Attached files
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EX-10.1 - EX-10.1 - DORAL FINANCIAL CORP | g23643exv10w1.htm |
EX-10.3 - EX-10.3 - DORAL FINANCIAL CORP | g23643exv10w3.htm |
EX-10.2 - EX-10.2 - DORAL FINANCIAL CORP | g23643exv10w2.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date
of Report (Date of earliest event reported): June 25, 2010
DORAL FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
Puerto Rico | 001-31579 | 66-031262 | ||
(State or Other Jurisdiction of | (Commission | (IRS Employer | ||
Incorporation) | File Number) | Identification No.) |
1451 Franklin D. Roosevelt Avenue, San Juan, Puerto Rico 00920-2717
(Address of Principal Executive Offices, Including Zip Code)
(Address of Principal Executive Offices, Including Zip Code)
Registrants telephone number, including area code: 787-474-6700
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions (see General Instruction
A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
A. Retention Program
On
June 25, 2010, the Board of Directors of Doral Financial Corporation (the Company), approved
and adopted a retention program for six of the Companys officers (the Retention Program),
pursuant to which the Company will: (i) award an aggregate of 3,000,000 shares of the Companys
common stock as restricted stock to such officers; and (ii) grant cash retention bonus awards to
such officers. The participants in the Retention Program include four of the Companys officers
who were named executive officers of the Company and listed in the Companys
Summary Compensation Table included in the Companys definitive proxy statement for its annual
meeting of shareholders held on May 12, 2010, consisting of: (a) Glen Wakeman, the Companys
President, Chief Executive Officer and Director; (b) Robert Wahlman, the Companys Executive Vice
President and Chief Financial and Investment Officer; (c) Christopher Poulton, the Companys
Executive Vice President and Chief Business Development Officer; and (d) Enrique R. Ubarri, the
Companys Executive Vice President and General Counsel. The terms of the restricted stock awards
and cash bonus awards granted under the Retention Program are described in further detail below.
Restricted Stock Awards
The restricted stock to be awarded under the Retention Program will be issued pursuant to the terms
and conditions of the Companys 2008 Stock Incentive Plan (the 2008 Plan). The restricted stock
will be issued without cost to the recipients, but will vest in installments so long as at the time
of vesting the employee has been continuously employed by the Company from the date of grant, as
follows: thirty-three percent (33%) will vest twelve (12) calendar months after the grant date, an
additional thirty-three percent (33%) will vest twenty-four (24) calendar months after the grant
date, and the remaining thirty-three percent (33%) will vest thirty-six (36) calendar months after
the grant date. Notwithstanding the foregoing, one hundred percent (100%) of the restricted stock
will vest (i) upon the occurrence of a change of control of the Company (as defined in the
restricted stock award agreement); (ii) if the Company terminates the employees employment without
cause (as defined in the restricted stock award agreement) or the employee terminates the
employees employment for good reason (as defined in the restricted stock award agreement); or
(iii) upon such employees death. Upon vesting of the shares, the Company will pay the recipient a
lump sum gross-up payment equal to the federal, state (including Puerto Rico) and local income
taxes imposed on the vested shares and such gross-up payment. In addition, the Company has agreed
that if the granting or vesting of the restricted stock would cause the recipient to be subject to
excise taxes in connection with a change of control, the Company will pay the recipient an
additional lump sum gross-up payment equal to such excise taxes plus the federal, state (including
Puerto Rico) and local income taxes imposed on such additional lump sum gross-up payment.
Pursuant
to the Retention Program, on June 25, 2010, the Company granted restricted stock awards to
certain officers of the Company, including the following named executive officers: Messrs Wakeman,
Wahlman, Poulton and Ubarri. The number of shares of restricted stock awarded to each of
Messrs Wakeman, Wahlman, Poulton and Ubarri pursuant to the Retention Program are as follows:
Shares of | ||||
Name and Title | Restricted Stock | |||
Glen Wakeman, President, Chief Executive Officer and Director |
1,000,000 | |||
Robert Wahlman, Executive Vice President and Chief Financial and Investment Officer |
750,000 | |||
Christopher Poulton, Executive Vice President and Chief Business Development
Officer |
375,000 | |||
Enrique Ubarri, Executive Vice President and General Counsel |
375,000 |
The foregoing description of the restricted stock awards granted pursuant to the Retention Program
is qualified in its entirety by reference to the form of Restricted Stock Award Agreement under the
2008 Plan, which is filed herewith as Exhibit 10.1 and which is incorporated herein by reference.
Cash Retention Bonus Awards
The cash retention bonus awards granted under the Retention Program will be issued pursuant to
retention bonus letters issued by the Company to each grantee (each, a Retention Bonus Letter).
The cash retention bonus awards vary in amount for each grantee and will be paid promptly by the
Company to each grantee, net of withholding taxes. However, if a grantees employment with the
Company is terminated prior to June 25, 2013, the grantee will
be required to repay a percentage of the bonus amount, depending upon the date of such employees
termination, in accordance with the following schedule:
Repayment | ||||
Termination Date | Percentage | |||
Before
December 25, 2010 |
100 | % | ||
From
December 25, 2010 and before June 25, 2011 |
83.4 | % | ||
From
June 25, 2011 and before December 25, 2011 |
66.8 | % | ||
From
December 25, 2011 and before June 25, 2012 |
50.2 | % | ||
From
June 25, 2012 and before December 25, 2012 |
33.6 | % | ||
From
December 25, 2012 and before June 25, 2013 |
17 | % | ||
On or After
June 25, 2013 |
0 | % |
Notwithstanding
the foregoing, if prior to June 25, 2013, (i) the grantee dies; (ii) there is a
change of control of the Company (as defined in the retention bonus letter); or (iii) the grantees
employment with the Company is terminated by the Company without cause (as defined in the retention
bonus letter) or by the grantee for good reason (as defined in the retention bonus letter), then
the grantee will not be required to repay any portion of his or her cash retention bonus award.
Pursuant
to the Retention Program, effective June 25, 2010, the Company issued Retention Bonus
Letters to certain officers of the Company, including the following named executive officers:
Messrs Wakeman, Wahlman, Poulton, and Ubarri. The cash retention bonus awards granted to each of
Messrs Wakeman, Wahlman, Poulton, and Ubarri pursuant to the Retention Program are as follows:
Name and Title | Bonus Amount | |||
Glen Wakeman, President, Chief Executive Officer and Director |
$ | 1,000,000 | ||
Robert Wahlman, Executive Vice President and Chief Financial and Investment Officer |
$ | 750,000 | ||
Christopher Poulton, Executive Vice President and Chief Business Development
Officer |
$ | 500,000 | ||
Enrique Ubarri, Executive Vice President and General Counsel |
$ | 500,000 |
The foregoing description of the cash retention bonus awards issued pursuant to the Retention
Program is qualified in its entirety by reference to the form of Retention Bonus Letter, which is
filed herewith as Exhibit 10.2 and which is incorporated herein by reference.
B. Amendment to Employment
Agreement with Robert Wahlman
On June 25, 2010 the Company and Mr. Robert Wahlman, the Companys Executive
Vice President and Chief Financial and Investment Officer, entered into an Amendment
to Employment Agreement, which amends the existing Employment Agreement dated
March 16, 2009.
Pursuant to such Amendment, the amount payable to Mr. Wahlman
in the event that the
Company, during the Employment Period, terminates Mr. Wahlman without Cause or
Mr. Wahlman terminates his employment for Good Reason, or if the Company fails to
renew or extend the Employment Agreement upon expiration of the two-year
employment period, was increased from one (1) time to two (2) times his compensation
(salary and bonus) during the preceding year. In the event that upon or within two years
following a Change in Control the Company terminates Mr. Wahlmans employment
without Cause or Mr. Wahlman terminates his employment for Good Reason, then Mr.
Wahlman shall also be entitled to, among other things, the payment described in the preceding sentence.
In addition, pursuant to such Amendment, the
definition of the definition of the term
Change in Control was amended. A Change in Control will be deemed to have taken
place if:
(i) any person (as such term is used in
Section 3(a)(9) and Section 13(d) of
the Exchange Act) other than the Company or any employee benefit plan of the
Company or any of it subsidiaries, (x) becomes the beneficial owner (as such
term is used in Rule 13d-3 promulgated under the Exchange Act) of Company
securities having more than 50% of the combined voting power of the then
outstanding securities of the Company that may be cast for the election of
directors of the Company (other than as a result of the issuance of securities
initiated by the Company in the ordinary course of business) (Voting Securities)
or (y) becomes the beneficial owner of the Company of 25% or more of the
Voting Securities of the Company and such person has the power to appoint or
elect a majority of the member of the Board; or
(ii) persons who, as of
the effective date of this Agreement, constitute the
Board (the Incumbent Directors) cease for any reason, including without
limitation, as a result of a tender offer, proxy contest, merger or similar
transaction, to constitute at least a majority thereof, provided that any person
becoming a director of the Company subsequent to the effective date of this
Agreement shall be considered an Incumbent Director if such persons election or
nomination for election was approved by a vote of at least 50% of the Incumbent
Directors; but provided further, that any such person whose initial assumption of
office is in connection with an actual or threatened election contest relating to the
election of members of the Board or other actual or threatened solicitation of
proxies or consents by or on behalf of a person (as defined in Section 13(d) and
14(d) of the Exchange Act) other than the Board, including by reason of
agreement intended to avoid or settle any such actual or threatened contest or
solicitation, shall not be considered an Incumbent Director; or
(iii) as the result
of, or in connection with, any cash tender or exchange offer,
merger or other business combination, or any combination of the foregoing
transactions, the holders of all the Companys securities entitled to vote generally
in the election of directors of the Company immediately prior to such transaction
constitute, following such transaction, less than a majority of the combined voting
power of the then-outstanding securities of the surviving entity (or in the event
each entity survives, the ultimate parent entity resulting from such transaction)
(the Surviving Entity) entitled to vote generally in the election to elect directors
of the Surviving Entity after such transaction.
Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
Exhibit No. | Description | |
10.1
|
Form of Restricted Stock Award under the Doral Financial Corporation 2008 Stock Incentive Plan. | |
10.2
|
Form of Retention Bonus Letter. | |
10.3
|
Amendment to Employment Agreement between the Company and Robert Wahlman. |
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 |
||||
Date: June 25, 2010 | By: | /s/ Enrique R. Ubarri | ||
Name: | Enrique R. Ubarri | |||
Title: | Executive Vice President and General Counsel | |||
EXHIBIT INDEX
Exhibit No. | Description | |
10.1
|
Form of Restricted Stock Award under the Doral Financial Corporation 2008 Stock Incentive Plan. | |
10.2
|
Form of Retention Bonus Letter. | |
10.3
|
Amendment to Employment Agreement between the Company and Robert Wahlman. |