the date of default, but the rights of the
President and CEO to compensation and benefits accrued as of the date of
termination shall not be affected.


 


6.7         In
the event that the President and CEO is terminated in a manner which violates
the provisions of Section 6.1 hereof, as determined by a court of competent
jurisdiction, the President and CEO shall be entitled to reimbursement for all
reasonable costs, including attorneys’ fees, in challenging such termination. 
Such reimbursement shall be in addition to all rights to which the President
and CEO is otherwise entitled under this Agreement.


 


6.8         (a)
The President and CEO may terminate his employment hereunder for good reason. 
For purposes of this Agreement, the term “good reason” shall mean (i) a failure
by the Company to comply with any material provision of this Agreement, which
failure has not been cured within ten (10) days after a notice of such noncompliance
has been given by the President and CEO to the Company; (ii) any purported
termination of the President and CEO’s employment hereunder which is not
effected pursuant to a Notice of Termination (and for purposes of this
Agreement no such purported termination shall be effective); (iii) any
reduction in the President and CEO’s compensation and fringe benefits,
including a reduction in his Incentive Bonus  opportunity, or Special Bonus,
without his written consent; (iv) failure to nominate the President and CEO for
reelection as a member of the Board of Directors and, if elected, failure to
appoint him as Vice Chairman of the Board of Directors as herein provided; (v)
a material diminution in his 




 












 





positions, duties and
authorities as President and Chief Executive Officer of the Company; (vi) if
President and CEO is not the President and Chief Executive Officer of the
ultimate parent entity resulting from a Change of Control of the Company, as
defined in the Change in Control Compensation Agreement; (vii) a change in
reporting structure so that the President and CEO reports to someone other than
the Board of Directors, or (viii) 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.


 


(b) Any termination of
the President and CEO’s employment by the Company or by the President and CEO
shall be communicated by a written Notice of Termination to the other party
hereto.  For purposes of this Agreement, the term “Notice of Termination” shall
mean a dated notice which shall (i) indicate the specific termination provision
in the Agreement relied upon; (ii) set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the President and
CEO’s employment under the provision so indicated; (iii) specify a date of
termination, which shall be not less than thirty (30) nor more than ninety (90)
days after such Notice of Termination is given, except in the case of the
Company’s termination of the President and CEO’s employment for just cause
pursuant to Section 6.1 hereof or in connection with a removal or bar from
office pursuant to Section 6.5 hereof, in which case the Notice of Termination
may specify a date of termination as of the date such Notice of Termination is
given; and (iv) be given in the manner specified in Section 9.1 hereof.


 


(c) In the event that: 
(i) the President and CEO shall terminate his employment for good reason as
defined in Section 6.8(a) hereof, or (ii) if the President and CEO is
terminated by the Company other than for just cause pursuant to Section 6.1
hereof, other than in connection with a removal or bar from office pursuant to
Section 6.5 hereof, and other than in connection with a Change of Control of the
Company, as defined in the Change in Control Compensation Agreement, then in
lieu of any further compensation to the President and CEO for periods
subsequent to the date of termination, the Company shall pay as severance to
the President and CEO an amount equal to the product of (A) the aggregate
annual compensation paid to or payable by the Company and any of its
subsidiaries to the President and CEO during the year in which the termination
of the President and CEO’s employment occurs, which amount shall include the
President and CEO’s (i) annual base salary, and (ii) Incentive Bonus  (equal to
the average aggregate cash bonuses paid to the President and CEO in the last
two fiscal years prior to the date of termination of employment), multiplied by
(B) 3.00, such payment to be made in a lump sum on or before the fifth day
following the date of termination.


 


(d) Unless the
President and CEO’s employment is terminated for just cause pursuant to Section
6.1 hereof, or in connection with a removal or bar from office pursuant to
Section 6.5 hereof, or in connection with a Change of Control of the Company,
as defined in the Change in Control Compensation Agreement, the Company shall
maintain in full force and effect, for the continued benefit of the President
and CEO for the balance of the term of this Agreement (as such term may have
been extended as provided herein), all employee benefit plans and programs in
which the President and CEO was entitled to participate immediately prior to
the date of termination, provided that the President and CEO’s continued
participation is possible under the general terms and provisions of such plans
and programs, and, further provided, that the Company shall not be obligated to
continue the payment of health benefits if the President and CEO receives equal
or greater health benefits under the medical plan of a subsequent employer.


 






 












 





(e)
The President and CEO shall not be required to mitigate the amount of any
payment provided for in paragraphs (c) and (d) of this Section 6.8 by seeking
other employment or otherwise.


 


 


7.         INDEMNIFICATION


 


7.l         The
Company shall indemnify the President and CEO to the fullest extent authorized
by applicable federal and Commonwealth of Puerto Rico laws and regulations
(including 12 C.F.R. part 359), with respect to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the Company) that
the President and CEO is a party or is threatened to made a party by reason of
the fact that he is or was the President and Chief Executive Officer of the
Company or that he is or was a member of the Board of Directors, or is or was
serving at the written request of the Company as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, against costs and expenses (including attorneys’ fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good faith and
in a matter he reasonably believed to be in or not opposed to the best
interests of the Company, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful,
provided that the Company shall not be liable for any amounts which may be due
to the President and CEO in connection with a settlement of any action, suit or
proceeding effected without its prior written consent or any action, suit or
proceeding initiated by the President and CEO seeking indemnification hereunder
without its prior written consent.  The provisions of this Section 7.1 shall
also extend the conjugal partnership of the President and CEO and his spouse
and to the President and CEO’s spouse, when applicable, and shall survive the
termination of this Agreement.


 


 


8.         SUCCESSORS OF THE PARTIES


 


8.1         This
Agreement shall inure to the benefit of and be binding upon the President and
CEO, and, to the extent applicable, his assigns, executors, and personal
representatives and the Company, its successors, and assigns, including,
without limitation, any person, partnership, or corporation which may acquire
all or substantially all of the Company’s assets and business, or with or into
which the Company may be consolidated or merged, and this provision shall apply
in the event of any subsequent merger, consolidation, or transfer.


 


8.2         This
Agreement is personal to each of the parties hereto and neither party may
assign or delegate any of his or its rights or obligations hereunder without
first obtaining the written consent of the other party.


 


 


9.         NOTICES


 


9.1         All
notices required by this Agreement to be given by one party to the other shall
be in writing and shall be deemed to have been delivered either:






 












 





(a)        
When personally delivered to the office of the Secretary of the Company at
his regular corporate office, or the President and CEO in person; or


 


(b)         Five
days after depositing such notice in the United States mails, certified mail
with return receipt requested and postage prepaid to:


 


(i)         José Rafael Fernández


                                                       
(at the address of record in his employment


                                                       
file with the Company)


 


(ii)         OFG Bancorp 


                                                        
P.O. Box 195115


                                                        
San Juan, Puerto Rico 00919-5115


                                                        
Attention: 
Chairman–Compensation Committee


 


or such other address as either party
may designate to the other by notice in writing in accordance with the terms
hereof.


 


 


10.         AMENDMENTS OR ADDITIONS


 


10.1         No
amendments or additions to this Agreement shall be binding unless in writing
and signed by both parties.  The prior approval by a two-thirds affirmative
vote of the full Board of Directors shall be required in order for the Company
to authorize any amendments or additions to this Agreement, to give any consent
or waivers of provisions of this Agreement, or to take any other action under
this Agreement including any termination of the employment of the President and
CEO with or without just cause under Section 6.1 hereof.


 


 


11.         MISCELLANEOUS


 


11.1         No
course of conduct between the Company and President and CEO to exercise any
right or power given under this Agreement shall: (i) impair the subsequent
exercise of any right or power, or (ii) be construed to be a waiver of any
default or any acquiescence in or consent to the curing of any default while
any other default shall continue to exist, or be construed to be a waiver of
such continuing default or of any other right or power that shall theretofore
have arisen; and, every power and remedy granted by law and by this Agreement
to any party hereto may be exercised from time to time, and as often as may be
deemed expedient. All such rights and powers shall be cumulative to the fullest
extent permitted by law.


 


11.2         The
provisions of this Agreement shall be deemed severable and the invalidity or
unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof.


 


11.3         This
Agreement shall be governed in all respects and be interpreted by and under the
laws of the Commonwealth of Puerto Rico, except to the extent that such law may
be preempted by applicable federal law, including applicable regulations,
opinions 




 












 





or orders duly issued by the FDIC, the FRB or
the SEC (“Federal Law”), in which event this Agreement shall be governed and be
interpreted by and under Federal Law.  Venue for the litigation of any and all
matters arising under or in connection with this Agreement shall be laid in the
United States District Court for the District of Puerto Rico, in the case of
federal jurisdiction, and in the Court of First Instance, Superior Part of San
Juan, of the Commonwealth of Puerto Rico, in the case of state court
jurisdiction.


 


11.4         Notwithstanding
anything to the contrary herein contained, the payment or obligation to pay any
monies or granting of any rights or privileges to the President and CEO as
provided in this Agreement shall not be in lieu or derogation of the rights and
privileges that the President and CEO now has under any plan or benefit
presently outstanding.


 


11.5         As
used herein, the term “Company” shall include all of the Company’s
subsidiaries.


 


11.6         This Agreement constitutes the entire agreement and understanding between the parties hereto with
respect to the subject matter hereof and, as of the Effective Date, supersedes
all prior agreements and understandings, whether written or oral, relating to
such subject matter.  For the avoidance of doubt, nothing in this Agreement
limits, expands or otherwise amends the terms of the Change in Control
Compensation Agreement.


 


11.7         This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original and all of which taken together shall constitute one and the
same agreement.


 


11.8         The
heading of each section or paragraph of this Agreement is for reference
purposes only and shall not in any way affect the meaning or interpretation of
any provision of this Agreement.


IN WITNESS WHEREOF,
the parties have duly executed and delivered this Agreement in San Juan, Puerto
Rico, as of the date first above written.


 


PRESIDENT
AND CEO


 


 


              /s/ José Rafael
Fernández


José Rafael Fernández


 


 


OFG
BANCORP


 


By:       
Compensation Committee of the 


             
Board of Directors


 


 


 


By:
       /s/ Jorge
Colón Gerena


             
Jorge Colón Gerena 


             
Chairman – Compensation Committee