<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
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CURRENT REPORT
Pursuant to Section 13
or 15(d) of the Securities
Exchange Act of 1934
Date of Report (Date of earliest event reported): December 22, 1999
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Doral Financial Corporation
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(Exact name of registrant as specified in this charter)
<TABLE>
<CAPTION>
Puerto Rico 0-17224 00-0312182
- ------------------------------- --------------------- ---------------------------------
<S> <C> <C>
(State or other jurisdiction of (Commission File No.) (IRS Employer Identification No.)
incorporation)
</TABLE>
1159 Franklin D. Roosevelt Avenue, San Juan, Puerto Rico 00920
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (787) 749-7100
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<PAGE> 2
ITEM 5. OTHER EVENTS
Doral Financial Corporation (the "Company") entered into new employment
agreements with Salomon Levis, the Chairman of the Board and Chief Executive
Officer of the Company, as well as with Zoila Levis, its President, Richard F.
Bonini, its Senior Executive Vice President and Chief Financial Officer, and
Mario S. Levis, its Executive Vice President and Treasurer.
The new agreements, dated as of December 22, 1999, are for a two year term
commencing on January 1, 2000 and ending on December 31, 2001. The existing
employment agreements for Salomon Levis, Zoila Levis and Richard F. Bonini
expired on December 31, 1999. The employment agreement for Mario S. Levis was
scheduled to expire on December 31, 2000.
The new agreements provide for the same basic annual salary as the prior
agreements. As with the prior agreements, the new agreements also provide for
annual incentive cash compensation based on a percentage of the Company's net
income over a 15% base return on common stockholders' equity. The new
agreements, however, place a greater emphasis on stock based compensation versus
cash compensation. Accordingly, under the new agreements the maximum cash
incentive compensation payable is reduced by approximately 50% (except in the
case of Mr. Bonini in which case the reduction is greater) compared to the prior
agreements.
For the four agreements taken together, the maximum cash incentive
compensation payable under the agreements is reduced by $3.1 million per year
compared to the prior agreements, or by $6.2 million over the two-year term of
the agreements broken down as follows:
<TABLE>
<CAPTION>
Maximum Annual Maximum Annual
Cash Incentive Cash Incentive
Compensation Compensation
(Prior Agreement) (New Agreement)
----------------- -----------------
<S> <C> <C>
Salomon Levis $3.0 million $1.5 million
Zoila Levis $1.2 million $600,000
Richard F. Bonini $810,000 $210,000
Mario S. Levis $810,000 $410,000
</TABLE>
The new agreements provide for the grant of stock options under the
Company's 1997 Employee Stock Option Plan. In connection with the execution of
the new employment agreements, options to acquire the following number of shares
were awarded on December 22, 1999:
Salomon Levis - 400,000 shares
Zoila Levis - 200,000 shares
Richard F. Bonini - 180,000 shares
Mario S. Levis - 150,000 shares
The options have an exercise price of $11.25, the closing price of the
Common Stock on the date of grant. The options vest over a two year period,
with 50% vesting on December 22, 2000 and the remaining 50% vesting on December
22, 2001.
Copies of the employment agreements are being filed as exhibits to this
Current Report on Form 8-K.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA, FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits
10.90 Employment Agreement, dated as of December 22, 1999,
between the Company and Salomon Levis.
10.91 Employment Agreement, dated as of December 22, 1999,
between the Company and Zoila Levis.
10.92 Employment Agreement, dated as of December 22, 1999,
between the Company and Richard F. Bonini.
10.93 Employment Agreement, dated as of December 22, 1999,
between the Company and Mario S. Levis.
2
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
DORAL FINANCIAL CORPORATION
By: /s/ Richard F. Bonini
---------------------------------
Richard F. Bonini
Senior Executive Vice President
and Chief Financial Officer
Date: January 10, 2000
3
<PAGE> 1
EXHIBIT 10.90
DORAL FINANCIAL CORPORATION
1159 F.D. Roosevelt Avenue
Puerto Nuevo, Puerto Rico 00920
As of December 22, 1999
Mr. Salomon Levis
650 Munoz Rivera Avenue
Hato Rey, Puerto Rico 00918
Dear Mr. Levis:
You were previously employed pursuant to an Agreement (the "Prior
Employment Agreement") dated as of May 1, 1999 by Doral Financial Corporation, a
Puerto Rico corporation ("DFC"). You have had wide experience during your
employment by DFC in the financial services industry, have been employed by DFC
or its predecessors since 1983, and have served as Chairman of the Board of
Directors and Chief Executive Officer of DFC since February 1, 1990. Because of
your experience, DFC deems it in its best interests to continue to have the
benefit of your services as Chairman of the Board and Chief Executive Officer.
It is expected that in such capacity, in addition to your duties as
Chairman and Chief Executive Officer of DFC you will continue to manage the
business of DFC substantially in the manner in which you have prior to the date
hereof. The Board of Directors of DFC has authorized the execution of this
Agreement with regard to your employment on the conditions outlined in the
following sections of this letter. With respect to any period after December 31,
1999, this Agreement supersedes and cancels all prior employment, personal
service, consulting or similar agreement between you and DFC and its
subsidiaries, divisions and ventures, including the Prior Employment Agreement.
1. TERM OF EMPLOYMENT
The term of this Agreement shall be for a period commencing on
January 1, 2000 and ending December 31, 2001, unless sooner terminated as herein
provided.
2. POSITION AND RESPONSIBILITIES
You will serve as Chairman and Chief Executive Officer of DFC. By
your acceptance of this Agreement, you undertake to accept such employment and
to devote your full time and attention to DFC, and to use your best efforts,
ability and fidelity in the performance of the duties attaching to such
employment. During the term of your employment hereunder, you shall not perform
any services for any other company, which services conflict in any way with your
obligations under the two preceding sentences of this Section 2, whether or not
such company is competitive with the businesses of DFC, provided, however, that
nothing in this Agreement shall preclude you from devoting reasonable periods
required for
(i) serving as a director or member of a committee of any
organization involving no conflict or potential conflict of interest with the
interests of DFC;
<PAGE> 2
Mr. Salomon Levis
As of December 22, 1999
Page 2
(ii) delivering lectures, fulfilling speaking engagements,
teaching at educational institutions;
(iii) engaging in charitable and community activities; and
(iv) managing your personal and family investments, provided that
such activities do not interfere with the regular performance of your duties and
responsibilities under this Agreement.
You shall, at all times during the term hereof, be subject to the
supervision and direction of the Board of Directors of DFC with respect to your
duties, responsibilities and the exercise of your powers.
3. COMPENSATION
(a) During the term of this Agreement you shall receive an annual
salary of $1,500,000 annually, payable no less often than monthly in accordance
with corporate policy.
(b) (i) During the term of this Agreement, you shall also be
entitled to receive an annual incentive bonus (commencing with the year ended
December 31, 2000) equal to 15% of the amount of Adjusted Net Income in excess
of a 15% Return on Equity Capital (as hereinafter defined); provided, however,
that the total salary and incentive compensation payable to you pursuant to this
Agreement shall not exceed $3.0 million per annum; and
(ii) The incentive bonus shall be payable annually by DFC
within 30 days following the date on which its Annual Report on Form 10-K for
the fiscal year ended the prior December 31 shall have been filed with the
United States Securities and Exchange Commission; provided that such amount
shall only be payable if you shall have served as Chairman of the Board and
Chief Executive Officer to DFC pursuant to this Agreement for the entire fiscal
year to which such payments relate. As used in this Section 3, "Adjusted Net
Income" means the annual consolidated net income by DFC and its subsidiaries
after all taxes (including net income from equity interests held by DFC in any
other venture and net income of any successor of DFC which may be formed by
merger, consolidation or sale of substantially all of the assets of DFC) during
the calendar year preceding the payment as determined in accordance with
generally accepted accounting principles applied on a consistent basis
throughout the periods involved and as shown by DFC's published consolidated
financial statements audited by its independent accountants (hereinafter
referred to as "GAAP"), such net income to be adjusted (A) by adding back to
such net income any payments made pursuant to Section 3(b)(i) hereof and
payments of similar incentive compensation to other executive officers of DFC,
(B) by deducting from such net income dividends on shares of preferred stock
that are excluded from the definition of "Equity Capital" set forth below and
(C) by adjusting such net income by any extraordinary items of income and
expense such as merger related expenses. As used in Section 3, (1) "Equity
Capital" means DFC's consolidated Stockholders Equity (excluding preferred stock
or other similar instruments that are not convertible into shares of Common
Stock) at the December 31 immediately preceding the beginning of the fiscal year
for which the calculation is being made, determined in accordance with GAAP and
(2) "Return on Equity Capital" for any fiscal year means the percentage
determined by dividing DFC's consolidated net income after all taxes determined
in accordance with GAAP for such fiscal year by Equity Capital for such
preceding December 31; provided that such calculation shall be adjusted as set
forth in the immediately succeeding sentence. If DFC sells securities that
constitute Equity
<PAGE> 3
Mr. Salomon Levis
As of December 22, 1999
Page 3
Capital during the fiscal year, Equity Capital shall be increased by the net
proceeds to DFC (after expenses) of such sale multiplied by a fraction the
numerator of which shall be the number of days in such fiscal year which had
elapsed from the date of the closing of such sale to the end of such fiscal year
and the denominator of which shall be 365.
(c) You shall be entitled to receive stock options to acquire
400,000 shares of DFC's Common Stock subject to the terms and conditions of
DFC's 1997 Employee Stock Option Plan and of the stock option awards made on the
date hereby by DFC's Corporation Committee.
(d) You shall be entitled to participate in the other benefit
plans of DFC upon the terms and conditions on which such benefits are made
available to other officers of DFC. Nothing herein shall obligate DFC to
continue any existing benefit plan or to establish any replacement benefit plan.
(e) You shall be entitled to reimbursement for reasonable travel
and entertainment expenses incurred in connection with the rendering of your
services hereunder in compliance with DFC policy. Nothing contained herein shall
authorize you to make any political contributions, including but not limited to
payments for dinners and advertising in any political party program or any other
payment to any person which might be deemed a bribe, kickback or otherwise and
improper payment under corporate policy or practice and no portion of the
compensation payable hereunder is for any such purpose.
(f) Payments under this Agreement shall be subject to reduction by
the amount of any applicable federal, Commonwealth, state or municipal income,
withholding, social security, state disability insurance, or similar or other
taxes or other items which may be required or authorized to be deducted by law
or custom.
(g) No additional compensation shall be due to you for services
performed or offices held in any subsidiary, division, affiliate, or venture of
DFC.
4. MISCELLANEOUS PROVISIONS RELATING TO THE BONUS AND OTHER MATTERS
(a) Your acceptance of this Agreement will confirm that you
understand and agree that the granting of the incentive compensation referred to
in Section 3(b) and the receipt of any incentive bonus thereunder (the
"incentive compensation") and of the stock options referred in Section 3(c), and
any action thereunder, does not involve any statement or representation of any
kind by DFC as to its business, affairs, earnings or assets, or as to the tax
status of the incentive compensation or stock options or the tax consequences of
any payment or exercise thereof, or otherwise. You further agree that any action
at any time taken by or on behalf of DFC or by its directors or any committee
thereof, which might or shall at any time adversely affect you or the incentive
compensation, may be freely taken notwithstanding any such adverse effect
without your being thereby or otherwise entitled to any right or claim against
DFC or any other person or party by reason thereof.
(b) The incentive compensation is personal to you and, except as
provided or contemplated in Section 3(b) above, in the event of your death or
incapacity, is not transferable or assignable either by your act or by operation
of law, and no assignee, trustee in bankruptcy, receiver or other party
whosoever
<PAGE> 4
Mr. Salomon Levis
As of December 22, 1999
Page 4
shall have any right to demand any incentive compensation or any other right
with respect to it. If, in the event of your death or incapacity, your legal
representative shall be entitled to demand the incentive compensation under any
of the provisions hereof then, unless otherwise indicated by the context or
otherwise required by any term hereof, references to "you" shall apply to said
representative.
(c) If and when questions arise from time to time as to the
intent, meaning or application of any one or more of the provisions hereof such
questions will be decided by the Board of Directors of DFC or any Committee
appointed to consider such matters, or, in the event DFC is merged into or
consolidated with any other corporation, by the Board of Directors (or a
Committee appointed by it) of the surviving or resulting corporation, and the
decision of such Board of Directors or Committee, as the case may be, as to what
is a fair and equitable settlement of each such question or as to what is a fair
and proper interpretation of any provision hereof or thereof, whatever the
effect of such a decision may be, beneficial or adverse, upon the incentive
compensation, shall be conclusive and binding and you hereby agree that the
incentive compensation is granted to and accepted by you subject to such
condition and understanding. You understand that the incentive compensation is
not held or set aside in trust and (1) DFC may seek to retain, offset, attach or
similarly place a lien on such funds in circumstances where you have been
discharged for cause and shall be entitled to do so for (x) malfeasance damaging
to DFC, (y) conversion to you of an DFC opportunity, or (z) a violation of DFC's
conflict of interest policy, in each case as determined in the sole discretion
of the Board of Directors, and (2) in the event DFC is unable to make any
payment under this Agreement because of insolvency, bankruptcy or similar status
or proceedings, you will be treated as a general unsecured creditor of DFC and
may be entitled to no priority under applicable law with respect to such
payments.
5. RESTRICTIONS ON COMPETITION
During the term of this Agreement and for a period of one year
after you cease to be an employee of DFC or an affiliate of DFC, you will not,
without the prior written consent of DFC, (a) accept employment or render
service to any person, firm or corporation, directly or indirectly, in
competition with DFC, or any affiliate thereof for any purpose which would be
competitive with the business of DFC and its affiliates within the Commonwealth
of Puerto Rico or any other geographic area in which DFC or any affiliate of DFC
by which you were employed, conducted operations (the "Restricted Area") or any
business as to which studies or preparations relating to the entry into which
were made by DFC or any affiliate of DFC by which you were employed within one
year prior thereto (collectively, the "Restricted Businesses") or (b) directly
or indirectly, enter into or in any manner take part in or lend your name,
counsel or assistance to any venture, enterprise, business or endeavor, wither
as proprietor, principal, investor, partner, director, officer, employee,
consultant, adviser, agent, independent contractor or in any other capacity
whatsoever for any purpose which would be competitive with the Restricted
Businesses in the Restricted Area. An investment not exceeding 5% of the
outstanding stock in any corporation regularly traded on any national securities
exchange or in the over-the-counter market shall not be deemed to violate this
provision, provided that you shall not render any services for such corporation.
<PAGE> 5
Mr. Salomon Levis
As of December 22, 1999
Page 5
6. TERMINATION OF EMPLOYMENT
(a) Your employment hereunder may be terminated for dishonesty,
death, incapacity, or inability to perform the duties of your employment on a
daily basis, resulting from physical or mental disability caused by illness,
accident or otherwise or refusal to perform the duties and responsibilities of
you employment hereunder, or breach of fidelity to DFC.
(b) At any time following a "Change in Control" of DFC, this
Agreement may be terminated by DFC or you on 30 days' written notice to you or
DFC, as the case may be, such termination to be effective as of the end of the
calendar year during which such notice is given. As used herein, a "Change in
Control" shall be deemed to have occurred at such time as (i) any person or
group becomes the beneficial owner of more than 50% of the voting power of DFC's
voting stock, or (ii) DFC consolidates with or merges into any other corporation
or conveys or otherwise disposes of all or substantially all of its assets to
any person.
(c) If at any time you shall voluntarily terminate your
employment, then this Agreement, except for Section 5 hereof, shall terminate
and all further obligations of DFC hereunder shall cease, provided that in any
termination pursuant to subsection (b) of this Section 6 you shall be entitled
to receive all compensation due to pursuant to Section 3 hereof for the calendar
year in which such date of termination occurs.
You agree that this Section 6 shall create no additional rights in
you to direct the operations of DFC.
7. WAIVERS AND MODIFICATIONS
No waiver by either party of any breach by the other of any
provisions hereof shall be deemed to be a waiver of any later or other breach
thereof, or as a waiver of any such or other provision of this Agreement. This
Agreement sets forth all of the terms of the understandings between the parties
with reference to the subject matter set forth herein and may not be waived,
changed, discharged or terminated orally or by any course of dealing between the
parties, but only by an instrument in writing signed by the party against whom
any waiver, change, discharge or termination is sought.
8. SEVERABILITY
Wherever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective under applicable law. In the event
that any provision, or any portion of any provision, of this Agreement shall be
held to be void and unenforceable, the remaining provisions of this Agreement,
and the remaining portion of any provision found void or unenforceable in part
only, shall continue in full force and effect.
<PAGE> 6
Mr. Salomon Levis
As of December 22, 1999
Page 6
9. ARBITRATION
Any dispute arising under this Agreement shall be submitted to
arbitration in San Juan, Puerto Rico under the rules of the American Arbitration
Association.
10. NOTICES
Any notice or communication required or permitted to be given
hereunder shall be deemed duly given if delivered personally or sent by
registered or certified mail, return receipt requested, to the address of the
intended recipient as herein set forth or to such other address as a party may
theretofore have specified in writing to the other by delivering or mailing in a
similar manner. Any notice or communication intended for DFC shall be addressed
to the attention of its Board of Directors.
11. GOVERNING LAW
This Agreement shall be construed in accordance with the laws of
the Commonwealth of Puerto Rico.
12. MISCELLANEOUS
This Agreement shall be binding upon the successors and assigns of
DFC. This Agreement is personal to you, and you therefore may not assign your
duties under this Agreement. The headings of the Sections of this Agreement are
inserted for convenience only and shall not be deemed to constitute a part
thereof or to affect the meaning hereof.
<PAGE> 7
Mr. Salomon Levis
As of December 22, 1999
Page 7
If the foregoing terms and conditions correctly embody your mutual
understanding with DFC, kindly endorse your acceptance and agreement therewith
in the space below provided, whereupon this shall become a binding agreement.
Very truly yours,
DORAL FINANCIAL CORPORATION
By: /s/ RICHARD F. BONINI
--------------------------------------------
Name: Richard F. Bonini
Title: Senior Executive Vice President
Accepted and Agreed to as of the
date first above set forth:
/s/ SALOMON LEVIS
- ----------------------------------
Salomon Levis
<PAGE> 1
EXHIBIT 10.91
DORAL FINANCIAL CORPORATION
1159 F.D. Roosevelt Avenue
Puerto Nuevo, Puerto Rico 00920
As of December 22, 1999
Mrs. Zoila Levis
1159 F.D. Roosevelt Avenue
Puerto Nuevo, Puerto Rico 00920
Dear Mrs. Levis:
We are pleased to detail herein below the provisions of your employment
agreement with Doral Financial Corporation ("DFC").
1. TERMS OF EMPLOYMENT
The term of this Agreement shall be for a period commencing on
January 1, 2000 and ending on December 31, 2001, unless sooner terminated as
herein provided. With respect to any period after December 31, 1999, this
Agreement supersedes and cancels all prior employment, personal service or
similar agreements between you and DFC and its subsidiaries, divisions and
ventures.
2. POSITION AND RESPONSIBILITIES
You will serve as President and Chief Operating Officer of DFC. By
your acceptance of this Agreement, you undertake to accept such employment and
to devote your full time and attention to DFC, and to use your best efforts,
ability and fidelity in the performance of the duties attaching to such
employment. During the term of your employment hereunder, you shall not perform
any services for any other company, which services conflict in any way with your
obligations under the two preceding sentences of this Section 2, whether or not
such company is competitive with the businesses of DFC, provided, however, that
nothing in this Agreement shall preclude you from devoting reasonable periods
required for
(i) serving as a director or member of a committee of any
organization involving no conflict or potential conflict of interest with the
interests of DFC;
(ii) delivering lectures, fulfilling speaking engagements,
teaching at educational institutions;
(iii) engaging in charitable and community activities; and
(iv) managing your personal and family investments, provided
that such activities do not interfere with the regular performance of your
duties and responsibilities under this Agreement.
You shall, at all times during the term hereof, be subject to the
supervision and direction of the Chairman of the Board and Chief Executive
Officer and the Board of Directors of DFC with respect to your duties,
responsibilities and the exercise of your powers.
<PAGE> 2
Mrs. Zoila Levis
As of December 22, 1999
Page 2
3. COMPENSATION
(a) During the term of this Agreement you shall receive an
annual salary of $500,000 annually, payable no less often than monthly in
accordance with corporate policy.
(b) (i) During the term of this Agreement, you shall also
be entitled to receive an annual incentive bonus (commencing
with the year ending December 31, 2000) equal to 5% of the
amount of Adjusted Net Income in excess of a 15% Return on
Equity Capital (as hereinafter defined); provided, however,
that the total salary and incentive compensation payable to
you pursuant to this Agreement shall not exceed $1,100,000
per annum; and
(ii) The incentive bonus shall be payable annually by
DFC within 30 days following the date on which its Annual
Report on Form 10-K for the fiscal year ended the prior
December 31 shall have been filed with the United States
Securities and Exchange Commission; provided that such
amount shall only be payable if you shall have served as
President to DFC pursuant to this Agreement for the entire
fiscal year to which such payments relate. As used in this
Section 3, "Adjusted Net Income" means the annual
consolidated net income by DFC and its subsidiaries after
all taxes (including net income from equity interests held
by DFC in any other venture and net income of any successor
of DFC which may be formed by merger, consolidation or sale
of substantially all of the assets of DFC) during the
calendar year preceding the payment as determined in
accordance with generally accepted accounting principles
applied on a consistent basis throughout the periods
involved and as shown by DFC's published consolidated
financial statements audited by its independent accountants
(hereinafter referred to as "GAAP"), such net income to be
adjusted (A) by adding back to such net income any payments
made pursuant to Section 3(b)(i) hereof and payments of
similar incentive compensation to other executive officers
of DFC, (B) by adding back to such net income dividends on
shares of preferred stock that are excluded from the
definition of "Equity Capital" set forth below and (c) by
adjusting such net income for any extraordinary items of
income and expense such as merger related expenses. As used
in this Section 3, (1) "Equity Capital" means DFC's
consolidated Stockholders Equity (excluding preferred stock
or other similar instruments that are not convertible into
shares of Common Stock) at the December 31 immediately
preceding the beginning of the fiscal year for which the
calculation is being made, determined in accordance with
GAAP and (2) "Return on Equity Capital" for any fiscal year
means the percentage determined by dividing DFC's
consolidated net income after all taxes determined in
accordance with GAAP for such fiscal year by Equity Capital
for such preceding December 31; provided that such
calculation shall be adjusted as set forth in the
immediately succeeding sentence. If DFC sells securities
constituting Equity Capital during the fiscal year, Equity
Capital shall be increased by the net proceeds to DFC (after
expenses) of such sale multiplied by a fraction the
numerator of which shall be the number of days in such
fiscal year which had elapsed from the date of the closing
of such sale to the end of such fiscal year and the
denominator of which shall be 365.
<PAGE> 3
Mrs. Zoila Levis
As of December 22, 1999
Page 3
(c) You shall be entitled to receive stock options to acquire
200,000 shares of DFC's Common Stock subject to the terms and conditions of
DFC's 1997 Employee Stock Option Plan and the stock option awards made on the
date hereof by DFC's Compensation Committee.
(d) You shall be entitled to participate in the other benefit
plans of DFC upon the terms and conditions on which such benefits are made
available to other officers of DFC. Nothing herein shall obligate DFC to
continue any existing benefit plan or to establish any replacement benefit plan.
(e) You shall be entitled to reimbursement for reasonable travel
and entertainment expenses incurred in connection with the rendering of your
services hereunder in compliance with DFC policy. Nothing contained herein shall
authorize you to make any political contributions, including but not limited to
payments for dinners and advertising in any political party program or any other
payment to any person which might be deemed a bribe, kickback or otherwise and
improper payment under corporate policy or practice and no portion of the
compensation payable hereunder is for any such purpose.
(f) Payments under this Agreement shall be subject to reduction
by the amount of any applicable federal, Commonwealth, state or municipal
income, withholding, social security, state disability insurance, or similar or
other taxes or other items which may be required or authorized to be deducted by
law or custom.
(g) No additional compensation shall be due to you for services
performed or offices held in any subsidiary, division, affiliate, or venture of
DFC.
4. MISCELLANEOUS PROVISIONS RELATING TO THE BONUS AND OTHER MATTERS
(a) Your acceptance of this Agreement will confirm that you
understand and agree that the granting of the incentive compensation referred to
in Section 3(b) (the "incentive compensation") or the stock options referred in
Section 3(c), and any action thereunder, does not involve any statement or
representation of any kind by DFC as to its business, affairs, earnings or
assets, or as to the tax status of the incentive compensation or the stock
options or the tax consequences of any payment or exercise thereof, or
otherwise. You further agree that any action at any time taken by or on behalf
of DFC or by its directors or any committee thereof, which might or shall at any
time adversely affect you or the incentive compensation, may be freely taken
notwithstanding any such adverse effect without your being thereby or otherwise
entitled to any right or claim against DFC or any other person or party by
reason thereof.
(b) The incentive compensation is personal to you and, except as
provided as contemplated in Section 3(b) above, in the event of your death or
incapacity, is not transferable or assignable either by your act or by operation
of law, and no assignee, trustee in bankruptcy, receiver or other party
whosoever shall have any right to demand any incentive compensation or any other
right with respect to it. If, in the event of your death or incapacity, your
legal representative shall be entitled to demand the incentive compensation
under any of the provisions hereof then, unless otherwise indicated by the
context or otherwise required by any term hereof, references to "you" shall
apply to said representative.
(c) If and when questions arise from time to time as to the
intent, meaning or application of any one or more of the provisions hereof such
questions will be decided by the Board of Directors of DFC
<PAGE> 4
Mrs. Zoila Levis
As of December 22, 1999
Page 4
or any Committee appointed to consider such matters, or, in the event DFC is
merged into or consolidated with any other corporation, by the Board of
Directors (or a Committee appointed by it) of the surviving or resulting
corporation, and the decision of such Board of Directors or Committee, as the
case may be, as to what is a fair and equitable settlement of each such question
or as to what is a fair and proper interpretation of any provision hereof or
thereof, whatever the effect of such a decision may be, beneficial or adverse,
upon the incentive compensation, shall be conclusive and binding and you hereby
agree that the incentive compensation is granted to and accepted by you subject
to such condition and understanding. You understand that the incentive
compensation is not held or set aside in trust and (1) DFC may seek to retain,
offset, attach or similarly place a lien on such funds in circumstances where
you have been discharged for cause and shall be entitled to do so for (x)
malfeasance damaging to DFC, (y) conversion to you of an DFC opportunity, or (z)
a violation of DFC's conflict of interest policy, in each case as determined in
the sole discretion of the Board of Directors, and (2) in the event DFC is
unable to make any payment under this Agreement because of insolvency,
bankruptcy or similar status or proceedings, you will be treated as a general
unsecured creditor of DFC and may be entitled to no priority under applicable
law with respect to such payments.
5. RESTRICTIONS ON COMPETITION
During the term of this Agreement and for a period of one year
after you cease to be an employee of DFC or an affiliate of DFC, you will not,
without the prior written consent of DFC, (a) accept employment or render
service to any person, firm or corporation, directly or indirectly, in
competition with DFC, or any affiliate thereof for any purpose which would be
competitive with the business of DFC and its affiliates within the Commonwealth
of Puerto Rico or any other geographic area in which DFC or any affiliate of DFC
by which you were employed, conducted operations (the "Restricted Area") or any
business as to which studies or preparations relating to the entry into which
were made by DFC or any affiliate of DFC by which you were employed within one
year prior thereto (collectively, the "Restricted Businesses") or (b) directly
or indirectly, enter into or in any manner take part in or lend your name,
counsel or assistance to any venture, enterprise, business or endeavor, whether
as proprietor, principal, investor, partner, director, officer, employee,
consultant, adviser, agent, independent contractor or in any other capacity
whatsoever for any purpose which would be competitive with the Restricted
Businesses in the Restricted Area. An investment not exceeding 5% of the
outstanding stock in any corporation regularly traded on any national securities
exchange or in the over-the-counter market shall not be deemed to violate this
provision, provided that you shall not render any services for such corporation.
6. TERMINATION OF EMPLOYMENT
(a) Your employment hereunder may be terminated for dishonesty,
death, incapacity, or inability to perform the duties of your employment on a
daily basis, resulting from physical or mental disability caused by illness,
accident or otherwise or refusal to perform the duties and responsibilities of
you employment hereunder, or breach of fidelity to DFC.
(b) At any time following a "Change in Control" of DFC, this
Agreement may be terminated by DFC or you on 30 days' written notice to you or
DFC, as the case may be, such termination to be effective as of the end of the
calendar year during which such notice is given. As used herein, a "Change in
Control" shall be deemed to have occurred at such time as (i) any person or
group becomes the beneficial
<PAGE> 5
Mrs. Zoila Levis
As of December 22, 1999
Page 5
owner of more than 50% of the voting power of DFC's voting stock, or (ii) DFC
consolidates with or merges into any other corporation or conveys or otherwise
disposes of all or substantially all of its assets to any person.
(c) If at any time you shall voluntarily terminate your
employment, then this Agreement, except for Section 5 hereof, shall terminate
and all further obligations of DFC hereunder shall cease, provided that in any
termination pursuant to subsection (b) of this Section 6 you shall be entitled
to receive all compensation due to pursuant to Section 3 hereof for the calendar
year in which such date of termination occurs.
You agree that this Section 6 shall create no additional rights in
you to direct the operations of DFC.
7. WAIVERS AND MODIFICATIONS
No waiver by either party of any breach by the other of any
provisions hereof shall be deemed to be a waiver of any later or other breach
thereof, or as a waiver of any such or other provision of this Agreement. This
Agreement sets forth all of the terms of the understandings between the parties
with reference to the subject matter set forth herein and may not be waived,
changed, discharged or terminated orally or by any course of dealing between the
parties, but only by an instrument in writing signed by the party against whom
any waiver, change, discharge or termination is sought.
8. SEVERABILITY
Wherever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective under applicable law. In the event
that any provision, or any portion of any provision, of this Agreement shall be
held to be void and unenforceable, the remaining provisions of this Agreement,
and the remaining portion of any provision found void or unenforceable in part
only, shall continue in full force and effect.
9. ARBITRATION
Any dispute arising under this Agreement shall be submitted to
arbitration in San Juan, Puerto Rico under the rules of the American Arbitration
Association.
10. NOTICES
Any notice or communication required or permitted to be given
hereunder shall be deemed duly given if delivered personally or sent by
registered or certified mail, return receipt requested, to the address of the
intended recipient as herein set forth or to such other address as a party may
theretofore have specified in writing to the other by delivering or mailing in a
similar manner. Any notice or communication intended for DFC shall be addressed
to the attention of its Board of Directors.
<PAGE> 6
Mrs. Zoila Levis
As of December 22, 1999
Page 6
11. GOVERNING LAW
This Agreement shall be construed in accordance with the laws of
the Commonwealth of Puerto Rico.
12. MISCELLANEOUS
This Agreement shall be binding upon the successors and assigns of
DFC. This Agreement is personal to you, and you therefore may not assign your
duties under this Agreement. The headings of the Sections of this Agreement are
inserted for convenience only and shall not be deemed to constitute a part
thereof or to affect the meaning hereof.
If the foregoing terms and conditions correctly embody your mutual
understanding with DFC, kindly endorse your acceptance and agreement therewith
in the space below provided, whereupon this shall become a binding agreement.
Very truly yours,
DORAL FINANCIAL CORPORATION
By: /s/ Salomon Levis
-----------------------------------------------------
Name: Salomon Levis
Title: Chairman of the Board and Chief Executive Officer
Accepted and Agreed to as of the
date first above set forth:
/s/ Zoila Levis
- ----------------------------------
Zoila Levis
<PAGE> 1
EXHIBIT 10.92
DORAL FINANCIAL CORPORATION
1159 F.D. Roosevelt Avenue
Puerto Nuevo, Puerto Rico 00920
As of December 22, 1999
Mr. Richard F. Bonini
570 Lexington Avenue
40th Floor
New York, NY 10022-6824
Dear Mr. Bonini:
We are pleased to detail herein below the provisions of your employment
agreement with Doral Financial Corporation ("DFC").
1. TERMS OF EMPLOYMENT
The term of this Agreement shall be for a period commencing on to
January 1, 2000 and ending on December 31, 2001, unless sooner terminated as
herein provided. With respect to any period after January 1, 1999, this
Agreement supersedes and cancels all prior employment, personal service or
similar agreements between you and DFC and its subsidiaries, divisions and
ventures.
2. POSITION AND RESPONSIBILITIES
You will serve as Senior Executive Vice President, Secretary and
Chief Financial Officer of DFC. By your acceptance of this Agreement, you
undertake to accept such employment and to devote your full time and attention
to DFC, and to use your best efforts, ability and fidelity in the performance of
the duties attaching to such employment. During the term of your employment
hereunder, you shall not perform any services for any other company, which
services conflict in any way with your obligations under the two preceding
sentences of this Section 2, whether or not such company is competitive with the
businesses of DFC, provided, however, that nothing in this Agreement shall
preclude you from devoting reasonable periods required for
(i) serving as a director or member of a committee of any
organization involving no conflict or potential conflict of interest with the
interests of DFC;
(ii) delivering lectures, fulfilling speaking engagements,
teaching at educational institutions;
(iii) engaging in charitable and community activities; and
(iv) managing your personal and family investments, provided that
such activities do not interfere with the regular performance of your duties and
responsibilities under this Agreement.
You shall, at all times during the term hereof, be subject to the
supervision and direction of the Chairman of the Board and Chief Executive
Officer and the President of DFC with respect to your duties, responsibilities
and the exercise of your powers.
<PAGE> 2
Mr. Richard F. Bonini
As of December 22, 1999
Page 2
3. COMPENSATION
(a) During the term of this Agreement you shall receive an
annual salary of $390,000 annually, payable no less often than monthly in
accordance with corporate policy.
(b) (i) During the term of this Agreement, you shall also be
entitled to receive an annual incentive bonus (commencing
with the year ending December 31, 2000) equal to 5% of the
amount of Adjusted Net Income (as hereinafter defined) in
excess of a 15% Return on Equity Capital (as hereinafter
defined); provided, however, that total salary and incentive
compensation payable to you pursuant to this Agreement shall
not exceed $600,000 per annum; and
(ii) The incentive bonus shall be payable annually by
DFC within 30 days following the date on which its Annual
Report on Form 10-K for the fiscal year ended the prior
December 31 shall have been filed with the United States
Securities and Exchange Commission; provided that such
amount shall only be payable if you shall have served as
Senior Executive Vice President to DFC pursuant to this
Agreement for the entire fiscal year to which such payments
relate. As used in this Section 3, "Adjusted Net Income"
means the annual consolidated net income by DFC and its
subsidiaries after all taxes (including net income from
equity interests held by DFC in any other venture and net
income of any successor of DFC which may be formed by
merger, consolidation or sale of substantially all of the
assets of DFC) during the calendar year preceding the
payment as determined in accordance with generally accepted
accounting principles applied on a consistent basis
throughout the periods involved and as shown by DFC's
published consolidated financial statements audited by its
independent accountants (hereinafter referred to as "GAAP"),
such net income to be adjusted (A) by adding back to such
net income any payments made pursuant to Section 3(b)(i)
hereof and payments of similar incentive compensation to
other executive officers of DFC, (B) by deducting from such
net income dividends on preferred stock that are excluded
from the definition of "Equity Capital" set forth below and
(C) by adjusting such net income for any extraordinary items
of income and expense such as merger related expenses. As
used in this Section 3, (1) "Equity Capital" means DFC's
consolidated Stockholders Equity (excluding preferred stock
or other similar instrument that are not convertible into
shares of Common Stock) at the December 31 immediately
preceding the beginning of the fiscal year for which the
calculation is being made, determined in accordance with
GAAP and (2) "Return on Equity Capital" for any fiscal year
means the percentage determined by dividing DFC's
consolidated net income after all taxes determined in
accordance with GAAP for such fiscal year by Equity Capital
for such preceding December 31; provided that such
calculation shall be adjusted as set forth in the
immediately succeeding sentence. If DFC sells equity
securities during the fiscal year, Equity Capital shall be
increased by the net proceeds to DFC (after expenses) of
such sale multiplied by a fraction the numerator of which
shall be the number of days in such fiscal year which had
elapsed from the date of the closing of such sale to the end
of such fiscal year and the denominator of which shall be
365.
<PAGE> 3
Mr. Richard F. Bonini
As of December 22, 1999
Page 3
(c) You shall be entitled to receive stock options to acquire
180,000 shares of DFC's Common Stock subject to the terms and conditions of the
stock option awards made on the date hereof by DFC's Compensation Committee.
(d) You shall be entitled to participate in the other benefit
plans of DFC upon the terms and conditions on which such benefits are made
available to other officers of DFC, except that DFC agrees to establish an
annuity contract for your benefit in the amount of $30,000 per year in lieu of
your participation in DFC's pension plan and will acquire separate medical
insurance for you in lieu of your participation in DFC's medical plan. Nothing
herein shall obligate DFC to continue any existing benefit plan or to establish
any replacement benefit plan.
(e) You shall be entitled to reimbursement for reasonable travel
and entertainment expenses incurred in connection with the rendering of your
services hereunder in compliance with DFC policy. Nothing contained herein shall
authorize you to make any political contributions, including but not limited to
payments for dinners and advertising in any political party program or any other
payment to any person which might be deemed a bribe, kickback or otherwise and
improper payment under corporate policy or practice and no portion of the
compensation payable hereunder is for any such purpose.
(f) Payments under this Agreement shall be subject to reduction
by the amount of any applicable federal, Commonwealth, state or municipal
income, withholding, social security, state disability insurance, or similar or
other taxes or other items which may be required or authorized to be deducted by
law or custom.
(g) No additional compensation shall be due to you for services
performed or offices held in any subsidiary, division, affiliate, or venture of
DFC.
4. MISCELLANEOUS PROVISIONS RELATING TO THE BONUS AND OTHER MATTERS
(a) Your acceptance of this Agreement will confirm that you
understand and agree that the granting of the incentive compensation referred to
in Section 3(b) (the "incentive compensation"), and any action thereunder, does
not involve any statement or representation of any kind by DFC as to its
business, affairs, earnings or assets, or as to the tax status of the incentive
compensation or stock options or the tax consequences of any payment or exercise
thereof, or otherwise. You further agree that any action at any time taken by or
on behalf of DFC or by its directors or any committee thereof, which might or
shall at any time adversely affect you or the incentive compensation, may be
freely taken notwithstanding any such adverse effect without your being thereby
or otherwise entitled to any right or claim against DFC, Doral or any other
person or party by reason thereof.
(b) The incentive compensation is personal to you and, except as
provided as contemplated in Section 3(b) above, in the event of your death or
incapacity, is not transferable or assignable either by your act or by operation
of law, and no assignee, trustee in bankruptcy, receiver or other party
whosoever shall have any right to demand any incentive compensation or any other
right with respect to it. If, in the event of your death or incapacity, your
legal representative shall be entitled to demand the incentive compensation
under any of the provisions hereof then, unless otherwise indicated by the
context or otherwise required by any term hereof, references to "you" shall
apply to said representative.
<PAGE> 4
Mr. Richard F. Bonini
As of December 22, 1999
Page 4
(c) If and when questions arise from time to time as to the
intent, meaning or application of any one or more of the provisions hereof such
questions will be decided by the Board of Directors of DFC or any Committee
appointed to consider such matters, or, in the event DFC is merged into or
consolidated with any other corporation, by the Board of Directors (or a
Committee appointed by it) of the surviving or resulting corporation, and the
decision of such Board of Directors or Committee, as the case may be, as to what
is a fair and equitable settlement of each such question or as to what is a fair
and proper interpretation of any provision hereof or thereof, whatever the
effect of such a decision may be, beneficial or adverse, upon the incentive
compensation, shall be conclusive and binding and you hereby agree that the
incentive compensation is granted to and accepted by you subject to such
condition and understanding. You understand that the incentive compensation is
not held or set aside in trust and (1) DFC may seek to retain, offset, attach or
similarly place a lien on such funds in circumstances where you have been
discharged for cause and shall be entitled to do so for (x) malfeasance damaging
to DFC, (y) conversion to you of an DFC opportunity, or (z) a violation of DFC's
conflict of interest policy, in each case as determined in the sole discretion
of the Board of Directors, and (2) in the event DFC is unable to make any
payment under this Agreement because of insolvency, bankruptcy or similar status
or proceedings, you will be treated as a general unsecured creditor of DFC and
may be entitled to no priority under applicable law with respect to such
payments.
5. RESTRICTIONS ON COMPETITION
During the term of this Agreement and for a period of one year
after you cease to be an employee of DFC or an affiliate of DFC, you will not,
without the prior written consent of DFC, (a) accept employment or render
service to any person, firm or corporation, directly or indirectly, in
competition with DFC, or any affiliate thereof for any purpose which would be
competitive with the mortgage banking business within the Commonwealth of Puerto
Rico or any other geographic area in which DFC or any affiliate of DFC by which
you were employed, conducted operations (the "Restricted Area") or any business
as to which studies or preparations relating to the entry into which were made
by DFC or any affiliate of DFC by which you were employed within two years prior
thereto (collectively, the "Restricted Businesses") or (b) directly or
indirectly, enter into or in any manner take part in or lend your name, counsel
or assistance to any venture, enterprise, business or endeavor, whether as
proprietor, principal, investor, partner, director, officer, employee,
consultant, adviser, agent, independent contractor or in any other capacity
whatsoever for any purpose which would be competitive with the Restricted
Businesses in the Restricted Area. An investment not exceeding 5% of the
outstanding stock in any corporation regularly traded on any national securities
exchange or in the over-the-counter market shall not be deemed to violate this
provision, provided that you shall not render any services for such corporation.
6. TERMINATION OF EMPLOYMENT
(a) Your employment hereunder may be terminated for dishonesty,
death, incapacity, or inability to perform the duties of your employment on a
daily basis, resulting from physical or mental disability caused by illness,
accident or otherwise or refusal to perform the duties and responsibilities of
you employment hereunder, or breach of fidelity to DFC.
(b) At any time following a "Change in Control" of DFC, this
Agreement may be terminated by DFC or you on 30 days' written notice to you or
DFC, as the case may be, such termination to be effective as of the end of the
calendar year during which such notice is given. As used herein, a "Change in
Control" shall be deemed to have occurred at such time as (i) any person or
group becomes the beneficial
<PAGE> 5
Mr. Richard F. Bonini
As of December 22, 1999
Page 5
owner of more than 50% of the voting power of DFC's voting stock, or (ii) DFC
consolidates with or merges into any other corporation or conveys or otherwise
disposes of all or substantially all of its assets to any person.
(c) If at any time you shall voluntarily terminate your
employment, then this Agreement, except for Section 5 hereof, shall terminate
and all further obligations of DFC hereunder shall cease, provided that in any
termination pursuant to subsection (b) of this Section 6 you shall be entitled
to receive all compensation due to pursuant to Section 3 hereof for the calendar
year in which such date of termination occurs.
You agree that this Section 6 shall create no additional rights in
you to direct the operations of DFC.
7. MEMBERSHIP ON BOARD OF DIRECTORS. DFC agrees to nominate or cause
you to be nominated for election to DFC's Board of Directors.
8. WAIVERS AND MODIFICATIONS
No waiver by either party of any breach by the other of any
provisions hereof shall be deemed to be a waiver of any later or other breach
thereof, or as a waiver of any such or other provision of this Agreement. This
Agreement sets forth all of the terms of the understandings between the parties
with reference to the subject matter set forth herein and may not be waived,
changed, discharged or terminated orally or by any course of dealing between the
parties, but only by an instrument in writing signed by the party against whom
any waiver, change, discharge or termination is sought.
9. SEVERABILITY
Wherever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective under applicable law. In the event
that any provision, or any portion of any provision, of this Agreement shall be
held to be void and unenforceable, the remaining provisions of this Agreement,
and the remaining portion of any provision found void or unenforceable in part
only, shall continue in full force and effect.
10. ARBITRATION
Any dispute arising under this Agreement shall be submitted to
arbitration in New York, New York under the rules of the American Arbitration
Association.
11. NOTICES
Any notice or communication required or permitted to be given
hereunder shall be deemed duly given if delivered personally or sent by
registered or certified mail, return receipt requested, to the address of the
intended recipient as herein set forth or to such other address as a party may
theretofore have specified in writing to the other by delivering or mailing in a
similar manner. Any notice or communication intended for DFC shall be addressed
to the attention of its Board of Directors.
<PAGE> 6
Mr. Richard F. Bonini
As of December 22, 1999
Page 6
12. GOVERNING LAW
This Agreement shall be construed in accordance with the laws of
the Commonwealth of Puerto Rico.
13. MISCELLANEOUS
This Agreement shall be binding upon the successors and assigns of
DFC. This Agreement is personal to you, and you therefore may not assign your
duties under this Agreement. The headings of the sections of this Agreement are
inserted for convenience only and shall not be deemed to constitute a part
thereof or to affect the meaning hereof.
If the foregoing terms and conditions correctly embody your mutual
understanding with DFC, kindly endorse your acceptance and agreement therewith
in the space below provided, whereupon this shall become a binding agreement.
Very truly yours,
DORAL FINANCIAL CORPORATION
By: /s/ Salomon Levis
--------------------------------------
Name: Salomon Levis
Title: Chairman of the Board and
Chief Executive Officer
Accepted and Agreed to as of the
date first above set forth:
/s/ Richard F. Bonini
- ----------------------------------
Richard F. Bonini
<PAGE> 1
EXHIBIT 10.93
DORAL FINANCIAL CORPORATION
1159 F.D. Roosevelt Avenue
Puerto Nuevo, Puerto Rico 00920
As of December 22, 1999
Mr. Mario S. Levis
1159 F.D. Roosevelt Avenue
San Juan, Puerto Rico 00920
Dear Mr. Levis:
We are pleased to detail herein below the provisions of your employment
agreement with Doral Financial Corporation ("DFC").
1. TERMS OF EMPLOYMENT
The term of this Agreement shall be for a period commencing on
January 1, 2000 and ending on December 31, 2001, unless sooner terminated as
herein provided. This Agreement supersedes and cancels your prior Employment
Agreement, dated as of December 1, 1998, for all periods after December 31,
1999.
2. POSITION AND RESPONSIBILITIES
You will serve as Executive Vice President and Treasurer of
DFC. By your acceptance of this Agreement, you undertake to accept such
employment and to devote your full time and attention to DFC, and to use your
best efforts, ability and fidelity in the performance of the duties attaching to
such employment. During the term of your employment hereunder, you shall not
perform any services for any other company, which services conflict in any way
with your obligations under the two preceding sentences of this Section 2,
whether or not such company is competitive with the businesses of DFC, provided,
however, that nothing in this Agreement shall preclude you from devoting
reasonable periods required for
(i) serving as a director or member of a committee
of any organization involving no conflict or potential conflict of interest with
the interests of DFC;
(ii) delivering lectures, fulfilling speaking
engagements, teaching at educational institutions;
(iii) engaging in charitable and community
activities; and
(iv) managing your personal and family investments,
provided that such activities do not interfere with the regular performance of
your duties and responsibilities under this Agreement.
You shall, at all times during the term hereof, be subject to
the supervision and direction of the Chairman of the Board and Chief Executive
Officer and the President of DFC with respect to your duties, responsibilities
and the exercise of your powers.
<PAGE> 2
Mr. Mario S. Levis
As of December 22, 1999
Page 2
3. COMPENSATION
(a) During the term of this Agreement you shall receive
an annual salary of $390,000 annually, payable no less often than monthly in
accordance with corporate policy.
(b) (i) During the term of this Agreement, you shall also
be entitled to receive an annual incentive bonus (commencing with the year ended
December 31, 2000) equal to 5% of the amount of Adjusted Net Income (as
hereinafter defined) in excess of a 15% Return on Equity Capital (as hereinafter
defined); provided, however, that total salary and incentive compensation
payable to you pursuant to this Agreement shall not exceed $800,000 per annum;
and
(ii) The incentive bonus shall be payable annually by
DFC within 30 days following the date on which its Annual Report on Form 10-K
for the fiscal year ended the prior December 31 shall have been filed with the
United States Securities and Exchange Commission; provided that such amount
shall only be payable if you shall have served as Executive Vice President and
Treasurer to DFC pursuant to this Agreement for the entire fiscal year to which
such payments relate. As used in this Section 3, "Adjusted Net Income" means the
annual consolidated net income by DFC and its subsidiaries after all taxes
(including net income from equity interests held by DFC in any other venture and
net income of any successor of DFC which may be formed by merger, consolidation
or sale of substantially all of the assets of DFC) during the calendar year
preceding the payment as determined in accordance with generally accepted
accounting principles applied on a consistent basis throughout the periods
involved and as shown by DFC's published consolidated financial statements
audited by its independent accountants (hereinafter referred to as "GAAP"), such
net income to be adjusted (A) by adding back to such net income any payments
made pursuant to Section 3(b)(i) hereof and payments of similar incentive
compensation to other executive officers of DFC, (B) by adjusting such net
income for any extraordinary items of income and expense such as merger related
expenses and (C) by deducting from net income dividends on shares of preferred
stock that are excluded from the definition of "Equity Capital" set forth below.
As used in this Section 3, (1) "Equity Capital" means DFC's consolidated
Stockholders Equity (excluding preferred stock or other similar instruments that
are not convertible into shares of Common Stock) at the December 31 immediately
preceding the beginning of the fiscal year for which the calculation is being
made, determined in accordance with GAAP and (2) "Return on Equity Capital" for
any fiscal year means the percentage determined by dividing DFC's consolidated
net income after all taxes determined in accordance with GAAP for such fiscal
year by Equity Capital for such preceding December 31; provided that such
calculation shall be adjusted as set forth in the immediately succeeding
sentence. If DFC sells securities representing Equity Capital during the fiscal
year, Equity Capital shall be increased by the net proceeds to DFC (after
expenses) of such sale multiplied by a fraction the numerator of which shall be
the number of days in such fiscal year which had elapsed from the date of the
closing of such sale to the end of such fiscal year and the denominator of which
shall be 365.
(c) You shall be entitled to receive stock options to
acquire 150,000 shares of DFC's Common Stock subject to the terms and conditions
of DFC's 1997 Employee Stock Option Plan and the stock option awards made on the
date hereto by DFC's Compensation Committee.
(d) You shall be entitled to participate in the other
benefit plans of DFC upon the terms and conditions on which such benefits are
made available to other officers of DFC. Nothing herein shall obligate DFC to
continue any existing benefit plan or to establish any replacement benefit plan.
(e) You shall be entitled to reimbursement for reasonable
travel and entertainment expenses incurred in connection with the rendering of
your services hereunder in compliance with DFC policy. Nothing contained herein
shall authorize you to make any political contributions, including but not
limited to payments for dinners and advertising in any political party program
or any other payment to any person which might be
<PAGE> 3
Mr. Mario S. Levis
As of December 22, 1999
Page 3
deemed a bribe, kickback or otherwise and improper payment under corporate
policy or practice and no portion of the compensation payable hereunder is for
any such purpose.
(f) Payments under this Agreement shall be subject to
reduction by the amount of any applicable federal, Commonwealth, state or
municipal income, withholding, social security, state disability insurance, or
similar or other taxes or other items which may be required or authorized to be
deducted by law or custom.
(g) No additional compensation shall be due to you for
services performed or offices held in any subsidiary, division, affiliate, or
venture of DFC.
4. MISCELLANEOUS PROVISIONS RELATING TO THE BONUS AND OTHER
MATTERS
(a) Your acceptance of this Agreement will confirm that
you understand and agree that the granting of the incentive compensation
referred to in Section 3(b) (the "incentive compensation") and the stock options
referred in Section 3(c), and any action thereunder, does not involve any
statement or representation of any kind by DFC as to its business, affairs,
earnings or assets, or as to the tax status of the incentive compensation or
stock options or the tax consequences of any payment or exercise thereof, or
otherwise. You further agree that any action at any time taken by or on behalf
of DFC or by its directors or any committee thereof, which might or shall at any
time adversely affect you or the incentive compensation, may be freely taken
notwithstanding any such adverse effect without your being thereby or otherwise
entitled to any right or claim against DFC or any other person or party by
reason thereof.
(b) The incentive compensation is personal to you and,
except as provided as contemplated in Section 3(b) above, in the event of your
death or incapacity, is not transferable or assignable either by your act or by
operation of law, and no assignee, trustee in bankruptcy, receiver or other
party whosoever shall have any right to demand any incentive compensation or any
other right with respect to it. If, in the event of your death or incapacity,
your legal representative shall be entitled to demand the incentive compensation
under any of the provisions hereof then, unless otherwise indicated by the
context or otherwise required by any term hereof, references to "you" shall
apply to said representative.
(c) If and when questions arise from time to time as to
the intent, meaning or application of any one or more of the provisions hereof
such questions will be decided by the Board of Directors of DFC or any Committee
appointed to consider such matters, or, in the event DFC is merged into or
consolidated with any other corporation, by the Board of Directors (or a
Committee appointed by it) of the surviving or resulting corporation, and the
decision of such Board of Directors or Committee, as the case may be, as to what
is a fair and equitable settlement of each such question or as to what is a fair
and proper interpretation of any provision hereof or thereof, whatever the
effect of such a decision may be, beneficial or adverse, upon the incentive
compensation, shall be conclusive and binding and you hereby agree that the
incentive compensation is granted to and accepted by you subject to such
condition and understanding. You understand that the incentive compensation is
not held or set aside in trust and (1) DFC may seek to retain, offset, attach or
similarly place a lien on such funds in circumstances where you have been
discharged for cause and shall be entitled to do so for (x) malfeasance damaging
to DFC, (y) conversion to you of an DFC opportunity, or (z) a violation of DFC's
conflict of interest policy, in each case as determined in the sole discretion
of the Board of Directors, and (2) in the event DFC is unable to make any
payment under this Agreement because of insolvency, bankruptcy or similar status
or proceedings, you will be treated as a general unsecured creditor of DFC and
may be entitled to no priority under applicable law with respect to such
payments.
<PAGE> 4
Mr. Mario S. Levis
As of December 22, 1999
Page 4
5. RESTRICTIONS ON COMPETITION
During the term of this Agreement and for a period of one year
after you cease to be an employee of DFC or an affiliate of DFC, you will not,
without the prior written consent of DFC, (a) accept employment or render
service to any person, firm or corporation, directly or indirectly, in
competition with DFC, or any affiliate thereof for any purpose which would be
competitive with the business of DFC and its affiliates within the Commonwealth
of Puerto Rico or any other geographic area in which DFC or any affiliate of DFC
by which you were employed, conducted operations (the "Restricted Area") or any
business as to which studies or preparations relating to the entry into which
were made by DFC or any affiliate of DFC by which you were employed within one
year prior thereto (collectively, the "Restricted Businesses") or (b) directly
or indirectly, enter into or in any manner take part in or lend your name,
counsel or assistance to any venture, enterprise, business or endeavor, whether
as proprietor, principal, investor, partner, director, officer, employee,
consultant, adviser, agent, independent contractor or in any other capacity
whatsoever for any purpose which would be competitive with the Restricted
Businesses in the Restricted Area. An investment not exceeding 5% of the
outstanding stock in any corporation regularly traded on any national securities
exchange or in the over-the-counter market shall not be deemed to violate this
provision, provided that you shall not render any services for such corporation.
6. TERMINATION OF EMPLOYMENT
(a) Your employment hereunder may be terminated for
dishonesty, death, incapacity, or inability to perform the duties of your
employment on a daily basis, resulting from physical or mental disability caused
by illness, accident or otherwise or refusal to perform the duties and
responsibilities of you employment hereunder, or breach of fidelity to DFC.
(b) At any time following a "Change in Control" of DFC, this
Agreement may be terminated by DFC or you on 30 days' written notice to you or
DFC, as the case may be, such termination to be effective as of the end of the
calendar year during which such notice is given. As used herein, a "Change in
Control" shall be deemed to have occurred at such time as (i) any person or
group becomes the beneficial owner of more than 50% of the voting power of DFC's
voting stock, or (ii) DFC consolidates with or merges into any other corporation
or conveys or otherwise disposes of all or substantially all of its assets to
any person.
(c) If at any time you shall voluntarily terminate your
employment, then this Agreement, except for Section 5 hereof, shall terminate
and all further obligations of DFC hereunder shall cease, provided that in any
termination pursuant to subsection (b) of this Section 6 you shall be entitled
to receive all compensation due to pursuant to Section 3 hereof for the calendar
year in which such date of termination occurs.
You agree that this Section 6 shall create no additional
rights in you to direct the operations of DFC.
7. WAIVERS AND MODIFICATIONS
No waiver by either party of any breach by the other of any
provisions hereof shall be deemed to be a waiver of any later or other breach
thereof, or as a waiver of any such or other provision of this Agreement. This
Agreement sets forth all of the terms of the understandings between the parties
with reference to the subject matter set forth herein and may not be waived,
changed, discharged or terminated orally or by any course of dealing between the
parties, but only by an instrument in writing signed by the party against whom
any waiver, change, discharge or termination is sought.
<PAGE> 5
Mr. Mario S. Levis
As of December 22, 1999
Page 5
8. SEVERABILITY
Wherever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective under applicable law. In the event
that any provision, or any portion of any provision, of this Agreement shall be
held to be void and unenforceable, the remaining provisions of this Agreement,
and the remaining portion of any provision found void or unenforceable in part
only, shall continue in full force and effect.
9. ARBITRATION
Any dispute arising under this Agreement shall be submitted to
arbitration in San Juan, Puerto Rico under the rules of the American Arbitration
Association.
10. NOTICES
Any notice or communication required or permitted to be given
hereunder shall be deemed duly given if delivered personally or sent by
registered or certified mail, return receipt requested, to the address of the
intended recipient as herein set forth or to such other address as a party may
theretofore have specified in writing to the other by delivering or mailing in a
similar manner. Any notice or communication intended for DFC shall be addressed
to the attention of its Board of Directors.
11. GOVERNING LAW
This Agreement shall be construed in accordance with the laws
of the Commonwealth of Puerto Rico.
12. MISCELLANEOUS
This Agreement shall be binding upon the successors and
assigns of DFC. This Agreement is personal to you, and you therefore may not
assign your duties under this Agreement. The headings of the sections of this
Agreement are inserted for convenience only and shall not be deemed to
constitute a part thereof or to affect the meaning hereof.
If the foregoing terms and conditions correctly embody your mutual
understanding with DFC, kindly endorse your acceptance and agreement therewith
in the space below provided, whereupon this shall become a binding agreement.
Very truly yours,
DORAL FINANCIAL CORPORATION
By: /s/ Salomon Levis
-----------------------------------------------------
Name: Salomon Levis
Title: Chairman of the Board and Chief Executive Officer
<PAGE> 6
Mr. Mario S. Levis
As of December 22, 1999
Page 6
Accepted and Agreed to as of the
date first above set forth:
/s/ Mario S. Levis
- ----------------------------------
Mario S. Levis
