Document:

EXHIBIT 10.1

 Exhibit 10.1 
 SEPARATION AND RELEASE AGREEMENT 
 This Separation and Release Agreement (“Agreement”) is
entered into as of this 28th day of August 2006, between R&G Financial Corporation (the “Company”),
R&G Portfolio Management Corporation, R&G Mortgage Corporation, R&G International Corporation, R&G Acquisition Holdings Corporation (collectively, the “Employers”), Vicente Gregorio (the “Employee”) and Carmen A.
Martinez, his wife (hereinafter, “Employee and Spouse”), and the conjugal partnership they compose, both of whom are of legal age, married and residents of Puerto Rico. 
 RECITALS 
 WHEREAS, the Employee has agreed to modify his employment
relationship with the Company from that which was initially set forth in that certain Letter Agreement entered into with the Company on August 24, 2005 (the “Letter Agreement”) and as subsequently modified by action of the
Company’s Board of Directors, and the Employers and the Employee and Spouse have mutually agreed to certain arrangements and understandings which are set forth herein which address the Executive’s continued employment with the Company as
well as the terms of his eventual resignation from the Company. 
 NOW, THEREFORE, in consideration of the mutual promises and the
terms and conditions set forth below and the other obligations under this Agreement, the Employers, the Employee and Spouse, and the conjugal partnership composed of them (collectively referred to as the “‘Parties”) hereby agree as
follows: 
 AGREEMENT 
 1.
Continuation of Employment Relationship. The Employee shall continue to serve as Executive Vice President and Chief Financial Officer of the Company until October 31, 2006, at which time he shall resign from the position of Chief
Financial Officer. The Employee shall continue as an Executive Vice President of the Company until December 31, 2006. During the period from November 1, 2006 through December 31, 2006 he shall perform such services as shall be
requested of him by the Company’s Chief Executive Officer and the Board of Directors provided, however, that such services shall generally not require more than 40 hours per month of his time, although reasonable accommodations would be made if
the Company requested the Employee to provide more time. 
 2. Termination of Employment Relationships. The employment relationships
between the Employee and the Employers shall terminate on December 31, 2006 or any earlier date covered by this section 2 (the “Resignation Date”). Effective as of the Resignation Date, the Employee hereby resigns all officer and
employee positions (including all responsibilities attendant thereto) with each of the Employers, his membership on all Boards of Directors and committees of each of the Employers and his positions as trustee or administrator with respect to any
statutory business trusts formed by the Company. Employee agrees, upon request by Employers, to sign writings confirming his resignation from any such positions. After October 31, 2006 but before December 31, 2006, Employee may 

 
resign should he become employed by another company, and under such circumstances, he will be paid his $425,000 bonus, while any salary, car allowance and
any other amount owed to him will be paid out pro-rata calculated to his date of termination. 
 3. Salary and Expenses Payment.
During the period from the signing of this letter to December 31, 2006 the Employee shall receive the regular compensation he was paid prior to this Agreement, including but not limited to salary, bonus and car allowance. At the close of
business on the Resignation Date, the Employee shall receive from the Company (i) any remaining salary and wages owed to Employee, (ii) a bonus payment due to him under the Letter Agreement of $425,000 and (iii) reimbursement for all
reasonable and documented business expenses which have been submitted to the Employers. The Parties hereby acknowledge that except as provided herein, no other payments or benefits are due to the Employee under the Letter Agreement. 
 4. Benefits. (a) For a period of eighteen (18) months from the Resignation Date, which Resignation Date shall be the “qualifying
event” date under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Employee shall have the right to continue coverage under the Company’s medical insurance programs as provided by COBRA. At
the close of business on the Resignation Date, Employee shall receive payment for Employee’s accumulated unused vacation time and the amount which constitutes Employee’s vested interest in the Company’s profit sharing plan. The
Company shall continue to provide medical and life insurance through the end of December 2006 and shall permit Employee to convert the Company’s life insurance with respect to Employee to a personal policy if desired by Employee, and at
Employee’s expense. 
 (b) Except as set forth in this Section 4, the Employee shall not be entitled to participate in any benefit
plans or programs provided to employees of the Employers following the Resignation Date. 
 5. No Other Payments Due. Except as
provided in Section 3 and Section 4 hereof, the Employee shall not be entitled to any payments or other benefits following the Resignation Date. The Employee further acknowledges that, subject to the above-referenced exceptions, there is
no other wages, accrued but unused vacation or other compensation or benefits arising out of or as a result of his employment by the Employers. 
 6. Release. (a) In consideration of the above, the sufficiency of which the Employee and Spouse hereby acknowledge, the Employee and Spouse, and the conjugal partnership they compose, on behalf of the Employee and Spouse, and
the conjugal partnership they compose and their heirs, executors and assigns, hereby knowingly and voluntarily release and forever discharge the Employers and each of the Employers’ shareholders, parents, affiliates, subsidiaries, divisions,
any and all current and former directors, officers, employees, agents, and representatives (including but not limited to all counsel to the Employers), and their heirs and assigns, and any and all employee pension benefit or welfare benefit plans of
the Employers, including current and former trustees and administrators of such employee pension benefit and welfare benefit plans (the “Released Parties”), from all claims, charges, or demands, in law or in equity, whether known or
unknown, which may have existed or which may now exist from the beginning of time to the date of this Agreement, arising from or relating to the Employee’s employment relationships or termination from such relationships with the Employers,
including, 
  

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 but not limited to, a release of any rights or claims the Employee may have under Title VII of the Civil Rights Act of
1964, as amended, and the Civil Rights Act of 1991 (which prohibit discrimination in employment based upon race, color, sex, religion and national origin); the Americans with Disabilities Act of 1990, as amended, and the Rehabilitation Act of 1973
(which prohibit discrimination based upon disability); the Family and Medical Leave Act of 1993 (which prohibits discrimination based on requesting or taking a family or medical leave); Section 1981 of the Civil Rights Act of 1866 (which
prohibits discrimination based upon race); Section 1985(3) of the Civil Rights Act of 1871 (which prohibits conspiracies to discriminate); the National Labor Relations Act; the Employee Retirement Income Security Act of 1974, as amended (other
than any accrued benefit(s) to which the Employee has a non-forfeitable right under any pension benefit plan) (which prohibits discrimination with regard to benefits); the Worker Adjustment and Retraining Notification Act; the Fair Labor Standards
Act; any claim to further payment by the Employee and Spouse other than the payments set forth herein; Puerto Rico Law 80 of May 30, 1976; (unjustified dismissal); dismissal or discriminatory treatment prohibited by the Constitution of Puerto
Rico; Puerto Rico Law 17 of April 22, 1988 (Sexual Harassment); Puerto Rico Law 3 of March 13, 1942, as amended; Puerto Rico Law 115 of December 20, 1991; Puerto Rico Law 139 of June 26, 1968; Puerto Rico Law 45 of April 18,
1935 (State Insurance Fund); Puerto Rico Law 379 of May 15, 1948 (Days and Hours of Work); Puerto Rico Law 96 of June 26, 1956 (Minimum Wage); Puerto Rico Law 180 of July 27, 1998; the Insurance and Civil Codes of Puerto Rico; and
claims the Employee and Spouse and the conjugal partnership they compose may have arising under or any other U.S. federal, Puerto Rico, local statute, or common law relating to discrimination, employment, wages, hours, or any other terms and
conditions of employment. The release provided for herein includes a release by the Employee and Spouse of any claims for wrongful discharge, breach of contract, torts, attorney’s fees or any other claims in any way related to the
Employee’s employment relationships with, or resignation or termination from, each of the Employers. Nothing in this Agreement is intended to modify any rights to contribution, indemnification or advancement of expenses that Employee may have
under the Company’s articles of incorporation and/or by-laws, the Company’s director and officer insurance policies that provide coverage for any time period prior to the effective date of this Agreement, or applicable law. 
 (b) It is a condition hereof, and it is the Parties’ intention in the execution of the release in this Section 6, that the same shall be
effective as a bar to each and every claim hereinabove specified. 
 (c) Employee and Spouse hereby represent that Employee and Spouse have
not filed any action, complaint, charge, grievance or arbitration against the Released Parties, and covenant and agree not to file any action, complaint, grievance or arbitration or commence any other proceedings against the Released Parties in any
court of law or equity or in any arbitral forum with respect to any matter, cause or thing occurring through the date of this Agreement. Employee and Spouse agree not to bring any claim based upon the failure or refusal of the Employers to employ
Employee after the Resignation Date. 
 (d) Employers hereby release, forever discharge and hold harmless the Employee and Spouse and the
conjugal partnership they compose, from all claims, charges or demands which may arise from the contractual relationship between the Employers and Employee. 
 7. No Authority to Bind the Employers. As of the Resignation Date, neither the Employee, nor any partner, agent or employee of the Employee, has authority to enter into any contracts that bind one or more of
the Employers or create obligations on the part of any of the Employers. 
  

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 8. Confidentiality and Non-Disparagement. 
 (a) Employee confirms his continuing obligations as a former Company employee hereafter under the Company’s policies and procedures in effect as of
the date of this Agreement and agrees that, to the maximum extent permitted by law, Employee will not divulge and/or communicate to any third parties, or make use of any confidential, sensitive or proprietary information (collectively
“Confidential Information”) acquired in the performance of Employee’s duties for and/or during Employee’s employment with the Employers, except that the Employee may make use of Confidential Information for the purpose of
enforcing this Agreement, in which event Employee will take steps to limit the disclosure of such Confidential Information to the maximum extent reasonably possible including, for example, by making filings under seal. For purposes of this
Agreement, “Confidential Information” shall include, without limitation, information not otherwise known in the financial services industry, not generally known by persons not employed by the Employers and that could not easily be
determined or learned by someone outside of the Employers, and/or not previously disclosed to the public by the Employers or their management with respect to the Employers’ businesses, business and financial methods or practices, operations,
facilities, trade secrets and other intellectual property, systems, procedures, technical know-how, methods of investment, processes, customers, clients, investors, marketing methods or techniques, manuals, confidential reports, fee information,
finances, financial or listing information (including, without limitation, the revenues, costs or profits associated with any activities or products of the Employers), business plans, prospects, budgetary objectives, customers, vendors, suppliers,
training programs, manuals or materials, contracts, systems, mailing lists, trade names, improvements, pricing, price lists, or other data, litigation, regulatory investigations, strategy, code books, invoices and other financial statements,
computer programs, software systems, databases, discs and printouts, other plans (technical or otherwise), correspondence, internal reports, personnel files, employee compensation, sales and advertising material which is or was used in the business
of the Employers. The Employee agrees and acknowledges that all of such Confidential Information, in any form, and copies and extracts thereof, are and shall remain the sole and exclusive property of the Employers and the Employee shall return to
the Employers the originals and all copies of any such information provided to or acquired by the Employee in connection with the performance of his duties for the Employers, and shall return to the Employers all files, correspondence and/or other
communications received, maintained and/or originated by the Employee during the course of his relationship with the Employers, and no copy of any such information shall be retained by him. “Confidential Information” shall not include
information which is known within the financial services industry or is or becomes generally available to the public other than as a result of disclosure by Employee or Spouse in violation of this Section 8. 
 (b) The Company understands and agrees that if the Human Resources Department of the Company and/or its senior management are contacted by any person
with respect to a reference regarding the Employee, the Company shall not, without the written consent of the Employee, provide any information in response other than length of service and positions held with the Company and/or its subsidiaries. The
Employers agree not to disparage (i.e., by making negative comments about the Employee and/or Spouse) and also agree not to initiate or participate in any discussion or written or oral communication that reflects negatively on the Employee and/or
Spouse. For purposes of this Section 8(b), the Employee and Spouse acknowledge that they have had an opportunity to review the Form 8-K and related press release to be filed by the Company with the United States Securities and Exchange Commission
with respect to Employee’s departure from the Employers and agree that such Form 8-K and related press release do not in any way constitute disparagement of Employee or his Spouse. 
 (c) Nothing herein shall limit (i) the Parties’ right under applicable law to provide truthful information to judicial, regulatory,
administrative or other governmental 
  

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 authorities or in connection with testimony given pursuant to compulsory process; or (ii) Employee’s right to
provide truthful information in response to inquiries from or with the express consent of the Company’s Chief Executive Officer. 
 (d)
If there is a breach or threatened breach of the provisions of this Section 8, the Employers or the Employee, as the case may be, shall be entitled to an injunction restraining the other party from such breach. Nothing herein shall be construed
as prohibiting any other remedies for such breach. 
 9. Cooperation in Legal and Other Matters. (a) Without waiving any
applicable privilege or constitutional rights, Employee agrees to make himself reasonably available to the Employers to respond to requests by the Employers for information involving facts or events relating to the Employers that may be within
Employee’s knowledge. Employee agrees that he will cooperate in good faith with the Employers and their counsel in connection with any investigation, administrative proceeding, litigation or regulatory proceeding relating to any matter that
occurred during Employee’s employment with the Employers in which Employee was involved or of which Employee has knowledge. Under such circumstances, Employers agree to pay the Employee for his time as a consultant and/or witness at the rate of
$350/hour and to reimburse Employee for reasonable expenses that Employee may incur in complying with this Section 9. Employers will provide and pay for counsel of the Employee choosing (i) to assist Employee in responding to requests by
the Employers for information involving facts or events relating to the Employers that may be within Employee’s knowledge (ii) to accompany and counsel Employee in connection with any investigation, administrative procedure or litigation,
and (iii) otherwise, to the extent that the Employers deem it necessary and appropriate to do so. 
 (b) Employee agrees that, in the
event that Employee is subpoenaed, requested to appear for an interview or otherwise provide information by any person or entity (including but not limited to, any government agency) to provide testimony or information (in a deposition, court
proceeding, interview or otherwise) which in any way relates to Employee’s employment with the Employers beyond the mere fact of employment, positions held and years of service, Employee will give prompt notice of such request to the Chief
Executive Officer or Corporate Secretary of the Company, and will make no disclosure, unless otherwise required by law, until the Company has had a reasonable opportunity to contest the right of the requesting person or entity to such disclosure.
Should the Company fail to act within the time frame specified in the subpoena, the Employee will comply and will provide the testimony or information requested. 
 (c) Nothing in this Agreement is intended to modify any rights to contribution, indemnification or advancement of expenses that Employee may have under the Company’s articles of incorporation and/or by-laws, the
Company’s director and officer insurance policies that provide coverage for any time period prior to the effective date of this Agreement, or applicable law. 
 10. Return of Property. The Employee shall promptly return all the Employers’ property in the Employee’s possession of which the Employee is aware after a diligent search, including, but not limited
to, the Employers’ keys, credit cards, computer software and peripherals and originals or copies of books, records, or other information pertaining to the Employers’ businesses, including any Employer information regarding Employers on
Employee’s personal computers. The Employee will keep his contact list contained in the Employer’s computer system. 
  

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 11. Acknowledgment of Spouse. Spouse acknowledges that she has not suffered any damages attributed
to the Employers for any reason including, but not limited to, the employment relationship of Employee, the termination of same and any other event, act or omission occurring during his employment or thereafter and states that her spouse, family
members, heirs, executor, assignees, bondsmen, dependents, friends or relatives have not suffered any damages caused by the Employers for any reason including, but not limited to, the employee relationship of Employee, the termination of same and
any other incident or fact occurring during his employment or thereafter and promises and agrees to testify to such effect in any forum which is established to consider such matter. 
 12. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Puerto Rico, without
reference to the principles of conflict of laws. 
 13. Deductions. All payments to be made hereunder shall be net of all applicable
deductions. 
 14. Complete Agreement; Amendments. This Agreement represents the complete agreement between the Parties concerning the
subject matter in this Agreement and supersedes all prior agreements or understandings, written or oral, including without limitation the terms of the Letter Agreement and any and all other prior agreements with respect to Employee’s employment
with Employers. In executing this Agreement, none of the Parties has relied or is relying on any representation with respect to the subject matter of this Agreement or any representation inducing the execution of this Agreement except those
representations as are expressly set forth in this Agreement, and the Parties acknowledge that each has relied on their own judgment in entering into this Agreement. This Agreement may not be amended or modified otherwise than by a written agreement
executed by the parties hereto or their respective successors and legal representatives. 
 15. Severability. If, at any time after
the execution of this Agreement, any provision of this Agreement shall be held to be illegal, void or unenforceable by a court, arbitrator or agency of competent jurisdiction, solely such provision shall be of no force or effect. The illegality or
unenforceability of such provision shall have no effect upon, and shall not impair the enforceability of, any other provision of this Agreement; provided, however, that, upon any finding by a court, arbitrator or agency of competent jurisdiction
that the covenant and release provided for by Section 6(a) and/or (d) of this Agreement is illegal, void or unenforceable, Employee and Spouse, and Employers, respectively, agree to execute a release, waiver and/or covenant that cures the
matter determined to be illegal, void or unenforceable and that is legal and enforceable. 
 16. Counterparts. This Agreement may be
executed in counterparts, and each counterpart shall have the same force and effect as an original and shall constitute an effective, binding agreement on the part of each of the undersigned. 
 17. Notices. All notices, requests, claims, demands or other communications hereunder shall be in writing and shall be deemed given when delivered
personally, upon receipt of a 
  

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 transmission confirmation if sent by telecopy or like transmission and on the next business day when sent by a reputable
overnight carrier service to the Parties at the following addresses (or at such other address for a Party as shall be specified by like notice): 
 If to the
Employers: 
 R&G Financial Corporation 
 280 Jesús T. Piñero Avenue 
 Hato Rey, San Juan, Puerto Rico 
 Attention: Corporate Secretary 
 Fax:
(787) 766-8175 
 With a copy to: 
 Patton
Boggs LLP 
 2550 M Street, NW 
 Washington, DC 20037 

			
	Attention:	 	Norman B. Antin, Esq.
		 	Jeffrey D. Haas, Esq.

 Fax: (202) 457-6315 
 If to the Employee and Spouse: 
 G-15 Granada 
 Vistamar Marina Este 
 Carolina, Puerto Rico 00983 
 18. Voluntary Execution of Agreement. This Agreement is executed
voluntarily and without any duress or undue influence on the part or on behalf of the Parties hereto. Each Party acknowledges that (i) they have had the opportunity to consult an attorney regarding the terms and conditions of this Agreement
before executing it, (ii) they have read the Agreement and they fully understand the terms of this Agreement including, without limitation, the significance and consequences of the release in Section 6 hereof, (iii) they are executing
this Agreement in exchange for consideration in addition to anything of value to which they are entitled, and (iv) they are fully satisfied with the terms of this Agreement and are executing this Agreement voluntarily, knowingly and willingly
and without duress. 
 [Signature Page Follows] 
  

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 In San Juan, Puerto Rico, the Parties to this Agreement have executed this Agreement as of the day and
first written above. The signature of the Parties hereto shall reflect that each has received an executed copy of this Agreement. 
  

			
	R&G FINANCIAL CORPORATION
		
	By:	 	 /s/ Victor J. Galán

	Name:	 	Victor J. Galán
	Title:	 	 Chairman of the Board and
 Chief Executive
Officer

	
	R&G PORTFOLIO MANAGEMENT CORPORATION
		
	By:	 	 /s/ Victor J. Galán

	Name:	 	Victor J. Galán
	Title:	 	Chairman of the Board
	
	R&G MORTGAGE CORPORATION
		
	By:	 	 /s/ Victor J. Galán

	Name:	 	Victor J. Galán
	Title:	 	Chairman of the Board and
		 	Chief Executive Officer
	
	R&G INTERNATIONAL CORPORATION
		
	By:	 	 /s/ Victor J. Galán

	Name:	 	Victor J. Galán
	Title:	 	Chairman of the Board
	
	R&G ACQUISITION HOLDINGS CORPORATION
		
	By:	 	 /s/ Victor J. Galán

	Name:	 	Victor J. Galán
	Title:	 	Chairman of the Board
	
	VICENTE GREGORIO
	
	 /s/ Vincente Gregorio

	
	CARMEN A. MARTINEZ
	
	 /s/ Carmen A. Martinez

	Spouse

  

 8EXHIBIT 10.2

 Exhibit 10.2 
 AGREEMENT 
 AGREEMENT, dated this 28th day of August 2006 between R&G Financial Corporation, a Puerto Rico corporation (the “Company”), and Mr. Andrés Pérez (the
“Executive”). 
 RECITALS 
 WHEREAS, the Company desires to be ensured of the Executive’s continued active participation in the business of the Company; and 
 WHEREAS, the Company desires to enter into an employment agreement with the Executive with respect to Executive’s employment by the Company.

 AGREEMENT 
 NOW
THEREFORE, in consideration of the mutual agreements herein contained, and upon the other terms and conditions hereinafter provided, the parties hereby agree as follows: 
 1. Definitions. The following words and terms shall have the meanings set forth below for the purposes of this Agreement: 
 a. Base Salary. “Base Salary” shall have the meaning set forth in Section 3(a) hereof. 
 (b) Cause. Termination of the Executive’s employment for “Cause” shall mean termination because of personal dishonesty,
incompetence, willful misconduct, breach of fiduciary duty involving personal profit, intentional failure to perform stated duties, willful violation of any law, rule or regulation (other than traffic violations or similar offenses) or final
cease-and-desist order or material breach of any provision of this Agreement. 
 (c) Date of Termination. “Date of
Termination” shall mean (i) if the Executive’s employment is terminated for Cause or for Disability, the date specified in the Notice of Termination, and (ii) if the Executive’s employment is terminated for any other reason,
the date on which a Notice of Termination is given or as specified in such Notice. 
 (d) Disability. Termination by the Company of
the Executive’s employment based on “Disability” shall mean termination because of any physical or mental impairment which qualifies the Executive for disability benefits under the applicable long-term disability plan maintained by
the Company or, if no such plan applies, which would qualify the Executive for disability benefits under the Federal Social Securities System. 
 (e) Notice of Termination. Any purported termination of the Executive’s employment by the Company for any reason, including without limitation for Cause or 

 Disability, or by the Executive for any reason, shall be communicated by written “Notice of Termination” to the
other party hereto. For purposes of this Agreement, a “Notice of Termination” shall mean a dated notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) sets forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination of Executive’s employment under the provision so indicated, (iii) specifies 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 Executive’s employment for Cause, which shall be effective immediately; and (iv) is given in the manner specified in
Section 9 hereof. 
  

	 	2.	Term of Employment. 

 (a) The Company hereby employs
the Executive as Executive Vice President of the Company and the Executive hereby accepts said employment and agrees to render such services to the Company on the terms and conditions set forth in this Agreement. The term of employment under this
Agreement shall be as of October 1, 2006 until midnight of December 31, 2008 commencing on the date of this Agreement. The Executive shall also become the Company’s Chief Financial Officer effective November 1, 2006. The term of
this Agreement, and the employment of the Executive hereunder, may be renewed and extended for such period or periods as may be mutually agreed to by the Company and the Executive in a written supplement to this Agreement. If this Agreement is not
so renewed and extended, this Agreement shall automatically terminate and the employment of the Executive shall become month-to-month unless otherwise agreed to by the parties. 
 (b) During the term of this Agreement, the Executive shall perform such executive services for the Company as may be consistent with the Executive’s
titles and from time to time assigned to the Executive by the Company’s Board of Directors. 
  

	 	3.	Compensation and Benefits. 

 (a) (i) The
Company shall compensate and pay the Executive for services during the term of this Agreement at a base annual salary of $500,000 per year (“Base Salary”), which may be increased from time to time in such amounts as may be determined by
the Board of Directors of the Company and may not be decreased without the Executive’s express written consent. 
 (ii) In addition to
Base Salary, the Executive shall be entitled to receive during the term of this Agreement a Guaranteed Bonus of $200,000, payable following each of December 31, 2007 and 2008, which shall be subject to pro rata adjustment based on the months
employed in the year to the extent that the Executive terminate the employment agreement or the Company terminates the agreement for cause. 
 (iii) An additional “Restatement” Bonus in the amounts shown below provided that a complete and final Form 10-K/A for the year 2004 is provided to the Company’s independent auditors for final review and authorization by no
later than the following dates: 
  

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 $125,000 if by November 17, 2006, $100,000 if by November 30,2006, $75,000 if by December 15, 2006 and
$50,000 if by December 31, 2006 and nothing if thereafter; $150,000 subject to completion and filing with the SEC of the 2005 Form 10-K by the March 27, 2007 deadline for New York Stock Exchange delisting of the Company’s common
stock; $50,000 subject to completion and filing with the SEC of the 2006 Form 10-K filing by June 2007; $50,000 subject to completion and filing with the SEC of the 2007 quarterly filings with the SEC (i.e. March and June Form 10-Qs) by no later
than September 31, 2007. Due dates have to be met for any Restatement Bonuses to be paid. 
 (iv) A Performance Bonus of $100,000 will
be paid after December 31, 2007 and $200,000 will be paid after December 31, 2008, provided in each case that Executive’s performance and that of the Company is in accordance with the Company’s financial plan for the period,
which shall be subject to the approval of the Board of Directors. 
 (v) Stock options of 30,000 shares of the Company’s common stock
will be issued once the filing of all SEC reports is completed and the Company is up to date and current in all its SEC filings. The stock options will vest and be exercisable in accordance with the Company’s 2004 Stock Option Plan. 

(vi) A Signing Bonus of $150,000 shall be paid upon execution of this Agreement. 
 (b) During the term of this Agreement, the Executive shall be entitled to participate in and receive the benefits of any pension or other retirement
benefit plan, profit sharing, stock option, employee stock ownership, or other plans, benefits and privileges given to employees and executives of the Company, to the extent commensurate with then duties and responsibilities, as fixed by the Board
of Directors of the Company. 
 (c) During the term of this Agreement, the Executive shall be entitled to eighteen (18) days paid annual
vacation. The Executive shall not be entitled to receive any additional compensation from the Company for failure to take a vacation, nor shall the Executive be able to accumulate unused vacation in excess of 36 days except to the extent authorized
by the Board of Directors of the Company. 
 (d) In the event the Executive’s employment is terminated due to Disability, the Executive
may continue coverage for medical and life insurance coverage under COBRA (36 months) and individual policy conversion for life insurance. 
 (e) The Company shall, during the term of this Agreement, pay the Executive the sum of $2,750 per month as a car allowance. 
 (f)
The Company shall provide up to $15,000 annually for one country club membership. 
  

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 4. Expenses. The Company shall reimburse the Executive or otherwise provide for or pay for all
reasonable expenses incurred by the Executive in furtherance of or in connection with the business of the Company, including, but not by way of limitation, traveling expenses, subject to such reasonable documentation and other limitations as may be
established by the Board of Directors of the Company. If such expenses are paid in the first instance by the Executive, the Company shall reimburse the Executive therefor. 
 5. Termination. 
 (a) The Company
shall have the right, at any time upon prior Notice of Termination, to terminate the Executive’s employment hereunder for any reason, including without limitation, termination for Cause or Disability, and the Executive shall have the right,
upon prior Notice of Termination, to terminate employment hereunder for any reason. 
 (b) In the event that (i) the Executive’s
employment is terminated by the Company for Cause or (ii) the Executive terminates employment hereunder other than for Disability or death, the Executive shall have no right pursuant to this Agreement to compensation or other benefits for any
period after the applicable Date of Termination. 
 (c) In the event that the Executive’s employment is terminated as a result of
Disability during the term of this Agreement, the Executive shall receive Base Salary for the duration of the term of this Agreement. In the event of the Executive’s death during the term of the Agreement, the Executive’s estate shall
receive Base Salary to the end of the term of this Agreement. 
 (d) In the event that (i) the Executive’s employment is terminated
by the Company for other than Cause, Disability, or the Executive’s death or (ii) such employment is terminated by the Executive due to a material breach of this Agreement by the Company, which breach has not been cured within fifteen
(15) days after a written notice of non-compliance has been given by the Executive to the Company, then the Company shall provide the Executive with the compensation otherwise payable pursuant to Section 3(a) hereof. 
 (e) In the event of change of control of the operation at RG Financial Corp., a $500,000 payment shall be entitled as specified in the Change of Control
Agreement. The selling or merger of one of the subsidiaries will not considered as a change of control event. 
 6. Non-Competition.
The Executive agrees that: 
 (a) During the term of this Agreement, the Executive will not, directly or indirectly, participate in or act
as a principal, partner, officer, employee, agent, or consultant to any business entity which is competitive with the business now or hereafter engaged in or conducted by the Company, nor shall the Executive hold greater than 5% of the equity
securities of any such business. 
 (b) For a period of one year following the termination of this Agreement for any reason, the Executive
will not, directly or indirectly, solicit for employment, or hire any person who during the term of this Agreement was engaged as an employee or officer of the Company or any of its subsidiary or affiliated companies. 
  

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 7. Withholding. All payments required to be made by the Company hereunder to the Executive shall
be subject to the withholding of such amounts, if any, relating to tax and other payroll deductions as the Company may reasonably determine should be withheld pursuant to any applicable law or regulation. 
 8. Assignability. The Company may assign this Agreement and its rights and obligations hereunder in whole, but not in part, to any corporation,
Company or other entity with or into which the Company may hereafter merge or consolidate or to which the Company may transfer all or substantially all of its assets, if in any such case said corporation, Company or other entity shall by operation
of law or expressly in writing assume all obligations of the Company hereunder as fully as if it had been originally made a party hereto, but may not otherwise assign this Agreement or its rights and obligations hereunder. The Executive may not
assign or transfer this Agreement or any rights or obligations hereunder. 
 9. Notice. For the purposes of this Agreement, notices
and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by certified or registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth below: 
  

					
	 	 	The Company : Chairman of the Board and CEO
		 		    	R&G Financial Corporation
		 		    	 R&G Tower

		 		    	 290 Jesús T. Pinero Avenue

		 		    	 San Juan, Puerto Rico 00918

			
		 		    	 With a copy to:

			
		 		    	 Secretary

		 		    	 R&G Financial Corporation

		 		    	 R&G Tower

		 		    	 290 Jesús T. Pinero Avenue

		 		    	 San Juan, Puerto Rico 00918

			
		 	 The Executive:
	    	
		 		    	 Mr. Andrés Pérez

		 		    	 313 Rey Felipe

		 		    	 La Villa de Torrimar

		 		    	 Guaynabo, Puerto Rico 00969

 10. Amendment; Waiver. No provisions of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing and signed by the Executive and such officer or officers as may be specifically designated by the 
  

 5 

 Board of Directors of the Company to sign on its behalf. No waiver by any party hereto at any time of any breach by any
other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

 11. Governing Law. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of
the United States where applicable and otherwise by the substantive laws of Puerto Rico. 
 12. Nature of Obligations. Nothing
contained herein shall create or require the Company to create a trust of any kind to fund any benefits which may be payable hereunder, and to the extent that the Executive acquires a right to receive benefits from the Company hereunder, such right
shall be no greater than the right of any unsecured general creditor of the Company. 
 13. Headings. The section headings contained
in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. 
 14.
Validity. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provisions of this Agreement, which shall remain in full force and effect. 
 15. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument. 
 16. Entire Agreement. This Agreement embodies the entire agreement between
the Company and the Executive with respect to the matters agreed to herein. All prior agreements between the Company and the Executive with respect to the matters agreed to herein are hereby superseded and shall have no force or effect. 

 

 6 

 IN WITNESS WHEREOF, this Agreement has been executed as of the date first above written.

  

			
	R-G FINANCIAL CORPORATION
		
	By:	 	 /s/ Víctor J. Galán

		 	Víctor J. Galán
		 	Chairman of the Board and CEO
	
	EXECUTIVE
		
	By:	 	 /s/ Andrés Pérez

		 	Andrés Pérez

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