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                                                                    EXHIBIT 10.3

                                            [THIS IS AN UNOFICCIAL TRANSLATION
                                             OF THE ORIGINAL LETTER IN SPANISH,
                                             SIGNED BY THE PARTIES.]

June 10, 2002

Mrs. Migdalia Rivera Polanco
Condominio Segovia
Apartamento 709
Hato Rey, PR

Dear Mrs. Rivera:

By this letter I confirm your employment as President of the new division of
Westernbank to be known as "Expre$$o de Westernbank", in charge of small
consumer loans and Expre$$o branches which will handle such loans as its main
product in addition to other banking products.

In your position you will organize the operations of the division and its
respective branches, and will employ its officers and necessary personnel for
the operations of the same. The persons to be recruited and their salaries will
be determined by us before employment as well as to the establishment of any
bonus or incentive.

We have agreed that you will serve in such position for a term not less than
five (5) years starting on your employment date, with the agreement and
condition that you will not compete or be employed in any way, directly or
indirectly, in Puerto Rico or any other financial institution (e.g. bank,
finance company, mortgage house, etc.) during the term of this contract as well
as during the term of two additional years, after you have ceased in your
position, if it occurs.

Upon accepting your appointment, you will receive an employment bonus of
$1,000,000 payable to your order, as well as an annual gross salary of $250,000
plus all fringe benefits inherent to the position you will occupy, subject to
the policies of the institution, including a company car up to a maximum of
$40,000 and a mobile phone. Any additional bonus and benefits will be determined
by the Bank depending on your performance and the division's production. This
employment bonus will be considered as earned based on the proportion of months
elapsed, during the contract effective term.

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Your employment and compensation has been offered in consideration of your level
of experience, relations and specialized knowledge of the small consumer loans
business in Puerto Rico and your exclusive employment commitment as President of
the Division, as well as the compliance with the following revenues projections
and growth. We expect that this new division under your direction and leadership
will generate the following revenues:

During the first 120 days we expect a production of $120.0 million net in new
business and for the period ending December 31, 2002, we expect to have a new
business base not less than $175.0 million net. Also, we expect that the
division operation does not result in losses for the period ending December 31,
2002, and to generate an income before income taxes of $5,000,000 for the year
ending December 31, 2003. Thereafter, a 25.0% annual growth for the following
two years and a 15.0% annual growth thereafter until the achievement of a net
portfolio base of approximately $500.0 million or in accordance with what the
market dictates, which we will inform you from time to time.

Your performance bonus in accordance with the division's net income will be as
follows:

         -        After the first $5,000,000 in net income before income taxes,
                  $75,000. From thereon you will participate at a ratio of
                  $75,000 for each additional $5.0 million in net income before
                  income taxes (prorated proportionally in whole multiples of
                  $1.0 million up to $20.0 million). After $20.01 million it
                  will be 2% over the excess.

We will appreciate that if you are in agreement with the above terms and
conditions, please sign the enclosed copy of this letter and return it to my
attention, being clearly established that this letter supersedes any other
previous negotiation regarding the terms and conditions of your recruitment.

Yours truly,

/s/ Frank C. Stipes

------------------------------
Frank C. Stipes, Esq.
President and Chief Executive Officer

                                                /s/ Migdalia Rivera Polanco
                                                -----------------------
                                                Migdalia Rivera Polanco<PAGE>
                                                                    EXHIBIT 10.6

                                PAYMENT AGREEMENT
                       IN THE EVENT OF A CHANGE OF CONTROL

This PAYMENT AGREEMENT IN THE EVENT OF A CHANGE OF CONTROL (the "Agreement") is
dated December 7, 2001, between WESTERNBANK PUERTO RICO (the "Bank") and Mr.
Andres Morgado (the "Employee").

         WHEREAS, the Employee is currently serving as the Vice-president of the
Trust Division of the Bank; and

         WHEREAS, the Board believes that it is in the best interests of the
Bank to encourage the Employee's continued employment with dedication to the
Bank in the face of potentially distracting circumstances arising from the
remote possibility of a change in control of the Bank, although no such change
is now thought of or contemplated; and

         WHEREAS, the parties desire to enter into this Agreement setting forth
the terms and conditions for the payment of special compensation to the Employee
in the event of a termination of the Employee's employment in connection with or
as a result of a change in control;

         NOW THEREFORE, IT IS AGREED AS FOLLOWS:

1.       TERM. The initial term of this Agreement shall be for a two (2) year
         period commencing on the date hereof. This Agreement shall be
         automatically renewed for one (1) additional year on the first and each
         subsequent anniversary date of this Agreement, unless the Bank gives
         contrary written notice to the Employee sixty (60) days prior to such
         renewal date. References herein to the term of this Agreement shall
         include the initial term and any additional years for which this
         Agreement is renewed.

2.       TERMINATION OF EMPLOYMENT IN CONNECTION WITH A CHANGE IN CONTROL.

         (a)      If during the term of this Agreement there is a change in
                  control of the Bank, the Employee shall be entitled to receive
                  as a special compensation a lump sum cash payment as provided
                  for herein, in connection with or within one (1) year after a
                  "Change in Control" (as defined below) in the event the
                  Employee's employment is terminated voluntarily by the
                  Employee or involuntarily by the Bank without cause in
                  connection with or within one (1) year after a change in
                  control has occurred. The amount of this payment shall be
                  equal to three (3) times the annual base compensation,
                  year-end Christmas bonus, and special bonuses, if any, paid to
                  the Employee by the Bank during the calendar year preceding
                  the year in which the Change in Control occurs. Payment under
                  this Section 2(a) shall be in lieu of any amount that may be
                  otherwise owed to the employee as damages for the loss of
                  employment, in the event that such loss occurs. Payment under
                  this

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                  Section 2(a) shall not be reduced by any compensation which
                  the Employee may receive from other employment with another
                  employer after termination of the Employee's employment with
                  the Bank, if such termination occurs. No payment hereunder
                  shall affect the Employee's entitlement to any vested benefits
                  or other compensation payments.

         (b)      For purposes of this Agreement, a "Change in Control" shall be
                  deemed to have occurred if:

                  (i)      Twenty-five (25) percent or more of ownership,
                           control, power to vote, or beneficial ownership of
                           any class of voting securities of the Bank is
                           acquired by any person, either directly or indirectly
                           or acting through one or more other persons;

                  (ii)     any person (other than any person named as a proxy in
                           connection with any solicitation on behalf of the
                           Board) holds revocable or irrevocable proxies, as to
                           the election or removal of three (3) or more
                           Directors of the Bank, for twenty-five (25) percent
                           or more of the total number of voting shares of the
                           Bank;

                  (iii)    any person has received all applicable regulatory
                           approvals to acquire control of the Bank;

                  (iv)     any person has commenced a cash tender or exchange
                           offer, or entered into an agreement or received an
                           option, to acquire beneficial ownership of
                           twenty-five (25) percent or more of the total number
                           of voting shares of the Bank, whether or not any
                           requisite regulatory approval for such acquisition
                           has been received, provided that a Change in Control
                           will not be deemed to have occurred under this clause
                           (iv) unless the Board has made a determination that
                           such action constitutes or will constitute a Change
                           in control; or

                  (v)      as the result of, or in connection with, any cash
                           tender or Exchange offer, merger, or other business
                           combination, sale of assets or contested election, or
                           any combination of the foregoing transaction, (A) the
                           persons who were directors of the Bank before such
                           transaction shall cease to constitute at least a
                           majority of the Board or its successor, or (B) the
                           persons who were stockholders of the Bank immediately
                           before such transaction do not own more than fifty
                           (50) percent of the outstanding voting stock of the
                           Bank or its successor immediately after such
                           transaction.

                           For purposes of this Section, a "person" includes an
                           individual, corporation, partnership, trust,
                           association, joint venture, pool, syndicate,
                           unincorporated organization, joint-stock company or
                           similar organization or entity or group acting in
                           concert. A person for these purposes shall be deemed
                           to be a "beneficial

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                           owner" as that term is used in Rule 13d-3 under the
                           Securities Exchange Act of 1934.

3.       NO ASSIGNMENTS. This Agreement is personal to each of the parties
         hereto. No party may assign or delegate any rights or obligations
         hereunder without first obtaining the written consent of the other
         party hereto. However, in the event of the death of the Employee, all
         rights to receive payments hereunder shall become rights of the
         Employee's estate claimable within a twelve (12) month period following
         the date of death of the Employee.

4.       AMENDMENTS OR ADDITIONS: ACTION BY BOARD OF DIRECTORS. No amendments or
         additions to this Agreement shall be binding unless in writing and
         signed by both parties hereto. The prior approval by a majority
         affirmative vote of the full Board shall be required in order for the
         Bank to authorize any amendments or additions to this Agreement.

5.       SECTION HEADINGS. The section headings used in this Agreement are
         included solely for convenience and shall not affect, or be used in
         connection with, the interpretation of this Agreement.

6.       COMPENSATION. The special compensation to be received as agreed to
         herein shall not exceed in any event $1.5 million.

7.       GOVERNING LAW. This Agreement shall be governed by the laws of the
         United States to the extent applicable because of the Bank's status as
         a federally insured financial institution, and otherwise by the laws of
         the Commonwealth of Puerto Rico.

                                                    WESTERNBANK PUERTO RICO

ATTEST:     /s/ Cesar Ruiz                  BY:     /s/ Frank C. Stipes
            --------------                          -------------------
             (Secretary)                                 (President)

                                                    EMPLOYEE:

                                                    /s/ Andres Morgado
                                                    -------------------

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