Document:

Exhibit 10.2

EXHIBIT 10.2

FIFTH AMENDMENT

     This Fifth Amendment (the “Agreement”) to the Credit Agreement referred to below is dated as
of April 30, 2008, by and among BOWATER CANADIAN FOREST PRODUCTS INC., a company organized under
the laws of Canada, in its capacity as Borrower under the Credit Agreement referred to below (the
“Borrower”), BOWATER INCORPORATED, a corporation organized under the laws of Delaware, in its
capacity as a Guarantor under the Credit Agreement referred to below (the “Original U.S.
Borrower”), certain Subsidiaries and Affiliates of the Original U.S. Borrower party hereto (the
“Grantors”), AbitibiBowater Inc., a corporation organized under the laws of Delaware (the
“Parent”), the Lenders and the U.S. Lenders party hereto (collectively, the “Consenting Lenders”)
pursuant to an authorization (in the form attached hereto as Exhibit A, each a “Lender
Authorization”) and THE BANK OF NOVA SCOTIA, as administrative agent (the “Administrative Agent”)
for the Lenders party to the Credit Agreement referred to below.

STATEMENT OF PURPOSE:

     The Borrower, the Original U.S. Borrower, the Lenders, certain other financial institutions
and the Administrative Agent are parties to the Credit Agreement dated as of May 31, 2006 (as
amended by that certain First Amendment dated as of July 20, 2007, that certain Second Amendment
dated as of October 31, 2007, that certain Third Amendment and Waiver dated as of February 25,
2008, that certain Fourth Amendment dated as of March 31, 2008, as amended hereby and as further
amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”).

     The Borrower has requested that the Administrative Agent, the Lenders and the U.S. Lenders
agree to amend the Credit Agreement as more specifically set forth herein. Subject to the terms
and conditions set forth herein, the Administrative Agent and each of the Consenting Lenders have
agreed to grant such requests of the Borrower.

     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:

     1. Capitalized Terms. Except as otherwise provided herein, all capitalized undefined
terms used in this Agreement (including, without limitation, in the introductory paragraph
and the statement of purpose hereto) shall have the meanings assigned thereto in the Credit
Agreement (as amended by this Agreement).

     2. Credit
Agreement Amendments. The Credit Agreement is hereby amended by:

     (a) Section 1.1 of the Credit Agreement is hereby amended by:

     (i) amending and restating the following definitions as follows:

     “New U.S. Borrower Mortgages” means those certain mortgages, deeds of trust, security
agreements, subordination agreements or other real property security documents encumbering
the New U.S. Borrower Fixed Assets, in each case in form and substance

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reasonably satisfactory to the Administrative Agent and the U.S. Administrative Agent and
executed by the applicable New U.S. Borrower in favor of the U.S. Administrative Agent, for
the ratable benefit of the Secured Parties and the U.S. Secured Parties, as amended,
restated, supplemented or otherwise modified from time to time. Unless specifically
excluded, the Supplemental New U.S. Borrower Mortgage shall be a New U.S. Borrower
Mortgage.

     “New U.S. Borrowers” means (a) Bowater Alabama LLC (formerly known as Bowater
Alabama, Inc.), an Alabama limited liability company (the “Coosa Pines U.S. Borrower”),
(b) Bowater Newsprint South LLC, a Delaware limited liability company (“BNS Holdings”) and
(c) Bowater Newsprint South Operations LLC (formerly known as Bowater Newsprint South,
Inc.), a Delaware corporation and as successor by merger to Bowater Mississippi, LLC (the
“Grenada U.S. Borrower”).

     (ii) adding the following new definition in proper alphabetical order:

     “Supplemental New U.S. Borrower Mortgage” means that certain mortgage, deed of trust,
security agreement, subordination agreement or other real property security document
encumbering a fee interest in the Coosa Pines Mill and a leasehold interest in the Coosa
Pines Real Property or otherwise subordinating the interests of the Industrial Development
Board of the City of Childersburg, a public corporation duly organized and existing under
the laws of the State of Alabama (such Person, the “Supplemental New U.S. Borrower
Mortgagor”), in the Coosa Pines Mill or Coosa Pines Real Property to the interests of the
Administrative Agent and the U.S. Administrative Agent therein, in each case in form and
substance reasonably satisfactory to the Administrative Agent and the U.S. Administrative
Agent and executed by the Supplemental New U.S. Borrower Mortgagor in favor of the U.S.
Administrative Agent, for the ratable benefit of the Secured Parties and the U.S. Secured
Parties, as amended, restated, supplemented or otherwise modified from time to time.

     “Supplemental New U.S. Borrower Mortgagor” has the meaning set forth in the definition
of Supplemental New U.S. Borrower Mortgage.

     (b) Amendment to Section 5.3. The following new subsection (d) shall be added to Section 5.3:

     “(d) Delivery of Documentation Pursuant to Section 8.10(e)(i). If the requested
borrowing, conversion or continuation of any Loan or the requested
issuance or extension of any Letter of Credit would cause the
aggregate principal amount of all Obligations outstanding as of the date of such borrowing, conversion, continuation, issuance
or extension (after giving effect to the requested borrowing, conversion, continuation,
issuance or extension) to exceed C$91,500,000, the Administrative Agent shall have received
each item required to be delivered thereto pursuant to Section 8.l0(e)(i), in all cases, in
accordance with the terms and provisions thereof (or as such terms and conditions may be
amended, modified or waived in accordance with the terms of Section 14.2).”

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     (c) Amendments to Section 8.10. Clauses (i) and (ii) of subsection (e) of Section 8.10
of the Credit Agreement are hereby amended and restated as follows:

“(i) (A) Concurrently with the delivery of the documentation required to be
delivered pursuant to Section 8.10(e)(ii)(A) of the U.S. Credit Agreement but in no
event later than April 15, 2008, the U.S. Administrative Agent shall have received:

     (1) evidence satisfactory to the U.S. Administrative Agent that the
U.S. Borrower shall be diligently pursuing in good faith the rendering of
the solvency opinions referred to in Sections 8.10(e)(i)(B) and
8.10(e)(i)(C) by a third party consultant reasonably acceptable to the U.S.
Administrative Agent (including having delivered to such third party
consultant all financial and other information necessary to provide the
basis for the delivery of such solvency opinion); and

     (2) information, in form and substance reasonably satisfactory to the
U.S. Administrative Agent, confirming (x) that the New U.S. Borrowers own,
free and clear of any Liens, the New U.S. Borrower Fixed Assets and (y) the
ability of the New U.S. Borrowers to grant to the U.S. Administrative Agent,
on behalf of the Secured Parties and the U.S. Secured Parties, a perfected
first priority security interest in the New U.S. Borrower Fixed Assets
without the consent or approval of any third Person; and

     (B) Concurrently with the delivery of the documentation required to be
delivered pursuant to Section 8.10(e)(ii)(B) of the U.S. Credit Agreement but in no
event later than May 15, 2008, the Administrative Agent shall have received:

     (1) a copy of a solvency opinion from Houlihan Lokey Howard
& Zukin Financial Advisors, Inc. or another opinion provider reasonably
acceptable to the Administrative Agent as to the solvency of the
Original U.S. Borrower after giving effect to the New U.S. Borrower Transactions
and the transactions contemplated by the Fourth Amendment, this
Agreement and the joinder agreement referred to in clause (2) below and
such other matters as the Lenders shall request (which such opinion
shall expressly permit reliance (or be accompanied by a letter, in form and
substance satisfactory to the Administrative Agent, executed by the
opinion provider that (expressly permits reliance) by the Administrative
Agent, the Lenders and any successors and assigns of the Administrative Agent
or any Lender);

     (2) a duly executed joinder agreement, in form and substance
reasonably satisfactory to the Administrative Agent, joining each New
U.S. Borrower to Article XI of this Agreement (as a U.S. Borrower), the
Intercompany Subordination Agreement and any other applicable Loan
Documents;

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     (3) such updated Schedules to the Loan Documents as requested by the Administrative Agent or
the U.S. Administrative Agent with regard to the New U.S. Borrowers (including, without
limitation, an updated Schedule 6.1(b));

     (4) a certificate of a Responsible Officer of each New U.S. Borrower certifying as to the
incumbency and genuineness of the signature of each officer of each New U.S. Borrower executing the
Loan Documents to which it is a party and certifying that attached thereto is a true, correct and
complete copy of (w) the articles or certificate of incorporation or formation of each New U.S.
Borrower and all amendments thereto, certified as of a recent date by the appropriate Governmental
Authority in its jurisdiction of incorporation or formation, (x) the bylaws or other governing
document of each New U.S. Borrower as in effect on the date hereof, (y) resolutions duly adopted by
the board of directors or other governing body of each New U.S. Borrower authorizing the
transactions contemplated hereunder and the execution, delivery and performance of this Agreement
and the other Loan Documents to which it is a party, and (z) certificates as of a recent date of
the good standing of each New U.S. Borrower under the laws of its jurisdiction of incorporation or
formation;

     (5) the results of a Lien search (including a search as to judgments, pending litigation and
tax matters) made against each New U.S. Borrower under the Uniform Commercial Code (or applicable
judicial docket) as in effect in each jurisdiction in which filings or recordations under the
Uniform Commercial Code should be made to evidence or perfect security interests in all assets of
each New U.S. Borrower, indicating among other things that the assets of each New U.S. Borrower
are free and clear of any Liens (except Permitted Liens);

     (6) evidence in form and substance reasonably satisfactory to the Administrative Agent
confirming the interest of the U.S. Administrative Agent (as loss payee and additional insured
and, with respect to the real property subject to the New U.S. Borrower Mortgages (other than the
Supplemental New U.S. Borrower Mortgage), as mortgagee) with respect to such insurance coverage;

     (7) a duly executed counterpart of each New U.S. Borrower Mortgage (other than the
Supplemental New U.S. Borrower Mortgage);

     (8) all filings and recordations that are necessary to perfect the security interests of the
U.S. Administrative Agent, on behalf of itself, the Secured Parties and the U.S. Secured Parties,
in the Collateral granted by each New U.S. Borrower under each New U.S. Borrower Mortgage (other
than the Supplemental New U.S. Borrower Mortgage) and evidence satisfactory to the Administrative
Agent that upon such filings and recordations such security interests constitute valid and
perfected first priority Liens therein;

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     (9) favorable opinions of counsel of each New U.S. Borrower addressed to the
Administrative Agent and the Lenders with respect to each New U.S. Borrower, this
Agreement, each of the New U.S. Borrower Mortgages (other than the Supplemental New U.S.
Borrower Mortgage) and the other Loan Documents to which the New U.S. Borrowers are a
party and such other matters as the Lenders shall reasonably request (which such opinions
shall expressly permit reliance by successors and assigns of the Administrative Agent or
any Lender); and

     (10) such other instruments, documents and certificates as the Administrative Agent
shall reasonably request.

     (C) Concurrently with the delivery of the documentation required to be delivered pursuant to
Section 8.10(e)(ii)(C) of the U.S. Credit Agreement but in no event later than May 22, 2008, the
Administrative Agent shall have received a copy of a solvency opinion from Houlihan Lokey Howard &
Zukin Financial Advisors, Inc. or another opinion provider reasonably acceptable to the
Administrative Agent as to the solvency of each of the New U.S. Borrowers (other than BNS Holdings
if BNS Holdings is a holding company that holds only the Capital Stock of the Coosa Pines U.S.
Borrower and the Grenada U.S. Borrower and has no creditors other than the U.S. Lenders), in each
case after giving effect to the New U.S. Borrower Transactions and the transactions contemplated
by the Fourth Amendment, this Agreement and the joinder agreement referred to in Section
8.10(e)(i)(B)(2) above and such other matters as the Lenders shall request (which such opinion
shall expressly permit reliance (or be accompanied by a letter, in form and substance satisfactory
to the Administrative Agent, executed by the opinion provider that expressly permits reliance) by
the Administrative Agent, the Lenders and any successors and assigns of the Administrative Agent
or any Lender).

     (D) Concurrently with the delivery of the documentation required to be delivered pursuant to
Section 8.10(e)(ii)(D) of the U.S. Credit Agreement but in no event later than May 30, 2008, the
Administrative Agent shall have received:

     (1) to the extent reasonably requested by the Administrative
Agent, evidence in form and substance reasonably satisfactory to the
Administrative Agent confirming the interest of the U.S. Administrative
Agent as loss payee, additional insured and mortgagee with respect to the
Coosa Pines Mill and Coosa Pines Real Property subject to the Supplemental New U.S. Borrower Mortgage;

     (2) a duly executed counterpart of the Supplemental New U.S. Borrower Mortgage;

     (3) all filings and recordations that are necessary to perfect the security
interests of the U.S. Administrative Agent, on behalf of itself, the other Secured
Parties and the U.S. Secured Parties, in the Collateral granted by the Supplemental New
U.S. Borrower Mortgagor, and evidence

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satisfactory to the Administrative Agent that upon such filings and recordations
such security interests constitute valid and perfected first priority Liens
therein (or, to the extent acceptable to the Administrative Agent, evidence
satisfactory to the Administrative Agent that upon delivery of the Supplemental
New U.S. Borrower Mortgage, all right, title and interest of the Supplemental New
U.S. Borrower Mortgagor shall be subordinated in all respects to the security
interests of the U.S. Administrative Agent, on behalf of itself, the other Secured
Parties and the U.S. Secured Parties, with respect to the interests subject to the
Supplemental New U.S. Borrower Mortgage);

     (4) favorable opinions of counsel of the Supplemental New U.S. Borrower
Mortgagor addressed to the Administrative Agent and the Lenders with respect to the
Supplemental New U.S. Borrower Mortgage and such other matters as the Lenders shall
reasonably request (which such opinions shall expressly permit reliance by
successors and assigns of the Administrative Agent or any Lender); and

     (5) such other instruments, documents and certificates as the Administrative
Agent shall reasonably request.

     (ii) Within forty-five (45) days of the date upon which each New U.S. Borrower is joined
as a Credit Party pursuant to Section 8.10(e)(i)(B):

     (A) a final title policy, insuring the first priority Liens of the Secured Parties and
the U.S. Secured Parties and showing no Liens prior to the Liens of the Secured Parties and
the U.S. Secured Parties (other than for ad valorem taxes not yet due and payable) and
containing only such other customary title exceptions as are reasonably acceptable to the
U.S. Administrative Agent, with title insurance companies acceptable to the U.S.
Administrative Agent, on each of the Coosa Pines Mill Real Property and Grenada Mill Real
Property (it being agreed that the U.S. Borrower and its Subsidiaries shall provide or
obtain any customary affidavits and indemnities as may be required or necessary to obtain
title insurance satisfactory to the U.S. Administrative Agent);

     (B) copies of all recorded documents creating exceptions to the title policies
referred to in Section 8.10(e)(ii)(A);

     (C) a certification form of a certification from the National Research Center, or any
successor ageney thereto, regarding each of the Coosa Pines Mill Real Property and the Grenada Mill Real Property;

     (D) copies of as-built surveys of a recent date of each of the Coosa
Pines Mill Real Property and the Grenada Mill Real Property, in each case,
certified as of a recent date by a registered engineer or land surveyor. Each such
survey shall be accompanied by an affidavit (a “Survey Affidavit”) of an
authorized signatory of the owner of such property stating that there have been no
improvements or encroachments to the property since the date of the respective

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survey such that the existing survey is no longer accurate. Each such survey shall
show the area of such property, all boundaries of the land with courses and
distances indicated, including chord bearings and arc and chord distances for all
curves, and shall show dimensions and locations of all easements, private drives,
roadways, and other facts materially affecting such property, and shall show such
other details as the U.S. Administrative Agent may reasonably request, including,
without limitation, any encroachment (and the extent thereof in feet and inches)
onto the property or by any of the improvements on the property upon adjoining land
or upon any easement burdening the property; any improvements, to the extent
constructed, and the relation of the improvements by distances to the boundaries of
the property, to any easements burdening the property, and to the established
building lines and the street lines; and if improvements are existing, (x) a
statement of the number of each type of parking space required by Applicable Laws,
ordinances, orders, rules, regulations, restrictive covenants and easements
affecting the improvement, and the number of each such type of parking space
provided, and (y) the locations of all utilities serving the improvement;

     (E) a Phase I environmental assessment and such other environmental
report reasonably requested by the U.S. Administrative Agent regarding each of
the Coosa Pines Mill Real Property and the Grenada Mill Real Property, in each
case prepared by an environmental engineering firm acceptable to the U.S.
Administrative Agent showing no environmental conditions in violation of
Environmental Laws or liabilities under Environmental Laws, either of which
could reasonably be expected to have a Material Adverse Effect; and

     (F) such other certificates, documents and information (including,
without limitation, engineering and structural reports, permanent certificates
of
occupancy and evidence of zoning compliance, in each case, with respect to
each
of the Coosa Pines Mill Real Property and the Grenada Mill Real Property) as
may be reasonably requested by the U.S. Administrative Agent, all in form,
consent and scope reasonably satisfactory to the U.S. Administrative Agent.”

     (c) Amendment to Section 12.1 (d). Section 12.1 (d) of the Credit Agreement is
hereby amended and restated in its entirety as follows:

     “(d) The U.S. Borrower, the Borrower or any other Credit Party shall default in the
performance or observance of any covenant or agreement contained in Sections 5.4,

          3. Conditions to Effectiveness. Upon the satisfaction of each of the following
conditions, this Agreement shall be deemed to be effective as of the date hereof:

     (a) the U.S. Administrative Agent shall have received counterparts of this Agreement executed
by the Administrative Agent (on behalf of itself and each of the Consenting Lenders by virtue of
each Consenting Lender’s execution of a Lender Authorization), the Borrower, the Original U.S.
Borrower, the Parent and the Grantors;

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     (b) the U.S. Administrative Agent shall have received executed Lender Authorizations from
the requisite Consenting Lenders;

     (c) the Administrative Agent shall have been reimbursed for all fees and out-of-pocket
charges and other expenses incurred in connection with this Agreement, including, without
limitation, the reasonable fees and disbursements of counsel for the Administrative Agent;

     (d) the Administrative Agent shall have received a corresponding amendment to the U.S.
Credit Agreement, in form and substance substantially consistent with this Agreement (with
such changes as are applicable only to the U.S. Credit Agreement), duly executed by the U.S.
Administrative Agent, the Original U.S. Borrower, the Parent, each U.S. Subsidiary Guarantor
and the requisite Consenting Lenders (whether directly or through a lender authorization); and

     (e) the Administrative Agent shall have received such other instruments, documents and
certificates as the Administrative Agent shall reasonably request in connection with the
execution of this Agreement.

     4. Effect of the Agreement. Except as expressly provided herein, the Credit Agreement and
the other Loan Documents shall remain unmodified and in full force and effect. Except as
expressly set forth herein, this Agreement shall not be deemed (a) to be a waiver of, or
consent to, a modification or amendment of, any other term or condition of the Credit
Agreement or any other Loan Document, (b) to prejudice any other right or rights which the
Administrative Agent or the Lenders may now have or may have in the future under or in
connection with the Credit Agreement or the other Loan Documents or any of the instruments or
agreements referred to therein, as the same may be amended, restated, supplemented or
otherwise modified from time to time, (c) to be a commitment or any other undertaking or
expression of any willingness to engage in any further discussion with the Borrower, the U.S.
Borrower or any other Person with respect to any waiver, amendment, modification or any other
change to the Credit Agreement or the Loan Documents or any rights or remedies arising in
favor of the Lenders or the Administrative Agent, or any of them, under or with respect to any
such documents or (d) to be a waiver of, or consent to or a modification or amendment of, any
other term or condition of any other agreement by and among the Borrower and the U.S.
Borrower, on the one hand, and the Administrative Agent or any other Lender, on the other
hand. References in the Credit Agreement to “this Agreement” (and indirect references such as
“hereunder”, “hereby”, “herein”, and “hereof) and in any Loan Document to the Credit Agreement
shall be deemed to be references to the Credit Agreement as modified hereby.

     5. Representations and Warrenties/No Default. By their execution hereof,

     (a) the Borrower, the Original U.S. Borrower and each Grantor hereby certifies,
represents and warrants to the Administrative Agent and the Lenders that after giving effect
to the amendments set forth in Section 2 above, each of the representations and warranties set
forth in the Credit Agreement and the other Loan Documents is true and correct in all material
respects as of the date hereof (except to the extent that (i) any such representation or
warranty that is qualified by materiality or by reference to Material Adverse Effect, in which
case such representation or warranty is true and correct in all respects as of the date hereof
or (ii) any such representation or warranty relates only to an earlier date, in which case
such representation or

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warranty shall remain true and correct as of such earlier date) and that no Default or Event of
Default has occurred or is continuing;

     (b) the Borrower, the Original U.S. Borrower, the Parent and each of the Grantors hereby
certifies, represents and warrants to the Administrative Agent and the Lenders that:

     (i) it has the right, power and authority and has taken all necessary corporate
and other action to authorize the execution, delivery and performance of this Agreement
and each of the other documents executed in connection herewith to which it is a party
in accordance with their respective terms and the transactions contemplated hereby; and

     (ii) this Agreement and each other document executed in connection herewith has
been duly executed and delivered by the duly authorized officers of the Borrower, the
Original U.S. Borrower, the Parent and each of the Grantors, and each such document
constitutes the legal, valid and binding obligation of the Borrower, the Original U.S.
Borrower, the Parent and each of the Grantors, enforceable in accordance with its terms,
except as may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar state or federal debtor relief laws from time to time in effect which affect the
enforcement of creditors’ rights in general and the availability of equitable remedies.

     6. Reaffirmations. Each Credit Party (a) agrees that the transactions contemplated by this
Agreement shall not limit or diminish the obligations of such Person under, or release such
Person from any obligations under the Credit Agreement, the applicable Guaranty Agreement, the
Collateral Agreement and each other Security Document to which it is a party, (b) confirms and
reaffirms its obligations under the Credit Agreement, the applicable Guaranty Agreement, the
Collateral Agreement and each other Security Document to which it is a party and (c) agrees that
the Credit Agreement, the applicable Guaranty Agreement, the Collateral Agreement and each other
Security Document to which it is a party remain in full force and effect and are hereby ratified
and confirmed.

     7. Acknowledgement by Parent. The Parent hereby acknowledges receipt of a copy of the
Credit Agreement and agrees, for the benefit of the Administrative Agent and the Secured
Parties, to be bound thereby and to comply with the terms thereof insofar as such terms are
applicable to it (including, without limitation, Sections 7.1(f), 10.6(i) and 12.1(o)).

     8. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REFERENCE TO THE CONFLICTS OF LAW PRINCIPLES THEREOF.

     9. Counterparts. This Agreement may be executed by one or more of the parties hereto in any
number of separate counterparts and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.

     10. Electronic Transmission. A facsimile, telecopy, pdf or other reproduction of this
Agreement may be executed by one or more parties hereto, and an executed copy of this Agreement
may be delivered by one or more parties hereto by facsimile or similar instantaneous electronic
transmission device pursuant to which the signature of or on behalf of such party can

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be seen, and such execution and delivery shall be considered valid, binding and effective for all
purposes. At the request of any party hereto, all parties hereto agree to execute an original of
this Agreement as well as any facsimile, telecopy, pdf or other reproduction hereof.

[Signature Pages Follow]

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     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of
the date and year first above written.

	 	 	 	 	 
	 	BORROWER:

BOWATER CANADIAN FOREST PRODUCTS INC.

 	 
	 	By:  	/s/
William G. harvey
 	 
	 	 	Name:  	William G. harvey	 
	 	 	Title:  	SVP and CFO	 
	 
	 	PARENT:

ABITIBIBOWATER INC.

 	 
	 	By:  	/s/
William G. harvey
 	 
	 	 	Name:  	William G. harvey	 
	 	 	Title:  	SVP and CFO	 
	 
	 	PARENT GRANTORS:

BOWATER INCORPORATED

 	 
	 	By:  	/s/
William G. harvey
 	 
	 	 	Name:  	William G. harvey	 
	 	 	Title:  	SVP and CFO	 
	 
	 	BOWATER CANADIAN HOLDINGS
INCORPORATED

 	 
	 	By:  	/s/
William G. harvey
 	 
	 	 	Name:  	William G. harvey	 
	 	 	Title:  	Vice President	 
	 

[Signature
Pages Continue]

[Fifth Amendment—Bowater Canada]

 

 

	 	 	 	 	 
	 	SUBSIDIARY GRANTORS:

BOWATER CANADA FINANCE LIMITED
PARTNERSHIP

 	 
	 	By:  	BOWATER CANADA TREASURY 
CORPORATION, its general partner

	 
	 	By:  	/s/
William G. harvey	 
	 	 	Name:  	William G. harvey	 
	 	 	Title:  	President	 
	 
	 	BOWATER SHELBURNE CORPORATION

 	 
	 	By:  	/s/
Duane A. Owens	 
	 	 	Name:  	Duane A. Owens	 
	 	 	Title:  	Vice President and Treasurer	 
	 
	 	BOWATER LAHAVE CORPORATION

 	 
	 	By:  	/s/
William
A. Mccormick	 
	 	 	Name:  	William
A. Mccormick	 
	 	 	Title:  	Asst. Secretary	 
	 

[Signature
Pages Continue]

[Fifth Amendment—Bowater Canada]

 

 

	 	 	 	 	 
	 	THE BANK OF NOVA SCOTIA, as Administrative Agent (on behalf of itself and the Consenting Lenders who have executed a Lender Authorization) and as Issuing Lender and Lender

 	 
	 	By:  	/s/ Robert Boomhour
 	 
	 	Name:  	 	Robert Boomhour 	 
	 	Title:  	 	Director 	 
	 

 

 

Loan Documents (as defined in the Canadian Credit Agreement) to which Canadian Lenders are parties
and shall have the rights and obligations of a “Lender” (as defined in the Canadian Credit
Agreement), and agrees to be bound by the terms and provisions applicable to a “Lender” under each
such agreement. In furtherance of the foregoing, each financial institution executing this Lender
Authorization agrees to execute any additional documents reasonably requested by the U.S.
Administrative Agent or the Canadian Administrative Agent, as applicable, to evidence such
financial institution’s rights and obligations under the U.S. Credit Agreement or the Canadian
Credit Agreement, as applicable.

     A facsimile, telecopy, pdf or other reproduction of this Lender Authorization may be executed
by one or more parties hereto, and an executed copy of this Lender Authorization may be delivered
by one or more parties hereto by facsimile or similar instantaneous electronic transmission device
pursuant to which the signature of or on behalf of such party can be seen, and such execution and
delivery shall be considered valid, binding and effective for all purposes.

	 	 	 	 	 
	 	The Bank of Nova Scotia
 	 
	 
	 	By:  	/s/ David Angel
 	 
	 	Name:  	 	David Angel 	 
	 	Title:  	 	Director 	 
	 
	 	 	 
	 	By:  	                          /s/ Daniel Zolov
 	 
	 	Name:  	 	Daniel Zolov 	 
	 	Title:  	 	Associate 	 
	 

 

 

Loan Documents (as defined in the Canadian Credit Agreement) to which Canadian Lenders are parties
and shall have the rights and obligations of a “Lender” (as defined in the Canadian Credit
Agreement), and agrees to be bound by the terms and provisions applicable to a “Lender” under each
such agreement. In furtherance of the foregoing, each financial institution executing this Lender
Authorization agrees to execute any additional documents reasonably requested by the U.S.
Administrative Agent or the Canadian Administrative Agent, as applicable, to evidence such
financial institution’s rights and obligations under the U.S. Credit Agreement or the Canadian
Credit Agreement, as applicable.

     A facsimile, telecopy, pdf or other reproduction of this Lender Authorization may be executed
by one or more parties hereto, and an executed copy of this Lender Authorization may be delivered
by one or more parties hereto by facsimile or similar instantaneous electronic transmission device
pursuant to which the signature of or on behalf of such party can be seen, and such execution and
delivery shall be considered valid, binding and effective for all purposes,

	 	 	 	 	 
	 	Toronto Dominion Batik, 	 
	 
	 	By:  	/s/ Deborah Gravinese
 	 
	 	Name:  	 	Deborah Gravinese 	 
	 	Title:  	 	Managing Director 	 
	 

 

 

Loan Documents (as defined in the Canadian Credit Agreement) to which Canadian Lenders are parties
and shall have the rights and obligations of a “Lender” (as defined in the Canadian Credit
Agreement), and agrees to be bound by the terms and provisions applicable to a “Lender” under each
such agreement. In furtherance of the foregoing, each financial institution executing this Lender
Authorization agrees to execute any additional documents reasonably requested by the U.S.
Administrative Agent or the Canadian Administrative Agent, as applicable, to evidence such
financial institution’s rights and obligations under the U.S. Credit Agreement or the Canadian
Credit Agreement, as applicable.

     A facsimile, telecopy, pdf or other reproduction of this Lender Authorization may be executed
by one or more parties hereto, and an executed copy of this Lender Authorization may be delivered
by one or more parties hereto by facsimile or similar instantaneous electronic transmission device
pursuant to which the signature of or on behalf of such party can be seen, and such execution and
delivery shall be considered valid, binding and effective for all purposes.

	 	 	 	 	 
	 	BANK OF MONTREAL

 	 
	 	By:  	/s/ Bruno Jarry
 	 
	 	Name:  	 	Bruno Jarry 	 
	 	Title:  	 	Director 	 
	 

[Fifth Amendment—Bowater Canada]

 

 

Loan Documents (as defined in the Canadian Credit Agreement) to which Canadian Lenders are parties
and shall have the rights and obligations of a “Lender” (as defined in the Canadian Credit
Agreement), and agrees to be bound by the terms and provisions applicable to a “Lender” under each
such agreement. In furtherance of the foregoing, each financial institution executing this Lender
Authorization agrees to execute any additional documents reasonably requested by the U.S.
Administrative Agent or the Canadian Administrative Agent, as applicable, to evidence such
financial institution’s rights and obligations under the U.S. Credit Agreement or the Canadian
Credit Agreement, as applicable.

     A facsimile, telecopy, pdf or other reproduction of this Lender Authorization may be executed
by one or more parties hereto, and an executed copy of this Lender Authorization may be delivered
by one or more parties hereto by facsimile or similar instantaneous electronic transmission device
pursuant to which the signature of or on behalf of such party can be seen, and such execution and
delivery shall be considered valid, binding and effective for all purposes.

	 	 	 	 	 
	 	Export Development Canada 	 
	 
	 	By:  	/s/ Matthew Devine
 	 
	 	Name:  	 	Matthew Devine  	 
	 	Title:  	 	Asset Manager 	 
	 
	 	 	 
	 	By:  	                                                /s/ Howard Clysdale
 	 
	 	Name:  	 	Howard Clysdale  	 
	 	Title:  	 	Loan Portfolio Manager 	 
	 

 

 

Loan Documents (as defined in the Canadian Credit Agreement) to which Canadian Lenders are
parties and shall have the rights and obligations of a “Lender” (as defined in the Canadian Credit
Agreement), and agrees to be bound by the terms and provisions applicable to a “Lender” under
each such agreement. In furtherance of the foregoing each financial institution executing this
Lender Authorization agrees to execute any additional documents reasonably requested by the
U.S. Administrative Agent or the Canadian Administrative Agent, as applicable, to evidence
such financial institution’s rights and obligations under the U.S. Credit Agreement or the
Canadian Credit Agreement, as applicable.

     A
facsimile, telecopy, pdf or other reproduction of this Lender Authorization may be
executed by one or more parties hereto, and an executed copy of this Lender Authorization may
be delivered by one or more parties hereto by facsimile or similar instantaneous electronic
transmission device pursuant to which the signature of or on behalf of such party can be seen,
and such execution and delivery shall be considered valid, binding and effective for all purposes.

	 	 	 	 	 
	 	
Bank of America, N.A. (Canada branch)

 	 
	 	By:  	/s/ Modina Sales de Andrade
 	 
	 	Name:  	 	Modina Sales de Andrade 	 
	 	Title:  	 	Vice PresidentEX-10.1 FIRST BANCORP'S 2008 OMNIBUS INCENTIVE

EXHIBIT 10.1

FIRST BANCORP 2008 OMNIBUS INCENTIVE PLAN

Section I

PURPOSE

The purpose of the First BanCorp 2008 Omnibus Incentive Plan (the “Plan”) is to develop and provide
long term incentive compensation benefits to First BanCorp’s (the “Corporation” or the “Bank”)
employees and directors, who are expected to contribute significantly to the success of the
Corporation and its Affiliates, a proprietary interest in the continued growth and success of the
Bank through the grant of stock options, stock appreciation rights, restricted stock, restricted
stock units, performance shares, and other stock-based awards. The Plan is also intended to
encourage recipients to remain in the employ of the Bank and to assist the Board of Directors and
Management in the attraction and recruitment of qualified officers to serve the Bank and/or its
Subsidiaries. The Plan is intended to comply with Section 1046 of the Puerto Rico Internal Revenue
Code of 1994, as amended, and regulations promulgated thereunder, with respect to the Puerto Rico
directors and employees participating thereunder, and Section 422 of the U.S. Internal Revenue Code
of 1986, as amended, with respect to the U.S. employees participating in the Plan.

On January 21, 2007 the Corporation’s 1997 Employee Stock Option Plan (the “1997 Option Plan”)
expired, all outstanding award grants under the 1997 Option Plan shall continue in full force and
effect, subject to their original terms.

Section 2

DEFINITIONS

Whenever used herein, the following terms shall have the respective meanings set forth below:

	(a)	 	“Affiliate” means any organization controlling, controlled by or under common control with
the Corporation, or any corporation or other form of entity of which the Corporation owns,
from time to time, directly or indirectly, 50% or more of the total combined voting power of
all classes of stock. The term “Control” means the power (direct or indirect) to direct the
policies and management of a company. In addition to the ownership of voting securities,
control may be through voting trusts, stock in escrow and management.

	(b)	 	“Award” means the award of an Option, a SAR, Restricted Stock, Restricted Stock Unit,
Performance Share, or Other Stock-Based Award under the Plan.

	(c)	 	“Award Agreement” shall mean an agreement which shall contain such terms and conditions with
respect to an Award as the Committee shall determine, consistent with the Plan.

	(d)	 	“Board” means the Board of Directors of the Corporation.

	(e)	 	“Cause” means with respect to a Participant, any act or omission on the part of the
Participant which involves personal dishonesty, willful misconduct, breach of fiduciary duty,
a material violation of any law, rule or regulation of any regulatory agency, commission of a
crime, a violation of any policy or rule of the Corporation or any Affiliates, or a material
breach of any provision of any written covenant or agreement with the Corporation or any
Affiliate, such as the willful and continued failure of the Participant to perform the duties
set forth therein. No act or failure to act on the Participant’s part shall be considered
“willful” unless done, or omitted to be done, by him/her not in good faith and without
reasonable belief that his/her action or omission was in the best interest of the Bank. For
purposes of this paragraph, any act or omission to act on the part of the Participant in
reliance upon an opinion of counsel to the Bank or to the Participant shall not be deemed to
be willful or without reasonable belief that the act or omission to act was in the best
interest of the Bank.

	(f)	 	“Change in Control” shall be deemed to have taken place if: (i) a third person, including a
“group” as defined in

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	 	 	Section 13(d)(3) of the Securities Exchange Act of 1934, becomes the beneficial owner of shares
of the Bank having 25% or more of the total number of votes which may be cast for the election
of directors of the Bank or which, by cumulative voting, if permitted by the Bank’s charter or
bylaws, would enable such third person to elect 25% or more of the directors of the Bank; or
(ii) as the result of, or in connection with, any cash tender or exchange offer, merger or any
other business combination, sales of assets or contested election, or any combination of the
foregoing transactions, the persons who were directors of the Bank before such transaction shall
cease to constitute a majority of the Board of the Bank or any successor institution.
	 
	(g)	 	“Committee” means the Compensation and Benefits Committee of the Board or such other
committee of the Board as the Board shall designate from time to time, which committee shall
consist of two or more members, each of whom shall be a “Non Employee Director” within the
meaning of Rule 16b-3, as promulgated under the Exchange Act, an “outside director” within the
meaning of section 162(m) of the U.S. Code, and an “independent director” under the rules of
any exchange where the Common Stock may be traded.
	 
	(h)	 	“Common Stock” means the common stock of the Corporation, par value $1.00 per share.
	 
	(i)	 	“Corporation” means First BanCorp., a Puerto Rico Corporation, and any successor thereto.
	 
	(j)	 	“Covered Employees” are any Executive Officers or other Eligible Persons who are or the
Committee determines may be “covered employees” within the meaning of U.S. Code section
162(m).
	 
	(k)	 	“Disability”, means permanently disabled or incapacitated, due to physical or mental illness,
if absent from his/her duties with the Bank on a full-time basis for three consecutive months.
	 
	(l)	 	“Eligible Persons” means officers, directors and other employees of the Corporation or its
Affiliates. The Committee will determine the eligibility of officers, directors and other
employees based on, among other factors, the position and responsibilities of such individuals
and the nature and value to the Corporation or its Affiliates of such individual’s
accomplishments and potential contribution to the success of the Corporation or its
Affiliates. However, for purposes of Section 1046 of the P.R. Code, the stock option plan may
cover only directors and employees in Puerto Rico of the Corporation or its Affiliates.
Whereas, for purposes of Section 422 of the U.S. Code, the stock option plan may cover only
employees of the corporation or its affiliates.
	 
	(m)	 	“Exchange Act” means the Securities Exchange Act of 1934, as amended.
	 
	(n)	 	“Fair Market Value” means, with respect to stock or other property, the fair market value of
such stock or other property determined by such methods or procedures as shall be established
from time to time by the Committee. Unless otherwise determined by the Committee in good
faith, the per share Fair Market Value of stock as of a particular date shall mean, (i) the
closing sales price per share of stock on the national securities exchange on which the stock
is principally traded, for the date of grant, or (ii) if the shares of stock are then traded
in an over-the-counter market, the average of the closing bid and asked prices for the shares
of stock in such over-the-counter market for the last preceding date on which there was a sale
of such stock in such market, or if the shares of stock are not then listed on a national
securities exchange or traded in an over-the-counter market, such value as the Committee, in
its sole discretion, shall determine in good faith.
	 
	(o)	 	“ISO” means an Option that is an “incentive stock option” within the meaning of U.S. Code
section 422.
	 
	(p)	 	“Non Employee Director” means a member of the Board of Directors of the Corporation or an
Affiliate who is not an employee of the Corporation or any Affiliate.
	 
	(q)	 	“Non-qualified Stock Option” means an Option that is not an ISO or a QSO.
	 
	(r)	 	“Option” (including ISOs, QSOs and Non-qualified Stock Options) means the right to purchase
Common Stock at a stated price for a specified period of time. For purposes of the Plan, an
Option may be either (i) an ISO, (ii) a QSO or (iii) a Non-qualified Stock Option.

2

 

	(s)	 	“Other Stock-Based Award” means an Award granted pursuant to Section 10 of the Plan.
	 
	(t)	 	“P.R. Code” means the Puerto Rico Internal Revenue Code of 1994, as amended, including, for
these purposes, any regulations promulgated by the Puerto Rico Department of the Treasury with
respect to the provisions of the P.R. Code, and any successor thereto.
	 
	(u)	 	“Participant” means those Eligible Persons designed by the affirmative action of the
Committee to participate in the Plan.
	 
	(v)	 	“Performance Cycle” means the period selected by the Committee during which the performance
of the Corporation or any Affiliate or unit thereof or any individual is measured for the
purpose of determining the extent to which an Award subject to Performance Goals has been
earned.
	 
	(w)	 	“Performance Goals” means the objectives for the Corporation, any Affiliate or business unit
thereof, or an Eligible Person that may be established by the Committee for a Performance
Cycle with respect to any performance based Awards contingently granted under the Plan,
provided that, for awards intended to qualify for the performance-based compensation exception
under Section 162(m) of the U.S. Code:

	 	(i)	 	The performance criteria that shall be used to establish Performance Goals may include
any or a combination of the following as determined by the Committee: (i) net earnings
(either before or after (A) interest, (B) taxes, (C) depreciation and (D) amortization),
(ii) gross or net sales or revenue, (iii) net income (either before or after taxes), (iv)
operating profit, (v) cash flow (including, but not limited to, operating cash flow and
free cash flow), (vi) return on assets, (vii) return on capital, (viii) return on
stockholders’ equity, (ix) return on sales, (x) gross or net profit or operating margin,
(xi) costs, (xii) funds from operations, (xiii) expense, (xiv) working capital, (xv)
earnings per share, and (xvi) price per share of Common Stock, (xvii) regulatory ratings,
(xviii) market share, (xix) growth in loans and/or other assets, (xx) growth in deposits
and (xxi) various measures of credit quality, (xxii) customer satisfaction, satisfaction
based on specified objective goals or a Corporation-sponsored customer survey, (xxiii)
employee satisfaction, satisfaction based on specified objective goals or a
Corporation-sponsored employee survey, (xxiv) Economic value added measurements, or (xxv)
market share or market penetration with respect to specific designated products or
services, product or service groups and/or specific geographic areas (xxvi) total
shareholder return; (xxvii) increase in stock price; any of which may be measured either in
absolute terms or as compared to any incremental increase or decrease or as compared to
results of a peer group.
	 
	 	(ii)	 	The Committee may, in its discretion, at the time of grant, specify in the Award that
one or more objectively determinable adjustments shall be made to one or more of the
Performance Goals. Such adjustments may include one or more of the following: (i) items
related to a change in accounting principle; (ii) items relating to financing activities;
(iii) expenses for restructuring or productivity initiatives; (iv) other non-operating
items; (v) items related to acquisitions; (vi) items attributable to the business
operations of any entity acquired by the Corporation during the Performance Period; (vii)
items related to the disposal of a business or segment of a business; or (viii) items
related to discontinued operations that do not qualify as a segment of a business under
United States generally accepted accounting principles; (ix) non-cash valuation changes
related to financial instruments accounted at fair value; or (x) any other extraordinary
item as the Committee may consider appropriate.

	(x)	 	“Performance Shares” means an Award made pursuant to Section 9 of the Plan, which are units
denominated in Common Stock, the number of such units which may be adjusted over a Performance
Cycle based upon the satisfaction of Performance Goals.
	 
	(y)	 	“QSO” means an Option that is a “qualified stock option” within the meaning of P.R. Code
section 1046.
	 
	(z)	 	“Restricted Period” means the period of time during which Restricted Stock Units or shares of
Restricted Stock are subject to forfeiture or restrictions on transfer.

3

 

	(aa)	 	“Restricted Stock” means Common Stock awarded to a Participant pursuant to the Plan that is
subject to forfeiture and restrictions on transferability in accordance with Section 8 of the
Plan.
	 
	(bb)	 	“Restricted Stock Unit” means a Participant’s right to receive, pursuant to this Plan, one
share of Common Stock (or in the discretion of the Committee, its cash equivalent) at the end
of a specified period of time, which right is subject to forfeiture in accordance with Section
8 of the Plan.
	 
	(cc)	 	“Retirement” means the voluntarily termination of employment by a Participant after he or she
has attained the age of 65 or such other age as may be determined by the Committee in its sole
discretion or as otherwise may be set forth in the Incentive Award agreement or other grant
document with respect to a Participant and a particular Incentive Award.
	 
	(dd)	 	“SAR” means a stock appreciation right granted under Section 7 in respect of one or more
 shares of Common Stock that entitles the holder thereof to receive, in cash or Common Stock,
or a combination thereof, at the discretion of the Committee (which discretion may be
exercised at or after grant, including after exercise of the SAR), an amount per share of
Common Stock equal to the excess, if any, of the Fair Market Value on the date the SAR is
exercised over the Fair Market Value on the date the SAR is granted.
	 
	(ee)	 	“Substitute Award” shall mean an Award granted under this Plan upon the assumption of, or in
substitution for, outstanding equity awards previously granted by a company or other entity in
connection with a corporate transaction, such as a merger, combination, consolidation or
acquisition of property or stock; provided, however, that in no event shall the term
“Substitute Award” be construed to refer to an award made in connection with the cancellation
and repricing of an Option or SAR.
	 
	(ff)	 	“U.S. Code” means the U.S. Internal Revenue Code of 1986, as amended, including, for these
purposes, any regulations promulgated by the Internal Revenue Service with respect to the
provisions of the U.S. Code (“Treasury Regulations”), and any successor thereto.

Section 3

ELIGIBILITY

Any Eligible Person shall be eligible to be selected to receive an Award under the Plan, except
that ISOs, under U.S. Code section 422 may be granted only to employees of the Corporation or a
subsidiary.

Section 4

ADMINISTRATION

	(a)	 	The Plan shall be administered by the Committee. The Committee may issue rules and
regulations for administration of the Plan. It shall meet at such times and places as it may
determine.
	 
	(b)	 	Subject to the terms of the Plan and applicable law, the Board, upon receiving the relevant
recommendations of the Committee, shall have power and authority to: (i) designate
participants; (ii) determine the type or types of Awards to be granted to each participant
under the Plan; (iii) determine the number of shares of Common Stock 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) adopt form of Award
Agreements; (vi) determine whether, to what extent, and under what circumstances Awards may be
settled or exercised in cash, shares of Common Stock, other securities, or other Awards, or
canceled, forfeited or suspended, and the method or methods by which Awards may be settled,
exercised, canceled, forfeited or suspended; (vii) correct any defect, supply any omission or
reconcile any inconsistency in or among the Plan, an Award or an Award Agreement;
(viii) determine whether, to what extent, and under what circumstances cash, shares of Common
Stock, other securities, other Awards, and other amounts payable with respect to an Award
under the Plan shall be deferred either automatically or at the election of the holder thereof
or of the Board; (ix) interpret and administer the Plan and any instrument or agreement
relating to, or Award made under, the Plan; (x) establish,

4

 

	 	 	amend, suspend or waive such rules and regulations and appoint such agents as it shall deem
appropriate for the proper administration of the Plan; and (xi) make any other determination and
take any other action that the Board deems necessary or desirable for the administration of the
Plan.
	 
	(c)	 	All decisions of the Board shall be final, conclusive and binding upon all parties, including
the Corporation, the stockholders and the Participants.

Section 5

COMMON STOCK SUBJECT TO PLAN; OTHER LIMITATIONS

	(a)	 	Subject to adjustment as provided in (d) below, (i) the maximum number of shares of Common
Stock available for delivery under the Plan is 3,800,000 Shares, (ii) the maximum number of
 shares of Common Stock that may be subject to grant of ISOs is 3,800,000 and (iii) the maximum
number of shares of Common Stock that are available for Awards under 8, 9 and 10 is 1,900,000.
	 
	(b)	 	No participant may receive Options, SARs or any Award granted in accordance with Section 11
below in any fiscal year that relate to more than 650,000 shares of Common Stock.
	 
	(c)	 	If, after the effective date of the Plan, any shares of Common Stock covered by an Award, or
to which such an Award relates, are forfeited, or if such an Award otherwise terminates
without the delivery of shares of Common Stock, then the shares of Common Stock covered by
such Award, or to which such Award relates, to the extent of any such forfeiture or
termination, shall again be, or shall become, available for issuance under the Plan.
Notwithstanding the foregoing, the following shares of Common Stock shall not become available
for purposes of the Plan: (1) shares of Common Stock previously owned or acquired by the
participant that are delivered to the Corporation, or withheld from an Award, to pay the
exercise price, (2) shares of Common Stock that are delivered or withheld for purposes of
satisfying a tax withholding obligation, or (3) shares of Common Stock reserved for issuance
upon the grant of a SAR that exceed the number of shares actually issued upon exercise.
	 
	(d)	 	Any Shares delivered pursuant to an Award may consist, in whole or in part, of authorized and
unissued shares of Common Stock or shares of Common Stock acquired by the Corporation.
	 
	(e)	 	In the event that the Committee shall determine that any dividend or other distribution
(whether in the form of cash, shares of Common Stock or other securities), recapitalization,
stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase or exchange of shares of Common Stock or other securities of the
Corporation, issuance of warrants or other rights to purchase shares of Common Stock or other
securities of the Corporation, or other similar corporate transaction or event affects the
 shares such that an adjustment is determined by the Committee to be appropriate in order to
prevent dilution or enlargement of the benefits or potential benefits intended to be made
available under the Plan, then the Committee shall, in such manner as it may deem equitable,
adjust any or all of (i) the number and type of shares of Common Stock (or other securities)
which thereafter may be made the subject of Awards, including the aggregate and individual
limits specified above, (ii) the number and type of shares of common Stock (or other
securities) subject to outstanding Awards, and (iii) the grant, purchase, or exercise price
with respect to any Award or, if deemed appropriate, make provision for a cash payment to the
holder of an outstanding Award; provided, however, that the number of shares of Common Stock
subject to any Award denominated in shares shall always be a whole number. Notwithstanding the
foregoing, to the extent applicable, adjustments to Awards will be made only to the extent
permitted under Section 409A of the U.S. Code.
	 
	(f)	 	Shares of Common Stock underlying Substitute Awards, and Awards settled in cash, shall not
reduce the number of shares of Common Stock remaining available for issuance under the Plan.

5

 

Section 6

STOCK OPTIONS

	(a)	 	The Board, upon receiving the relevant recommendations of the Committee, may grant Options to
Eligible Persons in the following forms: (1) ISOs; (2) QSOs and (3) Non-qualified stock
options. ISOs and QSOs may only be granted to those who meet the requirements of U.S. or P.R.
Code, respectively. Each Option will be evidenced by an Award Agreement.
	 
	(b)	 	Except in the case of Substitute Awards, Non-qualified Stock Options and QSOs and ISOs
granted pursuant to the Plan shall have an exercise price of no less than the Fair Market
Value of a share of Common Stock on the date the Option is granted. Except as provided in
Section 5(e), the Board shall not have the ability or authority to reduce the exercise price
of outstanding Options nor to grant any new Options or other Awards in substitution for or
upon the cancellation of Options previously granted which shall have the effect of reducing
the exercise price of any outstanding Option without the approval of a majority of the
Corporation’s shareholders.
	 
	(c)	 	Each Option granted pursuant to the Plan shall become exercisable as determined by the Board
at the time of grant. The Board shall determine the time or times at which an Option may be
exercised in whole or in part.
	 
	(d)	 	The term of each Option shall be fixed by the Board but shall not exceed 10 years from the
date of grant thereof.
	 
	(e)	 	Pursuant to the provisions of Section 1046 of the P.R. Code and/or Section 422 of the U.S.
Code, the aggregate Fair Market Value of the shares (determined as of the time the Option is
granted) with respect to which QSO’s and/or ISO’s are exercisable for the first time by any
Optionee during any calendar year (under the Plan and any other plans of the Corporation and
its Affiliates) shall not exceed one hundred thousand dollars ($100,000).
	 
	(f)	 	Payment of the exercise price shall be made in cash or check. However, the Committee may, in
its discretion, (i) allow payment, in whole or in part, through the delivery of shares of
Common Stock which have been owned by the participant for at least six months, duly endorsed
for transfer to the Corporation with a Fair Market Value on the date of delivery equal to the
aggregate exercise price of the Option or exercised portion thereof; (ii) allow payment, in
whole or in part, through the surrender of shares of Common Stock then issuable upon exercise
of the Option having a Fair Market Value on the date of Option exercise equal to the aggregate
exercise price of the Option or exercised portion thereof; (iii) allow payment, in whole or in
part, through the delivery of a notice that the participant has placed a market sell order
with a broker with respect to shares of Common Stock then issuable upon exercise of the
Option, and the broker timely pays a sufficient portion of the net proceeds of the sale to the
Corporation in satisfaction of the Option exercise price; or (iv) allow payment through any
combination of the consideration provided in the foregoing subparagraphs (i), (ii), (iii) and
(iv); provided, however, that the payment in the manner prescribed in the preceding paragraphs
shall not be permitted to the extent that the Committee determines that payment in such manner
shall result in an extension or maintenance of credit, an arrangement for the extension of
credit, or a renewal or an extension of credit in the form of a personal loan to or for any
Director or executive officer of the Corporation that is prohibited by Section 13(k) of the
Exchange Act or other applicable law.
	 
	(g)	 	Upon exercise of a SAR, the holder shall be entitled to receive payment, in cash, in shares
of common stock or in a combination thereof.

Section 7

SARs

	(a)	 	The Board, upon receiving relevant recommendations from the Committee, may grant SARs to
Eligible Persons with terms and conditions that are not inconsistent with the provisions of
the Plan. Each SAR shall be evidenced by an Award Agreement which includes the terms and
conditions recommended by the Committee.
	 
	(b)	 	SARs may be granted hereunder to Participants either alone (“freestanding”) or in addition to
other Awards granted under the Plan (“tandem”) and may, but need not, relate to a specific
Option granted under Section 6.

6

 

	(c)	 	Any tandem SAR related to an Option may be granted at the same time such Option is granted or
at any time thereafter before exercise or expiration of such Option. In the case of any tandem
SAR related to any Option, the SAR or applicable portion thereof shall not be exercisable
until the related Option or applicable portion thereof is exercisable and shall terminate and
no longer be exercisable upon the termination or exercise of the related Option, except that a
SAR granted with respect to less than the full number of Shares covered by a related Option
shall not be reduced until the exercise or termination of the related Option exceeds the
number of Shares not covered by the SAR. Any Option related to any tandem SAR shall no longer
be exercisable to the extent the related SAR has been exercised.
	 
	(d)	 	A freestanding SAR shall not have a term of greater than 10 years or, unless it is a
Substitute Award, an exercise price less than the Fair Market Value of the Share on the date
of grant. Except as provided in Section 5(e), the Board shall not have the ability or
authority to reduce the exercise price of outstanding SARs nor to grant any new SARs or other
Awards in substitution for or upon the cancellation of SARs previously granted which shall
have the effect of reducing the exercise price of any outstanding SAR without the approval of
a majority of the Corporation’s shareholders.

Section 8

RESTRICTED STOCK AND RESTRICTED STOCK UNITS

	(a)	 	The Board, upon receiving the relevant recommendations of the Committee, may grant Awards to
Eligible Persons of Restricted Stock or Restricted Units. Each Award of Restricted Stock and
Restricted Stock Units shall be evidenced by an Award Agreement which shall set forth the
conditions, if any, which will need to be satisfied before the grant will be effective and the
conditions, if any, under which the participant’s Award will be forfeited or become vested,
including Performance Goals, if any, that must be achieved as a condition to vesting.
	 
	(b)	 	Shares of Restricted Stock may not be sold, assigned, transferred, pledged, hypothecated or
otherwise encumbered by the participant during the Restricted Period, except as hereinafter
provided.
	 
	(c)	 	Unless otherwise stated, holders of Restricted Stock or Restricted Stock Units shall have the
rights to dividends or dividend equivalents, as applicable, during the Restriction Period.
Such dividends or dividend equivalents will accrue during the Restriction Period, but not be
paid until restrictions lapse.
	 
	(d)	 	In the case of Restricted Stock, the participant will have the right to vote shares.
	 
	(e)	 	For Restricted Stock and Restricted Stock Unit Awards intended to vest solely on the basis of
the passage of time, the Awards will not vest more quickly than ratably over a three-year
period beginning on the first anniversary of the award. Awards may vest more quickly in the
event of (a) death, Disability or Retirement, (b) job loss due to workforce reduction, job
elimination or divestiture or (c) a Change in Control. Also, Awards necessary in the
recruitment of new key employees or for the retention of key employees acquired in a business
combination will not be subject to a minimum time-based vesting requirement.
	 
	(f)	 	The restricted period shall commence upon the date of the grant by the Board and shall lapse
with respect to the shares of Restricted Stock and Restricted Stock Units on such date the
vesting period of the Award elapses.

Section 9

PERFORMANCE SHARES

The Board, upon receiving the relevant recommendations of the Committee, may grant Performance
Shares to Eligible Persons. Performance Shares shall represent the right of a participant to
receive shares of Common Stock (or their cash equivalent) at a future date upon the achievement of
Performance Goals established by the Committee, during a specified Performance Cycle. Performance
Shares may include the right to receive dividend equivalents thereon, on a current, reinvested
and/or restricted basis. Each Award of Performance Shares shall be evidenced by an Award Agreement
which shall set forth the terms and conditions of the Award.

7

 

Section 10

OTHER STOCK-BASED AWARDS

The Board, upon receiving the relevant recommendations of the Committee, may grant Other
Stock-Based Awards to Eligible Persons. An Other Stock-Based Award means any other type of
equity-based or equity-related Award not otherwise described by the terms of this Plan (including
the grant or offer for sale of unrestricted Shares) in such amount and subject to such terms and
conditions as the Administrator shall determine. Such Awards may involve the transfer of actual
shares of Common Stock, or payment in cash or otherwise of amounts based on the value of shares of
Common Stock. Each Other Stock-Based Award shall be evidenced by an Award Agreement which shall set
forth the terms and conditions of the Award.

Section 11

QUALIFIED PERFORMANCE-BASED AWARDS

	(a)	 	The Board, upon receiving the relevant recommendations of the Committee, may determine
whether an Award is to qualify as performance-based compensation (as described in Section
162(m)(4)(C) of the U.S. Code).
	 
	(b)	 	To the extent necessary to comply with the performance-based compensation requirements of
Section 162, no later than ninety (90) days following the commencement of any Performance
Cycle (or such earlier time as may be required under Section 162(m)), the Committee shall, in
writing, (i) designate one or more Covered Employees, (ii) select the Performance Goals
applicable to the Performance Cycle (including any applicable adjustments), (iii) establish
the various performance targets, in terms of an objective formula or standard, and amounts of
such Awards, as applicable, which may be earned for such Performance Cycle, and (iv) specify
the relationship between the performance targets and the amounts of such Awards, as
applicable, to be earned by each Covered Employee for such Performance Cycle. Following the
completion of each Performance Cycle, the Committee shall certify in writing whether the
applicable performance targets have been met. In determining the amount earned by a Covered
Employee, the Committee shall have the right to reduce (but not to increase) the amount
payable at a given level of performance to take into account additional factors that the
Committee may deem relevant to the assessment of individual or corporate performance for the
Performance Cycle.
	 
	(c)	 	Furthermore, notwithstanding any other provision of the Plan, any Award which is granted to a
Covered Employee and is intended to qualify as performance-based compensation shall be subject
to any additional limitations set forth in Section 162(m) of the U.S. Code (including any
amendment to Section 162(m) or any regulations or rulings issued thereunder that are
requirements for qualification as performance-based compensation and the Plan shall be deemed
amended to the extent necessary to conform to such requirements.

Section 12

TERMINATION OF EMPLOYMENT; CHANGE OF CONTROL

	(a)	 	In the event of the death of a participant while in the employ or service of the Bank, Awards
held by such participant which have not been exercised or which have not vested, shall vest
and may be exercised, as the case may be (irrespective of whether the vesting period has been
completed), by the estate of the participant or by any person who acquired the right to
exercise such Award by bequest or inheritance from such participant, within one year after the
date of such death but not later that the date on which the Award would otherwise expire.
	 
	(b)	 	If the employment or service of a participant is terminated by reason of Disability, Awards
held by such participant which have not been exercised or which have not vested, shall vest
and may be exercised, as the case may be (irrespective of whether the vesting period has been
completed),, within one year after such termination but not later than the date on which such
Award would otherwise expire.

8

 

	(c)	 	In the event a Participant’s employment or service is terminated by the Corporation or any
Affiliate for Cause, Awards held by such Participant which have not been exercised or which
have not vested shall be forfeited and canceled upon such termination and shall not thereafter
be exercisable.
	 
	(d)	 	Unless otherwise determined by the Committee, in the event a Participant’s employment or
service ends as a result of such participants resignation from the Corporation or an
Affiliate, any Award held by such Participant which has not been exercised or which have not
vested, shall be forfeited and canceled upon such termination and shall not thereafter be
exercisable.
	 
	(e)	 	If the employment or service of the participant is terminated for any reason other than
described in Section 13 (a) through (d), Awards held by such participant which have not been
exercised or which have not vested shall vest and may be exercised, as the case may be, at
any time prior to the expiration of the term of the Award or the ninetieth (90th)
day following the Participants termination of employment, whichever period is shorter, and any
Awards that are not exercisable at the time of the termination of employment shall be canceled
upon such termination and shall not thereafter be exercisable; provided, however, that a
participant whose employment is terminated by reason of Retirement, or who is voluntarily or
involuntarily terminated within one year after a Change in Control, Awards held by such
participant shall vest and may be exercised, as the case may be (irrespective of whether the
vesting period has been completed), within four months after the date of such termination but
not later than the date on which the Awards would otherwise expire.
	 
	(f)	 	Based on particular circumstances evaluated by the Committee as they may relate to the
termination of a Participant, the Board may, with the recommendation of the Committee, grant
the full vesting of any Award held by the participant upon termination of employment.
	 
	(g)	 	If awards are accelerated for reasons other than death, disability, retirement, or change in
control, those discretionarily accelerated shares will be limited to 10% of the total number
of shares authorized under Section 5(a) of the Plan.

Section 13

AMENDMENT, MODIFICATION, AND TERMINATION OF PLAN

	(a)	 	The Board may, at any time and from time to time amend, modify, suspend, or terminate this
Plan, in whole or in part, without notice to or the consent of any participant or employee;
provided, however, that any amendment which would (i) increase the number of shares available
for issuance under the Plan, (ii) lower the minimum exercise price at which an Option or SAR
may be granted or (iii) change the Award limits as set forth in Section 5(a) or 5(b) or (iv)
require shareholder approval under the rules of any exchange where the Common Stock may be
traded, shall be subject to the approval of the Corporation’s shareholders. No amendment,
modification or termination of the Plan shall in any manner adversely affect any Award
theretofore granted under the Plan, without the consent of the Participant Award (for this
purpose, actions that alter the timing of federal income taxation of a participant will not be
deemed material unless such action results in an income tax penalty on the Participant).
	 
	(b)	 	The effective date and date of adoption of the Plan shall be March 13, 2008, the date of
adoption of the Plan by the Board, provided that such adoption of the Plan by the Board is
approved by a majority of the votes cast at a duly held meeting of stockholders held on or
prior to April 29, 2008 at which a quorum representing a majority of the outstanding voting
stock of the Corporation is, either in person or by proxy, present and voting. No Award may
be granted subsequent to March 13, 2018. Absent additional stockholder approval, no Award
intended to qualify as performance-based under Section 162(m) of the U.S. Code may be granted
under the Plan subsequent to the Corporation’s annual meeting of stockholders in April 29,
2013.

Section 14

MISCELLANEOUS

 

	(a)	 	The Corporation may, to the extent deemed necessary or advisable by the Committee postpone
the issuance or delivery of shares of Common Stock or payment of other benefits under any
Award until completion of such

9

 

	 	 	registration or qualification of such shares or other required action under any federal or state
law, rule or regulation, listing or other required action with respect to any stock exchange or
automated quotation system upon which the shares of Common Stock or other securities of the
Corporation are listed or quoted, or compliance with any other obligation of the Corporation, as
the Committee may consider appropriate, and may require any participant to make such
representations, furnish such information and comply with or be subject to such other conditions
as it may consider appropriate in connection with the issuance or delivery of shares of Common
Stock or payment of other benefits in compliance with applicable laws, rules, and regulations,
listing requirements, or other obligations.
	 
	(b)	 	No Award or other right or interest of a participant under the Plan shall be pledged,
hypothecated or otherwise encumbered or subject to any lien, obligation or liability of such
participant to any party (other than the Corporation or an Affiliate), or assigned or
transferred by such participant otherwise than by will or the laws of descent and distribution
or to a beneficiary upon the death of a participant, and such Awards or rights that may be
exercisable shall be exercised during the lifetime of the participant only by the participant
or his or her guardian or legal representative.
	 
	(c)	 	The Corporation and any Affiliate is authorized to withhold from any Award granted, any
payment relating to an Award under the Plan, including from a distribution of shares of Common
Stock, or any payroll or other payment to a participant, amounts of withholding and other
taxes due or potentially payable in connection with any transaction involving an Award, and to
take such other action as the Committee may deem advisable to enable the Corporation and
participants to satisfy obligations for the payment of withholding taxes and other tax
obligations relating to any Award. This authority shall include authority to withhold or
receive shares of Common Stock or other property and to make cash payments in respect thereof
in satisfaction of a participant’s withholding obligations, either on a mandatory or elective
basis in the discretion of the Committee, or in satisfaction of other tax obligations if such
withholding will not result in additional accounting expense to the Corporation. Other
provisions of the Plan notwithstanding, only the minimum amount of shares of Common Stock
deliverable in connection with an Award necessary to satisfy statutory withholding
requirements will be withheld, unless withholding of any additional amount of shares of Common
Stock will not result in additional accounting expense to the Corporation.
	 
	(d)	 	No election under Section 83(b) of the U.S. Code (to include in gross income in the year of
transfer the amounts specified in Code Section 83(b)) or under a similar provision of the laws
of a jurisdiction outside the United States may be made unless expressly permitted by the
terms of the Award document or by action of the Committee in writing prior to the making of
such election. In any case in which a participant is permitted to make such an election in
connection with an Award, the participant shall notify the Corporation of such election within
ten days of filing notice of the election with the Internal Revenue Service or other
governmental authority, in addition to any filing and notification required pursuant to
regulations issued under Section 83(b) or other applicable provision.
	 
	(e)	 	If any participant shall make any disposition of shares of shares of Common Stock delivered
pursuant to the exercise of an ISO under the circumstances described in Code Section 421(b)
(relating to certain disqualifying dispositions), such Participant shall notify the
Corporation of such disposition within ten days thereof.
	 
	(f)	 	The Corporation or any Affiliate may, to the extent permitted by applicable law, deduct from
and set off against any amounts the Corporation or an Affiliate may owe to the participant
from time to time, including amounts payable in connection with any Award, owed as wages,
fringe benefits, or other compensation owed to the participant, such amounts as may be owed by
the participant to the Corporation, including but not limited to amounts owed under Section
(c) above, although the participant shall remain liable for any part of the participant’s
payment obligation not satisfied through such deduction and setoff. By accepting any Award
granted hereunder, the participant agrees to any such deduction or setoff.
	 
	(g)	 	The Plan is intended to constitute an “unfunded” plan for incentive and deferred
compensation. With respect to any payments not yet made to a participant or obligation to
deliver shares of Common Stock pursuant to an Award, nothing contained in the Plan or any
Award shall give any such Participant any rights that are greater than those of a general
creditor of the Corporation; provided that the Committee may authorize the creation of trusts
and deposit therein cash, shares of Common Stock, other Awards or other property, or make
other

10

 

	 	 	arrangements to meet the Corporation’s obligations under the Plan. Such trusts or other
arrangements shall be consistent with the “unfunded” status of the Plan unless the Committee
otherwise determines with the consent of each affected participant.
	 
	(h)	 	Neither the adoption of the Plan by the Board nor its submission to the shareholders of the
Corporation for approval shall be construed as creating any limitations on the power of the
Board or a committee thereof to adopt such other incentive arrangements, apart from the Plan,
as it may deem desirable, including incentive arrangements and awards which do not qualify
under Section 162(m) of the U.S. Code, and such other arrangements may be either applicable
generally or only in specific cases.
	 
	(i)	 	No fractional shares of Common Stock shall be issued or delivered pursuant to the Plan or any
Award. The Committee shall determine whether cash, other Awards or other property shall be
issued or paid in lieu of such fractional shares or whether such fractional shares or any
rights thereto shall be forfeited or otherwise eliminated.
	 
	(j)	 	It is the intent of the Corporation that Options and SARs granted to Covered Employees and
other designated Awards shall constitute qualified “performance-based compensation” within the
meaning of Section 162(m) of the U.S. Code and regulations thereunder, unless otherwise
determined by the Committee at the time of allocation of an Award. If any provision of the
Plan or any Award document relating to an Award that is designated as intended to comply with
Section 162(m) does not comply or is inconsistent with the requirements of Section 162(m) or
regulations thereunder, such provision shall be construed or deemed amended to the extent
necessary to conform to such requirements, and no provision shall be deemed to confer upon the
Committee or any other person discretion to increase the amount of compensation otherwise
payable in connection with any such Award upon attainment of the applicable performance
objectives.
	 
	(k)	 	Other provisions of the Plan notwithstanding, to the extent applicable, the terms of any
Award, including any authority of the Corporation and rights of the participant with respect
to the Award, shall be limited to those terms permitted under Section 409A, and any terms not
permitted under Section 409A shall be automatically modified and limited to the extent
necessary to conform with Section 409A. For this purpose, other provisions of the Plan
notwithstanding, the Corporation shall have no authority to accelerate distributions relating
to Awards subject to Section 409A in excess of the authority permitted under Section 409A, and
any distribution subject to Section 409A(a)(2)(A)(i) (separation from service) to a “key
employee” as defined under Section 409A(a)(2)(B)(i), shall not occur earlier than the earliest
time permitted under Section 409A(a)(2)(B)(i).
	 
	(l)	 	The validity, construction, and effect of the Plan, any rules and regulations relating to the
Plan and any Award Agreement shall be determined in accordance with the laws of the
Commonwealth of Puerto Rico, without giving effect to principles of conflicts of laws, and
applicable provisions of federal law.
	 
	(m)	 	Neither the Plan nor any action taken hereunder shall be construed as (i) giving any Eligible
Person or participant the right to continue as an Eligible Person or participant or in the
employ or service of the Corporation or an Affiliate, (ii) interfering in any way with the
right of the Corporation or an Affiliate to terminate any Eligible Person’s or participant’s
employment or service at any time, (iii) giving an Eligible Person or participant any claim to
be granted any Award under the Plan or to be treated uniformly with other participants and
employees, or (iv) conferring on a participant any of the rights of a shareholder of the
Corporation unless and until the participant is duly issued or transferred shares of Common
Stock in accordance with the terms of an. Except as expressly provided in the Plan and an
Award Agreement, neither the Plan nor any Award Agreement shall confer on any person other
than the Corporation and the participant any rights or remedies thereunder.
	 
	(n)	 	If any of the provisions of this Plan or any Award Agreement is finally held to be invalid,
illegal or unenforceable (whether in whole or in part), such provision shall be deemed
modified to the extent, but only to the extent, of such invalidity, illegality or
unenforceability, and the remaining provisions shall not be affected thereby; provided, that,
if any of such provisions is finally held to be invalid, illegal, or unenforceable because it
exceeds the maximum scope determined to be acceptable to permit such provision to be
enforceable, such provision shall be deemed to be modified to the minimum extent necessary to
modify such scope in order to make such provision enforceable hereunder. The Plan and any
Award Agreements contain the entire agreement

11

 

	 	 	of the parties with respect to the subject matter thereof and supersede all prior agreements,
promises, covenants, arrangements, communications, representations and warranties between them,
whether written or oral with respect to the subject matter thereof.

12

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