EXHIBIT 10.10
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 Xx.
Xxxxxx Xxxxxxxxx Xxxxx (the "Employee").
WHEREAS, the Employee is currently serving as the Vice-president of
Finance and Investment and Chief Financial Officer 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
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
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/ Xxxxx Xxxx BY: /s/ Xxxxx X. Xxxxxx
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(Secretary) (President)
EMPLOYEE:
/s/ Xxxxxx Xxxxxxxxx
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