Exhibit 10.60

EXECUTION COPY

EVERTEC, INC.

2013 EQUITY INCENTIVE PLAN

1. Purpose. The purpose of the EVERTEC, Inc. 2013 Equity Incentive Plan is to
provide a means through which the Company and its Subsidiaries may attract and
retain key personnel and to provide a means whereby directors, officers,
employees, consultants and advisors (and prospective directors, officers,
employees, consultants and advisors) of the Company and its Subsidiaries can
acquire and maintain an equity interest in the Company, or be paid incentive
compensation, which may (but need not) be measured by reference to the value of
Common Shares, thereby strengthening their commitment to the welfare of the
Company and its Subsidiaries and aligning their interests with those of the
Company’s shareholders.

2. Definitions. The following definitions shall be applicable throughout the
Plan:

(a) “Affiliate” means (i) with respect to any Person (including, without
limitation, the Company), any Person that directly or indirectly controls, is
controlled by or is under common control with such Person and/or (ii) with
respect to the Company, to the extent provided by the Committee, any Person in
which the Company has a significant interest. The term “control” (including,
with correlative meaning, the terms “controlled by” and “under common control
with”), as applied to any Person, means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
such person or entity, whether through the ownership of voting or other
securities, by contract or otherwise.

(b) “Award” means, individually or collectively, any Incentive Stock Option,
Nonqualified Stock Option, Stock Appreciation Right, Restricted Stock,
Restricted Stock Unit, Stock Bonus Award, and Performance Compensation Award
granted under the Plan.

(c) “Board” means the Board of Directors of the Company.

(d) “Cause” means, in the case of a particular Award, unless the applicable
Award agreement states otherwise, (i) the Company or any of its Subsidiaries
having “cause” to terminate a Participant’s employment or service, as defined in
any employment or consulting or similar agreement between the Participant and
the Company or any of its Subsidiaries in effect at the time of such termination
or (ii) in the absence of any such employment or consulting or similar agreement
(or the absence of any definition of “Cause” contained therein), (A) the
Participant’s commission of, conviction for, plea of guilty or nolo contendere
to a felony or a crime involving moral turpitude, or other material act or
omission involving dishonesty or fraud, (B) the Participant’s conduct that
results in or is reasonably likely to result in harm to the reputation or
business of the Company or any of its Subsidiaries in any material way, (C) the
Participant’s failure to perform duties as reasonably directed by the Company or
the Participant’s material violation of any rule, regulation, policy or plan for
the conduct of any service provider to the Company or its Subsidiaries or its or
their business (which, if curable, is not cured within 10 days after notice
thereof is provided to the Participant) or (D) the Participant’s gross
negligence, willful malfeasance or material act of disloyalty with respect to
the Company or its Subsidiaries (which, if curable, is not cured within 10 days
after notice thereof is provided to the Participant). Any determination of
whether Cause exists shall be made by the Committee in its sole discretion.

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(e) “Capital Stock” means any and all shares of, interests and participations
in, and other equivalents (however designated) of stock of the Company,
including, without limitation, all Common Shares and preferred stock.

(f) “Change in Control” shall, in the case of a particular Award, unless the
applicable Award agreement states otherwise or contains a different definition
of “Change in Control,” be deemed to occur upon:

(i) Any Person (other than an Excluded Entity) acquires “beneficial ownership”
(within the meaning of Rule 13d-3 under the Exchange Act) of Capital Stock of
the Company representing more than 50% of the combined voting power of the
Company’s then outstanding securities; provided, however, that if the Company
engages in a merger or consolidation in which the Company or the surviving
entity in such merger or consolidation becomes a subsidiary of another entity,
then references to the Company’s then outstanding securities shall be deemed to
refer to the outstanding securities of such parent entity;

(ii) During any period of two (2) consecutive years, a majority of the members
of the Board shall not be Continuing Directors;

(iii) The consummation of a merger or consolidation of the Company with any
other entity, other than a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity (or if the surviving entity is or
shall become a subsidiary of another entity, then such parent entity)) more than
50% of the combined voting power of the voting securities of the Company (or
such surviving entity or parent entity, as the case may be) outstanding
immediately after such merger or consolidation; or

(iv) The consummation of a plan of complete liquidation or dissolution of the
Company or the sale or disposition by the Company (in one or a series of
transactions) of all or substantially all of the Company’s assets.

To the extent an Award provides for “nonqualified deferred compensation” within
the meaning of Section 409A of the Code and a Change in Control is intended to
constitute a payment event under such Plan Award, then Change in Control shall
mean a “change in control event” as defined in Treasury Regulations
Section 1.409A-3(i)(5) and any interpretative guidance promulgated under
Section 409A of the Code. In addition, notwithstanding anything herein to the
contrary, in any circumstance in which the definition of “Change in Control”
under this Plan would otherwise be operative and with respect to which the
additional tax under Section 409A of the Code would apply or be imposed, but
where such tax would not apply or be imposed if the meaning of the term “Change
in Control” met the requirements of Section 409A(a)(2)(A)(v) of the Code, then
the term “Change in Control” herein shall mean, but only for the transaction,
event or circumstance so affected and the item of income with respect to which
the additional tax under Section 409A of the Code would otherwise be imposed, a
transaction, event or circumstance that is both (x) described in the preceding
provisions of this definition, and (y) a “change in control event” within the
meaning of Treasury Regulations Section 1.409A-3(i)(5).

 

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(g) “Code” means the Internal Revenue Code of 1986, as amended, and any
successor thereto or the Puerto Rico Code. Reference in the Plan to any section
of the Code shall be deemed to include any regulations or other interpretative
guidance under such section, and any amendments or successor provisions to such
section, regulations or guidance.

(h) “Committee” means a committee of at least two people as the Board may
appoint to administer the Plan or, if no such committee has been appointed by
the Board, the Board.

(i) “Common Shares” means the voting and non-voting common shares, par value
$0.01 per share, of the Company (and any stock or other securities into which
such common shares may be converted or into which they may be exchanged).

(j) “Company” means EVERTEC, Inc., a corporation formed under the laws of the
Commonwealth of Puerto Rico.

(k) “Continuing Directors” means, as of any date of determination, any member of
the Board who: (i) was a member of the Board on the Effective Date; (ii) was
nominated for election to the Board by any Principal Stockholder or Partial
Rights Transferee pursuant to the Stockholders’ Agreement or (iii) was nominated
for election or elected to the Board with the approval of a majority of the
Continuing Directors who were members of the Board at the time of such
nomination or election.

(l) “Date of Grant” means the date on which the granting of an Award is
authorized, or such other date as may be specified in such authorization.

(m) “Effective Date” means the date on which the initial public offering of the
Company’s Common Shares pursuant to the Registration Statement on Form S-1, as
initially filed with the Securities and Exchange Commission on February 6, 2013,
is consummated.

(n) “Eligible Director” means a person who is a “non-employee director” within
the meaning of Rule 16b-3 under the Exchange Act.

(o) “Eligible Person” means any (i) individual employed by the Company or any of
its Subsidiaries; provided, however, that no such employee covered by a
collective bargaining agreement shall be an Eligible Person unless and to the
extent that such eligibility is set forth in such collective bargaining
agreement or in an agreement or instrument relating thereto; (ii) director of
the Company or any of its Subsidiaries; (iii) consultant or advisor to the
Company or any of its Subsidiaries, provided that if the Securities Act applies
such persons must be eligible to be offered securities registrable on Form S-8
under the Securities Act; or (iv) prospective employees, directors, officers,
consultants or advisors who have accepted offers of employment or consultancy
from the Company or any of its Subsidiaries (and would satisfy the provisions of
clauses (i) through (iii) above once he or she begins employment with or begins
providing services to the Company or any of its Subsidiaries).

(p) “Exchange Act” means the Securities Exchange Act of 1934, as amended. Any
reference in the Plan to any section of (or rule promulgated under) the Exchange
Act shall be deemed to include any rules, regulations or other interpretative
guidance under such section or rule, and any amendments or successor provisions
to such section, rules, regulations or guidance.

 

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(q) “Excluded Entity” means the Investor, Popular, Inc., the Company and any
Affiliate of any of the foregoing.

(r) “Exercise Price” has the meaning given such term in Section 7(c) of the
Plan.

(s) “Fair Market Value” means, as of any date, the value of Common Shares
determined as follows:

(i) If the Common Shares are listed on any established stock exchange or a
national market system will be the closing sales price for such shares (or the
closing bid, if no sales were reported) as quoted on such exchange or system on
the day of determination, as reported in The Wall Street Journal or such other
source as the Committee deems reliable;

(ii) If the Common Shares are regularly quoted by a recognized securities dealer
but selling prices are not reported, the Fair Market Value of a Common Share
will be the mean between the high bid and low asked prices for the Common Shares
on the day of determination, as reported in The Wall Street Journal or such
other source as the Committee deems reliable; or

(iii) In the absence of an established market for the Common Shares, the Fair
Market Value will be determined in good faith by the Committee in accordance
with Section 409A of the Code.

(t) “Immediate Family Members” shall have the meaning set forth in
Section 15(b).

(u) “Incentive Stock Option” means an Option that is designated by the Committee
as an incentive stock option as described in Section 422 of the Code or a
“qualified stock option” as described in Section 1046 of the Puerto Rico
Internal Code of 1994, as amended (the “Puerto Rico Code”) and, in each case,
otherwise meets the requirements set forth in the Plan.

(v) “Indemnifiable Person” shall have the meaning set forth in Section 4(e) of
the Plan.

(w) “Investor” means Apollo Investment Fund VII, L.P., each of its Affiliates
and any other investment fund or vehicle managed by Apollo Management VII, L.P.
or any of its Affiliates (including any successors or assigns of any such
manager).

(x) “Mature Shares” means Common Shares owned by a Participant that are not
subject to any pledge or security interest and that have been either previously
acquired by the Participant on the open market or meet such other requirements,
if any, as the Committee may determine are necessary in order to avoid an
accounting earnings charge on account of the use of such shares to pay the
Exercise Price or satisfy a withholding obligation of the Participant.

(y) “Negative Discretion” shall mean the discretion authorized by the Plan to be
applied by the Committee to eliminate or reduce the size of a Performance
Compensation Award.

 

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(z) “Nonqualified Stock Option” means an Option that is not designated by the
Committee as an Incentive Stock Option.

(aa) “Option” means an Award granted under Section 7 of the Plan.

(bb) “Option Period” has the meaning given such term in Section 7(d) of the
Plan.

(cc) “Partial Rights Transferee” has the meaning given such term in the
Stockholders’ Agreement.

(dd) “Participant” means an Eligible Person who has been selected by the
Committee to participate in the Plan and to receive an Award pursuant to
Section 6 of the Plan.

(ee) “Performance Compensation Award” shall mean any Award designated by the
Committee as a Performance Compensation Award pursuant to Section 11 of the
Plan.

(ff) “Performance Criteria” shall mean the criterion or criteria that the
Committee shall select for purposes of establishing the Performance Goal(s) for
a Performance Period with respect to any Performance Compensation Award under
the Plan.

(gg) “Performance Formula” shall mean, for a Performance Period, the one or more
objective formulae applied against the relevant Performance Goal to determine,
with regard to the Performance Compensation Award of a particular Participant,
whether all, some portion but less than all, or none of the Performance
Compensation Award has been earned for the Performance Period.

(hh) “Performance Goals” shall mean, for a Performance Period, the one or more
goals established by the Committee for the Performance Period based upon the
Performance Criteria.

(ii) “Performance Period” shall mean the one or more periods of time, as the
Committee may select, over which the attainment of one or more Performance Goals
will be measured for the purpose of determining a Participant’s right to, and
the payment of, a Performance Compensation Award.

(jj) “Permitted Transferee” shall have the meaning set forth in Section 15(b) of
the Plan.

(kk) “Person” means “person” as such term is used in Section 13(d) or 14(d) of
the Exchange Act.

(11) “Plan” means this EVERTEC, Inc. 2013 Equity Incentive Plan.

(mm) “Principal Stockholder” has the meaning given such term in the
Stockholders’ Agreement.

 

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(nn) “Restricted Period” means the period of time determined by the Committee
during which an Award is subject to restrictions or, as applicable, the period
of time within which performance is measured for purposes of determining whether
an Award has been earned.

(oo) “Restricted Stock Unit” means an unfunded and unsecured promise to deliver
Common Shares, cash, other securities or other property, subject to certain
restrictions (including, without limitation, a requirement that the Participant
remain continuously employed or provide continuous services for a specified
period of time), granted under Section 9 of the Plan.

(pp) “Restricted Stock” means Common Shares, subject to certain specified
restrictions (including, without limitation, a requirement that the Participant
remain continuously employed or provide continuous services for a specified
period of time), granted under Section 9 of the Plan.

(qq) “SAR Period” has the meaning given such term in Section 8(c) of the Plan.

(rr) “Securities Act” means the Securities Act of 1933, as amended, and any
successor thereto. Reference in the Plan to any section of the Securities Act
shall be deemed to include any rules, regulations or other interpretative
guidance under such section, and any amendments or successor provisions to such
section, rules, regulations or guidance.

(ss) “Stock Appreciation Right” or “SAR” means an Award granted under Section 8
of the Plan.

(tt) “Stock Bonus Award” means an Award granted under Section 10 of the Plan.

(uu) “Stockholders’ Agreement” means that certain Stockholder Agreement, dated
as of April 17, 2012, among EVERTEC, Inc. and the holders party thereto, as it
may be amended, modified or supplemented from time to time.

(vv) “Strike Price” means, except as otherwise provided by the Committee in the
case of Substitute Awards, (i) in the case of a SAR granted in tandem with an
Option, the Exercise Price of the related Option, or (ii) in the case of a SAR
granted independent of an Option, an amount not less than the Fair Market Value
on the Date of Grant.

(ww) “Subsidiary” means, with respect to the Company:

(1) any corporation, association or other business entity of which more than 50%
of the total voting power of shares of capital stock entitled (without regard to
the occurrence of any contingency and after giving effect to any voting
agreement or shareholders’ agreement that effectively transfers voting power) to
vote in the election of directors, managers, representatives or trustees thereof
is at the time owned or controlled, directly or indirectly, by the Company or
one or more of the Company’s other Subsidiaries (or a combination thereof); and

(2) any partnership (or any comparable foreign entity (a) the sole general
partner (or functional equivalent thereof) or the managing general partner of
which is the Company or one of the Company’s other Subsidiaries or (b) the only
general partners (or functional equivalents thereof) of which are the Company or
one or more of the Company’s Subsidiaries (or any combination thereof).

(xx) “Substitute Award” has the meaning given such term in Section 5(e).

 

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3. Effective Date; Duration. The Plan shall be effective as of the Effective
Date. The expiration date of the Plan, on and after which date no Awards may be
granted hereunder, shall be the tenth anniversary of the Effective Date;
provided, however, that such expiration shall not affect Awards then
outstanding, and the terms and conditions of the Plan shall continue to apply to
such Awards.

4. Administration.

(a) The Committee shall administer the Plan. To the extent required to comply
with the provisions of Rule 16b-3 promulgated under the Exchange Act (if the
Board is not acting as the Committee under the Plan), it is intended that each
member of the Committee shall, at the time he takes any action with respect to
an Award under the Plan, be an Eligible Director. However, the fact that a
Committee member shall fail to qualify as an Eligible Director shall not
invalidate any Award granted by the Committee that is otherwise validly granted
under the Plan. The acts of a majority of the members present at any meeting at
which a quorum is present or acts approved in writing by a majority of the
Committee shall be deemed the acts of the Committee. Whether a quorum is present
shall be determined based on the Committee’s charter as approved by the Board.

(b) Subject to the provisions of the Plan and applicable law, the Committee
shall have the sole and plenary authority, in addition to other express powers
and authorizations conferred on the Committee by the Plan, to: (i) designate
Participants; (ii) determine the type or types of Awards to be granted to a
Participant; (iii) determine the number of Common Shares to be covered by, or
with respect to which payments, rights, or other matters are to be calculated in
connection with, Awards; (iv) determine the terms and conditions of any Award;
(v) determine whether, to what extent, and under what circumstances Awards may
be settled or exercised in cash, Common Shares, other securities, other Awards
or other property, or canceled, forfeited, or suspended and the method or
methods by which Awards may be settled, exercised, canceled, forfeited, or
suspended; (vi) determine whether, to what extent, and under what circumstances
the delivery of cash, Common Shares, other securities, other Awards or other
property and other amounts payable with respect to an Award shall be deferred
either automatically or at the election of the Participant or of the Committee;
(vii) interpret, administer, reconcile any inconsistency in, correct any defect
in and/or supply any omission in the Plan and any instrument or agreement
relating to, or Award granted under, the Plan; (viii) establish, amend, suspend,
or waive any rules and regulations and appoint such agents as the Committee
shall deem appropriate for the proper administration of the Plan;
(ix) accelerate the vesting or exercisability of, payment for or lapse of
restrictions on, Awards; and (x) make any other determination and take any other
action that the Committee deems necessary or desirable for the administration of
the Plan.

(c) The Committee may delegate to one or more officers of the Company or any of
its Subsidiaries the authority to act on behalf of the Committee with respect to
any matter, right,

 

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obligation, or election that is the responsibility of or that is allocated to
the Committee herein, and that may be so delegated as a matter of law, except
for giants of Awards to persons subject to Section 16 of the Exchange Act.

(d) Unless otherwise expressly provided in the Plan, all designations,
determinations, interpretations, and other decisions under or with respect to
the Plan or any Award or any documents evidencing Awards granted pursuant to the
Plan shall be within the sole discretion of the Committee, may be made at any
time and shall be final, conclusive and binding upon all persons or entities,
including, without limitation, the Company, any Affiliate of the Company, any
Participant, any holder or beneficiary of any Award, and any shareholder of the
Company.

(e) No member of the Board, member of the Committee, delegate of the Committee
or any employee or agent of the Company (each such person, an “Indemnifiable
Person”) shall be liable for any action taken or omitted to be taken or any
determination made in good faith with respect to the Plan or any Award
hereunder. Each Indemnifiable Person shall be indemnified and held harmless by
the Company against and from any loss, cost, liability, or expense (including
attorneys’ fees) that may be imposed upon or incurred by such Indemnifiable
Person in connection with or resulting from any action, suit or proceeding to
which such Indemnifiable Person may be a party or in which such Indemnifiable
Person may be involved by reason of any action taken or omitted to be taken
under the Plan or any Award agreement and against and from any and all amounts
paid by such Indemnifiable Person with the Company’s approval, in settlement
thereof, or paid by such Indemnifiable Person in satisfaction of any judgment in
any such action, suit or proceeding against such Indemnifiable Person, provided,
that the Company shall have the right, at its own expense, to assume and defend
any such action, suit or proceeding and once the Company gives notice of its
intent to assume the defense, the Company shall have sole control over such
defense with counsel of the Company’s choice. The foregoing right of
indemnification shall not be available to an Indemnifiable Person to the extent
that a final judgment or other final adjudication (in either case not subject to
further appeal) binding upon such Indemnifiable Person determines that the acts
or omissions of such Indemnifiable Person giving rise to the indemnification
claim resulted from such Indemnifiable Person’s bad faith, fraud or willful
criminal act or omission or that such right of indemnification is otherwise
prohibited by law or by the Company’s Certificate of Incorporation or Bylaws.
The foregoing right of indemnification shall not be exclusive of any other
rights of indemnification to which such Indemnifiable Persons may be entitled
under the Company’s Certificate of Incorporation or Bylaws, as a matter of law,
or otherwise, or any other power that the Company may have to indemnify such
Indemnifiable Persons or hold them harmless.

(f) Notwithstanding anything to the contrary contained in the Plan, the Board
may, in its sole discretion, at any time and from time to time, grant Awards and
administer the Plan with respect to such Awards. In any such case, the Board
shall have all the authority granted to the Committee under the Plan.

5. Grant of Awards; Shares Subject to the Plan; Limitations.

(a) The Committee may, from time to time, grant Options, Stock Appreciation
Rights, Restricted Stock, Restricted Stock Units, Stock Bonus Awards and/or
Performance Compensation Awards to one or more Eligible Persons.

 

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(b) Awards granted under the Plan shall be subject to the following limitations:
subject to Section 12 of the Plan, (i) the Committee is authorized to deliver
under the Plan no more than an aggregate of 5,956,882 Common Shares and (ii) no
more than 5,956,882 Common Shares shall be subject to grants of Incentive Stock
Options under the Plan to any single Participant during any calendar year.

(c) Use of Common Shares to pay the required Exercise Price or tax obligations,
or that are used or withheld to satisfy tax obligations of the Participant
shall, notwithstanding anything herein to the contrary, not be available again
for other Awards under the Plan. Shares underlying Awards under this Plan that
are forfeited, cancelled, expire unexercised, or are settled in cash are
available again for Awards under the Plan.

(d) Common Shares delivered by the Company in settlement of Awards may be
authorized and unissued shares, shares held in the treasury of the Company,
shares purchased on the open market or by private purchase, or a combination of
the foregoing.

(e) Awards may, in the sole discretion of the Committee, be granted under the
Plan in assumption of, or in substitution for, outstanding awards previously
granted by an entity acquired by the Company or with which the Company combines
(“Substitute Awards”) to a person would otherwise be an Eligible Person
following the closing of such acquisition or combination. The number of Common
Shares underlying any Substitute Awards shall be counted against the aggregate
number of Common Shares available for Awards under the Plan.

6. Eligibility. Participation shall be limited to Eligible Persons who have
entered into an Award agreement or who have received written notification from
the Committee, or from a person designated by the Committee, that they have been
selected to participate in the Plan.

7. Options.

(a) Generally. Each Option granted under the Plan shall be evidenced by an Award
agreement (whether in paper or electronic medium (including email or the posting
on a web site maintained by the Company or a third party under contract with the
Company)), which shall set forth the vesting and other applicable terms and
conditions. Each Option so granted shall be subject to the conditions set forth
in this Section 7, and to such other conditions not inconsistent with the Plan
as may be reflected in the applicable Award agreement.

(b) Incentive Stock Options. All Options granted under the Plan shall be
Nonqualified Stock Options unless the applicable Award agreement expressly
states that the Option is intended to be an Incentive Stock Option. Incentive
Stock Options shall be granted only to Eligible Persons who are employees of the
Company and its Subsidiaries, and no Incentive Stock Option shall be granted to
any Eligible Person who is ineligible to receive an Incentive Stock Option under
the Code. No Option shall be treated as an Incentive Stock Option unless the
Plan has been approved by the shareholders of the Company in a manner intended
to comply with the stockholder approval requirements of Section 422(b)(1) of the
Code or Section 1046 of the Puerto Rico Code, provided that any Option intended
to be an Incentive Stock Option shall not fail to be effective solely on account
of a failure to obtain such approval, but rather such Option shall be treated as
a Nonqualified Stock Option unless and until such approval

 

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is obtained. To the extent an Incentive Stock Option is intended to be a
“qualified stock option” as described in Section 1046 of the Puerto Rico Code,
prior to the grant of such Incentive Stock Option, the Company shall submit the
Plan to the Secretary of the Treasury of Puerto Rico for a determination that
the Plan complies with the provisions of Section 1046 of the Puerto Rico Code.
In the case of an Incentive Stock Option, the terms and conditions of such giant
shall be subject to and comply with such rules as may be prescribed by
Section 422 of the Code or Section 1046 of the Puerto Rico Code, as applicable.
If for any reason an Option intended to be an Incentive Stock Option (or any
portion thereof) shall not qualify as an Incentive Stock Option, then, to the
extent of such nonqualification, such Option or portion thereof shall be
regarded as a Nonqualified Stock Option appropriately granted under the Plan.

(c) Exercise Price. The exercise price (“Exercise Price”) per Common Share for
each Option shall not be less than 100% of the Fair Market Value of such share
determined as of the Date of Grant; provided, however, that in the case of an
Incentive Stock Option granted to an employee who, at the time of the grant of
such Option, owns shares representing more than 10% of the voting power of all
classes of shares of the Company or any of its Affiliates, the Exercise Price
per share shall not be less than 110% of the Fair Market Value per share on the
Date of Grant and provided, further, that, notwithstanding any provision herein
to the contrary, the Exercise Price shall not be less than the par value per
Common Share.

(d) Vesting and Expiration. Options shall vest and become exercisable in such
manner and on such date or dates determined by the Committee and shall expire
after such period, not to exceed ten years, as may be determined by the
Committee (the “Option Period”); provided, however, that the Option Period shall
not exceed five years from the Date of Grant in the case of an Incentive Stock
Option granted to a Participant who on the Date of Grant owns shares
representing more than 10% of the voting power of all classes of shares of the
Company or any of its Affiliates; provided, further, that, notwithstanding any
vesting dates set by the Committee, the Committee may, in its sole discretion,
accelerate the exercisability of any Option, which acceleration shall not affect
the terms and conditions of such Option other than with respect to
exercisability. Unless otherwise provided by the Committee in an Award
agreement: (i) the unvested portion of an Option shall expire upon termination
of employment or service of the Participant granted the Option, and the vested
portion of such Option shall remain exercisable for (A) one year following
termination of employment or service by reason of such Participant’s death or
disability (as determined by the Committee), but not later than the expiration
of the Option Period or (B) 90 days following termination of employment or
service for any reason other than such Participant’s death or disability, and
other than termination of such Participant’s employment or service for Cause,
but not later than the expiration of the Option Period; and (ii) both the
unvested and the vested portion of an Option shall expire upon the termination
of the Participant’s employment or service by the Company or any of its
Subsidiaries for Cause.

(e) Method of Exercise and Form of Payment. No Common Shares shall be delivered
pursuant to any exercise of an Option until payment in full of the Exercise
Price therefor is received by the Company and the Participant has paid to the
Company an amount equal to any federal, state, local and non-U.S. income and
employment taxes required to be withheld. Options that have become exercisable
may be exercised by delivery of written or electronic notice of exercise to the
Company in accordance with the terms of the Option accompanied by

 

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payment of the Exercise Price. The Exercise Price shall be payable (i) in cash,
check, cash equivalent and/or Common Shares valued at the Fair Market Value at
the time the Option is exercised (including, pursuant to procedures approved by
the Committee, by means of attestation of ownership of a sufficient number of
Common Shares in lieu of actual delivery of such shares to the Company);
provided, that such Common Shares are Mature Shares; and (ii) by such other
method as the Committee may permit in accordance with applicable law, in its
sole discretion, including without limitation: (A) in other property having a
Fair Market Value on the date of exercise equal to the Exercise Price or (B) if
there is a public market for the Common Shares at such time, by means of a
broker-assisted “cashless exercise” pursuant to which the Company is delivered a
copy of irrevocable instructions to a stockbroker to sell the Common Shares
otherwise deliverable upon the exercise of the Option and to deliver promptly to
the Company an amount equal to the Exercise Price or (C) by a “net exercise”
method whereby the Company withholds from the delivery of the Common Shares for
which the Option was exercised that number of Common Shares having a Fair Market
Value equal to the aggregate Exercise Price for the Common Shares for which the
Option was exercised. Any fractional Common Shares shall be settled in cash.

(f) Notification upon Disqualifying Disposition of an Incentive Stock Option.
Each Participant awarded an Incentive Stock Option under the Plan shall notify
the Company in writing immediately after the date he makes a disqualifying
disposition of any Common Shares acquired pursuant to the exercise of such
Incentive Stock Option. A disqualifying disposition is any disposition
(including, without limitation, any sale) of such Common Shares before the later
of (A) two years after the Date of Grant of the Incentive Stock Option or
(B) one year after the date of exercise of the Incentive Stock Option. The
Company may, if determined by the Committee and in accordance with procedures
established by the Committee, retain possession of any Common Shares acquired
pursuant to the exercise of an Incentive Stock Option as agent for the
applicable Participant until the end of the period described in the preceding
sentence.

(g) Compliance With Laws, etc. Notwithstanding the foregoing, in no event shall
a Participant be permitted to exercise an Option in a manner that the Committee
determines would violate the Sarbanes-Oxley Act of 2002, if applicable, or any
other applicable law or the applicable rules and regulations of the Securities
and Exchange Commission or the applicable rules and regulations of any
securities exchange or inter-dealer quotation system on which the securities of
the Company are listed or traded.

8. Stock Appreciation Rights.

(a) Generally. Each SAR granted under the Plan shall be evidenced by an Award
agreement (whether in paper or electronic medium (including email or the posting
on a web site maintained by the Company or a third party under contract with the
Company)), which shall set forth the vesting and other applicable terms and
conditions. Each SAR so granted shall be subject to the conditions set forth in
this Section 8, and to such other conditions not inconsistent with the Plan as
may be reflected in the applicable Award agreement. Any Option granted under the
Plan may include tandem SARs. The Committee also may award SARs to Eligible
Persons independent of any Option.

 

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(b) Strike Price. The Strike Price per Common Share for each SAR shall not be
less than 100% of the Fair Market Value of such share determined as of the Date
of Grant.

(c) Vesting and Expiration. A SAR granted in connection with an Option shall
become exercisable and shall expire according to the same vesting schedule and
expiration provisions as the corresponding Option. A SAR granted independent of
an Option shall vest and become exercisable and shall expire in such manner and
on such date or dates determined by the Committee and shall expire after such
period, not to exceed ten years, as may be determined by the Committee (the “SAR
Period”); provided, however, that notwithstanding any vesting dates set by the
Committee, the Committee may, in its sole discretion, accelerate the
exercisability of any SAR, which acceleration shall not affect the terms and
conditions of such SAR other than with respect to exercisability. Unless
otherwise provided by the Committee in an Award agreement: (i) the unvested
portion of a SAR shall expire upon termination of employment or service of the
Participant granted the SAR, and the vested portion of such SAR shall remain
exercisable for (A) one year following termination of employment or service by
reason of such Participant’s death or disability (as determined by the
Committee), but not later than the expiration of the SAR Period or (B) 90 days
following termination of employment or service for any reason other than such
Participant’s death or disability, and other than termination of such
Participant’s employment or service for Cause, but not later than the expiration
of the SAR Period; and (ii) both the unvested and the vested portion of a SAR
shall expire upon the termination of the Participant’s employment or service by
the Company or any of its Subsidiaries for Cause.

(d) Method of Exercise. SARs that have become exercisable may be exercised by
delivery of written or electronic notice of exercise to the Company in
accordance with the terms of the Award, specifying the number of SARs to be
exercised and the date on which such SARs were awarded. Notwithstanding the
foregoing, if on the last day of the Option Period (or in the case of a SAR
independent of an option, the SAR Period), the Fair Market Value exceeds the
Strike Price, the Participant has not exercised the SAR or the corresponding
Option (if applicable), and neither the SAR nor the corresponding Option (if
applicable) has expired, such SAR shall be deemed to have been exercised by the
Participant on such last day and the Company shall make the appropriate payment
therefor.

(e) Payment. Upon the exercise of a SAR, the Company shall pay to the
Participant an amount equal to the number of shares subject to the SAR that are
being exercised multiplied by the excess, if any, of the Fair Market Value of
one Common Share on the exercise date over the Strike Price, less an amount
equal to any federal, state, local and non-U.S. income and employment taxes
required to be withheld. The Company shall pay such amount in cash, in Common
Shares valued at Fair Market Value, or any combination thereof, as determined by
the Committee. Any fractional Common Share shall be settled in cash.

9. Restricted Stock and Restricted Stock Units.

(a) Generally. Each grant of Restricted Stock and Restricted Stock Units shall
be evidenced by an Award agreement (whether in paper or electronic medium
(including email or the posting on a web site maintained by the Company or a
third party under contract with the Company)), which shall set forth the vesting
and other applicable terms and conditions. Each such giant shall be subject to
the conditions set forth in this Section 9, and to such other conditions not
inconsistent with the Plan as may be reflected in the applicable Award
agreement.

 

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(b) Restricted Accounts; Escrow or Similar Arrangement. Upon the grant of
Restricted Stock, a book entry in a restricted account shall be established in
the Participant’s name at the Company’s transfer agent and, if the Committee
determines that the Restricted Stock shall be held by the Company or in escrow
rather than held in such restricted account pending the release of the
applicable restrictions, the Committee may require the Participant to
additionally execute and deliver to the Company (i) an escrow agreement
satisfactory to the Committee, if applicable, and (ii) the appropriate share
power (endorsed in blank) with respect to the Restricted Stock covered by such
agreement. If a Participant shall fail to execute an agreement evidencing an
Award of Restricted Stock and, if applicable, an escrow agreement and blank
share power within the amount of time specified by the Committee, the Award
shall be null and void. Subject to the restrictions set forth in this Section 9
and the applicable Award agreement, the Participant generally shall have the
rights and privileges of a shareholder as to such Restricted Stock, including,
without limitation, the right to vote such Restricted Stock and the right to
receive dividends, if applicable. To the extent shares of Restricted Stock are
forfeited, any share certificates issued to the Participant evidencing such
shares shall be returned to the Company, and all rights of the Participant to
such shares and as a shareholder with respect thereto shall terminate without
further obligation on the part of the Company.

(c) Vesting; Acceleration of Lapse of Restrictions. Unless otherwise provided by
the Committee in an Award agreement, the unvested portion of Restricted Stock
and Restricted Stock Units shall terminate and be forfeited upon termination of
employment or service of the Participant granted the applicable Award.

(d) Delivery of Restricted Stock and Settlement of Restricted Stock Units.

(i) Upon the expiration of the Restricted Period with respect to any shares of
Restricted Stock, the restrictions set forth in the applicable Award agreement
shall be of no further force or effect with respect to such shares, except as
set forth in the applicable Award agreement. If an escrow arrangement is used,
upon such expiration, the Company shall deliver to the Participant, or his
beneficiary, without charge, the share certificate evidencing the shares of
Restricted Stock that have not then been forfeited and with respect to which the
Restricted Period has expired (rounded down to the nearest full share).
Dividends, if any, that may have been withheld by the Committee and attributable
to any particular share of Restricted Stock shall be distributed to the
Participant in cash or, at the sole discretion of the Committee, in shares of
Common Stock having a Fair Market Value equal to the amount of such dividends,
upon the release of restrictions on such share and, if such share is forfeited,
the Participant shall have no right to such dividends (except as otherwise set
forth by the Committee in the applicable Award agreement).

(ii) Unless otherwise provided by the Committee in an Award agreement, upon the
expiration of the Restricted Period with respect to any outstanding Restricted
Stock Units, the Company shall deliver to the Participant, or his beneficiary,
without charge, one Common Share for each such outstanding Restricted Stock
Unit; provided, however, that the Committee may, in its sole discretion, elect
to (i) pay cash or part cash and part Common Share

 

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in lieu of delivering only Common Shares in respect of such Restricted Stock
Units or (ii) defer the delivery of Common Shares (or cash or part Common Shares
and part cash, as the case may be) beyond the expiration of the Restricted
Period if such delivery would result in a violation of applicable law until such
time as is no longer the case. If a cash payment is made in lieu of delivering
Common Shares, the amount of such payment shall be equal to the Fair Market
Value of the Common Shares as of the date on which the Restricted Period lapsed
with respect to such Restricted Stock Units, less an amount equal to any
federal, state, local and non-U.S. income and employment taxes required to be
withheld.

10. Stock Bonus Awards. The Committee may issue unrestricted Common Shares, or
other Awards denominated in Common Shares, under the Plan to Eligible Persons,
either alone or in tandem with other awards, in such amounts as the Committee
shall from time to time in its sole discretion determine. Each Stock Bonus Award
granted under the Plan shall be evidenced by an Award agreement (whether in
paper or electronic medium (including email or the posting on a web site
maintained by the Company or a third party under contract with the Company)),
which shall set forth the vesting and other applicable terms and conditions.
Each Stock Bonus Award so granted shall be subject to such conditions not
inconsistent with the Plan as may be reflected in the applicable Award
agreement.

11. Performance Compensation Awards.

(a) Generally. The Committee shall have the authority, at the time of grant of
any Award described in Sections 7 through 10 of the Plan, to designate such
Award as a Performance Compensation Award. The Committee shall have the
authority to make an award of a cash bonus to any Participant.

(b) Discretion of Committee with Respect to Performance Compensation Awards.
With regard to a particular Performance Period, the Committee shall have sole
discretion to select the length of such Performance Period, the type(s) of
Performance Compensation Awards to be issued, the Performance Criteria that will
be used to establish the Performance Goal(s), the kind(s) and/or level(s) of the
Performance Goals(s) that is (are) to apply and the Performance Formula. Within
the first 90 days of a Performance Period (if applicable), the Committee shall,
with regard to the Performance Compensation Awards to be issued for such
Performance Period, exercise its discretion with respect to each of the matters
enumerated in the immediately preceding sentence and record the same in writing.

(c) Performance Criteria. The Performance Criteria that will be used to
establish the Performance Goal(s) shall be based on the attainment of specific
levels of performance of the Company (and/or one or more of its Affiliates,
divisions or operational units, or any combination of the foregoing) and may
include the following or any such other Performance Criteria as determined by
the Committee in its discretion: (i) net earnings or net income (before or after
taxes); (ii) basic or diluted earnings per share (before or after taxes);
(iii) net revenue or revenue growth; (iv) gross profit or gross profit growth;
(v) operating profit (before or after taxes); (vi) return measures (including,
but not limited to, return on assets, capital, invested capital, equity, or
sales); (vii) cash flow (including, but not limited to, operating cash flow,
free cash flow, and cash flow return on capital); (viii) earnings before or
after taxes, interest, depreciation and/or amortization; (ix) gross or operating
margins; (x) productivity ratios; (xi) share price

 

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(including, but not limited to, growth measures and total shareholder return);
(xii) expense targets; (xiii) margins; (xiv) operating efficiency;
(xv) objective measures of customer satisfaction; (xvi) working capital targets;
(xvii) measures of economic value added; (xviii) inventory control;
(xix) enterprise value; (xx) sales; (xxi) debt levels and net debt;
(xxii) combined ratio; (xxiii) timely launch of new facilities; (xxiv) client
retention; (xxv) employee retention; (xxvi) timely completion of new product
rollouts; and (xxvii) objective measures of personal targets, goals or
completion of projects. Any one or more of the Performance Criteria may be used
on an absolute or relative basis to measure the performance of the Company
and/or one or more of its Affiliates as a whole or any business unit(s) of the
Company and/or one or more of its Affiliates or any combination thereof, as the
Committee may deem appropriate, or any of the above Performance Criteria may be
compared to the performance of a selected group of comparison companies, or a
published or special index that the Committee, in its sole discretion, deems
appropriate, or as compared to various stock market indices. The Committee also
has the authority to provide for accelerated vesting of any Award based on the
achievement of Performance Goals pursuant to the Performance Criteria specified
in this paragraph.

(d) Modification of Performance Goal(s). In the event that applicable tax and/or
securities laws change to permit Committee discretion to alter the governing
Performance Criteria without obtaining shareholder approval of such alterations,
the Committee shall have sole discretion to make such alterations without
obtaining shareholder approval. The Committee is authorized at any time, in its
sole discretion, to adjust or modify the calculation of a Performance Goal for
such Performance Period, based on and in order to appropriately reflect the
following events: (i) asset write-downs; (ii) litigation or claim judgments or
settlements; (iii) the effect of changes in tax laws, accounting principles, or
other laws or regulatory rules affecting reported results; (iv) any
reorganization and restructuring programs; (v) extraordinary nonrecurring items
as described in Accounting Principles Board Opinion No. 30 (or any successor
pronouncement thereto) and/or in management’s discussion and analysis of
financial condition and results of operations appearing in the Company’s annual
report to shareholders for the applicable year; (vi) acquisitions or
divestitures; (vii) any other specific unusual or nonrecurring events, or
objectively determinable category thereof; (viii) foreign exchange gains and
losses; (ix) a change in the Company’s fiscal year and (x) any other
extraordinary event that, in the reasonable determination of the Committee,
impacts the applicable Performance Criteria.

(e) Payment of Performance Compensation Awards.

(i) Condition to Receipt of Payment. Unless otherwise provided in the applicable
Award agreement, a Participant must be employed by the Company or one of its
Subsidiaries on the last day of a Performance Period to be eligible for payment
in respect of a Performance Compensation Award for such Performance Period.

(ii) Limitation. A Participant shall be eligible to receive payment in respect
of a Performance Compensation Award only to the extent that: (A) the Performance
Goals for such period are achieved; and (B) all or some of the portion of such
Participant’s Performance Compensation Award has been earned for the Performance
Period based on the application of the Performance Formula to such achieved
Performance Goals.

 

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(iii) Certification. Following the completion of a Performance Period, the
Committee shall review and certify in writing whether, and to what extent, the
Performance Goals for the Performance Period have been achieved and, if so,
calculate and certify in writing that amount of the Performance Compensation
Awards earned for the period based upon the Performance Formula. The Committee
shall then determine the amount of each Participant’s Performance Compensation
Award actually payable for the Performance Period and, in so doing, may apply
Negative Discretion.

(iv) Use of Negative Discretion. In determining the actual amount of an
individual Participant’s Performance Compensation Award for a Performance
Period, the Committee may reduce or eliminate the amount of the Performance
Compensation Award earned under the Performance Formula in the Performance
Period through the use of Negative Discretion if, in its sole judgment, such
reduction or elimination is appropriate.

(f) Timing of Award Payments. Performance Compensation Awards granted for a
Performance Period shall be paid to Participants as soon as administratively
practicable following completion of the certifications required by this
Section 11, but in no event later than two-and-one-half months following the end
of the fiscal year during which the Performance Period is completed.

12. Changes in Capital Structure and Similar Events. In the event of (a) any
dividend or other distribution (whether in the form of cash, Common Shares,
other securities or other property), recapitalization, stock split, reverse
stock split, reorganization, merger, amalgamation, consolidation, split-up,
split-off, combination, repurchase or exchange of Common Shares or other
securities of the Company, issuance of warrants or other rights to acquire
Common Shares or other securities of the Company, or other similar corporate
transaction or event (including, without limitation, a Change in Control) that
affects the Common Shares, or (b) unusual or nonrecurring events (including,
without limitation, a Change in Control) affecting the Company, any of its
Affiliates, or the financial statements of the Company or any of its Affiliates,
or changes in applicable rules, rulings, regulations or other requirements of
any governmental body or securities exchange or inter-dealer quotation system,
accounting principles or law, such that in either case an adjustment is
determined by the Committee in its sole discretion to be necessary or
appropriate, then the Committee shall make any such adjustments in such manner
as it may deem equitable, including without limitation any or all of the
following:

(i) adjusting any or all of (A) the number of Common Shares or other securities
of the Company (or number and kind of other securities or other property) that
may be delivered in respect of Awards or with respect to which Awards may be
granted under the Plan (including, without limitation, adjusting any or all of
the limitations under Section 5 of the Plan) and (B) the terms of any
outstanding Award, including, without limitation, (1) the number of Common
Shares or other securities of the Company (or number and kind of other
securities or other property) subject to outstanding Awards or to which
outstanding Awards relate, (2) the Exercise Price or Strike Price with respect
to any Award or (3) any applicable performance measures (including, without
limitation, Performance Criteria and Performance Goals);

 

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(ii) providing for a substitution or assumption of Awards, accelerating the
exercisability of, lapse of restrictions on, or termination of, Awards or
providing for a period of time for exercise prior to the occurrence of such
event; and

(iii) canceling any one or more outstanding Awards and causing to be paid to the
holders thereof, in cash, Common Shares, other securities or other property, or
any combination thereof, the value of such Awards, if any, as determined by the
Committee (which if applicable may be based upon the price per Common Share
received or to be received by other shareholders of the Company in such event),
including, without limitation, in the case of an outstanding Option or SAR, a
cash payment in an amount equal to the excess, if any, of the Fair Market Value
(as of a date specified by the Committee) of the Common Shares subject to such
Option or SAR over the aggregate Exercise Price or Strike Price of such Option
or SAR, respectively (it being understood that, in such event, any Option or SAR
having a per share Exercise Price or Strike Price equal to, or in excess of, the
Fair Market Value of a Common Share subject thereto may be canceled and
terminated without any payment or consideration therefor);

provided, however, that in the case of any “equity restructuring” (within the
meaning of the Financial Accounting Standards Board Statement of Financial
Accounting Standards No. 123 (revised 2004)), the Committee shall make an
equitable or proportionate adjustment to outstanding Awards to reflect such
equity restructuring. Any adjustment in Incentive Stock Options under this
Section 12 (other than any cancellation of Incentive Stock Options) shall be
made only to the extent not constituting a “modification” within the meaning of
Section 424(h)(3) of the Code or Section 1046 of the Puerto Rico Code, and any
adjustments under this Section 12 shall be made in a manner that does not
adversely affect the exemption provided pursuant to Rule 16b-3 under the
Exchange Act. The Company shall give each Participant notice of an adjustment
hereunder and, upon notice, such adjustment shall be conclusive and binding for
all purposes.

13. Effect of Change in Control. Except to the extent otherwise provided in an
Award agreement, in the event of a (i) Change in Control and, within twelve
(12) months following such Change in Control, (ii) (x) a Participant’s
employment or service is terminated by the Company without Cause (other than due
to the Participant’s death or disability) or (y) the Participant terminates his
or her employment or service for “good reason” as defined in any employment or
consulting or similar agreement between the Participant and the Company or any
of its Subsidiaries in effect at the time of such termination, as applicable,
notwithstanding any provision of the Plan to the contrary, with respect to any
outstanding Awards then held by such Participant:

(a) the then outstanding Options and SARs shall become immediately exercisable
as of a time prior to the Change in Control;

(b) the Restricted Period shall expire as of a time prior to the Change in
Control (including without limitation a waiver of any applicable Performance
Goals);

(c) Performance Periods in effect on the date the Change in Control occurs shall
end on such date, and the Committee shall (i) determine the extent to which
Performance Goals with

 

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respect to each such Performance Period have been met based upon such audited or
unaudited financial information or other information then available as it deems
relevant and (ii) cause the Participant to receive partial or full payment of
Awards for each such Performance Period based upon the Committee’s determination
of the degree of attainment of the Performance Goals, or assuming that the
applicable “target” levels of performance have been attained or on such other
basis determined by the Committee.

To the extent practicable, any actions taken by the Committee under the
immediately preceding clauses (a) through (c) shall occur in a manner and at a
time which allows affected Participants the ability to participate in the Change
in Control transactions with respect to the Common Shares subject to their
Awards.

14. Amendments and Termination,

(a) Amendment and Termination of the Plan. The Board may amend, alter, suspend,
discontinue, or terminate the Plan or any portion thereof at any time; provided,
that (i) no amendment to Section 14(b) (to the extent required by the proviso in
such Section 14(b)) shall be made without shareholder approval and (ii) no such
amendment, alteration, suspension, discontinuation or termination shall be made
without shareholder approval if such approval is necessary to comply with any
tax or regulatory requirement applicable to the Plan (including, without
limitation, as necessary to comply with any rules or requirements of any
securities exchange or inter-dealer quotation system on which the Common Shares
may be listed or quoted); provided, further, that any such amendment,
alteration, suspension, discontinuance or termination that would materially and
adversely affect the rights of any Participant or any holder or beneficiary of
any Award theretofore granted shall not to that extent be effective without the
consent of the affected Participant, holder or beneficiary.

(b) Amendment of Award Agreements. The Committee may, to the extent consistent
with the terms of any applicable Award agreement, waive any conditions or rights
under, amend any terms of, or alter, suspend, discontinue, cancel or terminate,
any Award theretofore granted or the associated Award agreement, prospectively
or retroactively; provided that any such waiver, amendment, alteration,
suspension, discontinuance, cancellation or termination that would materially
and adversely affect the rights of any Participant with respect to any Award
theretofore granted shall not to that extent be effective without the consent of
the affected Participant; provided, further, that without shareholder approval,
except as otherwise permitted under Section 12 of the Plan, (i) no amendment or
modification may reduce the Exercise Price of any Option or the Strike Price of
any SAR, (ii) the Committee may not cancel any outstanding Option or SAR and
replace it with a new Option or SAR, another Award or cash and (iii) the
Committee may not take any other action that is considered a “repricing” for
purposes of the shareholder approval rules of the applicable securities exchange
or inter-dealer quotation system on which the Common Shares are listed or
quoted.

15. General.

(a) Award Agreements. Each Award under the Plan shall be evidenced by an Award
agreement, which shall be delivered to the Participant (whether in paper or
electronic medium (including email or the posting on a web site maintained by
the Company or a third party under

 

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contract with the Company)) and shall specify the terms and conditions of the
Award and any rules applicable thereto, including, without limitation, the
effect on such Award of the death, disability or termination of employment or
service of a Participant, or of such other events as may be determined by the
Committee.

(b) Nontransferability.

(i) Each Award shall be exercisable only by a Participant during the
Participant’s lifetime, or, if permissible under applicable law, by the
Participant’s legal guardian or representative. No Award may be assigned,
alienated, pledged, attached, sold or otherwise transferred or encumbered by a
Participant other than by will or by the laws of descent and distribution and
any such purported assignment, alienation, pledge, attachment, sale, transfer or
encumbrance shall be void and unenforceable against the Company and its
Affiliates; provided that the designation of a beneficiary shall not constitute
an assignment, alienation, pledge, attachment, sale, transfer or encumbrance.

(ii) Notwithstanding the foregoing, the Committee may, in its sole discretion,
permit Awards (other than Incentive Stock Options) to be transferred by a
Participant, without consideration, subject to such rules as the Committee may
adopt consistent with any applicable Award agreement to preserve the purposes of
the Plan, to: (A) any person who is a “family member” of the Participant, as
such term is used in the instructions to Form S-8 under the Securities Act
(collectively, the “Immediate Family Members”); (B) a trust solely for the
benefit of the Participant and his or her Immediate Family Members; or (C) a
partnership or limited liability company whose only partners or stockholders are
the Participant and his or her Immediate Family Members; or (D) any other
transferee as may be approved either (I) by the Board or the Committee in its
sole discretion, or (II) as provided in the applicable Award agreement (each
transferee described in clauses (A), (B) (C) and (D) above is hereinafter
referred to as a “Permitted Transferee”); provided, that the Participant gives
the Committee advance written notice describing the terms and conditions of the
proposed transfer and the Committee notifies the Participant in writing that
such a transfer would comply with the requirements of the Plan.

(iii) The terms of any Award transferred in accordance with the immediately
preceding sentence shall apply to the Permitted Transferee and any reference in
the Plan, or in any applicable Award agreement, to a Participant shall be deemed
to refer to the Permitted Transferee, except that (A) Permitted Transferees
shall not be entitled to transfer any Award, other than by will or the laws of
descent and distribution; (B) Permitted Transferees shall not be entitled to
exercise any transferred Option unless there shall be in effect a registration
statement on an appropriate form covering the Common Shares to be acquired
pursuant to the exercise of such Option if the Committee determines, consistent
with any applicable Award agreement, that such a registration statement is
necessary or appropriate; (C) the Committee or the Company shall not be required
to provide any notice to a Permitted Transferee, whether or not such notice is
or would otherwise have been required to be given to the Participant under the
Plan or otherwise; and (D) the consequences of the termination of the
Participant’s employment by, or services to, the Company or any of its
Subsidiaries under the terms of the Plan and the applicable Award agreement
shall continue to be applied with respect to the Participant, including, without
limitation, that an Option shall be exercisable by the Permitted Transferee only
to the extent, and for the periods, specified in the Plan and the applicable
Award agreement.

 

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(c) Tax Withholding.

(i) A Participant shall be required to pay to the Company or any of its
Subsidiaries, and the Company or any of its Subsidiaries shall have the right
and is hereby authorized to withhold, from any cash, Common Shares, other
securities or other property deliverable under any Award or from any
compensation or other amounts owing to a Participant, the amount (in cash,
Common Shares, other securities or other property) of any required withholding
taxes in respect of an Award, its exercise, or any payment or transfer under an
Award or under the Plan and to take such other action as may be necessary in the
opinion of the Committee or the Company to satisfy all obligations for the
payment of such withholding and taxes.

(ii) Without limiting the generality of clause (i) above, the Committee may, in
its sole discretion, permit a Participant to satisfy, in whole or in part, the
foregoing withholding liability by (A) the delivery of Common Shares (which are
Mature Shares) owned by the Participant having a Fair Market Value equal to such
withholding liability or (B) having the Company withhold from the number of
Common Shares otherwise issuable or deliverable pursuant to the exercise or
settlement of the Award a number of shares with a Fair Market Value equal to
such withholding liability (but no more than the minimum required statutory
withholding liability).

(d) No Claim to Awards; No Rights to Continued Employment; Waiver. No employee
of the Company or any of its Subsidiaries, or other person, shall have any claim
or right to be granted an Award under the Plan or, having been selected for the
grant of an Award, to be selected for a grant of any other Award. There is no
obligation for uniformity of treatment of Participants or holders or
beneficiaries of Awards. The terms and conditions of Awards and the Committee’s
determinations and interpretations with respect thereto need not be the same
with respect to each Participant and may be made selectively among Participants,
whether or not such Participants are similarly situated. Neither the Plan nor
any action taken hereunder shall be construed as giving any Participant any
right to be retained in the employ or service of the Company or any of its
Subsidiaries, nor shall it be construed as giving any Participant any rights to
continued service on the Board. The Company or any of its Subsidiaries may at
any time dismiss a Participant from employment or discontinue any consulting
relationship, free from any liability or any claim under the Plan, unless
otherwise expressly provided in the Plan or any Award agreement. By accepting an
Award under the Plan, a Participant shall thereby be deemed to have waived any
claim to continued exercise or vesting of an Award or to damages or severance
entitlement related to non-continuation of the Award beyond the period provided
under the Plan or any Award agreement, notwithstanding any provision to the
contrary in any written employment contract or other agreement between the
Company and its Subsidiaries and the Participant, whether any such agreement is
executed before, on or after the Date of Grant.

(e) International Participants. With respect to Participants who reside or work
outside of the United States of America, the Committee may in its sole
discretion amend the terms of the Plan or outstanding Awards with respect to
such Participants in order to conform such terms with the requirements of local
law or to obtain more favorable tax or other treatment for a Participant, the
Company or its Affiliates.

 

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(f) Designation and Change of Beneficiary. Each Participant may file with the
Committee a written designation of one or more persons as the beneficiary(ies)
who shall be entitled to receive the amounts payable with respect to an Award,
if any, due under the Plan upon his death. A Participant may, from time to time,
revoke or change his beneficiary designation without the consent of any prior
beneficiary by filing a new designation with the Committee. The last such
designation received by the Committee shall be controlling; provided, however,
that no designation, or change or revocation thereof, shall be effective unless
received by the Committee prior to the Participant’s death, and in no event
shall it be effective as of a date prior to such receipt. If no beneficiary
designation is filed by a Participant, the beneficiary shall be deemed to be his
or her spouse or, if the Participant is unmarried at the time of death, his or
her estate.

(g) Termination of Employment/Service. Unless determined otherwise by the
Committee at any point following such event: (i) neither a temporary absence
from employment or service due to illness, vacation or leave of absence nor a
transfer from employment or service with the Company to employment or service
with a Subsidiary of the Company (or vice versa) shall be considered a
termination of employment or service with the Company or a Subsidiary of the
Company; and (ii) if a Participant’s employment with the Company and its
Subsidiaries terminates, but such Participant continues to provide services to
the Company and its Subsidiaries in a non-employee capacity (or vice versa),
such change in status shall not be considered a termination of employment with
the Company or a Subsidiary of the Company.

(h) No Rights as a Stockholder. Except as otherwise specifically provided in the
Plan or any Award agreement, no person shall be entitled to the privileges of
ownership in respect of Common Shares that are subject to Awards hereunder until
such shares have been issued or delivered to that person.

(i) Government and Other Regulations.

(i) The obligation of the Company to settle Awards in Common Shares or other
consideration shall be subject to all applicable laws, rules, and regulations,
and to such approvals by governmental agencies as may be required.
Notwithstanding any terms or conditions of any Award to the contrary, the
Company shall be under no obligation to offer to sell or to sell, and shall be
prohibited from offering to sell or selling, any Common Shares pursuant to an
Award unless such shares have been properly registered for sale pursuant to the
Securities Act with the Securities and Exchange Commission or unless the Company
has received an opinion of counsel, satisfactory to the Company, that such
shares may be offered or sold without such registration pursuant to an available
exemption therefrom and the terms and conditions of such exemption have been
fully complied with. The Company shall be under no obligation to register for
sale under the Securities Act any of the Common Shares to be offered or sold
under the Plan. The Committee shall have the authority to provide that all
certificates for Common Shares or other securities of the Company or any of its
Affiliates delivered under the Plan shall be subject to such stop transfer
orders and other restrictions as the Committee may deem advisable under the
Plan, the applicable Award agreement, the federal securities laws, or

 

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the rules, regulations and other requirements of the Securities and Exchange
Commission, any securities exchange or inter-dealer quotation system upon which
such shares or other securities are then listed or quoted and any other
applicable federal, state, local or non-U.S. laws, and, without limiting the
generality of Section 9 of the Plan, the Committee may cause a legend or legends
to be put on any such certificates to make appropriate reference to such
restrictions. Notwithstanding any provision in the Plan to the contrary, the
Committee reserves the right to add any additional terms or provisions to any
Award granted under the Plan that it in its sole discretion deems necessary or
advisable in order that such Award complies with the legal requirements of any
governmental entity to whose jurisdiction the Award is subject.

(ii) The Committee may cancel an Award or any portion thereof if it determines,
in its sole discretion, that legal or contractual restrictions and/or blockage
and/or other market considerations would make the Company’s acquisition of
Common Shares from the public markets, the Company’s issuance of Common Shares
to the Participant, the Participant’s acquisition of Common Shares from the
Company and/or the Participant’s sale of Common Shares to the public markets
illegal, impracticable or inadvisable. If the Committee determines to cancel all
or any portion of an Award in accordance with the foregoing, the Company shall
pay to the Participant an amount equal to the excess of (A) the aggregate Fair
Market Value of the Common Shares subject to such Award or portion thereof
canceled (determined as of the applicable exercise date, or the date that the
shares would have been vested or delivered, as applicable), over (B) the
aggregate Exercise Price or Strike Price (in the case of an Option or SAR,
respectively) or any amount payable as a condition of delivery of Common Shares
(in the case of any other Award). Such amount shall be delivered to the
Participant as soon as practicable following the cancellation of such Award or
portion thereof.

(iii) Notwithstanding any provision in this Plan or any Award agreement to the
contrary, Awards granted hereunder shall be subject, to the extent applicable,
(A) to any clawback policy adopted by the Company, and (B) to the Dodd-Frank
Wall Street Reform and Consumer Protection Act, as amended, and rules,
regulations and binding, published guidance thereunder, which legislation
provides for the clawback and recovery of incentive compensation in the event of
certain financial statement restatements. If, pursuant to Section 10D of the
Exchange Act, the Company would not be eligible for continued listing, if
applicable, under Section 10D(a) of the Exchange Act if it did not adopt
policies consistent with Section 10D(b) of the Exchange Act, then, in accordance
with those policies that are so required, any incentive- based compensation
payable to a Participant under this Plan shall be subject to clawback in the
circumstances, to the extent, and in the manner, required by Section 10D(b)(2)
of the Exchange Act, as interpreted by rules of the Securities Exchange
Commission.

(j) Payments to Persons Other Than Participants. If the Committee shall find
that any person to whom any amount is payable under the Plan is unable to care
for his affairs because of illness or accident, or is a minor, or has died, then
any payment due to such person or his estate (unless a prior claim therefor has
been made by a duly appointed legal representative) may, if the Committee so
directs the Company, be paid to his spouse, child, relative, an institution
maintaining or having custody of such person, or any other person deemed by the
Committee to be a proper recipient on behalf of such person otherwise entitled
to payment. Any such payment shall be a complete discharge of the liability of
the Committee and the Company therefor.

 

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(k) Nonexclusivity of the Plan. Neither the adoption of this Plan by the Board
nor the submission of this Plan to the shareholders of the Company for approval,
as applicable, shall be construed as creating any limitations on the power of
the Board to adopt such other incentive arrangements as it may deem desirable,
including, without limitation, the granting of stock options or other
equity-based awards otherwise than under this Plan, and such arrangements may be
either applicable generally or only in specific cases.

(1) No Trust or Fund Created. Neither the Plan nor any Award shall create or be
construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Company or any of its Affiliates, on the one hand, and
a Participant or other person or entity, on the other hand. No provision of the
Plan or any Award shall require the Company, for the purpose of satisfying any
obligations under the Plan, to purchase assets or place any assets in a trust or
other entity to which contributions are made or otherwise to segregate any
assets, nor shall the Company maintain separate bank accounts, books, records or
other evidence of the existence of a segregated or separately maintained or
administered fund for such purposes. Participants shall have no rights under the
Plan other than as unsecured general creditors of the Company, except that
insofar as they may have become entitled to payment of additional compensation
by performance of services, they shall have the same rights as other employees
under general law.

(m) Reliance on Reports. Each member of the Committee and each member of the
Board shall be fully justified in acting or failing to act, as the case may be,
and shall not be liable for having so acted or failed to act in good faith, in
reliance upon any report made by the independent public accountant of the
Company and its Affiliates and/or any other information furnished in connection
with the Plan by any agent of the Company or the Committee or the Board, other
than himself.

(n) Relationship to Other Benefits. No payment under the Plan shall be taken
into account in determining any benefits under any pension, retirement, profit
sharing, group insurance or other benefit plan of the Company except as
otherwise specifically provided in such other plan.

(o) Governing Law. The Plan shall be governed by and construed in accordance
with the internal laws of the State of New York applicable to contracts made and
performed wholly within the State of New York without giving effect to the
conflict of laws provisions thereof.

(p) Severability. If any provision of the Plan or any Award or Award agreement
is or becomes or is deemed to be invalid, illegal, or unenforceable in any
jurisdiction or as to any person or entity or Award, or would disqualify the
Plan or any Award under any law deemed applicable by the Committee, such
provision shall be construed or deemed amended to conform to the applicable
laws, or if it cannot be construed or deemed amended without, in the
determination of the Committee, materially altering the intent of the Plan or
the Award, such provision shall be construed or deemed stricken as to such
jurisdiction, person or entity or Award and the remainder of the Plan and any
such Award shall remain in full force and effect.

(q) Obligations Binding on Successors. The obligations of the Company under the
Plan shall be binding upon any successor corporation or organization resulting
from the merger,

 

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amalgamation, consolidation or other reorganization of the Company, or upon any
successor corporation or organization succeeding to substantially all of the
assets and business of the Company.

(r) Expenses; Gender; Titles and Headings. The expenses of administering the
Plan shall be borne by the Company and its Affiliates. Masculine pronouns and
other words of masculine gender shall refer to both men and women. The titles
and headings of the sections in the Plan are for convenience of reference only,
and in the event of any conflict, the text of the Plan, rather than such titles
or headings, shall control.

(s) Shareholder Approval. The Plan shall become effective on the Effective Date,
provided, however, that, no Incentive Stock Options shall be valid as an
Incentive Stock Option unless and until the Plan has been approved by
shareholders within the twelve (12) month period following adoption of by the
Board in the manner provided under Code Section 424 and Treasury Regulations
thereunder, and any Option awarded as an Incentive Stock Option prior to such
shareholder approval shall be treated as a Nonqualified Stock Option.

(t) Shareholder/Other Agreements. Notwithstanding anything herein to the
contrary, in no event shall Common Shares be delivered pursuant to any Award
under this Plan unless and until the Participant executes the Stockholders’
Agreement or any other applicable shareholder agreement, which in all events
shall be within thirty (30) days following the vesting and exercise of the
Award, as applicable. In addition, the Committee may require, as a condition to
the grant of and/or the receipt of Common Shares under an Award, that the
Participant execute lock-up or other agreements, as it may determine in its sole
and absolute discretion.

(u) Payments. Participants shall be required to pay, to the extent required by
applicable law, any amounts required to receive Common Shares under any Award
made under the Plan.

(v) Section 409A. The Plan and the Awards hereunder are intended to either
comply with, or be exempt from, the requirements of Section 409A of the Code. To
the extent that the Plan or any Award is not exempt from the requirements of
Section 409A of the Code, the Plan and any such Award intended to comply with
the requirements of Section 409A of the Code shall be limited, construed and
interpreted in accordance with such intent. Notwithstanding the foregoing, in no
event whatsoever shall the Company be liable for any additional tax, interest or
penalty that may be imposed by Section 409A of the Code or any damages relating
to any failure to comply with Section 409A of the Code.

* * *

 

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