Exhibit 10.3

CONFIDENTIAL MODIFICATION AGREEMENT AND GENERAL RELEASE

APPEAR:

AS PARTY OF THE FIRST PART: EVERTEC, Inc. (the “Company”) and Carib Holdings,
Inc. (“Holdings”), each a corporation organized and existing under the laws of
the Commonwealth of Puerto Rico.

AS PARTY OF THE SECOND PART: Felix M. Villamil Pagani, of legal age, executive,
resident of San Juan, Puerto Rico, hereinafter referred to as “Villamil”, and
his spouse, Lourdes Duran, hereinafter referred to as “Spouse”; and by this
means freely and voluntarily:

STATE:

1. The Company and Villamil have previously entered into an employment agreement
dated as of October 1, 2010 (the “Employment Agreement”) and Holdings and
Villamil have entered into an Option Agreement, dated as of February 11, 2011
(the “Option Agreement”), a Restricted Stock Agreement, dated as of February 11,
2011 (the “Restricted Stock Agreement”) and a Stockholder Agreement, dated as of
September 30, 2010, as amended from time to time (the “Stockholder Agreement”);

2. Villamil’s employment with the Company has been modified as of the Effective
Date (as defined on the signature page hereto) and Villamil will no longer serve
as President and Chief Executive Officer of the Company.

3. The Company will employ a new President and Chief Executive Officer to
fulfill functions previously carried out by Villamil.

4. Villamil will remain employed as executive Vice Chairman (“Vice Chairman”) of
the Board of Directors of Company (the “Board”) until June 1, 2013 (the
“Retirement Date”) at which time Villamil will voluntarily retire from
employment with the Company, pursuant to the terms and conditions set forth
herein and on Annex A hereto.

5. Following the Retirement Date, Villamil will serve as an independent
contractor as non-executive Vice Chairman, pursuant to the terms and conditions
set forth herein and on Annex A hereto.

6. In connection with the modification of Villamil’s employment, (i) the Company
will provide Villamil with the payments and benefits set forth in paragraph 11
below, in full satisfaction of the Company’s obligations to Villamil, subject to
the terms and conditions set forth herein, and (ii) except as expressly provided
herein, the Employment Agreement shall terminate and no longer be of any force
or effect.

7. With the purpose of: (a) settling any possible controversy that may have
arisen during the employer-employee relationship that exists between the
parties, and/or the modification of Villamil’s employment; (b) providing
Villamil with the payments and benefits set forth in paragraph 11 below, in full
satisfaction of the Company’s obligations to Villamil and

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(c) ensuring that Villamil remains employed with the Company as executive Vice
Chairman until the Retirement Date and that Villamil services the Company as an
independent contractor in the role of non-executive Vice Chairman following the
Retirement Date, the parties have agreed to execute this Confidential
Modification Agreement and General Release, hereinafter referred to as
“Agreement”, for which reasons they freely and voluntarily.

PROVIDE:

8. For purposes of this Agreement, the term “Released Parties” includes
(a) EVERTEC, Inc., its parent company or companies, and its and their respective
direct and indirect subsidiaries, divisions, affiliates, stockholders, members,
partners, controlling persons, and entities, collective enterprises,
predecessors, successors in interest, franchises, benefit plans (collectively,
the “Company Group”), and (b) every past, present or future stockholder,
partner, director, officer, member, employee, controlling person, or entities,
attorney, agent, representative and conjugal partnerships of any member of the
Company Group, and/or any other person or entity in any manner related with any
member of the Company Group, including, but not limited to, its insurers,
guarantors, bondsmen and/or representatives, and the heirs, executors, and
successions of the aforementioned individuals. For the avoidance of doubt, the
Company Group includes each of AP Carib Holdings, Ltd. and Popular Inc. and
their respective parent company or companies, their respective direct and
indirect subsidiaries, divisions, affiliates, stockholders, member, partners,
controlling persons, or entities, collective enterprises, predecessors,
successors in interest, franchises, benefit plans.

9. The parties hereby agree, subject to paragraph 10 below, that Villamil’s
employment and any and all appointments he holds with the Company Group, whether
as officer, member, director, employee, representative, agent or otherwise
(including, without limitation, as President and Chief Executive Officer of the
Company) have ceased effective as of the Effective Date; provided, however, that
Villamil shall continue to serve as a member of the Board and a member of the
board of directors of Holdings; provided, further, that, at the request of the
Chairman of the Board or the Chief Executive Officer of the Company, Villamil
shall continue to participate as a representative of the Company at the meetings
of the board of directors of Consorcio de Tarjetas Dominicanas, S.A. (“Contado”)
and similar corporate activities of Contado. Effective as of the Effective Date,
except as set forth in this paragraph and subject to paragraph 10 below,
Villamil shall have no authority to act on behalf of the Company Group, and
shall not hold himself out as having such authority or otherwise act in an
executive or other decision making capacity. To the extent reasonably requested
by the Company, Villamil hereby agrees to execute any necessary documents to
give effect to the foregoing.

10. In consideration of the payments and benefits which will be provided by the
Company to Villamil pursuant to paragraph 11 of this Agreement, Villamil agrees
that, following the Effective Date and until the Retirement Date, he will serve
the Company as executive Vice Chairman and that, following the Retirement Date,
he will serve the Company as an independent contractor in the role of
non-executive Vice Chairman, pursuant to the terms and conditions set forth on
Annex A hereto.

 

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11. In exchange, and in consideration of Villamil signing this Agreement and in
strict compliance with all its terms and conditions, the Company and Holdings
agree to the following:

a. The Company shall pay to Villamil an aggregate cash amount equal to two
million two hundred sixteen thousand one hundred seventy dollars ($2,216,170) in
full satisfaction of the Company’s obligations to Villamil, in accordance with
paragraph 12. This payment shall be subject to any applicable withholdings,
including, but not limited to, Puerto Rico Income Tax, Social Security and
Medicare tax with holdings, and shall be reported to Villamil, the Puerto Rico
Treasury Department and the Social Security Administration as a payment of
taxable wages, along with any applicable tax withholdings as described above, in
form 499R-2/W-2PR to be issued by the Company on or before January 31, 2013.

b. The restricted shares of Class B non-voting common stock of Holdings granted
to Villamil pursuant to the Restricted Stock Agreement shall continue to vest
pursuant to the terms and conditions set forth in the Restricted Stock Agreement
until the Retirement Date, at which time such restricted shares shall become
fully vested and non-forfeitable, subject to Villamil’s continued employment
until the Retirement Date and the terms of the Stockholder Agreement, in full
satisfaction of the Company’s and Holdings’ obligations to Villamil.

c. Villamil has previously vested in 38,955 stock options granted to Villamil
under the Option Agreement, which vested stock options shall remain outstanding
following the Effective Date in accordance with the terms and conditions set
forth in the Option Agreement, including, without limitation, Section 4(d)
thereof. The stock options granted to Villamil under the Option Agreement that
have not vested as of the Effective Date, shall be cancelled for no
consideration as of the Effective Date; provided, however, that, subject to
Villamil’s service as Vice Chairman following the Effective Date pursuant to the
terms and conditions set forth on Annex A hereto, Villamil shall be eligible to
vest in an additional 38,955 stock options granted under the Option Agreement as
follows: (i) 50% of such stock options will vest on the first anniversary of the
Effective Date and (ii) the remaining 50% will vest on the second anniversary of
the Effective Date, subject to Villamil’s continued service with the Company on
each applicable vesting date.

The aforementioned payments and benefits are conditioned to the signing of this
Agreement and strict compliance with its terms and conditions. Said payments and
benefits shall be provided to Villamil after: (1) the period of twenty one
(21) days that the Company advised Villamil has available to consider this
Agreement has expired, unless Villamil waives such term, which Villamil hereby
waives; (2) this Agreement has been duly executed, as determined by the Company;
and (3) after the expiration of the seven (7) day revocation period following
the execution of this Agreement, as discussed subsequently in this Agreement.
The Company shall, pursuant to law, pay Villamil the liquidation of the vacation
leave accrued and not used on the Retirement Date or on the next pay date
following the Retirement Date, regardless of whether Villamil signs this
Agreement. The Company shall also pay Villamil the amount of any accrued but
unpaid Christmas Bonus, pursuant to Act No. 148 of June 30, 1969, and its
applicable Regulation, as amended, and pursuant to the corresponding policy
established by the Company.

12. Villamil shall receive the payment described in paragraph 11 of this
Agreement in the form of a lump sum. Said payment shall be made the next payday
following the expiration of the seven (7) day revocation period and when all the
terms and conditions described in paragraph 11 of this Agreement have been
complied with. Thereafter, except as expressly set forth in this Agreement,
including Annex A hereto, Villamil shall not be entitled to any

 

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payments or benefits from the Company, Holdings or any of the Released Parties;
provided, that, to the extent that Villamil is entitled to any benefits pursuant
to any employee benefit plans of the Company (excluding any severance plan or
policy) in which Villamil participated prior to the Effective Date, Villamil
shall be provided any such benefits in accordance with the applicable terms of
such plans.

13. Villamil and Spouse agree and acknowledge that they are solely responsible
for the tax obligations, payment, and consequences of the receipt of the
consideration provided under paragraph 11 of this Agreement, and settle, waive,
and herein holds each of the Released Parties harmless from any claim based on,
or related to, the payment of taxes on the payment mentioned in paragraph 11 of
this Agreement, or the way in which any of the Released Parties reports said
payment to the Puerto Rico Treasury Department or the Social Security
Administration as long as such reporting is made pursuant to law. In case
Villamil and/or Spouse desires to make a claim for refund of any of the amounts
withheld pursuant to this Agreement, Villamil and Spouse agree to file such
claim exclusively at the federal or state agency for which the amount was
withheld, and agree not to include any Released Party as defendant or party in
any legal procedure related to with such claim. In addition, in the case
Villamil and/or Spouse desire to contest any applicable withholdings made
pursuant to this agreement, Villamil and Spouse shall proceed by requesting
restitution and/or reimbursement exclusively from the federal and/or state
agency for which the withholding was made, and agree not to include any Released
Party as a defendant in any legal proceeding for such purposes. Likewise, in the
event any tax controversy arises for which Villamil and/or Spouse are required
to pay any amount, sum, penalty, surcharge or interest, Villamil and Spouse
shall be responsible to pay the totality of the same.

14. In consideration of the payments mentioned in paragraph 11 of this
Agreement, Villamil and Spouse offer full release of liability and in favor of
the Released Parties renounce any claim which may exist to the present,
including the date this Agreement is effective, known or unknown, filed or not,
related or unrelated to Villamil’s employment with any of the Released Parties
and/or termination of that employment relationship, under any constitution,
applicable law or regulation of Puerto Rico or federal or under any contract.
Additionally, it is provided that Villamil and Spouse expressly waive any claim
they may have under the Constitution of the Commonwealth of Puerto Rico; the
Constitution of the United States of America; Law No. 80 of May 26, 1976, as
amended (“Puerto Rico No. Law 80”); Law No. 100 of June 30, 1959 (discrimination
on the basis of age, race, sex, color, religion, marriage, political ideology,
national origin, social condition or origin, or as a result of being the victim
or perceived as a victim of domestic violence, sexual aggression or to lie in
wait for); Law No. 44 of June 2, 1985 (disability); Law No. 69 of July 6, 1985
(sex discrimination); Law No. 17 of April 22, 1988 (sexual harassment); Law
No. 115 of December 20, 1991 (retaliation for offering testimony); Law No. 59 of
August 7, 1997 (drug tests), Vietnam Veteran, Title VII of the Civil Rights Law
of 1964 (discrimination on the basis of sex, color, religion, national origin or
race), Civil Rights Law of 1866, Civil Rights Law of 1871, Civil Rights Act of
1991, Age Discrimination in Employment Act of 1967 (ADEA), Age Discrimination in
Employment Act of 1970 (ADEA), the Older Workers Benefit Protection Act (OWBPA),
the Uniformed Services Employment and Reemployment Rights Act (USERRA), the
Americans with Disabilities Act (ADA), the Family Medical Leave Act of 1993
(FMLA); the federal Rehabilitation Act of 1973; the Equal Pay Act of 1963; the
federal Occupational Safety and Health Act (OSHA); Law No. 16 of August 5, 1975

 

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(OSHO); the National Labor Relations Act (Taft Hartley), as amended; as well as
any claim for damages (including fault and/or negligence) under Articles 1802
and/or 1803 of the Civil Code of Puerto Rico or under the slander and libel law;
or for breach of contract; or any claim for wages, vacation, sick leave and/or
annual bonus pursuant to Law No. 148 of June 30, 1969; Law No. 379 of May 15,
1948; Fair Labor Standards Act of 1938; Law No. 180 of July 27, 1988; Law
No. 289 of April 9, 1946, as amended; and/or any applicable mandatory decree or
employment contract; or any claim for damages and/or requesting reinstatement
under the Workers Accident Compensation Act; the Non-Occupational Disability
Benefits Act (SINOT); and/or the Labor Relations Act of 1947, as amended; and/or
any claim under Law 116 of December 20, 1992, the Bankruptcy Act, the Insurance
Code and Civil Code of Puerto Rico, the Employment Retirement Income Security
Act (ERISA) (including any cause of action related to any welfare benefit plan;
except that it does not include the release of vested rights under any benefit
plan offered by the Company), the Worker Adjustment and Retraining Notification
Act (WARN), and/or the Consolidated Omnibus Budget Reconciliation Act (COBRA)
and/or the Health Insurance Portability and Accountability Act (HIPAA), as
amended; the Family and Medical Leave Act (FMLA), and/or any action under any
other employment or related law, whether of Puerto Rico or federal or any other
cause of action under any law which offers Villamil or Spouse any remedy,
including, but not limited to, damages, punitive damages, liquidated or
compensatory damages, attorney’s fees, interests, costs or re-employment.
Villamil and Spouse also waive any claims under any other law or regulation,
federal or of Puerto Rico, which regulates employment or employment termination
or intellectual property rights; or under any other law, which may impose civil
liability.

Villamil expressly agrees that the total amount of the payment set forth in
paragraph 11 – the payment of two million two hundred sixteen thousand one
hundred seventy dollars ($2,216,170) – is equal to or greater than the payment
of severance pay under Puerto Rico Law No. 80. Villamil also agrees that if in
the future any administrative agency, forum, tribunal or court of law were to
determine that employee is owed and entitled to the Puerto Rico Law No. 80
severance pay amount, or any portion thereof, then the payment made to Villamil
pursuant to this Agreement will be credited to any amount of severance that may
be due to Villamil under Puerto Rico Law 80, in conformity with and as decided
by the Supreme Court of Puerto Rico in the case of Mildred Vélez Cortés, et. al.
v. Baxter Healthcare Corp. of Puerto Rico, et. al., 179 D.P.R. 455 (2010).

Villamil recognizes and acknowledges that by entering into this Agreement he has
waived certain rights or claims in exchange for valuable consideration and
payments which are additional to anything of value to which Villamil is already
entitled.

Additionally, Villamil expressly recognizes that he has no claims under the
Consolidated Omnibus Budget Reconciliation Act (COBRA) and the Health Insurance
Portability and Accountability Act (HIPAA).

15. In view of the considerations to Villamil, as stipulated in this Agreement,
Villamil and Spouse release each of the Released Parties of all claims,
allegations, action, cause of action under law or equity, debt, controversy,
agreement, contract, promise, and damages Villamil, his Spouse, his children,
relatives, heirs, executors, administrators, assignees, successors in interest,
agents, proxy, tutors and dependents may have at the present time or may have
had in the past.

 

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16. The payment of the aforementioned sums of money and benefits does not
constitute an admission of guilt, responsibility, liability or admission of any
violation by any of the Released Parties to the Constitution, laws and/or
regulations of Puerto Rico or of the United States; and Villamil expressly
recognizes that his modification of employment is justified in accordance with
applicable legislation. Villamil expressly acknowledges and agrees that the
payment described in paragraph 11 of this Agreement is in full satisfaction of
any amount corresponding to a legal severance that a Court or administrative
agency could order the Released Parties to pay Villamil under Act No. 80 of
May 30, 1976, as amended, and that Villamil has no right or claim to any payment
in addition to the payment described in paragraph 11 of this Agreement.

17. Villamil manifests that he is convinced that none of the Released Parties
owes him any pay or compensation under Act No. 80 of May 30, 1976, or for unpaid
wages, severance, back pay, overtime, meal period, 7th day of work, annual
bonus, and vacation and/or sick leave, including any penalty and double
compensation, and that at all relevant times, the Released Parties have
compensated him for his services rendered pursuant to the applicable federal and
Puerto Rico law, contracts, norms, and/or policies.

18. Villamil and Spouse affirm that they have not filed at the present time any
judicial or administrative claim against any of the Released Parties.
Notwithstanding, in the event Villamil and/or Spouse has filed a judicial or
administrative claim against any of the Released Parties, they will voluntarily
request the dismissal of same with prejudice, and with this Agreement desists
from said claim or claims. Additionally, Villamil and Spouse promise that in the
future they will not file any judicial claim against any of the Released
Parties, related or not with Villamil’s employment with the Released Parties
and/or termination of said employment relationship, with respect to those acts
which occurred on or before the effective date of this Agreement.

19. Nothing in this Agreement shall be understood as a limitation or restriction
of the Company’s ability to terminate Villamil’s service as Vice Chairman
following the Effective Date at any time and for any reason.

20. Villamil and Spouse agree that they will not instigate, promote, incite,
cause, advise, or stimulate other individuals, group of individuals,
associations, administrative agencies, corporations, societies, or any other
person or entity to present, or get involved in a claim before any judicial
forum against any of the Released Parties. Moreover, Villamil and Spouse agree
that they will refrain from joining, representing or cooperating in any way with
any of the aforementioned individuals or entities in any lawsuit or claim
against any of the Released Parties, before any judicial forum, except in the
case that they are notified with a subpoena issued by a court of law or a forum
with jurisdiction to that effect.

21. Villamil and Spouse accept, moreover, to maintain strict confidentiality
regarding the terms and conditions of this Agreement. Villamil and Spouse affirm
that they are aware of their obligation to keep confidential, and not use or
disclose to any third party, any information concerning any of the Released
Parties or any of their respective clients, acquired during the course of
Villamil’s employment, including, but not limited to, personnel information,
quality control, costs, prices, assets, marketing, business secrets or any
similar information and, more

 

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specifically, any information of a confidential nature concerning any aspect of
the operations or business secrets of any of the Released Parties, except when
the disclosure of said information is required through a subpoena issued by a
court of law or a forum with jurisdiction to that effect if Villamil or his
Spouse violate the terms in this strict confidentiality covenant, or any other
clause of this Agreement, they will be obligated to reimburse the Released
Parties for any damages suffered as determined by a court of competent
jurisdiction.

22. Villamil understands and acknowledges that every invention, work or property
that he produced and/or created, or helped to produce and/or create, during his
employment with any member of the Company Group, or as a result of his
employment with the Company Group, is the property of the Company Group.
Villamil acknowledges and admits that he assigned the Released Parties all the
patent rights and copyrights regarding said invention, work or property.

23. Villamil acknowledges that he is not entitled to re-instatement.

24. Upon the Retirement Date, Villamil acknowledges and agrees that he will
execute a release of claims on substantially the same terms as set forth in this
Agreement, including, without limitation, the terms set forth in paragraphs
14-18 of this Agreement.

25. Villamil agrees to cooperate with the Released Parties and declare, give
testimony or evidence, or serve as a witness for the Released Parties in any
proceeding related to any case filed with any court of law, administrative
agency or hearing, or any local or federal forum, in relation to the matters he
may have personal knowledge, after being duly notified, including in the case of
Wilfredo Cosme Ortiz, Juan I. Orengo Ramirez, Juan A. Padilla Ortiz, Angel O.
Mena Rubio, Wendolin Bosques Cruz, José A. Resto Torres, y Raúl J. Blanco
Almerón v. EVERTEC Inc., Civil Num. K AC2011-0666 (905), and the Edwin Rivera
case before the Commonwealth of Puerto Rico Court of First Instance, San Juan
Part.

26. The parties agree that if any person or entity requests a reference from the
Human Resources Department of the Company regarding Villamil, said reference
shall be limited to providing information regarding the date of employment, last
position held, and accrued salaries of Villamil.

27. After having had sufficient time to carefully read this Agreement, Villamil
affirms that he clearly and fully understands all the provisions of this
Agreement, as well as the legal consequences of the same. Villamil also affirms
that he has been advised to consult with an attorney of his choice and trust
before signing this Agreement, which he has done with Pedro J. Manzano-Yates.

28. Additionally, Villamil and Spouse affirm and aver that the Company has
advised them that they have a period of twenty one (21) days to seek said legal
advice and to carefully consider the release of responsibility offered in this
Agreement; Villamil and Spouse have secured legal counsel through Pedro J.
Manzano-Yates and have had sufficient time to discuss with said counsel the
provisions contemplated in this agreement and that they willfully and
voluntarily waive such term of twenty one (21) days provided by law in order to
execute this Agreement.

 

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29. Villamil and Spouse manifest and agree that they have not depended on any
representation or statement made by any individual or entity in any manner
related to any of the Released Parties regarding the subject matter, basis or
effects of this Agreement, apart from the representations or statements
specifically made in this Agreement.

30. The parties agree that Villamil may revoke this Agreement in any moment
within the seven (7) day period after signing the same, by written notification
to Luisa Wert Serrano. Said revocation notification must be in writing,
delivered by certified mail to the postal address: PO Box 364527 San Juan, PR
00936-4527. The written revocation notification must be delivered within the
seven (7) days following the signing of this Agreement or the notification must
be post-marked proving that it was sent by certified mail together with a
confirmation that it was sent by facsimile, as well, within said seven (7) day
period. This Agreement shall not become effective or obligatory until said
revocation term has expired.

31. Villamil acknowledges and affirms that he: (a) has signed this Agreement
freely and voluntarily, and has not been coerced or unduly influenced to sign
this Agreement by any statement made by any of the Released Parties;
(b) understands the legal consequences of signing this Agreement, which include
that with his signature on this document he waives all actions or claims against
any of the Released Parties that he knew or may have known up to the effective
date of this Agreement; (c) has had ample opportunity to consult with an
attorney before signing this Agreement; (d) Villamil has waived the term of
twenty one (21) days to consider this Agreement; (e) has received adequate legal
advice from private counsel concerning this Agreement, specifically from Pedro
J. Manzano-Yates; (f) has been provided with a list of the occupational
classifications and ages of the employees in the occupational classifications
which are eligible and not eligible to participate in the Plan; and (g) has not
relied on any promise, statement or representation made by any of the Released
Parties with regard to this Agreement that is not expressly included herein.

32. If any provision of this Agreement were declared null by a court with
jurisdiction, the remaining provisions shall remain in full force and effect as
if the portion declared null had not formed part of the same; provided, that if
paragraphs 13, 14 and/or 15 were declared null, the Agreement shall be null and
void in its entirety, and the parties shall return their respective
considerations.

33. This Agreement shall be considered as adjudication on the merits, and shall
have the immediate effect of res judicata for all parties mentioned in the same.

34. The clauses, conditions, and obligations included in this Agreement shall be
interpreted pursuant to the laws of the Commonwealth of Puerto Rico.

35. Villamil and Spouse acknowledge that this Agreement represents the full
understanding between the parties and supersedes, invalidates and renders null
and unenforceable any and all other prior agreements associated with or in any
manner related to Villamil’s employment with any member of the Company Group
and/or termination of said employment relationship, including, without
limitation, the Employment Agreement. Notwithstanding the foregoing, Villamil
and Spouse hereby acknowledge and agree that the terms and conditions set forth
in Sections 5, 6, 7, 8 and 9(e) of the Employment Agreement shall survive in
accordance with the terms thereof and are incorporated by reference into this
Agreement and Villamil and Spouse agree to be bound thereby.

 

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36. Villamil and Spouse consent to and sign this Agreement freely and
voluntarily.

[signature page follows]

 

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IN WITNESS WHEREOF, the parties execute this document confirming their absolute
agreement with all the aforementioned.

In San Juan, Puerto Rico, on this 24th day of February, 2012, effective as of
the 22nd day of February, 2012 (the “Effective Date”).

 

CARIB HOLDINGS, INC. By:   /s/ Luisa Wert Serrano Name:   Luisa Wert Serrano
Title:   SVP

EVERTEC, INC. By:   /s/ Luisa Wert Serrano Name:   Luisa Wert Serrano Title:  
SVP

EMPLOYEE By:   /s/ Felix M. Villamil Pagani   Felix M. Villami Pagani

By:   /s/ Lourdes Duran   Lourdes Duran

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ANNEX A

TERMS OF VICE CHAIRMANSHIP

 

Position/Duties:    During the Term, Felix M. Villamil Pagani shall serve as
Vice Chairman of the Board (the “Vice Chairman”). The Vice Chairman will report
directly to the Chairman of the Board (the “Chairman”) and will perform such
duties as may be reasonably assigned to him by the Chairman or his designee(s)
including, without limitation, serving as an active member of boards of
directors of the Company and Holdings, and participating as a representative of
the Company at the meetings of the board of directors and similar corporate
activities of Contado, making customer calls or visits to the extent required
and attending Company related activities such as Town Hall meetings. Status:   
Notwithstanding anything herein to the contrary, (i) from the Effective Date
through the Retirement Date, the Vice Chairman shall be employed as an officer
of the Company and shall serve as Vice Chairman and (ii) upon the Retirement
Date, the Vice Chairman shall cease to be an officer and employee of the Company
and shall continue to serve as Vice Chairman as an independent contractor.
Notwithstanding the foregoing, the Vice Chairman shall have no authority to bind
the Company unless specified in writing by the Board. Office:    The Company
will provide the Vice Chairman with an office, as reasonably determined by the
Chairman or his designee(s). Term:    The term of Vice Chairman’s service shall
be for a period of two (2) years following the Effective Date (the “Term”).
Annual Salary/Fee:    During the portion of Term ending on the Retirement Date,
the Company shall pay the Vice Chairman an annual salary of $150,000, subject to
applicable withholding taxes. During the Term following the Retirement Date, the
Company shall pay the Vice Chairman an annual fee of $150,000. The annual salary
or annual fee, as applicable, shall be payable in cash in accordance with the
Company’s customary pay practices and prorated for any partial years of service.
The Vice Chairman shall not be eligible to receive to receive any bonus from the
Company during the Term. Stock Options:    Subject to the Vice Chairman’s
continuous service on the applicable vesting dates, the Vice Chairman shall vest
in an additional 38,995 stock options granted under the Option Agreement as
follows: (i) 50% of such stock options will vest on the first anniversary of the
Effective Date and (ii) the remaining 50% will vest on the second anniversary of
the Effective Date.

 

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Benefits:    During the portion of Term ending on the Retirement Date, the Vice
Chairman shall be eligible to participate in the Company’s employee benefit
plans generally made available to the Company’s employees, including, without
limitation, the Company’s medical plan and retirement plan. During the portion
of the Term following the Retirement Date, the Vice Chairman shall not be
eligible to participate in any of the Company’s employee benefit plans.
Automobile:    The Company has previously provided the Vice Chairman with an
automobile for business and personal use, which the Vice Chairman shall continue
to be able to use on the same basis as immediately prior to the Effective Date
until the Retirement Date. In addition, until the Retirement Date, the Vice
Chairman shall be entitled to reimbursement for expenses related to such
automobile on the same basis as immediately prior to the Effective Date. Subject
to the Vice Chairman’s continued service through the Retirement Date, the Vice
Chairman shall be entitled to full possession of such automobile following the
Retirement Date. Expenses:    The Company shall reimburse the Vice Chairman for
reasonable expenses incurred in connection with his service, subject to
reasonable substantiation in accordance with the Company’s policy for expense
reimbursement. Termination:    Prior to the Retirement Date, the Company may
terminate the Vice Chairman’s service for Cause. “Cause” shall mean (i) “cause”
within the meaning of Puerto Rico Law 80, (ii) the Vice Chairman’s failure to
adequately perform his duties in the reasonable good faith judgment of the
Chairman or (iii) the Vice Chairman’s commission of a felony or a crime of moral
turpitude. The Vice Chairman’s service shall not be terminated for “Cause”
pursuant to clause (ii) above unless the Vice Chairman has been given written
notice by the Board stating the basis for such termination and the Vice Chairman
is given ten (10) business days to cure, to the extent curable, the conduct that
is the basis for any such claim. From and after the Retirement Date, the Company
or the Vice Chairman may terminate the Vice Chairman’s service with the Company
at any time and for any reason upon thirty (30) days prior written notice to the
other party. Thereafter, the Company shall have no further obligation to the
Vice Chairman, other than with respect to payment of any accrued but unpaid
portion of the annual salary or annual fee, as applicable.

 

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